19–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 112–294 

REGULATORY ACCOUNTABILITY ACT OF 2011 

NOVEMBER 22, 2011.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. SMITH of Texas, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 3010] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 3010) to reform the process by which Federal agencies analyze and formulate new regulations and guidance documents, having considered the same, reports favorably thereon with an amendment and recommends that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Purpose and Summary ............................................................................................ 10 

Background and Need for the Legislation ............................................................. 10 

Hearings ................................................................................................................... 36 

Committee Consideration ........................................................................................ 36 

Committee Votes ...................................................................................................... 37 

Committee Oversight Findings ............................................................................... 42 

New Budget Authority and Tax Expenditures ...................................................... 42 

Congressional Budget Office Cost Estimate .......................................................... 42 

Performance Goals and Objectives ......................................................................... 47 

Advisory on Earmarks ............................................................................................. 47 

Section-by-Section Analysis .................................................................................... 47 

Changes in Existing Law Made by the Bill, as Reported ..................................... 52 

Committee Jurisdiction Letters .............................................................................. 67 

Dissenting Views ..................................................................................................... 70 

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The Amendment 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Regulatory Accountability Act of 2011’’. 

SEC. 2. DEFINITIONS. 

Section 551 of title 5, United States Code, is amended— 

(1) in paragraph (13), by striking ‘‘and’’ at the end; 

(2) in paragraph (14), by striking the period at the end and inserting a semicolon; and 

(3) by adding at the end the following: 

‘‘(15) ‘major rule’ means any rule that the Administrator of the Office of Information and Regulatory Affairs determines is likely to impose— 

‘‘(A) an annual cost on the economy of $100,000,000 or more, adjusted annually for inflation; 

‘‘(B) a major increase in costs or prices for consumers, individual industries, Federal, State, local, or tribal government agencies, or geographic regions; 

‘‘(C) significant adverse effects on competition, employment, investment, 

productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export 

markets; or 

‘‘(D) significant impacts on multiple sectors of the economy; 

‘‘(16) ‘high-impact rule’ means any rule that the Administrator of the Office 

of Information and Regulatory Affairs determines is likely to impose an annual 

cost on the economy of $1,000,000,000 or more, adjusted annually for inflation; 

‘‘(17) ‘guidance’ means an agency statement of general applicability and future effect, other than a regulatory action, that sets forth a policy on a statutory, regulatory or technical issue or an interpretation of a statutory or regulatory issue; 

‘‘(18) ‘major guidance’ means guidance that the Administrator of the Office of 

Information and Regulatory Affairs finds is likely to lead to— 

‘‘(A) an annual cost on the economy of $100,000,000 or more, adjusted annually for inflation; 

‘‘(B) a major increase in costs or prices for consumers, individual industries, Federal, State, local or tribal government agencies, or geographic regions; 

‘‘(C) significant adverse effects on competition, employment, investment, 

productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export 

markets; or 

‘‘(D) significant impacts on multiple sectors of the economy; 

‘‘(19) the ‘Information Quality Act’ means section 515 of Public Law 106–554, 

the Treasury and General Government Appropriations Act for Fiscal Year 2001, 

and guidelines issued by the Administrator of the Office of Information and 

Regulatory Affairs or other agencies pursuant to the Act; and 

‘‘(20) the ‘Office of Information and Regulatory Affairs’ means the office established under section 3503 of chapter 35 of title 44 and any successor to that 

office.’’. 

SEC. 3. RULE MAKING. 

(a) Section 553(a) of title 5, United States Code, is amended by striking ‘‘(a) This 

section applies’’ and inserting ‘‘(a) APPLICABILITY.—This section applies’’. 

(b) Section 553 of title 5, United States Code, is amended by striking subsections 

(b) through (e) and inserting the following: 

‘‘(b) RULE MAKING CONSIDERATIONS.—In a rule making, an agency shall make all 

preliminary and final factual determinations based on evidence and consider, in addition to other applicable considerations, the following: 

‘‘(1) The legal authority under which a rule may be proposed, including 

whether a rule making is required by statute, and if so, whether by a specific 

date, or whether the agency has discretion to commence a rule making. 

‘‘(2) Other statutory considerations applicable to whether the agency can or 

should propose a rule or undertake other agency action. 

‘‘(3) The specific nature and significance of the problem the agency may address with a rule (including the degree and nature of risks the problem poses 

and the priority of addressing those risks compared to other matters or activimstockstill on DSK4VPTVN1PROD with HEARINGS

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ties within the agency’s jurisdiction), whether the problem warrants new agency 

action, and the countervailing risks that may be posed by alternatives for new 

agency action. 

‘‘(4) Whether existing rules have created or contributed to the problem the 

agency may address with a rule and whether those rules could be amended or 

rescinded to address the problem in whole or part. 

‘‘(5) Any reasonable alternatives for a new rule or other response identified 

by the agency or interested persons, including not only responses that mandate 

particular conduct or manners of compliance, but also— 

‘‘(A) the alternative of no Federal response; 

‘‘(B) amending or rescinding existing rules; 

‘‘(C) potential regional, State, local, or tribal regulatory action or other responses that could be taken in lieu of agency action; and 

‘‘(D) potential responses that— 

‘‘(i) specify performance objectives rather than conduct or manners of 

compliance; 

‘‘(ii) establish economic incentives to encourage desired behavior; 

‘‘(iii) provide information upon which choices can be made by the public; or 

‘‘(iv) incorporate other innovative alternatives rather than agency actions that specify conduct or manners of compliance. 

‘‘(6) Notwithstanding any other provision of law— 

‘‘(A) the potential costs and benefits associated with potential alternative 

rules and other responses considered under section 553(b)(5), including direct, indirect, and cumulative costs and benefits and estimated impacts on 

jobs, economic growth, innovation, and economic competitiveness; 

‘‘(B) means to increase the cost-effectiveness of any Federal response; and 

‘‘(C) incentives for innovation, consistency, predictability, lower costs of 

enforcement and compliance (to government entities, regulated entities, and 

the public), and flexibility. 

‘‘(c) ADVANCE NOTICE OF PROPOSED RULE MAKING FOR MAJOR RULES, HIGH-IMPACT RULES, AND RULES INVOLVING NOVEL LEGAL OR POLICY ISSUES.—In the case 

of a rule making for a major rule or high-impact rule or a rule that involves a novel 

legal or policy issue arising out of statutory mandates, not later than 90 days before 

a notice of proposed rule making is published in the Federal Register, an agency 

shall publish advance notice of proposed rule making in the Federal Register. In 

publishing such advance notice, the agency shall— 

‘‘(1) include a written statement identifying, at a minimum— 

‘‘(A) the nature and significance of the problem the agency may address 

with a rule, including data and other evidence and information on which 

the agency expects to rely for the proposed rule; 

‘‘(B) the legal authority under which a rule may be proposed, including 

whether a rule making is required by statute, and if so, whether by a specific date, or whether the agency has discretion to commence a rule making; 

‘‘(C) preliminary information available to the agency concerning the other 

considerations specified in subsection (b); and 

‘‘(D) in the case of a rule that involves a novel legal or policy issue arising 

out of statutory mandates, the nature of and potential reasons to adopt the 

novel legal or policy position upon which the agency may base a proposed 

rule; 

‘‘(2) solicit written data, views or argument from interested persons concerning the information and issues addressed in the advance notice; and 

‘‘(3) provide for a period of not fewer than 60 days for interested persons to 

submit such written data, views, or argument to the agency. 

‘‘(d) NOTICES OF PROPOSED RULE MAKING; DETERMINATIONS OF OTHER AGENCY

COURSE.—(1) Before it determines to propose a rule, and following completion of 

procedures under subsection (c), if applicable, the agency shall consult with the Administrator of the Office of Information and Regulatory Affairs. If the agency thereafter determines to propose a rule, the agency shall publish a notice of proposed rule 

making, which shall include— 

‘‘(A) a statement of the time, place, and nature of public rule making proceedings; 

‘‘(B) reference to the legal authority under which the rule is proposed; 

‘‘(C) the terms of the proposed rule; 

‘‘(D) a description of information known to the agency on the subject and 

issues of the proposed rule, including but not limited to— 

‘‘(i) a summary of information known to the agency concerning the considerations specified in subsection (b); 

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‘‘(ii) a summary of additional information the agency provided to and obtained from interested persons under subsection (c); 

‘‘(iii) a summary of any preliminary risk assessment or regulatory impact 

analysis performed by the agency; and 

‘‘(iv) information specifically identifying all data, studies, models, and 

other evidence or information considered or used by the agency in connection with its determination to propose the rule; 

‘‘(E)(i) a reasoned preliminary determination of need for the rule based on the 

information described under subparagraph (D); and 

‘‘(ii) an additional statement of whether a rule is required by statute; 

‘‘(F) a reasoned preliminary determination that the benefits of the proposed 

rule meet the relevant statutory objectives and justify the costs of the proposed 

rule (including all costs to be considered under subsection (b)(6)), based on the 

information described under subparagraph (D); 

‘‘(G) a discussion of— 

‘‘(i) the alternatives to the proposed rule, and other alternative responses, 

considered by the agency under subsection (b); 

‘‘(ii) the costs and benefits of those alternatives (including all costs to be 

considered under subsection (b)(6)); 

‘‘(iii) whether those alternatives meet relevant statutory objectives; and 

‘‘(iv) why the agency did not propose any of those alternatives; and 

‘‘(H)(i) a statement of whether existing rules have created or contributed to 

the problem the agency seeks to address with the proposed rule; and 

‘‘(ii) if so, whether or not the agency proposes to amend or rescind any such 

rules, and why. 

All information provided to or considered by the agency, and steps to obtain information by the agency, in connection with its determination to propose the 

rule, including any preliminary risk assessment or regulatory impact analysis 

prepared by the agency and all other information prepared or described by the 

agency under subparagraph (D) and, at the discretion of the President or the 

Administrator of the Office of Information and Regulatory Affairs, information 

provided by that Office in consultations with the agency, shall be placed in the 

docket for the proposed rule and made accessible to the public by electronic 

means and otherwise for the public’s use when the notice of proposed rule making is published. 

‘‘(2)(A) If the agency undertakes procedures under subsection (c) and determines 

thereafter not to propose a rule, the agency shall, following consultation with the 

Office of Information and Regulatory Affairs, publish a notice of determination of 

other agency course. A notice of determination of other agency course shall include 

information required by paragraph (1)(D) to be included in a notice of proposed rule 

making and a description of the alternative response the agency determined to 

adopt. 

‘‘(B) If in its determination of other agency course the agency makes a determination to amend or rescind an existing rule, the agency need not undertake additional 

proceedings under subsection (c) before it publishes a notice of proposed rule making 

to amend or rescind the existing rule. 

All information provided to or considered by the agency, and steps to obtain information by the agency, in connection with its determination of other agency course, 

including but not limited to any preliminary risk assessment or regulatory impact 

analysis prepared by the agency and all other information that would be required 

to be prepared or described by the agency under paragraph (1)(D) if the agency had 

determined to publish a notice of proposed rule making and, at the discretion of the 

President or the Administrator of the Office of Information and Regulatory Affairs, 

information provided by that Office in consultations with the agency, shall be placed 

in the docket for the determination and made accessible to the public by electronic 

means and otherwise for the public’s use when the notice of determination is published. 

‘‘(3) After notice of proposed rule making required by this section, the agency shall 

provide interested persons an opportunity to participate in the rule making through 

submission of written data, views, or arguments with or without opportunity for oral 

presentation, except that— 

‘‘(A) if a hearing is required under paragraph (4)(B) or subsection (e), opportunity for oral presentation shall be provided pursuant to that requirement; or 

‘‘(B) when other than under subsection (e) of this section rules are required 

by statute or at the discretion of the agency to be made on the record after opportunity for an agency hearing, sections 556 and 557 shall apply, and paragraph (4), the requirements of subsection (e) to receive comment outside of the 

procedures of sections 556 and 557, and the petition procedures of subsection 

(e)(6) shall not apply. 

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The agency shall provide not fewer than 60 days for interested persons to submit 

written data, views, or argument (or 120 days in the case of a proposed major or 

high-impact rule). 

‘‘(4)(A) Within 30 days of publication of notice of proposed rule making, a member 

of the public may petition for a hearing in accordance with section 556 to determine 

whether any evidence or other information upon which the agency bases the proposed rule fails to comply with the Information Quality Act. 

‘‘(B)(i) The agency may, upon review of the petition, determine without further 

process to exclude from the rule making the evidence or other information that is 

the subject of the petition and, if appropriate, withdraw the proposed rule. The 

agency shall promptly publish any such determination. 

‘‘(ii) If the agency does not resolve the petition under the procedures of clause (i), 

it shall grant any such petition that presents a prima facie case that evidence or 

other information upon which the agency bases the proposed rule fails to comply 

with the Information Quality Act, hold the requested hearing not later than 30 days 

after receipt of the petition, provide a reasonable opportunity for cross-examination 

at the hearing, and decide the issues presented by the petition not later than 60 

days after receipt of the petition. The agency may deny any petition that it determines does not present such a prima facie case. 

‘‘(C) There shall be no judicial review of the agency’s disposition of issues considered and decided or determined under subparagraph (B)(ii) until judicial review of 

the agency’s final action. There shall be no judicial review of an agency’s determination to withdraw a proposed rule under subparagraph (B)(i) on the basis of the petition. 

‘‘(D) Failure to petition for a hearing under this paragraph shall not preclude judicial review of any claim based on the Information Quality Act under chapter 7 of 

this title. 

‘‘(e) HEARINGS FOR HIGH-IMPACT RULES.—Following notice of a proposed rule making, receipt of comments on the proposed rule, and any hearing held under subsection (d)(4), and before adoption of any high-impact rule, the agency shall hold a 

hearing in accordance with sections 556 and 557, unless such hearing is waived by 

all participants in the rule making other than the agency. The agency shall provide 

a reasonable opportunity for cross-examination at such hearing. The hearing shall 

be limited to the following issues of fact, except that participants at the hearing 

other than the agency may waive determination of any such issue: 

‘‘(1) Whether the agency’s asserted factual predicate for the rule is supported 

by the evidence. 

‘‘(2) Whether there is an alternative to the proposed rule that would achieve 

the relevant statutory objectives at a lower cost (including all costs to be considered under subsection (b)(6)) than the proposed rule. 

‘‘(3) If there is more than one alternative to the proposed rule that would 

achieve the relevant statutory objectives at a lower cost than the proposed rule, 

which alternative would achieve the relevant statutory objectives at the lowest 

cost. 

‘‘(4) Whether, if the agency proposes to adopt a rule that is more costly than 

the least costly alternative that would achieve the relevant statutory objectives 

(including all costs to be considered under subsection (b)(6)), the additional benefits of the more costly rule exceed the additional costs of the more costly rule. 

‘‘(5) Whether the evidence and other information upon which the agency bases 

the proposed rule meets the requirements of the Information Quality Act. 

‘‘(6) Upon petition by an interested person who has participated in the rule 

making, other issues relevant to the rule making, unless the agency determines 

that consideration of the issues at the hearing would not advance consideration 

of the rule or would, in light of the nature of the need for agency action, unreasonably delay completion of the rule making. An agency shall grant or deny a 

petition under this paragraph within 30 days of its receipt of the petition. 

No later than 45 days before any hearing held under this subsection or sections 556 

and 557, the agency shall publish in the Federal Register a notice specifying the 

proposed rule to be considered at such hearing, the issues to be considered at the 

hearing, and the time and place for such hearing, except that such notice may be 

issued not later than 15 days before a hearing held under subsection (d)(4)(B). 

‘‘(f) FINAL RULES.—(1) The agency shall adopt a rule only following consultation 

with the Administrator of the Office of Information and Regulatory Affairs to facilitate compliance with applicable rule making requirements. 

‘‘(2) The agency shall adopt a rule only on the basis of the best reasonably obtainable scientific, technical, economic, and other evidence and information concerning 

the need for, consequences of, and alternatives to the rule. 

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‘‘(3)(A) Except as provided in subparagraph (B), the agency shall adopt the least 

costly rule considered during the rule making (including all costs to be considered 

under subsection (b)(6)) that meets relevant statutory objectives. 

‘‘(B) The agency may adopt a rule that is more costly than the least costly alternative that would achieve the relevant statutory objectives only if the additional 

benefits of the more costly rule justify its additional costs and only if the agency 

explains its reason for doing so based on interests of public health, safety or welfare 

that are clearly within the scope of the statutory provision authorizing the rule. 

‘‘(4) When it adopts a final rule, the agency shall publish a notice of final rule 

making. The notice shall include— 

‘‘(A) a concise, general statement of the rule’s basis and purpose; 

‘‘(B) the agency’s reasoned final determination of need for a rule to address 

the problem the agency seeks to address with the rule, including a statement 

of whether a rule is required by statute and a summary of any final risk assessment or regulatory impact analysis prepared by the agency; 

‘‘(C) the agency’s reasoned final determination that the benefits of the rule 

meet the relevant statutory objectives and justify the rule’s costs (including all 

costs to be considered under subsection (b)(6)); 

‘‘(D) the agency’s reasoned final determination not to adopt any of the alternatives to the proposed rule considered by the agency during the rule making, 

including— 

‘‘(i) the agency’s reasoned final determination that no alternative considered achieved the relevant statutory objectives with lower costs (including 

all costs to be considered under subsection (b)(6)) than the rule; or 

‘‘(ii) the agency’s reasoned determination that its adoption of a more costly rule complies with subsection (f)(3)(B); 

‘‘(E) the agency’s reasoned final determination— 

‘‘(i) that existing rules have not created or contributed to the problem the 

agency seeks to address with the rule; or 

‘‘(ii) that existing rules have created or contributed to the problem the 

agency seeks to address with the rule, and, if so— 

‘‘(I) why amendment or rescission of such existing rules is not alone 

sufficient to respond to the problem; and 

‘‘(II) whether and how the agency intends to amend or rescind the 

existing rule separate from adoption of the rule; 

‘‘(F) the agency’s reasoned final determination that the evidence and other information upon which the agency bases the rule complies with the Information 

Quality Act; and 

‘‘(G)(i) for any major rule or high-impact rule, the agency’s plan for review of 

the rule no less than every ten years to determine whether, based upon evidence, there remains a need for the rule, whether the rule is in fact achieving 

statutory objectives, whether the rule’s benefits continue to justify its costs, and 

whether the rule can be modified or rescinded to reduce costs while continuing 

to achieve statutory objectives. 

‘‘(ii) review of a rule under a plan required by clause (i) of this subparagraph 

shall take into account the factors and criteria set forth in subsections (b) 

through (f) of section 553 of this title. 

All information considered by the agency in connection with its adoption of the rule, 

and, at the discretion of the President or the Administrator of the Office of Information and Regulatory Affairs, information provided by that Office in consultations 

with the agency, shall be placed in the docket for the rule and made accessible to 

the public for the public’s use no later than when the rule is adopted. 

‘‘(g) EXCEPTIONS FROM NOTICE AND HEARING REQUIREMENTS.—(1) Except when 

notice or hearing is required by statute, the following do not apply to interpretive 

rules, general statements of policy, or rules of agency organization, procedure, or 

practice: 

‘‘(A) Subsections (c) through (e). 

‘‘(B) Paragraphs (1) through (3) of subsection (f). 

‘‘(C) Subparagraphs (B) through (H) of subsection (f)(4). 

‘‘(2)(A) When the agency for good cause, based upon evidence, finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) 

that compliance with subsection (c), (d), or (e) or requirements to render final determinations under subsection (f) of this section before the issuance of an interim rule 

is impracticable or contrary to the public interest, including interests of national security, such subsections or requirements to render final determinations shall not 

apply to the agency’s adoption of an interim rule. 

‘‘(B) If, following compliance with subparagraph (A) of this paragraph, the agency 

adopts an interim rule, it shall commence proceedings that comply fully with subsections (d) through (f) of this section immediately upon publication of the interim 

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rule, shall treat the publication of the interim rule as publication of a notice of proposed rule making and shall not be required to issue supplemental notice other than 

to complete full compliance with subsection (d). No less than 270 days from publication of the interim rule (or 18 months in the case of a major rule or high-impact 

rule), the agency shall complete rule making under subsections (d) through (f) of 

this subsection and take final action to adopt a final rule or rescind the interim rule. 

If the agency fails to take timely final action, the interim rule will cease to have 

the effect of law. 

‘‘(C) Other than in cases involving interests of national security, upon the agency’s 

publication of an interim rule without compliance with subsections (c), (d), or (e) or 

requirements to render final determinations under subsection (f) of this section, an 

interested party may seek immediate judicial review under chapter 7 of this title 

of the agency’s determination to adopt such interim rule. The record on such review 

shall include all documents and information considered by the agency and any additional information presented by a party that the court determines necessary to consider to assure justice. 

‘‘(3) When the agency for good cause finds (and incorporates the finding and a 

brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are unnecessary, including because agency rule making is undertaken 

only to correct a de minimis technical or clerical error in a previously issued rule 

or for other noncontroversial purposes, the agency may publish a rule without compliance with subsections (c), (d), (e), or (f)(1)-(3) and (f)(4)(B)-(F). If the agency receives significant adverse comment within 60 days after publication of the rule, it 

shall treat the notice of the rule as a notice of proposed rule making and complete 

rule making in compliance with subsections (d) and (f). 

‘‘(h) ADDITIONAL REQUIREMENTS FOR HEARINGS.—When a hearing is required 

under subsection (e) or is otherwise required by statute or at the agency’s discretion 

before adoption of a rule, the agency shall comply with the requirements of sections 

556 and 557 in addition to the requirements of subsection (f) in adopting the rule 

and in providing notice of the rule’s adoption. 

‘‘(i) DATE OF PUBLICATION OF RULE.—The required publication or service of a substantive final or interim rule shall be made not less than 30 days before the effective date of the rule, except— 

‘‘(1) a substantive rule which grants or recognizes an exemption or relieves 

a restriction; 

‘‘(2) interpretive rules and statements of policy; or 

‘‘(3) as otherwise provided by the agency for good cause found and published 

with the rule. 

‘‘(j) RIGHT TO PETITION.—Each agency shall give an interested person the right 

to petition for the issuance, amendment, or repeal of a rule. 

‘‘(k) RULE MAKING GUIDELINES.—(1)(A) The Administrator of the Office of Information and Regulatory Affairs shall establish guidelines for the assessment, including quantitative and qualitative assessment, of the costs and benefits of proposed 

and final rules and other economic issues or issues related to risk that are relevant 

to rule making under this title. The rigor of cost-benefit analysis required by such 

guidelines shall be commensurate, in the Administrator’s determination, with the 

economic impact of the rule. 

‘‘(B) To ensure that agencies use the best available techniques to quantify and 

evaluate anticipated present and future benefits, costs, other economic issues, and 

risks as accurately as possible, the Administrator of the Office of Information and 

Regulatory Affairs shall regularly update guidelines established under paragraph 

(1)(A) of this subsection. 

‘‘(2) The Administrator of the Office of Information and Regulatory Affairs shall 

also issue guidelines to promote coordination, simplification and harmonization of 

agency rules during the rule making process and otherwise. Such guidelines shall 

assure that each agency avoids regulations that are inconsistent or incompatible 

with, or duplicative of, its other regulations and those of other Federal agencies and 

drafts its regulations to be simple and easy to understand, with the goal of minimizing the potential for uncertainty and litigation arising from such uncertainty. 

‘‘(3) To ensure consistency in Federal rule making, the Administrator of the Office 

of Information and Regulatory Affairs shall— 

‘‘(A) issue guidelines and otherwise take action to ensure that rule makings 

conducted in whole or in part under procedures specified in provisions of law 

other than those of subchapter II of this title conform to the fullest extent allowed by law with the procedures set forth in section 553 of this title; and 

‘‘(B) issue guidelines for the conduct of hearings under subsections 553(d)(4) 

and 553(e) of this section, including to assure a reasonable opportunity for 

cross-examination. Each agency shall adopt regulations for the conduct of hearings consistent with the guidelines issued under this subparagraph. 

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‘‘(4) The Administrator of the Office of Information and Regulatory Affairs shall 

issue guidelines pursuant to the Information Quality Act to apply in rule making 

proceedings under sections 553, 556, and 557 of this title. In all cases, such guidelines, and the Administrator’s specific determinations regarding agency compliance 

with such guidelines, shall be entitled to judicial deference. 

‘‘(l) INCLUSION IN THE RECORD OF CERTAIN DOCUMENTS AND INFORMATION.—The 

agency shall include in the record for a rule making, and shall make available by 

electronic means and otherwise, all documents and information prepared or considered by the agency during the proceeding, including, at the discretion of the President or the Administrator of the Office of Information and Regulatory Affairs, documents and information communicated by that Office during consultation with the 

Agency. 

‘‘(m) MONETARY POLICY EXEMPTION.—Nothing in subsection (b)(6), subparagraphs 

(F) and (G) of subsection (d)(1), subsection (e), subsection (f)(3), and subparagraphs 

(C) and (D) of subsection (f)(5) shall apply to rule makings that concern monetary 

policy proposed or implemented by the Board of Governors of the Federal Reserve 

System or the Federal Open Market Committee.’’. 

SEC. 4. AGENCY GUIDANCE; PROCEDURES TO ISSUE MAJOR GUIDANCE; PRESIDENTIAL AUTHORITY TO ISSUE GUIDELINES FOR ISSUANCE OF GUIDANCE. 

(a) IN GENERAL.—Chapter 5 of title 5, United States Code, is amended by inserting after section 553 the following new section: 

‘‘§ 553a. Agency guidance; procedures to issue major guidance; authority to 

issue guidelines for issuance of guidance 

‘‘(a) Before issuing any major guidance, or guidance that involves a novel legal or 

policy issue arising out of statutory mandates, an agency shall— 

‘‘(1) make and document a reasoned determination that— 

‘‘(A) assures that such guidance is understandable and complies with relevant statutory objectives and regulatory provisions (including any statutory deadlines for agency action); 

‘‘(B) summarizes the evidence and data on which the agency will base the 

guidance; 

‘‘(C) identifies the costs and benefits (including all costs to be considered 

during a rule making under section 553(b) of this title) of conduct conforming to such guidance and assures that such benefits justify such costs; 

and 

‘‘(D) describes alternatives to such guidance and their costs and benefits 

(including all costs to be considered during a rule making under section 

553(b) of this title) and explains why the agency rejected those alternatives; 

and 

‘‘(2) confer with the Administrator of the Office of Information and Regulatory 

Affairs on the issuance of such guidance to assure that the guidance is reasonable, understandable, consistent with relevant statutory and regulatory provisions and requirements or practices of other agencies, does not produce costs 

that are unjustified by the guidance’s benefits, and is otherwise appropriate. 

Upon issuing major guidance, or guidance that involves a novel legal or policy issue 

arising out of statutory mandates, the agency shall publish the documentation required by subparagraph (1) by electronic means and otherwise. 

‘‘(b) Agency guidance— 

‘‘(1) is not legally binding and may not be relied upon by an agency as legal 

grounds for agency action; 

‘‘(2) shall state in a plain, prominent and permanent manner that it is not 

legally binding; and 

‘‘(3) shall, at the time it is issued or upon request, be made available by the 

issuing agency to interested persons and the public by electronic means and 

otherwise. 

Agencies shall avoid the issuance of guidance that is inconsistent or incompatible 

with, or duplicative of, the agency’s governing statutes or regulations, with the goal 

of minimizing the potential for uncertainty and litigation arising from such uncertainty. 

‘‘(c) The Administrator of the Office of Information and Regulatory Affairs shall 

have authority to issue guidelines for use by the agencies in the issuance of major 

guidance and other guidance. Such guidelines shall assure that each agency avoids 

issuing guidance documents that are inconsistent or incompatible with, or duplicative of, the law, its other regulations, or the regulations of other Federal agencies 

and drafts its guidance documents to be simple and easy to understand, with the 

goal of minimizing the potential for uncertainty and litigation arising from such uncertainty.’’. 

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(b) CLERICAL AMENDMENT.—The table of sections for chapter 5 of title 5, United 

States Code, is amended by inserting after the item relating to section 553 the following new item: 

‘‘553a. Agency guidance; procedures to issue major guidance; authority to issue guidelines for issuance of guidance.’ ’’’. 

SEC. 5. HEARINGS; PRESIDING EMPLOYEES; POWERS AND DUTIES; BURDEN OF PROOF; EVIDENCE; RECORD AS BASIS OF DECISION. 

Section 556 of title 5, United States Code, is amended by striking subsection (e) 

and inserting the following: 

‘‘(e)(1) The transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, constitutes the exclusive record for decision in accordance with section 557 and shall be made available to the parties and the public by 

electronic means and, upon payment of lawfully prescribed costs, otherwise. When 

an agency decision rests on official notice of a material fact not appearing in the 

evidence in the record, a party is entitled, on timely request, to an opportunity to 

show the contrary. 

‘‘(2) Notwithstanding paragraph (1) of this subsection, in a proceeding held under 

this section pursuant to section 553(d)(4) or 553(e), the record for decision shall also 

include any information that is part of the record of proceedings under section 553. 

‘‘(f) When an agency conducts rule making under this section and section 557 directly after concluding proceedings upon an advance notice of proposed rule making 

under section 553(c), the matters to be considered and determinations to be made 

shall include, among other relevant matters and determinations, the matters and 

determinations described in subsections (b) and (f) of section 553. 

‘‘(g) Upon receipt of a petition for a hearing under this section, the agency shall 

grant the petition in the case of any major rule, unless the agency reasonably determines that a hearing would not advance consideration of the rule or would, in light 

of the need for agency action, unreasonably delay completion of the rule making. 

The agency shall publish its decision to grant or deny the petition when it renders 

the decision, including an explanation of the grounds for decision. The information 

contained in the petition shall in all cases be included in the administrative record. 

This subsection shall not apply to rule makings that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or 

the Federal Open Market Committee.’’. 

SEC. 6. ACTIONS REVIEWABLE. 

Section 704 of title 5, United States Code, is amended— 

(1) by striking ‘‘Agency action made’’ and inserting ‘‘(a) Agency action made’’; 

and 

(2) by adding at the end the following: ‘‘Denial by an agency of a correction 

request or, where administrative appeal is provided for, denial of an appeal, 

under an administrative mechanism described in subsection (b)(2)(B) of the Information Quality Act, or the failure of an agency within 90 days to grant or 

deny such request or appeal, shall be final action for purposes of this section. 

‘‘(b) Other than in cases involving interests of national security, notwithstanding 

subsection (a) of this section, upon the agency’s publication of an interim rule without compliance with section 553(c), (d), or (e) or requirements to render final determinations under subsection (f) of section 553, an interested party may seek immediate judicial review under this chapter of the agency’s determination to adopt such 

rule on an interim basis. Review shall be limited to whether the agency abused its 

discretion to adopt the interim rule without compliance with section 553(c), (d), or 

(e) or without rendering final determinations under subsection (f) of section 553.’’. 

SEC. 7. SCOPE OF REVIEW. 

Section 706 of title 5, United States Code is amended— 

(1) by striking ‘‘To the extent necessary’’ and inserting ‘‘(a) To the extent necessary’’; 

(2) in paragraph (2)(A) of subsection (a) (as designated by paragraph (1) of 

this section), by inserting after ‘‘in accordance with law’’ the following: ‘‘(including the Information Quality Act)’’; and 

(3) by adding at the end the following: 

‘‘(b) The court shall not defer to the agency’s— 

‘‘(1) interpretation of an agency rule if the agency did not comply with the 

procedures of section 553 or sections 556-557 of chapter 5 of this title to issue 

the interpretation; 

‘‘(2) determination of the costs and benefits or other economic or risk assessment of the action, if the agency failed to conform to guidelines on such determinations and assessments established by the Administrator of the Office of Information and Regulatory Affairs under section 553(k); 

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1See Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs on Small Firms, SMALL BUSINESS ADMINISTRATION, 6 & 48 (Sept. 2010), available at http://www.sba.gov/sites/default/files/rs371tot.pdf (last accessed Nov. 18, 2011). 2 James Gattuso, Diane Katz & Stephen Keen, Red Tape Rising: Obama’s Torrent of New Regulation, HERITAGE FOUNDATION (Oct. 26, 2010), available at http://www.heritage.org/research/reports/2010/10/red-tape-rising-obamas-torrent-of-new-regulation (last accessed Nov. 18, 2011). 3 Crain & Crain, note 1 supra, at iv. 4T. Randolph Beard et al., Regulatory Expenditures, Economic Growth and Jobs: An Empirical Study, PHOENIX CENTER FOR ADVANCED LEGAL & ECONOMIC POLICY STUDIES, 5 (Apr. 2011), 

‘‘(3) determinations made in the adoption of an interim rule; or 

‘‘(4) guidance. 

‘‘(c) The court shall review agency denials of petitions under section 553(e)(6) or 

any other petition for a hearing under sections 556 and 557 for abuse of agency discretion.’’. 

SEC. 8. ADDED DEFINITION. 

Section 701(b) of title 5, United States Code, is amended— 

(1) in paragraph (1), by striking ‘‘and’’ at the end; 

(2) in paragraph (2), by striking the period at the end, and inserting ‘‘; and’’; 

and 

(3) by adding at the end the following: 

‘‘(3) ‘substantial evidence’ means such relevant evidence as a reasonable mind 

might accept as adequate to support a conclusion in light of the record considered as a whole, taking into account whatever in the record fairly detracts from 

the weight of the evidence relied upon by the agency to support its decision.’’. 

SEC. 9. EFFECTIVE DATE. 

The amendments made by this Act to— 

(1) sections 553, 556, and 704 of title 5, United States Code; 

(2) subsection (b) of section 701 of such title; 

(3) paragraphs (2) and (3) of section 706(b) of such title; and 

(4) subsection (c) of section 706 of such title; 

shall not apply to any rule makings pending or completed on the date of enactment 

of this Act. 

Purpose and Summary 

The Regulatory Accountability Act of 2011 (‘‘the Bill’’ or ‘‘the 

Act’’) will promote job creation and economic growth by requiring 

regulatory agencies to lower the costs of regulation while meeting 

statutory objectives; to improve agencies’ decision-making processes 

and enhance regulatory transparency and accountability; and to 

strengthen judicial review of agency action. 

Background and Need for the Legislation 

I. INTRODUCTION

On September 22, 2011, Representative Lamar Smith (R–TX) introduced H.R. 3010, with Representative Howard Coble (R–NC) 

and Representative Collin Peterson (D–MN) as original co-sponsors. The Act currently has 29 additional co-sponsors. 

Government regulation is a fact of American life in the 21st Century. It is also true that wasteful, excessive and unnecessary regulations undermine job creation and economic growth. A recent 

Small Business Administration study found that Federal regulations impose an annual cost on the American economy of $1.75 trillion dollars, which is equal to about 14% of the national income 1

and ‘‘nearly twice as much as all individual income taxes collected 

last year.’’ 2 ‘‘Had every U.S. household paid an equal share of the 

Federal regulatory burden, each would have owed $15,586 in 

2008.’’ 3 Another study found that ‘‘[e]ach million-dollar increase in 

the regulatory budget costs the economy 420 private sector jobs.’’ 4

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11 

available at http://www.phoenix-center.org/PolicyBulletin/PCPB28Final.pdf (last accessed Nov. 

18, 2011). 5 Bill Clinton, It’s Still the Economy, Stupid, NEWSWEEK, June 19, 2011, available at http:// 

www.thedailybeast.com/newsweek/2011/06/19/it-s-still-the-economy-stupid.html (last accessed 

Nov. 18, 2011). 6Pub. L. No. 111–148, 124 Stat. 119 (2010). ‘‘The health care law provides for the creation 

of nearly 160 boards, bureaus, bureaucracies, and commissions. . . . Overall, the Federal Government is expected to issue roughly 10,000 pages of new regulations to govern the implementation of the new law.’’ ObamaCare: A Budget-Busting, Job-Killing Health Care Law, Jan. 6, 2011, 

at 7–8, available at http://www.speaker.gov/UploadedFiles/ObamaCareReport .pdf (last accessed 

Nov. 18, 2011). 7Pub.L. No. 111–203, 124 Stat. 1376 (2010). ‘‘[T]he Dodd-Frank Act is the most farreaching 

financial regulatory undertaking since the 1930’s, authorizing or requiring agencies to enact 447 

new rules and complete 63 reports and 59 studies.’’ Michael J. Ryan, Jr., U.S. Capital Markets 

Competitiveness: The Unfinished Agenda, Summer 2011, at 3, available at https:// 

www.uschamber.com/sites/default/files/reports/1107lUnfinishedAgendalWEB.pdf (last accessed Nov. 18, 2011). 8See, e.g., Editorial, The Uncertainty Principle, WALL ST. J., July 14, 2010, available at http:// 

online.wsj.com/article/SB10001424052748704288204575363162664835780.html?KEYWORDS= 

rulemakings (last accessed Nov. 18, 2011); Jobs for America: an Open Letter to the President 

of the United States, the United States Congress, and the American People, CHAMBER OF COM- MERCE, (July 14, 2010), available at http://www.uschamber.com/sites/default/files/hill-letters/ 

100713ljobslopenletter.pdf (last accessed Nov. 18, 2011) (stating, e.g., that, substantially due to regulatory uncertainty, American corporations are sitting on well over $1 trillion that they 

could otherwise invest); Terry Miller & Kim R. Holmes, ‘‘Mostly Free’’—The Startling Decline 

of America’s Economic Freedom and What to Do About It, HERITAGE FOUNDATION (July 14, 

2010), available at http://thflmedia.s3.amazonaws.com/2010/pdf/sr0082.pdf (last accessed Nov. 

18, 2011); Terry Miller, The U.S. Loses Ground on Economic Freedom, WALL ST. J., Jan. 12, 

2011, available at http://online.wsj.com/article/SB1000142405274870377970457607419321 

4999486.html?utmlsource=Newsletter&utmlmedium=Email&utmlcampaign=Heritage%2B 

Hotsheet (last accessed Nov. 18, 2011); Heritage Foundation & Wall Street Journal, 2011 Index 

of Economic Freedom: Executive Highlights (Jan. 2011) at 6 (placing America as ninth in economic freedom among countries surveyed and recording a further decline in U.S. economic freedom). 

