oversight

Rulemaking: OMB's Role in Reviews of Agencies' Draft Rules and the Transparency of Those Reviews

Published by the Government Accountability Office on 2003-09-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




September 2003
                 RULEMAKING
                 OMB’s Role in
                 Reviews of Agencies’
                 Draft Rules and the
                 Transparency of Those
                 Reviews




GAO-03-929

                 a

                                                September 2003


                                                RULEMAKING

                                                OMB’s Role in Reviews of Agencies’ Draft
Highlights of GAO-03-929, a report to           Rules and the Transparency of Those
congressional requesters
                                                Reviews



Under Executive Order 12866, the                The formal process by which OIRA reviews agencies’ proposed and final rules is
Office of Management and Budget’s               essentially unchanged since Executive Order 12866 was issued in 1993.
Office of Information and                       However, there have been several changes in OIRA’s policies in recent years,
Regulatory Affairs (OIRA) reviews               including increased use of public letters explaining why rules were returned to
hundreds of agency rules each year
                                                the agencies and prompting the development of new rules, increased emphasis
before they are published in the
Federal Register. Those reviews                 on economic analysis, stricter adherence to the 90-day time limit for OIRA
can have a significant effect on a              review, and improvements in the transparency of the OIRA review process
broad array of public policies.                 (although some elements of that process are still unclear). Underlying many of
GAO was asked to (1) describe                   these changes is a shift in how recent OIRA administrators view the office’s role
OIRA’s review process and any                   in the rulemaking process—from “counselor” to “gatekeeper.” OIRA sometimes
changes in its policies or processes            reviews drafts of rules before they are formally submitted, and OIRA has said it
in recent years, (2) provide detailed           can have its greatest influence on agencies’ rules during this informal review
information about rules submitted               period. However, OIRA contends that agencies need only document the changes
by nine health, safety, or                      made to rules during what are sometimes very brief formal review periods.
environmental agencies that were
returned, withdrawn, or changed at              Because about 400 rules were changed, returned, or withdrawn during the 1-year
OIRA’s suggestion, and (3) describe             period that GAO examined, the review focused on 85 rules from the nine health,
how OIRA decided that certain
                                                safety, or environmental agencies with five or more such rules. OIRA
existing rules merited high priority
                                                significantly affected 25 of those 85 rules. The Environmental Protection
review.
                                                Agency’s rules were most often significantly changed, and almost all of the
                                                returned rules were from the Department of Transportation. OIRA’s suggestions
                                                appeared to have at least some effect on almost all of the 25 rules’ potential
GAO recommends that the OMB                     costs and benefits or the agencies’ estimates of those costs and benefits.
Director build on recent                        Outside parties contacted OIRA before or during its formal review regarding 11
improvements that have been made                of the 25 rules that OIRA significantly affected. In 7 of these 11 cases, at least
in the transparency of the OIRA                 some of OIRA’s recommendations were similar to those of the outside parties,
review process. In particular, GAO              but we could not determine whether those contacts influenced OIRA’s actions.
recommends that agencies be                     The agencies’ docket files did not always provide clear and complete
instructed to document substantive              documentation of the changes made during OIRA’s review or at OIRA’s
changes made at OIRA’s suggestion               suggestion, as required by the executive order. However, some agencies clearly
to draft rules submitted for review             documented these changes, sometimes including changes suggested during
whenever they occur, not just                   OIRA’s informal reviews.
changes that OIRA recommended
during formal reviews.                          OIRA did not publicly disclose how it determined that 23 of the 71 rules
                                                nominated by the public for change or elimination in 2001 merited high priority
OMB said the factual foundations
                                                review. As explained to GAO, OIRA desk officers made the initial
of our report were well grounded
but disagreed with most of our                  determinations regarding issues with which they were familiar, subject to the
recommendations, saying that the                approval by OIRA management. The Mercatus Center at George Mason
report had not demonstrated the                 University made most of the nominations overall and in the high priority group.
need or desirability of changing the            Regulatory agencies or OIRA have at least begun to address the issues raised in
agency’s existing level of                      many of the 23 suggestions. OIRA’s 2002 nomination and review process was
transparency.                                   different from the 2001 process in several respects (e.g., broader request for
                                                reforms, more responses from more commentors, prioritization of the
www.gao.gov/cgi-bin/getrpt?GAO-03-929.
                                                suggestions being made by the agencies, and clearer discussion of process and
To view the full product, including the scope   criteria).
and methodology, click on the link above.
For more information, contact Victor
Rezendes at (202) 512-6806, or
rezendesv@gao.gov.
Contents




Letter                                                                                             1



Executive Summary                                                                                  3
                            Purpose                                                                3
                            Background                                                             3
                            Results in Brief                                                       5
                            Principal Findings                                                     7
                            Recommendations for Executive Action                                  14
                            Agency Comments and Our Evaluation                                    16


Chapter 1                                                                                         17
                            Background                                                            17
                            Objectives, Scope, and Methodology                                    26


Chapter 2
                                                                                        29
                            OIRA Regulatory Review Process                                        29
Some of OIRA’s
             Changes in Regulatory Review Policies                                 38
Regulatory Review 

Policies Have Changed


Chapter 3
                                                                                        69
                            OIRA Significantly Affected About One-Third of the Rules That the
OIRA’s Effects on Rules 
     Selected Agencies Submitted for Review                              69
Submitted for 
             OIRA Affected the Costs and Benefits or Estimates in Some Rules
                                                                                                  84
Executive Order 
           Outside Parties Contacted OIRA Regarding about Half of the Rules
Review Varied
                OIRA Significantly Affected                                         89
                            Documentation of OIRA’s Reviews Varied, but Some Agencies’
                              Practices Improved Transparency                                     94


Chapter 4                                                                                        103
                            Mercatus Center Nominated Most Rules Selected for
Many Rules Nominated          High Priority Review in 2001 Report                                103
for Reform Are Being        How High Priority Review Selections Were Made                        106
                            Status of Rules Selected for High Priority Review                    107
Changed                     Second Round of Nominations Was Different                            108




                            Page i                                                         GAO-03-929
                             Contents




Chapter 5                                                                                            110

                             Conclusions                                                             110

Conclusions and              Recommendations                                                         115

Recommendations              Agency Comments and Our Evaluation                                      116



Appendixes
              Appendix I:    Objectives, Scope, and Methodology                                      121
                             Objectives                                                              121
                             Scope and Methodology                                                   122
                             Limitations                                                             130
             Appendix II:    Summary Information on Selected Rules Submitted to OIRA
                             for Executive Order Review between July 2001 and June
                             2002                                                                    132
                             Explanation of Table Contents                                           132
             Appendix III:   Case Studies on Significantly Affected Rules With Evidence
                             That OIRA Was Contacted by External Parties                             188
                             Control of Emissions from Nonroad Large Spark Engines                   188
                             Proposed Nonconformance Penalties for 2004 and Later Model Year
                                Emission Standards for Heavy-duty Diesel Engines and
                                Heavy-duty Diesel Vehicles                                           189
                             Identification and Listing of Hazardous Waste (Manganese)               191
                             Minimizing Adverse Environmental Impact from Cooling Water
                                Intake Structures at New Facilities                                  194
                             National Pollutant Discharge Elimination System (Existing Intake
                                Structures)                                                          196
                             Effluent Limitation Guidelines and New Source Performance
                                Standards for the Construction and Development Category              199
                             Effluent Limitations Guidelines for the Iron and Steel Manufacturing
                                Point Source Category                                                201
                             Tire Pressure Monitoring Systems                                        202
                             Part 145 Review: Repair Stations                                        205
             Appendix IV:    Status of 23 High Priority Review Rules                                 207
              Appendix V:    Comments from the Office of the Information and Regulatory
                             Affairs                                                                 212


Tables                       Table 1:	 Selected Agencies’ Regulatory Submissions by 

                                       Outcome                                                        71





                             Page ii                                                           GAO-03-929
           Contents




           Table 2:	 Nature of Changes Made at the Suggestion or
                     Recommendation of OIRA                                        75
           Table 3:	 Rules from FAA and EPA’s Office of Air and Radiation and
                     Office of Water Were Most Often Significantly Affected by
                     OIRA Review                                                   82
           Table 4: OIRA Was Only Slightly More Likely to Significantly Affect
                     Economically Significant Rules                                83
           Table 5: Agencies’ Compliance with Executive Order 12866
                     Documentation Requirements Was Mixed                          97
           Table 6: The Mercatus Center Suggested Most of the 23
                     “High-Priority Review” Rules                                 105
           Table 7: Findings and Determinations for Rules Changed after
                     Submission to OIRA                                           136
           Table 8: Findings and Determinations for Rules Returned to Agency
                     after Submission to OIRA                                     178
           Table 9: Findings and Determinations for Rules Withdrawn after
                     Submission to OIRA                                           183
           Table 10: Status of the 23 High Priority Review Suggestions
                     Identified in OIRA’s December 2001 Report on the Costs
                     and Benefits of Federal Regulations                          207


Figures	   Figure 1: OIRA Is One of the Statutory Offices within OMB
              18
           Figure 2: Organization of OIRA
                                         19
           Figure 3: Number of Rules That OIRA Reviewed Dropped Under 

                      Executive Order 12866
                                       24
           Figure 4: The OIRA Regulatory Review Process
                           30
           Figure 5: OIRA Returned More Rules to Agencies in Calendar Year

                      2001 Than in the 7 Previous Years Combined
                  42
           Figure 6: OIRA Returned Only Two Rules Between February 2002 

                      and May 2003
                                                44
           Figure 7: The Number of OIRA Reviews Lasting More Than 90 Days

                      Dropped Sharply in 2002
                                     46
           Figure 8: OIRA Recently Reversed a 20-year Decline in Staffing
         60
           Figure 9: EPA Air and Water Rules Were More Often Significantly 

                      Changed at the Suggestion of OIRA
                           76
           Figure 10: Outside Parties Most Often Contacted OIRA Regarding
                      EPA Rules                                                    90




           Page iii                                                         GAO-03-929
Contents




Abbreviations

APA        Administrative Procedure Act

APHIS      Animal and Plant Health Inspection Service

ARSA       Aeronautical Repair Station Association

BLM        Bureau of Land Management

CEA        Council of Economic Advisors

CEED       Center for Energy and Economic Development

CFR        Code of Federal Regulations

CWD        chronic wasting disease

DOE        Department of Energy

DOI        Department of the Interior

DOL        Department of Labor

DOT        Department of Transportation

EEAC       Equal Employment Advisory Council

EEOC       Equal Employment Opportunity Commission

EPA        Environmental Protection Agency

EPF        Employment Policy Foundation

FAA        Federal Aviation Administration

FDA        Food and Drug Administration

FMCSA      Federal Motor Carriers Safety Administration

FTE        full-time equivalent

HHS        Department of Health and Human Services

ICR        information collection request

MACT       maximum achievable control technology

MGD        million gallons per day

MOU        memorandum of understanding

NCP        nonconformance penalty

NHTSA      National Highway Traffic Safety Administration

NMMA       National Marine Manufacturers Association

OFCCP      Office of Federal Contract Compliance Programs

OIRA       Office of Information and Regulatory Affairs

OMB        Office of Management and Budget

OSHA       Occupational Safety and Health Administration

PRA        Paperwork Reduction Act

RCRA       Resource Conservation and Recovery Act

RFG        reformulated gasoline

RIN        regulation information number

SBA        Small Business Administration

SDWA       Safe Drinking Water Act

TPMS       tire pressure monitoring system

TSS        total suspended solids




Page iv                                                      GAO-03-929
USDA        Department of Agriculture

VSL         value of a statistical life

VSLY        value of a statistical life year

WRAP        Western Regional Air Partnership





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Page v                                                                        GAO-03-929
Page vi   GAO-03-929
A

United States General Accounting Office
Washington, D.C. 20548



                                    September 22, 2003

                                    The Honorable Richard J. Durbin
                                    Ranking Minority Member
                                    Subcommittee on Oversight of Government Management,
                                     Restructuring, and the District of Columbia
                                    Committee on Governmental Affairs
                                    United States Senate

                                    The Honorable Joseph I. Lieberman
                                    Ranking Minority Member
                                    Committee on Governmental Affairs
                                    United States Senate

                                    In response to your request, this report on the regulatory review process of
                                    the Office of Management and Budget’s (OMB) Office of Information and
                                    Regulatory Affairs (OIRA) (1) describes OIRA’s review process and any
                                    changes in its policies or processes in recent years, (2) provides detailed
                                    information about rules submitted by nine health, safety, or environmental
                                    agencies that were returned, withdrawn, or changed at OIRA’s suggestion,
                                    and (3) describes how OIRA decided that certain rules merited “high
                                    priority” review. We include recommendations to the Director of OMB to
                                    improve the transparency of the OIRA review process.

                                    As we agreed with your office, unless you publicly announce the contents
                                    of this report earlier, we will not distribute it until 30 days from the date of
                                    this letter. We will then send copies to the Director of OMB and will
                                    provide copies to others on request. It will also be available at no charge
                                    on GAO’s Web site at http://www.gao.gov.




                                    Page 1                                                                GAO-03-929
If you have any questions concerning this report, please call me or Curtis 

Copeland at (202) 512-6806. Key contributors to this report were Ben 

Atwater, Tim Bober, and Joseph Santiago. 





Victor S. Rezendes

Managing Director, Strategic Issues





Page 2                                                             GAO-03-929
Executive Summary




Purpose	      The Office of Information and Regulatory Affairs (OIRA) within the Office
              of Management and Budget (OMB) is a relatively small office (currently, 55
              full-time equivalents), but it can have a significant—if not determinative—
              effect on a broad array of federal regulations that agencies issue to enact
              statutes and establish specific requirements. Under Executive Order
              12866, OIRA reviews hundreds of significant proposed and final rules from
              all federal agencies (other than independent regulatory agencies) before
              they are published in the Federal Register. As a result of OIRA’s review,
              many draft rules are changed before publication, withdrawn before a
              review is completed, or returned to the agencies because, in OIRA’s
              opinion, certain aspects of the rule need to be reconsidered.

              Despite its importance, OIRA’s regulatory review function generally is not
              well documented or well understood. Therefore, the Ranking Minority
              Members of the Senate Committee on Governmental Affairs and its
              Subcommittee on Oversight of Government Management, the Federal
              Workforce, and the District of Columbia requested that we examine and
              report on certain aspects of OIRA’s operations. Specifically, we were asked
              to (1) describe OIRA’s current regulatory review policies and processes and
              determine whether, and if so how, those policies have changed in recent
              years, (2) provide detailed information about the effects of OIRA’s reviews
              of rules submitted by nine health, safety, and environmental agencies that
              were returned to the agencies for reconsideration, withdrawn at OIRA’s
              request, or significantly changed in response to OIRA’s reviews during a 1-
              year period, and (3) describe how OIRA determined that certain existing
              rules listed in its reports to Congress on the costs and benefits of federal
              regulations merited high priority review for potential modification or
              rescission. We also examined the transparency of the OIRA’s review
              process. To address these objectives, we interviewed OIRA representatives,
              former OIRA officials, agency officials, and others knowledgeable about
              the OIRA review process. We also examined documentation at both OIRA
              and regulatory agencies to determine the effect of OIRA’s reviews. Specific
              elements of our methodology are discussed in the sections below.



Background	   The Paperwork Reduction Act of 1980 established OIRA to provide central
              agency leadership and oversight of governmentwide efforts to reduce
              unnecessary paperwork burden and manage information resources. In
              1981, OIRA’s responsibilities expanded when Executive Order 12291
              authorized it to review all proposed and final regulations from
              nonindependent regulatory agencies—between 2,000 and 3,000 rules each



              Page 3                                                            GAO-03-929
Executive Summary




year. OIRA’s regulatory review function under this executive order was
highly controversial, with concerns raised about its effects on separation of
powers, public participation, transparency, and the timeliness of agencies’
rulemaking efforts. In September 1993, Executive Order 12866 replaced
Executive Order 12291 and made several changes to OIRA’s regulatory
review function. For example, Executive Order 12866 limits OIRA’s
regulatory reviews to nonindependent agencies’ “significant regulatory
actions” (e.g., rules expected to have an annual effect of $100 million or
more on the economy or raising other coordination, budgetary, or policy
issues). As a result, the number of OIRA reviews declined to about 500 to
700 each year. The executive order also generally requires OIRA to
complete its review within 90 days after an agency formally submits a draft
regulation, and contains several “transparency” provisions that require
both OIRA and the agencies to disclose certain information about the
review process. For example, section 6 of the order requires agencies to
publicly identify the substantive changes made to rules during OIRA’s
review and at OIRA’s suggestion or recommendation. It also requires OIRA
to disclose all of the documents exchanged between the agencies and OIRA
during the review process. The executive order and related OIRA guidance
also identify some regulatory principles and analytical practices (e.g.,
considering the costs and benefits of a proposed regulation and assessing
alternative approaches) that help to guide OIRA’s reviews of agencies’ draft
regulatory actions.

In January 1998, we reported on the implementation of the transparency
requirements in Executive Order 12866 that are applicable to rulemaking
agencies.1 We concluded that complete documentation of all substantive
changes made in the rules, and of all the changes that OIRA had suggested,
was available to the public for only about one-quarter of the 122 rules that
we reviewed. The agencies’ rulemaking dockets had only some or no
documentation for the remaining rules, and we could not always determine
whether OIRA had made available all relevant documents exchanged
between the agencies and OIRA. We recommended that the Director of
OMB provide the agencies with guidance on how to implement these
transparency requirements. OMB disagreed with our recommendations in
this area and did not implement them.




1
U.S. General Accounting Office, Regulatory Reform: Changes Made to Agencies’ Rules Are
Not Always Clearly Documented, GAO/GGD-98-31 (Washington, D.C.: Jan. 8, 1998).




Page 4                                                                     GAO-03-929
                    Executive Summary




Results in Brief	   OIRA’s formal review process is essentially unchanged since Executive
                    Order 12866 was issued in 1993. However, there have been several changes
                    in OIRA policies and practices in recent years, particularly since the
                    current OIRA Administrator took office in July 2001. Those changes, some
                    of which the Administrator said would “have a long-lasting impact on the
                    regulatory state,” include increased use of public letters explaining why
                    OIRA returned rules to the agencies for their reconsideration (return
                    letters) and suggesting regulatory action (prompt letters), increased
                    emphasis on benefit-cost analysis and peer review, stricter adherence to
                    the 90-day time limit for OIRA review, improvements in the transparency of
                    the OIRA review process, and an increase in the size and skills of OIRA’s
                    staff. However, some of these changes are not as significant a departure
                    from previous practice as they initially appear. Underlying many of the
                    changes in OIRA’s policies is a shift in how the Administrator (and,
                    ultimately, the President) views OIRA’s role in the regulatory process—less
                    of a “counselor” to the agencies and more of a “gatekeeper.” Prior to the
                    formal executive order review process, OIRA sometimes informally
                    reviews agencies’ draft rules, and OIRA has said it can have a significant
                    influence on the rules during this informal review period.

                    OIRA’s database indicated that about 400 draft rules were changed,
                    returned, or withdrawn from OIRA during the 1-year period from July 2001
                    through June 2002. Therefore, we focused our examination of the effects
                    of OIRA’s review on 85 changed, returned, or withdrawn rules that had been
                    submitted by the nine health, safety, or environmental agencies with 5 or
                    more such rules.2 We concluded that OIRA had significantly affected 25 of
                    the 85 rules by suggesting changes that revised the scope, impact, or costs
                    and benefits of the rules, returning the rules for reconsideration by the
                    agency, or, in one case, requesting that the agency withdraw the rule from
                    review. The Environmental Protection Agency’s (EPA) rules were most
                    often significantly changed, and almost all of the returned rules were from
                    the Department of Transportation (DOT), as was the rule withdrawn at
                    OIRA’s request. Many of OIRA’s actions in these cases appeared to have
                    been prompted by concerns about the cost and cost effectiveness of the
                    regulatory options that agencies selected, in keeping with general


                    2
                     Our unit of analysis was technically the submission of a rule to OIRA for Executive Order
                    12866 review, rather than the rule itself, because some of the rules were reviewed by OIRA
                    more than once (e.g., submitted, reviewed, and withdrawn, then resubmitted, reviewed
                    again, and published). However, for simplicity we refer to these executive order
                    submissions as rules in this report.




                    Page 5                                                                         GAO-03-929
Executive Summary




principles established by Executive Order 12866 and related OIRA
guidance. In almost all of the 25 rules that were significantly affected,
OIRA’s actions appeared to have at least some effect on the potential costs
and benefits associated with the rule or prompted revisions to the agency’s
estimates of those costs and benefits. As permitted by the executive order,
outside parties contacted OIRA before or during the formal review period
regarding 11 of these 25 rules.3 Although OIRA’s positions regarding 7 of
the 11 rules were similar in some respects to those expressed by the
outside parties, it is impossible to determine the extent to which those
contacts might have influenced OIRA’s actions, if at all. OIRA might have
reached the same conclusions in the absence of those contacts. The
transparency of the agencies’ and OIRA’s actions during these 85 reviews
varied, with the docket files for between 45 percent and 62 percent of the
rules providing clear and complete documentation of all elements expected
under the two relevant portions of the executive order. However, a few
agencies exhibited exemplary transparency practices.

In May 2001, OIRA asked the public to nominate rules that it believed
should be modified or rescinded. OIRA decided that 23 of the 71
nominations that it received merited high priority review, but did not
publicly disclose how those determinations were made. Representatives of
OIRA told us that the agency’s desk officers initially determined which
nominations should be placed in the high priority category, subject to the
approval by OIRA management, with the final decisions made by the
Administrator. Forty-four of the 71 nominations were from the Mercatus
Center at George Mason University, as were 14 of the 23 high priority
nominations.4 As of May 2003, regulatory agencies or OIRA had addressed
or begun to address the issues raised in many of these 23 suggestions. In
March 2002 OIRA again solicited public comments on regulations in need
of reform. However, this effort was different from the 2001 process in
several respects (e.g., broader request for reforms, more responses from
more commentors, no ranking of the suggestions being made by the
agencies, nominations to strengthen rules, and clearer discussion of
process and criteria).


3
 OIRA defines outside parties as “persons not employed by the executive branch.”
4
  The Mercatus Center is an education, research, and outreach organization affiliated with
George Mason University. The Center’s Regulatory Studies Program includes a public
interest comment project, which analyzes agencies’ regulatory proposals during the public
comment process, before the rules become final. The Regulatory Studies Program is headed
by Dr. Wendy Lee Gramm, Administrator of OIRA from 1985 to 1988.




Page 6                                                                        GAO-03-929
                           Executive Summary




                           Although both OIRA and some of the rulemaking agencies have improved
                           the transparency of the regulatory review process, our review indicated
                           that some elements of the process remain unclear. For example, neither
                           OIRA nor the agencies are required to disclose why rules are withdrawn
                           from review, and the descriptions that OIRA discloses about its contacts
                           with outside parties is often not very helpful. In particular, OIRA
                           representatives said neither they nor the rulemaking agencies are required
                           to disclose the changes made to rules while they are under informal
                           review—the period in which OIRA said it can have its greatest effect. This
                           interpretation of this aspect of the executive order’s transparency
                           requirements restricts those requirements to the formal review period,
                           which can be as short as 1 day.



Principal Findings


OIRA’s Regulatory Review   OIRA’s formal regulatory review process begins when the rulemaking
Process and Changes in     agency sends a draft proposed or final rule and other parts of the review
                           package to OIRA. OIRA desk officers do not use a standard “checklist” in
Policies/Practices
                           their reviews, but most OIRA regulatory reviews are similar in that all rules
                           must be consistent with applicable law, the President’s priorities, and the
                           principles in Executive Order 12866, and must not conflict with the policies
                           or practices of other agencies. OIRA regulatory reviews differ somewhat
                           depending on the content of the draft rules. For example, if the rule
                           contains a collection of information under the Paperwork Reduction Act,
                           the desk officer would also review the rule for compliance with that act. If
                           the draft rule is “economically significant,” the desk officer would review
                           the agency’s economic analysis. There is usually some form of
                           communication between OIRA and the agency during the review, most
                           commonly by e-mail or telephone. OIRA desk officers always consult with
                           and obtain the consent of the appropriate resource management officer on
                           the budget side of OMB before approving a rule. OIRA may also consult
                           with others within the Executive Office of the President or other agencies,
                           managing an interagency review process.

                           In some cases, OIRA also reviews drafts of agencies’ rules before formal
                           submission (e.g., large rules with statutory or judicial deadlines and/or that
                           require discussions with other agencies). OIRA indicated that these
                           informal reviews are increasing, and that reviews before formal submission
                           can have a substantial effect on the agencies’ regulatory analysis and the



                           Page 7                                                              GAO-03-929
                            Executive Summary




                            substance of the rules—before the agencies’ positions become too
                            entrenched. OIRA also informally consulted with agencies and reviewed
                            agencies’ draft rules before formal submission during previous
                            administrations.

                            OIRA representatives told us that the formal process the office uses to
                            review draft rules has been essentially the same since Executive Order
                            12866 was established in 1993. However, several notable changes in OIRA’s
                            policies and practices have occurred since the current Administrator took
                            office in July 2001, including (1) an overall resurgence in the “gatekeeper”
                            role that OIRA played shortly after it was established, (2) increased use of
                            return letters, (3) greater emphasis on economic analysis and the issuance
                            of new draft guidelines on economic analysis, (4), fewer reviews extending
                            beyond the 90-day limit, (5) the use of “prompt” letters that suggest
                            regulatory priorities to the agencies, (6) improvements in the transparency
                            of OIRA’s regulatory review process (e.g., electronic access to information
                            about rules under review and fuller disclosure of OIRA’s contacts with
                            outside parties), and (7) expansion of the size and expertise of OIRA staff.
                            In some cases, though, the changes are less different from previous
                            practices than they initially appear. For example, in the first 8 months after
                            the Administrator took office, OIRA returned 21 of the nearly 400 rules it
                            reviewed to the agencies—more returns than in the previous 7 years
                            combined. However, in the subsequent 15 months OIRA returned only 2 of
                            the more than 850 rules that it reviewed. Also, OIRA prompted agencies to
                            initiate rulemaking in particular areas during previous administrations—
                            albeit not through public letters.



OIRA’s Effect on Changed,   Because of the large number of draft rules that had been changed,
Withdrawn, and Returned     withdrawn, or returned to the agencies from July 1, 2001, through June 30,
                            2002, we focused our analysis on the rules that were submitted by health,
Rules
                            safety, or environmental agencies or offices with five or more rules that
                            were changed, withdrawn, or returned during this 1-year period.5 This
                            resulted in the selection of 85 rules from 9 agencies: the Animal and Plant
                            Health Inspection Service (APHIS) within the Department of Agriculture;



                            5
                             Most of other agencies that submitted five or more such rules submitted rules that involved
                            transfer payments (e.g., reimbursement rates to doctors’ medical services in rules submitted
                            by the Centers for Medicare and Medicaid Services within the Department of Health and
                            Human Services).




                            Page 8                                                                          GAO-03-929
Executive Summary




the Food and Drug Administration (FDA) within the Department of Health
and Human Services; the Occupational Safety and Health Administration
(OSHA) within the Department of Labor; the Federal Aviation
Administration (FAA), Federal Motor Carrier Safety Administration
(FMCSA), and National Highway Traffic Safety Administration (NHTSA)
within DOT; and the Offices of Air and Radiation, Solid Waste and
Emergency Response, and Water within EPA.

We concluded that OIRA’s review had a significant effect on 25 of the 85
draft rules. In 17 of the 25 rules, OIRA recommended the revision,
elimination, or delay of certain provisions in the draft regulatory text, the
addition or revision of regulatory alternatives that provided more flexible
and/or less costly compliance options, or the revision of agencies’ cost
and/or benefit estimates for the rules. EPA submitted 14 of the 17 rules that
were significantly changed at OIRA’s suggestion. For example, at OIRA’s
suggestion, EPA took the following actions:

•	 Eliminated manganese from a list of hazardous constituents in a final
   rule on the identification and listing of hazardous wastes (see app. II, ID
   56).

•	 Delayed the compliance date for states to report two types of emissions
   in a final rule on consolidated emissions reporting (ID 50).

•	 Made compliance requirements more flexible in a proposed rule on
   pollutant discharge elimination systems for large cooling water intake
   structures at existing power generating facilities by allowing options for
   a site-specific approach to minimizing environmental harm (ID 68).

•	 Revised the benefit-cost and cost-effectiveness estimates in a proposed
   rule on emissions from spark ignition marine vessels and highway
   motorcycles (ID 54).

OIRA returned 7 of the 25 rules to the agencies for reconsideration (6 of
which had been submitted by DOT). For example, OIRA returned a NHTSA
final rule on tire pressure monitoring systems because, in the office’s
opinion, the agency’s analysis did not adequately demonstrate that NHTSA




Page 9                                                              GAO-03-929
Executive Summary




had selected the best available regulatory alternative (ID 78).6 OIRA
returned a proposed FAA rule on certification of pilots, aircraft, and
repairmen for the operation of light sport aircraft because it believed that
the agency’s regulatory analysis did not sufficiently justify the rule (ID 73).
OIRA also requested that an FAA rule be withdrawn by the agency. Overall,
we determined that rules submitted by three of the agencies (FAA, EPA’s
Office of Air and Radiation, and EPA’s Office of Water) were much more
often significantly affected by OIRA’s review than rules submitted by the
other six agencies in our study.

In 22 of the 25 rules that OIRA significantly affected, the changes appeared
to have an effect on either the costs and/or benefits of the rules or the
agencies’ estimates of those costs and/or benefits. For example, in the
above-mentioned EPA rule on cooling water intake structures, the
approach that OIRA recommended was expected to have somewhat lower
benefits than the approach EPA proposed but was estimated to cost
significantly less, thereby yielding much larger net benefits. In the tire
pressure monitoring system rule, NHTSA inserted (at OIRA’s suggestion)
additional estimates of some costs and benefits of regulatory alternatives
and added information about benefits that might be realized with different
regulatory alternatives.

In 34 of the 60 rules that OIRA did not significantly affect, the changes that
OIRA suggested primarily involved revisions to the language in the
preambles of the draft rules (e.g., expanding or clarifying agencies
explanations of certain issues) or suggestions that the agencies request
public comments on particular issues. Although we did not consider these
types of changes to be “significant,” they were substantive in that they
made the rules easier to understand and/or could affect the final versions of
the rules. OIRA suggested only minor editorial changes or no changes to 20
rules and returned 2 others for procedural rather than substantive reasons.
Four rules were withdrawn from OIRA’s review solely at the agencies’
initiative or because of a “mutual decision” made by the agencies and
OIRA.




6
 NHTSA revised the final rule to address OIRA’s concerns. However, the U.S. Court of
Appeals recently held that the rule was contrary to the intent of the tire safety legislation
and arbitrary and capricious under the Administrative Procedure Act. Public Citizen, Inc.
v. Mineta, No. 02-4237 (2d Cir. Aug. 6, 2003).




Page 10                                                                           GAO-03-929
                             Executive Summary




                             Materials in the OIRA docket or the rulemaking agencies’ dockets indicated
                             that outside parties (most commonly representatives of regulated entities)
                             had contacted OIRA regarding 11 of the 25 rules that OIRA significantly
                             affected (including 8 of the 15 rules submitted by EPA that were
                             significantly affected). In 7 of the 11 rules, at least some of the actions that
                             OIRA recommended were similar to those suggested to OIRA by outside
                             parties. For example:

                             •	 In the above-mentioned rule on cooling water intake structures, OIRA’s
                                suggested revisions of the regulatory language regarding the use of a
                                site-specific approach to minimizing environmental harm were similar
                                to those previously recommended by representatives of the electric
                                industry during their contacts with OIRA (ID 68).

                             •	 In letters and meetings with OIRA, representatives from steel
                                manufacturers and a chemical company opposed the listing of
                                manganese as a hazardous waste constituent in an EPA final rule (ID
                                56). Subsequently, the main focus of OIRA’s suggested changes to this
                                rule was the deferral of final action on all parts of the rule identifying
                                manganese as a hazardous constituent.

                             However, it is impossible to determine whether OIRA’s contacts with those
                             outside parties affected its conclusions; OIRA may have reached the same
                             conclusions without those contacts. In the four other cases, OIRA’s
                             recommended actions did not appear to be similar to those suggested by
                             outside parties. OIRA generally disclosed its contacts with outside parties;
                             we identified only four such contacts regarding the rules in our review that
                             OIRA had not disclosed. However, because our knowledge of such
                             contacts is generally limited to what OIRA or the agencies disclose, we
                             cannot be sure that there were not other contacts that did not come to our
                             attention.



Rules and Regulatory         Congress has required OMB to submit “recommendations for reform” with
Programs Selected for High   its recent reports on the costs and benefits of federal regulations. In May
                             2001, OIRA asked the public to suggest “specific regulations that could be
Priority Review
                             rescinded or changed that would increase net benefits to the public.” Of
                             the 71 nominations that OIRA received, 44 were from the Mercatus Center
                             at George Mason University. OIRA reviewed the suggestions and selected
                             23 of them for high priority review—including 14 of the 44 Mercatus
                             nominations. In its December 2001 final report, OIRA said the high priority
                             designation indicated that it was inclined to agree with the



                             Page 11                                                               GAO-03-929
Executive Summary




recommendation. However, OIRA did not indicate in the report how it
made that determination. OIRA representatives described the process to
us as a “bottom up” exercise, with desk officers making the initial
determinations and the final decisions being made by the OIRA
Administrator. Five of the 23 rules designated for high priority review had
been issued at the end of the Clinton Administration, and 13 had been
issued by EPA or were environmental in nature.

As of May 2003, most of these 23 high-priority review items were at least in
the process of being addressed by either the rulemaking agencies or OIRA.
For example:

•	 One of the nominations focused on a Department of Energy (DOE) rule
   issued in January 2001 that would have raised the energy efficiency of
   new central air conditioners by 30 percent. In May 2002, DOE withdrew
   the rule and issued a new rule raising the efficiency level by 20 percent.

•	 An EPA July 2000 final rule regarding allowable amounts of pollution in
   water (“total maximum daily load”) was also the subject of a suggested
   change. In March 2003, EPA published a final rule withdrawing the July
   2000 rule. By May 2003, a draft of a new proposed rule was undergoing
   informal interagency review.

However, in a few cases the agencies and/or OIRA decided not to take any
action or had not made a decision regarding the rules in question.

In March 2002, OIRA again asked the public to nominate rules for reform,
and received suggestions involving 267 regulations and 49 guidance
documents from approximately 1,700 individuals, trade associations,
nonprofit organizations, and others. In contrast to the first round, OIRA
asked the public to nominate not only regulations that could be rescinded
or changed, but also rules that could be expanded. Also, OIRA did not
designate certain nominated rules for high priority review. Instead, OIRA
forwarded the nominations to the appropriate agencies for their review and
prioritization, and suggested that the agencies rely on three criteria:
efficiency, fairness, and practicality. Although most of the nominations
sought modifications that would increase regulatory flexibility or rescind
rules, more than a quarter of them suggested making rules more stringent
or developing new rules.




Page 12                                                            GAO-03-929
                              Executive Summary




Improvements                  OIRA and some of the agencies whose rules we examined have taken
Notwithstanding, OIRA’s       several steps to improve the transparency of the regulatory review process
                              and its outcomes since our last review. For example, OIRA’s disclosure of
Review Process Is Still Not   its contacts with outside parties is now triggered by the start of informal
Well Documented or Clear      review, not just formal reviews, and OIRA is now providing electronic
                              access to review information. Also, some agencies’ dockets now more
                              clearly indicated the changes made to their rules than was the case during
                              our previous review 5 years ago, and some agencies’ practices in this area
                              were exemplary (FDA, FMCSA, and EPA’s Office of Water).

                              However, the agencies still varied in the extent to which the transparency
                              requirements in Executive Order 12866 were satisfied. Where the
                              requirements were applicable, the agencies clearly identified the
                              substantive changes made between the draft submitted for review and the
                              action subsequently announced in only about 45 percent of the rules. The
                              agencies clearly identified the changes made at OIRA’s suggestion or
                              recommendation in about 62 percent of these rules. FAA had no such
                              documentation available, and OSHA said it did not keep the information in
                              its docket to ensure that it is not part of the official rulemaking record if a
                              lawsuit is filed. Other agencies had copies of e-mails between them and
                              OIRA discussing changes that had been made to the rules, but we could not
                              tell whether these e-mails represented all or just some of the changes that
                              had been made.

                              Also, several aspects of the OIRA review process remain unclear, and could
                              be improved to better allow the public to understand the effects of OIRA’s
                              reviews. For example:

                              •	 There is no requirement that either OIRA or the agencies explain why
                                 rules are withdrawn before OIRA completes its review.

                              •	 Although the executive order requires OIRA to disclose its contacts with
                                 outside parties regarding rules under review, the information that OIRA
                                 provides in its publicly available meeting log often does not allow the
                                 public to know what rule is being discussed or what parties were
                                 represented.

                              •	 The executive order requires OIRA to disclose “all documents
                                 exchanged” between the office and the rulemaking agency during the
                                 review, but OIRA said it would not do so regarding exchanges between
                                 the agencies and OIRA staff at the level where most such exchanges
                                 occur.


                              Page 13                                                              GAO-03-929
                      Executive Summary




                      •	 The “consistent with change” category in OIRA’s public database does
                         not indicate whether the changes made to agencies’ rules during the
                         formal review process had been suggested by OIRA or the agencies, or
                         whether the changes were substantive or editorial in nature.

                      •	 The agencies differed considerably regarding what types of changes
                         made to their rules were “substantive” and therefore needed to be
                         documented. For example, documentation for some rules included
                         changes made to both the regulatory text and the agencies’ explanations
                         of their rules, while other documentation only included changes to the
                         regulatory text.

                      •	 OIRA said informal submission of a draft rule for review triggers the
                         office’s disclosure requirements regarding its contacts with outside
                         parties, but OIRA representatives said it does not trigger the
                         requirements that the office and the rulemaking agency disclose the
                         changes made during the review—even though OIRA has said it can
                         have a significant influence on agencies’ draft rules during this informal
                         review period. OIRA indicated that the transparency requirements only
                         apply to the formal review period—which can be as short as 1 day—
                         even though OIRA may have been reviewing substantive drafts of
                         agencies’ rule weeks or even months in advance of the formal review
                         period.

                      In some cases, the agencies or OIRA included materials in their files (e.g.,
                      substantive changes made during OIRA’s informal review) that, while not
                      required by the executive order as interpreted by OIRA, provided valuable
                      insights regarding OIRA’s effect on the development of those rules.
                      Although OIRA indicated that disclosure of substantive changes made to
                      agencies rules during informal review could have a “chilling effect” on
                      OIRA-agency interactions, we saw no evidence of that effect in those
                      instances where the substantive changes were already being disclosed.
                      However, we recognize that OIRA and the agencies should be able to
                      discuss regulatory matters in general without having to document and
                      disclose those communications.



Recommendations for   We recommend that the Director of the Office of Management and Budget:

Executive Action      •	 Define the transparency requirements applicable to the agencies and
                         OIRA in section 6 of Executive Order 12866 in such a way that they
                         include not only the formal review period, but also the informal review



                      Page 14                                                            GAO-03-929
Executive Summary




   period when OIRA says it can have its most important impact on
   agencies’ rules. Doing so would make the trigger for the transparency
   requirements applicable to OIRA’s and the agencies’ interaction
   consistent with the trigger for the transparency requirements applicable
   to OIRA regarding its communications with outside parties.

•	 Change OIRA’s database to clearly differentiate within the “consistent
   with change” outcome category which rules were substantively changed
   at OIRA’s suggestion or recommendation and which were changed in
   other ways and for other reasons.

•	 Improve the implementation of the transparency requirements in the
   executive order that are applicable to OIRA. Specifically, the
   Administrator should take the following actions:

   •	 More clearly indicate in the meeting log which regulatory action was
      being discussed and the affiliations of the participants in those
      meetings.

   •	 Because most of the documents that are exchanged while rules are
      under review at OIRA are exchanged between agency staff and OIRA
      desk officers, OIRA should reexamine its current policy that only
      documents exchanged by OIRA branch chiefs and above need to be
      disclosed.

   •	 Establish procedures whereby either OIRA or the agencies disclose
      the reasons why rules are withdrawn from OIRA review.

•	 Improve the implementation of the transparency requirements in the
   executive order that are applicable to rulemaking agencies. Specifically,
   the Administrator should take the following actions:

   •	 Define the types of “substantive” changes during the OIRA review
      process that agencies should disclose as including not only changes
      made to the regulatory text but also other, noneditorial changes that
      could ultimately affect the rules’ application (e.g., explanations
      supporting the choice of one alternative over another and
      solicitations of comments on the estimated benefits and costs of
      regulatory options).

   •	 Instruct agencies to put information about changes made in a rule
      after submission for OIRA’s review and those made at OIRA’s



Page 15                                                           GAO-03-929
                      Executive Summary




                            suggestion or recommendation in the agencies’ public rulemaking
                            dockets, and to do so within a reasonable period after the rules have
                            been published.

                         •	 Encourage agencies to use “best practice” methods of documentation
                            that clearly describe those changes (e.g., like those used by FDA,
                            EPA’s Office of Water, or FMCSA).



Agency Comments and   On August 8, 2003, we provided a draft of this report to the Director of the
                      Office of Management and Budget for his review and comment. On
Our Evaluation        September 2, 2003, the Administrator of OIRA provided written comments
                      on the draft report. (See app. V for a copy of these comments.) The
                      Administrator said OIRA believed the “factual foundations of the report are
                      well grounded,” and was pleased that the report noted improvements in the
                      timeliness of OIRA’s reviews and the transparency of the review process.
                      He indicated that OIRA agreed with our recommendation to improve the
                      clarity of the office’s meeting log, but said OIRA did not agree with all of the
                      recommendations in the draft report. He said the report had not
                      demonstrated the need or desirability of changing the agency’s existing
                      “unprecedented” level of transparency, and cited several specific examples.
                      However, we continue to believe that improvements can and should be
                      made to improve the transparency of the OIRA review process. The
                      difficulties that we experienced during this review clearly demonstrated
                      that OIRA’s reviews are not always transparent to the public. (See chapter 5
                      for a fuller description of OMB’s comments and our evaluation.)




                      Page 16                                                               GAO-03-929
Chapter 1

Introduction



                Federal regulation, like taxing and spending, is one of the basic tools of
                government used to implement public policy. Regulations generally start
                with an act of Congress and are the means by which statutes are enacted in
                specific requirements are established. Federal agencies issue more than
                4,000 regulatory actions each year on topics ranging from the timing of
                bridge openings to the permissible levels of contaminants in drinking
                water. The costs and benefits associated with all federal regulations has
                been a subject of great controversy, with the costs estimated in the
                hundreds of billions of dollars and the benefits estimates even higher.
                During the past 50 to 60 years, Congress and various presidents have
                developed an elaborate set of procedures and requirements to guide the
                federal rulemaking process. One of the most important yet least
                understood of these requirements is the provision that federal agencies
                (other than independent regulatory agencies) submit their draft rules to the
                Office of Information and Regulatory Affairs (OIRA) within the Office of
                Management and Budget (OMB) for review before being published in the
                Federal Register. Although a relatively small office (about 55 full-time
                equivalent or “FTE” positions), OIRA reviews can have a significant—if not
                determinative—effect on federal rulemaking and, therefore, public policy.

                Because OIRA’s regulatory review function is not well understood, the
                Ranking Minority Members of the Senate Committee on Governmental
                Affairs and its Subcommittee on Oversight of Government Management,
                the Federal Workforce, and the District of Columbia requested that we
                examine and report on certain aspects of its operation. Specifically, they
                requested that we (1) describe OIRA’s current regulatory review policies
                and processes and determine whether, and if so how, those policies have
                changed in recent years, (2) provide information about health, safety, and
                environmental rules from nine selected agencies that were returned to the
                agencies for reconsideration, withdrawn at OIRA’s request, or significantly
                changed in response to OIRA’s reviews during a 1-year period, and (3)
                describe how OIRA determined that certain existing rules listed in its
                reports to Congress on the costs and benefits of federal regulations merited
                high priority review for potential modification or rescission.



Background	     OMB is part of the Executive Office of the President, along with such
                agencies as the Council of Economic Advisors (CEA), the Council on
                Environmental Quality, and the Office of Science and Technology Policy.
                These agencies help develop and implement the policies and programs of
                the President. As figure 1 shows, OIRA is one of the statutory offices
                within OMB—which are sometimes collectively referred to as the



                Page 17                                                           GAO-03-929
                                                  Chapter 1




                                                  “management” side of OMB. Other OMB offices include the resource
                                                  management offices, which review agencies’ budget submissions and are
                                                  sometimes collectively referred to as OMB’s “budget” side.1



Figure 1: OIRA Is One of the Statutory Offices within OMB


                                                      OMB-wide support offices                         Statutory offices

                                                   General Counsel                                      Office of Federal Financial Management
                                                   Legislative Affairs
                                                   Communications                                       Office of Information & Regulatory Affairs
                                                   Administration
     Executive Office of the President
     _____________________________                 Economic Policy
     Office of Management and Budget               Legislative Reference
                                                   Budget Review


                                                             Resource Management Offices


       Natural Resource Programs           Human Resource Programs               General Government Programs               National Security Programs

        Energy, Science & Water Division   Health Divison                         Transportation, Homeland, Justice         International Affairs Division
        Natural Resources Division         Education & Human Resources            & Services Division                       National Security Division
                                           Division                               Housing,Treasury & Commerce
                                                                                  Division

Source: GAO.



                                                  The Administrator of OIRA is appointed by the President, subject to the
                                                  advice and consent of the Senate. As figure 2 illustrates, OIRA currently
                                                  has four branches: (1) Information Policy and Technology, (2) Statistical
                                                  and Science Policy, (3) Health, Transportation, and General Government,
                                                  and (4) Natural Resources, Energy, and Agriculture. Of these, the last two
                                                  branches are primarily responsible for reviewing agencies’ draft proposed
                                                  and final regulations under Executive Order 12866. However, as discussed
                                                  later in this report, the other branches as well as other parts of OMB and
                                                  the Executive Office of the President may be consulted during their
                                                  reviews.



                                                  1
                                                  For a discussion of these offices, see U.S. General Accounting Office, Office of
                                                  Management and Budget: Changes Resulting From the OMB 2000 Reorganization,
                                                  GAO/GGD/AIMD-96-50 (Washington, D.C.: Dec. 29, 1995).




                                                  Page 18                                                                                            GAO-03-929
                                                     Chapter 1




Figure 2: Organization of OIRA


                                                                                              Administrator

                             Office of Management and Budget
                                                                                              Deputy Administrator
                             Office of Information and
                             Regulatory Affairs                                               Counselor              Confidential assistant
                                                                                              Special assistant      Administrative assistants (2)
                                                                                              Senior advisor         Records management assistant



       Information Policy and                  Statistical and Science         Health, Transportation, and            Natural Resources, Energy
       Technology Branch                       Policy Branch                   General Government Branch              and Agriculture Branch

        Branch chief                            Branch chief                   Branch chief                            Branch chief

        Desk officers (11)                     Desk officers (6)               Desk officers (12)                      Desk officers (10)
        Administrative assistant               Administrative assistant        Administrative assistant                Administrative assistant


Source: GAO.




The Rulemaking Process                               The basic process by which federal agencies develop and issue regulations
and Presidential Review                              is spelled out in the Administrative Procedure Act of 1946, as amended
                                                     (APA), codified at 5 U.S.C. section 553. Among other things, the APA
                                                     generally requires agencies to (1) publish a notice of proposed rulemaking
                                                     in the Federal Register, (2) allow interested persons an opportunity to
                                                     participate in the rulemaking process by providing “written data, views, or
                                                     arguments,” and (3) publish the final rule 30 days before it becomes
                                                     effective. However, the APA allows agencies to issue final rules without a
                                                     previous notice of proposed rulemaking in certain cases.2

                                                     The Paperwork Reduction Act (PRA) of 1980 established OIRA to provide
                                                     central agency leadership and oversight of governmentwide efforts to
                                                     reduce unnecessary paperwork burden and improve the management of
                                                     information resources. Specifically, the act required OIRA to review and
                                                     approve agencies’ proposed collections of information before the agencies
                                                     could collect information from the public. In recent years, OIRA has

                                                     2
                                                      We previously reported that about half of all final rules published during 1997 were
                                                     published without a notice of proposed rulemaking. See U.S. General Accounting Office,
                                                     Federal Rulemaking: Agencies Often Published Final Actions Without Proposed Rules,
                                                     GAO/GGD-98-126 (Washington, D.C.: Aug. 31, 1998).




                                                     Page 19                                                                                  GAO-03-929
Chapter 1




reviewed between 3,000 and 5,000 proposed collections of information
each year under the PRA. Although many federal regulations have an
information collection component, the PRA did not specifically authorize
OIRA to review or comment on the substance of those regulations.

Nevertheless, centralized review of agencies’ regulations within the
Executive Office of the President has been part of the rulemaking process
for more than 30 years. For example:

•	 In 1971, President Nixon established a “Quality of Life Review” program
   in which agencies submitted all significant draft proposed and final
   rules to OMB, which then circulated them to other agencies for
   comment. In their submissions, agencies provided a summary of their
   proposals, a description of the alternatives that they considered, and the
   cost of those alternatives.

•	 In 1974, President Ford issued Executive Order 11821, which required
   agencies to prepare an “inflation impact statement” for each “major”
   proposed rule before publication in the Federal Register, and to send a
   summary of those statements to the Council on Wage and Price Stability
   when the rule was published. The council would then review the
   statement and either provide comments to the agency or participate in
   the comment process.

•	 In 1978, President Carter issued Executive Order 12044, which (among
   other things) required agencies to publish semiannual agendas of any
   significant rules under development and to prepare a regulatory analysis
   that examined the cost-effectiveness (i.e., the least cost of achieving the
   objective) of alternative regulatory approaches for major rules.
   President Carter also established (1) a “regulatory analysis review
   group” to review the analyses prepared for certain major rules and to
   submit comments during the comment period, and (2) a “regulatory
   council” to coordinate agencies’ actions to avoid conflicting
   requirements and duplication of effort.

Perhaps the most significant development in this evolution of presidential
review of rulemaking occurred in 1981 when President Reagan issued




Page 20                                                             GAO-03-929
Chapter 1




Executive Order 12291.3 The executive order replaced Executive Order
12044 and established a set of general requirements for rulemaking—e.g.,
that (to the extent permitted by law) (1) the potential benefits of a
regulatory action must outweigh the potential costs to society, (2)
regulatory objectives should maximize net benefits to society, and (3)
agencies should select the regulatory alternative involving the least net cost
to society. The order also required federal agencies (other than
independent regulatory agencies) to send a copy of each draft proposed
and final rule to OMB before publication in the Federal Register. In
addition, it required covered agencies to prepare a regulatory impact
analysis for each “major” rule, and authorized OMB to review “any
preliminary or final Regulatory Impact Analysis, notice of proposed
rulemaking, or final rule based on the requirements of this Order.”4 As a
result of this order, OIRA’s responsibilities were greatly expanded from
paperwork reviews to examinations of the substance of covered agencies’
proposed and final rules—between 2,000 and 3,000 reviews per year.5 In
1985, President Reagan extended OIRA’s influence even further by issuing
Executive Order 12498, which required nonindependent agencies to submit
a regulatory plan to OMB for review each year that covered all of their
significant regulatory actions underway or planned.

The expansion of OIRA’s role in the rulemaking process as a result of these
executive orders was not without controversy. Concerns were raised by
members of Congress, public interest groups, and others regarding a
variety of issues, including whether OIRA’s role violated constitutional
separation of powers, and the effect that OIRA’s review had on public
participation under the APA and the timeliness of agencies’ rulemaking.
(Neither the order nor OIRA guidance placed any time limits on OIRA’s
reviews.) Concerns were also raised regarding the transparency of OIRA’s
reviews, specifically whether OIRA had become a clandestine conduit for


3
  See, for example, Erik D. Olson, “The Quiet Shift of Power: Office of Management & Budget
Supervision of Environmental Protection Agency Rulemaking Under Executive Order
12291,” Virginia Journal of Natural Resources Law, 4 (Fall 1984), 1-80.
4
 The order defined a “major rule” as any regulation likely to result in (1) an annual effect on
the economy of $100 million or more, (2) a major increase in costs or prices for consumers
or others, or (3) significant adverse effects on competition, employment, investment,
productivity, innovation, or international competitiveness.
5
 For a discussion of OIRA’s review process under this order, see U.S. General Accounting
Office, Regulatory Review: Information on OMB’s Review Process, GAO/GGD-89-101FS
(Washington, D.C.: July 14, 1989).




