Regulatory Analysis Requirements
A Review and Recommendations for Reform
Curtis W. Copeland
April 23, 2012

This report was prepared for the consideration of the Administrative Conference
of the United States. The views expressed are those of the author and do not
necessarily reflect those of the members of the Conference or its committees.

Table of Contents
Introduction...........................................................................................................................3
Objectives, Scope, and Methodology .......................................................................................... 5
Final Rules and Major Final Rules ...........................................................................................7
Table 1. Number of Final Rules and Major Final Rules by Calendar Year: 1997-2011 .................8
Table 2. Number of Final Rules and Major Final Rules by Department or Agency: Calendar Years
2004-2011..............................................................................................................................9
Why Rules Are Considered “Major” .......................................................................................... 10
Table 3. Why Rules Appeared to be “Major” by Agency: Calendar Year 2010 .......................... 12
“Rulemaking Requirements” Versus “Analytical Requirements”............................................. 13
Crosscutting Analytical Requirements....................................................................................... 16
National Environmental Policy Act........................................................................................ 16
Regulatory Flexibility Act ...................................................................................................... 18
Paperwork Reduction Act ..................................................................................................... 19
Unfunded Mandates Reform Act .......................................................................................... 20
Privacy Assessments Under the E-Government Act and P.L. 108-447 .................................. 21
Family Assessments Under Section 654 of P.L. 105-277 ....................................................... 22
Executive Order 12866.......................................................................................................... 22
Executive Order 12630.......................................................................................................... 27
Executive Order 12898.......................................................................................................... 27
Executive Order 13045.......................................................................................................... 27
Executive Order 13132.......................................................................................................... 28
Executive Order 13175.......................................................................................................... 28
Executive Order 13211.......................................................................................................... 29
Agency- or Issue-Specific Analytical Requirements ................................................................... 29
Requirements to “Consider” Impacts ................................................................................... 30
Analytical Requirements Cited in 2010 Major Rules............................................................... 33
Figure 1: Some Analytical Requirements Were Rarely Mentioned in Major Rules .................. 35
Why Certain Analytical Requirements Were Not Mentioned ............................................... 36
Why Certain Analytical Requirements Were Not Triggered ................................................. 37
Inconsistency in the Application of the Requirements ......................................................... 39
Interviews with Agency Officials ............................................................................................... 40
Agency- or Issue-Specific Analytical Requirements ................................................................... 42
Consolidation of Analytical Requirements............................................................................. 45
Factors to Consider When Comparing Analytical Requirements............................................... 45
Agencies and Rules Covered ................................................................................................. 45
Agency Discretion ................................................................................................................. 49
Nature of the Requirements ................................................................................................. 52
Table 3: Similar Elements in Analyses Pursuant to the RFA, UMRA, the PRA, and EO 12866 ... 52
Summary ............................................................................................................................... 56
Table 4: Crosscutting Regulatory Analysis Requirements Differ in Many Respects .................. 56
Overlaps and Consolidations Cited in 2010 Major Rules........................................................... 57

2

Interviews with Agency Officials ............................................................................................... 60
Other Changes to Improve Regulatory Analysis ................................................................... 65
Analytical Requirements and Ossification ............................................................................. 66
GAO Report................................................................................................................................ 67
A Case Study .............................................................................................................................. 68
Factors Affecting Ossification .................................................................................................... 69
Measuring Ossification.............................................................................................................. 70
Interviews with Agency Officials ............................................................................................... 71
Conclusions/Recommendations ........................................................................................... 74
Listing of Analytical Requirements ............................................................................................ 75
Transparency and the Applicability of Rulemaking Requirements ............................................ 76
Coverage of the Analytical Requirements ................................................................................. 76
Different Analyses for Different Types of Rules ......................................................................... 78
Overlapping Analytical Requirements ....................................................................................... 79
Consolidation of Analytical Requirements ................................................................................ 80
Analytical Requirements and Ossification ................................................................................. 82
Transfer Rules........................................................................................................................ 84
“Consumer Surplus” Rules and Rules Establishing Fees ....................................................... 90
Costs, Benefits, or Both ........................................................................................................ 91
Major Increase in Costs or Prices.......................................................................................... 96

Introduction

3

Numerous analytical rulemaking requirements have been established incrementally
during the last 40 to 50 years through a series of presidential and congressional
initiatives. Concerns have been raised that the cumulative and uncoordinated nature of
these and other requirements have slowed down the rulemaking process without
improving the quality of the resultant regulations.1 Others have pointed out that even if
one believes that the analytical requirements are effective, “the patchwork of statutes and
executive orders by which these analysis requirements have been imposed and the
interrelations between these various statutes and executive orders have created a
confusing labyrinth through which agencies seeking to adopt rules must grope.”2
The Administrative Conference of the United States (ACUS) has previously
recommended procedures for performing regulatory analyses, and ways to make those
analyses more transparent to the public.3 In 1993, ACUS noted that “[i]nformed observers
generally agree that the rulemaking process has become increasingly less effective and
more time-consuming.”4 ACUS therefore recommended that, among other things,
“Congress should reconsider the need for continuing statutory analytical requirements
that necessitate broadly applicable analyses or action to address narrowly-focused
issues.”
Similarly, in 1992 the American Bar Association (ABA) recommended that the President
and Congress “exercise restraint in the overall number of required rulemaking impact
analyses [and] assess the usefulness of existing and planned impact analyses.” The ABA
went on to say that “the steady increase in the number and types of cost-benefit or
rulemaking review requirements has occurred without any apparent consideration being
given to their cumulative effect on the ability of agencies to carry out their statutory
obligations.” In 2008, the ABA reiterated its concerns:
Over time, both Congress and the executive have laden the process of informal
rulemaking with multiple requirements for regulatory analysis. Viewed in isolation, a
good case can be made for each of these requirements. Their cumulative effect, however,
has been unfortunate. The addition of too many analytical requirements can detract from
the seriousness with which any one is taken, deter the initiation of needed rulemaking,
and induce agencies to rely on non-regulatory pronouncements that may be issued
without public comment procedures but have real-world effects.5

The ABA recommended that Congress and the President should “work to replace the
current patchwork of analytical requirements found in various statutes and Executive
Orders with one coordinated statutory structure.” Similarly, in 2009, a group of
individuals organized by OMB Watch recommended to the incoming Obama
1

See, for example, Thomas O. McGarity, “Some Thoughts on ‘Deossifying’ the Rulemaking Process,” Duke Law
Journal, vol. 41 (1992), pp. 1385- 1462; and Thomas O. McGarity, “The Expanded Debate Over the Future of the
Regulatory State,” University of Chicago Law Review, vol. 63 (1996), pp. 1463 – 1532.
2
Mark Seidenfeld, “A Table of Requirements for Federal Administrative Rulemaking,” Florida State University Law
Review,” vol. 27 (2000), p. 534.
3
See, for example, ACUS Recommendations 79-4 and 85-2, available at http://www.acus.gov/acus-recommendations/.
4
ACUS Recommendation 93-4.
5
ABA Section of Administrative Law and Regulatory Practice, “Improving the Administrative Process: A Report to
the President-Elect of the United States, “ Administrative Law Review, vol. 61 (2008), pp. 239-240 (2008).

4

Administration that the analytical requirements be “rationalized, simplified, and in many
cases deleted.”6
Others have also examined the growing set of rulemaking requirements and
recommended simplification. For example, in 2011, Stuart Shapiro concluded that the
rulemaking process contained “many requirements of dubious utility” but that consumed
increasing amounts of agency resources.7 He suggested that a single statutory
requirement for cost-benefit analysis and the elimination of other statutory and executive
order requirements “would streamline, defragment, and ‘clarify’ the regulatory process
and regulations themselves.”8
These comments and recommendations notwithstanding, Congress and various Presidents
have continued to add new analytical requirements to the rulemaking process, and many
more requirements were proposed during the first session of the 112th Congress.9
Commenting on one bill that would make major changes to the rulemaking process (H.R.
3010, the Regulatory Accountability Act of 2011), the ABA’s Section of Administrative
Law and Regulatory Practice said it was “gravely concerned” about a revision of the
rulemaking process that “not only failed to consolidate existing analysis requirements,
but greatly augmented the analysis burdens associated with completing a rulemaking
proceeding.”10 The Section went on to say the following:
These incremental requirements would in all likelihood significantly hamper agencies’
ability to respond to congressional mandates to issue rules, or to delegations of
rulemaking authority. Moreover, they would likely augment the tendency of agencies to
use “underground rules” (a.k.a. “regulation by guidance”) or case-by-case adjudication to
formulate policy without having to surmount the additional hurdles presented by [the
proposed revisions].

Objectives, Scope, and Methodology
The primary objective of this report is to identify the analytical requirements that
executive branch agencies currently must comply with in the federal rulemaking process,
and determine whether those requirements could or should be consolidated or otherwise
reformed to make the rulemaking process more efficient and effective. The report
focuses primarily on the analytical requirements that are “crosscutting” in that they apply
to a large number of executive branch agencies, but it will also note some (but not all) of
6

Gary D. Bass, et al., Advancing the Public Interest Through Regulatory Reform: Recommendations for PresidentElect Obama and the 111th Congress, November 2008, p. 22.
7
Stuart Shapiro, “Defragmenting the Regulatory Process,” Risk Analysis, vol. 31 (2011), pp. 893-901.
8
Ibid., p. 898.
9
U.S. Congressional Research Service, Regulatory Reform Legislation in the 112th Congress, CRS Report R41834, by
Curtis W. Copeland, August 24, 2011.
10
American Bar Association, Section of Administrative Law and Regulatory Practice, “Comments on H.R. 3010, the
Regulatory Accountability Act of 2011,” October 24, 2011, available at
http://www.americanbar.org/content/dam/aba/administrative/administrative_law/commentson3010_final_nocover.auth
checkdam.pdf.

5

the agency- or issue-specific requirements. This report will also attempt to determine
whether these analytical requirements have measurably slowed down the rulemaking
process. The terms “regulatory impact analysis” (RIA) or “economic analysis” are used
in this report to refer to a variety of analyses that are required before agencies issue final
rules, including (but not limited to) cost-benefit analysis (sometimes referred to as
“benefit-cost analysis”).
To help provide context for these objectives, the report first discusses the number of rules
and “major” rules (e.g., those with an annual effect on the economy of $100 million or
more) that have been issued in recent years, noting the different types of major rules that
federal agencies issue. Major rules are focused on in this report because some analytical
requirements only apply to such rules, and they are more likely to trigger other
requirements than rules that are not considered major. The report also distinguishes
“analytical requirements” from other “rulemaking requirements” that do not require some
type of analysis or assessment. It then examines the major rules that were published in
the Federal Register during calendar year 2010 (the most recent full year when the
research began) to determine which analytical requirements the agencies mentioned in
the preambles, and which requirements they indicated triggered an analysis. The major
rules published in 2010 were identified using the Government Accountability Office’s
(GAO) rules database that was developed pursuant to the Congressional Review Act
(CRA, 5 U.S.C. §§ 801-808).11
Finally, structured interviews were conducted with officials in some of the agencies that
issued the 2010 major rules, as well as some agencies that did not issue such rules that
year. Interviews were conducted with officials in the following departments and
agencies: the Departments of Agriculture (USDA), Commerce (DOC), Energy (DOE),
Health and Human Services (HHS), the Interior (DOI), and Transportation (DOT); the
Environmental Protection Agency (EPA); the Securities and Exchange Commission
(SEC), the Federal Communications Commission (FCC), and the Food and Drug
Administration (FDA). In these departments and agencies, particular major rules were
discussed with agency officials, addressing such issues as why certain analytical
requirements were and were not considered applicable to the rules; whether the analytical
requirements had measurably slowed rulemaking, whether all or some of the analytical
requirements could or should be consolidated into a single statute or executive order; and
the effect that the requirements had on the amount of time needed to issue rules.
Interviews were also conducted with officials at GAO, the Small Business
Administration’s (SBA) Office of Advocacy, and with representatives of other
organizations that have been interested in these issues (e.g., the Mercatus Center at
George Mason University, the Center for Progressive Reform, Resources for the Future,
OMB Watch, and the U.S. Chamber of Commerce). The Office of Information and
Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) declined to
participate in the study, but asked to review a copy of the draft report.

11

The GAO database may be accessed at http://gao.gov/legal/congressact/fedrule.html.

6

Final Rules and Major Final Rules
The Congressional Review Act requires each federal agency (including cabinet
departments, independent agencies, and independent regulatory agencies) to send its
covered final rules to the Comptroller General at GAO and to both houses of Congress
before the rules can take effect.12 Section 804(3) of the CRA generally defines a covered
“rule” by referring to the definition in Section 551 of the APA, which says that a rule is
the whole or a part of an agency statement of general or particular applicability and future
effect designed to implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of an agency and includes the approval
or prescription for the future of rates, wages, corporate or financial structures or
reorganizations thereof, prices, facilities, appliances, services or allowances therefore or
of valuations, costs, or accounting, or practices bearing on any of the foregoing.13

The CRA does, however, exclude certain types of rules from its coverage:
(A) any rule of particular applicability, including a rule that approves or prescribes for the
future rates, wages, prices, services, or allowances therefore, corporate or financial
structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or
disclosures bearing on any of the foregoing; (B) any rule relating to agency management
or personnel; or (C) any rule of agency organization, procedure, or practice that does not
substantially affect the rights or obligations of non-agency parties.14

These limits notwithstanding, the scope of the CRA is extremely broad, including rules
that are exempt from notice-and-comment rulemaking procedures (e.g., interpretive rules,
statements of policy, and rules that are considered “proprietary” or that fall under the
“military” or “foreign affairs” exemptions in the APA).15
The CRA generally requires agencies to delay the effective dates of “major” final rules
until 60 days after the date that the rules are published in the Federal Register or
submitted to Congress, whichever is later.16 The Act also requires the Comptroller
General to provide a report to the congressional committees of jurisdiction within 15
12

5 U.S.C. § 801(a)(1)(A). For more information on the CRA, see U.S. Congressional Research Service, Disapproval
of Regulations by Congress: Procedure Under the Congressional Review Act, CRS Report RL31160, by Richard S.
Beth, October 10, 2001, available at http://www.au.af.mil/au/awc/awcgate/crs/rl31160.pdf ; and Morton Rosenberg,
“The Congressional Review Act After 15 Years: Background and Considerations for Reform,” September 16, 2011,
available at http://www.acus.gov/wp-content/uploads/downloads/2011/09/COJR-Draft-CRA-Report-9-16-11.pdf. In
this report, “independent agencies” refers to agencies that answer directly to the President, but are not part of cabinet
departments (e.g., the Environmental Protection Agency). “Independent regulatory agencies” refers to the boards and
commissions identified as such in the Paperwork Reduction Act (44 U.S.C. 3502(5)), such as the Securities and
Exchange Commission.
13
5 U.S.C. §551(4).
14
5 U.S.C. §804 (3)(A-C).
15
Jeffrey S. Lubbers, A Guide to Federal Agency Rulemaking, 4th ed., (Chicago, IL: 2006), p. 187.
16
5 U.S.C. § 801(a)(3).

7

calendar days after each major rule is submitted or published, with the report
summarizing the issuing agency’s compliance with relevant rulemaking requirements.17
The Act defines a “major rule” as
any rule that the Administrator of the Office of Information and Regulatory Affairs of the
Office of Management and Budget finds has resulted in or is likely to result in—(A) an
annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or
prices for consumers, individual industries, Federal, State, or local government agencies,
or geographic regions; or (C) significant adverse effects on competition, employment,
investment, productivity, innovation, or on the ability of United States-based enterprises
to compete with foreign-based enterprises in domestic and export markets. The term does
not include any rule promulgated under the Telecommunications Act of 1996 and the
amendments made by that Act.18

No data are available on the number of major final rules published prior to March 1996,
when the CRA was enacted.19 As Table 1 below indicates, GAO’s database of rules
submitted to the Comptroller General shows that in the first 11 full calendar years after
the CRA was enacted (1997 through 2007), federal agencies published between 50 and 80
major rules each year in the Federal Register. The number of major rules issued during a
single calendar year first exceeded 80 in 2008 (the last full year of the George W. Bush
Administration), when 95 major rules were published. In calendar year 2009, the first
calendar year of the Obama Administration, federal agencies issued 84 major final rules.
However, 11 of those 84 rules were actually issued in early January 2009, during final
days of the Bush Administration.20 During calendar year 2010, federal agencies published
100 major final rules. In calendar year 2011, the number of major rules fell to 76.

Table 1. Number of Final Rules and Major Final Rules by Calendar Year: 1997-2011
Calendar Year

Number of Final Rules

Number of
Major Final Rules

1997

3,960

61

17

5 U.S.C. § 801(a)(2)(A). To access these reports, see http://www.gao.gov/decisions/majrule/majrule.php. In the
reports, GAO generally summarizes the agencies’ economic analyses, and does not prepare its own analysis.
18
5 U.S.C. § 804(2).
19
The definition of a “major rule” in the CRA was taken from Executive Order 12291, which was abolished when
Executive Order 12866 was issued in September 1993. Data from the Regulatory Information Service Center (at
http://www.reginfo.gov) indicates that OIRA reviewed an average of 67 “economically significant” or “major”
regulatory actions per year from 1982 through 1996, but that average includes both proposed and final rules.
20
Of the 16 major rules that were published in the Federal Register during January 2009, the GAO database indicates
that 11 of them were published on or before January 21, 2009. Although President Obama was sworn into office on
January 20, 2009, the rules that were published on January 21 (including one major rule) had already been submitted to
the Office of the Federal Register.

8

Calendar Year

Number of Final Rules

Number of
Major Final Rules

1998

4,420

76

1999

4,373

51

2000

4,113

77

2001

3,454

70

2002

3,608

51

2003

3,785

50

2004

3,703

66

2005

3,352

56

2006

3,083

56

2007

2,971

61

2008

3,117

95

2009

3,492

84

2010

3,271

100

2011

3,453

76

Source: GAO rules database, available at http://www.gao.gov/fedrules/.

Table 2 below shows the number of final rules and major final rules by cabinet
department and agency from 2004 through 2011.21 The table indicates that the number of
rules and major rules issued has varied considerably by department and agency, and that
the number of final rules that an agency issues is not necessarily an indication of how
many major rules the agency will issue. For example, although the Department of
Commerce (DOC) published nearly 2,500 final rules during this period, only 6 of those
rules (0.2%) were considered “major.” In contrast, the Department of Health and Human
Services (HHS) issued 726 final rules from 2004 through 2011, of which 168 (23.4%)
were considered major rules.

Table 2. Number of Final Rules and Major Final Rules by Department or Agency:
Calendar Years 2004-2011
Department/Agency
Agriculture (USDA)

Number of Final Rules

Number of Major Final Rules

1,419

53

21

The starting point of 2004 was selected because that was the first full year that the Department of Homeland Security
was in existence, and government organization has been relatively stable since that date.

9

Department/Agency

Number of Final Rules

Number of Major Final Rules

Commerce (DOC)

2,442

6

Defense (DOD)

708

14

Education (ED)

159

17

Energy (DOE)

235

22

Health and Human Services (HHS)

726

168

Homeland Security (DHS)

6,156

21

Housing and Urban Development
(HUD)

161

8

Interior (DOI)

612

55

Justice (DOJ)

161

7

Labor (DOL)

197

19

State (DOS)

112

2

Treasury (TREAS)

809

9

Transportation (DOT)

6,225

32

Veterans Affairs (DVA)

182

8

Environmental Protection Agency
(EPA)

3,582

46

Federal Communications
Commission (FCC)

821

14

Federal Reserve System (FRS)

83

18

Nuclear Regulatory Commission
(NRC)

146

10

Other Independent Agencies and
Government Corporations

1,600

65

Total

26,536

594

Source: GAO rules database, available at http://www.gao.gov/fedrules/.
Note: Agencies in the “Other Independent Agencies and Government Corporations” grouping include the
Federal Deposit Insurance Corporation, the General Services Administration, and the Social Security
Administration. DOD rules include those that GAO reports separately for the Department of the Air Force and
the Department of the Army.

Why Rules Are Considered “Major”
As noted previously, the Congressional Review Act generally defines a “major rule” as
one that OIRA concludes is likely to result in at least one of the following: (1) an annual
“effect on the economy” of $100 million or more; (2) a “major increase in costs or prices
for consumers, individual industries, Federal, State, or local government agencies, or
geographic regions;” or (3) “significant adverse effects on competition, employment,

10

investment, productivity, innovation, or on the ability of United States-based enterprises
to compete with foreign-based enterprises in domestic and export markets.”22
Within the first of these three definitional categories, a rule could have a $100 million
annual “effect on the economy” in any of several ways.23 For example, if a rule is
expected to have $100 million in compliance costs in any one year, it would likely be
considered a “major” rule. If a rule is expected to produce economic benefits in any one
year that are valued at $100 million, that rule would also likely be considered “major.”
Other rules that increase or decrease federal grants, subsidies, or other types of “transfer”
payments by at least $100 million in any year, or rules that increase federal fees or other
revenues by at least $100 million in a year, would also appear to meet this definition of a
major rule. In addition, a rule would also be a “major rule” if is expected to yield a $100
million “consumer surplus” during a year by triggering consumer spending.
Table 3 below, drawn from a 2011 report from the Congressional Review Service
(CRS),24 takes the 100 major rules that were published during calendar year 2010 and,
using information in GAO’s reports on the major rules and information in the preambles
to the rules themselves, illustrates which of the various definitions of a “major rule”
appear to be applicable to them (i.e., why the rules were considered “major”). The table
divides the category of “$100 million annual effect on the economy” into five
subcategories (regulatory costs, regulatory benefits, transfers, consumer surplus, and fees
and revenues). In some cases, more than one category or subcategory applies to a single
rule. For example, if a rule was expected to result in at least $100 million in annual
compliance costs and was also expected to result in at least $100 million in annual
benefits, then both subcategories would appear to apply. Therefore, the number of
explanations provided overall (and sometimes by agency) exceeds the number of rules
issued. However, if a rule appeared to be major because it had $100 million or more in
annual compliance costs, CRS did not also code it as having a “major” increase in costs
or prices.

22

5 U.S.C. § 804(2). The definition of a “major rule” is very similar to the definition of an “economically significant”
rule under Executive Order 12866 (which is defined as a rule that may “have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or tribal governments or communities”).
23
See, for example, “Regulatory Impact Analysis: Frequently Asked Questions (FAQs),” February 7, 2011, available at
http://www.whitehouse.gov/sites/default/files/omb/circulars/a004/a-4_FAQ.pdf, which says that a rule can meet the
$100 million threshold as benefits, costs, or transfers.
24
U.S. Congressional Research Service, REINS Act: Number and Type of “Major” Rules in Calendar Year 2010, by
Curtis W. Copeland and Maeve P. Carey, April 2011.

11

Table 3. Why Rules Appeared to be “Major” by Agency: Calendar Year 2010
$100 Million Annual Effect on the Economy Due to…

Regulatory
Costs

Regulatory
Benefits

Transfers

Consumer
Surplus

Fees and
Revenues

Major
Increase in
Costs/
Prices

USDA (6)

—

—

5

—

—

1

DOD (4)

—

—

4

—

—

—

ED (5)

1

—

4

—

—

—

DOE (4)

2

3

1

—

—

—

HHS (21)

6

2

16

—

—

—

DHS (3)

—

—

1

—

2

—

HUD (1)

—

1

—

—

—

—

DOI (7)

1

1

—

6

—

—

DOJ (3)

2

3

—

—

—

—

DOL (3)

2

2

—

—

—

1

DOS (1)

—

—

—

—

1

—

DOT (4)

4

4

—

—

—

—

TREAS (3)

—

2

—

—

—

1

DVA (2)

—

—

2

—

—

—

CPSC (1)

1

—

—

—

—

—

EPA (8)

7

8

—

—

—

—

FRS (5)

—

1

—

—

—

4

NRC (1)

—

—

—

—

1

—

SEC (9)

2

1

—

—

—

6

TREAS/ DOL/
HHS (6)

—

—

4

—

—

3

TREAS/ FRS/
FDIC (1)

—

—

—

—

—

1

FRS/ FTC (1)

1

—

—

—

—

—

EPA/ DOT (1)

1

1

—

—

—

—

Total (100)

30

29

37

6

4

17

Agency
(Number of
Major Rules)

Source: CRS, based on information in GAO’s major rule reports and the rules themselves.
Notes: A rule may appear to be “major” for more than one reason (e.g., annual regulatory costs and benefits
are each expected to exceed $100 million). Therefore, the number of rules issued by an agency may be less than
the number of explanations provided. Agencies are presented first by cabinet department, then by independent
agency, and finally by groups of agencies that issued certain rules. Agency abbreviations not previously identified
are CPSC (Consumer Product Safety Commission), FDIC (Federal Deposit Insurance Corporation), and FTC
(Federal Trade Commission).

Overall, 37 of the 100 rules appeared to be “major” only because they were expected to
produce $100 million in costs, $100 million in benefits, or (most frequently) both; 34 of
the rules appeared to only involve some type of transfer of funds from one party to
12

another, most commonly the transfer of federal funds to the recipients of those funds
(e.g., grants, food stamps, Medicare or Medicaid funds, special pay for members of the
military, and crop payments); 16 rules appeared to be major only because they were
expected to result in increased costs or prices (but not at or above the $100 million
threshold); 6 rules appeared to only involve “consumer surplus” issues; 4 rules appeared
to only involve changes to federal fee structures; and 3 rules appeared to be major for
multiple reasons. More detailed descriptions of the 2010 rules within each of these
“major” categories are discussed in Appendix 1 to this report.

“Rulemaking Requirements” Versus “Analytical
Requirements”
A threshold issue in this research was to determine what should be considered an
“analytical requirement” in the rulemaking process. During the past 65 years, Congress
and various Presidents have put in place an array of rulemaking requirements that all or
most executive branch agencies must follow when issuing regulations. Several
individuals and organizations have published lists of those requirements. For example,
In 2000, Mark Seidenfeld published a “Table of Requirements for Federal
Administrative Rulemaking” in which he delineated “all of the requirements that
an agency seeking to adopt a rule must follow.”25
In a 2009 report, GAO listed 17 rulemaking statutes and executive orders that
were cited in 10 or more of 139 major rules.26
ICF International created a “Reg Map” that lists dozens of rulemaking
requirements. (A 2-foot by 2-foot poster of the Reg Map is available from ICF,27
or from a website maintained by the Regulatory Information Service Center at the
General Services Administration.28)
Some federal agencies have published their own lists of rulemaking requirements,
which typically include (but are not limited to) analytical requirements. For
example, the Assistant General Counsel for Regulation and Enforcement at DOT
compiled a 47-page listing of governmentwide and agency-specific rulemaking
requirements, which is accessible on the DOT website.29

25

Mark Seidenfeld, “A Table of Requirements for Federal Administrative Rulemaking,” Florida State University Law
Review,” vol. 27 (2000), pp. 533-545.
26
U.S. General Accounting Office, Federal Rulemaking: Improvements Needed to Monitoring and Evaluation of Rules
Development as Well as to the Transparency of OMB Regulatory Reviews, GAO-09-205, April 20, 2009.
27
See http://www.icfi.com/insights/products-and-tools/reg-map.
28
http://www.reginfo.gov/public/reginfo/Regmap/index.jsp.
29
See http://regs.dot.gov/docs/Rulemaking_Requirements_05312011.pdf.

13

However, some of the crosscutting statutes and executive orders included in these lists
are primarily procedural in nature, requiring agencies to allow the public to participate in
the rulemaking process, to consult with certain groups, or to establish certain policies and
processes. They do not specifically require agencies to prepare some kind of analysis or
assessment. For example:
The Administrative Procedure Act of 1946 (APA, 5 U.S.C. §§ 551-559) generally
requires agencies to publish a notice of proposed rulemaking (NPRM), give
“interested persons” an opportunity to comment, publish a final rule
(accompanied by a concise statement of basis and purpose), and not make that
final rule effective until at least 30 days after its publication. An agency may
avoid notice and comment and the 30-day delay in effective date if (among other
things) the agency concludes there is “good cause” to do so.30 Section 706(2)(A)
of the APA instructs courts reviewing regulations to set aside any agency action
found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law."
The Negotiated Rulemaking Act of 1990 (5 U.S.C. §§ 561-570a) encourages
agencies to consider convening a negotiated rulemaking committee before
developing and issuing a proposed regulation under the APA.
The Congressional Review Act (CRA, 5 U.S.C. §§ 801-808) requires agencies to
submit their final rules to the Government Accountability Office (GAO) and both
houses of Congress before they can take effect, and generally requires agencies to
delay the effective dates of “major rules” (e.g., those with at least a $100 million
annual effect on the economy) for 60 days after the date of publication and
submission to GAO and Congress.31
Section 515 of the Treasury and General Government Appropriations Act for
Fiscal Year 2001, generally known as the “Data Quality Act” or the “Information
Quality Act” (IQA), directed OMB to issue government-wide guidelines that
“provide policy and procedural guidance to Federal agencies for ensuring and
maximizing the quality, objectivity, utility, and integrity of information (including
statistical information) disseminated by Federal agencies.” The IQA also
instructed agencies to issue their own guidelines not more than one year after the
issuance of OMB’s government-wide guidelines, and to establish administrative
mechanisms allowing affected persons to seek and obtain correction of
information maintained and disseminated by the agency.
Section 206 of the E-Government Act of 2002 generally requires agencies to (1)
ensure that a publicly accessible website includes all information about that
30

To conclude that there is “good cause” to avoid notice and comment, Section 553(b) of the APA requires the agency
to conclude that it is “impracticable, unnecessary, or contrary to the public interest.”
31
Section 801(a)(1)(B) of the Congressional Review Act does require agencies to submit to GAO and make available
to Congress any cost-benefit or other type of analysis that has been prepared, but the act does not require agencies to
prepare those analyses.