This burden, coupled with uncertainty over what additional Federal regulations may be imposed in the near term, have been cited 

as key factors holding back economic recovery and the creation of 

new jobs. For example, President Clinton recently recognized that 

over-regulation is inimical to job creation, by proposing that the 

Federal Government grant states waivers from environmental regulations for construction projects.5

The future threat of excessive Federal regulations—such as those 

intended to implement the Patient Protection and Affordable Care 

Act 6 and the Dodd-Frank Wall Street Reform and Consumer Protection Act 7—have created immense burdens and uncertainty for 

the economy—chilling job creation, investment and economic 

growth and suppressing America’s economic freedom and standing 

among the world’s economies.8 Nor does the regulatory deluge show 

any sign of slackening: 

President Obama’s December 2010 Unified Agenda of Regulatory and Deregulatory Activities does not presage a 

slow-down in activity. The Agenda lists 4,225 regulatory 

actions under development by Federal regulatory agencies. 

That is 182 more entries than the previous year, representing a 5-percent increase in activity. The regulatory 

road ahead looks even more ambitious when one focuses 

on the largest regulations. The Agenda reveals a twenty 

percent increase in economically significant regulations, or 

forty more regulations with impacts of over $100 million 

under development now than at this time last year. Of the 

224 economically significant rules listed in the 2010 Agenda, forty-eight appear there for the first time. There are 

100 more economically significant regulations listed in last 

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9Susan E. Dudley, Prospects for Regulatory Reform in 2011, 11 ENGAGE 7, 9–10 (2011). 10 James L. Gattuso, Obama’s Red Tape: Tsunami or Ripple?, HERITAGE FOUNDATION (Nov. 

8, 2011), available at http://www.heritage.org/Research/Reports/2011/11/Obamas-RegulationsRed-Tape-Tsunami-or-Ripple (last accessed Nov. 18, 2011). 11 H.R. 3010, the ‘‘Regulatory Accountability Act of 2011’’: Hearing Before the House Committee 

on the Judiciary, 112th Cong. (Oct. 25, 2011) (records on file with the Committee) (Testimony 

of Christopher DeMuth). 12 H. COMM. ON THE JUDICIARY, 109TH CONG., INTERIM REP. ON THE ADMINISTRATIVE LAW, PROCESS AND PROCEDURE PROJECT FOR THE 21ST CENTURY (Comm. Print 2010). 13 APA at 65: Is Reform Needed to Create Jobs, Promote Economic Growth, and Reduce Costs?: 

Hearing Before the House Committee on the Judiciary, Subcommittee on Courts, Commercial and 

Administrative Law, 112th Cong. (Feb. 28, 2011). 14Raising the Agencies’ Grades—Protecting the Economy, Assuring Regulatory Quality and Improving Assessments of Regulatory Need: Hearing Before the House Committee on the Judiciary, 

Subcommittee on Courts, Commercial and Administrative Law, 112th Cong. (Mar. 29, 2011). 

December’s Agenda than there were in 1995 (the first year 

for which electronic data are available).9

‘‘[T]hrough the end of March 2011, the Obama Administration 

added close to $40 billion in new costs to the economy, more than 

twice the Bush rate.’’ 10

The regulatory burden currently weighing down the American 

economy is largely caused by inadequate administrative law. The 

Administrative Procedure Act (‘‘APA’’), known as the ‘‘constitution’’ 

of agency rulemaking, imposes only a few light-handed constraints 

on most agency rulemaking proceedings. For example, the APA 

does not require an agency to consider the costs or benefits of a 

proposed regulation. 

The APA has not been updated in the 65 years since it was enacted on June 11, 1946. The American economy, however, has 

changed a great deal since the end of the Second World War. ‘‘Regulation has grown in scope and impact far beyond anything the 

framers of the APA (or for that matter the New Deal) could have 

anticipated. The APA has not kept up, and special-purpose administrative agencies have acquired an unsettling degree of power over 

our economy and society.’’ 11

In the 109th Congress, the Subcommittee on Commercial and 

Administrative Law documented a host of potential rulemaking reforms to modernize the APA.12 Continuing this effort, this year the 

Subcommittee on Courts, Commercial and Administrative Law held 

a series of four hearings to discuss how Congress could improve the 

APA to create jobs and promote economic growth by improving 

agencies’ decision-making processes and enhancing regulatory 

transparency and accountability. 

On February 28, 2011, the Subcommittee held a hearing entitled, 

‘‘The APA at 65: Is Reform Needed to Create Jobs, Promote Economic Growth and Reduce Costs?’’ 13 Witnesses at this hearing 

were Susan E. Dudley, director of George Washington University’s 

Regulatory Studies Center and former Administrator of the Office 

of Information and Regulatory Affairs (‘‘OIRA’’) (2007–09); Jeffrey 

A. Rosen, Esq., Kirkland & Ellis LLP and former general counsel 

to the Office of Management and Budget (‘‘OMB’’) (2006–09); and 

Professor Peter L. Strauss, Betts Professor of Law, Columbia University Law School. 

On March 29, 2011, the Subcommittee held a hearing entitled, 

‘‘Raising the Agencies’ Grades: Protecting the Economy, Assuring 

Regulatory Quality and Improving Assessments of Regulatory 

Need.’’ 14 At this hearing the Subcommittee heard testimony from 

Jerry Ellig, Ph.D., director of the Regulatory Report Card project 

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15 Cost-Justifying Regulations: Protecting Jobs and the Economy by Presidential and Judicial 

Review of Costs and Benefits: Hearing Before the House Committee on the Judiciary, Subcommittee on Courts, Commercial and Administrative Law, 112th Cong. (May 4, 2011). 16Formal Rulemaking and Judicial Review: Protecting Jobs and the Economy with Greater 

Regulatory Transparency and Accountability: Hearing Before the House Committee on the Judiciary, Subcommittee on Courts, Commercial and Administrative Law, 112th Cong. (May 31, 2011). 17 H.R. 3010, note 11 supra. 

at George Mason University’s Mercatus Center, and former deputy 

director and acting director of the Office of Policy Planning at the 

Federal Trade Commission; Richard A. Williams, Ph.D., Director of 

Policy Research at the Mercatus Center and former OMB and FDA 

regulatory development and review official; and Professor Robert L. 

Glicksman, J.B. and Maurice C. Shapiro Professor of Environmental Law at The George Washington University Law School. 

On May 4, 2011, the Subcommittee held a hearing entitled, 

‘‘Cost-Justifying Regulations: Protecting Jobs and the Economy by 

Presidential and Judicial Review of Costs and Benefits.’’ 15 Witnesses at this hearing were John D. Graham, Dean of Indiana University’s School of Public and Environmental Affairs and former 

OIRA Administrator (2001–06); Jeffrey R. Holmstead, Esq., 

Bracewell & Giuliani LLP and former Environmental Protection 

Agency Assistant Administrator for Air and Radiation (2001–05); 

Harold Furchtgott-Roth, Ph.D., former Commissioner, Federal 

Communications Commission (1997–2001); and Sally Katzen, Visiting Professor, New York University School of Law, Senior Advisor 

at the Podesta Group, and former OIRA Administrator (1993–98). 

On May 31, 2011, the Subcommittee held a hearing entitled, 

‘‘Formal Rulemaking and Judicial Review: Protecting Jobs and the 

Economy with Greater Regulatory Transparency and Accountability.’’ 16 The Subcommittee heard testimony from Noel J. Francisco, Esq., former White House Associate Counsel (2001–03), Deputy Assistant Attorney General for the Department of Justice’s Office of Legal Counsel (2003–05), and current member, Government 

Regulation Practice Group, Jones Day LLP; Edward W. Warren, 

Esq., Environmental Practice Group, Kirkland & Ellis LLP; and 

Professor Matthew Stephenson, Harvard Law School. 

Finally, on October 25, 2011, the Full Committee held a legislative hearing on the Bill.17 The Committee heard testimony from 

the Honorable C. Boyden Gray, Esq., Boyden Gray & Associates, 

former Counsel to the President (1989–93) and Ambassador to the 

European Union (2006–07); Arnold Baker, Chair of the National 

Black Chamber of Commerce and CEO of Baker Ready-Mix, a concrete supply company in New Orleans; the Honorable Christopher 

C. DeMuth, former OIRA Administrator (1981–84) and President of 

the American Enterprise Institute (1986–2008); and Professor Sidney Shapiro, University Distinguished Chair in Law, Wake Forest 

University School of Law. 

II. THE ADMINISTRATIVE PROCEDURE ACT: ORIGINAL INTENT AND

HISTORY OF PRACTICE

A. Early History of Rulemaking under the APA 

As originally conceived and practiced under the APA, the rulemaking process would begin when an agency proposed a rule under 

Section 553, 5 U.S.C., drawing upon any available sources of information or analysis, including expertise from business or consumer 

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18 5 U.S.C. § 553(c). The APA does not specify the length of the comment period. Presidential 

executive orders since the Carter Administration have suggested a period of not less than 60 

days ‘‘in order to afford the public a meaningful opportunity to comment on any proposed regulation.’’ See, e.g., Exec. Order No. 12866, 58 Fed. Reg. 51,735, § 6(a)(1) (Oct. 4, 1993). 19See, e.g., Pac. Coast European Conf. v. United States, 350 F.2d 197, 205 (9th Cir. 1965). 20See, e.g., NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 346–47 (1953) (order will be upheld 

unless it is attempting to achieve ends other than those set forth in statute); SEC v. Chenery 

Corp., 332 U.S. 194, 207 (1947) (order will be overturned only if it lacks ‘‘any rational and statutory foundation’’). 21See, e.g., SEC v. Chenery Corp., 318 U.S. 80, 93–94 (1943). 22See, e.g., Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168–69 (1962). 23See Nathaniel L. Nathanson, Probing the Mind of the Administrator: Hearing Variations 

and Standards of Judicial Review Under the Administrative Procedure Act and Other Federal 

Statutes, 75 COLUM. L. REV. 721, 755 (1975) (‘‘there is not the slightest indication that the purpose of the notice-and-comment proceeding was to develop a record by which a reviewing court 

could test the validity of the rule which the Administrator finally adopted.’’). 24See Martin Shapiro, On Predicting the Future of Administrative Law, 6 REGULATION 18, 19– 

20 (May/June 1982). 25 Nathanson, note 23 supra, at 755. 26See William F. Pederson, Jr., Formal Records and Informal Rulemaking, 85 YALE L.J. 38, 

62–65 (1975). 

representatives, academicians, or from the agency itself. The agency would then publish a Notice of Proposed Rulemaking (NPRM) in 

the Federal Register and open the matter to written comment for 

an unspecified period. During that time, any interested person 

could introduce into the record ‘‘data, views, or arguments’’ regarding the proposed rule.18 The agency had discretion to hold oral 

hearings or to take additional procedural steps to develop the rule. 

After considering the proposed rule in light of the comments, the 

agency could withdraw the proposal, publish a revision, or promulgate a final rule accompanied by a concise statement of basis and 

purpose explaining its action. In this original APA model, the final 

statement also could draw upon sources of information or arguments not previously raised or revealed.19

On review, a court would uphold the agency action if it found 

that the rule was within the scope of the agency’s authority and 

was not arbitrary and capricious. In other words, the court would 

uphold the rule if the agency could construct a plausible supporting 

hypothesis connected to the agency record. Agencies had no duty to 

consider all possible alternatives. They were expected to demonstrate that their policies were ‘‘rational’’ in a minimal sense.20

This standard of review gave agencies immense discretion and was 

mitigated only by the countervailing limitation that the supporting 

rationale had to be provided by the agency itself. A reviewing court 

would neither invent a hypothesis upon which the agency could 

have acted 21 nor accept inventions counsel might develop in the 

context of an appeal.22

During this era, no one thought the comments required by Section 553 were intended to constitute a complete record for decision 

either by the agency or by the reviewing court.23 Under the original APA model, the agency acted primarily on the basis of its expertise, using whatever internal processes and information it desired.24 Requiring comment simply gave the agency the opportunity 

to hear views of knowledgeable outsiders before exercising its own 

independent judgment; comments were regarded solely as ‘‘instruments for the education of the administrator.’’ 25 The agency was 

free, at the time of review, to support a rule with a ‘‘record’’ not 

based on the information available to various decision-makers during the rule’s formation.26 These post hoc rationalizations were acceptable, although courts at the time may have examined them 

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27See, e.g., FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 246–50 (1972). 28See James V. DeLong, Informal Rulemaking and the Integration of Law and Policy, 65 VA. L. REV. 257, 272 (1979). 29See ADMIN. PROCEDURE IN GOV’T AGENCIES, S. DOC. NO. 77–8, at 115–20 (1st Sess. 1941); 

Nathanson, note 23 supra, at 755–57; Colin S. Diver, Policymaking Paradigms in Administrative 

Law, 95 HARV. L. REV. 393, 405 (1981). 30Shapiro, note 24 supra, at 19. 31See James M. Landis, Report on Regulatory Agencies to the President Elect (Government 

Printing Office, 1960); American Bar Association, Commission to Study the FTC, Report of the 

ABA Commission to Study the Federal Trade Commission (Sept. 15, 1969); Roy L. Ash, A New 

Regulatory Framework: Report on Selected Independent Agencies (Government Printing Office, 

1971). 32See, e.g., Henry J. Friendly, The Federal Administrative Agencies: The Need for Better Definition of Standards, 75 HARV. L. REV. 1263 (1962); Samuel Estreicher, Pragmatic Justice: The 

Contributions of Judge Harold Leventhal to Administrative Law, 80 COLUM. L. REV. 894 (1980). 33See, e.g., KENNETH CULP DAVIS, DISCRETIONARY JUSTICE: A PRELIMINARY INQUIRY (Baton 

Rouge: Louisiana State Univ. Press ed., 1969); MURRAY EDELMAN, THE SYMBOLIC USES OF POLI- TICS 22–26 (Univ. of Illinois Press ed., 1964); Theodore J. LOWI, THE END OF LIBERALISM: THE

SECOND REPUBLIC OF THE UNITED STATES 92–126 (W. W. Norton & Co., Inc. ed., 2d ed. 1979). 34See, e.g., EDWARD F. COX, RICHARD C. FELLMETH & JOHN E. SCHULZ, THE NADER REPORT

ON THE FEDERAL TRADE COMMISSION (Grove Press ed., 1969); ROBERT C. FELLMETH, THE INTERSTATE COMMERCE OMISSION, THE PUBLIC INTEREST AND THE ICC; THE RALPH NADER STUDY

GROUP REPORT ON THE INTERSTATE COMMERCE COMMISSION AND TRANSPORTATION (Grossman 

ed., 1970). 

with skepticism.27 The agency could base its decision on expertise, 

unstated political considerations, or an inarticulable intuition.28 If 

questions of fact, rather than agency policy judgments, were determinative of the regulation’s validity, then an enforcement proceeding was deemed an adequate forum for review.29 In such proceedings, it was assumed the challenger could assail the rule as applied to his particular situation. Thus, under the original APA 

model, settlement of issues of policy and fact were not based on the 

rulemaking record. 

Professor Martin Shapiro has characterized the rule of the agencies and courts during this period and the reasons for this posture 

as follows: 

In the early 1930’s the New Deal created a government 

based on concentrating power in the hands of technically 

expert administrative agencies. By the early 1940’s administrative law had been well shaped to express this theory. 

The new judges enunciated a theory of review that was a 

restatement of Progressive political theory. Power must be 

concentrated to be effective; and it must be wielded by experts in order to achieve rational results. Thus judges, who 

were not technically expert, must defer to the agencies, 

who were. The central doctrines of the administrative law 

of the 1940’s were the twin presumptions that agencies 

had correctly found the facts and had correctly found the 

law. Given such presumptions, there was nothing for the 

judges to do. They effectively transferred their power over 

regulation to the agencies at the same time they gave constitutional approval to the delegation of congressional regulatory power to the same agencies. Voila` technocracy— 

rule by expert agencies.30

B. Developments since the 1960’s 

Criticism of the original rulemaking model had begun to swell by 

the 1960’s. Presidential commissions,31 jurists,32 academicians,33

and ‘‘public interest advocates’’ 34 all expressed skepticism about 

both the substance and form of government decision-making. This 

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35See, e.g., Richard B. Stewart, The Reformation of American Administrative Law, 88 HARV. 

L. REV. 1667 (1975); Paul R. Verkuil, The Emerging Concept of Administrative Procedure, 78 

COLUM. L. REV. 258 (1978); DeLong, note 28 supra. 36See In re Permian Basin Area Rate Cases, 390 U.S. 747 (1968); Fed. Power Comm’n v. Texaco, Inc., 377 U.S. 33 (1964); Nat’l Petroleum Refiners Ass’n v. FTC, 482 F.2d 672 (D.C. Cir. 

1973). 37See, e.g., Consumer Product Safety Act, 15 U.S.C. § 2051. 38See RICHARD B. STEWART & JAMES E. KRIER, ENVIRONMENTAL LAW AND POLICY 371–73 

(Bobbs-Merrill ed., 2d ed. 1978). 39See, e.g., Soglin v. Kauffman, 418 F.2d 163, 168 (7th Cir. 1969); Holmes v. N.Y. Housing 

Auth., 398 F.2d 262, 264–65 (2d Cir. 1968); Hornsby v. Allen, 326 F.2d 605, 609–10 (5th Cir. 

1964). 40See, e.g., Morton v. Ruiz, 415 U.S. 199, 231–36 (1974). 41See Bokat v. Sureck, 637 F.2d 1315, 1317 (9th Cir. 1981). 42 Cf. United States v. Fla. E. Coast Ry. Co., 410 U.S. 224 (1973). 43See, e.g., Auto. Parts & Accessories Ass’n v. Boyd, 407 F.2d 330 (D.C. Cir. 1968); Am. Airlines v. Civil Aeronautics Bd., 359 F. 2d 624 (D.C. Cir. 1966); Mobil Oil Corp. v. Fed. Power 

Comm’n, 483 F.2d 1238 (D.C. Cir. 1973). 44See, e.g., Barlow v. Collins, 397 U.S. 159 (1970); Ass’n of Data Processing Serv. Orgs. Inc., 

v. Camp, 397 U.S. 150 (1970) (standing); Gardner v. Toilet Goods Ass’n, 387 U.S. 167 (1967); 

Abbott Labs. v. Gardner, 387 U.S. 136 (1967) (ripeness); see generally Ralph F. Fuchs, Prerequisites to Judicial Review of Administrative Agency Action, 51 IND. L.J. 817 (1976). 

ernment, in terms of both its power and resources. The product of 

many agencies’ deliberations, these critics argued, was not a flexible policy, but no policy at all and which in some instances resulted 

in favoritism or uncertainty. The proliferation of the government’s 

reach also raised questions regarding the continued validity of the 

notion of the ‘‘expert’’ administrator. 

The cumulative effect of these criticisms was essentially an overhaul of the structure of administrative regulation. Led by the 

courts, beginning in the mid-1960’s and accelerating rapidly during 

the early years of the 1970’s, a new consensus about agency policymaking emerged.35 The key doctrinal shift was enhanced emphasis 

on rulemaking as a method of formulating policy. Doubts about 

some agencies’ legal authority to issue binding rules were erased 

by a series of judicial decisions.36 Congress joined in this trend by 

granting broad rulemaking power in new regulatory statutes 37 and 

by increasingly resorting to ‘‘action-forcing’’ techniques to compel 

prospective adoption of policies.38 Courts invoked a variety of legal 

grounds—due process,39 organic statutes and internal agency procedures,40 or abuse of discretion 41—for finding an obligation to proceed by rulemaking. Informal rulemaking became the presumptive 

and judicially preferred mode of policymaking procedure.42

The courts not only demanded greater use of rulemaking for policymaking, but also radically transformed the ways in which agencies make rules and courts review them. Led by the U.S. Court of 

Appeals for the District of Columbia Circuit,43 creative judicial interpretation of the APA and of the agencies’ organic statutes made 

rulemaking more accessible. First, the courts lowered barriers for 

public access to agencies and to courts by relaxing standing, ripeness, and exhaustion rules.44 Those rules originally had been designed to exclude from the rulemaking process everyone except 

those few individuals who had suffered direct legal injury by government action. Now, any interest group can gain access to the decision-making process of government by asserting a small or indirect potential injury. 

Next, courts attempted to ensure more meaningful access by judicial construction of Section 553’s spare and cryptic notice and 

comment requirements. The courts now required a rulemaking 

record which had to contain the material on which the agency 

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45 United States v. Nova Scotia Food Prod. Corp., 568 F.2d 240, 251–52 (2d Cir. 1977); Indus. 

Union Dept. v. Hodgson, 499 F.2d 267, 475–76, 488 (D.C. Cir. 1974); Portland Cement Assoc. 

v. Ruckelshaus, 486 F.2d 375, 393 n.67 (D.C. Cir. 1973). See generally William F. Pederson, Jr., 

Formal Records and Informal Rulemaking, 85 YALE L.J. 38 (1975). 46 U.S. Lines, Inc. v. Fed. Mar. Comm’n, 584 F.2d 519, 526 (D.C. Cir. 1978); Sangamon Valley 

TV Corp. v. United States, 269 F.2d 221, 224 (D.C. Cir. 1959). But cf. Action for Children’s Television v. FCC, 564 F.2d 458, 477–78 (D.C. Cir. 1977). 47Portland Cement, 486 F.2d at 392–94, 402; Home Box Office, Inc. v. FCC, 567 F.2d 9, 54– 

55 (D.C. Cir. 1977); Nova Scotia Food, 568 F.2d at 252; Int’l Harvester Co. v. Ruckelshaus, 478 

F.2d 615, 631–32 (D.C. Cir. 1973). 48 U.S. Lines, Inc. v. Fed. Mar. Comm’n, 584 F.2d 519, 533–36, 541–42 (D.C. Cir. 1978); Envtl. 

Def. Fund, Inc. v. Blum, 458 F. Supp. 650, 658–60 (D.D.C. 1978). 49See Home Box Office, 567 F.2d at 35–36; Mobil Oil Corp. v. Fed. Power Comm’n, 483 F.2d 

1238, 1259–60 (D. C. Cir. 1973). 50See, e.g., Bunker Hill Co. v. E.P.A., 572 F.2d 1286, 1305 n.41 (9th Cir. 1977). In Vermont 

Yankee Nuclear Power Corp v. Natural Resources Defense Council, 435 U.S. 519 (1978), the Supreme Court precluded the invalidation of rules solely because an agency failed to use specific 

procedures not required by section 553. The decision, however, did not overturn all the law of 

informal rulemaking that had been developed by the lower courts, and did not affect continuing 

strict scrutiny of agency adherence to the procedural requirements in the APA or in agency regulations and the obligation of agencies to engage in ‘‘reasoned decisionmaking,’’ which was to 

include the consideration of alternatives. See Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm 

Mut. Auto. Ins. Co., 463 U.S. 29 (1983). 51 Natural Res. Def. Council v. U.S. Nuclear Regulatory Comm’n, 547 F.2d 633, 658 n.3 (D.C. 

Cir. 1976) (Tamm, J., concurring) (quoting J. Skelly Wright, The Courts and the Rulemaking 

Process: The Limits of Judicial Review, 59 CORNELL L. REV. 375, 381 (1974)), rev’d sub nom., 

Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council, 435 U.S. 519 (1978). The 

Supreme Court specifically approved Judge Tamm’s characterization of the role of the reviewing 

court. 52 Auto. Parts, 407 F.2d at 338; Nova Scotia Food, 568 F.2d at 252–53. 

based its decision.45 Even if the record as it stood would support 

the agency decision, the court could find an abuse of discretion if 

other, unrevealed sources affected the rulemaking process.46 The 

courts also required agencies to place the relevant materials, particularly those of a complicated or technical nature, on the record 

at a time and in a form that would allow other parties an opportunity to evaluate them.47 Last-minute additions to the record were 

insufficient because they deprived participants of the opportunity 

to respond.48 Interested parties had to have the opportunity to test 

the bases of the agency’s position—factual, technical, analytical or 

theoretical.49 Although the timely entry of material into the record 

would suffice in most cases, some decisions stated that an agency 

should allow cross-examination or a specific opportunity for rebuttal if such procedures are the best method of illuminating issues.50

Finally, the courts developed a series of requirements on the 

agency’s final statement of basis and purpose: 

The ‘‘concise and general statement’’ required by section 

553 must be sufficiently complete and detailed to enable 

the court to accomplish its reviewing function, assuring 

itself that the agency has engaged in reasoned decisionmaking, has given serious thought to alternative rulings, 

and has provided reasoned explanations for controversial 

normative and empirical determinations. In short, ‘‘the reviewing court must satisfy itself that the requisite dialogue 

occurred and that it was not a sham.’’ 51

Thus, the agency’s statement must identify the major issues in the 

proceeding; explain the agency’s reasoning on those issues; and establish that the agency has indeed identified and taken a hard look 

at all the relevant factors.52 For important conclusions, the statement must point to specific materials in the record. Vague allumstockstill on DSK4VPTVN1PROD with HEARINGS

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53 U.S. Lines, 584 F.2d at 533–35. 54Office of Commc’n of United Church of Christ v. FCC, 560 F.2d 529, 532–33 (2d Cir. 1977). 55Motor Vehicle Mfrs., 463 U.S. at 43. 56This requirement was formally established through an October 1971 memorandum from 

then-OMB Director George Schultz. According to some observers, the requirements were routinely imposed only on the EPA. 57 Exec. Order No. 11,821, Inflation Impact Statements, 39 Fed. Reg. 41501 (Nov. 29, 1974). 

The order also required such statements for agency-proposed major legislation. 

sions to material on file or to the agency’s general expertise will 

not suffice.53

Courts also have held that, when preparing the final statement, 

agencies must answer cogent comments in terms of the particular 

record.54 A significant part of the statement’s function is seen as 

responding to public comments and explaining how the agency resolved the problems raised. The obligation to respond to serious objections may even extend to criticisms that might have been made, 

but were not. The agency itself may have to refute serious arguments against its positions or contentions.55

The rulemaking revolution of the 1970’s is now the status quo. 

In essence, courts now seek to ensure that agencies listen and respond to citizen comments by reading the APA’s ‘‘concise and general statement’’ language as a requirement that they conduct a dialogue with the public, and that the agency’s statement contains responses to the comments received. The hope is that if the agency 

must respond to public comments, it actually will listen to the public. Thus, courts have attempted to force agencies to grant real access to the public by demanding that they respond in detail to what 

the public has said to it. Nevertheless, and as the Subcommittee’s 

hearings revealed, it remains energetically disputed whether the 

administrative rulemaking process is fully responsive to the public 

and to the information put before the agencies. 

III. DEVELOPMENTS IN EXECUTIVE BRANCH PRACTICE: THE ADVENT OF

PRESIDENTIAL REVIEW AND COST-BENEFIT ANALYSIS

Since the early 1970’s, presidents of both parties have required 

agencies to evaluate the costs and benefits of proposed regulations. 

But the breadth and depth of these cost-benefit analysis requirements for Executive Branch agencies have waxed and waned over 

the course of eight presidential administrations. 

A. Nixon and Ford Administrations 

In 1971, President Nixon established a ‘‘Quality of Life Review’’ 

program in which executive departments and independent agencies 

submitted all ‘‘significant’’ draft proposed and final rules pertaining 

to ‘‘environment quality, consumer protection, and occupational and 

public health and safety’’ to OMB.56 In their submissions, agencies 

were required to provide a summary of their proposals, including 

their principal objectives, the alternatives that they considered, 

and a comparison of the expected benefits and costs of those alternatives. 

In 1974, President Ford issued Executive Order 11821, requiring 

agencies to prepare an ‘‘inflation impact statement’’ for each 

‘‘major’’ proposed rule and directing OMB to identify major rules 

that may have a significant impact on inflation.57 Executive Order 

11821 specified that OMB must consider costs, effects on producmstockstill on DSK4VPTVN1PROD with HEARINGS

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58 Id. § 3. 59 Exec. Order No. 12,044, Improving Government Regulations, 43 Fed. Reg. 12661 (Mar. 23, 

1978). 60 Id. § 3(b). 61 Id. § 5(c). 62 Exec. Order No. 12,291, Federal Regulation, 46 Fed. Reg. 13193 (Feb. 17, 1981). See generally Erik D. Olson, The Quiet Shift of Power: Office of Management & Budget Supervision of 

Environmental Protection Agency Rulemaking Under Executive Order 12,291, 4 VA. J. NAT. RESOURCES L. 1 (1984) (describing effect of this Order). 63 Exec. Order No. 12,291, § 2. 64 Id. § 3. 

tivity, effects on competition, and effects on supplies of important 

products and services.58

B. Carter Administration 

President Carter’s Executive Order 12044 required agencies to 

publish semiannual agendas of any significant rules under development or review, and to prepare a regulatory analysis for all rules 

with at least a $100 million impact on the economy.59 The analysis 

was to contain a succinct statement of the problem, a description 

of the alternative approaches considered, and the ‘‘economic consequences’’ of those alternatives.60 OMB was instructed to ‘‘assure 

the effective implementation of this Order,’’ but was not given specific review responsibilities.61

C. Reagan and George H.W. Bush Administrations 

Shortly after taking office, President Reagan issued the most detailed Executive Order up to that time regarding cost-benefit analysis. Executive Order 12291 greatly increased the scope and importance of presidential review of Federal regulations.62 Administratively, President Reagan consolidated new regulatory review authority in the OMB’s Office of Information and Regulatory Affairs 

(‘‘OIRA’’). Substantively, the Executive Order required Cabinet departments (but not independent regulatory agencies) to: 

• Refrain from taking regulatory action ‘‘unless the potential 

benefits to society for the regulation outweigh the potential 

costs to society,’’ identify regulatory objectives to maximize 

net benefits to society, and select the regulatory alternative 

that involves the least net cost to society;63

• Prepare a ‘‘regulatory impact analysis’’ for each ‘‘major’’ rule, 

defined as any regulation likely to result in (among other 

things) an annual effect on the economy of $100 million. 

Those analyses were required to describe the potential benefits and costs of the rule, alternative approaches that could 

achieve the regulatory goal at lower cost (and why they were 

not selected), and the rule’s net benefits. The issuing agency 

was to make the initial determination of whether a rule was 

‘‘major,’’ but the Executive Order gave OMB the authority to 

require a rule to be considered ‘‘major’’;64 and 

• Send a copy of each draft proposed and final rule to OMB 

before publication in the Federal Register. The Order authorized OMB to review ‘‘any preliminary or final regulatory impact analysis, notice of proposed rulemaking, or final rule 

based on the requirements of this Order.’’ Non-major rules 

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65 Id. § 3(c). 66 Exec. Order No. 12,498, Regulatory Planning Process, 50 Fed. Reg. 1036 (Jan. 4, 1985). 67 Exec. Order No. 12,866, Regulatory Planning and Review, 58 Fed. Reg. 51735 (Sept. 30, 

1993). 68 Id. § 1(a). 69 Id. 70 Id. §§ 1(b)(1), (4), (6) & (11). 

had to be submitted to OMB 10 days before publication, but 

major rules had to be submitted up to 60 days in advance.65

In 1985, President Reagan consolidated in OIRA the White 

House’s review of agencies’ regulatory development agendas.66 The 

basic regulatory framework developed by the Reagan Administration was continued through the George H.W. Bush Administration. 

D. Clinton Administration 

In September 1993, President Clinton replaced Executive Order 

12291 with Executive Order 12866, which is still in effect today.67

This executive order carried forward the coordinated planning process for Federal agencies’ development and promulgation of regulations; required yearly planning of regulatory proposals; mandated 

coordination of proposals with OMB and among agencies; required 

reviews to assure that proposed regulations were necessary and 

cost-beneficial; and, called for the naming of Regulatory Policy Officers who would report to agency heads and carry out hands-on 

oversight throughout the regulatory process. 

Specifically regarding cost-benefit analysis, in its statement of 

regulatory philosophy Executive Order 12866 directs agencies to 

assess all costs and benefits of available regulatory alternatives, including both quantitative and qualitative measures.68 It also provides that agencies should select regulatory approaches that maximize net benefits (unless a statute requires another approach).69

When permissible and applicable, the Order states that agencies 

should adhere to a set of principles when developing rules, including, for example: 

• Identify the problem, such as the failures of private markets 

or public institutions, and its significance, that warrants new 

regulations; 

• Consider the degree and nature of risk when setting regulatory priorities; 

• Adopt regulations only upon a ‘‘reasoned determination that 

the benefits of the intended regulation justify its costs’’ while 

‘‘recognizing that some costs and benefits are difficult to 

quantify’’; 

• Tailor regulations to impose the least burden on society 

needed to achieve regulatory objectives; and, 

• Base regulatory decisions on the ‘‘best reasonably obtainable’’ data.70

Executive Order 12866 limits OIRA reviews to actions identified 

by the rulemaking agency or OIRA as ‘‘significant’’ regulatory actions, which are defined as: 

[A]ny regulatory action that is likely to result in a rule 

that may (1) Have an annual effect on the economy of $100 

million or more or adversely affect in a material way the 

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71 Id. § 3(f). 72 United States General Accounting Office, Rulemaking: OMB’s Role in Reviews of Agencies’ 

Draft Rules and the Transparency of Those Reviews, GAO 03–929, at 24 (Sept. 2003), available at http://www.gao.gov/new.items/d03929.pdf (last accessed Nov. 18, 2011). 

73 Exec. Order No. 13,258, Amending Executive Order 12866 on Regulatory Planning and Review, 67 Fed. Reg. 9385 (Feb. 26, 2002). 74 Exec. Order No. 13,422, Further Amendment to Executive Order 12866 on Regulatory Planning and Review, 72 Fed. Reg. 2763 (Jan. 18, 2007). 75See id. § 4(c). 76See id. § 5(b). 77 Amending Executive Order 12866: Good Governance or Regulatory Usurpation?: Hearing Before the H. Comm. on the Judiciary, Subcomm. on Commercial and Administrative Law, 110th 

Cong., at 41 (Feb. 13, 2007). 78 Id. 

economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or 

State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an 

action taken or planned by another agency; (3) Materially 

alter the budgetary impact of entitlements, grants, user 

fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues 

arising out of legal mandates, the President’s priorities, or 

the principles set forth in this Executive order.71

By focusing OIRA review on significant rules, the number of draft 

proposed and final rules that OIRA reviewed fell from between 

2,000 and 3,000 per year under Executive Order 12291 to between 

500 and about 700 rules per year under Executive Order 12866.72

E. George W. Bush Administration 

In his first term, President George W. Bush left Executive Order 

12866 largely in place, except for some minor administrative revisions mainly designed to remove the Vice President from the regulatory review process.73 In 2007, however, President Bush expanded its scope by bringing major agency guidance documents 

within the OIRA review process.74 President Bush also required 

agencies to calculate a best estimate of the cumulative costs and 

benefits associated with all of the regulations planned for a given 

year, whereas Executive Order 12866 had only required regulationby-regulation cost-benefit analysis.75

Additionally, Executive Order 13422 required that Regulatory 

Policy Officers be drawn from the ranks of the Presidential appointees.76 This was controversial: Democrats and various interest 

groups accused President Bush of unduly politicizing the regulatory 

process, instituting hurdles in the way of agency efforts to protect 

public health, safety and welfare, and shifting authority to the 

President at the expense of the agencies and Congress. Steven 

Aitken, then-Acting Administrator of OIRA, responded in testimony 

to Congress that this aspect of the Executive Order would have little practical effect, because ‘‘the fact is that, in many departments 

and major agencies, the Regulatory Policy Officer has been a Presidential appointee.’’ 77 Acting Administrator Aitken further clarified 

‘‘that the term ‘Presidential appointee’ should not be confused with 

‘political appointee.’’’ 78

F. Obama Administration 

Promptly upon taking office, President Obama revoked Executive 

Order 13422, thus restoring Executive Order 12866 from the Clinmstockstill on DSK4VPTVN1PROD with HEARINGS

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79 Exec. Order No. 13,497, Revocation of Certain Executive Orders Concerning Regulatory 

Planning and Review, 74 Fed. Reg. 6113 (Jan. 30, 2009). 80 Exec. Order No. 13,563, Improving Regulation and Regulatory Review, 76 Fed. Reg. 3821 

(Jan. 18, 2011). 81 Id. § 1(a). 82 Id. § 1(b). 

ton Administration as the core charter for presidential review of 

rulemaking.79 In January 2011, President Obama issued Executive 

Order 13563, reaffirming Executive Order 12866’s principles while 

adding a number of additional provisions.80 Executive Order 13563 

states, ‘‘Our regulatory system . . . must take into account benefits 

and costs, both quantitative and qualitative.’’ 81 Specifically regarding cost-benefit analysis, it purports to ‘‘supplement’’ and ‘‘reaffirm’’ 

Executive Order 12866: 

[E]ach agency must, among other things: (1) propose or 

adopt a regulation only upon a reasoned determination 

that its benefits justify its costs (recognizing that some 

benefits and costs are difficult to quantify); (2) tailor its 

regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, 

the costs of cumulative regulations; (3) select, in choosing 

among alternative regulatory approaches, those approaches that maximize net benefits (including potential 

economic, environmental, public health and safety, and 

other advantages; distributive impacts; and equity); (4) to 

the extent feasible, specify performance objectives, rather 

than specifying the behavior or manner of compliance that 

regulated entities must adopt; and (5) identify and assess 

available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing 

information upon which choices can be made by the public.82

IV. SUGGESTIONS TO UPDATE AND IMPROVE THE APA

During this first Session of the 112th Congress, the Subcommittee on Courts, Commercial and Administrative Law held 

four hearings regarding the need for APA reform and received testimony from thirteen witnesses: administrative law scholars and 

practitioners alike, many of whose testimony was informed by 

years of public service in regulatory and Executive Branch agencies. The Full Committee also heard testimony about the Act itself 

from four distinguished witnesses. The witnesses’ suggestions to reform the APA can be organized broadly under three categories: 

helping agencies make better regulations; enhancing the accountability of regulatory agencies; and, increasing the transparency of 

the regulatory process. These suggestions are discussed below. 

