Document ID: FDA-2022-Z-0025-0002
Agency: fda
Document Type: Rule
Title: Withdrawing Rule on Securing Updated and Necessary Statutory Evaluations Timely
Posted Date: 2022-05-27T04:00Z

[Federal Register Volume 87, Number 103 (Friday, May 27, 2022)]
[Rules and Regulations]
[Pages 32246-32288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11477]

[[Page 32245]]

Vol. 87

Friday,

No. 103

May 27, 2022

Part II

Department of Health and Human Services

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Food and Drug Administration

21 CFR Part 6

Public Health Service

42 CFR Part 1

 Centers for Medicare and Medicaid Services

42 CFR Part 404

Office of the Inspector General

42 CFR Part 1000

Office of the Secretary

45 CFR Part 8

Administration for Children and Families

45 CFR Parts 200, 300, 403, et al.

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Withdrawing Rule on Securing Updated and Necessary Statutory 
Evaluations Timely; Final Rule

  Federal Register / Vol. 87 , No. 103 / Friday, May 27, 2022 / Rules 
and Regulations  

[[Page 32246]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 6

Public Health Service

42 CFR Part 1

Centers for Medicare and Medicaid Services

42 CFR Part 404

Office of the Inspector General

42 CFR Part 1000

Office of the Secretary

45 CFR Part 8

Administration for Children and Families

45 CFR Parts 200, 300, 403, 1010, and 1300

[Docket No. HHS-OS-2020-0012]
RIN 0991-AC24

Withdrawing Rule on Securing Updated and Necessary Statutory 
Evaluations Timely

AGENCY: Department of Health and Human Services.

ACTION: Final rule; withdrawal.

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SUMMARY: The Department of Health and Human Services (HHS or 
Department) is issuing a final rule withdrawing a rule entitled 
``Securing Updated and Necessary Statutory Evaluations Timely'' (SUNSET 
final rule), which published in the Federal Register of January 19, 
2021. The SUNSET final rule was originally scheduled to take effect on 
March 22, 2021. However, after a lawsuit was filed on March 9, 2021, 
seeking to overturn the SUNSET final rule, HHS extended the effective 
date of the SUNSET final rule until September 22, 2022. HHS is now 
withdrawing the SUNSET final rule.

DATES: As of July 26, 2022, the final rule published on January 19, 
2021 (86 FR 5694), which was delayed on March 23, 2021 (86 FR 15404), 
and March 4, 2022 (87 FR 12399), is withdrawn.

ADDRESSES:  For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov and insert the 
docket number found in brackets in the heading of this final rule into 
the ``Search'' box and follow the prompts.

FOR FURTHER INFORMATION CONTACT: Daniel J. Barry, Acting General 
Counsel, 200 Independence Avenue SW, Washington, DC 20201; or by email 
at [email protected]; or by telephone at 1-877-696-6775.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Purpose of the Final Withdrawal Rule
    B. Summary of Major Provisions
    C. Legal Authority
    D. Costs and Benefits
II. Table of Abbreviations/Commonly Used Acronyms in This Document
III. Background
    A. History of the SUNSET Rulemaking
    B. The Department's Review
IV. Legal Authority
V. Analysis of and Responses to Public Comments on the Withdrawal 
NPRM
    A. Comments on Implementation Burdens on the Department and 
Stakeholders
    B. Comments on Potential Harms From the Possible and Actual 
Expiration of Regulations
    C. Comments on the Regulatory Flexibility Act and Retrospective 
Review
    D. Other Legal Comments
    E. Comments on Vague and Confusing Provisions
VI. Final Regulatory Impact Analysis
    A. Introduction, Summary, and Background
    B. Market Failure or Social Purpose Requiring Federal Regulatory 
Action
    C. Purpose of the Final Withdrawal Rule
    D. Baseline Conditions
    E. Benefits of the Final Withdrawal Rule
    F. Costs of the Final Withdrawal Rule
    G. Analysis of Regulatory Alternatives to the Final Withdrawal 
Rule
    H. Final Small Entity Analysis
VII. Federalism
VIII. Consultation and Coordination With Indian Tribal Governments
IX. Analysis of Environmental Impact
X. Paperwork Reduction Act
XI. References

I. Executive Summary

A. Purpose of the Final Withdrawal Rule

    HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694. 
The SUNSET final rule provides, among other things, that all 
regulations, subject to certain exceptions, issued by the Secretary of 
the Department of Health and Human Services (Secretary) or his 
delegates or sub-delegates shall expire at the end of (1) five calendar 
years after the year that the SUNSET final rule first becomes 
effective, (2) ten calendar years after the year of the regulation's 
promulgation, or (3) ten calendar years after the last year in which 
the Department ``Assessed'' and, if required, ``Reviewed'' the 
regulation, whichever is latest.\1\ The SUNSET final rule was scheduled 
to take effect on March 22, 2021. However, after a lawsuit seeking to 
overturn the SUNSET final rule was filed on March 9, 2021, HHS issued 
an Administrative Delay of Effective Date, effective as of March 19, 
2021, which postponed the effective date of the SUNSET final rule, 
pending judicial review, until March 22, 2022 (Administrative Delay). 
86 FR 15404 (Mar. 23, 2021). HHS subsequently extended the effective 
date of the SUNSET final rule until September 22, 2022. 87 FR 12399 
(Mar. 4, 2022).
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    \1\ The terms ``Section,'' ``Assess,'' and ``Review'' were 
capitalized in the preamble to the SUNSET final rule where those 
terms have the definitions ascribed to them in the text of that 
final rule. For ease of readability, these terms are not capitalized 
in the following discussion of this withdrawal final rule unless 
directly quoting or paraphrasing the SUNSET final rule.
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    The Department undertook to reexamine the SUNSET final rule in 
light of the allegations in the lawsuit, the many substantive comments 
submitted on the SUNSET proposed rule, and the different policy views 
held by the Biden-Harris Administration as compared to the previous 
administration which issued the SUNSET final rule. That review 
considered the processes followed in issuing the SUNSET final rule, its 
policy goals and objectives, the projected effects and analysis of 
impacts in its implementation, and the legal evaluation of and support 
for its provisions, including whether the rule is consistent with HHS 
statutory obligations and its mission to promote and protect the public 
health. Based on that reevaluation, HHS published a notice of proposed 
rulemaking to withdraw or repeal the SUNSET final rule (Withdrawal 
NPRM). 86 FR 59906 (Oct. 29, 2021).
    HHS has reviewed the comments on the Withdrawal NPRM and now issues 
this final rule to withdraw the SUNSET final rule in its entirety.

B. Summary of Major Provisions

    We are withdrawing the SUNSET final rule in its entirety.

C. Legal Authority

    The primary statutory authorities supporting this rulemaking are 
the general rulemaking authorities for the various substantive areas 
under the Department's umbrella, as well as a general authorization for 
agencies to issue regulations regarding the administrative processes to 
be followed by that agency. These provisions include: 21 U.S.C. 371(a); 
42 U.S.C. 216; 42 U.S.C. 1302; 42 U.S.C. 1395hh; 42 U.S.C. 2003; and 5 
U.S.C. 301.

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D. Costs and Benefits

    This regulatory action will reduce the time spent by the Department 
performing retrospective assessments and reviews of its regulations 
that would have been required by the SUNSET final rule, and time spent 
by regulated entities and other stakeholders, including the general 
public, small and large businesses, non-governmental organizations, 
Tribes and state and local governments, on comments related to these 
assessments and reviews. The impact of the withdrawal is analyzed in 
the final Regulatory Impact Analysis (RIA) for this final rule. See 
Section VI below. In that section, we monetize the likely reductions in 
time spent by the Department and the general public as cost savings. 
Our primary estimate of these cost savings in 2020 dollars, annualized 
over 10 years, using a 3% discount rate, totals $69.9 million. Using a 
7% discount rate, we estimate $75.5 million in annualized cost savings. 
Table 1 in Section VI reports these primary estimates alongside a range 
of estimates that capture uncertainty in the amount of time it would 
have taken the Department to perform each regulatory assessment and 
review, and uncertainty in the amount of time the public would have 
spent on comments.

II. Table of Abbreviations/Commonly Used Acronyms in This Document

    As used in this preamble, the following terms and abbreviations 
have the meanings noted below.

------------------------------------------------------------------------
             Term                                Meaning
------------------------------------------------------------------------
ACA...........................  Affordable Care Act.
ACF...........................  Administration for Children and
                                 Families.
AI/ANs........................  American Indian and Alaska Native
                                 people.
AI............................  Artificial intelligence.
APA...........................  Administrative Procedure Act.
CDC...........................  Centers for Disease Control and
                                 Prevention.
CFR...........................  Code of Federal Regulations.
CHIP..........................  Children's Health Insurance Program.
CMS...........................  Centers for Medicare & Medicaid
                                 Services.
COVID-19......................  Coronavirus Disease 2019.
E.O...........................  Executive Order.
FD&C Act......................  Federal Food, Drug, and Cosmetic Act.
FDA...........................  Food and Drug Administration.
FSMA..........................  FDA Food Safety Modernization Act.
HHS or Department.............  U.S. Department of Health and Human
                                 Services.
IHS...........................  Indian Health Service.
OCR...........................  Office for Civil Rights.
OIRA..........................  Office of Information and Regulatory
                                 Affairs.
PDV...........................  Present Daily Value.
PHS Act.......................  Public Health Service Act.
RFA...........................  Regulatory Flexibility Act.
RIA...........................  Regulatory Impact Analysis.
SAMHSA........................  Substance Abuse and Mental Health
                                 Services Administration.
SBA...........................  Small Business Administration.
SEISNOSE......................  Significant Economic Impact Upon a
                                 Substantial Number of Small Entities.
SECG..........................  Small Entity Compliance Guide.
SSA...........................  Social Security Act.
SUNSET........................  Securing Updated and Necessary Statutory
                                 Evaluations Timely.
Unified Agenda................  Unified Agenda of Regulatory and
                                 Deregulatory Actions.
------------------------------------------------------------------------

III. Background

    The SUNSET final rule, if implemented, would have significantly 
altered the operations of HHS with considerable negative repercussions 
for a diverse array of stakeholders. We now conclude that these 
significant repercussions were not adequately considered in issuing the 
SUNSET final rule in part because the process to promulgate the rule 
was extremely unusual, if not unprecedented. We note a few of the key 
considerations here.
    The SUNSET final rule is expansive in scope and impact, faced 
considerable opposition from stakeholders (and very little support), 
and lacked a public health or welfare rationale for expediting 
rulemaking. In contrast to the Department's historical approach to 
rulemaking in these circumstances, HHS completed the rulemaking--from 
the publication of the proposal to publication of the final rule--in 
less than three months. In issuing the Withdrawal NPRM, we explained 
that, given the lack of a public health or welfare reason to expedite 
the rulemaking and other procedural shortcomings, we were reconsidering 
the commenters' significant objections to the SUNSET proposed rule. As 
summarized and discussed in the Withdrawal NPRM, we found that those 
comments raised compelling concerns that the SUNSET final rule would 
harm the public health and welfare, but were given insufficient weight 
in issuing the SUNSET final rule. Many of those same concerns have been 
further confirmed in the comments on the Withdrawal NPRM.
    We also conducted a reanalysis of the regulatory impact of the 
SUNSET final rule, and found that the rule rested on flawed assumptions 
and analysis.\2\ We now conclude that the SUNSET final rule likely 
underestimated to a significant degree the resources needed for the 
required undertaking. In particular, because the implementation of the 
SUNSET final rule would have required a significant expenditure of

[[Page 32248]]

resources, the Department would have been forced to make resource 
allocation decisions that would have impeded the Department's routine 
operations and hampered its ability to carry out other key priorities 
and goals.
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    \2\ The initial draft of the RIA for the SUNSET final rule was 
prepared by an outside economist. See 86 FR 5737 n. 210. As far as 
the Department is currently aware, no Department economist 
participated in considering, drafting, or revising the economic 
evaluation of the SUNSET proposed or final rule. These deviations 
from usual practice in developing the original SUNSET rule may help 
explain why our current RIA differs so greatly from the previous 
RIA.
    We also note that the Department, in developing the original 
SUNSET rule, did not follow other routine internal review 
procedures, such as distributing the draft proposed and final rules 
to the relevant HHS agencies to solicit their review, comments, and 
concurrences. These irregularities may have also contributed to the 
flawed execution and analysis in the original SUNSET rule.
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    We have also reconsidered the impact of the expiration provision in 
the SUNSET final rule and, upon further examination of the comments and 
the relevant legal standards, we have determined that the provision is 
unsound and in our view unlawful. The expiration provision was a key 
element of the SUNSET final rule (as its name suggests); however, the 
final rule erred in misjudging the likelihood that HHS regulations 
would expire if the SUNSET final rule were to go into effect and be 
implemented. As a result, the final rule failed to examine the 
instability, uncertainty, and confusion that could be generated by 
automatically expiring regulations. Further, we now believe that 
amending thousands of regulations to schedule their expiration based on 
the Department's purported failure to conduct a small-entity analysis, 
without any corresponding notice regarding or evaluation of the public 
health importance of the individual regulations or the public's 
reliance on them, violates the Administrative Procedure Act (APA) and 
is inconsistent with the purpose and intent of the Regulatory 
Flexibility Act (RFA). The policy ramifications and legal defects of 
the expiration provision call the entire rulemaking into question.
    In addition to our reconsideration of the expiration provision, we 
have reconsidered more broadly the public comments, the stated legal 
bases for the rule, and its RIA, including a consideration of the 
impacts that are not quantified or monetized. We have determined that 
the SUNSET final rule prioritized regulatory review over other 
Department operations to a degree that would negatively impact many 
stakeholders and the general public in a variety of ways. We no longer 
agree with our previous decision-making in promulgating the SUNSET 
final rule, because that decision-making was predicated on: (1) An 
inaccurate assessment of the effects of this rule, as indicated in the 
comments on both the SUNSET proposed rule and Withdrawal NPRM, and as 
discussed in the current RIA; (2) errors of law; and (3) a different 
set of policy priorities. We therefore have decided to withdraw the 
SUNSET final rule in its entirety.

A. History of the SUNSET Rulemaking

1. Proposed Rule, Comment Period, and Final Rule
    On November 4, 2020, HHS published a notice of proposed rulemaking 
entitled ``Securing Updated and Necessary Statutory Evaluations 
Timely'' (SUNSET proposed rule). 85 FR 70096. Under the proposed rule, 
subject to certain exceptions, Department regulations would expire at 
the end of (1) two calendar years after the year that the SUNSET rule 
first became effective, (2) ten calendar years after the year of the 
regulation's promulgation, or (3) ten calendar years after the last 
year in which the Department ``Assessed'' and, if required, 
``Reviewed'' the regulation, whichever was latest. Thus, under the 
SUNSET proposed rule, unless HHS assessed and, if required, reviewed 
most of its regulations within a certain timeframe specified in the 
rule (for most existing regulations, within two years) and every ten 
years thereafter, the regulations would automatically expire.
    The SUNSET proposed rule also provided that if a review led to a 
finding that a regulation should be amended or rescinded, the 
Department must amend or rescind the regulation within a specified 
timeframe (generally two years). In addition, the SUNSET proposed rule 
contained certain publication requirements, including that (1) the 
Department publish the results of all ``Assessments'' and ``Reviews,'' 
including the full underlying analyses and data used to support the 
results, in the Federal Register, and (2) the Department announce the 
commencement of an ``Assessment'' or ``Review'' of a particular 
regulation on a Department-managed website, with an opportunity for 
public comment. The SUNSET proposed rule provided that comments to the 
proposed rule had to be submitted by December 4, 2020, except for 
comments on the portion of the rule amending 42 Code of Federal 
Regulations (CFR) parts 400-429 and parts 475-499 (Medicare program 
regulations), which were to be submitted by January 4, 2021.
    On November 16, 2020, HHS announced a public hearing, scheduled for 
November 23, 2020, to receive information and views on the proposed 
rule (Public Hearing). 85 FR 73007. All of the commenters, which 
included industry/trade organizations, medical organizations, and 
public interest organizations, criticized the proposed rule in its 
substance, the rulemaking process, or both. See Transcript, Public 
Hearing on the Securing Updated and Necessary Statutory Evaluations 
Timely Notice of Proposed Rulemaking (Nov. 23, 2020) (available at 
https://www.regulations.gov/document/HHS-OS-2020-0012-0501) (Public 
Hearing Transcript).
    In addition to the oral comments, a wide range of stakeholders 
submitted over 500 comments on the proposed rule. Almost all of the 
comments opposed the proposal. Comments opposing the rule were 
submitted by, for example, health care and medical organizations; 
Federally Qualified Health Centers and advocates for beneficiaries of 
Federal health care programs; State attorneys general and other state 
government representatives; Tribal governments and Tribal 
organizations; large industry associations and trade associations; 
consumer and public interest groups; and interested individuals. Only a 
handful of commenters supported the SUNSET proposed rule, and two of 
those comments were submitted by an individual who, under an agreement 
with HHS, also provided a draft RIA for the SUNSET final rule. See 86 
FR 5737 n.210. Other commenters supporting the rule included 
independent business advocacy organizations and a nonprofit legal 
organization.
    On December 18, 2020, the Office of Information and Regulatory 
Affairs (OIRA) in the White House Office of Management and Budget (OMB) 
received the SUNSET final rule for review and clearance and posted on 
the OIRA dashboard for E.O. 12866 regulatory review (Ref. 1). This 
preceded the January 4, 2021, conclusion of the comment period for the 
parts of the proposed rule relating to 42 CFR parts 400-429 and parts 
475-499.
    HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694. 
The final rule provided that all regulations issued by the Secretary or 
their delegates or sub-delegates in titles 21, 42, and 45 of the CFR, 
subject to certain exceptions, shall expire at the end of (1) five 
calendar years after the year that the SUNSET final rule first becomes 
effective, (2) ten calendar years after the year of the regulation's 
promulgation, or (3) ten calendar years after the last year in which 
the Department ``Assessed'' and, if required, ``Reviewed'' the 
regulation, whichever is latest. Thus, the final rule contained the 
same basic expiration framework as the proposed rule, but extended the 
timeframe for assessment and any applicable review of most existing 
regulations from two calendar years to five calendar years. The final 
rule also provided for a one-time ``continuation'' of a regulation 
subject to expiration if the Secretary makes a written determination 
that the

[[Page 32249]]

public interest requires continuation. The continuation period, stated 
in the determination, is not to exceed one year. In addition, the final 
rule contained exemptions for a small set of HHS regulations applicable 
to the Food and Drug Administration (FDA), the Centers for Disease 
Control and Prevention (CDC), and the Centers for Medicare & Medicaid 
Services (CMS). The final rule maintained the timeframe for amendment 
or rescission of regulations, and included a new Federal Register 
publication requirement in addition to the publication requirements 
proposed in the SUNSET proposed rule.
2. Litigation and Delay of Effective Date
    On March 9, 2021, the County of Santa Clara and several other 
plaintiffs sued the Department seeking to overturn the SUNSET final 
rule under the APA. Complaint, County of Santa Clara v. HHS, Case No. 
5:21-cv-01655-BLF (N.D. Cal. Mar. 9, 2021) (Santa Clara) (Ref. 2).
    On March 18, 2021, the Acting Secretary of HHS signed, pursuant to 
5 U.S.C. 705 of the APA, the Administrative Delay, which extended the 
effective date of the SUNSET final rule until March 22, 2022. 86 FR 
15404. On March 3, 2022, the Secretary further extended the effective 
date of the SUNSET final rule until September 22, 2022. 87 FR 12399 
(Mar. 4, 2022). At the parties' joint request, the Santa Clara 
litigation has thus far been stayed.
3. The Withdrawal NPRM
    HHS published the Withdrawal NPRM on October 29, 2021, in which it 
proposed to withdraw or repeal the SUNSET final rule in its entirety. 
86 FR 59906. In the Withdrawal NPRM, the Department explained that--in 
issuing the SUNSET final rule--it should have engaged in a more robust 
consideration of the comments, and should have given greater weight to 
the potential harms to stakeholders and the public health. Therefore, 
before issuing the Withdrawal NPRM, the Department reexamined the 
SUNSET final rule in light of the allegations in the Santa Clara 
complaint, the many substantive comments submitted to the SUNSET 
proposed rule docket and raised at the Public Hearing, and the changed 
policy views in the current Administration. That review considered the 
processes followed in issuing the SUNSET final rule, its policy goals 
and objectives, the projected effects and analysis of impacts in its 
implementation, and the legal evaluation of and support for its 
provisions, including whether the rule is consistent with HHS statutory 
obligations and its mission to promote and protect the public health.
    The comment period on the Withdrawal NPRM closed on December 28, 
2021, and HHS received approximately 80 comments. A substantial 
majority of comments from a wide range of stakeholders supported the 
repeal or withdrawal of the SUNSET final rule. These commenters 
included health care and medical organizations; Federally Qualified 
Health Centers and advocates for beneficiaries of Federal health care 
programs; State attorneys general and other state and local government 
representatives; Tribal governments and Tribal organizations; large 
industry associations and trade associations; insurance plans and 
organizations; and consumer and public interest groups. Most of the 
comments that supported retention of the SUNSET final rule and opposed 
its withdrawal came from policy advocacy groups, including one business 
association and one submission from the individual who, as previously 
noted, provided a draft RIA for the SUNSET final rule. See 86 FR 5737 
n.210. One comment that supported retention of the original rule was 
submitted by a group of state legislators led by a former HHS official 
who presented the overview of the SUNSET proposed rule at the Public 
Hearing, and another comment was submitted by a different HHS official 
from the previous administration. There were also several identical 
anonymous comments that supported the original rule and opposed its 
repeal or withdrawal.

B. The Department's Review

    As described above, before issuing the Withdrawal NPRM, the 
Department reexamined the SUNSET final rule in light of the allegations 
in the Santa Clara complaint, the many comments submitted to the SUNSET 
proposed rule docket and raised at the Public Hearing, and changed 
policy views in the current Administration. This review considered the 
processes followed in issuing the rule, its policy goals and 
objectives, the projected effects and analysis of impacts in its 
implementation, and the legal evaluation of and support for its 
provisions, including whether the rule is consistent with HHS statutory 
obligations and its mission to promote and protect the public health. 
It should be noted at the outset that HHS recognizes the importance of 
retrospective review, already conducts retrospective reviews, and 
intends to continue to consider how to improve these existing 
processes. See Section V.C.2. The purpose of this review, however, was 
to reconsider whether the new requirements imposed in the SUNSET final 
rule would achieve the goals of retrospective review in a manner that 
best serves the Department's public health and welfare mission and that 
is consistent with applicable law.
    We have now carefully considered the comments submitted on the 
Withdrawal NPRM. As described further below, our consideration of the 
comments has confirmed our tentative conclusions described in the 
Withdrawal NPRM and our decision to withdraw the SUNSET final rule. In 
this section, we summarize the key considerations, addressed in greater 
detail throughout the preamble, that have led us to conclude, as 
proposed in the Withdrawal NPRM, that the SUNSET final rule should be 
withdrawn in its entirety. Many of these considerations, including the 
burdens of implementing the rule, the harms of expiration, and the 
various legal infirmities, each provide independent and sufficient 
reasons for this withdrawal.
    First, to be consistent with the Department's usual practices when 
engaging in rulemaking, the Department should have engaged in a more 
thorough consideration of the comments, and should have given greater 
weight to the potential harms to stakeholders and the public health. We 
have found that there were several procedural shortcuts taken in 
issuing the SUNSET final rule which may have impeded full consideration 
of the commenters' significant objections to the proposal as well as 
the care and meticulousness devoted to the final product. The SUNSET 
final rule was issued on a timeline of less than three months, which is 
unusually expedited for a rule of this significance, particularly given 
the potential impacts not just on small businesses but also the general 
public, larger businesses, Tribes, States, non-governmental 
organizations, and other regulated entities and stakeholders across a 
wide range of industrial sectors. The SUNSET rule was also remarkably 
expansive in scope, requiring review and possibly regulatory or 
deregulatory activity across a variety of distinct substantive statutes 
within the jurisdiction of several operating divisions (e.g., CMS, FDA, 
CDC, Substance Abuse and Mental Health Services Administration 
(SAMHSA), the Office for Civil Rights (OCR), and the Administration for 
Children and Families (ACF)). However, it appears that the comments 
were not adequately considered (as evidenced by the summary mention in 
the preamble to the SUNSET final rule, as discussed further elsewhere 
in this preamble), and, contrary to policy, the Department

[[Page 32250]]

did not consult with tribal governments.\3\
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    \3\ See E.O. 13175, ``Consultation and Coordination With Indian 
Tribal Governments,'' 65 FR 67249 (Nov. 6, 2000).
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    Second, the Department should have more thoroughly examined the 
factual basis of the SUNSET final rule before issuing it. Our thinking 
is informed by a reevaluation of the factual premises and conclusions 
in the SUNSET final rule that are central to the analysis of the rule's 
implications and effects. In particular, based on a reanalysis of the 
regulatory impact of the rule, we have now concluded that the rule 
rested on a flawed understanding of the resources required for 
implementing the SUNSET final rule, which implicates the likelihood 
that HHS regulations would have expired, and which would have required 
the Department to make resource allocation decisions which could have 
impeded the Department's ability to carry out other key priorities.
    In particular, the resources required to comply with the assessment 
and review requirements would be substantial. For each regulation 
covered by the SUNSET final rule, HHS agencies would need to: announce 
on a Department-managed website and in the Federal Register the 
commencement of an assessment or review; open and publicize public 
dockets for each assessment or review that the Department conducts; 
collect data to conduct the relevant evaluation (which may require time 
for additional public notice and comment, and OMB review and approval, 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., in addition 
to the time needed for data collection and analysis); engage subject 
matter experts and others to complete an assessment (and possibly a 
review); consult with state and local jurisdictions and Tribes, as 
appropriate; consider any comments to the public docket related to the 
evaluation; participate in interagency review, as appropriate; and 
publish the results of this process in the Federal Register, 
``including the full underlying analyses and data used to support the 
results.'' 86 FR 5712. If the Department could not complete this 
extensive process within the final rule's timeframes, the regulations 
would then automatically expire. The original RIA for the SUNSET final 
rule had erroneously assumed, for example, that an assessment--which 
requires each of the steps previously discussed--would take between 3 
and 10 hours. We have now revised that estimate to between 40 and 100 
hours.
    Beyond assessments and reviews, the SUNSET final rule would demand 
other significant resources, including the resources required to 
implement the overall framework, such as determining which regulations 
are exempt, and to amend or repeal regulations within a two-year time 
period (unless an extension is granted). These proceedings to amend or 
rescind the regulations would require an additional investment of HHS 
agencies' resources and public input. In addition, after those 
processes, the Department would likely then need to revise guidance 
documents and/or forms associated with both expiring regulations and 
regulations still in effect. Overall, we have determined that the 
SUNSET final rule miscalculated the extent of the resources needed for 
this undertaking and likely underestimated the costs of complying with 
the rule at least by a factor of four.
    This reanalysis shows the SUNSET final rule, if implemented, would 
harm the public health and welfare and diminish the Department's 
ability to protect and advance the public health and welfare. The 
diversion of resources to implement the SUNSET final rule processes, 
the potential for automatic expiration of rules, and the actual 
expiration of regulations could undermine the operation of existing 
programs and otherwise harm the public health in numerous ways, 
discussed in greater detail below. For example, the resulting 
regulatory uncertainty could have several negative repercussions for 
stakeholders, by interfering with planning, contracting, and product 
development. The actual expiration of regulations could lead to 
confusion among stakeholders and undermine predictability and 
confidence in many sectors regulated by the Department.
    Third, upon review, HHS has determined that the SUNSET final rule 
is contrary to several policy goals of the current Administration. The 
SUNSET final rule cited for support an Executive order (E.O.) entitled 
``Reducing Regulation and Controlling Regulatory Costs'' (E.O. 13771), 
which placed limits on agencies' ability to issue new regulations. 86 
FR 5696 (citing 82 FR 9339 (Jan. 30, 2017)). President Biden, on his 
first day in office, issued an E.O. entitled ``Revocation of Certain 
Executive Orders Concerning Federal Regulation,'' which revoked E.O. 
13771.\4\ 86 FR 7049 (Jan. 25, 2021) (E.O. 13992). As stated in E.O. 
13992, the current Administration's policy is to equip executive 
departments and agencies with flexibility to use available tools such 
as robust regulatory action to confront the urgent challenges facing 
the Nation, including the coronavirus disease 2019 (COVID-19) pandemic, 
economic recovery, racial justice, and climate change. Accordingly, 
E.O. 13992 revoked ``harmful policies and directives that threaten to 
frustrate the Federal Government's ability to confront these problems 
and empowers agencies to use appropriate regulatory tools to achieve 
these goals.'' Id.
---------------------------------------------------------------------------

    \4\ The SUNSET final rule also cited ``Regulatory Relief To 
Support Economic Recovery,'' (85 FR 31353, May 22, 2020) (E.O. 13924 
of May 19, 2020), which was revoked in E.O. 14018. 86 FR 11855 (Feb. 
24, 2021).
---------------------------------------------------------------------------

    The Biden-Harris Administration has further committed to using 
available tools of Federal administrative agencies to, among other 
things: Pursue a comprehensive approach to advancing equity for all, 
including people of color and others who have been historically 
underserved, marginalized, and adversely affected by persistent poverty 
and inequality; make respect for Tribal sovereignty, self-governance, 
and regular, meaningful, and robust consultation with Tribal Nations 
cornerstones of Federal policy pertaining to American Indian and Alaska 
Native people (AI/ANs); and protect and strengthen Medicaid and the 
Affordable Care Act (ACA) and make high-quality healthcare accessible 
and affordable for every American.\5\
---------------------------------------------------------------------------

    \5\ See ``Advancing Racial Equity and Support for Underserved 
Communities Through the Federal Government,'' 86 FR 7009 (Jan. 25, 
2021) (E.O. 13985 of Jan. 20, 2021); ``Tribal Consultation and 
Strengthening Nation-to-Nation Relationships,'' 86 FR 7491 (Jan. 29, 
2021) (Memorandum of Jan. 26, 2021); ``Strengthening Medicaid and 
the Affordable Care Act,'' 86 FR 7793 (Feb. 2, 2021) (E.O. 14009 of 
Jan. 28, 2021); ``Continuing to Strengthen Americans' Access to 
Affordable, Quality Health Coverage,'' 87 FR 20689 (April 8, 2022) 
(E.O. 14070 of April 5, 2022).
---------------------------------------------------------------------------

    If implemented, the SUNSET final rule would negatively impact 
diverse groups of stakeholders, including historically underserved, 
marginalized, and adversely affected communities, and undermine the 
Department's public health mission. For example, as discussed in more 
detail in Section V.A of this preamble, numerous commenters expressed 
concern about the anticipated impacts on various populations including 
children, the elderly, the disabled, those living in poverty, and 
communities marginalized by racism and prejudice, who could lose 
eligibility for programs and services if the regulations underpinning 
the eligibility requirements were to expire. Public commenters, 
including Tribes and tribal representatives, assert that the SUNSET 
final rule would threaten the regulatory underpinnings of the Indian 
health system, completely disrupt the ability of that system's mission 
to provide care to tribal communities, undermine the delivery of HHS 
public health and

[[Page 32251]]

social service programs for tribal members, and generate a level of 
uncertainty that is the antithesis of the goals of the HHS Tribal 
Consultation Policy.\6\ HHS now acknowledges that the SUNSET final rule 
does not provide for advance notice of regulations that might 
automatically expire, which we believe conflicts with the Department's 
policy to engage in meaningful consultation with Tribal Nations. We 
further note, however, that attempting to address the lack of adequate 
notice of expiring regulations would not resolve more fundamental 
problems with the SUNSET framework for tribal and other stakeholders.
---------------------------------------------------------------------------

    \6\ U.S. Department of Health and Human Services, HHS Tribal 
Consultation Policy (Dec. 12, 2010) (available at https://www.hhs.gov/about/agencies/iea/tribal-affairs/consultation/index.html).
---------------------------------------------------------------------------

    Fourth, the Department should have more carefully considered the 
legal basis for the SUNSET final rule, including the expiration 
provision, which is a cornerstone of the rule. Commenters on the SUNSET 
proposed rule had asserted that the Department did not adequately 
consider the legal questions raised by the automatic expiration 
provisions, which would potentially eliminate regulations without due 
notice and consideration of the implications of that specific 
expiration. After further review, we have concluded that the legal 
reasoning offered in support of the expiration provision did not 
address foundational Supreme Court case law requiring agencies to 
consider, among other things, the factual bases for a regulation before 
eliminating that regulation.\7\
---------------------------------------------------------------------------

    \7\ The Department is not questioning the legality of the well-
considered establishment of sunsetting provisions in other, more-
targeted circumstances, such as the inclusion of a sunset provision 
in a single rule. In such a case, the agency would have provided 
notice and the opportunity for comment on, and given due 
consideration of, the potential sunset of that particular 
regulation. In contrast, the SUNSET final rule was unusually 
sweeping and superficial, in that it established automatic 
expiration for a large swath of diverse regulations without due 
consideration of the substance of each regulation and the impact of 
the added sunset provision on affected entities under that 
regulation. See Section V.D.1 (discussing, e.g., Dep't of Homeland 
Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1913 (2020)).
---------------------------------------------------------------------------

    The SUNSET final rule dismissed these concerns regarding the public 
health and legal repercussions of the SUNSET final rule in part by 
assuming that regulations would not expire. See, e.g., 86 FR 5710 
(``HHS does not intend to allow a regulation to simply expire''); id. 
at 5712 (``the Department is committed to dedicating adequate resources 
to timely Assess and Review its regulations''); id. at 5714 (``the 
Department intends to timely complete the necessary Assessments and 
Reviews and has built in safeguards to mitigate the risk of inadvertent 
expiration''). The Department failed to consider, however, that public 
health and legal problems with the SUNSET final rule exist even if no 
expiration occurs. For example, the resources diverted from other key 
programs would still undermine the Department's public health mission 
and even the possibility of expiration would create serious 
instability. The SUNSET final rule did not provide an adequate 
justification for, or even acknowledge, either of these likely 
consequences.
    Moreover, we no longer agree with the Department's previous 
assumption that no regulations would expire. Preventing the automatic 
expiration of regulations would require prioritizing retrospective 
review above many other Department programs and missions. With its 
finite set of resources, the Department would be faced with a quandary 
of how best to triage the needs of its existing programs (as well as 
new public health priorities) and the new regulatory review process 
under the SUNSET final rule. On the one hand, given the large scale of 
resources necessary to conduct the required reviews, compliance with 
these new review requirements would lead to the diversion of resources 
from existing and new priority programs to the detriment of the other 
programs. This diversion of resources would constrain HHS's 
capabilities to carry out mission-critical objectives such as 
protecting the health of Americans, strengthening their economic and 
social well-being, and fostering sound, sustained advances in medical 
innovation and health sciences. On the other hand, the automatic 
expiration of regulations could also undermine mission-critical 
objectives. Based on our reconsideration and expert judgment, we no 
longer consider prioritizing resources to avoid expiration to be in the 
best interests of the public health and welfare. Therefore, we believe 
that this assumption--that no regulations would expire--was not well 
founded. The Department's previous reliance on this unsupported 
assumption, together with the miscalculation regarding the resources 
necessary to comply with the rule, are in themselves detrimental to the 
viability of the SUNSET final rule.
    Upon review, we now conclude that the burdens imposed by the SUNSET 
final rule could undermine the Department's ability to fulfill its 
public health and human services missions, promote national priorities, 
and confront the challenges facing the nation--contrary to its 
statutory mandates and the policies expressed in EOs 13992, 13985, 
14009, and 14070. As further described below, see Section V.C, the 
Department already has a longstanding retrospective review plan in 
place, and each year publishes in the Federal Register a list of the 
rules that it is reviewing, has reviewed, or intends to review under 
section 610 of the RFA. And although the Department is committed to 
exploring additional ways to improve its processes for conducting 
retrospective reviews under the RFA and identify and retire obsolete 
rules, the approach in the SUNSET final rule imposes requirements that 
are far more onerous than what is needed to meet those objectives and 
that would undermine essential Department priorities. In essence, 
implementation of the SUNSET final rule would likely have led to a 
sharply diminished ability of the Department to provide Federal 
leadership in public health and human services. On full consideration, 
the Department believes that implementation of the SUNSET final rule 
fundamentally conflicts with our policies and ability to achieve our 
statutory missions.