Page 21                                                                            GAO-03-929
Chapter 1




outside influence in the rulemaking process. In response to those
criticisms, in June 1986, the OIRA Administrator issued a memorandum for
the heads of departments and agencies subject to the executive orders
describing OIRA procedures to improve the transparency of the process.
For example, the memorandum said that only the Administrator or the
Deputy Administrator could communicate with outside parties regarding
rules submitted for review, and that OIRA would make available to the
public all written materials received from outside parties. OIRA also said
that it would, upon written request, make available all written
correspondence between OIRA and the agency head regarding a draft
submitted for review.

In 1987 the National Academy of Public Administration published a report
on presidential management of agency rulemaking that summarized the
criticisms of the OIRA regulatory review effort as well as the positions of
its proponents.6 The report also described a number of issues in regulatory
review and offered recommendations for improvement. For example, the
report recommended that “regulatory management be accepted as an
essential element of presidential management.” It also recommended that
regulatory agencies “log, summarize, and include in the rulemaking record
all communications from outside parties, OMB, or other executive or
legislative branch officials concerning the merits of proposed regulations.”

In 1988 the Administrative Conference of the United States also examined
the issue of presidential review of agency rulemaking and concluded that
the reviews could improve coordination and resolve conflicts among
agencies. However, the conference also said presidential review “does not
displace responsibilities placed in the agency by law nor authorize the use
of factors not otherwise permitted by law.” The Conference recommended
public disclosure of proposed and final agency rules submitted to OIRA
under the executive order, communications from OMB relating to the
substance of rules, and communications with outside parties, and also
recommended that the reviews be completed in a “timely fashion.”7



6
National Academy of Public Administration, Presidential Management of Rulemaking in
Regulatory Agencies (January 1987).
7
 The National Academy of Public Administration and the American Bar Association have
also recognized the potential value of presidential regulatory review. However, they too
recommended reforms such as improved transparency and better communication between
OIRA and agency staff.




Page 22                                                                      GAO-03-929
                         Chapter 1




Executive Order 12866	   On September 30, 1993, President Clinton issued Executive Order 12866 on
                         “Regulatory Planning and Review,” which revoked Executive Orders 12291
                         and 12498 and established a new regulatory philosophy and set of
                         principles, as well as a new process for OIRA review. In its statement of
                         regulatory philosophy, the executive order states, among other things, that
                         agencies should assess all costs and benefits of available regulatory
                         alternatives, including both quantitative and qualitative measures. It also
                         provides that agencies should select regulatory approaches that maximize
                         net benefits (unless a statute requires another approach). Where
                         permissible and applicable, the order states agencies should adhere to a set
                         of principles, including (1) consideration of the degree and nature of risk
                         posed when setting regulatory priorities, (2) adoption of regulations only
                         upon a “reasoned determination that the benefits of the intended regulation
                         justify its costs,” and (3) tailoring regulations to impose the least burden on
                         society needed to achieve the regulatory objectives. Some of the stated
                         objectives of the order are “to reaffirm the primacy of Federal agencies in
                         the regulatory decision-making process; to restore the integrity and
                         legitimacy of regulatory review and oversight; and to make the process
                         more accessible and open to the public.” Section 2(b) of the order assigns
                         responsibility for review of agency rulemaking to OMB, and specifically
                         names OIRA as “the repository of expertise concerning regulatory issues.”
                         The order also named the Vice President as principle advisor to the
                         President on regulatory policy, planning, and review.

                         Section 6 of Executive Order 12866 established agency and OIRA
                         responsibilities in the centralized review of regulations. Like its
                         predecessor, the new executive order limits OIRA reviews to rules
                         published by agencies other than independent regulatory agencies.
                         However, in contrast to the broad scope of review under Executive Order
                         11291, the new order limits OIRA reviews to actions identified by the
                         rulemaking agency or OIRA as “significant” regulatory actions, which are
                         defined in section 3(f) of the order as the following:

                         “Any regulatory action that is likely to result in a rule that may (1) have an annual effect on
                         the economy of $100 million or more or adversely affect in a material way the 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 the
                         Executive order.”




                         Page 23                                                                            GAO-03-929
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                                                             As figure 3 shows, by focusing OIRA’s reviews on significant rules, the
                                                             number of draft proposed and final rules that OIRA examined fell from
                                                             between 2,000 and 3,000 per year under the Executive Order 12291 to
                                                             between 500 and 700 rules per year under Executive Order 12866.



Figure 3: Number of Rules That OIRA Reviewed Dropped Under Executive Order 12866
 Number of rules reviewed
3,000                                        Executive Order 12291                                                                    Executive Order 12866
                 2,640
         2,790                                                                           2,524
                         2,483
                                                         2,315   2,362
2,500                                                                                             2,286
                                         2,213                           2,220
                                                                                                             2,167
                          2,113
                                                                                 2,138
2,000                                            2,011


1,500



1,000
                                                                                                             831

                                                                                                                                                                     700   669
  500                                                                                                                   620                         587       583
                                                                                                                               507    505    487


     0
         1981    1982    1983     1984   1985    1986    1987    1988    1989    1990    1991    1992     1993   1994   1995   1996   1997   1998   1999   2000     2001   2002
         Year
 Source: OIRA.



                                                             Executive Order 12866 also differs from its predecessor in other respects.
                                                             For example, the order required that OIRA generally complete its review of
                                                             proposed and final rules within 90 calendar days. It also requires both the
                                                             agencies and OIRA to disclose certain information about how the
                                                             regulatory reviews were conducted. For example, agencies are required to
                                                             identify for the public (1) the substantive changes made to rules between
                                                             the draft submitted to OIRA for review and the action subsequently
                                                             announced and (2) changes made at the suggestion or recommendation of
                                                             OIRA. OIRA is required to provide agencies with a copy of all written
                                                             communications between OIRA personnel and parties outside of the
                                                             executive branch, and a list of the dates and names of individuals involved
                                                             in substantive oral communications. OIRA is also instructed to maintain a




                                                             Page 24                                                                                                GAO-03-929
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                            public log of all regulatory actions under review and of all of the above-
                            mentioned documents provided to the agencies.8

                            In October 1993, the OIRA Administrator issued guidance to the heads of
                            executive department and agencies regarding the implementation of
                            Executive Order 12866. The section of that guidance on “Openness and
                            Public Accountability” that discussed the order’s transparency
                            requirements indicated that the requirement that agencies identify for the
                            public the changes made at the suggestion or recommendation of OIRA
                            only applies to changes made after draft rules are formally submitted to
                            OIRA for review. In January 1996, OIRA published a document that
                            described “best practices” for preparing the economic analysis of
                            significant regulatory actions called for by the executive order. This
                            document was revised and issued as guidance in 2000, and is described in
                            greater detail in chapter 2 of this report.



Prior Report on             In January 1998, we reported on the implementation of some of the
Transparency Requirements   transparency requirements in Executive Order 12866 within selected
                            agencies.9 We concluded that the agencies had complete documentation of
                            changes made during OIRA’s review for only about 26 percent of the 122
                            regulatory actions that we reviewed. The agencies had complete
                            documentation of the changes that OIRA suggested or recommended for
                            only about 24 percent of the rules. In other cases the agencies had some
                            documentation that changes had been made, but it was not clear whether
                            all such changes had been documented. In addition, the documentation
                            that we were able to locate was sometimes not available to the public or
                            hard to find. In our report, we recommended that OIRA provide agencies
                            with guidance on how to implement the transparency requirements in the
                            executive order. Specifically, we said the guidance should require the
                            agencies to include a single document in the public rulemaking docket for
                            each regulatory action that (1) identified all substantive changes made
                            during OIRA’s review and at the suggestion or recommendation of OIRA or


                            8
                             For a discussion of the differences between the transparency requirements under
                            Executive Order 12291 and Executive Order 12866, see William D. Araiza, “Judicial and
                            Legislative Checks on Ex Parte OMB Influence Over Rulemaking,” Administrative Law
                            Review, 54 (Spring 2002), 611-630, and Peter M. Shane, “Political Accountability in a System
                            of Checks and Balances: The Case of Presidential Review of Rulemaking,” Arkansas Law
                            Review, 48 (1995), 161-214.
                            9
                             GAO/GGD-98-31.




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                         (2) states that no changes were made.10 We also said that the guidance
                         should point to best practices in some agencies to suggest how other
                         agencies could organize their dockets to best facilitate public access and
                         disclosure. OIRA disagreed with our recommendations and did not
                         implement them.



Objectives, Scope, and   The overall objective of this assignment was to determine how OIRA
                         conducts its regulatory reviews. The requesters indicated that little was
Methodology              known about those reviews, the effects that outside parties have on OIRA
                         decision making, or the impact of OIRA decisions on the American public.
                         Our specific objectives were the following:

                         •	 Describe OIRA’s current regulatory review policies and processes and
                            determine whether, and if so how, those policies and processes have
                            changed in recent years.

                         •	 Identify the rules issued by selected agencies that were reviewed by
                            OIRA between July 1, 2001, through June 30, 2002, and that were either
                            significantly changed at OIRA’s direction, returned by OIRA for further
                            consideration by the agencies, or withdrawn by the agencies at OIRA’s
                            suggestion. For each such rule, (a) describe the changes made by OIRA,
                            the reasons why the rule was returned or withdrawn, and any
                            subsequent activity regarding the rule, (b) describe, to the extent
                            possible, the effects of the changes, returns, and withdrawals on the
                            rule’s original benefits and costs, and (c) determine whether there are
                            any indications that the actions OIRA took were traceable to
                            suggestions offered by regulated entities or outside parties and, if so,
                            whether OIRA publicly disclosed their involvement. We also examined
                            OIRA’s and the agencies’ application of the transparency requirements in
                            the executive order and related guidance.

                         •	 Describe how OIRA determined that certain existing rules listed in its
                            reports to Congress on the costs and benefits of federal regulations
                            merited high priority review. Specifically, determine (a) which
                            organizations or persons suggested that these rules be reviewed, (b)
                            what process OIRA used to select and prioritize the rules, (c) the extent


                         10
                           As used in this report, a rulemaking “docket” is the official repository for documents or
                         information related to an agency’s rulemaking activities and may include any public
                         comments received and other information used by agency decisionmakers.




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     to which OIRA publicly disclosed its selection and priority-setting
     process, and (d) the current status of those rules.

A detailed discussion of our methodology and scope limitations is provided
in appendix I. In brief, we defined OIRA’s “current” regulatory review
policies and processes as those in place as of June 2002 or later. To
describe those policies and processes and any changes in recent years, we
reviewed relevant documents (e.g., executive orders, legislation, and OMB
guidance) and interviewed current OIRA and agency staff, two former
OIRA Administrators, and knowledgeable officials and staff from external
groups that are actively involved in observing and commenting on the
federal regulatory process.

We focused our efforts in the second objective on those rules submitted for
OIRA review that met the following criteria: (a) the rule was submitted to
OIRA as a proposed, interim final, or final rule, (b) OMB completed its
review of the rule between July 1, 2001, and June 30, 2002, (c) the rule was
returned to the rulemaking agency by OIRA, withdrawn from OIRA’s review
by the agency, or changed after submission for OIRA’s review, and (d) it
was included among the set of health, safety, or environmental rules from
those agencies or subagencies that OIRA’s Executive Order Review
database indicated had five or more rules returned, withdrawn, or changed
during the period in scope for this objective. A total of 85 rules from nine
agencies—the Animal Plant and Health Inspection Service (APHIS); Food
and Drug Administration (FDA); Occupational Safety and Health
Administration (OSHA); Department of Transportation’s (DOT) Federal
Aviation Administration (FAA); Federal Motor Carrier Safety
Administration (FMCSA); and National Highway Traffic Safety
Administration (NHTSA); and the Environmental Protection Agency’s
(EPA) Office of Air and Radiation, Office of Solid Waste and Emergency
Response, and Office of Water—met these criteria.11 We also reviewed
documents in both agencies’ and OIRA’s rulemaking dockets, and
interviewed OIRA and agency officials to obtain information about the
regulatory review process for the individual rules included in our scope.




11
 These nine agencies submitted a total of 102 proposed, final, or interim final rules to OIRA
during this 1-year period. Another EPA rule that met these criteria was dropped from our
review because, although OIRA had cleared the submitted rule with changes, it has not yet
been publicly announced due to homeland security issues.




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Our work to address the third objective focused on the particular rules
identified for high priority review in the 2001 and 2002 versions of OMB’s
annual report to Congress on the costs and benefits of federal regulations.
We reviewed any available documentation describing the process that
OIRA used to select certain rules for high priority review. We also
interviewed OIRA representatives and representatives of other relevant
agencies and organizations to determine how the classifications were made
and why the particular selected rules were designated as high priority.

The specific limitations to our engagement are identified with each of our
findings. In general, our findings were sometimes limited to the
documentation that was available. Some types of OIRA’s influence on rules
may not be reflected in the documentation we relied on in this review. For
example, in a previous review DOT officials told us that they will not even
propose certain regulatory provisions because they know that OIRA will
not find them acceptable.12 Also, we cannot be sure that we have identified
all changes to the selected rules that were made at the direction or
suggestion of OIRA (e.g., changes made during informal OIRA reviews that
were not documented), nor can we be sure that we identified all the effects
of such changes on the rules or all instances in which an outside party may
have influenced OIRA’s actions. We conducted our review from July 2002
through May 2003 at the headquarters offices of the above-mentioned
agencies in accordance with generally accepted government auditing
standards. We verified data elements that we used from OIRA’s database
and found only minor differences between that database and information in
OIRA’s and agencies’ files. Therefore, we concluded that the data were
sufficiently reliable for purposes of our report. We provided a draft of this
report to OMB for comment. The comments that we received, and our
evaluation of those comments, are reflected in the “Agency Comments and
Our Evaluation” section of chapter 5 of this report.




12
 U.S. General Accounting Office, Regulatory Reform: Implementation of the Regulatory
Review Executive Order, GAO/T-GGD-96-185 (Washington, D.C.: Sept. 25, 1996).




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                    Our first objective was to describe OIRA’s current regulatory review
                    policies and processes and determine whether, and if so how, those policies
                    and processes have changed in recent years. We determined that OIRA’s
                    formal regulatory review process under Executive Order 12866 sometimes
                    also includes informal reviews before the official submission of draft rules
                    by the agencies. Both types of reviews focus on the draft rules’ adherence
                    to applicable laws, executive orders, guidance documents, and the
                    President’s policies. The OIRA review process is essentially unchanged
                    since the office began reviewing rules in 1981. The most significant
                    changes occurred in 1993 with the issuance of Executive Order 12866.
                    However, there have been several other changes in policies and emphasis
                    in recent years, particularly since the current OIRA Administrator took
                    office in July 2001. Those changes include increased use of return letters
                    and the advent of “prompt” letters, increased emphasis on benefit-cost
                    analysis and peer review, stricter adherence to the 90-day period for OIRA
                    review, improvements in the transparency of the OIRA review process, and
                    an increase in the size and skills of OIRA staff. However, some of these
                    changes are not as significant a departure from previous practice as they
                    initially appear. Underlying many of these changes is a shift in how the
                    Administrator views OIRA’s role in the regulatory process.



OIRA Regulatory 
   As noted in chapter 1 of this report, Executive Order 12866 limits OIRA’s
                    regulatory reviews to significant rules that are initiated by agencies other
Review Process
     than independent regulatory agencies.1 The executive order also
                    establishes certain requirements regarding how those reviews are
                    conducted (e.g., generally requiring the reviews to be completed within 90
                    calendar days after the rule is submitted to OIRA). Although the overall
                    process that OIRA uses to review covered agencies’ draft rules is described
                    in the executive order or other OIRA publications, the specific details
                    about how the office conducts its reviews are not well understood. One
                    rulemaking agency official described the review process to us as a “black
                    box” into which agencies submit rules that later come out intact, changed,
                    withdrawn, or returned.




                    1
                     Representatives of OIRA told us that the agency occasionally reviews other material, such
                    as agencies’ guidance documents or notices, reports and budget information shared with
                    OIRA by resource management officers on the budget side of OMB, and draft legislation.
                    However, these materials are not covered by the executive order’s review requirements.




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                                                           As figure 4 shows, OIRA reviews agencies’ draft rules at both the proposed
                                                           and final stages of rulemaking.2 In each phase, the rulemaking agency
                                                           formally submits a regulatory review package to OIRA (consisting of the
                                                           rule, any supporting materials, and a transmittal form) and OIRA initiates a
                                                           review. During the review process, OIRA analyzes the draft rule in light of
                                                           the principles of Executive Order 12866, and discusses the package with
                                                           staff and officials at the rulemaking agency, and, if the occasion warrants,
                                                           with other agencies with whom interagency coordination will be necessary.
                                                           In the course of that process, the draft rule that is submitted by the agency
                                                           often changes. In some cases, agencies withdraw the draft rule from OIRA
                                                           during the review period and the rule may or may not be subsequently
                                                           resubmitted to OIRA.



Figure 4: The OIRA Regulatory Review Process

           Proposed rulemaking                                                          Final rulemaking

                      Agency                                                                    Agency
                     develops                                                                   develops
                   proposed rule                                                                final rule



      Informal                                                                   Informal
     OIRA review                                                                OIRA review




                                          Withdrawn by                                                                Withdrawn by
                                             agency                                                                      agency
                     Formal                                           Comment                Formal
                   OIRA review                                         period              OIRA review
                                            Returned                                                                    Returned
                                            to agency                                                                   to agency



        Consistent           Consistent                                            Consistent            Consistent
         without               with                                                 without                with
         change               change                                                change                change


                                                  Publication of                                                              Publication of   Rule takes
                                                  proposed rule                                                                 final rule       effect



Source: GAO.




                                                           2
                                                            OIRA also reviews some rules at the Advance Notice of Proposed Rulemaking stage.




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                 At the end of the review period, OIRA either concludes that the draft rule is
                 consistent with the principles of the executive order (which occurs in the
                 vast majority of cases) or returns the rule to the agency “for further
                 consideration.”3 If a draft rule that was determined to be consistent with
                 the executive order had been modified in the course of the review, the rule
                 is coded in the OIRA database as “consistent with change” (regardless of
                 the source or extent of the change). If no changes have been made to the
                 draft rule during the review, the rule is coded as “consistent without
                 change.” OIRA only codes rules as “consistent with no change” if they are
                 exactly the same at the end of the review period as the original submission.
                 Even editorial changes made at the rulemaking agency’s initiative can
                 cause a rule to be coded “consistent with change.”

                 If the draft is a proposed rule, upon completion of OIRA’s review the agency
                 may then publish a notice of proposed rulemaking and, in accordance with
                 the APA, obtain comments during the specified period (usually at least 30
                 days), review the comments received, and make any changes to the rule
                 that it believes are necessary to respond to those comments. If the draft is
                 a final rule, the agency may publish the final rule after OIRA concludes its
                 review and the rule will take effect either at that point or at some later date
                 specified by the agency. OIRA representatives emphasized that the office
                 does not “approve” or “disapprove” draft rules. They noted that the
                 rulemaking agency has been vested with authority by Congress to issue
                 regulations, and said OIRA’s review of draft rules under Executive Order
                 12866 does not displace that authority. They said any changes that are
                 made to draft rules as a result of that review are made by the rulemaking
                 agency, not OIRA.

                 Figure 4 also illustrates that for some rules there are two distinct phases of
                 OIRA’s review: (1) a formal review period after the rule is officially
                 submitted to OIRA and (2) an informal review period before submission of
                 the rule.



Formal Review	   According to OIRA representatives, the formal regulatory review process
                 begins when the rulemaking agency sends the draft rule to the OIRA docket
                 librarian (either electronically or hand carried), who logs the receipt of the


                 3
                  As discussed in detail later in this report, more than 70 percent of draft rules submitted to
                 OIRA in recent years have been coded as either “consistent with change” or “consistent with
                 no change.” At most, only about 3 percent of the rules were coded as “returned.”




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rule and forwards it to the appropriate desk officer. The representatives
said that OIRA desk officers do not use a standard “checklist” to review
agencies’ rules, but indicated that most reviews are similar in certain
respects. Section 6 of Executive Order 12866 states that the OIRA
Administrator is to provide meaningful guidance and oversight “so that
each agency’s regulatory actions are consistent with applicable law, the
President’s priorities, and the principles set forth in this Executive order,
and do not conflict with the policies or actions of another agency.” The
laws applicable to specific regulations vary, but always include the specific
statutory authority under which each regulation is being developed (e.g.,
the Clean Air Act or the Occupational Safety and Health Act) as well as a
variety of crosscutting regulatory statutes (e.g., the APA and the Regulatory
Flexibility Act).

The principles in Executive Order 12866 that are intended to guide covered
agencies’ rulemaking practices (and therefore guide OIRA’s review
practices as well) include the following:

• Identify and assess available alternatives to direct regulation;

•	 design regulations in the most cost-effective manner to achieve the
   regulatory objective;

•	 assess both the costs and benefits of the intended regulation, and
   propose or adopt a regulation only upon a reasoned determination that
   the benefits of the intended regulation justify its costs;

•	 base decisions on the best reasonably obtainable scientific, technical,
   economic, and other information;

• identify and assess alternative forms of regulation; and

• tailor regulations to impose the least burden on society.

In addition, the executive order’s “regulatory philosophy” provides that “in
deciding whether and how to regulate, agencies should assess all costs and
benefits of available regulatory alternatives, including the alternative of not
regulating.” It goes on to state that, unless a statute requires another
regulatory approach, “in choosing among alternative regulatory
approaches, agencies should select those approaches that maximize net
benefits.”




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The type of review that OIRA conducts sometimes depends on the type of
draft rule submitted. For example, if the draft rule contains a collection of
information covered by the Paperwork Reduction Act, OIRA
representatives said that the desk officer would also review it for
compliance with the act. (They indicated that conducting both reviews
simultaneously can be more difficult if different offices within the
rulemaking agencies are responsible for the rule and the information
collection.) If the draft rule is “economically significant” (e.g., has an
annual impact on the economy of at least $100 million), the executive order
requires agencies to prepare an economic analysis describing, among other
things, the alternatives that the agency considered and the costs and
benefits of those alternatives. For those economically significant rules, the
desk officers review the economic analyses using the “best practices”
document developed in January 1996 and the related guidance document
issued in 2000. (These documents are described in more detail later in this
report.)

In addition to Executive Order 12866, there are several memoranda and
guidance documents from OMB and/or the OIRA Administrator that
provide additional details regarding the content of OIRA’s regulatory
reviews. For example, on September 20, 2001, the OIRA Administrator sent
a memorandum to the President’s Management Council on “Presidential
Review of Agency Rulemaking by OIRA.” An attachment to the
memorandum described “the general principles and procedures that will be
applied by OMB in the implementation of E.O. 12866 and related statutory
and executive authority.” For example, the attachment indicated that the
office would, where appropriate, (1) include an evaluation of whether the
agency has, in assessing exposure to a risk or environmental hazard,
conducted an adequate risk assessment, (2) give “a measure of deference”
to regulatory impact analyses and other supporting technical documents
that have been peer reviewed in accordance with specified procedures,4 (3)
ensure that regulatory clearance packages satisfy the requirements in other
executive orders (e.g., include the certifications required by Executive
Order 13132 on “Federalism” and Executive Order 13175 on “Consultation
and Coordination with Indian Tribal Governments”), (4) consult with the
Small Business Administration (SBA) and the SBA Chief Counsel for


4
 For example, the memorandum indicated that peer reviewers should (1) be selected
primarily on the basis of necessary technical expertise, (2) disclose to agencies any prior
positions on the issues at hand, and (3) disclose to agencies their sources of personal and
institutional funding.




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Advocacy, and (5) evaluate the possible impact of the draft rule on the
programs of other federal agencies. (Several of these elements are
discussed more fully later in this chapter, including OMB’s guidance on
economic analysis.)

OIRA representatives said that there is usually some type of
communication (often via e-mail or telephone) between the desk officer
and the rulemaking agency regarding specific issues in the draft rule. The
representatives said briefings and meetings are sometimes held between
OIRA and the agency during the review process, with branch chiefs, the
Deputy Administrator, and/or the Administrator involved in some of these
meetings.5 They also said that the desk officers always consult with the
resource management officers on the budget side of OMB as part of their
reviews, and reviews of draft rules are not completed until those resource
management officers sign off. (In fact, they said that the resource
management offices might take the lead in the review for rules involving
the “transfer” of federal funds within society.) If the draft rule is
economically significant, they said the desk officer would also consult with
an economist to help review the required economic analysis. For other
rules the OIRA representatives said the desk officer might consult with
other OIRA staff on issues involving statistics and surveys, information
technology and systems, or privacy issues. In certain cases, OIRA may
circulate a draft rule to other parts of the Executive Office of the President
(e.g., the Office of Science and Technology Policy or the Council on
Environmental Quality) or other agencies (e.g. SBA for rules having an
impact on small businesses, or DOE, DOT, the Department of Agriculture,
and the Department of the Interior for certain EPA rules). In those cases,
OIRA may not only review the rule itself, but also manage an interagency
review process.

Executive Order 12866 generally requires OIRA to complete its regulatory
reviews within certain time frames—(1) within 10 working days of
submission for any preliminary actions prior to a notice of proposed
rulemaking (e.g., a notice of inquiry or an advance notice of proposed
rulemaking) or (2) within 90 calendar days of submission for all other
regulatory actions (or 45 days if OIRA had previously reviewed the material
and there had been no material changes in the facts or circumstances upon


5
 OIRA representatives said the Administrator’s personal involvement in a review depends on
a variety of factors, such as whether the rule involves an issue of interest to him or whether
it is likely to be controversial.




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which the regulatory action was based). At the conclusion of its review,
they said OIRA notifies the issuing agency by telephone. At that point, the
agency may publish the rule in the Federal Register.

As noted previously, a draft rule that has been reviewed and judged
consistent with the executive order may be coded in the office’s database
as “consistent with no change” (meaning that OIRA considered the draft
rule as submitted to be consistent with all applicable requirements) or
“consistent with change” (which means that the draft rule was changed at
either the issuing agency’s initiation or at the suggestion of OIRA, and that
OIRA then considered the changed rule to be consistent with all applicable
requirements). If the rule is returned to the issuing agency for
reconsideration, the executive order requires OIRA to provide a written
explanation for the return. Section 7 of Executive Order 12866 originally
required the President or the Vice President to resolve any disagreements
or conflicts between or among agency heads or between OMB and any
agency that cannot be resolved by the OIRA Administrator. However, in
February 2002, Executive Order 13258 reassigned the Vice President’s
responsibilities in this area to the President’s chief of staff.

Executive Order 12866 also requires OIRA to take certain actions to ensure
greater openness, accessibility, and accountability in the regulatory review
process. For example, the order says that a representative from the agency
issuing the regulation must be invited to any meeting between OIRA
personnel and persons not employed by the executive branch of the federal
government regarding a rule under executive order review.6 It also requires
OIRA to forward to the issuing agency within 10 working days any written
communications between such outside contacts and OIRA personnel, as
well as the dates and names of such outside contacts involved in
substantive oral communications with OIRA staff. Other requirements
include public disclosure of such written and oral communications, and the
maintenance of a publicly available log containing, among other things, the
status of all regulatory actions. After the regulatory action has been
published in the Federal Register or otherwise issued (or after the agency
announces it will not publish or issue the action), the executive order
requires OIRA to make available to the public “all documents exchanged


6
 The agency officials that we talked with during our review generally indicated that they
attended these meetings but sometimes did not participate. However, DOT considers these
meetings “ex parte communications,” and generally does not attend. (In fact, DOT has a
written policy of not attending these meetings.)




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                   between OIRA and the agency during the review.” The executive order
                   established other transparency requirements for rulemaking agencies (e.g.,
                   requiring them to identify substantive changes made to draft rules during
                   OIRA’s review and at the suggestion or recommendation of OIRA).



Informal Review	   In its December 2001 report on the costs and benefits of federal
                   regulations, OIRA stated that the office’s original review process “was
                   designed as an end-of-the-pipeline check against poorly conceived
                   regulations.”7 However, OIRA also stated that by the time an agency
                   formally submits a rule to OIRA for review there may be “strong
                   institutional momentum” behind the proposal and, as a result, the agency
                   may be reluctant to address certain issues that OIRA analysts might raise.
                   Therefore, OIRA indicated “there is value in promoting a role for OIRA’s
                   analytic perspective earlier in the process, before the agency becomes too
                   entrenched.” OIRA went on to state the following:

                   “A common yet informal practice is for agencies to share preliminary drafts of rules and/or
                   analyses with OIRA desk officers prior to final decision making at the agency. This practice
                   is useful for agencies since they have the opportunity to educate OIRA desk officers in a
                   more patient way, before the formal 90-day review clock at OMB begins to tick. The
                   practice is also useful for OIRA analysts because they have the opportunity to flag serious
                   problems early enough to facilitate correction before the agency’s position is irreversible.”

                   However, because of its size, OIRA cannot informally review each of the
                   hundreds of significant proposed and final rules that are submitted to the
                   office each year. OIRA representatives told us that a variety of factors
                   could trigger informal discussions about a forthcoming rule. For example,
                   they said informal reviews are sometimes used when there is a statutory or
                   legal deadline for a rule or when the rule has a large impact on society and
                   requires discussion with not only OMB but also other federal agencies.
                   Therefore, they said informal review is more likely regarding rules issued
                   by certain agencies (e.g., EPA, DOT, the Department of Agriculture, and the
                   Department of Health and Human Services) that issue those types of rules.
                   OIRA representatives also said there is an important distinction between
                   informal consultations between OIRA and agency staff that may occur at
                   any time and informal reviews that occur when OIRA is provided a
                   substantive draft of a rule.


                   7
                    Office of Management and Budget, “Making Sense of Regulation: 2001 Report to Congress
                   on the Cost and Benefits of Regulations and Unfunded Mandates on State, Local and Tribal
                   Entities,” (December 2001).




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There have been some indications that OIRA has increased its use of
informal reviews in recent years. For example, in its March 2002 draft
report to Congress on the costs and benefits of federal regulation, OIRA
said “agencies are beginning to invite OIRA staff into earlier phases of
regulatory development in order to prevent returns late in the rulemaking
process. It is at these early stages where OIRA’s analytic approach can
most improve on the quality of regulatory analyses and the substance of
rules.” Similarly, the Administrator said “we are trying to transform OIRA
from an end-of-the-pipeline organization to one that also engages in early
promotion of good policies and prevention of bad ones.” He also said “an
increasing number of agencies are becoming more receptive to early
discussions with OMB, at least on highly significant rulemakings.” As OIRA
noted, that receptivity may be enhanced by the threat of a returned rule. In
early 2002, the Administrator said OIRA was trying “to create an incentive
for agencies to come to us when they know they have something that in the
final analysis is going to be something we’re going to be looking at
carefully. And I think that agencies that wait until the last minute and then
come to us—well, in a sense, they’re rolling the dice.”8 Perhaps the clearest
manifestation of OIRA’s early involvement in rulemaking occurred in 2002,
when OIRA and EPA began what EPA described as an “unusual
collaboration,” working closely together to develop a rule curbing pollution
from diesel-powered nonroad vehicles. EPA also indicated that it would
collaborate with OIRA on the design of an “innovative regulatory analysis”
for the rule.

However, OIRA informally consulted with agencies and reviewed agencies’
draft rules before formal submission during previous administrations as
well. For example, in September 1996, the then-OIRA Administrator
testified that her office is sometimes “involved earlier and more deeply in
an agency rulemaking—before the agency has completed all of its own
evaluation and its internal and/or interagency coordination, and has
become invested in its decision.” An OIRA representative told us that
informal reviews probably had been conducted since OIRA began
reviewing rules, but became more common when Executive Order 12866
was adopted in 1993 and OIRA’s reviews were focused on “significant”
rules. He said because these more complex rules can take years to
develop, it makes sense for agencies to involve OMB earlier in the process



8
 Rebecca Adams, “Regulating the Rule-Makers: John Graham at OIRA,” CQ Weekly, 60 (Feb.
23, 2002), 520-526.




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                        so that policy disagreements can be discussed before substantial amounts
                        of staff work is conducted.



Changes in Regulatory   According to OIRA representatives, the process that OIRA uses to review
                        draft rules has been essentially the same since that process was established
Review Policies         in 1981. OIRA representatives indicated that the review process had
                        changed less in recent years than the changes that occurred with the
                        advent of Executive Order 12866 in 1993 (e.g., the focus on “significant”
                        rules, the 90-day clock, and the transparency requirements). In
                        presentations before various groups, the OIRA Administrator has said that
                        the office is “pursuing the agenda of quality regulation under the terms of
                        the Clinton-Gore executive order, which we believe…is based on sound
                        principles and procedures.”

                        However, there have been several subtle yet notable changes in OIRA
                        policies and practices in recent years—particularly since the current OIRA
                        Administrator took office in July 2001. In October 2002, the Administrator
                        said “the changes we are making at OMB in pursuit of smarter regulation
                        are not headline grabbers: No far-reaching legislative initiatives, no
                        rhetoric-laden executive orders, and no campaigns of regulatory relief. Yet
                        we are making some changes that we believe will have a long-lasting
                        impact on the regulatory state.”

                        Some of OIRA’s review policies and practices that the Administrator and
                        others have identified as significant changes are clear departures from the
                        policies evident in previous administrations. However, other recent OIRA
                        policies and practices are only incrementally different from those evident
                        in previous administrations or have caveats that must be recognized in
                        their implementation.



OIRA as Regulatory      Overall, there has been a notable change in how recent Administrators (and
“Gatekeeper”            perhaps more generally, how recent administrations) have viewed OIRA’s
                        role in the rulemaking process and its relationships with rulemaking
                        agencies—in essence, whether OIRA should play a more collaborative,
                        consultative role in relation to the agencies, or whether OIRA should take
                        on more of a “gatekeeper” role. This change in philosophy has
                        implications for virtually all of OIRA’s responsibilities, and may be a
                        precipitating factor for many of the other changes identified in this section
                        of our report.



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Perhaps the clearest indications of this change in philosophy are in the
public statements of recent Administrators. For example, in a May 1994
report to the President on the first 6 months of Executive Order 12866, the
Administrator of OIRA at the time said the relationship between OIRA and
the agencies had “vastly improved” and that “rule writers and rule
reviewers were learning to work together as partners rather than as
adversaries.” Officials we spoke with in 1996 at both EPA and DOT
confirmed this perception. In testimony before the Senate Committee on
Governmental Affairs in September 1996, the Administrator said, “we have
consciously changed the way we relate to the agencies” and described that
change as a “paradigm shift” from the relationship during previous
administrations. She described OIRA’s relationship with rulemaking
agencies as “collegial” and “constructive,” and said OIRA was “not in the
business of playing ‘gotcha’ with them.”9 She cited an article that she said
accurately described OIRA’s approach as a “consensual process,” and that
said OIRA functioned “more as a counselor during the review process than
as an enforcer of the executive order.”10 She also emphasized that this
collaborative approach yielded better results than a more confrontational
OIRA-agency relationship.

Another former OIRA Administrator voiced similar sentiments during our
review. He said that during his and his predecessor’s tenure in the mid-to-
late 1990s OIRA acted in a spirit of partnership with agencies submitting
regulations for review. He also said that although agencies were not
allowed to do whatever they wanted, OIRA did not dictate how regulations
should be written and worked with the agencies to ensure transparency
and fairness in the rulemaking process.

The current Administrator has characterized OIRA’s role and relationship
with the agencies in quite different terms. For example, in its December
2002 report on the costs and benefits of federal regulations, OIRA
described itself as the “gatekeeper for new rulemakings.”11 In a speech, the
current Administrator described OIRA’s regulatory review process as “a


9
 Testimony before the Senate Committee on Governmental Affairs, September 25, 1996.
10
 William Niskanen, “Clinton’s Regulatory Record: Policies, Process, and Outcomes,”
Regulation (1996), 27-28.
11
 Office of Management and Budget, “Stimulating Smarter Regulation: 2002 Report to
Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on
State, Local, and Tribal Entities,” (December 2002).




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form of consumer protection to protect people from poorly designed
rules.” He went on to say that OMB’s process of centralized oversight “is a
device to strengthen the hands of scientists, engineers and economists
within the agencies—they now know that regulatory proposals cannot
survive OMB review without careful supporting analysis.” He also said
OMB review is a device “to combat the tunnel vision that plagues the
thinking of single-mission regulators.” The Administrator has also
compared OIRA’s role in reviewing agencies’ proposed regulations to
OMB’s role in reviewing agencies’ budget requests:

“Now, no one would suggest that agencies should be permitted to negotiate their ‘on-budget’
resources from Congress, without any OMB review. Likewise, Presidents realize that
regulatory expenditures, while off budget, require fiscal restraint for the same reasons that
the size of public budgets need to be restrained. If the President restrains the federal budget
without restraining regulation, regulatory advocates may simply respond by urging
Congress to shift regulatory costs from the federal budget to states and the private sector.
In other words, the President cannot manage the Nation’s fiscal health without managing
the regulatory state.”

Comments from both the current and former OIRA Administrators suggest
that the change in the philosophy underlying OIRA’s regulatory review
function may be, at least in part, a function of the change in the presidency
that the office serves. A previous Administrator emphasized that OIRA is
part of the Executive Office of the President, and the President is the
office’s chief client. Therefore, she said, a change in the presidency has a
profound effect on how OIRA operates. She also said each new
Administrator of OIRA—and ultimately each new administration—
represents a reaction to the previous Administrator and administration.
Just as the Clinton administration’s OIRA was a reaction to the
administrations that preceded it, she said the current Bush administration’s
OIRA is a reaction to the Clinton period. Similarly, in March 2002, the
current OIRA Administrator said “Presidents use the powers of OMB
regarding agency action to advance Administration priorities and policy
objectives… We should remember that OMB is an office within the




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                          Executive Office of the President and its actions necessarily reflect
                          Presidential priorities.”12



Increased Use of Return   One clear indication of the emergence of OIRA’s “gatekeeper” role is the
Letters                   office’s increased use of return letters since 2001. During the first 7 full
                          calendar years that Executive Order 12866 was in place (1994 through
                          2000), OIRA generally reviewed between 500 and 700 rules each year but
                          returned very few of them to the agencies—three rules in 1995 and four in
                          1997. (See fig. 5.) However, although the total number of rules reviewed
                          each year remained about the same, the number of rules returned to the
                          agencies increased dramatically in 2001. In fact, OIRA returned almost
                          three times as many rules that year (18 rules) than in the 7 previous years
                          combined. All of the returns during calendar year 2001 occurred after the
                          current Administrator took office in July 2001. In calendar years 2001 and
                          2002 combined, OIRA returned a total of 23 rules to the agencies.




                          12
                            Others have also noted the salience of presidential priorities in OIRA’s operations. See, for
                          example, Susan E. Dudley and Angela Antonelli, “Congress and the Clinton OMB: Unwilling
                          Partners in Regulatory Oversight?,” Regulation (Fall 1997), 17-23. The authors noted “OIRA
                          is supposed to simultaneously provide independent and objective analysis, and report to the
                          president on the progress of executive policies and programs. When those functions
                          conflict, the presidential agenda will most certainly prevail over independent and objective
                          analysis.”




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Figure 5: OIRA Returned More Rules to Agencies in Calendar Year 2001 Than in the
7 Previous Years Combined
20 Number of draft regulatory actions returned to agency
                                                                       18




15




10




                                                                              5
 5
                                     4
                 3



        0                  0                  0            0    0
 0
      1994      1995     1996      1997      1998      1999    2000   2001   2002
     Calendar year
 Source: OMB.




DOT had the most rules returned during 2001 and 2002 (eight), followed by
the Social Security Administration (five), the Department of Veterans
Affairs (four), and the Department of Housing and Urban Development
(two). The Department of Agriculture, the Office of Personnel
Management, EPA, and SBA each received one return letter. In the letters,
OIRA commonly said that it returned the rules because of concerns about
the agencies’ analytic approach—such as whether the agency had
considered all reasonable regulatory alternatives, or had selected the
alternative that would produce the greatest net benefits. In its December
2002 report on the costs and benefits of regulations, OIRA reported that 10
of the 22 rules returned by October 2002 had been resubmitted and
approved for publication.

Recent OIRA Administrators have taken very different positions regarding
the use of return letters, reflecting the philosophical differences between
the administrations in OIRA’s relationship with the agencies and explaining
the dramatic change in the use of returns. For example, two former OIRA
Administrators during the previous administration told us that the
objective of the review process was to achieve an end result that was
mutually agreeable, and that they viewed return letters as evidence of a
failure of the collaborative review process. One of the former



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Administrators noted that the agencies and OIRA are parts of the same
administration “team,” so any public failure to agree on how a rule should
be written could only be seen as a breakdown of that process.

In contrast, the current OIRA Administrator said in one of his speeches that
the office is using a “carrot and stick” strategy in its efforts to encourage
better regulatory analysis, and that the “stick” has been the revival of the
return letter. In its March 2002 draft report on the costs and benefits of
federal regulations, OIRA noted that no rules had been returned to the
agencies for reconsideration during the previous administration’s final 3
years, and said “the degree of OIRA’s actual effectiveness can be questioned
when it declines to use its authority to return rules.” OIRA noted that
under the current administration the office had revived the return letter,
“making clear that OMB is serious about the quality of new rulemakings.”

However, OIRA’s increased use of return letters appears to have been short
lived. As figure 6 shows, the sharp increase in the use of return letters was
primarily in the current Administrator’s first 8 months in office (July 2001
through February 2002). During that period, OIRA returned 21 of the 415
rules that it reviewed to the agencies. More than half (11) of the 21 rules
that OIRA returned during this period were sent to the agencies in a single
month—September 2001. However, during the following 15-month period
(from March 2002 through May 2003), OIRA returned to the agencies only 2
of the 863 rules that it reviewed—about the same pace as during the
previous administration.




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                      Figure 6: OIRA Returned Only Two Rules Between February 2002 and May 2003
                      12 Number of draft regulatory actions returned to agency
                                     11

                      10



                       8



                       6



                       4


                                2            2   2           2
                       2
                           1                             1                                   1         1

                                                     0           0   0   0   0   0   0   0        0         0   0     0    0   0
                       0
                           7    8    9      10   11 12   1   2   3   4   5   6   7   8   9   10   11   12   1   2     3    4   5
                                     2001                                    2002                                   2003

                           Month/year
                      Source: OMB.




                      In its December 2002 report on the costs and benefits of federal
                      regulations, OIRA indicated that the decline in the number of returns since
                      February 2002 was a reflection of the improved quality of regulatory
                      packages. OIRA also said that an even more important factor was the
                      “earlier interaction between OIRA and agency staffs during regulatory
                      development in order to prevent returns late in the rulemaking process. It
                      is at these early stages where OIRA’s analytic approach can most improve
                      the quality of regulatory analyses and the substance of rules.”



Greater Emphasis on   Some of the officials from rulemaking agencies who regularly interact with
Economic Analysis     OIRA also told us that there is a greater expectation now than several years
                      ago that the agencies’ economic analyses (both benefit-cost and cost-
                      effectiveness) will be thorough. Officials from one agency described it as a
                      “more relentless emphasis” on benefit-cost analysis, and said OIRA is
                      expecting the agencies to devote more money and effort to refining their
                      analyses to develop rules that are more cost effective. Officials in another
                      agency said there had been a perceptible “stepping up the bar” regarding
                      what is expected in agencies’ analyses. They also said that OIRA is looking
                      for greater quantification of benefits and more justification and breakdown



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                            of marginal benefits of every line item in the agency’s rules, and that OIRA
                            now expects agencies to do a benefit-cost analysis for all regulatory
                            options, not just for the option that the agency selected.

                            OIRA representatives pointed out that their office has always pushed for
                            agencies to do a better job with their analyses. However, they confirmed
                            that the current Administrator is somewhat more interested in having the
                            agencies do better analyses than previous Administrators. In fact, they said
                            the current Administrator said early in his tenure that he would return a
                            rule if the analysis needed work, even if the rule itself was acceptable.



Emphasis on 90-day Period   Another clear change in OIRA regulatory review policy since the current
for Review                  OIRA Administrator took office has been a stricter adherence to the time
                            frames for OIRA review. As mentioned earlier in this report, Executive
                            Order 12866 generally requires OIRA to complete its regulatory reviews
                            within 90 calendar days of submission for all draft proposed and final rules.
                            The executive order allows the review period to be extended once upon the
                            written permission of the OMB Director and at the request of the
                            rulemaking agency.13 According to a former OIRA Administrator, the
                            90-day time limit in the executive order was put in place because of
                            “strident complaints” about the length of reviews during the previous
                            administrations’ implementation of Executive Order 12291 in the 1980’s and
                            early 1990’s. However, she said the time limit created an unintended
                            “perverse incentive” for the agencies to respond to OMB suggestions late in
                            the 90-day period, and then suggest that the rule be approved because of
                            the time limit. As a result, she said, review periods were often extended
                            beyond the 90-day limit.

                            As figure 7 indicates, during each of the calendar years 1999, 2000, and
                            2001, more than 100 OIRA reviews exceeded the 90-day limit (115, 159, and
                            149, respectively). However, during calendar year 2002 (the current
                            Administrator’s first full year in office) only 9 reviews lasted longer than 90
                            days. According to an OIRA representative, virtually all of the extensions
                            of the review periods in each of these 4 years were done at the request of
                            the agency issuing the rule. (However, officials from one agency and a



                            13
                               The executive order actually says review periods can be extended only if the agency
                            requests an extension and the OMB Director provides written permission. However, an
                            OIRA representative said that extensions have been provided if either condition is met.




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previous OIRA Administrator told us that OIRA sometimes asked the
agency to request an extension.)



Figure 7: The Number of OIRA Reviews Lasting More Than 90 Days Dropped Sharply
in 2002
 170 Number of OIRA reviews over 90 days

 160                 159

 150
                            149
 140

 130

 120
     115
 110

 100

  90
  80
  70
  60
  50
  40
  30
  20
  10                                         9

   0
          1999         2000      2001       2002
       Calendar year
 Source: OMB.




The dramatic decline in the number of reviews lasting more than 90 days is
traceable to clear differences in philosophy between Administrators
regarding the importance of this requirement. For example, in September
1997 the OIRA Administrator at the time testified that “when two or more
agencies are at loggerheads over a regulatory issue, it may well take more
than 90, or even 120, days to obtain needed data and analyses, to conduct
the appropriate evaluation, and to arrange for the policy officials in the
interested agencies to come to agreement.” For that and other reasons she
opposed draft legislation that would have imposed a statutory time limit on
OIRA reviews. Another OIRA Administrator during the previous
administration told us during our review that he considered it more
important to “get the rule right” rather than rigidly adhere to a 90-day time
limitation. Several of the agency officials that we contacted during this
review confirmed that view, saying that during the previous administration
OIRA often worked with the agencies after the 90-day deadline had passed
in order to resolve comments or questions. In contrast, in May 2002 the



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current OIRA Administrator said “agencies have sometimes been forced to
wait 6 months, a year, or even longer to get an answer from OMB. We have
changed that practice. I have instructed my staff that no rule will stay
longer than 90 days at OMB without my personal authorization.” According
to OIRA’s December 2002 report on the costs and benefits of regulations,
the office now regards the 90-day review limit as “a performance indicator
for a strong regulatory gatekeeper.” OIRA representatives confirmed that
close adherence to the 90-day clock is new, and said that OIRA
management tracks all rules that have been under formal review for more
than 60 days. They also said that a benefit of stricter adherence to the 90-
day review limit is that it forces officials to make decisions sooner, thereby
moving the review along more quickly.

Officials from several rulemaking agencies also told us that OIRA staff
currently seem much more focused on the 90-day clock than during the
previous administration. In fact, concerns about adherence to this fixed
review period might have precipitated some of the return letters that have
been more common during the current administration. For example, in the
September 14, 2001, return letter to DOT, the OIRA Administrator said
“(s)ince the resolution of the concerns will take some additional time, I am
returning the draft final rule on flight data recorders to the Department for
your reconsideration.” The return letters for this rule and for one other
rule were sent to the agencies shortly after the rules’ 90-day review periods
had ended. An OIRA representative told us that the 90-day clock may play
a role in some returns, but not always.

Officials in other agencies also said that rules are sometimes returned or
withdrawn at OIRA’s request when time is running out on the 90-day clock
and it is recognized that more time is needed to resolve issues “off the
clock” or during a separate 90-day period. Representatives of OIRA told us
they do not request that agencies withdraw rules, and emphasized that it is
the agencies—not OIRA—that ultimately make withdrawal decisions.
They also said agencies sometimes withdraw rules as a negotiating
strategy.

Although an increased emphasis on the 90-day time limit is clearly an area
of change in recent years, the formal review period itself may be somewhat
of an artificial construct if OIRA and the agency had been substantively
discussing the rule and/or exchanging drafts of the rule before formal
submission. For example, on December 10, 2001, EPA formally submitted a
draft rule to OIRA on proposed nonconformance penalties for heavy-duty
diesel engines. OIRA’s database indicates that it completed its review 10



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                         days later on December 20, 2001. However, public documents indicate that
                         EPA and OIRA met with outside parties in early October 2001 and mid-
                         November 2001 to discuss the rule, and that EPA informally submitted a
                         version of the draft rule and its economic analysis to OIRA in late October
                         2001—weeks before the 10-day formal review period began. (See GAO ID
                         53 in app. II of this report.) OIRA records indicate that the formal review
                         period for an EPA Clean Water Act rule in which OIRA made significant
                         changes was even shorter—1 day. (See GAO ID 69 in app. II of this report.)



Use of Prompt Letters	   Another change in OIRA policies and practices has been the development
                         of a new form of communication with the agencies—the “prompt letter.” In
                         its December 2002 report on the costs and benefits of federal regulations,
                         OIRA stated that the office had historically been a reactive force in the
                         regulatory process, responding to proposed and final rules that were
                         generated by federal agencies. However, the report went on to say that
                         OIRA had recently begun “taking a more proactive role in suggesting
                         regulatory priorities for agency consideration,” and the prompt letter is the
                         format by which those suggestions are brought to the agencies’ attention.

                         By the end of May 2003, OIRA had sent nine prompt letters to regulatory
                         agencies.14 Several of the initial prompt letters recommended that the
                         agencies consider taking regulatory actions regarding particular issues.
                         Notably, the letters did not always suggest that the agency publish a rule on
                         the issue, sometimes recognized that the agency had already begun taking
                         action, and generally left the final decision to the agency regarding what
                         action to take. For example:

                         •	 In September 2001, OIRA sent a letter to the Department of Health and
                            Human Services suggesting that FDA publish a final rule requiring that
                            the amount of trans fatty acid present in food be included in a product’s
                            label. However, OIRA said the agency should review the comments
                            received on its proposed rule and proceed to final rulemaking “if
                            appropriate.”




                         14
                          OIRA listed two items on the “prompt letters” page of its Web site that did not appear to be
                         prompt letters—a June 2002 EPA press release regarding an EPA-OIRA collaboration and a
                         January 2003 memorandum to the heads of selected independent agencies asking them to
                         consider recommendations for reform that OIRA had received from the public.




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•	 Also in September 2001, OIRA sent a letter to OSHA requesting that the
   agency “consider whether promotion of (automatic external heart
   defibrillators) should be elevated to a priority.” However, OIRA said it
   understood that OSHA had limited resources and other constraints, and
   was simply asking the agency to consider the matter.

•	 In December 2001, OIRA sent a letter to DOT encouraging NHTSA to
   give greater priority to modifying its frontal occupant protection
   standard by establishing a high-speed, frontal offset crash test. OIRA
   recognized that the agency had already signaled its intent to move
   forward with this standard, and also recognized NHTSA’s resource
   constraints and other legislative mandates.

•	 In May 2002, OIRA sent a letter to the Office of Federal Housing
   Enterprise Oversight recommending that the office consider developing
   a rule strengthening the corporate governance of Fannie Mae and
   Freddie Mac, and to require them to make certain public disclosures.