A. Helping Agencies Make Better Regulations 

i. Codifying established rulemaking principles from the Executive Orders 

‘‘Whereas Congress has never amended the APA in a material 

way, the Executive Branch has frequently created its own requiremstockstill on DSK4VPTVN1PROD with HEARINGS

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83 APA at 65, note 13 supra, at 31 (Testimony of Jeffrey Rosen). 84See Exec. Order No. 12,866, § 10 (‘‘Judicial Review. Nothing in this Executive order shall 

affect any otherwise available judicial review of agency action. This Executive order is intended 

only to improve the internal management of the Federal Government and does not create any 

right or benefit, substantive or procedural, enforceable at law or equity by a party against the 

United States, its agencies or instrumentalities, its officers or employees, or any other person.’’); 

see also Air Transp. Ass’n of Am. v. FAA, 169 F.3d 1, 8 (D.C. Cir. 1999) (Executive Order 12893, 

‘‘which requires a ‘systematic analysis of expected benefits and costs’ . . . for infrastructure investments of Federal agencies,’’ also ‘‘provides that it is ‘intended only to improve the internal 

management of the executive branch and does not create any right . . . enforceable against the 

United States,’’’ and so ‘‘is not subject to judicial review’’); Michigan v. Thomas, 805 F.2d 176, 

187 (6th Cir. 1986) (this language evinces ‘‘clear and unequivocal intent that agency compliance 

with Executive Order 12,291 not be subject to judicial review’’); Alliance for Natural Health U.S. 

v. Sebelius, 775 F. Supp. 2d 114, 135 n.10 (D.D.C. 2011) (agency compliance with Executive 

Order 12866 is not subject to judicial review); Idaho Mining Ass’n v. Browner, 90 F. Supp. 2d 

1078, 1102 (D. Idaho 2000) (same); Trawler Diane Marie, Inc. v. Brown, 918 F. Supp. 921, 932 

(E.D.N.C. 1995) (same), aff’d sub. nom. Trawler Diane Marie, Inc. v. Kantor, 91 F.3d 134 (4th 

Cir. 1996); Louisiana ex rel. Guste v. Verity, 681 F. Supp. 1178, 1181–82 (E.D. La. 1988) (‘‘this 

Court may not review the agency’s compliance with’’ Executive Order 12291), aff’d, 850 F.2d 211 

(5th Cir. 1988); Ishtyaq v. Nelson, 627 F. Supp. 13, 24 (E.D.N.Y. 1983) (same). 85Raising the Agencies’ Grades, note 14 supra, at 20 (Testimony of Jerry Ellig). 86 Id. at 21. 87 Id. at 23 (‘‘One of the major areas where regulatory analysis is weakest is identification 

of the systemic problem the regulation is supposed to solve.’’). 88 Id. at 21 (‘‘All too often, agency economists have to conduct regulatory analysis after most 

major decisions about 

regulations have already been made. The analysis then becomes an advocacy document written to justify 

the agency’s decisions, or a mere paperwork exercise to fulfill requirements imposed by the 

Office of 

Management and Budget.’’). 

ments for how Federal agencies ought to function, and established 

a variety of principles, requirements, coordination mechanisms, 

and the like . . . .’’ 83 Over the last 30 years, presidents from both 

parties have issued executive orders that require regulatory agencies to take steps in addition to those required by the APA. Executive Orders 12291, 12866, 13422 and 13563 all required regulatory 

agencies in the Executive Branch to conduct regulatory impact 

analyses, including cost-benefit analysis requirements, and to coordinate rulemaking with OIRA. Other requirements of the orders 

include consideration of reasonable alternatives to proposed rules, 

identification of the least burdensome alternative, and consideration of whether it would be more appropriate to defer to State and 

local authorities than to issue a Federal rule. 

Enforcing the requirements of these executive orders, however, 

has been up to White House discretion, not to the courts; an agency’s compliance is not judicially reviewable by any court.84 As a result, ‘‘agency regulatory analysis is often incomplete and seldom 

used in decisions. This pattern persists across administrations, suggesting that the source of the problem is institutional, not political.’’ 85 In the Mercatus Center’s Regulatory Report Card project, 

Drs. Ellig and Williams ‘‘examine[d] how well the executive-branch 

regulatory agencies do what presidents have been telling them to 

do for more than three decades.’’ 86 Overall, Drs. Ellig and Williams 

found that the quality of agencies’ regulatory impact analysis is 

lacking,87 and that agencies rarely utilize the analysis in the decision-making process.88 Specifically, in evaluating 34 major 

rulemakings conducted by 17 agencies from 2008 through 2011, the 

highest average score obtained by any agency (the Department of 

Justice) was a meager 35 points out of 60. The Social Security Administration earned the worst performance with a score of seven 

points. 

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89 Id. at 73–74. 90 Id. at 74. 91 Ibid. 92 H.R. 3010, note 11 supra (Testimony of Christopher DeMuth). 93 Id. (Testimony of C. Boyden Gray). 94Raising the Agencies’ Grades, note 14 supra, at 20. 95 Cass R. Sunstein, Constitutionalism after the New Deal, 101 HARV. L. REV. 421, 492 (1987). 

Dr. Williams observed that agencies only have an incentive to 

regulate; there is no incentive not to issue a new regulation.89

Drawing upon his 27 years of experience as an FDA economist, Dr. 

Williams testified that ‘‘there is no discussion [within agencies] of 

whether or not a regulation is required. There is also no discussion 

as to whether there is a failure of the market or some other reason 

for regulatory intervention; whether the market will solve the problem in the near future without intervention (baseline analysis); or 

if there is a need for federal, as opposed to some other level of government, intervention.’’ 90 Consequently, ‘‘the regulatory analysis 

analyzes a decision, not a problem.’’ 91

Mr. DeMuth explained, 

Federal regulation today presents a political problem and 

an economic problem. The political problem is that regulatory agencies often operate under extremely broad grants 

of authority from Congress. . . . The economic problem is 

that regulatory agencies are single-purpose organizations 

operating with scant restraint on the resources their decisions command. The costs and benefits of regulation are 

realized almost entirely in the private sector. . . . The 

cost-benefit standard addresses these problems by imposing a resource constraint that is the regulatory analogue 

of the budget constraint on spending programs; by applying a decision rule that is the best approximation of how 

a representative legislature should want otherwise unspecified lawmaking discretion to be exercised; and by promoting transparency and accountability.92

Ambassador Gray cited new regulations from the Commodity Futures Trading Commission, charged with implementing the DoddFrank Wall Street Reform and Consumer Protection Act, and the 

Federal Communications Commission’s net neutrality regulation, 

as examples of the need to require independent agencies to perform 

cost-benefit analysis: ‘‘Only by requiring Federal agencies to calculate the costs and benefits of their regulations, and then subjecting those projections to the scrutiny of public comment, can we 

know with greater certainty whether new regulatory initiatives, especially landmark initiatives affecting economic growth and energy 

infrastructure, do more harm than good.’’ 93

Dr. Ellig testified, ‘‘[r]egulatory analysis needs to be legislatively 

required for all Federal agencies, including independent agencies.’’ 94 An independent regulatory agency is constitutionally part 

of the Executive Branch but is insulated from direct presidential 

control because by statute its ‘‘members are not subject to the plenary removal power of the President.’’ 95 The Board of Governors 

of the Federal Reserve System, the Federal Communications Commission, the Federal Trade Commission, the Securities and Exmstockstill on DSK4VPTVN1PROD with HEARINGS

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96See, e.g., 44 U.S.C. § 3502(5) (listing independent regulatory agencies for the purposes of the 

Paperwork Reduction Act of 1995). 97 Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI. L. REV. 1, 15 (1995). 98 Exec. Order No. 13,579, Regulation and Independent Regulatory Agencies, 76 Fed. Reg. 

41587 (July 11, 2011). 99Letter on file with the Committee. 100 Ryan, note 7 supra, at 3. 101 APA at 65, note 13 supra, at 33–35. 102 Id. at 20–21. 103 Id. at 47. 104 Cost-Justifying Regulations, note 15 supra, at 6. 105 Id. at 16. 106 Id. at 38. 107Federal Rulemaking and the Regulatory Process: Hearing Before the H. Comm. on the Judiciary, Subcommittee on Commercial and Administrative Law, 111th Cong., at 28 (2010). 108 Robert W. Hahn & Cass R. Sunstein, A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis, John M. Olin Law and Economics Working 

Paper No. 150, UNIV. OF CHICAGO LAW SCHOOL (2002), available at http://www.law.uchicago.edu/ 

files/files/150.CRSllCost-Benefit.pdf (last accessed Nov. 18, 2011). See also Peter L. Strauss 

& Cass R. Sunstein, The Role of the President and OMB in Informal Rulemaking, 38 ADMIN. L. REV. 181, 205 (1986) (‘‘The same considerations that justify a coordinating presidential role 

Continued 

change Commission, and the Nuclear Regulatory Commission are 

examples of independent regulatory agencies.96

‘‘President Reagan considered subjecting the independent agencies to [Executive Order 12291], but ultimately declined to do so, 

partly because of concerns about legal authority, but mostly because of fears of an adverse congressional reaction. The independent agencies were asked voluntarily to comply with Executive 

Order 12291, but not one of them formally acknowledged their willingness to do so.’’ 97 In Executive Order 12866, President Clinton 

required independent regulatory agencies to contribute to the Unified Regulatory Agenda, but he did not take the next step of requiring them to conduct cost-benefit analysis of proposed major rules, 

like other Executive Branch agencies. 

On July 11, 2011, President Obama issued an Executive Order 

that independent agencies ‘‘should comply’’ with the ‘‘general requirements’’ of Executive Order 13563 ‘‘to the extent permitted by 

law.’’ 98 Whether this gesture will bring independent agencies to 

heel is very much in doubt. For example, by letter of September 8, 

2011, Commissioner Nord of the Consumer Product Safety Commission informed OIRA Administrator Cass Sunstein that ‘‘a majority of the Commissioners at this agency have proactively decided 

to ignore the President’s direction [to conduct cost-benefit analysis 

for new regulations].’’ 99 Independent regulatory agencies—such as 

those charged with enacting the 447 new rules and completing 63 

reports and 59 studies authorized or required by Dodd-Frank 100— thus may escape the good-government requirements of these Executive Orders, including the cost-benefit analysis requirements. 

The proposal to codify some or all of the Executive Orders’ decision-making criteria also was endorsed by Mr. Rosen,101 Ms. Dudley,102 Prof. Strauss,103 Dean Graham,104 Mr. Holmstead,105 and 

Dr. Furchtgott-Roth.106 Similarly, at a hearing before the Subcommittee on Commercial and Administrative Law in the 111th 

Congress, Ms. Katzen endorsed extending the cost-benefit analysis 

requirements of Executive Order 12,866 to independent agencies.107 Current OIRA Administrator Sunstein also has endorsed 

requiring independent regulatory agencies to perform cost-benefit 

analysis, as well as granting limited judicial review to the cost-benefit analyses performed by government agencies.108

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with respect to ‘executive’ agencies apply with full force to those characterized as ‘independent.’ 

For these reasons, we believe that Executive Orders 12,291 and 12,498 should be applied to the 

latter set of agencies.’’). 109 Cost-Justifying Regulations, note 15 supra, at 37. 110 Id. at 38 (‘‘Perhaps partly because it is not covered by the executive orders, the FCC does 

not directly weigh or even itemize the benefits and costs of a particular regulation. The FCC 

does not systematically consider alternative forms of regulation including no regulation. The 

FCC certainly does not focus on the alternative with the greatest net benefit. The only presentation of the costs and benefits of a regulation is an appendix for the Regulatory Flexibility Act. 

This appendix is at best an afterthought: a short, rarely read boilerplate passage that is outside 

the deliberative process. Sometimes it is forgotten altogether. I have seen little change in the 

regulatory analyses at the FCC since I left the Commission.’’). 111 Id. at 15. 112 H.R. 3010, note 11 supra (Testimony of Arnold Baker). 113Raising the Agencies’ Grades, note 14 supra, at 23 (Testimony of Jerry Ellig) (‘‘One of the 

major areas where regulatory analysis is weakest is identification of the systemic problem the 

regulation is supposed to solve (criterion 6). This is a key weakness. . . . If the agency cannot 

identify and demonstrate the existence of a systemic problem that a regulation might solve, how 

can it assess whether the regulation is likely to solve the problem or identify alternative solutions that might be more effective?’’); id. at 74 (Testimony of Richard Williams) (‘‘Discussion of 

whether there is a problem and whether Federal regulation is the best way to solve that problem is ‘off the table.’ That is, there is no discussion of whether or not a regulation is required. 

There is also no discussion as to whether there is a failure of the market or some other reason 

for regulatory intervention; whether the market will solve the problem in the near future without intervention (baseline analysis); or if there is a need for federal, as opposed to some other 

level of government, intervention.’’). 

ii. Improving the process for notice-and-comment rulemaking 

In his testimony to the Subcommittee on May 4, 2011, Dr. 

Furchtgott-Roth discussed the importance of having a functional, 

transparent notice-and-comment rulemaking process: 

One of the most important aspects of the Notice of Proposed Rulemaking process is to obtain guidance from the 

public about how best to craft a rule. A Federal agency 

should solicit ideas from the public first rather than develop a predetermined rule before seeking public comment. 

An agency that can articulate in detail the possible costs 

and benefits to various segments of our economy of each 

proposed rule and alternatives to it demonstrates some 

thoughtful analysis behind the proposed rule. And the 

agency can explain other forms of the rule, including no 

new rule, that can be considered.109

Drawing on his experience at the FCC, Dr. Furchtgott-Roth described how that independent regulatory agency falls short in its 

decision-making processes.110 Specifically regarding cost-benefit 

analysis, Mr. Holmstead remarked, ‘‘I have also seen, however, 

that Federal agencies sometimes do not use [cost-benefit analysis] 

to inform their regulatory decision, but rather to justify actions 

they may want to take for other reasons.’’ 111 To support his statement that ‘‘[f]ederal agencies need to do a much better job of understanding the full impact their regulations will have on businesses and jobs—along with possible alternatives—before they impose the most costly new rules,’’ Mr. Baker cited the EPA’s new Fly 

Ash, Greenhouse Gas, and Cement Maximum Achievable Control 

Technology rules.112 Taken together, these rules will cause a 33% 

price increase for one component of Mr. Baker’s business, severely 

impacting his bottom line and hampering his ability to create jobs 

in New Orleans. 

In the Regulatory Report Card project, Drs. Ellig and Williams 

found that agencies do a poor job of both analyzing the problem 

they are trying to solve 113 and then applying whatever analysis is 

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114 Id. at 74 (Testimony of Richard Williams) (regulatory impact analysis ‘‘is generally begun 

after the decision on how to regulate has been announced. That is a key part of the problem: 

the regulatory analysis analyzes a decision, not a problem.’’); id. at 25 (Testimony of Jerry Ellig) 

(‘‘But the average scores on our Use criteria are relatively low—less than 2.5 out of a possible 

5 points on each of these criteria. Even under our relatively liberal definition of ‘use,’ agencies 

claim to use the regulatory impact analysis for significant decisions only about 20 percent of 

the time at best. . . .’’). 115 Id. at 27 (Testimony of Jerry Ellig). 116 Ibid. 117 Exec. Order No. 13,422, Further Amendment to Executive Order 12866 on Regulatory Planning and Review, 72 Fed. Reg. 2763 (Jan. 18, 2007). 118 Exec. Order No. 13,497, Revocation of Certain Executive Orders Concerning Regulatory 

Planning and Review, 74 Fed. Reg. 6113 (Jan. 30, 2009). 119Formal Rulemaking and Judicial Review, note 16 supra, at 179–80 (discussing Bowles v. 

Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945) and Auer v. Robbins, 519 U.S. 452, 461 

(1997)). 120 Cost-Justifying Regulations, note 15 supra, at 7 (Testimony of John Graham) (‘‘Third, I recommend that Congress expand the scope of the statutory mandate to include significant guidance documents as well as legislative rules, at least in cases where the agency’s action to issue 

a guidance document has the same practical effect on regulated parties as a regulation.’’); id. 

at 18 (Testimony of Jeffrey Holmstead) (‘‘I also recommend that the Subcommittee go beyond 

just rules and regulations to require that significant guidance documents are subject to analysis 

and interagency review.’’). 

conducted to the drafting of a new regulation.114 This is not to say 

that agencies are ignorant of how to make good decisions. Drs. 

Ellig and Williams found that in 2008 and 2009, across Republican 

and Democratic administrations, ‘‘a few regulatory analyses received a score of ‘5’ [out of 5] for employing potential best practices.’’ 115 This shows that ‘‘[t]he knowledge required to produce better regulatory analysis exists, dispersed throughout agencies in the 

Federal Government. OMB Circular A–4 also summarizes a great 

deal of this knowledge. What’s lacking are institutional incentives 

to produce good analysis and use it to guide decisions.’’ 116

iii. Bringing major guidance within the rulemaking process 

In 2007, President Bush expanded the scope of Executive Order 

12866 to bring major agency guidance documents within the OIRA 

review process.117 Promptly upon taking office, however, President 

Obama revoked this Executive Order, thus excluding major guidance documents from the OIRA review process.118

In his testimony on May 31, 2011, Mr. Francisco described how 

current judicial review doctrines encourage agencies to issue broad, 

ambiguous regulations, and then interpret those regulations 

through mere guidance documents, which do not have to be promulgated through any established processes.119 Under these circumstances, a court will defer to the agency’s interpretation of its 

own ambiguous regulation even though the guidance document 

does not have the force of law. On May 4, Dean Graham and Mr. 

Holmstead both recommended requiring agencies to follow some decision-making criteria when issuing significant guidance documents.120

B. Enhancing Regulatory Accountability 

i. Modernizing judicial review doctrines 

The ‘‘substantial evidence’’ standard of review for agency decisions pre-existed the APA. The Attorney General’s Manual on the 

Administrative Procedure Act, published shortly after Congress 

adopted the APA in 1946, describes Section 706(2)(E), 5 U.S.C., as 

‘‘a general codification of the substantial evidence rule which, either by statute or judicial rule, has long been applied to the review 

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121Quoted in GARY LAWSON, FEDERAL ADMINISTRATIVE LAW 207–08 (West ed., 5th ed. 2009). 122 340 U.S. at 477 (citing N.L.R.B. v. Columbian Enameling & Stamping Co., 306 U.S. 292, 

300 (1939)). 123 Id. at 489, 487, 490. 124 Id. at 488 (‘‘The substantiality of evidence must take into account whatever in the record 

fairly detracts from its weight.’’). 125LAWSON, note 121 supra, at 386. 126 522 U.S. at 366–67. 127 5 U.S.C. § 706(2)(A). 

of Federal administrative action.’’ 121 The seminal case interpreting 

the APA’s ‘‘substantial evidence’’ test is Universal Camera Corp. v. 

NLRB, 340 U.S. 474 (1951). In Universal Camera, the Court observed that, pre-APA, ‘‘substantial evidence’’ was akin to what is 

known as the jury standard, the most deferential standard of review for findings of fact. As the Court put it, substantial evidence 

‘‘must be enough to justify, if the trial were to a jury, a refusal to 

direct a verdict when the conclusion sought to be drawn from it is 

one of fact for the jury.’’ 122 The Court, however, held that although 

‘‘retention of the familiar ‘substantial evidence’ terminology indicates that no drastic reversal of attitude was intended,’’ by adopting the APA ‘‘Congress expressed a mood’’ that ‘‘courts must now 

assume more responsibility for the reasonableness and fairness of 

Labor Board decisions than some courts have shown in the 

past.’’ 123 The Court further held that ‘‘substantial evidence’’ is to 

be measured in light of the whole record, not on one piece of evidence taken in isolation.124

The Universal Camera statement of the ‘‘substantial evidence’’ 

standard remains good law. According to one scholar, ‘‘No verbal 

formula adequately expresses the quantum of evidence needed to 

satisfy this new test, but one can fairly say that the substantial 

evidence standard, as articulated by the Court in Universal Camera and as applied day-to-day by the lower courts that have followed it, is less deferential than the jury standard but more deferential than the clearly erroneous standard of Fed. R. Civ. P. 

52(a).’’ 125 In Allentown Mack Sales & Service, Inc. v. NLRB, 522 

U.S. 359 (1998), the Supreme Court stated that the question posed 

by the substantial evidence standard is ‘‘whether on this record it 

would have been possible for a reasonable jury to reach the Board’s 

conclusion.’’ 126 Taken literally, Allentown Mack suggests a more 

deferential gloss on the ‘‘substantial evidence’’ standard than Universal Camera. Congress could resolve this ambiguity by defining 

the term ‘‘substantial evidence’’ in the APA itself. 

When reviewing factual findings made at informal proceedings, 

the APA directs courts to accept those findings unless they are ‘‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’’ 127 Whether this ‘‘arbitrary or capricious’’ 

standard of review differs in content from the ‘‘substantial evidence’’ standard is unsettled. Justice Scalia, then a judge on the 

U.S. Court of Appeals for the District of Columbia Circuit, stated 

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128See Ass’n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors of Fed. Reserve Sys., 745 

F.2d 677, 683, 683–84, 685 (D.C. Cir. 1984) (‘‘[I]n their application to the requirement of factual 

support the substantial evidence test and the arbitrary or capricious test are one and the 

same. . . . When the arbitrary or capricious standard is performing that function of assuring 

factual support, there is no substantive difference between what it requires and what would be 

required by the substantial evidence test, since it is impossible to conceive of a ‘nonarbitrary’ 

factual judgment supported only by evidence that is not substantial in the APA sense. . . . What we have said suggests that the normal (APA) meaning of the ‘substantial evidence’ terminology connotes a substantive standard no different from the arbitrary or capricious test.’’). 129See, e.g., Safe Extensions, Inc. v. FAA, 509 F.3d 593, 604 (D.C. Cir. 2007) (‘‘Nonetheless, . . . the agency’s decision still must be supported by substantial evidence—otherwise it 

would be arbitrary and capricious. For ‘it is impossible to conceive of a ‘nonarbitrary’ factual 

judgment supported only by evidence that is not substantial in the APA sense.’’) (citations omitted). 130STEPHEN G. BREYER ET AL., ADMINISTRATIVE LAW AND REGULATORY POLICY 384 (Aspen 

Publishers, Inc. ed., 6th ed. 2006) (‘‘It is increasingly thought that the two tests are the same.’’) 

(quoted in Notes, Rationalizing Hard Look Review After the Fact, 122 HARV. L. REV. 1909, 1910 

n.6 (May 2009)). 131 467 U.S. at 842–43. 132See Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005). 133See United States v. Mead Corp., 533 U.S. 218 (2001). 134See Gonzales v. Oregon, 546 U.S. 243 (2006). 135Mead Corp., 533 U.S. at 229. 136See id. 

they are substantively equivalent.128 This remains the view of the 

D.C. Circuit,129 and it is shared by Justice Breyer.130

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 

467 U.S. 837 (1984), famously establishes a two-step process for 

courts to employ when confronted with an agency’s interpretation 

of its statutory authority in rulemaking: 

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent 

of Congress is clear, that is the end of the matter; for the 

court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the 

court determines Congress has not directly addressed the 

precise question at issue, the court does not simply impose 

its own construction on the statute, as would be necessary 

in the absence of an administrative interpretation. Rather, 

if the statute is silent or ambiguous with respect to the 

specific issue, the question for the court is whether the 

agency’s answer is based on a permissible construction of 

the statute.131

An agency’s re-interpretation of its own previous interpretation of 

an ambiguous statute does not preclude Chevron deference. Such a 

re-interpretation is still reviewed under the lenient ‘‘permissible 

construction’’ standard applied at Chevron step two.132

Neither informal ruling letters,133 nor an agency’s interpretive 

rules,134 receive Chevron deference. The Supreme Court has ‘‘recognized a very good indicator of delegation meriting Chevron treatment [exists] in express congressional authorizations to engage in 

the process of rulemaking or adjudication that produces regulations 

or rulings for which deference is claimed.’’ 135 ‘‘It is fair to assume 

generally that Congress contemplates administrative action with 

the effect of law [and thus compelling Chevron deference] when it 

provides for a relatively formal administrative procedure tending to 

foster the fairness and deliberation that should underlie a pronouncement of such force.’’ 136 In other words, congressional intent 

to delegate power to an agency to make rules with the force of law 

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137 Nathan Alexander Sales & Jonathan H. Adler, The Rest Is Silence: Chevron Deference, 

Agency Jurisdiction, and Statutory Silences, 2009 U. ILL. L. REV. 1497, 1526 (2009). 138 325 U.S. at 414. 139 Id. at 413–14. 140Talk Am., Inc. v. Michigan Bell Tel. Co., 131 S. Ct. 2254, 2266 (2011) (Scalia, J., concurring) (‘‘When Congress enacts an imprecise statute that it commits to the implementation of an 

executive agency, it has no control over that implementation (except, of course, through further, 

more precise, legislation). The legislative and executive functions are not combined. But when 

an agency promulgates an imprecise rule, it leaves to itself the implementation of that rule, and 

thus the initial determination of the rule’s meaning. . . . ‘When the legislative and executive 

powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical 

laws, to execute them in a tyrannical manner.’’’) (quoting Montesquieu, THE SPIRIT OF THE

LAWS). 141 323 U.S. at 140 (cited in Christensen v. Harris County, 529 U.S. 576, 587–88 (2000)). 142See, e.g., John F. Manning, Constitutional Structure and Judicial Deference to Agency Interpretations of Agency Rules, 96 COLUM. L. REV. 612 (1996); William Funk, Legislating for Nonlegislative Rules, 56 ADMIN. L. REV. 1023, 1034 (2004); Peter L. Strauss, Within Marbury: The 

Importance of Judicial Limits on the Executive’s Power To Say What the Law Is, 116 YALE L.J. 

is the ‘‘touchstone’’ for determining whether the Chevron analysis 

is triggered.137

Another unsettled issue is how much deference a court should 

give to an agency’s interpretation of its own regulations. In Bowles 

v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), the Court was 

called upon to interpret a wartime price control regulation issued 

by the Administrator of the Office of Price Administration, which 

required that each seller could charge no more for a commodity 

than it charged in March 1942. Maximum Price Regulation No. 188 

refined this General Maximum Price Regulation to define the 

phrase ‘‘highest price charged during March 1942.’’ The Court explained, ‘‘In this case the only problem is to discover the meaning 

of certain portions of Maximum Price Regulation No. 188.’’ 138

‘‘Since this involves an interpretation of an administrative regulation a court must necessarily look to the administrative construction of the regulation if the meaning of the words used is in doubt. 

The intention of Congress or the principles of the Constitution in 

some situations may be relevant in the first instance in choosing 

between various constructions. But the ultimate criterion is the administrative interpretation, which becomes of controlling weight 

unless it is plainly erroneous or inconsistent with the regulation.’’ 139 Thus, the Court deferred to the Administrator’s interpretation of Maximum Price Regulation No. 188. The Court directly 

re-affirmed the holding of Seminole Rock in Auer v. Robbins, 519 

U.S. 452 (1997). Notably, Justice Scalia—the author of Auer—recently admitted that he has ‘‘become increasingly doubtful of its validity.’’ 140

It is important to note that Seminole Rock deference only applies 

if the regulation itself is ambiguous. If the regulation is not ambiguous, then the court applies the regulation according to its plain 

language and the agency’s interpretation—whether in an opinion 

letter, policy statement, agency manual, enforcement guidelines, or 

another document lacking the force of law—is ‘‘entitled to respect’’ 

under Skidmore v. Swift & Co., 323 U.S. 134 (1944), but only, as 

Skidmore states, insofar as the agency interpretation has the 

‘‘power to persuade.’’ 141

Some scholars have advocated overturning Seminole Rock deference altogether, and giving Skidmore deference to all informal 

agency documents, whether the underlying regulation they purport 

to interpret is ambiguous or not.142 In dissent, Justice Thomas also 

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POCKET PART 59, 65 n.23 (2006) (citing, inter alia, Manning, supra, and Thomas Jefferson Univ., 

note 143 infra). 143See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 525 (1994) (Thomas, J., dissenting) 

(‘‘Here, far from resolving ambiguity in the Medicare program statutes, the Secretary has merely 

replaced statutory ambiguity with regulatory ambiguity. It is perfectly understandable, of 

course, for an agency to issue vague regulations, because to do so maximizes agency power and 

allows the agency greater latitude to make law through adjudication rather than through the 

more cumbersome rulemaking process. Nonetheless, agency rules should be clear and definite 

so that affected parties will have adequate notice concerning the agency’s understanding of the 

law.’’). 144 APA at 65, note 13 supra, at 35 (Testimony of Jeffrey Rosen). 145 Ibid. 146Formal Rulemaking and Judicial Review, note 16 supra, at 179 (‘‘Over time, however, the 

balance between deference and judicial oversight has tended strongly toward deference and 

away from rigorous judicial review. This shift toward ever-increasing deference weakens the primary check on agency discretion.’’). 147 APA at 65, note 13 supra, at 39 (Testimony of Jeffrey Rosen); Formal Rulemaking and Judicial Review, note 16 supra, at 175 (Testimony of Noel Francisco). 148 Cost-Justifying Regulations, note 15 supra, at 70. 149Formal Rulemaking and Judicial Review, note 16 supra, at 179–81. 150 Id. at 180 (citing Sales & Adler, note 135 supra, at 1518 (‘‘In all, four courts of appeals 

have concluded that Chevron is fully applicable to jurisdictional interpretations: the Second, 

Third, Fourth, and Ninth Circuits. The Federal and Seventh Circuits have declined to extend 

Chevron deference. The D.C. and Eighth Circuits appear to have resolved the issue both ways. 

After initially signaling that Chevron is inapplicable to jurisdictional questions, the courts have 

shown their willingness to extend deference in more recent cases. The question remains unresolved in the remaining circuits.’’)); Cass R. Sunstein, Law and Administration after Chevron, 

90 COLUM. L. REV. 2071, 2099 (Dec. 1990) (‘‘[C]ourts should probably refuse to defer to agency 

decisions with respect to issues of jurisdiction—again, if we assume that the distinction between 

jurisdictional and nonjurisdictional questions is easily administrable. The principal reason is 

that Congress would be unlikely to want agencies to have the authority to decide on the extent 

of their own powers. To accord such power to agencies would be to allow them to be judges in 

their own cause, in which they are of course susceptible to bias.’’)). 

has noted the perverse incentives created by giving maximum deference to ambiguous regulations.143

At its February 28 and May 31 hearings, the Subcommittee received testimony that ‘‘federal courts in general are exceedingly 

deferential’’ to regulatory agencies in the Executive Branch.144

Messrs. Rosen 145 and Francisco 146 both testified to this effect, and 

they both commented on the apparently counter-intuitive system 

whereby agency decisions made by informal rulemaking receive a 

lower standard of judicial review, and therefore a greater degree of 

judicial deference, than agency decisions made by more rigorous 

formal rulemaking.147 Similarly, in her written responses to the 

Subcommittee’s Questions for the Record from the May 4 hearing, 

Ms. Katzen observed, ‘‘Even though there are occasional newsworthy stories of courts’ remanding regulatory actions to the 

issuing agencies, for the most part courts defer to agency expertise 

so long as the basis for the decision is recorded and documented.’’ 148

Consistent with academic criticism, Mr. Francisco specifically 

questioned the deference doctrines established by the Supreme 

Court in Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), 

and Auer v. Robbins, 519 U.S. 452 (1997).149 Mr. Francisco also objected to the notion, over which the courts of appeals are split, that 

a court should defer to an agency’s interpretation of its own jurisdiction.150

ii. Reviewing ‘‘Interim-Final’’ Rules 

The APA allows an agency to make what is known as an ‘‘interim-final rule’’ ‘‘when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in 

the rules issued) that notice and public procedure thereon are immstockstill on DSK4VPTVN1PROD with HEARINGS

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151 5 U.S.C. § 553(b)(3)(B). 152Michael Asimow, Interim-Final Rules: Making Haste Slowly, 51 ADMIN. L. REV. 703, 704 

(Summer 1999). 153 APA at 65, note 13 supra, at 37 (Testimony of Jeffrey Rosen). 154 Id. at 21 (Testimony of Susan Dudley). 155Raising the Agencies’ Grades, note 14 supra, at 21 (Testimony of Jerry Ellig) (‘‘All too often, 

agency economists have to conduct regulatory analysis after most major decisions about regulations have already been made. The analysis then becomes an advocacy document written to justify the agency’s decisions, or a mere paperwork exercise to fulfill requirements imposed by the 

Office of Management and Budget.’’); id. at 74 (Testimony of Richard Williams) (‘‘But that analysis is generally begun after the decision on how to regulate has been announced. That is a key 

part of the problem: the regulatory analysis analyzes a decision, not a problem.’’). 156 Id. at 78 (Testimony of Richard Williams). 157 Amy Sinden & Lena Pons, White House Flouts Agency Heads, Rolls Out Backroom Deal 

on Fuel Economy Standard, CPRBlog (July 29, 2011), http://www.progressivereform.org/ 

CPRBlog.cfm?idBlog=7426C8E2–CF0F–8446–72B4F05FF595E94B (last accessed Nov. 18, 2011). 158 Id.; see also Letter from Hon. Darrell Issa, Chairman of the House Committee on Oversight 

and Government Reform, to Hon. Kathryn Ruemmler, Counsel to the President (Aug. 11, 2011) 

(letter on file with Committee). 159 APA at 65, note 13 supra, at 48–49 (quoting E. Donald Elliott, Re-Inventing Rulemaking, 

41 DUKE L.J. 1490, 1492 (June 1992)). 

practicable, unnecessary, or contrary to the public interest.’’ 151 The 

interim-final rule is effective immediately, but ‘‘[t]he adopting 

agency declares that it will consider . . . public comments’’ after 

the interim-final rule is issued, ‘‘will modify the rule in light of 

those comments, and will then adopt a final rule.’’ 152 Because interim-final rules necessarily ‘‘restrict public participation’’ 153 and 

‘‘hinder APA procedures,’’ 154 both Ms. Dudley and Mr. Rosen suggested that Congress examine this aspect of the APA. 

C. Increasing Regulatory Transparency 

i. Requiring advance notice of potential rulemakings 

At the Subcommittee’s March 29, 2011, hearing, Drs. Ellig and 

Williams both testified that agencies often make the decision to 

regulate behind closed doors, away from the public eye and before 

commencing the legally required regulatory process.155 ‘‘This 

doesn’t mean that no stakeholders have influence over the early decisions. Generally, those that have petitioned for and favor regulations are heard from early in the process to help shape the initial 

decisions.’’ 156 For example, the Center for Progressive Reform recently accused the Administration of ‘‘put[ting] the cart before the 

horse’’ by directly negotiating fuel economy and greenhouse gas 

emission standards with automakers, which ‘‘short-circuited’’ the 

notice-and-comment rulemaking process and reduced it to an 

empty formality.157 Consequently, ‘‘the number the President will 

roll out [54.5 mpg by 2025] was the result of raw political wrangling, not the rational policymaking process that the Administration purports to pride itself on.’’ 158 This is consistent with Professor Strauss’s testimony at the February 28 hearing: 

Often what occurs before a notice of proposed rulemaking has 

been published produces commitments that, in the words of President George H.W. Bush’s General Counsel at the EPA, convert notice and comment rulemaking into a form of Kabuki theater—‘a 

highly stylized process for displaying in a formal way the essence 

of something which in real life takes place in other venues.’ 159

Dr. Williams observes that this phenomenon is a result of the 

agency’s overriding incentive to regulate whenever possible, and 

that what is needed is ‘‘to decouple the agency’s decision from both 

early analysis of and democratic input into a problem. That is, initially, agencies should perform regulatory analysis and make that 

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160Raising the Agencies’ Grades, note 14 supra, at 77. 161 Id. at 78. 162 Id. at 28. 163 APA at 65, note 13 supra, at 37. 164 Id. at 20. 165 Cost-Justifying Regulations, note 15 supra, at 18. 166See Pub. L. No. 106–554. 167 Id. § 515(a). 168 Id. § 515(b). 169Salt Inst. v. Thompson, 345 F. Supp. 2d 589, 593 (E.D. Va. 2004), aff’d sub nom. Salt Inst. 

v. Leavitt, 440 F.3d 156, 159 (4th Cir. 2006) (‘‘By its terms, [the IQA] creates no legal rights 

in any third parties. Instead, it orders the Office of Management and Budget to draft guidelines 

concerning information quality and specifies what those guidelines should contain. Because the 

statute upon which appellants rely does not create a legal right to access to information or to 

correctness, appellants have not alleged an invasion of a legal right and, thus, have failed to 

establish an injury in fact sufficient to satisfy Article III.’’). But cf. Prime Time Int’l Co. v. 

Continued 

analysis available for public comment. There should be no discussion of the agency’s preferred solutions in this document.’’ 160 Specifically, Dr. Williams recommended requiring agencies to give: 

• A clear definition of the problem that the agency seeks to 

solve and the evidence it relied on to define the problem; 

• An explanation, supported by evidence, of why a Federal solution is necessary; 

• The possible ways to solve the problem; and 

• A preliminary estimate of the benefits and costs of each option.161

Dr. Ellig concurs in these recommendations.162 Mr. Rosen also 

testified, ‘‘[g]reater use of the Advanced Notice of Proposed Rulemaking and similar advance processes would be a good thing.’’ 163

Ms. Dudley recommended Congress consider this proposal as 

well.164 Relatedly, on May 4, 2011, Mr. Holmstead described how 

potentially collusive litigation between regulatory agencies and interested parties can undermine the regulatory process.165

ii. Enhancing the effectiveness of the Information Quality Act 

Congress enacted the Information Quality Act as Section 515 of 

the Treasury and General Government Appropriations Act for Fiscal Year 2001.166 The IQA requires the OMB Director to ‘‘issue 

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 in fulfillment of the purposes and provisions of’’ the Paperwork Reduction Act.167 Further, 

the IQA instructs that Federal agencies shall ‘‘issue guidelines ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated 

by the agency,’’ to ‘‘establish administrative mechanisms allowing 

affected persons to seek and obtain correction of information maintained and disseminated by the agency’’ and to report both ‘‘the 

number and nature of complaints received by the agency regarding 

the accuracy of information disseminated’’ and ‘‘how such complaints were handled.’’ 168

The U.S. Court of Appeals for the Fourth Circuit has held, 

‘‘[n]either the Act itself nor its very limited legislative history provide a mechanism for judicial review of information quality or any 

avenue for judicial relief.’’ 169 Several lower courts also have held 

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Vilsack, 599 F.3d 678 (D.C. Cir. 2010) (affirming the dismissal of appellant’s IQA challenge not 

because the IQA ‘‘creates no legal rights in any third party’’ as the district court held, but pursuant to OMB’s decision ‘‘to exclude documents prepared and distributed in the context of adjudicative proceedings’’ from the IQA). 170See, e.g., San Luis & Delta-Mendota Water Auth. v. Salazar, 760 F. Supp. 2d 855, 964 (E.D. 