14

agency that is required to be published in the Federal Register, (2) accept public
comments on proposed rules “by electronic means,” and (3) ensure that a publicly
accessible federal website contains “electronic dockets” for proposed rules
containing all comments submitted on the rules as well as “other materials that by
agency rule or practice are included in the rulemaking docket under [the APA],
whether or not submitted electronically.”
The Small Business Paperwork Relief Act of 2002 (P.L. 107-198) required each
agency to establish a single point of contact to act as a liaison for small business
concerns with regard to information collection and paperwork issues. It also
directed agencies to make a special effort to reduce information collection
burdens for small businesses with fewer than 25 employees. OMB was directed to
publish in the Federal Register and make available on the Internet an annual list
of the compliance assistance resources available to small businesses.32 The Act
also required agencies to report to Congress on the amount of penalty relief
provided to small businesses, and established a task force to study the feasibility
of streamlining information collection requirements on small businesses.33
Executive Order 12889 on the North American Free Trade Agreement34 generally
requires agencies subject to the APA to provide at least a 75-day comment period
for any “proposed Federal technical regulation or any Federal sanitary or
phytosanitary measure of general application.”
Executive Order 12988 on civil justice reform35 generally requires agencies to
review proposed regulations to eliminate drafting errors and ambiguity, write
rules to minimize litigation, and provide a clear legal standard for affected
conduct. Rules are also to define key terms and clearly specify any preemptive or
retroactive effects.
Other broadly applicable statutes and executive orders can affect the rulemaking process,
but do not specifically require some type of analysis. For example:
The Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C. App. II)
established requirements to ensure that agencies using advisory committees
receive impartial and relevant expertise. Specifically, FACA requires that the
advice provided by advisory committees be objective and accessible to the public.
With certain exceptions, each advisory committee meeting is presumptively open
to the public. Adequate advance notice of the meetings must be published in the
Federal Register, and all papers, records, and minutes of the meetings must
32

These lists of compliance assistance resources are available at http://www.sba.gov/category/navigation-structure/
starting-managing-business/starting-business/business-law-regulations/contact-government-agency/fe.
33
See http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/sbpr2004.pdf for a copy of the task
force’s June 28, 2004, final report.
34
Executive Order 12889, “Implementation of the North American Free Trade Agreement,” 58 Federal Register
69681, December 30, 1993.
35
Executive Order 12988, “Civil Justice Reform,” 61 Federal Register 4729, February 7, 1996.

15

generally be made available to the public. FACA also requires that the advisory
committees be fairly balanced in regard to the points of view of affected interests
and the functions performed. The Act defines an advisory committee as any
committee or similar group (1) established or used to obtain advice or
recommendation for one or more federal agencies or the President and (2) that is
not composed wholly of full-time federal officers or employees.
The Trade Agreements Act of 1979 (19 U.S.C. §§ 2531-2533) prohibits agencies
from setting regulatory standards that create “unnecessary obstacles to foreign
commerce” of the United States. The Act specifically states that legitimate
domestic objectives such as safety or health are not considered unnecessary
obstacles. The statute also requires, where appropriate, the use of performance
standards rather than design standards and the consideration of international
standards as the basis of domestic standards.
Section 12(d) of the National Technology Transfer and Advancement Act (15
U.S.C. 272 note), adopted in March 1996, generally requires federal agencies to
“use technical standards that are developed or adopted by voluntary consensus
standards bodies” to carry out policy objectives unless doing so is “inconsistent
with applicable law or otherwise impractical.” Agencies are also required to
consult with and (if in the public interest and compatible with agency missions,
authority, priorities, and resources) participate with voluntary private sector
consensus bodies.
Executive Order 1321236 generally requires agencies to take actions to accelerate
the completion of energy-related projects.

Crosscutting Analytical Requirements
On the other hand, a number of crosscutting statutes and executive orders require some
type of analysis or assessment for certain rules.
National Environmental Policy Act
The National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. §§ 4321-4347)
requires federal agencies to include in every recommendation or report related to “major
Federal actions significantly affecting the quality of the human environment” a detailed
statement on the environmental impact of the proposed action. If a rule is expected to
have significant environmental effects, the agency must prepare an environmental impact
statement (EIS), take public comments, publish a final EIS, and publish a record of
decision. The environmental impact statement must delineate the direct, indirect, and
cumulative effects of the proposed action. Agencies are also required to include in the
36

Executive Order 13212, “Actions to Expedite Energy-Related Projects,” 66 Federal Register 28357, May 22, 2001.

16

statement (1) any adverse environmental effects that cannot be avoided should the
proposal be implemented, (2) alternatives to the proposed action, (3) the relationship
between local short-term uses of the environment and the maintenance and enhancement
of long-term productivity, and (4) any irreversible and irretrievable commitments of
resources that would be involved if the proposed action should be implemented. If it is
unclear whether the rule will have such effects, the agency may first prepare an
environmental assessment (EA), which may reveal significant effects (which would then
require an EIS) or no significant effects (in which case the agency would issue a “finding
of no significant impact,” or FONSI, and proceed with the issuance of the rule). Both the
EA and the EIS should discuss the need for the rule, alternative courses of action, and
environmental effects, although the EIS process is more complex. If an agency
determines that a category of actions will not have “significant” environmental effects, it
may publish a categorical exclusion to the analysis requirement in the Federal Register
and take public comments on the exclusion. 37
Some rules are, however, exempt from NEPA. For example, according to EPA’s website
on NEPA compliance,38 although EPA is required to comply with NEPA with regard to its
research and development activities, facilities construction, wastewater treatment
construction grants under Title II of the Clean Water Act (CWA), EPA-issued National
Pollutant Discharge Elimination System (NPDES) permits for new sources, and for
certain projects funded through EPA annual Appropriations Acts,
Section 511(c) of the CWA exempts other EPA actions under the CWA from the
requirements of NEPA. Section 7(c) of the Energy Supply and Environmental
Coordination Act of 1974 (15 U.S.C. 793(c)(1)) exempts actions under the Clean Air Act
from the requirements of NEPA. EPA is also exempted from the procedural requirements
of environmental laws, including NEPA, for comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) response actions. Courts also consistently
have recognized that EPA procedures or environmental reviews under enabling
legislation are functionally equivalent to the NEPA process and thus exempt from the
procedural requirements in NEPA.39

Under Section 309 of the Clean Air Act (42 U.S.C. § 7609), EPA is required to review
and publicly comment on the environmental impacts of major federal actions, including
actions that are the subject of an EIS. If EPA determines that the action is
environmentally unsatisfactory, it is required by Section 309 to refer the matter to the
Council on Environmental Quality (CEQ). In accordance with a Memorandum of
Agreement between EPA and CEQ, EPA carries out the operational duties associated with
the administrative aspects of the EIS filing process.

37

See http://ceq.hss.doe.gov/ for more information on NEPA.
See http://epa.gov/compliance/nepa/epacompliance/.
39
See http://www.gpo.gov/fdsys/pkg/FR-1998-10-29/pdf/98-29019.pdf for a 1998 Federal Register publication on
EPA and NEPA compliance.
38

17

Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA, 5 U.S.C. §§ 601-612) requires federal agencies to
assess the impact of their forthcoming regulations on “small entities,” which the Act
defines as including small businesses, small governmental jurisdictions, and certain small
not-for-profit organizations. Section 603 of the RFA requires agencies to prepare an
“initial regulatory flexibility analysis” (IRFA) before publishing a proposed rule, which is
to contain (1) a description of the reasons why the rule is being considered, (2) a
statement of the rule’s objectives and legal basis, (3) a description of and, where feasible,
an estimate of the number of small entities to which the rule would apply; (4) a
description of the projected reporting, recordkeeping, and other compliance requirements,
including an estimate of the classes of small entities that will be subject to the rule and
the types of professional skills necessary for preparation of any report or records; and (5)
an identification of all federal rules that may duplicate, overlap, or conflict with the
proposed rule. The IRFA is also to contain “a description of any significant alternatives
to the proposed rule which accomplish the stated objectives of applicable statutes and
which minimize any significant economic impact of the proposed rule on small entities,”
such as differing compliance or reporting requirements or timetables, simplification of
requirements, and exemptions for small entities.
When an agency issues a final rule for which a proposed rule is required, the agency is
required to prepare a “final regulatory flexibility analyses” (FRFA), which is required to
contain (1) a state of the need for and objectives of the rule; (2) a summary of the
significant issues raised by the public comments in response to the IRFA, the agency’s
assessment, and any changes made pursuant to those comments; (3) a description of and
an estimate of the number of small entities to which the rule will apply, or an explanation
of why the estimate is not available; (4) a description of the steps the agency has taken to
minimize the significant economic impact on small entities, including a “statement of the
factual, policy, and legal reasons for selecting the alternative adopted in the final rule and
why each one of the other significant alternatives to the rule considered by the agency
which affect the impact on small entities was rejected.”40 In complying with the
requirements for an IRFA and a FRFA, agencies are permitted to provide “either a
quantifiable or numerical description of the effects of a proposed rule or alternatives to
the proposed rule, or more general descriptive statements if quantification is not
practicable or reliable.”41
However, the agency is not required to prepare an IRFA or a FRFA at all if the rule
published without an NPRM, or if the agency certifies that the rule is not expected to
have a “significant economic impact on a substantial number of small entities”
(SEISNSE)42 Agencies are required to publish such certifications in the Federal Register
at the time the proposed and final rules are published, along with a statement providing

40

5 U.S.C. § 604.
5 U.S.C. § 607.
42
5 U.S.C. § 605(b).
41

18

the factual basis for such certification.43 Section 612 of the RFA requires the SBA Chief
Counsel for Advocacy to monitor agency compliance with the Act and to report at least
annually to the President and to the Committees on the Judiciary and Small Business of
the Senate and House of Representatives.
Several other statutes, executive orders, and memoranda supplement, but do not alter, the
RFA’s requirements, and do not themselves require an analysis. For example, Section
212 of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA, P.L.
104-121, 5 U.S.C. § 601 note) requires agencies to develop one or more compliance
guides for each final rule or group of related final rules for which the agency is required
to prepare a regulatory flexibility analysis under the RFA. Executive Order 1327244
generally requires federal agencies to issue written procedures and policies to ensure
proper consideration during the rulemaking process of the impacts of their draft rules on
small entities. The order also requires agencies to notify the SBA Chief Counsel for
Advocacy of any draft rules that may have a significant economic impact on a substantial
number of small entities under the RFA, and to give “every appropriate consideration” to
any comments the Chief Counsel provides. Also, a January 18, 2011, presidential
memorandum on “Regulatory Flexibility, Small Business, and Job Creation” directs
agencies, “when initiating rulemaking that will have a significant economic impact on a
substantial number of small entities, to give serious consideration to whether and how it
is appropriate, consistent with law and regulatory objectives, to reduce regulatory
burdens on small businesses, through increased flexibility.”45
Paperwork Reduction Act
The Paperwork Reduction Act (PRA, 44 U.S.C. §§ 3501-3520) was originally enacted in
1980, but was subsequently amended in 1986 and again in 1995. One of the purposes of
the PRA is to minimize paperwork burden for individuals, small businesses, and others
resulting from a collection of information by or for the federal government.46 The PRA
requires agencies to justify any covered collection of information from the public by
establishing the need and intended use of the information, estimating the burden that the
collection will impose on respondents, and showing that the collection is the least
burdensome way to gather the information.47 “Burden” is also broadly defined in the Act
to include all of the “time, effort, or financial resources expended by persons to generate,
43

The RFA initially did not permit judicial review of agencies’ actions under the act. However, amendments to the act
in 1996 as part of the Small Business Regulatory Enforcement Fairness Act (SBREFA, 5 U.S.C. § 601 note) permitted
judicial review regarding, among other things, agencies’ regulatory flexibility analyses for final rules and any
certifications that their rules will not have a significant impact on small entities. As a result, a small entity that is
adversely affected or aggrieved by an agency’s determination that its final rule would not have a significant impact on
small entities could seek judicial review of that determination within one year of the date of the final agency action. In
granting relief, a court may remand the rule to the agency or defer enforcement against small entities.
44
Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 Federal Register
53461, August 16, 2002.
45
See http://www.gpo.gov/fdsys/pkg/DCPD-201100033/pdf/DCPD-201100033.pdf for a copy of this memorandum.
46
44 U.S.C. § 3501(1).
47
44 U.S.C. § 3506(c).

19

maintain, or provide information to or for a Federal agency,” including any time or other
expenditure needed to review instructions, acquire technology, or search data sources.48
Paperwork burden is most commonly estimated in terms of “burden hours,” which is a
function of (1) the frequency of an information collection, (2) the estimated number of
respondents, and (3) the amount of time that the agency estimates it takes each
respondent to complete the collection. A “collection of information” is defined as
“obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties
or the public” of information from 10 or more persons, not including agencies or
employees of the federal government. The PRA does not apply to collections of
information “during the conduct of a Federal criminal investigation,” or “during the
conduct of ... an administrative action or investigation involving an agency against
specific individuals or entities.”49 However, the PRA does apply to “the collection of
information during the conduct of general investigations ... undertaken with reference to a
category of individuals or entities such as a class of licensees or an entire industry.”50
The original PRA established the Office of Information and Regulatory Affairs (OIRA)
within OMB to provide central agency leadership and oversight of government-wide
efforts to reduce unnecessary paperwork burden and improve the management of
information resources. Agencies must receive OIRA-approval (signified by an OMB
control number displayed on the information collection) for each collection request
before it is implemented, and those approvals must be renewed at least every three years.
Failure to obtain OIRA approval for an active collection, or the lapse of that approval,
represents a violation of the act, and triggers the PRA’s public protection provision.
Under that provision, no one can be penalized for failing to comply with a collection of
information subject to the Act if the collection does not display a valid OMB control
number.51 OIRA can disapprove any collection of information if it believes the collection
is inconsistent with the requirements of the PRA. However, multi-headed independent
regulatory agencies can, by majority vote of the leadership, void any OIRA disapproval
of a proposed information collection.52
Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act (UMRA, 2 U.S.C. §§ 1532-1538)
requires covered agencies (cabinet departments and independent agencies, but not
independent regulatory agencies)53 to, among other things, prepare a written statement
48

44 U.S.C. § 3502(2).
44 U.S.C. § 3518(c)(1).
50
44 U.S.C. § 3518(c)(2).
51
For an up-to-date inventory of OMB-approved information collections, see http://www.reginfo.gov/public/do/
PRAMain.
52
44 U.S.C. § 3507(f). For more information on the PRA, see U.S. Congressional Research Service, Paperwork
Reduction Act (PRA): OMB and Agency Responsibilities and Burden Estimates, CRS Report R40636, June 15, 2009,
by Curtis W. Copeland and Vanessa K. Burrows, available at
http://graphics8.nytimes.com/packages/pdf/nyregion/2009/records/paperworkreductionreportbycrs.pdf.
53
The PRA (44 U.S.C. 3502(5)) defines an independent regulatory agency by listing a number of agencies (e.g., the
Board of Governors of the Federal Reserve System, the Consumer Product Safety Commission, the Federal
49

20

containing specific descriptions and estimates for any proposed rule or any final rule for
which a proposed rule was published that includes any federal mandate that may result in
the expenditure of $100 million or more (indexed for inflation) in any year by state, local,
or tribal governments, in the aggregate, or the private sector. The written statement is to
contain (among other things) a “qualitative and quantitative assessment of the anticipated
costs and benefits ... as well as the effect of the Federal mandate on health, safety, and the
natural environment.” It is also generally required to include estimates of future
compliance costs, and any disproportionate budgetary effects on particular regions,
governments, or segments of the private sector, and estimates of effects on the national
economy, including effects on job creation, productivity, full employment, and
international competitiveness. Also, Section 205 of UMRA generally requires agencies
preparing a written statement to “identify and consider a reasonable number of regulatory
alternatives and from those alternatives select the least costly, most cost-effective or least
burdensome alternative that achieves the objectives of the rule,” or explain why the least
costly, most cost-effective or least burdensome method of achieving the objectives of the
rule was not adopted, or why the provisions are inconsistent with law. However,
UMRA’s analytical requirements do not apply if the agency issues the final rule without a
previous notice of proposed rulemaking, if the rule is not considered a “mandate” (e.g., a
condition of federal financial assistance, or a duty arising from participation in a
voluntary federal program); if it incorporates requirements specifically set forth in law;
and for various other reasons. Section 208 of UMRA requires OMB to submit an annual
report to Congress on agencies’ compliance with Title II.
Privacy Assessments Under the E-Government Act and P.L. 108-447
Section 208 of the E-Government Act (44 U.S.C.A. §3601 note) requires agencies to
conduct a “privacy impact assessment” before initiating a new covered collection of
information that uses information technology and contains individually identifying
information.54 These assessments must analyze and describe what information is to be
collected (e.g., nature and source); why the information is being collected (e.g., to
determine eligibility); the intended use of the information (e.g., to verify existing data);
with whom the information will be shared (e.g., another agency for a specified
programmatic purpose); what opportunities individuals have to decline to provide
information (i.e., where providing information is voluntary) or to consent to particular
uses of the information (other than required or authorized uses), and how individuals can
grant consent; how the information will be secured (e.g., administrative and technological
controls); and whether a system of records is being created under the Privacy Act (5
U.S.C. § 552a).
Also, Section 522(a) of the Consolidated Appropriations Act, 2005 (P.L. 108-447, 5
U.S.C. 552a note) requires each agency to have a chief privacy officer, whose duties
Communications Commission, the Nuclear Regulatory Commission, and the Securities and Exchange Commission)
and also saying it includes “any other similar agency designated by statute as a Federal independent regulatory agency
or commission.”
54
See http://www.whitehouse.gov/omb/memoranda_m03-22 for more information on these assessments.

21

include “conducting a privacy impact assessment of proposed rules of the Department on
the privacy of information in an identifiable form, including the type of personally
identifiable information collected and the number of people affected.”
Family Assessments Under Section 654 of P.L. 105-277
Section 654 of the Treasury and General Government Appropriations Act, 1999 (P.L.
105-277, 5 U.S.C. § 601 note) requires federal agencies (other than GAO) to assess their
pending regulations that “may affect family well-being” to determine whether the
proposed benefits of the action justify the financial impact on the family. Agencies are
also to determine in these “family policymaking assessments” whether the rule would
have other types of effects (e.g., “strengthens or erodes the stability or safety of the
family and, particularly, the marital commitment;” “strengthens or erodes the authority
and rights of parents in the education, nurture, and supervision of their children;” and
“increases or decreases disposable income or poverty of families and children”). For
each proposed rule that may affect family well-being, agencies are required to submit a
written certification to OMB and to Congress that the rule has been assessed in
accordance with these requirements, and provide an “adequate rationale” for
implementation of each rule that may negatively affect family well-being. Agencies are
required to conduct such assessments and provide certifications upon request by a
Member of Congress. This requirement went into effect in October 1998 when the
appropriations Act was signed into law. As noted in a January 1999 memorandum from
the Director of OMB,55 this provision reinstated a requirement that was in Executive
Order 12606 until it was revoked in April 1997 by Executive Order 13045.
Executive Order 12866
Section 1(a) of Executive Order (EO) 1286656 states that covered agencies
should assess all costs and benefits of available regulatory alternatives, including the
alternative of not regulating. Costs and benefits shall be understood to include both
quantifiable measures (to the fullest extent that these can be usefully estimated) and
qualitative measures of costs and benefits that are difficult to quantify, but nevertheless
essential to consider. Further, in choosing among alternative regulatory approaches,
agencies should select those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other advantages; distributive
impacts; and equity), unless a statute requires another regulatory approach.

Section 1(b) of EO 12866 delineates certain “Principles of Regulation” that covered
agencies “should adhere to” (to the extent permitted by law and where applicable). For
example, the agencies are told that they should:

55
56

See http://www.fws.gov/policy/library/rglew.pdf for a copy of this memorandum.
Executive Order 12866, “Regulatory Planning and Review,” 58 Federal Register 51735, October 4, 1993.

22

design their regulations “in the most cost-effective manner to achieve the
regulatory objective. In doing so, each agency shall consider incentives for
innovation, consistency, predictability, the costs of enforcement and compliance
(to the government, regulated entities, and the public), flexibility, distributive
impacts, and equity.”
assess both the costs and the benefits of their intended regulations and,
“recognizing that some costs and benefits are difficult to quantify, propose or
adopt a regulation only upon a reasoned determination that the benefits of the
intended regulation justify its costs.”57
tailor their regulations “to impose the least burden on society, including
individuals, businesses of differing sizes, and other entities (including small
communities and governmental entities), consistent with obtaining the regulatory
objectives, taking into account, among other things, and to the extent practicable,
the costs of cumulative regulations.”
The heart of the analytical requirements are in Section 6(a)(3)(B) of the executive order,
which states that, for each “economically significant” regulatory action (e.g., proposed
and final rules expected to have an annual impact on the economy of $100 million or
more),58 covered agencies (cabinet departments and independent agencies, but not
independent regulatory agencies) are generally required to provide to the Office of
Information and Regulatory Affairs (OIRA) within OMB an assessment, including the
underlying analysis, of the benefits and costs anticipated from a regulatory action, and the
costs and benefits of “potentially effective and reasonably feasible alternatives to the
planned regulation… and an explanation why the planned regulatory action is preferable
to the identified potential alternatives.” Assessments of benefits and costs are to include,
to the extent feasible, a quantification of those benefits and costs. In emergency
situations, or when an agency is required by law to act more quickly than normal review
procedures allow, the rulemaking agency is required to comply with the order’s
requirements “to the extent practicable.”59

OMB Circular A-4

57

The requirement that agencies adopt regulations only if the benefits “justify” the costs was seen as a somewhat
different threshold than the one in Executive Order 12291, which had required agencies to determine that regulatory
benefits “outweigh” the costs.
58
Section 3(f) of EO 12866 defines a “significant” rule as one that satisfies any of four conditions: (1) Have an annual
effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal
governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned
by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the
President’s priorities, or the principles set forth in this Executive order. Rules fitting the first of these conditions are
often referred to as “economically significant” regulatory actions.
59
Section 3(a)(3)(D) of Executive Order 12866.

23

The analytical requirements in EO 12866 are further elaborated in OMB Circular A-4,
which says a good analysis contains three basic elements: (1) a statement of the need for
the proposed action, (2) an examination of alternative approaches, and (3) an evaluation
of the benefits and costs—quantitative and qualitative—of the proposed action and the
main alternatives identified by the analysis.
With regard to need, Circular A-4 states that the agency should describe the
statutory or judicial directives that authorize the action, and describe the problem
that it intends to address. The underlying problem can involve a market failure
(e.g., a monopoly that adversely affects consumers, or inadequate information
about a product) or other social purposes (e.g., to combat discrimination). The
statement of need should also consider other alternatives to federal regulation,
including the option of state or local regulation.
After determining that federal regulation is needed, Circular A-4 requires the
agency to consider a “reasonable number” of alternative regulatory approaches
available within the statutory authority provided to the agency. For example, the
circular says agencies should consider different compliance dates, enforcement
methods, levels of stringency, requirements based on firm size or geographic
region; performance standards instead of design standards, market approaches
instead of direct controls; and informational measures instead of regulation.
With regard to analytical approaches, the circular states that agencies should use
both cost-benefit analysis and cost-effectiveness analysis. When all benefits and
costs can be expressed in monetary units, cost-benefit analysis can clearly indicate
which approach is most efficient in terms of net benefits.60 However, in many
(and perhaps most) cases, agencies are not able to express all of the benefits or
costs in monetary units. In such cases, Circular A-4 states that cost-benefit
analysis “is less useful, and it can even be misleading, because the calculation of
net benefits in such cases does not provide a full evaluation of all relevant benefits
and costs.”61 Analysts should therefore attempt to quantify benefits or costs as
much as possible (e.g., tons of pollution avoided, or the number of children who
will not suffer discrimination), and “exercise professional judgment” in
determining whether non-quantified factors are important enough to justify
consideration of the regulation.
The circular also requires an “accounting statement” with tables reporting benefit and
cost estimates for each major final rule.62 For rules involving annual economic effects of
$1 billion or more, the circular says agencies should present a “formal quantitative
analysis of the relevant uncertainties about benefits and costs,” including estimates of the

60

For example, if Option A has expected costs of $100 million and expected benefits of $200 million, the net benefits
are $100 million. If Option B has expected costs of $200 million, and expected benefits of $400 million, the net
benefits are $200 million. In this scenario, Option B produces the largest net benefits.
61
OMB Circular A-4, p. 10.
62
See http://www.whitehouse.gov/omb/circulars_a004_a-4 for a copy of Circular A-4.

24

central tendency (e.g., mean and median), ranges, and other characteristics of the
distribution.63

Supplemental Publications
On October 28, 2010, OMB published an agency checklist for the regulatory impact
analyses required by EO 12866 and OMB Circular A-4.64 It contains repeated references
to provisions in the executive order and the circular, and states that nothing in the
checklist “alters, adds to, or reformulates existing requirements in any way.” Among
other things, the checklist asks whether the agency’s analysis (1) has a reasonably
detailed description of the need for the regulatory action, (2) explains how the action will
meet that need, (3) quantifies and monetizes the expected costs and benefits of the action
to the extent feasible, (4) explains and supports a reasoned justification that the benefits
of the regulatory action justify the costs, (5) assesses the potentially effective and
reasonable alternatives to the action (including at least one alternative that is more
stringent and less stringent), and (6) explains why the planned regulatory action is
preferable to those alternatives.
On January 18, 2011, President Obama issued Executive Order 13563 on “Improving
Regulation and Regulatory Review.”65 The executive order is described as “supplemental
to and reaffirms the principles, structures, and definitions governing contemporary
regulatory review that were established in EO 12866 of September 30, 1993.” It
reiterates many of the principles in the 1993 executive order (e.g., that benefits should
“justify” costs, and that agencies should select the regulatory alternative that maximizes
net benefits). The primary new element was a requirement that agencies develop a plan
for the retrospective review of their existing regulations to determine if any should be
modified, streamlined, expanded, or repealed. On July 11, 2011, President Obama issued
Executive Order 13579 requesting, but not requiring, independent regulatory agencies to
follow the principles in Executive Order 13563, and to develop plans for the review of
their existing rules.66
On February 7, 2011, OMB published a document entitled “Regulatory Impact Analysis:
Frequently Asked Questions.”67 Again, OMB said “nothing said here is meant to alter
existing requirements in any way.” Among other things, OMB indicated that:
A rule may be considered “economically significant” if it expected to have $100
million in costs, benefits, or transfers in any one year, and rules that do not cross
63

OMB has also published a checklist to assist agencies in the production of regulatory impact analyses under EO
12866 and Circular A-4. See http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/RIA_Checklist.pdf.
64
See http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/RIA_Checklist.pdf for a copy of the checklist.
65
Executive Order 13563, “Improving Regulation and Regulatory Review,” 76 Federal Register 3821, January 21,
2011.
66
Executive Order 13579, “Regulation and Independent Regulatory Agencies,” 76 Federal Register 41587, July 14,
2011.
67
See http://www.whitehouse.gov/sites/default/files/omb/circulars/a004/a-4_FAQ.pdf for a copy of this document.