•	 In May 2003, OIRA sent a letter to the Departments of Agriculture and
   Health and Human Services requesting them to “further incorporate the
   large body of recent public health evidence linking food consumption
   patterns to health and disease” as the departments revise their dietary
   guidelines and update the “Food Guide Pyramid.” Specifically, OIRA
   recommended that the revisions “emphasize the benefits of reducing
   foods high in trans fatty acids and increasing consumption of foods rich
   in omega-3 fatty acid.”

Other OIRA prompt letters were even less focused on rulemaking or
guidance, instead recommending that the agencies better focus certain
research or programs. For example, in December 2001 OIRA sent a letter
to EPA highlighting “some critical research needs that can help target
environmental-protection investments to the most important sources of
(fine particulate matter) and thereby better inform cost-benefit studies of
future air pollution control policies.” OIRA recognized that EPA already
devoted a substantial share of its research budget on particulate matter, but
suggested that the research focus on three particular issues. Similarly, in
February 2003, OIRA sent a letter to the Department of Energy raising
several issues regarding a particular energy modeling system, and
suggested changes in that system that would, in OIRA’s view, better enable
the agency to assess the potential of hybrid-electric and diesel powered
vehicles.




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In March 2002 the OIRA Administrator said that the prompt letters issued
as of that date “have emerged primarily from discussions with my
professional staff,” but encouraged the public to submit ideas for prompts.
In another speech he said the use of prompt letters “enables OMB to
publicly identify areas where agencies might improve regulatory policies.”
He also said that prompt letters differ from the more definitive presidential
directive in that the letters represent a “public request that is intended to
stimulate agency and public deliberation,” and emphasized that “final
decisions about priorities remain with the agencies.”

Although OIRA’s use of public prompt letters is new, the concept of OIRA
(or, more generally, the President) making regulatory suggestions to the
agencies is not.15 One former OIRA Administrator told us that every
administration has had certain areas of regulatory emphasis and has
communicated those ideas to rulemaking agencies in a variety of ways.
She said that if OIRA wanted the agencies to initiate rulemaking in a
particular area, “we could get the agencies’ attention without using a
letter.” Similarly, another former OIRA Administrator said that during his
tenure if OIRA thought an agency should regulate in a particular area, he
would call an agency official and talk about the issue rather than sending a
public prompt letter than could embarrass the agency. Officials in one
agency also indicated that these types of communications had existed
previously—albeit not publicly. As indicated in the following quote from its
December 2002 report on the costs and benefits of federal regulation, OIRA
identified the public nature of the prompt letter as a distinguishing feature:

“An important feature of the prompt letter can be its public nature, aimed at stimulating
agency, public and congressional interest in a potential regulatory or informational priority.
Although prompt letters could be treated as confidential pre-decisional communications,
OIRA believes that it was wiser to make these prompt letters publicly available in order to
focus congressional and public scrutiny on the important underlying issues.”

 An OIRA branch chief told us that the office still does, on occasion, call an
agency on the telephone and suggest areas for regulation. He said the
strategy used (telephone versus prompt letter) depends on a variety of



15
 See Elena Kagan, “Presidential Administration,” Harvard Law Review, 114 (2001): 2,245-
2,385, who asserted that recent presidents have increasingly made agencies’ regulatory
activity into an extension of their own policy and political agendas. She said President
Clinton did so primarily by “exercising directive authority over these agencies,” using formal
directives to the heads of executive agencies to “set the terms of administrative action and
prevent deviation from his proposed course.”




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                       circumstances, but noted that prompt letters are more “transparent” and
                       may have more impact than a telephone call.

                       Several of the agencies have taken some type of action in response to the
                       OIRA prompt letters, and other actions were planned. For example, in
                       December 2001 OSHA issued a technical information bulletin regarding the
                       use of defibrillators in the workplace. In July 2003, FDA published a final
                       rule on trans-fatty acids. NHTSA said that it planned to issue a notice of
                       proposed rulemaking on offset crash testing in 2003.



Post-Review Letters	   In 2001 and 2002, OIRA sent a total of five “post-review letters” to
                       rulemaking agencies and posted those letters on its Web site. As of May
                       2003, no post-review letters had been sent since August 2002. OIRA
                       representatives said that although individual branch chiefs or desk officers
                       had previously provided staff-level comments to rulemaking agencies at the
                       conclusion of reviews, the use of a public letter signed by the Administrator
                       to convey those comments represented a change in OIRA policy.

                       In some of the post-review letters, OIRA expressed concerns about the
                       rulemaking agencies’ analyses and the cost-effectiveness of the rules that
                       were similar in many respects to the concerns that the office had expressed
                       in the previously mentioned return letters. For example, after OIRA
                       completed its review of EPA’s draft proposed rule on “Control of Emissions
                       from Nonroad Large Spark-Ignition Engines and Recreational Engines
                       (Marine and Land-Based)” in September 2001, the OIRA Administrator sent
                       a letter to EPA noting that he was “concerned that the regulatory analysis is
                       not sufficient to support a reasoned determination on the appropriate
                       regulation of these sources.” Specifically, he said that the analysis did not
                       “provide a benefit/cost analysis integral to the decision-making process”
                       and did not evaluate any alternatives as required by the Unfunded
                       Mandates Reform Act of 1995 and Executive Order 12866. The
                       Administrator said he expected improvements to the analysis to be
                       submitted before the final rule was submitted, and said EPA and OIRA
                       should schedule “quarterly meetings to review the progress in developing a
                       refined analysis.”

                       However, in other post-review letters, OIRA expressed other types of
                       comments. For example:

                       •	 In an October 2001 letter regarding an FAA draft proposed rule on
                          “Traffic Alert and Collision Avoidance Systems,” the OIRA Administrator



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                  recognized that despite the rule’s high cost compared to its benefits, the
                  agency had “limited alternatives available under the statute.” In that
                  regard, he indicated that the department and the agency should share
                  with Congress “any information made available by the public that bears
                  on the reasonableness of implementing the statute.” He also
                  encouraged FAA to carefully assess the impact of the rule on small
                  entities and the financial health of the industry “in light of recent
                  events.”

               •	 In a June 2002 letter regarding a NHTSA final rule on tire pressure
                  monitoring systems, the OIRA Administrator expressed his appreciation
                  for the “significant improvements NHTSA made in the regulatory
                  analysis,” and encouraged the agency to conduct a study examining the
                  relative frequency of different causes of crashes.

               •	 In an August 2002 letter regarding a Department of Housing and Urban
                  Development rule on improving the process for obtaining mortgages,
                  the OIRA Administrator encouraged the department to continue its
                  work to improve and simplify the proposed forms, and suggested that
                  the department “further strengthen the economic and regulatory
                  flexibility analyses.”

               A former OIRA Administrator told us that the office’s current use of public
               post-review letters represents a change in policy from the previous
               administration. She said that during the previous administration OIRA
               might have spoken with an agency about what it should be doing before a
               proposed rule was resubmitted, but OIRA would not have put those
               comments in writing. She described the previous process as “non-public
               post review comments,” and said written material was too confrontational.



Transparency   On numerous occasions, the current OIRA Administrator has identified
Improvements   improvements in the transparency of the office’s regulatory review process
               as a key area of change, and has described the establishment of a climate of
               openness at OIRA as his “first priority.” The Administrator said the
               information that OIRA discloses about its reviews is intended to “diminish
               the culture of secrecy and mystery that has surrounded my Office since it
               was launched early in the Reagan Administration,” and said that “more
               openness at OMB about regulatory review will enhance public appreciation
               of the value and legitimacy of a centralized analytical approach to
               regulatory policy.” He also described the transparency of OIRA’s regulatory
               review process as “critical to our ability to improve the nation’s regulatory



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                              system,” and said “only if it is clear how the OMB review process works
                              and what it does will Congress and the public understand our role and the
                              reasons behind our decisions.” He also said “we see openness not simply
                              as a canon of good government but as a strategy to transform the public
                              debate about regulation to one of substance…rather than process.”
                              Similarly, in May 2002 the OMB Director said that one way to establish
                              public confidence in the “consumer protection” mission of OMB is
                              “maximum openness.”

Disclosure of Contacts with   In October 2001, the OIRA Administrator sent a memorandum to OIRA staff
Outside Parties	              (and published it on the office’s Web site) that, among other things,
                              delineated OIRA’s disclosure procedures regarding substantive
                              communications with outside parties (i.e., persons not employed by the
                              executive branch) while rules were under review. Many of the procedures
                              listed were the same as or clarifications of the disclosure requirements in
                              Executive Order 12866. For example, like the executive order, the
                              memorandum said that (1) only the Administrator or a particular designee
                              can receive substantive telephone calls from outside parties, (2) a
                              representative from the issuing agency must be invited to any meeting
                              between OIRA personnel and outside parties, and (3) OIRA must send to
                              the regulatory agency all written communications between OIRA personnel
                              and outside parties within 10 days.

                              However, the Administrator’s October 2001 memorandum also extended
                              the executive order’s disclosure requirements in certain areas. For
                              example, the memorandum said that OIRA would disclose substantive
                              telephone calls with outside parties about a rule under review if the calls
                              are initiated by the Administrator, not just the calls that the Administrator
                              receives from outside parties. Also, the memorandum said that OIRA
                              considers a rule to be under review for purposes of OIRA’s disclosure
                              requirements regarding outside parties not just during the formal review
                              process, but before formal submission of the review package (i.e., during
                              the previously mentioned informal review period) if OIRA has started a
                              “substantive discussion with the agency concerning the provisions of a
                              draft rule or OIRA has received the rule in draft.” As a result of this change
                              in policy, for the first time OIRA began disclosing letters, telephone
                              conversations, and meetings that occurred during the informal review
                              period. In its 2001 report on the costs and benefits of federal regulations,
                              OIRA described why the office believed that these outside contacts before
                              a rule is formally submitted should be disclosed.




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“Interested outside parties have gradually learned about this informal process of agency-
OIRA discussion and thus attempts are made to provide information to agency and OIRA
analysts. In order to protect the integrity of OIRA and the administrative record, an informal
practice has developed that communications between OIRA and outside parties are treated
as ‘covered by E.O. 12866’ as soon as a rulemaking has proceeded to a point where OIRA
desk officers have received from agencies copies of preliminary draft regulatory text or
analysis.”

However, OIRA representatives that we contacted during this review
emphasized that a rule is not considered under review with regard to these
disclosure requirements if OIRA and an agency are in general consultation
about an issue, but the consultation has not become “substantive” and/or
the agency has not submitted a substantive draft of a rule for informal
review. Therefore, at that “preinformal review” stage of the process, OIRA
can communicate with outside parties about the issue and not have to
disclose those communications.

The October 2001 memorandum also announced that much of the
information generated through the disclosure requirements would be
available to the public on the agency’s Web site, including summary
information on meetings, phone calls, and other oral communications with
outside parties and a list of the written correspondence that OIRA had
received from outside parties. The memorandum said that other
information previously available in hard copy and/or in the OIRA docket
library would also be posted to the Web site (e.g., monthly regulatory
review lists and statistics and the text of written outside
communications).16 Improving access to information about OIRA’s review
process by putting the information on the office’s Web site has been widely
hailed as a significant improvement in the transparency of the regulatory
review process.17

However, we concluded that some of the information that OIRA provides
on its Web site regarding its communications with outside parties is not
very informative. As a result, it is sometimes difficult to understand what


16
 The October 2001 transparency memorandum indicates that covered telephone calls and
correspondence must be logged and/or sent to the rulemaking agency within 10 working
days. An OIRA representative told us that meetings are typically logged within 3 or 4 days.
He also said that materials provided to OIRA at meetings are only available in hard copy in
the OIRA docket, not electronically.
17
 An OIRA representative told us that the office had not made this information available
electronically during previous administrations because of resource constraints.




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rule a meeting was about or the affiliations of the meeting participants. For
example, during our review the OIRA Web site provided the following
descriptions:

•	 On February 3, 2003, an OIRA desk officer had a meeting with a person
   whose affiliation was listed as “Albemarle” regarding an EPA issue
   identified as “N-Propyl Bromid (nPB).”

•	 On October 24, 2002, OIRA leadership and staff met with four
   individuals regarding a Centers for Medicare and Medicaid Services
   issue identified as “Outpatient.”

•	 On June 27, 2002, the Administrator and other OIRA staff met with
   several individuals whose affiliations were listed as “TPLG,” “American
   Association,” “Powell Golstein,” and “Hunton & Williams” regarding a
   Centers for Medicare and Medicaid Services issue identified as
   “Inherent Reasonableness.”

•	 On April 26, 2002, OIRA and OMB leadership and staff met with several
   individuals regarding a General Services Administration issue identified
   as “DOT Gov Rule: 3090-AH41.” Two of the non-OMB participants’
   affiliations were listed as “NASCIO” and “PTI.”

The OIRA Web site included a column for each meeting in which the client
being represented by an outside party could be identified. However, we
found that this column was usually blank. An OIRA representative told us
that he recognized that OIRA could sometimes do a better job describing
the rule being discussed at meetings as well as the affiliations of the
meeting participants, and said that he had already notified OIRA staff that
the information posted on executive order meetings should be clearer
regarding these issues (e.g., no abbreviations when identifying the
affiliations of outside parties).

OIRA’s practice of providing minimal information to the public about its
meetings with outside parties stands in contrast to the more formal, APA-
driven practices of certain agencies that we reviewed. For example, on
October 26, 2001, the OIRA Administrator and three OIRA staff members
met with representatives of the automobile industry regarding a NHTSA
tire pressure monitoring proposed rule. Two representatives from NHTSA
were also present. The OIRA web page listed the names and affiliations of
those present. However, the DOT electronic docket contained a
memorandum providing that information and also described the positions



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                            taken by the various parties at the meeting. The memorandum indicated it
                            was prepared pursuant to DOT Order 2100.2, which requires that DOT
                            agencies prepare a report on meetings with outside parties for the
                            rulemaking docket. The DOT order also says “a mere recitation that on X
                            day a meeting was held with listed persons to discuss a named general
                            subject is inadequate.”

Disclosure of OIRA-Agency   The Administrator’s October 2001 memorandum also briefly discussed the
Interactions                requirements in Executive Order 12866 regarding disclosure of OIRA’s
                            interactions with the rulemaking agencies. For example, it stated that
                            OIRA would, upon request, provide certain materials to the public after a
                            reviewed rule had been published, including the draft as originally
                            submitted, any material submitted by the agency during the review, pages
                            where changes occurred in the course of review, and correspondence
                            between OIRA and the agency that had been exchanged during the review.

                            However, OIRA representatives told us that the term “during the review” in
                            this context has a different meaning from the term “under review” with
                            regard to OIRA’s contacts with outside parties. As mentioned previously,
                            OIRA considers a rule under review whenever informal review begins, and
                            said it would disclose all contacts with outside parties after that date. In
                            contrast, OIRA considers the period “during the review” in relation to its
                            contacts with the rulemaking agencies to include only a rule’s formal
                            review period. Therefore, whereas OIRA discloses its contacts with
                            outside parties during informal reviews, it does not disclose its contacts
                            with rulemaking agencies during this period.

                            Similarly, OIRA representatives also said that the transparency
                            requirements in the executive order that are applicable to the agencies are
                            not triggered by informal reviews. As noted previously, the executive order
                            requires agencies to identify for the public (1) “the substantive changes
                            between the draft submitted to OIRA for review and the action
                            subsequently announced,” and (2) “those changes in the regulatory action
                            that were made at the suggestion or recommendation of OIRA.” The OIRA
                            representatives said they considered the second of these requirements to
                            be a subset of the first, and that the term “the draft submitted to OIRA for
                            review” refers to the draft rule submitted for formal review, not any drafts
                            submitted for informal review.

                            Therefore, under this interpretation of the executive order, an agency could
                            submit a draft rule to OIRA for informal review, make changes in response
                            to multiple OIRA suggestions and recommendations, and neither the



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                 agency nor OIRA would have to disclose those changes to the public. If the
                 rule was not subsequently changed during the formal review period, OIRA
                 would code the rule in its database as “consistent with no change” and the
                 public would never know that OIRA had influenced its development.

                 OIRA representatives told us that drafts of a rule that are informally
                 submitted to OIRA do not represent the agency’s official position, and
                 therefore should not be disclosed to the public even after the rule is
                 published. They also said that postpublication disclosure of
                 communications between OIRA and the agency that occur prior to formal
                 rule submission could have a “chilling effect” on those communications in
                 the future. Similarly, in its 2002 report on the costs and benefits of
                 regulations, OIRA said it believes “that its interactions with agencies prior
                 to formal regulatory review are pre-decisional communications that should
                 generally be insulated from public disclosure in order to facilitate valuable
                 deliberative exchanges.” However, in the same report, OIRA said “it is at
                 these early stages where OIRA’s analytic approach can most improve the
                 quality of regulatory analyses and the substance of rules.”

                 During our review we found evidence that some of these OIRA-agency
                 communications are being disclosed. OIRA’s and the agencies’ dockets for
                 several of the rules that we examined in chapter 3 of this report contained
                 e-mails and faxes between OIRA and the agency about rules under informal
                 review. Those documents proved very helpful to us in determining what
                 changes had been made to agencies’ rules at the suggestion of OIRA.

Other Caveats	   There are also other caveats to the OIRA-agency transparency
                 requirements in the executive order and the Administrator’s October 2001
                 memorandum. For example, OIRA representatives told us that the
                 requirement in the executive order that OIRA make available to the public
                 “all documents exchanged between OIRA and the agency” issuing the
                 regulation applies only to exchanges made by OIRA staff at the branch
                 chief-level and above. Therefore, any e-mails, faxes, or other documents
                 exchanged between OIRA desk officers and staff in regulatory agencies
                 about rules under review do not have to be disclosed.18 OIRA said that this



                 18
                  However, in practice we found evidence that such communications are, at least in some
                 cases, disclosed. OIRA’s docket for several of the rules that we examined in chapter 3 of this
                 report contained e-mails and faxes between the OIRA desk officer and agency staff about
                 rules under review.




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                            “branch chiefs and above” distinction had been the office’s policy during
                            the previous administration as well.

                            Other OIRA-agency interactions are not covered by any transparency
                            requirements. For example, if OIRA returns a rule to an agency for
                            reconsideration, the executive order requires the Administrator to provide
                            the agency with a written explanation for the return. The return letter is
                            then made available to the public. After OIRA concludes its review and a
                            rule is published, the executive order requires the agency to disclose to the
                            public the substantive changes made during OIRA’s review and those made
                            at OIRA’s suggestion or recommendation. However, if an agency withdraws
                            a rule from OIRA during its review—either at its own initiative or at the
                            recommendation of OIRA—neither the agency nor OIRA is required to
                            disclose the reason.19



OIRA’s “Open Door” Policy   In its December 2002 report on the costs and benefits of federal
on Meetings with Outside    regulations, OIRA said that it had adopted an “open door approach to
                            meeting with outside parties.” In explanation, OIRA representative told us
Parties
                            that if a party outside of the federal government wanted to meet with OIRA
                            about a rule under review or a matter of general regulatory policy, OIRA
                            would always try and accommodate that request. OIRA representatives
                            emphasized that these meetings are initiated by the outside parties, not
                            OIRA. However, a former OIRA Administrator told us that she did not
                            believe that this “open door” policy was new, and said OIRA had meetings
                            with outside interest groups “all of the time” during her tenure in the mid-
                            1990s.

                            Information on the OIRA Web site indicated that from October 2001
                            through March 2003, OIRA had more than 100 meetings with outside
                            parties. Of these, at least 85 were with representatives of regulated entities
                            (primarily private companies); environmental and other public interest




                            19
                             Agency officials told us that if a rule is withdrawn after having been formally proposed, an
                            agency may publish a “withdrawal” notice in the Federal Register. If the rule is withdrawn
                            before being proposed, they said the only documentation may be a notation in the
                            “completed action” section of the Unified Agenda of Federal Regulatory and Deregulatory
                            Actions. However, OIRA’s involvement may not be revealed in either form of
                            documentation.




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                             groups were involved in 8 meetings.20 OIRA representatives said that one
                             possible explanation for the apparent imbalance in those with whom OIRA
                             meets is that there are more regulated entities that are directly affected by
                             agencies’ regulations than public interest groups who have a more general
                             interest in the issues. However, another possible explanation is that, while
                             OIRA has said that it will meet with any organization that wants to meet
                             with it about a rule under review, representatives of several public interest
                             groups told us some such groups have made a policy decision to not
                             request meetings with OIRA. They said they take this position because
                             their groups do not believe that OIRA is the proper locus of authority or
                             decision making with regard to rulemaking issues.



Hiring of Additional Staff   OIRA has also changed the office’s human capital strategy in recent years,
Specialists                  increasing both the number of staff and adding new types of expertise. As
                             figure 8 shows, when OIRA was created in fiscal year 1981 the office had an
                             FTE ceiling of 90 staff members. By 1997, the number of FTEs allocated to
                             OIRA declined to 47—a nearly 50 percent reduction since 1981. OIRA
                             noted in its December 2002 report on the costs and benefits of regulations
                             that the decline in OIRA staffing during this period was more pronounced
                             than the decline in OMB as a whole, and occurred at a time when OIRA was
                             given new statutory responsibilities (e.g., concerning unfunded mandates,
                             small business, regulatory accounting, and information policy) and when
                             regulatory agencies’ staffing and budgetary levels were increasing. Also
                             during this period, though, with the advent of Executive Order 12866 in late
                             1993, the number of rules that OIRA reviewed went from between 2,000 and
                             3,000 per year to between 500 and 700 per year.




                             20
                              The other meetings were with representatives of state, local, or tribal governments (11
                             meetings), Members of Congress (2 meetings), or individuals/organizations that could not
                             be readily identified (8 meetings).




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Figure 8: OIRA Recently Reversed a 20-year Decline in Staffing

100 Number FTEs in OIRA
                                 Executive Order 12291                                                        Executive Order 12866
        90
 90
               79         80
 80                 77
                                 75   75

 70                                          69     69
                                                                 65   65
                                                          62
                                                                           60
 60                                                                               57
                                                                                                                                             55    55
                                                                                         52
                                                                                               50                                     49
 50                                                                                                    49    47    47     47     47

 40

 30

 20

 10

   0
       1981 1982 1983    1984   1985 1986   1987 1988    1989   1990 1991 1992   1993   1994   1995   1996   1997 1998 1999     2000 2001   2002   2003
Source: OMB.




                                                    As the figure shows, OIRA’s staffing authorization began to increase in
                                                    2001, and by 2002 the office had 55 authorized FTEs. 21 Between 2001 and
                                                    2003, OIRA had hired five new “specialist” or “expert” staff members who
                                                    were intended to provide new science and engineering expertise to OIRA:

                                                    •	 A risk assessor who received her Ph.D. in environmental
                                                       health/molecular toxicology from the University of Washington and who
                                                       most recently had been a science and technology fellow at EPA’s
                                                       National Center for Environmental Assessment.

                                                    •	 An epidemiologist who received her Ph.D. in geography (resources
                                                       management) from Clark University and who had worked on exposure
                                                       assessment issues at EPA and was an environmental professor and
                                                       researcher at the schools of health at Johns Hopkins University and
                                                       Harvard University.



                                                    21
                                                     OIRA’s FTE total includes a number of positions that are not regularly involved in the
                                                    review of rules under Executive Order 12866, including staff within the Information Policy
                                                    and Technology branch and the Statistical and Science Policy branch, and administrative
                                                    staff within the office. As of July 2003, 22 full-time OIRA analysts were primarily
                                                    responsible for the regulatory and paperwork reviews of all federal agencies.




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•	 An engineer who received his Ph.D. in health policy from Harvard
   University and a Masters of Science from the Massachusetts Institute of
   Technology in civil and environmental engineering and technology and
   policy. He previously worked at Resources for the Future and the
   consulting firm Industrial Economics Incorporated.

•	 A health economist who received her Ph.D. in health policy from
   Harvard University and a Master of Science degree in earth systems
   from Stanford University. She formerly worked at the American
   Enterprise Institute.

•	 An economist who received his Ph.D. in economics from the University
   of North Carolina at Chapel Hill and who formerly worked at FDA’s
   Center for Food Safety and Applied Nutrition.

In its December 2002 report on regulatory costs and benefits, OIRA said
these hires would facilitate collaboration with staff in the Office of Science
and Technology Policy and would “enable us to develop a more diversified
pool of expertise to ask penetrating technical questions about agency
proposals.” In an October 2002 speech, the Administrator said that these
new hires also reflected “the increasing importance of science-based
regulation in the federal agencies.” He also indicated that his vision for
how OIRA should be staffed is similar to that outlined in a 1993 book by
Stephen Breyer (later appointed to the Supreme Court), who suggested the
creation of a small, technically-trained group within OMB that offered its
members a special civil service career path—similar to that of the French
Conseil d’ Etat.22 Breyer also indicated that this group might assume OIRA’s
mandate to review agencies’ proposed rules, “augmented by its missions to
rationalize risk regulation and seek tradeoffs.” The OIRA Administrator
said “although I am not sure that the British or French civil service are
exactly the right analogies, I do have in mind a talented and analytically
keen staff who know how markets work, how government works, and
respect the role of expertise and values in solving national problems.”

Both former OIRA Administrators with whom we spoke supported
increasing the number of OIRA staff. However, both also indicated that
they never felt that OIRA was lacking in technical expertise and that they
could always tap into the resources available in other parts of the


22
 Stephen Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation
(Cambridge, Mass.: Harvard University Press, 1993).




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                        Executive Office of the President (e.g., the Office of Science and
                        Technology Policy or the Council of Economic Advisors) or other agencies
                        if the need arose. An OIRA branch chief said the office still utilizes staff
                        from other agencies from time to time, in addition to using its new “in
                        house” expertise.



Relationship With SBA   In March 2002, the OIRA Administrator and the SBA chief counsel for
Office of Advocacy      advocacy signed a memorandum of understanding (MOU) committing
                        OIRA and the Office of Advocacy to work together to ensure that federal
                        agencies comply with the Regulatory Flexibility Act.23 As part of OIRA’s
                        regulatory reviews, the MOU requires OIRA to consider whether agencies
                        should have prepared regulatory flexibility analyses under the act. If the
                        Office of Advocacy has concerns about an agency’s analysis, the MOU
                        requires OIRA to provide a copy of the draft rule to that office. Also, the
                        MOU says that OIRA would help the Office of Advocacy develop guidance
                        for agencies to follow in complying with the act. In May 2003 testimony
                        before the House Committee on Small Business, the OIRA Administrator
                        said that this agreement would enhance OIRA’s and SBA’s ability to ensure
                        that agencies are meeting their Regulatory Flexibility Act responsibilities.

                        However, in that same testimony the Administrator said that the
                        memorandum of understanding would “formalize OIRA’s long-standing
                        practice of involving the Office of Advocacy in our review of agency
                        regulations.” In response to recommendations in our March 1994 report on
                        the administration of the Regulatory Flexibility Act, the SBA chief counsel
                        for advocacy said that she would send OMB a copy of any written
                        notifications of noncompliance with the act that she sends to the agencies
                        during the rulemaking process.24 She and the Deputy Administrator of
                        OIRA said they would work together to develop criteria and procedures for
                        determining agency compliance with the act. The Deputy Administrator
                        also said that if the chief counsel notified OMB about an agency’s
                        compliance with the Regulatory Flexibility Act, OMB would discuss the
                        issue with the agency before concluding its review of any final regulations.



                        23
                           In August 2002, the President signed Executive Order 13272, which also urged agencies to
                        give proper consideration to small entities in their rulemaking.
                        24
                         U.S. General Accounting Office, Regulatory Flexibility Act: Status of Agencies’
                        Compliance, GAO/GGD-94-105 (Washington, D.C.: Apr. 27, 1994).




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Proposed New Guidelines   One of the more controversial elements of OIRA’s regulatory review
on Economic Analysis      function involves its examination of agencies’ regulatory impact analyses
                          that are required in support of the 70 to 110 rules that the office has
                          reviewed in recent years that are “economically significant” (e.g., have a
                          $100 million impact on the economy). As of May 2003, OIRA’s approach to
                          these reviews had not officially changed. However, OIRA had initiated a
                          process that may ultimately result in alterations to its current procedures.

                          In January 1996, OIRA published a document entitled “Economic Analysis
                          of Federal Regulations Under Executive Order 12866.” Developed by a
                          group established by the OIRA Administrator and cochaired by a member
                          of the Council of Economic Advisers (CEA), the document described “best
                          practices” for preparing the economic analysis of significant regulatory
                          actions called for by the executive order.25 In general, the guidance states
                          that the agencies’ analyses should contain three elements: (1) a statement
                          of the need for the proposed action, (2) an examination of alternative
                          approaches, and (3) an analysis of benefits and costs. Within each of these
                          areas, the guidance provides additional information. For example, in the
                          discussion of benefits and costs, the guidance addresses such issues as
                          discounting (when benefits and costs occur at different times), the
                          treatment of risk and uncertainty, and general methods for valuing health
                          and safety benefits (e.g., the monetary valuation of reductions in the risk of
                          illness, injury, and premature death). Each of these issues can have a major
                          effect on agencies’ estimates of benefits and costs. For example, in a
                          February 2003 speech the OIRA Administrator noted that the present value
                          of 1,000 lives saved 50 years from now is 608 when evaluated at 1 percent
                          discount rate, 228 when evaluated at 3 percent, and 34 when evaluated at 7
                          percent.26

                          In its December 2002 final report on the costs and benefits of federal
                          regulations, OIRA noted that it had initiated “a process of refinement” to
                          the guidance. In its February 2003 draft report, OIRA said the review was
                          again cochaired by the Administrator and a member of the CEA, and
                          published proposed revised guidelines for comment. OIRA said the key
                          changes in the proposed guidelines included the following:



                          25
                               The 1996 best practices document was modified and issued as guidance in 2000.
                          26
                           “Valuing Health: An OMB Perspective,” speech given before the Conference on Valuing
                          Health Outcomes: An Assessment of Approaches (Feb. 13, 2003).




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•	 The proposal encourages agencies to perform both cost-effectiveness
   and benefit-cost analyses in support of major rules, where feasible,
   because the two techniques offer regulators somewhat different but
   useful perspectives. In the previously mentioned February 2003 speech,
   the Administrator described cost-effectiveness analysis as a “bang for
   the buck” exercise in which the payoff is measured in health units rather
   than dollars. However, since cost-effectiveness analysis only provides
   relative comparisons, he said benefit-cost analysis is still needed to
   determine whether the benefits of any particular alternative justify the
   costs. Also, the Administrator said that OMB believes that multiple
   effectiveness measures based on different value assumptions and
   research designs should be encouraged (which he said can lead to
   inconsistency). To promote more consistency, he said OMB would
   sponsor interagency discussions about the most promising and practical
   effectiveness measures. Also, he said OMB would request that agencies
   provide it with their original data on mortality and morbidity to allow
   OMB to compare across agencies using similar assumptions and
   methods (as an aid to performance-based budgeting).

•	 When the benefits and costs of rules are expected to occur in different
   periods, the proposal recommends that agencies report the results of
   their analyses using multiple discount rates. Historically, OMB has
   recommended a uniform 7 percent rate of discount for these rules.
   Now, the proposal recommends that the results be computed at both 3
   percent and 7 percent for rules with impacts primarily within this
   generation. However, for rules with intergenerational impacts, the
   proposal permits additional sensitivity analysis with rates as low as 1
   percent.

•	 For rules that are expected to have a more than $1 billion impact on the
   economy, the proposal calls for agencies to employ formal probability
   analysis of benefits and costs (rather than a single number) unless the
   benefits and costs are known with a high degree of certainty. The
   Administrator said that information on probabilities is crucial when
   agencies must decide whether to act now, based on imperfect science,
   or whether to collect additional information prior to rulemaking—
   particularly in relation to “low-probability, high-consequence events
   such as the events of September 11th.”

The February 2003 draft guidelines also noted that two widely used
techniques were being used to assign a monetary value to projected
reductions in premature mortality—(1) the value of a statistical life (VSL)



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                         and (2) the value of a statistical life year (VSLY). The guidelines pointed
                         out a number of technical issues associated with the appropriate use of
                         these measures, and said “in all instances…agencies should consider
                         providing estimates of both VSL and VSLY, while recognizing the
                         developing states of knowledge in this area.” Subsequently, AARP and
                         other organizations expressed concern that use of the VSLY approach
                         could lead to an undervaluing of the lives of older adults. On May 30, 2003,
                         the OIRA Administrator sent a memorandum to the President’s
                         Management Council that again recommended that agency benefit-cost
                         analysts present both VSL and VSLY methods. However, the Administrator
                         cautioned that a “simple VSLY method” (i.e., assuming that saving 10 life
                         years is 10 times more valuable than saving 1 life year) “could
                         underestimate benefits significantly when applied to rules that primarily or
                         significantly benefit senior citizens.” He went on to say that, “when benefit
                         estimates based on the VSLY method are presented, as OMB has
                         encouraged since 1996, I recommend that agencies present analyses with
                         larger VSLY estimates for senior citizens.”27

                         In February 2003, OIRA released the draft guidelines for public comment.
                         After the comment period, OIRA said that it planned to conduct an
                         interagency review of the draft guidelines. Until this process is complete,
                         OIRA said that it would continue to use the 1996 best practices guidance
                         document. However, as noted earlier in this chapter, some agency officials
                         told us that OIRA already expects agencies’ cost-benefit analyses to be
                         more thorough than they were required to be several years ago.



New Guidelines on Risk   Some (but by no means all) of OIRA’s regulatory reviews evaluate whether
Assessment               an agency’s assessment of the exposure to a risk or environmental hazard
                         was properly conducted. Risk assessment is a complex but valuable set of
                         tools for federal regulatory agencies, helping them to identify issues of
                         potential concern, select regulatory options, and estimate the range of a
                         forthcoming regulation’s benefits. As we noted in our August 2001 report,
                         the statutory and legal context in which risk assessments are conducted
                         determine the general focus and goals of an agency’s risk assessment
                         activities, and also may shape how those assessments are supposed to be




                         27
                          The Administrator noted that EPA’s most recent VSLY estimates were $434,000 per life-year
                         saved for persons over age 65 and $172,000 per life year saved for those under age 65.




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conducted.28 Therefore, different agencies (and different offices within
those agencies) may have distinctive concerns regarding chemical risks.
OIRA’s January 1996 “best practices” guidance contains a section on risk
assessment, stating in general terms the qualities of a good assessment.
For example, it says that assessments “should present results representing
a range of plausible scenarios, together with any information that can help
in providing a qualitative judgment of which scenarios are more
scientifically plausible.” It also says that risk assessments “must provide
some estimates of the probability distribution of risks with and without the
regulation” and, where possible, “some estimates of central tendency (e.g.,
mean and median) must be provided in addition to ranges, variances,
specified low-end and high-end percentile estimates, and other
characteristics of the distribution.”

In 1996, Congress adopted a basic standard of quality for the use of science
in health decisions under the Safe Drinking Water Act (SDWA).
Specifically, Congress provided that if an agency’s decision under the
statute was based on science, it should use “(i) the best available, peer-
reviewed science and supporting studies conducted in accordance with
sound and objective scientific practices, and (ii) data collected by accepted
methods or best available methods (if the reliability of the method and the
nature of the decision justifies the use of data).” Congress also adopted a
standard for the dissemination of public information involving risks under
SDWA, providing that agencies should “ensure that the presentation of
information on (risk) effects is comprehensive, informative, and
understandable.” In addition, Congress required that agencies should, to
the extent practicable, specify and make available to the public in a
supporting document information on (1) each population addressed by any
estimate of applicable risk effects, (2) the expected risk or central estimate
of risk for the affected populations, (3) each appropriate upper-bound or
lower-bound estimate of risk, (4) each significant uncertainty identified in
the process of the risk assessment (and any studies that would help resolve
the uncertainty), and (5) relevant peer-reviewed studies regarding the
estimated risk effects.

In his September 2001 memorandum on presidential review of agency
rulemaking, the OIRA Administrator proposed expanding the applicability
of these requirements to statutes other than SDWA. Specifically, he


28
 U.S. General Accounting Office, Chemical Risk Assessment: Selected Federal Agencies’
Procedures, Assumptions, and Policies, GAO-01-810 (Washington, D.C.: Aug. 6, 2001).




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                             recommended that each agency consider adopting or adapting these
                             standards for judging the quality of scientific information that it uses about
                             risk. These recommendations were subsequently contained in information
                             quality guidelines intended to ensure and maximize the quality, objectivity,
                             utility, and integrity of a wide range of information disseminated by federal
                             agencies.29 The Administrator said that under these guidelines “the public
                             will be provided an opportunity to challenge any health risk information
                             disseminated by a federal agency that does not adhere to the OMB and
                             agency guidelines. Agencies will be expected to provide a prompt and
                             objective response to these challenges.” An OIRA representative said the
                             office considered the SDWA risk assessment standards “reasonable” and a
                             “model” approach the could be used in regulations under other statutes
                             (unless, of course, those other statutes prohibited that approach).



Deference to Peer Reviewed   In his September 2001 memorandum on “Presidential Review of Agency
Regulatory Analyses          Rulemaking by OIRA,” the OIRA Administrator said OMB recommended
                             that agencies subject regulatory impact analyses and other supporting
                             documents to independent, external peer review. He also delineated
                             certain peer review practices that OMB recommended, including (1)
                             selection of reviewers primarily on the basis of necessary technical
                             expertise, (2) disclosure of reviewers’ prior positions on the issues at hand
                             as well as sources of personal and institutional funding, and (3)
                             implementation of the review in an open and rigorous manner. In the
                             previously mentioned information quality guidelines, OMB noted that if
                             peer review is used to help satisfy the “objectivity” standard, the review
                             process should meet these criteria. The OIRA Administrator has described
                             EPA’s 2001 decision on arsenic as an example of a quality, peer-reviewed
                             study.

                             Although OIRA did not require greater use of peer review by rulemaking
                             agencies in this September 2001 memorandum, the Administrator said that
                             OIRA would “be giving a measure of deference” to agencies’ analyses that
                             were developed in conjunction with certain peer review principles.30 In one
                             of his speeches he said that this deference to peer reviewed studies was


                             29
                                  For a copy of these guidelines, see 67 Fed. Reg. 8452 (Feb. 22, 2002).
                             30
                                Shortly before the publication of this report, on August 29, 2003, OIRA proposed a
                             standard analytical process by which all “significant regulatory information” that federal
                             agencies intend to disseminate would be peer reviewed.




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intended to serve as an incentive to improved regulatory analysis—the
“carrot” portion of the “carrot and stick” approach mentioned previously.

However, two former OIRA Administrator indicated that similar deference
was given during the previous administration to peer reviewed regulatory
analyses, and that the current administration’s initiative in this area
reflected a change in the degree to which deference is given rather than a
substantial change of direction. On the other hand, they also said the
current policy is more explicit than the previous administration’s approach.




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                          OIRA had a significant effect on 25 of the 85 draft proposed and final rules
                          from nine selected agencies that it reviewed between July 1, 2001, and June
                          30, 2002; 17 of the rules were significantly changed by OIRA, 7 were
                          returned to the agencies for reconsideration, and 1 was withdrawn by the
                          agency at OIRA’s request.1 Almost all of the rules that were significantly
                          changed at OIRA’s suggestion were from EPA. Almost all of the returned
                          rules were from DOT, as was the rule withdrawn at OIRA’s request. Many
                          of OIRA’s actions in these cases were prompted by concerns about the
                          quality of the agencies’ regulatory analyses and/or whether the agencies
                          had selected the most cost-effective regulatory option. For 22 of the 25
                          rules, OIRA’s actions appeared to have at least some effect on the costs and
                          benefits associated with the rule or to have prompted revisions in the
                          agency’s estimates of those costs and benefits. There was evidence that
                          outside parties had contacted OIRA before or during OIRA’s formal review
                          period regarding about half of the significantly changed rules, two of the
                          returned rules, and the rule withdrawn at OIRA’s request. Although OIRA’s
                          positions regarding these rules were sometimes similar to those expressed
                          by outside parties, it is impossible to determine the extent to which those
                          contacts might have influenced OIRA’s actions, if at all. ORIA might have
                          reached the same conclusions in the absence of those contacts. Some of
                          the agencies did not clearly identify all of the changes made to their rules
                          during OIRA’s review or at OIRA’s suggestion—as required by Executive
                          Order 12866. However, other agencies clearly identified those changes.



OIRA Significantly        Our second objective was to provide detailed information on rules that
                          were significantly changed by OIRA, withdrawn at OIRA’s initiative, or
Affected About One-       returned to the agencies for reconsideration. According to the OIRA
Third of the Rules That   database, from July 1, 2001, through June 30, 2002, OIRA completed 642
                          reviews of agencies’ draft regulatory actions submitted under Executive
the Selected Agencies     Order 12866. The dispositions of these reviews were as follows:
Submitted for Review
                          •	 About 33 percent (214) were coded in the database as “consistent with
                             no change,” indicating that OIRA considered the rules consistent with
                             the executive order as submitted.



                          1
                           Our unit of analysis was technically the submission of a rule to OIRA for Executive Order
                          12866 review, rather than the rule itself, because some of the rules were reviewed by OIRA
                          more than once. However, for simplicity we refer to these executive order submissions as
                          rules in this report.




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•	 About 50 percent (322) were coded as “consistent with change,”
   indicating that the rules had changed after being submitted to OIRA, and
   that OIRA subsequently concluded that the rule was consistent with the
   executive order’s requirements.

• About 8 percent (50) were coded as “withdrawn” by the agency.

• About 3 percent (21) were coded as “returned” to the agency by OIRA.

•	 About 5 percent (35) had some other disposition (e.g., “sent improperly,”
   “emergency,” or “statutory or judicial deadline”).

Because the number of changed, returned, or withdrawn rules
governmentwide during this time frame was so large (393), we focused this
part of our review on 85 proposed and final rules with those dispositions
that were submitted to OIRA by nine selected agencies or offices: 2

•	 The Animal and Plant Health Inspection Service within the Department
   of Agriculture.

•	 The Food and Drug Administration within the Department of Health and
   Human Services.

•	 The Occupational Safety and Health Administration within the
   Department of Labor.

•	 The Federal Aviation Administration, the Federal Motor Carrier Safety
   Administration, and the National Highway Traffic Safety Administration
   within the Department of Transportation.

•	 The Offices of Air and Radiation, Solid Waste and Emergency Response,
   and Water within EPA.

We selected these agencies and offices because the OIRA database
indicated they had the most rules that were changed, withdrawn, or
returned during the relevant 1-year period.




2
 See appendix I for a more detailed description of our objectives, scope, and methodology,
and appendix II for information about each of the 85 submissions.




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                                        Table 1 shows the number of rules with each type of OIRA disposition
                                        within each of the selected agencies or offices. We generally did not
                                        question the rule dispositions used in the OIRA database. However, we
                                        included one rule from EPA’s Office of Air and Radiation in the “consistent
                                        with change” category that had been coded as a “deadline case” in the
                                        database because publicly available information indicated that the rule had
                                        been changed in response to OIRA’s review (ID 41).3 It is unclear whether
                                        other rules with “deadline case” outcome codes in the database were also
                                        changed by OIRA, or why other rules that we reviewed with legal deadlines
                                        were not coded as deadline cases.4 Also, we dropped one rule from EPA’s
                                        Office of Solid Waste and Emergency Response that was coded “consistent
                                        with change” because it had not been published in the Federal Register at
                                        the time of our review.



Table 1: Selected Agencies’ Regulatory Submissions by Outcome

                            Number of rules reviewed between July 1, 2001, and June 30, 2002, that
Agency                                       were coded in the OIRA database as                                                     Total
                                                                                        Withdrawn by the
                            Consistent with change        Returned to agency                     agency
APHIS                                             12                            0                         1                           13
FDA                                               7                             0                         2                            9
OSHA                                              5                             0                         0                            5
DOT-FAA                                           5                             6                         1                           12
DOT-FMCSA                                         6                             0                         0                            6
DOT-NHTSA                                         5                             1                         1                            7
EPA Office of Air and                             14                            1                         0                           15
Radiation
EPA Office of Solid Waste                         9                             0                         0                            9
and Emergency Response
EPA Office of Water                               8                             1                         0                            9
Total                                             71                            9                         5                           85
Source:OIRA’s database.




                                        3
                                        See, for example, Arthur Allen, “Where the Snowmobiles Roam,” Washington Post
                                        Magazine (Aug. 18, 2002).
                                        4
                                         OIRA’s database has a separate field, separate from the field on reviews’ outcomes, that
                                        identifies submissions with legal deadlines. Twenty-two of the 85 rules that we reviewed
                                        were coded in OIRA’s database as having a statutory or judicial deadline.




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Note: Data in each category reflect the number of proposed, final, and interim final rules that OIRA
reviewed between July 1, 2001, and June 30, 2002, but do not include other types of regulatory actions
submitted to OIRA during this period (e.g., notices, prerules, or emergency rules). As discussed later
in this report, the nine returned rules included two improper submissions—one from FAA and one from
the EPA Office of Air and Radiation.


Although the OIRA database was useful in focusing our review on certain
agencies and rules, the categories used in that database are broader than
the specific types of rules targeted in this section of our report—those that
were significantly affected by OIRA.

•	 The “consistent with change” category includes all rules that were
   changed between their formal submission to OIRA for review and their
   issuance by the agency, regardless of the source or the significance of
   the changes made—not just those that were significantly changed at
   OIRA’s request. For example, even if the only change made to a rule
   during OIRA’s review was the correction of a legal citation made by the
   submitting agency, the rule would be coded in the database as
   “consistent with change.”

•	 The “returned” category includes all returns, not just those that were
   substantively “returned for reconsideration.” Therefore, if OIRA
   returned a rule solely because it was not subject to OIRA review (e.g.,
   was improperly submitted), it would be coded in the database as a
   “returned” rule.

•	 The “withdrawn” category includes all rules withdrawn by the agencies
   during OIRA’s review, not just those that were withdrawn at the
   initiation of OIRA. Therefore, if an agency erroneously submitted a rule
   to OIRA and withdrew it solely at the agency’s initiative, the rule would
   be coded in the OIRA database as “withdrawn.”

Because of the breadth of these categories, we had to gather additional
information on each of the 85 changed, returned or withdrawn rules to
determine which ones had been significantly affected by OIRA and,
therefore, met our more specific criteria.

Ultimately, we determined that 25 of the 85 rules from these agencies were
significantly affected by OIRA’s review. Specifically, we concluded that 17
of the 71 rules that were coded as “changed” in the database were
significantly affected by OIRA. Seven of the nine rules coded as “returned”
were returned by OIRA for substantive reasons. One of the five
“withdrawn” rules was returned at the initiation of OIRA.




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OIRA Did Not Significantly   We used a variety of information sources (e.g., agency and OIRA docket
Affect Many of the           materials and interviews with agency officials) to place each of the 71 rules
                             coded as “consistent with change” into one of three categories:
“Changed” Rules
                             1.	 Significant changes—i.e., rules in which the most significant changes
                                 attributed to OIRA’s or OMB’s suggestions affected the scope, impact,
                                 or estimated costs and benefits of the rules as originally submitted to
                                 OIRA.5 Usually, these significant changes were made to the regulatory
                                 language that would ultimately appear in the Code of Federal
                                 Regulations.

                             2.	 Other material changes—i.e., rules in which the most significant
                                 changes attributed to OIRA’s or OMB’s suggestions resulted in the
                                 addition or deletion of material in the explanatory preamble section of
                                 the rule. For example, OIRA may have recommended that agencies
                                 provide better explanations for certain rulemaking actions and/or
                                 suggested that agencies ask the public to comment on particular
                                 aspects of the rules.

                             3.	 Minor or no OIRA/OMB changes—i.e., rules in which the most
                                 significant changes attributed to OIRA’s or OMB’s suggestions resulted
                                 in editorial or other minor revisions, or rules in which changes
                                 occurred prior to publication but not at the suggestion of OIRA or OMB.
                                 Where no changes were made at OIRA’s or OMB’s suggestion, the
                                 changes that caused the rule to be coded “consistent with change”
                                 could have been initiated by the regulatory agency itself or by another
                                 federal agency (e.g., the Office of the Federal Register).6

                             We placed each of the rules that we examined into the appropriate category
                             based on the most significant changes attributed to either OIRA or OMB—
                             even if the regulatory agencies initiated more significant changes to their
                             rules during the period of OIRA’s review than did OIRA.7




                             5
                              The agencies sometimes attributed suggested changes to OMB and sometimes specifically
                             to OIRA. In a few instances, OMB staff outside of OIRA suggested the changes.
                             6
                              Because the executive order does not require agencies to document nonsubstantive
                             changes, three of the rules we included in this category were ones in which it was clear all
                             the changes were minor, but the source of the changes (i.e., whether they were made at the
                             suggestion of OMB/OIRA) could not be identified.




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Table 2 presents the results of our analysis by agency. We concluded that
17 of the 71 rules coded as “consistent with change” in the OIRA database
(about 24 percent) were significantly changed as a result of OIRA’s
suggestion or recommendation, 34 of the rules had other material changes
attributable to requests by OIRA, and 20 rules had only minor changes or
no changes at OIRA’s suggestion or recommendation. Fourteen of the 17
significantly changed rules were from EPA—all but one of which were from
the agency’s Offices of Air and Radiation or Water. Three other rules had
significant changes attributed to suggestions from OIRA or OMB—two
APHIS rules regarding indemnity payments for the destruction of diseased
animals and one NHTSA rule on tire pressure monitoring systems. (See
app. II for the coding and detailed descriptions of the changes made to each
of the 71 rules.)




7
 For example, after submitting its rule on emission standards for surface coating of metal
furniture to OIRA, EPA reanalyzed data from the covered industry and revised the emission
limits to be less stringent than those originally proposed—what we would have considered a
“significant” change if suggested by OIRA (ID 47). However, because the most significant
OIRA-suggested change was the addition of text to the preamble clarifying the agency’s
analysis and requesting comments on a particular provision, we coded this rule as having
had “other material changes.”




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Table 2: Nature of Changes Made at the Suggestion or Recommendation of OIRA

                                                                            Total rules changed
                        Number of rules by most significant level of        after submission to
Agency                        change suggested by OIRA                                     OIRA
                                               Other
                            Significant      material      Minor or no
                              changes        changes          changes
APHIS                                 2              9                 1                    12
FDA                                   0              6                 1                     7
OSHA                                  0              2                 3                     5
DOT-FAA                               0              2                 3                     5
DOT-                                  0              3                 3                     6
FMCSA
DOT-                                  1              2                 2                     5
NHTSA
EPA Office                            7              4                 3                    14
of Air and
Radiation
EPA Office                            1              4                 4                     9
of Solid
Waste and
Emergency
Response
EPA Office                            6              2                 0                     8
of Water
Total                               17              34                 20                   71
Source: GAO analysis.


As figure 9 illustrates, rules from EPA’s Office of Air and Radiation and
Office of Water were more often significantly changed at the suggestion of
OIRA than rules from the other agencies and offices that we examined.




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                               Figure 9: EPA Air and Water Rules Were More Often Significantly Changed at the
                               Suggestion of OIRA

                                16 Number of changed submissions


                                14


                                12


                                10


                                 8


                                 6


                                 4


                                 2


                                 0
                                     APHIS       FDA       OSHA        DOT-FAA    DOT-    DOT-   EPA-AR    EPA-   EPA-
                                                                                 FMCSA   NHTSA            OSWER   Water
                                     Agency

                                              Significant changes

                                              Other material changes

                                              Minor or no changes

                               Source: GAO.




Types of Significant Changes   In 6 of the 14 EPA rules that were significantly changed, the primary effect
Made at OIRA’s                 of OIRA’s suggestions or recommendations was to delay or eliminate
Suggestion/Recommendation      certain regulatory provisions that were included in the draft rules as
                               submitted to OIRA. For example:

                               •	 In response to OIRA concerns about the information collection request
                                  associated with an EPA Office of Air and Radiation final rule on
                                  consolidated emissions reporting, EPA delayed the compliance date for
                                  states to report on two types of emissions (ID 50).