Cal. 2010); Habitat for Horses v. Salazar, 745 F. Supp. 2d 438, 455–56 (S.D.N.Y. 2010); In re 

Operation of the Missouri River Sys. Litig., 363 F. Supp. 2d 1145, 1174–75 (D. Minn. 2004). 171 APA at 65, note 13 supra, at 39. 172 Id. at 18. 173Formal Rulemaking and Judicial Review, note 16 supra, at 183. 174 5 U.S.C. §§ 553(c), 556 & 557. 175 Edward Rubin, It’s Time to Make the Administrative Procedure Act Administrative, 89 COR- NELL L. REV. 95, 106 (2003) (citing 5 U.S.C. § 556(d)). 176 Richard J. Pierce, Jr., Rulemaking and the Administrative Procedure Act, 32 TULSA L.J. 

185, 187 (1996). 177 Id. at 188–90. 178 H.R. 3010, note 11 supra (Testimony of Christopher DeMuth). 

that an agency’s failure to comply with the IQA is not judicially reviewable.170

On February 28, 2011, Mr. Rosen recommended Congress clarify 

that judicial review is available under the IQA.171 Ms. Dudley suggested Congress ‘‘consider amending the IQA to make agency decisions reviewable.’’ 172 In the same vein, on May 31, 2011, Mr. Francisco suggested that one way to enhance the effectiveness of the 

IQA would be to incorporate it into the APA.173

iii. Improving the record to support significant rules 

The APA establishes two basic methods for agencies to take action: rulemaking and adjudication, with formal and informal procedures for each method. In rulemakings, formal procedures are required when a statute requires rules ‘‘to be made on the record 

after opportunity for an agency hearing.’’ 174 Formal rulemaking 

entails some trial-like procedures and ‘‘requires the agency to provide private parties potentially affected by the rule with an oral 

hearing in which they can present witnesses and cross examine opposing witnesses.’’ 175

‘‘Agencies made little use of rulemaking in the first two decades 

following enactment of the APA. The New Deal agencies viewed 

themselves as akin to special purpose courts. They eschewed the 

opportunity to issue rules in favor of near exclusive reliance on adjudicatory proceedings.’’ 176 As discussed earlier in this Report, in 

the 1960’s and 1970’s agencies began to utilize rulemaking under 

the APA more frequently. This shift from adjudication towards 

rulemaking was due in part to a growing belief among administrative law scholars that rulemaking is superior to adjudication, and 

in part to a new wave of regulatory agencies created by Congress 

(e.g., the Environmental Protection Agency and the Occupational 

Safety and Health Administration).177 ‘‘These agencies differed 

from their 1930’s predecessors in important respects. The New 

Deal agencies were headed by commissions that included members 

from both political parties serving statutory terms; the new ones 

were generally headed by a single administrator serving at the 

President’s pleasure. While most of the older agencies regulated 

single industries, the new ones regulated wide sectors of the economy.’’ 178

Despite the growing trend toward rulemaking and away from adjudication, rulemaking typically still remained of the formal variety. The Attorney General’s Manual on the Administrative Procedure Act explains that when a statute requires an agency to formumstockstill on DSK4VPTVN1PROD with HEARINGS

35 

179Quoted in LAWSON, note 121 supra, at 207–08. 180Pierce, note 176 supra, at 194. 181 Richard E. Levy & Sidney A. Shapiro, Administrative Procedure and the Decline of the 

Trial, 51 KAN. L. REV. 473, 485 (2003). 182 406 U.S. at 757 (citing 5 U.S.C. § 553(c)). See also United States v. Florida E. Coast Ry. 

Co., 410 U.S. 224, 241 (1973) (‘‘Similarly, even where the statute requires that the rulemaking 

procedure take place ‘on the record after opportunity for an agency hearing,’ thus triggering the 

applicability of § 556. . . .’’). 183 Rubin, note 175 supra, at 106. 184LAWSON, note 121 supra, at 229. 185 Rubin, note 175 supra, at 107. 186St. Louis Fuel & Supply Co. v. FERC, 890 F.2d 446, 448 (D.C. Cir. 1989). 187LAWSON, note 121 supra, at 229. 

late a rule after a ‘‘hearing,’’ ‘‘the agencies and the courts have long 

assumed that the agency’s action must be based upon the record 

made in the hearing,’’ and therefore that the organic statute requires formal rulemaking.179 Thus, ‘‘[u]ntil 1973, most agencies believed that they were required to use formal rulemaking procedures, including an oral evidentiary hearing, if a statute authorized 

them to act only after providing an opportunity for a ‘hearing.’ This 

belief, reinforced by some judicial decisions, acted as a powerful deterrent to the use of rulemakings by the many agencies whose statutes conditioned their power to act on provision of a ‘hearing.’’’ 180

Today, however, agencies ‘‘avoid formal rulemaking whenever 

possible. The United States Supreme Court facilitated the avoidance of formal rulemaking procedures through a series of decisions 

that made clear that formal rulemaking procedures are seldom required by due process, the APA, or an agency’s organic statute.’’ 181

In United States v. Allegheny-Ludlum Steel Corp., 406 U.S. 742 

(1972), the Supreme Court held that the words ‘‘after hearing’’ in 

a statute did not require the agency to hold a formal hearing in 

order to make a rule establishing certain railroad rates. The Court 

based its conclusion on the fact that the Interstate Commerce Act 

‘‘does not require that such rules ‘be made on the record,’’’ which 

is the particular phrase used for formal rulemaking in the APA.182

Consequently, ‘‘formal rulemaking has turned out to be a null 

set;’’ 183 it has ‘‘virtually disappeared as a procedural category.’’ 184

It is studiously eschewed by agencies. ‘‘Congress rarely requires 

this technique, and courts avoid interpreting statutes to require it, 

even in the rare cases where the statute seems to do so.’’ 185 Lower 

courts may deny that their analysis of whether formal rulemaking 

is required ‘‘turn[s], mechanically, on the absence of magic 

words,’’ 186 but the fact remains that ‘‘since [Florida East Coast 

Railway] was decided, no statute that does not contain the magic 

words ‘on the record’ has been found to require formal rulemaking.’’ 187

Notwithstanding the trend of court decisions and agency practice, 

formal rulemaking continues to offer the advantages that it more 

rigorously proves facts and more transparently reveals agency decision-making. As rulemaking subjects have become more complex 

and the real costs of agency rules have risen ever higher, there has 

been renewed interest in using some formal rulemaking procedures 

to assure better agency fact-finding and decision-making. 

At the Subcommittee’s February 28, 2011, hearing, Mr. Rosen 

discussed how formal rulemaking—i.e., rulemaking based on formal 

agency hearings—was specifically contemplated by the APA, but 

mstockstill on DSK4VPTVN1PROD with HEARINGS

36 

188 APA at 65, note 13 supra, at 35, 38. 189 Id. at 35. 190 Id. at 38. 191 Ibid. 192 Id. at 17. 193Formal Rulemaking and Judicial Review, note 16 supra, at 177. 194 Id. at 178. 195 Ibid. 196 Id. at 39. 197 Ibid. 

has become a dead letter over the past several decades.188 Mr. 

Rosen testified that the formal procedures discussed in 5 U.S.C. 

§§ 556 and 557 (with evidence presentation and cross-examination) 

‘‘can be especially beneficial for issues involving complex empirical 

or scientific issues.’’ 189 Mr. Rosen added, ‘‘[t]here is no better tool 

than cross-examination to expose unsupportable factual assertions 

and assure the public that only the best science underlies agency 

action.’’ 190 One option Mr. Rosen suggested is that ‘‘all ‘major 

rules’ above a certain threshold could be subject to formal rulemaking. . . .’’ 191 Ms. Dudley suggested that ‘‘legislators might 

consider amending the APA to [] expand the use of formal rulemaking procedures.’’ 192

On May 31, 2011, Mr. Francisco observed that ‘‘[f]ormal rulemaking is often called ‘rulemaking on a record’ because these trialtype proceedings provide much more opportunity for the agency to 

develop a formal record before issuing a final rule.’’ 193 Mr. Francisco also explained that formal rulemaking is subject to a higher 

standard of judicial review than informal rulemaking, i.e., ‘‘substantial evidence’’ versus ‘‘arbitrary or capricious’’ review.194 Mr. 

Francisco suggested that Congress consider legislation to put ‘‘a renewed emphasis on formal rulemaking procedures.’’ 195

Also on May 31, Mr. Warren testified at length in favor of 

‘‘mak[ing] carefully-tailored amendments to the Administrative 

Procedure Act (‘APA’) which would permit slightly more formal procedures for major rules currently reviewed by [OIRA] under Executive Orders 12866 and 13563.’’ Believing ‘‘that additional procedures are warranted in the interest of improving the agency work 

product,’’ 196 Mr. Warren suggested that the additional formal procedures should be ‘‘in addition to, not in lieu of,’’ the procedures for 

informal rulemaking.197

Hearings 

This year the Subcommittee on Courts, Commercial and Administrative Law held a series of four hearings featuring thirteen witnesses to consider how the APA could be improved to create jobs 

and promote economic growth by improving agencies’ decision-making processes and enhancing regulatory transparency and accountability. The Subcommittee’s hearings were held on February 28, 

March 29, May 4 and May 31, 2011, and the witnesses are listed 

earlier in this Report. On October 25, 2011, the Full Committee 

held a legislative hearing on the Bill, with testimony from four witnesses, also listed above. 

Committee Consideration 

On November 3, 2011, the Committee met in open session and 

ordered the bill, H.R. 3010, favorably reported with an amendment 

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37 

in the nature of a substitute, by a rollcall vote of 16 to 6, a quorum 

being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of H.R. 

3010. 

1. Amendment #8, offered by Mr. Watt. The Amendment would 

strike Section 3(e) from the Act, which requires hearings for highimpact rules. Defeated 13 to 16. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................... X 

Mr. Sensenbrenner, Jr. ............................................................. X 

Mr. Coble ................................................................................. X 

Mr. Gallegly ............................................................................. X 

Mr. Goodlatte ...........................................................................

Mr. Lungren .............................................................................

Mr. Chabot ...............................................................................

Mr. Issa ...................................................................................

Mr. Pence .................................................................................

Mr. Forbes ................................................................................ X 

Mr. King ................................................................................... X 

Mr. Franks ............................................................................... X 

Mr. Gohmert ............................................................................. X 

Mr. Jordan ................................................................................ X 

Mr. Poe .................................................................................... X 

Mr. Chaffetz ............................................................................. X 

Mr. Griffin ................................................................................ X 

Mr. Marino ............................................................................... X 

Mr. Gowdy ................................................................................ X 

Mr. Ross ..................................................................................

Ms. Adams ...............................................................................

Mr. Quayle ............................................................................... X 

Mr. Amodei .............................................................................. X 

Mr. Conyers, Jr., Ranking Member .......................................... X 

Mr. Berman ..............................................................................

Mr. Nadler ................................................................................ X 

Mr. Scott .................................................................................. X 

Mr. Watt ................................................................................... X 

Ms. Lofgren .............................................................................. X 

Ms. Jackson Lee ...................................................................... X 

Ms. Waters ............................................................................... X 

Mr. Cohen ................................................................................ X 

Mr. Johnson ............................................................................. X 

Mr. Pierluisi ............................................................................. X 

Mr. Quigley .............................................................................. X 

Ms. Chu ...................................................................................

Mr. Deutch ............................................................................... X 

Ms. Sa ́ nchez ............................................................................ X 

(Vacant) ...................................................................................

Total ....................................................................... 13 16 

2. Amendment #12, offered by Mr. Nadler. The Amendment 

would exempt from the Act ‘‘any proposed rule, final rule, or guidmstockstill on DSK4VPTVN1PROD with HEARINGS

38 

ance made by the Nuclear Regulatory Commission under the Atomic Energy Act.’’ Defeated 13 to 16. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................... X 

Mr. Sensenbrenner, Jr. ............................................................. X 

Mr. Coble ................................................................................. X 

Mr. Gallegly ............................................................................. X 

Mr. Goodlatte ...........................................................................

Mr. Lungren .............................................................................

Mr. Chabot ...............................................................................

Mr. Issa ...................................................................................

Mr. Pence .................................................................................

Mr. Forbes ................................................................................ X 

Mr. King ................................................................................... X 

Mr. Franks ............................................................................... X 

Mr. Gohmert ............................................................................. X 

Mr. Jordan ................................................................................ X 

Mr. Poe .................................................................................... X 

Mr. Chaffetz ............................................................................. X 

Mr. Griffin ................................................................................ X 

Mr. Marino ............................................................................... X 

Mr. Gowdy ................................................................................ X 

Mr. Ross ..................................................................................

Ms. Adams ...............................................................................

Mr. Quayle ............................................................................... X 

Mr. Amodei .............................................................................. X 

Mr. Conyers, Jr., Ranking Member .......................................... X 

Mr. Berman ..............................................................................

Mr. Nadler ................................................................................ X 

Mr. Scott .................................................................................. X 

Mr. Watt ................................................................................... X 

Ms. Lofgren .............................................................................. X 

Ms. Jackson Lee ...................................................................... X 

Ms. Waters ...............................................................................

Mr. Cohen ................................................................................ X 

Mr. Johnson ............................................................................. X 

Mr. Pierluisi ............................................................................. X 

Mr. Quigley .............................................................................. X 

Ms. Chu ................................................................................... X 

Mr. Deutch ............................................................................... X 

Ms. Sa ́ nchez ............................................................................ X 

(Vacant) ...................................................................................

Total ....................................................................... 13 16 

3. Amendment #10, offered by Mr. Cohen. The Amendment 

would strike Section 7 from the Act, which pertains to the scope 

of judicial review. Defeated 14 to 18. 

ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................... X 

Mr. Sensenbrenner, Jr. ............................................................. X 

Mr. Coble ................................................................................. X 

Mr. Gallegly ............................................................................. X 

mstockstill on DSK4VPTVN1PROD with HEARINGS

39 

ROLLCALL NO. 3—Continued 

Ayes Nays Present 

Mr. Goodlatte ...........................................................................

Mr. Lungren .............................................................................

Mr. Chabot ............................................................................... X 

Mr. Issa ...................................................................................

Mr. Pence ................................................................................. X 

Mr. Forbes ................................................................................ X 

Mr. King ................................................................................... X 

Mr. Franks ............................................................................... X 

Mr. Gohmert ............................................................................. X 

Mr. Jordan ................................................................................

Mr. Poe .................................................................................... X 

Mr. Chaffetz ............................................................................. X 

Mr. Griffin ................................................................................ X 

Mr. Marino ............................................................................... X 

Mr. Gowdy ................................................................................ X 

Mr. Ross .................................................................................. X 

Ms. Adams ...............................................................................

Mr. Quayle ............................................................................... X 

Mr. Amodei .............................................................................. X 

Mr. Conyers, Jr., Ranking Member .......................................... X 

Mr. Berman ..............................................................................

Mr. Nadler ................................................................................ X 

Mr. Scott .................................................................................. X 

Mr. Watt ................................................................................... X 

Ms. Lofgren .............................................................................. X 

Ms. Jackson Lee ...................................................................... X 

Ms. Waters ............................................................................... X 

Mr. Cohen ................................................................................ X 

Mr. Johnson ............................................................................. X 

Mr. Pierluisi ............................................................................. X 

Mr. Quigley .............................................................................. X 

Ms. Chu ................................................................................... X 

Mr. Deutch ............................................................................... X 

Ms. Sa ́ nchez ............................................................................ X 

(Vacant) ...................................................................................

Total ....................................................................... 14 18 

4. Amendment #5, offered by Mr. Nadler. The Amendment would 

strike Section 3 from the Act, which requires agencies to consult 

with OIRA during the rulemaking process. Defeated 13 to 20. 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................... X 

Mr. Sensenbrenner, Jr. ............................................................. X 

Mr. Coble ................................................................................. X 

Mr. Gallegly ............................................................................. X 

Mr. Goodlatte ...........................................................................

Mr. Lungren .............................................................................

Mr. Chabot ............................................................................... X 

Mr. Issa ...................................................................................

Mr. Pence ................................................................................. X 

Mr. Forbes ................................................................................ X 

Mr. King ................................................................................... X 

mstockstill on DSK4VPTVN1PROD with HEARINGS

40 

ROLLCALL NO. 4—Continued 

Ayes Nays Present 

Mr. Franks ............................................................................... X 

Mr. Gohmert .............................................................................

Mr. Jordan ................................................................................ X 

Mr. Poe .................................................................................... X 

Mr. Chaffetz ............................................................................. X 

Mr. Griffin ................................................................................ X 

Mr. Marino ............................................................................... X 

Mr. Gowdy ................................................................................ X 

Mr. Ross .................................................................................. X 

Ms. Adams ............................................................................... X 

Mr. Quayle ............................................................................... X 

Mr. Amodei .............................................................................. X 

Mr. Conyers, Jr., Ranking Member .......................................... X 

Mr. Berman ..............................................................................

Mr. Nadler ................................................................................ X 

Mr. Scott .................................................................................. X 

Mr. Watt ................................................................................... X 

Ms. Lofgren .............................................................................. X 

Ms. Jackson Lee ...................................................................... X 

Ms. Waters ............................................................................... X 

Mr. Cohen ................................................................................ X 

Mr. Johnson ............................................................................. X 

Mr. Pierluisi ............................................................................. X 

Mr. Quigley .............................................................................. X 

Ms. Chu ................................................................................... X 

Mr. Deutch ............................................................................... X 

Ms. Sa ́ nchez ............................................................................ X 

(Vacant) ...................................................................................

Total ....................................................................... 13 20 

5. Amendment #2, offered by Mr. Cohen. The Amendment would 

specify that the cost-benefit analysis requirements in Sections 3 

and 4 apply only if they do not conflict with any other law. Defeated 14 to 15. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................... X 

Mr. Sensenbrenner, Jr. ............................................................. X 

Mr. Coble ................................................................................. X 

Mr. Gallegly ............................................................................. X 

Mr. Goodlatte ...........................................................................

Mr. Lungren .............................................................................

Mr. Chabot ............................................................................... X 

Mr. Issa ...................................................................................

Mr. Pence .................................................................................

Mr. Forbes ................................................................................

Mr. King ................................................................................... X 

Mr. Franks ............................................................................... X 

Mr. Gohmert .............................................................................

Mr. Jordan ................................................................................

Mr. Poe .................................................................................... X 

Mr. Chaffetz ............................................................................. X 

Mr. Griffin ................................................................................ X 

mstockstill on DSK4VPTVN1PROD with HEARINGS

41 

ROLLCALL NO. 5—Continued 

Ayes Nays Present 

Mr. Marino ............................................................................... X 

Mr. Gowdy ................................................................................ X 

Mr. Ross ..................................................................................

Ms. Adams ............................................................................... X 

Mr. Quayle ............................................................................... X 

Mr. Amodei .............................................................................. X 

Mr. Conyers, Jr., Ranking Member .......................................... X 

Mr. Berman ..............................................................................

Mr. Nadler ................................................................................ X 

Mr. Scott .................................................................................. X 

Mr. Watt ................................................................................... X 

Ms. Lofgren .............................................................................. X 

Ms. Jackson Lee ...................................................................... X 

Ms. Waters ............................................................................... X 

Mr. Cohen ................................................................................ X 

Mr. Johnson ............................................................................. X 

Mr. Pierluisi ............................................................................. X 

Mr. Quigley .............................................................................. X 

Ms. Chu ................................................................................... X 

Mr. Deutch ............................................................................... X 

Ms. Sa ́ nchez ............................................................................ X 

(Vacant) ...................................................................................

Total ....................................................................... 14 15 

6. Reporting H.R. 3010 as amended. The Act will improve and 

reform the Federal regulatory process to reduce unnecessary burdens on job creators. Approved 16 to 6. 

ROLLCALL NO. 6 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................... X 

Mr. Sensenbrenner, Jr. .............................................................

Mr. Coble ................................................................................. X 

Mr. Gallegly ............................................................................. X 

Mr. Goodlatte ........................................................................... X 

Mr. Lungren .............................................................................

Mr. Chabot ...............................................................................

Mr. Issa ................................................................................... X 

Mr. Pence .................................................................................

Mr. Forbes ................................................................................ X 

Mr. King ................................................................................... X 

Mr. Franks ............................................................................... X 

Mr. Gohmert .............................................................................

Mr. Jordan ................................................................................

Mr. Poe .................................................................................... X 

Mr. Chaffetz ............................................................................. X 

Mr. Griffin ................................................................................ X 

Mr. Marino ............................................................................... X 

Mr. Gowdy ................................................................................ X 

Mr. Ross .................................................................................. X 

Ms. Adams ............................................................................... X 

Mr. Quayle ...............................................................................

Mr. Amodei .............................................................................. X 

Mr. Conyers, Jr., Ranking Member ..........................................

mstockstill on DSK4VPTVN1PROD with HEARINGS

42 

ROLLCALL NO. 6—Continued 

Ayes Nays Present 

Mr. Berman ..............................................................................

Mr. Nadler ................................................................................

Mr. Scott .................................................................................. X 

Mr. Watt ...................................................................................

Ms. Lofgren ..............................................................................

Ms. Jackson Lee ......................................................................

Ms. Waters ............................................................................... X 

Mr. Cohen ................................................................................

Mr. Johnson ............................................................................. X 

Mr. Pierluisi ............................................................................. X 

Mr. Quigley ..............................................................................

Ms. Chu ................................................................................... X 

Mr. Deutch ...............................................................................

Ms. Sa ́ nchez ............................................................................ X 

(Vacant) ...................................................................................

Total ....................................................................... 16 6 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 3010, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, November 21, 2011. 

Hon. LAMAR SMITH, CHAIRMAN, Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3010, the Regulatory Accountability Act of 2011. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Sean Dunbar, who can 

mstockstill on DSK4VPTVN1PROD with HEARINGS

43 

be reached at 226–9010, and Susanne S. Mehlman, who can be 

reached at 226–2860. 

Sincerely, 

DOUGLAS W. ELMENDORF, DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 3010—Regulatory Accountability Act of 2011. 

As ordered reported by the House Committee on the Judiciary on 

November 3, 2011 

SUMMARY

H.R. 3010 would amend the Administrative Procedures Act 

(APA), which is the law that governs how Federal agencies propose 

and establish regulations. Enacting this legislation would codify 

many practices aimed at increasing regulatory transparency and 

accountability that are currently required under several executive 

orders. However, this legislation also would impose some new requirements on Federal agencies related to the rulemaking process 

and would extend some of the current requirements under the executive orders to additional Federal agencies. Except for changes 

permitting judicial review for compliance with the Information 

Quality Act (enacted as part of the Consolidated Appropriations 

Acts, 2001 [Public Law 106–554]), the changes contained in this 

legislation would not apply to any rulemaking pending or completed on the date of enactment. 

CBO estimates that implementing H.R. 3010 would cost about 

$70 million over the 2012–2016 period, assuming appropriation of 

the necessary funds. Such funding would cover the governmentwide costs of additional personnel, contractor costs, and other administrative expenses associated with meeting the new requirements under the legislation. 

CBO also expects that enacting H.R. 3010 could delay the 

issuance of some final rules each year. As a result, CBO and the 

staff of the Joint Committee on Taxation (JCT) expect that enacting H.R. 3010 could have effects on both direct spending and revenues. Therefore, pay-as-you-go procedures apply to the legislation. 

However, given the large number of major rules issued each year 

and the extent to which rules vary in their nature and scope, we 

cannot determine the level of costs or savings stemming from delaying the effective date of some rules. In addition, while enacting 

the bill could affect direct spending and revenues if agencies not 

funded through annual appropriations incur additional costs, CBO 

estimates that any net increase in spending or change in revenues 

for those agencies would not be significant. 

CBO expects that H.R. 3010 would impose no intergovernmental 

or private-sector mandates as defined in the Unfunded Mandates 

Reform Act (UMRA). 

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ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 3010 on discretionary 

spending is shown in the following table. The costs of this legislation fall within all budget functions that include agencies that 

issue regulations. 

By Fiscal Year, in Millions of Dollars 

2012 2013 2014 2015 2016 2012– 

2016 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level 5 10 15 20 20 70 

Estimated Outlays 4 9 14 20 20 67 

Enacting H.R. 3010 also would affect direct spending and revenues, but CBO and JCT cannot determine the extent or sign of 

those effects. 

BASIS OF ESTIMATE

For this estimate, CBO assumes that the legislation will be enacted near the beginning of calendar year 2012, that the necessary 

amounts will be appropriated near the start of each fiscal year, and 

that spending will follow historical patterns for regulatory analysis 

activities. 

Background 

CBO is unaware of any comprehensive information on current 

spending for regulatory activities governmentwide. However, according to the Congressional Research Service, Federal agencies 

issue 3,000 to 4,000 final rules each year. Most are promulgated by 

the Departments of Transportation, Homeland Security, and Commerce, and the Environmental Protection Agency (EPA). Agencies 

that issue the most major rules (those with an estimated economic 

impact on the economy of more than $100 million per year) include 

the Department of Health and Human Services, the Department of 

Agriculture, and EPA. 

H.R. 3010 would amend the APA to codify certain practices currently required under several executive orders, including Executive 

Orders 12866, 13563, and 13422. (Those instructions require agencies in the executive branch to analyze the impacts of regulations 

(including costs and benefits), to coordinate with the Office of Information and Regulatory Affairs (OIRA) during the rulemaking, and 

to perform other activities and analyses related to the rulemaking 

process.) The legislation would add several definitions to the APA, 

including major rule, major guidance, and high-impact rule. 

A major rule would be defined as any rule, as determined by 

OIRA, likely to impose:An annual cost on the economy of $100 million or more, adjusted annually for inflation; 

• A major increase in costs or prices for consumers, individual 

industries, Federal, State, local, or tribal government agencies, or geographic regions; 

mstockstill on DSK4VPTVN1PROD with HEARINGS

45 

• Significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of 

United States-based enterprises to compete with foreignbased enterprises in domestic and export markets; or 

• Significant impacts on multiple sectors of the economy. 

This definition of a major rule differs from the one contained in 

the Congressional Review Act (CRA) of 1996, which defines a major 

rule as one having an annual effect on the economy instead of an 

annual cost as defined in H.R. 3010. 

The legislation would define the term major guidance issued by 

Federal agencies using the same criteria as that used for a major 

rule. A high-impact rule would be defined as any rule that OIRA 

determines is likely to impose an annual cost on the economy of $1 

billion or more. That threshold would be adjusted annually for inflation. 

Enacting H.R. 3010 also would add several new requirements 

that would broadly change the current rulemaking process. For all 

major and high-impact rules as well as rules that involve ‘‘novel 

legal or policy issues,’’ agencies would be required to publish an advance notice of proposed rulemaking (ANPRM) in the Federal Register 90 days prior to publishing a Notice of Proposed Rulemaking 

(NPRM). The legislation specifies minimum requirements for the 

ANPRM, including a period of not less than 60 days during which 

interested parties may submit data, views, or argument to the 

agency. A pre-proposal process occurs on a voluntary basis for some 

rules under current law, as guided by Executive Order 13563. 

The NPRM process, as defined in the APA, would be amended 

to codify certain requirements in place under Executive Orders 

12866 and 13563. While many agencies subject to the executive orders may already be implementing those practices for certain rules, 

some independent agencies outside the purview of executive orders 

may face an increase in workload with respect to the rulemaking 

process. For all agencies, H.R. 3010 would increase requirements 

for documenting cost-benefit analyses as well as placing other supporting documentation in the docket for the proposed rule. Furthermore, the legislation would incorporate into the rulemaking process 

a remedy for members of the public to petition for a hearing to determine if any information used by the agency in developing the 

proposed rule violates the Information Quality Act. 

The legislation would require agencies to hold a hearing for all 

high-impact rules. The hearing would occur after comments have 

been received on the proposed rule and after any hearings were 

held under the NPRM process but before adoption of the rule. The 

hearing could be waived if all participants-not including the agency-agree. 

Spending Subject to Appropriation 

Based on information from several Federal agencies, CBO estimates that more resources would be needed for Federal agencies to 

produce additional guidance documents and cost-benefit analyses, 

support judicial reviews and hearings, and perform other administrative tasks related to the rulemaking process. Eventually, CBO 

estimates that Federal agencies would spend about $20 million anmstockstill on DSK4VPTVN1PROD with HEARINGS

46 

nually to meet the requirements under this legislation. We expect 

that it would take about three years to reach that level of effort. 

Direct Spending 

CBO expects that enacting H.R. 3010 would delay a number of 

major and high-impact rules from taking effect each year. Therefore, in assessing the budgetary effects of H.R. 3010, CBO considered the costs and savings that would be realized if anticipated 

major and high-impact rules were delayed. Delaying the issuance 

of some major or high-impact rules, which would delay when they 

take effect, could result in costs, while delaying others could result 

in savings. CBO expects that the rules with the largest effects on 

Federal spending would be those related to Federal health programs, particularly Medicare; thus, enacting H.R. 3010 could significantly affect Medicare spending relative to current law. 

CBO cannot determine the level of costs or savings in direct 

spending over the 2012–2021 period. However, we expect that such 

budgetary effects would largely be driven by delaying annual updates to payment schedules for providing Medicare services and 

other routine revisions to aspects of other government programs. 

Revenues 

Enacting H.R. 3010 also would affect revenues by changing the 

way the Internal Revenue Service could issue its nonregulatory 

guidance and by slowing down rulemaking generally. JCT expects 

those delays would reduce revenue collections in some cases and increase them in others. However, JCT cannot determine the level of 

costs or savings of those possible effects. 

PAY-AS-YOU-GO CONSIDERATIONS

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct 

spending or revenues. Pay-as-you-go procedures apply to H.R. 3010 

because enacting the legislation would affect direct spending and 

revenues. CBO and JCT cannot determine the level of costs or savings associated with those effects. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

CBO expects that H.R. 3010 would impose no intergovernmental 

or private-sector mandates as defined in UMRA. By potentially delaying Federal rules, the bill could affect public or private entities 

in a number of other ways, for example by slowing reimbursements 

or delaying the implementation of regulatory requirements. While 

the costs and savings associated with such effects could be significant, because we cannot predict the nature or number of regulations that could be delayed, CBO has no basis for estimating the 

level of costs or savings that would result. 

ESTIMATE PREPARED BY: 

Federal Spending: Sean Dunbar and Susanne S. Mehlman 

Impact on State, Local, and Tribal Governments: Elizabeth Cove 

Delisle 

Impact on the Private Sector: Paige Piper/Bach 

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47 

ESTIMATE APPROVED BY: 

Theresa Gullo 

Deputy Assistant Director for Budget Analysis 

Holly Harvey 

Deputy Assistant Director for Budget Analysis 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 3010 will create 

jobs and promote economic growth by improving agencies’ decisionmaking processes and enhancing regulatory transparency and accountability. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 3010 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short Title. Section 1 designates H.R. 3010 the ‘‘Regulatory Accountability Act of 2011.’’ 

Sec. 2. Definitions. Section 2 adds to the APA definitions of the 

following terms: ‘‘major rule,’’ based in part on the definition given 

to that term in Section 1(b) of Executive Order 12866 (narrowing 

the term to include rules that ‘‘impose costs’’ of $100 million or 

more annually on the economy, rather than rules that have annual 

‘‘effects’’ of $100 million or more, and including rules with ‘‘significant impacts on multiple sectors of the economy’’), and in part on 

the definition used in H.R. 10, the ‘‘Regulations from the Executive 

in Need of Scrutiny Act’’; ‘‘high-impact rule’’ as any rule likely to 

impose an annual cost of $1 billion or more on the economy; ‘‘guidance,’’ based on the definition given to that term in Section 3(g) of 

Executive Order 13422; ‘‘major guidance,’’ based on the definition 

given to the term ‘‘significant guidance document’’ in Section 3(h) 

of Executive Order 13422; ‘‘Information Quality Act,’’ as Section 

515 of Public Law 106–554 and its implementing OMB and agency 

guidelines; and, the ‘‘Office of Information and Regulatory Affairs.’’ 

Sec. 3. Rulemaking. Section 3 updates and reforms the rulemaking process in Section 553, U.S.C. 5. At Section 553(b), the Act 

incorporates into the APA universally applicable rulemaking principles rooted in Executive Orders 12291, 12866, 13422 and 13563, 

making them statutorily mandatory and judicially enforceable. In 

a rulemaking, the agency must consider: 

• The legal authority for the rule and other relevant statutory 

considerations (5 U.S.C. § 553(b)(1)-(2)); 

• The specific nature of the problem, whether it genuinely 

warrants new regulations, and countervailing risks that may 

be posed by alternatives for new agency action (5 U.S.C. 

§ 553(b)(3)); 

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• Whether the problem could be addressed by repealing or 

modifying existing regulations (5 U.S.C. § 553(b)(4)); 

• Potential alternatives to adopting a new regulation, including no Federal response and a regional/State/local/tribal response (5 U.S.C. § 553(b)(5)); 

• Notwithstanding any other law, the potential costs and benefits—direct, indirect and cumulative—associated with each 

alternative, as well as estimated impacts on jobs, economic 

growth, innovation and economic competitiveness (5 U.S.C. 

§ 553(b)(6)). 

The last of these terms overrides provisions of existing law that 

limit agencies from considering costs in a small number of rulemaking settings. The term does not, however, require agencies to 

base their final rulemaking decisions in those settings on cost considerations, irrespective of other statutory considerations. 

Consistent with President Obama’s call in Executive Order 13563 

for earlier, more transparent outreach to the public and affected 

entities, the Bill requires Advance Notices of Proposed Rulemaking 

(ANPRs) 90 days before an agency may propose any major or highimpact rule or a rule involving novel legal or policy issues that 

arise from statutory mandates. ANPRs must disclose in writing information already known to the agency and the legal basis for a potential rulemaking. The agency must solicit information from interested persons and allow the public 60 days to submit written views 

about the information and issues discussed in the advance notice. 

(5 U.S.C. § 553(c)) For a rule involving novel legal or policy issues, 

the agency must disclose the nature of and reasons to adopt the 

novel legal or policy position. This builds upon Executive Orders 

12866 and 13563 and gives the public an opportunity to offer views 

on rules that involve novel legal or policy issues early in the rulemaking process, when agencies could profit significantly from 

them. In parallel, Section 4 requires agencies to consult with OIRA 

before issuing major guidance based on novel legal or policy issues 

that arise from statutory mandates. 

The Act contains improved Notice of Proposed Rulemaking requirements that assure major and high-impact proposed rules are 

built upon the sound, transparent decision-making platform made 

possible by the ANPR process and that other proposed rules also 

rest on a more robust and transparent decision-making platform. 

Before proposing a rule, the agency is required to consult with 

OIRA. These requirements will crystallize for public comment the 

agency’s preliminary determinations of whether a Federal regulation is needed; whether the benefits of the proposed rule meet statutory objectives and justify its costs, and whether the agency has 

conducted a preliminary risk assessment or regulatory impact analysis; whether alternatives exist that could achieve statutory objectives at lower costs; whether and why the agency has not proposed 

a lower-cost alternative; whether existing regulations or other laws 

have produced or contributed to the problem the agency seeks to 

correct with new regulation; and, if so, whether modification or repeal of those other regulations or laws could resolve the problem 

more effectively than a new rule. (5 U.S.C. § 553(d)(1)) 

After concluding the ANPR process, if applicable, an agency may 

alternatively publish a Determination of Other Agency Course, demstockstill on DSK4VPTVN1PROD with HEARINGS

49 

scribing the alternative response the agency chose rather than to 

issue a new rule. The agency must consult with OIRA, and disclose 

all information provided to or considered by the agency in its decision-making process, including but not limited to any preliminary 

risk assessment or regulatory impact analysis. (5 U.S.C. 

§ 553(d)(2)) 

If the agency proceeds with the rulemaking, then the agency 

must give interested parties at least 60 days to submit written 

data, views or arguments related to the proposed rule, and 120 

days to do so for any proposed major or high-impact rule. (5 U.S.C. 

§ 553(d)(3)) 

The Bill also provides an early opportunity for quick administrative appeals of whether the key studies or other information on 

which agencies base their proposed rules meet vital standards set 

under the Information Quality Act. (5 U.S.C. § 553(d)(4)) 

For any high-impact rule, after following the steps prescribed by 

Section 553(d)(1)-(3), the Act requires agencies to hold limited formal hearings with opportunities for cross-examination on the most 

critical factual issues for proposed rules that impose a $1 billion 

burden on the economy. These issues concern the key information 

on ‘‘whether the agency’s asserted factual predicate for the rule is 

supported by the evidence’’; whether there is a lower-cost alternative for regulation that achieves statutory objectives, and why 

the agency did not choose it; and whether the final information on 

which the agency relies satisfies the Information Quality Act. The 

agency must publish public notice of the hearing not less than 45 

days in advance. Upon petition, hearings or issues may be waived 

by participants in the rulemaking other than the agency. Issues 

also may be added to hearings on high-impact rules, and hearings 

may be granted on major rules, upon petition and at the agency’s 

discretion. 

The Act contains improved requirements at the final rulemaking 

stage as well. In adopting a final rule, an agency must: 

• Consult with the OIRA Administrator; (5 U.S.C. § 553(f)(1)) 

• Rely only on the best reasonably obtainable scientific, technical and economic information; (5 U.S.C. § 553(f)(2)) 

• Adopt only the least-cost alternative considered during rulemaking that meets statutory objectives, unless the agency 

explains why a more costly rule is justified to serve interests 

of public health, safety or welfare clearly within the scope of 

the statutory provision that authorizes the rule and the more 

costly rule’s additional benefits justify its additional costs; (5 

U.S.C. § 553(f)(3)) 

• Publish a notice of final rulemaking giving: ‘‘a concise, general statement of the rule’s basis and purpose,’’ an explanation of the need for the rule, the costs and benefits, any 

final risk assessment or regulatory impact analysis, and why 

the agency did not adopt an alternative rule or amend or rescind an existing rule. The agency must rest on specific, final 

determinations on the critical issues considered during formal rulemaking hearings, based on data that meets the 

strictures of the Information Quality Act; (5 U.S.C. 