25

that threshold but have adversely affect a small sector of the economy and would
threaten to create significant job loss would still be considered “economically
significant.”
Agencies’ regulatory impact analyses should be presented in plain language, and
should include a clear executive summary of their central conclusions and an
accounting statement with a table summarizing the expected costs, benefits, and
transfers.
When considering regulatory alternatives, agencies should begin by asking
whether to regulate at all, and should consider deferring to regulation at the state
or local level. If federal regulation is needed, agencies should consider analyzing
at least three options: the preferred option, a more stringent option, and a less
stringent one. Agencies should also generally include a sensitivity analysis
showing how results can vary with changes in assumptions, data, and analytical
approaches.
On January 4, 2012, OIRA sent a memorandum to the heads of executive departments
and agencies requiring that regulatory preambles for “lengthy or complex” proposed and
final rules should include “straightforward executive summaries” that describe major
provisions and policy choices.68 A suggested template for these summaries stated that
they should generally be three to four double-spaced pages in a Word document, and
should state (1) the purpose of the regulatory action (including the need, how the action
will meet that need, and a statement of legal authority); (2) a summary of the major
provisions of the regulatory action; and (for economically significant rules) (3) a table
summarizing the estimated costs and benefits, both quantitative and qualitative.
On March 20, 2012, OIRA issued a memorandum to the heads of executive departments
and agencies on “Cumulative Effects of Regulations.” 69 The memorandum said that
agencies should “take active steps to take account of the cumulative effects of new and
existing rules and to identify opportunities to harmonize and streamline multiple rules.”
It also stated that agencies should, where “appropriate and feasible,”
consider cumulative effects and opportunities for regulatory harmonization as part of
their analysis of particular rules, and should carefully assess the appropriate content and
timing of rules in light of those effects and opportunities. Consideration of cumulative
effects and of opportunities to reduce burdens and to increase net benefits should be part
of the assessment of costs and benefits, consistent with the requirement of Executive
Order 13563 that, to the extent permitted by law, agencies must “select, in choosing
among alternative regulatory approaches, those approaches that maximize net benefits.”

68

See http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/clarifying-regulatoryrequirements_executive-summaries.pdf for a copy of this memorandum.
69
See http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/cumulative-effects-guidance.pdf for a copy of
this memorandum.

26

Executive Order 12630
Executive Order 12630 on “constitutionally protected property rights”70 states that before
undertaking any proposed action regulating private property use for the protection of
public health or safety that has “takings implications,” executive departments and
agencies must, in internal deliberative documents and submissions to OMB, (1) identify
the public health or safety risk created by the private property use; (2) show that the
proposed action substantially advances the purpose of protecting public health and safety
against that risk; (3) show (to the extent possible) that the restrictions imposed on the
private property are not disproportionate to the risk; and (4) estimate (to the extent
possible) the potential cost to the government in the event that a court later determines
that the action constituted a taking.71
Executive Order 12898
Executive Order 1289872 generally requires executive departments and agencies to
“collect, maintain, and analyze information assessing and comparing environmental and
human health risks borne by populations identified by race, national origin, or income,”
and are to “use this information to determine whether their programs, policies, and
activities have disproportionately high and adverse human health or environmental
effects on minority populations and low-income populations.” Agencies are instructed to
do so “to the extent permitted by existing law,” and “whenever practicable and
appropriate.”
Executive Order 13045
Executive Order 1304573 generally requires covered agencies (cabinet departments and
independent agencies, but not independent regulatory agencies) to provide with any
“covered regulatory action” an “evaluation of the environmental health or safety effects
of the planned regulation on children” and “an explanation of why the planned regulation
is preferable to other potentially feasible alternatives considered by the agency.” A
“covered” action is defined as those for which the agency publishes an NPRM, that is
considered “economically significant” under EO 12866, and that concerns an
environmental health or safety risk that the agency “has reason to believe may
disproportionately affect children.” In an “emergency situation,” or when an agency is
70

Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,”
53 Federal Register 8859, March 18, 1988.
71
In 2003, GAO reported that few takings implications assessments were being prepared. See GAO-03-1015, at
http://www.gao.gov/assets/240/239832.pdf. To view a hearing on this issue, see
http://judiciary.house.gov/legacy/89877.PDF.
72
Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and LowIncome Populations,” 59 Federal Register 7629, February 11, 1994.
73
Executive Order 13045, “Protection of Children From Environmental Health Risks and Safety Risks,” 62 Federal
Register 19883, April 23, 1997.

27

required to act more quickly than normal, the agency is permitted to satisfy the
requirement “to the extent practicable.”

Executive Order 13132
Executive Order 13132 on “federalism”74 generally prohibits covered agencies (cabinet
departments and independent agencies, but not independent regulatory agencies) from
issuing any regulation that has federalism implications, is not required by law, and
imposes substantial direct compliance costs on state and local governments unless the
necessary funds are provided or the agency consults with state and local officials and
prepares a “federalism summary impact statement” describing the extent of those
consultations, a summary of the nature of the officials’ concerns and the agency’s
position supporting the need to issue the regulation, and a statement of the extent to
which the concerns have been met. The impact statement is to be provided to the Director
of OMB and published in a “separately identified portion of the preamble” to the rule.
Rules are considered to have “federalism implications” when they 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.”
Executive Order 13175
Executive Order 13175 on consultation and coordination with Indian tribal governments75
generally prohibits covered agencies (cabinet departments and independent agencies, but
not independent regulatory agencies) from issuing any regulation that has tribal
implications, is not required by law, and imposes substantial direct compliance costs on
tribal governments unless the necessary funds are provided or the agency consults with
tribal officials and prepares a “tribal summary impact statement” describing the extent of
those consultations, a summary of the nature of the officials’ concerns and the agency’s
position supporting the need to issue the regulation, and a statement of the extent to
which the concerns have been met. The statement is to be provided to the Director of
OMB and published in a “separately identified portion of the preamble to the regulation.”
Rules are considered to have “tribal implications” when they have “substantial direct
effects on one or more Indian tribes, on the relationship between the Federal government
and the Indian tribes, or on the distribution of power and responsibilities between the
Federal Government and Indian tribes.”

74

Executive Order 13132, “Federalism,” 64 Federal Register 43255, August 10, 1999.
Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” 65 Federal Register
67249, November 9, 2000.
75

28

Executive Order 13211
Executive Order 1321176 generally requires covered agencies (cabinet departments and
independent agencies, but not independent regulatory agencies) to prepare a “statement of
energy effects” for any rule identified as a “significant energy action.” A “significant
energy action” is defined as any rule that is “significant” under EO 12866 and is likely to
have a “significant adverse effect on the supply, distribution, or use of energy,” or that is
so designated by the OIRA Administrator. The statement of energy effects is described as
a “detailed statement” relating to “any adverse effects on energy supply, distribution, or
use” should the proposal be implemented, and “reasonable alternatives to the action with
adverse energy effects and the expected effects of such alternatives on energy supply,
distribution, and use.” The statement is to be submitted to OIRA when the rule is
submitted pursuant to EO 12866, and it (or a summary) must be included in the proposed
and final rule.

Agency- or Issue-Specific Analytical Requirements
In addition to these crosscutting analytical requirements, a number of agency or issuespecific statutory provisions require certain agencies to conduct some type of analysis
when issuing regulations.77 For example:
Section 1102(b) of the Social Security Act (42 U.S.C. § 1302(b)) requires the
Department of Health and Human Services (HHS) to prepare an initial regulatory
impact analysis if a proposed rule issued under certain statutory authorities may
have a significant impact on the operations of a substantial number of small rural
hospitals. The analysis is required to describe the impact of the proposed rule on
such hospitals, and must set forth with respect to small hospitals the matters
required to be addressed in an IRFA under the RFA. When HHS publishes the
final version of the rule for which an initial analysis is prepared, the department
must prepare a final regulatory impact analysis, which must set forth with respect
to small rural hospitals the same issues required to be addressed in a FRFA under
the RFA.
15 U.S.C. § 2058(f)(2) states that the Consumer Product Safety Commission
“shall not promulgate a consumer product safety rule unless it has prepared... a
final regulatory analysis of the rule containing the following information: (A) A
76

Executive Order 13211, “Actions Concerning Regulations That Significant Affect Energy Supply, Distribution, or
Use.” 66 Federal Register 28355, May 22, 2001.
77
There are also some agency-specific statutory requirements for some type of analysis, but that are not keyed to the
issuance of regulations. For example, Section 321(a) of the Clean Air Act (42 U.S.C. § 7621) requires the EPA
administrator to conduct “continuing evaluations of potential loss or shifts of employment which may result from the
administration or enforcement of the provision of this chapter and applicable implementation plans, including where
appropriate, investigating threatened plant closures or reductions in employment allegedly resulting from such
administration or enforcement.”

29

description of the potential benefits and potential costs of the rule, including costs
and benefits that cannot be quantified in monetary terms, and the identification of
those likely to receive the benefits and bear the costs. (B) A description of any
alternatives to the final rule which were considered by the Commission, together
with a summary description of their potential benefits and costs and a brief
explanation of the reasons why these alternatives were not chosen. (C) A
summary of any significant issues raised by the comments submitted during the
public comment period in response to the preliminary regulatory analysis, and a
summary of the assessment by the Commission of such issues. The Commission
shall publish its final regulatory analysis with the rule.”
The Department of Energy’s requirements for setting or amending energy
efficiency standards for certain types of products are in the Energy Policy and
Conservation Act (EPCA, 42 U.S. C. 6295(o)), which says that the standards
should “achieve maximum improvement” in energy or water efficiency that the
Secretary determines is “technologically feasible and economically justified.” To
determine whether a standard is economically justified, the Secretary is required
to “determine whether the benefits of the standard exceed its burdens” taking into
account such factors as the economic impact on manufacturers and consumers,
savings in operating costs, impacts on competition, and the total projected energy
or water savings likely to result from the standard.78
Requirements to “Consider” Impacts
Other statutory provisions are less specific, requiring that certain agencies “consider” the
impact of their rules on regulated parties or the public. For example:
The National Securities Market Improvement Act (15 U.S.C. § 77b(b)) requires
the Securities and Exchange Commission (SEC) to consider whether an action
“will promote efficiency, competition, and capital formation” whenever it is
“engaged in rulemaking and is required to consider or determine whether an
action is necessary or appropriate in the public interest.” Also, Section 23(a)(2) of
the Securities Exchange Act of 1934 (15 U.S.C. § 78w(a)(2)) states that the SEC
and the Secretary of the Treasury, in making rules and regulations pursuant to any
78

42 U.S.C. § 6295(o)(2) states that in determining whether a standard is economically justified, the Secretary shall
consider “(I) the economic impact of the standard on the manufacturers and on the consumers of the products subject to
such standard; (II) the savings in operating costs throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the
covered products which are likely to result from the imposition of the standard; (III) the total projected amount of
energy, or as applicable, water, savings likely to result directly from the imposition of the standard; (IV) any lessening
of the utility or the performance of the covered products likely to result from the imposition of the standard; (V) the
impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from
the imposition of the standard; (VI) the need for national energy and water conservation; and (VII) other factors the
Secretary considers relevant.” DOE’s rulemaking procedures for the energy conservation program are delineated in a
rule. See U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, “Energy Conservation:
Program for Consumer Products: Procedures for Consideration of New or Revised Energy Conservation Standards for
Consumer Products,” 61 Federal Register 36974, July 15, 1996.

30

provisions of this chapter, shall consider among other matters the impact any such
rule or regulation would have on competition. In addition, Section 3(f) of the
Exchange Act (15 U.S.C. § 78c(f)) and Section 2(c) of the Investment Company
Act of 1940 (15 U.S.C. § 80a-2(c)) require the Commission to consider “whether
the action will promote efficiency, competition, and capital formation.”
Section 15(a) of the Commodity Exchange Act (7 U.S.C. § 19(a)) requires the
Commodity Futures Trading Commission (CFTC) to consider costs and benefits
before issuing certain regulations, and states that those costs and benefits “shall be
evaluated in light of - (A) considerations of protection of market participants and
the public; (B) considerations of the efficiency, competitiveness, and financial
integrity of futures markets; (C) considerations of price discovery; (D)
considerations of sound risk management practices; and (E) other public interest
considerations.”
In determining the effective date and administrative compliance requirements for
new regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions, Section 302 of the Riegle
Community Development and Regulatory Improvement Act (12 U.S.C. § 4802(a)
requires federal banking agencies to “consider, consistent with the principles of
safety and soundness and the public interest - (1) any administrative burdens that
such regulations would place on depository institutions, including small
depository institutions and customers of depository institutions; and (2) the
benefits of such regulations.”
In determining the effective date and administrative compliance requirements for
new regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions, the Riegle Community
Development and Regulatory Improvement Act (12 U.S.C. § 4802(a)) requires
federal banking agencies to “consider, consistent with the principles of safety and
soundness and the public interest - (1) any administrative burdens that such
regulations would place on depository institutions, including small depository
institutions and customers of depository institutions; and (2) the benefits of such
regulations.” The term “federal banking agencies” is defined in Section 4801 of
the Riegle Act (12 U.S.C. § 1813) as the “Office of the Comptroller of the
Currency, the Office of Thrift Supervision, the Board of Governors of the Federal
Reserve System, and the Federal Deposit Insurance Corporation.”
Section 1022(b)(2)(A) of the Dodd-Frank Wall Street Reform Act (12 U.S.C. §
5512) establishes certain “standards of rulemaking” for the newly established
Consumer Financial Protection Bureau (CFPB). Specifically, it states that the
Bureau “shall consider—(i) the potential benefits and costs to consumers and
covered persons, including the potential reduction of access by consumers to
consumer financial products or services resulting from such rule; and (ii) the
impact of proposed rules on covered persons, as described in section 1026, and
the impact on consumers in rural areas.”

31

Before issuing a consumer product safety rule, 15 U.S.C. § 2058(f)(1) requires the
CPSC to “consider, and shall make appropriate findings for inclusion in such rule
with respect to - (A) the degree and nature of the risk of injury the rule is designed
to eliminate or reduce; (B) the approximate number of consumer products, or
types or classes thereof, subject to such rule; (C) the need of the public for the
consumer products subject to such rule, and the probable effect of such rule upon
the utility, cost, or availability of such products to meet such need; and (D) any
means of achieving the objective of the order while minimizing adverse effects on
competition or disruption or dislocation of manufacturing and other commercial
practices consistent with the public health and safety.”
It is unclear whether a requirement that an agency “consider” costs and benefits
constitutes an “analytical” requirement. For example, in light of the requirement in
Section 15(a) of the Commodity Exchange Act, the CFTC Office of General Counsel and
Office of Chief Economist created a template for a uniform cost-benefit analysis
methodology to be used in upcoming proposed rules. That template stated, in part, that
Section 15(a) “does not require the Commission to quantify the costs and benefits of a
rule or to determine whether the benefits of the order outweigh its costs; rather, it requires
that the Commission ‘consider’ the costs and benefits of its actions.”
On the other hand, the courts or others may view these “consider” provisions as requiring
some type of detailed cost-benefit analysis. On July 22, 2011, the U.S. Court of Appeals
for the District of Columbia Circuit vacated an SEC final rule on proxy access, saying the
Commission acted arbitrarily and capriciously for having failed to assess the economic
implications of a rule adequately.79 The Court specifically referenced (on p. 3 of the
opinion) the requirements in Section 3(f) of the Exchange Act and Section 2(c) of the
Investment Company Act of 1940 that the SEC consider the impact of the rule on
efficiency, competition, and capital formation. Although the SEC had prepared a costbenefit analysis and discussed it in the final rule, the Court said (on p. 7 of the opinion)
that the SEC had “inconsistently and opportunistically framed the costs and benefits of
the rule; failed adequately to quantify the certain costs or to explain why those costs
could not be quantified; neglected to support its predictive judgments; contradicted itself;
and failed to respond to substantial problems raised by commenters.” Citing an earlier
case,80 the Court said that the agency has a “statutory obligation to determine as best it
can the economic implications of the rule.” Some observers believe that this case has
“elevated the importance of economic analysis in rulemaking to implement” the DoddFrank Wall Street Reform Act. 81

79

Business Roundtable v. SEC, D.C. Cir., No 10-1305, July 22, 2010. To view a copy of this decision, see
http://www.cadc.uscourts.gov/internet/opinions.nsf/89BE4D084BA5EBDA852578D5004FBBBE/$file/10-13051320103.pdf.
80
Chamber of Commerce v. SEC, 412 F.3d 133, 143 (D.C. Cir. 2005).
81
See, for example, Yin Wilczek, “D.C. Circuit’s Proxy Access Ruling Raises Importance of Economic Review, Panel
Says,” BNA Daily Report for Executives, August 2, 2011, p. EE-4; and David S. Hilzenrath, “Wall Street Finds Relief
in Court from SEC Rules,” Washington Post, August 12, 2011, p. A-10.

32

Analytical Requirements Cited in 2010 Major Rules
The agencies issuing the 100 major rules that were published in 2010 cited a variety of
analytical requirements in the preambles to their rules. (See Appendix 2 to this report for
a summary of the requirements that were cited in each of the 100 major rules, along with
other information.) In many of these cases, however, the agencies indicated that an
analysis was not required or was not prepared for the rules. For example:
The agencies mentioned the Regulatory Flexibility Act’s analysis requirements in
99 of the 100 rules.82 In 72 of the 99 rules, the agencies indicated that a
regulatory flexibility analysis was not required, either because the rules were not
expected to have a “significant economic impact on a substantial number of small
entities” (SEISNSE, 53 rules),83 the agency was not required to issue a notice of
proposed rulemaking (12 rules),84 or because the agency continued to rely on an
analysis prepared for a similar rule (7 rules). In the remaining 27 rules, the
agencies prepared an RFA analysis.
The agencies mentioned the Paperwork Reduction Act in 96 of the 100 major
rules.85 In 21 of the 96 rules, the agencies said the regulation did not contain a
covered collection of information, so the PRA did not apply. In 64 of the
remaining 75 rules, the agencies indicated that the PRA did apply, and that they
had done some type of analysis of paperwork burden hours or costs. In two rules,
the Department of Agriculture cited a statutory exemption from the PRA.86 In the
remaining nine rules, the agencies took various other types of actions (e.g.,
requested reinstatement of or referred to an earlier collection, or referred to
another Federal Register notice).
The agencies mentioned the Unfunded Mandates Reform Act in 77 of the 83
major rules issued by cabinet departments and independent agencies covered by
UMRA. (Seventeen rules were issued solely by independent regulatory agencies
that are not covered by the act.) However, the agencies prepared a written
statement pursuant to Section 202 of UMRA in only 4 of the 77 rules. In the
82

The RFA was not mentioned in the March 19 Food and Drug Administration rule restricting the sale and distribution
of cigarettes and smokeless tobacco to protect children and adolescents. One agency official said that the reason the
RFA was mentioned so frequently was because the agencies know that the SBA Office of Advocacy is reviewing the
agencies’ actions regarding the RFA.
83
Nevertheless, in 11 of these 54 rules, the agencies indicated that they conducted an analysis meeting the requirements
of the RFA.
84
The RFA states (5 U.S.C. § 604(a)) that a final regulatory flexibility analysis is required “When an agency
promulgates a final rule under section 553 of this title, after being required by that section or any other law to publish a
general notice of proposed rulemaking.”
85
The four rules that did not mention the PRA were a January 25 DOE rule on the weatherization assistance program; a
November 9 rule issued by the Centers for Medicare and Medicaid Services on the Medicare program; a November 9
SEC rule on Regulation SHO; and a December 22 rule issued by Treasury on management of federal agency
disbursements.
86
In these rules, the department cited Section 2904 of the Food, Conservation, and Energy Act of 2008 as providing
that any regulations issued under Title II would be issued “without regard to” the PRA.

33

remaining 73 rules, the agencies either referred to another analysis as satisfying
the requirements of UMRA (9 rules), or cited one of the many exemptions and
exceptions to UMRA coverage, such as no “expenditures” of at least $100 million
in a year (30 rules), no UMRA “mandate” as defined in the Act (16 rules), or no
prior notice of proposed rulemaking (9 rules).
In the 83 rules that were issued at least in part by a cabinet department or
independent agency covered by the analytical requirements in most executive
orders, the agencies mentioned Executive Order 12866 in all 83 rules. However,
in 4 of the 83 rules, the agencies did not indicate that an RIA had been prepared,87
and in 6 rules on migratory bird hunting, the Fish and Wildlife Service relied on a
previously developed RIA. In the remaining 73 rules, the agencies prepared some
type of regulatory analysis, and usually provided detailed descriptions of the
expected costs, benefits, and transfers in the preambles to the rules.
The agencies cited Executive Order 13132 in 70 of the 83 covered major rules,
but said that 60 of the rules did not require a federalism impact statement because
the rule would not have significant federalism implications. The agencies said
there were significant federalism implications in the remaining 10 rules, and
discussed those impacts in the preambles.
The other crosscutting analytical requirements were mentioned much less frequently in
the rule preambles, and those requirements were triggered even less frequently. For
example:
The agencies mentioned NEPA in 25 of the 100 major rules, and concluded that
only 2 of the rules required a new environmental impact statement. In the
remaining 23 rules, the agencies either prepared an environmental assessment but
ultimately issued a “finding of no significant impact” (FONSI, 10 rules),
referenced an earlier environmental impact statement (6 rules), cited a categorical
exemption to NEPA (6 rules), or said a NEPA analysis was not necessary (1 rule).
The agencies mentioned Executive Order 13211 in 23 rules, and concluded that an
energy impact analysis was required in only 1 of the rules. The agencies said that
the other 22 rules were not “significant energy actions” as defined in the executive
order, so no analysis was required.
Executive Order 13175 was mentioned in 16 of the rules, but only one subpart of
one rule triggered the tribal impact analysis. The agencies said that the other 15
rules did not have any tribal implications, so no analysis was required.
87

In one of these rules (a March 19 FDA rule on tobacco products), the agency said OMB did not require a new RIA
because the statute required a rule identical to that issued in 1996. In another rule (a May 4 Office of Thrift
Supervision rule on unfair or deceptive practices), the agency said an RIA was not needed because the rule eliminated a
provision that an economically significant impact. In two other rules (a January 28 rule on risk-based capital guidelines
and a November 16 DOD rule on the homeowner assistance program), the agencies did not indicate that an RIA had
been done.

34

Executive Order 12630 on “takings” was mentioned in 13 rules, and the agencies
said that none of the rules triggered the analytical requirements.
The agencies cited Executive Order 13045 on children and the environment in
nine rules, and said four of them triggered the analytical requirement (which was
satisfied by another analysis in two instances). In the other five rules, the
agencies said the requirements of the executive order did not apply. In three of
the five rules (all issued by EPA), the reason cited was because the rule was
“based solely on technology performance.”
Executive Order 12898 on environmental justice was mentioned in nine rules, but
the agencies said that none of the rules triggered the analytical requirements.
Only four rules (all issued by DOE) mentioned the “family assessment”
requirement under Section 654 of the Treasury and General Government
Appropriations Act of 1999 (P.L. 105-277), but none of the rules triggered the
analysis requirement.
Only one rule mentioned the privacy impact assessments required by the EGovernment Act, indicating that the agency had updated a prior assessment, and
one other rule mentioned having done a privacy impact assessment under the
Section 522 of the 2005 appropriations bill.
Figure 1 below graphically displays these results.
Figure 1: Some Analytical Requirements Were Rarely Mentioned in Major Rules

35

Egov/Privacy
Section 654
EO13045
EO12898
EO12630
EO13175
EO13211

Did Analysis

NEPA

Mentioned

EO13132
UMRA
EO12866
PRA
RFA
0

20

40

60

80

100

Source: Analysis of preambles of major rules issued during calendar year 2010.

These results are similar to those reported by GAO in 2009. Of 139 major rules and 16
case study rules, the analytical requirements that were most commonly triggered were the
PRA, the RFA, and EO 12866 (except for independent regulatory agencies like the SEC,
which are not covered by the executive order). Other analytical requirements (e.g.,
UMRA and EO 13132) were mentioned in more than half of the rules, but the analysis
was done only rarely.88
Why Certain Analytical Requirements Were Not Mentioned
When the agencies did not mention a particular analytical requirement, it was usually
clear from the context of the rule why it was not mentioned. For example, if a rule was
issued by an independent regulatory agency that is not covered by EO 12866 or UMRA,
it is understandable that the agency would not mention those requirements. If a rule only
made changes in federal banking requirements, it is understandable why the agency
would not mention having done an environmental impact statement under NEPA. If a
rule has no apparent collection of information from the public, it is understandable why
the agency would not mention the PRA.
In other cases, however, it was not clear why the agency did not mention a potentially
applicable rulemaking requirement. For example, it was not clear why the Food and
88

U.S. Government Accountability Office, GAO-09-205, p. 25.

36

Drug Administration’s March 19 rule restricting the sale and distribution of cigarettes and
smokeless tobacco did not mention the RFA or UMRA, given that both statutes covered
the agency, and the rule could conceivably affect small businesses or businesses in
general.89 Even if the agency ultimately concluded that the rule did not trigger the
analytical requirements (e.g., because the rule would not have economic effects rising to
a SEISNSE, or would not constitute a “mandate” under UMRA), some mention of the
statutes would have been appropriate.90 Several of the agency officials interviewed for
this report indicated that the review offices in their departments and agencies encourage
the agencies to mention all of the most important analytical requirements, even when an
analysis is not required.
Why Certain Analytical Requirements Were Not Triggered
In many of the rules, the agencies provided lengthy discussions of why certain analytical
requirements did not apply. Thus, even though the agencies ultimately concluded that the
analytical requirements in a statute or executive order were not applicable, some type of
analysis appears to have occurred in order to reach that conclusion. For example:
In 37 of the 53 rules in which the agencies certified that they would not have a
SEISNSE, the agencies provided sometimes-lengthy discussions in the preambles
as to why no RFA analysis was required.91 In 11 other rules, the agencies certified
that there was no SEISNSE, but still did an analysis that approximated a final
regulatory flexibility analysis. For example, in a December 1 rule on medical loss
ratio requirements, HHS said that an RFA analysis was not required for the rule
because there had been no notice of proposed rulemaking. Nevertheless, HHS
said it considered the likely impact of the rule on small entities, and discussed the
analysis conducted for a related rule, which led to the conclusion that this rule
would not have a significant economic impact on a substantial number of small
entities.
Although the agencies prepared a new environmental impact statement under
NEPA in only 2 rules, the agencies prepared somewhat less detailed
environmental assessments in 10 rules, and referenced an earlier environmental
impact statement in 6 other rules. As noted previously, these environmental
assessments still discuss the need for the rule, alternative courses of action, and
environmental effects.
89

See Appendix II of this report to find citations for this and other rules mentioned in the body of the report. The rules
in the appendix are organized by date of publication in the Federal Register.
90
An HHS official said during this review that the RFA and UMRA were probably not mentioned because the agency
was statutorily required to simply reissue a 1996 rule on this issue, so no RFA or UMRA analysis was believed needed.
An FDA official said that the agency probably should have indicated that this was the case in the preamble, as was
done for EO 12866.
91
For example, in a March 31, 2010, rule on “Electronic Prescriptions for Controlled Substances,” the Drug
Enforcement Administration within the Department of Justice described in detail (at 75 Federal Register 16302) the
number of small entities affected and the size of those effects, and ultimately concluded that the rule would affect a
substantial number of small entities, but would not have a significant economic effect on them.

37

In an August 9 rule on “Cranes and Derricks in Construction,” the Occupational
Safety and Health Administration (OSHA) within the Department of Labor
provided a lengthy discussion of federalism effects, but ultimately decided that a
formal federalism impact analysis under EO 13132 was not required.
In an August 20 rule on emission standards for reciprocating internal combustion
engines, EPA concluded that the rule was not a “significant energy action” under
EO 13211, and prepared an analysis of energy effects that explained this
conclusion.
In a May 6 rule on the renovation, repair, and painting program, EPA said it
assessed the impact of the rule on minority and low-income populations pursuant
to EO 12898 as part of the overall economic analysis, but ultimately concluded
that the rule would not have adverse effects.
In other cases, however, the agencies did not indicate that any type of analysis preceded
the determination that a particular analytical requirement did not apply. The agencies
sometimes used the same “boilerplate” language to indicate that the rule would not have a
SEISNSE under the RFA, was not a mandate under UMRA, did not contain a covered
collection of information under the PRA, or did not have sufficient federalism
implications to warrant coverage under EO 13132. For example:
In DOD’s April 9 rule on the relationship between the TRICARE program and
employer-sponsored group health coverage, the department simply said the
rule “will not have a significant impact on a substantial number of small
entities for purposes of the RFA.” No further explanation was provided. Four
other rules (two from DOD, two from CMS) contained similarly brief RFA
certification statements.
In an October 14 rule on oil and gas and sulphur operations in the outer
continental shelf, the Bureau of Ocean Energy Management, Regulation and
Enforcement within the Department of the Interior said the rule “will impose
an unfunded mandate on State, local, or tribal governments or the private
sector of more than $100 million per year,” but then said the rule would not
have a “significant or unique effect” on those entities, and that an UMRA
written statement was not required. No further explanation was provided.92
In six rules on migratory bird hunting (August 30, August 31, September 1,
September 23, and two on September 24), the Fish and Wildlife Service used
the same language to address the requirements in the RFA (citing a 2008
92

Section 203 of UMRA requires a small government plan before an agency establishes requirements that may have a
significant or unique effect on small governments. The written statement requirement in Section 202 of UMRA does
not require such significant or unique effects. A DOI official said during this review that an analysis was not required
for this rule because it was issued without a prior NPRM.