IV. Legal Authority

    The primary statutory authorities supporting this final rule are 
the general rulemaking authorities for the various substantive areas 
under the Department's umbrella, as well as a general provision 
authorizing agencies to issue regulations regarding the administrative 
processes to be followed by that agency. These include:
     Section 701(a) of the Federal Food, Drug, and Cosmetic Act 
(FD&C Act), 21 U.S.C. 371(a), which authorizes the Secretary to 
``promulgate regulations for the efficient enforcement of [the FD&C 
Act], except as otherwise provided in this section;''
     Section 215 of the Public Health Service Act (PHS Act), 42 
U.S.C. 216, which provides that ``The Surgeon General, with the 
approval of the Secretary, unless specifically otherwise provided, 
shall promulgate all other regulations necessary to the administration 
of the Service[];''
     Section 1102 of the Social Security Act (SSA), 42 U.S.C. 
1302, which provides that the Secretary ``shall make and publish such 
rules and regulations, not inconsistent with this Act, as may be 
necessary to the efficient administration of the functions with which 
[they are] charged under this Act;''
     Section 1871 of the SSA, 42 U.S.C. 1395hh, which provides 
that ``the Secretary shall prescribe such regulations as may be 
necessary to carry out the administration of the insurance programs 
under this title;''

[[Page 32252]]

     42 U.S.C. 2003, which provides that ``the Secretary of 
Health and Human Services is also authorized to make such other 
regulations as [they] deem desirable to carry out the provisions of 
this subchapter [transferring to the Indian Health Service (IHS) the 
authority to provide health care services to AI/ANs];'' and
     5 U.S.C. 301, which provides that ``[t]he head of an 
Executive department or military department may prescribe regulations 
for the government of his department, the conduct of its employees, the 
distribution and performance of its business, and the custody, use, and 
preservation of its records, papers, and property. This section does 
not authorize withholding information from the public or limiting the 
availability of records to the public.''
    Congress's grant of broad, discretionary rulemaking authority 
necessarily includes the authority not to promulgate--and therefore 
also to withdraw or repeal--a proposed or final rule. See Natural Res. 
Def. Council, Inc. v. SEC, 606 F.2d 1031, 1045 (D.C. Cir. 1979); see 
also 5 U.S.C. 551(5) (defining ``rule making'' to include formulating, 
amending, and repealing a rule). In addition, ``[t]he power to 
reconsider is inherent in the power to decide,'' Albertson v. FCC, 182 
F.2d 397, 399 (1950), and, thus, ``[a]dministrative agencies have an 
inherent authority to reconsider their own decisions.'' Trujillo v. 
Gen. Elec. Co., 621 F.2d 1084, 1086 (10th Cir. 1980).

V. Analysis of and Responses to Public Comments on the Withdrawal NPRM

    During the 60-day public comment period, we received approximately 
80 public comments. The majority of commenters expressed support for 
the Withdrawal NPRM, and in general these comments closely aligned with 
comments received in opposition to the SUNSET proposed rule. A 
substantial number of these commenters had submitted comments on the 
SUNSET proposed rule and either restated, submitted, or referenced 
their earlier comments in explaining their support for the Withdrawal 
NPRM. In the Withdrawal NPRM, we discussed the substantial number of 
comments on the SUNSET proposed rule, and we incorporate the comments 
on the SUNSET proposed rule and the discussion of the underlying issues 
and comments in the Withdrawal NPRM by reference as part of the basis 
for this final rule. Below we summarize and respond to the comments on 
the Withdrawal NPRM.

A. Comments on Implementation Burdens on the Department and 
Stakeholders

    In issuing the Withdrawal NPRM, the Department explained that it 
was concerned that implementation of the SUNSET final rule would create 
burdens on the Department and on stakeholders that would divert 
resources from pressing public health matters and thus harm the public. 
89 FR 59911. Below we respond to the comments on the Withdrawal NPRM on 
this subject.
1. Burden on the Department
    Comment: The Department received numerous comments agreeing with 
HHS's explanation in the Withdrawal NPRM that the SUNSET final rule 
rested on a significantly flawed understanding of the time and 
resources that would have been needed to carry out the scope and pace 
of assessments and reviews required under the rule. In general, these 
commenters asserted that there are simply not enough HHS staff or 
resources to undertake such a sweeping process and simultaneously 
evaluate thousands of regulations in a short period of time. Several of 
the commenters further explained that the SUNSET final rule would 
create more burdens than it would ease and would be unlikely to benefit 
industry and consumers. In contrast, one commenter asserted that the 
SUNSET rule can and should be implemented and that concern regarding 
the enormous scope of the task and pace of reviews that would be 
required under the SUNSET final rule is not a valid reason to withdraw 
or rescind the rule. The commenter explained that, without the SUNSET 
framework, the quantity of regulatory reviews that the Department 
should undertake will grow ever more daunting as time passes and 
rulemaking persists.
    Response: We agree with the commenters who stated that the 
framework set forth in the SUNSET final rule would create a tremendous 
economic and workload burden on the Department and would require 
pursuing the objective of regulatory review at great expense to the 
public and to the small business community it purports to benefit. Our 
current RIA, revised from the SUNSET final rule, provides ample support 
for these assertions. See Section VI. The assessments and reviews 
required by the SUNSET final rule would be a colossal undertaking with 
significant resource implications. Among other things, approximately 
12,400 of the Department's estimated 18,000 sections in the CFR are 
over ten years old and would be subject to review during the initial 
five-year period. Assessing more than two-thirds of all HHS regulations 
simultaneously in a compressed 5-year timeframe, and assessing them 
again on a recurring basis ten years after conclusion of the prior 
assessment, is infeasible. Many of these comments underscored that the 
SUNSET final rule failed to appreciate the scope of its effects on the 
Department, including that the rule could compromise some of the 
Department's most important public health and public safety 
initiatives. As stated in the Withdrawal NPRM, HHS continues to 
conclude that the SUNSET final rule ``did not explain how HHS could 
devote numerous employees to full-time retrospective review without 
compromising the Department's and its sub-agencies' many other crucial 
tasks, such as protecting the country from future pandemics or other 
public health emergencies.'' 86 FR 59911.
    We disagree with one commenter's suggestion that we should 
disregard these concerns because we should prioritize retrospective 
review as provided under the SUNSET final rule. First, we disagree that 
the framework that would have been established by the SUNSET final rule 
is an appropriate model for engaging in retrospective review. As 
discussed in further detail in Sections V.C. and D. of this preamble, 
the framework that would have been implemented under the SUNSET final 
rule is inconsistent with the requirements and objectives of the RFA; 
does not fulfill the directives of EOs related to retrospective review, 
such as E.O. 13563 on ``Improving Regulation and Regulatory Review;'' 
and likely violates the APA. Second, the disruption to the Department's 
normal operations that would have been caused by the implementation of 
the SUNSET final rule is too sizable to disregard and is an entirely 
valid reason to reject these self-imposed procedures. As discussed in 
Section V.C below, the Department intends to continue to engage in 
retrospective review and to explore ways to improve those processes in 
a manner that is consistent with applicable law and does not undermine 
its core missions.
    Comment: A number of commenters supporting the Withdrawal NPRM 
highlighted the concern that the SUNSET final rule would shift the 
Department's focus away from its public health mission. Several of 
these commenters particularly focused on concerns that the SUNSET final 
rule would divert resources and attention from the urgent COVID-19 
pandemic response and impact the Department's ability to develop policy 
and

[[Page 32253]]

promulgate regulations implementing new Federal laws and programs to 
address pandemic relief. In describing the need for the Department to 
remain flexible and have the capacity to respond quickly to crises and 
changing circumstances, one commenter gave the example of CMS needing 
to take action during the pandemic to swiftly approve hundreds of 
waivers and state plan amendments so people with disabilities could 
remain safely in their home. The commenter concluded that, if the 
SUNSET final rule had been in effect and CMS staff were hamstrung by 
assessments and reviews, they may not have been able to pivot quickly 
and review and approve states' crucial changes. Some commenters also 
expressed concern that the SUNSET final rule would divert resources and 
attention from other public health emergencies like the opioid 
epidemic.
    Commenters also expressed concern that the volume of assessments 
and reviews would detract from the Department's overarching work to 
address the needs of vulnerable populations including children, the 
elderly, the disabled, those living in poverty, the LGBTQ community, 
patients living with HIV/AIDS, tribal members, and communities of 
color. Commenters stated that the SUNSET final rule would frustrate the 
objectives articulated in E.O. 13985, ``Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government,'' 
86 FR 7009, by burdening the programs that serve vulnerable populations 
and communities of color.
    In addition, commenters asserted that implementation of the SUNSET 
final rule would detract from public health and innovation in the 
health sector by diverting FDA staff time from regulatory science, 
engagement with sponsors to support product development, communication 
of standards to stakeholders on new therapeutic areas such as gene 
editing, and the conduct of timely reviews of new drug applications. 
Other commenters expressed concern that the SUNSET final rule would 
undermine FDA's ability to ensure the safety of food and medicines 
because the burden of assessments and reviews could divert resources 
from the implementation and enforcement of existing regulations 
impacting public safety, patient safety, and public health.
    Response: We agree that redirecting significant resources from core 
HHS functions and priorities to undertake assessments and reviews and 
preserve regulations from automatic expiration under the SUNSET final 
rule would be contrary to the Department's role as the U.S. 
Government's principal agency for protecting the health of all 
Americans and providing essential human services, especially for those 
who are least able to help themselves. The Department's ongoing 
experience with the current pandemic reinforces the need for the 
Department to remain flexible and focused on the management and 
utilization of HHS resources. The SUNSET final rule, however, would 
require HHS to redirect subject matter experts, including program 
analysts and administrators, economists, and counsel, to perform 
assessments and reviews. The SUNSET framework would require 
prioritizing retrospective review above many other Department programs 
and missions, including both ongoing program operations and the 
development of new policies and regulations (often necessitated by new 
statutory requirements) to address public health needs such as the 
needs of vulnerable populations and advances in health care products 
and services. Because of these effects, the SUNSET final rule poses a 
significant risk of future harm.
    Moreover, as described in the Withdrawal NPRM, the SUNSET final 
rule provides no good cause exception to avert the expiration of a 
regulation, such as in the event of a pandemic, a public health 
emergency, or another declared national emergency. 86 FR 59912. 
Although the SUNSET final rule added a provision to permit the 
Secretary to extend the period for assessments and reviews, the 
extension could only be applied one time, for up to one year, per each 
section of regulation, and the extension could only be exercised 
through a determination published in the Federal Register. 86 FR 5725. 
Given the brief extension available for the assessment and review and 
the potential duration of an emergency (as evidenced by the current 2 
years plus duration of the COVID-19 pandemic), the Department has 
determined that the SUNSET final rule was incorrect to conclude that 
this option would be sufficient to avoid the diversion of resources and 
the automatic expiration of regulations in the event of a pandemic, 
emergency, or other development that prevents the Department from 
timely assessing or reviewing certain sections. Id. at 5726. Even if a 
broader good cause exception were included, the option of employing an 
exceptional process for emergencies would not begin to address the 
substantial burdens imposed by, and fundamental policy and legal 
problems with, the SUNSET final rule, with its application to virtually 
all of HHS regulations.
2. Burden on Stakeholders
    Comment: Commenters representing industry and public interest 
groups supported withdrawing or repealing the SUNSET final rule because 
of the expected burden on the general public and entities with an 
interest in the underlying regulations. These stakeholders explained 
that the rule failed to adequately consider the burden imposed on 
regulated industry and others to both track HHS regulations for 
potential expiration and submit comments related to the assessments and 
reviews. For example, one commenter expressed concern that if the 
SUNSET final rule is not withdrawn, their advocacy organization would 
need to redirect resources to monitor the status of the approximately 
2,000 FDA regulations and then, if needed, invest at least 40 to 100 
hours per rule to provide comments. Another coalition estimated that 
over 1,000 CMS regulations would require their immediate attention if 
the SUNSET final rule was not withdrawn or repealed. Among industry 
stakeholders, one commenter stated that, rather than having a 
deregulatory impact, the SUNSET final rule would require near constant 
vigilance as relatively stable regulatory schemes like Medicaid 
programs would become subject to constant change.
    Response: The Department believes that any retrospective review 
process should not impose an undue burden on the public and agrees that 
the SUNSET final rule would be extremely burdensome on stakeholders to 
monitor and provide input on both assessments and reviews. As noted in 
the Withdrawal NPRM, approximately 12,400 of the Department's estimated 
18,000 sections in the CFR are over ten years old, and each of these 
are regulations that could automatically expire five years after the 
SUNSET final rule's effective date if the rule were implemented. Under 
the timeline and definitions provided in the final rule, over 7,000 
sections of the CFR that were promulgated by the FDA are more than ten 
years old, or would become more than ten years old during the first 
five years the rule would be in effect, representing over 95 percent of 
this agency's current regulations. 86 FR 59912. These numbers indicate 
that the burden of public participation is significant. In addition, 
HHS no longer agrees with its previous approach of putting the onus on 
the public to monitor the Department's progress under the rule to 
prevent expiration.

[[Page 32254]]

The SUNSET final rule stated that a ``safeguard'' to mitigate the risk 
of inadvertent expiration was for the public to perform this monitoring 
function and submit comments requesting that the Department commence an 
assessment or review. 86 FR 5714. We no longer believe it is 
appropriate to set up a system that depends on stakeholders, including 
non-profits and state, tribal, and local governments, to ensure that a 
Department performs an administrative function properly, due to the 
significant resources it would require those stakeholders to invest in 
such an effort.
    Comment: Several commenters expressing support for the Withdrawal 
NPRM stated that it would be difficult, if not impossible, for the 
public to accurately determine whether and when a regulation would be 
subject to review under the SUNSET final rule, and if so, the deadline 
for informing the Department and commenting. Many of these commenters 
noted, in response to similar comments on the SUNSET proposed rule, the 
Department had attempted to mitigate those concerns in the SUNSET final 
rule by providing that the Department would (1) publish a monthly list 
of new assessment or review that have commenced and (2) establish a 
general docket where the public could alert the Department when a 
regulation may be at risk of expiration because of an approaching 
deadline for assessment or review. 86 FR 5702. However, the commenters 
explained that these mitigation efforts are insufficient to address the 
difficulty of continuously monitoring the pace of assessments and 
reviews and the burden on stakeholders to alert the Department 
regarding potentially expiring rules. Another commenter disagreed and 
stated that, if a section of a regulation were to inadvertently expire 
under the SUNSET final rule, HHS could follow the APA's flexible 
rulemaking procedure to readopt it.
    Response: The Department agrees that the overall framework of the 
SUNSET final rule would make it difficult and confusing for the 
Department to implement and for stakeholders to follow. For example, 
the SUNSET final rule would require each section of the CFR to be 
assessed and, if applicable, reviewed in the context of the final rule 
under which it was promulgated. However, final rules often cross-
reference or amend previously promulgated sections of the CFR. Given 
this complication, it would be difficult for the HHS to accurately and 
comprehensively develop and maintain a list for stakeholders regarding 
regulations that could expire under the SUNSET final rule framework. 
Moreover, the Department agrees that it is unreasonable to expect 
stakeholders to navigate such a process. We conclude it is 
inappropriate for the SUNSET final rule to rely in part on the public 
submitting comments requesting that the Department assess or review a 
regulation in order to operationalize the final rule.
    The Department also has determined that addressing the inadvertent 
expiration of a regulation under the SUNSET final rule by reissuing the 
implicated regulation would be inefficient, costly, wasteful, and 
confusing--with insufficient, and in many cases, no countervailing 
benefit. Such an effort would require a full notice and comment 
process, as well as a full economic assessment, for a proposed and 
final rule during which stakeholders and programs would experience the 
legal and regulatory uncertainty of an expired regulation.
3. Comments on Economic Evaluation of Burdens
    Comment: A few commenters disagreed with the Department's 
assessment in the Withdrawal NPRM of the burden of the SUNSET final 
rule and asserted that the Withdrawal NPRM's RIA overstated the cost 
estimated for implementing the SUNSET final rule. More specifically, 
some commenters questioned the estimates for burdens on stakeholders to 
comment on assessments and reviews based on these commenters' 
prediction that most members of the public have little incentive to 
take an interest in the assessment and review of individual HHS 
policies. One comment suggested the costs were overstated because the 
regulations that were the subject of stakeholder comments would be 
eliminating costs on these (and other) commenters. The comment also 
asserted that any uncertainty created by the SUNSET final rule is a 
``short-term cost[]'' that ``will be resolved as the schedules for 
expiration are discovered'' and may be offset by the reduction in 
uncertainty associated with diverting HHS resources away from other 
actions.
    Another comment asserted that HHS ignored the concept of ``rent-
seeking'' when it considered the costs of HHS regulatory actions and 
the ``likely unrepresentative nature of the comments received by HHS'' 
on the SUNSET proposed rule. The commenter further stated that ``rent-
seeking costs'' may also affect the Department's cost estimates. The 
commenter concluded that ``[i]f the entities that submit comments to 
the department while it is undergoing retrospective reviews would have 
been rent-seeking in absence of having to write comments, then the 
private costs to these individuals and groups from writing comments 
could well constitute social benefits to society writ large.''
    In addition, one comment questioned the estimates for burdens on 
the Department. The commenter stated that the Withdrawal NPRM's RIA 
used cost estimates for burdens on the Department that were 
inconsistent with guidance in OMB Circular A-4 and HHS Guidelines for 
Regulatory Impact Analysis.\8\ In the commenter's view, the RIA 
incorrectly projected ``accounting costs'' from hiring new personnel to 
perform these tasks. The commenter asserted that, instead, the RIA 
should have assessed the real opportunity costs to the Department and 
taxpayers from the forgone activities such staff would have performed 
in the absence of the process required by the SUNSET final rule. The 
commenter also questioned the Department's assumption in the RIA for 
the Withdrawal NPRM that HHS would follow Small Business Administration 
(SBA) guidance in conducting reviews, and asserted that the costs of 
conducting reviews would lessen over time.
---------------------------------------------------------------------------

    \8\ See OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf); HHS Guidelines for Regulatory Impact Analysis 
(2016) (available at https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf).
---------------------------------------------------------------------------

    Response: We disagree with these commenters concerning the cost 
estimates in the Withdrawal NPRM RIA and continue to believe that the 
RIA in the SUNSET final rule likely underestimated the costs of 
implementing that rule to a significant degree. With regard to the 
estimated burden on stakeholders, as discussed in greater detail in 
Section VI, the SUNSET final rule likely underestimated the time and 
resource commitment of a credible assessment and review process. The 
Department acknowledges that there is uncertainty in the amount of time 
the public would spend commenting on assessments and reviews under the 
SUNSET final rule. We have appropriately incorporated this uncertainty 
into the estimates of the burden to stakeholders by incorporating a 
range of estimates of the time spent per comment into our current 
evaluation of the burden of the SUNSET final rule. To the extent that 
the commenters indicate that the public would submit fewer, rather than 
zero, comments prior to the assessments, we have incorporated this into 
the Withdrawal NPRM's preliminary RIA by incorporating a lower estimate 
of 25

[[Page 32255]]

comments per assessment into our current evaluation of the burden of 
the SUNSET final rule. This estimate is about five percent of the 
comments anticipated in the SUNSET final rule's RIA for regulations 
that the Department announces would be rescinded following a review.
    In contrast, the SUNSET final rule's RIA incorrectly based its 
burden estimates on an assumption that the public would forego 
commenting until the retrospective analysis was complete and the 
Department announced its intent to rescind or amend a rulemaking. We 
now find this assumption puzzling: It would not make sense to require a 
comment process for assessments if the Department thought no one would 
be interested in commenting. In any event, we disagree with the 
assumption that stakeholders will forego commenting until late in the 
process because it is illogical, lacks any evidentiary basis, and is 
contrary to the weight of the comments. Indeed, stakeholders have 
already demonstrated a high level of interest in the subject of this 
rulemaking.\9\ We understand that these stakeholders would be motivated 
to comment because they would want to ensure that HHS has up-to-date 
information to correctly evaluate both the impacts of a rulemaking and 
potential changes to the regulations. We also note that Congress, in 
drafting the RFA, appeared to believe the public would be interested in 
commenting on reviews because it required agencies to provide an 
opportunity for public participation in the review process.
---------------------------------------------------------------------------

    \9\ As noted above, a wide range of stakeholders submitted over 
500 comments on the SUNSET proposed rule, almost all in opposition, 
and several stakeholders filed the Santa Clara lawsuit seeking to 
overturn the SUNSET final rule. As discussed in the Withdrawal NPRM 
and in Sections IV.A.2 and IV.B.1. of this preamble, many 
stakeholders opposed the SUNSET final rule because the threat of 
regulations automatically expiring would increase cost and 
confusion, impede competition, and harm the public health in 
numerous ways. Moreover, if the SUNSET final rule were to be 
implemented, many of these stakeholders have indicated that they 
would expect to expend considerable resources tracking HHS 
regulations for potential expiration and submitting comments. See 
Section V.A.2.
---------------------------------------------------------------------------

    We also do not agree that uncertainty is a short term cost. The 
SUNSET final rule creates a continuing threat of expiration because, 
regardless of the ``schedules for expiration,'' the public cannot know 
what public health exigencies may arise in the future and what 
decisions the Department will make to serve its mission. The same 
uncertainty does not exist with more typical rulemakings because they 
have built-in safeguards, such as notice and opportunity for comment.
    With regard to the comment about ``rent-seeking,'' this comment 
appears to confuse several economic concepts, including ``rent-
seeking,'' ``rent-seeking costs,'' and economic rent, which makes the 
comment difficult to parse and understand. Additionally, we do not 
unambiguously attribute to the SUNSET final rule the impacts of 
regulations that would be rescinded or amended following a review under 
the SUNSET final rule. It is also not clear why the commenter 
anticipates that the SUNSET final rule, which would invite public 
comment on about 18,000 regulations over ten years, would result in 
public comments that are more representative of the views of the 
general public than the notice-and-comment rulemaking process the 
Department follows under the APA in this rulemaking. As such, it is not 
clear how the SUNSET final rule would provide a superior approach to 
addressing economic rents attributable to existing regulations.
    With respect to the comment on the Withdrawal NPRM preliminary 
RIA's estimated burden on the Department, we agree with the commenter 
that there would be real opportunity costs to the Department and 
taxpayers attributable to forgone activities that would have been 
performed in the absence of the process required by the SUNSET final 
rule. While we cannot predict all of the likely forgone activities, 
they could include, for example, actions to address urgent public 
health matters such as COVID-19 pandemic relief efforts or similar 
efforts to respond to future emergent threats, FDA review of 
applications and the fulfillment of user fee commitments, work to 
ameliorate the opioid crisis, stem outbreaks of foodborne illness, and 
conduct inspections, recalls and other public health priorities. To the 
extent that Department would need to defend challenges related to 
expired regulations, such effort would further require the Department 
to divert resources from other public health priorities. To measure 
these opportunity costs, we adopt the standard approach recommended in 
the HHS Guidelines for Regulatory Impact Analysis of a ``default 
assumption'' ``that the value of activities conducted during paid work 
time can be best approximated by the cost of labor to the employer. The 
standard economic model assumes that employers are willing to incur 
labor costs equal to the value of workers' marginal product. 
Conceptually, this amount represents the value of what the employee 
would have otherwise produced in the absence of the regulation. Thus, 
the opportunity cost of paid work time can be approximated based on the 
employer costs, including pay, benefits, taxes, and associated 
overhead.'' \10\
---------------------------------------------------------------------------

    \10\ HHS Guidelines for Regulatory Impact Analysis at 27 (2016) 
(available at https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf). This default 
assumption is discussed in greater detail in Valuing Time in U.S. 
Department of Health and Human Services Regulatory Impact Analyses: 
Conceptual Framework and Best Practices'' (Sept. 17, 2017) 
(available at https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework).
---------------------------------------------------------------------------

    However, the commenter is incorrect that the assessments and 
reviews would be achieved solely through the reallocation of existing 
staff resources. As described in Section VI, implementation of the 
SUNSET final rule would require contributions from current and new 
Department subject matter experts, lawyers, and other reviewers 
informing the retrospective analysis and providing feedback on draft 
analyses, time spent by economists and other analysts developing the 
retrospective analysis to respond to this feedback, time spent reading 
and incorporating evidence from other sources, including public 
comments, and other activities. The SUNSET final rule RIA did not 
explicitly include these important activities in its estimates of the 
time per review. The consequence of excluding these activities in its 
analysis is that the SUNSET final rule likely underestimated the total 
costs to the Department of the SUNSET final rule to a significant 
degree. Our current evaluation of these costs indicates that the 
Department would incur additional costs to hire, train, and transfer 
personnel with technical expertise.
    One comment argued that the Department's cost estimates in the 
Withdrawal NPRM are likely to be inaccurate because the comment 
disagreed with our assumption that the Department would follow the 
recommendations in the SBA guidance.\11\ The commenter cited an 
analysis of regulatory impact analyses performed between 2008 and 2013 
as support. This analysis, which predates the SBA Guidance published in 
August 2017, does not reference ``Regulatory Flexibility Act,'' 
``regulatory flexibility analysis,'' ``Section 610 reviews,'' ``small 
business,'' ``small entity,'' or otherwise contain any evidence that 
the Department does not currently follow the recommendations in the SBA 
guidance, or any evidence that the Department would not follow these

[[Page 32256]]

recommendations for assessments or reviews performed under the SUNSET 
final rule.
---------------------------------------------------------------------------

    \11\ ``A Guide for Government Agencies: How to Comply with The 
Regulatory Flexibility Act,'' (Aug. 2017) (available at https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf).
---------------------------------------------------------------------------

    The commenter also discussed the potential that the costs of 
conducting reviews will lessen over time. We are not able to fully 
evaluate the merits of comment since it does not provide any guide for 
when the Department would begin to experience these lower costs, and 
because it does not include a quantification of the reduction in time 
per assessment or review resulting in lower costs over time. See 
Section VI.