                               •	 OIRA’s suggestions also prompted the deletion of provisions covering
                                  marine and highway motorcycle engines from an EPA Office of Air and




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    Radiation proposed rule on emissions from nonroad large spark-ignition
    engines and recreational engines (ID 41).8

•	 EPA eliminated manganese from a list of hazardous constituents in an
   Office of Solid Waste and Emergency Response final rule on the
   identification and list of hazardous wastes in response to comments
   from OIRA (ID 56).

In four other significantly changed EPA rules, OIRA suggestions
encouraged the agency to change, add, or select regulatory alternatives that
generally provided more flexible and/or less costly compliance options to
regulated entities. For example:

•	 OIRA suggestions led to changes in an EPA Office of Water proposed
   rule on pollutant discharge elimination systems for large cooling water
   intake structures at existing power generating facilities that (1) lowered
   the performance standard in the rule, (2) made compliance
   requirements more flexible by allowing options for a site-specific
   approach to minimizing environmental harm, and (3) broadened a
   restoration option whereby firms may repair environmental harm rather
   than comply with the designated performance standard (ID 68). OIRA
   believed that these options were not only less burdensome, but also
   would yield greater net benefits.

•	 In a related EPA Office of Water final rule on minimizing environmental
   impact from cooling water intake structures at new facilities, OIRA-
   suggested changes included (1) the addition of criteria that would allow
   more facilities to qualify for lower performance standards, (2) a changed
   requirement so that facilities only needed to use screens to minimize
   impingement mortality of fish and shellfish if certain criteria were met,
   and (3) the addition of an exception to intake flow requirements
   regarding cooling water intake structures located in a lake or reservoir
   (ID 65).

In three other EPA rules and the NHTSA tire pressure monitoring systems
rule, OIRA suggested significant changes to the agencies’ regulatory impact
analysis. For example:




8
 The marine and motorcycle engines provisions later resurfaced as a separate rule (ID 54).




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                                •	 OIRA suggestions prompted EPA to make changes regarding the
                                   discount rates and fuel prices that the agency used to estimate the
                                   potential costs of a proposed rule on nonconformance penalties and
                                   emission standards for heavy-duty diesel engines and vehicles (ID 53).

                                •	 Similarly, OIRA comments led EPA to revise the cost-benefit and cost-
                                   effectiveness estimates in a proposed rule on emissions from spark
                                   ignition marine vessels and highway motorcycles (ID 54).

                                In both of the APHIS rules with significant changes attributed to requests
                                from OMB, the changes reduced the potential total cost to the federal
                                government of paying indemnities to owners of animals destroyed or for
                                other measures taken to avoid the spread of certain communicable
                                diseases among animals (IDs 9 and 12).

Rules With “Other Material      We concluded that in 34 (about 48 percent) of the 71 “consistent with
Changes” Attributable to OIRA   change” rules, regulatory agencies made “other material changes” in
                                response to OIRA’s suggestions or recommendations. Typically, these
                                changes augmented an agency’s explanation of certain provisions in the
                                rule, clarified the agency’s basis for decisions made about regulatory
                                options or assumptions, better explained the potential impact of different
                                options, or requested public comments and data on regulatory options or
                                costs. For example, in response to OIRA’s suggestions or
                                recommendations:

                                •	 APHIS revised the preamble to a rule that updated plant pest regulations
                                   to (1) clarify that the proposed regulations would not cover genetically
                                   modified organisms, (2) acknowledge there is a continuum of risk
                                   related to regulated organisms, (3) solicit comments about the adequacy
                                   of criteria APHIS used to identify organisms for inclusion, and (4) solicit
                                   comments on the data elements that would have to be addressed in a
                                   proposed notification system (ID 6).

                                •	 FDA added or revised information to the preamble of a final rule on
                                   notification and recordkeeping requirements for exports to clarify its
                                   responses to public comments on the proposed rule (ID 13).

                                •	 OSHA revised the preamble to a rule on procedures for handling
                                   discrimination complaints (1) to add information and request public
                                   comment regarding the whistle-blower model that OSHA chose and (2)
                                   to clarify that certain procedures would be triggered at the “request of
                                   the named person” (the person alleged to have violated the act) (ID 21).



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                                •	 EPA’s Office of Air and Radiation revised the preamble of its proposed
                                   rule on national emission standards for hazardous air pollutants from
                                   surface coating of metal furniture to request public comments on (1) its
                                   conclusion that the creation of subcategories in the rule was not
                                   warranted and (2) whether there were alternative means of monitoring
                                   performance for add-on controls at source facilities that would be as
                                   effective and less expensive than the proposed requirements (ID 47).

Rules in Which OIRA Suggested   OIRA suggested only editorial or other minor changes, or no changes at all,
Minor Changes or No Changes	    in 20 (about 28 percent) of the 71 rules coded in the OIRA database as
                                “consistent with change.” These minor changes included rearranging
                                existing text for clarity, correcting spelling errors, making word choice
                                changes, and adding or correcting procedural language, such as where to
                                submit public comments on the rules being published. For example:

                                •	 The only two changes that OIRA suggested in a FMCSA rule on
                                   certification of safety auditors, investigators, and inspectors were to
                                   delete a redundant sentence and to correct the number cited for a
                                   relevant executive order (ID 33).

                                •	 In an EPA proposed rule on a national ambient air quality standard for
                                   ozone, OIRA suggested rewording three similar statements in the
                                   preamble regarding EPA’s views about “using plausible but highly
                                   uncertain assumptions” (ID 42).

                                •	 The only change made at OIRA’s suggestion in an EPA hazardous waste
                                   management rule concerning cathode ray tubes and mercury-containing
                                   equipment was to revise a request for comments on extending the
                                   “speculative accumulation time of used, broken CRTs” to “two or more
                                   years” instead of just “two years” (ID 62).

                                As noted previously, although we concluded that OIRA suggested only
                                minor changes or no changes to these rules, some of them appeared to
                                have been significantly changed during the period of OIRA’s review at the
                                initiative of the agencies.



Most of the Rules That OIRA     Two of the nine rules from the selected agencies that were coded as
Returned Were for               “returned” in the OIRA database were returned because they were
                                improperly submitted for review. The other seven rules were returned to
Reconsideration
                                the issuing agencies for reconsideration—five rules from FAA, one from
                                NHTSA, and one from EPA.



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In each of these seven cases, OIRA sent the rulemaking agency a “return
letter” describing its rationale for returning the rule. The letters indicated
that the returns for reconsideration were most often triggered by OIRA
concerns about the quality of agencies’ regulatory analyses or the cost-
effectiveness of the proposed regulatory options. For example:

•	 OIRA said it returned a proposed FAA rule on certification of pilots,
   aircraft, and repairmen for the operation of light sport aircraft because it
   believed that the regulatory analysis did not sufficiently justify the rule
   (ID 73).

•	 OIRA returned another FAA draft final rule after raising questions and
   concerns about the relative cost-effectiveness of requiring additional
   flight data recorder parameters (ID 77).

•	 OIRA returned a NHTSA final rule on tire pressure monitoring systems
   because, in OIRA’s opinion, NHTSA’s analysis did not adequately
   demonstrate that the agency had selected the best available alternative
   (ID 78).

•	 OIRA returned an EPA rule on water quality standards for Indian
   country because, among other issues, EPA did not provide a quantitative
   analysis of the costs and benefits that could result from this regulatory
   action (ID 80).

In other cases, OIRA cited coordination issues as its rationale for the
returns. For example, in one rule OIRA suggested to FAA that a concurrent
review of the aging aircraft and corrosion control plan rules could assist in
determining the most cost-effective way to detect and correct problems
affecting aging aircraft safety (IDs 76 and 74). In another FAA rule on Part
145 repair stations, OIRA cited concerns from the Department of State
regarding the effect of the rule on international treaties (ID 72). (However,
FAA officials told us during our review that FAA and the Department of
State had resolved these concerns prior to the rule’s submission to OIRA,
so the rule might have been returned because of a misunderstanding.)9
Another factor that seems to have influenced at least some of the returns
was the 90-day limit for OIRA’s reviews. In return letters for three rules,
OIRA specifically mentioned the need for additional time to resolve some


9
 FAA resubmitted the rule, with no revisions, on the same day that it was returned. Ten days
later, OIRA completed its review of the resubmitted version “consistent with no change.”




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                             of its issues and comments as part of the explanation for returning draft
                             rules for reconsideration.

                             As of May 2003, five of the seven rules that OIRA returned for
                             reconsideration by the rulemaking agencies had been resubmitted by the
                             agencies, completed another review by OIRA, and were published in the
                             Federal Register. Publication of one other rule—FAA’s proposed revision
                             of digital flight data recorder regulations—was still pending, according to
                             FAA officials, but EPA had not resubmitted its proposed rule on federal
                             water quality standards for Indian country to OIRA.



Agencies, Not OIRA,          Neither OIRA nor the regulatory agencies are required to document why
Initiated Most Withdrawals   rules are withdrawn from OIRA’s review. Therefore, we relied primarily on
                             testimonial evidence from agency officials to determine whether the five
                             rules within the scope of our review had been withdrawn at the suggestion
                             of OIRA or OMB. We determined that only one of the five rules appeared to
                             have been withdrawn at OIRA’s initiative—FAA’s Part 145 Review rule on
                             repair stations (ID 84). FAA’s docket included a chronology of
                             developments regarding this rule with an entry stating that OIRA instructed
                             the agency to withdraw the rule. FAA officials explained that OIRA
                             suggested this withdrawal due to “concerns from industry and the State
                             Department.”10 (As noted previously, OIRA representatives told us they do
                             not request that agencies withdraw rules, and emphasized that it is the
                             agencies—not OIRA—that ultimately make withdrawal decisions.
                             However, they also said that agencies sometimes withdraw rules as a
                             negotiating strategy.)

                             Agency officials characterized two of the withdrawals as “mutual
                             decisions” made by their agencies and OIRA. In one of these cases, an
                             APHIS rule on importation of clementines from Spain, an agency official
                             said that the rule was withdrawn pending the close of a comment period on
                             a related document published by the agency, because keeping the rule at
                             OIRA until then would have taken OIRA’s review period beyond 90 days (ID
                             81). (It was resubmitted about a month later and subsequently coded
                             “consistent with change.”) In the other case, an FDA rule on records and
                             reports concerning new animal drugs, the agency officials characterized
                             the mutual decision as a compromise to address the fact that the old

                             10
                              This was the same rule that was subsequently resubmitted, returned to FAA by OIRA,
                             resubmitted yet again, and ultimately completed OIRA review with no changes.




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                              proposed rule was “stale” (ID 82). (The rule was later published as an
                              “interim final” rule to permit additional public comment without having to
                              restart the rulemaking at the proposed rule stage.) The remaining two
                              rules—an FDA proposed rule concerning dietary ingredients and
                              supplements and a NHTSA rule on light truck fuel economy standards—
                              were withdrawn solely at the initiative of the agency or its executive
                              department (IDs 83 and 85). All five of the withdrawn rules that we
                              examined were subsequently resubmitted to OIRA by the agencies and
                              were later characterized by the office as consistent with the executive
                              order.



Rules from FAA and EPA’s      As table 3 shows, when the results for all the changed, returned, or
Office of Air and Radiation   withdrawn rules are combined, it is clear that the rules submitted by FAA
                              and EPA’s Office of Air and Radiation and Office of Water were most often
and Office of Water Were
                              significantly affected by OIRA’s review. During the period covered by our
More Often Significantly      review, about 56 percent of the rules from these agencies (20 of 36) were
Affected by OIRA              significantly affected. In contrast, only about 10 percent of the rules from
                              the remaining six agencies (5 of 49) were significantly affected by OIRA’s
                              review.



                              Table 3: Rules from FAA and EPA’s Office of Air and Radiation and Office of Water
                              Were Most Often Significantly Affected by OIRA Review

                                                              Rules submitted to OIRA for executive order review
                                                                                 Significantly affected by OIRA
                              Agency                                     Total          Number             Percent
                              APHIS                                        13                  2                   15
                              FDA                                           9                  0                   0
                              OSHA                                          5                  0                   0
                              DOT-FAA                                      12                  6                   50
                              DOT-FMCSA                                     6                  0                   0
                              DOT-NHTSA                                     7                  2                   29
                              EPA-Office of Air and                        15                  7                   47
                              Radiation
                              EPA-Office of Solid Waste                     9                  1                   11
                              and Emergency Response
                              EPA-Office of Water                           9                  7                   78
                              Total                                        85                25                    29
                              Source: GAO analysis.




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OIRA representatives suggested that the differences in the extent to which
OIRA significantly affected agencies’ rules might actually be a function of
differences in the importance or impact of the rules submitted—not
whether they are from one agency or another. The representatives said
that OIRA typically spends more time and effort reviewing economically
significant rules that are likely to have the biggest impact on society.
Therefore, they indicated that agencies like EPA that produce a number of
economically significant rules were more likely to have their rules
significantly affected by OIRA’s review than agencies like FDA that did not
submit as many economically significant rules.

As table 4 shows, 14 of the 85 rules that we examined were economically
significant. We concluded that 5 of those 14 rules (36 percent) had been
significantly affected by OIRA’s review. In comparison, we concluded that
20 of the 71 rules that were not economically significant (28 percent) had
been significantly affected by OIRA’s review. Therefore, although OIRA
was slightly more likely to have had a major effect on economically
significant rules than other rules, the difference was not statistically
significant.11



Table 4: OIRA Was Only Slightly More Likely to Significantly Affect Economically
Significant Rules

                              Rules submitted to OIRA for executive order review
                                                       Significantly affected by OIRA
Type of rule
                                           Total               Number                   Percent
Economically                                  14                       5                      36
significant
Not economically                              71                      20                      28
significant
Total                                         85                      25                      29
Source: GAO analysis.




11
  We performed a statistical analysis using Fisher’s exact test to determine if there was a
statistically significant association between whether the rules reviewed by OIRA were
economically significant and whether the rules were significantly affected by OIRA. The
test results (p = 0.43) did not support a hypothesis that a statistically significant association
exists.




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                              Notably, all six of the FAA rules that OIRA significantly affected were not
                              economically significant. Of the 14 EPA Office of Air and Radiation and
                              Office of Water rules that OIRA significantly affected, only 3 were
                              economically significant.



OIRA Affected the             In 22 of the 25 rules that we concluded had been significantly affected by
                              OIRA’s suggestions or recommendations, OIRA appeared to have
Costs and Benefits or         influenced either (1) the expected costs and/or benefits of the rules and/or
Estimates in Some             (2) the agencies’ estimates of those costs and/or benefits. The focus of
                              OIRA’s changes in most of these cases appeared to be on reducing the costs
Rules                         and regulatory burdens, improving the cost-effectiveness of the rules,
                              and/or yielding greater net benefits. This focus is consistent with the
                              emphasis in Executive Order 12866 and the related “best practices”
                              document and guidance on improving regulatory net benefits and cost-
                              effectiveness and minimizing the cost burden of regulation.



OIRA-Suggested Changes        In at least 12 rules, OIRA or OMB suggested changes to the regulatory text
That Appeared to Have         that could reasonably be expected to affect the potential costs and/or
                              benefits of the regulations. Sometimes there was direct evidence in the
Affected Costs and Benefits   docket materials of those effects. For example:

                              •	 In an EPA Office of Water proposed rule on pollutant discharge
                                 elimination systems for large cooling water intake structures at existing
                                 power generating facilities, OIRA recommended that the agency select a
                                 regulatory alternative that it believed would yield substantially greater
                                 net benefits (ID 68). The approach that EPA originally proposed would
                                 have cost an estimated $610 million per year, with estimated benefits of
                                 $890 million per year, yielding net benefits of $280 million. However,
                                 OIRA recommended that EPA select another approach that, while
                                 having estimated benefits of $735 million, was expected to cost only
                                 $280 million, yielding net benefits of $455 million.

                              •	 In another example, an APHIS rule regarding foot-and-mouth disease,
                                 OMB suggested changes in the indemnity payments that were, in turn,
                                 reflected in the agency’s revised estimates of the rule’s costs and
                                 benefits (ID 12).

                              However, in most of the cases in which OIRA suggested changes to
                              regulatory text, the documentary evidence of how those changes affected



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the rules’ costs and/or benefits was more limited and less clear. In some
cases the rules at issue were not “economically significant,” so the
regulatory agencies were not required to prepare formal quantitative
assessments of the rules’ expected costs or benefits. In another case, the
agency prepared those assessments but did not include complete copies of
the original and revised versions of the cost and benefit estimates in the
regulatory dockets. Therefore, we were unable to compare the agencies’
estimates to determine the effect of the OIRA-suggested changes in the
regulatory text.

Nevertheless, even in the absence of such documentation, we believe that it
is reasonable to assume in at least some cases that the OIRA-suggested
elimination or delay of certain regulatory provisions in the text of draft
rules as submitted to OIRA would also eliminate or delay the expected
costs and/or benefits associated with those provisions. The following are
examples of OIRA suggested changes in regulatory text that appeared to
affect the rules’ expected costs and/or benefits:

•	 APHIS revised the regulatory text in a proposed rule on payment of
   indemnity for animals affected by foot-and-mouth disease to eliminate
   compensation coverage for certain voluntary actions taken by owners of
   animals, thereby reducing potential costs to the federal government (ID
   12). However, according to an APHIS official (and as explained in the
   preamble of the proposed rule), not providing compensation for the care
   and feeding of “official vaccinates” that could be used as a “fire wall”
   around infected animals to help prevent the spread of the disease, and
   eliminating compensation for cleaning and disinfecting non-susceptible
   animals that could spread the disease even if they cannot themselves
   become infected, could impede eradication efforts, thus reducing
   overall benefits to society.12

•	 EPA changed the regulatory text in a final rule regarding cooling water
   intake structures at new facilities to provide regulated entities the
   flexibility to use more alternatives or exceptions to compliance with the
   rule’s requirements and standards (ID 65). These changes could
   reasonably be expected to reduce at least some of the regulated entities’
   costs of compliance with those requirements and standards, without any
   documented change in benefits.


12
 Official vaccinates are livestock vaccinated as part of a foot-and-mouth eradication
program.




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                          •	 EPA deferred final action on adding manganese to the list of hazardous
                             waste constituents, thereby also deferring the potential costs and
                             benefits of designating manganese as a hazardous waste constituent,
                             with an unknown effect on net benefits (ID 56).

                          •	 EPA delayed compliance dates in two provisions of a proposed rule
                             setting national emission standards for hazardous air pollutants from
                             surface coating of wood building products, thereby producing
                             corresponding delays in the costs and benefits expected for the rule (ID
                             51).



OIRA-Suggested Changes    In 14 rules (including some of the ones described above with regulatory
that Affected Agencies’   text changes), OIRA specifically commented on and requested changes in
                          the agencies’ analyses of the economic impacts of the draft regulations. Six
Estimates of Costs and
                          of the seven rules that OIRA returned to agencies for reconsideration fell
Benefits                  into this category. Although OIRA sometimes suggested revisions in
                          existing estimates and calculations, OIRA more often suggested changes
                          that added or clarified information and analysis presented on a draft rule’s
                          economic impacts. For example:

                          •	 EPA responded to OIRA comments and suggestions by revising cost-
                             benefit and cost-effectiveness estimates for a proposed rule regarding
                             emissions from spark-ignition marine vessels and highway motorcycles
                             (ID 54). As a result of the changes, the estimated annual costs to
                             manufacturers were reduced by $4 million and the estimated annual fuel
                             savings to the public were increased by $4.3 million.

                          •	 OIRA returned an FAA proposed rule on certification of pilots, aircraft,
                             and repairmen for the operation of light sport aircraft with a request that
                             the agency prepare additional revised analyses of the potential impacts
                             (ID 73). OIRA’s comments focused on the analytical baseline FAA had
                             used and the regulatory alternatives presented. Among other things,
                             OIRA suggested that, as part of an improved analysis of alternatives,
                             FAA could consider means of improved compliance and enforcement of
                             regulations currently in place.

                          •	 At OIRA’s suggestion, NHTSA inserted additional estimates of some
                             costs and benefits of regulatory alternatives (e.g., adding estimates of
                             the total estimated costs of the proposed alternatives, where the original
                             draft only provided estimates of average cost per vehicle), added
                             additional information about the potential range of injuries and deaths



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                             prevented and other benefits that might be realized with different
                             regulatory alternatives, and identified unquantified benefits and costs
                             that might be associated with its proposed rule on tire pressure
                             monitoring systems (ID 36).



A Focus on Costs, Cost-   In general, the focus of OIRA’s changes in most of these cases appeared to
Effectiveness, and Net    be on reducing costs and regulatory burdens, improving the cost-
                          effectiveness of the rules, or maximizing the rules’ net benefits. For
Benefits
                          example, OIRA returned six rules for reconsideration because of concerns
                          that the agencies’ analyses had not adequately captured all economic
                          effects of the rules or presented regulatory options that OIRA did not
                          believe were cost-effective. In the changed rules, reducing costs or
                          improving cost-effectiveness was sometimes accomplished by suggesting
                          additional, more flexible regulatory options, but it was not always clear
                          whether reductions in costs would necessarily be accompanied by
                          increases in net benefits to society. For example, in response to an OIRA
                          suggestion, EPA eliminated a regulatory provision requiring a minimum net
                          reduction if steel facilities used a voluntary pollutant trading mechanism
                          called a “water bubble (ID 71).” EPA’s original draft rule noted that the
                          mechanism had been structured in a way to produce an additional benefit
                          because the amount of the pollutant discharges pursuant to the bubble had
                          to be 10-percent to 15-percent less than the discharges otherwise
                          authorized by the rule without the bubble. However, eliminating this
                          minimum net reduction requirement might encourage more regulated
                          entities to use this voluntary mechanism to comply with the standards of
                          the rule at lower cost. The potential change in net benefits to society is
                          therefore not clear.

                          Although attention to the cost side of economic effects was most prevalent
                          in OIRA’s comments and suggestions, in at least four cases OIRA also
                          suggested specific changes in agencies’ estimated benefits of their rules.
                          OIRA suggested several changes regarding the benefits estimates of
                          NHTSA’s proposed tire pressure monitoring system rule, in particular
                          inserting additional information about benefit estimates, such as the range
                          of injuries and deaths prevented, stopping distance effects, and average tire
                          life increases (ID 36). OIRA also suggested adding a discussion on the
                          effect of human factors on the benefits of tire pressure monitoring systems.
                          When OIRA returned NHTSA’s draft final rule on tire pressure monitoring
                          systems, the office stated that the technical foundation for NHTSA’s
                          estimates of safety benefits needed to be better explained and subjected to
                          sensitivity analysis (ID 78). OIRA also questioned some of EPA’s estimates



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of the environmental impacts associated with a proposed rule on emissions
from nonroad large spark-ignition engines and recreational engines (ID 41).
In an indemnity program to address chronic wasting disease (CWD) in
cervids (antler-bearing animals, such as elk and deer), OIRA asked APHIS
to avoid citing as a benefit the avoidance of disease in humans caused by
CWD because this possibility was considered remote by a Harvard risk
analysis (ID 9).

There were also cases in which OIRA did not directly affect the expected
costs or benefits of a rule but nevertheless suggested changes to an
agency’s discussion of the rule’s costs and benefits. In 19 such rules that
were changed after submission, OIRA suggested clarification or revision of
the information presented in the rule about estimated costs and benefits or
how they were calculated, solicited comments on a regulatory agency’s
cost-benefit estimates, or requested comments on ways to make a
regulation more cost-effective or less costly and burdensome. (At least 2 of
the 22 rules that we identified as having costs and/or benefits directly
affected by OIRA’s actions also had such clarifications or requests for
comments inserted at OIRA’s suggestion.)

Again, many of OIRA’s comments and suggested changes were focused on
the costs of the proposed regulatory actions, although in these cases OIRA’s
suggestions most often helped to clarify the potential costs of regulatory
alternatives or how an agency had estimated those costs. In at least seven
rules, OIRA specifically suggested that agencies solicit public comments
and data on the potential costs and burdens of proposed regulations or
suggestions for alternative regulatory options that would be more cost-
effective or less burdensome. By focusing attention and soliciting
comments on cost and burden issues, particularly at the proposed rule
stage, these revisions to preamble language might prompt changes in the
costs and benefits of the rules in future iterations of the rules.

Appendix II includes more detailed information on the extent to which
OIRA’s regulatory reviews had an effect on the potential costs and benefits
of individual rules within the scope of our report.




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Outside Parties          Another part of this objective was to determine whether there was any
                         evidence that the actions that OIRA took (e.g., to suggest significant
Contacted OIRA           changes to rules or to return them to the agencies for reconsideration)
Regarding about Half     were traceable to suggestions offered by regulated entities or other parties
                         outside of the federal government. It is not possible to independently
of the Rules OIRA        determine what motivated OIRA’s actions with regard to any of the rules
Significantly Affected   that it reviewed. However, we did identify a number of instances in which
                         outside parties directly contacted OIRA regarding rules that OIRA later
                         significantly affected. Those direct contacts took the form of either a
                         meeting with OIRA representatives or a letter sent to OIRA before or during
                         the period of OIRA’s review.13 We also identified similarities between the
                         actions that OIRA suggested or recommended to the agencies and those
                         advocated to OIRA by outside parties through those direct contacts.

                         Outside parties directly contacted OIRA regarding 11 of the 25 rules that
                         OIRA significantly affected—8 of the rules that were significantly changed
                         as a result of OIRA’s suggestions or recommendations, 2 of the rules that
                         OIRA returned to the agencies for reconsideration, and the 1 withdrawal
                         that was made at OIRA’s request. As figure 10 shows, 8 of these 11 rules
                         were from EPA, FAA submitted 2 of the rules, and 1 was a NHTSA
                         submission.14 In all 11 cases, representatives of regulated entities were
                         involved in those contacts with OIRA. In 3 of the 11 cases, environmental
                         and other public interest groups also contacted OIRA about the rules.




                         13
                            In some OIRA files, we found evidence that OIRA had reviewed copies of substantive
                         comments on previous versions of the draft rule currently under review. Because these
                         were public docket materials previously submitted to the regulatory agencies, not OIRA, we
                         did not consider them as evidence of direct contact with OIRA by external parties. Also,
                         there was evidence that external parties contacted OIRA after the formal review period
                         regarding two other substantively changed submissions, but such postreview contacts could
                         not have affected the outcome of OIRA’s reviews in those cases.
                         14
                          The two FAA submissions were actually the same Part 145 repair station regulation. One
                         of the submissions resulted in a withdrawal and one resulted in a return (IDs 84 and 72,
                         respectively).




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Figure 10: Outside Parties Most Often Contacted OIRA Regarding EPA Rules
                                                          No contact by outside
                                                          parties




                                                 8        Contact on EPA rule
               14
                           11

                                                 2        Contact on FAA rule

                                                 1        Contact on NHTSA
                                                          rule


Source: GAO.




In 7 of the 11 cases where there was direct contact with OIRA by outside
parties, at least some of the actions that OIRA recommended or took
appeared to be similar to those suggested to OIRA by regulated parties.
(OIRA did not recommend changes that were similar to all of the changes
suggested by the regulated entities.) Environmental or other public
interest groups had also directly contacted OIRA in 3 of these 7 cases, but
OIRA’s actions did not appear to be similar to the suggestions offered by
those groups. Examples of the 7 cases include the following:

•	 As a result of its review of an EPA Office of Water rule on cooling water
   intake structures at existing power-generating facilities, OIRA suggested
   changes that lowered the draft performance standard and added
   compliance flexibility to the rule by allowing, among other things,
   options for a site-specific approach to minimizing environmental harm
   (ID 68). Some of OIRA’s suggested revisions of the regulatory language
   were similar to those proposed by representatives of the electric
   industry—in particular, the site-specific approach—during their
   contacts with OIRA regarding this rule. (The representatives of the
   electric industry also proposed other changes to this rule that OIRA did
   not recommend to EPA.) Representatives of an environmental interest
   group also contacted OIRA regarding this rule, advocating that EPA’s
   regulations be based on nationally uniform standards and not on case-
   by-case, site-specific determinations.



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•	 During its review of an EPA final rule on identification and listing of
   hazardous waste, industry representatives from steel manufacturers and
   a chemical company sent letters and met with OIRA opposing the listing
   of manganese as a hazardous waste constituent due to concerns about
   the costs that the rule would impose on certain facilities (ID 56).
   Industry representatives had raised similar points in the public
   comments they submitted during the proposed rule stage of this
   rulemaking, but EPA was not persuaded to revise its draft of the final
   rule after considering those comments. The main focus of OIRA’s
   extensive changes in this rule was the deferral of final action on all parts
   of the draft rule that would have identified manganese as a hazardous
   contaminant, as in the original proposed rule and EPA’s draft final rule.

•	 In a draft final rule on tire pressure monitoring systems, NHTSA
   included provisions that would eventually have mandated use of direct
   sensing technologies, rather than indirect technologies, for such
   systems (ID 78).15 Representatives of automobile manufacturers
   contacted OIRA to raise concerns that “the structure of the final rule
   will have the effect of eliminating indirect tire pressure monitoring
   systems as a compliance option.” They also argued that there was no
   evidence that safety benefits would be noticeably different between
   systems using indirect and direct sensing technologies. OIRA returned
   this rule to NHTSA for reconsideration, citing as its reason that the
   agency’s analysis did not adequately demonstrate that NHTSA had
   selected the best available option and raising concerns regarding
   NHTSA’s analysis of the safety impacts of regulatory alternatives. OIRA
   subsequently completed a review (consistent with no change) of
   NHTSA’s resubmitted version of the rule (with a revised analysis of
   safety issues, costs, and benefits of direct and indirect system
   alternatives) that allowed either type of sensing technology through a
   phase-in period and deferred until 2005 a decision on which
   performance standards would be effective after 2006.

However, it is impossible to determine the extent to which the suggestions
made by the regulated parties might have influenced OIRA’s actions, if at
all. OIRA might have independently reached the same conclusions or had

15
  Direct tire pressure monitoring systems have a tire pressure sensor in each tire that
transmits pressure information to a receiver. Indirect systems do not have tire pressure
sensors. Current indirect systems rely on the wheel speed sensors in an anti-lock braking
system to detect and compare differences in the rotational speed of a vehicle’s wheels,
which can correlate to differences in tire pressure.




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the same concerns even if the regulated entities had not contacted OIRA.
An OMB representative told us that in many of these meetings outside
parties have raised issues that had already been expressed in public
comments, meetings between the outside parties and the regulatory
agencies, trade papers, news articles, and other venues—all of which might
have been reviewed by OIRA.

On the other hand, in 4 of the 11 cases in which regulated parties directly
contacted OIRA, OIRA’s actions or suggestions to the agencies did not
appear to be similar to the actions or suggestions that the regulated parties
advocated. Examples of these cases include the following:

•	 Representatives of the steel industry contacted OIRA regarding an EPA
   final rule on effluent limitations guidelines, pretreatment standards, and
   new source performance standards for the iron and steel manufacturing
   point source category (ID 71). In the letter requesting a meeting with
   the OIRA Administrator, the steel industry representatives asserted that
   EPA’s revised effluent limitation guidelines were not technically,
   economically, or legally justified, and also raised concerns about
   specific aspects of EPA’s benefit-cost analysis. The only substantive
   change that OIRA suggested in this rule, however, was to eliminate a
   preexisting “minimum net reduction” provision in regulations that
   applied if facilities used a “water bubble” alternative mechanism for
   trading pollutants.

•	 Similarly, representatives from a number of regulated parties requested
   that OIRA return FAA’s draft final rule on part 145 repair stations to the
   agency with instructions to prepare a supplemental notice of proposed
   rulemaking and essentially restart most of the rulemaking process (IDs
   84 and 72). However, OIRA’s actions to have the agency withdraw the
   rule and, later, to return the rule to the agency for reconsideration cited
   issues unrelated to those voiced by the regulated entities. When FAA
   resubmitted the same draft rule a third time, OIRA completed its review
   of the rule with an outcome of “consistent with no change.” An industry
   representative that we interviewed said that the industry groups
   ultimately did not get the changes in the rule that they wanted from
   OIRA.

Appendix III contains case studies that provide more detailed information
about each of the rules for which we found evidence that outside parties
had contacted OIRA.




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OIRA Generally Disclosed   As noted in chapter 2 of this report, Executive Order 12866 requires OIRA
Outside Contacts           to maintain a publicly available log containing the dates and names of those
                           involved in substantive oral communications (e.g., telephone calls or
                           meetings) between OIRA personnel and outside parties and the subject
                           matter discussed. We used the OIRA list of substantive outside
                           communications to help us identify the information presented above and
                           examined other material to identify those contacts, including agencies’
                           rulemaking dockets.

                           Overall, we identified only two meetings that OIRA had with outside parties
                           and two letters to OIRA from outside parties regarding the rules in our
                           review that OIRA had not disclosed at the time of our review:

                           •	 The OIRA docket contained a letter indicating that OIRA had met in
                              October 2001 with representatives from the iron and steel industry in
                              relation to an EPA draft rule that would have added manganese to a list
                              of hazardous waste constituents (ID 56). However, when we examined
                              OIRA’s meeting log in early 2003 there was no record of this meeting.
                              (OIRA subsequently added this meeting to its on-line meeting log.)

                           •	 A July 2001 letter sent to OIRA in relation to the FAA part 145 rule was
                              included as part of a regulated entity’s testimony before a congressional
                              committee (IDs 84 and 72). However, OIRA’s docket did not contain a
                              copy of this correspondence at the time of our review. (OIRA
                              subsequently added this letter to its docket.)

                           •	 EPA’s docket included a February 2002 letter from the Center for Energy
                              and Economic Development to the OIRA Administrator regarding
                              revisions to a regional haze rule (ID 48).16 However, we did not find a
                              copy of this letter in OIRA’s docket. EPA’s docket for this rule also
                              included a copy of an e-mail message from OIRA to EPA noting that a
                              meeting at OMB had been scheduled at the Center’s request for
                              February 5, 2002. However, we did not find documentation for this
                              meeting during our review of OIRA’s dockets and logs. (OIRA’s docket
                              did contain a copy of a letter from another outside party regarding this
                              rule.)



                           16
                              The Center for Energy and Economic Development is a nonprofit organization formed by
                           coal-producing companies, railroads, a number of electric utilities, and related
                           organizations.




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                               However, we have no way of knowing whether there were other meetings
                               with outside parties or other letters from those parties about rules in our
                               review that did not come to our attention. Our knowledge of such meetings
                               or correspondence is generally limited to what OIRA or the agencies
                               disclose in their files. OIRA representatives told us that some of the letters
                               mailed to OIRA after the events of September 11, 2001, and the anthrax
                               letters in October 2001 may not have been delivered, and said they were
                               committed to disclosing all outside contacts regarding rules under review.



Documentation of               Agencies varied in the extent to which they satisfied the documentation
                               requirements in Executive Order 12866, but most of the agencies satisfied
OIRA’s Reviews Varied,         those requirements for most of their rules. However, having materials in
but Some Agencies’             the agencies’ rulemaking dockets does not necessarily mean that OIRA’s
                               effects on the rules were fully transparent. The executive order also
Practices Improved             requires OIRA to disclose certain information about its review process, and
Transparency                   we concluded that OIRA generally satisfied those requirements regarding
                               the rules that we reviewed.



Agencies Varied in Extent to   One of the stated purposes of Executive Order 12866 is to make the federal
Which Documentation            rulemaking process more accessible and open to the public. Toward that
                               end, the executive order places certain public disclosure and
Requirements Were
                               documentation requirements on regulatory agencies or OIRA. However,
Satisfied                      some types of actions are not covered by these requirements and,
                               therefore, do not have to be disclosed or documented by either party. Also,
                               in some cases the executive order does not clearly indicate what must be
                               disclosed or documented.

                               In general, the applicability and nature of the disclosure and
                               documentation requirements in the executive order depends on the
                               outcome of OIRA’s review. If an agency withdraws a rule from OIRA’s
                               review, neither the agency nor OIRA are required to disclose the reason.
                               However, if OIRA returns a rule to an agency for reconsideration, section
                               6(b)(3) of the executive order requires the OIRA Administrator to provide
                               the issuing agency with a written explanation delineating the pertinent
                               section of the order on which OIRA is relying. For rules that OIRA reviews
                               and are subsequently published in the Federal Register, the executive order
                               requires agencies to make the rule and any cost or benefit information
                               prepared available to the public. Two other sections of the order establish




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specific documentation requirements regarding changes made to rules
submitted to OIRA for review:

•	 Section 6(a)(3)(E)(ii) of the order states that agencies must “identify for
   the public, in a complete, clear, and simple manner, the substantive
   changes between the draft submitted to OIRA for review and the action
   subsequently announced.” However, neither the executive order nor
   OIRA’s October 1993 guidance on its implementation defines what the
   term “substantive changes” means.

•	 Section 6(a)(3)(E)(iii) of the order requires agencies to “identify for the
   public those changes in the regulatory action that were made at the
   suggestion or recommendation of OIRA.”

OIRA’s October 1993 guidance on the implementation of the order
considers the second requirement to be a subset of the first. Therefore,
under this interpretation, the agencies are only required to identify the
changes made at OIRA’s suggestion or recommendation after formal
submission of the rule to OIRA—not during any informal review period that
precedes formal submission. OIRA also took this position in response to
recommendations in our 1998 report on the implementation of these
transparency requirements and during this review. This distinction is
important because, in some of the 25 rules that we concluded had been
significantly changed at OIRA’s suggestion or recommendation, OIRA
suggested significant changes prior to formal submission of the rule to
OIRA. Also, some of the rules that were reviewed informally for weeks or
months had very short formal review periods—in some cases as little as a
few days.

To determine agencies’ compliance with these documentation
requirements, we considered the required information to have been
“identified for the public” if it was available in the agencies’ public docket
for the relevant rule. We coded the level of documentation in the agencies’
dockets for each changed rule into one of four categories, reflecting
whether (1) all changes were clearly documented, (2) changes were
identified but it was not clear that all changes had been documented or at
whose initiative, (3) no changes were documented in the agencies’ public
rulemaking docket, or (4) the Executive Order 12866 documentation
requirements were not applicable.17 The first requirement is not applicable
when there were no changes made to the rule during OIRA’s review that the
agencies considered “substantive.” Even if there were substantive changes
made during OIRA’s review, the second requirement is not applicable if



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those changes were not made at the suggestion or recommendation of
OIRA. We made our determinations regarding agencies’ compliance with
these requirements solely on the basis of the information that would be
available to a member of the public if he/she had reviewed the docket for a
given rule.18 Furthermore, because the executive order places
responsibility to document changes on the agencies rather than OIRA, our
determinations only reflect material available in the regulatory agencies’
dockets, not materials in OIRA’s public files.19 Table 5 presents the results
of our analysis of agencies’ compliance with both documentation
requirements in the executive order.




17
   We conducted a similar exercise in our previous GAO report on this subject. See
GAO/GGD-98-31.
18
   In many cases, the agencies prepared supplementary memoranda or summaries for us that
provided additional information and explanations regarding the changes made in various
rules. In those cases, we used the supplementary information to address other elements of
our review—such as the nature of changes attributed to OIRA—but did not consider the
materials specifically prepared for our review to be public documents within the dockets.
19
  It is notable that these dockets sometimes contained information that the agencies were
not required to disclose under OIRA’s interpretation of the executive order—and that
information frequently provided valuable insights to our determinations regarding the
nature of OIRA’s changes. For example, the agencies sometimes disclosed changes that
were not “substantive,” and sometimes disclosed changes that OIRA made to rules before
they were formally submitted to OIRA.




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Table 5: Agencies’ Compliance with Executive Order 12866 Documentation Requirements Was Mixed

                                                                                                                                         Total
                                                                                                                                     number of
                                                                                Changes made at OIRA’s suggestion or                  changed
Agency                  Changes made during OIRA review period                           recommendation                                  rules
                                       Not clear                                              Not clear
                                All      that all          No                          All      that all          No
                         changes       changes       changes                    changes       changes       changes
                           clearly    had been      identified           Not      clearly    had been      identified          Not
                        identified    identified    in docket     applicable   identified    identified    in docket    applicable
APHIS                            1             8              0           3             4             5            0            3           12
FDA                              7             0              0           0             6             0            0            1            7
OSHA                             0             0              4           1             0             0            2            3            5
DOT/FAA                          0             0              2           3             0             0            2            3            5
DOT/FMSCA                        4             0              0           2             2             0            0            4            6
DOT/NHTSA                        0             1              0           4             1             0            0            4            5
EPA Office of                    1             9              1           3             2             7            1            4           14
Air and
Radiation
EPA Office of                    2             3              0           4             5             0            0            4            9
Solid Waste
and
Emergency
Response
EPA Office of                    8             0              0           0             8             0            0            0            8
Water
Total                           23            21              7          20            28            12            5           26           71
Source: GAO analysis.


                                                    For the rules where the requirements were applicable, the results were
                                                    mixed. As discussed in more detail later in this report, some agencies
                                                    (FDA, FMCSA, and EPA’s Office of Water) provided clear documentation in
                                                    their rulemaking dockets of all of the changes made to their rules during
                                                    OIRA’s review and at OIRA’s suggestion or recommendation. In contrast,
                                                    other agencies (FAA and OSHA) did not have any documentation of the
                                                    changes made in their dockets. FAA officials told us that their agency had
                                                    not been documenting changes made during OIRA’s review, but would do
                                                    so in the future and put the documentation in the agency’s rulemaking
                                                    docket.20 OSHA officials said the documentation was available from the
                                                    Office of the Solicitor, and said that if a member of the public wanted
                                                    information on changes made during OIRA’s review it would be provided
                                                    upon specific request. (OSHA officials said that they keep the information




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                         in the Office of the Solicitor in order to ensure that the OIRA-directed
                         change documentation is not part of the official rulemaking record if a
                         lawsuit is filed.) However, because there is nothing in the OSHA
                         rulemaking docket to identify that documentation of OIRA changes exists
                         or is available, a member of the public interested in finding this information
                         would have to know to specifically request the relevant documentation
                         from the Office of the Solicitor.

                         For the remaining agencies (APHIS, NHTSA, and EPA’s Offices of Air and
                         Radiation and Solid Waste and Emergency Response), it was unclear that
                         the documentation available in the dockets covered all of the relevant
                         changes to their rules. For example, these agencies sometimes included in
                         their dockets copies of e-mails between OIRA and the agencies discussing
                         changes that had been made to the draft rule. However, we could not tell
                         whether these e-mails represented all or only some of the changes that had
                         been made. In other cases, agencies documented changes made, but it was
                         not clear if any of the changes had been at the suggestion or
                         recommendation of OIRA. Agency officials later told us that, in these
                         cases, the documentation that we found represented all of the changes that
                         had been made to the rules during OIRA’s review or at OIRA’s initiative.
                         Therefore, it may be that the lack of clarity regarding these agencies’
                         adherence to the documentation requirements in the executive order
                         reflected unclear or inadequate labeling and attribution of the sources of
                         changes, rather than the absence of documentation.



Agencies Varied in How   Executive Order 12866 does not specify how agencies should document the
Changes to Draft Rules   changes made to draft rules after their submission to OIRA, nor is there any
                         governmentwide guidance that directs agencies how to do so. OIRA
Were Documented          representatives told us that it is up to each agency to decide how its
                         rulemaking dockets are kept and how they satisfy the executive order’s
                         requirements. Not surprisingly, therefore, the regulatory agencies in our
                         review had different methods of documenting changes to the rules that
                         OIRA reviewed under Executive Order 12866. In the cases of DOT and
                         EPA, which each had three agencies or program offices in our review, the
                         documentation practices also varied across their agencies and offices.



                         20
                           As table 5 shows, the executive order’s documentation requirements were not applicable
                         in three of the five FAA changed rules we reviewed because only minor (nonsubstantive)
                         changes had been made to those rules.




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How Changes Were Identified	   For example, there were clear differences among the agencies in how they
                               “identified for the public” the changes made to draft rules after their
                               submission to OIRA and at the suggestion or recommendation of OIRA.

                               •	 The most common method was the inclusion in the public rulemaking
                                  docket of a marked-up copy of the rule (or selected pages thereof) as
                                  submitted to OIRA or after the review was completed showing the
                                  changes made during the review process. In some cases these marked-
                                  up copies were done by hand, but in other cases a “redline/strikeout”
                                  version was prepared electronically, printed, and placed in the public
                                  docket. Agencies with this type of documentation included FMCSA,
                                  NHTSA, and EPA’s Office of Solid Waste and Emergency Response. In
                                  addition to a marked-up version of its rules, FDA also included a
                                  standard cover form that identified the information placed in the
                                  dockets to address each part of the executive order’s documentation
                                  requirements.

                               •	 Some agencies’ documentation included the above marked-up versions
                                  of the rules and/or copies of e-mail messages of faxes between OIRA
                                  and the regulatory agencies reflecting the changes that were being made
                                  to the rules. Agencies with this type of documentation included EPA’s
                                  Office of Air and Radiation and APHIS.

                               •	 For all but one of the dockets prepared by EPA’s Office of Water, the
                                  office included a detailed memorandum addressing each of the
                                  executive order’s documentation requirements, summarizing the
                                  development and review of the rule and identifying all substantive
                                  changes made and those made at the suggestion of OIRA.21

How Sources of Changes Were    The regulatory agencies also differed in how they identified the source of
Identified	                    the changes (e.g., whether the changes had been made at the suggestion of
                               OIRA or at the agency’s initiative). Most commonly, the agencies noted the
                               source of the changes in the margins of their marked-up versions of at least
                               some of the rules (e.g., APHIS, FDA, and FMCSA). In those cases where e-
                               mails or faxes were used for documentation, the sources of the changes
                               were usually apparent from those documents (e.g., EPA’s Office of Air and


                               21
                                 The other Office of Water docket included an annotated “redline/strikeout” version of the
                               revised rule. The Corps of Engineers prepared the docket for one rule jointly issued by the
                               Corps and EPA’s Office of Water and similarly included an annotated “redline/strikeout”
                               version of the revised rule.




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                       Radiation). If the agency prepared a summary memorandum (e.g., EPA’s
                       Office of Water), the sources were usually identified in that memorandum.
                       However, in some cases the agencies did not clearly indicate which of the
                       changes that they identified were from OIRA and which were from the
                       agencies.

Other Differences in   Other areas in which the agencies’ documentation practices differed
Documentation          included the following:

                       •	 Officials in some of the agencies (e.g., APHIS, FDA, and NHTSA)
                          indicated that the only changes to their rules that they considered
                          “substantive” were those that affected the impact or text of the rule as it
                          appeared in the Code of Federal Regulations (although the executive
                          order does not specify that only changes to regulatory text are
                          substantive). However, in practice most of these agencies documented
                          both regulatory text changes and other changes to the preambles of
                          their rules (particularly those that we previously identified as “other
                          material changes” in which OIRA suggested that the agency clarify or
                          solicit comments on a particular issue). Other agencies documented all
                          changes to their rules, even those that were editorial or otherwise minor
                          in nature.

                       •	 Some agencies documented changes made to their rules by OIRA prior
                          to formal submission (e.g., EPA Office of Air and Radiation), while
                          others did not.

                       •	 Some of the agencies documented when there had been no substantive
                          changes made to their rules (e.g., EPA Office of Air and Radiation),
                          while others did not (e.g., FAA and NHTSA).



Some Agencies          Overall, we often found it difficult to identify the changes that had been
Demonstrated “Best     made to agencies’ rules during OIRA’s review and/or at the suggestion or
                       recommendation of OIRA by reviewing material in the agencies’
Practices”
                       rulemaking dockets. As noted previously, one agency (FAA) had done
                       nothing at the time of our review to document these changes, and another
                       agency (OSHA) placed its documentation in the Office of the Solicitor, not
                       the agency’s rulemaking docket. (Therefore, a member of the public would
                       have to know to ask for the materials from that office.) Other agencies did
                       not document any changes if the changes were not, in their opinion,
                       “substantive.” In another case the agency simply provided a copy of the
                       rule as submitted to OIRA and a copy of the rule as published in the Federal



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Register, with no indication of what had changed in the text. In still other
cases, the changes were indicated in a “redline/strikeout” version of the
rule, but the photocopied redline version was so indistinct that it was
difficult to identify or attribute all of the changes. The agencies appeared
to do a better job of documenting the changes that had been initiated by
OIRA than in clearly identifying whether other substantive changes had
been made to the rules by the agencies or other parties after submission to
OIRA. For several of the rules, the agencies added material to the public
dockets shortly before we arrived or after we told the agencies we could
not find documentation for certain rules that had been changed. For
example, FMCSA added documentation of changes made to a rule that
OIRA had finished reviewing in May 2002 after we asked about the rule
during a meeting with FMCSA officials in February 2003. Executive Order
12866 does not specify when agencies must “identify for the public” the
changes made during OIRA’s review.

In marked contrast, the documentation practices used by some of the
agencies and offices in our review—FDA, FMCSA and EPA’s Office of
Water—represented what we consider to be “best practices” that not only
met the minimal requirements of the Executive Order 12866 but also made
clear how the rules had changed during OIRA’s review and which changes
were made at OIRA’s suggestion.

•	 EPA’s Office of Water usually did this through detailed memoranda
   prepared for the docket specifically to address the executive order’s
   requirements. For example, in the Office of Water’s rule on proposed
   changes to meat and poultry effluent limitations guidelines and
   standards, EPA included a detailed cover memorandum specifically
   addressing the executive order’s requirements (ID 67). The
   memorandum not only identified all of the substantive changes made at
   OIRA’s suggestion, it also identified the substantive EPA changes made
   independent of other reviewers. Also, the memorandum identified
   nonsubstantive changes that had been suggested by OMB and others
   (e.g., SBA and the Department of Agriculture). Copies of relevant
   documents were attached to the memorandum as well as copies of
   suggested changes that were sent to the agency by the OIRA desk
   officer.

•	 FMCSA often provided a “redline/strikeout” version of the revised rule
   after OIRA’s review, clearly annotating the changes that had been made
   to the rule between submission of the manuscript to OIRA and its
   publication, as well as the source of each change. For example, in



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   several places in the agency’s interim final rule regarding a safety
   monitoring system and compliance initiative for Mexico-domiciled
   motor carriers operating in the United States, FMCSA identified changes
   that had been made at the request of OIRA, at the request of the Office
   of the Federal Register, or at FMCSA’s initiative after the submission of a
   previous version of the rule to OIRA (ID 32).

•	 FDA used a standard one-page cover form with attached copies of the
   rule in which the agency had marked the changes made to the rule and
   annotated the sources of those changes. The FDA form, as well as some
   similar forms we found in EPA’s dockets, had the additional benefit of
   allowing agency officials to affirmatively indicate whether there were
   substantive changes made to a rule during OIRA’s review and,
   separately, whether there were changes made at the suggestion or
   recommendation of OIRA. For example, in the agency’s draft final rule
   on food additives, FDA included the cover memorandum and a copy of
   the rule as submitted to OIRA with hand-written annotations of FDA and
   OIRA changes (ID 17). In addition, FDA included a copy of its responses
   to detailed OMB questions about the final rule.




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                          Our third objective was to describe how OIRA determined that certain
                          existing rules merited high priority review. With regard to OIRA’s 2001
                          review effort, our specific objectives were to determine (a) which
                          organizations or persons suggested that the rules be reviewed, (b) what
                          process OIRA used to select and prioritize the nominations, (c) the extent
                          to which OIRA publicly disclosed its selection and priority-setting process,
                          and (d) the current status of those rules. We also compared that review
                          effort to a second review that OIRA initiated in 2002.

                          In summary, OIRA received 71 nominations from the public in response to
                          its May 2001 request for suggestions of rules that should be modified or
                          rescinded. Of these, 44 nominations were from the Mercatus Center at
                          George Mason University. OIRA selected 23 of the 71 nominations for high
                          priority review—14 of which were originally nominated by the Mercatus
                          Center. The only other organizations that nominated more than one of the
                          suggestions that OIRA so designated were the Equal Employment Advisory
                          Council and the Employment Policy Foundation (two suggestions each).
                          Representatives of OIRA told us that the office’s desk officers initially
                          determined which issues merited high priority review, subject to the
                          approval by OIRA management. Although OIRA fully disclosed the source
                          of each of the nominations that it received and defined the priority
                          categories that it used, the office did not publicly describe how it decided
                          which nominations merited high priority review. As of May 2003,
                          regulatory agencies or OIRA have at least begun to address the issues
                          raised in many of the suggestions. In March 2002 OIRA again solicited
                          public comments on regulations in need of reform, and in response
                          received more than 300 suggestions. However, this time OIRA forwarded
                          the suggestions to the relevant federal agencies for review and
                          prioritization. In general, OIRA explained the process used for this second
                          round of nominations more clearly and completely than was done for the
                          first round.