38

analysis), and to indicate that the requirements of EO 12630, EO 13131, EO
13175, and EO 13211 did not apply.
In some of these cases, given the context of the rulemaking, the reasons for the
disqualification were obvious and no lengthy explanation appeared necessary. For
example, in DOD’s April 16, 2010, rule on retroactive stop loss special pay
compensation, the rule was likely not a “mandate” under UMRA because it simply
authorized certain payments to members of the armed forces.
In other cases, however, the reasons why these analytical requirements did not apply were
not clear, and additional information beyond the “boilerplate” language would have been
helpful to understand why the analytical requirements were not applicable. For example,
in a July 16 rule on fee disclosures, the Employee Benefits Security Administration
(EBSA) within DOL said the rule would impose paperwork costs of more than $230
million in the first year of implementation, but later said the rule would not trigger the
requirements in Section 202 of UMRA because it did not contain any mandate that could
result in expenditures of $100 million or more in any year.
Inconsistency in the Application of the Requirements
In some of the rules that were issued by multiple agencies, the agencies disagreed as to
whether certain types of analyses were required. For example:
In a July 28 rule on registration of mortgage loan originators, the Office of the
Comptroller of the Currency within the Department of the Treasury prepared
a final regulatory flexibility analysis under the RFA (reversing a
determination in the proposed rule that the rule would not have a SEISNSE
after receiving a comment letter from SBA). However, the five other agencies
that issued the rule with OCC (the Federal Reserve System, the National
Credit Union Administration, the Farm Credit Administration, the Federal
Deposit Insurance Corporation, and the Office of Thrift Supervision within
the Department of the Treasury) all certified that the rule would not have a
SEISNSE. In the same rule, the two issuing agencies that were covered by EO
12866 (OCC and OTS) disagreed as to whether the rule was economically
significant under EO 12866. (OCC said it was, but OTS said it was not.
Nevertheless, both prepared an RIA.)
In five separate rules (a February 2 rule under the Mental Health Parity and
Addiction Equity Act of 2008, a May 13 rule on coverage of children to age
26, a June 17 rule on grandfathered health plans, a July 19 rule on
preventative services, and a July 23 rule on claims and review processes),
DOL and HHS said the rules were economically significant under EO 12866,
so they prepared detailed assessments of the rules’ costs, benefits, and
transfers. However, the Department of the Treasury said the five rules were
not economically significant, and that such assessments were not required.
39

In a May 7 rule on light-duty vehicle greenhouse gas emission standards and
corporate average fuel economy that was jointly issued by EPA and the
National Highway Traffic Safety Administration (NHTSA), EPA said that the
rule had no federalism implications under EO 13132, but NHTSA did not say
so, indicating that it was deferring consideration of preemption effects until
later. Also, while EPA said the rule had no tribal implications under EO
13175, NHTSA did not mention the executive order. Finally, whereas NHTSA
said it complied with EO 12898 by discussing effects on covered populations
in the final environmental impact statement, EPA said the executive order
did not apply with regard to greenhouse gas emissions, and it was not
practical to determine the application with regard to other pollutants.
There also appeared to be some inconsistency across rules within certain agencies
regarding when certain analytical requirements were applicable. For example, in a
February 9 rule on nitrogen dioxide and a May 7 rule on greenhouse gas emissions and
corporate average fuel economy standards, EPA said the rules were subject to EO 13045
because each was an “economically significant regulatory action as defined by Executive
Order 12866, and EPA believes that the environmental health or safety risk addressed by
this action has a disproportionate effect on children.” However, in a June 3 rule on
greenhouse gas emissions and an August 20 rule on reciprocating internal combustion
engines, EPA said the rules were not subject to EO 13045 because the agency interprets
the executive order as “applying to those regulatory actions that concern health or safety
risks, such that the analysis required under section 5-501 of the Order has the potential to
influence the regulation.” EPA also said the executive order was not applicable because
the rules did not “establish an environmental standard intended to mitigate health or
safety risks.”

Interviews with Agency Officials
The agency officials interviewed for this report generally indicated that the previously
discussed list of crosscutting analytical requirements reflected the major requirements
that they must consider in rulemaking. However, some of the officials suggested some
possible additions. For example, a DOT official said that one could argue the APA’s
“arbitrary and capricious” standard is essentially an analytical requirement, noting that
agencies might have to do a cost-benefit analysis to show that their rules are “reasonable”
under the APA.93 Similarly, an FCC official said that the APA requires “reasoned
decisionmaking,” so it may be considered an “analytical requirement.” The FCC official
also suggested that OMB’s 2005 bulletin on peer review might be considered an

93

As one author noted, in the courts’ application of the “hard look” doctrine under the APA, they “examine the
agency’s explanatory material to determine whether the agency used the correct analytical methodology….” Thomas
O. McGarity, “The Courts and the Ossification of Rulemaking: A Response to Professor Seidenfeld, Texas Law
Review, volume 75 (1997), p. 527.

40

analytical requirement in that certain scientific and social scientific information would
have to be reviewed before it could be used in a rule.94
The agency officials often indicated that the analytical requirements that are most
commonly applicable to their rules are the RFA, the PRA (when an information collection
is involved), and (for cabinet departments and independent agencies) the cost-benefit
analysis requirements in EO 12866. On the other hand, several of the officials said that
some of the crosscutting analytical requirements are rarely triggered by their agencies’
rules. For example,
An EPA official said that her agency did not issue many rules with “takings”
implications under EO 12630, or that required privacy impact statements
under the E-Government Act. EPA reportedly has a standard set of statutes
and executive orders that they consider and discuss in the preambles of rules
signed by the agency’s administrator.
DOI officials said that many of the executive orders that require analysis of
effects on such topics as children’s health or environmental justice generally
do not apply to the department’s rules, and therefore can be dealt with
through “boilerplate” language.
A DOE official said that because DOE is setting performance standards in its
energy conservation rules (and not establishing traditional “command and
control” regulatory requirements), many of the crosscutting analytical
requirements do not apply.
A USDA official noted that the 2008 farm bill explicitly permits the
department to issue certain rules without regard to the PRA, and without an
NPRM (which, in turn, permits the issuing agencies to avoid the analytical
requirements in the RFA and UMRA).95 He also said that NEPA primarily
applies to rules issued by the Forest Service and the Animal and Plant Health
Inspection Service (APHIS), and that USDA only rarely issues rules that
trigger other analytical requirements (e.g., privacy assessments and family
assessments). Finally, he said that UMRA was not mentioned at all in one
rule (the “access to pasture” rule) because it did not have a mandate, and the
issuing agency should have briefly indicated that was the case.

94

Office of Management and Budget, “Final Information Quality Bulletin for Peer Review,” 70 Federal Register 2664,
January 14, 2005, available at
http://www.whitehouse.gov/sites/default/files/omb/assets/omb/fedreg/2005/011405_peer.pdf.
95
Section 1601(c)(2) of the 2008 farm bill (H.R. 6124, 110th Congress, P.L. 110-246) states that the “promulgation of
the regulations and administration of this title [Title I on commodity programs] and the amendments made by this title
shall be made without regard to-- (A) chapter 35 of title 44, United States Code (commonly known as the ``Paperwork
Reduction Act''); (B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg.
13804), relating to notices of proposed rulemaking and public participation in rulemaking; and (C) the notice and
comment provisions of section 553 of title 5, United States Code.” Section 2904(b) of the legislation contains similar
language for Title II on conservation programs.

41

An FDA official said that the agency often does not mention the analytical
requirements that are not applicable to its rules, but should probably do so in
some way because those requirements “are there for a reason, and we should
explain why we did not do an analysis.”
Some of the agencies indicated that although certain rules do “trip the wire” for analysis,
the trigger is not due to compliance costs. For example:
Officials from DOI indicated most of the “major” or “economically significant”
rules that the department issues are the migratory bird hunting rules that
have at least a $100 million annual effect on the economy because of
consumer spending, not compliance costs. To avoid having to do a full costbenefit analysis for each rule, DOI relies on a 1982 opinion from OIRA
allowing the department to update existing RIAs when new data become
available, and to do a “thorough review” of the RIA every five years.96
An HHS official said that most CMS major rules are transfer payments, and
the analysis done is more like the type scoring that CBO would do for
legislation (i.e., looking at budgetary impacts) than a true cost-benefit
analysis. She said these transfer rules often have to be done every year, so if
they had to do a full cost-benefit analysis it would not only be uninformative,
but could make it difficult for the agency to issue the rules on time.
USDA issued at least four major rules in 2010 that could be classified as
transfer rules. A USDA official noted that transfer rules have very different
consequences than rules that directly affect economic activity and benefit
from a different analytical approach.97 For transfers, he said, the analysis is
usually less rigorous, and is more of a scorekeeping exercise in which the
agency analyzes the amount of money being sent out and associated changes
in administrative burden, and whether that is an increase or decrease from
previous years. He said OIRA generally understands that the analysis will
primarily be a scorekeeping exercise, with a qualitative discussion of the
benefits. If there were administrative costs in addition to the transfers, then
other types of analysis (e.g., PRA or RFA) would also be reviewed.

Agency- or Issue-Specific Analytical Requirements

96

Letter from Christopher C. DeMuth, OIRA Administrator, to G. Ray Arnett, Assistant Secretary for Fish and
Wildlife and Parks, Department of the Interior, April 20, 1982, available from the author.
97
The official said although the APA contains an exemption for matters relating to federal benefits, under the
provisions of the ``Statement of Policy of the Secretary of Agriculture effective July 24, 1971,'' issued by Secretary
Hardin in 1971 (36 Federal Register 13804 (the ``Hardin Memorandum''), the Department normally engages in
rulemaking related to federal benefits despite that exemption.

42

In addition to the crosscutting analytical requirements, several of the major rules that
were issued in 2010 and/or the agency officials that were interviewed for this report
mentioned agency- or issue-specific analytic requirements. For example:
In three of the four DOE major rules, the department indicated that the Energy
Policy and Conservation Act (EPCA) was the primary factor in the analysis. As
noted previously, EPCA requires that energy conservation standards must be
designed to “achieve the maximum improvement in energy efficiency” that “is
technologically feasible and economically justified'' (42 U.S.C. § 6295(o)(2)(A)
and 6316(a)). Also, the standard must “result in significant conservation of
energy” (42 U.S.C. § 6295(o)(3)(B) and 6316(a)). A DOE official said that EPCA
is “the standard by which our rules are ultimately measured. Therefore, he said,
the bulk of the regulatory analysis is done to satisfy EPCA, with the other
required analyses “tiered off” the EPCA analysis. For example, in the January 8
rule setting energy conservation standards for commercial clothes washers, more
than 50 pages of the preamble were devoted to discussing the analyses done to
satisfy EPCA, but only 4 pages were devoted to the various crosscutting
analytical requirements (e.g., EO 12866, the RFA, the PRA, and other executive
orders).
An SEC official said there are several provisions in the statutes underlying most
of the agency’s rules that require certain factors to be considered during their
development. For example, Section 202(c)(1) of the Advisers Act (15 U.S.C. §
80b-2(c)) requires SEC to “consider, in addition to the protection of investors,
whether the action will promote efficiency, competition, and capital formation.”
Also, Section 204 of the Act (15 U.S.C. § 80b-4) states that SEC must consider
whether the rule is “necessary or appropriate in the public interest or for the
protection of investors.” Section 2(c) of the Investment Company Act (15 U.S.C.
§ 80a-2(c)) requires the SEC to consider “whether the action will promote
efficiency, competition, and capital formation.” Section 3(f) of Exchange Act (15
U.S.C. § 78c(f)) requires SEC to consider effects on efficiency, competition, and
capital formation, and Section 23(a)(2) of the Act, requiring consideration of
effects on competition. Section 23(a)(2) of the Exchange Act (15 U.S.C. §
78w(a)(2)) requires SEC to consider the impact on competition, and prohibits the
Commission from adopting any rule that would impose a competition burden not
necessary or appropriate. The SEC official said that these provisions, although
important, are not what drives the agency to do cost-benefit analyses for its rules,
and that the agency had done such analyses before these statutes were enacted.
He said the analyses are primarily done as a way to ensure that the agency’s rules
are well considered, not in response to any statutory or executive order
requirement.98

98

These requirements were also mentioned in several of the SEC’s major rules. For example, the Section 202(c)(1) and
Section 204 requirements were cited in the January 11 rule on custody of funds. The Section 204 requirements were
also mentioned in the agency’s July 14 rule on political contributions by certain investment advisors. The Section 2(c)
requirement was mentioned in the March 4 rule on money market fund reform.

43

A USDA official noted two agency-specific analytical requirements: (1)
Section 304 of the Federal Crop Insurance Reform and Department of
Agriculture Reorganization Act of 1994 (P.L. 103-354), which requires an
analysis of risk and costs/benefits for each rule that is expected to have a
$100 million impact on the economy in 1994 dollars, and whose primary
purpose is to regulate issues of human health or safety;99 and (2)
Departmental Regulation 4300-4, which requires a “civil rights impact
analysis” for any rule to determine possible adverse impacts on women,
minorities, and disabled stakeholders and USDA employees.100
An official at the Department of Commerce said that the Magnuson-Stevens
Fishery Conservation and Management Act (16 U.S.C. §§ 1801-1884) contains
provisions requiring NOAA to balance conservation and environmental
interests with the sustainability of the fishing industry. Therefore, she said
the department has to prepare a “kind of indirect cost-benefit analysis” to
achieve that balance. In general, she said, the Magnuson-Stevens Act
establishes the basis for what NOAA is trying to do, and then the
requirements of EO 12866 and the RFA come into play.
In more than a dozen of its rules, the Department of Health and Human Services
cited the previously-mentioned requirement in Section 1102(b) of the Social
Security Act that it analyze the effect of its rules on small rural hospitals. An
HHS official also said that some statutes contain rule specific analytical
requirements.
One rule issued by the Drug Enforcement Administration within the Department
of Justice cited a requirement in OMB’s December 2004 E-Authentication
Guidance for Federal Agencies (M-04-04) that the agency prepare a risk
assessment to determine the level of assurance needed to allow the use of
electronic prescriptions for controlled substances. 101
In an April 1 rule on electronic fund transfers, the Federal Reserve System cited a
requirement for an economic impact analysis under Section 904(a)(2) of the
Electronic Fund Transfer Act (15 U.S.C. § 1993 et seq.).
An EPA official noted that the Clean Air Act requires that certain rules have
an “ample margin of safety” or meet certain levels of risk (e.g., “protective of
human health”). Therefore, she said the agency has to prepare analyses
showing that those criteria have been satisfied.

99

The Commodity Credit Corporation also mentioned this requirement in a June 3, 2010, major rule on the
conservation stewardship program,
100
For more information, see http://www.ocio.usda.gov/directives/doc/DR4300-004.pdf. Several of the USDA major
rules also mentioned the requirement for a civil rights impact analysis pursuant to this departmental regulation.
101
This document is available at http://www.whitehouse.gov/sites/default/files/omb/memoranda/fy04/m04-04.pdf.

44

OSHA said in its August 9 rule on cranes and derricks in construction that the
Occupational Safety and Health Act of 1970 requires the agency to demonstrate
the “technological and economic feasibility of its rules.”

Consolidation of Analytical Requirements
The second objective of this report is to examine whether the various crosscutting
analytical requirements could or should be consolidated or otherwise changed to make
the federal rulemaking process more efficient and effective. This section will first note
several factors that must be considered to determine whether the requirements could be
combined or consolidated. It will then provide examples from the 2010 major rules of
overlapping requirements, and actions the agencies have taken to combine the
requirements. Finally, the section will provide information from interviews with agency
officials on whether the analytical requirements could or should be combined.

Factors to Consider When Comparing Analytical Requirements
Comparison of the crosscutting analytical requirements to determine whether they could
be combined or consolidated requires consideration of at least three factors: (1) which
agencies and rules the different analytical requirements cover, (2) the amount of
discretion that agencies have to determine whether the requirements are triggered, and (3)
the specific issues that the agencies are required to address in the analyses. The more
similar the analytical requirements are in these respects, the easier it is likely to be to
consolidate them into a single statute or executive order.
Agencies and Rules Covered
Some of the analytical requirements (e.g., NEPA, the RFA, the PRA) apply to virtually all
executive branch agencies, including independent regulatory agencies like the Federal
Reserve and the SEC. However, many other requirements (e.g., UMRA, EO 12866, and
EO 13132) only apply to cabinet departments and independent agencies like EPA, and
specifically exclude independent regulatory agencies.102 In fact, only two of the
executive orders appear to apply to independent regulatory agencies.103 Therefore,
consolidation of the analytical requirements would require either applying certain
requirements to independent regulatory agencies for the first time, or excluding
independent regulatory agencies from certain requirements that already cover them.

102

Independent regulatory agencies may, however, be covered by certain non-analytical requirements in these
executive orders (e.g., the requirement in EO 12866 to prepare a regulatory agenda), or may be encouraged to comply
with other requirements.
103
Most of the executive orders define a covered “agency” as “any authority of the United States that is an "agency"
under 44 U.S.C. § 3502(1), other than those considered to be independent regulatory agencies, as defined in 44 U.S.C.
3502(5).” However, EO 12630 does not contain this limitation, instead requiring action by “each Executive department
and agency.” Similarly, EO 12898 generally requires action by “each Federal agency.”

45

The analytical requirements differ even more dramatically in terms of the types of rules
that are included and excluded from coverage. For example, although both EO 12866 and
UMRA apply to the same agencies (cabinet departments and independent agencies, but
not independent regulatory agencies), UMRA contains many more exclusions and
exceptions than EO 12866, and therefore applies to significantly fewer rules than the
executive order. In one notable difference, EO 12866 generally applies to all rules that
are expected to have a $100 million annual “effect on the economy” (which, as noted
previously, can include costs, benefits, federal expenditures, user fees, consumer surplus
transfers, and other types of effects), and the $100 million figure is not adjusted for
inflation. UMRA, on the other hand, only applies to rules that require an “expenditure”
of $100 million in any year (adjusted for inflation) by the private sector, or by state, local,
or tribal governments in the aggregate. Therefore, a rule that is expected to reduce the
amount of income received by private sector companies by more than $200 million (e.g.,
fishing restrictions, or product importation changes that drive down the cost of domestic
products) would be covered by EO 12866, but would not be covered by UMRA because
the rule did not require those companies to actually spend any money. In addition to the
“expenditures” exclusion, UMRA also excludes final rules that:
Do not require a notice of proposed rulemaking.104
Incorporate requirements specifically set forth in law.105
Are not “federal mandates,” which is defined in title I of the Act as an
“enforceable duty” that is not “a condition of Federal assistance” or “a duty
arising from participation in a voluntary Federal program.”106
Enforce the constitutional rights of individuals.
Enforce rights prohibiting discrimination.107
Provide for emergency assistance.
Are necessary for national security or foreign affairs.
Relate to certain programs under the Social Security Act.
None of these exclusions are in EO 12866. In essence, therefore, the set of rules that are
subject to UMRA’s analytical requirements are a subset of the rules that are subject to the
analytical requirements in EO 12866. In 1998, GAO reported that 78 of the 110
economically significant final rules issued in the first two years of UMRA’s
104

The agencies cited this exclusion in at least 9 of the 100 major rules published in 2010, and could have cited it in
several other rules that were issued without an NPRM. The rules in which this reason was cited included a February 2
rule issued by multiple agencies under the Mental Health Parity and Addiction Equity Act of 2008; and rules issued by
multiple agencies on May 13, June 17, June 28, July 19, and July 23 under the Patient Protection and Affordable Care
Act.
105
In a July 28 major rule on registration of mortgage loan originators, the issuing agencies said that the written
statement requirements in UMRA did not apply because the rule only incorporated requirements in the underlying
statute.
106
In two rules (a January 19 rule issued by the Federal Emergency Management Agency on special community
disaster loans, and a November 8 rule issued by the Federal Highway Administration on the “real-time system
management information program”), the agencies said UMRA did not apply because conditions of federal financial
assistance are not considered “mandates.” DHS said a September 24 rule on the citizenship and immigration services
fee schedule was not covered by UMRA because any mandate arose from a voluntary federal program.
107
In two rules issued by the Department of Justice on September 15, the department said the rules were not subject to
UMRA because it excludes rules prohibiting discrimination on the basis of handicap or disability.

46

implementation did not require a written statement for one or more of the above
reasons.108 In 2004, GAO said that federal agencies identified only 9 of the 122 major
and/or economically significant rules published in 2001 or 2002 as containing mandates
under UMRA. 109 GAO also reported that 65 of the 113 rules that had not triggered
UMRA had impacts on nonfederal parties that those affected might perceive as unfunded
mandates. In February 2011 congressional testimony, GAO reiterated these conclusions,
noting that there are 14 reasons why a rule would not be considered a “mandate” under
UMRA.110
The other analytical requirements also contain various exclusions and exceptions. For
example:
The RFA’s regulatory flexibility analysis requirements (like the UMRA
written statement requirements discussed above) do not apply to final rules
that do not require a notice of proposed rulemaking. In at least 12 of the 100
major rules issued in 2010, the agencies said the RFA did not apply because
there was no NPRM, and other agencies could have cited this reason in a
number of other rules. GAO estimated in 1998 that half of all final rules
issued the previous year did not have a prior notice of proposed
rulemaking.111
Also, courts have ruled for more than 25 years that agencies need not
prepare regulatory flexibility analyses if the effects of a rule on an industry
are indirect.112 For example, in its February 9 major rule establishing
primary national ambient air quality standards (NAAQS) for nitrogen
dioxide, EPA said the rule did not require a regulatory flexibility analysis
“because NAAQS themselves impose no regulations upon small entities.”
(According to the agency’s regulatory impact analysis, implementation of the
NAAQS by the states was estimated to cost between $270 million and $580
million in the year 2020.)113
108

U.S. General Accounting Office, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking
Actions, GAO/GGD-98-30, February 4, 1998.
109
U.S. General Accounting Office, Unfunded Mandates: Analysis of Reform Act Coverage, GAO-04-637, May 12,
2004.
110
Testimony of Denise M. Fantone, Director, Strategic Issues, U.S. Government Accountability Office, before the
Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform, House
Committee on Oversight of Government Management, available at http://www.gao.gov/products/GAO-11-385T.
111
U.S. General Accounting Office, Federal Rulemaking: Agencies Often Published Final Actions Without Proposed
Rules, GAO/GGD-98-126, August 31, 1998.
112
See, for example, Mid-Tex Electric Cooperative, Inc. v. FERC, 773 F.2d 327, 343 (D.C. Cir. 1985). See also
American Trucking Associations, Inc. v. U.S. Environmental Protection Agency, 175 F.3d 1027 (D.C. Cir. 1999),
affirmed in part and reversed in part, Whitman v. American Trucking Associations, 532 U.S. 457 (2001), in which the
U.S. Court of Appeals for the District of Columbia ruled that EPA had complied with the RFA because the states, not
EPA, had the direct authority to impose requirements to control ozone and particulate matter consistent with EPA
health standards.
113
EPA has taken this position in other rules. For example, when EPA published a final rule establishing national
ambient air quality standards (NAAQS) for particulate matter in October 2006, the agency certified the rule as not
triggering the RFA “because NAAQS themselves impose no regulations on small entities.” In its cost-benefit analysis
for the rule, EPA estimated the cost of installing controls to meet the health standard at $5.6 billion in 2020. See U.S.

47

The PRA does not apply to rules that do not contain a covered “collection of
information.” Of the 100 major rules that were published in calendar year
2010, 25 of the rules did not appear to contain an information collection that
triggered an analysis under the PRA.114 Also, some statutes specifically
exclude certain rules from PRA coverage. For example, in two of the major
rules published in 2010, the Commodity Credit Corporation within USDA
stated that Section 2904 of the Food Conservation, and Energy Act of 2008
provides that any regulation under Title II of the Act would be issued
“without regard to” the PRA.115
The detailed analytical requirements in EO 12866 do not apply to rules that
are not “economically significant.” Between 1997 and 2010, federal agencies
published between 2,900 and 4,500 final rules each year, or an average of
about 3,600 rules each year. Of these, between 50 and 100 rules each year
were considered “major” under the Congressional Review Act (which is
definitionally very similarly to “economically significant” in EO 12866), or
about 68 rules each year.116 Therefore, on average, more than 98% of all final
rules were not subject to the analytical requirements of EO 12866 and OMB
Circular A-4, even before excluding rules that were issued by independent
regulatory agencies or were otherwise exempt from the executive order’s
requirements. Also, Section 6(a)(3)(D) of EO 12866 allows agencies to
comply with the analytical requirements in the executive order “to the extent
practicable” in “emergency situations or when an agency is obligated by law
to act more quickly than normal review procedures allow.” In at least one of
the major rules issued in 2010, the issuing agencies invoked this exception
and did not indicate whether a regulatory impact analysis was prepared.117
Because the analytical requirements differ in terms of the agencies and rules that they
cover, consolidation of those requirements and reconciliation of those differences would
Environmental Protection Agency, “National Ambient Air Quality Standards for Particulate Matter; Final Rule,” 71
Federal Register 61144, 61217. See also U.S. Environmental Protection Agency, “Primary National Ambient Air
Quality Standard for Sulfur Dioxide,” 74 Federal Register 64810, at 64865, December 8, 2009; and “National Ambient
Air Quality Standards for Carbon Monoxide,” 76 Federal Register 8158, at 8195, February 11, 2011.)
114
In 21 of the rules, the agencies specifically said there were no new collections of information. In four other rules,
the agencies did not mention the PRA, which could indicate that there were no covered information collections.
115
The two rules were issued on June 3 and July 28 on the Conservation Stewardship Program and the Conservation
Reserve Program, respectively.
116
Section 3(f)(1) of the executive order defines an economically significant rule as one that may “have an annual
effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal
governments or communities.” In its guidance on the CRA, OMB said that the main difference between “economically
significant” and “major” rules is that some rules may be captured by the CRA definition that are not considered
“economically significant” under EO 12866, “notably those rules that would have a significant adverse effect on the
ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.”
See http://www.whitehouse.gov/sites/default/files/omb/assets/memoranda_2010/m99-13.pdf.
117
This was the January 28 rule issued by the Office of the Comptroller of the Currency, the Federal Reserve System,
the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, in which the agencies cited a
November 15, 2009, deadline for the rule’s implementation.

48

necessitate either greater or lesser coverage than is currently permitted in the individual
statutes and executive orders.
Agency Discretion
Some of the analytical requirements give agencies relatively little discretion to decide
whether their rules are covered by the requirement. For example, if a rule requires 10 or
more persons outside of the federal government to provide facts or opinions to the
agency, a third party, or the pubic in any form or format in response to identical
questions, the agency generally must comply with the information collection
requirements in the PRA. If a rule issued by a cabinet department or independent agency
is expected to have a $100 million annual effect on the economy of any kind (e.g., costs,
benefits, or transfers), then the rule would generally be covered by the analytical
requirements in EO 12866. Even if the agency understates those effects to fall under the
$100 million threshold, OMB may determine that the rule is economically significant for
other reasons (e.g., the rule may “adversely affect in a material way the economy, a sector
of the economy, productivity, competition, jobs, the environment, public health or safety,
or State, local, or tribal governments or communities”).118
However, other analytical requirements give agencies wide latitude to determine whether
their rules are covered, which can lead to inconsistency in the application of those
requirements. Perhaps most notable in this regard is the RFA, which allows agencies to
avoid conducting an initial or final regulatory flexibility analysis if they certify that their
rules will not have a “significant economic impact on a substantial number of small
entities.” The RFA does not define the terms “significant economic impact” or
“substantial number of small entities,” thereby giving federal agencies substantial
discretion regarding when the act’s analytical requirements are initiated. In addition,
some agencies do not consider an RFA analysis to be required if the rule is expected to
have significant positive effects on small entities.119
GAO has examined the implementation of the RFA several times within the past 20
years, and a recurring theme in GAO’s reports is a lack of clarity in the Act and a
resulting variability in its implementation. For example, in 1991 GAO reported that each
of the four federal agencies that it reviewed had a different interpretation of key RFA
provisions.120 In 1994, GAO again reported that agencies’ compliance with the RFA
varied widely from one agency to another and that agencies were interpreting the statute
differently.121 In a 1999 report, GAO concluded that agencies had broad discretion to
118

Section 6(a)(3)(C) of Executive Order 12866 states that rules may be identified as economically significant by the
agency or by the Administrator of OIRA.
119
See, for example, U.S. Department of Health and Human Services, “Patient Protection and Affordable Care Act;
Establishment of Consumer Operated and Oriented Plan (CO-OP) Program,” 76 Federal Register 43237, July 20, 2011,
in which the department said that the Centers for Medicare and Medicaid Services interprets the RFA analysis
requirement “as applying only to regulations with negative impacts.” However, the department said it routinely
prepares a voluntary analysis when there are significant positive impacts.
120
U.S. General Accounting Office, Regulatory Flexibility Act: Inherent Weaknesses May Limit Its Usefulness for
Small Governments, GAO/HRD-91-16, January 11, 1991.
121
U.S. General Accounting Office, Regulatory Flexibility Act: Status of Agencies’ Compliance, GAO/GGD-94-105,

49

determine what the statute required.122 In a 2000 report, GAO said that EPA had certified
more than 95% of its final rules issued in the late 1990s, and characterized EPA as having
a “high threshold” for analysis (albeit within the discretion permitted in the statute).123 In
all of these reports, GAO suggested that Congress consider clarifying the act’s
requirements and/or give SBA or some other entity the responsibility to develop criteria
for whether and how agencies should conduct RFA analyses.124 In 2001, GAO testified
that the promise of the RFA might never be realized until Congress or some other entity
defines what a “significant economic impact” and a “substantial number of small entities”
mean in a rulemaking setting.125 However, other observers have indicated that the
definitions of these terms should remain flexible because of significant differences in
each agency’s operating environment.126
Other analytical requirements also give agencies a great deal of discretion to decide
whether an analysis is required. For example:
NEPA requires a detailed statement on the environmental impact of rules
that are “major Federal actions significantly affecting the quality of the
human environment.” As discussed in a Congressional Research Service
report, just about every word in the term “major Federal actions significantly
affecting the quality of the human environment” has been disputed,
scrutinized, and defined by the courts.127
Section 654 of the Treasury and General Government Appropriations Act,
1999 (P.L. 105-277) requires agencies to prepare an family policymaking
assessment before issuing any rule that “may affect family well-being.” As
one observer noted, the determination of whether a family assessment is
required, and determinations within those assessments, “call for extremely
subjective judgments on the part of the agency.”128
EO 12630 requires agencies (to the extent permitted by law) to identify the
“takings implications” of any proposed regulatory action submitted to OMB,
April 27, 1994.
122
U.S. General Accounting Office, Regulatory Flexibility Act: Agencies’ Interpretations of Review Requirements
Vary, GAO/GGD-99-55, April 2, 1999.
123
U.S. General Accounting Office, Regulatory Flexibility Act: Implementation in EPA Program Offices and Proposed
Lead Rule, GAO/GGD-00-193. September 20, 2000, p. 31.
124
Section 612 of the RFA requires the SBA Chief Counsel for Advocacy to “monitor” agencies’ compliance with the
RFA, but does not require SBA to issue binding rules defining key terms.
125
U.S. General Accounting Office, Regulatory Flexibility Act: Key Terms Still Need to Be Clarified, GAO-01-669T,
April 24, 2001.
126
See, for example, page 17 of the SBA Office of Advocacy’s guidance on the implementation of the RFA, available
at http://www.sba.gov/sites/default/files/rfaguide.pdf, which says “Significance should not be viewed in absolute
terms….”
127
U.S. Congressional Research Service, Overview of National Environmental Policy Act (NEPA) Requirements, CRS
Report RS20621, by Kristina Alexander, January 11, 2008, available at
http://www.nationalaglawcenter.org/assets/crs/RS20621.pdf.
128
Lubbers, p. 265.