B. Comments on Potential Harms From the Possible and Actual Expiration 
of Regulations

    In issuing the Withdrawal NPRM, the Department explained that it 
was concerned that, if the SUNSET final rule were implemented, both the 
possibility of automatic expiration of HHS regulations, and the actual 
expiration of HHS regulations, could harm the public. 89 FR 59914. 
Below we respond to the comments on the Withdrawal NPRM on this 
subject.
1. Impact on Stakeholders in General
    Comment: A number of commenters, including health care providers, 
public interest groups, and private sector entities, urged HHS to 
withdraw the SUNSET final rule because it would create unpredictability 
for industry and consumers. These commenters noted that the lack of 
predictability concerning the potential automatic expiration of 
regulations could result in the haphazard vacating of numerous existing 
rules without appropriate communication to regulated entities, and 
potentially upend long-standing foundational rules with provisions that 
are inter-related with other rules. The commenters expressed concern 
that such unpredictability regarding large swathes of the rules 
governing public health and welfare could lead to adverse impacts for 
stakeholders.
    Several of these comments expressed concern that the SUNSET final 
rule would introduce uncertainty regarding the validity and 
enforceability of regulations and wreak havoc on HHS programs. 
Commenters noted that there would be uncertainty and confusion 
regarding the current and future regulatory status of rules slated for 
review and assessment, and that expiring regulations could leave vast, 
gaping holes in the regulatory framework implementing HHS programs and 
policies and introduce confusion and sudden shifts in regulatory 
requirements. Commenters further noted that if the intent of the SUNSET 
final rule was to ease burdens upon small businesses, it would more 
likely have the opposite effect. All businesses, but most especially 
small ones, benefit from transparent regulation that can be planned 
for, budgeted for, and implemented.
    Among these commenters, several representatives of industry 
coalitions whose membership includes small entities also warned that, 
if not withdrawn or repealed, the SUNSET final rule could engender 
chaos and harm to both industry and consumers. Several commenters 
discussed the time, resources, and capital investments made by the food 
industry because of reliance on durable public standards that have been 
codified in regulation. The commenters expressed significant concerns 
about the expansive and accelerated approach taken in the SUNSET final 
rule and the disproportionate burden and uncertainty small entities 
would face should the final rule lead to the expiration of regulations 
that have been in place for years and are essential to a level playing 
field within the industry.
    Commenters also described the impacts of regulatory uncertainty on 
public health. One commenter described the potential damaging effects 
the SUNSET final rule would have on the drug development process, where 
drug sponsors rely on a predictable regulatory environment to plan 
their development programs. The commenter stated that an environment in 
which FDA or other HHS regulations may be capriciously eliminated could 
hamper progress on much needed therapies in the drug development 
pipeline. One commenter specifically referenced the consequences of a 
lack of public confidence in food labeling, including the rules that 
inform consumers about the ingredients and nutrient content of their 
food, and safety rules concerning Salmonella, Shiga toxin-producing E. 
coli, and other potentially deadly foodborne pathogens. Other 
commenters provided examples of harms of uncertainty to the HHS 
programs such as Temporary Assistance for Needy Families (TANF) and the 
Child Care and Development Fund (CCDF), where a strong regulatory 
framework provides the clarity needed to run these programs on a day-
to-day basis, gives providers guidance on their obligations, and 
explains to beneficiaries what their benefits mean.
    Response: We agree with these comments about the importance of a 
relatively steady and predictable regulatory environment and appreciate 
the examples of the ways the SUNSET final rule would introduce 
unpredictability regarding HHS regulations and the associated harms. 
Given the complicated resource allocation decisions necessary to 
implement the review framework prescribed in the SUNSET final rule, HHS 
is unable to forecast the number of or identify specific regulations 
that may expire without a completed assessment and, if applicable, 
review. It therefore may be difficult for stakeholders to know which 
regulations would remain in place because that would depend on whether 
the Department could actually complete each regulation's assessment 
and/or review by the assessment or review deadline. We concur that the 
potential automatic expiration of large swathes of rules, or even one 
complex rule, without notice of the reasoned justification for retiring 
that rule or set of rules, could create uncertainty and 
unpredictability regarding regulatory programs going forward.
    Although the SUNSET final rule stated that it ``does not believe 
uncertainty among the regulated community will add significantly to the 
costs of this rulemaking'' because ``there is always a possibility that 
regulations could be amended or rescinded, even absent this rule,'' 86 
FR 5709, HHS now concludes that this reasoning was flawed. The rule's 
automatic expiration of regulations is very different from amendment or 
rescission through notice and comment rulemaking, because there is no 
built-in safeguard of prior notice for automatic expiration, and no 
process for obtaining stakeholder input on the implications of losing 
the regulation. Therefore, expiration could be haphazard and 
unpredictable and without appropriate notice to and input from 
stakeholders. This outcome would be far more disruptive than the 
existing possibility of targeted changes to regulations based on a 
reasoned justification such as a change in the governing law, 
technology, policy, or other circumstances. Moreover, the Department 
generally uses mechanisms such as the Unified Agenda of Regulatory and 
Deregulatory Actions (Unified Agenda) and the HHS Regulatory Agenda, 
which are published in the Federal Register, to provide advance notice 
and predictability to affected stakeholders about specific regulations 
that may be amended or rescinded.\12\
---------------------------------------------------------------------------

    \12\ See, e.g., Regulatory Information Service Center, 
``Introduction to the Unified Agenda of Regulatory and Deregulatory 
Actions--Fall 2021'', 87 FR 5002, 5009 (Jan. 31, 2022).
---------------------------------------------------------------------------

    We have now determined that the mechanisms described in the SUNSET 
final rule, which include a dashboard on the HHS website that shows the

[[Page 32257]]

progress of Assessments and Reviews and when HHS expects them to be 
completed, are insufficient to provide adequate clarity concerning 
regulations that may be subject to automatic expiration. As discussed 
in greater detail in Section V.E, the rule includes a number of vague 
and confusing provisions that would make it difficult to determine when 
any given section of the CFR is subject to expiration. For example, a 
section may need to be reviewed multiple times as part of multiple 
rulemakings to avoid expiration, or it may require no review at all 
because it has been determined to fall within an exception. The public 
could not necessarily predict, from looking at the dashboard, the fate 
of that particular section. Moreover, rulemakings could be added or 
deleted from the dashboard at HHS's discretion, so the fact that a 
particular rulemaking is absent would not necessarily mean that the 
public could draw conclusions regarding the rule's expiration status 
until the expiration date is near. For these reasons, a dashboard 
indicating the progress of assessments and reviews would not adequately 
alleviate public uncertainty about the loss of regulations. These 
uncertainties could have several adverse repercussions as discussed in 
the Withdrawal NPRM, comments to the SUNSET proposed rule and 
Withdrawal NPRM, and below, for example, in the following comment and 
response.
    Comment: A variety of commenters including states, tribes, 
municipalities, hospital systems, insurers, healthcare providers, and 
patient advocacy organizations expressed support for the Withdrawal 
NPRM, citing the potential consequences of the SUNSET final rule 
creating uncertainty about the stability and predictability of HHS 
regulations and causing harm if HHS regulations were to actually 
expire. A number of commenters described the risk of such uncertainty 
for the Modified Adjusted Gross Income (MAGI) regulations, which are 
relied upon by states and state agencies to determine who is eligible 
for certain Medicare and Medicaid programs, Medicare Advantage, the 
Children's Health Insurance Program (CHIP), and insurance affordability 
programs through the Health Insurance Marketplace, as well as the 
consequences of such uncertainty for individuals in trying to ascertain 
their likely eligibility for these programs. Commenters underscored 
that Medicaid and CHIP are large, complex, Federal-state health 
insurance programs that affect not only all of the states and 
territories, but also millions of beneficiaries, tens of thousands of 
providers, and hundreds of managed care plans. They stated that these 
stakeholders have a legitimate expectation of stability in the Federal 
regulatory guidelines for these programs and that predictable and 
reliable Federal regulations are essential to facilitate their 
effective implementation, so that providers understand what their 
obligations are, and beneficiaries can understand what they are 
entitled to receive. Commenters emphasized the significance of these 
and other HHS administered healthcare programs for seniors, children, 
the disabled, low-income and rural communities, and other vulnerable 
segments of the population including people of color, members of the 
LGBTQ+ community, and others who suffer health disparities, and the 
dire consequences they would suffer if regulations were to expire under 
the SUNSET final rule and safety net programs were disrupted. 
Commenters noted that the SUNSET final rule is at odds with the policy 
goals of E.O. 14009, ``Strengthening Medicaid and the Affordable Care 
Act'', 86 FR 7793, by weakening the strong regulatory framework 
necessary for states to implement these complex programs that provide 
health care access to millions of otherwise uninsured Americans.
    Other commenters described the potential impact of expiration on 
stakeholders in the food industry and on consumer confidence in the 
safety of food and medical products. They provided examples of harms 
that would result in the event FDA regulations concerning false and 
misleading medical product labeling and advertising, nutrition 
labeling, food safety, or food standards of identity were to expire. 
Comments on the SUNSET proposed rule provided numerous additional 
examples related to HHS programs, as discussed in the Withdrawal NPRM. 
86 FR 59915-59917.
    Response: We thank the commenters for illustrating the many ways 
participants across the health care system and other Department 
programs would be harmed if they could not depend on the integrity and 
reliability of HHS regulations. We agree that, beyond the harm of 
regulatory uncertainty, the damage from actual expiration of 
regulations could be severe. As explained in the Withdrawal NPRM and in 
Section III.B., we have determined that regulations are likely to 
expire under the SUNSET final rule. Expiration could cause serious harm 
to millions of stakeholders who rely on HHS programs, including 
underserved populations; upend established understandings across the 
public health spectrum as to how to comply with statutory requirements; 
and disrupt established industry standards that advance public health, 
create a level playing field for businesses, and boost consumer 
confidence. Because of these potential harms, we now conclude that the 
automatic expiration provision is contrary to the Department's mission 
to protect the health of all Americans and provide essential human 
services, especially for those who are least able to help themselves.
    States, non-state government entities, hospitals and other health 
providers, insurers and managed care plans, and other key stakeholders 
in our country's health care system structure their programmatic and 
business operations to satisfy the current Federal regulations. These 
rules help beneficiaries and potential applicants to understand the 
coverage they are or may be entitled to receive, patients to understand 
their rights in accessing and receiving care, and providers to 
understand their patients' coverage. As discussed in the Withdrawal 
NPRM, the expiration of these regulations could mean that these and 
other regulated entities would be unsure how to comply with long-
standing statutory requirements and may no longer be compelled to 
comply with long-standing safety standards. See 86 FR 59915-59917. 
Likewise, we now recognize, as discussed in Section V.D of this 
preamble, that the SUNSET final rule could result in rescinding rules 
in their entirety without a rule-specific justification or an 
opportunity for the public to comment on that justification, including 
identifying potential harms associated with the expiration.
2. Impacts on State, Local, and Tribal Governments
    Comment: Several tribal organizations explained that the SUNSET 
final rule would undermine crucial regulatory protections for AI/ANs in 
accessing healthcare, including HHS regulations that are based in 
statute and developed through years of government-to-government 
consultation between Tribal Leaders and HHS Leadership. Tribal 
commenters expressed support for HHS's Withdrawal NPRM because the 
SUNSET final rule threatens the regulations intended to protect AI/ANs. 
These commenters also opposed the SUNSET final rule because they said 
the Department failed to abide by the HHS Tribal Consultation Policy 
and conduct tribal consultation to minimize the implications of this 
rule on tribal governments. One tribal commenter

[[Page 32258]]

expressed appreciation for the change of direction on the SUNSET final 
rule and hoped that the Department continues in this spirit of 
accounting for the impact of such decisions on Tribal Nations.
    Response: HHS respects and appreciates the leadership and 
partnership of Tribal Nations in protecting the health of AI/ANs. The 
Department is committed to strengthening the Nation-to-Nation 
relationship between the United States and federally recognized Indian 
Tribes.
    As discussed in the Withdrawal NPRM, HHS acknowledges that 
consultation with Tribal governments on the SUNSET proposed rule was 
not adequate. The Department also recognizes that it previously stated 
that the SUNSET final rule ``would have no direct impact on Indian 
Tribes, beyond their costs of participation in the monitoring, 
Assessment, and Review processes,'' based on an assumption that 
regulations would not expire. 86 FR 5711. However, we have now 
determined, and explained in detail throughout this preamble, that the 
Department's prior assumption that regulations would not expire was not 
well-founded. Therefore, HHS has revised its view of the impacts of the 
SUNSET final rule on Tribal Nations.
    The IHS serves over 2.6 million AI/ANs and the Department 
recognizes that there are stark health disparities that persist in 
Tribal communities. The COVID-19 pandemic's devastating impact on 
Tribal communities has demonstrated the real human toll of these 
disparities. HHS concludes that the SUNSET final rule would only make 
it harder to expand access to high-quality health care across Indian 
Country, because it is likely to divert resources from HHS programs 
serving Tribes and introduce uncertainty and a threat of expiration for 
regulations that support HHS programs serving tribal communities. 
Likewise, the SUNSET final rule does not provide for advance notice of 
regulations that might automatically expire which would make it 
difficult for the Department or Tribes to initiate consultation. 
Moreover, even if these significant deficiencies could be improved, it 
would still not resolve more fundamental problems the SUNSET framework 
presents for tribal stakeholders, such as the burdens imposed on and 
uncertainties created for many stakeholders.
    As discussed in the Withdrawal NPRM, HHS now acknowledges the 
SUNSET final rule conflicts with the Department's policy to engage in 
meaningful consultation. See 86 FR 55911. HHS believes finalizing the 
Withdrawal NPRM is consistent with the objectives of the January 26, 
2021, Presidential memorandum on ``Tribal Consultation and 
Strengthening Nation-to-Nation Relationships,'' which reaffirmed the 
tribal consultation policy outlined in E.O. 13175, and announced that 
the Biden-Harris administration priority to make respect for Tribal 
sovereignty, self-governance, and regular, meaningful, and robust 
consultation with Tribal Nations cornerstones of Federal Indian policy. 
86 FR 7491.
    Comment: A number of states, municipalities, and State attorneys 
general expressed concern that the SUNSET final rule would pose a 
direct threat to state health care systems and the health and safety of 
their residents. The commenters indicated that states are directly 
threatened by the SUNSET final rule because they depend on HHS to 
administer trillions of dollars in Federal funding, governed by an 
intricate web of regulations and requirements. A comment from State 
attorneys general explained that, by permitting complex regulatory 
systems to automatically expire, the SUNSET final rule could have dire 
consequences for those who stand to lose health benefits or services 
but have no recourse to prevent that loss. One commenter stated that 
the SUNSET final rule stands to undermine the operations of state 
partners, such as state Medicaid agencies, and would impede their 
ability to provide services for Medicaid beneficiaries.
    Response: We agree that many diverse stakeholders throughout the 
country, including states, state Medicaid and other program agencies, 
and tribal governments, as well as health care providers, program 
beneficiaries, and others who rely on the legal framework established 
by the Department's regulations and their implementation of the 
relevant statutes, could experience undue disruption as a result of the 
SUNSET final rule. As discussed in the Withdrawal NPRM, the automatic, 
potentially haphazard and unpredictable expiration of regulations could 
result in significant disruption, based on the sudden and unexamined 
removal of the prior regulatory framework without accompanying 
explanation or replacement. We appreciate the comments highlighting 
challenges that this scenario could present for many stakeholders, 
including state and tribal governments.
3. Other Comments on Expiration
    Comment: A few commenters expressed doubt that accidental and 
unintended expiration of regulations would occur and pointed to the 
experience of North Carolina and Missouri. Each of those states has an 
established process for the review of state regulations that features a 
sunset mechanism. One commenter stated that North Carolina's process 
resulted in no reports of accidental expirations. The commenter 
suggested that, because the quantity of HHS regulations is similar to 
the number of all regulations promulgated in North Carolina, the 
process should not be difficult for HHS to implement and avoid any 
expiration of a regulation. A second comment stated that Missouri 
connects a sunset provision to a five-year periodic review requirement 
in a manner similar to the SUNSET rule. The commenter shared a quote 
from the Missouri attorney general stating that they were not aware of 
any regulations that had expired as a result of Missouri's sunset 
provision and that state agencies review every regulation under their 
control.
    Response: We address in greater detail in Section V.C the many 
significant differences between the SUNSET final rule and these and 
other state sunset laws--here we address only the specific points 
regarding the potential expiration of regulations. We disagree with 
these commenters in their assertions that we should extrapolate from 
these state examples to conclude that regulations would not expire 
under the SUNSET final rule because there are too many substantial 
differences to make a direct comparison helpful or appropriate. North 
Carolina's reviews are less burdensome overall because North Carolina's 
experience does not entail the multi-factor review and assessment 
required by the SUNSET final rule. We similarly find that Missouri's 
experience does not match the scale and scope of the SUNSET final 
rule's assessment and review scheme. For example, the most recent 
reports of the Missouri State Auditor responsible for assessing state 
agency compliance with periodic rule review found that the Missouri 
Department of Health and Human Services reviewed 759 rules and received 
no comments on its review and that the Department of Mental Health 
reviewed 156 rules and received 14 comments.\13\ These rules represent 
a small fraction of the number of HHS regulations covering all of the 
HHS agencies and divisions, and the comment offers no analysis as to 
whether individual Missouri rules are

[[Page 32259]]

comparable to HHS regulations in terms of length and complexity. 
Furthermore, HHS regulations are national in scope, have an impact on a 
much greater number of programs and persons, and cover more diverse 
circumstances than state regulations. In issuing its regulations, HHS 
also follows Federal procedures and policies as set forth in statutes, 
EOs, and Department memoranda, which are not applicable to states. 
Accordingly, the review of HHS regulations is likely to entail greater 
complexities and the level of public interest in the HHS rules is 
likely to be much higher, which would result in significantly more 
comments. Thus, the pace and resources required to review North 
Carolina's and Missouri's inventory of regulations are not indicative 
of what HHS would experience under the SUNSET final rule, including the 
likelihood of expiring regulations.
---------------------------------------------------------------------------

    \13\ See Nicole Galloway, Missouri State Auditor Report No. 
2019-126 (Dec. 19, 2019) (available at https://app.auditor.mo.gov/Repository/Press/2019126349658.pdf); Nicole Galloway, Missouri State 
Auditor Report No. 2017-152 (Dec. 19, 2017) (available at https://app.auditor.mo.gov/Repository/Press/2017152319255.pdf).
---------------------------------------------------------------------------

    Moreover, as explained in Section III.B., implementation of the 
SUNSET final rule would require the Department to choose how to 
prioritize its resources as between (1) addressing existing and new 
priorities, including promulgating new congressionally directed 
regulations, and (2) preserving regulations from expiration. The fact 
that certain states with ``sunset'' programs can, and have chosen to, 
allocate resources in a way that preserves their regulations from 
expiration does not in any way imply that HHS would or could make the 
same choices in confronting this question. As explained above, we have 
considered the overall burdens and the ways in which full 
implementation of the SUNSET program would undermine other Department 
objectives, and we have concluded that prioritizing resources on SUNSET 
compliance, in order to avoid regulatory expiration, is not in the best 
interests of the public health and welfare. Therefore, we think 
regulations will expire. Whether states have made different choices 
does not determine the Department's analysis regarding its obligations 
and priorities.

C. Comments on the RFA and Retrospective Review

    In the Withdrawal NPRM, we tentatively concluded that the final 
rule may be harmful to small entities, inconsistent with Congress's 
intent in enacting the RFA, and unnecessary to achieve the RFA's 
objectives or to incentivize the Department to engage in retrospective 
review. 86 FR 59917. In this section, we respond to the comments 
submitted both on policy issues related to retrospective review and on 
compliance with the RFA.
1. SUNSET Final Rule's Degree of Consistency With the RFA
    Comment: Numerous commenters supported withdrawal of the SUNSET 
final rule as inconsistent with the RFA. Many of these commenters 
agreed with HHS's assertion in the Withdrawal NPRM that the SUNSET 
final rule imposes requirements beyond the requirements of the RFA. 
Several of these commenters noted that the RFA focuses on review of 
only those rules that have or will have a ``Significant Economic Impact 
Upon a Substantial Number of Small Entities'' (SEISNOSE), and the 
SUNSET rule exceeds that scope because it requires assessment of all 
agency rules regardless of whether they have a SEISNOSE. One commenter 
noted that the majority of the regulations to which the SUNSET final 
rule applies do not actually fall within the scope of the RFA, citing 
the SUNSET final rule's assumptions, which estimate that only 15% of 
the Department's regulations have a SEISNOSE. Commenters also 
questioned HHS's authority to impose the SUNSET rule's requirements for 
the scale and speed of assessments and reviews in the absence of 
express authorization in the RFA. One commenter noted that courts have 
uniformly recognized the limited scope of the RFA and that the SUNSET 
final rule's expansion of the RFA's requirements finds no support in 
the text or purpose of the statute. Several commenters also noted that 
the RFA does not authorize agencies to retroactively impose a blanket 
expiration date to rescind regulations.
    Response: The Department agrees with these commenters that the 
SUNSET final rule's requirements exceed the RFA's requirements. 
Specifically, the Department agrees with the commenters who noted that 
the rule's requirement that the Department ``assess'' all HHS 
regulations within certain timeframes, to determine whether the 
regulations have or will have a SEISNOSE, exceeds the express 
requirements of section 610 of the RFA, which contemplates periodic 
review of only ``rules . . . which have or will have a [SEISNOSE].'' 
Nothing in the express language of that section requires agencies to 
identify such rules by conducting ``assessments'' of every rule issued 
by the agency and to comply with the SUNSET final rule's notice and 
comment requirements for such assessments. Indeed, section 610 does not 
specify any means of identifying rules that have or will have a 
SEISNOSE. Section 610(a)'s silence with respect to identifying rules 
that have or will have a SEISNOSE, when contrasted with other 
provisions of that section explicitly imposing specific requirements on 
agencies' retrospective reviews, see, e.g., 5 U.S.C. 610(b) (requiring 
agencies to consider specific enumerated factors when conducting 
reviews), indicates that Congress intended to leave such determinations 
to agencies' discretion. See Fisher v. Pension Benefit Guar. Corp., 994 
F.3d 664, 671 (D.C. Cir. 2021) (``In an administrative setting, . . . 
`the contrast between Congress' mandate in one context with its silence 
in another suggests . . . a decision not to mandate any solution in the 
second context, i.e., to leave the question to agency discretion.' '').
    Judicial decisions have reinforced agencies' discretion under the 
RFA. As the D.C. Circuit has explained, ``the Act in and of itself 
imposes no substantive constraint on agency decisionmaking,'' Nat'l 
Tel. Co-op Ass'n v. FCC, 563 F.3d 536, 540 (D.C. Cir. 2009), but 
instead is limited to ``setting out precise, specific steps an agency 
must take,'' Aeronautical Repair Station Ass'n, Inc. v. FAA, 494 F.3d 
161, 178 (D.C. Cir. 2007). Courts have therefore instructed that the 
RFA ``requires nothing more than that the agency . . . demonstrate[e] a 
reasonable, good faith effort to carry out'' those steps. U.S. Cellular 
Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001); Aeronautical Repair 
Station, 494 F.3d at 178 (``[Section 604 of] the Act requires agencies 
to publish analyses that address certain legally delineated topics. 
Because the analysis at issue here undoubtedly addressed all of the 
legally mandated subject areas, it complies with the Act.''); see also 
Montgomery Cty., Maryland v. Fed. Commc'ns Comm'n, 863 F.3d 485, 495 
(6th Cir. 2017) (upholding agency's final regulatory flexibility 
analysis as ``procedurally adequate''); Zero Zone, Inc. v. United 
States Dep't of Energy, 832 F.3d 654, 683 (7th Cir. 2016) (citing U.S. 
Cellular Corp., 254 F.3d at 88); Alenco Commc'ns, Inc. v. FCC, 201 F.3d 
608, 625 (5th Cir. 2000) (citing Assoc. Fisheries of Me., Inc. v. 
Daley, 127 F.3d 104, 114 (1st Cir. 1997)).
    In addition to not being mandated by the RFA, the assessment 
process in the SUNSET final rule is an overly burdensome and 
unnecessary means of identifying rules that have or will have a 
SEISNOSE. In fact, as discussed in more detail below, we now question 
whether the assessment process is a reasonable exercise of the 
Department's discretion in light of the purpose and language of the 
RFA. As noted by one commenter, based on the Department's assumptions 
in the RIA of the SUNSET

[[Page 32260]]

final rule, which are adopted in the RIA of this final rule, only 530, 
or approximately 15%, of the Department's rulemakings impose a 
SEISNOSE, whereas the SUNSET rule estimates the Department would need 
to assess a total of 3,574 rulemakings in order to identify those 
rules. The Department continues to believe that, had Congress intended 
for section 610 to mandate such a burdensome process for identifying a 
minority of rulemakings that have or will have a SEISNOSE, it would 
have said so explicitly. See Whitman v. Am. Trucking Ass'ns, 531 U.S. 
457, 468 (2001) (Congress ``does not[ ] . . . hide elephants in mouse 
holes''). Moreover, as explained in Section V.C.2 of this rule and the 
Withdrawal NPRM, conducting assessments of all HHS rules is not the 
only available means of identifying rules with a SEISNOSE, as 
commenters have identified numerous more targeted, efficient, and 
effective alternatives for identifying regulations that have or will 
have a SEISNOSE. We further note that, although the RFA applies across 
numerous government agencies, HHS is not aware of any department or 
agency issuing a similar sunset regulation or any litigation asserting 
that any department or agency, including HHS, has violated the RFA by 
failing to implement a rule like the SUNSET final rule.
    Moreover, as explained in the Withdrawal NPRM, principles of 
statutory construction do not support broadly interpreting section 610 
to require agencies to simultaneously consider all regulations and do 
so on a recurring basis to determine whether they have or will have a 
SEISNOSE. Section 610(a) mandates that agencies publish a plan 
providing for a one-time simultaneous reexamination of regulations that 
have or will have a SEISNOSE. Had Congress intended for this plan to 
provide for simultaneous review that applies more broadly to all 
regulations and on a recurring basis, it would have said so. See, e.g., 
Salinas v. U.S. R.R. Retirement Bd., 141 S. Ct. 691, 698 (2021) 
(quoting Russello v. United States, 464 U.S. 16, 23 (1983) (``Where 
Congress includes particular language in one section of a statute but 
omits it in another section of the same Act, it is generally presumed 
that Congress acts intentionally and purposely in the disparate 
inclusion or exclusion.'')).
    The Department also agrees with commenters that the SUNSET final 
rule's automatic expiration provision--providing for the automatic 
expiration of any rule issued by the Department if it is not timely 
assessed or, as applicable, reviewed--exceeds the express requirements 
of the RFA. As explained in the Withdrawal NPRM, section 610 neither 
provides for automatic expiration of rules nor presumptively applies 
automatic expiration dates to regulations. Rather, it merely 
contemplates rescission or revision of rules, through the standard 
notice and comment rulemaking processes, only if they have or will have 
a SEISNOSE and if the Department has determined, based on its review of 
the factors set forth in section 610, that such rules should be 
rescinded or revised to minimize any SEISNOSE. We also note that 
section 608(b) of the RFA explicitly provides: ``If the agency has not 
prepared a final regulatory analysis pursuant to section 604 of this 
title within one hundred and eighty days from the date of publication 
of the final, such rule shall lapse and have no effect.'' The absence 
of any similar language in the RFA requiring rules to automatically 
lapse if an agency fails to comply with section 610 suggests that 
Congress did not intend for noncompliance with section 610 to have such 
an effect. See, e.g., Salinas, 141 S. Ct. at 698.
    The Department also notes that other requirements in the SUNSET 
final rule extend beyond the express requirements in the RFA. For 
example, the SUNSET final rule's requirements for public notice and 
comment procedures with respect to assessments--such as publishing in 
the Federal Register a notice within a month of commencing an 
assessment as well as a notice of the results of all assessments--
extend beyond section 610's notice and comment requirements. Although 
section 610 requires notice and comment procedures for retrospective 
review of rules which have or will have SEISNOSE,\14\ it does not 
require notice and comment procedures for the Department's 
determinations of which regulations have or will have a SEISNOSE. 
Additionally, the SUNSET final rule's expedited five-year timeline for 
the completion of certain reviews and two-year timeline for amending or 
rescinding regulations following such reviews go beyond the express 
requirements of section 610(a), which contemplate only that reviews of 
rules under that section be conducted ``within ten years'' of specific 
dates.\15\
---------------------------------------------------------------------------

    \14\ See 5 U.S.C. 610(c) (requiring agencies to publish in the 
Federal Register a list of rules to be reviewed during the 
succeeding twelve months as well as invite public comment on rules 
to be reviewed).
    \15\ We note that, as discussed in Section V.D, expanding these 
timeframes would not resolve the myriad of problems with the SUNSET 
final rule discussed throughout this preamble, such as the burdens, 
confusion, and uncertainty imposed on stakeholders.
---------------------------------------------------------------------------

    Additionally, the Department agrees with commenters that the 
automatic expiration provision and other requirements imposed by the 
SUNSET rule otherwise lack support in the language and purpose of the 
RFA. For the reasons already explained, the RFA does not explicitly 
impose or authorize these requirements. Moreover, as explained in the 
Withdrawal NPRM, these requirements appear to be inconsistent with the 
intent and purpose of the RFA as expressed in the statute's language 
and legislative history. Specifically, the automatic expiration 
provision--by providing for the automatic expiration of rules without 
consideration of the impact of the rules on small entities or the 
statutory objectives the rule implements--appears to be inconsistent 
with the RFA's intent to balance the objectives of the RFA with the 
objectives of statutes critical to public health. Congress expressed 
this intent in the language of section 610(a) itself, which 
contemplates the rescission of rules only if ``consistent with the 
stated objectives of applicable statutes'' and if the agency has 
determined that that the rule should be rescinded ``to minimize any 
significant economic impact of the rules upon a substantial number of . 
. . small entities.'' The RFA's legislative history further expresses 
this intent, stating that Congress did not intend for the RFA's 
requirements to ``undermine . . . important [regulatory] 
achievements,'' specifically those in the area of public health. 126 
Cong. Rec. 21,448, 21,451 (August 6, 1980) (statement of Sen. Culver, 
sponsor of S. 299, which was ultimately enacted as amended as the RFA); 
see also S. Rep. 96-878 (1980) (``The Committee is emphatically opposed 
to any weakening of the legislatively mandated goals of federal 
regulation in the name of cost reduction. The bill clearly stipulates 
that there is to be no loss of regulatory goals. The language states 
that agencies shall seek and consider alternative proposals to the 
proposed rule `consistent with the stated objectives of applicable 
statutes.''). Rather, Congress intended that ``agencies . . . continue 
to enforce [substantive] laws in a fully effective fashion,'' id., and 
that ``environmental, health or safety catastrophes must never be made 
more likely because of flexible regulations,'' id. at 21,455 
(Description of Major Issues and Section-by-Section Analysis of 
Substitute for S. 299).
    In addition to the automatic expiration provision, other SUNSET 
final rule requirements exceeding the express requirements of section 
610

[[Page 32261]]

appear inconsistent with the RFA's intent. As explained previously in 
this preamble and in the Withdrawal NPRM, compliance with the SUNSET 
final rule's requirement to assess thousands of regulations within 
certain timeframes would require the agency to divert resources from 
the Department's significant public health objectives and potentially 
impair its ability to achieve those objectives. The RFA's legislative 
history indicates that such a burden imposed by assessments would be 
contrary to Congress's intent that ``regulatory flexibility legislation 
[not] undermine . . . important [regulatory] achievements.'' 126 Cong. 
Rec. 21,451 (statement of Sen. Culver); see also id. at 21,455 
(Description of Major Issues and Section-by-Section Analysis of 
Substitute for S. 299) (addressing concerns that the RFA ``might 
require agencies to significantly compromise the objectives of 
underlying statutes authorizing rulemaking''). Such burdens on the 
Department's ability to achieve important statutory objectives related 
to public health also appear inconsistent with the RFA's intent to 
enhance administrative efficiency in the achievement of such 
objectives. See 126 Cong. Rec. 21,456 (Description of Major Issues and 
Section-by-Section Analysis of Substitute for S. 299) (emphasizing that 
``regulatory flexibility should be considered a means of improving 
administrative effectiveness in enforcing the regulatory statutes which 
the Congress has enacted rather than an additional bureaucratic 
burden''); see also S. Rep. 96-878 (stating that S. 299's findings 
include ``that reasonable alternative rules and regulations could be 
developed . . . without a significant loss of regulatory efficiency'').
    Furthermore, the SUNSET final rule's requirements exceeding the 
express requirements of section 610 also appear to be inconsistent with 
the RFA's purpose of alleviating the regulatory burden on small 
entities. See, e.g., 126 Cong. Rec. 21,449 (Description of Major Issues 
and Section-by-Section Analysis of Substitute for S. 299) (explaining 
that the RFA seeks to address the ``unnecessary and disproportionately 
burdensome demands . . . [of uniform regulatory requirements] upon 
small [entities] . . . with limited resources''). As discussed in 
Section V.A and V.B of this preamble, the regulatory uncertainty 
created by the sudden expiration and threat of sudden expiration of 
regulations would disproportionately burden small entities who rely on 
regulations to level the playing field and lack the resources to 
successfully navigate a confusing regulatory landscape. See 126 Cong. 
Rec. 21,453 (Description of Major Issues and Section-by-Section 
Analysis of Substitute for S. 299) (finding that small entities often 
have limited access to regulatory expertise and capital as compared to 
larger businesses). Additionally, the scope of and compressed timelines 
for the assessments required by the SUNSET final rule would undermine 
small entities' ability to provide input and data and otherwise 
participate in the assessment and review process, as well as undermine 
the Department's ability to meaningfully consider such information. 
Such a result would be inconsistent with the RFA's intent to ``give 
small businesses a greater opportunity to participate in shaping rules 
which would affect them.'' 126 Cong. Rec. 21,451 (statement of Sen. 
Culver). This result would also undermine the quality of the 
Department's reviews and, therefore, the Department's ability to 
accomplish the purpose of retrospective reviews as stated in section 
610(a), which is ``to minimize any significant economic impact of the 
rules upon a substantial number of such small entities.''
    For these reasons, the Department agrees with the commenters that 
the SUNSET final rule's requirements exceed the express requirements of 
the RFA and appear to be inconsistent with the intent and purpose of 
the RFA as expressed in the statute's language and legislative history, 
as well as case law interpreting the statute. We recognize that we 
previously took the position, in the SUNSET final rule, that the ``rule 
does not impose any additional burden on the Department beyond what was 
already called for in the RFA,'' 86 FR 5705, but after further 
considering the RFA and its legislative history, we now consider that 
prior position erroneous.
    Comment: Several commenters asserted that the SUNSET final rule, 
including its automatic expiration provision, is consistent with 
section 610 of the RFA. One commenter stated that the SUNSET rule 
accomplishes nothing new, different from, or contrary to the RFA 
because the RFA expressly contemplates rule rescission as one of the 
outcomes of retrospective review, and the SUNSET rule's automatic 
expiration provision preserves rule rescission as one of the options 
available to HHS upon completion (or not) of retrospective review under 
the RFA. Another commenter claimed that a 10-year automatic expiration 
provision seems entirely appropriate and consistent with the RFA's 
Congressional intent based on the view that the RFA already requires 
HHS to conduct 10-year reviews under section 610. Another commenter 
stated that the SUNSET rule is consistent with section 610 because it 
simply establishes an enforcement mechanism for that section. One 
commenter questioned the Department's conclusion that the SUNSET final 
rule's assessment requirement goes beyond the requirements of section 
610 and states that the Department must assess rules to determine 
whether a rule has or will have a SEISNOSE under section 610. The 
commenter also noted that assessments of rules not previously 
identified as having a SEISNOSE would impose a ``minimal burden'' 
because ``[i]t is likely that most of th[ose] . . . regulations would 
remain'' without a SEISNOSE and therefore ``only a simple assessment of 
these rules would be necessary.''
    Response: The Department disagrees with the commenters that the 
SUNSET final rule, including the automatic expiration provision, is no 
different from and consistent with the RFA, for the reasons already 
explained in the prior comment response.
    Specifically, with respect to the automatic expiration provision, 
the RFA contains no explicit or implicit authority for an automatic 
expiration provision, and such a provision is inconsistent with the 
RFA's intent and purpose. Thus, the Department disagrees with the 
commenter that the automatic expiration provision is not different from 
or inconsistent with the requirements in the RFA. Although section 610 
of the RFA does contemplate rule rescission as a potential outcome of 
retrospective review, it contemplates rescission of rules only through 
the standard notice-and-comment process. Furthermore, that outcome 
would apply only to rules that have or will have a SEISNOSE and for 
which the agency has conducted a review considering the factors set 
forth in section 610 and has determined, in its discretion and based on 
the results of the review, whether the rule at issue ``should be 
amended or rescinded, consistent with the stated objectives of 
applicable statutes, to minimize any significant economic impact of the 
rules upon a substantial number of such small entities.'' 5 U.S.C. 
610(a). In contrast, the automatic expiration provision explicitly 
mandates automatic rescission of any rule, regardless of whether it has 
or will have a SEISNOSE, not based on the agency's consideration of the 
relevant statutory factors or the potential for rescission to minimize 
SEISNOSE, but simply based on the agency's failure to conduct an 
assessment or review of the rule within certain timeframes. Therefore, 
the

