Date: 1982-12-15
Speaker: SAM B. HALL (democrat)
Chamber: H

Mr. Speaker. the basic purposes of H.R. 746 are unchanged by any of the modifications made by these amendments. In short. the purpose of title I is to improve the planning and management of the process through which major rules. that is. regulations. are developed. The purposes of title II are to amend the current Administrative Procedure Act (APA) to improve the quality of all regulatory decisionmaking. to increase public involvement in the regulatory process. and to modify the provisions for judicial review of agency action. Therefore. except as set forth in this discussion and the sectionbysection analysis that accompanies it. the report of the committee that was issued on February 25. 1982 (H. Rept. 97435) continues to apply. TITLE I Section 621. Definitions Section 621 sets forth definitions for purPoses of new subchapters II. III. and IV of Chapter 6 of title 5. New section 621(a)(2) and (3) define the terms "benefit" and "cost." respectively. These terms had been used without definition in the bill as reported by the Committee. and it seems useful to provide definitions. Although the definitions of "benefit" and "cost" are quite broadencompassing any direct or indirect beheficial (in the case of "benefit") or adverse (in the case of "cost") effectit Is not intended that agencies will have to identify all benefits and costs no matter how insignificant and attenuated they may be. The benefits and costs that are contemplated are those that are reasonably identifiable and of some significance. The term "economic cost" in section 621(a)(4) is a subset of the term "cost" as defined in section 621(a)(3)-being limited to those costs that are "reasonably quantifiable In monetary terms." The terra "economic costs" Is not limited to costs that are financial in nature. It also includes health. safety. and environmental costs which are reasonably quantifiable in monetary terms. In addition. it should be emphasized that some indirect as well as direct costs may be quantifiable in monetary terms. thereby qualifying as "economic costs". For example. an indirect effect of a rule. such as a reduction in innovation or productivity or an increase in consumer prices. might be quan tifiable in monetary terms with a reasonable degree of effort and accuracy. If so. such an indirect cost would be an "economic cost" within the meaning of section 621(a)(4). Section 621(a)(5) sets forth the definition of "rule". The exemption for rules involving internal revenue laws is moved from this list of exemptions to section 621(b)(2)(A). so that such rules can be designated as major either by the agency or by the President. Also. the exemption for rules that repeal. withdraw. or otherwise modify rules promulgated before the effective date of this Act has been deleted because of the imprecision of the language of the exemption and because of a concern that any agency action qualifying as a major rule should be carefully analyzed. Section 621(a)(6)(A). as redesignated. defines a "major rule" as a rule or group of closely related rules that the agency determines". . . Imposes economic costs. which are likely to result in an annual impact on the economy of $100.000.000 or more." The economic costs to which this provision refers are the aggregate costs imposed by the rule that are reasonably quantifiable in monetary terms. A rule also may be "major" because it would have significant adverse effects or cause a substantial increase in costs that are not reasonably quantifiable in monetary terms. But a classification of "major" on these latter grounds could be made under section 621(a)(6)(B) rather than section 621(a)(6)(A). It is important to emphasize that the reasonably quantifiable costs referred to in section 621(a)(6)(A) are to be computed on an aggregate basis. without any offsetting allowances for associated benefits of the rule. Benefits. of course. are important and must be identified and carefully analyzed in any regulatory analysis performed for a major rule. Thus. in deciding whether a rule qualifies as "major" under the $100 million test in the first place. the focus should be solely upon the gross costs that are reasonably quantifiable in monetary terms. without netting out any resulting benefits of the rule. On the other hand. if a rule. for example. reduces existing levels of environmental protection. that reduction in environmental protection would be a cost. though it may or may not be an "economic cost". depending upon whether it is reasonably quantifiable in monetary terms. The modification to the definition.of "major rule" deletes the separate category for rules that "will have a substantial impact on health. safety. or the environment" in light of the revision. described above. of the $100 million test. Under that test. rules which have an adverse impact on health. safety. or the environment which can be reasonably quanitfied in monetary terms and which exceed $100 million annually are major rules. In addition. either the agency or the President may designate as "major" any rules that have a substantial Impact as defined in section 621(a)(6)(B). Section 621(b)(1) requires the President to publish in the Federal Register a rule which he/she designates to be major. This publication must be accompanied by a succinct explanation of the basis for this designation. The President should make such a designation only when clearly justified since the designation of a rule as major imposes a burden on an agencys financial and personnel resources and may diinish the ability of an agency to carry out its other responsibilities. The bill prohibits the President from delegating his authority to make such a designation. H 9930 CO Section 621(b)(2) exempts certain rules from being major rules under the $100 million annual impact test of section 621(a)(6)(A). These rules are exempted because the analysis required of a major rule is inappropriate for these particular rules. Such rules could still be designated as "major" by an agency or the President uider section 621(a)(6)(B). Finally. it should be noted that the regulatory process affects a wide variety of matters. The proposed section 621(a)(6) which defines the term "major rule" is therefore of necessity framed in general terms. and its bare words could. It is recognized. be read to provide for hundreds of regulatory analyses. That is not the legislative intent. Rather. the point of section 621(a)(6) is to direct the agencies to allocate their resources to throughly analyze rules of truly major significance. The judgment expressed in section 621(a)(6) is that given the money and time that must be invested to conduct these analyses. it is only worthwhile to undertake them with regard to such rules. It should be noted also that the President is expected to use the authority stated in section 621(a)(6)(B) is a manner that does not place a disproportionate burden on any agency. Section 622. Additional procedures for * major rules Section 622 directs agencies to complete certain procedures as part of the process of issuing major rules. While these procedures should result in information valuable to the agency in making its regulatory decisions. they do not change the substantive standards applicable to the agencys action under any other provision of law. Sections 622(b) and (c) require an agency to issue certain material regarding each major rule. The material issued should be succinct but appropriately comprehensive to satisfy the particular requirement. However. there is no intent here to imply that the material issued under subsection (b) be as complete as that issued under subsection (c). The material issued pursuant to subsection (b) is intended to be a preliminary document. that is. a document that indicates the agencys thinking in issuing the notice of proposed rulemaking. Thus. it will probably be less conclusive and less extensive than that issued under subsection (c). Section 622(b)(2) requires an agency to describe the reasonable alternatives to a proposed rule and the main elements of the rule that may accomplish the stated rulemaking objectives in a manner consistent with the applicable statutes. In any case where the proposed rule does not have lower economic coststhat is. costs that are reasonably quantifiable in monetary termsthan each of the reasonable alternatives. the agency is to identify the alternative having the lowest such costs. The method that may accomplish the stated objectives of the proposed rule. in a manner consistent with the applicable statutes. at the lowest economic cost should be one of the reasonable alternatives described under section 622(bX2). unless the proposed rule itself is the method that has the lowest economic costs. The phrase "may accomplish" rather than "will accomplish" was used in recognition of the fact that when an agency proposes a rule. it is unlikely to know with a high degree of certainty that the proposed rule or any.one of the various alternatives will accomplish the stated objectives of the rulemaking. Consequently. in identifying and describing alternatives to the proposed rule. the agency should consider those alternatives that. at least at this preliminary stage. may reasonably be anticipated to accomplish the rulemaking objectives. A more