§ 553(f)(4)) 

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198See 5 U.S.C. § 807. 

• Publish plans for periodic review of high-impact and major 

rules to determine whether the agency’s final rule still is 

needed, achieves statutory objectives, and produces benefits 

that justify its costs or whether the rule could be modified 

or rescinded. (5 U.S.C. § 553(f)(4)(G)) 

The Bill seeks to prevent the abuse of ‘‘interim-final rules.’’ The 

Bill allows agencies in cases of public urgency to issue ‘‘interimfinal rules’’ that are effective before full rulemaking procedures are 

completed, but also requires prompt subsequent completion of full 

rulemaking procedures and allows affected entities to seek rapid 

judicial review of agency decisions to adopt interim-final rules (except for national security rules). An agency may forego the rulemaking process when the ‘‘rulemaking is undertaken only to correct a de minimis technical or clerical error in a previously issued 

rule or for other noncontroversial purposes.’’ To prevent abuse of 

this feature, if the agency receives significant adverse comment on 

such rules within 60 days, then it must conduct normal notice-andcomment rulemaking. (5 U.S.C. § 553(g)) 

The Act requires publication of a substantive final or interim 

rule no less than 30 days before its effective date. (5 U.S.C. § 553(i)) 

‘‘Each agency shall give an interested person the right to petition 

for the issuance, amendment, or repeal of a rule.’’ (5 U.S.C. § 553(j)) 

OIRA is required to issue guidelines for agencies to follow as 

they assess scientific and economic issues in rulemaking, including 

cost-benefit analysis and assessment of risks; as they observe statute-specific rulemaking regimes in conjunction with the generally 

applicable procedures of the APA as amended; to assure better coordination, simplification and coordination by agencies in rulemaking; and, as they conduct hearings under sections 553, 556 and 

557 of title 5. (5 U.S.C. § 553(k)) 

The agency must include in the rulemaking record ‘‘all documents and information prepared or considered by the agency during the proceeding’’ including, at the discretion of the President or 

the OIRA Administrator, communications from OIRA to the agency. The record shall be made available to the public online whenever feasible, but if not then by other electronic means, and otherwise. (5 U.S.C. § 553(l)) 

The Bill exempts the Board of Governors of the Federal Reserve 

System and the Federal Open Markets Committee from performing 

cost-benefit analysis or holding formal hearings for monetary policy 

rules. This parallels an exemption for such rules granted by Congress in the Congressional Review Act.198 (5 U.S.C. § 553(m)) 

Sec. 4. Agency Guidance. The Bill contains reforms to curb 

agency abuse of purportedly non-binding ‘‘guidance’’—particularly 

guidance with major economic impacts—to avoid statutory rulemaking requirements. Specifically, when issuing major guidance, 

the agency must consult with OIRA; document that the guidance 

is ‘‘understandable and complies with relevant statutory objectives 

and regulatory provisions’’; summarize the underlying evidence; 

identify the costs and benefits of the guidance; and, describe alternatives to the guidance, their costs and benefits, and why the agency rejected them. This documentation must be published online or 

made available to the public by electronic means, or otherwise. The 

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Act specifies that agency guidance is not legally binding, and requires agencies to disclose this on its guidance. Agencies should not 

issue guidance that is duplicative of, or inconsistent or incompatible with, existing statutes or regulations. (5 U.S.C. § 553a) 

Sec. 5. Hearings. The Bill adopts technical changes to existing 

APA requirements for formal, on-the-record rulemaking hearings 

that support hearing-based reforms in Section 3. (5 U.S.C. § 556) 

Sec. 6. Actions Reviewable. The Act clarifies that an agency’s 

denial of an Information Quality Act correction petition, or an 

agency’s failure to grant or deny such petition within 90 days, is 

reviewable by a court as a final action. The Act provides for immediate judicial review of agency decisions to establish ‘‘interim-final 

rules’’ before complying with normal rulemaking requirements. An 

abuse of discretion standard will apply in such review. (5 U.S.C. 

§ 704) 

Sec. 7. Scope of Review. Section 7 clarifies the scope and standards of judicial review available under the APA. First, courts may 

review agency action for violations of the Information Quality Act. 

Further, Section 7 prohibits judicial deference to agency guidance 

and other interpretive statements rendered outside of the rulemaking process; agency determinations of cost-benefit issues, other 

economic assessments or risk assessments that do not comply with 

applicable OIRA guidelines; and, agency determinations of law and 

fact to support interim-final rules. Section 7 allows agency denials 

of petitions for hearings or consideration of specific issues in hearings to be reviewed for abuse of discretion. (5 U.S.C. § 706). 

The Bill otherwise preserves traditional principles of judicial review and deference, including with respect to cost-benefit analysis. 

As discussed above, the requirements for agencies to consider costs 

and benefits in rulemaking, found in Section 3 of the Bill, supersede other statutory provisions that in limited circumstances preclude agencies from considering the costs of a new regulation. If, 

however, only one regulatory alternative considered in a rulemaking can achieve the relevant statutory objectives, cost considerations will not constrain the agency from adopting that alternative. 

By contrast, if there is more than one alternative for the rule that 

can achieve the relevant statutory objectives, then the required 

consideration of costs will place the agency in a position to adopt 

the alternative that achieves those objectives at the lowest cost. 

This determination is judicially reviewable, but a court is entitled 

to give Chevron deference to the agency’s interpretation of the relevant statutory objectives. A court is also entitled to defer to the 

agency’s determination of which alternative achieved those objectives at the lowest cost, provided that the agency has followed the 

applicable OIRA guidelines for how to assess costs and benefits or 

other economic issues or risks. Regardless of whether the court 

grants the agency an extra margin of deference under Chevron or 

other applicable deference doctrines, the court will review the agency’s determination under the APA’s ‘‘arbitrary or capricious standard’’—or, if the agency rule was based on a hearing, under the 

‘‘substantial evidence’’ standard. This follows traditional rules for 

judicial review of the determinations on which agencies base final 

rules. 

Sec. 8. Added Definition. The Act codifies the definition of the 

term ‘‘substantial evidence’’ given by the Supreme Court in Unimstockstill on DSK4VPTVN1PROD with HEARINGS

52 

versal Camera Corp. v. NLRB, 340 U.S. 474 (1951). (5 U.S.C. 

§ 701(b)) 

Sec. 9. Effective Date. In general, the Bill’s provisions do not 

apply to any rulemaking pending or completed on the date of enactment. Exceptions are made for the Act’s amendments to establish 

definitions in Section 551, 5 U.S.C.; to prohibit judicial deference 

to agency interpretations of regulations outside of rulemaking; and, 

to guarantee judicial review of Information Quality Act violations. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

TITLE 5, UNITED STATES CODE 

PART I—THE AGENCIES GENERALLY 

* * * * * * * 

CHAPTER 5—ADMINISTRATIVE PROCEDURE 

SUBCHAPTER I—GENERAL PROVISIONS 

Sec. 

500. Administrative practice; general provisions. 

* * * * * * * 

SUBCHAPTER II—ADMINISTRATIVE PROCEDURE 

* * * * * * * 

553a. Agency guidance; procedures to issue major guidance; authority to issue guidelines for issuance of guidance. 

* * * * * * * 

SUBCHAPTER II—ADMINISTRATIVE PROCEDURE 

§ 551. Definitions 

For the purpose of this subchapter— 

(1) * * * 

* * * * * * * 

(13) ‘‘agency action’’ includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act; øand¿ 

(14) ‘‘ex parte communication’’ means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not 

include requests for status reports on any matter or proceeding 

covered by this subchapterø.¿; 

(15) ‘‘major rule’’ means any rule that the Administrator of 

the Office of Information and Regulatory Affairs determines is 

likely to impose— 

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53 

(A) an annual cost on the economy of $100,000,000 or 

more, adjusted annually for inflation; 

(B) a major increase in costs or prices for consumers, individual industries, Federal, State, local, or tribal government agencies, or geographic regions; 

(C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability 

of United States-based enterprises to compete with foreignbased enterprises in domestic and export markets; or 

(D) significant impacts on multiple sectors of the economy; 

(16) ‘‘high-impact rule’’ means any rule that the Administrator of the Office of Information and Regulatory Affairs determines is likely to impose an annual cost on the economy of 

$1,000,000,000 or more, adjusted annually for inflation; 

(17) ‘‘guidance’’ means an agency statement of general applicability and future effect, other than a regulatory action, that 

sets forth a policy on a statutory, regulatory or technical issue 

or an interpretation of a statutory or regulatory issue; 

(18) ‘‘major guidance’’ means guidance that the Administrator 

of the Office of Information and Regulatory Affairs finds is likely to lead to— (A) an annual cost on the economy of $100,000,000 or 

more, adjusted annually for inflation; 

(B) a major increase in costs or prices for consumers, individual industries, Federal, State, local or tribal government agencies, or geographic regions; 

(C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability 

of United States-based enterprises to compete with foreignbased enterprises in domestic and export markets; or 

(D) significant impacts on multiple sectors of the economy; 

(19) the ‘‘Information Quality Act’’ means section 515 of Public Law 106–554, the Treasury and General Government Appropriations Act for Fiscal Year 2001, and guidelines issued by the 

Administrator of the Office of Information and Regulatory Affairs or other agencies pursuant to the Act; and 

(20) the ‘‘Office of Information and Regulatory Affairs’’ means 

the office established under section 3503 of chapter 35 of title 

44 and any successor to that office. 

* * * * * * * 

§ 553. Rule making 

ø(a) This section applies¿ (a) APPLICABILITY.—This section applies, according to the provisions thereof, except to the extent that 

there is involved— 

(1) * * * 

* * * * * * * 

ø(b) General notice of proposed rule making shall be published 

in the Federal Register, unless persons subject thereto are named 

and either personally served or otherwise have actual notice thereof in accordance with law. The notice shall include— 

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54 

ø(1) a statement of the time, place, and nature of public rule 

making proceedings; 

ø(2) reference to the legal authority under which the rule is 

proposed; and 

ø(3) either the terms or substance of the proposed rule or a 

description of the subjects and issues involved. 

Except when notice or hearing is required by statute, this subsection does not apply— 

ø(A) to interpretative rules, general statements of policy, or 

rules of agency organization, procedure, or practice; or 

ø(B) when the agency for good cause finds (and incorporates 

the finding and a brief statement of reasons therefor in the 

rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. 

ø(c) After notice required by this section, the agency shall give 

interested persons an opportunity to participate in the rule making 

through submission of written data, views, or arguments with or 

without opportunity for oral presentation. After consideration of 

the relevant matter presented, the agency shall incorporate in the 

rules adopted a concise general statement of their basis and purpose. When rules are required by statute to be made on the record 

after opportunity for an agency hearing, sections 556 and 557 of 

this title apply instead of this subsection. 

ø(d) The required publication or service of a substantive rule 

shall be made not less than 30 days before its effective date, except— 

ø(1) a substantive rule which grants or recognizes an exemption or relieves a restriction; 

ø(2) interpretative rules and statements of policy; or 

ø(3) as otherwise provided by the agency for good cause 

found and published with the rule. 

ø(e) Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.¿ 

(b) RULE MAKING CONSIDERATIONS.—In a rule making, an agency 

shall make all preliminary and final factual determinations based 

on evidence and consider, in addition to other applicable considerations, the following: 

(1) The legal authority under which a rule may be proposed, 

including whether a rule making is required by statute, and if 

so, whether by a specific date, or whether the agency has discretion to commence a rule making. 

(2) Other statutory considerations applicable to whether the 

agency can or should propose a rule or undertake other agency 

action. 

(3) The specific nature and significance of the problem the 

agency may address with a rule (including the degree and nature of risks the problem poses and the priority of addressing 

those risks compared to other matters or activities within the 

agency’s jurisdiction), whether the problem warrants new agency action, and the countervailing risks that may be posed by alternatives for new agency action. 

(4) Whether existing rules have created or contributed to the 

problem the agency may address with a rule and whether those 

rules could be amended or rescinded to address the problem in 

whole or part. 

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(5) Any reasonable alternatives for a new rule or other response identified by the agency or interested persons, including 

not only responses that mandate particular conduct or manners 

of compliance, but also— 

(A) the alternative of no Federal response; 

(B) amending or rescinding existing rules; 

(C) potential regional, State, local, or tribal regulatory 

action or other responses that could be taken in lieu of 

agency action; and 

(D) potential responses that— 

(i) specify performance objectives rather than conduct 

or manners of compliance; 

(ii) establish economic incentives to encourage desired behavior; 

(iii) provide information upon which choices can be 

made by the public; or 

(iv) incorporate other innovative alternatives rather 

than agency actions that specify conduct or manners of 

compliance. 

(6) Notwithstanding any other provision of law— 

(A) the potential costs and benefits associated with potential alternative rules and other responses considered under 

section 553(b)(5), including direct, indirect, and cumulative 

costs and benefits and estimated impacts on jobs, economic 

growth, innovation, and economic competitiveness; 

(B) means to increase the cost-effectiveness of any Federal 

response; and 

(C) incentives for innovation, consistency, predictability, 

lower costs of enforcement and compliance (to government 

entities, regulated entities, and the public), and flexibility. 

(c) ADVANCE NOTICE OF PROPOSED RULE MAKING FOR MAJOR

RULES, HIGH-IMPACT RULES, AND RULES INVOLVING NOVEL LEGAL

OR POLICY ISSUES.—In the case of a rule making for a major rule 

or high-impact rule or a rule that involves a novel legal or policy 

issue arising out of statutory mandates, not later than 90 days before a notice of proposed rule making is published in the Federal 

Register, an agency shall publish advance notice of proposed rule 

making in the Federal Register. In publishing such advance notice, 

the agency shall— 

(1) include a written statement identifying, at a minimum— 

(A) the nature and significance of the problem the agency 

may address with a rule, including data and other evidence 

and information on which the agency expects to rely for the 

proposed rule; 

(B) the legal authority under which a rule may be proposed, including whether a rule making is required by statute, and if so, whether by a specific date, or whether the 

agency has discretion to commence a rule making; 

(C) preliminary information available to the agency concerning the other considerations specified in subsection (b); 

and 

(D) in the case of a rule that involves a novel legal or policy issue arising out of statutory mandates, the nature of 

and potential reasons to adopt the novel legal or policy position upon which the agency may base a proposed rule; 

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(2) solicit written data, views or argument from interested 

persons concerning the information and issues addressed in the 

advance notice; and 

(3) provide for a period of not fewer than 60 days for interested persons to submit such written data, views, or argument 

to the agency. 

(d) NOTICES OF PROPOSED RULE MAKING; DETERMINATIONS OF

OTHER AGENCY COURSE.—(1) Before it determines to propose a rule, 

and following completion of procedures under subsection (c), if applicable, the agency shall consult with the Administrator of the Office of Information and Regulatory Affairs. If the agency thereafter 

determines to propose a rule, the agency shall publish a notice of 

proposed rule making, which shall include— 

(A) a statement of the time, place, and nature of public rule 

making proceedings; 

(B) reference to the legal authority under which the rule is 

proposed; 

(C) the terms of the proposed rule; 

(D) a description of information known to the agency on the 

subject and issues of the proposed rule, including but not limited to— 

(i) a summary of information known to the agency concerning the considerations specified in subsection (b); 

(ii) a summary of additional information the agency provided to and obtained from interested persons under subsection (c); 

(iii) a summary of any preliminary risk assessment or 

regulatory impact analysis performed by the agency; and 

(iv) information specifically identifying all data, studies, 

models, and other evidence or information considered or 

used by the agency in connection with its determination to 

propose the rule; 

(E)(i) a reasoned preliminary determination of need for the 

rule based on the information described under subparagraph 

(D); and 

(ii) an additional statement of whether a rule is required by 

statute; 

(F) a reasoned preliminary determination that the benefits of 

the proposed rule meet the relevant statutory objectives and justify the costs of the proposed rule (including all costs to be considered under subsection (b)(6)), based on the information described under subparagraph (D); 

(G) a discussion of— 

(i) the alternatives to the proposed rule, and other alternative responses, considered by the agency under subsection 

(b); 

(ii) the costs and benefits of those alternatives (including 

all costs to be considered under subsection (b)(6)); 

(iii) whether those alternatives meet relevant statutory objectives; and 

(iv) why the agency did not propose any of those alternatives; and 

(H)(i) a statement of whether existing rules have created or 

contributed to the problem the agency seeks to address with the 

proposed rule; and 

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(ii) if so, whether or not the agency proposes to amend or rescind any such rules, and why. 

All information provided to or considered by the agency, and 

steps to obtain information by the agency, in connection with its 

determination to propose the rule, including any preliminary 

risk assessment or regulatory impact analysis prepared by the 

agency and all other information prepared or described by the 

agency under subparagraph (D) and, at the discretion of the 

President or the Administrator of the Office of Information and 

Regulatory Affairs, information provided by that Office in consultations with the agency, shall be placed in the docket for the 

proposed rule and made accessible to the public by electronic 

means and otherwise for the public’s use when the notice of proposed rule making is published. 

(2)(A) If the agency undertakes procedures under subsection (c) 

and determines thereafter not to propose a rule, the agency shall, 

following consultation with the Office of Information and Regulatory Affairs, publish a notice of determination of other agency 

course. A notice of determination of other agency course shall include information required by paragraph (1)(D) to be included in a 

notice of proposed rule making and a description of the alternative 

response the agency determined to adopt. 

(B) If in its determination of other agency course the agency 

makes a determination to amend or rescind an existing rule, the 

agency need not undertake additional proceedings under subsection 

(c) before it publishes a notice of proposed rule making to amend or 

rescind the existing rule. 

All information provided to or considered by the agency, and steps 

to obtain information by the agency, in connection with its determination of other agency course, including but not limited to any 

preliminary risk assessment or regulatory impact analysis prepared 

by the agency and all other information that would be required to 

be prepared or described by the agency under paragraph (1)(D) if 

the agency had determined to publish a notice of proposed rule 

making and, at the discretion of the President or the Administrator 

of the Office of Information and Regulatory Affairs, information 

provided by that Office in consultations with the agency, shall be 

placed in the docket for the determination and made accessible to 

the public by electronic means and otherwise for the public’s use 

when the notice of determination is published. 

(3) After notice of proposed rule making required by this section, 

the agency shall provide interested persons an opportunity to participate in the rule making through submission of written data, 

views, or arguments with or without opportunity for oral presentation, except that— 

(A) if a hearing is required under paragraph (4)(B) or subsection (e), opportunity for oral presentation shall be provided 

pursuant to that requirement; or 

(B) when other than under subsection (e) of this section rules 

are required by statute or at the discretion of the agency to be 

made on the record after opportunity for an agency hearing, sections 556 and 557 shall apply, and paragraph (4), the requirements of subsection (e) to receive comment outside of the procedures of sections 556 and 557, and the petition procedures of 

subsection (e)(6) shall not apply. 

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The agency shall provide not fewer than 60 days for interested persons to submit written data, views, or argument (or 120 days in the 

case of a proposed major or high-impact rule). 

(4)(A) Within 30 days of publication of notice of proposed rule 

making, a member of the public may petition for a hearing in accordance with section 556 to determine whether any evidence or 

other information upon which the agency bases the proposed rule 

fails to comply with the Information Quality Act. 

(B)(i) The agency may, upon review of the petition, determine 

without further process to exclude from the rule making the evidence 

or other information that is the subject of the petition and, if appropriate, withdraw the proposed rule. The agency shall promptly publish any such determination. 

(ii) If the agency does not resolve the petition under the procedures 

of clause (i), it shall grant any such petition that presents a prima 

facie case that evidence or other information upon which the agency 

bases the proposed rule fails to comply with the Information Quality 

Act, hold the requested hearing not later than 30 days after receipt 

of the petition, provide a reasonable opportunity for cross-examination at the hearing, and decide the issues presented by the petition 

not later than 60 days after receipt of the petition. The agency may 

deny any petition that it determines does not present such a prima 

facie case. 

(C) There shall be no judicial review of the agency’s disposition 

of issues considered and decided or determined under subparagraph 

(B)(ii) until judicial review of the agency’s final action. There shall 

be no judicial review of an agency’s determination to withdraw a 

proposed rule under subparagraph (B)(i) on the basis of the petition. 

(D) Failure to petition for a hearing under this paragraph shall 

not preclude judicial review of any claim based on the Information 

Quality Act under chapter 7 of this title. 

(e) HEARINGS FOR HIGH-IMPACT RULES.—Following notice of a 

proposed rule making, receipt of comments on the proposed rule, 

and any hearing held under subsection (d)(4), and before adoption 

of any high-impact rule, the agency shall hold a hearing in accordance with sections 556 and 557, unless such hearing is waived by 

all participants in the rule making other than the agency. The agency shall provide a reasonable opportunity for cross-examination at 

such hearing. The hearing shall be limited to the following issues 

of fact, except that participants at the hearing other than the agency 

may waive determination of any such issue: 

(1) Whether the agency’s asserted factual predicate for the 

rule is supported by the evidence. 

(2) Whether there is an alternative to the proposed rule that 

would achieve the relevant statutory objectives at a lower cost 

(including all costs to be considered under subsection (b)(6)) 

than the proposed rule. 

(3) If there is more than one alternative to the proposed rule 

that would achieve the relevant statutory objectives at a lower 

cost than the proposed rule, which alternative would achieve 

the relevant statutory objectives at the lowest cost. 

(4) Whether, if the agency proposes to adopt a rule that is 

more costly than the least costly alternative that would achieve 

the relevant statutory objectives (including all costs to be considered under subsection (b)(6)), the additional benefits of the 

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more costly rule exceed the additional costs of the more costly 

rule. 

(5) Whether the evidence and other information upon which 

the agency bases the proposed rule meets the requirements of 

the Information Quality Act. 

(6) Upon petition by an interested person who has participated in the rule making, other issues relevant to the rule making, unless the agency determines that consideration of the 

issues at the hearing would not advance consideration of the 

rule or would, in light of the nature of the need for agency action, unreasonably delay completion of the rule making. An 

agency shall grant or deny a petition under this paragraph 

within 30 days of its receipt of the petition. 

No later than 45 days before any hearing held under this subsection 

or sections 556 and 557, the agency shall publish in the Federal 

Register a notice specifying the proposed rule to be considered at 

such hearing, the issues to be considered at the hearing, and the 

time and place for such hearing, except that such notice may be 

issued not later than 15 days before a hearing held under subsection (d)(4)(B). 

(f) FINAL RULES.—(1) The agency shall adopt a rule only following consultation with the Administrator of the Office of Information and Regulatory Affairs to facilitate compliance with applicable 

rule making requirements. 

(2) The agency shall adopt a rule only on the basis of the best reasonably obtainable scientific, technical, economic, and other evidence and information concerning the need for, consequences of, and 

alternatives to the rule. 

(3)(A) Except as provided in subparagraph (B), the agency shall 

adopt the least costly rule considered during the rule making (including all costs to be considered under subsection (b)(6)) that meets 

relevant statutory objectives. 

(B) The agency may adopt a rule that is more costly than the least 

costly alternative that would achieve the relevant statutory objectives only if the additional benefits of the more costly rule justify its 

additional costs and only if the agency explains its reason for doing 

so based on interests of public health, safety or welfare that are 

clearly within the scope of the statutory provision authorizing the 

rule. 

(4) When it adopts a final rule, the agency shall publish a notice 

of final rule making. The notice shall include— 

(A) a concise, general statement of the rule’s basis and purpose; 

(B) the agency’s reasoned final determination of need for a 

rule to address the problem the agency seeks to address with the 

rule, including a statement of whether a rule is required by 

statute and a summary of any final risk assessment or regulatory impact analysis prepared by the agency; 

(C) the agency’s reasoned final determination that the benefits 

of the rule meet the relevant statutory objectives and justify the 

rule’s costs (including all costs to be considered under subsection (b)(6)); 

(D) the agency’s reasoned final determination not to adopt 

any of the alternatives to the proposed rule considered by the 

agency during the rule making, including— 

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60 

(i) the agency’s reasoned final determination that no alternative considered achieved the relevant statutory objectives with lower costs (including all costs to be considered 

under subsection (b)(6)) than the rule; or 

(ii) the agency’s reasoned determination that its adoption 

of a more costly rule complies with subsection (f)(3)(B); 

(E) the agency’s reasoned final determination— 

(i) that existing rules have not created or contributed to 

the problem the agency seeks to address with the rule; or 

(ii) that existing rules have created or contributed to the 

problem the agency seeks to address with the rule, and, if 

so— 

(I) why amendment or rescission of such existing 

rules is not alone sufficient to respond to the problem; 

and 

(II) whether and how the agency intends to amend or 

rescind the existing rule separate from adoption of the 

rule; 

(F) the agency’s reasoned final determination that the evidence and other information upon which the agency bases the 

rule complies with the Information Quality Act; and 

(G)(i) for any major rule or high-impact rule, the agency’s 

plan for review of the rule no less than every ten years to determine whether, based upon evidence, there remains a need for 

the rule, whether the rule is in fact achieving statutory objectives, whether the rule’s benefits continue to justify its costs, and 

whether the rule can be modified or rescinded to reduce costs 

while continuing to achieve statutory objectives. 

(ii) review of a rule under a plan required by clause (i) of this 

subparagraph shall take into account the factors and criteria 

set forth in subsections (b) through (f) of section 553 of this title. 

All information considered by the agency in connection with its 

adoption of the rule, and, at the discretion of the President or the 

Administrator of the Office of Information and Regulatory Affairs, 

information provided by that Office in consultations with the agency, shall be placed in the docket for the rule and made accessible 

to the public for the public’s use no later than when the rule is 

adopted. 

(g) EXCEPTIONS FROM NOTICE AND HEARING REQUIREMENTS.—(1) 

Except when notice or hearing is required by statute, the following 

do not apply to interpretive rules, general statements of policy, or 

rules of agency organization, procedure, or practice: 

(A) Subsections (c) through (e). 

(B) Paragraphs (1) through (3) of subsection (f). 

(C) Subparagraphs (B) through (H) of subsection (f)(4). 

(2)(A) When the agency for good cause, based upon evidence, finds 

(and incorporates the finding and a brief statement of reasons therefor in the rules issued) that compliance with subsection (c), (d), or 

(e) or requirements to render final determinations under subsection 

(f) of this section before the issuance of an interim rule is impracticable or contrary to the public interest, including interests of national security, such subsections or requirements to render final determinations shall not apply to the agency’s adoption of an interim 

rule. 

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61 

(B) If, following compliance with subparagraph (A) of this paragraph, the agency adopts an interim rule, it shall commence proceedings that comply fully with subsections (d) through (f) of this 

section immediately upon publication of the interim rule, shall treat 

the publication of the interim rule as publication of a notice of proposed rule making and shall not be required to issue supplemental 

notice other than to complete full compliance with subsection (d). No 

less than 270 days from publication of the interim rule (or 18 

months in the case of a major rule or high-impact rule), the agency 

shall complete rule making under subsections (d) through (f) of this 

subsection and take final action to adopt a final rule or rescind the 

interim rule. If the agency fails to take timely final action, the interim rule will cease to have the effect of law. 

(C) Other than in cases involving interests of national security, 

upon the agency’s publication of an interim rule without compliance 

with subsections (c), (d), or (e) or requirements to render final determinations under subsection (f) of this section, an interested party 

may seek immediate judicial review under chapter 7 of this title of 

the agency’s determination to adopt such interim rule. The record 

on such review shall include all documents and information considered by the agency and any additional information presented by a 

party that the court determines necessary to consider to assure justice. 

(3) When the agency for good cause finds (and incorporates the 

finding and a brief statement of reasons therefor in the rules issued) 

that notice and public procedure thereon are unnecessary, including 

because agency rule making is undertaken only to correct a de minimis technical or clerical error in a previously issued rule or for 

other noncontroversial purposes, the agency may publish a rule 

without compliance with subsections (c), (d), (e), or (f)(1)-(3) and 

(f)(4)(B)-(F). If the agency receives significant adverse comment 

within 60 days after publication of the rule, it shall treat the notice 

of the rule as a notice of proposed rule making and complete rule 

making in compliance with subsections (d) and (f). 

(h) ADDITIONAL REQUIREMENTS FOR HEARINGS.—When a hearing 

is required under subsection (e) or is otherwise required by statute 

or at the agency’s discretion before adoption of a rule, the agency 

shall comply with the requirements of sections 556 and 557 in addition to the requirements of subsection (f) in adopting the rule and 

in providing notice of the rule’s adoption. 

(i) DATE OF PUBLICATION OF RULE.—The required publication or 

service of a substantive final or interim rule shall be made not less 

than 30 days before the effective date of the rule, except— 

(1) a substantive rule which grants or recognizes an exemption or relieves a restriction; 

(2) interpretive rules and statements of policy; or 

(3) as otherwise provided by the agency for good cause found 

and published with the rule. 

(j) RIGHT TO PETITION.—Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of 

a rule. 

(k) RULE MAKING GUIDELINES.—(1)(A) The Administrator of the 

Office of Information and Regulatory Affairs shall establish guidelines for the assessment, including quantitative and qualitative assessment, of the costs and benefits of proposed and final rules and 

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62 

other economic issues or issues related to risk that are relevant to 

rule making under this title. The rigor of cost-benefit analysis required by such guidelines shall be commensurate, in the Administrator’s determination, with the economic impact of the rule. 

(B) To ensure that agencies use the best available techniques to 

quantify and evaluate anticipated present and future benefits, costs, 

other economic issues, and risks as accurately as possible, the Administrator of the Office of Information and Regulatory Affairs 

shall regularly update guidelines established under paragraph 

(1)(A) of this subsection. 

(2) The Administrator of the Office of Information and Regulatory 

Affairs shall also issue guidelines to promote coordination, simplification and harmonization of agency rules during the rule making process and otherwise. Such guidelines shall assure that each 

agency avoids regulations that are inconsistent or incompatible 

with, or duplicative of, its other regulations and those of other Federal agencies and drafts its regulations to be simple and easy to understand, with the goal of minimizing the potential for uncertainty 

and litigation arising from such uncertainty. 

(3) To ensure consistency in Federal rule making, the Administrator of the Office of Information and Regulatory Affairs shall— 

(A) issue guidelines and otherwise take action to ensure that 

rule makings conducted in whole or in part under procedures 

specified in provisions of law other than those of subchapter II 

of this title conform to the fullest extent allowed by law with the 

procedures set forth in section 553 of this title; and 

(B) issue guidelines for the conduct of hearings under subsections 553(d)(4) and 553(e) of this section, including to assure 

a reasonable opportunity for cross-examination. Each agency 

shall adopt regulations for the conduct of hearings consistent 

with the guidelines issued under this subparagraph. 

(4) The Administrator of the Office of Information and Regulatory 

Affairs shall issue guidelines pursuant to the Information Quality 

Act to apply in rule making proceedings under sections 553, 556, 

and 557 of this title. In all cases, such guidelines, and the Administrator’s specific determinations regarding agency compliance with 

such guidelines, shall be entitled to judicial deference. 

(l) INCLUSION IN THE RECORD OF CERTAIN DOCUMENTS AND INFORMATION.—The agency shall include in the record for a rule making, and shall make available by electronic means and otherwise, 

all documents and information prepared or considered by the agency during the proceeding, including, at the discretion of the President or the Administrator of the Office of Information and Regulatory Affairs, documents and information communicated by that 

Office during consultation with the Agency. 

(m) MONETARY POLICY EXEMPTION.—Nothing in subsection (b)(6), 

subparagraphs (F) and (G) of subsection (d)(1), subsection (e), subsection (f)(3), and subparagraphs (C) and (D) of subsection (f)(5) 

shall apply to rule makings that concern monetary policy proposed 

or implemented by the Board of Governors of the Federal Reserve 

System or the Federal Open Market Committee. 

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§ 553a. Agency guidance; procedures to issue major guidance; 

authority to issue guidelines for issuance of guidance 

(a) Before issuing any major guidance, or guidance that involves 

a novel legal or policy issue arising out of statutory mandates, an 

agency shall— 

(1) make and document a reasoned determination that— 

(A) assures that such guidance is understandable and 

complies with relevant statutory objectives and regulatory 

provisions (including any statutory deadlines for agency action); 

(B) summarizes the evidence and data on which the 

agency will base the guidance; 

(C) identifies the costs and benefits (including all costs to 

be considered during a rule making under section 553(b) of 

this title) of conduct conforming to such guidance and 

assures that such benefits justify such costs; and 

(D) describes alternatives to such guidance and their 

costs and benefits (including all costs to be considered during a rule making under section 553(b) of this title) and explains why the agency rejected those alternatives; and 

(2) confer with the Administrator of the Office of Information 

and Regulatory Affairs on the issuance of such guidance to assure that the guidance is reasonable, understandable, consistent 

with relevant statutory and regulatory provisions and requirements or practices of other agencies, does not produce costs that 

are unjustified by the guidance’s benefits, and is otherwise appropriate. 

Upon issuing major guidance, or guidance that involves a novel 

legal or policy issue arising out of statutory mandates, the agency 

shall publish the documentation required by subparagraph (1) by 

electronic means and otherwise. 

(b) Agency guidance— 

(1) is not legally binding and may not be relied upon by an 

agency as legal grounds for agency action; 

(2) shall state in a plain, prominent and permanent manner 

that it is not legally binding; and 

(3) shall, at the time it is issued or upon request, be made 

available by the issuing agency to interested persons and the 

public by electronic means and otherwise. 

Agencies shall avoid the issuance of guidance that is inconsistent or 

incompatible with, or duplicative of, the agency’s governing statutes 

or regulations, with the goal of minimizing the potential for uncertainty and litigation arising from such uncertainty. 

(c) The Administrator of the Office of Information and Regulatory 

Affairs shall have authority to issue guidelines for use by the agencies in the issuance of major guidance and other guidance. Such 

guidelines shall assure that each agency avoids issuing guidance 

documents that are inconsistent or incompatible with, or duplicative 

of, the law, its other regulations, or the regulations of other Federal 

agencies and drafts its guidance documents to be simple and easy 

to understand, with the goal of minimizing the potential for uncertainty and litigation arising from such uncertainty. 

* * * * * * * 

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§ 556. Hearings; presiding employees; powers and duties; 

burden of proof; evidence; record as basis of decision 

(a) * * * 

* * * * * * * 

ø(e) The transcript of testimony and exhibits, together with all 

papers and requests filed in the proceeding, constitutes the exclusive record for decision in accordance with section 557 of this title 

and, on payment of lawfully prescribed costs, shall be made available to the parties. When an agency decision rests on official notice 

of a material fact not appearing in the evidence in the record, a 

party is entitled, on timely request, to an opportunity to show the 

contrary.¿ 

(e)(1) The transcript of testimony and exhibits, together with all 

papers and requests filed in the proceeding, constitutes the exclusive 

record for decision in accordance with section 557 and shall be 

made available to the parties and the public by electronic means 

and, upon payment of lawfully prescribed costs, otherwise. When an 

agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary. 

(2) Notwithstanding paragraph (1) of this subsection, in a proceeding held under this section pursuant to section 553(d)(4) or 

553(e), the record for decision shall also include any information 

that is part of the record of proceedings under section 553. 

(f) When an agency conducts rule making under this section and 

section 557 directly after concluding proceedings upon an advance 

notice of proposed rule making under section 553(c), the matters to 

be considered and determinations to be made shall include, among 

other relevant matters and determinations, the matters and determinations described in subsections (b) and (f) of section 553. 

(g) Upon receipt of a petition for a hearing under this section, the 

agency shall grant the petition in the case of any major rule, unless 

the agency reasonably determines that a hearing would not advance 

consideration of the rule or would, in light of the need for agency 

action, unreasonably delay completion of the rule making. The agency shall publish its decision to grant or deny the petition when it 

renders the decision, including an explanation of the grounds for 

decision. The information contained in the petition shall in all cases 

be included in the administrative record. This subsection shall not 

apply to rule makings that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System 

or the Federal Open Market Committee. 

* * * * * * * 

CHAPTER 7—JUDICIAL REVIEW 

* * * * * * * 

§ 701. Application; definitions 

(a) * * * 

(b) For the purpose of this chapter— 

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(1) ‘‘agency’’ means each authority of the Government of the 

United States, whether or not it is within or subject to review 

by another agency, but does not include— 

(A) * * * 

* * * * * * * 

(H) functions conferred by sections 1738, 1739, 1743, and 

1744 of title 12; subchapter II of chapter 471 of title 49; 

or sections 1884, 1891-1902, and former section 1641(b)(2), 

of title 50, appendix; øand¿ 

(2) ‘‘person’’, ‘‘rule’’, ‘‘order’’, ‘‘license’’, ‘‘sanction’’, ‘‘relief’’, and 

‘‘agency action’’ have the meanings given them by section 551 

of this titleø.¿; and 

(3) ‘‘substantial evidence’’ means such relevant evidence as a 

reasonable mind might accept as adequate to support a conclusion in light of the record considered as a whole, taking into account whatever in the record fairly detracts from the weight of 

the evidence relied upon by the agency to support its decision. 

* * * * * * * 

§ 704. Actions reviewable 

øAgency action made¿ (a) Agency action made reviewable by 

statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final 

agency action. Except as otherwise expressly required by statute, 

agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, 

unless the agency otherwise requires by rule and provides that the 

action meanwhile is inoperative, for an appeal to superior agency 

authority. Denial by an agency of a correction request or, where administrative appeal is provided for, denial of an appeal, under an 

administrative mechanism described in subsection (b)(2)(B) of the 

Information Quality Act, or the failure of an agency within 90 days 

to grant or deny such request or appeal, shall be final action for 

purposes of this section. 