50

and should identify and discuss “significant” takings implications in notices
of proposed rulemakings. Of the 13 major rules published in 2010 that
mentioned EO 12630, the agencies indicated that none of them required a
takings analysis.
EO 12898 requires agencies (to the “extent permitted by existing law”, and
“whenever practical and appropriate”) to collect, maintain, and analyze
information assessing and comparing environmental and human health risks
borne by populations identified by race, national origin, or income. Also, “to
the extent practical and appropriate,” the agencies are to use this information
to determine whether their programs, policies, and activities have
“disproportionately high and adverse human health or environmental effects
on minority populations and low-income populations.” The executive order
does not indicate what constitutes a “disproportionately high” effect. Also,
the phrase “whenever practical and appropriate” is repeated 10 times in the
executive order. Of the eight rules that mentioned EO 12898, the agencies
indicated that none of them triggered the order’s analytical requirements.129
EO 13045 requires agencies (unless prohibited by law) to evaluate the
environmental health or safety effects of each rule considered economically
significant under EO 12866 that “concern[s] an environmental health risk or
safety risk that an agency has reason to believe may disproportionately affect
children.” The executive order does not indicate what constitutes a
“disproportionate” effect, or even indicate whether the effect must be a
negative effect. The analysis is also required “to the extent permitted by law
and appropriate, and consistent with the agency’s mission.”
EO 13132 requires agencies (“to the extent practicable and permitted by
law”) to prepare an impact statement for any rule with “federalism
implications,” which is defined as a rule with “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.” The term “substantial direct effects” is not defined in the
executive order. Of the 69 major rules published in 2010 that mentioned EO
13132, the agencies indicated that 59 of them did not have sufficient
federalism implications to warrant an analysis. 130
EO 13175 requires agencies (“to the extent practicable and permitted by
law”) to prepare a tribal summary impact statement for any rule that has
“tribal implications and that preempts tribal law.” “Tribal implications” is
129

In the June 3 greenhouse gas “tailoring” rule, EPA said it was “not practicable to identify and address
disproportionately high and adverse health or environmental effects on minority populations and low income
populations” under EO 12898.
130
In a January 15 major rule on positive train control systems, the Federal Railroad Administration said the rule would
“have no federalism implications, other than the preemption of state laws,” which it said was caused by the underlying
statute, not the regulation. Therefore, the agency said no federalism impact statement was required.

51

defined as including rules that have “substantial direct effects 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.” The term “substantial direct
effects” is not defined in the executive order. Of the 16 major rules issued in
2010 that mentioned EO 13175, the agencies indicated that 15 of them did
not have tribal implications that triggered the analytical requirement.
EO 13211 requires agencies (to the extent permitted by law) to prepare a
statement of energy effects for any rule considered a “significant energy
action,” which is defined as any significant regulatory action under EO 12866
that is “likely to have a significant adverse effect on the supply, distribution,
or use of energy.”131 The executive order does not define the term
“significant adverse effect.” Of the 23 major rules issued in 2010 that
mentioned EO 13211, the agencies indicated that 22 of them were not
significant energy actions that required analysis.
Because the analytical requirements differ in the amount of discretion that agencies have
regarding whether an analysis is required, consolidation of those requirements and
reconciliation of the differences would necessitate either more discretion or less
discretion than is currently permitted in individual statutes and executive orders.
Nature of the Requirements
Some of the broad themes in the crosscutting analytical requirements are quite similar. As
Table 3 below shows, all four of the analytical requirements that were most commonly
cited in the 2010 major rules (the RFA, the PRA, UMRA, and EO 12866) generally
require some type of (1) discussion of the need for the regulatory action, including the
statutory or legal basis; (2) assessment of costs and/or benefits of the rule; and (3)
discussion of alternatives to the regulatory action that could have been selected. Other
analytical requirements also often have one or more of these three elements.132
Table 3: Similar Elements in Analyses Pursuant to the RFA, UMRA, the PRA, and EO
12866
Elements
Required in
Analysis

RFA

UMRA

PRA

EO 12866

131

The OIRA administrator can also designate a rule as a “significant energy action.”
For example, EO 13132 on federalism requires agencies to “consult with appropriate State and local officials as to
the need for national standards and any alternatives that would limit the scope of national standards or otherwise
preserve State prerogatives and authority.” The federalism impact statement is to include the “agency's position
supporting the need to issue the regulation.” EO 13211 on energy effects requires agencies to describe “reasonable
alternatives to the action with adverse energy effects and the expected effects of such alternatives on energy supply,
distribution, and use.”
132

52

Need/legal basis

IRFA is to include a
“description of the
reasons why action
by the agency is
being considered”
and “the objectives
of, and legal basis
for,” the rule; FRFA
to include a
“statement of the
need for, and
objectives of, the
rule.”

Section 202 written
statement is to
include an
“identification of
the provision of
Federal law under
which the rule is
being promulgated.”

Federal Register notice is
to include a “brief
description of the
need” for the
information collection,
and the submission to
OMB is to include the
statutory authority for
the collection.

Agencies are to provide
to OMB a “description
of the need for the
regulatory action
and…how the
regulatory action will
meet that need”; also
an “explanation of the
manner in which the
regulatory action is
consistent with a
statutory mandate.”

Assessment of
costs and/or
benefits of the
rule

FRFA is to include a
“description of…
[the] compliance
requirements”
including the
number and classes
of affected small
entities and the
skills needed.

Written statement
is to include a
“qualitative and
quantitative
assessment of the
anticipated costs
and benefits of the
Federal mandate.”

Notice to include an
“estimate of the burden
that shall result” from
the information, and
agency review includes
a “specific, objectively
supported estimate of
burden.”

Agencies are to provide
an “assessment,
including the underlying
analysis,” of costs and
benefits anticipated
from the action,
including quantification
(if feasible).

Alternatives and
reasons for
selection

IRFA is to “discuss
significant
alternatives” to the
rule; FRFA to
include “steps the
agency has taken to
minimize” the
economic effects of
the rule, and explain
why other
significant
alternatives not
selected.

Section 205
generally requires
written statement
to “identify and
consider a
reasonable number
of regulatory
alternatives” and to
select the least
costly, most costeffective, or least
burdensome option
(or explain why).

Agencies are to certify
to OMB and provide
evidence that
paperwork burden has
been reduced to extent
possible (e.g., through
consideration of
different reporting
provisions, exemptions,
and simplified
provisions).

Economic analysis is to
include an
“assessment… of costs
and benefits of
potentially effective and
reasonably feasible
alternatives to the
planned regulation.”
Agencies are to explain
why the planned action
is preferable to the
alternatives. (In
principles, agencies are
to select the alternative
that maximizes net
benefits.)

Other types of information or analysis are stipulated in two or more of the requirements.
For example, both UMRA and EO 12866 (including Circular A-4) require a discussion of
effects on “health, safety, and the natural environment,” the economy, and future
compliance costs.133 The RFA, UMRA, and the PRA each require a discussion of the
public comments received (although only UMRA specifically requires the agency to
evaluate those comments).134

133

Circular A-4 requires the use of discounting to account for future benefits and costs in current dollars.
The RFA requires agencies to summarize the “significant issues raised by the public comments” in the FRFA.
UMRA requires the written statement to include a “summary of the comments and concerns” that were presented by
state, local, and tribal governments, and “the agency’s evaluation of those comments.” The PRA certification to OMB
is to include “public comments received by the agency.”
134

53

Also, some of the analytical requirements specifically refer to other requirements. For
example, one of the certifications that agencies are required to provide OMB pursuant to
the PRA is that the draft information collection
reduces to the extent practicable and appropriate the burden on persons who shall provide
information to or for the agency, including with respect to small entities, as defined under
section 601(6) of title 5 [the RFA], the use of such techniques as (i) establishing differing
compliance or reporting requirements or timetables that take into account the resources
available to those who are to respond; (ii) the clarification, consolidation, or
simplification of compliance and reporting requirements; or (iii) an exemption from
coverage of the collection of information, or any part thereof. 135

Therefore, the PRA essentially requires agencies to certify that they have taken the types
of actions that are required under the RFA. Also, if HHS is required to prepare a
regulatory flexibility analysis under the RFA, Section 1102(b) of the Social Security Act
states that the RFA analysis “shall specifically address the impact of the rule or regulation
on small rural hospitals.”136

Differences
However, the origins, objectives, and political constituencies of these crosscutting
analytical requirements are often quite different. For example, the primary objective of
the regulatory impact analysis requirements in EO 12866 is the maximization of
regulatory net benefits.137 In contrast, the goal of the RFA analysis is to minimize the
burden associated with a rule on small businesses and other small entities while still
meeting the regulation’s purpose.138 These two objectives are not necessarily
consistent,139 so any attempt to combine these analytical requirements into a single statute
or executive order would require that these differences be reconciled in some way.
Consolidation with other requirements adds another level of complication. For example,
one of the goals of the PRA is to minimize paperwork burden, which may or may not be
consistent with the goals of maximizing net benefits or minimizing effects on small
entities.
Also, because some of these crosscutting analytical requirements primarily focus on
particular issues (e.g., small entities, governmental units, or paperwork issues), it is not
surprising that there are differences in the particular elements required in the analyses.
135

5 U.S.C. § 3506(c)(3)(C).
42 U.S.C. § 1302(b)(3).
137
In its statement of regulatory philosophy, EO 12866 says that agencies should select regulatory approaches “that
maximize net benefits” unless a statute requires another regulatory approach.
138
Congress said the purpose of the RFA is to establish as a principle of regulatory issuance that “agencies shall
endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational
requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.”
139
For example, one regulatory approach could have the least impact on small businesses, and produce net benefits of
$100 million. Another approach could produce net benefits of $500 million, but could have a much more negative
effect on small businesses than the first alternative.
136

54

For example, only the RFA specifically requires agencies to determine the number and
classes of small entities affected, and the skills needed to comply with regulatory
requirements. Only UMRA requires an assessment of any “disproportionate budgetary
effects,” the extent to which the federal government may pay for costs to state, local, and
tribal governments, and the extent to which federal resources are available to pay for the
mandate. Only UMRA requires a description of the agency’s consultation with elected
representatives of state, local, and tribal governments. Only the PRA specifically
requires an estimate of paperwork burden. The PRA also requires a separate submission
to and clearance from OIRA (in addition to submissions under EO 12866).
The provisions in some of the other analytical requirements are even more particularized,
and therefore more likely to be different from other requirements. For example:
Only EO 12898 specifically requires agencies to determine whether their
rules have “disproportionately high and adverse human health or
environmental effects on minority populations and low-income populations.”
Only EO 13045 specifically requires agencies to evaluate the “environmental
health or safety effects of the planned regulation on children.”
Only EO 13211 requires agencies to prepare a “statement of energy effects”
describing adverse effects on energy supply, distribution, or use if the rule is
implemented.
Therefore, beyond the three general elements that the primary analytical requirements
have in common (statement of need, assessment of costs and benefits, and consideration
of alternative approaches), reconciling and combining the other requirements in these
statutes and executive orders would either expand the number of issues that are currently
being addressed in the analyses, or eliminate certain issues from consideration.

Recognition of Overlaps/Duplication in the Analytical Requirements
Several of the analytical requirements themselves appear to recognize that they may
overlap or duplicate other requirements, and specifically allow agencies to combine the
requirements as appropriate. For example:
Subsection 605(a) of the RFA states that “Any Federal agency may perform the
analyses required by sections 602, 603, and 604 of this title in conjunction with or
as a part of any other agenda or analysis required by any other law if such other
analysis satisfies the provisions of such sections.” Also, subsection 605(c) says
“In order to avoid duplicative action, an agency may consider a series of closely
related rules as one rule for the purposes of sections 602, 603, 604 and 610 of this
title.”

55

Subsection 202(c) of UMRA states that the written statement required under
subsection 202(a) may be prepared “in conjunction with or as a part of any other
statement or analysis, provided that the statement or analysis satisfies the
provisions of subsection (a).” Similarly, in its discussion of UMRA, OMB
Circular A-4 states that the “analytical requirements under Executive Order 12866
are similar to the analytical requirements under this Act, and thus the same
analysis may permit you to comply with both analytical requirements.”140
Section 5-503 of EO 13045 states that the required evaluation of environmental
health or safety effects on children “may be included as part of any other required
analysis.”
However, the other analytical requirements do not contain such statements explicitly
permitting one analysis to satisfy multiple requirements.
Summary
Although the crosscutting analytical requirements are similar in some respects, they are
also quite different in terms of the agencies and rules they cover, the amount of discretion
agencies have to decide whether an analysis is required, and they particular issues that the
analyses are required to address. The requirements also differ in terms of the agencies
responsible for overseeing or monitoring their implementation. Table 4 below illustrates
some of those differences across the five analytical requirements most commonly cited in
the major rules issued during calendar year 2010.

Table 4: Crosscutting Regulatory Analysis Requirements Differ in Many Respects
NEPA

RFA

PRA

UMRA

EO 12866

EO 13132

Covers
independent
regulatory agencies

Yes

Yes

Yes

No

No

No

Covers rules
without an NPRM

Yes

No

Yes

No

Yes

Yes

Covers rules with
indirect effects

Yes

No

Yes

No

Yes

Yes

Uses $100 million
analysis threshold/
indexed for
inflation

No

No

No

Yes/Yes

Yes/No

No

140

OMB Circular A-4, available at http://www.whitehouse.gov/omb/circulars_a004_a-4.

56

Gives agencies
broad discretion to
determine
coverage

Yes

Yes

No

Yes

No

Yes

Overall goal of
analysis

Identify
effects on
environment
and
alternatives

Minimize effects
on small entities

Minimize
paperwork
burden

Consider
impacts on
state/local/tribal
governments
and private
sector

Maximize net
benefits

Ensure
principles of
federalism

Specific
requirements

EIS must
identify
direct,
indirect, and
cumulative
environment
effects

Identify small
entities affected
and skills
needed to
comply

Measure burden
in hours to
complete
paperwork

Identify budget
effects, extent
of federal
payments, and
discussions with
governments

Determine
costs and
benefits of rule
and major
alternative
approaches

Describe
discussions with
state/ local
officials and
extent concerns
met

Oversight agency

EPA and
CEQ

SBA Advocacy

OIRA

None141

OIRA

OIRA

Overlaps and Consolidations Cited in 2010 Major Rules
In many of the 2010 major rules, the agencies indicated that the analytical requirements
overlapped or required the same general types of analysis. In many of these cases, the
agencies indicated that they had combined the requirements. For example:
In a January 8 rule on energy conservation standards, DOE said the requirements
in UMRA “substantially overlap the economic analysis requirements that apply
under section 325(o) of EPCA [the Energy Policy and Conservation Act] and
Executive Order 12866,” and said that the RIA section of the technical supporting
document “responds to those requirements.”142 DOE also said that it prepared an
environmental assessment pursuant to NEPA as part of the technical supporting
document.
In a February 12 rule on the national organic program, the Agricultural Marketing
Service noted that the RFA’s requirements overlapped with the RIA prepared
under EO 12866, and with the requirements of the PRA.
In a March 3 rule establishing national emission standards for hazardous air
pollutants, EPA said that the economic analysis it used to determine whether the
rule would have a SEISNSE under the RFA could be found in the RIA for the
rule. EPA also indicated that it prepared the RIA because the rule was
economically significant under EO 12866, but summarized the RIA’s findings
under the UMRA heading in the rule.
141

OIRA is required to prepare an annual report on the implementation of Title II of UMRA, but is not specifically
required to oversee agencies’ implementation of the act.
142
75 FR 1177.

57

DOE said that a March 9 rule on energy conservation standards required a written
statement under Section 202 of UMRA, but said the technical supporting
document, preamble, and regulatory impact analysis for the rule “contain a full
discussion of the rule's costs, benefits, and other effects on the national economy,
and therefore satisfy UMRA’s written statement requirement.” Also, the preamble
discussion that the department provided under the Energy Policy and
Conservation Act was largely repeated and expanded in the section discussing EO
12866.
EPA indicated in a March 26 rule on changes to the renewable fuel standard
program that the discussions of costs and benefits under EO 12866 and UMRA
were both “contained in the Regulatory Impact Analysis.”
In a March 31 rule on electronic prescriptions for controlled substances, the Drug
Enforcement Administration said that the economic impact analysis prepared
under EO 12866 also included the required analyses under the RFA and UMRA.
In an April 1 rule issued by the Federal Reserve System on electronic fund
transfers, the agency said that the RFA analysis and the section-by-section
analysis served as the economic impact analysis pursuant to Section 904(a)(2) of
the Electronic Fund Transfer Act (15 U.S.C. § 1993 et seq.).
In several rules issued by the Food and Drug Administration and the Centers for
Medicare and Medicaid Services within the Department of Health and Human
Services, the agencies indicated that the rules were economically significant under
EO 12866 and required an UMRA written statement, but only one economic
analysis was discussed in each of the rules.143
In an April 16 rule on energy conservation standards for water heaters, DOE
indicated that the technical supporting document contained both the RIA required
under EO 12866 and the UMRA written statement.
In each of the rules that CMS issued, the first sentence under the heading
“Regulatory Impact Statement” said that the agency examined the impact of the
rule under EO 12866, the RFA, Section 1102(b) of the Social Security Act,
UMRA, and EO 13132. CMS also sometimes specifically said that the analysis
prepared under EO 12866 satisfied the requirement for an analysis under Section
1102(b) of the Social Security Act.144
In a June 3 rule issued by the Commodity Credit Corporation within USDA, the
agency said that although it was not technically required to conduct a risk
143

See, for example, the April 14 FDA rule on ozone-depleting substances, and the April 15 CMS rule on changes to
the Medicare advantage and Medicare prescription drug benefit programs.
144
See, for example, the June 2 CMS rule on hospital inpatient prospective payment systems.

58

assessment under Section 304 of the Agriculture Reorganization Act of 1994 (P.L.
103-354), risks were already assessed under the EO 12866 analysis.
In a June 3 EPA greenhouse gas tailoring rule, EPA said that although an UMRA
written statement was not required, the RIA prepared for the rule under EO 12866
met UMRA’s requirement for a cost-benefit analysis.
In a June 17 rule issued jointly by IRS, EBSA, and HHS, the agencies said that
although the RFA did not apply to the rule (because it was issued without an
NPRM), they considered the likely impact on small entities in connection with
their assessment under EO 12866.
In a June 22 rule on sulfur dioxide, EPA said that although EO 13045 applied to
the rule, the required analysis of effects on children was already discussed in an
earlier integrated science assessment for particulate matter and the risk and
exposure assessment.
In a July 23 rule on internal claims and external review processes, EBSA and
HHS said that although the RFA did not apply to the rule (no notice of proposed
rulemaking), they considered the impact on small entities “in connection with”
their assessment under EO 12866.
In a July 28 rule on the electronic health record incentive program, CMS said that
the rule did not impose any mandates, but said the RIA and the discussion in the
preamble “constitutes the analysis required by UMRA.” CMS also said that the
RFA analysis satisfied the requirement for analysis of impacts on small hospitals
under Section 1102(b) of the Social Security Act.
OSHA indicated in an August 9 rule on cranes and derricks in construction that
the economic analysis that it prepared under EO 12866 also satisfied the
requirements for a final regulatory flexibility analysis under the RFA and the
written statement requirement in UMRA.
The cost information provided in August 12 SEC rule on “Amendments to Form
ADV” was drawn largely from the information collection analysis prepared
pursuant to the Paperwork Reduction Act.
In an August 16 rule on Medicare inpatient prospective payment systems, CMS
did not prepare a separate RFA analysis, indicating that the “analysis discussed
throughout the preamble of this final rule constitutes our final regulatory
flexibility analysis.” CMS also said that the analysis required under Section 1102
of the Social Security Act “must conform to the provisions of Section 604 of the
RFA.”
In an August 20 rule on emission standards for reciprocating internal combustion
engines, EPA certified that the rule would not have a SEISNSE under the RFA,

59

and indicated that a detailed explanation was available in the RIA that had been
prepared for the rule under EO 12866.
In two September 15 rules on nondiscrimination on the basis of disability, the
Department of Justice said that chapter seven of the RIA provided information on
why the rules would not have a SEISNSE, but added that the advance notices of
proposed rulemaking, the notices of proposed rulemaking, the initial and final
RIAs, and other documents collectively “include all of the elements” of a final
regulatory flexibility analysis required by the RFA.
In an October 20 rule on fiduciary requirements, the Employee Benefits Security
Administration within the Department of Labor said that it had prepared a final
regulatory flexibility analysis under the RFA, but that certain required elements of
that analysis (statement of need for the rule, legal basis) could be found in the
RIA.
Although the Federal Highway Administration concluded that its November 8 rule
on “real-time system management information” did not impose an unfunded
mandate and, as a condition of federal financial assistance, was exempt from
UMRA, the effects of the rule were already discussed in the regulatory cost
analysis available in the docket.
In a November 24 rule on the “hospital outpatient prospective payment system”
and a November 29 rule on “payment policies under the physician fee schedule,”
CMS said “the analysis presented throughout the final rule with comment period
constitutes our regulatory flexibility analysis.”
In the “Regulatory Flexibility Act” section of a December 17 rule on patient care
payment systems, the Department of Veterans Affairs said the Secretary had
determined that the rule would have a SEISNSE, but referred readers to another
section entitled “Executive Order 12866 and Regulatory Flexibility Act” for the
results of the regulatory flexibility analysis.

Interviews with Agency Officials
Many of the agencies (e.g., DOE, DOT, DOC, DOI) indicated that they prepare a single
economic or regulatory impact analysis, with different chapters or subheadings discussing
each of the different requirements (e.g., the RFA or the PRA). Some of the officials said
that consolidating the requirements into a single statute or executive order would have
little substantive impact on this aspect of their rulemaking procedures. For example:
A DOE official said that the department prepares a single technical support
document that primarily focuses on the requirements in EPCA, but that also
addresses the crosscutting analytical requirements. He said that by the time
the EPCA analysis is completed, they have essentially satisfied all of the other
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analytical requirements.145 If the crosscutting requirements were combined,
he said the primary benefit would be that they would only have to do one
certification that they have satisfied the consolidated requirement instead of
the current multiple certifications.
A DOT official said that the department generally does one economic analysis
that encompasses all of the applicable analytical requirements. Although the
documents generally have chapters addressing certain requirements (e.g., EO
12866 and the RFA), other chapters are added addressing other relevant
requirements (e.g., energy impacts or family impacts), depending on the
particular rule.
DOI officials said that agencies already consolidate the various analytical
requirements into one economic analysis, with subparts discussing each of
the requirements. Therefore, they said, consolidating all of the requirements
into a single statute or executive order probably would not change that
practice. They also said that OIRA seems to consolidate the requirements in
practice. For example, if an agency has described the alternatives that it
considered in one place (e.g., for the RFA), OIRA does not require those
alternatives to be restated in relation to other requirements.
An FDA official said that types of information required by UMRA are very
similar to that required by EO 12866, and that anything in the statute that is
not already required by the executive order is “folded in anyway.” He said
that FDA should have a separate heading in the preamble for UMRA, but it
should simply point the reader to the EO 12866 section.
Other agency officials indicated that they do not prepare a single analytical document, or
that at least some of the analyses conducted are very different. For example:
An FCC official said that the cost-benefit analysis that the agency prepares is
done as part of the overall analysis of the pros and cons for the rule, and
cannot be combined with the RFA or PRA analysis. He said the requirements
are sufficiently different in purpose, format, and procedure that they really
cannot be combined. For example, the RFA analysis must be published with
the proposed or final rule, and the PRA analysis must be submitted to OMB in
a separate document from the rule itself.
An SEC official said that the primary crosscutting analytical requirements
that the agency encounters are the RFA and the PRA. Both require reports to,
and are subject to oversight by, government agencies (i.e., SBA and OIRA,
145

To view the technical support document for the January 8, 2010, final rule on commercial clothes washers, see
http://www1.eere.energy.gov/buildings/appliance_standards/commercial/clothes_washers_ecs_final_rule_tsd.html. It
includes a market and technology assessment, engineering analysis, energy and water use analysis, shipments analysis,
national impact analysis, life-cycle cost subgroup analysis, utility impact analysis, employment impact analysis,
regulatory impact analysis, and environmental impact analysis.

61

respectively). Therefore, the SEC tends to do distinct analyses to show SBA
that small business interests were considered, and show OIRA that
information collection burdens are discussed and analyzed. The official said
that the agency had been “experimenting” during the previous year to so
with preparing a unified economic analysis that combines the cost-benefit
analysis and the statutory requirements. This unified analysis does not,
however, include the PRA and RFA requirements, which are discussed
separately because their requirements are so different and must be
separately submitted to OIRA and SBA.
DOI officials said that although the department prepares one economic
analysis with sections for the different requirements, the PRA analyses are
done separately by a different group of people. They said that information
collection requirements and procedures are different, and are reviewed
differently, even though the burden hour totals may be used in the
assessment of regulatory costs.
An EPA official said that her office oversees the agency’s rulemaking process
and the implementation of various analytical requirements (e.g., EO 12866
and UMRA), but that different groups within EPA are responsible for
ensuring implementation of the PRA and NEPA.
Both USDA and HHS officials said that although there is not one “economic
analysis” document, their departments always start with the analysis
required by EO 12866 and Circular A-4, with other analyses (e.g., PRA, RFA,
UMRA) added as needed. The USDA official said that NEPA is on a different
timing from the rule, and is done by a different group within the department.
The HHS official said that the PRA analysis is often done by a separate group,
and uses a different metric (burden hours), but is monetized in the EO 12866
analysis. The RFA analysis is different, but uses information from the EO
12866 analysis. She said UMRA is rarely triggered, and even then usually
only adds a few sentences to the preamble.
Some of the agency officials said consolidation of the analytical requirements would have
certain advantages. For example:
DOT official said that if all of the requirements were consolidated into one
document, it would be easier for those preparing and reviewing the analyses
to know what the agency needed to include.
Similarly, DOI officials said that putting all of the requirements into one
statute or executive order would be “wonderful,” and “would simplify things
greatly.” Currently, they said, it can be confusing to know whether you have
captured all of the relevant requirements. They said it would be “cleaner”
and more “logical” if the requirements were consolidated, with one source.