[[Page 32262]]

commenter is incorrect that the automatic expiration provision can be 
equated to or is consistent with the rescission of rules under the RFA. 
Furthermore, as explained above, section 608(b) of the RFA explicitly 
requires rules to automatically ``lapse and have no effect'' if the 
agency fails to timely prepare a final regulatory analysis pursuant to 
section 604, and the absence of any similar language in the RFA 
requiring rules to automatically lapse if an agency fails to comply 
with section 610 suggests that Congress did not intend for 
noncompliance with section 610 to have such an effect. See, e.g., 
Salinas, 141 S. Ct. at 698.
    The Department also disagrees with commenters that the SUNSET final 
rule's automatic expiration provision is consistent with section 610 
because that section already requires agencies to conduct 10-year 
reviews or because the rule simply provides an enforcement mechanism 
for section 610's review requirements. As already explained in the 
prior comment response, the SUNSET final rule's requirement that 
agencies assess thousands of rules without a SEISNOSE, in some cases 
within an expedited five-year timeframe, exceeds the express 
requirements of section 610. Therefore, by mandating automatic 
expiration of rules without a SEISNOSE when the Department fails to 
timely assess them, the rule's automatic expiration provision does not 
seek to enforce only the requirements of section 610 but also 
requirements not expressly imposed by that section. Moreover, the 
Department notes that section 611(a) of the RFA already provides a 
remedy for agency noncompliance with section 610: Judicial review of 
such noncompliance and any relief deemed appropriate by the reviewing 
court.
    Additionally, the Department disagrees with the comment that the 
SUNSET final rule's assessment requirement is necessary under or 
consistent with section 610. Indeed, HHS is not aware of any other 
Federal department or agency implementing a rule similar to the SUNSET 
final rule. As explained in the previous comment response, although 
section 610 implicitly contemplates that agencies have some means of 
identifying rules with a SEISNOSE for retrospective review, it does not 
require agencies to conduct ``assessments'' of every rule and comply 
with the notice and comment requirements for such assessments. Rather, 
it is silent with respect to how agencies identify rules with SEISNOSE 
for review. This indicates that Congress intended to leave these 
determinations to agencies' discretion, see Fisher, 994 F.3d at 671, 
and the Department, in its discretion, has now determined that the 
assessment process in the SUNSET final rule is overly burdensome and 
unnecessary for making such determinations.
    Moreover, the commenter's suggestion that assessments would impose 
a ``minimal burden'' is not persuasive. The only support the commenter 
cited for this assertion is its speculation that assessments of rules 
previously identified as not having a SEISNOSE would be ``simple'' 
because ``[i]t is likely that most of th[ose] . . . regulations would 
remain'' without a SEISNOSE. However, even if the commenter is correct 
that such rules are likely to remain without a SEISNOSE, the SUNSET 
final rule would still require the Department to assess them to 
determine whether that is the case, and in doing so, the Department 
would need to examine any relevant experience with the rule since its 
promulgation. Furthermore, the commenter failed to acknowledge that 
even assessments that are potentially more straightforward than others 
would still be subject to the extensive requirements the SUNSET final 
rule imposes on every assessment, including requirements for announcing 
the assessment on the website and in the Federal Register, opening a 
public docket, considering comments to the docket, and publishing the 
full results in the Federal Register. Given these requirements, the 
Department does not agree with the commenter that any assessment under 
the SUNSET final rule would be ``simple'' or that the assessment 
process as a whole would impose a ``minimal burden.''
2. HHS Compliance With the RFA
    Comment: Several commenters contended that withdrawal of the SUNSET 
final rule violates the RFA because, without the rule, the Department 
would not comply with section 610. These commenters asserted that HHS 
historically has not complied with section 610, and withdrawal of the 
rule would allow the Department to continue its noncompliance. Some of 
these commenters maintained that the SUNSET final rule is HHS's current 
``plan'' for periodic review under section 610(a), and therefore 
repealing it will leave HHS without the required plan. One commenter 
asserted that HHS cannot repeal the SUNSET final rule because section 
610 allows agencies only to ``amend'' their plans for retrospective 
review. Another commenter asserted that HHS has failed each year to 
``publish in the Federal Register a list of the rules . . . which are 
to be reviewed pursuant to . . . section [610] during the succeeding 
twelve months'' under section 610(c). The commenters also claimed that 
the RFA requires (``shall provide for'') that HHS conduct the 
retrospective reviews identified in section 610 on the timelines 
provided for in that section, and that HHS has not adequately conducted 
such reviews.
    Response: We disagree with these commenters' assessments of the 
history of the Department's compliance with the RFA and predictions 
about the Department's future plans with respect to the RFA. As noted 
by commenters, section 610 requires agencies to: Publish in the Federal 
Register a plan for the periodic review of the rules issued by the 
agency which have or will have a SEISNOSE; and each year publish in the 
Federal Register a list of the rules which have a SEISNOSE and are to 
be reviewed pursuant to section 610 during the succeeding twelve 
months. HHS has complied with these requirements.
    First, following the enactment of the RFA, on July 14, 1981, the 
Department published in the Federal Register its plan for periodic 
review as required by section 610(a).\16\ That plan provides for, among 
other things, the Department's review of regulations that have or will 
have a SEISNOSE and identifies processes and principles that guide such 
reviews, including principles for prioritizing those reviews.\17\ 
Accordingly, the Department has had a plan in place since shortly after 
the enactment of the RFA. Second, in accordance with that plan and 
section 610(c), the Department each year publishes in the Federal 
Register a list of the rules with a SEISNOSE that it is reviewing, has 
reviewed, or intends to review under section 610, along with a 
discussion of the Department's

[[Page 32263]]

commitment to compliance with the requirements and intent of section 
610.\18\ As required by section 610(c), this document includes for each 
such rule a brief description of the rule, its legal basis, and the 
opportunity for public comment.\19\ Therefore, the commenters are 
incorrect that withdrawal of the SUNSET final rule would leave the 
Department without a plan for the periodic review of rules as required 
by section 610(a), or that HHS does not comply with section 610(c). The 
commenters have not cited any authority that either of these sections 
requires more.\20\
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    \16\ See Notice of Plan for Periodic Review of Rules, 46 FR 
36332 (July 14, 1981). We note that FDA simultaneously published in 
the Federal Register its own plan for periodic review of its rules 
as a supplement to the Department's plan. See Notice, 46 FR 36333 
(July 14, 1981) (``This notice supplements the Department plan with 
additional information about FDA procedures for reviewing existing 
rules.'').
    \17\ See, e.g., 46 FR 36332 (``[T]he Department and those staff 
divisions which administer rules will inventory and review all 
regulations for the purpose of selecting those regulations that 
should receive early, in depth review and revision, where necessary, 
to reduce regulatory burdens'' and identifying principles to guide 
prioritization of review of existing regulations); id. (``[A]gencies 
and offices of the Department will seek to identify for earliest 
review those regulations for which revision will most advance 
[certain] principles,'' including ``[m]inimiz[ing] Federal, State, 
local, and private costs'' and ``[p]revent[ing] fraud, abuse, waste, 
and inefficiency''); id. (``The Department's semiannual agenda will 
advise the public of regulations selected for review''); id. at 
36333 (``[I]t is important that to the extent possible the more 
costly and burdensome rules by reviewed first'').
    \18\ See, e.g., Semiannual Regulatory Agenda, 86 FR 16892 (Mar. 
31, 2021) (publishing under the RFA and E.O. 12866 the Department's 
``semiannual . . . inventory of rulemaking actions under development 
throughout,'' including ``as required by the [RFA] . . . , those 
prospective HHS rulemakings likely to have a [SEISNOSE],'' 
``offering for public review summarized information about 
forthcoming regulatory actions the Department,'' and describing and 
identifying examples of the Department's ``agency-wide effort to 
support the [Regulatory] Agenda's purpose of encouraging more 
effective public participation in the regulatory process'').
    \19\ See, e.g., id. The Department also submits this information 
regarding rules it has identified for periodic review under section 
610 in its submissions to the Unified Agenda. One commenter 
maintained that these Unified Agenda submissions cannot satisfy 
section 610 because they are not published in the Federal Register 
and they are not contained in a single document. However, as 
explained above, the Department publishes information satisfying 
section 610 in the Federal Register as a single document. See, e.g., 
Regulatory Information Service Center, Introduction to the Unified 
Agenda of Regulatory and Deregulatory Actions--Fall 2021, 87 FR 
5002, 5009 (Jan. 31. 2022).
    \20\ Congress considered and rejected a provision included in an 
earlier version of the bill that would have supported the 
commenter's position. See 46 FR 21449 (section 5(a) of S. 299, which 
was amended before being enacted as the RFA, included the following: 
``Each agency shall periodically review its rules and regulations in 
accordance with the schedule and criteria set forth in its published 
plan.'').
---------------------------------------------------------------------------

    The Department also disagrees with the commenter that it cannot 
repeal the SUNSET final rule because section 610 permits agencies to 
only ``amend[]'' their plans for retrospective review. However, the 
language the commenter cites--``[s]uch plan may be amended by the 
agency at any time,'' 5 U.S.C. 610(a)--is a broad grant of authority to 
agencies with respect to amending their plans for retrospective review, 
not a limitation. See, e.g., Adirondack Med. Ctr. v. Sebelius, 740 F.3d 
692, 698 (D.C. Cir. 2014) (``Congress generally knows how to use the 
word `only' when drafting laws.''). This interpretation of section 
610(a) is also consistent with Congress's intent as expressed in the 
remaining language of that provision, which sets forth the general 
requirement that agencies publish plans for retrospective review but 
does not further specify how agencies develop and implement those 
plans. Such language stands in stark contrast to section 610(b), which 
explicitly imposes specific requirements on agencies' retrospective 
reviews. See Fisher, 994 F.3d at 671 (``In an administrative setting, . 
. . `the contrast between Congress' mandate in one context with its 
silence in another suggests not a prohibition but simply a decision not 
to mandate any solution in the second context, i.e., to leave the 
question to agency discretion.' '').
    We also disagree with the assertion in the comments that the SUNSET 
final rule is HHS's current ``plan.'' As described above, HHS has had a 
retrospective review plan in place since 1981, which was unacknowledged 
in the SUNSET final rule. Under that plan, among other things, the 
Department reviews regulations that have or will have a SEISNOSE and 
identifies processes and principles that guide such reviews, including 
principles for prioritizing those reviews. Because the SUNSET final 
rule never became effective, the Department has never implemented the 
SUNSET final rule as its retrospective review plan. Instead, HHS's 
longstanding plan remains operative.
    Furthermore, as discussed in the Withdrawal NPRM and as noted by 
the commenters to that proposal, the Department has a meaningful track 
record of retrospective regulatory review. HHS conducts retrospective 
reviews of its regulations with impacts on small entities and publishes 
notice of the reviews in the Federal Register. Additionally, as 
acknowledged in the SUNSET final rule, the Department in 2016 and 2019 
issued final rules resulting from section 610 reviews updating the 
requirements of participation in the Medicare and Medicaid programs for 
hospitals and critical access hospitals \21\ and long-term care 
facilities.\22\ These rulemakings, among other things, allowed these 
entities greater flexibility in meeting the requirements and eliminated 
unnecessary, obsolete, or overly burdensome requirements.\23\
---------------------------------------------------------------------------

    \21\ See Medicare and Medicaid Programs; Regulatory Provisions 
to Promote Program Efficiency, Transparency, and Burden Reduction; 
Fire Safety Requirements for Certain Dialysis Facilities; Hospital 
and Critical Access Hospital (CAH) Changes to Promote Innovation, 
Flexibility, and Improvement in Patient Care, 84 FR 51732 (Sept. 30, 
2019) (RIN 0938-AT23); see also Semiannual Regulatory Agenda, 84 FR 
29633 (June 24, 2019) (merged with 0938-AT23).
    \22\ See Medicare and Medicaid Programs; Reform of Requirements 
for Long-Term Care Facilities, 81 FR 68688 (Oct. 4, 2016); see also 
Regulatory Agenda, 81 FR 94754 (Dec. 23, 2016) (0938-AR61).
    \23\ See, e.g., Medicare and Medicaid Programs; Regulatory 
Provisions to Promote Program Efficiency, Transparency, and Burden 
Reduction; Fire Safety Requirements for Certain Dialysis Facilities; 
Hospital and Critical Access Hospital (CAH) Changes to Promote 
Innovation, Flexibility, andImprovement in Patient Care, 84 FR 51732 
(Sept. 30, 2019).
---------------------------------------------------------------------------

    As described in the Withdrawal NPRM and as noted by commenters to 
that proposal, the Department also has undertaken several other recent 
and significant retrospective regulatory review efforts. Several 
commenters noted the 2015 CMS initiative to modernize Medicaid Managed 
Care regulations for Medicaid and CHIP beneficiaries, and we also noted 
in the Withdrawal NPRM that the CMS Office of Burden Reduction and 
Health Informatics works to eliminate over-burdensome and unnecessary 
regulations. Commenters additionally noted that the Department's 2011 
Plan for Retrospective Review of Existing Rules,\24\ an initiative 
developed in accordance with E.O. 13563 and E.O. 13610, and plans the 
Department subsequently published from Fiscal Year 2012 through 2016, 
have served as a framework for its retrospective review of existing 
regulations. Under these plans, the Department identified rules that 
could be potentially eliminated as obsolete, unnecessary, burdensome, 
or counterproductive or that could be modified to be more effective, 
efficient, flexible, and streamlined. Additionally, as noted in the 
Withdrawal NPRM, the Department, in response to E.O. 13771, ``Enforcing 
the Regulatory Reform Agenda,'' established a Regulatory Reform Task 
Force that oversaw an effort to evaluate existing regulations and make 
recommendations to the Secretary regarding their repeal, replacement, 
or modification, consistent with applicable law. While this E.O. has 
since been revoked, the published summary reports of these reviews for 
Fiscal Years 2018-2020 are available on the HHS website.\25\
---------------------------------------------------------------------------

    \24\ Improving Regulation and Regulatory Review, 76 FR 3821 
(Jan. 21, 2011).
    \25\ FY 2021 Annual Performance Plan and Report--Regulatory 
Reform, HHS, https://www.hhs.gov/about/budget/fy2021/performance/regulatory-reform/index.html.
---------------------------------------------------------------------------

    Also noted in the Withdrawal NPRM, numerous additional regulatory 
efforts by HHS routinely involve the review of regulations. The 
Department provides technical assistance to Congress on proposed 
legislation, which quite often requires an assessment of the proposal's 
impact on current regulations. FDA also reviews regulations in 
responding to certain citizen petitions submitted

[[Page 32264]]

under 21 CFR 10.30, requesting changes in FDA regulations. 
Additionally, it is common for new HHS regulations to amend, revise, or 
modify sections of regulations in order to update, replace, or rescind 
requirements, or to add new definitions or clarifications, which 
inherently entails review of these sections.\26\ As another example, 
regulations are reviewed to determine if guidance documents are needed 
to provide recommendations for complying with the regulation, which is 
particularly important when the regulation is necessarily general or 
broad to accommodate scientific and other innovation changes, and 
guidance is helpful to consider applicability of the regulatory 
provisions.
---------------------------------------------------------------------------

    \26\ For example, the regulations FDA issued to implement FSMA 
included both the addition of new sections of regulation and 
revisions and modifications to existing sections. See FSMA Rules & 
Guidance for Industry (available at https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-rules-guidance-industry#Rules).
---------------------------------------------------------------------------

    All of these initiatives demonstrate HHS's commitment to reviewing 
its regulations. Thus, the suggestion in the comments that HHS will not 
adequately conduct periodic review under section 610 of the RFA moving 
forward absent the rule is groundless and speculative. HHS is committed 
to effective and appropriate retrospective review of its regulations 
and looks forward to exploring ways to improve its processes through 
means other than binding regulations.
    Accordingly, the Department believes that the SUNSET rule is not 
necessary to ensure its compliance with section 610 and that its 
ability to undertake regulatory review efforts in the future would be 
undermined by complying with the unnecessary and burdensome 
requirements of the SUNSET final rule.
    Comment: Several comments asserted that HHS has essentially 
admitted in the SUNSET final rule that, absent the rule, it does not 
otherwise comply with the RFA. One comment asserted that HHS admitted 
in the SUNSET final rule that ``all prior plans'' for retrospective 
review did not meet the requirement to publish a plan under section 610 
``because each prior plan hopelessly failed to provide for any review 
of each regulation within ten years, if ever.'' The comment also cited 
the following statements in the SUNSET final rule: HHS has had 
``limited success in performing retrospective regulatory review,'' 86 
FR 5738; ``the Department's efforts to comply with 5 U.S.C. 610 have at 
times been lacking,'' id. at 5696; and ``The Department's experience 
over the last forty years is that, absent a strong incentive such as 
the potential expiration of a regulation, the Department will not 
review an adequate number of its regulations,'' id. at 5739. Another 
comment asserted that HHS admitted that many of its rules have remained 
untouched for years. Two of these comments questioned the Withdrawal 
NPRM's assertion that many rules have remained untouched because they 
work as intended, asserting that the Withdrawal NPRM does not provide 
evidence to support this assertion. One comment asserted that if a rule 
finalized in the 1980s or 1990s is working as intended, that means it 
is likely out of date because rule's drafters could not have envisioned 
the technological and informational improvements that have taken place 
since the rule's promulgation.
    Response: The Department disagrees with the comments that the 
SUNSET final rule concluded or demonstrated that HHS does not comply 
with the RFA absent that rule, but, to the extent that the SUNSET final 
rule is understood to convey that conclusion, we now think that 
conclusion is wrong. First, the SUNSET final rule does not state that 
``all prior plans'' for the Department's retrospective review do not 
satisfy section 610(a), nor could it. For example, as explained in a 
prior comment response, the Department in 1981 published in the Federal 
Register a plan for retrospective review that directly responds to the 
requirements under the RFA and provides for the Department's periodic 
review of regulations that have or will have a SEISNOSE.\27\ Thus, HHS 
fulfilled section 610(a)'s ``plan'' requirement long before the 
promulgation of the SUNSET final rule. Notably, the SUNSET final rule 
does not even refer to this plan, let alone assert that it does not 
satisfy section 610(a)'s requirements.
---------------------------------------------------------------------------

    \27\ See Notice of Plan for Periodic Review of Rules, 46 FR 
36332 (July 14, 1981).
---------------------------------------------------------------------------

    Second, neither the statements from the SUNSET final rule cited by 
the comments, nor the evidence cited for those statements, establish 
noncompliance or support the comments' conclusion that HHS does not 
otherwise comply with the RFA. For example, the SUNSET final rule's 
statement that the Department has had ``limited success in performing 
retrospective regulatory review'' does not assert that the Department 
does not comply with section 610 specifically. As the SUNSET final rule 
shows, the Department under the previous administration expressed the 
policy position that extensive retrospective review, across the 
Department's entire regulatory portfolio, was appropriate and should be 
prioritized above other Department priorities; its statements of 
``limited success,'' ``lacking'' efforts, and ``adequate'' review must 
be understood in the context of these prior expectations and priorities 
rather than compliance with the RFA. Furthermore, the evidence the 
Department cited as support also does not specifically pertain to the 
Department's section 610 reviews or necessarily reveal anything about 
them. Specifically, this evidence includes: (1) An artificial 
intelligence (AI) data analysis of HHS regulations identifying that 
``85% of Department regulations created before 1990 have not been 
edited; the Department has nearly 300 broken citation references in the 
CFR; and there are more than 50 instances of HHS regulatory 
requirements to submit paper documents in triplicate or 
quadruplicate''; and (2) a 2018 study estimating that 68% of Federal 
regulations have never been updated. 86 FR 5710. The SUNSET final rule 
does not assert that the HHS regulations identified in this analysis 
are regulations with a SEISNOSE subject to section 610, and there 
appears to be no reason to assume that is the case. See 86 FR 5710 
(acknowledging that AI ``cannot at this time easily determine if a 
regulation satisfies the criteria listed in 5 U.S.C. 610''). Indeed, 
based on the SUNSET final rule's estimate that only 15% of the 
Department's regulations have or will have a SEISNOSE, it is possible 
that none of the regulations identified in either study are rules that 
have or will have a SEISNOSE. Thus, there appears to be no reason to 
conclude that the rules identified as unedited or flawed are rules with 
SEISNOSE that should be reviewed under section 610.\28\
---------------------------------------------------------------------------

    \28\ Commenters to the SUNSET proposed rule also expressed 
concern that the methodology of the AI review was never made public, 
and the SUNSET final rule confirmed that the ``Department did not 
notify the public about this research project.'' 86 FR 5710.
---------------------------------------------------------------------------

    Another HHS statement cited by the comment--that ``the Department's 
efforts to comply with 5 U.S.C. 610 have at times been lacking,'' 86 FR 
5696--also does not assert or establish that the Department does not 
comply with section 610. The statement merely suggests a belief that, 
``at times,'' the Department could have improved its processes for 
retrospective review under section 610. It does not explicitly assert 
that the Department, then or now, fails to comply with the RFA. 
Additionally, like the data discussed above, the data the statement 
cites as support does not

[[Page 32265]]

pertain specifically to reviews conducted under section 610. 
Specifically, the statement cites the number of retrospective analyses 
the Department has conducted in response to E.O. 13563. 86 FR 5696. 
However, E.O. 13563, unlike section 610, does not contemplate periodic 
review of only rules with a SEISNOSE for the purpose of minimizing 
SEISNOSE but instead applies to ``existing significant regulations'' 
for the purpose of assessing a far broader set of factors not focused 
on small entities, including ``whether any such regulations should be 
modified, streamlined, expanded, or repealed . . . to make [an] 
agency's regulatory program more effective or less burdensome in 
achieving the regulatory objectives.'' See Improving Regulation and 
Regulatory Review, 76 FR 3821, 3822 (Jan. 18, 2011). Therefore, the 
Department's reviews conducted in response to that E.O. do not 
necessarily indicate anything about the number of reviews the 
Department has conducted or should consider conducting under section 
610. The SUNSET final rule itself appears to recognize the limited 
value of these data by concluding only that ``[t]hese findings are 
consistent with government assessments that the Department's efforts to 
comply with 5 U.S.C. 610 have at times been lacking.'' 86 FR 5696 
(emphasis added).
    The final HHS statement cited by the commenter--``The Department's 
experience over the last forty years is that, absent a strong incentive 
such as the potential expiration of a regulation, the Department will 
not review an adequate number of its regulations''--is equally flawed. 
Again, this statement does not explicitly address the adequacy of the 
Department's reviews of regulations under section 610 but only 
generally refers to ``review . . . of [ ] regulations.'' Moreover, as 
explained above, the statement's implication that the Department has 
not conducted an ``adequate'' number of reviews must be understood in 
the context of the Department's policy position under the previous 
administration that extensive retrospective review across its entire 
regulatory portfolio was appropriate and should be prioritized above 
other agency priorities.
    Third, the SUNSET final rule's discussion of the Department's 
section 610 compliance and record of retrospective review contains 
errors and misstatements. In relying on studies purporting to 
demonstrate that HHS's regulations have not been edited or are 
otherwise flawed, the SUNSET final rule appears to incorrectly assume 
that the age of a regulation and the fact that it has not been edited 
for some period of time suggests that the regulation should be and has 
not been reviewed under section 610 or pursuant to any of the 
Department's numerous regulatory review efforts. See 86 FR 5710 
(concluding the AI data ``suggested that large numbers of Department 
regulations would benefit from retrospective review''); id. at 5738 
(``These findings suggest regulations are not being updated to reflect 
evolving economic conditions and technology, even though this is a goal 
of the RFA.''). As the Withdrawal NPRM explained, numerous agency 
efforts involving the review of regulations do not result in a change 
in the regulation. Moreover, section 610(a) explicitly contemplates 
unchanged regulations, stating that ``[t]he purpose of the review shall 
be to determine whether such rules should be continued without change, 
or should be amended or rescinded'' (emphasis added). Also, as noted in 
the Withdrawal NPRM, the broken links and other typographical errors 
identified through the AI review were successfully addressed as part of 
the HHS ``Regulatory Clean-Up Initiative,'' a final rule published on 
November 16, 2020, 85 FR 72899, that made miscellaneous corrections, 
including correcting references to other regulations, misspellings and 
other typographical errors in regulations issued by FDA, CMS, the 
Office of the Inspector General, and the ACF. In addition, FDA issued a 
final rule to amend regulations on medical device premarket submissions 
to remove requirements for paper and multiple copies and replace them 
with requirements for a single submission in electronic format.\29\
---------------------------------------------------------------------------

    \29\ ``Medical Device Submissions: Amending Premarket 
Regulations That Require Multiple Copies and Specify that Paper 
Copies To Be Required in Electronic Format,'' 84 FR 68334 (Dec. 16, 
2019).
---------------------------------------------------------------------------

    The assumption that unedited rules have not been reviewed is 
incorrect for the additional reason that many rules setting industry 
standards have remained untouched for years, not from neglect, but 
because they work as intended. The OMB memo offering guidance to heads 
of executive departments and agencies on implementation of E.O. 13563 
explicitly states that, in conducting retrospective analysis of 
existing rules: ``Agency plans should not, of course, call into 
question the value of longstanding agency rules simply because they are 
longstanding. Many important rules have been in place for some time.'' 
\30\ The Withdrawal NPRM points to numerous longstanding regulations 
that bring efficiencies to industry by clarifying applicable statutory 
obligations, such as food regulations involving nutrition, food 
labeling, standards of identity, food ingredients, and color additives. 
Furthermore, the Withdrawal NPRM cited comments to the SUNSET proposed 
rule confirming that these longstanding regulations create important 
efficiencies for regulated industry. By contrast, the commenter offered 
no support for its assumption that the age of a rule and the fact that 
it has not been edited must mean that it is out of date with respect to 
its technological and informational requirements. Moreover, even if 
certain of such requirements could be updated to reflect technological 
advances, the commenter does not explain why that would necessarily 
mean that the rule has or will have a SEISNOSE and should be reviewed 
under section 610. To have a SEISNOSE, a rule must have a significant 
economic impact on a substantial number of small entities, and the 
Department considers a rule to have a SEISNOSE if it has at least a 
three percent impact on revenue on at least five percent of small 
entities. See, e.g., 86 FR 5749. Again, based on the SUNSET final 
rule's estimates, only 15% of the Department's regulations have a 
SEISNOSE, 86 FR 5737, which suggests that many, or potentially all, of 
the regulations the commenter claims have outdated technological 
requirements are not regulations with SEISNOSE subject to section 610 
review.
---------------------------------------------------------------------------

    \30\ OMB Memorandum M-11-10, ``Executive Order 13563, `Improving 
Regulation and Regulatory Review' '' (Feb. 2, 2011) (available at 
https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2011/m11-10.pdf).
---------------------------------------------------------------------------

    The SUNSET final rule made similar errors with respect to other 
data it cited in its discussion of the Department's RFA compliance and 
record of retrospective review. Specifically, the SUNSET final rule 
cited a review of HHS's entries in the semiannual Unified Agenda over 
the last ten years, which identified three entries for final 
rulemakings resulting from section 610 reviews. See 86 FR 5737. Based 
on these data, the SUNSET final rule suggested that, during that ten-
year time period, the Department conducted section 610 reviews of only 
26 of its 370 rulemakings previously determined to have a SEISNOSE. See 
id. at 5737-38 (referring to ``lax compliance with periodic review 
requirements under the . . . [ ]RFA[ ]''). However, in drawing this 
conclusion, the SUNSET final rule appears to improperly assume that the 
three final rulemakings resulting in section 610 reviews (which it 
estimated

[[Page 32266]]

amended CFR sections equivalent to approximately 26 rulemakings) 
represented the only section 610 reviews conducted by the Department 
during this ten-year time period. See id. at 5737 n.213. In so 
concluding, the SUNSET final rule again relied on the flawed assumption 
that a section 610 review must result in the amendment of a rule or a 
new rule, and thus excluded all other section 610 reviews indicated in 
the Unified Agenda during that time period. As a result of that 
exclusion, the Department incorrectly assessed the scope of rulemakings 
the Department reviewed under section 610 during the last ten years.
    The SUNSET final rule's discussion of the Department's RFA 
compliance also contains misstatements and other errors. The SUNSET 
final rule cited three ``examples of regulations that [commenters] and/
or Congress have requested the Department to review, but that the 
commenters claimed were not reviewed.'' 86 FR 5696. Although the SUNSET 
final rule did not take a firm position on the status of these 
examples, the implication that these matters are inactive is factually 
incorrect. For example, the Fall 2021 Unified Agenda includes planned 
action to harmonize the differences between the Basic HHS Policy for 
the Protection of Human Research Subjects (45 CFR part 46, subpart A) 
and the FDA regulations for the protection of human subjects (21 CFR 
parts 50 and 56).\31\ The Fall 2021 Unified Agenda also includes 
several planned regulatory actions by FDA's Center for Veterinary 
Medicine (CVM) to revise \32\ and in certain instances withdraw several 
regulations based, in part, on the comments received in dockets issued 
in 2017 seeking comments and information from interested parties to 
help FDA identify existing regulations and related paperwork 
requirements that could be modified, repealed, or replaced, consistent 
with the law, to achieve meaningful burden reduction while allowing us 
to achieve our public health mission and fulfill statutory obligations. 
In addition, CMS revised the Medicare Beneficiary Program Manual 
(MBPM), in accordance with the national settlement agreement in the 
Jimmo v. Sebelius litigation.\33\ Moreover, the SUNSET final rule did 
not assert that these regulations have or will have a SEISNOSE, or even 
that the commenters or Congress asserted that they do, and thus, the 
rule failed to demonstrate how, if at all, these examples implicate the 
Department's retrospective review efforts under section 610.
---------------------------------------------------------------------------

    \31\ See Protection of Human Subjects and Institutional Review 
Boards, RIN 0910-A107 (Fall 2021) (available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI07).
    \32\ See, e.g., Current Good Manufacturing Practice, Hazard 
Analysis, and Risk-Based Preventive Controls for Food for Animals, 
RIN 0910-AI24 (Fall 2021) (available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI24); Phased Review 
of New Animal Drug Applications, Electronic Submission, and Master 
Files, RIN 0910-A135 (Fall 2021) (available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI35); Revision of Requirements for the Establishment and 
Maintenance of Records Related to Medicated Animal Feed and 
Veterinary Feed Directive Drugs Office of Information and Regulatory 
Affairs, RIN: 0190-AI67 (Fall 2021) (available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI67).
    \33\ See Medicare Beneficiary Policy Manual, Chapters 7 (Home 
Health), 8 (Skilled Nursing Facilities) and 15 (Outpatient Therapy) 
(available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS012673). We note that 
the SUNSET final rule referred to a comment stating that regulations 
covering access to skilled therapy services had not been updated to 
reflect the national settlement in Jimmo v. Sebelius. See 86 FR 
5696. However, the settlement agreement requires HHS to amend the 
Medicare Benefit Policy Manual to clarify the coverage standards, 
not to amend Medicare regulations. See ``IX. Injunctive Provisions'' 
in Settlement Agreement, at 8-14 (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-Settlement-Agreement.pdf).
---------------------------------------------------------------------------