Mercatus Center           Section 628(a)(3) of the fiscal year 2000 Treasury and General Government
                          Appropriations Act required OMB to submit “recommendations for reform”
Nominated Most Rules      with its report on the costs and benefits of federal regulations. In the
Selected for              portion of its May 2001 draft report responding to this requirement, OIRA
                          said it did not have enough information to make recommendations for the
High Priority Review in   reform of specific regulations or regulatory programs, and asked for
2001 Report               recommendations and comments on rules and regulatory programs that
                          could be “of concern to the public.” Specifically, OIRA said the following:




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“We would like to receive suggestions on specific regulations that could be rescinded or
changed that would increase net benefits to the public by either reducing costs and/or
increasing benefits. We would appreciate if commenters identified regulations that are
obsolete or outmoded, and could be rescinded or updated.”

OIRA asked that commenters provide their suggestions in a particular
format (e.g., name of regulation, agency regulating, citation, and
description of problem) and invited commenters to suggest “any other
reforms to the regulatory development and oversight processes that would
improve regulatory outcomes.”

In its December 2001 final report, OIRA said it received 71 suggestions in
response to its request from 33 commentators involving 17 agencies. In an
appendix to the report listing the suggestions, OIRA indicated that 44 of
them came from the Mercatus Center at George Mason University. The
report also indicated that OIRA had completed an initial review of the
suggestions and placed them into one of three categories: (1) “high
priority,” meaning that OIRA was inclined to agree with and look into the
suggestion, (2) “medium priority,” meaning that OIRA needed more
information about the suggestion, or (3) “low priority,” meaning that OIRA
was not convinced that the suggestion had merit. OIRA listed 23 of the
suggestions in the first category, and said a “prompt letter” might be sent to
the responsible agency for its “deliberation and response.” Eight of the 23
high priority suggestions involved regulations from EPA, 5 suggestions
involved regulations from the Department of Labor (DOL), and 2 each from
the Departments of Health and Human Services (HHS), Agriculture
(USDA), and the Interior (DOI). Five of the 23 suggestions involved rules
that had been issued at the end of the Clinton administration and delayed
by a January 20, 2001, memorandum from Assistant to the President and
Chief of Staff Andrew H. Card, Jr. (Card memorandum) directing federal
agencies to, among other things, postpone the effective dates of certain
regulations for 60 days.1 As table 6 shows, 13 of the 23 recommendations
came from the Mercatus Center, and one was a joint recommendation from
Mercatus and the Association of Metropolitan Water Agencies.




1
 For a discussion of this memorandum and the rules delayed, see U.S. General Accounting
Office, Regulatory Review: Delay of Effective Dates of Final Rules Subject to the
Administration’s January 20, 2001, Memorandum, GAO/02-370R (Washington, D.C.: Feb.
15, 2002).




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Table 6: The Mercatus Center Suggested Most of the 23 “High-Priority Review”
Rules

Commenter            Regulation at issue                     Agency issuing regulation
Mercatus Center	     Central air conditioner and heat        Department of Energy
                     pump energy conservation
                     standards
Mercatus Center	     Standards for privacy of individually   HHS
                     identifiable health information
Mercatus Center      Food labeling: trans fatty acids in     HHS/Food and Drug
                     nutrition labeling                      Administration
Mercatus Center      Hardrock mining                         DOI/Bureau of Land
                                                             Management
Mercatus Center	     Snowmobile use in Rocky Mountain        DOI/National Park Service
                     National Park
Mercatus Center      Davis-Bacon Act “helpers” regulation 	 DOL/ Employment Standards
                                                            Administration
Mercatus Center      Hours of service of drivers 	           DOT/Federal Motor Carrier
                                                             Safety Administration
Mercatus Center      Total maximum daily loads               EPA
Mercatus Center	     Economic incentive program              EPA
                     guidance
Mercatus Center	     New source review 90-day review         EPA
                     background paper
Mercatus Center	     Concentrated animal feeding             EPA
                     operations effluent guidelines
Mercatus Center/     Arsenic in drinking water               EPA

Association of 

Metropolitan Water 

Agencies

Mercatus Center	     Roadless area conservation (draft       USDA/ Forest Service
                     environmental impact statement)
Mercatus Center      Forest Service planning rules           USDA/Forest Service
Notre Dame           Title IV regulations under the Higher Department of Education
University           Education Act
Equal Employment     Office of Federal Contract              DOL/OFCCP
Advisory Council     Compliance Programs’ (OFCCP)
                     equal opportunity survey
Equal Employment     Uniform Guidelines on Employee          Equal Employment
Advisory Council     Selection Procedures                    Opportunity Commission
Employment Policy    Procedures for certification of         DOL/Employment and
Foundation (EPF)     employment based immigration and        Training Administration
                     guest worker applications
LPA, Inc.	           Overtime compensation under the         DOL/Wage and Hour
                     Fair Labor Standards Act                Division




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                    (Continued From Previous Page)
                    Commenter             Regulation at issue                      Agency issuing regulation
                    EPF/National          Record keeping and notification          DOL/Wage and Hour
                    Partnership for       regulations under the Family and         Division
                    Women and             Medical Leave Act
                    Families
                    American              Mixture and derived from rule under      EPA
                    Chemistry Council	    the Resource Conservation and
                                          Recovery Act
                    City of Austin	       Drinking water regulations under the EPA
                                          Safe Drinking Water Act
                    American              Notification of substantial risk under   EPA
                    Petroleum Institute   the Toxic Substances Control Act
                    Source: OMB.


                    In its December 2002 report, OIRA noted that several commenters
                    questioned the 2001 comment process because the Mercatus Center
                    provided a majority of the recommendations for reform. OIRA said it
                    believed that, if there was a problem with that process, “it was not that the
                    Mercatus Center was too active but that other potential commenters were
                    silent.” An OIRA representative told us during this review that the
                    Mercatus Center had systematically tried to analyze and comment on a
                    wide range of rules, and it simply submitted the analyses that it had done.
                    A Mercatus Center official told us that the center had submitted
                    nominations regarding all of the rules on which it had commented since
                    1997.2



How High Priority   Although OIRA identified the source and ranking of each of the suggestions
                    that it received, the office did not fully explain in its report to Congress
Review Selections   how it decided that 23 of the suggestions merited high priority review.
Were Made           During our review, OIRA representatives told us that those determinations
                    were made through a very informal, “bottom-up” process, with OIRA staff
                    initially looking at the nominations with which they were most familiar and
                    making some preliminary decisions that were then reviewed by the branch
                    chiefs and others. They said the OIRA Administrator made the final
                    decision regarding which rules should be in the high priority category.



                    2
                     She said that the Mercatus Center actually submitted a total of 58 suggestions for reform.
                    However, several of the suggestions were about the same rule, so OIRA’s report only listed
                    the 44 comments that were about different rules.




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                    In its December 2002 final report, OIRA noted that 8 of the 23 high-priority
                    nominations listed in the December 2001 report addressed EPA rules, and
                    another 5 addressed rules that could be considered environmental in
                    nature. However, OIRA said “an examination of OIRA’s decision-making
                    process reveals no implicit or explicit intent to target environmental rules
                    for scrutiny. In fact, the distribution of nominated rules by agency reflects
                    the concerns raised by public comments, not the interests of OIRA.” OIRA
                    noted that only 13 of 33 environmental rules that were nominated were
                    rated as a high priority for review and said some of these 13 rules had
                    already been established as an administration priority for review.



Status of Rules     As of May 2003, the status of the rules that were the subject of the 23 high-
                    priority suggestions varied. OIRA said in its December 2002 final report
Selected for High   that, in some cases, the agencies had “convinced us that reform is
Priority Review     unnecessary or not appropriate at this time.” For example, OIRA noted
                    that EPA had decided not to modify its rule on arsenic in drinking water,
                    and DOL had decided that changes in the Davis-Bacon regulations were not
                    appropriate at that time. However, as the following examples illustrate, in
                    many cases the responsible agencies took action on the suggestions or
                    were in the process of taking action:

                    •	 One of the nominations focused on a Department of Energy rule issued
                       in January 2001 that would have required that the energy efficiency of
                       new central air conditioners be increased by 30 percent. The
                       commenter said that the department did not adequately consider
                       differences among consumers and may have overstated projected
                       energy savings. In May 2002, DOE withdrew the rule and issued a new
                       rule requiring a 20 percent increase in energy efficiency. The new rule’s
                       effective date was August 2002.

                    •	 EPA’s July 2000 final rule regarding allowable amounts of pollution in
                       water (“total maximum daily load”) was also the subject of a suggested
                       change. Specifically, the commenter said the revisions to the program in
                       that rule were overly prescriptive and could prove costly to the states.
                       In October 2001, EPA published a notice delaying the effective date of
                       the rule until April 2003. In March 2003, EPA published a final rule
                       withdrawing the July 2000 rule. By May 2003, a draft of a new proposed
                       rule was undergoing informal interagency review.

                    •	 Another commenter questioned the assumptions underlying a May 2000
                       proposed rule that would alter the hours of service for motor carrier



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                     drivers (e.g., trucks and buses). In April 2003, FMCSA published the
                     final rule that changed the scope and the requirements from the
                     proposal. For example, the final rule exempts buses from its coverage.
                     Most of the final rule’s provisions were scheduled to take effect in June
                     2003.

                  •	 One commenter expressed concerns about Department of Education
                     regulations under Title IV of the Higher Education Act, indicating that
                     the rules were redundant and placed “inappropriate administrative
                     burdens on institutions of higher learning.” In November 2002, the
                     department published a final rule amending regulations under the
                     Higher Education Act, and said the amendments were designed to
                     “reduce administrative burden for program participants, and to provide
                     them with greater flexibility to serve students and borrowers.” The
                     rules were generally scheduled to take effect in July 2003.

                  In these and many other cases, it is impossible to know whether the
                  changes that the agencies made and were making to rules were initiated or
                  affected by their designation as an item for high priority review. However,
                  OIRA representatives noted that some of the changes that agencies were
                  making to their rules began as a consequence of the administration’s Card
                  memorandum review in January 2001—not their later designation as an
                  item for high priority review. Appendix IV provides information on the
                  status of each of the 23 high priority rules as of May 2003.



Second Round of   Section 624 of the Treasury and General Government Appropriations Act of
                  2001, also known as the “Regulatory Right-to-Know Act,” required OIRA to
Nominations Was   include “recommendations for reform” in its cost-benefit report each year.
Different         Therefore, in its March 2002 draft report, OIRA repeated its solicitation of
                  public comments on regulations or regulatory programs in need of reform.
                  However, OIRA’s second effort to identify rules for further review differed
                  from its 2001 effort in the following respects.

                  •	 In the 2001 effort, OIRA asked the public to identify “regulations that
                     could be rescinded or changed that would increase net benefits to the
                     public by either reducing costs and/or increasing benefits.” However, in
                     the 2002 effort OIRA asked the public to nominate reforms to specific
                     rules that would increase net benefits to the public, including not just
                     the elimination or modification of existing rules but also “extending or
                     expanding existing regulatory programs.” OIRA also specifically




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   requested comments on regulations affecting small businesses, and
   invited comments on agencies’ practices regarding guidance documents.

•	 Whereas OIRA received only 71 nominations in 2001, primarily from one
   commentor, in the December 2002 report OIRA said it received
   comments on 267 regulations and 49 guidance documents from
   approximately 1,700 individuals, firms, trade organizations, and others.
   Many of the 23 items that OIRA designated for high priority review
   during the 2001 process were again nominated. Although most of the
   nominations sought modifications that would increase regulatory
   flexibility or rescind rules, more than a quarter of them suggested
   making rules more stringent or developing new rules.

•	 In the first effort, OIRA reviewed the nominations and decided which
   ones merited high priority review. In the second effort, OIRA indicated
   that the agencies would be responsible for initially reviewing and
   prioritizing the suggested items. OIRA said it did so because of the large
   volume of nominations, and because the agencies could bring to bear
   “their extensive knowledge and resources, which will provide a basis for
   selecting reform priorities in consultation with OIRA.”

•	 As noted previously, OIRA did not fully explain in its report to Congress
   regarding the 2001 review how it decided which rules merited high
   priority review. However, in the December 2002 report OIRA discussed
   in some detail how it processed the nominations and suggested three
   criteria that the agencies should use to conduct their evaluations: (1)
   efficiency (reforms that can maximize net benefits, including
   improvements to the economy, environment, and public health and
   safety), (2) fairness (nominations with the potential for desirable
   distributive impacts and process considerations), and (3) practicality
   (nominations that are more important than others and that can be
   implemented under existing statutory authority).

OIRA asked the Small Business Administration’s Office of Advocacy to
review all of the nominations and identify those that it believes could
reduce unjustified regulatory burdens on small businesses. OIRA asked
that agencies complete their initial review of the nominations and discuss
them with OIRA by the end of February 2003. An OIRA representative told
us that the office met with the agencies that had the most nominated rules
(i.e, EPA, HHS, DOT, and DOL) in January and February 2003 and
emphasized that the final decisions on which suggestions to pursue would
be up to the agencies.



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Conclusions	               OIRA has been reviewing agencies’ draft rules for more than 20 years, and
                           those reviews have become an established and important part of the
                           federal rulemaking process. While OIRA reviews clearly have an analytical
                           component (e.g., ensuring compliance with legal and procedural
                           requirements and conformance with principles of economic analysis), they
                           are also a way to ensure that the agencies’ regulatory programs are
                           consistent with administration priorities (within applicable legislative
                           constraints). OIRA is part of the Executive Office of the President, and the
                           President is OIRA’s chief client. Because it represents the President and
                           because it reviews hundreds of significant rules each year from dozens of
                           federal agencies, OIRA can have a major influence on the direction of a
                           wide range of public policies.

                           Our review documented OIRA’s direct influence with regard to more than
                           two dozen rules in which it suggested significant changes that were
                           ultimately adopted by the rulemaking agencies. OIRA’s presence in the
                           rulemaking process may also have a subtler, more indirect effect on
                           agencies’ decision making—discouraging them from submitting rules that
                           OIRA is unlikely to find acceptable and encouraging them to make the case
                           for the regulations that they do submit more carefully. However, the OIRA
                           regulatory review process is not well understood or documented, and the
                           effect that OIRA’s reviews have on individual rules is not always easy to
                           determine.



Agency and OIRA            Concerns about the effect that OIRA was having on agencies’ rules led to
Documentation Not Always   the adoption of transparency requirements in section 6 of Executive Order
                           12866. For nearly 10 years the executive order has required agencies to
Clear
                           identify for the public the substantive changes in regulatory actions that
                           were made between the drafts submitted to OIRA and the actions
                           subsequently announced, and to identify the changes made to the drafts at
                           the suggestion or recommendation of OIRA. Some of the agencies that we
                           focused on in our review (EPA’s Office of Water, FDA, and FMCSA) had
                           what we considered to be “best practices” of documenting these changes,
                           although their methods of documentation varied considerably. However, in
                           other agencies the documentation of the changes made to their rules was
                           either unavailable or unclear, making it difficult for us to determine what
                           effect OIRA’s review had on their rules. For example:

                           •	 Some agencies did not comply with the executive order’s transparency
                              requirements at all (FAA) or did not put the required information in the



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   agencies’ public dockets (OSHA). In a few cases, the agencies did not
   put the information in the dockets until months after the rules had been
   published (i.e., not until we asked for the files as part of this review).
   The agencies correctly noted that neither the executive order nor OIRA
   guidance establishes a time limit by which the documentation had to be
   provided.

•	 In many cases, it was unclear whether the documentation that the
   agencies provided was complete (e.g., the agencies provided multiple
   drafts, “change pages,” and/or memoranda identifying alterations that
   had been made to their rules, but there was no indication that the
   changes identified represented all of the substantive changes made to
   the rules).

•	 In some cases, it was unclear which changes that the agencies identified
   were suggested by OIRA and which were suggested by others (e.g., the
   rulemaking agencies themselves).

•	 In other cases, it appeared that the agencies focused their efforts on
   documenting changes that had been suggested by OIRA but did not
   clearly document whether others had initiated substantive changes in
   the rules during the OIRA review period.

•	 The agencies also differed in what they considered a “substantive”
   change that required documentation. Some of the agencies identified all
   changes made to their rules during OIRA’s review, regardless how small.
   However, other agencies said they only considered changes to the text
   of the rule as it appears in the Code of Federal Regulations to be
   “substantive.” Our review indicated that some changes made to the
   preambles of the agencies’ rules (e.g., suggestions that agencies solicit
   comments on particular issues) could affect their application, and
   therefore appeared to us to be “substantive.”

The executive order also places certain transparency requirements on
OIRA. For example, the order requires OIRA to disclose any substantive
communications it has with outside parties regarding rules under review,
and the status of all regulatory actions under review. After a regulatory
action that it reviewed has been issued, OIRA is required to disclose all
documents exchanged between OIRA and the agency during the review.
However, in some cases the documentation that OIRA provided regarding
the rules it reviewed did not clearly illustrate what occurred. For example,




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•	 OIRA’s descriptions of its contacts with outside parties sometimes did
   not clearly indicate what rule was being discussed or what organizations
   those parties represented.

•	 OIRA’s coding of some of the outcomes of its reviews made our review
   more difficult. In particular, the “consistent with change” code included
   any type of change made to a rule, regardless of its significance or
   source. As a result, an agency’s action to correct a legal citation or a
   misspelling is coded the same as a significant change to the text of a rule
   that was suggested by OIRA. Also, OIRA’s use of an outcome code of
   “deadline case” for some rules provided no information on whether the
   reviews of such rules were completed with or without changes. The
   usefulness of that outcome code is also questionable, given that OIRA’s
   database already has a separate field to identify rules with legal
   deadlines.

•	 As interpreted by OIRA, the requirement that OIRA disclose documents
   exchanged with the agencies only applies to documents exchanged by
   staff at the branch chief level and above. Therefore, under this
   interpretation, OIRA is not required to disclose any documents that are
   e-mailed or faxed between OIRA desk officers and regulatory agency
   personnel—the level at which such exchanges are most likely to occur.
   Nevertheless, during our review we sometimes discovered staff-level
   e-mails and other documentation in the agencies’ or OIRA’s dockets, and
   that information was very useful in explaining what had happened to
   rules undergoing OIRA review. We have no way of knowing how often
   other documents were exchanged at the staff level and not disclosed.

There also appears to be a gap in the transparency requirements applicable
to OIRA regulatory reviews. If OIRA returns a rule to the rulemaking
agency for reconsideration, the executive order requires OIRA to explain in
writing why the rule was returned. If a rule is substantively changed while
under review at OIRA, the executive order requires the agency to identify
those changes for the public. However, neither the rulemaking agencies
nor OIRA are required to disclose why rules are withdrawn from review.
Our review indicated that withdrawals can be initiated by the agencies, can
be requested by OIRA, or can be a joint decision. If a rule is withdrawn and
not subsequently published, the agencies may not create a docket into
which any explanation for the withdrawal could be disclosed. Therefore, in
those instances, OIRA may be the most logical site for any withdrawal
disclosure—just as it is for returns. If the withdrawn rule is subsequently




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                          published, the agencies could document the reasons for the withdrawals in
                          the rulemaking docket.



Opportunity to Build on   The current OIRA Administrator has made several notable improvements
Improvements in           in the transparency of the office’s regulatory reviews. For example, by
                          placing information about the rules under review and OIRA’s contacts with
Transparency              outside parties on the office’s Web site, the Administrator has made that
                          information much more accessible to the public than it had been
                          previously. Also, recognizing that outside parties were increasingly
                          contacting OIRA during the informal review periods that sometimes
                          precede formal submission, the Administrator changed the trigger for the
                          disclosure requirements applicable to OIRA’s interactions with outside
                          parties from the start of the formal review period to the start of any
                          informal review period. As a result, OIRA now discloses substantive
                          communications (e.g., phone calls, meetings, and correspondence) with
                          outside parties involving specific rules that occur any time after OIRA
                          receives a draft rule from the agency or begins substantive discussions with
                          an agency about the provisions of a draft rule. Disclosing the office’s
                          interactions with outside parties at this stage of the rulemaking process can
                          go a long way toward eliminating what the Administrator referred to as “the
                          culture of secrecy and mystery” that has surrounded OIRA for more than 20
                          years.

                          However, another result of this change in policy is that the trigger for the
                          transparency requirements applicable to OIRA regarding its interaction
                          with outside parties (the start of informal review) is now inconsistent with
                          the trigger for the transparency requirements applicable to OIRA and the
                          agencies regarding their interactions with each other (the start of formal
                          review). We agree with the Administrator that it is useful and important
                          that the public know about OIRA contacts with outside parties while rules
                          are undergoing informal review. However, we also believe that it is at least
                          as important for the public to know whether substantive changes were
                          made to agencies’ draft rules during this period, and in particular, whether
                          those changes were suggested by OIRA.

                          The transparency requirements in Executive Order 12866 were intended to
                          allow the public to understand what changes had been made to agencies’
                          rules during OIRA’s review and at OIRA’s suggestion. During our review we
                          discovered that formal OIRA review periods can be as short as 1 day, but
                          informal review periods can go on for weeks or even months in advance of
                          formal reviews. Therefore, restricting the transparency requirements in



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Executive Order 12866 only to a brief period of formal review seems
antithetical to the intent of those requirements. We also discovered that
agencies sometimes provided the public with documentation of changes
occurring during informal OIRA reviews—even though they were not
required to do so. In several cases that documentation helped us to identify
significant changes that had been suggested by OIRA and to better
understand how the published rule was developed. Based on that
documentation and other evidence that was available, we concluded that
OIRA’s reviews appeared to have had a significant effect on 25 of the 85
rules that we examined. However, because neither OIRA nor the
rulemaking agencies are required to document the changes during informal
review, we do not know whether there were other “consistent with change”
rules (or even rules coded as “consistent with no change”) that were
significantly altered at the suggestion of OIRA.

In several speeches during the past 2 years the OIRA Administrator has
emphasized the importance of transparency, describing the establishment
of a climate of openness at OIRA as his “first priority” and stating that
“more openness at OMB about regulatory review will enhance public
appreciation of the value and legitimacy of a centralized analytical
approach to regulatory policy.” Also, on more than one occasion, OIRA has
said that it can have its most significant effect on agencies’ draft rules
before they are formally submitted to OIRA for review. Therefore, it is not
clear why OIRA believes that the executive order’s transparency
requirements should not cover the part of the review period when the most
important changes can occur. Real transparency about the effects of
OIRA’s reviews would require either OIRA or the rulemaking agencies to
disclose the changes made to agencies’ draft rules during informal review.
Under OIRA’s current interpretation of the executive order’s requirements,
the public might never know about some of the most significant changes
that are made to agencies’ rules.

We recognize that there are limits to what should be disclosed regarding
OIRA’s interactions with the rulemaking agencies. OIRA and the agencies
should be able to discuss regulatory matters in general without having to
document and disclose those communications. However, if the published
version of a rule reflects substantive changes that OIRA recommended to
the draft rule, even if those changes were recommended during informal
review, we believe that the agencies should document the changes so that
the public can understand how the rule was developed. We also recognize
that it may not always be clear when informal reviews begin (e.g., when
“substantive” discussions with agencies have begun regarding draft rules).



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                  However, OIRA must make that determination now regarding the
                  disclosure of its contacts with outside parties. Also, although OIRA
                  representatives indicated that postpublication disclosure of
                  communications between OIRA and the agency that occur prior to formal
                  rule submission could have a “chilling effect” on those communications in
                  the future, that effect does not appear to have taken place in those agencies
                  that already disclose those communications. Further, our interactions with
                  the agencies and OIRA during this review indicated that a requirement that
                  substantive changes be disclosed during any part of OIRA’s review would
                  not pose practical difficulties for either party. Both OIRA and the agencies
                  know what substantive changes are made to agencies’ rules during the
                  review period (whether formal or informal) and the source of those
                  changes.

                  Although the current Administrator has substantively improved the ability
                  of the public to understand the OIRA regulatory review process, we believe
                  that there are several additional initiatives that OIRA can undertake to
                  further improve the transparency of the review process without sacrificing
                  the confidentiality of OIRA-agency consultations.



Recommendations   We recommend that the Director of the Office of Management and Budget:

                  •	 Define the transparency requirements applicable to the agencies and
                     OIRA in section 6 of Executive Order 12866 in such a way that they
                     include not only the formal review period but also the informal review
                     period when OIRA says it can have its most important impact on
                     agencies’ rules. Doing so would make the trigger for the transparency
                     requirements applicable to OIRA’s and the agencies’ interaction
                     consistent with the trigger for the transparency requirements applicable
                     to OIRA regarding its communications with outside parties.

                  •	 Change OIRA’s database to clearly differentiate within the “consistent
                     with change” outcome category which rules were substantively changed
                     at OIRA’s suggestion or recommendation and which rules were changed
                     in other ways and for other reasons.

                  •	 Improve the implementation of the transparency requirements in the
                     executive order that are applicable to OIRA. Specifically, the
                     Administrator should take the following actions:




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                           •	 More clearly indicate in the OIRA meeting log which regulatory
                              action was discussed and the affiliations of the participants in those
                              meetings.

                           •	 Because most of the documents that are exchanged while rules are
                              under review at OIRA are exchanged between agency staff and OIRA
                              desk officers, OIRA should reexamine its current policy that only
                              documents exchanged by OIRA branch chiefs and above need to be
                              disclosed.

                           •	 Establish procedures whereby either OIRA or the agencies disclose
                              the reasons why rules are withdrawn from review.

                        •	 Improve the implementation of the transparency requirements in the
                           executive order that are applicable to agencies. Specifically, the
                           Administrator should:

                           •	 Define the types of “substantive” changes during the OIRA review
                              process that agencies should disclose as including not only changes
                              made to the regulatory text but also other, noneditorial changes that
                              could ultimately affect the rules’ application (e.g., explanations
                              supporting the choice of one alternative over another and
                              suggestions that agencies solicit comments on the estimated benefits
                              and costs of regulatory options).

                           •	 Instruct agencies to put information about changes made to rules
                              after submission for OIRA’s review and at OIRA’s suggestion or
                              recommendation in the agencies’ public rulemaking dockets, and to
                              do so within a reasonable period after the rules have been published.

                           •	 Encourage all agencies to use “best practice” methods of
                              documentation that clearly describe the changes made to agencies’
                              rules (e.g., like those practices used by FDA, EPA’s Office of Water, or
                              FMCSA).



Agency Comments and 	   On August 8, 2003, we provided a draft of this report to the Director of OMB
                        for his review and comment. We also provided a draft to APHIS, FDA, DOL,
Our Evaluation	         DOT, and EPA for technical review. We received several technical
                        suggestions from these agencies, which we incorporated as appropriate.
                        For example, at the request of certain agencies, some of the entries in
                        appendix II now provide both the title of the rule as submitted to OIRA and



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the title as published in the Federal Register. We also made minor changes
to the body of the report clarifying why certain rules were changed or
withdrawn.

On September 2, 2003, the Administrator of OIRA provided written
comments on the draft report. (See app. V for a copy of these comments.)
The Administrator said OIRA believed the “factual foundations of the
report are well grounded,” and was particularly pleased that the report
noted improvements in the timeliness of OIRA’s reviews and the
transparency of the review process. He also said that OIRA plans to review
its implementation of the transparency requirements and, in particular,
would work to improve the clarity of its meeting log. However, the
Administrator said OIRA did not agree with all of the recommendations in
the draft report, and did not believe that the report had demonstrated the
need or desirability of changing the agency’s existing “unprecedented” level
of transparency. He then discussed several specific issues, describing why
he disagreed with the recommendations. The bullets below summarize his
concerns and present our response.

•	 The Administrator said that OIRA did not believe that disclosure of
   “deliberations” that occur during informal review of rules would
   improve the rulemaking process. He also said that Congress and the
   courts have recognized the importance of confidentiality during the
   deliberative process and said it would not be appropriate for OIRA to
   waive the “deliberative privilege” for rulemaking agencies. However, we
   did not recommend that OIRA’s deliberations with the agencies be
   disclosed. Our recommendation was that, after a rule has been
   published in the Federal Register, agencies disclose any substantive
   changes made to draft rules—whether those changes were made during
   the formal review process or an informal review. As we said in the draft
   report, real transparency regarding the substantive changes made to
   agencies’ draft rules during OIRA’s review requires disclosure of those
   changes whenever they occurred. Excluding the portion of the review
   process when OIRA has said it can have its most significant effect seems
   to seriously call into question the transparency of that process. The
   desirability of such disclosure was clearly demonstrated during our
   review when agencies disclosed substantive changes made to their rules
   during informal review at the suggestion or recommendation of OIRA.
   Those disclosures greatly facilitated our understanding of the extent to
   which OIRA affected the rules at issue.




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•	 The Administrator said that the draft report does not explain why
   changes are needed to the “longstanding practice” of limiting the
   disclosure of documents exchanged during the review process to only
   documents that were exchanged at the OIRA branch chief level and
   above. In our draft report, we recommended that OIRA reexamine that
   policy because our review of OIRA’s and the rulemaking agencies’ files
   indicated that most of the documents exchanged occurred below the
   branch chief level. Therefore, only requiring disclosure of documents
   exchanged at a level at which they rarely are exchanged seems
   inconsistent with the spirit of transparency.

•	 The Administrator indicated that the draft report does not explain why
   agencies or OIRA should disclose why rules are withdrawn from review,
   again noting that nondisclosure has been a “longstanding practice.” He
   also indicated that rules are withdrawn at the request of the rulemaking
   agency and that OIRA does not believe it is appropriate for it to “waive
   the deliberative privilege” by disclosing why rules are withdrawn.
   However, as we noted in our report, the executive order already requires
   disclosure regarding rules that are changed or returned to the agencies.
   Withdrawals are the only substantive action that can be taken without
   explanation or documentation. Further, our review indicated that OIRA
   sometimes initiates these withdrawals (even though they were
   technically “requested” by the agencies).

•	 The Administrator noted that the draft report recommended that OIRA
   differentiate within the “consistent with change” category in its
   database those rules that were substantively changed at OIRA’s
   suggestion or recommendation and those rules that were changed in
   other ways and for other reasons. He then referred to the former
   Administrator’s response to our 1998 report, indicating that OIRA
   continues to believe that it is better to provide the public with copies of
   the draft regulations reviewed by OIRA than to clearly delineate which
   changes were substantive. First of all, we did not address the issue of
   the “consistent with change” category in our 1998 report. Further, we
   concluded during this review that it is extremely difficult to determine
   what changes had been made in different versions of draft rules that
   sometimes were hundreds of pages in length—much less to determine
   which of those changes were substantive. The executive order requires
   rulemaking agencies to identify for the public the substantive changes
   made to draft rules “in a complete, clear, and simple manner.” It does
   not place the responsibility on the public to identify changes made to
   agency rules. Also, simply providing copies of the rules as they entered



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    and exited OIRA does not necessarily identify changes made at OIRA’s
    suggestion or recommendation.

•	 Finally, the Administrator indicated that he disagreed with our
   recommendation that OIRA encourage agencies to use “best practices”
   in disclosing changes made to their rules and said that OIRA would
   defer to the agencies on this issue (as it did during the previous
   administration). He also said OIRA expected that many of the
   differences in agencies’ documentation practices that we identified
   should be eliminated by the administration’s e-rulemaking initiative
   (which would consolidate each agency’s public docket into a single
   governmentwide docket).1 Our examination of agencies’ rulemaking
   dockets during this review indicated that the documentation of changes
   made during OIRA’s review was often confusing and, at times, totally
   absent. Also, section 2(b) of the executive order states “to the extent
   permitted by law, OMB shall provide guidance to agencies” and that
   OIRA “is the repository of expertise concerning regulatory issues,
   including methodologies and procedures that affect more than one
   agency.” Therefore, we believe that OIRA has a responsibility under the
   executive order to instruct agencies regarding the order’s transparency
   requirements (just as it has done with regard to other issues). Further,
   the consolidation of the agencies’ dockets in the administration’s e­
   rulemaking initiative will not address the deficiencies that we observed
   regarding the contents of some of those dockets. The confusing
   documentation (or the absence of documentation) will just be more
   accessible to the public.

Overall, we continue to believe that improvements can and should be made
to improve the transparency of the OIRA review process. We recognize and
applaud the improvements that the current Administrator has made in this
area. However, the difficulties that we experienced during this review
clearly demonstrated that OIRA’s reviews are not always transparent to the
public. Weaknesses were apparent regarding both the coverage and the
implementation of the requirements placed on both OIRA and the
rulemaking agencies. Our review also indicated that, when OIRA and the
rulemaking agencies disclosed changes and communications beyond what



1
 For an examination of the first module of this initiative, see U.S. General Accounting Office,
Electronic Rulemaking: Efforts to Facilitate Public Participation Can Be Improved, GAO-
03-901 (Washington, D.C.: Sept. 17, 2003).




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is currently required, those practices greatly enhanced our (and the
public’s) ability to understand how rules are made.




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              This appendix presents more detailed information about our reporting
              objectives, the scope and methods used to address each of the objectives
              and subobjectives, and the most significant limitations of our findings and
              analyses.



Objectives	   The general purpose of this engagement was to examine and report on how
              the Office of Management and Budget’s Office of Information and
              Regulatory Affairs (OIRA) conducts its regulatory review function and the
              outcomes of those reviews. Specifically, we were asked to:

              1. Describe OIRA’s current regulatory review policies and processes and
                 determine whether, and if so how, those policies and processes have
                 changed in recent years.

              2. Identify the rules issued by selected agencies that were reviewed by
                 OIRA between July 1, 2001, and June 30, 2002, and that were either
                 significantly changed at OIRA’s direction, returned by OIRA for further
                 consideration by the agencies, or withdrawn by the agencies at OIRA’s
                 suggestion. For each such rule, (a) describe the changes made by
                 OIRA, the reasons why the rule was returned or withdrawn, and any
                 subsequent activity regarding the rule, (b) describe, to the extent
                 possible, the effects of the changes, returns, and withdrawals on the
                 rule’s original benefits and costs, and (c) determine whether there are
                 any indications that the actions OIRA took were traceable to
                 suggestions offered by regulated entities or outside parties and, if so,
                 whether OIRA publicly disclosed their involvement.1 We also examined
                 OIRA’s and the agencies’ application of the transparency requirements
                 in Executive Order 12866 and related guidance.

              3. Describe how OIRA determined that certain existing rules listed in its
                 reports to Congress on the costs and benefits of federal regulations
                 merited high priority review. With regard to OIRA’s 2001 report, our
                 specific objectives were to determine (a) which organizations or
                 persons suggested that the rules be reviewed, (b) what process OIRA
                 used to select and prioritize the nominations, (c) the extent to which
                 OIRA publicly disclosed its selection and priority-setting process, and
                 (d) the current status of those rules. Another specific objective was to


              1
               OIRA defines outside parties as “persons not employed by the executive branch.”




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                   compare that 2001 effort to the process OIRA used regarding a second
                   round of nominations for OIRA’s 2002 report.



Scope and
Methodology

Objective 1	   Under the first objective, our primary focus was on describing OIRA’s
               regulatory review policies and processes in place as of June 2002 or later.
               To determine whether and to what extent those policies and processes
               have changed in recent years, we focused mainly on identifying changes
               that may have occurred since the previous administration. However, to
               provide additional context on the evolution of the OIRA review processes,
               we also identified the major changes that have occurred since OIRA began
               carrying out a regulatory review function in 1981.

               To describe the policies and processes used by OIRA to conduct regulatory
               reviews, we reviewed relevant primary documents, such as executive
               orders, legislation, OMB guidance, and memoranda, speeches, and
               documents from the OIRA administrator describing aspects of the review
               process. We also reviewed other historical and secondary documents that
               provided background and context on the framework for OIRA’s regulatory
               reviews. We interviewed current and former OIRA officials to provide
               additional information on the changes, if any, in the agency’s regulatory
               review policies and processes. We supplemented the documentary and
               testimonial evidence obtained from OIRA with interviews and document
               reviews at selected regulatory agencies that are subject to OIRA’s
               regulatory reviews.

               For this objective, and the other two objectives, we also interviewed
               officials and staff from outside (nonfederal) groups representing public
               interest groups and regulated entities that are actively involved in
               observing and commenting on the federal regulatory process. Participants
               in these meetings included representatives of the American Bakers
               Association, American Road and Transportation Builders Association,
               Center for Regulatory Effectiveness, Exxon/Mobil, Mercatus Center,
               National Association of Home Builders, National Association of
               Manufacturers, National Federation of Independent Business Research
               Foundation, Natural Resources Defense Council, National Roofing




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               Contractors Association, OMB Watch, Public Citizen, and United States
               Chamber of Commerce.



Objective 2	   With regard to the second objective, we used OIRA’s Executive Order
               Review database to identify the draft regulatory actions that agencies had
               submitted for OIRA’s review during the 1-year time period (July 1, 2001,
               through June 30, 2002) specified in the congressional request. Because a
               given draft regulatory action could have been submitted for OIRA’s review
               more than once before final publication or disposition, our unit of analysis
               was each separate submission to OIRA, which is what OIRA’s database
               reflects, rather than each rule. However, to simplify reporting, we refer to
               these submissions as rules in this report.

               Out of the total of 642 draft items submitted for OIRA’s review during the 1-
               year time period, we identified 393 draft rules from 81 agencies and offices
               for which OIRA’s database had coded the outcome of the review as
               “returned,” “withdrawn,” or “consistent with change.” Because we could
               not devote the time and resources that would have been necessary to
               search dockets for all of these rules at all of the agencies, we limited our
               efforts to selected rules and agencies, focusing on the agencies with the
               largest numbers of affected rules, as discussed and agreed to in
               consultation with the requesters. Specifically, we agreed to focus our
               efforts on the rules submitted for OIRA regulatory reviews that met the
               following criteria:

               •	 The submission to OIRA was a draft health, safety, or environmental
                  rule.

               •	 The rule was submitted to OIRA as a proposed, interim final, or final
                  rule (i.e., we did not include other items, such as prerules and white
                  papers, that agencies also sometimes submitted for OIRA’s review).

               •	 OIRA completed its review of the rule between July 1, 2001, and June 30,
                  2002.

               •	 The rule was returned to the rulemaking agency by OIRA, withdrawn
                  from OIRA’s review by the agency, or changed after its submission to
                  OIRA.




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•	 The rule was from an agency or subagency that OIRA’s Executive Order
   Review database indicated had five or more rules returned, withdrawn,
   or changed during the time period in scope for this objective.

We identified 85 draft regulatory actions that met these criteria. The 85
rules were submitted for OIRA’s review from nine agencies—the Animal
Plant and Health Inspection Service (APHIS), the Food and Drug
Administration (FDA), the Occupational Safety and Health Administration
(OSHA), the Department of Transportation’s (DOT) Federal Aviation
Administration (FAA), Federal Motor Carrier Safety Administration
(FMCSA), and National Highway Traffic Safety Administration (NHTSA),
and the Environmental Protection Agency’s (EPA) Office of Air and
Radiation, Office of Solid Waste and Emergency Response, and Office of
Water. We generally did not question the rule dispositions used in the OIRA
database. However, we included one rule from EPA’s Office of Air and
Radiation in the “consistent with change” category that had been coded as
a “deadline case” in the database because publicly available information
indicated that the rule had been changed in response to OIRA’s review.2 It
is unclear whether other rules with “deadline case” outcome codes in the
database were also changed by OIRA, or why other rules that we reviewed
with statutory or legal deadlines were not coded as deadline cases.3 We
also dropped one rule from EPA’s Office of Solid Waste and Emergency
Response that had a “consistent with change” outcome code in OIRA’s
database because it had not been published in the Federal Register at the
time of our review. (See app. II for information on each of the selected
submissions.)

We were asked to address three specific topics regarding the selected rules:
(1) the nature of the changes attributed to OIRA or the reasons that rules
were withdrawn or returned at OIRA’s initiation, (2) the effect of OIRA’s
actions on the costs and/or benefits of the rules, and (3) contact with OIRA
by external parties regarding these rules. Because Executive Order 12866
also imposes certain documentation requirements on agencies and OIRA
regarding OIRA’s regulatory review process, we also addressed compliance
with those requirements as a fourth part of our analysis of the 85 rules.


2
See, for example, Arthur Allen, “Where the Snowmobiles Roam,” Washington Post
Magazine (Aug. 18, 2002).
3
 OIRA’s database has a separate field, separate from the field on reviews’ outcomes, that
identifies submissions with legal deadlines. Twenty-two of the 85 rules that we reviewed
were coded in OIRA’s database as having a statutory or judicial deadline.




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                             In general, to address these four areas we reviewed the available
                             documents in both agency and OIRA rule dockets. We also interviewed
                             officials at the agencies and OIRA to obtain information about the
                             regulatory review process for the individual rules included in our scope.
                             We then used an iterative process to develop summary findings and
                             determinations on each rule. Multiple reviewers from our team
                             independently examined and coded the information and materials that had
                             been collected. We then held a series of meetings to discuss and reach
                             consensus on the coding and description of results for each rule. We vetted
                             these preliminary results with OIRA and the agencies to address
                             outstanding questions and obtain their feedback on the accuracy of our
                             findings and determinations. We incorporated their comments as
                             appropriate before developing our official draft report for formal agency
                             comments. The analysis and coding process for each of the four areas also
                             had some unique aspects, as described below.

Nature and significance of   The review outcome categories used in the OIRA database are broader than
OIRA’s effects on rules	     the specific types of rules targeted by our second objective—those that
                             were significantly affected by OIRA. Therefore, we had to gather
                             additional information on each of the 71 changed, 9 returned, and 5
                             withdrawn rules to determine which ones had been significantly affected
                             by OIRA and, therefore, met our more specific criteria.

                             First, we used a variety of information sources (e.g., agency and OIRA
                             docket materials and interviews with agency officials) to place each of the
                             71 rules that had been changed after submission to OIRA into one of three
                             categories, based on the most significant changes attributed to either OIRA
                             or OMB.4 Our three coding categories were:

                             1.	 Significant changes—This category included rules in which the most
                                 significant changes attributed to OIRA or OMB affected the scope,
                                 impact, or estimated costs and benefits of the rules as originally
                                 submitted to OIRA. Usually, these significant changes were made to the
                                 regulatory language that would ultimately appear in the Code of Federal
                                 Regulations.



                             4
                              The agencies sometimes attributed changes to OMB and sometimes specifically to OIRA.
                             In a few instances, OMB staff outside of OIRA suggested the changes. There were also rules
                             in which the regulatory agencies initiated more significant changes during the period of
                             OIRA’s review than did OIRA.




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                                    2. Other material changes—This category covered rules in which the
                                       most significant changes attributed to OIRA or OMB resulted in the
                                       addition or deletion of material in the explanatory preamble section of
                                       the rule. For example, OIRA may have recommended that agencies
                                       provide better explanations for certain rulemaking actions and/or
                                       suggested that agencies ask the public to comment on particular
                                       aspects of the rules.

                                    3. Minor or no OIRA/OMB changes—We used this category to identify
                                       rules in which the most significant changes attributed to OIRA’s or
                                       OMB’s suggestions resulted in editorial or other minor revisions, or
                                       rules in which changes occurred prior to publication but not at the
                                       suggestion of OIRA or OMB. Where no OIRA/OMB changes were made,
                                       the changes that caused the rule to be coded “consistent with change”
                                       in OIRA’s database could have been initiated by the regulatory agency
                                       itself or by another federal agency (e.g., the Office of the Federal
                                       Register). Because the executive order does not require agencies to
                                       document nonsubstantive changes, three of the rules we included in
                                       this category were ones in which it was clear that all the changes were
                                       minor, but the source of the changes (i.e., whether they were made at
                                       the suggestion of OIRA/OMB) could not be identified.

                                    Identifying returned rules significantly affected by OIRA and OIRA’s
                                    rationale for the returns was more straightforward. When OIRA returns a
                                    rule to an agency for reconsideration, section 6(b)(3) of Executive Order
                                    12866 requires the OIRA Administrator to provide the issuing agency with a
                                    written explanation delineating the pertinent section of the order on which
                                    OIRA is relying. OIRA has posted copies of its return letters, including
                                    those relevant to rules within the scope of our engagement, on the OMB
                                    Web site. OIRA identified other rules that were returned for
                                    nonsubstantive reasons as “improper submissions” in its database.

                                    There are no documentation requirements on agencies or OIRA covering
                                    withdrawn rules, so we relied primarily on testimonial evidence from
                                    agency officials to determine whether OIRA, rather than the submitting
                                    agency, had initiated the withdrawal. In one case, however, a withdrawn
                                    rule from FAA that was subsequently resubmitted to OIRA and published,
                                    the agency docket included a written chronology for the rulemaking
                                    process that attributed the withdrawal to OIRA’s action.

Effect of OIRA’s reviews on costs   We considered two types of actions attributed to OIRA or OMB as potential
and benefits                        evidence that OIRA directly affected the costs and/or benefits of the rule



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                                  compared to those expected under the draft version of the rule submitted
                                  for OIRA’s review. These were when (1) OIRA or OMB suggested changes
                                  to a draft rule’s regulatory text that could reasonably be expected to affect
                                  the potential costs and/or benefits of the regulations (e.g., changing the
                                  proposed federal share of an indemnity payment) and (2) OIRA specifically
                                  commented on and requested changes in the agencies’ analyses of the
                                  economic impacts of the draft regulations. With regard to the first type of
                                  action, we believed that it was reasonable to assume that OIRA-suggested
                                  elimination or delay of certain regulatory provisions in the text of draft
                                  rules as submitted to OIRA would also eliminate or delay the expected
                                  costs and/or benefits associated with those provisions. We also identified
                                  and reported on other changes suggested by OIRA that, while not directly
                                  affecting regulatory provisions or cost-benefit estimates, otherwise revised,
                                  clarified, or requested comments on issues relevant to the agencies’
                                  discussion of potential costs and/or benefits of a rule. We consulted with
                                  our Chief Economist in making our determinations and describing the
                                  potential effects of OIRA’s actions.

Evidence of outside contacts      Another part of this objective was to determine whether there was any
regarding rules under OIRA        evidence that the actions that OIRA took (e.g., to suggest significant
review	                           changes to rules or to return them to the agencies for reconsideration)
                                  were traceable to suggestions offered by regulated entities or other parties
                                  outside of the federal government. It is not possible to independently
                                  determine what motivated OIRA’s actions with regard to any of the rules
                                  that it reviewed. However, as part of our review, we checked whether
                                  OIRA had direct contact with such outside parties regarding rules that
                                  OIRA significantly affected. We defined “direct contact” as taking the form
                                  of either oral communications with OIRA (meetings or phone calls) or
                                  written communications (correspondence) sent directly to OIRA officials
                                  before or during the period of OIRA’s review. In some OIRA files, we found
                                  evidence that OIRA had reviewed copies of substantive comments on
                                  previous versions of the draft rule currently under review. Because these
                                  were public docket materials previously submitted to the regulatory
                                  agencies, not OIRA, we did not consider them as evidence of direct contact
                                  with OIRA by outside parties. If there was evidence that outside parties
                                  had contacted OIRA, we also examined whether there were similarities
                                  between the actions that OIRA suggested or recommended to the agencies
                                  and those advocated to OIRA by external parties through those direct
                                  contacts.

Transparency of agencies’ and     Our primary focus with regard to agencies’ compliance with
OIRA’s documentation of reviews   documentation requirements of Executive Order 12866 was on determining



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whether the agencies had publicly documented changes made in rules
between submission for OIRA’s review and publication in the Federal
Register. Section 6(a)(3)(E)(ii) of the order states that agencies must
“identify for the public, in a complete, clear, and simple manner, the
substantive changes between the draft submitted to OIRA for review and
the action subsequently announced.” However, neither the executive order
nor OIRA’s October 1993 guidance on its implementation defines what the
term “substantive changes” means. Section 6(a)(3)(E)(iii) of the order
requires agencies to “identify for the public those changes in the regulatory
action that were made at the suggestion or recommendation of OIRA.”
OIRA’s October 1993 guidance on the implementation of the order
considers the second requirement to be a subset of the first. Therefore,
under this interpretation, the agencies are only required to disclose the
changes made at OIRA’s suggestion or recommendation after formal
submission of the rule to OIRA—not during any informal review period that
precedes formal submission.

To determine agencies’ compliance with these documentation
requirements, we considered the required information to have been
“identified for the public” if it was available in the agencies’ public docket
for the relevant rule. We coded the level of documentation in the agencies’
dockets for each changed rule into one of four categories, reflecting
whether (1) all changes were clearly documented, (2) changes were
identified but it was not clear that all changes had been documented or at
whose initiative, (3) no changes were documented in the public docket, or
(4) the Executive Order 12866 documentation requirements were not
applicable.5 The first requirement is not applicable when there were no
changes made to the rule during OIRA’s review that the agencies
considered “substantive.” Even if there were substantive changes made
during OIRA’s review, the second requirement is not applicable if those
changes were not made at the suggestion or recommendation of OIRA. We
made our determinations regarding agencies’ compliance with these
requirements solely on the basis of the information that would be available
to a member of the public if he/she had reviewed the docket for a given
rule.6 Further, because the executive order places responsibility to
document changes on the agencies rather than OIRA, our determinations
only reflect material available in the regulatory agencies’ dockets, not



5
 We conducted a similar exercise in our previous GAO report on this subject. See
GAO/GGD-98-31.




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               materials in OIRA’s public files.7 However, we did use information from the
               OIRA files to identify rule changes that agencies should have documented.

               Our primary focus with regard to OIRA’s compliance with documentation
               requirements was to see if (1) when returning rules to agencies for
               reconsideration, the OIRA Administrator provided the issuing agency with
               a written explanation delineating the pertinent section of the order on
               which OIRA relied in returning the rule, as required by section 6(b)(3) of
               the executive order, and (2) OIRA had documented written and oral
               communications with outside parties regarding rules under review by
               OIRA, as required by section 6(b)(4) of the order. To address the first item,
               we confirmed that OIRA had prepared a return letter for each of the rules it
               returned to agencies for reconsideration of substantive issues. To address
               the second item, we reviewed OIRA’s docket files, meeting logs (both the
               paper-based and on-line versions), and phone logs. We also checked other
               potential sources of information on contacts with outside parties regarding
               the 85 rules, especially the agencies’ regulatory docket files on these rules.



Objective 3	   Our work to address the third objective focused on the particular rules, and
               OIRA’s processes for selecting and ranking those rules, identified for high
               priority review in the 2001 and 2002 versions of OMB’s annual report to
               Congress on the costs and benefits of federal regulations. In order to
               address the third objective, we reviewed any available documentation
               describing the process that OIRA used to select certain rules for high
               priority review. We also interviewed OIRA officials and officials in other
               relevant agencies and organizations to determine how the classifications
               were made, and reasons why the particular selected rules were designated
               as high priority.




               6
                 In many cases, the agencies prepared supplementary memos or summaries for us that
               provided additional information and explanations regarding the changes made in various
               rules. In those cases, we used the supplementary information to address other elements of
               our review—such as the nature of changes attributed to OIRA—but did not consider the
               materials specifically prepared for our review to be public documents within the dockets.
               7
                It is notable that these dockets sometimes contained information that the agencies were
               not technically required to disclose—and that information frequently provided valuable
               insights to our determinations regarding the gravity of OIRA’s changes. For example, the
               agencies sometimes disclosed changes that were not “substantive,” and sometimes
               disclosed changes that OIRA made to rules before they were formally submitted to OIRA.




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              Appendix I

              Objectives, Scope, and Methodology





Limitations   The most important limitations to our engagement were related to the
              second objective. In particular:

              •	 Our analysis of individual rules submitted for OIRA’s review was limited
                 to the 85 rules and 9 agencies or offices that met specific selection
                 criteria. We did not review all 393 rules from all 81 agencies or offices
                 that OIRA’s database indicated had rules changed, returned, or
                 withdrawn during the 1-year period from July 1, 2001, through June 30,
                 2002.