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An FDA official said that although the agency tries to do one analysis that
satisfies multiple requirements, consolidation of the requirements would
make their jobs easier (doing one analysis rather than multiple analyses that
have to be folded together, and making sure that they had “checked every
box”), and would likely make it faster for the agencies to issue rules.
Hopefully, he said, consolidation would eliminate some of the definitional
inconsistencies between the various analytical requirements (e.g., analytical
thresholds that are and are not indexed for inflation).
However, even those who supported consolidation of the analytical requirements in
theory said that combining the requirements would probably be very difficult to do in
practice. For example:
A DOT official said that combining the requirements might require that they
be modified because they often have different goals and use different terms
and cutoffs. For example, UMRA requires an analysis for rules with $100
million in “expenditures” indexed for inflation, while EO 12866 uses $100
million in “effects on the economy” not indexed for inflation. He also said
that any consolidated analytical requirement would have to mesh with each
agency’s underlying statutory requirements. These underlying statutory
requirements are, he said, “all over the place,” as the requirements were
written at different times during the past several decades, and one has to
assume that the differences in language are meaningful (e.g., “issue rules
requiring” versus “issue reasonable rules requiring”). He also said that some
requirements that are vague and therefore difficult for agencies to know how
to implement (e.g., family impact assessments) could be clarified or
eliminated.
An EPA official said that although some of the analytical requirements were
similar in some respects, she did not view most of them as duplicative or
overlapping. Although her agency prepares a single RIA for each rule, each of
the different analytical requirements is discussed separately in the
document. She said that different people prepare the analyses, and the
analyses use different data sets and contain different requirements and
emphases. For example, to satisfy EO 12898 on environmental justice, EPA
must attempt to determine how many people live within certain distances
from certain facilities – information that would not be gathered to determine
overall benefits and costs under EO 12866. Even when the requirements are
similar (e.g., the written statement requirement in Section 202 of UMRA and
the cost-benefit analysis requirement in EO 12866), there are often
differences in definition and analytical thresholds between the requirements
that would make consolidation difficult. Even combining requirements that
are very similar in the types of information they require would be difficult.
For example, combining EO 12866 and UMRA would require reconciling
their differences in scope (i.e., either expanding the scope of UMRA to include
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more rules, or limiting the scope of EO 12866). She also said that
consolidating the requirements into a single statute or executive order would
likely make it more difficult for interested parties to identify the analysis that
they care about (e.g., environmental justice or children). Also, without major
changes to the requirements, agencies would likely still have to have
separate discussions of those impacts. As a result, the amount of work
required would stay about the same, unless certain requirements were
eliminated entirely. However, because certain groups only care about certain
things, they would likely lobby to keep the requirements, and to keep them
distinct.
An FCC official said that the analytical requirements cover very different
things and are differently focused. For example, the PRA is only interested in
paperwork burden, while the RFA is interested in all types of burden that are
imposed on small businesses and other small entities. Paperwork burden
may be part of the small business burden, but may not be all of it. The official
also said that if the requirements were consolidated under a single statute or
executive order with OMB in charge of oversight, the rulemaking
environment would likely be very different and controversial. For example,
if OMB was responsible for the RFA instead of SBA, small businesses would
likely feel like they had less of a “voice” in rulemaking, and that their
interests were less likely to be advocated by OMB.
A Commerce official said that because some agencies are currently exempt
from certain requirements, if all of the requirements were put in one place
and made universally applicable, then currently exempt agencies would
likely object because it would require more analysis. She also said that the
various analytical requirements may have different requirements and
purposes (e.g., the RFA versus EO 12866), so reconciling those differences
and satisfying the different constituencies may be difficult.
DOI officials said that although some of the requirements may look similar
(e.g., the $100 million threshold), in reality they are often different, which
can be confusing. They are also different in purpose, and were developed to
serve different interests. And those interests are not likely to be willing to
see freestanding requirements eliminated. Also, although some things could
be done to make the requirements more similar (e.g., have the $100 million
threshold in EO 12866 indexed for inflation like UMRA, or resolve certain
definitional differences), some may not like the results. For example, if EO
12866 were indexed for inflation, fewer rules would be subject to OIRA
review and cost-benefit analysis, which OIRA may not like.
A USDA official said that while putting all of the analytical requirements into
a single statute or executive order might be theoretically possible, it would
be difficult to do because they each have different goals, definitions, and

64

thresholds. For example, he said the RFA is more about mitigating the impact
of rules on small entities than tallying up costs and benefits. He also said
putting all of the requirements into a single document would not likely save
much time or money because USDA is already treating them as a unified set
of requirements. In some ways, he said, it is easier to think about them as
separate requirements.
An HHS official said that she was not sure what a consolidated statute or
executive order would look like, or whether it is even feasible. She said the
cost-benefit analysis required by EO 12866 is what drives the HHS work in
this area, with other analyses viewed as different from, and supplements to,
the EO 12866 cost-benefit analysis. Although the EO 12866 analysis should
theoretically include the types of distributive impacts contemplated in other
requirements, in reality they are viewed as separate from the analysis of
overall costs and benefits. In addition to the technical difficulties associated
with combining different statutes and executive orders, there is also likely to
be a political problem associated with eliminating free-standing statutes and
folding those requirements into an omnibus statute or executive order. She
said that Congress and various interest groups are likely to resist such
efforts.
An FDA official said that consolidation of requirements that have very
different purposes (e.g., EO 12866 verses the RFA) would have to ensure that
those both objectives are fulfilled – which may be difficult. He also said the
various stakeholders would probably not be willing to sacrifice free-standing
requirements, as they are more interested in pursuing their issue than in
making the analysts’ lives easier.
Other Changes to Improve Regulatory Analysis
Three agency officials voluntarily said that changes should be made to the PRA to make
it easier for agencies to gather the data needed for regulatory analysis. Currently, they
said, if an agency wants to collect information from 10 or more regulated entities to
determine the likely effects of forthcoming a rule, the agency would have to obtain public
comments and get clearance from OMB under the PRA, which may take a considerable
amount of time. Ironically, therefore, to satisfy one analytical requirement (cost-benefit
analysis), the agency has to invoke another analytical requirement (the PRA). Some of
the agency officials said they might call fewer than 10 affected parties to obtain at least
some information, but the accuracy and validity of that information is unclear. One
agency official said that the time required to go through that PRA process is a major
disincentive to gathering valid information, so the agencies often do analysis “based on
assumptions.” She and other officials suggested some type of expedited OMB approval
process in such cases, allowing agencies to gather information quickly from 10 or more

65

individuals or organizations when doing so in the context of preparing a regulatory
impact analysis.146
Several agency officials also supported putting all of the analytical rulemaking
requirements in one place so that agencies and the public would know what has to be
done. Although some departments and agencies have documents that summarize those
and other rulemaking requirements (e.g., USDA’s Departmental Regulation 1512-1),
other agencies do not have such documents. Another agency officials also supported
putting all of the requirements in one place, and making it clear to agencies that satisfying
one requirement can satisfy other requirements. She also said that it would be helpful if
Congress and the President would examine the current set of requirements and determine
whether they can satisfy any concerns they might have before “piling on” new analytical
requirements.
One agency official said that it would be helpful if there were some “middle ground”
between “no analysis” and a full-blown cost-benefit analysis. He said rules that have a
policy impact but are not “economically significant” should be subject to this mid-level
type of analysis.147

Analytical Requirements and Ossification
Several previous studies have suggested that the accumulation of analytical requirements
(among other things) had “ossified” the rulemaking process, resulting in slower rule
issuance and fewer rules overall. For example, Thomas O. McGarity said in 1992 that
the informal rulemaking process had become “increasingly rigid and burdensome,” and
that the causes of that ossification include the analytical requirements that have been
imposed by the courts, Congress, and various Presidents.148 McGarity’s proposed
solutions to this problem included (but were not limited to) amending individual agency
statutes to eliminate some of the more burdensome analytical requirements, and reducing
or eliminating some of the crosscutting analytical requirements in statutes and executive
orders.149
146

Federal agencies can obtain generic clearances for certain types of information collections. See
http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/PRA_Gen_ICRs_5-28-2010.pdf for more
information. Also, in January 2012, OMB announced a new fast-track process for collection service delivery feedback
under the PRA. See http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/pra-faqs.pdf for more
information.
147
Section 6(a)(3)(B) of Executive Order 12866 already requires covered agencies to provide to OIRA an “assessment
of the potential costs and benefits” of regulatory actions that are “significant” but not “economically significant.” A
full cost-benefit analysis is required only for rules that are considered “economically significant” (e.g., have a $100
million effect on the economy).
148
Thomas O. McGarity, “Some Thoughts on ‘Deossifying’ the Rulemaking Process,” Duke Law Journal, volume 41
(1992), pp. 1385-1462.
149
Ibid., pp. 1444-1447. See also Richard Pierce, “Seven Ways to Deossify Agency Rulemaking,” Administrative Law

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However, other studies suggest that analytical and procedural requirements have not
slowed rulemaking. For example, Jason Webb Yackee and Susan Webb Yackee examined
data from the Unified Agenda of Federal Regulatory and Deregulatory Actions150
covering rules issued from 1983 to 2006, and reported that agencies appeared “readily
able to issue a sizeable number of rules and to do so relatively quickly.”151 The authors
concluded that procedural constraints did not appear to unduly interfere with the ability
of federal agencies to act, and may actually speed up the issuance of rules.152

GAO Report
In an April 2009 report, GAO reported that the time needed to develop and finalize 16
case study rules varied considerably, from less than 1 year to about 14 years.153 The
average amount of time was four years. In most of the rules, the majority of the time
elapsed before the publication of the proposed rule, although GAO pointed out that it is
often difficult to determine when the rulemaking process begins. Factors that GAO said
influenced the amount of time needed to issue a rule included (1) the complexity of the
issues addressed by the rule; (2) prioritizations set by agency management that can
change when new priorities are set (e.g., new congressional mandates); and (3) the
amount of internal and external review required at the different phases of the rulemaking
process. GAO also said that the agencies “could provide little systematic data on the
resources they use, such as staff hours, contract costs, and other expenses, in developing
individual rules.”154
GAO staff who prepared the report indicated during this study that statutory and
executive order analytical requirements, while potentially time consuming, were not the
major factor in determining the amount of time that it took for the agencies to issue these
rules.155 When looking at the whole timeline for rulemaking, they said most of the time
Review, volume 47 (1995), pp. 59-95, which evaluates a series of changes in legal doctrines that could deossify
rulemaking; and Paul R. Verkuil, “Comment: Rulemaking Ossification—A Modest Proposal,” Administrative Law
Review, volume 47 (1995), pp. 453-459, which suggested a legislative solution to ossification.
150
The Unified Agenda is compiled and published twice each year by the Regulatory Information Service Center
within the General Services Administration, and provides the public with information about regulations that federal
agencies are considering or reviewing. To access the Unified Agenda, see http://www.reginfo.gov/public/#.
151
Jason Webb Yackee and Susan Webb Yackee, “Administrative Procedures and Bureaucratic Performance: Is
Federal Rule-making ‘Ossified’?,” Journal of Public Administration Research and Theory, volume 20 (2009), pp. 262282. The authors primarily focused on the amount of time between the issuance of a proposed rule and the issuance of
the final rule. The authors recognized that agency rulemaking often begins well in advance of the issuance of the
proposed rule, and used the publication of an advance notice of proposed rulemaking as the start of the rulemaking
process for a more limited number of rules. They reportedly obtained similar results.
152
See also Stephen M. Johnson, “Ossification’s Demise?: An Empirical Analysis of EPA Rulemaking from 20012005,” Environmental Law, volume 38 (2008, pp. 767-792, who reported that “it did not take EPA much longer to
finalize rules subject to the most stringent procedural requirements imposed by the Executive Branch and Congress
than it took to finalize rules not subject to those procedures.”
153
U.S. Government Accountability Office, GAO-09-205, p. 18.
154
Ibid., p. 6.
155
Interview with GAO staff, October 26, 2011.

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is taken up with doing the basic science and other preparations for the rule, not the
crosscutting analytical requirements. They also said that although agencies often blame
certain requirements for slowing down the issuance of a rule (e.g., the analyses required
to get OMB clearance under the PRA), it did not seem likely that those requirements
were the primary factor in determining how long it took for the agency to issue certain
rules.

A Case Study
An April 2011 study by Public Citizen of one of the 2010 major rules – the August 9
OSHA rule on cranes and derricks – serves as an interesting case study of the extent to
which rules are delayed by the analytical requirements, or by other parts of the
rulemaking process.156
Public Citizen traced the origins of the rule to 1998, when an advisory committee
established a workgroup to recommend changes to an existing rule. The
workgroup recommended in 1999 that the agency use negotiated rulemaking to
update the rule, but the agency did not announce its intention to follow the
workgroup’s recommendation until 2002.
The negotiation committee was not selected until July 2003, and the committee
reached consensus and sent a draft standard to OSHA in July 2004.
At that point, OSHA reportedly began preparing a series of required analyses,
including an initial regulatory flexibility analysis under the RFA and an economic
analysis under EO 12866. In June 2006, OSHA determined that the rule may
have a significant economic impact on a substantial number of small entities, and
convened a SBREFA advocacy review panel, which sent OSHA a series of
recommendations in October 2006.
In May 2008, OSHA completed a final economic analysis of the draft proposed
rule, and provided OMB with an estimate of its paperwork burden.
OMB completed its review of the proposed rule in August 2008, and OSHA
published the notice of proposed rulemaking in October 2008. It received
comments until January 2009.
In March 2009, OSHA held four days of hearings, and closed the hearing record
in June 2009.
After analyzing and responding to the proposed rule comments and hearing
comments, OSHA published the final rule in August 2010.
156

Public Citizen, Cranes & Derricks: The Prolonged Creation of a Key Public Safety Rule, April 2011, available at
http://www.citizen.org/documents/CranesAndDerricks.pdf.

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Therefore, it appears that while the analytical requirements consumed some of the time
required to develop the OSHA cranes and derricks rule, a great deal of the 12-year period
was taken up by inactivity on the part of the agency and non-analytical procedural actions
(e.g., the negotiated rulemaking process, the SBREFA panel, and public hearings). In its
discussion of this process, Public Citizen focused on the delays caused by the public
participation requirements, not the analytical requirements:
The creation of the cranes and derricks standard clearly illustrates that tremendous
redundancy exists in the rulemaking process. Setting aside the rare decision to employ a
negotiated rulemaking process, stakeholders in the cranes rule had at least five
opportunities to have their voices heard: at the SBREFA stage; to the Office of
Management and Budget before it signed off on the proposed rule; during the
conventional comment period after the proposed rule was published; during hearings on
the proposed rule; and in post-hearing comments and briefs.157

Factors Affecting Ossification
The degree to which analytical rulemaking requirements can significantly increase the
amount of time needed to issue a rule appears to be a function of several factors,
including (1) whether the rule triggers the requirements, and if so, how many; and (2)
whether the requirements can be satisfied simultaneously with other parts of the
rulemaking process.
As noted previously in this report, many of the crosscutting analytical requirements do
not apply to certain agencies, or cover only certain types of rules or effects. For example,
the analytical requirements in EO 12866 do not apply to independent regulatory agencies
or any rules that are not “economically significant.” The analytical requirements in the
PRA only apply when a rule contains a collection of information. The RFA and UMRA
do not apply when an agency issues a final rule without a prior notice of proposed
rulemaking. Other requirements provide agencies with substantial discretion as to their
application. For example, the RFA allows agencies to avoid analysis if they certify that
their rules will not have a “significant” economic impact on a “substantial” number of
small entities. EO 13132 only requires an analysis if there are “significant” federalism
effects. Also, some requirements are only intended to apply to particular types of rules.
For example, NEPA requires an analysis only for “major Federal actions significantly
affecting the quality of the human environment.” It is unlikely to be triggered by rules
increasing or decreasing federal transfer payments, or by rules establishing banking
requirements.
As a result, most of the more than 3,000 final rules that are issued in a typical year do not
trigger any of the crosscutting analytical requirements. Even the most significant rules
that agencies issue are often not subject to these requirements. For example, only two of
157

Ibid., p. 10.

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the analytical requirements appeared to result in some kind of new analysis for more than
half of the 100 major rules that were published in 2010—(1) EO 12866, which appeared
to trigger some type of new regulatory impact analysis in 73 rules; and (2) the PRA,
which appeared to require the issuing agencies to do an analysis of paperwork burden or
other compliance costs in 64 rules. In contrast, the agencies prepared a new final
regulatory flexibility analysis under the RFA for only 26 of the 100 major rules; prepared
a NEPA environmental impact statement or environmental assessment in 12 rules;
prepared an EO 13132 federalism impact statement for only 10 rules; and prepared an
UMRA Section 202 written statement for only 4 rules.
Even when an analytical requirement is applicable to a rule, at least some of the specific
requirements may be satisfied by another analysis. For example, any rule that satisfies
the analytical requirements in EO 12866 and Circular A-4 will likely satisfy most if not
all of the requirements in Section 202 of UMRA. Estimates of a rule’s paperwork burden
that is required under the PRA will be one element of the agency’s estimate of the cost of
the rule under EO 12866. As noted earlier in this report, several of the analytical
requirements themselves permit agencies to combine the requirements as appropriate.
Also, the agencies frequently indicate that certain requirements overlapped, and that they
combined certain requirements.
Nevertheless, some of the analytical requirements are sufficiently different that they
cannot be combined with other analyses, and require different procedures. Satisfying
these requirements will take time, and are likely to cause some delays in the issuance of a
rule.

Measuring Ossification
To determine empirically whether the crosscutting or other analytical requirements were a
significant factor in the length of time it took for agencies to develop and issue the 100
major rules published in 2010, the first step would be to determine the total amount of
time it took the agency to issue the rule. Then, one must attempt to determine how much
of the overall time was caused by the “analytical requirements.” However, each of these
two steps is fraught with difficulties.
To determine how long the overall rulemaking process took, one must determine when
the process started for each rule. As GAO pointed out in its 2009 report,158 though,
determining that starting point is often difficult. Many rules are based on statutory
authorities that are decades old, and the agencies usually do not indicate in the preambles
to their rules when they began development. More commonly, agencies only mention
when certain major actions occurred (e.g., publication of an NPRM, or more rarely, an
ANPRM), but the lead up to those milestones can take many months or years.

158

GAO-09-205, p. 17.

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Even if one could determine the rulemaking starting point, and even if one assumes that
the ending point is the publication of the final rule,159 it may be difficult or impossible to
determine how much of the overall rulemaking period is a function of the analytical
requirements. Agencies typically do not record the amount of time required for analysis,
as there is no current business reason to do so. Also, agencies may be preparing the
required analyses at the same time as other rulemaking procedures are being carried out
(e.g., legal or engineering studies). In such cases, even if the analytical requirements
were eliminated entirely, the overall length of time needed to issue the rule could be
unchanged.

Interviews with Agency Officials
Although some of the agency officials interviewed for this report indicated that they data
indicating how long it took their agencies to issue final rules, none of the officials had
any data showing how much how much of that time was devoted to satisfying the
crosscutting analytical requirements. Even the data on the time required to issue rules
varied from one agency to the other, with the agencies often using different starting
points for their rulemaking process. The officials also frequently pointed out that the
analyses needed to satisfy those requirements were occurring at the same time as other
rulemaking processes, and that non-analytical steps in the rulemaking process (e.g.,
public comments, and OMB reviews) were often focused on the regulatory analyses. In
practice, therefore, there may be no clear demarcation between the “analytical” and “nonanalytical” rulemaking processes.
Some of the agency officials indicated that the crosscutting analytical requirements were
a significant factor in how long it took their agencies to issue rules, but recognized that
other factors also play a part. For example:
A DOT official said that EOs 12866 and 13563 are the primary drivers behind
the economic analyses done for DOT agencies’ rules. He also said that one
analysis then in progress had been in development for more than three
months, and that if his office determines that the analysis had been done
incorrectly, redoing the analysis could add several more months to the
process. Just the requirement in Circular A-4 that agencies present a formal
uncertainty analysis for rules involving annual economic effects of $1 billion
or more can take weeks. In addition, because of resource constraints, the
amount of analysis can not only lengthen the time required to issue rules, but
can also reduce the number of rules that an agency can issue. The official
also said that – as part of a departmental goal to issue well-done rules in a
timely manner—DOT considers a rule “old and cold” if it takes five years to
issue from start to finish. Rules that take that long, however, may be delayed
because of matters outside of the department’s control, such as intervening
159

OMB officials pointed out in the GAO report that a rule that is later subject o a judicial challenge may not have
“ended” with the publication of the final rule.

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court decisions, changes in underlying legislation, or changes in presidential
administrations.
DOI officials said they believe that the analytical requirements are a
significant contributor to the length of time it takes the department to issue a
rule. They said the primary “drivers” of these analyses are EO 12866 (with
OMB Circular A-4) and the RFA. The officials also said that, because the
analysis is the primary subject of OIRA’s reviews, those reviews could lead to
agencies spending even more time doing the analysis than is absolutely
necessary.
An FDA official said that although the amount of time it takes the agency to
issue a rule varies widely, an average rule that took four years from start to
finish would spend about a year in the economics office undergoing the
various types of analysis required. During this one-year period, however,
other rulemaking steps were going on simultaneously. He also said that if the
analytical requirements were removed entirely, the average time required to
issue the rule might be less than three years, as much of the reviews of the
rule within the agency, department, and OIRA are focused on the analysis and
what it implies about the rule.
More commonly, however, the agency officials said they did not believe that the
crosscutting analytical requirements were the primary factors determining how long it
took their agencies to issue their rules. For example:
A DOE official said that while preparation and revision of regulatory analyses
took up a substantial portion of the time needed to issue the department’s
energy conservation standards (17 months of the 36-month standard
timetable to issue such standards), the amount of time required to prepare
those analyses was primarily driven by the requirements in EPCA, not the
crosscutting analytical requirements. He said that even if all of the
crosscutting analytical requirements were taken away, they would still have
to do virtually the same amount of analysis to satisfy EPCA. The official said
that the amount of analysis is driven somewhat by concerns about judicial
review and OIRA review. He also said that rulemaking is slowed by the
number of rules being reviewed by OIRA and the pace of those reviews.
Additionally, the official said that EPCA provides specific time periods for
public participation.
An EPA official said that much of the time needed to issue a significant EPA
rule is taken up doing the basic science underlying the rule; having the rule
reviewed by OIRA; public comment periods; and ensuring that that the rule
meets legal requirements and will not be overturned by the courts. The
analytical requirements may play a role in one or more of these elements, but
she said it is likely that it would take about the same amount of time to issue

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an EPA rule even if the analytical requirements were not there – particularly
with regard to rules in which EPA is prohibited from considering costs (e.g.,
the NAAQS).160 She also pointed out that the PRA usually does not delay the
issuance of rules because, although the burden-hour estimates are part of the
agency’s cost-benefit analysis, the agency often goes through the OIRA
review and public comment processes after the rule is written and published.
As a result, although the effective date of the information collection element
may be delayed, the issuance of the rule itself is not.
A Commerce official said that although satisfying the analytical requirements
for significant rules does take time, most of the time required to issue such
rules is taken up with doing the basic science needed to develop regulatory
standards, understanding the industry, and achieving consensus among the
various parties in the rulemaking.
An FCC official said he did not think the RFA affects the amount of time to
issue a rule “in the least.” He said the PRA usually does not delay the
issuance of rules, but sometimes does delay the effective date of paperwork
requirements by a few months. However, most of this delay is due to the
two-stage notice and comment requirements in the PRA and OMB review,
not the paperwork burden analysis per se. He said the primary “drivers” of
the length of time it takes FCC to issue a rule are (1) the notice and comment
requirements in the APA (allowing adequate comment period), (2) the need
to write rules in such a way that they maximize the chances of survival of
judicial review, and (3) different FCC priorities that place one regulatory
action ahead of another.
An SEC official said that although the crosscutting analytical requirements
clearly have some effect on the amount of time required to issue a rule, he
believed that most of the time is driven by the agency’s preparation of the
cost-benefit analysis and satisfaction of the requirements in the underlying
statutes (e.g., the Advisers Act and the Exchange Act). He said the time
required to satisfy the PRA varies considerably, from zero when the rule has
no new information collection to a great deal for rules in which the primary
burden is associated with an information collection. With regard to the RFA,
he said the SEC has an “active community” that ensures that consideration of
the effects on small entities is part of the rulemaking from start to finish.
An HHS official said the time it takes to issue a rule is highly variable (from a
few weeks to 20 years), with the amount of time required a function of many
different factors (e.g., OMB and departmental review, public participation,
and just the time it takes for the agency to understand the underlying
problem). She also said that politics can also play a role, with rules taking
160

The EPA official said that although courts have ruled that EPA cannot consider costs in setting standards under the
Clean Air Act and the Safe Drinking Water Act, the agency does the analysis anyway.

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longer when there is a lack of political will needed to issue a rule, or when
other issues become a priority in an administration. The official also said
many of the analyses and steps in the rulemaking process are going on
simultaneously. Therefore, even if all or most of the crosscutting analytical
requirements were removed, the overall amount of time required to issue a
rule might be about the same. In fact, she said that without the analytical
requirements, she could envision that it would take more time for agencies to
issue rules, because the agency would know less about them, and would
therefore have to spend more time in the review phase debating whether
they should be issued.
A USDA official said the time required to issue the department’s rules varies
considerably, with the starting point usually being when the work plan for
the rule is submitted to OIRA. However, work on the rule sometimes does
not begin immediately because of competing agency or departmental
priorities. He said the biggest driver for how long it takes USDA to issue a
rule is the time it takes for the agency and department to make the policy
decisions regarding what the rule should address. If the agency can make
those decisions quickly, “the rest follows pretty quickly,” particularly since
many of the different types of analyses can be done simultaneously rather
than sequentially.
In some cases, although the analytical requirements themselves were not the cause of
delays in rulemaking, they were a contributing factor. For example, an EPA official said
that if the agency does not certify that a rule does not have a SEISNSE under the RFA,
then they have to convene an advocacy review panel and take input from small entity
representatives before issuing an NPRM. She said the conduct of those panels can take
six or seven months from start to finish. Therefore, the RFA analysis can trigger a
separate but time consuming step in the rulemaking process.
Just the process of determining whether an analysis is required can take substantial time.
For example, an EPA official said that the RFA does not really slow down rulemaking if it
is clear that the rule will or will not have a SEISNSE. But if EPA is not sure of that
effect, the analysis can take substantial amounts of time (e.g., gathering data on the
number of small businesses affected and their gross sales).

Conclusions/Recommendations
The primary objectives of this report were to identify the crosscutting analytical
requirements that executive branch agencies must comply with in the federal rulemaking
process, and to determine whether those requirements could be consolidated to make the
rulemaking process more efficient and effective. The report also attempted to determine
the extent to which those analytical requirements have slowed down (“ossified”)
rulemaking.
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Listing of Analytical Requirements
Although this report viewed crosscutting analytical requirements somewhat narrowly
(i.e., as a subset of all rulemaking requirements), the number of such requirements that
agencies must consider when issuing a rule is clearly substantial, covering a wide range
of topics and with a variety of underlying objectives. The analytical requirements also
vary in terms of what agencies and types of rules are covered, analytical thresholds,
definitions, and the types of analyses that are required. Some of the requirements are
general in nature, stating that agencies should identify all of the expected costs and
benefits of forthcoming regulations. Other requirements are more specific, requiring
discussions of environmental impacts, small entity impacts, paperwork burden, and
effects on privacy, families, children, property rights, environmental justice, federalism,
tribal governments, and energy.
Although some federal departments and agencies (e.g., DOT and USDA) have developed
their own sometimes-lengthy compilations of federal rulemaking requirements (which
usually include, but are not limited to, the analytical requirements), there is currently no
authoritative government wide listing of the crosscutting analytical requirements that may
apply to agencies’ rules. Several of the agency officials interviewed for this report
indicated that having a complete, up to date, and authoritative listing of the analytical
requirements would make it easier for those preparing and reviewing the analyses to
know what issues the agencies need to address in their rules. The lack of such a
centralized listing may help explain why many of the analytical requirements
(particularly those in the various executive orders) were not even mentioned in many of
the major rules issued in 2010. Several of the agency officials indicated that failing to
mention certain requirements was an oversight.
OIRA is described in Section 2(b) of EO 12866 as the “repository of expertise concerning
regulatory issues, including methodologies and procedures that affect more than one
agency.” Therefore, it seems appropriate that OIRA post on its website a list of the
crosscutting analytical rulemaking requirements that may apply to the issuance of agency
rules. The listing should provide hypertext links to the statutes and executive orders
themselves, and could also walk the agencies through the circumstances in which certain
analytical requirements apply.161
Recommendation: OIRA should prepare and post on its website a concise listing of the
various analytical rulemaking requirements, along with links to the documents
themselves.

161

For example, one section of the “Reg Map” (available at http://www.reginfo.gov/public/reginfo/Regmap/index.jsp)
walks the reader through a series of basic questions to determine whether particular analytical requirements apply.