    The remaining data cited in the SUNSET final rule's discussion of 
the Department's RFA compliance lacks relevance to that discussion. For 
example, the SUNSET final rule asserted that good governance 
stewardship actions were deprioritized and relegated to ``rainy day'' 
activities the Department operating divisions would get to when they 
could, citing a review conducted in 2019 that entailed an AI data 
analysis of HHS regulations. 86 FR 5697. As already discussed in this 
response, the AI review results do not indicate whether any of the 
rules it identified as not updated or otherwise flawed have or will 
have a SEISNOSE, and thus the rule fails to demonstrate how, if at all, 
this review implicates the Department's activities under section 610. 
Furthermore, as noted above, the broken links and other typographical 
errors identified through the AI review process were successfully 
addressed as part of the HHS ``Regulatory Clean-Up Initiative.'' As 
another example, the SUNSET final rule also cited ``government 
assessments that the Department's efforts to comply with 5 U.S.C. 610 
have at times been lacking,'' 86 FR 5696; however, these sources at 
most indicate at times in the past the Department could have reviewed 
more rules under section 610, and therefore, these sources do not 
demonstrate that the Department does not currently comply.\34\
---------------------------------------------------------------------------

    \34\ See, e.g., Curtis W. Copeland, Cong. Rsch. Serv., RL32801, 
Reexamining Rules: Section 610 of the Regulatory Flexibility Act 8 
(2008) (``[I]t would be reasonable to expect that, since [certain 
departments] indicated that they intended to issue a large number of 
rules each year with a significant effect on small entities, those 
same agencies would need to reexamine a large number of rules each 
year under Section 610.''); U.S. Accountability Off., GAO/GGD-94-
105, Regulatory Flexibility Act: Status of Agencies' Compliance 
(1994) (citing an SBA report from 1983 suggesting potential for 
improving the Department's review plan).
---------------------------------------------------------------------------

    The SUNSET final rule's discussion of ``[m]achine-learning tools . 
. . [that] demonstrate the complexity of Department rules'' similarly 
lacks relevance to the Department's compliance with section 610. The 
rule cites data showing that the Department's regulations in 2019, 
``based on the amount of information contained in text,'' were ``more 
complex than a typical Shakespeare play,'' and notes that ``reducing 
complexity is another goal of the RFA.'' 86 FR 5738. However, as with 
much of the data already discussed, these data do not purport to relate 
specifically to rules that have or will have a SEISNOSE, and thus, 
again do not necessarily implicate the Department's efforts under 
section 610. Moreover, even if these data were specific to regulations 
with a SEISNOSE, the Department does not agree with the SUNSET final 
rule that these data demonstrate that its regulations are overly 
complicated. As the SUNSET final rule itself acknowledges, complexity 
in the Department's regulations ``is not . . . surprising given that 
the regulations often involve science, engineering, or highly technical 
material.'' 86 FR 5738.
    Moreover, the Department disagrees that ``the amount of information 
in text'' is a reliable proxy for complexity that is unnecessary or 
undesirable given that, in the Department's experience, providing more 
information in a regulation can often enhance clarity. For example, in 
FDA's experience, often in response to a proposed rule, commenters will 
request that the agency provide examples in the codified text which can 
lengthen the text but clarify the requirements. For example, a good 
manufacturing practices rule may require that ``qualified personnel 
handle x.'' So, to better explain what constitutes ``qualified 
personnel,'' the codified text may include examples such as education, 
years of work experience, etc. The examples are general and not 
prescriptive so that the regulated entity can exercise flexibility in 
determining what is applicable to their industry and their unique

[[Page 32267]]

manufacturing processes. Thus, while the codified text may be longer, 
it is not inherently more complex or burdensome.
3. Policy Considerations Related to Retrospective Review
    Comment: Some commenters opposed finalizing the Withdrawal NPRM 
because, in their view, there is a need for HHS to conduct more 
retrospective review. Several commenters asserted that HHS regulations 
are outdated. One comment stated that greater retrospective review is 
needed because ``the costs of regulations frequently exceed what was 
projected at the time of promulgation,'' citing information from the 
preamble to the SUNSET final rule. Another comment stated that there is 
an ``overall lack of an evidentiary basis for many of [HHS's] 
regulations'' and cited a working paper \35\ criticizing the 
Department's retrospective review and HHS regulations' identification 
of a problem that would be solved by the regulation. Several comments 
stated that widespread retrospective review is appropriate because, if 
the public must comply with HHS regulations, HHS should have to review 
them. Approximately ten identical anonymous comments stated that the 
Withdrawal NPRM should not be finalized because withdrawal or repeal of 
the SUNSET final rule would ensure Americans continue to be subject to 
costly, burdensome regulations and, before adding additional burdens on 
the American people, HHS should determine if its existing regulations 
are helping or harming them.
---------------------------------------------------------------------------

    \35\ Ellig, Jerry, ``Evaluating the Quality and Use of 
Regulatory Impact Analysis: The Mercatus Center's Regulatory Report 
Card 2008-2013'' Mercatus Center at George Mason University (July 
2016) (available at https://www.mercatus.org/publications/regulation/evaluating-quality-and-use-regulatory-impact-analysis).
---------------------------------------------------------------------------

    Response: HHS does not agree that the SUNSET final rule should be 
retained for any of the reasons cited by commenters. First, even 
assuming that HHS would benefit from more retrospective review, none of 
these comments explain why the onerous procedures and compressed 
timeframes of the SUNSET final rule are necessary or desirable to 
achieve that goal. Upon review, HHS believes that the procedures set 
forth in the SUNSET final rule would be a poor method for achieving the 
goal of improved regulations through retrospective review because the 
pressure created by the SUNSET final rule process would undermine the 
quality of the Department's reviews. The SUNSET final rule's focus on 
small-entity impacts also does not seem directly responsive to these 
calls for large-scale reconsideration of HHS regulations.
    Second, HHS does not agree that the commenters have demonstrated a 
need for widespread retrospective review. For example, HHS disagrees 
with the general proposition that its regulations are outdated. The 
only evidence offered to support these assertions is the evidence 
presented in the SUNSET final rule, which is discussed in the previous 
comment response. For example, commenters cited the fact that many HHS 
regulations issued prior to 1990 have not been edited. But that fact 
does not show that edits are needed, and it certainly does not show 
that the underlying policies of those regulations are flawed or that 
the regulations have impacts that should be reassessed. Similarly, the 
fact that broken links or typographical errors may exist in HHS 
regulations does not stand for a broader proposition that the 
underlying policies or impact analyses in the regulations are outdated. 
Nor is automatic expiration of a regulation an appropriate response to 
broken links or typographical errors in that regulation. Overall, HHS 
rejects the conclusion that our regulations are generally ``outdated'' 
because, as discussed throughout this preamble, we review regulations 
under many processes, regularly engage with stakeholders regarding the 
effects of our regulations, and craft regulations to be flexible and to 
account for technological advancement and changed circumstances over 
time.
    HHS has also reconsidered the evidence presented in the SUNSET 
final rule concerning cost-benefit projections at the time of 
promulgation, and we now determine that it is of limited, if any, 
relevance to HHS. In particular, in order to reach the conclusion that 
limitations in ``government projections'' counsel in favor of 
widespread retrospective regulatory review specifically for HHS, the 
SUNSET final rule relied on a 2005 OMB report that compared pre- and 
post-regulation cost-benefit calculations for 47 regulations at five 
agencies. However, the report did not include HHS or any HHS 
regulations.\36\ Moreover, the 2005 OMB report looked at rules dating 
back from 1975 to 1996.\37\ The SUNSET final rule also relied upon 
another study that evaluated OMB's 2005 report to Congress on the 
benefits and costs of Federal regulations and a 2005 analysis sponsored 
by the SBA, but this study did not evaluate any HHS regulations.\38\ In 
addition, the SUNSET final rule presented, as evidence of inaccuracies 
in regulatory cost-benefit analysis, a publication that looked at eight 
regulations and included only one HHS regulation, an FDA rule related 
to food safety.\39\ One single FDA regulation is not a sufficiently 
representative sample from which any generalizable conclusions may be 
drawn regarding HHS regulations. Finally, another study relied upon in 
the SUNSET final rule pertained to only one regulation promulgated by 
the Environmental Protection Agency (EPA) to address arsenic in 
drinking water.\40\ It is not possible to draw any conclusions about 
HHS regulations from a study looking at just one EPA regulation.
---------------------------------------------------------------------------

    \36\ OMB, Validating Regulatory Analysis: 2005 Report to 
Congress on the Costs and Benefits of Federal Regulations and 
Unfunded Mandates on State, Local, and Tribal Entities (2005), at 42 
(available at https://perma.cc/R8LX-BQMJ) (comparing pre- and post-
regulation cost-benefit data for regulations promulgated by the 
Occupational Safety and Health Administration, the National Highway 
Traffic Safety Administration, the Environmental Protection Agency, 
the Department of Energy, and the Nuclear Regulatory Commission).
    \37\ Id.
    \38\ See 86 FR5697 (citing Winston Harrington, Grading Estimates 
of the Benefits and Costs of Federal Regulation, Res. for the 
Future, Discussion Paper 06-39 (2006)).
    \39\ See 86 FR 5698 (citing Richard Morgenstern, Retrospective 
Analysis of U.S. Federal Environmental Regulation, 9 J. of Benefit 
Cost Anal., no. 2., 285-304 (2018)).
    \40\ See 86 FR 5698 (citing Cynthia Morgan & Nathalie B. Simon, 
National primary drinking water regulation for arsenic: A 
retrospective assessment of costs, 5 J. Benefit Cost Anal. no. 2 
(2014)).
---------------------------------------------------------------------------

    The Department also strongly disagrees that there is a lack of an 
evidentiary basis for many of its regulations. At the most basic level, 
the Department relies on evidence to guide it in its public health 
mission, including its rulemaking efforts. The economic analyses for 
rulemakings include qualitative and quantitative consideration of the 
impacts. Evidence, data, and analyses are considered to the extent 
available and are reflected in the RIAs for the regulations. The 
analyses and supporting data are included and made publicly available 
when the rulemaking is published. The same principles apply to the 
entire rulemaking.
    We are also not persuaded that the working paper cited by the 
commenter supports the proposition that HHS's regulations lack an 
evidentiary basis. Critically, the paper limited its assessment to 
preliminary regulatory impact analyses accompanying proposed 
economically significant regulations. This approach discounts any 
additional evidence gathered between a notice of proposed rulemaking 
and publication of a final rule, including evidence from public

[[Page 32268]]

comment incorporated into the final regulatory impact analysis. Thus, 
the commenter likely errs when transferring the findings of the report 
to finalized regulations, since HHS is more likely to publish final 
rules of actions that are justified. As an additional concern, the 
underlying report adopts several assessment criteria that do not speak 
to the quality of evidence presented in the preliminary regulatory 
impact analyses. For example, the paper awards points based on writing 
style, including whether the RIA is ``written in plain English (light 
on technical jargon and acronyms, well organized, grammatically 
correct, direct language used),'' and on how well a non-specialist 
reader would understand the analysis, results, and conclusion. Although 
these factors may represent desirable practices, they do not relate to 
the evidentiary basis of a regulation. The commenter highlights the 
paper's findings related to retrospective review; however, this score 
relates to whether a preliminary regulatory impact analysis discusses 
whether ``the proposed rule establish[es] measures and goals that can 
be used to track the regulation's results in the future'' and whether 
it ``indicate[s] the data it will use to assess the regulation's 
performance in the future and establish[es] provisions for doing so?'' 
\41\ Similarly, although these may represent desirable practices, they 
do not speak to the evidence contained in regulatory impact analysis of 
HHS regulations. Finally, we note that the paper covers proposed rules 
published between 2008 and 2013. It is quite likely that a more recent 
assessment would yield higher scores for HHS as regards some of the 
scoring criteria. For example, the paper assigned points based on 
accessibility, including whether an agency publishes proposed rules and 
RIAs on its website. FDA now maintains a website containing Economic 
Impact Analyses of FDA regulations, which contains links to at least 
170 regulatory impact analyses the agency has developed since 2012.\42\ 
Other HHS agencies currently routinely publish preliminary RIAs in the 
same document as notices of proposed rulemaking in the Federal 
Register, which is also available online.\43\ Thus, we anticipate that 
a more recent assessment of the availability of RIAs online would yield 
higher scores in this category. The report also assigned points based 
on the verifiability of the models and assumptions used in the 
analysis, including whether the RIAs include citations to sources that 
justify the models or assumptions. Since the time of the paper, HHS has 
updated its approach to valuing reductions in mortality risks in 
benefit-cost analysis by commissioning a criteria-driven review of the 
empirical literature on the value per statistical life (VSL),\44\ and 
has published subsequent documentation of the Department's approach to 
updating the VSL to account for income growth and inflation.\45\ HHS 
also commissioned research on the approaches used to value changes in 
time use and research on estimating impacts related to medical costs in 
RIAs, publishing conceptual frameworks and best practices on each of 
these topics.46 47 HHS also published Guidelines for 
Regulatory Impact Analysis in 2016, which includes best practices for 
conducting prospective and retrospective analysis.\48\ Since HHS RIAs 
routinely reference these documents, as well as the models and 
assumptions contained in these documents, we anticipate that a more 
recent assessment of the verifiability of the models and assumptions 
used in RIAs would also yield higher scores in this category.
---------------------------------------------------------------------------

    \41\ https://www.mercatus.org/system/files/Ellig-Reg-Report-Card-Eval-v1.pdf. Quotes are located on pages 14 and 94.
    \42\ https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations.
    \43\ https://www.federalregister.gov/.
    \44\ Robinson, L.A., & Hammitt, J.K., ``Valuing reductions in 
fatal illness risks: Implications of recent research,'' 25(8) Health 
Economics 1039-52 (2016).
    \45\ Office of the Assistant Secretary for Planning and 
Evaluation, U.S. Department of Health and Human Services, ``Appendix 
D: Updating Value per Statistical Life (VSL) Estimates for Inflation 
and Changes in Real Income'' (June 2021) (available at https://aspe.hhs.gov/reports/updating-vsl-estimates).
    \46\ Office of the Assistant Secretary for Planning and 
Evaluation, U.S. Department of Health and Human Services, ``Valuing 
Time in U.S. Department of Health and Human Services Regulatory 
Impact Analyses: Conceptual Framework and Best Practices'' (June 
2017) (available at https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework).
    \47\ Office of the Assistant Secretary for Planning and 
Evaluation, U.S. Department of Health and Human Services, 
``Estimating Medical Costs for Regulatory Benefit-Cost Analysis: 
Conceptual Framework and Best Practices'' (June 2017) (available at 
https://aspe.hhs.gov/reports/estimating-medical-costs-regulatory-benefit-cost-analysis-conceptual-framework-best-practices).
    \48\ https://aspe.hhs.gov/reports/guidelines-regulatory-impact-analysis.
---------------------------------------------------------------------------

    The Department also does not agree that the fact that regulated 
entities must comply with HHS regulations is a reason to retain the 
SUNSET final rule. The commenters appear to suggest that widespread 
review of regulations is needed as a sort of quid pro quo for regulated 
entities to comply with those regulations. But to the extent that these 
comments are purporting to protect the interests of regulated entities, 
HHS does not agree that the SUNSET final rule protects those interests. 
We have now determined, as discussed in Section VI, that the quantified 
costs of the rule far outstrip the quantified benefits, and the 
expiration provision threatens the basic regulatory frameworks on which 
regulated entities rely. Furthermore, the Department has finite 
resources, and we seriously doubt that deploying those resources for 
roving review under the SUNSET final rule, rather than other 
initiatives important to regulated entities, is in these entities' 
interest. We note that almost no regulated entities submitted comments 
in support of the SUNSET final rule.
    Although some commenters stated that HHS regulations generally are 
burdensome, these commenters did not identify any specific regulations 
or offer support for their assertions. In any event, we disagree with 
the assertion. HHS regulations enhance public health, safety, and 
welfare and provide significant cost savings by, for example: 
Facilitating the implementation of programs to benefit millions of 
stakeholders, including underserved populations; preventing serious 
harm to the public; providing clarity and consistency across the public 
health spectrum to streamline compliance with statutory requirements; 
creating a level playing field for businesses; and boosting consumer 
confidence.
    In general, HHS agrees that there is value in retrospective review, 
but it must weigh that value against the value of other competing 
regulatory objectives that may be of equal or greater importance. 
Weighing those considerations, the Department has determined that the 
SUNSET final rule is not an appropriate way to achieve the goals of 
retrospective review.
    Comment: Some commenters stated that the SUNSET final rule should 
be retained because it provides benefits to the public. These 
commenters stated, for example, that the rule: allows HHS to consider 
new developments in science and medicine, better respect legal rights 
of conscience and religion, and perform more accurate cost-benefit 
analyses; gives ``recurring departmental attention to the impact of HHS 
regulations on small and independent businesses;'' increases 
accountability to real-world impacts; and makes sure that regulations 
``do not unnecessarily burden the American public through sheer 
inertia.'' Some commenters stated that the rule would ``eliminate red 
tape,'' lead to ``faster economic growth'' and ``significant economic 
benefits,'' and ``save lives.'' Certain policy advocacy groups 
suggested that the

[[Page 32269]]

SUNSET final rule benefits individuals because it provides a mechanism 
for every American to have their voice heard.
    Response: HHS does not agree that the SUNSET final rule should be 
retained based on these purported benefits. First, HHS considers 
matters of conscience and religion as relevant and appropriate as a 
matter of course, and has an Office for Civil Rights to address such 
issues as they arise. We do not see how conducting retrospective 
reviews under SUNSET final rule is necessary or even helpful to better 
respect legal rights of conscience and religion.
    Second, for the purported benefits of eliminating red tape, faster 
economic growth, significant cost savings and other types of broad 
economic benefits, and saved lives, HHS considers these speculative and 
not obviously attributable to the SUNSET final rule. The commenters 
make a number of leaps in their analysis to assert these benefits. For 
example, they assume that (1) regulations would be amended or rescinded 
following review under the SUNSET final rule; (2) these amendments and 
rescissions would have overall economic and/or life-saving benefits; 
and (3) no other Department processes would result in these same 
amendments or rescissions. We disagree both with these assumptions and 
the chain of reasoning leading to the conclusion that the SUNSET final 
rule would necessarily have these benefits. As discussed in more detail 
in our preliminary and final regulatory impact analyses, see 86 FR 
59922 and Section VI, the benefit attributable to the SUNSET final rule 
is the benefit of any information learned from completing the 
assessments and reviews. We note that the SUNSET final rule's 
regulatory impact analysis, similarly, contained very little discussion 
of benefits and did not quantify any benefits of the rule. 86 FR 5749.
    Third, for the purported benefit of helping individuals--for 
example, by making it easier for them to participate in the process of 
regulatory review and have their voices heard--we do not agree that the 
SUNSET final rule would provide that benefit. Our view, which is 
informed by many comments on this subject as discussed in detail above, 
is that the SUNSET final rule generally harms individuals. The rule 
poses harm through, among other things, Department and stakeholder 
diversion of resources away from other important initiatives, 
uncertainty, and loss of regulatory programs through expiration. And, 
with respect to regulations that automatically expire, there will have 
been no notice and comment process for the expiration of those specific 
regulations. Even considering in a vacuum the purported benefit of 
increased stakeholder participation, our regulatory impact analysis 
recognizes that the approach of the SUNSET final rule creates greater 
costs for stakeholders. Furthermore, the sheer volume of rulemakings 
under assessment and review risks overwhelming individual commenters 
and preventing their participation.
    Fourth, for the remaining benefits asserted by commenters, such as 
incorporating new scientific information and updating impact analyses, 
HHS recognizes that these could be potential benefits of an 
appropriately targeted and manageable retrospective review scheme. 
Thus, the RIA notes that the final withdrawal rule will result in 
forgone information as a result of not performing the SUNSET final 
rule's assessments and reviews. See Section VI below. However, we 
disagree that the SUNSET final rule would have generated significant 
benefits in these areas that outweigh the costs. Among other things, 
the pace and scope of assessments and reviews, combined with the threat 
of expiration, would likely curtail the careful and thorough 
deliberation needed to produce these types of benefits and could reduce 
the quality of regulatory reviews. Moreover, because HHS already 
undertakes regulatory review under the RFA and otherwise, benefits in 
these areas, if any, would only be incremental over the ones already 
produced.
    In light of the limited nature of the potential benefits, and 
balancing those potential benefits against the significant harms of the 
rule (which include, for example, resource diversion from other key 
programs, uncertainty, and the potential loss of regulations through 
the expiration mechanism), the Department has determined that the 
SUNSET final rule should be withdrawn. The Department recognizes that 
it previously concluded, in the SUNSET final rule, that the value of 
the rule's retrospective review program outweighed any harms associated 
with the rule. However, the Department has since identified multiple 
flaws in its prior analysis that have led it to reconsider and reverse 
this conclusion. Among other things, finalization of the SUNSET final 
rule was premised on a miscalculation of the resources needed to comply 
with the rule. Because of that error, the analysis in the SUNSET final 
rule failed to recognize the effects the rule would have on other key 
programs and initiatives and the likelihood of expiration. The 
Department also previously miscalculated the substantial burdens the 
rule would place on stakeholders. Overall, HHS now recognizes that any 
informational benefits of the rule are greatly outweighed by its harms, 
and that the rule is irreconcilable with the Department's public health 
mission. Thus, HHS is withdrawing this rule.
    Comment: Several commenters referred to various E.O.s issued over 
the years related to retrospective review. One of these commenters 
stated that HHS, in withdrawing the SUNSET final rule, must consider 
compliance with the E.O.s identified in the preamble to that rule.
    Response: First, we note that many of the E.O.s referred to in 
these comments or identified in the SUNSET final rule have been 
revoked, including E.O. 12044, E.O. 12291, E.O. 12498, E.O. 13771, and 
E.O. 13924. Thus, there is no requirement or expectation of 
``compliance'' with these E.O.s.
    Second, HHS has considered these E.O.s and does not agree that they 
provide support for retaining the SUNSET final rule. Most of these 
E.O.s direct agencies to develop plans for the periodic review of 
existing significant regulations to determine whether any such 
regulations should be modified or repealed so as to make the agency's 
regulatory program more effective or less burdensome. One E.O. focuses 
on public engagement and OMB reporting with respect to the same scope 
of retrospective review. HHS already took various actions in response 
to these E.O.s, including publishing a plan and soliciting 
comments.\49\ Moreover, the E.O.s have a different purpose and focus 
than the SUNSET final rule, which purports to focus on minimizing the 
impacts of regulations on small entities. See, e.g., 86 FR 5751 
(defining ``Review'' as ``a process . . . the purpose of which shall be 
to determine whether Sections [of the CFR] . . . should be continued 
without change, or should be amended or rescinded, consistent with the 
stated objectives of applicable statutes, to minimize any significant 
economic impact of the Sections upon a substantial number of small 
entities.'').
---------------------------------------------------------------------------

    \49\ More information about HHS's actions, including HHS's plan, 
progress on the plan, and public engagement, is available here: 
https://www.hhs.gov/open/retrospective-review/index.html.
---------------------------------------------------------------------------

    Thus, we disagree that the E.O.s constitute a reason to retain the 
SUNSET final rule.
    Comment: In the Withdrawal NPRM, the Department invited comment on 
the experience of states and foreign governments implementing laws 
requiring ``sunset reviews.'' A few

[[Page 32270]]

commenters provided an assessment of the positive experience some 
states and foreign governments have had with implementing their own 
sunset laws. These commenters opposed the Withdrawal NPRM and pointed 
to the experience of North Carolina, Missouri, and Texas, whose state 
legislatures have each established a sunset law and a process for the 
review of state regulations that feature a sunset mechanism. One 
commenter stated that North Carolina's process, under which all agency 
rules are slated for automatic repeal in 10 years unless reviewed, 
resulted in the repeal of about one state rule out of every ten 
reviewed. A second comment described the cost savings attributed to the 
Texas Sunset Advisory Commission. A third comment noted that Missouri 
connects a sunset provision to a five-year periodic review requirement 
in a manner very similar to the SUNSET final rule. In contrast, a 
comment submitted by the North Carolina attorney general, together with 
19 other State attorneys general, expressed support for withdrawing the 
SUNSET final rule, noting that the SUNSET final rule posed a direct 
threat to their states' health care systems and the health and safety 
of their residents.
    Response: We appreciate that the commenters provided information in 
response to our request. The SUNSET final rule cited the experience of 
states and foreign governments as a justification for the rule, noting 
that the mechanism of retrospective review being implemented by the 
SUNSET final rule was informed by the experience of states and other 
jurisdictions that allow for the automatic expiration of regulations 
subject to review. See 86 FR 5700 (``experience in the States suggests 
that sunset provisions can be an important tool to ensure reviews take 
place''). However, the SUNSET final rule did not account for myriad 
ways in which those state and international frameworks cited are 
considerably different from each other, nor did it account for their 
considerable differences with the SUNSET final rule.\50\
---------------------------------------------------------------------------

    \50\ See, e.g., N.D. Cent. Code 28-32-18.1 (permitting amendment 
or repeal of rules without complying with the other requirements of 
North Dakota's Administrative Agencies Practice Act relating to 
adoption of rules); 75 OK Stat section 75-307.1 (2014) (directing 
the Oklahoma House and Senate to conduct rule review); Tenn. Code 
Ann. section 4-56-102 (limiting review to procurement rules). One 
state cited had repealed its sunset provision. Rhode Island created 
an Office of Regulatory Reform to review proposed and existing rules 
and regulations, but the statutory provision requiring all agencies 
to conduct periodic review of rules was repealed. See R.I. Gen. Laws 
Ann. tit. 42, ch. 64.13; see also 2016 R.I. Pub. Laws 206 (June 29, 
2016) (repealing section 42-35-3.4 of Rhode Island's Administrative 
Procedures Act).
---------------------------------------------------------------------------

    The Department has given further consideration to differences 
between state sunset laws, such as those of North Carolina, Missouri, 
and Texas, and the HHS SUNSET final rule. These differences include the 
legislative origins, implementation, operations, governing 
administrative law requirements, and the scope, breadth and volume of 
regulations. More specifically, the states' experience with their 
sunset laws is of limited relevance to HHS because of the vastly 
greater scope of national regulations that impact tribal, state and 
local governments, and international stakeholders; the corresponding 
greater extent of the economic and public health impacts of the 
regulations; the amount of Department and stakeholder resources 
consumed by that larger scope; and differences in governing law, 
including the APA. We now conclude that the differences are so stark 
the states' experiences have limited relevance for the Department and 
do not support retention of the SUNSET final rule.
    For example, with respect to North Carolina, the initial assessment 
outlined in its sunset law does not entail the multi-factor review and 
assessment required by the SUNSET final rule to evaluate whether a 
regulation has significant economic impact on a substantial number of 
small entities. Rather, the North Carolina law enacted by the General 
Assembly entails periodic review and expiration based on whether the 
rule is ``necessary with substantive public interest,'' ``necessary 
without substantive public interest,'' or ``unnecessary.'' \51\ Given 
that this framework is starkly different from the framework in the 
SUNSET final rule, and given the differences in the breadth and 
complexity of the underlying HHS regulations as compared to state 
regulations, the state experience implementing its own law does not 
shed much light on how implementation of the SUNSET final rule would 
impact the Department and its stakeholders. For example, the state 
experience does not inform the extent of Federal resources which would 
be diverted from addressing public health goals to undertake the scale 
and pace of reviews required by the SUNSET final rule, and potentially 
defend against challenges to each of those actions.
---------------------------------------------------------------------------

    \51\ N.C. Gen. Stat section 150B-21.3A, ``Periodic Review and 
Expiration of Existing Rules.''
---------------------------------------------------------------------------

    The commenter also contended that continuing to create regulations 
without revisiting them is irresponsible because, with decades passing 
by without review, it is reasonable and likely to expect some portion, 
possibly sizeable, of HHS rules to be obsolete. The commenter asserted 
that North Carolina's experience with regulatory review supports this 
assertion. We disagree. The commenter's characterization of HHS 
regulations was conclusory and not grounded in any actual evaluation of 
current HHS regulations. In particular, it failed to take into account 
the regulatory reviews that have taken place and it assumes without 
evidence that the passage of time alone makes regulations obsolete. 
However, as discussed in greater detail elsewhere in this section, many 
regulations remain unchanged because they work as intended. For 
example, regulations that establish product standards or public service 
programs may not need periodic updates and their automatic expiration 
would cause public harm.
    Under the Texas Sunset Law, the Texas Legislature sets an 
expiration date in an agency's authorizing statute and a review cycle 
to determine whether the Agency should be automatically abolished on 
this date or continued. As part of a review cycle, the Agency must 
submit a self-evaluation report, the public is invited to submit 
comments, and then the Texas Sunset Advisory Commission, a legislative 
advisory body, reviews the information and makes a recommendation 
whether to abolish or continue the agency. If the recommendation is for 
the Agency to continue, the Legislature must pass a bill to continue 
the Agency. As explained by Sunset Advisory Commission, in the self-
evaluation report agencies describe their mission, functions, and 
programs, provide operational and performance data, and identify 
potential issues and opportunities for change through the Sunset 
process.\52\ Thus, the Texas agencies are not required to provide an 
assessment or review of their regulations. Because this scheme differs 
so vastly from the SUNSET final rule, Texas is not an appropriate model 
or comparator for the SUNSET final rule.
---------------------------------------------------------------------------

    \52\ Sunset Advisory Commission, ``Sunset in Texas 2022-2023,'' 
88th Legislature (Sept. 2021) (available at https://www.sunset.texas.gov/public/uploads/files/reports/Sunset%20in%20Texas%202022-23.pdf).
---------------------------------------------------------------------------

    With respect to Missouri, we already explained that the quantity of 
regulations subject to review in that state represents a small fraction 
of HHS regulations, and their substantive scope is far more limited. 
See Section V.B.3. We also note that it was the Missouri General 
Assembly that enacted

[[Page 32271]]

legislation directing State agencies to conduct periodic review of 
rules and rendering rules void if the agency fails to timely file a 
report on their review.\53\ Thus, the Missouri example does not show 
that the relevant agencies themselves view this type of sunset 
framework as advantageous or beneficial to their missions or that they 
would choose of their own volition to allocate their resources in this 
manner. In contrast, Congress has not directed the Department or any 
other agency, under the RFA or any other statute, to adopt a sunset 
mechanism for their regulations.
---------------------------------------------------------------------------

    \53\ Missouri Rev. Stat., Title XXXVI section 536.175.5.
---------------------------------------------------------------------------

    One commenter also cited an Organisation for Economic Cooperation 
and Development (OECD) \54\ report on the ex post review of laws and 
regulations and reiterated that the SUNSET final rule acknowledges that 
some countries have sunset provisions. However, no commenters provided 
substantive information about the experience of foreign governments 
adopting such laws. Thus, the Department concludes that the resource 
allocations of foreign governments, and approaches adopted in countries 
not bound by the U.S. APA, are not instructive for one department of 
the U.S. Government to adopt unilaterally.
---------------------------------------------------------------------------

    \54\ The OECD is forum where 37 democratic governments with 
market-based economies collaborate to develop policy standards to 
promote sustainable economic growth. See https://www.state.gov/the-organization-for-economic-co-operation-and-development-oecd/.
---------------------------------------------------------------------------

    The comment submitted by the North Carolina attorney general and 19 
other State attorneys general in favor of withdrawing the SUNSET final 
rule, reflects that these attorneys general do not share the views of 
the commenters discussed above. Despite a comment indicating the lack 
of reports of accidental expirations of regulations encountered, for 
example, in North Carolina's regulatory reform process, the attorneys 
general stated that the considerably different process embodied by the 
SUNSET final rule would threatens their states' health care systems and 
the health and safety of their residents. We agree with this comment 
and find it notable that an attorney general from a state with sunset 
provisions does not find their experience with the sunset law to be 
beneficial enough to encourage HHS to adopt its own. In sum, as 
discussed above, we conclude that the states' experience with sunset 
laws do not support retention of the SUNSET final rule.