(b) Other than in cases involving interests of national security, 

notwithstanding subsection (a) of this section, upon the agency’s 

publication of an interim rule without compliance with section 

553(c), (d), or (e) or requirements to render final determinations 

under subsection (f) of section 553, an interested party may seek immediate judicial review under this chapter of the agency’s determination to adopt such rule on an interim basis. Review shall be 

limited to whether the agency abused its discretion to adopt the interim rule without compliance with section 553(c), (d), or (e) or 

without rendering final determinations under subsection (f) of section 553. 

* * * * * * * 

§ 706. Scope of review 

øTo the extent necessary¿ (a) To the extent necessary to decision 

and when presented, the reviewing court shall decide all relevant 

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questions of law, interpret constitutional and statutory provisions, 

and determine the meaning or applicability of the terms of an 

agency action. The reviewing court shall— 

(1) * * * 

(2) hold unlawful and set aside agency action, findings, and 

conclusions found to be— 

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law (including the Information 

Quality Act); 

* * * * * * * 

(b) The court shall not defer to the agency’s— 

(1) interpretation of an agency rule if the agency did not comply with the procedures of section 553 or sections 556-557 of 

chapter 5 of this title to issue the interpretation; 

(2) determination of the costs and benefits or other economic 

or risk assessment of the action, if the agency failed to conform 

to guidelines on such determinations and assessments established by the Administrator of the Office of Information and 

Regulatory Affairs under section 553(k); 

(3) determinations made in the adoption of an interim rule; 

or 

(4) guidance. 

(c) The court shall review agency denials of petitions under section 553(e)(6) or any other petition for a hearing under sections 556 

and 557 for abuse of agency discretion. 

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Committee Jurisdiction Letters 


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68 


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1 5 U.S.C. §§ 551–59, 701–06, 1305, 3105, 3344, 5372, 7521 (2011). 

2Letter from 52 administrative law academics to House Judiciary Committee Chair Lamar 

Smith and House Judiciary Committee Ranking Member John Conyers, Jr., at 1 (Oct. 24, 2011) 

(on file with the H. Committee on the Judiciary, Democratic Staff) (‘‘strenuously’’ urging ‘‘rejection of this proposal). 3 American Bar Ass’n—Section of Administrative Law and Regulatory Practice, Comments on 

H.R. 3010, the Regulatory Accountability Act (Oct. 24, 2011) (on file with the H. Committee on 

the Judiciary, Democratic Staff). 4Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from William Samuel, Director, the American Federation 

of Labor and Congress of Industrial Organizations, at 1 (Nov. 1, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff) (noting that the bill will ‘‘cripple’’ the regulatory process). 5Letter to to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from Francesca T. Grifo, Senior Scientist and Director—Scientific Integrity Program, Union of Concerned Scientists (Nov. 3, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff) (noting that the bill ‘‘jeopardizes’’ the ability of agencies to provide public protections). 6Letter to to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from Nasima Hossain, U.S. PIRG Public Health Advocate, 

at 1 (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff) (noting 

that the bill ‘‘would override decades of legislation enacted by Congress to protect the public 

and American workers from harm’’). 7 Email to House Members from Jennie Rasmussen, Federal Relations Counsel, American Association for Justice (Oct. 24, 2011) (on file with the H. Committee on the Judiciary, Democratic 

Staff). 8Letter to to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from the Alliance for Justice, at 1 (Nov. 2, 2011) (on file 

with the H. Committee on the Judiciary, Democratic Staff) (noting that the ‘‘bill is a dream come 

true for corporate special interests pushing to block or weaken regulatory safeguards in order 

to maximize short-term profits’’). 9Letter to to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from John W. Curtis, Director of Research and Public Policy, American Association of University Professors (Nov. 2, 2011) (on file with the H. Committee 

on the Judiciary, Democratic Staff) (expressing ‘‘full-throated concurrence’’ with the 52 administrative law professor letter of Oct. 24, 2011 regarding H.R. 3010). 10 According to the Coalition, the following entities are members: Ability Production, AFL– 

CIO, Alliance for Justice, American Association of University Professors, American Federation 

of State, County and Municipal Employees, American Lung Association. American Rivers, American Values Campaign, Americans for Financial Reform, ATTIC, Inc., BlueGreen Alliance, Campaign for Contract Agriculture Reform (CCAR), Center for Food Safety, Center for Independent 

Living, Center for Science in the Public Interest, Citizens for Sludge-Free Land, Clean Air 

Watch, Clean Water Network, Consortium for Citizens with Disabilities, Consumer Federation 

of America, Consumers Union, CounterCorp, Cumberland Countians for Peace & Justice, 

Demos, Economic Policy Institute, Edmonds Institute, Free Press, Friends of the Earth, Green 

for All, Health Care for America Now, In the Public Interest, International Brotherhood of 

Teamsters, International Center for Technology Assessment, International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW), Jam On! Music Production & Recording, League of Conservation Voters, Los Angeles Alliance for a New Economy, 

National Center for Healthy Housing, National Consumers League, National Council for Occupational Safety and Health, National Employment Law Project, National Lawyers Guild, Louisville Chapter, National Women’s Health Network, National Women’s Law Center, Natural Resources Defense Council, Network for Environmental & Economic, Responsibility of United 

Dissenting Views 

INTRODUCTION

H.R. 3010, the ‘‘Regulatory Accountability Act of 2011,’’ amends 

the Administrative Procedure Act (‘‘APA’’)1 in many problematic respects. We are very concerned that these drastic changes, if enacted, would seriously undermine the agency rulemaking process 

by hobbling the ability of agencies to effectively regulate consumer 

health and product safety, environmental protection, workplace 

safety, and financial services industry misconduct, among other 

matters. More than 50 leading administrative law academics,2 the 

Administrative Law and Regulatory Practice Section of the American Bar Association (‘‘ABA’’),3 the AFL–CIO,4 the Union of Concerned Scientists,5 U.S. PIRG,6 American Association for Justice,7

the Alliance for Justice,8 the American Association of University 

Professors,9 and the Coalition for Sensible Safeguards (‘‘Coalition’’), 

representing more than 60 organizations,10 share many of our conmstockstill on DSK4VPTVN1PROD with HEARINGS

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Church of Christ, New Jersey Work Environment Council, New York Committee for Occupational Safety and Health (NYCOSH), OMB Watch, Oregon PeaceWorks, People for the American 

Way, Protect All Children’s Environment, Public Citizen, Reproductive Health Technologies 

Project, Safe Tables Our Priority (S.T.O.P.), Service Employees International Union, Southern 

Illinois Committee for Occupational Safety and Health. The Partnership for Working Families, 

Union of Concerned Scientists, Union Plus, United Food and Commercial Workers Union, U.S. 

Chamber Watch, U.S. PIRG, Waterkeeper Alliance, and Worksafe. Coalition for Sensible Safeguards website—About Us, available at http://www.sensiblesafeguards.org/aboutlus (last visited Nov. 8, 2011). 11 Coalition for Sensible Safeguards, The Regulatory Accountability Act of 2011: Legislation 

Would Override and Threaten Decades of Public Protections, at 1 (undated) (on file with the 

H. Committee on the Judiciary, Democratic Staff). 12Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from William Samuel, Director, the American Federation 

of Labor and Congress of Industrial Organizations, at 1 (Nov. 1, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 

cerns about the bill. The Coalition, for example, observes that H.R. 

3010 represents ‘‘the biggest threat to environmental standards, 

workplace safety rules, public health, and financial reform regulations to appear in decades.’’ 11 Similarly, the AFL–CIO states that 

this legislation ‘‘would upend more than 40 years of labor, health, 

safety and environmental laws and threaten new needed protections.’’ 12

Our principal concerns about H.R. 3010 include the following: (1) 

the bill is based on the faulty premise that regulations result in 

economically stifling costs; (2) if enacted, the bill’s cumulative effect 

would be to halt agency rulemaking; (3) H.R. 3010 prioritizes costcutting over public health and safety by overriding existing statutes such as the Clean Air Act that prohibit or limit consideration 

of cost when promulgating rules and by unnecessarily expanding 

and codifying cost-benefit analysis requirements; (4) the bill dangerously concentrates unaccountable power in the Office of Information and Regulatory Affairs; and (5) the bill tilts the rulemaking 

playing field in industry’s favor through several mechanisms, including expanded use of formal rulemaking; expanded and less deferential judicial review; providing numerous opportunities for the 

private sector to challenge agency compliance with the Information 

Quality Act, thereby encouraging dilatory tactics by opponents of 

regulation; and promoting a regulatory ‘‘race to the bottom’’ between the United States and developing nations that have lax regulatory structures. 

For these reasons, and others discussed below, we strongly oppose H.R. 3010 and must respectfully dissent. 

CONCERNS WITH H.R. 3010

I. H.R. 3010 IS BASED ON FALSE PREMISES

H.R. 3010’s proponents rely on unsupported assertions that regulations stifle economic growth and job creation and impose burdensome costs on business. Evidence, however, demonstrates that 

these assertions are completely unfounded. 

A. Regulations Have No Discernible Impact on Job Creation and 

They Do Not Inhibit Business Development 

Proponents of deregulatory measures like H.R. 3010 wrongly and 

without any proof insist that regulations impose burdensome compliance costs on businesses and thereby stifle job creation. As the 

author of this legislation explained: 

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13The Regulatory Accountability Act of 2011: Hearing on H.R. 3010 Before the Subcomm. on 

Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011) 

[hereinafter ‘‘H.R. 3010 Hearing’’] (remarks of Rep. Lamar Smith (R–TX), Chair, H. Comm. on 

the Judiciary). 14 Bruce Bartlett, a senior policy analyst in the Reagan and George H.W. Bush Administrations, offers this explanation: 

Republicans have a problem. People are increasingly concerned about unemployment, 

but Republicans have nothing to offer them. The G.O.P. opposes additional government 

spending for jobs programs and, in fact, favors big cuts in spending that would be likely 

to lead to further layoffs at all levels of government. . . . 

These constraints have led Republicans to embrace the idea that government regulation is the principal factor holding back employment. They assert that Barack Obama 

has unleashed a tidal wave of new regulations, which has created uncertainty among 

businesses and prevents them from investing and hiring. 

No hard evidence is offered for this claim; it is simply asserted as self-evident and 

repeated endlessly throughout the conservative echo chamber. 

Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and Jobs, N.Y. Times Economix, Oct. 

4, 2011, available at http://economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/. 15 H.R. 3010 Hearing (prepared statement of Christopher DeMuth, American Enterprise Institute). 16Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from David A. Forster, Executive Director, BlueGreen Alliance, at 2 (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 17 Executive Office of the President—Office of Management and Budget, Statement of Administration Policy on H.R. 2401, Transparency in Regulatory Analysis of Impacts on the Nation 

Act of 2011 (Sept. 21, 2011). 

The American people urgently need jobs that only economic growth can give. Standing in the way of growth and 

job creation is a wall of Federal regulation. 

* * * * * 

New regulatory burdens and uncertainty about the economy have helped to keep trillions of dollars of private sector capital on the sidelines. Companies cannot safely invest if they cannot tell whether tomorrow’s regulations will 

make their investments unprofitable.13

These types of arguments are part of a deregulatory mantra embraced by conservatives.14

Nevertheless, the Majority’s own witness at the legislative hearing on H.R. 3010 clearly debunked the myth that regulations stymie job creation. Christopher DeMuth, who appeared on behalf of 

the American Enterprise Institute, a conservative think tank, stated in his prepared testimony that the ‘‘focus on jobs . . . can lead 

to confusion in regulatory debates’’ and that ‘‘the employment effects of regulation, while important, are indeterminate.’’ 15 If anything, regulations may promote job growth and put Americans back 

to work. For instance, the BlueGreen Alliance, notes: 

Studies on the direct impact of regulations on job growth 

have found that most regulations result in modest job 

growth or have no effect, and economic growth has consistently surged forward in concert with these health and safety protections. The Clean Air Act is a shining example, 

given that the economy has grown 204% and private sector 

job creation has expanded 86% since its passage in 1970.16

Also in reference to the Clean Air Act, the White House Office of 

Management and Budget (‘‘OMB’’) recently observed that 40 years 

of success with this measure ‘‘have demonstrated that strong environmental protections and strong economic growth go hand in 

hand.’’ 17 Similarly, the Natural Resources Defense Council and the 

United Auto Workers cite the fact that increased fuel economy 

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18 Natural Resources Defense Council et al., Supplying Ingenuity: U.S. Suppliers of Clean, 

Fuel-Efficient Vehicle Technologies (2011), available at http://www.nrdc.org/transportation/ 

autosuppliers/files/SupplierMappingReport.pdf. 19 Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and Jobs, N.Y. TIMES Economix 

Blog, Oct. 4, 2011, available at http://economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/?scp=4&sq=bartlett&st=cse. 20 H.R. 3010 Hearing (prepared statement of Prof. Sidney Shapiro, Wake Forest School of 

Law). 21Phil Izzo, Dearth of Demand Seen Behind Weak Hiring, Wall St. J., July 18, 2011, available 

at http://online.wsj.com/article/SB10001424052702303661904576452181063763332.html. 

22Press Release, Nat’l Federation of Independent Businesses, Small Business Confidence 

Takes Huge Hit: Optimism Index Now in Decline for Six Months Running (Sept. 13, 2011) (‘‘Of 

those reporting negative sales trends, 45 percent blamed faltering sales, 5 percent higher labor 

costs, 15 percent higher materials costs, 3 percent insurance costs, 8 percent lower selling prices 

and 10 percent higher taxes and regulatory costs.’’), available at http://www.nfib.com/pressmedia/press-media-item?cmsid=58190. 

standards have already led to the creation of more than 155,000 

U.S. jobs.18

To highlight the fallacy of the bill’s premise that regulations result in job loss, Representative Henry C. ‘‘Hank’’ Johnson (D–GA) 

had been prepared to offer an amendment at the full Committee 

markup that would have exempted from H.R. 3010 any rule that 

OMB determines will result in net job creation. His amendment 

would have ensured that any rule that would help put unemployed 

Americans back to work could take effect without the unnecessary 

cost and delay that H.R. 3010 would impose. While Representative 

Johnson was en route to the Committee markup for the explicit 

purpose of offering his amendment, however, the Majority declined 

to wait for his arrival and pressed forward to final approval of the 

bill. 

Another argument made by the bill’s proponents—namely, that 

regulatory uncertainty hurts businesses—was similarly debunked 

by Bruce Bartlett, a senior policy analyst in the Reagan and 

George H.W. Bush Administrations. He observes: 

[R]egulatory uncertainty is a canard invented by Republicans that allows them to use current economic problems 

to pursue an agenda supported by the business community 

year in and year out. In other words, it is a simple case 

of political opportunism, not a serious effort to deal with 

high unemployment.19

At the legislative hearing on H.R. 3010, Professor Sidney Shapiro 

similarly noted, ‘‘All of the available evidence contradicts the claim 

that regulatory uncertainty is deterring business investment.’’ 20

This may explain the findings of a July 2011 Wall Street Journal 

survey of business economists, which found that the ‘‘main reason 

U.S. companies are reluctant to step up hiring is scant demand, 

rather than uncertainty over government policies.’’ 21 Similarly, the 

most recent National Federation of Independent Business survey of 

its members likewise shows that ‘‘poor sales’’—not regulation—is 

the biggest problem.22 Indeed, the Main Street Alliance, an alliance 

of small businesses, observes: 

In survey after survey and interview after interview, 

Main Street small business owners confirm that what we 

really need is more customers—more demand—not deregulation. Policies that restore our customer base are what we 

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23Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from Jim Houser, Co-Chair, The Main Street Alliance, et 

al., at 1–2 (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 24See also Jia Lynn Yang, Does Government Regulation Really Kill Jobs? Economists Say 

Overall Effect Minimal, Wash. Post, Nov. 13, 2011, available at http://www.washingtonpost.com/ 

business/economy/does-government-regulation-really-kill-jobs-economists-say-overall-effect-minimal/2011/10/19/gIQALRF5INlstory.html?hpid=z1 (‘‘In 2010, 0.3 percent of the people who lost 

their jobs in layoffs were let go because of ‘government regulations/intervention.’ By comparison, 

25 percent were laid off because of a drop in business demand. . . . Economists who have studied the matter say that there is little evidence that regulations cause massive job loss in the 

economy, and that rolling them back would not lead to a boom in job creation.’’). 25See, e.g., Hearing on H.R. 3010; Formal Rulemaking and Judicial Review: Protecting Jobs 

and the Economy with Greater Regulatory Transparency and Accountability: Hearing Before the 

Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. (2011) [hereinafter, ‘‘Formal Rulemaking Hearing’’]; Cost-Justifying Regulations: Protecting Jobs and the Economy by Presidential and Judicial Review of Costs and Benefits: Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011) [hereinafter, ‘‘Cost-Benefit Hearing’’]; Raising the Agencies’ Grades— 

Protecting the Economy, Assuring Regulatory Quality and Improving Assessments of Regulatory 

Need: Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. 

on the Judiciary, 112th Cong. (2011) [hereinafter, ‘‘Scorecard Hearing’’]; The APA at 65—Is Reform Needed to Create Jobs, Promote Economic Growth, and Reduce Costs?: Hearing Before the 

Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. (2011) [hereinafter, ‘‘APA 65 Hearing’’]. 26 Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs on Small Firms, Rep. 

No. SBAHQ–08–M–0466 (Sept. 2010), available at http://archive.sba.gov/advo/research/ 

rs371tot.pdf. 

27Sidney Shapiro, et al., Setting the Record Straight: The Crain and Crain Report on Regulatory Costs, Center for Progressive Reform White Paper #1103 (Feb. 2011). 

need now, not policies that shift more risk and more costs 

onto us from big corporate actors. 

* * * * * 

To create jobs and get our country on a path to a strong 

economic future, what small businesses need is customers—Americans with spending money in their pockets—not watered down standards that give big corporations free reign to cut corners, use their market power at 

our expense, and force small businesses to lay people off 

and close up shop.23

In sum, there is no credible evidence that regulations depress job 

creation.24

B. The Claim that Regulations Impose Burdensome Costs is a Canard 

In addition to falsely claiming that regulations ‘‘kill’’ jobs, supporters of H.R. 3010 assert that regulations impose burdensome 

costs on businesses. For example, in nearly every hearing before 

the House Judiciary Committee and its Subcommittee on Courts, 

Commercial and Administrative Law (‘‘CCAL’’) regarding regulatory issues this Congress,25 Majority witnesses have cited the 

same widely discredited study by economists Mark and Nicole 

Crain (‘‘Crain Study’’), which claims that federal regulation imposes an annual cost of $1.75 trillion on business.26

The Crain Study, however, has been thoroughly and repeatedly 

debunked and criticized for exaggerating regulatory costs. For example, the Center for Progressive Reform (‘‘CPR’’) notes that the 

$1.75 trillion cumulative burden cited by the study fails to account 

for any benefits of regulation.27 In addition, the study’s methodology is seriously flawed with respect to how it calculated economic 

costs. The study, which relied on international public opinion polling by the World Bank on how friendly a particular country was 

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28 Id. 29 Curtis W. Copeland, Analysis of an Estimate of the Total Costs of Federal Regulations, Congressional Research Service Report for Congress, R41763 (Apr. 6, 2011). 30 Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to the author of the CRS report). 31 Id. The Economic Policy Institute also issued a critique of the Crain study outlining additional concerns with the study’s methodology and data. See John Irons & Andrew Green, Flaws 

Call for Rejecting Crain and Crain Model: Cited $1.75 Trillion Cost of Regulations Is Not Worth 

Repeating, Economic Policy Institute, July 19, 2011, available at http://w3.epi-data.org/ 

temp2011/IssueBrief308.pdf. 32 John Irons & Andrew Green, Flaws Call for Rejecting Crain and Crain Model: Cited $1.75 

Trillion Cost of Regulations Is Not Worth Repeating, Economic Policy Institute, July 19, 2011, 

available at http://w3.epi-data.org/temp2011/IssueBrief308.pdf. 33Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from Americans for Financial Reform, at 2 (on file with the 

H. Committee on the Judiciary, Democratic Staff). 34 Curtis W. Copeland, The Federal Rulemaking Process: An Overview, Congressional Research Service Report for Congress, RL 32240, at 1 (Feb. 7, 2005). 

to business interests, ignored actual data on costs imposed by Federal regulation in the United States.28

The Congressional Research Service (‘‘CRS’’) also conducted an 

extensive examination of the Crain Study and criticized much of its 

methodology.29 Moreover, CRS noted that the authors of the Crain 

Study themselves told CRS that their analysis was ‘‘‘not meant to 

be a decision-making tool for lawmakers or Federal regulatory 

agencies to use in choosing the ‘right’ level of regulation. In no 

place in any of the reports do we imply that our reports should be 

used for this purpose. (How could we recommend this use when we 

make no attempt to estimate the benefits?)’’’ 30 CRS concluded that 

‘‘a valid, reasoned policy decision can only be made after considering information on both costs and benefits’’ of regulation.31 The 

Economic Policy Institute reached a similar conclusion.32

Perhaps our greatest macroscopic concern about H.R. 3010 is 

that it will undermine government’s ability to protect Americans 

from a wide range of harms, in complete disregard of the devastating impact that inadequate regulation has had on the health 

and economic well-being of Americans. Our Nation continues to 

struggle in the aftermath of the 2008 financial crisis and to deal 

with the ongoing costs of regulatory failure and underenforcement 

of current regulations. As observed by Americans for Financial Reform, it is estimated that the crisis has cost the United States economy ‘‘trillions of dollars and millions of jobs, and led to millions of 

families losing their homes.’’ 33 The BP oil spill and Massey coal 

mine explosion are further examples of regulatory failure. The supporters of H.R. 3010 appear, however, to suffer some form of collective amnesia about these devastating examples of regulatory failure. 

H.R. 3010’s proponents downplay and, perhaps, even ignore the 

evidence demonstrating that whatever the costs of regulation, it results consistently in net benefits. ‘‘Federal regulation, like taxing 

and spending,’’ as CRS observed, ‘‘is one of the basic tools of government used to implement public policy.’’ 34 Impacting nearly 

every aspect of society, regulations have significant benefits as 

summarized in the following: 

Agencies issue thousands of rules and regulations each 

year to implement statutes enacted by Congress. The public policy goals and benefits of regulations include, among 

other things, ensuring that workplaces, air travel, foods, 

and drugs are safe; that the nation’s air, water and land 

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35Regulatory Reform: Are Regulations Hindering Our Competitiveness?: Hearing Before the 

Subcomm. on Regulatory Affairs of the H. Comm. on Government Reform, 109th Cong. 56 (2005) 

(prepared statement of J. Christopher Mihm, Managing Director—Strategic Issues, U.S. Government Accountability Office) (emphasis added). 36REINS Act—Promoting Jobs and Expanding Freedom by Reducing Needless Regulation: 

Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the 

Judiciary, 112th Cong. 3 (2011) (statement of Sally Katzen). 37Office of Management and Budget, 2011 Report to Congress on the Benefits and Costs of 

Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities at 21, available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/2011lcb/2011lcbalreport.pdf 38The APA defines ‘‘rulemaking’’ as the ‘‘agency process for formulating, amending or repealing a rule.’’ 5 U.S.C. § 551(5) (2011). A ‘‘rule,’’ in turn, is defined as ‘‘an agency statement of 

general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an 

agency.’’ 5 U.S.C. § 551(4) (2011). 39Gary J. Edles, Lessons from the Administrative Conference of the United States, 2 EUR. PUB. 

L. 571, 572 (1996). 

are not polluted; and that the appropriate amount of taxes 

is collected. The costs of these regulations are estimated to 

be in the hundreds of billions of dollars, and the benefits 

estimates are even higher.35

Regulation routinely results in net benefits to society. This is in 

part because both the President and Congress have sought ways to 

oversee agency rulemaking to ensure that the rulemaking process 

is fair to affected parties and that the benefits of a rule outweigh 

its costs. Sally Katzen, a former Administrator of the Office of Information and Regulatory Affairs (‘‘OIRA’’) during the Clinton Administration, cited the OMB’s annual reports to Congress concerning the costs and benefits of regulations from the Clinton, 

Bush, and Obama Administrations in support of this fact. These reports demonstrate that, even using OMB’s highest estimate of costs 

and its lowest estimate of benefits, the regulations issued between 

fiscal years 1999 and 2009 produced a net benefit of $73 billion.36

The latest OMB report to Congress on the costs and benefits of regulations also concluded that for fiscal year 2010, federal regulations 

cost between $6.5 billion and $12.5 billion, but resulted in between 

$18.8 billion and $86.1 billion in benefits.37 This overwhelming evidence undermines the unsupported assertion that regulatory costs 

are simply too burdensome. 

C. H.R. 3010 Is a Solution in Search of a Problem as the Current 

Regulatory Process Has Worked Well 

The APA, enacted in 1946, establishes the minimum rulemaking 38 and formal adjudication requirements for all executive 

branch administrative agencies. The APA also sets forth standards 

for judicial review of final agency actions. While the APA sets minimum standards, many agency actions may involve procedures that 

depart from or go beyond APA requirements. As one academic 

noted, ‘‘[T]he American administrative system, by evolution and design, is characterized by a considerable degree of informality, agency discretion and procedural flexibility.’’ 39 The APA’s baseline procedural requirements are designed to maintain a balance between 

this type of agency flexibility and the requirements of due process. 

As more than 50 leading administrative law academics recently observed, ‘‘The APA has served for 65 years as a kind of Constitution 

for administrative agencies and the affected public—flexible enough 

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40Letter from 52 administrative law academics to House Judiciary Committee Chair Lamar 

Smith and House Judiciary Committee Ranking Member John Conyers, Jr., at 1 (Oct. 24, 2011) 

(on file with the H. Committee on the Judiciary, Democratic Staff). 41Many commentators note that although notice-and-comment rulemaking is less rigid than 

formal rulemaking, it is still subject to numerous procedural and analytical requirements. If 

anything, the current process may already be too heavily proceduralized, or ‘‘ossified.’’ See, e.g., 

Formal Rulemaking Hearing (statement of Matthew C. Stephenson, Harvard Law School) (‘‘It 

turns out, however, that the term ‘informal rulemaking’ is misleading. Nominally ‘informal’ notice-and-comment rulemaking is in fact heavily proceduralized, to the point where many commentators describe this process as a kind of ‘paper hearing.’ Agencies must provide a fairly detailed and specific proposal, or set of alternatives, in their initial published notice of proposed 

rulemaking. This notice must also disclose the scientific or evidentiary basis of the proposal, so 

that the agency’s evidence can be subjected to critical scrutiny. Any interested party (indeed, 

any member of the public) may submit written comments on the agency’s proposal. These submissions may criticize the agency’s analysis and evidence, and may also suggest alternatives. 

Under Executive Order 12866, executive branch agencies must also submit proposed rules, along 

with a detailed cost-benefit analysis, to the Office of Management and Budget for review. If the 

agency decides to promulgate a final rule, it must provide a detailed written explanation that 

includes responses to all material comments submitted by interested parties. If an agency fails 

to respond adequately to criticisms or proposed alternatives submitted by commenters, the agency risks judicial reversal. This creates powerful incentives for agencies to take comments seriously and to provide detailed responses. Furthermore, if the agency decides to change its policy 

substantially in response to comments, it may have to initiate a new round of notice-and-comment so that all parties have a fair opportunity to critique the new proposal. . . . Indeed, the 

more common criticism of notice-and-comment rulemaking is that it is too demanding of agencies. . . .’’) (citations omitted); H.R. 3010 Hearing (statement of Prof. Sidney Shapiro, Wake 

Forest Law School) (‘‘The regulatory system is already too ossified, and H.R. 3010 would only 

exacerbate this problem.’’). 42See, e.g., Regulatory Flexibility Act, 5 U.S.C. §§ 603, 604 (2011) (requiring assessments of 

regulatory impact of proposed and final rules on small entities); Unfunded Mandates Reform 

Act, 2 U.S.C. §§ 1531–1538 (2011) (requiring assessments of regulatory impact on state and local 

government entities of proposed and final rules). 43 H.R. 3010 Hearing (statement of Prof. Sidney Shapiro, Wake Forest Law School) (‘‘It currently takes four to eight years for an agency to promulgate and enforce most significant rules, 

and the proposed procedures would likely add another two to three years to the process. Under 

H.R. 3010, the longest rulemakings could take more than 12 years—spanning potentially four 

different presidential administrations—to complete. In the meantime, thousands of people would 

die and tens of thousands more would be injured or become ill because of the lack of regulation.’’). 44Letter from 52 administrative law academics to House Judiciary Committee Chair Lamar 

Smith and House Judiciary Committee Ranking Member John Conyers, Jr., at 2 (Oct. 24, 2011) 

(on file with the H. Committee on the Judiciary, Democratic Staff). 

to accommodate the variety of agencies operating under it and the 

changes in modern life.’’ 40

The informal notice-and-comment rulemaking process outlined in 

section 553 of the APA is the process that agencies follow for promulgating rules in the overwhelming majority of cases.41 Noticeand-comment rulemaking, while being flexible, is also subject to 

many procedural and analytical requirements, including those imposed by statutes other than the APA.42 Agencies, however, may 

choose or may be required by statute to use other rulemaking procedures, including formal rulemaking, negotiated rulemaking, and 

hybrid or expedited approaches, which generally tend to have 

greater procedural requirements and be subject to stricter judicial 

review than section 553 notice-and-comment rulemaking. 

II. THE CUMULATIVE EFFECT OF H.R. 3010’S AMENDMENTS TO THE APA

WILL BE TO PROMOTE, NOT LIMIT, MORE UNCERTAINTY BY GREATLY

EXTENDING THE RULEMAKING PROCESS

Rather than reducing uncertainty, H.R. 3010 will substantially 

increase uncertainty by extending and multiplying the complexity 

of the rulemaking process.43 As a result, it will leave ‘‘stakeholders 

(including businesses large and small) less able to plan effectively 

for the future.’’ 44 It does this by adding more than ‘‘60 new procedural and analytical requirements to the agency rulemaking process’’ and expands section 553 of the APA by approximately tenmstockstill on DSK4VPTVN1PROD with HEARINGS

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45 Id. 46See, e.g., id. (‘‘Collectively, the procedural and analytical requirements added by this bill 

would be enormously burdensome. . . . Not only new regulations, but amendments or recisions 

of rules could be deterred by the additional expense and complexity that would be added to the 

process. Enforcement of these requirements on judicial review is available to regulatory proponents and regulatory opponents alike, adding to the burden of defensive lawyering agencies 

must carry. Thus, both affirmative regulation and deregulation may be impeded.’’). 47 H.R. 3010 Hearing (prepared statement of Prof. Sidney Shapiro, Wake Forest School of 

Law); see, e.g., American Bar Ass’n—Section of Administrative Law and Regulatory Practice, 

Comments on H.R. 3010, the Regulatory Accountability Act, at 1 (Oct. 24, 2011) (on file with 

the H. Committee on the Judiciary, Democratic Staff); Letter from 52 administrative law academics to Lamar Smith, House Judiciary Committee Chair, and John Conyers, Jr., House Judiciary Committee Ranking Member, at 2 (Oct. 24, 2011) (on file with the H. Committee on the 

Judiciary, Democratic Staff); Administrative Conference of the United States Recommendation 

93–4, 59 Fed. Reg. 4670, 4670 (1993) (concluding in 1993 that the state of the rulemaking process ‘‘has become increasingly less effective and more time-consuming.’’) 48Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from William Samuel, Director, the American Federation 

of Labor and Congress of Industrial Organizations, at 1 (Nov. 1, 2011). 49 Id. 50Letter from 52 administrative law academics to Lamar Smith, House Judiciary Committee 

Chair, and John Conyers, Jr., House Judiciary Committee Ranking Member, at 1 (Oct. 24, 2011) 

(on file with the H. Committee on the Judiciary, Democratic Staff). 51 American Bar Ass’n—Section of Administrative Law and Regulatory Practice, Comments on 

H.R. 3010, the Regulatory Accountability Act, at 5 (Oct. 24, 2011) (on file with the H. Committee 

on the Judiciary, Democratic Staff) (noting that ‘‘[c]ollectively, these requirements would be 

enormously burdensome’’). 

fold.45 Whatever the merits of the individual amendments to the 

APA that are contained in H.R. 3010, the cumulative weight of all 

of the changes threatens to grind rulemaking to a halt. Many administrative law experts believe that the changes contained in H.R. 

3010, taken as a whole, will pour ‘‘sand in the gears’’ of the rulemaking process.46 The bill’s cost-benefit analysis requirements 

alone would slow down the rulemaking process, which some have 

already criticized as being ‘‘already too ossified,’’ and possibly bring 

rulemaking to a halt.47

Likewise, the AFL–CIO observes that the bill ‘‘adds dozens of 

new analytical and procedural requirements to the rulemaking 

process.’’ 48 It is particularly concerned that the ‘‘development of 

major workplace safety rules already takes 6–10 years’’ and that 

H.R. 3010 ‘‘will further delay these rules and cost workers their 

lives.’’ 49 Congress delegated legislative authority to agencies to 

issue rules to protect the American public from a wide spectrum of 

harms. H.R. 3010 effectively contravenes Congress’s intent in delegating that authority in the first place. 

If enacted, the bill’s amendments to the APA ‘‘would likely lead 

to rulemaking avoidance by agencies—increasing use of underground rules, case-by-case adjudication, or even prosecutorial actions, to achieve policies without having to surmount the additional 

sections presented [by the bill],’’ as observed by more than 50 leading administrative law academics.50 The ABA’s Administrative Law 

Section has also expressed similar concerns.51

In light of concerns about H.R. 3010’s cumulative effect on rulemaking and on society, Representative Steve Cohen (D–TN) offered 

an amendment at markup that would have delayed H.R. 3010’s effective date to 90 days after the Administrative Conference of the 

United States—a neutral body of administrative law experts—submits a report to Congress containing a cost-benefit analysis of H.R. 

3010. Such analysis would have included consideration of both the 

quantitative and qualitative benefits and costs of H.R. 3010 for the 

rulemaking process, the federal government, and society. If H.R. 

3010’s proponents were to be logically consistent in their view of 

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52 42 U.S.C. §§ 2011 et seq. (2011). 53 H.R. 3010, 112th Cong. § 3(b)(6) (2011) (emphasis supplied). 54Pub. L. No. 91–604, 84 Stat. 1676 (1970), as amended. The cost prohibition is codified at 

42 U.S.C. § 7142(d)(2) (2011). 55Pub. L. No. 95–217, 86 Stat. 816 (1977), as amended. The limitation on cost consideration 

is codified at 33 U.S.C. § 1311(b) (2011). 

the efficacy of cost-benefit analysis, they would have supported this 

amendment. Unfortunately, they did not, and the amendment was 

not adopted. 

To highlight the potential cost to society of delaying regulation, 

Representative Jerrold Nadler (D–NY) offered an amendment that 

would have exempted from H.R. 3010 any proposed rule made by 

the Nuclear Regulatory Commission under the Atomic Energy 

Act.52 The meltdown of the nuclear reactors at the Fukushima 

Daiichi power plant in Japan earlier this year in the aftermath of 

a devastating earthquake and tsunami highlights the dangers of 

regulatory failure when it comes to ensuring the safe operation of 

nuclear reactors. Representative Nadler was particularly concerned 

about the potential for a similar meltdown just north of New York 

City, at the Indian Point Nuclear Power Plant, which is an aged 

facility and potential terrorist target. H.R. 3010 would inhibit or 

prevent the Nuclear Regulatory Commission from being able to 

protect the tens of millions who live in the greater New York metropolitan area and millions of other Americans who live near nuclear power plants from a catastrophe akin to what happened at 

Fukushima. The amendment failed by a vote of 13 to 16. 

III. H.R. 3010’S SUPERMANDATES AND OTHER PROVISIONS PRIORITIZE

COSTS OVER CRITICAL PUBLIC HEALTH, WORKPLACE SAFETY, AND

ENVIRONMENTAL PROTECTIONS

H.R 3010 prioritizes minimizing business costs over health, safety, and environmental protections in at least two ways. First, it imposes a ‘‘supermandate’’ on agencies that overrides numerous statutes that prohibit or limit the consideration of cost in promulgating 

public health and safety rules. Second, it goes well beyond the costbenefit analysis requirements contained in Executive Orders 12,866 

and 13,563 by codifying expanded analytical requirements that 

allow for much less agency discretion, threatening ‘‘paralysis by 

analysis.’’ 

A. H.R. 3010 Makes a Huge Substantive Change to Existing Law 

by Overturning Statutory Prohibitions or Limitations on Considering Costs in the Rulemaking Process 

H.R. 3010’s requirement that agencies consider regulatory costs 

and benefits of proposed and final rules regardless of the dictates 

of other laws, thereby establishing a ‘‘supermandate,’’ imposes a 

major substantive change to existing law. Specifically, section 

3(b)(6) of the bill, when combined with the bill’s required cost and 

benefit information in the notice of proposed rulemaking and the 

issuance of a final rule, would require agencies to consider potential costs and benefits associated with proposed and final rules 

‘‘[n]otwithstanding any other provision of law.’’ 53 As a result, H.R. 

3010 overrides provisions in numerous other statutes that prohibit 

or limit agency consideration of costs when promulgating rules. 