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Transparency and the Applicability of Rulemaking Requirements
Some of the crosscutting analytical requirements (the RFA, the PRA, UMRA, EO 12866,
and EO 13132) were mentioned in most of the major rules published in 2010. However,
other requirements were mentioned in a quarter of the rules, or less. Even where the
requirements were mentioned, in many cases it was only to say that the analysis was not
required – sometimes using standard “boilerplate” explanatory language.
In many cases, given the substance and context of the rule and the nature of the analytical
requirements, it is understandable why a particular requirement was not mentioned, or
why an analysis was not required. For example, if a rule was issued by an independent
regulatory agency that is not covered by EO 12866 or EO 13132, it is understandable (at
least to those aware of the scope of the executive orders) why the agency would not
mention them in the preamble to the rule. Also, if a rule establishes new disclosure or
auditing requirements on the banking industry that will have no effect on the
environment, it is understandable why the agency would not mention NEPA, or why a
NEPA environmental impact statement would not be required. Even in these situations,
though, a brief explanation could help the public understand why certain types of
analyses were not performed.
Explanations appear to be even more necessary and important for transparency when
analytical requirements appear to be applicable, but the rule does not trigger the analysis.
Some agencies went to great lengths to demonstrate why certain types of analysis were
not required. However, other agencies simply said that certain types of analyses were not
required for their rules, with little or no further explanation. The RFA states that when an
agency certifies that a rule will not have a SEISNSE, it must include “a statement
providing the factual basis for such certification.” Other analytical requirements do not
require such explanatory statements.
Some agency officials indicated that requiring agencies to identify in the rule preambles
the analytical requirements that are not triggered could be expensive for agencies, since
the agencies must pay for each page published in the Federal Register. However, the
absence of even a brief mention or explanation leaves the public wondering whether the
agency even considered the requirement at all.
Recommendation: Agencies should briefly indicate in the preamble to each rule whether
or not certain analytical requirements are applicable to the rule. For each applicable
requirement, when an analysis is not required, agencies should provide at least a brief
explanation.

Coverage of the Analytical Requirements
Most of the more than 3,000 final rules issued each year are not subject to any analytical
requirements, and often for good reason. After all, most final rules are administrative or

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technical in nature, and relatively uncontroversial, such as FAA airworthiness directives,
administrative provisions for grant programs, and catch limitations in certain fishery
economic zones. However, as this report points out, even most “major” rules are not
covered by many of the analytical requirements. In some cases the lack of coverage is
because independent regulatory agencies are not covered by the requirements (e.g., EO
12866 and OMB Circular A-4). In other cases it is because of various exclusions and
exceptions written into the requirements (e.g., UMRA), or because of the discretion given
to rulemaking agencies to decide whether the analysis is required (e.g., the RFA and
various executive orders). GAO and others have reported that the exclusions and
exceptions in UMRA, and the amount of discretion that agencies have under the RFA,
have prevented those requirements from operating as effectively as they could.
Also, since the issuance of EO 12291 in 1981, executive departments and independent
agencies have been required to prepare costs-benefit analyses for “major” or
“economically significant” rules that have a $100 million effect on the economy.
However, unlike the $100 million “expenditure” level in UMRA,162 the $100 million
“effect” level in EO 12291, and later EO 12866, is not indexed for inflation. As a result,
rules with a buying power of $100 million in 2012 dollars would not have been
previously considered “major” or “economically significant. For example, according to
the Bureau of Labor Statistics, $100 million in 2012 dollars has the same buying power
as $40.1 million in 1981 (when EO 12291 was issued), and $63.7 million in 1993 (when
EO 12866 was issued).163 Conversely, $100 million in 1981 has the same buying power
as $249.4 million in 2012; $100 million in 1993 has the same buying power as $156.9
million in 2012.
Several pieces of legislation were introduced in the first session of the112th Congress that
would expand the scope of various analytical requirements. For example, S. 602 would
expand the coverage of EO 12866 and generally require all agencies (including
independent regulatory agencies) to submit cost-benefit analyses to OIRA for their
significant regulatory actions (not just “economically significant” rules). S. 1189 and
H.R. 373 would close some of the exemptions currently in UMRA (e.g., the exclusion for
rules that are published without an NPRM). S. 474 and H.R. 527 would make several
changes to the RFA’s requirements. Other proposed legislation would require certain
agencies to do more analyses. For example, H.R. 3309 and S. 1784 would require the
FCC, before adopting or amending a rule that may have an economically significant
impact, to (1) analyze the specified market failure, actual consumer harm, burden of
existing regulation, or failure of public institutions that warrants the rule or amendment;
and (2) determine that the benefits justify its costs. In addition to these legislative
initiatives, President Obama’s EO 13579 suggested that independent regulatory agencies
should comply with certain provisions in EO 13563 (which repeated many of the analytic
goals in EO 12866).

162

According to the Bureau of Labor Statistics, $100 million in 1995 has the same buying power as $148.7 million in
2012 dollars. See http://www.bls.gov/data/inflation_calculator.htm.
163
See http://www.bls.gov/data/inflation_calculator.htm.

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Recommendation: Congress and the President should continue to reconsider the
coverage of the crosscutting requirements. That reconsideration should particularly
focus on analytical requirements that GAO and others have identified as giving agencies
substantial amounts of discretion (e.g., the RFA and various executive orders), and
requirements that are written in such a way that they exclude most of the rules that are
covered by similar requirements (e.g., UMRA). Also, as part of that reconsideration, and
before establishing any new requirements, Congress and the President should index any
monetary thresholds for analysis to inflation.

Different Analyses for Different Types of Rules
In the cabinet departments and independent agencies where the most crosscutting
requirements were applicable, the analytical requirement that seemed to drive the analysis
most frequently was EO 12866 (and the associated Circular A-4). EO 12866 requires
agencies to analyze the costs and benefits of alternative approaches for any rule that is
expected to have a $100 million “effect on the economy” in any year. This approach
seems appropriate for rules that are expected to impose substantial compliance costs, or
that may result in a “major increase in costs or prices.” However, as this report and the
associated appendix makes clear, agencies’ rules can have a $100 million “effect on the
economy” without imposing any traditional regulatory compliance costs or increasing
costs or prices. 164 Nearly half of the “major” rules that were issued in 2010 seemed to be
subject to the executive order’s analytical requirements for other reasons (e.g., rules
increasing or decreasing federal transfer payments, rules triggering consumer spending,
or rules setting fee structures that the agencies use to fund certain government services).
Given the different nature of these “major” or “economically significant” rules, and that
many of them are simply implementing statutory requirements, it is appropriate to
consider whether different types of analyses should be required for different types of
rules. The “analysis” that is done for many of the federal transfer rules is more like an
accounting exercise, and is unlikely to have an effect on the agency’s ultimate decision.
Consumer surplus rules and rules that simply establish some type of user fee for
government services seem even more different than compliance rules, and are also
unlikely to be affected by the analysis. Therefore, it seems reasonable to question
whether federal transfer, consumer surplus, and fee structure rules should be subject to
the same type of analytical requirements as traditional regulations that impose
compliance costs. 165
164

Not everyone seems to understand this distinction. See, for example, Wayne Crews, “Tyranny of the Unelected;
Congress Needs to Get a Handle on Costly Rules,” Washington Times, October 12, 2010, p. B.1, in which the author
states that Congress need not approve all rules, “just the ‘major’ ones costing more than $100 million annually….”
Also, in testimony before the House Judiciary Committee’s Subcommittee on the Courts and Commercial and
Administrative Law on January 24, 2011, former Representative David McIntosh said that major rules are “those
projected to impose cost on the American economy of more than $100 million each.” See http://judiciary.house.gov/
hearings/pdf/McIntosh01242011.pdf.
165
However, rules that are expected to result in non-federal annual transfers $100 million or more from one population
group to another (e.g., rules issued on February 2 and May 13 by IRS, EBSA, and CMS pursuant to the health care
reform law) may well be affected by the agencies’ analyses, and therefore are not considered part of this group.

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Although OMB Circular A-4 mentions transfer payments, and says that they should be
addressed in a separate discussion of the regulation’s distributional effects, the circular
does not clearly describe the type of analysis that should be prepared for rules that are
economically significant for this reason. Neither does it describe how agencies should
treat other types of “major” or “economically significant” rules (e.g., those setting fee
structures, or that trigger consumer spending).
Recommendation: OMB should amend Circular A-4 to clearly indicate that the
analytical requirements should be tailored to the different types of rules. Traditional
cost-benefit analysis appears most suited to rules that would impose $100 million or
more in annual compliance costs, or that would result in major increases in costs or
prices. Other types of analyses may be more appropriate for rules increasing or
decreasing federal transfer payments by at least $100 million annually. Still other
analytical approaches should perhaps be used for rules setting fee structures that are
expected to produce $100 million or more in annual revenues. Finally, consideration
should be given to whether rules that are “major” or “economically significant” only
because they are expected to stimulate consumer spending (e.g., the DOI migratory bird
hunting rules) should be subject to any analytical requirements at all.

Overlapping Analytical Requirements
Each of the crosscutting analytical requirements that were most commonly cited in the
2010 major rules (the RFA, the PRA, UMRA, and EO 12866) share certain themes. Each
generally requires some type of (1) discussion of the need for the regulatory action, (2)
assessment of costs and/or benefits of the rule, and (3) discussion of the alternatives to
the regulatory action that could have been selected. In some cases, the overlaps between
the analytical requirements are substantial. For example, any rule that triggers the
requirement for an UMRA Section 202 written statement will likely trigger the economic
analysis requirements in EO 12866 and Circular A-4. There may also be substantial
overlaps between crosscutting and agency or issue-specific analytical requirements. For
example, DOE has indicated that the requirements of EO 12866 and UMRA substantially
overlap with those in the Energy Policy and Conservation Act. Also, some of the
analytical requirements can be integral parts of other requirements. For example, if a rule
contains a covered collection of information under the PRA, an agency’s estimate of the
burden hours and other costs associated with that collection would naturally be part of the
agency’s overall estimate of regulatory costs under EO 12866.
A review of the 100 major rules published in 2010 indicates that the agencies recognize
these overlaps, and that many of the analytical requirements are already being combined
in some way. Many of the agency officials interviewed for this report indicated that the
agencies often prepare a single analytical document intended to satisfy a range of
crosscutting and agency- or issue-specific requirements, sometimes with separate
chapters for particular types of studies. Therefore, in practice, the agencies already
appear to be consolidating some of the analytical requirements.

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Some of the crosscutting analytical requirements (e.g., the RFA, UMRA, and EO 13045)
explicitly permit agencies to satisfy them as part of, or in conjunction with, some other
analysis. However, other analytical requirements do not contain such statements. To
ensure that agencies know that they need not duplicate their efforts, each of the analytical
requirements could be amended to make this point clear. However, amending each of the
statutes and executive orders would likely be very difficult. Another approach could be
for OMB or OIRA to issue a document (or amend an existing document, like OMB
Circular A-4, or the February 7, 2011, “Regulatory Impact Analysis: Frequently Asked
Questions”) clearly stating that any analysis can be used to satisfy more than one
analytical requirement.
Recommendation: Either as part of a reconsideration of OMB Circular A-4 or
elsewhere, OMB or OIRA should notify agencies that a single analysis can be used to
satisfy more than one analytical requirement. Agencies need not prepare separate
analyses for each analytical requirement.

Consolidation of Analytical Requirements
Although many agencies appear to be consolidating some of the crosscutting analytical
requirements in practice, consolidation of the requirements themselves into a single
statute or executive order is likely to be difficult, if not impossible, for a variety of
reasons. As noted earlier in this report and illustrated in Table 4, the requirements vary
substantially in terms of the agencies and rules that they cover, their goals and specific
requirements, and even the agencies responsible for their oversight. Some of the
requirements apply to virtually every executive branch agency, while others specifically
exclude independent regulatory agencies. Some of the requirements apply to most major
rules, while others exclude most such rules. Specifically, some cover rules that are issued
without an NPRM, and others do not. Some use a fixed dollar threshold ($100 million) to
determine coverage, but others do not. Even in the two analytical requirements that use a
$100 million analytical threshold, there are major differences. In UMRA, the analytical
trigger is $100 million in “expenditures,” and the figure is indexed for inflation. In EO
12866, one of the triggers (but not the only trigger) is $100 million in economic “effect,”
and that threshold is not indexed for inflation. Some of the requirements give agencies
little or no discretion to decide whether an analysis is required, while others allow
agencies wide latitude to decide whether the effects of the rule are “significant” or
“substantial” enough to merit analysis. In determining whether the analytical
requirements are triggered or as part of the analysis itself, some provisions require the
agencies to consider indirect effects, while others do not. Combining requirements with
such dissimilar coverages and terms would require that these differences be reconciled in
some way, either by expanding the scope of one or limiting the scope of the other.
For example, although EO 12866 and UMRA cover the same agencies and require similar
types of analysis, agencies prepared a regulatory analysis pursuant to the executive order
in 73 of the 83 covered major rules issued in 2010; in contrast, the agencies prepared an

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analysis pursuant to Section 202 of UMRA in only four rules. If the analytical
requirements in EO 12866 and UMRA were combined into a single statute or executive
order, the coverage of EO 12866 would need to be limited to match UMRA, the coverage
of UMRA would need to be expanded to match EO 12866, or some compromise position
between the two extremes would have to be reached.
Consolidation of the RFA and EO 12866 could be even more difficult. First, the RFA
covers virtually every executive branch agency, while EO 12866 excludes independent
regulatory agencies. Consolidation would either require a limitation of the RFA’s
coverage, or an expansion of the agencies covered by EO 12866. Those who favor
keeping independent regulatory agencies at arms length from presidential control are
likely to resist having those agencies prepare cost-benefit analyses that are overseen by
OIRA, the President’s agent. Also, the RFA gives agencies substantial discretion to
determine whether their rules have a “significant” economic impact on a “substantial”
number of small entities, and therefore whether an analysis is required. EO 12866 gives
agencies much less discretion; any rule that is expected to have an annual “effect on the
economy” of $100 million or more is required to have an RIA, and OIRA may require
agencies to prepare an analysis for rules below that threshold. Consolidation of the RFA
and EO 12866 would require that these major differences in scope and agency discretion
be reconciled in some way.
The analytical requirements are also very different in terms of their origins and
objectives. For example, while the overall goal of the analytical requirements in EO
12866 is the maximization of regulatory net benefits, the goal of the RFA analysis is to
minimize impacts on small entities (while still meeting the purpose of the rule) – goals
that may or may not be consistent. Also, meshing these analytical requirements with the
statutory authorities underlying agency rules and the implicit or explicit analytical
requirements therein might be even more difficult. (Therefore, EO 12866 and the other
executive orders often say that their analytical requirements are to be met “to the extent
permitted by law.”)
An even larger barrier to consolidation of the various analytical requirements may be the
interested parties that advocated for the creation of certain requirements, and who are
likely to view with suspicion any effort to combine them with other requirements. For
example, the small business community, SBA’s Office of Advocacy, and the House and
Senate Small Business Committees are likely to resist any effort to fold regulatory
flexibility analyses under the RFA into a general analytical requirement. State and local
government representatives are likely to oppose consolidation of unfunded mandate and
federalism analyses into a broader analytical requirement. Other groups that are
primarily interested in particular issues (e.g., the effect of rules on children, minorities, or
energy supplies) may also resist merging these stand-alone analyses into a single,
omnibus study.
Also, consolidation of the requirements without narrowing their applicability or the
nature of the analyses would not likely save the rulemaking agencies much time or
money. Many agencies already view the requirements as a set of interrelated but

81

sequentially discussed analyses, which is unlikely to change if the requirements are
housed in a single statute or executive order. The manner in which the analytical
requirements are consolidated (i.e., via statute or executive order) is also likely to be
important. Unless specifically excluded, statutory requirements may be considered
subject to enforcement by the courts through judicial review. Executive order
requirements, on the other hand, are generally considered management requirements, and
are usually enforceable only by the executive. Placing the current executive order
analytical requirements into a statute could open new avenues for judicial challenge,
which could make the rulemaking process slower and more adversarial.166
If any of the crosscutting analytical requirements were to be consolidated, the most likely
candidates would be the various executive order requirements that have been established
over the past 25 years on such topics as constitutionally protected property rights (EO
12630), environmental justice (EO 12898), children and the environment (EO 13045),
federalism (EO 13132), and energy effects (EO 13211). Rather than having to enact
legislation, the President could simply issue a new executive order combining all or some
of the analytical requirements into a single executive order, or explicitly folding these
considerations into the economic analysis required by EO 12866. (EO 12866 and
Circular A-4 already call for agencies to consider the “distributional effects” of their
forthcoming rules.) The President could also make clear that these consolidated
requirements are not subject to judicial review. Nevertheless, consolidation of these
executive orders would require reconciling many of the differences in scope that were
previously described. For example, while EO 12630 and EO 12898 arguably include
independent regulatory agencies, the other executive orders clearly do not. EO 13045
excludes rules for which the agency does not publish an NPRM; the other executive
orders do not contain this restriction. EO 13211 only applies to rules that are considered
“significant” under EO 12866; the other executive orders apply to all rules issued by
covered agencies. Also, as noted previously, certain interest groups may resist
elimination of freestanding analytical requirements into a single omnibus requirement.
As noted at the beginning of this report, in 1993, ACUS recommended that Congress
“reconsider the need for continuing statutory analytical requirements that necessitate
broadly applicable analyses or action to address narrowly-focused issues.” However,
since many of the crosscutting requirements are currently in executive orders, ACUS may
want to consider making the same type of recommendation to the President.
Recommendation: The President should review the current set of executive order
analytical requirements and determine whether some or all of them could be consolidated
into a single executive order.

Analytical Requirements and Ossification
166

For other concerns, see Sally Katzen, “Why Congress Should Not Codify Cost-Benefit Analysis Requirements,”
June 7, 2011, at http://www.law.upenn.edu/blogs/regblog/2011/06/why-congress-should-not-codify-requirements-foreconomic-analysis-of-new-regulations.html.

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Satisfying the crosscutting analytical requirements, or even just determining that a
particular type of analysis is not required, can clearly take agencies substantial amounts
of staff time and resources. The agency officials interviewed for this report said the time
required to issue rules varied substantially, and some said they had data on how long the
overall process took (although the starting point for the process was not always clear or
uniform). However, none of the officials said their agencies had data showing how much
of the time needed to issue a rule was a function of the crosscutting analytical
requirements. They often indicated that the amount of time needed to issue a rule was
driven by a variety of factors, such as gathering data to understanding the industry that is
being regulated, obtaining basic scientific information, balancing competing interests,
obtaining political support to go forward with the rule, allowing the public to participate
in the rulemaking process, and having the draft rule reviewed within the department or
agency and by OIRA – often pursuant to what were identified as non-analytical
requirements at the beginning of this report (e.g., the Administrative Procedure Act, or
the review provisions in EO 12866).
In many ways, the dividing line between the analytical requirements and the nonanalytical rulemaking requirements is not well defined. For example, in some rules,
many of the comments provided during the notice and comment process, and OIRA’s
reviews of draft rules, are about the regulatory analyses that the agencies conducted.
Also, concerns about OIRA review under EO 12866 and judicial review under the APA’s
“arbitrary and capricious” standard may well cause agencies to do more than the minimal
amount of analysis that is required. In some agencies, the analyses that are conducted are
primarily driven not by the crosscutting analytical requirements, but by the statutes
underlying the rules (e.g., EPCA within DOE). In other agencies (e.g., EPA, OSHA, and
the new CFPB), if the agency concludes that a rule has a “significant” economic impact
on a “substantial” number of small entities under the RFA, the agency must hold an
advocacy review panel and prepare a compliance guide – steps that, while not analytical
themselves, are triggered by an analysis and can cause significant delays. Finally, many
of the agency officials indicated that the analyses required by the various statutes and
executive orders are being conducted at the same time as other steps in the rulemaking
process (e.g., engineering studies and legal reviews). Therefore, while the analytical
requirements might add to the number of “person days” required to issue a rule, the actual
number of elapsed days may increase only slightly, or not at all.
It should be recognized that not everyone views “ossification” negatively. Some consider
the additional time required to do analyses a good thing, as they believe the rulemaking
process should be as slow and deliberative as necessary to produce sound decisions.
Because agencies have no data showing that the analytical requirements themselves add
significant amounts of time to the rulemaking process, and because the analyses can often
be done simultaneous with other rulemaking steps, this report makes no
recommendations in this area.

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Appendix 1: Why Rules Were Considered “Major”
As noted in the body of this report, the Congressional Review Act (CRA) defines a
“major rule” as
any rule that the Administrator of the Office of Information and Regulatory
Affairs of the Office of Management and Budget finds has resulted in or is likely
to result in—(A) an annual effect on the economy of $100,000,000 or more; (B) a
major increase in costs or prices for consumers, individual industries, Federal,
State, or local government agencies, or geographic regions; or (C) significant
adverse effects on competition, employment, investment, productivity, innovation,
or on the ability of United States-based enterprises to compete with foreign-based
enterprises in domestic and export markets. The term does not include any rule
promulgated under the Telecommunications Act of 1996 and the amendments
made by that Act.167
Some observers have indicated that all major rules have $100 million dollars or more in
annual compliance costs. For example, Wayne Crews of the Competitive Enterprise
Institute said major rules “are the ones costing $100 million annually.”168 Also, an
editorial in the Las Vegas Review-Journal (“Too Many Rules,” January 24, 2011, p. B9)
stated that the REINS Act (H.R. 10 in the 112th Congress) requires an up-or-down vote on
“regulations likely to cost $100 million or more.” In fact, however, many rules are
considered “major” because of an annual “effect on the economy” that is unrelated to
compliance costs (e.g., increases or decreases in federal transfer payments, changes in
consumer spending, or changes in fees for government services). Also, where
compliance costs are a factor in why rules are considered “major,” more often than not
the rules are expected to have benefits that exceed those costs.
This appendix, drawn from a report prepared by the Congressional Research Service
(CRS),169 discusses why the 100 major rules issued in calendar year 2010 appeared to be
considered “major,” and provides examples of transfer rules (increasing and decreasing
federal transfer payments, and non-federal transfers; consumer surplus rules and rules
establishing fees; rules considered major because of costs, benefits, or both; and rules that
appeared to be major because of major increases in costs or prices.
Transfer Rules

167

5 U.S.C. § 804(2).
Wayne Crews, “Tyranny of the Unelected; Congress Needs to Get a Handle on Costly Rules,” Washington Times,
October 12, 2010, p. B.1.
169
U.S. Congressional Research Service, REINS Act: Number and Type of “Major” Rules in Calendar Year 2010, by
Curtis W. Copeland and Maeve P. Carey, April 2011.
168

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Several rules that involved transfers of funds from one party to another were considered
“major” because the amount of federal transfer payments were increasing or decreasing,
or because the rules involved non-federal transfers.

Increasing Federal Transfer Payments
In 23 of the rules, the federal transfer payments appeared to be increasing. For example:
A January 25, 2010, DOE rule on “Weatherization Assistance Program for
Low-Income Persons” reduced the procedural burdens on evaluating
applications from buildings that are part of HUD assisted and public housing
programs, the Federal Low Income Housing Tax Credit Program, and the
USDA Rural Development Program. DOE indicated that the $5 billion in
grants provided under this program by the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5) made the rule a major rule, and
“constitute transfer payments, meaning that they do not represent a change
in the total resources available to society.”170
A January 29, 2010, USDA Food and Nutrition Service rule established new
eligibility and certification requirements for the receipt of food stamps. USDA
said that it expects this rule to simplify program administration, allow states
greater flexibility, and provide enhanced access to eligible populations. The
agency estimated that the total transfer costs to the government of this rule
would be $2.669 billion in FY2010 and $13.541 billion during the five-year
period from FY2010 through FY2014.171
A March 12, 2010, rule issued by the Office of Innovation and Improvement
within ED established priorities, requirements, definitions, and selection
criteria under the Investing in Innovation Fund, which provides funding
support to local educational agencies (LEAs) and nonprofit organizations in a
partnership with one or more LEAs or a consortium of schools with a record
of improving student achievement and attainment. ED estimated that the
final rule would result in associated “annual monetized transfers” of $643
million per year from the federal government to LEAs and nonprofit
organizations.172
170

U.S. Department of Energy, “Weatherization Assistance Program for Low-Income Persons,” 75 Federal Register
3847, January 25, 2010. DOE stated (p. 3854) that the $5 billion in grants for the weatherization program “at a level
greater than $100 million makes this rulemaking economically significant under [Executive Order 12866].” As noted
later in this report, the definition a “major rule” in the CRA is slightly broader than the definition of “economically
significant” in the executive order. DOE also indicated (on p. 3856) that the rule was “major” under the CRA.
171
U.S. Department of Agriculture, Food and Nutrition Service, “Food Stamp Program: Eligibility and Certification
Provisions of the Farm Security and Rural Investment Act of 2002; Final Rule,” 75 Federal Register 4911, January 29,
2010.
172
U.S. Department of Education, Office of Innovation and Improvement, “Investing in Innovation Fund; Final Rule
and Notice,” 75 Federal Register 12003, March 12, 2010.

85

An April 16, 2010, DOD rule provided for retroactive stop loss special pay to
members of the military service as authorized and appropriated in the
Supplemental Appropriations Act, 2009 (Section 310 of P.L. 111-32).
Although DOD did not provide a cost-benefit analysis with the final rule, in
the preamble to the rule the department stated that the rule would have a
$100 million annual impact on the economy in that the “Supplemental
Appropriations Act, 2009 appropriated $534,400,000 to the Department of
Defense, to remain available for obligation until expended.”173
A July 22, 2010, rule issued by the Centers for Medicare and Medicaid
Services (CMS) within HHS announced the annual update to the hospice
wage index for FY2011 and continued the phase out of the wage index
budget neutrality adjustment factor. As a result, CMS estimated that total
federal hospice payments would increase by $220 million in FY2010.174
A July 30, 2010, rule issued by the Office of Consumer Information and
Insurance Oversight (OCIIO) within HHS implemented Section 1101 of the
Patient Protection and Affordable Care Act of 2010 (PPACA, P.L. 111-148,
March 23, 2010), which required HHS to establish, either directly or through
contracts with states or nonprofit entities, a temporary high-risk health
insurance pool program to provide affordable health insurance coverage to
uninsured individuals with pre-existing conditions. OCIIO estimated that the
annual reporting and recordkeeping costs would be less than $2 million, but
said that $5 billion in federal funds would be transferred from the Secretary
to contractors to aid in administering the program from July 1, 2010, to
December 31, 2013.175
An August 31, 2010, DVA rule amended the department’s adjudication
regulations to implement the decision of the Secretary of Veterans Affairs
that there is a positive association between exposure to certain herbicides
and the subsequent development of hairy cell leukemia and other chronic Bcell leukemias, Parkinson’s disease, and ischemic heart disease. DVA
estimated that the total cost for this rulemaking (primarily retroactive and
ongoing benefits payments) to be $13.6 billion during FY2010, $25.3 billion
for 5 years, and $42.2 billion over 10 years.176
173

U.S. Department of Defense, Office of the Secretary, “Retroactive Stop Loss Special Pay Compensation,” 75
Federal Register 19878, April 16, 2010. For more information on the stop loss special pay program, see
http://www.defense.gov/home/features/2010/0710_stoploss/.
174
U.S. Department of Health and Human Services, “Medicare Program; Hospice Wage Index for Fiscal Year 2011;
Notice,” 75 Federal Register 42943, July 22, 2010.
175
U.S. Department of Health and Human Services, Office of Consumer Information and Insurance Oversight, “PreExisting Condition Insurance Plan Program,” 75 Federal Register 45013, July 30, 2010.
176
U.S. Department of Veterans Affairs, “Diseases Associated With Exposure to Certain Herbicide Agents (Hairy Cell
Leukemia and Other Chronic B-Cell Leukemias, Parkinson’s Disease and Ischemic Heart Disease),” 75 Federal
Register 53202, August 31, 2010.