D. Other Legal Comments

    In issuing the Withdrawal NPRM, the Department explained that 
questions had been raised in comments on the SUNSET proposed rule as to 
whether the SUNSET final rule is consistent with the procedural and 
substantive requirements of the APA. 86 FR 59921. Commenters on the 
Withdrawal NPRM discussed these and other legal issues. Below, we 
respond to the comments on (1) the legal issues with the SUNSET final 
rule, (2) legal arguments regarding this withdrawal proceeding, (3) 
proposed modifications to the SUNSET final rule, and (4) other legal 
issues raised in comments.
1. Legal Objections to the SUNSET Final Rule
    Comment: Multiple comments stated that the expiration portion of 
the SUNSET final rule violates the APA because, to amend or repeal a 
rule under the APA, an agency must conduct a notice-and-comment process 
specific to the individual rule being amended or repealed. Various 
comments identified regulations subject to the expiration provision 
whose elimination would likely cause harm to the public, and stated 
that HHS was obligated to consider the seriousness of these potential 
harms. Other comments stated that the expiration provision was unlawful 
for other reasons, such as that it lacked or was contrary to statutory 
authority.
    One commenter disagreed, arguing that the expiration provision is 
consistent with the APA because HHS followed the APA's rulemaking 
procedure in adopting the SUNSET rule and because ``the Sunset Rule 
merely encoded what the RFA already contemplates.'' Another commenter 
stated that HHS must ``specifically address the inconsistency between 
its current view that the SUNSET Rule stands on a legally questionable 
footing, and its prior conclusion that it was legally sound under the 
RFA.''
    Response: The Department agrees with commenters who raised 
questions about lawfulness of the expiration provision. Specifically, 
we have serious concerns that the SUNSET final rule's automatic 
expiration provision, as constructed, was not adequately justified 
under the APA. Similarly, we also question whether the SUNSET proposed 
rule was sufficiently detailed to provide adequate notice and an 
opportunity to comment on the potential expiration of each and every 
regulation covered under the SUNSET final rule.
    ``The APA's arbitrary-and-capricious standard requires that agency 
action be reasonable and reasonably explained.'' FCC v. Prometheus 
Radio Project, 141 S. Ct. 1150, 1158 (2021). An ``agency must examine 
the relevant data and articulate a satisfactory explanation for its 
action including a `rational connection between the facts found and the 
choice made.' '' State Farm, 463 U.S. at 43 (quoting Burlington Truck 
Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). That 
explanation must show that ``the decision was based on a consideration 
of the relevant factors.'' Id. If the agency has ``entirely failed to 
consider an important aspect of the problem,'' the rule is ``normally . 
. . arbitrary and capricious.'' Id. These principles apply in full 
force to agency decisions to amend or repeal regulations. See generally 
id. In particular, when an agency changes course, including by amending 
a regulation, ``a reasoned explanation is needed for disregarding facts 
and circumstances that underlay or were engendered by the prior 
policy.'' FCC v. Fox TV Stations, Inc., 556 U.S. 502, 515-16 (2009).
    As discussed, the SUNSET final rule would have amended thousands of 
regulations to schedule their expiration if the Department failed to 
conduct assessments and reviews on a certain timetable. In addressing 
this subject, the Department did not provide any particularized 
consideration of the regulations subject to expiration. It did not 
consider the specific ``facts and circumstances that underlay'' these 
regulations, such as the statutory directives and public health 
problems that these regulations address and that would be left 
unaddressed upon expiration.\55\ It also did not consider the specific 
``facts and circumstances that . . . were engendered'' by these 
regulations, such as any reliance interests that may have developed 
based on the regulations. The Department did not even identify these 
specific facts and circumstances for the covered regulations, let alone 
treat them as

[[Page 32272]]

relevant factors and weigh them against any perceived advantages of the 
SUNSET final rule. In addition, the Department did not address the 
various statutory purposes that would be undermined by expiration. 
Congress empowered the Department to act through its grants of 
authority, but there is no evidence that the Department considered 
those legislative goals or considered the expiration amendments in 
light of those goals. The expiration amendments were promulgated on a 
scale that made it nearly impossible to generate this type of 
particularized analysis or explanation.
---------------------------------------------------------------------------

    \55\ For example, the SUNSET final rule amended an FDA 
regulation requiring an investigational medical device to disclose 
that it is ``[l]imited . . . to investigational use.'' 21 CFR 
812.5(a). This regulation responds to a legislative directive to 
establish an investigational device program, the public-health need 
to establish safeguards for investigational use, and the specific 
circumstance that investigational devices could be diverted for 
ordinary patient use. Merely by introducing the possibility of 
expiration of this regulation without any replacement, the SUNSET 
final rule undermines these legislative objectives, threatens basic 
public-health protections, and creates uncertainty in the 
marketplace about the status of this requirement. But these factors 
were not considered when this regulation was amended by the SUNSET 
final rule.
---------------------------------------------------------------------------

    Instead, the Department offered the categorical rationale that 
``the benefits of retrospective review, and the need to strongly 
incentivize it, are so great that the risk of a regulation 
inadvertently expiring is justified by the benefit of 
institutionalizing retrospective review in this manner.'' 86 FR 5723. 
One commenter asserted that this type of rationale, focusing solely on 
benefits and importance of retrospective review, meets the satisfactory 
explanation requirement in the APA. However, the Department now 
questions that assertion. We doubt that this one-sided explanation, 
which considers none of the facts, circumstances, or goals of the 
regulations subject to expiration, would enable a court to conclude 
that the expiration amendment was reasonable and reasonably explained. 
Ultimately, the Department failed to genuinely grapple with the 
potential harms of each amended regulation expiring, and the Department 
now acknowledges that those harms are unquestionably ``relevant 
factors.''
    The Department recognizes that it previously stated that it was 
``considering the important factors'' in the SUNSET final rule, but 
this bare assertion is belied by the fact that the rule did not 
elaborate on any factors other than the benefits of retrospective 
review. 86 FR 5716. The Department also stated that it had ``provide[d] 
the reasoned explanation that would be required if it were a change in 
policy,'' but, as previously noted, the Department did not provide any 
explanation addressing the relevant factors. Id. at 5702. In addition, 
in the final rule, HHS stated that it ``considered each individual 
Department regulation'' in connection with deciding whether to exempt 
the regulation from the scope of the SUNSET final rule. Id. at 5703. 
However, courts have found that ``[s]tating that a factor was 
considered . . . is not a substitute for considering it,'' Getty v. 
Fed. Sav. & Loan Ins. Corp., 805 F.2d 1050, 1055 (D.C. Cir. 1986), and 
the record does not provide further evidence of Departmental 
consideration of the individual covered regulations. On the contrary, 
the SUNSET final rule contains a list of various regulations that 
commenters had proposed for exemption from the SUNSET final rule and 
then concludes, without explanation, that the regulations would not be 
exempt. 86 FR 5736. This bare conclusion appears to be directly at odds 
with the Department's obligations under the APA to consider the 
relevant factors and adequately explain its decision.\56\
---------------------------------------------------------------------------

    \56\ The Department also previously justified the SUNSET final 
rule by comparing it to an amendment to a specific rule to add an 
expiration date, or an amendment to a defined term that is more 
widely applicable to a set of regulations. However, those 
comparisons do not address the underlying concern that the 
expiration provision lacked adequate justification. Because of the 
differences in scope, scale, and effect, it is far more likely that 
HHS could provide appropriate notice, consider the relevant factors, 
and produce the record needed to support those more targeted 
amendments, in contrast to the global amendment created by the 
SUNSET final rule.
---------------------------------------------------------------------------

    The legal defects described above concerning the SUNSET final 
rule's amendments to regulations are the same, only magnified, in the 
circumstance that the SUNSET final rule results in the automatic 
expiration of a regulation. As reflected elsewhere in this preamble, 
the Department has determined that it is likely that at least some 
amended regulations would expire because of overburdened resources. 
Even if that were not immediately the case, this framework would allow 
a future administration with a deregulatory agenda to strategically 
repeal regulations through inaction. In the event of such expiration, 
the Department would be reversing course on a policy embodied in a 
regulation without any specific analysis of, or justification for--and 
without notice and an opportunity to comment on--the expiration, 
including the original motivating factors for issuing the regulation 
and potential relevant reliance interests. The Department likewise 
appears not to have examined whether expiration--without notice and 
comment--would be consistent with the HHS agency's decision not to 
impose a termination date when it promulgated the rule in question. 
But, as noted above, when an agency changes course, such as by 
repealing a regulation, ``a reasoned explanation is needed for 
disregarding facts and circumstances that underlay or were engendered 
by the prior policy.'' Fox, 556 U.S. at 515-16.
    The failure to consider reliance interests, in particular, presents 
a substantial legal concern in light of the Supreme Court's admonition 
that ``[w]hen an agency changes course, . . . it must be cognizant that 
longstanding policies may have engendered serious reliance interests 
that must be taken into account.'' Dep't of Homeland Sec. v. Regents of 
the Univ. of Cal., 140 S. Ct. 1891, 1913 (2020) (internal quotations 
omitted). The Court held that agencies in the midst of policy change 
are ``required to assess whether there were reliance interests, 
determine whether they were significant, and weigh any such interests 
against competing policy concerns.'' Id. at 377. The Department's 
regulations, which affect a significant sector of the American economy, 
undoubtedly could have engendered varying degrees of reliance, and the 
expiration of those regulations could undermine any such reliance 
interests. At the time that a particular regulation expires under the 
SUNSET final rule, however, the Department would not have considered 
any of those regulation-specific interests.
    In the SUNSET final rule, HHS acknowledged the significant 
potential for there to be reliance interests in existing HHS 
regulations. For example, it stated that it had increased the length of 
time before the first expiration date from two years to five years in 
order to give ``the regulated community . . . five years to adjust to 
the changes made by this final rule, so any reliance interests are 
significantly reduced as compared to the proposed rule.'' 86 FR 5709. 
The Department has reconsidered this statement and has determined that 
this additional length of time is unlikely to significantly reduce 
reliance interests because the public would not know, likely for most 
of the five-year time period, whether a regulation would actually 
expire. In any event, the Department did not supply the particularized 
analysis regarding reliance interests contemplated by the Supreme 
Court, and the Department now doubts that this approach is lawful under 
the APA.\57\
---------------------------------------------------------------------------

    \57\ The Department also continues to be concerned that the 
specific exemptions included in the SUNSET final rule were not the 
product of reasoned decision-making. The Department exempted certain 
FDA regulations, for example, because they ``simply create product 
identities'' and because, according to the Department, some subset 
of those regulations are being reviewed under other processes. 86 FR 
5731. However, these regulations do not simply create product 
identities; instead, they describe the conditions under which 
certain products can be marketed. The stated reasoning does not 
appear to support the exemption decision or their scope. In 
addition, the existing review processes cited by the Department only 
apply to a subset of the exempted regulations, and some of those 
review processes are limited to narrow issues, such as whether a 
device should be exempt from premarket review. See 86 FR 5731 nn. 
199, 200 (citing 21 U.S.C. 360(l), (m) and 85 FR 21795). Finally, 
the exemptions are underinclusive: The Department failed to include 
other regulations that are similar, such as those codifying the 
standards for human blood and blood products or those codifying 
animal drug approvals.

---------------------------------------------------------------------------

[[Page 32273]]

    HHS also disagrees with the commenter who stated that ``the Sunset 
Rule merely encoded what the RFA already contemplates.'' As explained 
elsewhere in this preamble, the RFA neither explicitly nor implicitly 
provides authority for automatic expiration dates. With respect to the 
comment that HHS must specifically address the inconsistency between 
its current view that the SUNSET final rule stands on a legally 
questionable footing, and its prior conclusion that it was legally 
sound under the RFA, the Department now has concluded that the SUNSET 
final rule exceeded the requirements of the RFA and did so in a manner 
that likely violates the APA.
    Comment: Multiple comments objected to the length of the comment 
period for the SUNSET proposed rule. One comment stated that ``HHS did 
not provide . . . a meaningful opportunity for comment'' under the APA. 
Another comment stated that the Department ``failed to provide any 
justification for the unusually short 30-day comment period'' for 
portions of the proposed rule. The comment stated that the ``ability of 
the public to meaningfully and thoroughly comment on all aspects of the 
[SUNSET proposed rule] was compromised by the lack of prior notice and 
the shortened comment period.''
    Response: The Department shares the commenters' concerns that the 
30-day comment period on the SUNSET proposed rule did not provide a 
meaningful opportunity for comment in this particular rulemaking. The 
SUNSET final rule was indisputably complex and vast in scope and 
impact, affecting thousands of regulations. Given the complexity of 
this rule, we are no longer confident in the Department's previous 
conclusion that the comment period during the initial SUNSET rulemaking 
was adequate. However, because the Withdrawal NPRM provided an 
opportunity for additional comment on the SUNSET final rule and because 
the SUNSET final rule is now being withdrawn, this procedural concern 
about the SUNSET proposed rule is now moot.
2. Legal Objections to Withdrawal of the SUNSET Final Rule
    Comment: One comment asserted that the proposed withdrawal of the 
SUNSET final rule would be unlawful under the APA because HHS has not 
considered the ``relevant factor'' of compliance with the RFA. The 
comment stated that the SUNSET rule put HHS into compliance with the 
RFA, and that HHS ``ignored important factors'' when it ``fail[ed] to 
explain how [it] will, in the alternative to the SUNSET Rule, comply 
with the RFA.'' The comment also stated that HHS was obligated to 
explain how ``its actions during the delay [of the SUNSET rule 
effective date] complied with its RFA obligations.''
    Response: HHS agrees that it must consider ``relevant factors'' in 
issuing this withdrawal decision, including the requirements of 
applicable statutes and the impact of the SUNSET final rule on 
stakeholders. Thus, the Department's statutory obligations under the 
RFA is one of the factors we must consider. Elsewhere in this preamble, 
the Department has discussed in detail how it complies with the RFA's 
requirements to publish a plan for periodic review and a list of the 
rules to be reviewed each year and how it completes regular reviews of 
its regulations under section 610. All of these RFA activities 
continued during the delay of the effective date for the SUNSET final 
rule. HHS intends to continue its current practices under the RFA. 
Thus, HHS has considered the factor of compliance with the RFA and does 
not believe this factor requires the Department to retain the SUNSET 
final rule.
    Comment: One comment identified various factors that, in the 
commenter's view, are ``important aspects'' that HHS needs to consider 
under the APA in order to withdraw the SUNSET final rule. The comment 
stated that these factors include (1) ``the disruption that . . . this 
repeal rule would have on the agency and on public participation in the 
review process'' and ``the degree of regulatory uncertainty that [this 
rule] create[s]''; (2) ``the interests of doctors who would benefit 
from the on-time implementation of the SUNSET Rule to rules like the 
gender identity [nondiscrimination] mandate in HHS's Section 1557 rule 
under the ACA, HHS's gender identity [nondiscrimination] mandate in its 
grants rule 45 CFR 75.300(c) and (d), and HHS's conscience rule at 45 
CFR part 88''; and (3) the public's ``interests in participating in 
notice and comment procedures to lift regulatory burdens on small 
entities.''
    Response: We disagree with this comment's characterization of this 
rulemaking and its assessment of its impacts. With respect to the first 
factor identified in the comment, concerning disruption to the agency 
and the public, HHS has determined that it is the SUNSET final rule, 
and not withdrawal of the SUNSET final rule, that will disrupt the 
Department's operations and create regulatory uncertainty. With 
elimination of the SUNSET final rule, HHS agencies and the public can 
have confidence that resources will continue to be allocated in the 
manner that best promotes the Department's mission, and that HHS's 
regulations will be amended or repealed through the well-established 
APA rulemaking processes. Because the SUNSET rule never took effect, 
the Department has not taken any implementation steps that would be 
disrupted by this withdrawal. Furthermore, because the rule never took 
effect, HHS has no reason to believe that the public has developed 
processes or expectations that would be disrupted by this withdrawal. 
This is particularly true given that the SUNSET final rule was issued 
on January 19, 2021, and a new administration, with new policies and 
priorities, entered office on January 20, 2021. Even in the 
unanticipated circumstance that significant reliance interests have 
developed, we believe those interests would be outweighed by the 
important reasons for withdrawal identified in this preamble.
    With respect to the second factor, the suggestion that the 
expiration of regulations under the SUNSET final rule will benefit 
certain doctors who disagree in conscience with certain HHS rules is 
entirely speculative, and we do not agree that it is an ``important 
aspect of the problem'' that must be evaluated in connection with this 
withdrawal action. Even if this could be considered a relevant factor, 
the interests of this one subgroup do not outweigh the many important 
reasons for withdrawing this rule, including differing views on the 
same regulations as well as the risks the rule poses to a far larger 
sector of the U.S. population.
    With respect to the third factor, concerning the public's interest 
in participating in a notice and comment process to lift regulatory 
burdens on small entities, HHS notes that under its current processes, 
the public already has an opportunity to participate in this type of 
notice and comment process when the Department conducts reviews under 
section 610. Indeed, section 610(c) requires HHS to ``invite public 
comment'' on rules that are being reviewed under the RFA. Furthermore, 
the Department publishes its semiannual Regulatory Agenda for the 
express ``purpose of . . . encourag[ing] more effective public 
participation in the regulatory process.'' \58\ In addition,

[[Page 32274]]

HHS implements Department-wide initiatives to support that purpose, 
including the Department's regulatory web page with resources such as 
links to HHS rules currently open for public comment and an ``HHS 
Regulations Toolkit'' providing background information on regulations, 
the commenting process, how public comments influence the development 
of a rule, and how the public can provide effective comments.\59\ Thus, 
to the extent that this is a relevant factor, HHS has considered this 
factor and does not agree it justifies retaining the SUNSET final rule.
---------------------------------------------------------------------------

    \58\ See, e.g., Regulatory Agenda, 87 FR 5226 (Jan. 31, 2022).
    \59\ See, e.g., Regulatory Agenda, 86 FR 16892 (Mar. 31, 2021).
---------------------------------------------------------------------------

    Comment: A few comments asserted that HHS has not adequately 
considered the benefits of the SUNSET final rule, in violation of the 
APA. One comment stated that the Withdrawal NPRM was ``inadequately 
supported'' because HHS has not provided ``any meaningful analysis or 
balance of the two sides of the issues.'' Another comment asserted that 
the benefits of the SUNSET final rule were an ``important aspect of the 
problem'' that HHS had ignored.
    Response: In Section V.C.3 of this preamble, the Department has 
considered and addressed the various benefits asserted by commenters to 
be associated with the SUNSET final rule. Overall, we consider many of 
these benefits to be speculative, and we question whether they would 
transpire as a result of the SUNSET final rule. Furthermore, we have 
confirmed that the SUNSET final rule involves significant costs and 
legal vulnerabilities. In light of these considerations, we conclude 
that any benefits of the SUNSET final rule do not justify its costs and 
do not change the legal analysis of the expiration provision. Because 
HHS has considered the purported benefits and weighed them against the 
harms in determining that the rule should be withdrawn, we have 
fulfilled any applicable obligation under the APA.
    Comment: One comment asserted that ``HHS has not offered sufficient 
new reasons to change course'' and withdraw the SUNSET final rule 
because ``each reason [provided in the Withdrawal NPRM] had been 
considered and rejected in the SUNSET rule.'' The comment also claimed 
that the Department did not give the public an adequate opportunity to 
comment because the Withdrawal NPRM did not ``disclos[e] to the public 
HHS's reasons for changing its views.''
    Response: HHS disagrees with the commenter that its reasons for 
withdrawal, as stated in the Withdrawal NPRM and here, are inadequate 
or were inadequately communicated to the public. In both documents, HHS 
identified a number of reasons why this withdrawal is appropriate, and 
we explained in detail why these reasons are persuasive even in light 
of the Department's prior analysis. We have been clear that the SUNSET 
final rule contained significant errors of fact and law and is contrary 
to the policies of the current Administration.
    For example, we explained that in the SUNSET final rule, HHS failed 
to give sufficient consideration and weight to the many comments 
opposing the SUNSET proposed rule and grossly miscalculated the 
resources required to comply with the rule and the manner in which the 
rule would affect the Department. Because of that, HHS improperly 
dismissed the many concerns raised about the diversion of HHS's 
resources from other key initiatives and the harms of expired 
regulations, among other things. Although HHS may have previously 
``considered and rejected'' these considerations, HHS's decision-making 
relied on a fundamentally flawed premise and therefore was unsound.
    In addition, we have explained that, upon review, we believe HHS 
previously overlooked key legal defects in the justification for the 
expiration provision, which we now must consider in the context of 
withdrawal. We have also cited the policy goals of the current 
Administration, which strongly support a change in course here. It is 
our view that burdens imposed by the SUNSET final rule could undermine 
the Department's ability to fulfill its public health and human 
services missions, promote national priorities, and confront the 
challenges facing the nation. We have also further considered the 
evidence HHS previously cited to establish the purported need for or 
benefits of the SUNSET final rule, and we have explained why we no 
longer consider that evidence to justify the rule. In light of these 
and other reasons provided throughout this preamble and in the 
Withdrawal NPRM, HHS has adequately justified the change in course.
    Comment: One comment suggested that it is arbitrary and capricious 
for HHS to consider the harms of expiration in determining whether to 
withdraw the SUNSET final rule. The comment expressed the view that the 
SUNSET final rule does not exceed the requirements of the RFA, and 
because HHS must comply with the RFA, HHS should assume it can also 
comply with the SUNSET final rule and avoid expiration. The comment 
posited that, because letting anything expire under the SUNSET rule 
would violate the RFA, HHS should not consider expiration (and the 
resulting harms) within the realm of possibility.
    Response: We disagree. This comment is premised on the incorrect 
assumption that the RFA requires HHS to conduct assessments and reviews 
under the processes specified in the SUNSET final rule. As noted 
elsewhere in this preamble, that is not true: The requirements of the 
SUNSET final rule far exceed the requirements of the RFA. Because of 
that, it is entirely reasonable for HHS to predict that it will not be 
able to conduct the assessments and reviews in the timeframes required 
under the SUNSET final rule, such that regulations will expire, but 
that it can, at the same time, fully comply with the RFA. Moreover, HHS 
believes that the risk of expiration is exactly the type of relevant 
factor it is required to consider. HHS can and must consider whether 
its self-imposed retrospective review scheme will consume such 
resources, and creates such an existential threat, that duly 
promulgated regulations will disappear for reasons that have nothing to 
do with their regulatory value.
    Comment: One comment asserted that withdrawal of the SUNSET final 
rule will render HHS noncompliant with the RFA's requirements, 
including the requirement to publish a plan for periodic review, such 
that withdrawal is unconstitutional under the Take Care Clause, the 
Supremacy Clause, and the separation-of-powers doctrine. The comment 
stated that ``[n]either the President nor HHS can render optional a 
statutory directive that HHS publish a plan to periodically review its 
code of regulations.''
    Response: HHS disagrees that maintaining the SUNSET final rule is 
necessary to prevent non-compliance with the RFA. In Section V.C.2, the 
Department discussed its compliance with the RFA, including compliance 
with the ``plan'' requirement under section 610(a). In light of this 
compliance, to the extent that the Take Care Clause, Supremacy Clause, 
or separation-of-powers doctrine are implicated here, the President and 
the Department have fully discharged their responsibilities under those 
authorities.
3. Proposed Modifications to the SUNSET Final Rule
    Comment: Some commenters stated that HHS should withdraw the SUNSET 
final rule in its entirety, citing, for example, the continuing 
uncertainty the rule would create. Other commenters identified 
modifications to the SUNSET

[[Page 32275]]

final rule, short of full withdrawal, that they believed could address 
the Department's concerns as described in the Withdrawal NPRM. These 
proposed alternatives included providing a longer period for reviewing 
existing rules or forgoing the review of existing rules; providing a 
longer period for undertaking the reviews; reviewing only a subset of 
existing rules, such as those that have already been designated as 
having a SEISNOSE, are significant rules, are major rules, have 
unfunded mandates, or arise out of a particular section of the CFR, 
subagency, or statute; and narrowing or eliminating the expiration 
provision. Some of these commenters also suggested that the Withdrawal 
NPRM conceded that such targeted approaches are desirable. These 
commenters asserted that the Withdrawal NPRM failed to seriously 
consider alternatives and asserted that neither of the two alternatives 
considered in the Withdrawal NPRM's economic analysis offers a targeted 
approach.
    Response: The Department agrees with the commenters who supported 
full withdrawal, but thanks the other commenters for offering these 
proposed modifications. In evaluating these proposals, we must balance 
the relevant factors and determine whether the various proposals 
advance the mission, policies, and priorities of the Department. We 
must take into account both competing statutory obligations and 
significant public health and welfare considerations, among other 
things. See Motor Vehicle Mfrs. Ass'n of the U.S., Inc. v. State Farm 
Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983) (holding agencies must 
consider each ``important aspect of the problem''). After assessing the 
benefits and harms of the SUNSET final rule's binding program of 
retrospective review, the statutory obligations for HHS to follow 
lawful regulatory processes and establish and maintain programs that 
serve the public health and welfare, and the Department's basic public 
health mission, we have concluded that the relevant factors weigh 
heavily in favor of withdrawing the SUNSET final rule in its entirety. 
To the extent that there are any issues with HHS's current 
retrospective review process, those issues should be addressed through 
other means than this rulemaking. Our reasoning is set forth below.
    First, the Department has determined that any version of a 
retrospective review program established through binding regulations 
could undermine our mission to advance public health and welfare. 
Legislative rules impose a legal duty on the Department to conduct 
retrospective review regardless of other urgent priorities, and they 
create an avenue for litigation based on non-compliance. While the 
Department acknowledges that there is value in retrospective review and 
has a plan for such review, the resources allocated for retrospective 
review can and should vary depending on the circumstances facing an 
agency. A prescriptive, binding review framework can improperly skew 
priorities, forcing the Department to elevate review above other public 
health initiatives that may be more important. The emergence of a 
global pandemic, for example, has shown how HHS must have the 
flexibility to adapt as new public health demands arise.
    In the RFA, Congress recognized the importance of this type of 
flexibility. Importantly, the RFA does not direct agencies to issue 
rules binding themselves to a prescriptive program of retrospective 
review. Instead, it directs agencies to ``publish in the Federal 
Register a plan for the periodic review of [certain] rules.'' 5 U.S.C. 
610(a) (emphasis added). This plan can be ``amended by the agency at 
any time by publishing the revision in the Federal Register.'' Id. 
(emphasis added). Congress could have required agencies to proceed 
through notice-and-comment rulemaking to bind themselves to a review 
program. It certainly demonstrated awareness of that procedural 
mechanism, given that the RFA is squarely focused on rules promulgated 
through notice-and-comment rulemaking. But instead, Congress tasked 
agencies with establishing a ``plan'' by Federal Register publication 
that can be amended ``at any time''--i.e., a plan that can be adjusted 
as circumstances arise to preserve and support underlying programs. The 
fact that Congress chose not to direct agencies to issue binding 
regulation to implement the RFA, and the fact that such binding 
regulations would by their nature place outsized importance on 
retrospective review, weigh heavily in favor of wholesale withdrawal 
(rather than modification) of the SUNSET final rule.
    Second, the Department must keep in mind its statutory obligations 
to follow lawful regulatory processes and to fulfill substantive 
statutory objectives. As explained earlier in this section, many 
comments asserted that the expiration provision in the SUNSET rule 
violates the APA. In the SUNSET final rule, HHS previously asserted 
that the expiration provision is a cornerstone of the SUNSET rule. It 
described the rule as not just creating a framework for retrospective 
review but also ``impos[ing] a strong incentive on [the Department] to 
perform retrospective review.'' 86 FR 5697. It stated that ``absent 
such a forcing mechanism, the Department will not conduct as many 
retrospective reviews as desired'' and that ``it is nearly impossible 
to see how a satisfyingly comprehensive review could occur without a 
sunset mechanism.'' 86 FR 5723, 5702. HHS even considered whether the 
expiration provision should be severable from other portions of the 
rule, but expressed doubt ``that the proposed rule could properly 
function without the expiration dates.'' 86 FR 5734. Thus, the 
expiration provision is a key animating feature of the SUNSET final 
rule. However, as explained above, HHS now agrees with the many 
commenters who asserted that the expiration provision is not adequately 
justified and is unlawful under the APA. Moreover, in Section V.C.1, we 
expressed doubt that the expiration provision is consistent with the 
intent and purpose of the RFA. And, where Congress has empowered the 
Department to promulgate specific substantive regulations, automatic 
expiration of those regulations could conflict with Congressional 
purpose, as well as violate the APA. In light of our new conclusions 
about a fundamental premise of the SUNSET final rule, the best course 
is for the rule to be retracted and for the Department to then take a 
fresh look at next steps.
    Third, even if the Department determined that a binding regulation 
for retrospective review were appropriate, and even if the legal issues 
with the automatic expiration provision did not fundamentally undermine 
the rule, HHS has considered alternatives within the ambit of the 
existing policy and has determined that they either are not viable or 
should not be adopted.\60\ Most of the alternate proposals presented by 
commenters retain the key animating feature of the SUNSET final rule--
automatic expiration. But as explained in the Withdrawal NPRM and in 
this preamble, the automatic expiration provision is in our view 
unlawful and could lead to significant harm, including a significant 
burden on stakeholders such as small entities. The uncertainty 
resulting from the sudden expiration and threat of sudden expiration of 
regulations could create numerous negative repercussions for 
stakeholders and for the public health, including undermining the 
effective

[[Page 32276]]

implementation of Federal/State partnership programs such as Medicaid 
that rely on HHS rules establishing national standards for these 
programs, hindering the ability of programs that rely on Federal 
funding to apply for or receive that funding or engage in long-term 
planning, and impeding product development and innovation. Moreover, as 
explained in a prior comment response, regulatory uncertainty created 
by the SUNSET final rule, if effective, would disproportionately burden 
small entities who rely on regulations to level the playing field and 
lack resources to navigate the resulting confusing regulatory 
landscape. This result would be inconsistent with the RFA's purpose of 
alleviating disproportionate burdens on small entities. Furthermore, 
the expiration of any regulations under the SUNSET final rule--which 
the Department now predicts would be unavoidable--means the public 
would lose any protections, entitlements, and other public health 
benefits those regulations provide. Leaving the automatic expiration 
provision intact in any form would not address the Department's 
concerns that the provision is unlawful under the APA and inconsistent 
with the RFA and, in some cases, the Congressional purposes of the 
authorizing statutes for particular sets of regulations.
---------------------------------------------------------------------------

    \60\ As explained further in the regulatory impact analysis in 
Section VI, the Department conducted a quantitative analysis of four 
alternatives, including alternatives recommended by commenters.
---------------------------------------------------------------------------

    Other commenters proposed modifying the SUNSET final rule to 
eliminate the automatic expiration provision. HHS has considered this 
alternative as well, and we have determined that a regulation that 
retains any of the other key features of the SUNSET final rule--such as 
widespread assessments or provisions imposing accelerated timelines for 
assessments and reviews--is not viable or appropriate because those 
provisions impose significant and unnecessary burdens on the Department 
and stakeholders. As explained in a prior comment response, the 
requirement to conduct thousands of assessments on a continuing basis, 
including the requirement to comply with notice and comment procedures 
for each assessment, are both onerous and unnecessary methods of 
identifying the minority of rules which have or will have a SEISNOSE 
and is inconsistent with the intent of section 610 and the RFA's 
purpose. Even if the Department also limited the scope of rules subject 
to assessment, as some commenters suggested, those proposals raise the 
concerns that (1) the Department could miss rules that have or will 
have a SEISNOSE (because the scope would be limited based on criteria 
unrelated to SEISNOSE, such as imposing an unfunded mandate), and (2) 
the process for assessments under the SUNSET final rule, such as the 
inclusion of a comment period, is still unnecessarily burdensome. In 
addition, the five-year timeframe for assessing and reviewing existing 
regulations and the two-year timeframe for amending or rescinding 
regulations based on the results of a SUNSET final rule review impose 
additional unnecessary burdens on the Department. Proposals that do not 
eliminate these requirements are not viable or desirable because they 
fail to resolve the Department's concerns with the drain on resources 
resulting from these provisions and force the Department to elevate 
retrospective review above other public health initiatives that may be 
more important. The Department has the discretion to ``prioritize 
regulatory actions in a way that best achieves the objectives'' of the 
RFA, other applicable statutes, and its public health and welfare 
mission, see WildEarth Guardians v. EPA, 751 F.3d 649, 656 (D.C. Cir. 
2014), and the Department has determined that these proposals would not 
best achieve its objectives.
    The Department also considered alternatives that combine proposals 
from various commenters (even though these combinations were not 
specifically proposed), and we reject those alternatives for various 
reasons. As discussed, retaining any portion of the SUNSET final rule 
would run counter to HHS's view that its section 610 ``plan'' should 
not be codified in regulations, and it would not address the concern 
that elimination of the expiration provision fundamentally changes the 
nature and purpose of the SUNSET final rule such that wholesale 
reevaluation of the effort is required. We have also determined that 
lengthening the various timelines in the rule would not adequately 
address our concerns. The Regulatory Impact Analysis for this 
withdrawal rule considers the policy alternative of an initial ten-year 
period following the effective date to assess and review all 
regulations, for example, and while that policy alternative temporally 
shifts some of the burden on HHS, it does not meaningfully reduce the 
burdens. Indeed, even if HHS eliminated all of the most concerning 
provisions of the SUNSET final rule--such as the expiration provision, 
the assessment process, and the narrow timeframes--the remaining 
portions of the SUNSET final rule are still fundamentally flawed 
because they do not provide for a logical or reasonable approach to 
retrospective review under the RFA. For example, these provisions 
require recurring review of ``Sections that were issued as part of the 
same rulemaking (and any amendments or additions that may have been 
issued thereafter).'' See, e.g., 86 FR 5751. But such Sections are 
often themselves ``amendments or additions'' to existing rulemakings, 
so this language suggests that these Sections would need to be reviewed 
multiple times in connection with each of those existing rulemakings 
and any future rulemakings amending such Sections. This methodology for 
implementing the RFA is unreasonable and should not be retained. As 
another example, the SUNSET final rule contains exceptions from the 
review processes, but upon review, these exceptions are not only 
ambiguous and difficult to implement, but also apparently inconsistent 
with the language in section 610 of the RFA that contemplates review of 
all regulations based on whether they have or will have a SEISNOSE. In 
sum, HHS has not identified any substantive portion of the SUNSET final 
rule that is worth retaining.\61\
---------------------------------------------------------------------------