              •	 Some types of OIRA’s influence on rules may not be reflected in the
                 documentation we relied on in this review. For example, DOT officials
                 told us in 1996 that they will not even propose certain regulatory
                 provisions because they know that OIRA will not find them acceptable.
                 Also, the documentation that we reviewed generally did not reflect the
                 OIRA-suggested changes that were not adopted by the agencies.

              •	 We cannot be sure that we have identified all changes to the selected
                 rules that were made at the suggestion or recommendation of OIRA
                 (e.g., changes made as a result of informal OIRA reviews that were not
                 documented). Neither can we be sure to have identified all the effects of
                 such changes on the rules or all instances in which an external party
                 may have influenced OIRA’s actions.

              •	 Given the available documentation, we were not able to clearly attribute
                 all changes or actions taken regarding the selected rules to OIRA or to
                 the actions or influence of outside parties. We cannot attribute any
                 cause-effect relationships in those instances where both OIRA’s
                 comments or changes regarding a particular rule and the suggestions of
                 an external party on that same rule were similar. Likewise, any
                 identified changes in the benefits and costs of selected rules after OIRA’s
                 reviews may not be attributable in whole or in part to changes made at
                 OIRA’s suggestion.

              •	 Characterizing the nature of changes made to the rules, particularly the
                 extent to which they are “significant,” is inherently subjective. We
                 attempted to mitigate this limitation by (1) establishing criteria to
                 generally categorize the nature of changes, (2) using multiple reviewers
                 for each rule, and (3) obtaining views of agency and OIRA officials on
                 whether we had accurately identified and characterized the nature of
                 OIRA’s effect on each rule.



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Objectives, Scope, and Methodology





•	 Our knowledge of OIRA contacts by outside parties, such meetings or
   correspondence, was generally limited to what OIRA or the agencies
   disclosed in their files. Although in one case we found documented
   evidence of such contact through materials posted by a trade group—
   evidence that did not appear in either the OIRA or agency files—we do
   not know whether there were other meetings with outside parties or
   other letters from those parties about rules in our review that did not
   come to our attention.




Page 131                                                         GAO-03-929
Appendix II

Summary Information on Selected Rules
Submitted to OIRA for Executive Order
Review between July 2001 and June 2002
                             This appendix contains three tables that summarize GAO’s findings and
                             determinations regarding 85 health, safety, or environmental rules
                             submitted for OIRA’s review by nine selected agencies (APHIS, FDA,
                             OSHA, DOT-FAA, DOT-FMCSA, DOT-NHTSA, EPA-Office of Air and
                             Radiation, EPA-Office of Solid Waste and Emergency Response, and EPA-
                             Office of Water) that we examined to address our second reporting
                             objective. The three tables present information on, respectively, rules that
                             were changed after being submitted for OIRA’s review (table 7), rules that
                             OIRA returned to the agencies (table 8), and rules that were withdrawn
                             after having been submitted for OIRA’s review (table 9).



Explanation of Table 	       The following paragraphs identify the analytical contents of each table and
                             provide definitions of the codes we used. In general, for each analytical
Contents	                    category, we used a process of separate coding by each GAO team member,
                             followed by a discussion to reconcile any differences and reach consensus
                             on the most appropriate code. We then shared our preliminary findings and
                             determinations with OIRA and the regulatory agencies to obtain a “fact
                             check” on the descriptive information and also solicited their comments or
                             clarifications regarding our coding determinations.



Table 7: Summary of          •	 GAO ID – This column provides a unique GAO case identification
Findings and                    number for each executive order submission to OIRA that we reviewed
                                to address our second reporting objective. Note that our unit of analysis
Determinations for Changed
                                was the submission of a draft regulation for OIRA’s review, not the rule
Rules                           itself. Therefore, a given draft regulation could have been submitted to
                                OIRA more than once with more than one outcome. In such cases, each
                                separate submission that fell within the scope of our review would
                                appear under a different GAO ID.

                             •	 Executive order review submission – This column provides general
                                information about the draft regulation submitted for OIRA’s review. As
                                noted above, our unit of analysis was the submission to OIRA, so the
                                titles presented here are those that appear in OIRA’s data base on the
                                submissions it has received, not the titles of the rules as published in the
                                Federal Register. We also identify the draft rule’s Regulation Identifier
                                Number (RIN),1 its type (proposed, final, or interim final rule), the time




                             Page 132                                                             GAO-03-929
Appendix II

Summary Information on Selected Rules 

Submitted to OIRA for Executive Order

Review between July 2001 and June 2002





   period for OIRA’s formal review of the rule, and when and where the
   cleared version of the rule was published in the Federal Register.2

•	 Nature of OMB/OIRA changes – This column represents GAO’s
   interpretation of the nature of the changes suggested by OMB or OIRA,
   in particular whether the changes made to the rule in response to OMB
   or OIRA significantly affected the draft rule. We used any available
   information to categorize and describe the changes attributed to OMB
   or OIRA (e.g., agency docket materials, OIRA files, interviews with
   agency officials, and any memos or e-mails on the changes that agency
   officials specifically prepared to address this GAO engagement). We
   characterized the nature of the changes for each of the changed rules
   using three categories, with a code assigned to each rule for the most
   significant level of change observed. The three categories were:

1. Significant changes – We used this category for rules in which changes
   attributed to OMB or OIRA resulted in a revision to the scope, impact,
   or estimated costs and benefits of the rule compared to the draft
   version originally submitted to OIRA. Most often, these were rules in
   which changes were made to the regulatory language of the draft
   regulation (i.e., amendments to the Code of Federal Regulations).

2.	 Other material changes – We used this category for changes that did not
    have as significant an effect as “significant changes,” but did result in
    adding or deleting material to the original text. Most often, these
    changes were in the preambles of the rules, rather than the regulatory
    text, and involved clarifying an agency’s explanation of certain
    provisions in the rule, clarifying the agency’s basis for decisions made
    about regulatory options or assumptions, better explaining the
    potential impact of different options, and requesting public comments
    and/or data on regulatory options or costs.



1
  The RIN is assigned by the Regulatory Information Service Center to identify each
rulemaking cycle listed in The Regulatory Plan and the Unified Agenda of federal agencies,
as directed by Executive Order 12866. Also, OMB has asked agencies to include RINs in the
headings of their Rule and Proposed Rule documents when publishing them in the Federal
Register to make it easier for the public and agency officials to track the publication history
of regulatory actions throughout their development.
2
  In addition to the date of publication, we provide the location of the published rule using
the Federal Register’s standard format (e.g., 66 FR 55530 indicates that the rule was
published starting on page 55530 of volume 66).




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                      Appendix II

                      Summary Information on Selected Rules 

                      Submitted to OIRA for Executive Order

                      Review between July 2001 and June 2002





                      3.	 Minor editorial changes or no OMB or OIRA changes – This category
                          was used both for rules with changes that, at best, represented editorial
                          corrections and revisions (e.g., rearranging existing text, correcting
                          spelling, word choice changes, and adding or correcting boilerplate
                          language, such as where to submit comments) and rules in which no
                          changes were made at the suggestion or recommendation of OMB or
                          OIRA.

                      •	 Evidence that OMB/OIRA changes affected the potential costs or
                         benefits of the submitted rule – We usually only assigned a “yes” code
                         under this topic if documentation of OMB or OIRA changes to a rule
                         specifically showed that cost-benefit, cost-effectiveness, Paperwork
                         Reduction Act burden estimates, or similar information on regulatory
                         impacts had been edited or changed at the suggestion of OMB or OIRA.
                         However, in the case of rules with substantive changes (additions or
                         deletions) in the regulatory language, we assumed that adding or
                         deleting entire provisions would have at least some effect on the
                         potential costs or benefits of the rule, compared to the draft version
                         submitted to OIRA.

                      •	 Evidence that outside parties contacted or met with OMB/OIRA
                         regarding the submitted rule – A “yes” code under this topic indicates
                         that we found documentation that an outside (nonfederal government)
                         party or parties had directly contacted OMB or OIRA regarding a
                         particular rule before or during OIRA’s formal review period for that
                         rule. Direct contacts were either through a meeting or correspondence.3
                         Most often, this evidence came from OIRA’s files and logs, but
                         sometimes the documentation came from a regulatory agency’s docket
                         on that rule.



Table 8: Summary of   • GAO ID and Executive Order Review Submission – (Columns as
Findings and            described under table 7, except that information about the publication
                        of the rule, if applicable, appears under a separate column on
Determinations for
                        subsequent activity.)
Returned Rules


                      3
                       We also checked OIRA’s phone logs regarding calls related to Executive Order 12866
                      reviews, but found no evidence of such calls before or during OIRA’s formal review periods
                      of the rules within our scope.




                      Page 134                                                                       GAO-03-929
                      Appendix II

                      Summary Information on Selected Rules 

                      Submitted to OIRA for Executive Order

                      Review between July 2001 and June 2002





                      •	 Reason for OIRA’s return of the rule – For each rule, we summarized
                         the information presented in OIRA’s return letter or, for the “improper”
                         submissions with no return letters, cited the classification from OIRA’s
                         regulatory review database. In some cases, we supplemented these
                         descriptions with additional information provided by regulatory agency
                         officials.

                      •	 Evidence that outside parties contacted or met with OIRA regarding
                         this submission – (As described under table 7.)

                      •	 Evidence of subsequent activity regarding this submission – Our focus
                         under this topic was identifying information regarding resubmission and
                         publication of the rule after OIRA had returned it. If an agency provided
                         information that the rule has not yet been resubmitted and/or published,
                         we also report that.



Table 9: Summary of   •	 GAO ID and Executive Order Review Submission – (As described
Findings and             under table 7, except that information about the publication of the rule,
                         if applicable, appears under a separate column on subsequent activity.)
Determinations for
Withdrawn Rules       •	 Reasons for withdrawal of the submitted rule – For each rule, we
                         report the explanation provided by the regulatory agency and/or OIRA
                         regarding the withdrawal of the rule. Our primary focus under this item,
                         per our congressional request, was on identifying whether the rule had
                         been withdrawn at the suggestion of OIRA.

                      •	 Evidence that outside parties contacted or met with OIRA regarding
                         this submission – (As described under table 7.)

                      •	 Evidence of subsequent activity regarding this submission – (As
                         described under table 8.)




                      Page 135                                                          GAO-03-929
                                          Appendix II

                                          Summary Information on Selected Rules 

                                          Submitted to OIRA for Executive Order

                                          Review between July 2001 and June 2002





Table 7: Findings and Determinations for Rules Changed after Submission to OIRA

                                                                               Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA              changes affected costs parties contacted
GAO ID submission             changes                                          or benefits            OMB/OIRA
APHIS
1       Mexican Hass Avocado   Other material changes                          No                      No
        Import Program
                               Information was added to the preamble
        Proposed rule          regarding several topics—e.g., a previous
                               amendment to Hass avocado regulations, an
        RIN 0579-AB27          APHIS review of the Hass avocado import
                               program, a study on fruit flies, responses to
        OIRA review period:    commenter concerns, and a new section
        06/13/2001 to          summarizing the regulatory impact analysis.
        07/05/2001             Also, there were minor rewording changes
                               throughout. An APHIS official characterized
        Published 07/13/2001   most OIRA changes to the rule as minor
        (66 FR 36892)          editorial comments but said that other
                               changes strengthened the agency’s
                               explanation for the rule. There were no
                               substantive changes to the regulatory
                               language.
2       Karnal Bunt;           Minor editoral changes or no changes            No                      No
        Compensation for the
        1999-2000 and          Changes were limited to minor clarifications
        Subsequent Crop        and a sentence change in the Paperwork
        Seasons                Reduction Act section in the preamble.
                               There were no changes in the regulatory
        Final rule             language.

        RIN 0579-AA83

        OIRA review period:
        07/26/2001 to
        07/31/2001

        Published 08/06/2001
        (66 FR 40839)




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                                             Summary Information on Selected Rules 

                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
3       Importation Prohibitions Other material changes                         No                        No
        Because of Bovine
        Spongiform               A section was added to the preamble noting
        Encephalopathy (BSE) that APHIS would obtain BSE risk factor data
                                 from trading partners and, if significant risk
        Interim final rule       was indicated, APHIS would take action to
                                 restrict animal product imports from the risky
        RIN 0579-AB26            areas.

        OIRA review period:
        04/18/2001 to
        07/27/2001

        Published 08/14/2001
        (66 FR 42595)
4       Scrapie in Sheep and      Other material changes                          No                      No
        Goats; Interstate
        Movement Restrictions   OMB suggested several changes to the
        and Indemnity Program   preamble that added or clarified descriptions
                                of issues such as (a) the increase in
        (Listed in OIRA’s       paperwork burden caused by this rule, (b)
        database as: Interstate how to calculate animal and human health
        Movement of Sheep and risks associated with scrapie, and (c) how to
        Goats From States That estimate the effectiveness of indemnity as an
        Do Not Quarantine       incentive. OMB also suggested that APHIS
        Scrapie-Infected and    clarify how much of the rule’s activities could
        Source Flocks)          be funded from currently projected agency
                                budgets and how much would require
        Final rule              additional funds. According to APHIS, these
                                additional discussions caused no significant
        RIN 0579-AA90           changes to the scope of the rule or the
                                benefits it provided. The regulatory language
        OIRA review period:     was not changed.
        04/18/2001 to
        08/07/2001

        Published 08/21/2001
        (66 FR 43964)




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                                             Summary Information on Selected Rules 

                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                 Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                changes affected costs parties contacted
GAO ID submission             changes                                            or benefits            OMB/OIRA
5       Phytosanitary             Other material changes                         No                             No
        Certificates for Imported
        Fruits and Vegetables     In a memo prepared for GAO, APHIS              The actual costs and
                                  identified eight specific changes that OMB     benefits did not appear to
        Proposed rule             requested, all in the preamble. These          change as a result of the
                                  changes mainly provided more specific          revisions made at the
        RIN 0579-AB18             information, additional examples, and          request of OMB, but the
                                  expanded discussions about the economic        revisions did provide more
        OIRA review period:       impacts of this rule.                          information on and support
        03/21/2001 to                                                            for APHIS’ analysis of the
        08/15/2001                                                               economic impacts of the
                                                                                 rule.
        Published 08/29/2001
        (66 FR 45637)
6       Plant Pest Regulations;   Other material changes                         No                             No
        Update of Current
        Provisions                APHIS identified five main changes that OMB    Although the paperwork
                                  requested to the preamble of the rule, such    burden estimates were
        Proposed rule             as adding explanations and soliciting          revised downward in the
                                  comments and alternatives on certain issues,   final version, there is no
        RIN 0579-AA80             all focused on improving the clarity of the    indication that OIRA was
                                  rule. There were no changes to the             the source of the revisions.
        OIRA review period:       regulatory language.
        03/21/2001 to
        09/26/2001

        Published 10/09/2001
        (66 FR 51340)
7       Mexican Hass Avocado      Other material changes                         No                             No
        Import Program
                                  Numerous changes were made to the                                             However, OIRA focused
        Final rule                preamble of the rule, especially regarding                                    many of its comments
                                  responses to public comments on the                                           on suggesting revisions
        RIN 0579-AB27             proposed rule and explanations of the                                         or expansions of the
                                  agency’s actions. APHIS characterized                                         APHIS responses to
        OIRA review period:       these as changes to make the final rule                                       public comments on the
        10/23/2001 to             “more defensible and internally consistent.”                                  proposed rule, and the
        10/29/2001                There were no changes to the regulatory                                       OIRA docket included
                                  language.                                                                     copies of adverse
        Published 11/01/2001                                                                                    comments submitted on
        (66 FR 55530)                                                                                           the proposed rule.




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                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
8       Interstate Movement of    Other material changes                          No                           No
        Swine Within a
        Production System         There were inserts in the Federalism and
                                  Paperwork Reduction Act sections of the
        Final rule                preamble. Inserts in the Paperwork
                                  Reduction Act section added information
        RIN 0579-AB28             about changes made from proposed rule in
                                  terms of paperwork and information
        OIRA review period:       collection requirements.
        09/25/2001 to
        12/11/2001

        Published 12/20/2001
        (66 FR 65598)
9       Chronic Wasting           Significant changes                             Yes                          No
        Disease in Cervids;
        Payment of Indemnity      The most significant change made at the         OMB changed the 100-
                                  suggestion of OMB affected the cost-sharing     percent reimbursement
        (Listed in OIRA’s         formula, limiting the federal indemnity         that APHIS had proposed
        database as: Chronic      payment to 95 percent. Other changes made       for the indemnity to be 95
        Wasting Disease in Elk;   in response to OMB were related to cost,        percent. OMB also asked
        Interstate Movement       benefit, and risk data. Both the preamble       APHIS to avoid citing the
        Restrictions and          and the CFR section of the rule were affected   possible avoidance of a
        Payment of Indemnity)     by OMB-suggested changes.                       human disease caused by
                                                                                  chronic wasting disease as
        Interim final rule                                                        a benefit of this rule
                                                                                  because this possibility
        RIN 0579-AB35                                                             was considered remote by
                                                                                  a Harvard risk analysis.
        OIRA review period:
        01/07/2002 to
        02/04/2002

        Published 02/08/2002
        (67 FR 5925)




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                                            Submitted to OIRA for Executive Order

                                            Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
10      Animals Destroyed        Other material changes                           No                          No
        Because of
        Tuberculosis; Payment    Changes were made to the preamble for
        of Indemnity             clarification, particularly regarding APHIS’s
                                 cost-sharing policy. However, no changes
        Interim final rule       were made to the regulatory language in the
                                 CFR amendments section of the rule.
        RIN 0579-AB29

        OIRA review period:
        11/13/2001 to
        02/11/2002

        Published 02/20/2002
        (67 FR 7583)
11      Infectious Salmon        Other material changes                           Unclear                     No
        Anemia; Payment of
        Indemnity                OMB requested changes related to future          The preamble changes
                                 (post-2002) funding for the infectious salmon    suggest that indemnity
        Interim final rule       anemia indemnity and a control and               rates and program funding
                                 eradication program (e.g., clarifying that the   in a second
        RIN 0579-AB37            administration was examining how the costs       indemnity/program year
                                 of program activities, including the payment     might change.
        OIRA review period:      of indemnity, are shared among the federal
        03/08/2002 to            government and others and, therefore, that in
        04/02/2002               the future the indemnity rate provided under
                                 this rule might change). OMB further
        Published 04/11/2002     requested that APHIS make clear that all
        (67 FR 17605)            potential indemnity payments were subject to
                                 the availability of funding.

                                 (An APHIS official also noted that, before the
                                 formal review period for this action, OIRA and
                                 APHIS agreed to make the federal share of
                                 the indemnity 60 percent. Whether this
                                 share is any different from what would have
                                 been stated in the rule without OIRA’s input
                                 is not known.)




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                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
12      Foot-and-Mouth            Significant changes                              Yes                            No
        Disease; Payment of
        Indemnity                The most substantive changes attributed to        APHIS made substantial
                                 OMB affected the regulatory language in the       changes to the economic
        (Listed in OIRA’s        Code of Federal Regulations (CFR)                 analysis in response to
        database as: Foot-and- amendments section—specifically,                    OIRA’s suggestion.
        Mouth Disease,           eliminating language in the original version of   Further, limiting
        Pleuropneumonia,         the rule that would have provided                 compensation by not
        Rinderpest, and Certain compensation for care and feeding of “official     covering the care and
        Other Communicable       vaccinates” (livestock vaccinated as part of a    feeding of official
        Diseases of Livestock or foot-and-mouth eradication program) and           vaccinates or the cleaning
        Poultry; Payment of      compensation “relating to cleaning and            and disinfection of non-
        Indemnity)               disinfecting non-susceptible animals.” OMB        susceptible animals
                                 suggested other changes in the preamble           lowered the potential costs
        Proposed rule            that generally provided additional                to the government of the
                                 justifications for the rule and added             indemnity program.
        RIN 0579-AB34            explanations in the Regulatory Flexibility Act
                                 and Executive Order 12866 sections. OMB           However, according to an
        OIRA review period:      also requested substantial changes to the         APHIS official (and as
        01/17/2002 to            economic analysis and APHIS’s approach in         explained in the preamble
        04/16/2002               evaluating the proposed rule’s impact.            of the proposed rule),
                                                                                   removing these
        Published 05/01/2002                                                       compensation provisions
        (67 FR 21934)                                                              could impede eradication
                                                                                   efforts and, thus, reduce
                                                                                   overall benefits to society.
                                                                                   This is because official
                                                                                   vaccinates may be used as
                                                                                   a “fire wall” to prevent the
                                                                                   spread of the disease
                                                                                   beyond infected animals,
                                                                                   and owners would not be
                                                                                   compensated for the costs
                                                                                   of maintaining the
                                                                                   vaccinated animals for the
                                                                                   time that might be
                                                                                   necessary, and because
                                                                                   non-susceptible animals
                                                                                   could spread foot-and-
                                                                                   mouth disease even if they
                                                                                   cannot themselves
                                                                                   become infected.




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                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
FDA
13      Exports; Notification and Other material changes                     No                           No
        Recordkeeping
        Requirements              Some of the OMB-suggested changes in the
                                  preamble added or revised information to
        Final rule                clarify FDA’s responses to public comments
                                  on the proposed rule. There were no
        RIN 0910-AB16             changes to the regulatory language in the
                                  CFR section of the rule.
        OIRA review period:
        08/28/2001 to
        11/27/2001

        Published 12/19/2001
        (66 FR 65429)
14      Additional Criteria and   Other material changes                          No                      No
        Procedures for
        Classifying Over-the-     Most changes were minor editorial revisions
        Counter Drugs as          in the preamble, but some more substantive
        Generally Recognized      changes included (a) repeating information
        as Safe and Effective     from the analysis of impacts section at the
        and Not Misbranded        end of the rule on page 2, (b) inserting
                                  clarifying material about the General
        Final rule                Agreement on Tariffs and Trade and the
                                  World Trade Organization to a response to
        RIN 0910-AA01             comments on the proposed rule, and (c)
                                  inserting a sentence to note that, over the
        OIRA review period:       next several years, FDA expects to be able to
        09/27/2001 to             accept electronic submissions. There were
        12/21/2001                no changes in the regulatory language of the
                                  CFR section.
        Published 01/23/2002
        (67 FR 3060)




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                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
15      Records and Reports       Other material changes                          Unclear                        No
        Concerning Experience
        with Approved New         Some of the changes to the preamble that        Updated information on the
        Animal Drugs; Interim     were attributed to OMB added new clarifying     estimated reporting and
        Final Rule                information or examples to the original text.   recordkeeping burdens
                                  OMB also revised some of the text on the        was included in the revised
        (Listed in OIRA’s         estimated reporting and recordkeeping           version of the rule
        database at time of       burdens, specifically characterizing two        (replacing data from 1999
        GAO’s review as: New      sections of the rule as posing new              fiscal year submission
        Animal Drug Approval      information collection requirements over the    reports with data from
        Process;                  existing requirements. The changes              2000 fiscal year reports),
        Implementation of Title I attributed to OMB in the regulatory language    but the source of this
        of the Generic Animal     of the CFR section appeared to be mainly        change is not clear in the
        Drug and Patent Term      editorial in nature, although the language in   documentation. FDA,
        Restoration Act           one provision on reporting requirements was     rather than OIRA, might
        (GADPTRA))                changed from “must” to “should.” (Note: this    have initiated this change.
                                  rule was previously withdrawn. See GAO ID
        Interim final rule        82.)

        RIN 0910-AA02

        OIRA review period:
        11/29/2001 to
        01/08/2002

        Published 02/04/2002
        (67 FR 5046)
16      Requirements for          Other material changes                          No                             No
        Submission of Labeling
        for Human Prescription    The changes made in response to OIRA            Although the OIRA
        Drugs and Biologics in    included (a) how electronic signatures would    changes affected the
        Electronic Format         be handled and how this would be described      categorization and
                                  in the rule and (b) the treatment and           description of the costs of
        Proposed rule             description of the onetime capital costs        this rule—identifying them
                                  associated with the reporting burden for this   as onetime capital costs
        RIN 0910-AB91             rule. There were also some clarifying           associated with the
                                  changes to the proposed regulatory              reporting burdens of this
        OIRA review period:       language in the CFR section.                    proposal, where FDA’s
        12/14/2001 to                                                             original text had said there
        03/05/2002                                                                were no capital costs
                                                                                  associated with this
        Published 05/03/2002                                                      information collection—this
        (67 FR 22367)                                                             re-categorization did not
                                                                                  change FDA’s estimate of
                                                                                  total costs.




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                                                                                     Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                    changes affected costs parties contacted
GAO ID submission             changes                                                or benefits            OMB/OIRA
17      Food Additives: Food      Minor editoral changes or no changes               No                      No
        Contact Substances
        Notification System       Only a few minor changes were attributed to
                                  OMB, such as rewording an introductory
        Final rule                paragraph regarding comments received on
                                  the proposed rule and inserting one sentence
        RIN 0910-AB94             in an illustration of how FDA expected its
                                  review of notifications to proceed in the
        OIRA review period:       future. The Executive Order 12866
        02/19/2002 to             statement in the rule was also revised to note
        05/14/2002                that it was a significant regulatory action that
                                  was reviewed by OMB, rather than the
        Published 05/21/2002      original statement that it was not. All of these
        (67 FR 35724)             changes were in the preamble; OMB
                                  requested no changes in the regulatory
                                  language.

                                  (However, a substantive FDA change is
                                  reflected in the documentation.)
18      Efficacy Evidence         Other material changes                             No                      No
        Needed for Products To
        Be Used Against Toxic     Additional material was inserted in the
        Substances When           preamble to better explain the legal authority
        Human Studies Are         and rationale for taking this regulatory action.
        Unethical or Unfeasible   Other changes were made to FDA’s
                                  response to some public comments on the
        Final rule                proposed version of this rule. However, no
                                  changes were made to the regulatory
        RIN 0910-AC05             language.

        OIRA review period:
        03/07/2002 to
        05/21/2002

        Published 05/31/2002
        (67 FR 37988)




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                                                                                 Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                changes affected costs parties contacted
GAO ID submission             changes                                            or benefits            OMB/OIRA
19      Investigational New      Other material changes                          No                      No
        Drugs; Export
        Requirements for         The only changes attributed to OMB were (a)
        Unapproved New Drug      expanding the citations of relevant legal
        Products                 authority in the background section of the
                                 preamble and (b) updating references to a
        Proposed rule            previous Federal Register notice with a
                                 related record keeping requirement—and
        RIN 0910-AA61            noting that this particular rule, therefore,
                                 would not contain any new record keeping
        OIRA review period:      requirements. There were no changes at
        03/07/2002 to            OMB’s request in the regulatory language.
        05/29/2002

        Published 06/19/2002
        (67 FR 41642)
OSHA
20      Occupational Injury and Minor editoral changes or no changes             No                      No
        Illness Recording and
        Reporting               OIRA did not suggest or recommend any            No changes were
        Requirements            substantive changes to this rule.                suggested by OIRA.

        Final rule               (However, OSHA initiated a substantive
                                 change to delay the effective date of Section
        RIN 1218-AC00            1904.29(b)(7)(vi), and new language was
                                 included in the preamble and regulatory text
        OIRA review period:      to accomplish this change.)
        09/24/2001 to
        10/04/2001

        Published 10/12/2001
        (66 FR 52031)




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(Continued From Previous Page)
                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
21      Procedures for Handling    Other material changes                          No                      No
        of Discrimination
        Complaints Under           Three sets of changes were attributed to
        Section 519 of the         OIRA. In the preamble of the rule, the
        Wendal H. Ford Aviation    changes included (a) adding information and
        Investment and Reform      a request for public comment regarding the
        Act for the 21st Century   whistle-blower model that OSHA chose for
                                   this rule and (b) identifying this rule as a
        Interim final              significant regulatory action (originally
                                   labeled “not significant” by OSHA). In the
        RIN 1218-AB99              CFR section, language was added to three
                                   provisions to clarify that certain procedures
        OIRA review period:        would be triggered at the “request of the
        12/21/2001 to              named person” (the person alleged to have
        03/20/2002                 violated the act).

        Published 04/01/2002
        (67 FR 15454)
22      Safety Standards for       Minor editoral changes or no changes            No                      No
        Signs, Signals, and
        Barricades                 The only changes attributed to OMB affected
                                   two sentences regarding EO 12866 in the
        Final rule                 preamble—identifying this as a significant
                                   regulatory action that was reviewed by OMB,
        RIN 1218-AB88              but also noting that the rule was not an
                                   economically significant action within the
        OIRA review period:        meaning of the executive order.
        12/31/2001 to
        03/07/2002

        Published 04/15/2002
        (67 FR 18145)




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                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
23      Occupational Injury and    Other material changes                         No                         No
        Illness Recording and
        Reporting                  OIRA requested an additional explanation of    However, the substantive
        Requirements;              OSHA’s method of estimating the number of      insert in the preamble
        Occupational Hearing       recordable hearing loss cases. OSHA added      explained OSHA’s
        Loss                       a section in the preamble in response to       estimation of recordable
                                   OIRA’s request.                                hearing loss cases.
        Final rule

        RIN 1218-AC06

        Economically significant

        OIRA review period:
        05/24/2002 to
        06/25/2002

        Published 07/01/2002
        (67 FR 44037)
24      Occupational Injury and Minor editoral changes or no changes              No                         No
        Illness Recording and
        Reporting               OIRA did not suggest or recommend any             No changes were
        Requirements            substantive changes to this rule.                 suggested by OIRA.

        Proposed rule            (OSHA initiated the only substantive change
                                 made to the rule after it was submitted for
        RIN 1218-AC06            OIRA’s review, deleting a section on state
                                 occupational safety and health plans in the
        Economically significant preamble. A section on state plans was later
                                 reinserted in the version of the rule that was
        OIRA review period:      published in the Federal Register.
        05/24/2002 to            Documentation in the OIRA file for this rule
        06/25/2002               showed that OSHA had informed OIRA
                                 before reinserting the state plans section
        Published 07/01/2002     before publication.)
        (67 FR 44124)




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(Continued From Previous Page)
                                                                                      Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                     changes affected costs parties contacted
GAO ID submission             changes                                                 or benefits            OMB/OIRA
DOT-FAA
25        Fees for FAA Services     Minor editoral changes or no changes              No                            No
          for Certain Flights
                                    No substantive changes were made to this
          Final rule                rule.

          RIN 2120-AG17

          OIRA review period:
          08/01/2001 to
          08/06/2001

          Published 08/20/2001
          (66 FR 43680)
26        Flight Operational        Minor editoral changes or no changes              No                            No
          Quality Assurance
          Program                   The only changes made to this rule were
                                    minor editorial revisions, such as changing
          Final rule                section headings.

          RIN 2120-AF04

          OIRA review period:
          07/30/2001 to
          08/28/2001

          Published 10/31/2001
          (66 FR 55042)
27        Traffic Alert Collision   Other material changes                            No                            No
          Avoidance System
                                    FAA officials provided evidence that indicates    (However, OIRA did
          Proposed rule             that OIRA suggested clarification to the cost-    suggest that DOT develop
                                    benefit section to be more explicit on how the    a more transparent
          RIN 2120-AG90             benefits were determined. Direct questions        analysis of the benefits of
                                    from OIRA indicate that OIRA wanted the           the proposal.)
          OIRA review period:       regulation evaluation to be more explicit
          08/01/2001 to             regarding the rule’s likely benefits. According
          10/18/2001                to FAA officials, changes made to the rule
                                    were not major, although the rule did receive
          Published 11/01/2001      a postreview letter.
          (66 FR 55506)




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                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
28      Certification of Pilots, Other material changes                            No                           No
        Aircraft, and Repairmen
        for the Operation of     In response to issues raised by OIRA, FAA         (However, in response to
        Light Sport Aircraft     added a footnote to this rule that explained      OIRA’s review, FAA added
                                 consumer surplus benefits and also clarified      information to clarify and
        Proposed rule            that specific accident data were not counted      explain some of the
                                 more than once. FAA officials characterized       information on benefits
        RIN 2120-AH19            these changes as clarifications.                  discussed in the rule.)

        OIRA review period:       (Note that a previous version of this rule was
        12/17/2001 to             returned by OIRA to FAA for reconsideration
        01/03/2002                [see GAO ID 73 in the table on returned
                                  rules].)
        Published 02/05/2002
        (67 FR 5368)
29      Reduced Vertical          Minor editoral changes or no changes             No                           No
        Separation Minimum in
        Domestic United States    According to FAA officials, only one
        Airspace                  paragraph was changed in the regulatory
                                  evaluation, and FAA officials could not
        Proposed rule             determine whether that change was due to
                                  OIRA’s suggestion. Further, the one change
        RIN 2120-AH63 (in the     to the rule was not substantive; it broke out
        published rule)           components of a cost estimate without
        RIN 2120-AH68 (in         changing the estimate itself.
        OIRA’s list of reviewed
        rules)

        OIRA review period:
        04/12/2002 to
        05/03/2002

        Published 05/10/2002
        (67 FR 31920)




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(Continued From Previous Page)
                                                                                     Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                    changes affected costs parties contacted
GAO ID submission             changes                                                or benefits            OMB/OIRA
DOT-FMCSA
30      Revision of Regulations    Minor editoral changes or no changes              No                            No
        and Application Form for
        Mexican-Domiciled          FMCSA considered the OIRA-suggested               (However, FMCSA made
        Motor Carriers to          changes to be primarily editorial or clarifying   changes to the burden-
        Operate in U.S.            in nature and not substantive (such as            hour estimates for the
        Municipalities and         substituting numbers for percentages in a         information collection
        Commercial Zones on        discussion of the cost-effectiveness of this      associated with this rule.)
        the U.S.-Mexico Border     rule). However, there were substantive
                                   changes made by FMCSA.
        Final rule

        RIN 2126-AA33

        OIRA review period:
        01/15/2002 to
        03/01/2002

        Published 03/19/2002
        (67 FR 12652)
31      Application by Certain     Other material changes                            No                            No
        Mexican Motor Carriers
        to Operate Beyond U.S.  OIRA suggested some revisions or                     (However, FMCSA initiated
        Municipalities and      clarifications to descriptions in the preamble       changes to the Paperwork
        Commercial Zones on     and regulatory language of this rule,                Reduction Act section of
        the U.S.-Mexico Border  including noting the applicability of                the preamble after
                                immigration law, revising the rationale in           submission of the draft to
        Interim final rule      some of FMCSA’s explanations or responses            OIRA. FMCSA’s changes
                                to public comments, and clarifying that, under       slightly reduced the
        RIN 2126-AA34           the North American Free Trade Agreement              estimated burden of the
                                Annex, Mexican-domiciled motor carriers              information collection
        OIRA review period:     may not provide point-to-point transportation        associated with this rule.)
        01/15/2002 to 03/1/2002 services, including express delivery services,
                                within the United States, other than
        Published 03/19/2002    international cargo. Other OIRA-suggested
        (67 FR 12702)           changes were largely minor editorial
                                changes, such as correcting the title of an
                                application form and substituting numbers for
                                percentages in a discussion of the cost-
                                effectiveness of this rule.




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(Continued From Previous Page)
                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
32      Safety Monitoring         Other material changes                            No                            No
        System and Compliance
        Initiative for Mexico-  Although most of the changes OIRA
        Domiciled Motor         suggested were minor (e.g., word choice),
        Carriers Operating in   one change in the preamble appeared to be
        the United States       material. At OIRA’s suggestion, FMCSA
                                added Appendix A to Part 385 for
        Interim final rule      clarification. This new appendix informed
                                Mexico-domiciled motor carriers of the
        RIN 2126-AA35           evaluation criteria that FMCSA would use to
                                ensure compliance with the requirements of
        OIRA review period:     this rule. A statement in the original draft that
        01/15/2002 to 03/1/2002 the statute requires an examination of each
                                Mexico-domiciled carrier’s drivers upon entry
        Published 03/19/2002    was also revised to say that the examination
        (67 FR 12758)           of drivers resulting from the statute provision
                                would allow inspection of each Mexico
                                carrier’s drivers upon entry. Changes to the
                                CFR that were attributed to OIRA appeared
                                to be minor, editorial changes (e.g., replacing
                                “oversight program” with “monitoring
                                system”), as well as rewording and
                                reordering of sentences.
33      Certification of Safety   Minor editoral changes or no changes              No                            No
        Auditors, Safety
        Investigators, and        The two changes attributed to OIRA were not       OIRA did not suggest or
        Safety Inspectors         substantive as they dealt with minor              recommend any
                                  corrections to the rule. One of the suggested     substantive changes to this
        Interim final rule        changes deleted a redundant statement, and        rule.
                                  the other corrected the citation of a relevant
        RIN 2126-AA64             executive order (changing the citation from
                                  Executive Order 12866 to Executive Order
        OIRA review period:       13211).
        01/15/2002 to
        03/01/2002

        Published 03/19/2002
        (67 FR 12776)




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                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
34      Parts and Accessories      Minor editoral changes or no changes            No                             No
        Necessary for Safe
        Operation; Certification   The only change that was attributed as being
        of Compliance with         made at the request of OIRA was the
        Federal Motor Vehicle      deletion of a redundant statement in the
        Safety Standards           preamble– regarding the boilerplate section
        (FMVSS)                    on the National Environmental Policy Act.

        Proposed rule

        RIN 2126-AA69

        OIRA review period:
        01/15/2002 to
        03/01/2002

        Published 03/19/2002
        (67 FR 12782)
35      New Entrant Safety         Other material changes                          No                             No
        Assurance Process
                                 The changes attributed to requests by OIRA        Although the OIRA
        Interim final rule       in the draft rule or the regulatory evaluation    changes added several
                                 included (1) requesting comments on the           requests for comments on
        RIN 2126-AA59            resource cost to the economy of denying           the potential economic
                                 permanent registration, the effect on safety of   effects and benefits of this
        Economically significant denying registration, and the assumptions         rule and also clarified that
                                 FMCSA made regarding crash rate                   FMCSA would reimburse
        OIRA review period:      reductions, (2) attributing designation that      states 80 percent of costs
        04/12/2002 to            this was an economically significant rule to      incurred conducting safety
        05/06/2002               OMB rather than FMCSA, and (3) adding a           audits, the changes did not
                                 statement on reimbursement to states of the       affect the costs or benefits
        Published 05/13/2002     costs incurred in conducting safety audits (80    of the rule.
        (67 FR 31978)            percent). There were no changes to the
                                 regulatory language.




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                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
DOT-NHTSA
36      Tire Pressure             Significant changes                              Yes                           No
        Monitoring Systems
                                 Changes identified in the material found in       At OIRA’s suggestion,
        Proposed rule            the NHTSA docket indicate that OIRA               statements were added
                                 suggested changes to discussions of cost          that unquantified benefits
        RIN 2127-AI33            and benefit estimates in the proposed rule, in    and costs may exist due to
                                 particular (a) adding statements to the           this rule, and public
        Economically significant preamble regarding unquantified benefits          comments were requested
                                 and costs that might exist, (b) adding            on this issue. OIRA also
        OIRA review period:      estimates of total estimated costs of the two     suggested the insertion of
        07/05/2001 to            regulatory alternatives in the proposal           (a) additional estimates of
        07/23/2001               (original draft only provided estimates of        some costs and benefits,
                                 average cost per vehicle), (c) inserting          (b) added clarification or
        Published 07/26/2001     additional information about the calculation of   explanation of some
        (66 FR 38982)            some benefit estimates (e.g., range of            economic effects, and (c)
                                 injuries and deaths prevented, stopping           requests for public
                                 distance effects, and average tire life           comments on benefits and
                                 increases), and (d) adding a discussion           costs of the proposed
                                 regarding the effect of human factors on the      regulatory alternatives.
                                 benefits of tire pressure monitoring systems.
                                 Many of the OIRA-suggested inserts
                                 included a request for public comments. At
                                 OIRA’s suggestion, NHTSA also deleted
                                 draft material about potential unquantified
                                 environmental benefits.
37      Light Truck Average      Other material changes                            No                            No
        Fuel Economy Standard
        Model Year 2004          OIRA suggested the addition of an Energy
                                 Impact section. Although NHTSA did not
        Proposed rule            consider the addition of this section to be a
                                 substantive change, it met our criteria for
        2127-AI68                classifying the nature of the change in this
                                 rule to be an “other material change.”
        Economically significant

        OIRA review period:
        01/10/2002 to
        01/17/2002

        Published 01/24/2002
        (67 FR 3470)




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(Continued From Previous Page)
                                                                                 Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                changes affected costs parties contacted
GAO ID submission             changes                                            or benefits            OMB/OIRA
38      Federal Motor Vehicle      Minor editoral changes or no changes          No                      No
        Improved Tire Safety
        Standards                  NHTSA officials could not recall any
                                   changes, substantive or nonsubstantive, to
        Proposed rule              this rule during OIRA’s review.

        RIN 2127-AI54

        Economically significant

        OIRA review period:
        12/17/2001 to
        02/22/2002

        Published 03/05/2002
        (67 FR 10050)
39      Automotive Fuel          Other material changes                          No                      No
        Economy Manufacturing
        Incentives for Dual Fuel Additional information was added to the
        Vehicles                 introduction and background sections of the
                                 preamble referring to the Energy Task Force
        Proposed rule            and additional public comments. There were
                                 also minor editorial changes throughout the
        RIN 2127-AI41            revised draft.

        Economically significant Although NHTSA did not consider OIRA’s
                                 suggested changes to be substantive, we
        OIRA review period:      classified the changes made to this rule as
        12/19/2001 to            an “other material change” to Other material
        02/22/2002               changesbe consistent with our coding of the
                                 level of changes observed in other rules.
        Published 03/11/2002
        (67 FR 10873)
40      Federal Motor Vehicle      Minor editoral changes or no changes          No                      No
        Safety Standards; Child
        Restraint Systems          NHTSA officials confirmed that OIRA only
                                   suggested editorial changes on two or three
        Proposed rule              pages.

        RIN 2127-AI34

        OIRA review period:
        02/26/2002 to
        04/08/2002

        Published 05/01/2002
        (67 FR 21806)




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(Continued From Previous Page)
                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
EPA-Office of Air and Radiation
41       Control of Emissions       Significant changes                            Yes                           Yes
         From Nonroad Large
         Spark-Ignition Engines     There were substantive comments and            Deleting some of the          Many outside parties
         and Recreational           changes from OMB on the preamble, CFR          regulatory scope from the     contacted OIRA
         Engines (Marine and        section, and regulatory support document for   original version of this      regarding this rule,
         Land-Based)                this rule. The most substantive issue/change   rule—covering regulation      including
                                    was “OMB’s desire to not move forward with     of highway motorcycles        representatives of
         Proposed rule              the marine and highway motorcycle portions     and marine engines—           several environmental
                                    of the proposal.”                              would reduce the potential    organizations (Natural
         RIN 2060-AI11                                                             total costs and benefits of   Trails and Waters
                                                                                   the rule as originally        Coalition, PIRG, Sierra
         Economically significant                                                  submitted for OMB’s           Club, Bluewater
                                                                                   review.                       Network, National Parks
         OIRA review period:                                                                                     Conservation
         08/01/2001 to                                                             (Note, however, that EPA      Association – meeting
         09/14/2001                                                                then covered those            held 08/29/2001); the
                                                                                   engines in a separate         National Marine
         Published 10/05/2001                                                      rule—see GAO ID 54.)          Maritime Association
         (66 FR 51098)                                                                                           (meeting held
                                                                                                                 08/31/2001); the
                                                                                                                 snowmobile industry
                                                                                                                 (Polaris Industries,
                                                                                                                 Arctic Cat, Bombadier,
                                                                                                                 and International
                                                                                                                 Snowmobile
                                                                                                                 Manufacturers
                                                                                                                 Association — meeting
                                                                                                                 held 09/06/2001); and
                                                                                                                 the Motorcycle Riders
                                                                                                                 Association (letter of
                                                                                                                 09/14/2001; meeting
                                                                                                                 held 10/25/2001).

                                                                                                                 (Representatives of the
                                                                                                                 Vice President’s Office,
                                                                                                                 the White House Council
                                                                                                                 of Economic Advisors,
                                                                                                                 and the Small Business
                                                                                                                 Administration also
                                                                                                                 attended these
                                                                                                                 meetings.)




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(Continued From Previous Page)
                                                                                      Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                     changes affected costs parties contacted
GAO ID submission             changes                                                 or benefits            OMB/OIRA
42      National Ambient Air       Minor editoral changes or no changes               No                      No
        Quality Standard for
        Ozone; Proposed            There were only three minor changes in the
        Response to Remand         preamble attributed to OMB. All three
                                   changes appeared to be rewording (rather
        Proposed rule              than deleting or adding information) of
                                   statements in the submitted version
        RIN 2060-ZA11              regarding EPA’s views about effects “using
                                   plausible but highly uncertain assumptions.”
        Economically significant

        OIRA review period:
        08/27/2001 to
        10/25/2001

        Published 11/14/2001
        (66 FR 57268)
43      Regulation to Establish    Other material changes                             No                      No
        New Date Receipt of
        Summer Grade               Changes were made to the preamble, CFR
        Reformulated Gasoline      section, and regulatory support document,
        at Terminals               although the CFR changes would probably
                                   not be considered substantive even using a
        Proposed rule              “possibly substantive” definition. In the
                                   preamble, material was added regarding (a)
        RIN 2060-AJ79              the dates when terminals can receive
                                   summer grade reformulated gasoline (RFG),
        OIRA review period:        (b) explanations of the costs of producing
        10/24/2001 to              more summer grade and less winter grade
        11/16/2001                 RFG, (c) an explanation of the requirement to
                                   petition EPA for approval to transfer dirty
        Published 12/03/2001       blendstocks (with a request for comment on
        (66 FR 60163)              the issue), (d) classification of this rule as a
                                   significant regulatory action under EO 12866,
                                   and (e) reporting burden comments from the
                                   National Petrochemical and Refiners
                                   Association in response to a related EPA
                                   information collection request. Original
                                   material regarding requirements for
                                   transferring blendstocks was deleted from the
                                   preamble. In the CFR section the only
                                   changes were incorporation by reference of a
                                   standard test method and some minor edits.
                                   The technical support document was
                                   changed to specify dates when terminals are
                                   required to receive summer grade RFG and
                                   to add explanatory details on the costs of
                                   producing more summer grade RFG.




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(Continued From Previous Page)
                                                                                      Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                     changes affected costs parties contacted
GAO ID submission             changes                                                 or benefits            OMB/OIRA
44      National Emission           Other material changes                            No                      No
        Standards for
        Hazardous Air               Changes attributed to OMB in the preamble
        Pollutants: Organic         of the rule included (a) a new section
        Liquid Distribution (Non-   regarding Executive Order 13211, discussing
        Gasoline)                   energy effects of the rule, (b) new language
                                    reflecting the rule’s impact on organic liquid
        Proposed rule               distribution sources, and (c) a request for
                                    comments from the public regarding the
        RIN 2060-AH41               accuracy of EPA’s cost impact estimates.
                                    There were also minor editorial changes
        OIRA review period:         throughout the preamble. There were no
        06/18/2001 to               changes to the regulatory language in the
        09/19/2001                  CFR section of the proposed rule.

        Published 04/02/2002
        (67 FR 15674)
45      National Emission           Minor editoral changes or no changes              No                      No
        Standards for
        Hazardous Air               EPA docket materials appeared to identify                                 Although there was no
        Pollutants:                 many changes suggested by the Small                                       evidence of OMB/OIRA
        Miscellaneous Organic       Business Administration’s (SBA) Office of                                 contacts with outside
        Chemical Manufacturing      Advocacy, but the only evidence of a change                               parties during the formal
        and Miscellaneous           suggested by OMB was an e-mail message                                    review period for this
        Coating Manufacturing       suggesting a rewrite of two explanatory                                   proposal, the EPA
                                    sentences in the preamble.                                                docket files did
        Proposed rule                                                                                         document a
                                    (A side-by-side comparison of the submitted                               presentation by industry
        RIN 2060-AE82               and cleared versions of this rule in OIRA’s                               representatives to OMB
                                    files indicated that there were many changes                              and SBA’s Office of
        OIRA review period:         but without attribution of the sources of those                           Advocacy (not attended
        06/18/2001 to               changes.)                                                                 by EPA) in August 2000.
        09/21/2001

        Published 04/04/2002
        (67 FR 16154)




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(Continued From Previous Page)
                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
46      NESHAP: Petroleum           Minor editoral changes or no changes           No                      No
        Refineries; Catalytic
        Cracking Units, Catalytic   The EPA docket had an OMB review cover
        Reforming Units and         sheet indicating “no substantive changes.”
        Sulfur Recovery Units       The person in charge of developing this rule
                                    confirmed that OMB’s review resulted in only
        Final rule                  a few very minor editorial changes.

        RIN 2060-AF28

        OIRA review period:
        08/29/2001 to
        11/27/2001

        Published 04/11/2002
        (67 FR 17762)




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(Continued From Previous Page)
                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
47      National Emission        Other material changes                           No                              No
        Standards for
        Hazardous Air            Changes in the preamble to address OMB           (Substantive changes to
        Pollutants; Surface      comments primarily inserted material for         the potential costs and
        Coating of Metal         clarification and to request comments. For       benefits of the rule were
        Furniture (Surface       example, language was added to ask for           not attributed to a change
        Coating)                 comments on EPA’s maximum achievable             suggested by OMB but
                                 control technology (MACT) floor, EPA’s           rather to a change EPA
        Proposed rule            conclusion that the creation of subcategories    made to the proposed
                                 was not warranted for these standards, EPA’s     emission limits after
        RIN 2060-AG55            decision to reject regulatory options more       reanalysis of emissions
                                 stringent than the MACT floor, and whether       data submitted by facilities.
        OIRA review period:      there were alternative means of monitoring       The revised limits were
        06/18/2001 to            performance for add-on controls at source        less stringent than
        10/24/2001               facilities that would be as effective and less   originally proposed,
                                 expensive than the proposed requirements.        leading to lower costs and
        Published 04/24/2002     In response to OMB’s comments, EPA also          lower projected emission
        (67 FR 20206)            asked that commenters provide information        reductions.)
                                 in support of their comments. More detailed
                                 explanations were added regarding (a) the
                                 subcategories issue, (b) a requirement to
                                 determine the mass of organic hazardous air
                                 pollutants in coatings, thinners, and cleaning
                                 materials, (c) monitoring systems, and (d) the
                                 explanation of the equation for calculating
                                 hazardous air pollutant emissions.

                                 Changes in the CFR section to address OMB
                                 comments included modifying (a) the
                                 applicability section of the rule to clarify
                                 applicability where a potential overlap may
                                 exist with EPA’s wood furniture rule and (b)
                                 the equation for calculating hazardous air
                                 pollutant emissions.

                                 (Note that there was also a substantive
                                 change regarding the proposed emission
                                 limits—which, in turn, affected the estimated
                                 costs and benefits of the rule—but the
                                 materials in EPA’s docket indicated that the
                                 change was due to EPA’s own reanalysis of
                                 emissions data received from firms.)




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(Continued From Previous Page)
                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
48      Revisions to Regional      Other material changes                           No                             Yes
        Haze Rule to
        Incorporate Sulfur         There were only a few changes in the                                            WRAP and CEED sent
        Dioxide Milestones and     preamble—for example, deleting some                                             letters to OIRA on this
        Backstop Emissions         requests for comments and an explanatory                                        rule, and CEED
        Trading Program for        section on why EPA was deferring to the                                         requested an EO 12866
        Nine Western States        Western Regional Air Partnership’s (WRAP)                                       meeting with OMB on
        and Eligible Indian        judgment on the issue of critical mass and                                      the rule. The EPA
        Tribes                     inserting a footnote in response to issues                                      docket included a copy
                                   raised in a meeting with the Center for                                         of a 02/05/2002 CEED
        Proposed rule              Energy and Economic Development (CEED).                                         letter to Dr. Graham (not
                                   There were no changes in the CFR section.                                       found in the OIRA files)
        RIN 2060-AJ50                                                                                              and an e-mail from
                                   (WRAP is a collaborative effort of tribal                                       OIRA to EPA noting that
        OIRA review period:        governments, state governments, and                                             a meeting had been
        11/29/2001 to              various federal agencies to implement the                                       scheduled at CEED’s
        02/22/2002                 Grand Canyon Visibility Transport                                               request on that date (no
                                   Commission’s recommendations and                                                record found in OIRA’s
        Published 05/06/2002       develop tools to comply with EPA’s regional                                     files). A 02/15/2002
        (67 FR 30418)              haze regulations. CEED is a national,                                           letter from WRAP to Dr.
                                   nonprofit organization formed by the nation’s                                   Graham appeared in
                                   coal-producing companies, railroads, a                                          OIRA’s docket.
                                   number of electric utilities, equipment
                                   manufacturers, and related organizations that
                                   advocates on behalf of the long-term viability
                                   of coal-based electricity generation in
                                   America.)
49      Control of Emissions of    Significant changes                              Unclear                        No
        Air Pollution From New
        Marine Compression         Docket materials indicated that EPA moved        Material in the OIRA files
        Ignition Engines At or     from proposing to considering second tier        indicated that, although the
        Above 30 Liters/Cylinder   emission standards. Specifically, OIRA edits     regulatory support
                                   systematically suggested changing language       document was amended,
        Proposed rule              regarding certain emission [Tier 2] standards    the revisions did not affect
                                   from statements “proposing” the adoption of      the estimates of costs and
        RIN 2060-AJ89              these standards to statements that EPA was       benefits for this proposed
                                   only “considering” adoption of the standards.    rule. However, it seems
        OIRA review period:                                                         that a shift from actually
        04/15/2002 to                                                               proposing to just
        04/30/2002                                                                  considering adoption of
                                                                                    particular emission
        Published 05/29/2002                                                        standards should have had
        (67 FR 37548)                                                               some effect on the rule’s
                                                                                    potential costs and
                                                                                    benefits.