86

An October 25, 2010, rule issued by the Farm Service Agency (FSA) within
USDA provided emergency assistance to reestablish the purchasing of rice,
cotton, soybeans, and sweet potatoes in specified counties for which a
disaster designation was issued based on excessive moisture and related
conditions for the 2009 crop year. The rule specified the eligibility
requirements, payment calculations, and application procedures for the Crop
Assistance Program. FSA estimated that the total cost to the government for
the program would be between $137 million and $543 million, depending on
how many producers in disaster counties applied for payments.177
One other rule appeared to be “major” because federal loans were expected to be
converted into transfer payments (which CRS considered to be a transfer increase). On
January 19, 2010, the Federal Emergency Management Agency (FEMA) within DHS
published a rule that amended the agency’s Special Community Disaster Loan (CDL)
Program regulations to establish procedures and requirements for Special CDL
cancellations. The loan cancellations were authorized by Section 4502(a) of the U.S.
Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007 (P.L. 110-28). The Special CDL Program and the cancellation
provisions applied to communities in the Gulf Coast region who received Special CDLs
following Hurricanes Katrina and Rita. FEMA estimated that up to $1.3 billion in loans,
interest, and costs could be forgiven under this effort.178
Decreased Federal Transfers
Nine other rules appeared to be “major” at least in part because they were decreasing the
amount of federal transfers provided.179 For example:
An August 12, 2010, CMS rule implemented a new prospective payment
system for Medicare outpatient end-stage renal disease dialysis facilities, in
compliance with the Medicare Improvements for Patients and Providers Act
of 2008 (P.L. 110-275). The rule also replaced the previous payment system
and the methodologies for the reimbursement of separately billable
outpatient end-stage renal disease services. CMS estimated that there would
be an approximately $200 million decrease in payments to all end-stage
renal disease facilities for renal dialysis during calendar year 2011,

177

U.S. Department of Agriculture, Farm Service Agency, “Crop Assistance Program,” 75 Federal Register 65423,
October 25, 2010.
178
U.S. Department of Homeland Security, Federal Emergency Management Agency, “Special Community Disaster
Loans Program,” 75 Federal Register 2800, January 19, 2010. FEMA stated (p. 2815) that although “the impact of the
rule could be spread over multiple years as applications are received, processed, and loans cancelled, the total economic
effects of a specific loan cancellation would occur once, rather than annually.”
179
Seven of these rules appeared to be “major” only because of decreased transfers, and two other rules involved
decreased transfers and one other category of explanation.

87

compared to what the payments would have been that year in the absence of
this rule.180
An August 16, 2010, CMS rule revised the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related costs
of acute care hospitals to implement changes arising from the agency’s
continuing experience with these systems, and to implement certain
statutory provisions. The rule also described the changes to the amounts and
factors used to determine the rates for Medicare acute care hospital inpatient
services for operating costs and capital-related costs, and updated the rateof-increase limits for certain hospitals excluded from the IPPS that are paid
on a reasonable cost basis subject to these limits. In addition, the rule
updated the payment policy and the annual payment rates for the Medicare
prospective payment system (PPS) for inpatient hospital services provided
by long-term care hospitals (LTCHs) and set forth the changes to the
payment rates, factors, and other payment rate policies under the LTCH PPS.
CMS estimated that the final applicable percentage increase to the IPPS rates
required by the statute, in conjunction with other final payment changes in
the rule, would result in a $440 million decrease in FY2011 operating
payments and an estimated $21 million decrease in FY2011 capital
payments.181
An October 15, 2010, DOD rule implemented Section 703 of the National
Defense Authorization Act for Fiscal Year 2008, which stated that, with
respect to any prescription filled on or after the date of enactment, the
TRICARE Retail Pharmacy Program shall be treated as an element of DOD for
purposes of procurement of drugs by federal agencies under 38 U.S.C. § 8126,
to the extent necessary to ensure pharmaceuticals paid for by DOD that are
provided by network retail pharmacies to TRICARE beneficiaries are subject
to Federal Ceiling Prices (FCPs). Section 8126 established FCPs for covered
drugs (requiring a minimum 24% discount) procured by DOD and three
other agencies from manufacturers. DOD estimated that the rule would result
in cost reductions from applying FCPs to the TRICARE Retail Pharmacy
Network in FY2010 through FY2015 of between $375 million and $560
million for Defense Health Program spending, and between $474 million and
$707 million for Medicare-Eligible Retiree Health Care Fund spending.182
180

U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, “Medicare Program;
End-Stage Renal Disease Prospective Payment System; Final Rule and Proposed Rule,” 75 Federal Register 49029,
August 25, 2010.
181
U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, “Medicare Program;
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital
Prospective Payment System Changes and FY2011 Rates; Provider Agreements and Supplier Approvals; and Hospital
Conditions of Participation for Rehabilitation and Respiratory Care Services; Medicaid Program: Accreditation for
Providers of Inpatient Psychiatric Services,” 75 Federal Register 50041, August 16, 2010.
182
U.S. Department of Defense, Office of the Secretary, “Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS)/TRICARE: Inclusion of TRICARE Retail Pharmacy Program in Federal Procurement of
Pharmaceuticals,” 75 Federal Register 63383, October 15, 2010.

88

Non-federal Transfers
Five rules appeared to be “major” not because of increases or decreases in the transfer of
federal funds, but because they were (at least in part) expected to result in annual
transfers of $100 million or more from one population group to another.183 Four of the
rules were jointly issued by the Internal Revenue Service (IRS) within the Department of
the Treasury, the Employee Benefits Security Administration (EBSA) within the
Department of Labor, and CMS within the Department of Health and Human Services.
For example:
A February 2, 2010, rule required parity between mental health or substance
use disorder benefits and medical/surgical benefits with respect to financial
requirements and treatment limitations under group health plans and health
insurance coverage offered in connection with a group health plan. The rule
replaced regulations implementing the Mental Health Parity Act of 1996, and
made conforming changes to reflect modifications to the act. The agencies
said that the rule was considered “major” because total health care
premiums were expected to rise 0.4%, and that increase was considered a
transfer from those individuals not using mental health and substance use
disorder benefits to those who do. The agencies estimated that those
undiscounted transfers to be about $25.6 billion during the next 10 years.184
A May 13, 2010, rule implemented the requirements for group health plans
and health insurance issuers in the group and individual markets under
provisions of the Patient Protection and Affordable Care Act regarding
dependent coverage of children who have not reached age 26. Specifically, a
plan or issuer that makes available dependent coverage of children was
required to make such coverage available for children until attainment of 26
years of age. The agencies estimated the 2011 to 2013 transfers associated
with this rule at between $3.5 and $6.9 billion, with the funds moving from
individuals with family health insurance coverage who do not have
dependents aged 19-25 to those individuals with family health insurance
coverage that do have such dependents.185

183

Four of these rules appeared to be “major” only because of non-federal transfers, and one other rule also involved
another category of explanation.
184
U.S. Department of the Treasury, Internal Revenue Service; Department of Labor, Employee Benefits Security
Administration; Department of Health and Human Services, Centers for Medicare and Medicaid Services, “Interim
Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008,” 75
Federal Register 5409, February 2, 2010. Discounted benefits or costs are sometimes referred to as “discounted present
values,” or simply “present values,” and are used when the costs and the benefits of rules are expected to occur at
different times. OMB Circular A-4 recommends that agencies use both a 7% and a 3% discount rate. The annual
undiscounted transfer estimates ranged from $2.36 billion to $2.81 billion per year.
185
U.S. Department of the Treasury, Internal Revenue Service; Department of Labor, Employee Benefits Security
Administration; Department of Health and Human Services, Centers for Medicare and Medicaid Services, “Group
Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 Under the Patient
Protection and Affordable Care Act,” 75 Federal Register 27121, May 13, 2010.

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One other rule issued by the Commodity Credit Corporation within USDA also appeared
to be a major rule because of these kinds of non-federal transfers.186
“Consumer Surplus” Rules and Rules Establishing Fees
Six of the 100 major final rules published in 2010 appeared to be “major” because they
were expected to trigger a certain type of economic activity by the public (termed a
“consumer surplus”).187 All six of these rules were issued by DOI’s Fish and Wildlife
Service (FWS), and established hunting seasons and bag limits for certain types of
migratory birds. For example, a September 23, 2010, FWS rule prescribed final lateseason frameworks from which the states could select season dates, limits, and other
options for the 2010-2011 migratory bird hunting seasons.188 FWS estimated that the rule
would result in a consumer surplus of between $205 million and $270 million. The other
five FWS rules had similar consumer surplus estimates.
Four other rules appeared to be considered “major” because they established fee
structures that were intended to fund certain government operations. For example:
A June 16, 2010, NRC rule amended the licensing, inspection, and annual fees
charged to the agency’s applicants and licensees. NRC said it viewed these
amendments as necessary to implement the Omnibus Budget Reconciliation
Act of 1990, as amended (42 U.S.C. § 2214), which the agency said generally
requires the NRC to recover through fees approximately 90% of its budget
authority in FY2010. NRC determined that its required fee recovery amount
for FY2010 was approximately $912.2 million and that, after accounting for
billing adjustments, the total amount to be billed as fees was approximately
$911.1 million.189
A June 28, 2010, Department of State rule adjusted the Schedule of Fees for
Consular Services based on an independent cost of service study’s findings
that the United States was not fully covering its costs for providing these
services under the previous fee structure. The department said that its
primary objective was to ensure that fees for consular services reflected the
costs to the United States of providing the services to the extent possible.
Among other things, the rule increased the Passport Book Application
186

U.S. Department of Agriculture, Commodity Credit Corporation, “Conservation Reserve Program,” 75 Federal
Register 44067, July 28, 2010. According to the GAO major rule report, certain provisions in the rule would “largely
substitute one [conservation reserve program] participant for another, or one practice for another, leading in a shift in
costs and benefits to different participants and practices, but little net cost or benefit for the [commodity reserve
program] as a whole.”
187
In this case, the consumer surplus is an estimate of the amount individuals are willing to pay to hunt waterfowl and
other types of migratory birds.
188
U.S. Department of the Interior, Fish and Wildlife Department, “Migratory Bird Hunting; Final Frameworks for
Late-Season Migratory Bird Hunting Regulations,” 75 Federal Register 58249, September 23, 2010.
189
U.S. Nuclear Regulatory Commission, “Revision of Fee Schedules; Fee Recovery for FY 2010,” 75 Federal
Register 34219, June 16, 2010

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Services fee (for applicants age 16 and older) from $55 to $70, which was
expected to produce additional fees of about $138 million. An increase in the
Passport Book Security Surcharge from $20 to $40 was expected to generate
additional fees of nearly $239 million.190
A September 24, 2010, DHS rule adjusted the fee schedule for the U.S.
Citizenship and Immigration Services to fully recover costs and maintain
adequate service. DHS said that the rule would provide it with an average of
$209 million in FY2010 and FY2011 annual fee revenue over the fee revenue
that would have been collected under the previous fee structure. DHS said
that the increased revenue would be used to fund the full cost of processing
immigration benefit applications and associated support benefits, providing
similar benefits to asylum and refugee applicants, and providing similar
benefits to others at no charge.191
Costs, Benefits, or Both
As the above discussion illustrates, final rules can be considered “major” for a variety of
reasons unrelated to traditional notions of regulatory costs or benefits. Nevertheless, 39
of the 100 major rules that were published in 2010 appeared to be “major” in part because
they were expected to result in at least $100 million in annual compliance costs, $100
million in annual benefits, or both.192 (Thirty of the rules were expected to have
regulatory costs of at least $100 million, and 29 rules were expected to have regulatory
benefits of at least $100 million.) In 20 of the 39 rules, estimated costs and benefits were
both expected to exceed $100 million. In the 19 other major rules, the agencies did not
provide a monetary estimate of either annual costs or benefits, or those estimates were
less than $100 million.
In almost all of the rules in which both benefits and costs were estimated and monetized,
the agencies’ average or central estimates of regulatory benefits were larger than their
average or central estimates of compliance costs. However, in some of these cases, the
ranges of estimated benefits and costs overlapped, or could overlap. Therefore, while
these rules appeared likely to produce net benefits, it is theoretically possible that the
costs of the rules could exceed the benefits (assuming the agencies’ estimates of the range
of costs and benefits are accurate). For example:
A February 9, 2010, rule issued by EPA revised the primary nitrogen dioxide
national ambient air quality standards. The rule established a new 1-hour
standard at a level of 100 parts per billion, and established requirements for
190

U.S. Department of State, “Schedule of Fees for Consular Services, Department of State and Overseas Embassies
and Consulates,” 75 Federal Register 36522, June 28, 2010.
191
U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, “U.S. Citizenship and
Immigration Services Fee Schedule,” 75 Federal Register 58961, September 24, 2010.
192
Thirty-seven of the rules appeared to be “major” only because of such costs and/or benefits, and two other rules also
involved one other category of explanation.

91

a nitrogen dioxide monitoring network that will include monitors at
locations where maximum nitrogen dioxide concentrations are expected.
EPA estimated that the cost of the rule in the year 2020 would be between
$270 million and $510 million (in 2006 dollars), and the estimated benefits
that year would be between $120 million and $580 million (in 2006 dollars).
Therefore, EPA said the rule could result in either positive or negative net
benefits.193
A March 3, 2010, EPA rule promulgated national emission standards for
hazardous air pollutants for certain existing stationary compression ignition
reciprocating internal combustion engines. The rule also promulgated
national air standards for hazardous air pollutants for certain existing nonemergency stationary compression ignition engines. EPA estimated the total
national capital cost for the final rule to be $744 million, with a total national
annual cost of $373 million in 2013. EPA estimated the monetized benefits of
the rule to be between $850 million and $2.3 billion in 2013. Therefore, if
$478 million or more of the expected capital costs occur in 2013, the total
estimated costs of the rule in that year would exceed the lowest estimated
benefits.194
A May 28, 2010, rule issued by the Federal Aviation Administration (FAA)
within DOT amended the agency’s regulations by adding equipage
requirements and performance standards for Automatic Dependent
Surveillance-Broadcast (ADS-B) Out avionics on aircraft operating in Classes
A, B, and C airspace, as well as certain other specified classes of airspace
within the U.S. National Airspace System. FAA said that the rule facilitated the
use of ADS-B for aircraft surveillance by FAA and DOD air traffic controllers
to safely and efficiently accommodate aircraft operations and the expected
increase in demand for air transportation. The agency estimated that the
undiscounted quantified benefits of the final rule ranged from $6.8 billion to
$8.5 billion, and estimated the undiscounted incremental costs at between
$3.3 billion and $7.0 billion.195 Therefore, although average expected benefits
substantially exceeded average expected costs, the highest estimate of cost
($7.0 billion) was slightly higher than the lowest estimate of benefits ($6.8
billion).

193

U.S. Environmental Protection Agency, “Primary National Ambient Air Quality Standards for Nitrogen Dioxide,”
75 Federal Register 6473, February 9, 2010. Although EPA prepared a cost-benefit analysis for the rule, EPA said that
the Clean Air Act and judicial decisions “make clear that the economic and technical feasibility of attaining ambient
standards are not to be considered in setting or revising [national ambient air quality standards].”
194
U.S. Environmental Protection Agency, “National Emission Standards for Hazardous Air Pollutants for
Reciprocating Internal Combustion Engines,” 75 Federal Register 9647, March 3, 2010.
195
U.S. Department of Transportation, Federal Aviation Administration, “Automatic Dependent Surveillance—
Broadcast (ADS-B) Out Performance Requirements To Support Air Traffic Control (ATC) Service,” 75 Federal
Register 30159, May 28, 2010.

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A September 15, 2010, rule issued by the Civil Rights Division within DOJ
revised the regulation that implements Title II of the Americans with
Disabilities Act (ADA), relating to nondiscrimination on the basis of disability
in state and local government services. The department reportedly issued
this rule in order to adopt enforceable accessibility standards under the ADA
that are consistent with the minimum guidelines and requirements issued by
the Architectural and Transportation Barriers Compliance Board (Access
Board), and to update or amend certain provisions of the Title II regulation
so that they comport with the department’s legal and practical experiences in
enforcing the ADA since 1991. DOJ’s estimate of compliance costs ranged
from $12.8 billion to $25.8 billion, and the estimate of benefits ranged from
$22.0 billion to $66.2 billion. Therefore, although average expected benefits
substantially exceeded average expected costs, the highest estimate of cost
($25.8 billion) was higher than the lowest estimate of benefits ($22.0
billion).196
Net Benefits
In 14 of the 20 rules with estimated annual regulatory costs and benefits of at least $100
million, the agencies’ lowest estimates of regulatory benefits were larger than the highest
estimated compliance costs. Therefore, assuming that the agencies’ estimates of the range
of costs and benefits were correct, the rules should produce positive net benefits. For
example:
A March 9, 2010, DOE rule established energy conservation standards for
small electric motors. The department estimated that the annualized costs of
this rule would be about $264 million per year. DOE estimated a range of
possible values for the total monetary benefits of this final rule from $867.5
million to about $1.36 billion.197
A March 19, 2010, rule issued by the Food and Drug Administration (FDA)
within HHS was identical to the provisions of the final rule on cigarettes and
smokeless tobacco published by FDA in 1996, with certain required
exceptions. The rule prohibited the sale of cigarettes and smokeless tobacco
to individuals under the age of 18 and imposed specific marketing, labeling,
and advertising requirements. Although FDA did not include a cost-benefit
analysis in the 2010 rule, in the 1996 rule, the agency said that the rule could
prevent 60,000 early deaths. The monetary value of these and other health
benefits was estimated to be between $9.2 billion and $43 billion per year.
FDA estimated the rule’s overall compliance costs at from $174 million to
196

U.S. Department of Justice, Civil Rights Division, “Nondiscrimination on the Basis of Disability in State and Local
Government Services,” 75 Federal Register 56163, September 15, 2010.
197
U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, “Energy Conservation Program:
Energy Conservation Standards for Small Electric Motors,” 75 Federal Register 10873, March 9, 2010.

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$187 million in one-time costs, and from $149 million to $185 million in
annual operating costs.198 Therefore, even if the highest estimated one-time
costs occurred in the same year as the highest estimated annual operating
costs, the total would still be less than the lowest estimated benefits for that
year.
An April 5, 2010, rule issued by the Federal Motor Carrier Safety
Administration (FMSCA) within DOT incorporated new performance
standards for electronic on-board recorders (EOBRs) installed in commercial
motor vehicles manufactured on or after June 4, 2012. The rule also made
motor carriers that have demonstrated serious noncompliance with hoursof-service rules subject to mandatory installation of EOBRs meeting the new
performance standards. FMSCA said that the costs of the final rule on an
annualized basis over a 10-year period would be $139 million. FMCSA
determined the benefits of the final rule to be $182 million annually, which
included safety benefits of electronic on-board recorder use by estimating
reductions in hours of service violations and resulting reductions in fatiguerelated crashes.199
An April 16, 2010, DOE rule amended the existing energy conservation
standards for residential water heaters (other than tabletop and electric
instantaneous models), gas-fired direct heating equipment, and gas-fired
pool heaters. DOE determined that the annualized monetized benefits of the
rule would be between $1.67 billion per year and $2.02 billion per year, with
costs estimated to be between $1.25 billion per year and $1.28 billion per
year.200
An August 9, 2010, rule issued by the Occupational Safety and Health
Administration (OSHA) within DOL revised the agency’s “Cranes and
Derricks Standard” and related sections of the “Construction Standard” to
update and specify industry work practices necessary to protect employees
during the use of cranes and derricks in construction. This rule also
addressed advances in the designs of cranes and derricks, related hazards,
and the qualifications of employees needed to operate them safely. OSHA
estimated that the total annualized costs of the rule would be $154.1 million.
OSHA estimated that the annual benefits included injuries prevented (175),
fatalities prevented (22), and property damage from tipovers prevented ($7
million), for total monetized benefits of $209.3 million.201
198

U.S. Department of Health and Human Services, Food and Drug Administration, “Regulations Restricting the Sale
and Distribution of Cigarettes and Smokeless Tobacco To Protect Children and Adolescents,” 61 Federal Register
44569, March 19, 2010.
199
Department of Transportation, Federal Motor Carrier Safety Administration, “Electronic On-Board Recorders for
Hours-of-Service Compliance,” 75 Federal Register 17207, April 5, 2010.
200
Department of Energy, “Energy Conservation Program: Energy Conservation Standards for Residential Water
Heaters, Direct Heating Equipment, and Pool Heaters,” 75 Federal Register 20112, April 16, 2010.
201
U.S. Department of Labor, Occupational Safety and Health Administration, “Cranes and Derricks in Construction,”

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Net Costs
In only one of the major rules did the agency indicate that the rule would likely result in
net costs (i.e., that the highest estimate of benefits was less than the lowest estimate of
costs). On January 15, 2010, the Federal Railroad Administration (FRA) within DOT
issued a rule on “Positive Train Control Systems” that were required on certain passenger
and freight rail lines by the Rail Safety Improvement Act of 2008 (P.L. 110-432, 122 Stat.
4854, October 16, 2008).202 Congress enacted the statutory requirement in the wake of
several serious rail accidents involving dozens of fatalities and hundreds of injuries. FRA
estimated that the rule would reduce deaths and injuries from this type of accident by
more than 50%, and estimated the monetized benefits of the rule at between $440 million
and $674 million. However, the agency estimated the 20-year costs at between $9.5
billion and $13.2 billion—about 20 times greater than the estimated benefits. FRA noted
this imbalance in the rule, but said it was “constrained by the requirements of [the Rail
Safety Improvement Act of 2008], which do not provide latitude for implementing
[positive train controls] differently.”203 In August 2011, though, DOT announced that it
was considering modifying or removing certain provisions in the rule, which were
expected to result in savings of between $443 million and $1.04 billion over 20 years.204
Monetized Costs but Non-monetized Benefits
In several other rules, the agencies estimated the annual compliance costs at $100 million
or more, but provided only qualitative descriptions of expected regulatory benefits.
Nevertheless, the agencies indicated in many of these rules that the value of the expected
benefits, if monetized, would exceed or “justify” the costs. For example, see the
following:
A January 11, 2010, rule issued by the Securities and Exchange Commission
(SEC) amended the custody and recordkeeping rules under the Investment
Advisers Act of 1940 and related forms by providing additional safeguards
when a registered adviser has custody of client funds or securities. The SEC
estimated the aggregate compliance costs at more than $126 million; it said
the non-monetized benefits would be “substantial,” and would include
increasing investors’ confidence when obtaining advisory services from

75 Federal Register 47905, August 9, 2010.
202
U.S. Department of Transportation, Federal Railroad Administration, “Positive Train Control Systems,” 75 Federal
Register 2598, January 15, 2010. “Positive train control systems” refers to technology that can prevent accidents such
as train-to-train collisions and train movements through a switch left in the wrong position. DOT subsequently
announced that it had reviewed the rule pursuant to Executive Order 13563, and was planning to revise it to lower
implementation costs by hundreds of millions of dollars. See http://regs.dot.gov/docs/RRR-Planfinal-8-20.pdf for a
copy of DOT’s review plan.
203
U.S. Department of Transportation, Federal Railroad Administration, “Positive Train Control Systems,” 75 Federal
Register 2598, January 15, 2010, p. 2685.
204
This review was done as part of DOT’s response to EO 13563. See http://regs.dot.gov/docs/RRR-Planfinal-8-20.pdf
for a copy of DOT’s review plan.

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registered investment advisers, which could lead to more efficient allocation
of investor assets and an increase in the availability of capital.205
An April 14, 2010, FDA rule amended the agency’s regulations on the use of
ozone-depleting substances in self-pressurized containers to remove the
essential-use designations for certain substances used in oral pressurized
metered-dose inhalers. As a result, the agency estimated that private, thirdparty, and public expenditures on inhaled medicines would increase by
roughly $90 million to $280 million per year. FDA characterized the benefits
as “environmental and public health improvements from protecting
stratospheric ozone by reducing chlorofluorocarbons emissions” and
“expectations of increased return on investments in environmentally friendly
technology.”206
An October 29, 2010, ED rule amended the agency’s regulations under
certain programs (e.g., the Federal Family Education Loan Program, the
William D. Ford Federal Direct Loan Program, and the Federal Pell Grant
Program) to improve the integrity in these programs. The department
indicated that annual paperwork-related costs could exceed $100 million,207
but provided only qualitative descriptions of the expected benefits (e.g.,
“updated administrative structures for federal student aid programs,” and
“enhanced reliability and security of ability-to-benefit tests”). Nevertheless,
ED stated in the rule that it believed “that the benefits of these regulations for
students, consumers, and taxpayers justify the burdens of institutional
compliance.”208
Major Increase in Costs or Prices
Seventeen of the 100 major rules published in calendar year 2010 appeared to be “major”
at least in part because they were expected to result in “major increase in costs or prices
for consumers, individual industries, Federal, State, or local government agencies, or
geographic regions.”209 CRS included rules in this category (instead of the earlier
category of rules with a $100 million annual “effect on the economy”) if those costs were
either not monetized, or if they were estimated to be less than $100 million in any year.
For example:

205

U.S. Securities and Exchange Commission, “Custody of Funds or Securities of Clients by Investment Advisers,” 75
Federal Register, 1455, January 11, 2010.
206
U.S. Department of Health and Human Services, Food and Drug Administration, “Use of Ozone-Depleting
Substances; Removal of Essential-Use Designation (Flunisolide, etc.),” 75 Federal Register 19213, April 14, 2010.
207
The agency indicated that the rule could add more than 5 million hours of annual paperwork burden. Using OMB’s
estimate of the cost of completing this paperwork of $30 per hour, compliance costs would exceed $100 million.
208
U.S. Department of Education, Office of Postsecondary Education, “Program Integrity Issues,” 75 Federal Register
66831, October 29, 2010.
209
Sixteen of the rules only had this effect, and one rule also appeared to be major for another reason.

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A February 17, 2010, rule issued by the Agricultural Marketing Service (AMS)
within USDA amended livestock and related provisions of the national
organic program’s regulations. The rule generally requires that producers
maintain ruminant slaughter stock on pasture for each day that the finishing
period corresponds with the grazing season for the geographical location.
AMS did not monetize the benefits or the costs of the rule, but said that the
benefits of the rule include uniformity in application to the livestock
regulations especially as they relate to the pasturing of ruminants, which
should result in a near elimination of violations of the pasture regulations.
The agency said that the costs of the rule include an increase in the cost of
production for producers who currently do not pasture their ruminant
animals and those producers who do not manage their pastures at a
sufficient level to provide at least 30% dry matter intake. AMS also said there
may be an increase in consumer prices, but did not estimate the size of those
increases.210
A July 14, 2010, SEC rule addressed “pay to play” practices in investment
advising, and prohibited an investment adviser from providing advisory
services for compensation to a government client for two years after the
adviser or certain of its executives or employees make a contribution to
certain elected officials or candidates. The rule also prohibited an adviser
from providing payment to any third party for a solicitation of advisory
business from any government entity on behalf of such adviser, unless such
third parties are registered broker-dealers or registered investment advisers.
The SEC said that advisers with government clients would incur costs to
monitor contributions and establish compliance procedures, and estimated
initial compliance costs of approximately $2,352 per smaller firm, $29,407
per medium firm, and $58,813 per larger firm. The commission also
estimated that the rule would impose annual, ongoing compliance expenses
of approximately $2,940 per smaller firm, $117,625 per medium firm, and
$235,250 per larger firm. In addition, the commission estimated that
advisers would incur an aggregate cost of approximately $200,246 per year
and the non-labor costs of $20,080,000. The SEC did not monetize the
expected benefits of the rule, but said it should (among other things) help
minimize or eliminate manipulation of the market for advisory services to
state and local governments.211
A July 16, 2010, rule issued by the Employee Benefits Security
Administration (EBSA) within DOL required that certain service providers to
employee pension benefit plans disclose information to assist plan
fiduciaries in assessing the reasonableness of contracts or arrangements,
210

Department of Agriculture, Agricultural Marketing Service, “National Organic Program; Access to Pasture
(Livestock),” 75 Federal Register 7154, February 17, 2010.
211
Securities and Exchange Commission, “Political Contributions by Certain Investment Advisers,” 75 Federal
Register 41018, July 14, 2010.

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including the reasonableness of the service providers’ compensation and
potential conflicts of interest that may affect the service providers’
performance. EBSA did not quantify the expected benefits of the rule, but
said that mandatory proactive disclosure would reduce sponsor information
costs, discourage harmful conflicts of interest, and enhance service value.
EBSA estimated that the annual cost of this rule from 2011 to 2020 would be
between $54.3 million and $58.7 million.212
A July 28, 2010, rule issued by the Office of the Comptroller of the Currency
within the Department of the Treasury and other agencies implemented
provisions of the Secure and Fair Enforcement for Mortgage Licensing Act of
2008 (P.L. 110-289). The final rule required mortgage loan originators
employed by national banks to register with the Nationwide Mortgage
Licensing System and Registry and maintain their registration. Mortgage loan
originators were also required to obtain a unique identifier through the
registry that will remain with that originator, regardless of changes in
employment. In addition, the rule required mortgage loan originators and
national banks to provide these unique identifiers to consumers in certain
circumstances, and requires national banks to adopt and follow written
procedures to assure compliance with the registration requirements.
Although the agencies indicated that these requirements would impose
certain regulatory costs, they did not provide monetized estimates of those
costs in the rule.213

212

Department of Labor, Employee Benefits Security Administration, “Reasonable Contract or Arrangement Under
Section 408(b)(2)- Fee Disclosure,” 75 Federal Register 41600, July 16, 2010.
213
U.S. Department of the Treasury, Comptroller of the Currency and Office of Thrift Supervision; Federal Reserve
System; Federal Deposit Insurance Corporation; Farm Credit Administration; and National Credit Union
Administration, “Registration of Mortgage Loan Originators,” 75 Federal Register 44655, July 28, 2010.

98