These statutes include the Clean Air Act,54 the Clean Water Act,55

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56Pub. L. No. 91–596, 84 Stat. 1590, 84 Stat. 1590 (1970), as amended. The limitation on cost 

consideration is codified at 29 U.S.C. § 655(b)(5) (2011). 57Pub. L. No. 95–164, 91 Stat. 1290 (1977), as amended. The limitation on cost consideration 

is contained in section 101(a)(6)(A) of the Act. 58Letter to House Members from American Rivers, Clean Water Action, Defenders of Wildlife, 

Earthjustice, Environment America, League of Conservation Voters & the Natural Resources 

Defense Council (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic 

Staff). 59Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from Jim Bradley, Director of Government Relations, American Rivers (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 60 American Bar Ass’n—Section of Administrative Law and Regulatory Practice, Comments on 

H.R. 3010, the Regulatory Accountability Act, at 12–13 (Oct. 24, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff) (noting that ‘‘[m]uch, perhaps most, of the safety and 

health legislation now on the books would seemingly be replaced’’). 61Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from William Samuel, Director, the American Federation 

of Labor and Congress of Industrial Organizations, at 1 (Nov. 1, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 

the Occupational Safety and Health Act,56 and the Federal Mine 

Safety and Health Act.57 Various environmental groups warn that 

this is a ‘‘cynical attempt’’ to overturn these measures and the carefully crafted legislative bargains that they represent.58 One such 

organization, American Rivers, notes that ‘‘[m]any of our nation’s 

fundamental laws protecting our health, like the Clean Air Act and 

the Clean Water Act, would likely not have come into effect when 

their costs, the costs of keeping our air and water clean, were 

greater compared to less protective regulations.’’ 59 As the ABA’s 

Administrative Law Section observes: 

In addition to burdening the rulemaking process with 

analytical requirements that appear to out of proportion to 

their likely payoffs, the bill’s ‘‘rulemaking considerations’’ 

are troubling because of the way in which they would, in 

some cases, alter the substantive law. The APA would thus 

become, in several respects, an ‘‘Administrative Substance 

Act.’’ 60

In addition, H.R. 3010 imposes other supermandates that compromise public health, workplace safety, and environmental protections. New APA section 553(d) as proposed by H.R. 3010, for instance, requires agencies to ‘‘adopt the least costly rule considered 

during the rule making . . . that meets relevant statutory objectives’’ and permits agencies to chose a more expensive option only 

if the additional benefits ‘‘justify its additional costs.’’ As the AFL– 

CIO observed, this provision ‘‘would make protecting workers and 

the public secondary to limiting costs and impacts on business and 

corporations.’’ 61

To rectify the pernicious effects of the bill’s supermandates, Representative Steve Cohen (D–TN) offered an amendment clarifying 

that these provisions apply only if they do not conflict with any 

other law. Representative Cohen’s amendment would have ensured 

that prior Congressional intent as expressed in these other measures, such as the Clean Air Act, would be preserved and would 

have prevented unelected agency bureaucrats from weighing costs 

against saving lives. His amendment, however, failed by a vote of 

14 to 15. 

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62 Exec. Order No. 12,291, 46 Fed. Reg. 13,193 (Feb. 19, 1981). 63 Exec. Ord. No. 12,866, 58 Fed. Reg. 51,735 (Oct. 4, 1993). 64 EO 12866 defines ‘‘significant regulatory action’’ as any action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely 

effect in a material way the economy, a sector of the economy, productivity, competition, jobs, 

the environment, public health or safety, or State, local, or tribal communities; (2) create a serious inconsistency with another agency’s actions; (3) materially alter the budgetary impact or the 

rights of recipients of entitlement, grant, user fee, or loan programs; or (4) raise novel legal or 

policy issues arising out of legal mandates, the President’s priorities, or the principles set forth 

in EO 12866. Id. 65 Exec. Ord. No. 13,422, 72 Fed. Reg. 2,763 (Jan. 23, 2007). President Obama revoked EO 

13422 on January 30, 2009. Exec. Ord. No. 13,497, 74 Fed. Reg. 6,113 (Jan. 30, 2009). 66 Exec. Ord. No. 13,563, 76 Fed. Reg. 3,821 (Jan. 18, 2011). 

B. Contrary To Its Proponent’s Claims, H.R. 3010, Rather Than 

Merely Codifying the Existing Cost-Benefit Analysis Requirements, Greatly Expands Them, Threatening ‘‘Paralysis by Analysis’’ 

1. Cost-Benefit Requirements in Executive Orders 

For more than 30 years, beginning with President Ronald 

Reagan, every Administration has required significant rules to undergo a comprehensive cost-benefit analysis. President Reagan’s 

EO 12291, for example, which outlined certain cost-benefit analysis 

requirements for ‘‘major’’ rules, i.e., rules that would have at least 

a $100 million annual effect on the economy, a major increase in 

costs or prices for consumers, industries, government agencies, or 

regions, or significant adverse effects on competition, employment, 

investment, productivity, innovation, or on the ability of United 

States-based enterprises to compete with foreign-based enterprises 

in domestic or export markets.62

President Bill Clinton carried forward the cost-benefit analysis 

requirement as reflected in his EO 12866, issued in 1993.63 This 

EO mandates agencies to prepare cost-benefit analyses for ‘‘significant regulatory actions.’’ 64 In particular, EO 12866 requires agencies to assess all costs and benefits of available regulatory alternatives, including, significantly, both quantitative and qualitative 

measures. It also provides that agencies should select regulatory 

approaches that maximize net benefits, unless a statute requires 

another approach. Under EO 12866, agencies should, among other 

priorities, adopt regulations only upon a ‘‘reasoned determination 

that the benefits of the intended regulation justify its costs,’’ and 

tailor regulations so that they impose the least burden on society 

needed to achieve the regulatory objectives. 

In 2007, President George W. Bush issued EO 13422,65 which 

substantively amended EO 12866 in various ways. In pertinent 

part, it increased emphasis on cost-benefit analysis by agencies, including requiring agencies to include reasonable estimates of the 

aggregate costs and benefits of all regulations for each calendar 

year; and allowed for a greater role for political appointees in agency rulemaking. 

On January 18, 2011, President Barack Obama issued EO 

13563,66 which supplemented and reaffirmed the principles of EO 

12866 as issued by President Clinton. In relevant part, EO 13563 

requires agencies to identify, ‘‘as appropriate, means to achieve regulatory goals designed to promote innovation,’’ and to reduce costs 

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67 Id. 68 Id. 69 H.R. 3010 Hearing (prepared statement of Prof. Sidney Shapiro, Wake Forest School of 

Law). 70 H.R. 3010 Hearing (prepared statement of Christopher DeMuth, American Enterprise Institute). 71Letter from 52 administrative law academics to House Judiciary Committee Chair Lamar 

Smith and House Judiciary Committee Ranking Member John Conyers, Jr., at 1 (Oct. 24, 2011). 

tion.67 The order also clarifies that agencies must identify and consider regulatory approaches that reduce burdens and maintain 

flexibility and freedom of choice for the public.68

2. H.R. 3010 Expands the Scope and Reach of Cost-Benefit 

Analysis Requirements Beyond the Executive Orders 

Contrary to the claims of H.R. 3010’s proponents, the bill would 

add additional analytical requirements and expand the reach of the 

requirement for cost-benefit analysis. At the hearing on H.R. 3010, 

the Majority witnesses, perhaps tellingly, only made general platitudinal arguments about the benefits of cost-benefit analysis, without addressing the specific analytical factors required by H.R. 3010. 

The Minority witness, Professor Sidney Shapiro, however, explained that cost-benefit analysis ‘‘is, at best, inexact and manipulable.’’ 69

Belying the claims of the bill’s proponents that H.R. 3010 merely 

codifies the requirements of the various Executive Orders, sections 

3(b)(6), 3(d)(1), 3(f)(3), and 3(f)(4) of the bill impose a mandate on 

all agencies to conduct a cost-benefit analysis for virtually all rules, 

and not just economically significant ones. This expanded scope 

would apply to in excess of 3,000 rules annually, including minor 

ones. For example, if the Coast Guard wanted to issue a rule establishing a safety zone for a fireworks display (something the Coast 

Guard does frequently), the bill would require the agency to do a 

cost-benefit analysis, and to show that the benefits ‘‘justify’’ the 

costs. 

The bill’s cost-benefit analysis mandate itself will result in a tremendous expenditure of taxpayer dollars in the amount of resources that it will require agencies to comply. Even one of the Majority’s witnesses at the legislative hearing on this bill acknowledged as much. He said cost-benefit analysis ‘‘summons the apparatus of cost (and benefit) estimation—which is itself costly.’’ 70

More than 50 administrative law academics also highlighted their 

concern about the additional costs that the bill’s burdensome requirements will impose on agencies, which is particularly problematic in this time of severe budgetary pressures.71

In addition to expanding cost-benefit analysis requirements to include all rules and not just economically significant ones per the 

existing Executive Orders, H.R. 3010 also adds numerous analytical requirements to the already substantial analytical requirements of the rulemaking process, threatening ‘‘paralysis by analysis.’’ Moreover, H.R. 3010 expands the cost-benefit analysis requirement to include ‘‘major guidance’’ documents, i.e., documents 

that are not ‘‘rules’’ under current law. The bill also would require 

agencies to identify the costs and benefits of alternatives to rules 

that are ultimately proposed. 

Additionally, as noted, H.R. 3010 would force agencies to adopt 

the least costly rule absent a compelling need to protect public 

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72Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from Nasima Hossain, U.S. PIRG Public Health Advocate, 

at 2 (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff) 73 Cost-Benefit Hearing (statement of Sally Katzen). 74 Executive Office of the President of the United States, Office of Management and Budget 

Mission, available at http://www.whitehouse.gov/omb/organizationlmission/. OMB’s ‘‘predominant mission,’’ however, is ‘‘is to assist the President in overseeing the preparation of the federal 

budget and to supervise its administration in Executive Branch agencies.’’ Id. 

health and safety. Under EO 12866, in contrast, agencies must 

simply determine that the benefits of a proposed rule—including 

non-quantifiable benefits—justify their costs and that benefits are 

maximized. As U.S. PIRG observes: 

The new bill would in effect slow down the regulatory 

process by adding unending cost-benefit analyses, followed 

by court challenges. New analyses mandated by the legislation would require estimates of future direct and indirect 

costs that are impossible to forecast with any reliability. 

These new hurdles and the increased influence given to big 

business and corporate special interests would cause significant problems for federal agencies such as the CDC 

and the FDA and would undermine their ability to fulfill 

their missions.72

We are concerned not only with the bill’s cost-benefit analysis 

provisions, but with its specific mandates as to the factors that 

must be considered as part of that analysis. While former OIRA 

Administrator Sally Katzen testified before the CCAL Subcommittee that both Democratic and Republican administrations 

have agreed on the basic principle that agencies should engage in 

cost-benefit analysis of proposed and final rules, she strongly opposed codification because each administration has chosen to place 

different emphases and nuances into its cost-benefit analysis requirements. Codifying a single, stringent standard would prohibit 

such flexibility.73

IV. H.R. 3010 USURPS CONGRESSIONAL INTENT BY SUBSTANTIALLY EXPANDING OIRA’S—AND, THEREFORE, THE PRESIDENT’S—CONTROL

OVER RULEMAKING AND UNDERCUTS CURRENT TRANSPARENCY REQUIREMENTS

H.R. 3010 expands OIRA’s control over all agency rulemaking 

and undercuts the transparency requirements that currently exist 

in EO 12866. In the hands of the wrong administration, this extraordinary and unaccountable power over rulemaking threatens 

agencies’ ability to do the job that Congress tasked them with 

doing, which is to protect the American people from a broad array 

of harms. 

A. H.R. 3010 Would Empower OIRA To Exert a Choke Hold Over 

Rulemaking 

Within the Executive Office of the President, OMB is charged 

with the responsibility to oversee and coordinate Executive Branch 

agencies. OMB works with agencies ‘‘to help improve administrative management, to develop better performance measures and coordinating mechanisms, and to reduce any unnecessary burdens on 

the public.’’ 74 Since the 1930’s, OMB has been involved in ‘‘quesmstockstill on DSK4VPTVN1PROD with HEARINGS

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75 Committee Print: Office of Management and Budget: Evolving Roles and Future Issues Congressional Research Service Report, S. Comm. on Governmental Affairs, 99th Cong. 185 (1986). 76Paperwork Reduction Act of 1980 § 3503, 44 U.S.C. ch. 35 (2011). 77 Interim Report on the Administrative Law, Process and Procedure Project for the 21st Century, Subcomm. on Commercial and Administrative Law of the H. Comm. on the Judiciary, 

109th Cong. 39 (2006) available at http://judiciary.house.gov/Media/PDFS/Printers/109th/ 

31505.pdf [hereinafter ‘‘Interim Report’’]. 78 Curtis W. Copeland, ‘‘Changes to the OMB Regulatory Review Process by Executive Order 

13422,’’ CRS Report for Congress, RL 33862, at 56 (2007) (quoting Office of Management and 

Budget, Stimulating Smarter Regulation: 2002 Report to Congress on the Costs and Benefits of 

Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, Dec. 2002). 79 John Graham, Administrator, OIRA, Remarks to the Board of Trustees, The Keystone Center, at Washington, DC (June 18, 2002), available at http://www.whitehouse.gov/omb/inforeg/keystonelspeech061802.html. 80 Interim Report at 56. 81Lisa Heinzerling, ‘‘Statutory Interpretation in the Era of OIRA,’’ 33 Ford. Urb. L. Rev. 1097, 

1117 (2006). 82 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. 83The Rulemaking Process and the Unitary Executive Theory: Hearing Before the Subcomm. 

on Commercial and Administrative Law of the H. Comm. on the Judiciary, 110th Cong. (2008) 

(prepared statement of Curtis W. Copeland, Specialist in American National Government, Congressional Research Service) (footnotes omitted). Additional instances of this heightened role include the following: 

• the increased use of ‘‘informal’’ OIRA reviews in which agencies share preliminary drafts 

of rules and analyses before final decisionmaking at the agencies—a period when OIRA says 

it can have its greatest impact on the rules, but when OIRA says that some of the transparency requirements in Executive Order 12866 do not apply; 

• extensions of OIRA review for certain rules for months or years beyond the 90-day time 

limit delineated in the executive order; 

• using a general statutory requirement that OIRA provide Congress with ‘‘recommendations 

for reform’’ to request the public to identify rules that it believes should be eliminated or 

reformed; 

• a leadership role for OIRA in the development of electronic rulemaking, which has led to 

the development of a centralized rulemaking docket, but which some observers believe can 

lead to increased presidential influence over the agencies; 

• the development of an OMB bulletin on peer review that, in its original form, some believed 

could have led to a centralized system within OMB that could be vulnerable to political manipulation or control; 

tions of management and organization of the executive branch’’ and 

the level of its involvement has fluctuated over time.75

With regard to the regulatory processes of Executive Branch 

agencies, OIRA, established by Congress in the Paperwork Reduction Act of 1980 as an arm of OMB, reviews significant proposed 

and final rules from federal agencies before they are published in 

the Federal Register.76 As a result of OIRA’s review, draft rules 

may be revised before publication, withdrawn before a review is 

completed, or returned to the agencies ‘‘because, in OIRA’s analysis, certain aspects of the rule need to be reconsidered.’’ 77

Excessive concentration of power in OIRA can be troubling. For 

instance, under the Bush Administration, OIRA’s role as a ‘‘gatekeeper for new rulemakings’’ was substantially strengthened.78 The 

OIRA Administrator during the Bush Administration explained 

that one of his office’s functions was ‘‘to protect people from poorly 

designed rules,’’ and that OIRA review was a way to ‘‘combat the 

tunnel vision that plagues the thinking of single-mission regulators.’’ 79 This ‘‘return to the gatekeeper perspective of OIRA’s role 

[had] implications for an array of OIRA’s functions.’’ 80 During the 

Bush Administration, ‘‘OIRA’s increasingly aggressive role in controlling agency action’’ may have been ‘‘the biggest administrative 

law story of the new century.’’ 81 Manifestations of OIRA’s heightened role in the rulemaking process, as identified by the Government Accountability Office (‘‘GAO’’)82 and CRS,83 included the following: 

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• the development of a proposed bulletin standardizing agency risk assessment procedures 

that the National Academy of Sciences concluded was ‘‘fundamentally flawed,’’ and that 

OIRA later withdrew; and 

• the development of a ‘‘good guidance practices’’ bulletin that standardizes certain agency 

guidance practices. 

Id. 84OIRA, however, returned only two rules in 2003, one rule in 2004, one rule in 2005, no rules 

in 2006, and one rule in 2007. OIRA officials indicated that the pace of return letters declined 

after 2002 because agencies had gotten the message about the seriousness of OIRA reviews. 85The Rulemaking Process and the Unitary Executive Theory: Hearing Before the Subcomm. 

on Commercial and Administrative Law of the H. Comm. on the Judiciary, 110th Cong. (2008) 

(prepared statement of Curtis W. Copeland, Specialist in American National Government, Congressional Research Service). 86 H. Comm. on the Judiciary Majority Staff, Reining in the Imperial Presidency—Lessons and 

Recommendations Relating to the Presidency of George W. Bush, 111th Cong., at 186 (Mar. 

2009). 87 Exec. Ord. No. 13,497, 74 Fed. Reg. 6,113 (Jan. 30, 2009). 88 Certain agencies are considered ‘‘independent’’ because the President has limited authority 

to remove their leaders (usually, heads of such agencies can only be removed for cause, rather 

than at the President’s pleasure). Stephen G. Breyer, et al., Administrative Law and Regulatory 

Policy, at 100 (4th ed. 1999). 

• the development of a detailed economic analysis circular and 

what agency officials described as a perceptible ‘‘stepping up 

the bar’’ in the amount of support required from agencies for 

their rules, with OIRA reportedly more often looking for regulatory benefits to be quantified and a cost-benefit analysis 

for every regulatory option that the agency considered, not 

just the option selected; 

• the issuance of 21 letters returning rules to the agencies between July 2001 and March 2002—three times the number 

of return letters issued during the last 6 years of the Clinton 

Administration;84

• the issuance of 13 ‘‘prompt letters’’ between September 2001 

and December 2003 suggesting that agencies develop regulations in a particular area or encouraging ongoing efforts. 

However, OIRA issued two prompt letters in 2004, none in 

2005, one in 2006, and none in 2007[.] 

According to CRS, these and other Bush Administration initiatives 

‘‘represent[ed] the strongest assertion of presidential power in the 

area of rulemaking in at least 20 years.’’ 85 A detailed analysis prepared by the Democratic staff of the House Judiciary Committee 

concerning the Bush Administration’s control of the rulemaking 

process concluded that such control was ‘‘to the detriment of the 

public interest and has served to circumvent legislative intent.’’ 86

Not surprisingly, President Obama, in one of his first acts in office, 

revoked EO 13422, which contained these expanded OIRA authority provisions, on January 30, 2009.87

Notwithstanding the serious concerns presented regarding greater presidential control over rulemaking, section 3 of H.R. 3010 

would require all agencies—including independent regulatory agencies—to consult with OIRA before they could publish a proposed or 

final rule. This requirement represents an unprecedented delegation of power to OIRA and the President as it will effectively allow 

OIRA to control all rulemaking activity. Moreover, this provision 

would undermine the independence of independent regulatory 

agencies that Congress created to be independent of the President.88 This requirement is particularly curious in light of the fact 

that many of the proponents of H.R. 3010 are also, somewhat hypocritically, proponents of H.R. 10, the Regulations from the Execumstockstill on DSK4VPTVN1PROD with HEARINGS

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89 H.R. 10, 112th Cong. (2011). 90 U.S. CONST. amend. XIV, § 1. 

tive in Need of Scrutiny Act, or ‘‘REINS Act.’’ 89 That bill requires, 

among other things, that Congress approve all major rules before 

they can go into effect. Therefore, in H.R. 10, proponents of this 

legislation are seeking to regain control from the Executive Branch 

over the rulemaking process, while in H.R. 3010, they seek to give 

the Executive Branch even more power over the rulemaking process. 

Rather than learning from prior mistakes, the proponents of H.R. 

3010, in effect, seek to revitalize and codify the Bush Administration’s view that OIRA should act as a rulemaking ‘‘gatekeeper’’ by 

mandating OIRA review authority in some of the same ways specified in the Bush Administration’s overruled EO 13422. As a result, 

H.R. 3010 ensures greater presidential control over rulemaking, 

which, in the wrong administration’s hands, could undermine important health, safety, consumer protection, financial and other 

regulations. 

In recognition of the problematic consequences of the bill’s delegation of virtually unlimited control over the rulemaking process to 

OIRA, Representative Nadler offered an amendment deleting the 

requirement in the bill that agencies (including independent regulatory agencies) consult with OIRA before they may publish an Notice of Proposed Rule Making or issue final rules. His amendment, 

however, failed by a vote of 13 to 20. 

B. H.R. 3010 Undercuts Current Transparency Requirements 

Another problematic aspect of H.R. 3010 is section 3, which gives 

the President and OIRA the discretion as to what information must 

be made available to the public in connection with certain rulemaking processes. As a result, the bill would reduce—not strengthen—current requirements for OIRA transparency. For example, EO 

12866 currently requires OIRA to ‘‘make available to the public all 

documents exchanged between OIRA and the agency during the review by OIRA’’ The bill, however, would allow the President and 

the OIRA Administrator to decide—at their discretion—what information that OIRA provides to the agency will be disclosed to the 

public. Also, section 3(l) of the bill would allow the President or the 

OIRA Administrator to prevent the inclusion of documents and information communicated by OIRA from the rulemaking record. 

V. H.R. 3010 FURTHER TILTS THE REGULATORY PROCESS IN FAVOR OF

BUSINESS INTERESTS AND OTHERS WHO WANT TO STOP REGULATIONS

A. H.R. 3010 Reinstates a Long-Discredited, Cumbersome, and 

Time-Consuming Formal Rulemaking Process That Can Be 

Used To Thwart Needed Public Health and Safety Rules from 

Being Promulgated 

1. There Is No Need for Formal Rulemaking 

While regulations provide a substantial net benefit for society, 

agencies must nonetheless comply with constitutional due process 

requirements when issuing them. The Constitution provides that 

the government may not deprive anyone of life, liberty, or property 

without ‘‘due process of law.’’ 90 This requirement of fair procedure 

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91Federal Trade Commission v. Ruberoid Co., 343 U.S. 470, 487 (1952) (Jackson, J., dissenting). 92 5 U.S.C. § 553(c) (2011). 93 United States v. Florida East Coast Railway Co., 410 U.S. 224, 237–238 (1973). 94 5 U.S.C. § 556(d) (2011). 95 5 U.S.C. § 556(c), (d) (2011). 96 5 U.S.C. § 556(d) (2011). 97 Id. 98See 5 U.S.C. § 706(2) (2011) (outlining various bases for judicial review). 99Stephen G. Breyer et al., Administrative Law and Regulatory Policy, at 582 (4th ed. 1999). 100 Id. 

applies to the federal regulatory rulemaking and adjudicatory processes, the impact of which can be extensive. As Justice Robert 

Jackson observed in 1952, ‘‘The rise of administrative bodies probably has been the most significant legal trend of the last century 

and perhaps more values today are affected by their decisions than 

by those of all the courts, review of administrative decisions 

apart.’’ 91

Though rarely used, agencies must sometimes follow the APA’s 

formal rulemaking procedures ‘‘when rules are required by statute 

to be made on the record after opportunity for an agency hearing.’’ 92 The Supreme Court, in an opinion authored by then-Justice 

William Rehnquist, interpreted this language to mean that unless 

Congress specifically states in a statute governing the substance of 

the rulemaking that agency ‘‘hearings’’ regarding proposed rules 

are to be ‘‘on the record,’’ an agency is not required to use formal 

rulemaking procedures.93

The formal rulemaking procedures, outlined in sections 556 and 

557 of the APA, require the agency seeking to promulgate the rule 

to carry the burden of proof in a trial-like process.94 Any interested 

party has the opportunity to present evidence and conduct crossexamination with an administrative law judge or other agency official presiding.95 The presiding officer can administer oaths, issue 

subpoenas, exclude irrelevant evidence, and make other rulings 

concerning the conduct of the proceeding.96 The rule must be supported by substantial evidence.97 In contrast to an informal rulemaking, a court can review a rule subject to formal rulemaking to 

determine whether the ‘‘evidence’’ supporting the rule was ‘‘substantial.’’ 98

Up until the 1970’s, the trial-type procedures involved in formal 

rulemaking were thought to be the best (though not the only) 

means of ensuring that agency rulemaking satisfied due process 

concerns and ensured fairness and accuracy in the rulemaking 

process. Over time, however, informal procedures (partly described 

in footnote 41 above) came to be seen as being sufficient to satisfy 

due process, while formal rulemaking procedures came to be seen 

as unnecessarily cumbersome and time-consuming and offering little advantage over informal rulemaking procedures.99 For instance, 

in the 1960’s, of 16 formal rulemakings under the Food, Drug and 

Cosmetic Act, not one was completed in less than 2 years and the 

average time elapsed between first proposal and final order was 4 

years.100 Moreover, in two of the 16 cases, the formal rulemaking 

proceedings took more than a decade, including one proceeding to 

determine whether the Food and Drug Administration (FDA) 

should require that peanut butter contain at least 90% peanuts (as 

the FDA proposed) as opposed to 87% peanuts (as proposed by inmstockstill on DSK4VPTVN1PROD with HEARINGS

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101 Id. 102 Id. 103 American Bar Ass’n—Section of Administrative Law and Regulatory Practice, Comments 

on H.R. 3010, the Regulatory Accountability Act, at 2 (Oct. 24, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 104 Id. at 20. 105 Administrative Conference of the United States Recommendation 93–4, 59 Fed. Reg. 4670, 

4670 (1993). 106 American Bar Ass’n—Section of Administrative Law and Regulatory Practice, Comments 

on H.R. 3010, the Regulatory Accountability Act, at 22 (Oct. 24, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 107 APA 65 Hearing (statement of Jeffrey A. Rosen); Formal Rulemaking Hearing (statements 

of Noel J. Francisco and Edward W. Warren). 108Formal Rulemaking Hearing (statement of Matthew C. Stephenson). 109 Id. 

dustry).101 In the peanut butter case, a government witness was 

examined and cross-examined for an entire day about a survey of 

cookbook and patented peanut butter formulas, missing recipes, 

and his personal preferences regarding peanut butter.102

Not surprisingly, the ABA’s Administrative Law Section has observed that formal rulemaking has been ‘‘long-discredited’’ and that 

it has ‘‘passed almost completely into disuse, because experience 

has shown that it leads to substantial delays and unproductive confrontation and because courtroom methods are not generally suited 

to resolution of legislative-type issues.’’ 103 The Section’s views reflect a ‘‘virtual consensus in the administrative law community that 

the APA formal rulemaking procedure is obsolete.’’ 104 Indeed, the 

Administrative Conference of the United States recommended in 

1993 that the APA’s formal rulemaking procedure be repealed.105

Studies conducted of formal rulemaking procedures ‘‘showed clearly’’ that such procedures ‘‘slowed proceedings considerably and undermined agencies’ ability to fulfill their mandates’’ that, in turn, 

imposed ‘‘heavy social costs.’’ 106

Notwithstanding the obvious shortcomings with formal rulemaking, H.R. 3010 fully embraces this procedure for ‘‘high-impact’’ 

rules, defined in the bill as those with a $1 billion cost to the economy. Proponents of formal rulemaking assert that it allows an opportunity for parties to cross-examine the agency, which is the best 

way to vet the agency’s factual assertions and assure the public 

that only the best science underlies agency action.107

Such an assertion, however, is itself unsupported by evidence. 

H.R. 3010’s proponents offer no study or other data indicating that 

cross-examination and other facets of the formal rulemaking process are the most effective tools for making scientific and policy 

judgments. Indeed, Professor Matthew Stephenson of Harvard Law 

School challenged this assertion in testimony before the CCAL Subcommittee.108 Additionally, Professor Stephenson noted that informal notice-and-comment rulemaking is already heavily proceduralized, making formal rulemaking procedures unnecessary. 

2. Formal Rulemaking Will Bring Agency Rulemaking To a 

Halt 

While formal rulemaking procedures will not improve the quality 

of agency rules, the costs and delays associated with formal rulemaking would effectively grind agency rulemaking to a halt.109 As 

demonstrated by the peanut butter case described above, a formal 

rulemaking can take up to a decade to complete without any positive effect on the quality of the final decisions. Additionally, by immstockstill on DSK4VPTVN1PROD with HEARINGS

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110 Id. 111 Hearing on H.R. 3010 (prepared statement of Prof. Sidney Shapiro, Wake Forest School 

of Law). 112Letter from 52 administrative law academics to House Judiciary Committee Chair Lamar 

Smith and House Judiciary Committee Ranking Member John Conyers, Jr., at 2 (Oct. 24, 2011) 

(noting that formal rulemaking ‘‘runs directly contrary to the consensus of the administrative 

law community that the APA formal rulemaking procedure is unworkable and obsolete’’) (on file 

with H. Committee on the Judiciary, Democratic Staff). 113Letter to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee 

Ranking Member John Conyers, Jr. from William Samuel, Director, the American Federation 

of Labor and Congress of Industrial Organizations, at 2 (Nov. 1, 2011) (on file with H. Committee on the Judiciary, Democratic Staff). 114 H.R. 3010 Hearing (prepared statement of Prof. Sidney Shapiro, Wake Forest School of 

Law). 

peding agency rulemaking through more formal procedural requirements, H.R. 3010 could: (1) impede desirable rule changes; (2) lead 

agencies to use other, less desirable forms of agency regulation 

such as ad hoc adjudication; (3) be forced to write cruder, blunter 

rules or use more vague statutory language, leaving the interpretation to courts; and (4) impede its own oversight of rulemaking by 

making it harder for agencies to change course in response to the 

views of the political branches, giving agencies a way to ‘‘run out 

the clock’’ on a President or a congressional majority, and shifting 

power within agencies away from political appointees to career 

staff.110 At the legislative hearing on this bill, Minority witness 

Professor Sidney Shapiro observed, ‘‘Almost no serious administrative law expert regards formal rulemaking as reasonable, and it 

has been all but relegated to the dustbin of history.’’ 111 More than 

50 other administrative law academics concur.112

By delaying the rulemaking process, H.R. 3010 presents serious 

public health and workplace safety concerns. As noted by the AFL– 

CIO: 

These formal rulemaking procedures will make it more difficult for workers and members of the public to participate, 

and give greater access and influence to business groups 

that have the resources to hire lawyers and lobbyists to 

participte in this complex process. For agencies that already provide for public hearings, such as OSHA and 

MSHA, the bill would substitute formal rulemaking for the 

development of all new rules, overriding the effective public participation processes conducted by these agencies.113

3. Formal Rulemaking Will Give an Unfair Advantage to 

Well-Funded Special Interests to Influence Rulemaking 

We are also particularly concerned that H.R. 3010’s formal rulemaking requirements will favor those special interests that have 

the resources to fund the kind of protracted litigation this process 

entails. Under the current law, ‘‘corporate and business lobbying of 

agencies far exceeds that by groups representing the public,’’ as 

Professor Shapiro testified at the legislative hearing on the bill.114

H.R. 3010, however, will facilitate greater influence of business interests on rulemaking and agencies. 

In particular, we share the fears of the Union of Concerned Scientists, which notes, for example, that the legislation jeopardizes 

‘‘the respect and deference to the role of science in rulemaking’’ 

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115Letter to to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee Ranking Member John Conyers, Jr. from Francesca T. Grifo, Senior Scientist and Director—Scientific Integrity Program, Union of Concerned Scientists (Nov. 3, 2011) (on file with the 

H. Committee on the Judiciary, Democratic Staff). 116 Id. 117Frank Knapp, Vice-Chair, American Sustainable Business Council, & President, South 

Carolina Small Business Chamber of Commerce, Regulatory Reform Good for Multinationals, 

Yet Bad for You, The Hill Blog, Nov. 1, 2011 (original emphasis), available at http://thehill.com/ 

blogs/congress-blog/judicial/191015-regulatory-reform-good-for-multinationals-yet-bad-for-you 118 5 U.S.C. §§ 702, 704 (2011). 

that exists under current law.115 Rather than facilitating ‘‘thoughtful consideration based on facts,’’ the bill would open ‘‘the floodgates to challenges that are not fact-based and that seek only to 

delay the rulemaking process, and to make it easier for special interests to contest rules in the courts.’’ 116 Aptly describing the bill 

as a ‘‘corporate lobbyist dream,’’ the Vice-Chair of the American 

Sustainable Business Council and President of the South Carolina 

Small Business Chamber of Commerce explains: 

It appears to be written by corporate attorneys for corporate attorneys. 

Every aspect of the RAA is geared toward encouraging 

special interests to legally challenge every regulation of an 

agency. Even frivolous lawsuits are protected under the 

bill because the RAA defines as ‘‘substantial evidence’’ for 

a lawsuit to be anything the special interest thinks is reasonable.117

Given all these shortcomings with formal rulemaking, Representative Melvin Watt (D–NC) offered an amendment to strike this provision from the bill at the Committee markup. The amendment, 

however, failed by a vote of 13 to 16. 

B. H.R. 3010’s Expanded and Less Deferential Judicial Review 

Risks Undermining Agency Rulemaking and Reducing Political 

Accountability for Policy Decisions Without Enhancing Due 

Process 

1. Current Law Provides Adequate Opportunity for Judicial 

Review 

The APA provides for judicial review of final agency action when 

there is no other adequate judicial remedy available.118 The APA 

requires a reviewing court to compel agency action when it is unlawfully withheld or unreasonably delayed and to set aside as unlawful agency action, findings, and conclusions when they are 

found to be: 

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; 

(B) contrary to constitutional right, power, privilege, or immunity; 

(C) in excess if statutory jurisdiction, authority, or limitations, or short of statutory right; 

(D) without observance of procedure required by law; 

(E) unsupported by substantial evidence in [a formal rulemaking] or otherwise reviewed on the record of an agency 

hearing provided by statute; or 

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119 5 U.S.C. § 706(2) (2011). 120 5 U.S.C. § 701 (2011). 121See Webster v. Doe, 486 U.S. 592 (1988); Oestereich v. Selective Service System, 393 U.S. 

233 (1968). 122 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). 123 Id. 124 Id. 125 United States v. Mead Corp., 533 U.S. 218 (2001). 126 Interim Report at 112. 127Motor Vehicle Mfr. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983); Citizens 

to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). 128 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971); Interim Report at 

113. 129 Interim Report at 113 (quoting Thomas O. McGarity, Some Thoughts on Deossifying the 

Rulemaking Process, 41 Duke L.J. 1385, 1410 (1992)). 

(F) unwarranted by the facts to the extent that the facts 

are subject to trial de novo by the reviewing court.119

The two exceptions to this presumption of judicial review under the 

APA are when ‘‘statutes preclude judicial review’’ and when ‘‘agency action is committed to agency discretion by law.’’ 120 A court, 

however, always has the authority to review the constitutionality 

of agency action, including those actions that are otherwise 

unreviewable.121

In Chevron U.S.A., Inc. v. Natural Resources Defense Council, the 

Supreme Court held that a reviewing court can invalidate an agency rule or formal adjudication only when it violates a constitutional 

provision or when the agency’s rule exceeds its statutory authority 

to issue the rule as clearly expressed by Congress.122 Where the 

statute is ambiguous, courts must defer to an agency’s permissible 

interpretation of the statute.123 The court cannot strike down a 

rule based on substantive policy grounds, out of deference to an 

agency’s substantive expertise in the matter being regulated.124

Subsequent to the Chevron decision, the Supreme Court has limited the Chevron doctrine to legislative rules 125 (i.e., those having 

the effect of law), and the extent of judicial deference can be unclear in a given case. 

Courts will also invalidate a rule that is arbitrary or capricious. 

Normally, this type of scrutiny applies to informal rulemaking.126

Although originally an extremely deferential standard, the Supreme Court, in a series of decisions since the 1970’s, has left unclear precisely what level of deference is required, suggesting that 

the ‘‘arbitrary or capricious’’ standard may not be as deferential towards agency action as it is in other contexts.127 The Court has 

suggested that, even under the arbitrary or capricious standard, a 

reviewing court must conduct a ‘‘searching and careful’’ review of 

agency action.128 Heightened review under the arbitrary or capricious standard has been referred to as the ‘‘hard look’’ doctrine, 

under which a court examines ‘‘carefully the administrative record 

and the agency’s explanation, to determine whether the agency applied the correct analytical methodology, applied the right criteria, 

considered the relevant factors, chose from among the available 

range of regulatory options, relied upon appropriate policies, and 

pointed to adequate support in the record for material empirical 

conclusions.’’ 129

The existence of the ‘‘hard look’’ review of informal rulemaking 

already provides arguably deferential, but still meaningful judicial 

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130 According to some critics, ‘‘hard look’’ review itself may be insufficiently deferential to 

agency decisions. Id. at 115. Whatever the merits of such criticism, H.R. 3010’s judicial review 

provisions would tip the balance much further away from judicial deference than current law. 131Letter to to House Judiciary Committee Chair Lamar Smith and House Judiciary Committee Ranking Member John Conyers, Jr. from David Arkush, Director, & Amit Narang, Regulatory Policy Advocate, Public Citizen’s Congress Watch, at 2 (on file with the H. Committee 

on the Judiciary, Democratic Staff). 

review of agency rulemaking. H.R. 3010, however, threatens to 

upset that balance.130

2. Judicial Review under H.R. 3010 Will Allow Courts to 

Substitute Their Judgment for That of Agency Experts and 

Give More Opportunities for Special Interests to Challenge 

Rules 

H.R. 3010 would subject to judicial review agency compliance 

with numerous APA requirements, including their application of 

H.R. 3010’s cost-benefit analysis requirements. By greatly expanding opportunities for judicial review, H.R. 3010 would present 

many more instances when a court could overrule agency action as 

a result (e.g., a court could find that an agency failed to properly 

identify the costs and benefits of alternatives to a proposed rule). 

Even assuming that courts had the resources to review these 

types of agency decisions, expanded and less deferential judicial review would be troublesome because it would make rulemaking 

more costly and time-consuming for agencies by forcing them to 

adopt more detailed factual records and explanations, effectively 

imposing more procedural requirements on agency rulemaking. 

Also, agencies may be dissuaded from pursuing regulations in the 

first place. Additionally, criticism of the existing ‘‘hard look’’ arbitrary or capricious review standard for informal rulemaking may 

apply to a much greater degree to H.R. 3010’s more formal move 

to expand the scope of judicial review. 