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(Continued From Previous Page)
                                                                               Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA              changes affected costs parties contacted
GAO ID submission             changes                                          or benefits            OMB/OIRA
50      Consolidated Emissions Significant changes                             Unclear                         No
        Reporting Rule
                               Per review of the Paperwork Reduction Act       Delaying commencement
        Final rule             portion of this rule, OMB raised concerns       of reporting for one
                               about one portion of the Information            subsection of the rule
        RIN 2060-AH25          Collection Request (ICR). In response, EPA      might have a marginal
                               elected to delay compliance with that portion   effect on the projected
        OIRA review period:    of the ICR, rather than delay the compliance    costs and benefits of
        08/27/2001 to          date of the rule. With this change, states      states’ reporting on
        11/26/2001             would not have to commence reporting point      emissions.
                               source emissions for two types of emissions
        Published 06/10/2002   until 06/01/2004, or later, if EPA fails to
        (67 FR 39602)          publish an approved revised ICR.
51      National Emission        Significant changes                           Yes                             No
        Standards for
        Hazardous Air            Changes were made in both the preamble        The most substantive
        Pollutants; Surface      and CFR sections of the proposal. The most    change in the proposed
        Coating for Wood         substantive change attributed to a request    regulatory language would
        Building Products        from OMB was in the CFR section—delaying      delay compliance dates for
                                 the compliance dates in two provisions from   two of the rule’s provisions.
        Proposed rule            2 years to 3 years after the date of
                                 publication of the final rule.                (Note also that some of the
        RIN 2060-AH02                                                          changes in the preamble
                                 At OMB’s request, language also was           raised questions and
        OIRA review period:      inserted throughout the preamble requesting solicited comments about
        09/07/2001 to            specific comments on various aspects of       the cost-effectiveness of
        12/07/2001               products and activities EPA selected for      elements of this proposal.)
                                 coverage in this rule. Requests were also
        Published 06/21/2002     inserted for data on potential costs and
        (67 FR 42400)            burdens of the rule and how they might differ
                                 by subcategories of emission sources.




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(Continued From Previous Page)
                                                                                   Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                  changes affected costs parties contacted
GAO ID submission             changes                                              or benefits            OMB/OIRA
52      Proposed Rule for        Significant changes                               No                           No
        Compliance Program
        Fees for Light-Duty      Lengthy inserts were made to the preamble         The changes primarily
        Vehicles and Engines;    and the regulatory language in the CFR            affected the explanations
        Heavy-Duty Vehicles      section. The most substantive change              of fee payments and
        and Engines; and         appeared to be the insertion of an entire new     application processes,
        Nonroad Engines and      section on how to qualify for reduced fees        including clarification of
        Motorcycles              within the regulatory provisions of the CFR       how to qualify for reduced
                                 section. The changes that appeared to be          fees, but did not change
        Proposed rule            most substantive in the preamble included:        EPA’s estimated costs of
                                 (a) inserting requests for comments               the proposed rule.
        RIN 2060-AJ62            regarding many aspects of the proposed fee
                                 system (e.g., on minimum fees, alternative
        OIRA review period:      ways to adjust fees for inflation, various
        02/01/2002 to            process questions, and EPA’s cost analysis),
        04/22/2002               (b) adding material on special provision fee
                                 payments and applications for certain types
        Published 08/07/2002     of manufacturers (and deleting the previous
        (67 FR 51402)            version of the basis for fee schedules), (c)
                                 adding clarifying material defining how to
                                 calculate a vehicle’s average retail value, and
                                 (d) adding a Paperwork Reduction Act
                                 section.




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(Continued From Previous Page)
                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
53      Proposed Non-            Significant changes                                Unclear                    Yes
        Conformance Penalties
        for 2004 and Later       The most significant comments and edits       Overall, the actual             OIRA was contacted
        Model Year Emission      conveyed from OIRA to EPA on this rule        economic impact of the          before the formal review
        Standards for Heavy-     addressed: (a) rewriting a section about an   rule (and any changes           period by industry
        Duty Diesel Engines      additional adjustment to “level the playing   made to it) is unclear          representatives from
        and Heavy-Duty Diesel    field” and the assumptions used by EPA        because the use of              Cummins Inc. (letters to
        Vehicles                 (OIRA’s position was that this secondary      nonconformance penalties        OIRA on 09/13/2001,
                                 adjustment was not necessary), (b) discount   by manufacturers is             10/12/2001, and
        Proposed rule            rate (OIRA’s position was that, per OMB       optional. According to EPA,     11/07/2001; meeting
                                 Circular A-94, it was more appropriate to use manufacturers are likely to     with OIRA on
        RIN 2060-AJ73            a discount rate of 7 percent consistently     choose whether or not to        10/01/2001) and
                                 throughout the rule and regulatory impact     use nonconformance              Caterpillar Inc. (letter on
        OIRA review period:      analysis—in some instances EPA had used a     penalties based on their        10/25/2001 and meeting
        12/10/2001 to            3 percent discount rate, citing a             ability to comply with          on 11/14/2001), but
        12/20/2001               recommendation by EPA’s Science Advisory      emissions standards.            there was no evidence
                                 Board), (c) fuel prices (OIRA’s position was  Nevertheless, changes           of outside contacts
        Published 08/08/2002     that the estimated fuel price EPA used in its regarding the discount rate     within the formal review
        (67 FR 51464)            draft was excessive, and OIRA suggested       and fuel price could have       period for this proposed
                                 that EPA instead use a 3- to 5-year average   an effect on the potential      rule.
                                 of nationwide fuel prices), (d) significance of
                                                                               costs and benefits of this
                                 this proposed rule (OIRA’s position was that  rule. (A higher discount        (There were also many
                                 the proposed rule was significant and         rate reduces the present        other documents on
                                 potentially economically significant in light of
                                                                               value of future costs and       outside contacts in the
                                 the estimated nonconformance penalties),      benefits compared to more       dockets for this
                                 and (e) cost estimation (OIRA’s position was  immediate costs and             rulemaking, but they
                                 that the basis for the cost estimates was     benefits.) In particular, the   were dated during
                                 unclear, among other issues, and OIRA         discount rate changes           OIRA’s formal review
                                 suggested that EPA clarify and explicitly     appeared to result in a         period for the final
                                 discuss its estimation method).               slight decrease in the          version of the rule.)
                                                                               penalty amounts cited in
                                 (The proposed rule as published solicited     the rule once the discount
                                 comments on use of discount rate other than rate is changed to 7
                                 7 percent and on using a 5-year average of    percent.
                                 fuel prices. In the final rule, EPA based its (As noted in the revised
                                 analysis on use of a 7 percent discount rate version of the Technical
                                 and a 5-year average for the price of fuel.)  Support Document section,
                                                                               “Penalty Sensitivity to
                                                                               Discount Rate” the net
                                                                               effect of using a smaller
                                                                               discount rate would
                                                                               generally be penalties that
                                                                               were higher.)




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(Continued From Previous Page)
                                                                                Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA               changes affected costs parties contacted
GAO ID submission             changes                                           or benefits            OMB/OIRA
54      Control of Emissions     Significant changes                            Yes                           Yes
        from Spark Ignition
        Marine Vessels and       There were substantive changes in the         The docket materials           Although there was no
        Highway Motorcycles      preamble and the regulatory support           identified changes in cost-    evidence of direct
                                 document, along with minor editorial          benefit and cost-              contact from outside
        Proposed rule            changes. However, there did not appear to be  effectiveness estimates for    parties during the formal
                                 any substantive changes in the regulatory     this rule. In aggregate, the   review period for this
        RIN 2060-AJ90            language of the CFR section.                  estimated annual cost to       rule, OMB had meetings
                                                                               manufacturers was              with and received letters
        OIRA review period:      Substantive changes were made in the          reduced by $4 million per      from several groups
        01/16/2002 to            regulatory support document regarding some year and the estimated            (representing both
        04/16/2002               of the cost-benefit, and cost-effectiveness   annual fuel savings was        industry and
                                 estimates (e.g., cost per motorcycle, cost    increased by $4.3 million      environmental interests)
        Published 08/14/2002     increases, and fuel savings rates). In the    per year.                      on a previous related
        (67 FR 53050)            preamble, the sections on regulatory                                         rule—GAO ID 41, from
                                 flexibility alternatives and the Paperwork                                   which this rule was spun
                                 Reduction Act were expanded, while original                                  off.
                                 language was deleted regarding (a) previous
                                 standards accomplishing little more than a
                                 phase-out of two-stroke engines, (b) the
                                 contributions of motorcycles and marine
                                 engines to total U.S. emissions, (c) use of
                                 catalysts and safety concerns for marine
                                 engines, (d) a request for comment on
                                 whether banking or trading emission credits
                                 should be incorporated into the program, (e)
                                 total increased costs per motorcycle, (f) a
                                 statement that fuel savings offset cost of
                                 emission controls, and (g) a conclusion
                                 regarding cost per ton of emission reduction.




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(Continued From Previous Page)
                                                                                     Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                    changes affected costs parties contacted
GAO ID submission             changes                                                or benefits            OMB/OIRA
EPA-Office of Solid Waste and Emergency Response
55      Hazardous Waste            Other material changes                            No                      No
        Management System;
        Standardized Permit        Among the revisions attributed to OMB in the
        Corrective Action; and     preamble were (a) adding several inserts
        Financial Responsibility   requesting comments on various aspects of
        for RCRA Hazardous         the rule (e.g., on ways to reduce the burden
        Waste Management           and cost of the permitting process), (b)
        Facilities                 adding a statement that storage of hazardous
                                   waste military munitions should continue
        Proposed rule              under the individual permitting program, (c)
                                   deleting a short section proposing that “the
        RIN 2050-AE44              regulatory agency may itself choose to
                                   initiate your conversion to a standardized
        OIRA review period:        permit,” (d) adding an explanation of current
        05/10/2001 to              regulatory responsibilities if a generator
        07/19/2001                 sends waste off-site for land disposal, (e)
                                   adding several paragraphs explaining the
        Published 10/12/2001       option of not requiring a closure plan, (f)
        (66 FR 52192)              deleting much of a paragraph discussing
                                   differences between closure cost estimates
                                   prepared using EPA’s methodology and the
                                   estimates from owners and operators (but
                                   leaving in a request for actual cost data and a
                                   discussion of six options EPA considered for
                                   developing cost estimates), (g) adding a
                                   reference to an estimation option that has a
                                   larger reduction of burden associated with
                                   cost estimating but tends to produce higher
                                   cost estimates, and (h) adding a paragraph
                                   regarding the level of detail required for
                                   compliance audits. In the CFR section, the
                                   only material change was adding language to
                                   clarify which parts of Title 40 CFR section
                                   124.10 apply to the Resource Conservation
                                   and Recovery Act (RCRA) standardized
                                   permit. There were also minor editorial
                                   changes throughout the revised rule.




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(Continued From Previous Page)
                                                                                      Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                     changes affected costs parties contacted
GAO ID submission             changes                                                 or benefits            OMB/OIRA
56      Identification and Listing    Significant changes                             Yes                           Yes
        of Hazardous Waste;
        Addition of Manganese         Substantive changes were made throughout        Deferring regulatory action   OIRA was contacted by
        to Appendix VIII;             the preamble and CFR section of the notice      on manganese would also       industry representatives
        Inorganic Chemical            in response to OMB’s comments.                  defer potential costs and     from the Steel
        Manufacturing Waste;          Specifically, the rule as cleared by OMB        benefits of the regulatory    Manufacturers
        and CERCLA                    deferred final action on all elements of the    actions originally proposed   Association and
        Hazardous Substance           original proposal related to the waste          by EPA.                       American Iron and Steel
        Designation and               constituent manganese (e.g., adding                                           Institute (sent letters
        Reportable Quantities         manganese as a regulated hazardous                                            09/28/2001 and
                                      constituent).                                                                 10/19/2001; met with
        Final rule                                                                                                  OIRA 10/16/2001),
                                                                                                                    Cookson Group (sent
        RIN 2050-AE49                                                                                               letters 09/26/2001 and
                                                                                                                    10/18/2001), and
        OIRA review period:                                                                                         Eastman (sent letter
        09/26/2001 to                                                                                               10/08/2001).
        10/31/2001
                                                                                                                    The OIRA files also
        Published 11/20/2001                                                                                        indicated that OIRA
        (66 FR 58258)                                                                                               reviewed materials sent
                                                                                                                    by some of these groups
                                                                                                                    to the RCRA Information
                                                                                                                    Center. Cookson Group
                                                                                                                    also requested a
                                                                                                                    meeting with OIRA.
57      Resource Conservation         Minor editoral changes or no changes            No                            No
        and Recovery Act
        Burden Reduction              EPA told us they made no substantive
        Initiative; Office of Solid   changes to the rule. The sensitivity analysis
        Waste Burden                  requested by OMB also did not result in any
        Reduction Project             changes to the rule.

        Proposed rule

        RIN 2050-AE50

        OIRA review period:
        08/02/2001 to
        10/15/2001

        Published 01/17/2002
        (67 FR 2518)




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                                            Review between July 2001 and June 2002





(Continued From Previous Page)
                                                                                  Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                 changes affected costs parties contacted
GAO ID submission             changes                                             or benefits            OMB/OIRA
58      Amendments to the        Other material changes                           No                      No
        Corrective Action
        Management Unit          The changes attributed to OMB in the
        [CAMU] Rule              redline/strikeout document were all in the
                                 preamble of the rule. In addition to several
        Final rule               minor editorial changes (e.g., correcting
                                 spelling), changes attributed to OMB
        RIN 2050-AE77            included (a) adding a couple of sentences to
                                 a paragraph discussing differences between
        OIRA review period:      generic minimum national design and
        11/14/2001 to            operation standards for disposal units and
        12/19/2001               requirements for site-specific clean-ups, (b)
                                 rewording and clarifying some statements
        Published 01/22/2002     and responses to public comments regarding
        (67 FR 2962)             a proposed “discretionary kickout provision,”
                                 (c) clarifying in one sentence, as stated
                                 previously in the same section, that the final
                                 regulation covers both listed and
                                 characteristic wastes, and (d) deleting some
                                 of the text explaining why EPA was not
                                 further extending the comment period.

                                 (Note that the most substantive change from
                                 the original draft to the published version of
                                 the rule—adding a new provision about
                                 allowing disposal of “CAMU-eligible wastes”
                                 in off-site hazardous waste landfills—was not
                                 attributed to OMB.)
59      NESHAPS: Standards       Minor editoral changes or no changes        No                           No
        for Hazardous Air
        Pollutants for Hazardous The only changes marked were in the
        Waste Combustors         preamble, and all appeared to be minor.
                                 There were no changes in the CFR section of
        Interim final rule       the rule.

        RIN 2050-AE79

        OIRA review period:
        01/09/2002 to
        01/18/2002

        Published 02/13/2002
        (67 FR 6792)




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                                                                                Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA               changes affected costs parties contacted
GAO ID submission             changes                                           or benefits            OMB/OIRA
60      NESHAPS: Standards       Minor editoral changes or no changes           No                             No
        for Hazardous Air
        Pollutants for Hazardous The only two changes clearly marked in the
        Waste Combustors         redline/strikeout document were in the
                                 preamble and appeared to be minor. There
        Final rule               were no changes in the CFR section of the
                                 rule.
        RIN 2050-AE79

        OIRA review period:
        01/09/2002 to
        01/18/2002

        Published 02/14/2002
        (67 FR 6968)
61      Gasification of          Other material changes                         No                             No
        Hazardous Oil-Bearing
        Secondary Materials      There were changes on most of the pages in     The changes regarding
        from the Petroleum       the revised version of the rule. All of the    potential economic impacts
        Refining Industry to     substantive changes were in the preamble,      just provided more
        Produce Synthesis Gas    including sizeable insertions of text that     explanation of the potential
        Fuel                     provided explanatory information not in the    benefits of this rule. The
                                 original version of the rule. In particular,   estimated costs and
        Proposed rule            there were lengthy inserts requesting          benefits did not change.
                                 comments on a variety of issues and options
        RIN 2050-AE78            and also new text regarding the potential
                                 economic impacts. There were also many
        OIRA review period:      minor editorial changes throughout the
        10/17/2001 to            preamble and some rewording in the CFR
        01/15/2002               section.

        Published 03/25/2002
        (67 FR 13684)




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                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
62      Hazardous Waste          Minor editoral changes or no changes               No                      No
        Management System;
        Modification of the      According to EPA, the only change made at
        Hazardous Waste          the suggestion of OMB was that EPA
        Program; Cathode Ray     solicited comments on extending the
        Tubes and Mercury-       speculative accumulation time of used,
        Containing Equipment     broken CRTs to “two or more years” instead
                                 of just “two years.” A line-by-line comparison
        Proposed rule            of the revised and original versions of the rule
                                 in the OIRA docket confirmed only minor
        RIN 2050-AE52            changes in the preamble and no changes
                                 evident in the CFR section of this rule.
        OIRA review period:
        12/21/2001 to
        02/13/2002

        Published 06/12/2002
        (67 FR 40508)




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                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
63      Oil Pollution Prevention   Other material changes                           No                              No
        Regulation: Non-
        Transportation-Related     The following changes were attributed to         (However, the docket
        Onshore and Offshore       OMB in the preamble of the rule: (a) added       materials did show that
        Facilities; Revisions      two sentences to note that EPA will continue     EPA provided OIRA
                                   to evaluate and intends to request additional    supplemental cost
        Final rule                 data and comments on the issue of modifying      analyses as part of the
                                   secondary containment requirements for           revised version of the rule.)
        RIN 2050-AC62              small electrical and other types of equipment
                                   that use oil for operating purposes, (b)
        OIRA review period:        deleted a total of 10 sentences in a section
        04/27/2001 to              about discretionary provisions in the rule—all
        10/15/2001                 appeared to be related to wording changes
                                   or additional clarifications in response to
        Published 07/17/2002       comments, (c) expanded a paragraph
        (67 FR 47042)              regarding appropriate methods of secondary
                                   containment (e.g., factors to consider in
                                   determining whether to install double-walled
                                   piping), (d) added a few sentences to a
                                   paragraph in which EPA withdrew a proposed
                                   72-hour impermeability standard that was in
                                   the proposed rule, (e) added two sentences
                                   explaining an editorial change made to one of
                                   the rule’s provisions (deleting unnecessary
                                   words), and (f) added sentences in a
                                   response to public comments to note that
                                   EPA will continue to evaluate whether
                                   provisions for secondary containment found
                                   in section 112.7(h)(1) should be modified or
                                   revised and that EPA intends to publish a
                                   notice asking for additional data and
                                   comment on this issue. The only two
                                   changed sentences in the CFR section
                                   appeared to reflect minor editorial wording
                                   changes.




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                                                                                 Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                changes affected costs parties contacted
GAO ID submission             changes                                            or benefits            OMB/OIRA
EPA-Office of Water
64       National Primary        Other material changes                          No                      No
         Drinking Water
         Regulations: Arsenic    The significant OMB changes identified by                               (However, the OMB
         and Clarifications to   the EPA memo were all in the preamble.                                  docket did include
         Compliance and New      (There was no regulatory language                                       copies of letters and
         Source Contaminant      associated with this proposal.) EPA made                                comments dated prior to
         Monitoring              changes to the following seven aspects of the                           the publication of the
                                 preamble as a result of discussions with                                previous related
         Proposed rule           OMB: (1) changed questions in the requests                              rulemaking on
                                 for comments to be identical to the language                            01/22/2001.)
         RIN 2040-AB75           used in the charges to the three review
                                 panels, (2) expanded the description of
         OIRA review period:     uncertainties in risk analysis, (3) included
         06/22/2001 to           information specific to the recommendations
         07/13/2001              from the Science Advisory Board on
                                 treatment technologies and from a Science
         Published 07/19/2001    Advisory Board advisory committee on
         (66 FR 37617)           latency and income adjustments, (4)
                                 expanded the description of latency and
                                 other income adjustments, (5) included
                                 several clearly worded references to the
                                 health date relating primarily to arsenic
                                 research at levels above 50 parts per billion
                                 (ppb), and the extent to which that affects
                                 uncertainties associated with benefits of
                                 reducing arsenic below 50 ppb, (6) made
                                 editorial changes to the small system section
                                 to clearly indicate that EPA identified
                                 affordable technologies, so small system
                                 variances will not be an option, and (7)
                                 included additional wording about providing a
                                 small government agency plan under section
                                 203 of the Unfunded Mandates Reform Act.)




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                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
65      Minimizing Adverse       Significant changes                                Yes                            Yes
        Environmental Impact
        From Cooling Water       Five major changes to the rule were                OIRA’s changes would           OMB met with
        Intake Structures at     attributed to OIRA, all of which appeared to       likely reduce the costs of     Riverkeeper on
        New Facilities Under     provide greater flexibility and more               the rule by providing          09/27/2001, and with
        Section 316(b) of the    alternatives to compliance with requirements       regulated entities more        representatives from
        Clean Water Act, Phase   and standards in the original draft of the rule.   flexibility and alternatives   Edison Electric Institute
        I                        OIRA’s five main changes were to (a) add           to compliance with the         and EOP Group) on
                                 criteria that would allow more facilities to       original standards and         10/29/2001.
        Final rule               qualify for lower performance standards, (b)       requirements of the rule.
                                 change requirements so that facilities             Their effect on potential
        RIN 2040-AC34            withdrawing between 2 million gallons per          benefits is not clear.
                                 day (MGD) and 10 MGD did not have to               Changes to the cost
        OIRA review period:      reduce intake flow to a minimum level              estimates were evident in
        09/10/2001 to            commensurate with that attained by a closed-       the published version of the
        11/08/2001               cycle recirculating cooling water system, (c)      rule.
                                 change a requirement so that facilities only
        Published 12/18/2001     needed to use screens to minimize
        (66 FR 65256)            impingement mortality of fish and shellfish if
                                 certain criteria were met, (d) add an
                                 exception to intake flow requirements
                                 regarding cooling water intake structures
                                 located in a lake or reservoir, and (e) add
                                 “restoration measures” as a compliance
                                 alternative under the “Track II” compliance
                                 alternative so that intake structure operators
                                 may implement measures that “result in
                                 increases in fish and shellfish.”




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                                                                                     Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                    changes affected costs parties contacted
GAO ID submission             changes                                                or benefits            OMB/OIRA
66      National Primary          Significant changes                                Yes                            No
        Drinking Water
        Regulations: Long-Term    Although the EPA docket memo first stated          In response to OMB’s
        1 Enhanced Surface        that OMB had no significant comments on            concern about EPA’s
        Water Treatment Rule      this rule, it went on to a long discussion about   valuation of the cost of
                                  two major policy issues raised by OMB              Cryptospirdiosis used in
        Final rule                concerning (a) special primacy requirements        the economic analysis,
                                  for states and (b) the valuation of the cost of    OMB and the Office of
        RIN 2040-AD18             Cryptospirdiosis used in the economic              Water agreed to expand
                                  analysis accompanying the final rule. The          the rule’s benefit range by
        OIRA review period:       memo noted that both of these issues were          using two cost-of-illness
        06/13/2001 to             elevated to Dr. Graham (OIRA) and Tracy            values instead of one. This
        09/24/2001                Mehan (EPA Office of Water). OMB agreed            second COI estimate that
                                  to remove their objections to the special          was added was lower and
        Published 01/14/2002      primacy requirements in this rule, but             only valued lost work time
        (67 FR 1812)              indicated intent to raise this issue in            and medical costs
                                  subsequent Safe Drinking Water Act                 associated with
                                  regulatory packages. To address OMB’s              Cryptospirdiosis. The
                                  concerns about the valuation issue, the            other estimate remained
                                  Office of Water and OMB agreed to expand           the same as EPA’s original
                                  this rule’s benefit range by using two cost-of-    and valued all loss
                                  illness values instead of one. The memo            categories included in the
                                  stated that other OMB comments were                original published study
                                  editorial in nature.                               used by EPA (valuing
                                                                                     losses for medical costs,
                                  (Note that the redline/strikeout document          work time, productivity, and
                                  also shows many other changes in the               leisure time).
                                  preamble. It was not clear whether these
                                  were changes that were not made at the
                                  suggestion of OMB or whether the author of
                                  EPA’s Executive Order 12866 compliance
                                  memo did not consider changes to the
                                  preamble to be substantive.)
67      Effluent Guidelines and   Other material changes                             No                             No
        Standards for the Meat
        Products Point Source     OMB and SBA suggested changes in two
        Category (Revisions)      sections of the preamble of the proposed
                                  rule. In response to those suggestions, EPA:
        Proposed rule             (a) revised the pretreatment discussion in the
                                  preamble to restate the results from EPA’s
        RIN 2040-AD56             preliminary data collection on meat and
                                  poultry product indirect dischargers and
        OIRA review period:       related POTW interference events and (b)
        12/21/2001 to             added a lengthy paragraph in response to
        01/28/2002                OMB’s and SBA’s request to provide a more
                                  thorough explanation of how EPA developed
        Published 02/25/2002      four different production size classifications
        (67 FR 8582)              for each meat and poultry product
                                  subcategory.




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                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
68      National Pollutant         Significant changes                              Yes                             Yes
        Discharge Elimination
        System: Proposed         EPA identified major changes made at the            OIRA recommended that          Industry groups, such as
        Regulations to Establish suggestion or recommendation of OIRA in             EPA select a regulatory        Edison Electric Institute,
        Requirements for Large   both the preamble and CFR sections of the           alternative that OIRA          EOP Group, and
        Cooling Water Intake     proposed rule. Overall, these OIRA changes          believed would yield           Cinergy, sent letters and
        Structure at Existing    lowered the performance standard in the rule        substantially greater net      provided materials to
        Power Generating         and made compliance requirements more               benefits. The approach         OIRA. Representatives
        Facilities               flexible by allowing, among other things,           that EPA originally            of those groups and
                                 options for a site-specific approach to             proposed would have cost       Public Service Electric
        Proposed rule            minimizing environmental harm. The                  an estimated $610 million      and Gas, TXU, Progress
                                 changes also broadened a restoration option,        per year, with estimated       Energy, Teco Energy,
        RIN 2040-AD62            whereby firms may restore environmental             benefits of $890 million per   Constellation Energy
                                 harm rather than comply with the designated         year, yielding net benefits    Group, Allegheny
        Economically significant performance standard.                               of $280 million. However,      Energy, Minnesota
                                                                                     OIRA recommended that          Power, and Migrant
        OIRA review period:        Many changes to the proposed rule language EPA select another                    Corp. met with OIRA on
        12/28/2001 to              in eight sections of the proposed CFR             approach that, while having    02/08/2002.
        02/28/2002                 amendments were attributed to OIRA. The           estimated benefits of $735     Riverkeeper (an
                                   most extensive changes were to sections           million, was expected to       environmental interest
        Published 04/09/2002       125.94 (10 of 14 major changes in this            cost only $280 million,        group) met with OMB on
        (67 FR 17122)              section were attributed to OIRA) and 125.95 yielding net benefits of             02/07/2002.
                                   (previously 125.96 – all 7 major changes          $455 million.
                                   identified in this section were attributed to
                                   OIRA). For example OIRA suggested
                                   removing a requirement that facilities in
                                   estuaries and tidal waters withdrawing
                                   greater than 1 percent of the tidal excursion
                                   volume, and oceans withdrawing greater than
                                   500 MGD meet performance standards for
                                   reducing mortality and entrainment based on
                                   reducing flow commensurate with a closed-
                                   cycle, recirculating cooling system and
                                   replaced it with a requirement for all facilities
                                   in estuaries, tidal rivers, and oceans
                                   (regardless of flow) to reduce both
                                   impingement mortality and entrainment
                                   based on the performance of fish return
                                   systems and fine mesh screens.
                                   OIRA also suggested broadening the scope
                                   of restoration measures to allow use under all
                                   compliance alternatives, adding language
                                   that allows restoration measures to be used
                                   in lieu of design and construction
                                   technologies and operational measures to
                                   meet performance requirements of the rule.




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                                                                                        Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                       changes affected costs parties contacted
GAO ID submission             changes                                                   or benefits            OMB/OIRA
69      Final Revisions to the     Significant changes                                  Unclear                          No
        Clean Water Act
        Regulatory Definition of   The most substantive change attributed to            Revising original regulatory     There was no evidence
        “Fill Material” and        OIRA in the preamble and regulatory                  language to exclude the          of contact before or
        “Discharge of Fill         language of the rule revised the definition of       possible use of trash,           during OIRA’s formal
        Material”                  fill material as follows – “The term fill material   garbage, or similar              review. However, in a
                                   does not include trash,or garbage, or similar        materials as fill material for   joint letter dated
        Final rule                 materials unless such materials are to be            some purposes might              05/03/2002, one day
                                   used to create any structure or infrastructure       affect potential costs and       after OIRA cleared this
        RIN 2040-AD51              in waters of the United States, such as an           environmental benefits.	         rule, 10 environmental
                                   artificial reef or berm. (According to an EPA                                         groups—American
        OIRA review period:        official, the impact of the change was to                                             Rivers, Clean Water
        05/01/2002 to              make the definition clearer so that fill material                                     Action, Earthjustice,
        05/02/2002                 permit applicants could not ask to use trash                                          Friends of the Earth,
                                   or garbage as fill material in creating a                                             League of Conservation
        Published 05/09/2002       structure or infrastructure.) Many of the other                                       Voters, Mineral Policy
        (67 FR 31129)              OIRA-suggested changes revised                                                        Center, National
                                   discussions of relevant court actions and                                             Audubon Society,
        (Note that this was a      decisions related to this rulemaking.                                                 National Wildlife
        joint rulemaking of the                                                                                          Federation, Natural
        Department of the                                                                                                Resources Defense
        Army’s Corps of                                                                                                  Council, and the Sierra
        Engineers and EPA.)                                                                                              Club—contacted Dr.
                                                                                                                         Graham regarding this
                                                                                                                         rule.

                                                                                                                         (The OIRA files also
                                                                                                                         included a newspaper
                                                                                                                         article that referred to a
                                                                                                                         meeting between the
                                                                                                                         National Mining
                                                                                                                         Association and OMB on
                                                                                                                         04/06/2001. However,
                                                                                                                         meeting records we
                                                                                                                         reviewed indicated only
                                                                                                                         that EPA attended a
                                                                                                                         meeting with the
                                                                                                                         National Mining
                                                                                                                         Association on that date;
                                                                                                                         there was no mention of
                                                                                                                         whether anyone from
                                                                                                                         OMB also participated.)




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                                                                                    Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                   changes affected costs parties contacted
GAO ID submission             changes                                               or benefits            OMB/OIRA
70      Effluent Limitation       Significant changes                               Unclear                      Yes
        Guidelines and New
        Source Performance       There were substantive changes in both the         The memo in EPA’s docket     The OIRA files on this
        Standards for the        proposed regulatory options in the CFR             regarding OIRA changes       rulemaking included a
        Construction and         amendments and the preamble discussion of          did not directly address     document from the ELG
        Development Category     those regulatory options. At the suggestion        whether there were           Working Group (a
                                 or recommendation of OIRA, the proposed            changes in the potential     coalition of interested
        Proposed rule            regulation no longer included the storm water      costs and benefits of the    trade associations)
                                 management or postconstruction regulatory          rule. The EPA docket did     entitled “Issues Raised
        RIN 2040-AD42            options from the original draft. Also, the         not include sufficient       By The Construction
                                 active construction options were changed to        information to allow for a   and Development
        Economically significant identify and discuss the following three           detailed comparison of       Effluent Limitations
                                 regulatory options: (1) inspection and             revised cost and benefit     Guidelines Working
        OIRA review period:      certification of construction site erosion and     data. However, the nature    Group Before the White
        03/01/2002 to            sediment controls, for sites one acre or           of the changes made to the   House Office of
        05/15/2002               larger, (2) codification of the Construction       regulatory options should    Management and
                                 General permit plus inspection and                 have had some effect on      Budget Office of
        Published 06/24/2002     certification requirements, for sites five acres   the proposed rule’s          Information and
        (67 FR 42644)            or larger, and (3) no regulation. The              potential costs and          Regulatory Affairs”
                                 revisions to the regulatory proposal required      benefits.                    (dated 02/04/2002 –
                                 corresponding revisions to the preamble.                                        about 1 month prior to
                                                                                                                 the formal review
                                                                                                                 period).




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                                                                                          Evidence that OMB/OIRA Evidence that outside
       Executive order review Nature of most significant OMB/OIRA                         changes affected costs parties contacted
GAO ID submission             changes                                                     or benefits            OMB/OIRA
71           Effluent Limitations      Significant changes                                Unclear                           Yes
             Guidelines,
             Pretreatment              At the suggestion of OMB, EPA revised the          As described in the existing      Representatives of
             Standards, and New        regulation and supporting preamble                 regulation that this rule was     industry groups
             Source Performance        discussion for the “water bubble” provision (a     amending, the water               contacted OIRA prior to
             Standards for the Iron    voluntary regulatory flexibility mechanism to      bubble provision had a            OIRA’s formal review
             and Steel Manufacturing   allow for trading of identical pollutants at any   minimum net reduction             period for this
             Point Source Category     single steel facility with multiple compliance     provision—if a facility used      rulemaking. On
                                       points). This change eliminated an existing        this tool, the amount of the      03/04/2002,
             Final rule                minimum net reduction provision that had           pollutant discharges              representatives of the
                                       applied if facilities used the water bubble        pursuant to the bubble had        Steel Manufacturers
             RIN 2040-AC90             alternative.                                       to be 10 percent to 15            Association and the
                                                                                          percent less than the             Specialty Steel Industry
             OIRA review period:                                                          discharges otherwise              of North America sent a
             03/29/2002 to                                                                authorized by the rule            letter to Dr. Graham with
             04/30/2002                                                                   without the bubble. At the        comments and a request
                                                                                          suggestion of OMB, the            for a meeting. On
             Published 10/17/2002                                                         revised final rule eliminated     03/19/2002, OIRA held a
             (67 FR 64216)                                                                this minimum net reduction        meeting with steel
                                                                                          provision.                        industry representatives
                                                                                                                            (including those who
                                                                                          However, the net effect on        requested the meeting
                                                                                          costs and benefits of this        on March 4).
                                                                                          rule are unclear. While this
                                                                                          change eliminated a               (Note also that the OIRA
                                                                                          requirement for additional        files on its review of this
                                                                                          reductions in pollutant           rule indicated that OIRA
                                                                                          discharges if the water           had reviewed the
                                                                                          bubble tool is used, it also      substantive comments
                                                                                          provided greater flexibility      from the proposed rule
                                                                                          for facilities to use this tool   stage. The water bubble
                                                                                          to achieve the overall            provision was the
                                                                                          pollutant reductions              subject of some of the
                                                                                          required by 40 CFR 420 at         public comments on the
                                                                                          the least cost.                   proposed rule, with
                                                                                                                            industry groups
                                                                                                                            generally supportive of
                                                                                                                            expansions of the water
                                                                                                                            bubble flexibilities and
                                                                                                                            environmental groups
                                                                                                                            supportive of restrictions
                                                                                                                            on the water bubble.)
Source: GAO analysis.




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Table 8: Findings and Determinations for Rules Returned to Agency after Submission to OIRA

                                                                                                                  Evidence of
                                                                                    Evidence that outside parties subsequent activity
       Executive order review                                                       contacted or met with OIRA regarding this
GAO ID submission                    Reason for OIRA’s return                       regarding this submission     submission
DOT-FAA
72        Part 145 Review: Repair    OIRA cited concerns from other federal         Yes                          There were a series of
          Stations                   agencies and unease about                                                   activities regarding
                                     complicating relations with other        On 07/09/2001—2 days before        this rule both before
          Final rule                 countries in its rationale for returning the
                                                                              FAA withdrew the original          and after this return.
                                     rule.                                    submission of this rule—the        On 07/02/2001, FAA
          RIN 2120-AC38                                                       Aeronautical Repair Station        submitted a draft of
                                     DOT officials confirmed that the         Association, the Airline           this rule for OIRA’s
          OIRA review period:        Department of State voiced concerns      Suppliers Association and          review. On
          07/13/2001 to 07/20/2001   about the wording of certain provisions. other business representatives     07/11/2001, FAA
                                     However, they pointed out that FAA had sent a letter to the OMB             withdrew the rule (at
                                     worked out wording changes with the      Director with a copy to OIRA       OIRA’s suggestion
                                     Department of State prior to submitting asking that OIRA send the rule      according to FAA
                                     the rule for OIRA’s review. They         back to FAA with instructions to   officials.) (This
                                     believed that OIRA’s request that FAA    prepare a Supplemental Notice      withdrawal is covered
                                     withdraw the rule (see GAO ID 84) and of Proposed Rulemaking.               by GAO ID 84.)
                                     OIRA’s subsequent return of the
                                     resubmitted rule (this case) were based On 07/26/2001—about 1 week          On 07/13/2001, FAA
                                     on an OIRA misunderstanding that the after OIRA returned the rule to        resubmitted the rule
                                     Department of State’s concerns had not FAA and FAA resubmitted to           for OIRA’s review, and
                                     been addressed.                          rule to OIRA—OIRA met with         OIRA returned it on
                                                                              representatives from the           07/20/2001 (the
                                                                              Aeronautical Repair Station        sequence covered by
                                                                              Association, Aerospace             this particular case).
                                                                              Industries Association, Air        That same day FAA
                                                                              Transport Association of           resubmitted the rule
                                                                              America, Aircraft Electronics      to OIRA.
                                                                              Association, Aircraft Owners
                                                                              and Pilots Association, Airline    On 07/30/2001, OIRA
                                                                              Suppliers Association, General     completed its review
                                                                              Aviation Manufacturers             of the rule (with the
                                                                              Association, National Air          outcome coded
                                                                              Carrier Association, National      “consistent with no
                                                                              Air Transport Association,         change”). The rule
                                                                              Professional Aviation              was published on
                                                                              Maintenance Association, The       08/06/2001 (66 FR
                                                                              Boeing Company, General            41088).
                                                                              Electric Aircraft Engines,
                                                                              Goodrich, Honeywell, Rockwell
                                                                              Collins, and United
                                                                              Technologies Corporation.




                                             Page 178                                                                        GAO-03-929
                                              Appendix II

                                              Summary Information on Selected Rules 

                                              Submitted to OIRA for Executive Order

                                              Review between July 2001 and June 2002





                                                                                                              Evidence of
                                                                                Evidence that outside parties subsequent activity
       Executive order review                                                   contacted or met with OIRA regarding this
GAO ID submission                      Reason for OIRA’s return                 regarding this submission     submission
73      Certification of Pilots,       OIRA returned this rule because of       No 	                         FAA reexamined its
        Aircraft and Repairmen for     concerns that the regulatory analysis                                 regulatory evaluation
        the Operation of Light Sport   did not adequately support the rule.                                  and resubmitted the
        Aircraft                       OIRA noted that FAA used a baseline                                   rule to OIRA on
                                       with which to compare the rule that                                   12/17/2001.
        Proposed rule                  assumed that, in the absence of this
                                       rule, FAA would propose a more                                        OIRA completed its
        RIN 2120-AH19                  stringent set of standards than in the                                review of the
                                       proposal. Although OIRA had no                                        resubmitted rule on
        OIRA review period:            objection to FAA analyzing an                                         01/03/2002 (outcome
        07/06/2001 to 08/09/2001       alternative that was more stringent than                              code “consistent with
                                       the proposal, OIRA believed that the                                  change”) (see GAO ID
                                       benefits of the proposal should be                                    28).
                                       compared with a status quo that did not
                                       include the artificial “baseline”                                     The proposed rule
                                       assumption of increased stringency.                                   was published on
                                       OIRA also suggested that, as part of an                               02/05/2002 (67 FR
                                       improved analysis of alternatives, FAA                                5368).
                                       could also consider means of improved
                                       compliance and enforcement of
                                       regulations currently in place.

                                       Given these concerns, OIRA suggested
                                       that DOT publish an advanced notice of
                                       proposed rulemaking before publishing
                                       the specific proposal and returned the
                                       rule to DOT for reconsideration.
74      Corrosion Control Plan         OIRA returned this rule because of       No 	                         On 06/18/2002, FAA
                                       concerns about the agency’s regulatory                                resubmitted this rule
        Proposed rule                  analysis, primarily related to the cost-                              to OIRA.
                                       benefit analysis. Many of these same
        RIN 2120-AE92                  concerns applied to the analysis of a                                 On 09/16/2002, OIRA
                                       related FAA rule on aging aircraft. (See                              completed its review
        OIRA review period:            related rule at GAO ID 76.) Although                                  of the resubmitted
        03/02/2001 to 09/18/2001       FAA responded to some of these                                        rule (outcome code
                                       concerns in a revised regulatory                                      “consistent with no
                                       evaluation on 07/27/2001, OIRA                                        change”).
                                       suggested that a concurrent review of
                                       this rule and the aging aircraft rule                                 The proposed rule
                                       would help resolve OIRA’s concerns                                    was published on
                                       and assist in determining the most cost-                              10/03/2002 (67 FR
                                       effective way to detect and correct                                   62142).
                                       problems affecting the safety of aging
                                       aircraft. Because resolution of these
                                       concerns would take additional time,
                                       OIRA returned the two rules to DOT and
                                       FAA for reconsideration.




                                              Page 179                                                                   GAO-03-929
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                                            Summary Information on Selected Rules 

                                            Submitted to OIRA for Executive Order

                                            Review between July 2001 and June 2002





                                                                                                               Evidence of
                                                                                 Evidence that outside parties subsequent activity
       Executive order review                                                    contacted or met with OIRA regarding this
GAO ID submission                    Reason for OIRA’s return                    regarding this submission     submission
75      Retrofit of Improved Seats   According to the OIRA database, this    No 	                             On 06/17/2002, FAA
        in Air Carrier Transport     rule was returned to FAA because it was                                  resubmitted this rule
        Category Airplanes           an improper submission.                                                  for OIRA’s review.

        Proposed rule                However, FAA officials disputed that                                     OIRA completed its
                                     characterization. They stated that OIRA                                  review of the
        RIN 2120-AC84                “had a slew of questions” to which FAA                                   resubmitted version
                                     gave a 12-page response. They said                                       on 09/24/2002
        OIRA review period:          that, after the return and an exchange of                                (outcome code
        05/14/2002 to 05/16/2002     OIRA suggestions and FAA’s response,                                     “consistent with
                                     FAA added language to further explain                                    change”).
                                     the plan for improving the seat
                                     certification process.                                                   The proposed rule
                                                                                                              was published on
                                                                                                              10/04/2002 (67 FR
                                                                                                              62294).
76      Aging Airplane Safety        OIRA returned this rule due to concerns No 	                             On 06/18/2002, FAA
                                     about the regulatory analysis. Many of                                   resubmitted this rule
        Final rule                   these same concerns applied to the                                       to OIRA.
                                     analysis of a related FAA corrosion
        RIN 2120-AE42                control plan rule (GAO ID 74). Although                                  On 09/24/2002, OIRA
                                     FAA responded to some of these                                           completed its review
        OIRA review period:          concerns in a revised regulatory                                         (outcome code
        07/27/2001 to 09/18/2001     evaluation on 07/27/2001, OIRA                                           “consistent with
                                     believed that a concurrent review of this                                change”). According
                                     rule and the corrosion control plan rule                                 to FAA, the changes
                                     would help resolve OIRA’s concerns                                       were to issue this as
                                     and assist in determining the most cost-                                 an interim final rule
                                     effective way to detect and correct                                      with a request for
                                     problems affecting the safety of aging                                   comment, instead of
                                     aircraft. Because resolution of these                                    as a final rule, and to
                                     concerns would take additional time,                                     expand the benefit
                                     OIRA returned the two rules to DOT-                                      analysis in the
                                     FAA for reconsideration.                                                 regulatory evaluation.

                                                                                                              The interim final rule
                                                                                                              was published on
                                                                                                              12/06/2002 (67 FR
                                                                                                              72726).




                                            Page 180                                                                      GAO-03-929
                                             Appendix II

                                             Summary Information on Selected Rules 

                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





                                                                                                              Evidence of
                                                                                Evidence that outside parties subsequent activity
       Executive order review                                                   contacted or met with OIRA regarding this
GAO ID submission                    Reason for OIRA’s return                   regarding this submission     submission
77      Revision of Digital Flight   OIRA returned this rule due to concerns No                                   The final rule is still
        Data Recorder Regulations    about the relative cost-effectiveness of                                     pending, according to
        for Boeing 737 Airplanes     requiring additional flight data recorder                                    FAA officials.
        and for Part 125 Operators   parameters, in light of additional steps
                                     that would be proposed in a related
        Final rule                   notice of proposed rulemaking on
                                     general flight recorder improvements.
        RIN 2120-AG87

        OIRA review period:
        06/14/2001 to 09/18/2001
DOT-NHTSA
78      Tire Pressure Monitoring     OIRA returned this rule because it did     Yes, prior to the formal review   On 05/28/2002,
        Systems                      not believe the analysis performed by      period                            NHTSA submitted a
                                     NHTSA adequately demonstrated that                                           final rule to OIRA that
        Final rule                   the agency selected the best available      On 10/26/2001, OIRA and DOT contained the
                                     alternative.                                officials met with               changes suggested
        RIN 2127-AI33                                                            representatives of the Alliance by OIRA in the return
                                     Specifically, OIRA returned the rule for of Automobile Manufacturers         letter.
        Economically significant     reconsideration of two analytic concerns and various member
                                     related to safety. First, OIRA identified a companies, including Daimler- OIRA completed its
        OIRA review period:          regulatory alternative that NHTSA had Chrysler, Ford, Toyota, and VW review of the rule on
        12/17/2001 to 02/12/2002     not explicitly analyzed—considering the of America.                          05/29/2002 (outcome
                                     impact of regulatory alternatives on the                                     code “consistent with
                                     availability of anti-lock brake systems.    (There was also a meeting        no change”).
                                     Second, OIRA said that the technical        after the formal review period –
                                     foundation for NHTSA’s estimates of         on 02/21/2002 – with the         The final rule was
                                     safety benefits needed to be better         Rubber Manufacturers’            published on
                                     explained and subjected to sensitivity      Association.)                    06/05/2002 (67 FR
                                     analysis.                                                                    38704).

                                                                                                                  The U.S. Court of
                                                                                                                  Appeals recently held
                                                                                                                  that the rule was
                                                                                                                  contrary to the intent
                                                                                                                  of the tire safety
                                                                                                                  legislation and
                                                                                                                  arbitrary and
                                                                                                                  capricious under the
                                                                                                                  APA. Public Citizen,
                                                                                                                  Inc. v. Mineta, No. 02-
                                                                                                                  4237 (2d Cir. Aug. 6,
                                                                                                                  2003).




                                             Page 181                                                                          GAO-03-929
                                                  Appendix II

                                                  Summary Information on Selected Rules 

                                                  Submitted to OIRA for Executive Order

                                                  Review between July 2001 and June 2002





                                                                                                                   Evidence of
                                                                                     Evidence that outside parties subsequent activity
       Executive order review                                                        contacted or met with OIRA regarding this
GAO ID submission                          Reason for OIRA’s return                  regarding this submission     submission
EPA-Office of Air and Radiation
79           FY 2000 Report to             OIRA returned this item because it was    No                           N/A
             Congress on EPA’s             an improper submission.
             Implementation of the
             Waste Isolation Pilot Plant
             Land Withdrawal Act

             Proposed rule

             RIN 2060-ZA12

             OIRA review period:
             09/13/2001 to 10/17/2001
EPA-Office of Water
80           Federal Water Quality         OIRA’s return letter cited a number of     No                          No
             Standards for Indian          concerns about this rule. In particular,
             Country and Other             the return letter noted that EPA did not                               According to an EPA
             Provisions Regarding          provide a quantitative analysis of the                                 official, EPA has not
             Federal Water Quality         costs and benefits that would result from                              resubmitted this rule
             Standards                     this action. OIRA pointed out that the                                 to OIRA.
                                           preamble identified nearly 300 point
             Proposed rule                 sources on tribal lands that would be
                                           directly affected by the rule and that
             RIN 2040-AD46                 there might be substantial numbers of
                                           nonpoint sources and point sources
             OIRA review period:           upstream of tribal lands that could also
             06/29/2001 to 10/02/2001      be affected. OIRA therefore stated that
                                           the rule could benefit from further
                                           analysis of costs and benefits in order to
                                           support informed public comment.
                                           OIRA was also concerned with EPA’s
                                           conclusion that this proposed rule did
                                           not have federalism implications. OIRA
                                           noted that some of the impacts of this
                                           rule on states were likely to be
                                           significant (e.g., affecting state
                                           permitting activities in upstream
                                           waters), but the rule did not appear to
                                           contain any requirements for
                                           consultation with states. OIRA was also
                                           concerned that the rule appeared to
                                           establish for the first time EPA
                                           jurisdiction over waters whose Indian
                                           country status is in dispute.
Source: GAO analysis.




                                                  Page 182                                                                    GAO-03-929
                                         Appendix II

                                         Summary Information on Selected Rules 

                                         Submitted to OIRA for Executive Order

                                         Review between July 2001 and June 2002





Table 9: Findings and Determinations for Rules Withdrawn after Submission to OIRA

                              Did the agency                                          Evidence that
                              withdraw this                                           outside parties
                              submission at the                                       contacted or met   Evidence of
                              suggestion or                                           with OIRA          subsequent activity
GAO     Executive order       recommendation of         Reason for withdrawal of      regarding this     regarding this
ID      review submission     OIRA?                     the submitted rule            submission         submission
APHIS
81      Importation of        The withdrawal was        According to APHIS, OIRA      No                 APHIS resubmitted the
        Clementines From      characterized by APHIS    and APHIS mutually                               rule to OIRA on
        Spain                 as a mutual decision by   decided to withdraw this                         06/28/2002.
                              APHIS and OIRA.           rule to avoid violating the
        Proposed rule                                   90-day limit on reviews                          OIRA completed
                                                        under Executive Order                            review of the rule on
        RIN 0579-AB40                                   12866. 	                                         07/05/2002 (outcome
                                                                                                         code “consistent with
        OIRA review period:                                                                              change”). According
        04/26/2002 to                                                                                    to APHIS, OIRA had
        05/21/2002                                                                                       some changes to
                                                                                                         better explain the basis
                                                                                                         for the rule and to
                                                                                                         address concerns by
                                                                                                         Spanish clementine
                                                                                                         exporters. APHIS also
                                                                                                         noted that some
                                                                                                         changes were made to
                                                                                                         the regulatory
                                                                                                         language in response
                                                                                                         to the U.S. Trade
                                                                                                         Representative’s
                                                                                                         Office.

                                                                                                         The rule was published
                                                                                                         on 07/11/2002 (67 FR
                                                                                                         45922).