    \61\ The Department notes that several comments suggest that 
extensively revising the rule would require a new rulemaking under 
the APA or at least an additional notice and comment period.
---------------------------------------------------------------------------

    As evidenced by the discussion in this preamble, the Department has 
considered numerous alternatives to withdrawal of the SUNSET final 
rule, including commenters' proposed alternatives, and has explained 
its reasons for rejecting those alternatives. Contrary to one 
commenter's suggestion, the alternatives considered by HHS were not 
limited to the alternatives identified in the Withdrawal NPRM's 
economic analysis. Therefore, the Department has satisfied its 
obligation to ``consider the `alternative[s]' that are `within the 
ambit of the existing [policy],' '' Regents, 140 S. Ct. at 913 (2020) 
(quoting State Farm, 463 U.S. at 51), and give ``adequate reasons for 
its abandonment'' of any such alternatives, State Farm, 463 U.S. at 51. 
Moreover, the Department notes that those precedents make clear that an 
agency is ``not required to . . . `consider all policy alternatives in 
reaching [its] decision' '' and is ``not compelled to explore `every 
alternative device and thought conceivable by the mind of man.' '' 
Regents, 140 S. Ct. at 1914 (first quoting State Farm, 463 U.S. at 51; 
then quoting Vt. Yankee Nuclear Power Corp. v. Natural Resources 
Defense Council, Inc., 425 U.S. 519, 551 (1978)); see State Farm, 463 
U.S. at 51 (``Nor do we broadly require an agency to consider all 
policy alternatives in reaching

[[Page 32277]]

decision. It is true that a rulemaking `cannot be found wanting simply 
because the agency failed to include every alternative device and 
thought conceivable by the mind of man . . . regardless of how uncommon 
or unknown that alternative may have been . . . .''). Therefore, HHS 
has satisfied any obligation to consider alternatives to withdrawal of 
the SUNSET final rule under State Farm and Regents.
4. Other Legal Issues
    Comment: One comment alleged various legal defects associated with 
the Administrative Delay, which delayed the effective date of the 
SUNSET final rule under 5 U.S.C. 705. 86 FR 15404. The comment stated, 
for example, that the Administrative Delay was untimely, that HHS 
unlawfully skipped notice-and-comment processes under 5 U.S.C. 553, and 
that the Administrative Delay was not lawfully issued under section 
705. The comment stated that because the Withdrawal NPRM ``relies 
essentially on the purported legitimacy of the [Administrative 
Delay],'' it ``is part and parcel of an unlawful delay, and therefore 
is fruit of a poisonous tree that is arbitrary and capricious and abuse 
of discretion under the APA.''
    Response: HHS disagrees with the suggestion that the Administrative 
Delay suffers from any legal defect, and we are not aware of any legal 
basis for the commenter's assertion regarding the applicability of a 
fruit-of-the-poisonous-tree doctrine.
    In any event, criticisms of the Administrative Delay are outside 
the scope of this rulemaking proceeding. In this proceeding, HHS has 
proposed and has sought comment on withdrawal of the SUNSET final rule. 
That proposal is separate from the Administrative Delay. While the 
Department continues to believe that the Administrative Delay was 
lawful, we disagree with the commenter that the Administrative Delay--
whether lawful or unlawful--affects or is otherwise relevant to this 
withdrawal action.
    Moreover, the Department is withdrawing the SUNSET final rule well 
before the first deadline for completing assessments and reviews of 
Department regulations would have occurred if the rule had taken effect 
absent the Administrative Delay. Accordingly, any question of the 
validity of the Administrative Delay is now moot.
    Comment: One comment noted that the Withdrawal NPRM proposed to 
``withdraw or repeal'' the rule and requested that the Department 
clarify whether it intends to withdraw vs. repeal the SUNSET final rule 
and identify any advantages and disadvantages associated with each 
action. Although the comment acknowledged that both withdrawal and 
repeal are methods to revoke a rule, it asserted that withdrawal of a 
rule from the Office of the Federal Register ordinarily takes place 
prior to a rule's publication whereas a notice-and-comment rule that 
has become effective generally needs to be repealed through notice-and-
comment rulemaking.
    Response: As used in this rulemaking, the terms ``withdraw'' and 
``repeal'' refer to the timing of the issuance of this final rule 
relative to the effective date of the SUNSET final rule. When HHS 
issued the Withdrawal NPRM, it was not certain about future timing and 
therefore referred to both withdrawal and repeal in the alternative. 
Because the effective date of this final rule will occur before the 
effective date of the SUNSET final rule,\62\ HHS is withdrawing the 
SUNSET final rule before it ever becomes effective.
---------------------------------------------------------------------------

    \62\ See 86 FR 15404 (extending SUNSET final rule effective date 
of until March 22, 2022); 87 FR 12399 (further extending SUNSET 
final rule effective date until September 22, 2022).
---------------------------------------------------------------------------

    Because the Department has engaged in notice and comment 
rulemaking, it need not address the question of whether it could have 
withdrawn the rule without notice and comment procedures. Whether this 
final rule is characterized as a ``withdrawal,'' ``repeal,'' or 
``rescission'' is ultimately of no consequence to the validity of this 
rulemaking,\63\ because HHS has engaged in notice and comment under the 
APA, and the revocation (under any label) of the SUNSET final rule is 
fully justified for all of the reasons we have set forth in this 
preamble. In addition, even if ``withdrawal'' of the SUNSET final rule 
were not appropriate due to some alleged defect in the Administrative 
Delay (which HHS does not believe exists), the Department would have 
repealed the rule, through a process identical to this process, for the 
reasons explained throughout this preamble.
---------------------------------------------------------------------------

    \63\ However, we note that, upon judicial review, a decision to 
withdraw a rule that is not yet effective may be accorded even more 
deference than a decision to repeal a rule in effect. Cf. Int'l 
Union, United Mine Workers of Am. v. U.S. Dep't of Lab., 358 F.3d 
40, 43 (D.C. Cir. 2004) (courts ``give more deference to an agency's 
decision to withdraw a proposed rule than . . . to its decision to 
promulgate a new rule or to rescind an existing one''); Williams 
Nat. Gas Co. v. F.E.R.C., 872 F.2d 438, 444 (D.C. Cir. 1989) (noting 
that the ``application of the `arbitrary and capricious' standard 
must be informed by [the court's] recognition that an agency's 
decision to retain the status quo may be more easily defensible than 
a shift in policy would be'').
---------------------------------------------------------------------------

    Comment: One comment urged HHS to fully incorporate all public 
comments to the SUNSET proposed rule into the administrative record for 
its withdrawal of the SUNSET final rule. The commenter noted with 
approval that the Withdrawal NPRM discusses concerns raised in the 
comments to the SUNSET proposed rule.
    Response: The Department agrees with the comment that all public 
comments to the SUNSET proposed rule are properly part of the 
administrative record for this rulemaking proceeding. As the comment 
acknowledged, the Department considered the public comments to the 
SUNSET proposed rule before it issued the Withdrawal NPRM. See, e.g., 
86 FR 59906 (``After reconsideration of the comments submitted on the 
SUNSET proposed rule (85 FR 70096 (Nov. 4, 2020)), HHS is now issuing 
this notice of proposed rulemaking to withdraw or repeal the SUNSET 
final rule.''). Therefore, those comments are properly part of the 
administrative record for this final rule. See, e.g., 21 CFR 10.3 (FDA 
regulation defining ``Administrative record'' as ``documents . . . on 
which the Commissioner relies to support the action''); 42 CFR 405.1042 
(Office of Medicare Hearings and Appeals regulation defining 
administrative record as ``complete record of the evidence and 
administrative proceedings on the appealed matter''). The Department 
notes that many of the comments to the Withdrawal NPRM discussed or 
attached copies of public comments to the SUNSET proposed rule and are 
therefore part of the administrative record for this rulemaking for 
that reason, as well. See, e.g., 21 CFR 10.40(g) (FDA regulation 
instructing that the record of the administrative proceeding for the 
promulgation of rules consists of ``[a]ll comments received on the 
proposal, including all information submitted as part of the 
comments''); 42 CFR 431.416 (CMS regulation defining administrative 
record for State Medicaid and CHIP demonstration projects to include 
``[w]ritten public comments sent to the CMS and any CMS responses'' and 
``all documentation related'' to a project application).

E. Vague and Confusing Provisions

    In the Withdrawal NPRM, we explained that, upon reconsideration, 
the Department found many ambiguities in the SUNSET final rule that 
could impede the ability of the Department and the public to determine 
the scope and timing of the assessment and review process. 87 FR 59922. 
This confusion would have increased the burden on stakeholders trying 
to navigate the assessment and review process. Process

[[Page 32278]]

ambiguities would also increase the risk of the automatic expiration of 
HHS regulations due to inadvertent noncompliance or misapplication of 
the requirements. We received the following additional comments on this 
topic.
    Comment: Many commenters agreed that the SUNSET final rule would 
create burdens, confusion, and uncertainty over which regulations are 
likely to remain in effect, and overall decrease predictability, 
transparency, and public engagement critical to the regulatory process. 
Ambiguities in the regulatory text would contribute to those problems. 
One comment, for example, stated that the SUNSET final rule contained 
many ambiguities that could impede the ability of HHS and the public to 
determine the scope and timing of the assessment and review process. 
Another comment criticized the SUNSET final rule for confusing 
definitions. Another comment opined that the rush to issue the SUNSET 
final rule, with the extremely short time for stakeholder comment and 
unprecedented acceleration of the timeline for completion of the 
rulemaking, resulted in an inadequately considered and drafted final 
rule, with provisions that are overly vague, lack needed details, and 
are impractical to implement.
    Response: We agree with these concerns. For example, as explained 
in Section V.D of this preamble, the SUNSET final rule requires 
recurring review of ``Sections that were issued as part of the same 
rulemaking (and any amendments or additions that may have been issued 
thereafter).'' But such Sections are often themselves ``amendments or 
additions'' to existing rulemakings, so this language suggests that 
these Sections would need to be reviewed multiple times in connection 
with each of those existing rulemakings and any future rulemakings 
amending such Sections. This methodology for implementing the RFA is 
unreasonable and confusing.
    For example, the FDA rulemaking ``Current Good Manufacturing 
Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human 
Food'' (Preventive Controls for Human Food) was published on September 
17, 2015 (80 FR 55907). However, in addition to new sections first 
promulgated in 2015, the rule also included revisions to sections of 
the CFR that were first promulgated in 1975, 1979, 1986, 1995, 1997, 
2001, 2004, and 2008. The SUNSET final rule suggests that, because 
these revised sections were issued as part of the 2015 rulemaking, the 
Department would need to review these revised sections multiple times--
first, as part of a review of the 2015 rulemaking, and then again as 
part of the Department's reviews of the rulemakings in which those 
sections were first promulgated or previously revised. Moreover, the 
complexity of this process would be compounded by the fact that each of 
these sections of the CFR, because they were promulgated at different 
times, would have different expiration dates under the SUNSET final 
rule.
    Comment: The Withdrawal NPRM also expressed concern about ambiguity 
in the categories of exceptions described in the proposed rule and 
included in the final rule.\64\ Numerous commenters on the SUNSET 
proposed rule noted the lack of examples provided, and stated the lack 
of clarity for the categorical exceptions would leave the public unable 
to know which regulations would be eligible for the exceptions. 
Accordingly, some commenters stated that stakeholders would face a 
burden to conduct their own legal analysis.
---------------------------------------------------------------------------

    \64\ The regulatory text of the SUNSET final rule consisted of 
one regulation, with multiple subsections, substantially replicated 
10 times. Subsection (g) in the replicated regulatory text excluded 
(1) Sections that are prescribed by Federal law, such that the 
Department exercises no discretion as to whether to promulgate the 
Section and as to what is prescribed by the Section; (2) Sections 
whose expiration pursuant to this section would violate any other 
Federal law; (3) The SUNSET final rule; (4) Sections that involve a 
military or foreign affairs function of the United States; (5) 
Sections addressed solely to internal agency management or personnel 
matters; (6) Sections related solely to Federal Government 
procurement; and (7) Sections that were issued jointly with other 
Federal agencies, or that were issued in consultation with other 
agencies because of a legal requirement to consult with that other 
agency. Subsection (g) also excludes individual regulations specific 
to each HHS agency. 86 FR 5729.
---------------------------------------------------------------------------

    Response: In the Withdrawal NPRM, we agreed with these comments, 
and we continue to agree with them now. We explained that the SUNSET 
final rule failed to provide meaningful examples of these exceptions 
and recognized the possibility that this lack of clarity could delay 
the completion of the assessment process and place further strain on 
the resources and effort needed to avoid the expiration of regulations. 
Commenters on the Withdrawal NPRM confirmed this view. For example, one 
commenter explained that, rather than vaguely indicate that certain 
types of regulations may be subject to exceptions, the SUNSET final 
rule should have identified the regulations more specifically, so that 
commenters could engage in the comment process, and stakeholders could 
better understand the rule if implemented. Another commenter criticized 
the scope of the exceptions in the SUNSET final rule for their failure 
to ensure that these exceptions would avert the expiration of a 
regulation in the event of a pandemic or other declared national or 
public health emergency.
    In addition, many commenters on the original SUNSET proposed rule 
stated that it was improper for the final rule to exclude the SUNSET 
final rule itself from the requirements of Section (c) of each of the 
codified provisions, meaning that under the rule, the rule itself is 
not subject to assessment, review, or expiration. The SUNSET final rule 
based this exemption on an assumption that the SUNSET final rule would 
not ``directly impose on the public costs that exceed benefits'' 
because no rules would expire due to lack of assessment or review. 86 
FR 5730. The Department now concludes that this assumption was 
incorrect and therefore does not justify the double-standard inherent 
in this aspect of the SUNSET final rule.

VI. Final Regulatory Impact Analysis

A. Introduction, Summary, and Background

1. Introduction
    We have examined the impacts of the final withdrawal rule under 
E.O. 12866, E.O. 13563, the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). 
E.O.s 12866 and 13563 direct us to assess all costs and benefits of 
available regulatory alternatives and, when regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). We believe that this 
final withdrawal rule is a significant regulatory action as defined by 
E.O. 12866.
    The RFA requires us to analyze regulatory options that would 
minimize any significant impact of a rule on small entities. Because 
the final withdrawal rule would result in cost savings to regulated 
entities, this analysis concludes, and the Secretary certifies, that 
the final withdrawal rule will not have a significant economic impact 
on a substantial number of small entities.
    The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires 
us to prepare a written statement, which includes an assessment of 
anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $165 million,

[[Page 32279]]

using the most current (2021) Implicit Price Deflator for the Gross 
Domestic Product. This final withdrawal rule will result in an 
expenditure in at least one year that meets or exceeds this amount.
2. Summary of Costs and Benefits
    The final withdrawal rule will withdraw the SUNSET final rule. This 
regulatory action will reduce the time spent by the Department 
performing retrospective assessments and reviews of its regulations, 
and time spent by the general public on comments related to these 
assessments and reviews anticipated under the SUNSET final rule. We 
monetize the likely reductions in time spent by the Department and the 
general public and report these impacts as cost savings. Our primary 
estimate of these cost savings in 2020 dollars, annualized over 10 
years, using a 3% discount rate, totals $69.9 million. Using a 7% 
discount rate, we estimate $75.5 million in annualized cost savings. 
Table 1 reports these primary estimates alongside a range of estimates 
that capture uncertainty in the amount of time it will take the 
Department to perform each assessment and review, and uncertainty in 
the amount of time the public will spend on comments.
    In addition to these monetized effects, the final withdrawal rule 
will also reduce regulatory uncertainty and regulatory confusion 
anticipated under the SUNSET final rule. Given the scope of the SUNSET 
final rule, these impacts would have been experienced by small 
businesses but also the general public, larger businesses, Tribes, 
States, non-governmental organizations, and other regulated entities 
and stakeholders across a wide range of industrial sectors. The final 
withdrawal rule will also reduce the time spent by the Department on 
other activities that we have not monetized or quantified, such as the 
time developing Small Entity Compliance Guides (SECGs), and it will 
reduce the time spent by the public monitoring regulations undergoing 
assessment or review and set to expire. The final withdrawal rule will 
also result in a disbenefit with respect to forgone information as a 
result of not performing the assessments and reviews.

                               Table 1--Summary of Benefits, Costs and Distributional Effects of the Final Withdrawal Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Units
                                                  Primary       Low        High    ------------------------------------
                   Category                      estimate    estimate    estimate      Year      Discount     Period                  Notes
                                                                                      dollars    rate (%)     covered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized $millions/year.......  ..........  ..........  ..........  ..........           7  ..........
                                                ..........  ..........  ..........  ..........           3  ..........
    Annualized Quantified.....................  ..........  ..........  ..........  ..........           7  ..........
                                                ..........  ..........  ..........  ..........           3  ..........
                                               ---------------------------------------------------------------------------------------------------------
    Qualitative...............................  --Reduction in regulatory
                                                uncertainty and confusion.
                                                --Disbenefits from the information
                                                foregone from not performing
                                                assessments and reviews.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs:
    Annualized Monetized $millions/year.......      -$75.5      -$40.1     -$110.9        2020           7   2022-2031  Cost savings from not performing
                                                     -69.9       -37.2      -102.7        2020           3   2022-2031   assessments and reviews, and
                                                                                                                         time spent by the public on
                                                                                                                         comments.
    Annualized Quantified.....................  ..........  ..........  ..........  ..........           7  ..........
                                                ..........  ..........  ..........  ..........           3  ..........
    Qualitative.
Transfers:
    Federal Annualized Monetized $millions/     ..........  ..........  ..........  ..........           7  ..........
     year.                                      ..........  ..........  ..........  ..........           3  ..........
                                               ---------------------------------------------------------------------------------------------------------
    From/To...................................  From:
                                                To:
                                               ---------------------------------------------------------------------------------------------------------
    Other Annualized Monetized $millions/year.  ..........  ..........  ..........  ..........           7  ..........
                                                ..........  ..........  ..........  ..........           3  ..........
                                               ---------------------------------------------------------------------------------------------------------
    From/To...................................  From:
                                                To:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effects:
    State, Local or Tribal Government:..................................................................................................................
    Small Business:.....................................................................................................................................
    Wages:..............................................................................................................................................
    Growth:.............................................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Summary of Changes
    Compared to the preliminary regulatory impact analysis, this final 
regulatory impact analysis expands the discussion of regulatory 
alternatives, including a quantitative analysis of two additional 
alternatives recommended in public comments. Specifically, we analyze a 
policy option that would maintain the general framework of the SUNSET 
final rule but limit its scope to regulations that the Department 
previously identified as having a significant economic impact on a 
substantial number of small entities. We also analyze a policy option 
that would maintain the SUNSET final rule's requirements related to the 
timeline for assessing and reviewing all of the Department's existing 
regulations, but without the automatic expiration provision contained 
in the SUNSET final rule.
    We have revised the discussion and estimates contained in this 
regulatory impact analysis to reflect regulatory action that 
administratively postponed the effective date of the SUNSET final rule. 
This analysis now states that the regulatory action will withdraw the 
SUNSET final rule, whereas the preliminary regulatory impact analysis

[[Page 32280]]

covered regulatory actions to withdraw or repeal the SUNSET final rule. 
We have made minor edits for clarity throughout the document. Finally, 
we have read and considered public comments addressing the regulatory 
impact analysis and respond to these comments in Sections V.A.3, C.3, 
and D.3 of this preamble.
4. Background
    On January 19, 2021, HHS issued the ``Securing Updated and 
Necessary Statutory Evaluations Timely'' final rule. Under the SUNSET 
final rule, all HHS regulations less than ten years old, with certain 
exceptions, will expire ten years after issuance, unless HHS performs 
an assessment of the regulations and a more detailed review of those 
regulations that have a significant economic impact upon a substantial 
number of small entities. The SUNSET final rule also provides for 
regulations older than ten years to expire unless assessed and, if 
applicable, reviewed within an initial five-year period. After this 
initial assessment and review process, the SUNSET final rule requires 
continuing assessments and reviews every ten years under threat of 
expiration. HHS published a regulatory impact analysis (SUNSET RIA) 
alongside the final rule, providing estimates of the likely impact of 
the policy on Departmental resources and time spent by the general 
public related to these efforts. Following the initiation of 
litigation, HHS issued an administrative delay of effective date, 
effective as of March 19, 2021, which extended the effective date of 
the SUNSET final rule by one year to March 22, 2022. HHS issued a 
second administrative delay of effective date, effective as of March 4, 
2022, which further extended the effective date of the final rule by 
six months to September 22, 2022. For the purposes of this analysis, we 
refer to the January 19, 2021, final rule and the two administrative 
delays collectively as the SUNSET final rule. On October 19, 2021, HHS 
published a proposed rule to withdraw or repeal the SUNSET final rule.

B. Market Failure or Social Purpose Requiring Federal Regulatory Action

    The SUNSET final rule established automatic expiration dates for 
most of the Department's regulations, and a recurring assessment and 
review process that it must follow to avoid such expirations. The 
SUNSET final rule's RIA likely underestimated both the time commitment 
of a credible assessment and review process, and the time spent by the 
general public commenting on regulations undergoing assessment and 
review. Given the volume and heterogeneity of regulations affected, our 
current evaluation of the time commitment necessary to conduct credible 
assessments and reviews, the timeframes for completing these 
retrospective analyses, and subsequent regulatory actions anticipated 
as a result of these analyses, it is likely that regulations will 
automatically expire. The potential for regulations to automatically 
expire introduces regulatory uncertainty, with potential negative 
repercussions for stakeholders. The actuality of having regulations 
expire automatically could lead to regulatory confusion among 
stakeholders and harm the public health in numerous ways, as described 
in the preamble and this analysis. This final withdrawal rule is 
therefore needed to improve the functioning of government and to reduce 
the costs to the Department and the general public associated with the 
SUNSET final rule.

C. Purpose of the Final Withdrawal Rule

    The purpose of the final withdrawal rule is to revoke the SUNSET 
final rule. This regulatory action will directly address the potential 
harm from the automatic expiration of the Department's regulations. The 
final withdrawal rule will generate cost savings to the Department from 
reductions in staff time spent on assessments and reviews, and on 
related activities. It will also generate cost savings to the general 
public by reducing time spent on public comments related to these 
assessments and reviews, and on other activities, such as monitoring 
potentially expiring regulations. The final withdrawal rule will also 
reduce any regulatory uncertainty from the potential automatic 
expiration of rules.

D. Baseline Conditions

    We adopt a baseline that assumes the requirements of the January 
19, 2021, SUNSET final rule \65\ remain in place over the period of our 
analysis, accounting for the administrative delays of the effective 
date.\66\ The SUNSET final rule RIA contains monetized estimates of the 
costs to the Department to perform retrospective analyses of existing 
regulations and the costs to the public to monitor and respond to 
anticipated regulatory actions taken by the Department following these 
retrospective analyses. For the purpose of estimating the time spent on 
retrospective analyses under the baseline of this analysis, we maintain 
the assumption in the SUNSET final rule RIA that the Department will 
satisfy the requirements of the SUNSET final rule and no regulations 
will automatically expire.\67\ We also maintain various assumptions in 
the SUNSET final rule RIA relating to the timing of the effects and 
treatment of the one-year waiver provision that allows the Secretary to 
make one-time, case-by-case exceptions to the automatic expiration of a 
rule. We also maintain the SUNSET final rule RIA's choice of a 10-year 
time horizon for the analysis and adopt a base year of 2022 for 
discounting purposes. In this section, we reconsider several other 
assumptions underlying the cost estimates in the SUNSET final rule RIA, 
and discuss additional cost drivers not identified and monetized in the 
analysis. These revised estimates inform our baseline scenario of no 
further regulatory action. This analysis of the baseline scenario 
concludes that the SUNSET final rule likely underestimated to a 
significant degree the resources needed for the required undertaking.
---------------------------------------------------------------------------

    \65\ 86 FR 5694.
    \66\ 86 FR 15404; 87 FR 12399.
    \67\ This approach allows for a more direct comparison with the 
estimates contained in the SUNSET final rule RIA and follows a 
common practice in regulatory impact analysis to assess costs 
assuming full compliance with the regulation. We supplement the 
full-compliance estimates by identifying the likely impacts 
associated with less than full compliance. The HHS Guidelines for 
Regulatory Impact Analysis (available at https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf.), Chapter 4 ``Assess 
Costs,'' contains a more complete discussion of this approach.
---------------------------------------------------------------------------

Regulations Subject to the SUNSET Final Rule
    We adopt the SUNSET final rule RIA's estimate of 18,000 regulations 
potentially subject to the SUNSET final rule that will need to be 
assessed in the first ten years. For each of these regulations, the 
Department will need to perform an assessment to determine whether the 
regulation imposes a significant economic impact on a substantial 
number of small entities. The SUNSET final rule RIA estimates that 
roughly five regulations on average are part of the same rulemaking and 
could be assessed at one time. We maintain this assumption and 
terminology, which results in a total of 3,600 assessments in the first 
ten years. Although we adopt the SUNSET final rule RIA's estimate that 
the Department would perform 3,600 assessments, this estimate may 
understate the number of assessments performed under the SUNSET final 
rule, since certain regulations would need to be assessed multiple 
times as part of separate

[[Page 32281]]

assessments. The SUNSET final rule RIA assumes that 11% of these 
assessments, or 396, are for regulations previously determined to have 
a significant economic impact on a substantial number of small 
entities, but reduces this figure to 370 to account for rulemakings 
that are likely to be reviewed for reasons other than the SUNSET final 
rule. This adjustment similarly reduces the estimate of the number of 
rulemakings impacted by the SUNSET final rule to 3,574 [=3600-(396-
370)].
    For each of these 370 rulemakings, the Department will need to 
perform a review, which includes a retrospective regulatory flexibility 
analysis. The SUNSET final rule RIA distinguishes between the 44 
rulemakings that predate the RFA and are unlikely to have an existing 
prospective regulatory flexibility analysis, and the remaining 326 
rulemakings that are assumed to have an existing prospective analysis. 
The SUNSET final rule RIA also estimates there will be an additional 
160 rulemakings assessed to have a significant impact on a substantial 
number of small entities that have not previously been identified as 
having a significant economic impact. The Department will need to 
perform a review of these rulemakings under the SUNSET final rule.
    The SUNSET final rule provides for an initial five-year period for 
the Department to address regulations older than ten years. We maintain 
the assumption in the SUNSET final rule RIA that assessments and 
reviews required in the first five years will be completed evenly 
across this time period, and that the remaining assessments and reviews 
will be completed evenly across the next five-year time period. Of the 
3,574 total assessments anticipated under the SUNSET final rule, 3,415 
would occur during the first five-year period, an average of 683.0 
assessments per year; while 159 assessments would occur during the 
second five-year period, an average of 31.8 assessments per year. Of 
the total reviews anticipated under the SUNSET final rule, 506 would 
occur during the first five-year period, an average of 101.2 reviews 
per year; while 24 assessments would occur during the second five-year 
period, an average of 4.8 reviews per year. Table D1 presents yearly 
counts of assessments and reviews anticipated under the baseline 
scenario. These figures are broadly consistent with the figures 
contained in the SUNSET final rule RIA; however, unlike that analysis, 
we do not reduce the number of assessments under the SUNSET final rule 
by the number of reviews performed, since these assessments occur first 
and serve to identify those regulations requiring review.

                     Table D1--Baseline Assessments and Reviews Under the SUNSET Final Rule
----------------------------------------------------------------------------------------------------------------
                                                                              Reviews
              Year                     Total     ---------------------------------------------------------------
                                    assessments       Pre-RFA        Post-RFA      Not specified       Total
----------------------------------------------------------------------------------------------------------------
2022............................           683.0             8.8            61.8            30.6           101.2
2023............................           683.0             8.8            61.8            30.6           101.2
2024............................           683.0             8.8            61.8            30.6           101.2
2025............................           683.0             8.8            61.8            30.6           101.2
2026............................           683.0             8.8            61.8            30.6           101.2
2027............................            31.8             0.0             3.4             1.4             4.8
2028............................            31.8             0.0             3.4             1.4             4.8
2029............................            31.8             0.0             3.4             1.4             4.8
2030............................            31.8             0.0             3.4             1.4             4.8
2031............................            31.8             0.0             3.4             1.4             4.8
                                 -------------------------------------------------------------------------------
    Total.......................          3574.0            44.0           326.0           160.0           530.0
----------------------------------------------------------------------------------------------------------------

Time per Assessment and per Review
    The SUNSET final rule RIA contains estimates of the time per 
assessment and time per review performed under the SUNSET final rule. 
For each assessment, the SUNSET final rule RIA assumes that it will 
require between 3 and 10 hours to assess a rulemaking. For each review, 
the SUNSET RIA assumes that it will require between 250 and 500 hours 
to review rulemakings that predate the RFA, and between 40 and 100 
hours to review rulemakings that postdate the RFA. For the 160 
rulemakings newly found to have a significant impact, the SUNSET RIA 
assumes that it will take between 40 and 100 hours to complete a 
review.
    The Department now concludes the SUNSET RIA likely underestimates 
the time necessary to credibly assess whether a regulation imposes a 
significant economic impact on a substantial number of small entities 
by a significant degree. The Small Business Administration (SBA) Office 
of Advocacy published ``A Guide for Government Agencies: How to Comply 
with The Regulatory Flexibility Act,'' detailing a step-by-step 
approach for analysts.\68\ For each of the 3,574 rulemakings requiring 
an assessment under the SUNSET final rule, the Department will need to 
define the problem and describe the regulated entities, estimate 
economic impacts by size categories, and determine which size 
categories incur significant impacts. The SBA guide presents a two-page 
checklist containing the elements of an adequate certification. In 
practice, when performing a threshold analysis, analysts will face 
novel conceptual issues and data challenges, both of which require 
thoughtful consideration and professional judgement. The SUNSET final 
rule also requires HHS to open a docket and review public comments on 
each rulemaking being assessed. Furthermore, SBA indicates that it is 
not sufficient to rely on an assessment made at the time a regulation 
was published:
---------------------------------------------------------------------------

    \68\ Available at https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf.

    In some cases, even if an agency was originally able to certify 
properly under section 605 of the RFA that a rule would not have a 
significant economic impact on a substantial number of small 
entities, changed conditions may mean that the rule now does have a 
significant impact and therefore should be reviewed under section 
610. For example, many more small businesses may be subject to the 
rule now than when the rule was promulgated. The cost of compliance 
with a current rule may have increased sharply because of a required 
---------------------------------------------------------------------------
new technology. (SBA, pp. 80-81)

    We assume that, under the baseline scenario of the SUNSET final 
rule, the Department will follow the

[[Page 32282]]

recommendations in the SBA guidance, and will perform a credible 
threshold analysis for each rulemaking to assess whether it imposes a 
significant economic impact on a substantial number of small entities. 
Each assessment will likely require time by an economist or other 
analyst to perform and document the threshold analysis, with input from 
at least one subject matter expert on the area of the regulation. 
Recognizing the need to fully respond to all the requirements, we 
modify the assumption in the SUNSET final rule RIA and adopt an 
estimate of 40 to 100 hours to complete a credible threshold analysis 
for each rulemaking requiring an assessment.
    As described earlier, the SUNSET final rule RIA contains two 
estimates for the time necessary to perform a retrospective analysis as 
part of a review. For rulemakings published before the RFA was enacted, 
the SUNSET final rule RIA assumes between 250 and 500 hours per review. 
For rulemakings published after the RFA was enacted, the SUNSET final 
rule RIA assumes that a prospective regulatory flexibility analysis is 
available and further assumes that this will reduce the time necessary 
to complete a review, adopting a range of 40 and 100 hours per review. 
For the 160 rulemakings newly found to have a significant impact, the 
SUNSET RIA assumes that it will take between 40 and 100 hours to 
complete a review. The Sensitivity Analysis Section of the SUNSET final 
rule RIA acknowledges that ``[o]ne commenter noted that conducting a 
retrospective analysis can be as time-consuming and expensive as a 
prospective regulatory analysis, suggesting the Department's estimates 
of the time and expense of Reviews may be understated.'' Upon further 
consideration, the Department agrees that the commenter is likely 
correct.
    For the analysis of this final withdrawal rule, we adopt the SUNSET 
final rule RIA estimate of 250 to 500 hours for all retrospective 
analyses performed as part of a review, regardless of when the 
underlying rulemaking was published, and regardless of whether the 
rulemaking was previously found to have a significant impact on a 
substantial number of small entities. If previously published 
prospective or retrospective regulatory flexibility analyses are 
generally available, analysts may be able to build off of these 
previous analytic efforts when developing a retrospective analysis 
under the SUNSET final rule. All else equal, this would suggest the 
average time per retrospective analysis may be closer to the lower-
bound estimate of 250 hours. If these analyses are not generally 
available, this would suggest an average time per retrospective 
analysis closer to the upper-bound estimate of 500 hours. We do not 
address the assumption in the SUNSET final rule RIA that a prospective 
regulatory flexibility analysis is available for every rulemaking 
published after the RFA was enacted, because it does not impact the 
estimate of the overall time spent on reviews under the baseline 
scenario. Our approach also allows us to ignore the apparent internal 
inconsistency in the SUNSET final rule RIA underlying the time per 
review of the 160 rulemakings that are newly assessed to have a 
significant impact.
    The SUNSET final rule RIA is not clear on what activities are 
included in its estimates of the time per review other than the time 
spent developing a retrospective analysis. We interpret the magnitudes 
of these estimates to exclude consideration of time spent on activities 
other than drafting the retrospective analysis. For example, the 
Department may need to conduct a study or survey to gather data to 
inform its analyses. We therefore include an additional 250 hours to 
500 hours per review to account for this omission. This estimate 
reflects time spent by Department subject matter experts, lawyers, and 
other reviewers informing the retrospective analysis and providing 
feedback on draft analyses. It also reflects time spent by economists 
and other analysts developing the retrospective analysis to respond to 
this feedback, and time spent reading and incorporating evidence from 
other sources, including public comments. Table D2 summarizes the 
assumptions in the SUNSET final rule RIA and our revised assumptions 
for the final withdrawal rule of the time per assessment and time per 
review performed under the baseline scenario of the SUNSET final rule. 
Combining the time spent on retrospective analysis and on other related 
activities, we estimate that each review will take between 500 and 
1,000 hours to complete.