In particular, H.R. 3010 would require that a court give less deference to agency decisions under many circumstances, and such a 

less deferential judicial review standard runs the risk that judges 

effectively will be making policy by allowing personal policy preferences to intrude in their review of an agency rule, whether consciously or not. Public Citizen, a nonprofit consumer advocacy organization representing consumer interests, observes: 

[B]y needless expanding the scope of judicial review, the 

legislation marks an unprecedented and dangerous move 

away from traditional judicial deference to a system where 

courts are encouraged to overturn highly technical, resource-intensive agency decisions and substitute their own 

policy preferences instead. This new and inappropriate role 

for the courts is a recipe for more activist judges, increased 

litigation, endless delays, and more rather than less uncertainty for regulated parties and the public.131

Much of H.R. 3010’s judicial review standard appears to be old 

wine in new bottles. A similar legislative initiative was promoted 

during the 1980’s by anti-regulatory interests in Congress. The 

view then, as now, among proponents of enhanced judicial review 

was that the existing standard of judicial review favored agency decisions too much whenever injured members of the public sought 

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132Morton Rosenberg, The Future of Public Participation in Informal Agency Rulemaking 

Under Pending Regulatory Reform Proposals, Congressional Research Service Report for Congress, Dec. 7, 1982, at 44. 133 Id. at 45. 134 Id. 135 Id. at 46–47. 136 Id. at 47–48. 137 Id. at 48–51. 138Pub. L. No. 106–554, § 515 (2000). 

to reverse those decisions on appeal.132 The enhanced judicial review standard proposed in the legislation would have required 

courts to independently decide all relevant questions of law, review 

agency determinations of jurisdiction and authority to determine 

whether they were based on statutory language or other evidence 

of legislative intent, not accord any presumption in favor of agency 

determinations of questions of law other than its jurisdiction and 

authority, and apply what was in effect a ‘‘substantial evidence’’ 

test for informal rulemaking.133

CRS concluded that the effect of this enhanced judicial review 

proposal would be ‘‘to abolish the judicially developed doctrine of 

deference, which was developed by the courts as an aid to reviewing agency decisions and which recognizes agency expertise and involvement in the legislative process.’’ 134 CRS also noted that enhanced judicial review threatened to skew the agency factfinding 

process in favor of those with the resources to shape the agency 

record by making it more lengthy and costly.135 Also, parties opposed to a rule could further add costs and delay to the rulemaking 

process by increasing appeals of agency determinations.136 Finally, 

enhanced judicial review increases the risk of judicial activism, 

whereby judges would make policy from the bench by substituting 

their policy views for those of the agency.137 In short, the same 

criticisms that applied to expanded judicial review a generation ago 

apply to H.R. 3010’s judicial review provision. 

In response to the multiple problems presented by H.R. 3010’s judicial review provisions, Representative Cohen offered an amendment deleting section 7 of the bill, which expands the scope of judicial review to include compliance with the Information Quality Act 

and prohibits courts from deferring to agencies’ determinations 

under certain circumstances. The amendment, however, failed by a 

vote of 14 to 18. 

C. H.R. 3010’s Provisions of Opportunities to Challenge Agency 

Compliance With the Information Quality Act Is a Thinly Disguised Way to Regulate the Regulators and Give More Opportunities for Business Interests To Undermine Rulemaking 

New APA section 553(d)(4), as proposed by H.R. 3010, would permit any ‘‘member of the public’’—that is, literally anyone, including 

an entity that has no legitimate interest in the rule at issue—to 

petition for a trial-type hearing for the purpose of determining 

whether a proposed rule complies with of the Information Quality 

Act (‘‘IQA’’).138 In support of such petition, section 553(d)(4) only 

requires the proponent to present a ‘‘prima facie case that evidence 

or other information upon which the agency bases the proposed 

rule fails to comply’’ with the IQA. Moreover, the bill makes agency 

compliance with the IQA subject to judicial review, including the 

decision whether to hold an agency hearing. 

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139 Id. 140 Id. 141 Id. 142Project on Scientific Knowledge and Public Policy, Information Quality Act, available at 

DefendingScience.org. 143 H.R. 3010, 112th Cong. § 2 (2011). 

The IQA, also known as the Data Quality Act, was a Republican 

initiative included in a 2000 appropriations bill that required OMB 

to issue data quality guidelines to federal agencies beginning in 

2001.139 No hearings or legislative process preceded the enactment 

of this measure. Under these guidelines, all agencies subject to the 

Paperwork Reduction Act—a law that requires OMB to develop and 

oversee the implementation of policies, principles, standards, and 

guidelines applicable to the dissemination of public information by 

federal agencies—are required to establish and follow data quality 

guidelines that: (1) ensure and maximize the quality, objectivity, 

utility and integrity of information, including statistical information prior to dissemination; and (2) allow affected individuals and/ 

or organizations to seek and obtain correction of information maintained and disseminated by the agency that does not comply with 

OMB or agency guidelines. In addition, an agency must report to 

OMB regarding the number and nature of complaints received by 

the agency regarding agency compliance with OMB guidelines.140

More controversially, the IQA also requires federal agencies to 

have a process by which outside parties can ‘‘seek and obtain correction of information maintained and disseminated by the agency 

that does not comply with’’ the IQA’s requirements for information 

quality.141

Proponents of the IQA include the U.S. Chamber of Commerce 

and the Center for Regulatory Effectiveness, an industry-backed 

regulatory ‘‘watch dog’’ group. Critics of the law state, however, 

that it is a mechanism for ‘‘regulating the regulators.’’ These include CPR, OMB Watch, and Public Citizen.142

The expanded opportunities to challenge agency compliance with 

the IQA is troubling. In addition to offering yet another way to 

slow down rulemaking both by challenging agencies’ data and by 

challenging their compliance with the IQA, the IQA itself is problematic because it provides an opportunity for industry to challenge 

agencies’ scientific findings to the extent that those findings are 

contrary to the economic interests of industry. 

In sum, H.R. 3010 would permit anyone to request an IQA hearing, even if that person suffers no injury, i.e., lacks any legal standing. In addition, the bill fails to clarify what constitutes a ‘‘prima 

facie’’ case of agency non-compliance with the IQA, which will force 

agencies to err on the side of caution and hold IQA hearings, especially in light of the bill’s provision making a decision not to hold 

a hearing subject to judicial review. Finally, judicial review would 

add an entirely new level of litigation to the rulemaking process. 

D. H.R. 3010 Encourages a Regulatory Race to the Bottom 

Section 2 of the bill defines a major rule, in pertinent part, as 

a rule that has ‘‘significant adverse effects on . . . the ability of 

United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.’’ 143 The practical effect 

of this definition is that it will require agencies and the courts to 

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144See, e.g., Andrew Jacobs, With Anger Over Dirty Air Rising, Beijing Tries Tours on Monitoring Center, N.Y. Times, Nov. 9, 2011 (‘‘Environmental officials who have resisted releasing 

sensitive data about air pollution here in the capital announced that they would take action to 

address increasing complaints that the government’s monitoring system fails to report on the 

most dangerous airborne particles emitted by the growing ranks of cars and trucks.’’), available at http://www.nytimes.com/2011/11/10/world/asia/with-anger-over-dirty-air-rising-beijing-triestours-on-monitoring-center.html?ref=world. 

consider the business and regulatory environments of other nations. 

For example, a proposed rule that imposes heightened clean air 

requirements on American steel manufacturers would necessarily 

require consideration of whether this regulation—which could potentially result in higher compliance costs—could make American 

steel products less competitive in a country, such as China, that 

has a much less stringent regulatory regime. While the economic 

analysis under this requirement may be simple, its dangerous 

ramifications for public health cannot be underestimated. Chinese 

officials have only recently begun to acknowledge the health hazard 

risks presented by extensive air pollution that affects its cities, including its capital.144 The end result of H.R. 3010 is that the public 

health of Americans and the safety of the environment will be compromised so that American manufacturers can better compete with 

their foreign counterparts. This is a shortsighted regulatory ‘‘race 

to the bottom’’ that prioritizes profits over saving lives. 

DESCRIPTION AND BACKGROUND

The following section-by-section explanation of H.R. 3010, as 

amended, highlights the most problematic provisions in the bill. 

Sec. 2. Definitions. Section 2 of the bill amends section 551 of 

title 5 of the U.S. Code, which defines various terms applicable to 

the Administrative Procedure Act (‘‘APA’’) to add new definitions. 

Rather than providing clear and concise definitions for these new 

terms, H.R. 3010 defines these terms in vague and subjective respects. For the definition of ‘‘major rule,’’ section 2 sets forth four 

alternative definitions, each of which is potentially vague and subject to interpretation: 

(1) an annual cost on the economy of $100 million or more, 

adjusted annually for inflation; 

(2) a major increase in costs or prices for consumers, individual industries, federal, state, local or tribal government 

agencies, or geographic regions; 

(3) significant adverse effects on competition, employment, 

investment, productivity, innovation, or on the ability of 

U.S.-based enterprises to compete with foreign-based enterprises in domestic and export markets; or 

(4) significant impacts on multiple sectors of the economy. 

This definition is plagued with uncertainty and wrong-headed 

policy objectives. To begin with, each alternative definition is qualified by the phrase ‘‘likely to impose,’’ which is inherently vague. 

Second, it fails to clarify what ‘‘a major increase in costs or prices’’ 

would mean in this context. Similarly, the definition does not specify what would constitute ‘‘significant adverse effects.’’ Third, the 

definition, as revised by the Manager’s Amendment, applies to regulations that have ‘‘significant impacts on multiple sectors of the 

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economy.’’ The introduced version of the bill referred to ‘‘significant 

costs.’’ Whereas the term ‘‘costs’’ is susceptible of definition, ‘‘impacts’’ would capture a much broader category of rules, a subset of 

which would include costs. Costs, for example, is defined in Black’s 

Law Dictionary, while ‘‘impacts’’ is not. Unlike the Regulatory 

Flexibility Act which uses the term ‘‘significant economic impact,’’ 

the Manager’s Amendment use of the word ‘‘impact’’ would appear 

to be much broader. 

Perhaps most importantly, the definition clearly signals that our 

Nation’s regulatory regime must now be compared to those of other 

nations. The definition requires analysis of the effect of a regulation on the ‘‘ability of United States-based enterprises to compete 

with foreign-based enterprises in domestic and export markets,’’ 

which may be subject to little or no regulation. This provision will 

clearly facilitate the race to the bottom of deregulation and has the 

real potential to undo a broad range of public health, workplace 

safety and environmental protection regulations. 

While most of the other definitions in section 2 do not appear to 

be problematic, the provision’s definition of ‘‘major guidance’’ is 

equally as vague and reflective of bad policy as its definition of 

‘‘major rule’’ because it uses similar criteria. 

Sec. 3. Rulemaking. Section 3 substantively amends APA section 

553, which sets forth the requirements for informal notice-and-comment rulemaking under the APA, to vastly complicate and extend 

these requirements in ways that are unclear. To begin with, while 

new subsection (b) of section 553 requires an agency to make all 

preliminary and final factual determinations based on evidence, it 

is not clear what type of evidentiary standard would apply. 

Second, the agency must, in addition to other applicable considerations, consider the following: 

(1) The legal authority under which the rule may be proposed, such as whether it is required by statute and if so, 

whether it is due by a specific date; and whether the agency has discretion to commence a rulemaking (new section 

553(b)(1)). 

(2) Other statutory considerations applicable to whether 

the agency can or should propose a rule or undertake other 

agency action (new section 553(b)(2)). It is unclear what 

‘‘other agency action’’ would encompass. 

(3) The specific nature and significance of the problem the 

agency may address with a rule, including the degree and 

nature of risks the problem poses and the priority of addressing those risks compared to other matters or activities within the agency’s jurisdiction, and whether the problem warrants new agency action and any countervailing 

risks posed by such new action (new section 553(b)(3)). 

Again, this is very vague. 

(4) Whether existing rules have created or contributed to 

the problem the agency may address with a rule and 

whether such rules ‘‘could’’ be amended or rescinded to address the problem in whole or in part (new section 

553(b)(4)). The provision’s use of the word ‘‘could’’ encompasses a potentially extraordinary realm of possibilities. 

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145Pub. L. No. 91–604, 84 Stat. 1676 (1970), as amended. 146Pub. L. No. 95–217, 86 Stat. 816 (1977), as amended 147Pub. L. No. 91–596, 84 Stat. 1590, 84 Stat. 1590 (1970), as amended. 148Pub. L. 95–164, 91 Stat. 1290 (1977), as amended. 149Letter to House Members from American Rivers, Clean Water Action, Defenders of Wildlife, Earthjustice, Environment America, League of Conservation Voters & the Natural Resources Defense Council (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 150Pub. L. No. 111–203 (2010). 151Pub. L. No. 111–148 (2010). 

(5) Any reasonable alternatives in lieu of a new rule or 

other response identified by the agency or ‘‘interested persons,’’ including not only responses that mandate particular conduct or manners of compliance, but also the alternative of no federal response; amending/rescinding existing rules; potential regional, state, local or tribal regulatory action or other responses that could be taken in lieu 

of agency action; and potential responses that specify performance objectives rather than conduct or manners of 

compliance, establish economic incentives to encourage desired behavior, provide information upon which choices can 

be made by the public, or incorporate other innovative alternatives rather than agency actions that specify conduct 

or manners of compliance (new section 553(b)(5)). Essentially, this directs the agency to consider alternatives to 

promulgating a new rule. Note that ‘‘interested persons’’ 

can include literally anyone. 

Third, new section 553(b)(6) overrides all existing law to require 

the agency to consider: (1) the ‘‘potential’’ costs and benefits associated with ‘‘potential’’ alternatives set forth above, including direct, 

indirect, and cumulative costs and benefits and estimated impacts 

on jobs, economic growth, innovation, and economic competitiveness (new section 553(b)(6)(A)); (2) means to increase the cost-effectiveness of any federal response (new section 553(b)(6)(B)); and (3) 

incentives for innovation, consistency, predictability, lower costs of 

enforcement and compliance—for governmental and regulated entities, and the public—and flexibility (new section 553(b)(6)(C)). 

As a result of this supermandate, H.R. 3010 overrides provisions 

in numerous other statutes that prohibit agencies from considering 

costs when promulgating rules. These statutes include the Clean 

Air Act,145 the Clean Water Act,146 the Occupational Safety and 

Health Act,147 and the Federal Mine Safety and Health Act.148

Various environmental groups warn that this provision is a ‘‘cynical attempt’’ to overturn these measures.149

Fourth, new section 553(c)(1) requires advance notice of proposed 

rulemaking (ANPRM) for certain types of rules. Whereas the bill, 

as introduced, only required an ANPRM for major and high-impact 

rules, the Manager’s Amendment extends this requirement to rules 

presenting a ‘‘novel legal or policy issue.’’ The effect of this revision 

is that this provision captures a potentially very broad and very indefinite category of rules, even if these rules do not have any major 

effect or economic impact. It is likely intended to capture regulations issued under the Dodd-Frank Wall Street Reform and Consumer Protection Act 150 and the Patient Protection and Affordable 

Care Act,151 both of which potentially raise novel legal and policy 

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152See, e.g., H. Comm. on the Judiciary Majority Staff, Reining in the Imperial Presidency: 

Lessons and Recommendations Relating to the Presidency of George W. Bush, Final Report to 

Chairman John Conyers Jr., at 186–87 (Mar. 2009). 153 Id. at 186. 

issues arising out of these measures. As a result, this change will 

cause greater delay and uncertainty in the rulemaking process. 

Not later than 90 days before a notice of proposed rulemaking 

(NPRM) is published in the Federal Register (the current starting 

point for notice-and-comment rulemaking), an agency must published an ANPRM in the Federal Register. This notice must include 

all of the following: 

(1) A written statement identifying, at a minimum, the nature and significance of the problem the agency may address with a rule, including data and other evidence and 

information on which the agency expects to rely for the 

proposed rule (new section 553(c)(1)(A)(i)). 

(2) The legal authority under which a rule may be proposed, such as whether it is required by statute and if so, 

whether it is due by a specific date; and whether the agency has discretion to commence a rule making (new section 

553(c)(1)(A)(ii). 

(3) Preliminary information available to the agency concerning the other considerations specified in new section 

553(b) (new section 553(c)(1)(A)(iii). 

In addition, the notice must solicit data, views and arguments from 

interested persons concerning the information and issues addressed 

in the ANPR and provide for a period of not less than 60 days for 

such persons to submit such feedback to the agency (new section 

553(c)(1)(B)-(C)). 

Fifth, new section 553(d) mandates that an agency must consult 

with OIRA before it determines to propose a rule. This provision essentially codifies OIRA’s role as a gatekeeper of agency rulemaking, 

a role that this Committee severely criticized in the last Congress.152 In particular, concern was expressed that the prior Administration’s ‘‘greatly enhanced control over the rulemaking process has been to the detriment of the public interest and has served 

to circumvent legislative intent.’’ 153 By mandating prior consultation with OIRA, this requirement could allow OIRA to have a potential choke hold on agency rulemaking and thereby be used to 

thwart Congressional intent. 

New section 553(d) then itemizes an extensive list of information 

that must be included with a NPRM in addition to that already required under current law. These additional requirements include a 

reasoned preliminary determination of the need for the rule and 

whether the rule is required by statute. In addition, the NPRM 

must include a reasoned preliminary determination that the benefits of the rule meet the relevant statutory objectives and justify 

the costs of the rule, including all costs described in section 

553(b)(6); whether those alternatives meet relevant statutory objectives; and why the agency did not propose any of those alternatives. This provision clearly prioritizes costs over benefits. 

Whereas an agency must merely determine that a rule’s benefits 

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dates that the agency ‘‘justify the costs’’ of a proposed rule, which 

is potentially a much higher standard. 

Further, the NPRM must include a discussion of: (a) the alternatives to the proposed rule, and other alternative responses, considered by the agency under new section 553(b); (b) the costs and 

benefits of those alternatives (including all costs to be considered 

under section 553(b)(6); (c) whether those alternatives meet relevant statutory objectives; and (d) why the agency did not propose 

any of those alternatives. Where there are numerous alternatives 

to a proposed rule, this requirement will require an agency to conduct multiple hypothetical cost-benefit analyses, which will only 

delay action on the proposed rule and cause agencies to incur extensive compliance costs. 

Finally, the NPRM must contain a statement of whether existing 

rules have created or contributed to the problem that the agency 

seeks to address with the rule, and, if so, whether or not the agency proposes to amend or rescind any of these rules. 

Sixth, all information considered by the agency and ‘‘steps to obtain information by the agency’’ in connection with its determination to propose the rule must be placed in the docket for the proposed rule and made available to the public and ‘‘at the discretion 

of the President or the Administrator of the Office of Information 

and Regulatory Affairs, information provided by that Office in consultations with the agency.’’ By allowing the President and OIRA 

to control the dissemination of information to the public, this provision largely undermines the transparency of the rulemaking process. 

Seventh, even when an agency decides against issuing a rule, it 

must still issue a notice of determination of other agency course of 

action that includes a description of the alternative response that 

the agency determined to adopt. The agency may only make such 

determination after consultation with OIRA. If in its determination 

of other agency course the agency determines to amend or rescind 

an existing rule, the agency is not required to undertake additional 

proceedings under new section 553(c) before it publishes a NPRM 

to amend or rescind the existing rule. 

Eighth, all information considered by the agency and ‘‘steps to 

obtain information by the agency’’ in connection with its determination of other agency course must be placed in the docket for the 

proposed rule and made available to the public and ‘‘at the discretion of the President or the Administrator of the Office of Information and Regulatory Affairs, information provided by that Office in 

consultations with the agency.’’ Again, this provision largely undermines the transparency of the rulemaking process. 

Ninth, after the NPRM has been sent, the agency must provide 

interested persons an opportunity to participate in the rulemaking 

through submissions of written data, views, or arguments with or 

without opportunity for oral presentation. An opportunity for oral 

presentation must be provided if a hearing is required under section 553(d)(4)(B) or 553(e). With regard to situations not covered by 

section 553(e), if rules are required to be made on the record after 

opportunity for agency hearing, formal rulemaking requirements of 

sections 556 and 557 apply. 

Tenth, the agency must provide not less than 60 days for interested persons to submit written data, views or argument, or not 

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154Pub. L. No. 106–554, 114 Stat. 2763, 2763A–153 (2000). 

less than 120 days for a proposed major or high-impact rule (new 

section 553(d)(3)). 

Eleventh, within 30 days of publication of a NPRM, a member 

of the public may petition for a hearing in accordance with section 

556 to determine any evidence or other information upon which the 

agency bases the proposed rule fails to comply with the Information 

Quality Act (IQA)154 (new section 553(d)(4)(A). This means that 

anyone, even someone who would not qualify as an interested person, could demand this relief (new section 553(d)(4)(A)). 

Upon its review of the petition, the agency may determine, without further process, to exclude from the rulemaking the evidence 

or information that is the subject of the petition and, if appropriate, withdraw the proposed rule. The agency must promptly 

publish any such determination (new section 553(d)(4)(B)(i)). 

If the petition is not resolved per the above, then the agency 

must grant any such petition that presents a prima facie case that 

evidence or other information upon which the agency bases the proposed rule fails to comply with the IQA and hold the requested 

hearing not later than 30 days after receipt of the petition, provide 

a reasonable opportunity for cross-examination at the hearing, and 

decide the issues presented by the petition no later than 60 days 

after receipt of the petition. The agency may deny a petition that 

does not present a prima facie case (new section 553(d)(4)(B)(ii)). 

Twelfth, judicial review of agency action pursuant to new section 

553(d)(4)(B)(ii) is available when there is judicial review of the 

agency’s final action. It is unclear what this means. No judicial review is permitted for an agency’s determination to withdraw a proposed rule under new section 553(d)(4)(B)(ii) (new section 

553(d)(3)(C)). The failure to petition for a hearing under new section 553(d)(4) does not preclude judicial review of any claim based 

on the IQA under section 7. 

Thirteenth, the agency is required to hold a hearing in accordance with sections 556 and 557, following a NPRM, receipt of comments on the proposed rule, and any hearing held under section 

553(d)(4), unless such hearing is waived by all participants in the 

rulemaking other than the agency (new section 553(e)). This requirement will also considerably increase delay and expense in the 

rulemaking process. The agency must provide a reasonable opportunity for cross-examination at the hearing. The hearing is limited 

to the following issues of fact, except that participants at the hearing other than the agency may waive determination of any such 

issue: (1) whether the agency’s asserted factual predicate for the 

rule is supported by the evidence; (2) whether there is an alternative to the proposed rule that would achieve the relevant statutory objectives at a lower cost (including all costs considered under 

section 553(b)(6)); (3) if there is more than one alternative, which 

would achieve the relevant statutory objectives at the lowest cost; 

(4) whether, if the agency proposes to adopt a rule that is more 

costly than the least costly alternative, the additional benefits of 

the more costly rule exceed the additional costs of the more costly 

rule; (5) whether the evidence and other information upon which 

the agency bases the proposed rule meets the requirements of the 

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pated in the rulemaking other issues relevant to the rulemaking, 

unless the agency determines that consideration of the rule would 

not advance consideration of the rule or would, in light of the need 

for agency action, unreasonably delay completion of the rulemaking. The agency must grant or deny this petition within 30 

days of receipt (new section 553(e)). 

Fourteenth, not later than 45 days before any hearing held under 

new section 553(e) or sections 556 and 557, the agency must publish in the Federal Register a notice specifying the proposed rule 

to be considered at such hearing, the issues to be considered at the 

hearing, time/place, except that such notice may be issued not later 

than 15 days before a hearing under section 553(d)(4)(B) (new section 553(d)(4)). 

Fifteenth, an agency may only adopt a rule following consultation 

with OIRA to facilitate compliance with applicable rulemaking requirements (new section 553(f)(1)). 

Sixteenth, an agency may adopt a rule only on the basis of best 

reasonably obtainable scientific, technical, economic, and other evidence and information concerning the need for, consequences of, 

and alternatives to the rule (new section 553(f)(2)). 

Seventeenth, except as provided in new section 553(f)(3)(B), the 

agency must adopt the rule considered during the rulemaking, including all costs pursuant to section 553(b)(6) (new section 

553(f)(3)(A)). The agency may adopt a more costly rule only if its 

additional benefits justify its additional costs and only if the agency 

explains its reason for doing so based on interests of public health, 

safety or welfare that are clearly within the scope of the statutory 

provision authorizing the rule (new section 553(f)(3)(B)). 

Eighteenth, when the agency adopts a final rule, it must publish 

a NFRM that includes: (1) a concise, general statement of the rule’s 

basis and purpose (new section 553(f)(4)(A)); (2) the agency’s reasoned final determination of need for a rule, including whether it 

is required by statute as well as a summary of any final risk assessment or regulatory impact analysis performed by the agency 

(new section 553(f)(4)(B)); (3) the agency’s reasoned final determination that the rule’s benefits meet the relevant statutory objectives and justify the rule’s costs (new section 553(f)(4)(C)); (4) the 

agency’s reasoned final determination not to adopt any of the alternatives to the rule (new section 553(f)(4)(D)); (5) the agency’s reasoned final determination that existing rules have not created or 

contributed to the problem that the agency seeks to address with 

the rule or that existing rules have created or contributed to the 

problem, and if so, why amendment or rescission of such existing 

rules is not alone sufficient to respond to the problem and whether 

and how the agency intends to amend or rescind the existing rule 

separate from adoption of the rule (new section 553(f)(4)(E)); (6) the 

agency’s reasoned final determination that the evidence and other 

information upon which the agency bases the rule complies with 

IQA (new section 553(f)(4)(F)); and (7) for any major or high-impact 

rule, the agency’s plan for review of the rule no less than every 10 

years to determine whether, based on evidence, there remains a 

need for the rule, whether the rule is in fact achieving statutory 

objectives, whether the rule’s benefits continue to justify its costs, 

and whether the rule can be modified or rescinded to reduce costs 

while continuing to achieve statutory objectives (new section 

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553(f)(4)(G)). As required elsewhere, all information considered by 

the agency must be placed in the docket for the rule. 

Unless notice or hearing is otherwise required by statute, certain 

specified requirements of new section 553 do not apply to interpretive rules, general statements of policy, or rules of agency organization, procedure or practice (new section 553(g)(1)). When the agency 

for good cause, based on evidence, finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) 

that compliance with subsection (c), (d) or (e) or requirements to 

render final determinations under subjection (f) before the issuance 

of an interim rule is impracticable or contrary to the public interest 

(including national security), such provisions/requirements do no 

apply to the agency’s adoption of an interim rule new section 

553(g)(2)(A)). If an agency, in compliance with subsection (A), 

adopts an interim rule, it must commence proceedings that comply 

fully with subsections (c) through (f) immediately upon publication 

of the interim rule and must complete compliance within 270 days 

from publication of the interim rule or 18 months for a major or 

high-impact rule and take final action to adopt a final rule or rescind the interim rule. If the agency fails to take timely final action, the interim rule will cease to have the effect of law (new section 553(g)(2)(B)). New section 553(g)(3), as added by the Manager’s 

Amendment, includes a ‘‘good cause’’ exception to the notice and 

public procedure requirements if the agency finds such requirements to be ‘‘unnecessary.’’ As examples, the Amendment mentions 

rules ‘‘undertaken only to correct a de minimis technical or clerical 

error in a previously issued rule or for other noncontroversial purposes.’’ This amendment recognizes to some degree why the bill’s 

additional procedural requirements may be unnecessary. A shortcoming of this change, however, is that it does not go far enough. 

For example, the additional requirements may still pertain to a 

new rule that makes only a de minimis technical change. 

Other than in cases involving national security, the agency’s publication of an interim rule not in compliance with subsection (c) 

through (e) or requirements to render final determinations under 

subsection (f), an interested party may seek immediate judiciary review under chapter 7 of the agency’s determination to adopt such 

interim rule. This requirement provides yet another opportunity for 

well-funded opponents of regulation to slow or derail a rulemaking. 

The record on review must include all documents and information considered by the agency and any additional information presented by a party that the court determines necessary to consider 

to assure justice (new section 553(g)(2)(C)). This provision could 

allow parties to overwhelm courts with submissions that would 

force them to sort through and determine whether they would assure justice (‘‘justice’’ being a vague term in this context). 

Nineteenth, when a hearing is required under subsection (e) or 

is otherwise required by statute or at the agency’s discretion before 

the adoption of a rule, the agency must comply with the formal 

rulemaking requirements of sections 556 and 557 in addition to 

subsection (f) in adopting the rule and in providing notice of the 

rule’s adoption (new section 553(h)). As explained in greater detail 

elsewhere in this dissent, formal rulemaking is a thoroughly discredited process that is hardly used anymore. 

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Twentieth, the required publication or service of a substantive 

final or interim rule must be made within 30 days before the rule’s 

effective date, unless: (1) a substantive rule grants or recognizes an 

exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good 

cause found and published with the rule (new section 553(i)). 

Twenty-first, each agency must give an interested person the 

right to petition for the issuance, amendment, or repeal of a rule 

(new section 553(j)). This appears to be extremely broad and again 

presents another opportunity for opponents of regulations to slow 

the rulemaking process down further. 

Twenty-second, new section 553(k) contains various provisions 

intended to strengthen OIRA’s control over rulemaking. These include the provision requiring OIRA to establish guidelines for the 

assessment, including quantitative and qualitative, of the costs and 

benefits of potential, proposed, and final rules, other economic 

issues, or issues related to risk that are relevant to rulemaking 

under section 553 and other sections of this title (new section 

553(k)(1)(A)). It is unclear, however, what ‘‘other economic issues’’ 

would include. OIRA must regularly update these guidelines to ensure that agencies use the best available techniques to quantify 

and evaluate anticipated present and future benefits, costs, other 

economic issues, and risks as accurately as possible (new section 

553(k)(2)(B)). In addition, OIRA must issue guidelines to promote 

coordination, simplification, and harmonization of agency rules 

(new section 553(k)(2)). Moreover, OIRA, must ensure consistency 

in rulemaking by issuing guidelines and ensure that rulemakings 

conducted under procedures specified in provisions of law (new section 553(k)(3)(A)). H.R. 3010 also empowers OIRA to issue guidelines for the conduct of hearings under subsections 553(d)(4) and 

(e), including provisions that assure a reasonable opportunity for 

cross-examination. In turn, each agency must adopt regulations for 

conducting hearings consistent with these guidelines (new section 

553(k)(3)(B)). With respect to the IQA, OIRA must issue guidelines 

with respect to how that Act applies in rulemaking proceedings 

under sections 553, 556, and 557. Such guidelines and OIRA’s specific determinations regarding agency compliance with such 

guidelilnes are entitled to judicial deference (new section 553(k)(4)). 

Twenty-three, the agency must include in the rulemaking record 

all documents and information considered by the agency during the 

proceeding, including at the discretion of the President or the OIRA 

documents and information communicated by OIRA during consultation with the agency (new section 553(l)). This is yet another 

example where the bill will undermine transparency of the rulemaking process. 

New section 553(m) recognizes an exception for certain provisions 

with respect to monetary policy rulemakings by the Federal Reserve or Federal Open Market Committee. Most regulations issued 

pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act, however, will still be subject to H.R. 3010’s cumbersome 

rulemaking requirements. 

Sec. 4. Agency Guidance; Procedures to Issue Major Guidance; 

Presidential Authority To Issue Guidelines for Issuance of Guidance. Section 4 imposes an extensive series of new obligations on 

an agency before it can issue major guidance and guidance permstockstill on DSK4VPTVN1PROD with HEARINGS

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taining to a ‘‘novel legal or policy issue arising out of statutory 

mandates.’’ By applying these requirements to ‘‘novel legal or policy’’ issues, section 4 would capture a very broad and very indefinite category of guidance, even if they do not have any major effect 

or economic impact. Its requirements would apply to guidance 

issued pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as the Patient Protection and Affordable Care Act, both of which potentially raise novel legal and policy 

issues arising out of these statutes. As a result, this change could 

cause greater uncertainty in the agency’s use of guidance process. 

Among the new requirements that an agency must satisfy before 

it may issue major guidance are the following: 

(1) Before an agency may issue any major guidance, it 

must make a reasonable determination that such guidance 

is understandable and complies with relevant statutory objectives and regulatory provisions (new section 

553a(a)(1)(A)). 

(2) The agency must identify the costs and benefits (including all costs considered during the rulemaking under section 553(b)) of conduct conforming to such guidance and 

assure that such benefits justify such costs (new section 

553a(a)(1)(B)). 

(3) The agency must describe alternatives to such guidance 

and their costs and benefits (including all costs to be considered during the rulemaking under section 553(b)) and 

explain why the agency rejected those alternatives (new 

section 553a(a)(1)(C)). This would force an agency to potentially do countless cost-benefit analyses. 

(4) The agency must confer with OIRA to assure that the 

guidance is reasonable, understandable, consistent with 

relevant statutory and regulatory provisions, and requirements or practices of other agencies, does not produce 

costs that are unjustified by the guidance’s benefits, and 

otherwise appropriate (new section 553a(a)(2)). This provision is yet another instance where the bill strengthens 

OIRA’s control over agency rulemaking. 

(5) The agency guidance must state in a plain, prominent 

and permanent manner that it is not legally binding (new 

section 553a(b)(2)). 

(6) The guidance must be made available by the issuing 

agency to interested persons and the public at the time it 

is issued (new section 553a(b)(3)). 

Section 4 also includes a general proviso to agencies that they 

minimize the potential for litigation arising from uncertainty, 

which itself may create uncertainty by having a chilling effect on 

the agencies’ willingness to issue guidance. It also specifies that 

OIRA has authority to issue guidelines for use by agencies in the 

issuance of major guidance and other guidance that must assure 

each agency avoids issuing guidance documents that are inconsistent or incompatible with or duplicative of its other regulations 

and those of other agencies, and drafts its guidance documents to 

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be simple and easy to understand to minimize the potential for uncertainty and litigation. 

Sec. 5. Hearings; Presiding Employees; Powers and Duties; Burden of Proof; Evidence; Record as Basis of Decision. Section 5 adds 

a comprehensive regime of new requirements for hearings. For example, new section 556(e)(2) specifies that the record for decision 

must include any information that is part of the record of proceedings under section 553. When an agency conducts formal rulemaking procedures under sections 556 and 557 directly after concluding proceedings on an ANPR under section 553(c), the matters 

to be considered and determinations to be made must include, 

among other factors, the matters and determinations described in 

subsections (b) and (f). 

Upon receipt of a petition for a hearing under this section, an 

agency pursuant to new subsection 556(g) must grant the petition 

in the case of any major rule, unless the agency reasonably determines that a hearing would not advance consideration of the rule 

or would, in light of the need for agency action, unreasonably delay 

completion of the rulemaking. The agency must publish its decision 

to grant or deny the petition when it renders the decision, including an explanation of the grounds for such decision. The information contained in the petition must be included in the administrative record. Subsection (g), however, does not apply to monetary 

policy rulemakings proposed or implemented by the Federal Reserve or Federal Open Market Committee. 

Sec. 6. Actions Reviewable. Section 6 amends section 704 of the 

APA, which specifies what agency actions are reviewable by a 

court. Whereas section 6 substantially broadens the types of actions reviewable, the Manager’s Amendment adds even more types 

of agency actions that would be subject to review: (1) denial by an 

agency of a correction request; (2) denial of an administrative appeal under section (b)(2)(B) of the IQA; and (3) the failure of an 

agency to grant or deny such request or appeal within 90 days. 

This will provide more opportunities for federal judges to second 

guess agency actions even though federal judges are generalists 

and agencies are experts. Also, the 90-day time frame may be unworkable under certain circumstances. 

Except for cases involving national security, new section 704 permits an interested party to seek immediate judicial review of an 

agency’s determination to adopt an interim rule on an interim 

basis upon the agency’s publication of such rule without compliance 

with section 553(c), (d), or (e) or requirements to render final determinations under section 553(f). While this provision at least recognizes an exception for national security matters, one can easily conceive of other matters that should also warrant exception from new 

section 704, e.g., imminent public health or safety rules. 

Sec. 7. Scope of Review. Section 7 amends section 706 of the APA, 

which sets forth the scope of judicial review. Current section 

706(a)(2)(A) provides that a court, in appropriate circumstances, 

must ‘‘hold unlawful and set aside action, findings, and conclusions 

found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’’ Section 7 broadens the matters 

subject to judicial review to include any agency action, findings or 

conclusions that allegedly violated the IQA. In addition, section 7 

prohibits a court from deferring to an agency’s interpretation of its 

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rule under various specified circumstances. Further, section 7 requires a court to review agency denials of petitions under section 

553(e)(6) (pertaining to petitions by interested persons raising 

other issues) or any other petition for a hearing under sections 556 

and 557 for abuse of agency discretion. 

Sec. 8. Added Definition. Section 8 amends the definitions pertinent to judicial review of agency actions to add a definition of ‘‘substantial evidence,’’ which it defines as such relevant evidence as a 

reasonable mind might accept as adequate to support a conclusion 

in light of the record considered as a whole, taking into account 

whatever in the record fairly detracts from the weight of the evidence relied on by the agency to support its decision. This amendment to current law may actually be one of the very few provisions 

in H.R. 3010 that are beneficial. 

CONCLUSION

H.R. 3010 troubles us for numerous reasons. First, it is based on 

the false and unsupported claims that regulations stifle economic 

growth and job creation and impose undue costs. Such claims also 

do not account for the overwhelming evidence that regulation results in net benefits to society, including spurring economic activity. Second, H.R. 3010’s numerous changes to the APA would have 

the cumulative effect of halting agency rulemaking in its tracks, 

undermining agencies’ ability to protect the American people from 

a wide range of harms and circumventing Congress’s intent in delegating rulemaking authority to agencies through various statutes. 

Third, H.R. 3010 privileges industry cost considerations over public 

health, workplace safety, environmental protection, and other values by overriding substantive law and imposing an unworkable 

cost-benefit analysis regime on agencies. Fourth, H.R. 3010 dangerously concentrates unaccountable power over rulemaking in 

OIRA’s hands. Fifth, H.R. 3010 tilts the rulemaking playing field 

in favor of business interests by resurrecting the long-discredited 

and time-consuming formal rulemaking process, providing for expanded and less deferential judicial review, increasing opportunities to challenge agency compliance with the IQA, and encouraging 

the United States to engage in a regulatory ‘‘race to the bottom’’ 

with China and other developing countries. 

For these reasons, we respectfully dissent and urge strong opposition to H.R. 3010. 

JOHN CONYERS, JR. 

JERROLD NADLER. 

ROBERT C. ‘‘BOBBY’’ SCOTT. 

MELVIN L. WATT. 

ZOE LOFGREN. 

SHEILA JACKSON LEE. 

MAXINE WATERS. 

STEVE COHEN. 

HENRY C. ‘‘HANK’’ JOHNSON, JR. 

TED DEUTCH. 

Æ 

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