                                    Table D2--Hours per Assessment and Review
----------------------------------------------------------------------------------------------------------------
                                                       SUNSET final rule RIA           Final withdrawal rule
              Baseline requirement               ---------------------------------------------------------------
                                                        Low            High             Low            High
----------------------------------------------------------------------------------------------------------------
Assessment......................................               3              10              40             100
Review: Retrospective Analysis, pre-RFA                      250             500             250             500
 regulation.....................................
Review: Retrospective Analysis, post-RFA                      40             100             250             500
 regulation.....................................
Review: Retrospective Analysis, Not Specified...              40             100             250             500
Review: Other Activities........................               0               0             250             500
----------------------------------------------------------------------------------------------------------------

Time Spent by the Public To Monitor and Comment
    Under the SUNSET final rule, the Department would create a docket 
on www.Regulations.gov for each assessment or review that the 
Department is conducting. The public would then be able to submit 
comments to the dockets of each rulemaking being assessed or reviewed. 
The SUNSET final rule RIA includes a discussion of the costs to the 
stakeholders to monitor and comment on regulations as these are 
undergoing assessment and review; however, the analysis assigns no 
costs to the Department associated with setting up these dockets or 
engaging with the comments. The analysis also does not monetize any 
other costs associated with operationalization of the SUNSET final 
rule, which also requires developing a schedule for activities 
associated with the SUNSET final rule, publishing monthly updates on 
the commencement of assessments and reviews, publishing the results of 
assessments and review (``including the full underlying analyses and 
data used to support the results'') once a year, and establishing a 
website dashboard to help the public monitor the Department's progress.
    When estimating the impact on the public, the SUNSET final rule RIA 
assumes the public will wait until the assessments and reviews are 
complete and the Department has announced it intends to rescind or 
amend a rulemaking before commenting. Thus,

[[Page 32283]]

for example, the SUNSET final rule RIA first estimates that 53 
rulemakings will be rescinded and another 159 rulemakings amended as a 
result of the retrospective analyses initiated as a result of the 
SUNSET final rule, monetizing the time spent by the public responding 
to those 212 rulemakings. The SUNSET final rule RIA assumes that, for 
each of the 53 rulemakings rescinded following a review completed under 
the SUNSET final rule, the public will submit 243 comments; and for 
each of the 159 rulemakings amended, the public will submit 486 
comments. This will result in an estimated 90,153 comments, for which 
the SUNSET final rule RIA assumes will take between 5 and 15 hours to 
prepare. Presumably, this estimate is inclusive of finding out that the 
rulemaking is likely to be rescinded or amended, reading and 
understanding the rulemaking, completing further research, 
communicating with other stakeholders, identifying concerns, and 
drafting and submitting comments. The preamble to the SUNSET final rule 
anticipates that the Department will create on its website a dashboard 
that shows its progress on its Assessments and Reviews. Therefore, we 
assume that any reduction in the time spent by the public attributable 
to this dashboard is accounted for in these time estimates.
    We have reconsidered the SUNSET final rule RIA's assumption that 
the public will wait until the Department has announced it intends to 
rescind or amend a rulemaking before commenting. Upon further 
consideration, the Department finds it more likely that the public will 
comment on rulemakings undergoing assessment and review rather than 
wait until learning the specific rulemakings that will be rescinded or 
amended as a result of these assessments and reviews. The Department's 
prior assumptions appear at odds with the decision to invite public 
comment during both the assessment and review processes. Furthermore, 
as discussed by the SBA, ``insights about an existing regulation 
received from regulated entities and other interested parties should be 
a key component of a retrospective rule review. By making the review 
process transparent and accessible, agencies are more likely to 
identify improvements that will benefit all parties at the conclusion 
of the review.'' \69\
---------------------------------------------------------------------------

    \69\ Available at https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf pg. 83.
---------------------------------------------------------------------------

    This means that we assume that the public will comment on all 3,600 
rulemakings subject to the SUNSET final rule that will be available for 
public comment in connection with a Department assessment or review, in 
contrast with the SUNSET final rule RIA, which assumes the public will 
offer no comments. We adopt the SUNSET final rule RIA's estimate of 486 
comments per rulemaking, but instead apply this to the 530 rulemakings 
that, following a threshold analysis in an assessment, the Department 
will begin to review. We believe that the public will submit fewer 
comments for rulemakings undergoing an assessment (rather than a 
review), and adopt an assumption of 25 comments per assessment. We also 
adopt the SUNSET final rule RIA's assumption about the time spent per 
comment (between 5 and 15 hours) and apply it in the context of 
assessments and reviews. Table D3 summarizes a comparison of the 
assumptions in the SUNSET final rule RIA and in the baseline analysis 
of this final withdrawal rule of the comments per assessment and 
review, and for the subsequent regulatory actions to rescind or amend 
rulemakings.

                 Table D3--Baseline Comments per Action
------------------------------------------------------------------------
                                    SUNSET final rule   Final withdrawal
       Baseline requirement                RIA                rule
------------------------------------------------------------------------
Assessment........................                  0                 25
Review............................                  0                486
Rescission........................                486                N/A
Amendment.........................                243                N/A
------------------------------------------------------------------------

Considerations Related to Rescissions and Amendments
    As described earlier, the SUNSET final rule RIA envisions the 
Department identifying and rescinding 53 rulemakings and amending 159 
rulemakings following completed reviews under the SUNSET final rule. 
Upon further reflection and analysis, the Department no longer believes 
it was appropriate to unambiguously attribute subsequent regulatory 
actions of this nature to the SUNSET final rulemaking in the context of 
a regulatory impact analysis. Even if the challenging attribution 
questions could be resolved, we maintain that the SUNSET final rule RIA 
understates the impact of the SUNSET final rule since it implicitly 
assumes that the Department would not have to spend any time to develop 
and publish subsequent regulatory actions to rescind or amend existing 
regulations. This unstated assumption is difficult to justify given the 
resources required to undertake a full notice-and-comment rulemaking 
proceeding. Since these anticipated regulatory actions relate to 
regulations that have a significant economic impact on a substantial 
number of small entities, we expect that these actions will need to 
involve subject matter experts, legal review, policy coordination, 
Departmental clearance, and a communications strategy to bring 
transparency to the process. For certain regulatory actions, we 
anticipate review by the Office of Management and Budget. We have not 
attempted to estimate the time and resources associated with developing 
these regulatory actions or unambiguously attributed the costs of those 
actions to the SUNSET final rule.
Baseline Effect of the SUNSET Final Rule
    To quantify the likely effect of the SUNSET final rule on the 
Department, we multiply the number of assessments and number of reviews 
from Table D1 by the assumptions relating to the time per assessment 
and time per review described in Table D2. To quantify the likely 
effect of the SUNSET final rule on the public, we multiply the figures 
in Table D1 by the assumptions relating to the comments per assessment 
and comments per review described in Table D3. This gives us estimates 
for the number of comments, which we then multiply by the time 
estimates per comment (between 5 and 15 hours) to estimate the total 
time spent by the public. Table D4 presents yearly estimates of hours 
spent related to assessments performed under the

[[Page 32284]]

SUNSET final rule to the Department and the public. Table D5 presents 
comparable figures related to reviews. Table D6 presents the total time 
anticipated under the SUNSET final rule related to assessments and 
reviews.

                       Table D4--Hours Related to Assessments Under the SUNSET Final Rule
----------------------------------------------------------------------------------------------------------------
                                                            Department                        Public
              Year                  Assessments  ---------------------------------------------------------------
                                                        Low            High             Low            High
----------------------------------------------------------------------------------------------------------------
2022............................           683.0          27,320          68,300          85,375         256,125
2023............................           683.0          27,320          68,300          85,375         256,125
2024............................           683.0          27,320          68,300          85,375         256,125
2025............................           683.0          27,320          68,300          85,375         256,125
2026............................           683.0          27,320          68,300          85,375         256,125
2027............................            31.8           1,272           3,180           3,975          11,925
2028............................            31.8           1,272           3,180           3,975          11,925
2029............................            31.8           1,272           3,180           3,975          11,925
2030............................            31.8           1,272           3,180           3,975          11,925
2031............................            31.8           1,272           3,180           3,975          11,925
----------------------------------------------------------------------------------------------------------------

                         Table D5--Hours Related to Reviews Under the SUNSET Final Rule
----------------------------------------------------------------------------------------------------------------
                                                            Department                        Public
              Year                    Reviews    ---------------------------------------------------------------
                                                        Low            High             Low            High
----------------------------------------------------------------------------------------------------------------
2022............................           101.2          50,600         101,200         245,916         737,748
2023............................           101.2          50,600         101,200         245,916         737,748
2024............................           101.2          50,600         101,200         245,916         737,748
2025............................           101.2          50,600         101,200         245,916         737,748
2026............................           101.2          50,600         101,200         245,916         737,748
2027............................             4.8           2,400           4,800          11,664          34,992
2028............................             4.8           2,400           4,800          11,664          34,992
2029............................             4.8           2,400           4,800          11,664          34,992
2030............................             4.8           2,400           4,800          11,664          34,992
2031............................             4.8           2,400           4,800          11,664          34,992
----------------------------------------------------------------------------------------------------------------

                             Table D6--Total Hours Related to the SUNSET Final Rule
----------------------------------------------------------------------------------------------------------------
                                                            Department                        Public
                      Year                       ---------------------------------------------------------------
                                                        Low            High             Low            High
----------------------------------------------------------------------------------------------------------------
2022............................................          77,920         169,500         331,291         993,873
2023............................................          77,920         169,500         331,291         993,873
2024............................................          77,920         169,500         331,291         993,873
2025............................................          77,920         169,500         331,291         993,873
2026............................................          77,920         169,500         331,291         993,873
2027............................................           3,672           7,980          15,639          46,917
2028............................................           3,672           7,980          15,639          46,917
2029............................................           3,672           7,980          15,639          46,917
2030............................................           3,672           7,980          15,639          46,917
2031............................................           3,672           7,980          15,639          46,917
----------------------------------------------------------------------------------------------------------------

    While these time estimates are significant, they are not inclusive 
of all costs expected under the SUNSET final rule. In addition to the 
quantified estimates above, we expect that the Department will 
experience other costs related to the requirements of the SUNSET final 
rule under the baseline scenario. For example, the estimates above do 
not include time spent reviewing guidance documents related to 
rulemaking undergoing assessment and review. They also do not include 
the time associated with developing SECGs for the 160 rulemakings newly 
found to have a significant impact on a substantial number of small 
entities, or the time associated with updating existing guidances for 
the same or related rulemakings. The figures above also omit the 
monetary costs to purchase data and data subscriptions that we 
anticipate will serve as critical inputs for the assessments and 
reviews, and costs associated with conducting formal evaluations to 
understand the impact of the rules. In addition, the estimates do not 
include the costs of resolving and communicating the meaning of 
ambiguous provisions in the SUNSET final rule. For example, HHS 
anticipates that it will take considerable work to determine when 
regulations must be assessed and reviewed as part of a particular 
rulemaking and when regulations fall within an exception. Even after 
that work is complete, additional resources are required to share those 
interpretations with the public. Furthermore, the figures do not 
account for the time and costs associated with HHS's efforts to 
reevaluate and redirect resources to support assessments and reviews 
and thereby preserve regulations.
    As an additional consideration, we estimate that assessing and 
reviewing regulations will require the equivalent of 67 and 146 full-
time employees in each of the first five years of the analysis, 
adopting the SUNSET final

[[Page 32285]]

rule RIA's estimate of 1,160 hours of work per year per employee.\70\ 
Given current staffing and other Departmental needs and priorities, we 
anticipate the need to hire non-government experts to perform a share 
of the retrospective work. This approach will likely result in 
additional overhead costs that we have not quantified. We also 
anticipate the need to spend Departmental resources to find, hire, 
train, and transfer personnel with technical expertise to conduct the 
analyses, the costs of which have not been quantified in this analysis.
---------------------------------------------------------------------------

    \70\ This 1,160-hour estimate corresponds to a measure of the 
``Net Supported Direct FDA Work Hours Available for Assignments'' 
(86 FR 5743).
---------------------------------------------------------------------------

E. Benefits of the Final Withdrawal Rule

    The monetized benefits of this regulatory action to withdraw the 
SUNSET final rule are the cost savings to the Department from not 
completing the assessments and reviews required under the baseline 
scenario, and the cost savings to the public from not commenting on 
these assessments and reviews. To monetize these cost savings, we 
multiply the hours related to the SUNSET final rule in Table D6 by the 
cost per hour of these activities. We adopt the SUNSET final rule RIA's 
``estimates that the fully-loaded cost per hour to the Department to 
employ a person to conduct a Review or Assessment is $244.98 per hour'' 
\71\ and ``fully loaded cost per hour of writing comments is $143.20.'' 
\72\ Table E1 presents the yearly cost savings to the Department and 
the public expected under the final withdrawal rule compared to the 
baseline scenario. We combine the low estimates for the Department and 
the public to generate an overall low estimate, and similarly combine 
the high estimates for the Department and the public to generate an 
overall high estimate. We also report an overall primary estimate, 
which is the midpoint between the low and high estimates. Finally, we 
report the present discounted value (PDV) and annualized cost savings 
under the final withdrawal rule for both a 3% and 7% discount rate. All 
figures are reported in 2020 dollars, in millions.
---------------------------------------------------------------------------

    \71\ 86 FR 5743.
    \72\ 86 FR 5745.

                                                 Table E1--Cost Savings Under the Final Withdrawal Rule
                                                                     [Millions of $]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Department                        Public                                  Overall
                  Year                   ---------------------------------------------------------------------------------------------------------------
                                                Low            High             Low            High             Low           Central          High
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022....................................           $19.1           $41.5           $47.4          $142.3           $66.5          $125.2          $183.8
2023....................................            19.1            41.5            47.4           142.3            66.5           125.2           183.8
2024....................................            19.1            41.5            47.4           142.3            66.5           125.2           183.8
2025....................................            19.1            41.5            47.4           142.3            66.5           125.2           183.8
2026....................................            19.1            41.5            47.4           142.3            66.5           125.2           183.8
2027....................................             0.9             2.0             2.2             6.7             3.1             5.9             8.7
2028....................................             0.9             2.0             2.2             6.7             3.1             5.9             8.7
2029....................................             0.9             2.0             2.2             6.7             3.1             5.9             8.7
2030....................................             0.9             2.0             2.2             6.7             3.1             5.9             8.7
2031....................................             0.9             2.0             2.2             6.7             3.1             5.9             8.7
PDV, 3%.................................            91.0           197.9           226.1           678.3           317.1           596.7           876.2
PDV, 7%.................................            80.9           176.0           201.1           603.2           282.0           530.6           779.2
Annualized, 3%..........................            10.7            23.2            26.5            79.5            37.2            69.9           102.7
Annualized, 7%..........................            11.5            25.1            28.6            85.9            40.1            75.5           110.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For comparison, in present value terms, these estimates of 
annualized cost savings are more than four times the size of the 
annualized cost estimates included in the SUNSET final rule RIA. This 
reflects what the Department has now concluded are more reasonable 
assumptions about the effect of the SUNSET final rule rather than a 
claim that the combination of these two regulatory actions will 
generate net cost savings. These cost savings estimates attributed to 
the final withdrawal rule are consistent with a scenario that the 
Department returns to its approach to Section 610 reviews that 
immediately predate the publication of the SUNSET final rule on January 
19, 2021. We believe that this represents a credible and appropriate 
approach for estimating the likely cost savings that will be 
attributable to the final withdrawal rule. Other considerations 
relating to the appropriate frequency or nature of retrospective 
economic analyses of existing Departmental regulations are beyond the 
scope of this final rule RIA.
    In the previous section, we discussed concerns about potential 
costs of the SUNSET final rule that were overlooked in the SUNSET final 
rule RIA. To the extent that we are unable to quantify or monetize 
these costs, such as the purchase of data, conducting studies to 
evaluate the impacts of rules, additional overhead costs associated 
with contracting with non-government entities to perform a share of the 
retrospective work, and other personnel costs, the cost savings 
anticipated under the final withdrawal rule are equally underestimated.
    In addition to cost savings, the final withdrawal rule will 
generate non-quantified benefits from reduced regulatory uncertainty. 
Although we calculate the cost savings estimates in this analysis by 
adopting an assumption that the Department will fulfill the 
requirements of the SUNSET final rule rather than to let any regulation 
expire automatically, it is highly likely that some regulations will 
automatically expire. Withdrawing the SUNSET final rule will remove the 
expiration provisions, which will also remove the likelihood of any 
automatic expiration of regulatory requirements. The final withdrawal 
rule will also eliminate the potential for regulatory confusion among 
stakeholders, and harm to the public health related to the actuality of 
having regulations expire automatically.

F. Costs of the Final Withdrawal Rule

    The costs of the final withdrawal rule will be the forgone benefits 
of the information learned from the assessments and reviews completed 
under the baseline scenario. We adopt the approach taken in the SUNSET 
final

[[Page 32286]]

rule RIA and make no attempt to quantify or monetize the value of this 
information. The SUNSET final rule RIA also describes potential 
benefits from subsequent regulatory actions to rescind or amend 
existing regulations as a result of the SUNSET final rule; however, the 
Department now believes that any effects associated with future 
regulatory actions raise challenging questions of attribution (entirely 
to those regulatory actions themselves, or at least partially to the 
SUNSET final rule). We therefore do not unambiguously identify these as 
a source of foregone benefits under the final withdrawal rule.

G. Analysis of Regulatory Alternatives to the Final Withdrawal Rule

    We quantitatively analyze four alternative options to the final 
withdrawal rule. First, we consider an option to maintain the general 
approach of the SUNSET final rule, but adopt a two-year period 
following the effective date to assess and review all regulations older 
than ten years. This option, Alternative 1, follows the timeline 
envisioned under the November 4, 2020, proposed SUNSET rule.\73\ 
Second, we consider an option to maintain the general approach of the 
SUNSET final rule, but adopt an initial ten-year period following the 
effective date to assess and review all regulations, regardless of when 
these were first published. This option, Alternative 2, evenly 
distributes the time spent by the Department assessing and reviewing 
existing regulations. Third, we consider an option to maintain the 
general framework of the SUNSET final rule but limit its scope to 
regulations that the Department previously identified as having a 
significant economic impact on a substantial number of small entities. 
This option, Alternative 3, would include the 326 Reviews of Post-RFA 
rulemakings identified in Table D1. Fourth, we consider an option, 
Alternative 4, that would maintain the SUNSET final rule's requirements 
related to the timeline for assessing and reviewing all of the 
Department's existing regulations, but without the automatic expiration 
provision contained in the SUNSET final rule.
---------------------------------------------------------------------------

    \73\ 85 FR 70096.
---------------------------------------------------------------------------

    Table G1 presents the primary estimates of yearly cost savings 
under the final withdrawal rule and under the four policy alternatives 
described above. Each of these policy options are compared to the 
common baseline scenario described in section D. We report the PDV and 
annualized cost savings under the final withdrawal rule and two policy 
alternatives for both a 3% and 7% discount rate. All figures are 
reported in 2020 dollars, in millions. Negative cost-savings estimates 
indicate that a policy alternative would likely result in net cost 
increases compared to the baseline scenario.

           Table G1--Primary Estimate of Cost Savings Under the Final Withdrawal Rule and Alternatives
                                                      [$M]
----------------------------------------------------------------------------------------------------------------
              Year                  Final rule     Alternative 1   Alternative 2   Alternative 3   Alternative 4
----------------------------------------------------------------------------------------------------------------
2022............................          $125.2         -$187.8           $59.6           $70.8            $0.0
2023............................           125.2          -187.8            59.6            70.8             0.0
2024............................           125.2           121.5            59.6            70.8             0.0
2025............................           125.2           121.5            59.6            70.8             0.0
2026............................           125.2           121.5            59.6            70.8             0.0
2027............................             5.9             2.2           -59.6             2.9             0.0
2028............................             5.9             2.2           -59.6             2.9             0.0
2029............................             5.9             2.2           -59.6             2.9             0.0
2030............................             5.9             2.2           -59.6             2.9             0.0
2031............................             5.9             2.2           -59.6             2.9             0.0
PDV, 3%.........................           596.7           -26.6            37.5           335.9             0.0
PDV, 7%.........................           530.6           -54.5            70.2           298.9             0.0
Annualized, 3%..................            69.9            -3.1             4.4            39.4             0.0
Annualized, 7%..................            75.5            -7.8            10.0            42.6             0.0
----------------------------------------------------------------------------------------------------------------

    The cost savings reported for the Sunset final rule match the 
estimates contained in Table E1 of this analysis. For Alternative 1, we 
estimate annualized cost savings of -$3.1 million using a 3% discount 
rate. This indicates that Alternative 1 would result in incremental 
annualized costs of $3.1 million above the baseline scenario of the 
SUNSET final rule. In addition to this quantified impact on cost 
savings, Alternative 1 would increase the likelihood that the 
Department would need to hire non-government experts to perform a share 
of the retrospective work, resulting in additional overhead costs that 
we have not monetized. Alternative 1 would also result in additional 
unquantified benefits associated with earlier completion of some of the 
retrospectives, and therefore earlier access to information from these 
assessments and reviews.
    For Alternatives 2 and 3, we estimate annualized cost savings of 
$4.4 million and $335.9 million, respectively. Compared to the SUNSET 
final rule, Alternatives 2 and 3 would reduce the likelihood that the 
Department would need to hire non-government experts to perform a share 
of the retrospective work, and thus reduce the potential for additional 
overhead costs. Compared to the SUNSET final rule, Alternative 2 would 
result in non-quantified forgone benefits associated with later 
completion of some of the retrospective analyses, and therefore later 
access to information from these assessments and reviews. Alternative 3 
would reduce the number of retrospective analyses and result in more 
foregone information.
    For Alternative 4, we do not identify any incremental costs or cost 
savings compared to the baseline scenario of the SUNSET final rule, 
maintaining the assumption in the main analysis that the Department 
will fulfill the analytic requirements of the SUNSET final rule. 
However, compared to SUNSET final rule, Alternative 4 would generate 
non-quantified benefits from reduced regulatory uncertainty associated 
with the automatic expiration provision of the SUNSET final rule. 
Alternative 4 would, therefore, result in non-quantified benefits from 
reduced regulatory confusion among stakeholders, and non-quantified 
benefits from reduced harm to the public health related to the 
actuality of having regulations expire automatically.

[[Page 32287]]

H. Final Small Entity Analysis

    The Department has examined the economic implications of this final 
withdrawal rule as required by the Regulatory Flexibility Act. This 
analysis, as well as other sections in this Regulatory Impact Analysis, 
serves as the Final Regulatory Flexibility Analysis, as required under 
the Regulatory Flexibility Act.
1. Description and Number of Affected Small Entities
    The SBA maintains a Table of Small Business Size Standards Matched 
to North American Industry Classification System Codes (NAICS).\74\ We 
replicate the SBA's description of this table:
---------------------------------------------------------------------------

    \74\ U.S. Small Business Administration (2019). ``Table of Size 
Standards.'' August 19, 2019. https://www.sba.gov/document/support--table-size-standards.

    This table lists small business size standards matched to 
industries described in the North American Industry Classification 
System (NAICS), as modified by the Office of Management and Budget, 
effective January 1, 2017. The latest NAICS codes are referred to as 
NAICS 2017.
    The size standards are for the most part expressed in either 
millions of dollars (those preceded by ``$'') or number of employees 
(those without the ``$''). A size standard is the largest that a 
concern can be and still qualify as a small business for Federal 
Government programs. For the most part, size standards are the 
average annual receipts or the average employment of a firm.

    The SUNSET final rule will potentially impact small entities across 
at least NAICS industry sectors 11 (Agriculture, Forestry, Fishing and 
Hunting), 31-33 (Manufacturing), 42 (Wholesale Trade), 44-45 (Retail 
Trade), 48-49 (Transportation and Warehousing), 52 (Finance and 
Insurance), 54 (Professional, Scientific, and Technical Services), 62 
(Health Care and Social Assistance), 81 (Other Services (except Public 
Administration)), and 92 (Public Administration). Given the wide range 
of entities affected, and various sources of uncertainty described in 
this section, it is not practical to directly estimate the number of 
small entities that will potentially be impacted under the baseline 
scenario of the SUNSET final rule. Similarly, it is impractical to 
identify the small entities that will be impacted by the final 
withdrawal rule. The Congressional Research Service observes that 
``about 97% of all employer firms qualify as small under the SBA's size 
standards. These firms represent about 30% of industry receipts.'' \75\ 
For practicality, we assume that the bulk of the potential impacts of 
the final withdrawal rule to private sector regulated entities are 
small entities.
---------------------------------------------------------------------------

    \75\ Robert Jay Dilger (2021). ``Small Business Size Standards: 
A Historical Analysis of Contemporary Issues.'' Congressional 
Research Service Report R40860. Updated May 28, 2021. Page 2. 
https://crsreports.congress.gov/product/pdf/R/R40860.
---------------------------------------------------------------------------

2. Description of the Potential Impacts of the Rule on Small Entities
Impacts to Small Entities Related to Rescissions and Amendments
    When estimating the impact on the public, the SUNSET final rule RIA 
first estimates that 53 regulations will be rescinded and another 159 
regulations will be amended as a result of the retrospective analyses 
initiated as a result of the SUNSET final rule. Since the particular 
regulations impacted are unknowable prior to conducting the 
retrospective analyses, this results in uncertainty over the types of 
small entities that will be affected under the baseline scenario of the 
SUNSET final rule. The nature of this uncertainty means it is 
infeasible to estimate the number of small entities affected by these 
potential rescinded or amended regulations without first completing the 
retrospective analyses.
    As described earlier, the Department no longer believes it was 
appropriate to unambiguously attribute to the SUNSET final rulemaking 
subsequent regulatory actions of this nature in the context of a 
regulatory impact analysis. We therefore do not attribute any impacts 
of this nature to the final withdrawal rule, nor do we identify any 
impacts to small entities.
Impacts to Small Entities Related to the Automatic Expiration of 
Regulations
    When identifying the potential benefits of the final withdrawal 
rule, we note that, while the Department would seek to fulfill the 
requirements of the SUNSET final rule rather than to let any regulation 
expire automatically, it is highly likely that some regulations will 
automatically expire without substantive review. This potential impact 
under the SUNSET final rule does not introduce similar questions of 
attribution; however, there remains uncertainty over the particular 
regulations that will be impacted. The nature of this uncertainty means 
we cannot identify the small entities that are most likely to be 
affected by regulations that automatically expire without substantive 
review.
    Revoking the SUNSET final rule will remove the expiration 
provisions, which will also remove the likelihood of any automatic 
expiration of regulatory requirements. The final withdrawal rule will 
also eliminate the potential for regulatory confusion among 
stakeholders, including small entities. We anticipate that a large 
share of these non-quantified benefits will accrue to small entities.
Impacts to Small Entities Related to Commenting on Assessments and 
Reviews
    When identifying the potential benefits of the final withdrawal 
rule, we estimate the cost savings to the public from not commenting on 
these assessments and reviews that will be performed under the baseline 
scenario of the SUNSET final rule. Table E1 summarizes these estimates, 
including a range of cost-savings to the public sector between $26.5 
million and $79.5 million in annualized terms under a 3% discount rate. 
Under a 7% discount rate, the comparable range of cost savings is $28.6 
million and $85.9 million. Although these represent substantial cost 
savings in the aggregate, these include comments not just from small 
entities but also the general public, larger businesses, Tribes, 
States, non-governmental organizations, and other regulated entities 
and stakeholders.
    To evaluate the likely magnitude of the impact to a single small 
entity, we consider an illustrative scenario of a full-time sole 
proprietor that submits 1 or fewer comment per year. As described 
earlier, we estimate that each comment takes between 5 and 15 hours to 
prepare and submit. The final withdrawal rule will reduce the time 
spent on comments for this small entity by 5 to 15 hours per year. This 
represents between 0.2% to 0.7% of annual labor time saved, computed 
using an assumption that the individual works 2,087 hours per year. As 
an additional sensitivity analysis, we computed the number of comments 
that a sole proprietor will need to submit in one year such that the 
time spent on comments will exceed 3% of total time spent on labor. 
Assuming 2,087 hours of labor time per year, the total time spent on 
comments to meet this threshold is about 63 hours. Using a central 
estimate of 10 hours to prepare and submit each comment, the sole 
proprietor could prepare up to 6 comments per year without exceeding 
the 3% threshold. We expect that fewer than 5 percent of small entities 
would share more than 6 comments per year on regulations undergoing a 
retrospective analysis under the SUNSET final rule. This indicates that 
the potential cost savings to small entities under the final withdrawal 
rule are unlikely to be significant for a substantial number of small 
entities. The Department

[[Page 32288]]

considers a rule to have a significant impact on a substantial number 
of small entities if it has at least a three percent impact on revenue 
on at least five percent of small entities. This cost-saving benefit is 
well below this threshold.

XII. Federalism

    We have analyzed this final rule in accordance with the principles 
set forth in E.O. 13132, ``Federalism.'' The Department has determined 
that this final rule does not contain policies that have substantial 
direct effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government.

VIII. Consultation and Coordination With Indian Tribal Governments

    We have analyzed this final rule in accordance with the principles 
set forth in E.O. 13175, ``Consultation and Coordination With Indian 
Tribal Governments.'' As we acknowledged and agreed in the Withdrawal 
NPRM, multiple comments from representatives of several Tribes and 
related groups expressed concern that the SUNSET final rule would have 
significant tribal implications, if implemented, and that consultation 
with Tribal governments on the SUNSET proposed rule was not adequate. 
See 86 FR 59931. However, the Department further explained that tribal 
consultation on the Withdrawal NPRM was unnecessary because the 
withdrawal of the SUNSET final rule would continue the status quo, and 
because of the numerous comments already received from Tribal 
governments and representatives asking for the SUNSET final rule to be 
withdrawn. The Department nevertheless provided notice of the 
Withdrawal NPRM to Tribes, acknowledging tribal concerns with the lack 
of tribal consultation on the earlier rulemaking and encouraging them 
to share any additional feedback by providing written comments on the 
proposed withdrawal. The Department continues to conclude that the 
final withdrawal rule does not contain policies that would have a 
substantial direct effect on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes.

IX. Analysis of Environmental Impacts

    HHS had determined that the final rule will not have a significant 
impact on the environment.

X. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 and its 
implementing regulations, 44 U.S.C. 3501-3521; 5 CFR part 1320, 
appendix A.1, the Department has reviewed this final rule and has 
determined that it proposes no new collections of information.

XI. References

1. OIRA dashboard screenshot (Dec. 18, 2020).
2. Complaint, County of Santa Clara v. HHS, Case No. 5:21-cv-01655-
BLF (N.D. Cal. Mar. 9, 2021).

    Dated: May 24, 2022.
Xavier Becerra,
Secretary.
[FR Doc. 2022-11477 Filed 5-26-22; 8:45 am]
BILLING CODE 4150-26-P