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                                             Summary Information on Selected Rules 

                                             Submitted to OIRA for Executive Order

                                             Review between July 2001 and June 2002





                                 Did the agency                                           Evidence that
                                 withdraw this                                            outside parties
                                 submission at the                                        contacted or met   Evidence of
                                 suggestion or                                            with OIRA          subsequent activity
GAO   Executive order            recommendation of          Reason for withdrawal of      regarding this     regarding this
ID    review submission          OIRA?                      the submitted rule            submission         submission
FDA
82    Records and Reports        FDA characterized the
     According to FDA, OIRA         No 	              FDA resubmitted the
      Concerning                 withdrawal as a mutual 
   and FDA made a mutual                            rule to OIRA on
      Experience with            decision by FDA and 
      decision to withdraw the                         11/29/2001.
      Approved New Animal        OIRA.
                     original final rule and
      Drugs; Final Rule
                                    reissue it as an interim final                   OIRA completed
                                                            rule. Issuing this rule as an                    review of the rule on
      (Listed in OIRA’s
                                    interim final rule with an                       01/08/2002 (outcome
      database at time of 
                                 opportunity for public                           code “consistent with
      GAO’s review as: 
                                    comment was a                                    change”). According
      Records and Reports 
                                 compromise decision to                           to FDA, OIRA had
      Concerning
                                           address OMB’s concerns                           some clarifying
      Experience with 
                                     regarding the length of time                     comments, but these
      Approved New Animal
                                  since publication of the                         were not substantive
      Drugs; Implementing of 
                              proposed rule (12/17/1991)                       (see GAO ID 15 in this
      Title I of the Generic 
                              while not further delaying                       appendix for additional
      Animal Drug and
                                      the rule by reproposing it.                      details).
      Patient [sic] Term

      Restoration Act)
                                                                                      An interim final rule
                                                                                                             was published on
      Final rule
                                                                                            02/04/2002 (67 FR
                                                                                                             5046). (The interim
      RIN 0910-AA02
                                                                                         final rule was
                                                                                                             published again on
      OIRA review period:
                                                                                   07/31/2002, delaying
      08/28/2001 to 
                                                                                        the effective date
      11/26/2001
                                                                                            indefinitely in order to
                                                                                                             address Paperwork
                                                                                                             Reduction Act of 1995
                                                                                                             requirements and
                                                                                                             comments received on
                                                                                                             the interim final rule.)




                                             Page 184                                                                     GAO-03-929
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                                           Summary Information on Selected Rules 

                                           Submitted to OIRA for Executive Order

                                           Review between July 2001 and June 2002





                                Did the agency                                       Evidence that
                                withdraw this                                        outside parties
                                submission at the                                    contacted or met   Evidence of
                                suggestion or                                        with OIRA          subsequent activity
GAO   Executive order           recommendation of       Reason for withdrawal of     regarding this     regarding this
ID    review submission         OIRA?                   the submitted rule           submission         submission
83    Current Good              No                      According to FDA, this rule No 	                FDA resubmitted a
      Manufacturing Practice                            previously had been                             version of this rule to
      in Manufacturing,         The Department of       submitted to OIRA for                           OIRA on 10/04/2002.
      Packing, or Holding       Health and Human        review but was initially
      Dietary Ingredients and   Services (HHS)          withdrawn in response to                        OIRA completed
      Dietary Supplements       withdrew the rule.      the Card memo. Although                         review of the
                                                        FDA then resubmitted this                       resubmitted rule on
      Proposed rule                                     rule to OIRA in March 2001,                     01/16/2003 (outcome
                                                        new policy makers in HHS                        code “consistent with
      RIN 0910-AB88                                     wanted to reconsider the                        change”).
                                                        rule. Therefore, HHS
      Economically                                      decided to again withdraw                       The proposed rule was
      significant                                       the rule from OIRA’s review.                    published on
                                                                                                        03/13/2003 (68 FR
      OIRA review period:                                                                               12158).
      03/28/2001 to
      12/19/2001




                                           Page 185                                                                  GAO-03-929
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                                            Summary Information on Selected Rules 

                                            Submitted to OIRA for Executive Order

                                            Review between July 2001 and June 2002





                                Did the agency                                         Evidence that
                                withdraw this                                          outside parties
                                submission at the                                      contacted or met         Evidence of
                                suggestion or                                          with OIRA                subsequent activity
GAO       Executive order       recommendation of        Reason for withdrawal of      regarding this           regarding this
ID        review submission     OIRA?                    the submitted rule            submission               submission
DOT-FAA
84        Part 145 Review:      Yes                      FAA officials stated that     Yes                      (See chronology
          Repair Stations                                OIRA suggested the                                     presented under GAO
                                According to FAA, the    withdrawal due to “concerns   On 07/09/2001— 2         ID 72, which covers
          Final rule            agency withdrew the      from industry and the State   days before the          the version of this rule
                                rule at OIRA’s           department.”	                 withdrawal—the           that was returned by
          RIN 2120-AC38         suggestion.                                            Aeronautical Repair      OIRA for
                                                                                       Station Association,     reconsideration by
          OIRA review period:                                                          the Airline Suppliers    DOT-FAA.)
          07/02/2001 to                                                                Association, and
          07/11/2001                                                                   other business
                                                                                       representatives sent
                                                                                       a letter to OMB
                                                                                       Director with a copy
                                                                                       to OIRA asking that it
                                                                                       send the rule back to
                                                                                       FAA with instructions
                                                                                       to prepare a
                                                                                       Supplemental Notice
                                                                                       of Proposed
                                                                                       Rulemaking.

                                                                                       (On 07/26/2001—
                                                                                       after the withdrawal
                                                                                       and also after OIRA’s
                                                                                       07/20/2001 return of
                                                                                       this draft rule—OIRA
                                                                                       met with these
                                                                                       business
                                                                                       representatives.)




                                            Page 186                                                                         GAO-03-929
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                                            Summary Information on Selected Rules 

                                            Submitted to OIRA for Executive Order

                                            Review between July 2001 and June 2002





                                  Did the agency                                        Evidence that
                                  withdraw this                                         outside parties
                                  submission at the                                     contacted or met   Evidence of
                                  suggestion or                                         with OIRA          subsequent activity
GAO         Executive order       recommendation of      Reason for withdrawal of       regarding this     regarding this
ID          review submission     OIRA?                  the submitted rule             submission         submission
DOT-NHTSA
85          Light Truck Average   No                     According to NHTSA             No                 NHTSA resubmitted a
            Fuel Economy                                 officials, they withdrew the                      proposed rule to OIRA
            Standard Model Year   NHTSA withdrew the     rule because the agency                           on 01/10/2002.
            2004                  rule.                  did not want to promulgate
                                                         fuel economy standards                            OIRA completed
            Final rule                                   under the congressional                           review of the proposed
                                                         freeze imposed when the                           rule on 01/17/2002
            RIN 2127-AI68                                rule was drafted, as it                           (outcome code
                                                         appeared that the freeze                          “consistent with
            Economically                                 would soon be lifted (as it                       change” – see GAO ID
            significant                                  was on 12/18/2001).                               37 in this appendix for
                                                                                                           additional information).
            OIRA review period:
            11/29/2001 to                                                                                  The proposed rule was
            12/12/2001                                                                                     published on
                                                                                                           01/24/2002. A final
                                                                                                           rule was published on
                                                                                                           04/04/2002 (67 FR
                                                                                                           16052).
Source: GAO analysis.




                                            Page 187                                                                    GAO-03-929
Appendix III

Case Studies on Significantly Affected Rules
With Evidence That OIRA Was Contacted by
External Parties
                             The case studies described in this appendix include significantly affected
                             rules that also had evidence of external party contact with OIRA during the
                             review process. For each case, a description of the rule as submitted to
                             OIRA, external party contact with OIRA, and changes ultimately made at
                             OIRA’s suggestion are included.



Control of Emissions         GAO ID 41
                             Agency: EPA
from Nonroad Large           RIN: 2060-AI11
Spark Engines 	              Rulemaking stage at time of review: Proposed
                             Date submitted to OMB for review: August 1, 2001
                             Date OMB review completed: September 14, 2001
                             Result of review: Consistent with change



Rule as Submitted to OIRA	   On August 2, 2001, OIRA formally received a draft rule from EPA that
                             proposed emission standards for several groups of nonroad engines. These
                             engines include large spark-ignition engines, such as those used in forklifts
                             and airport tugs; recreational vehicles using spark-ignition engines, such as
                             off-highway motorcycles, all-terrain vehicles, and snowmobiles; and
                             recreational marine diesel and highway motorcycle engines.



Outside Parties’ Contacts    In communications with OIRA, marine and highway motorcycle industry
with OIRA                    representatives objected to being covered by the proposed rule standards.
                             The Motorcycle Riders Foundation sent a letter (dated September 14, 2001)
                             to the OIRA Administrator stating that EPA should defer the proposed
                             rule’s coverage of highway motorcycles. According to the letter, “there is
                             no court-ordered deadline for this part of the regulation, and the EPA isn’t
                             otherwise under pressure to rush to regulation.” The National Marine
                             Manufacturers Association (NMMA) expressed similar concerns. A memo
                             summarizing a meeting with OIRA and EPA on August 31, 2001, indicated
                             that “the key issues raised by NMMA were a federal commitment to delay
                             action on exhaust standards coupled with working with NMMA, Coast
                             Guard and California on catalyst technology.”



Changes Made to Rule at      A redline/strikeout version of the rule in EPA’s docket containing “edits
OIRA’s Suggestion	           representing discussions between EPA and OMB on September 14” reflects
                             deletions of language covering marine vessels with spark engines and



                             Page 188                                                           GAO-03-929
                             Appendix III

                             Case Studies on Significantly Affected Rules 

                             With Evidence That OIRA Was Contacted by 

                             External Parties





                             highway motorcycles. Language in the published proposed rule states:
                             “We intended to include in this proposal emission standards for two
                             additional vehicle categories: new exhaust emission standards for highway
                             motorcycles and new evaporative emission standards for marine vessels
                             powered by spark-ignition engines. Proposals for these two categories are
                             not included in the September 14 deadline mandated by the courts, as is the
                             case for the remaining contents that appear in today’s proposed rule. We
                             are committed to issue proposals regarding these categories within the
                             next two to three months.”

                             The proposed rule was published in the Federal Register October 5, 2001.
                             The marine and highway motorcycle portions of the proposal were covered
                             in a later proposed rulemaking, which was published in the Federal
                             Register August 14, 2002.



Proposed                     GAO ID 53

                             Agency: EPA

Nonconformance               RIN: 2060-AJ73

Penalties for 2004 and       Rulemaking stage at time of review: Proposed

                             Date submitted to OMB for review: December 10, 2001

Later Model Year             Date OMB review completed: December 20, 2001

Emission Standards for       Result of Reviews: Consistent With Change

Heavy-duty Diesel
Engines and Heavy-
duty Diesel Vehicles

Rule as Submitted to OIRA	   On at least four occasions EPA sent versions of the proposed rule preamble
                             to OIRA previous to OIRA’s formal review period. The exchanges began
                             October 30, 2001, and OIRA’s official review period was logged as beginning
                             December 10, 2001. In the first draft rule sent to OIRA, EPA proposed that
                             nonconformance penalties (NCP) be made available for the 2004 and later
                             model year nonmethane hydrocarbons and nitrogen oxides standard for
                             heavy-duty diesel engines and vehicles. According to the proposal, the
                             availability of NCPs allows a manufacturer of heavy-duty engines or heavy-
                             duty vehicles whose engines or vehicles fail to conform with certain
                             applicable emission standards, but do not exceed a designated upper limit,
                             to be issued a certificate of conformity upon payment of a monetary
                             penalty. In the technical support document accompanying the rule



                             Page 189                                                         GAO-03-929
                            Appendix III

                            Case Studies on Significantly Affected Rules 

                            With Evidence That OIRA Was Contacted by 

                            External Parties





                            preamble, EPA originally used a 3 percent discount rate in calculating
                            certain compliance and fuel costs which were then used in calculating NCP
                            amounts.



Outside Parties’ Contacts   Regulated parties sent comments to OIRA and met with OIRA officials on
with OIRA                   several occasions before OIRA’s official review of this rule began. From
                            what is available in the OIRA meeting logs, some of the discussions
                            concerned whether the rule would advantage or disadvantage certain
                            engine manufacturers. (Available documents do not indicate that regulated
                            parties suggested OIRA’s primary revision to the rule—an increase in the
                            discount rate used in the regulatory impact analysis.) OIRA’s contact with
                            external parties regarding the proposed version of this rule is described
                            below.

                            On September 13, 2001, Cummins Inc. sent a letter to the OIRA
                            Administrator requesting a meeting “to discuss an important regulation
                            which has very serious competitive ramifications for our Company – the
                            2004 Nonconformance Penalty for Heavy Duty Engines.” On October 1,
                            2001, OIRA, EPA, DOE met with Cummins Inc. to discuss the rule. Several
                            days later (on October 12, 2001) Cummins Inc. sent a letter to the OIRA
                            Administrator thanking him for the October 1, 2001, meeting and requested
                            that the rule not harm engine manufacturers that produce compliant
                            engines. On October 25, 2001, another engine manufacturer (Caterpillar)
                            requested a meeting with OIRA regarding the heavy-duty diesel engine rule;
                            the meeting was held November 14, 2001. On November 7, 2001 Cummins
                            sent additional comments on the rule to the OIRA Administrator urging
                            “expeditious review” of the rule.



Changes Made to Rule at     OIRA initiated an increase (from 3 percent to 7 percent) in the discount
OIRA’s Suggestion           rate used in parts of the regulatory impact analysis for this rule. Some
                            members of EPA’s Environmental Economics Advisory Council
                            recommended use of the 3 percent rate. OIRA’s suggested change lowered
                            the NCPs levied in the rule from the amounts originally proposed by EPA.

                            Most of OIRA’s suggested changes to the discount rate occurred before
                            OIRA’s official review period. However, EPA did not completely switch to
                            the 7 percent discount rate before the official review period began. In a
                            draft submitted December 4, 2001, (about one week before OIRA’s official
                            review period began), the 3 percent discounted values remained and a table
                            was added showing certain values if a 7 percent discount rate were used.


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                             Additional language also requested comment on which discount rate would
                             be more appropriate.

                             OIRA’s rationale for increasing the discount rate is offered in the following
                             correspondence with EPA: “We believe that it is more appropriate to use a
                             discount rate of 7% (see OMB circular A-94) consistently throughout the
                             rule, representing the opportunity cost of capital. Since the EPA NCP Cost
                             Survey instructs respondents to discount by 3% and report net present
                             value estimates for the fixed costs, hardware cost, warranty cost, and
                             maintenance/operating cost, please discuss the necessary adjustments
                             used in presenting NPB estimates, in the first version of the proposal, for
                             these cost categories using the 7% discount rate.” The rationale for a 7
                             percent discount rate is also included in a separate fax sent to EPA. By the
                             time the proposed rule was published in the Federal Register, all discount
                             rate discussion in the rule used a 7 percent rate. However, the following
                             language is included in the rule regarding potential use of a different rate
                             for portions of the impact analysis and an example of nonconformance
                             penalty parameters using a 3 percent discount rate is included in the
                             technical support document:

                             “… there is evidence in other contexts that users might apply a different discount rate than
                             seven percent when considering future operating costs during a purchase decision. We
                             request comment on whether there is evidence to support the application of such an
                             alternative discount rate to operating costs in the various segments of the heavy duty engine
                             market. Your comments in support of an alternative discount rate (a higher or lower value)
                             should include a discussion of the supporting economic and business rationale for the
                             alternative rate. We have included an example of the impact on the NCP parameters from
                             using a smaller discount rate (three percent) in the draft Technical Support Document for
                             this proposal.”




Identification and           GAO ID 56
                             Agency: EPA
Listing of Hazardous         RIN: 2050-AE49
Waste (Manganese)	           Rulemaking stage at time of review: Final
                             Date submitted to OMB for review: September 26, 2001
                             Date OMB review completed: October 31, 2001
                             Result of review: Consistent with change



Rule as Submitted to OIRA	   On September 26, 2001, EPA submitted a draft final rule to OIRA for review
                             listing manganese and two other wastes generated from inorganic chemical
                             manufacturing processes as “hazardous constituents.” EPA said in the



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                            draft rule that it was adding manganese to the list “based on scientific
                            studies demonstrating that manganese has toxic effects on humans.” The
                            agency said manganese had long been known to cause neurological effects
                            in occupational settings, a “continuum of dysfunction” with low levels of
                            exposure, and a danger to individuals with a hepatic insufficiency. EPA
                            also cited evidence from epidemiological studies that point to negative
                            health impacts of low-level exposure to manganese in drinking water.
                            After considering public comments on the proposed rule, the agency
                            refuted commenters’ claims that manganese is not hazardous and said “we
                            continue to believe that manganese is toxic and clearly poses significant
                            risk to human health.” EPA also said that, “based on consultations with
                            individuals knowledgeable in hazardous waste treatment and corrective
                            action, a review of the chemical properties of manganese, and review of
                            Resource Conservation and Recovery Act (RCRA) regulations, the Agency
                            does not believe that there are significant, incremental costs or economic
                            impacts associated with adding manganese to [the list of hazardous
                            constituents].”



Outside Parties’ Contacts   Also on September 26, 2001, legal counsel for the Cookson Group (an
with OIRA                   international materials technology organization) sent a letter to OIRA
                            stating that the cost of the final rule to Cookson would be significantly
                            higher than EPA estimated. The letter indicated that Cookson was
                            obligated to manage and dispose of slag materials at a Laredo, Texas
                            smelter that it once owned, and that the rule would classify this slag as
                            hazardous waste—thereby costing the company an additional $29 million
                            to $36 million. The letter also indicated that the “Laredo slag constitutes
                            well over 90 percent of the material that will likely be subject to this
                            rulemaking over the next 30 years.” Later, on October 18, 2001, the counsel
                            for the Cookson Group sent another letter to OMB requesting a meeting to
                            discuss the “significant impact of the [rule] on Cookson at a former facility
                            in Laredo, TX, which impact was not known to and considered by EPA
                            when formulating the rule.”

                            On September 28, 2001, counsel for the Steel Manufacturers Association
                            and the American Iron and Steel Institute requested a meeting with the
                            OIRA Administrator to discuss “the failure of [EPA] to conduct any analysis
                            of the impact of the proposal on the steel industry, the country’s largest
                            consumer and user of manganese.” On October 16, 2001, OIRA and EPA
                            officials met with the organizations’ counsels. Three days later, the counsel
                            sent a letter to an OIRA official thanking him for the meeting and stating




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                          that listing manganese as hazardous could harm the steel industry due to
                          increased costs for treating manganese-contaminated waste.1

                          On October 8, 2001, the Eastman chemical company sent a letter to the
                          OIRA Administrator stating that the company “strongly opposes adding
                          manganese to [the listing of hazardous constituents] because of its very low
                          toxicity and the substantial costs it would impose on facilities outside the
                          inorganic chemicals industry, with no resultant environmental or health
                          benefits.”



Changes Made to Rule at   On October 31, 2001, OIRA’s review of the rule ended, and the rule was
OIRA’s Suggestion         coded as “consistent with change.” A memo dated the same day was
                          placed in the EPA docket submitting a “redline/strikeout” version of the
                          rule showing the changes made “in response to comments from OMB.” All
                          language in the rule related to listing manganese as hazardous had been
                          deleted. The following language was inserted in the text.

                          “We received numerous comments related to the risk associated with manganese and the
                          economic impact to many industries, including the steel industry, of adding manganese to
                          the Universal Treatment Standards requirements and to 40 CFR 261. Appendix VIII.
                          Although we continue to believe that manganese poses significant issues that ultimately
                          should be resolved, the court ordered schedule under which we are operating provides us
                          with no flexibility to take additional time to explore these topics more fully. As a result, we
                          have chosen to defer final action on [manganese].”

                          The final rule was published in the Federal Register on November 20, 2001.
                          As of May 30, 2003 EPA had not published a rule regarding manganese.




                          1
                           This letter was not in the EPA docket for the rule, but did appear in the OIRA docket.




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Minimizing Adverse           GAO ID 65
                             Agency: EPA
Environmental Impact         RIN: 2040-AC34
from Cooling Water           Rulemaking stage at time of review: Final
                             Date submitted to OMB for review: September 10, 2001
Intake Structures at 	       Date OMB review completed: November 8, 2001
New Facilities               Result of review: Consistent with change




Rule as Submitted to OIRA	   The draft version of the rule submitted to OIRA on September 10, 2001,
                             implemented section 316 (b) of the Clean Water Act for new facilities
                             (primarily electric power plants) that use water withdrawn from rivers,
                             streams, lakes, reservoirs, estuaries, oceans or other waters of the U.S. for
                             cooling purposes. The draft rule established national technology-based
                             performance requirements applicable to the location, design, construction,
                             and capacity of cooling water intake structures at new facilities. The
                             national requirements also established the best technology available
                             (referred to as a “closed-cycle recirculating cooling water system”) for
                             minimizing adverse environmental impacts associated with the use of these
                             structures. The primary adverse environmental impact due to these
                             structures is casualties among aquatic life forms (e.g., fish and shellfish).

                             The draft rule used a two-track approach to achieve technology based
                             performance requirements. Track I established national intake capacity
                             and velocity requirements as well as location- and capacity-based
                             requirements to reduce intake flows to certain levels. This performance
                             standard was to be commensurate with that produced by a closed-cycle
                             recirculating cooling water system. Track II allowed permit applicants to
                             conduct site-specific studies to demonstrate that alternatives to Track I
                             would result in the same level of reduction of impingement and
                             entrainment at the cooling water intake structure as would be achieved
                             under Track I.



Outside Parties’ Contacts    Riverkeeper met with OIRA and EPA officials on September 27, 2001,
with OIRA	                   regarding the rule and advocated “dry-cooling” as the technology basis for
                             the final rule.

                             On October 29, 2001, industry representatives (from EOP Group and
                             Edison Electric Institute) met with OIRA and EPA officials. The industry



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                          representatives recommended that the final rule: (1) use the level of harm
                          reduction in impingement and entrainment as the “point of departure to
                          compare Track I and II,” (2) allow different impingement and entrainment
                          performance if the system minimizes total adverse environmental impacts,
                          (3) eliminate the proposal for additional design and construction
                          technologies, (4) allow alternative systems if achieving the Track I system
                          performance is not a cost-effective reduction in adverse environmental
                          impacts.



Changes Made to Rule at   Five substantive changes were made to the rule due to OIRA’s suggestions.
OIRA’s Suggestion
                          •	 As originally written, EPA allowed facilities to qualify for alternative
                             performance requirements that were less stringent than those required
                             by the rule. OIRA suggested adding one additional criterion allowing
                             qualification for less stringency if full compliance “would result in
                             significant adverse impacts on local air quality, significant adverse
                             impacts on local water resources not addressed under Section 125.84
                             (d) (1) (i), or significant adverse impacts on local energy markets.”
                             This additional criterion could have the effect of allowing more facilities
                             to qualify for lower performance standards.

                          •	 As originally written, facilities withdrawing between 2 million gallons
                             per day (MGD) and 10 MGD had to meet the performance requirements
                             imposed on facilities with higher MGD withdrawal amounts. OIRA
                             suggested changing the requirements so that facilities withdrawing
                             between 2 MGD and 10 MGD did not have to reduce intake flow to a
                             minimum level commensurate with that attained by a closed-cycle
                             recirculating cooling water system. However, all other specifications
                             remained applicable (e.g., through-screen intake velocities and total
                             design intake flow requirements remained the same despite the OIRA
                             change).

                          •	 As originally written, intake structures were required to use screens in
                             order to minimize impingement mortality of fish and shellfish. OIRA
                             suggested changing the requirement so that the facilities only needed to
                             use the screens if certain criteria were met (e.g., if there are threatened
                             or endangered species or habitat for these species within the hydraulic
                             zone of the intake structure, if species of interest to fishery management
                             agencies pass through the hydraulic zone, or if the primary performance
                             requirements of the rule would not sufficiently ease stress on protected
                             species or habitat.)



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                             •	 As originally written, one of the intake flow requirements specified by
                                EPA stated that “for cooling water intake structures located in a lake or
                                reservoir, the total design intake flow must not alter the natural thermal
                                stratification or turnover pattern of the source water.” OIRA suggested
                                adding an exception to this requirement by inserting the following
                                language: “…except in cases where the disruption is determined to be
                                beneficial to the management of fisheries for fish and shellfish by any
                                fishery management agency (ies).”

                             •	 As originally written, EPA offered “Track II” compliance measures that
                                allowed facility operators to comply with the performance standard of
                                the rule through means other than a closed-cycle recirculating cooling
                                water system. OIRA suggested adding “restoration measures” as a
                                compliance alternative under the “Track II” compliance alternative so
                                that intake structure operators may implement measures that “result in
                                increases in fish and shellfish.”

                             The final rule was published in the Federal Register December 18, 2001.
                             Subsequently, on December 26, 2002, EPA published a direct final rule in
                             order to make “minor changes to EPA’s final rule published December 18,
                             2001.” However, on March 24, 2003, EPA withdrew the direct final rule “due
                             to adverse comments.”



National Pollutant           GAO ID 68
                             Agency: EPA
Discharge Elimination        RIN: 2040-AD62
System (Existing             Rulemaking stage at time of review: Proposed
                             Date submitted to OMB for review: December 28, 2001
Intake Structures)	          Date OMB review completed: February 28, 2002
                             Result of review: Consistent with change



Rule as Submitted to OIRA	   The proposed rule would have implemented section 316(b) of the Clean
                             Water Act for certain existing power producing facilities that employ a
                             cooling water intake structure and that withdraw 50 million gallons per day
                             or more of water from rivers, streams, lakes, reservoirs, estuaries, oceans,
                             or other waters of the U.S. for cooling purposes. According to the
                             legislative history, section 316(b) “requires the location, design,
                             construction, and capacity of cooling water intake structures of steam-




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                            electric generating plants to reflect the best technology available for
                            minimizing any adverse environmental impacts.”

                            As submitted to OIRA on December 28, 2001, the draft proposed rule
                            required that large facilities in estuaries and tidal rivers meet a uniform,
                            national performance standard commensurate with a closed-cycle,
                            recirculating cooling system that would reduce impingement mortality and
                            entrainment.



Outside Parties’ Contacts   On January 15, 2002, EPA provided OIRA with a copy of slides from a
with OIRA                   presentation that the Public Service Electric and Gas (PSEG) Company
                            made to EPA on January 3, 2002, regarding the section 316(b) rulemaking.
                            The slides recommend a “streamlined site-specific approach” for the rule
                            instead of uniform, national standards.

                            On January 23, 2002, Riverkeeper (an environmental group) sent a letter to
                            the OIRA Administrator requesting a meeting on the rule. February 7, 2002,
                            OIRA and EPA officials met with officials from Riverkeeper, who said
                            Congress mandated that best technology available standards be nationally
                            uniform and technology based—not set on a cases-by-case basis or related
                            to the quality of the water involved. They also said that the use of site-
                            specific best technology available determinations had perpetuated “the
                            most destructive ‘once-through’ technology.” Finally, they argued that
                            leaving best technology available determinations to a case-by-case, site-
                            specific determination “puts a tremendous burden on State regulatory
                            agencies, as well as environmental and citizens groups.”

                            On January 28, 2002, OIRA received an e-mail indicating “PSEG has
                            prepared draft language for implementing Section 316(b) on a site-specific
                            basis.” The draft posited that permittees could demonstrate compliance
                            with section 316(b) in any of three ways: (1) a demonstration based on a
                            prior Section 316(b) determination, (2) a demonstration based on a site-
                            specific evaluation of the best technologies or other measures for
                            minimizing adverse effects, or (3) a demonstration to determine the
                            presence of any adverse environmental effects. The draft concluded by
                            saying that “voluntary restoration or conservation measures may be used,
                            in conjunction with or instead of technologies, to demonstrate that a
                            [cooling water intake structure] is not causing (adverse environmental
                            impact).” On January 31, 2002, OIRA received a fax from the EOP Group (a
                            consulting company) containing identical draft section 316(b) regulations
                            “for Site-Specific Permit Renewal Options for Existing Sources.”



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                          In February 2002, the Edison Electric Institute prepared a paper advocating
                          a site-specific approach to regulating intake structures that are managed by
                          states. (We discovered the document in the OIRA docket for the rule,
                          although it is not clear how the paper was submitted to OIRA).

                          On January 31, 2002, Cinergy Corporation sent a letter to the OIRA
                          Administrator requesting a meeting with him on the proposed rule. The
                          Edison Electric Institute sent a similar letter on February 4, 2002. On
                          February 8, 2002, OIRA and EPA officials met with officials from a number
                          of regulated parties, including “TXU” (meaning unclear), Cinergy, Public
                          Service Enterprise Group, Edison Electric Institute, Progress Energy, Teco
                          Energy, Constellation Energy Group, Allegany Energy, Minnesota Power,
                          and Mirant Corporation. Documents submitted at the meeting advocate a
                          “site-specific approach” as “the best means for ensuring cost-effective
                          environmental protection.” The documents also indicated that the uniform
                          technology standards “would be based upon performance standards that
                          could only be met by retrofitting to closed cycle cooling for some or all
                          power plants covered under the Phase II rule.” In addition, the documents
                          indicated that retrofitting 40 percent of existing open cycle capacity would
                          cost $40 billion, that wide-scale construction outages could affect regional
                          power supplies, and increased air emissions could result from lower-
                          efficiency closed-cycle systems.

                          On February 27, 2002, OIRA received a fax from the EOP Group forwarding
                          letters that EPA had received from the states and others on the section
                          316(b) rule. The letters were signed by representatives from the
                          Pennsylvania Department of Environmental Protection, the Marine
                          Mammal Commission, the Texas Natural Resource Conservation
                          Commission, the Office of the Governor of the State of North Carolina, and
                          the Illinois Environmental Protection Agency.



Changes Made to Rule at   On February 14, 2002, EPA submitted a summary of the revised regulatory
OIRA’s Suggestion         proposal to OMB. The summary stated that permittees could chose one of
                          three alternatives for establishing the best technology for minimizing
                          adverse environmental impact at its facility—(1) demonstrate that existing
                          technologies and measures meet regulatory performance standards, (2)
                          demonstrate that technologies and measures selected by the permittee will
                          meet performance standards, and (3) demonstrate that a site-specific
                          determination of best technology available is appropriate. The summary
                          went on to say that restoration could be used in lieu of or in combination
                          with intake technologies and operational measures if the results could be



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                             shown to be comparable to the results obtained from compliance with the
                             regulatory standards.

                             In its summary of changes made during interagency review, one of the
                             changes that EPA identified as having been suggested by OIRA was “added
                             new regulatory framework that provides three compliance alternatives for
                             the Phase II existing facility rule.”

                             On February 28, 2002, OIRA approved the rule as revised. The rule was
                             published in the Federal Register on April 9, 2002.



Effluent Limitation          GAO ID 70
                             Agency: EPA
Guidelines and New           RIN: 2040-AD42
Source Performance           Rulemaking stage at time of review: Proposed
                             Date submitted to OMB for review: March 1, 2002
Standards for the 	          Date OMB review completed: May 15, 2002
Construction and             Result of review: Consistent with change
Development Category

Rule as Submitted to OIRA	   As originally submitted to OIRA, the draft proposed rule would have
                             established effluent limitations for 150,000 construction firms. The draft
                             contained a number of regulatory options to control discharges from active
                             construction sites of one acre or larger (temporary erosion and sediment
                             controls applicable to construction sites while land is being disturbed –
                             three options) and long-term storm water discharges (postconstruction,
                             long-term storm water management options intended as permanent storm
                             water controls – three options). EPA’s preferred option combination
                             contained two major provisions. For active construction sites, it would
                             have codified EPA’s current construction general permit, along with a
                             design goal of 80 percent reduction in total suspended solids (TSS)
                             discharged from sites and a series of enhanced inspection and certification
                             requirements to improve compliance.2 EPA’s preferred option for
                             management of postconstruction storm water run-off would have
                             established a design goal of an 80 percent reduction in TSS discharge from


                             2
                              TSS are characterized by EPA as conventional pollutants. The primary TSS of concern in
                             this rulemaking is sediment.




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                            finished projects and a requirement to maintain peak runoff levels at pre-
                            construction levels.



Outside Parties’ Contacts   ELG Working Group (an industry association) met with OIRA and EPA on
with OIRA	                  February 4, 2002 and argued that additional storm water regulations for the
                            construction and development industry are “unnecessary and
                            unwarranted” because construction and development activities “have been
                            subject to federal, state and often local regulations for controlling storm
                            water discharges since 1990.” In a document prepared for the meeting, the
                            ELG Working Group suggested that the federal government should
                            encourage state and local flexibility to address water quality issues.



Changes Made to Rule at     In a memo regarding interagency review, dated May 22, 2002 with no author
OIRA’s Suggestion           listed, changes to the rule while under OIRA review are identified,
                            including a change that dropped the postconstruction requirements from
                            the proposed rule. The memo stated that “given the requirement to address
                            postconstruction runoff in the Phase I and Phase II municipal stormwater
                            program, EPA determined that it would be more appropriate to support
                            local communities in developing tailored programs that could better reflect
                            regional and local conditions, and be better integrated into broader local
                            planning efforts.”

                            According to a June 10, 2002, memo (the memo author was not identified),
                            the agency made several changes to the proposed regulation at the
                            suggestion or recommendation of OIRA. The proposed regulation no
                            longer included the storm water management, or postconstruction,
                            regulatory options. Also, the active construction options changed. These
                            changes consisted of identifying and discussing three regulatory options:
                            (1) inspection and certification of construction site erosion and sediment
                            controls, for sites one acre or larger, (2) codification of the Construction
                            General Permit, plus inspection and certification requirements, for sites
                            five acres or larger, and (3) no regulation. These revisions to the regulatory
                            proposal required corresponding revisions to the preamble.

                            On June 24, 2002, the proposed rule was published in the Federal Register.




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Effluent Limitations         GAO ID 71
                             Agency: EPA
Guidelines for the Iron      RIN: 2040-AC90
and Steel                    Rulemaking stage at time of review: Final
                             Date submitted to OMB for review: March 29, 2002
Manufacturing Point 	        Date OMB review completed: April 30, 2002
Source Category              Result of review: Consistent with change



Rule as Submitted to OIRA	   The draft rule as submitted to OIRA for review revised technology-based
                             effluent limitations guidelines and standards for certain wastewater
                             discharges associated with metallurgical cokemaking, sintering, and
                             ironmaking operations. In its original form, the rule would have retained
                             an existing minimum net reduction provision in regulations regarding use
                             of a “water bubble” mechanism. According to the rule preamble, the “water
                             bubble” is a regulatory flexibility mechanism that allows trading of
                             identical pollutants at any single steel facility with multiple compliance
                             points to realize cost savings and/or to facilitate compliance. Under the
                             existing regulations, facilities that used the water bubble mechanism were
                             required to reduce the amount of their pollutant discharges pursuant to the
                             bubble to 10 percent to 15 percent less than the discharges otherwise
                             authorized by the regulations without use of the bubble. This additional
                             reduction was referred to as the “minimum net reduction” provision
                             throughout the rule.



Outside Parties’ Contacts    Counsel for Steel Manufacturers Association and Specialty Steel Industry
with OIRA                    of North America met with OIRA and EPA officials to discuss this
                             rulemaking on March 19, 2002. In the letter requesting a meeting, the
                             industry counsel argued that “revised effluent limitation guidelines are not
                             technically, economically, or legally justified.” The counsel further
                             specified aspects of EPA’s cost-benefit analysis that were believed to be
                             flawed, said that the actual cost-benefit ratio for this rule was at least 100:1,
                             and asserted that the rule would be the “most cost-ineffective ELG [effluent
                             limitation guideline] ever promulgated.”



Changes Made to Rule at 	    The major change in this final rule that was attributed to a request from
OIRA’s Suggestion            OIRA eliminated the existing minimum net reduction provision that applied
                             if facilities used a “water bubble” alternative. Because of the elimination of




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                             this minimum net reduction provision, facilities that trade pollutants in
                             accordance with the water bubble mechanism are not required to reduce
                             pollutant discharges to be 10 percent to 15 percent less than the discharges
                             otherwise authorized by the rule without use of the water bubble (as had
                             been required by the existing provision). This water bubble provision was
                             the subject of public comments on EPA’s proposed rule, with industry
                             groups generally supportive of the water bubble flexibilities and
                             environmental groups advocating restrictions on the water bubble. The
                             OIRA files on its review of this draft final rule indicated that OIRA had
                             reviewed the substantive comments EPA received on the proposed rule.

                             On October 17, 2002, the final rule was published in the Federal Register.



Tire Pressure                GAO ID 78
                             Agency: DOT-National Highway Traffic Safety Administration (NHTSA)
Monitoring Systems           RIN: 2127-AI33
                             Rulemaking stage at time of review: Final

                             Date submitted to OMB for review: December 17, 2001

                             Date OMB review completed: February 12, 2002

                             Result of Review: Returned




Rule as Submitted to OIRA	   As submitted to OIRA for review, the draft final rule would have
                             established a standard under which all new vehicles would be required to
                             have a tire pressure monitoring system (TPMS). The rule would have
                             allowed automobile manufacturers to use either of two types of systems
                             until October 31, 2006 —a “direct” system that measures the pressure in
                             each tire or an “indirect” system that uses a vehicle’s antilock brake system
                             to sense tire pressure differences by monitoring the speed of tire
                             revolution. However, after October 31, 2006, the rule would have required
                             manufacturers to use only the direct monitoring systems.



Outside Parties’ Contacts    On October 26, 2001—3 months after the Notice of Proposed Rulemaking
with OIRA	                   was published in the Federal Register and almost 2 months before the draft
                             final rule was submitted to OIRA for review—OIRA and NHTSA officials
                             met with representatives from the Alliance of Automobile Manufacturers
                             and representatives from individual auto manufacturers (Toyota, Ford,
                             Volkswagen, and Daimler Chrysler). According to a summary of the
                             meeting prepared by NHTSA and placed in the DOT docket, most of the



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                          comments presented by the industry representatives were similar to those
                          in their filed written comments concerning such issues as legislative intent,
                          assumptions about costs and benefits, the validity of test data on stopping
                          distance, the number of vehicles operating with more than one significantly
                          underinflated tire, and the safety benefits of antilock braking systems. In
                          its March 23, 2001, comments on the proposed rule, the Alliance of
                          Automobile Manufacturers said it “believes that both wheel-speed based
                          [indirect] and pressure-sensor based [direct] TPMS have merit, and should
                          be permitted under pending requirements. Our proposal will allow the
                          further development of both types of systems.”

                          On October 31, 2001, the Alliance sent letter to the OIRA Administrator
                          reiterating views regarding the draft final rule. The Alliance expressed
                          concern that the structure of the final rule would have the effect of
                          eliminating indirect tire pressure monitoring systems as a compliance
                          option. According to the letter:

                          “The Alliance has seen no evidence in the rulemaking record to suggest that real world
                          safety benefits that may accrue from tire pressure monitoring systems will be noticeably
                          different between systems using indirect and direct sensing technologies. Absent such
                          evidence, the Alliance believes that the final rule should be carefully structured to allow, at a
                          minimum, current systems employing either type of sensing technology – indirect or direct –
                          to be used as compliance options. As additional field experience is developed through the
                          implementation of this mandate, NHTSA may in the future exercise its long-standing
                          authority to initiate rulemaking to enhance the performance requirements for tire pressure
                          monitoring systems as may be warranted by valid engineering and performance data. The
                          rule should also be structured to assure the timely and orderly implementation by providing
                          a reasonable phase-in period.”

                          OIRA officials also met with representatives from the Rubber
                          Manufacturers Association regarding the rule on February 21, 2002—9 days
                          after OIRA returned the rule for reconsideration. However, because
                          NHTSA officials did not attend the meeting because of agency policy, there
                          is no summary of the meeting available. An e-mail attached to the OIRA
                          meeting log stated that, according to an OIRA branch chief, “this is not an
                          (Executive Order 12866) meeting, since the rule is no longer here for
                          review.” Nevertheless, OIRA listed the meeting on its Web site.



Changes Made to Rule at   According to the February 12, 2002, return letter, OIRA said “NHTSA needs
OIRA’s Suggestion	        to provide a stronger analysis of the safety issues and benefits, including a
                          formal analysis of a regulatory alternative that would permit indirect
                          systems after the phase-in period. Moreover, NHTSA could analyze an
                          option that would defer a decision about the ultimate fate of indirect


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systems for several more years, until the potential impact on installation of
anti-lock brake systems is better understood.”

According to a July 24, 2002, NHTSA memo, the agency changed the draft
rule at OIRA’s suggestion to “permit vehicle manufacturers to use current
indirect TPMSs as their means of complying with the standard.” The new
draft final rule established two compliance options for a period beginning
November 1, 2003, and ending October 31, 2006. During this period,
automobile manufacturers would be allowed to use either direct or indirect
TPMSs. Meanwhile, NHTSA said that it would conduct additional studies
and would leave the rulemaking docket open for the submission of new
data and analysis. NHTSA said the second part of the rule will be issued by
March 1, 2005, and will set performance standards to become effective
November 1, 2006. Depending on the data developed during the first
period, the performance standards issued in 2005 could require direct
monitoring systems (as in the draft final rule as submitted to OIRA), or they
could reach some other determination (e.g., continue to allow the use of
indirect systems).

On May 28, 2002, NHTSA resubmitted the draft final rule for OIRA review.
The next day, OIRA approved the rule “consistent with no change.” On
June 5, 2002, the final rule was published in the Federal Register.3




3
 The U.S. Court of Appeals recently held that the rule was contrary to the intent of the tire
safety legislation and arbitrary and capricious under the APA. Public Citizen, Inc. v.
Mineta, No. 02-4237 (2d Cir. Aug. 6, 2003).




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Part 145 Review:             GAO IDs 84 and 72

                             Agency: DOT-FAA

Repair Stations              RIN: 2120-AC38 

                             Rulemaking stage at time of review: Final

                             Dates submitted to OMB for review: July 2, 2001; resubmitted July 13, 2001;

                             resubmitted July 20, 2001

                             Dates OMB review completed: July 11, 2001 (withdrawn); July 20, 2001 

                             (returned); July 30, 2001 (consistent with no change)

                             Result of Reviews: Withdrawn, returned, consistent with no change 




Rule as Submitted to OIRA	   As submitted to OIRA on July 2, 2001, the rule updated and revised the
                             regulations for repair stations. Specifically, the rule reorganized the
                             requirements applicable to repair stations to reduce duplication of
                             regulatory language and eliminate obsolete information. In addition, the
                             rule established new definitions applicable to repair stations and updated
                             requirements relating to repair station certification; housing, facilities,
                             equipment, materials, and data; personnel; and operations. The rule also
                             eliminated, where practicable, distinctions between repair stations based
                             on geographical location.



Outside Parties’ Contacts    On July 9, 2001, the Aeronautical Repair Station Association (ARSA) and
with OIRA                    other industry representatives sent a letter to the Director of OMB (with
                             copies to the Deputy Administrator of OIRA and other OIRA officials and
                             staff) requesting that OIRA send the Part 145 rule back to FAA “with
                             instructions to prepare a Supplemental Notice of Proposed Rulemaking
                             (SNPRM) to address all of the issues needed to modernize Part 145.”

                             On July 26, 2001, ARSA and other industry representatives met with OIRA
                             officials and an official from the Department of Commerce (but no one
                             from FAA) to discuss the Part 145 rule. (DOT officials told us that they
                             generally do not attend meetings with industry representatives at OMB.) In
                             their presentation to OIRA, the industry representatives repeated their
                             request that a supplemental notice of proposed rulemaking be issued
                             instead of the final rule. They also requested that guidance material be
                             issued at the same time that the final rule is issued and that a more realistic
                             compliance date be set.




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Actions Taken at OIRA’s   On July 11, 2001, FAA withdrew the rule from OIRA review. An FAA
Suggestion                chronology of the rulemaking process stated that OMB “asked FAA to
                          withdraw the final (rule).” That same day, counsel to ARSA testified before
                          the House Subcommittee on Aviation on the FAA rulemaking process, and
                          attached the above-mentioned July 9, 2001, letter to his statement. During
                          our review, the counsel told us that he did not know whether OIRA had
                          requested that FAA withdraw the Part 145 rule, but said any such action on
                          OIRA’s part “had nothing to do with us.”

                          On July 13, 2001, FAA resubmitted the rule to OIRA for review. FAA
                          officials told us that the resubmitted rule was identical to the rule
                          submitted to OIRA on July 2, 2001. On July 20, 2001, OIRA returned the rule
                          to FAA for reconsideration. In his return letter, the Deputy Administrator
                          of OIRA said that the Department of State and the Office of the United
                          States Trade Representative indicated that certain language in the rule
                          could be read by other governments as a “needs test” for foreign repair
                          stations that would “raise a significant issue of our compliance with
                          applicable international trade agreements.” However, FAA officials told us
                          that they had already addressed the Department of State’s concerns.
                          Therefore, they said FAA resubmitted the rule to OIRA (unchanged from its
                          previous submission) on the same day as the return letter—July 20, 2001.

                          On July 30, 2001, OIRA approved the rule as “consistent with no change,”
                          and did not suggest that FAA make the changes that the industry
                          representatives recommended. On August 8, 2001, FAA published the final
                          rule in the Federal Register.




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Status of 23 High Priority Review Rules



                                                     In its May 2001 draft report on the costs and benefits of federal regulations,
                                                     the Office of Information and Regulatory Affairs (OIRA) within the Office
                                                     of Management and Budget requested that the public provide it with
                                                     “suggestions on specific regulations that could be rescinded or changed
                                                     that would increase net benefits to the public by either reducing costs
                                                     and/or increasing benefits.” In its December 2001 final report, OIRA said it
                                                     had received 71 suggestions in response to its request. The report also
                                                     indicated that OIRA had completed an initial review of the suggestions and
                                                     placed each of the suggestions into one of three categories: (1) “high
                                                     priority,” meaning that OIRA was inclined to agree with and look into the
                                                     suggestion, (2) “medium priority,” meaning that OIRA needed more
                                                     information about the suggestion, or (3) “low priority,” meaning that OIRA
                                                     was not convinced that the suggestion had merit. OIRA listed 23 of the
                                                     suggestions in the first category, and said a “prompt letter” might be sent to
                                                     the responsible agency for its “deliberation and response.”

                                                     In its December 2002 report, OIRA reported on the status of these 23 high
                                                     priority suggestions. We used that information and supplemented it with
                                                     additional information from published sources to determine the status of
                                                     each of the regulations or issues that were the subject of the 23 suggestions
                                                     as of May 2003. We then asked OIRA to review our descriptions and
                                                     provide us with any additional information available. The consolidated
                                                     information is presented in the table below for each of the 23 suggestions.



Table 10: Status of the 23 High Priority Review Suggestions Identified in OIRA’s December 2001 Report on the Costs and
Benefits of Federal Regulations

Regulation/issue and concern (as reported
by OIRA)                                              Status
The Mercatus Center said that the Department          As published in January 2001, a Department of Energy final rule would have required
of Energy’s analysis for its central air              that the energy efficiency of new central air conditioners and heat pumps be increased
conditioner and heat pump energy                      by 30 percent by January 2006. However, in May 2002, the department withdrew the
conservation standards did not adequately             rule and issued a new final rule raising minimum energy efficiency by 20 percent. The
consider key differences among consumers              department said the withdrawn rule, which never became effective, was “not
and may overstate projected energy savings.           economically justified under the Energy Policy and Conservation Act.”
The Mercatus Center said Department of                In August 2002, the department published final revisions to a December 2000 medical
Health and Human Services (HHS) rule on               privacy rule, clarifying some aspects and modifying others. For example, instead of
standards for privacy of individually identifiable    mandating that direct treatment providers obtain prior written consent to use protected
health information imposed a costly approach          health information before treating a patient, the final rule required them to make a good
to medical privacy protections while failing to       faith effort to obtain a patient’s written acknowledgement that the patient received a
offer tangible benefits.                              notice of privacy rights and practices. The department said the changes were intended
                                                      to, in part, relieve “unintended administrative burdens created by the Privacy Rule.”




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(Continued From Previous Page)
Regulation/issue and concern (as reported
by OIRA)                                                Status
The Mercatus Center said that the Food and              In September 2001, the OIRA administrator sent HHS a prompt letter on the trans fatty 

Drug Administration’s (FDA) proposed rule on            acid content of foods, encouraging the agency to give the issue greater priority. FDA 

trans fatty acids in nutrition labeling misled the      submitted the draft final rule to OIRA for review in May 2003.

public by treating trans fats as a subset of 

saturated fat.

The Mercatus Center said the costs of the               In March 2001, BLM published a proposed rule to suspend the hardrock mining
Department of the Interior’s (DOI) Bureau of            regulations that took effect in January 2001. In October 2001, BLM published a final
Land Management (BLM) rule on hardrock                  rule removing certain provisions and returning others to those in effect before January
mining outweighed the benefits.                         2001. For example, the final rule removed a provision granting federal land managers
                                                        more authority to deny hardrock mining permits and deleted enhanced performance
                                                        standards for groundwater and site remediation. BLM said the new rule “balances the
                                                        nation’s need to maintain reliable sources of strategic and industrial minerals, while
                                                        ensuring protection of the environment and natural resources on public lands.”
The Mercatus Center said that DOI’s National            In its December 2002 report, OIRA stated that the January 2001 DOI proposed rule on
Park Service’s rule prohibiting snowmobile use          at issue in this suggestion was undergoing internal departmental review. As of May
in Rocky Mountain National Park did not allow           2003 no final rule had been issued. However, in response to a lawsuit involving a
for different types of users to enjoy the park. 	       separate January 2001 final rule that restricted snowmobile use in other parks in the
                                                        Rocky Mountains, the National Park Service initiated an environmental impact
                                                        statement that, when completed in February 2003, suggested allowing the use of
                                                        snowmobiles with access restrictions and limitations on the types of engines. In March
                                                        2003, the Park Service approved a record of decision selecting that alternative.
                                                        Legislation has been introduced in both the House and the Senate that would, if
                                                        enacted, reinstate the ban on snowmobile use in the parks.
The Mercatus Center said the Department of              In November 2000, DOL published a final rule allowing contractors on federal and 

Labor’s (DOL) regulations on “helpers” under            federally assisted construction projects to use “helpers” when that practice prevails in a

the Davis-Bacon Act should attempt to conform           locality. In December 2002, OIRA noted in its final report on the costs and benefits of 

to private sector practices. Specifically,              regulations that DOL decided that changes to the Davis-Bacon regulations were not 

Mercatus questioned the department’s                    appropriate at that time. 

definition of a “helper,” which it said “constrains 

private sector practices and innovation.”

The Mercatus Center said the Department of              In May 2000, DOT’s Federal Motor Carrier Safety Administration (FMCSA) published a 

Transportation (DOT) did not present data               proposed rule to alter the hours of service for truck and other motor carrier drivers. The

supporting its conclusions in its rule on the           agency received more than 50,000 comments on the proposal, which it later 

hours of service of drivers that driver fatigue         characterized as “generally unfavorable.” The fiscal year 2002 appropriations bill 

contributes to highway fatalities or that its           prohibited the department from moving to a final rule that year. In April 2003, FMCSA 

proposal would address those issues.                    published a final rule that changed the scope and certain requirements from the

                                                        proposal. For example, the final rule exempted buses from its coverage.
The Mercatus Center said that revisions to the          EPA’s July 2000 final rule on the program was intended to resolve issues concerning the
Environmental Protection Agency’s (EPA) total           identification of impaired waterbodies and to address other issues. However, in an
maximum daily loads program were overly                 amendment to a fiscal year 2000 appropriations bill, Congress prohibited EPA from
prescriptive and could cost the states billions of      implementing the rule. In October 2001 EPA published a notice delaying the effective
dollars.                                                date of the agency’s July 2000 rule until April 2003. In March 2003, EPA published a
                                                        final rule withdrawing the July 2000 rule. According to OIRA, as of May 2003, a draft of
                                                        a new proposed rule was undergoing informal interagency review.
The Mercatus Center recommended changes                 In its December 2002 report, OIRA said it would “consider further review of the 

to EPA’s guidance on states’ use of economic            guidance after the States have further experience with the current guidelines.”

incentive programs to achieve air quality 

standards. 





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(Continued From Previous Page)
Regulation/issue and concern (as reported
by OIRA)                                             Status
The Mercatus Center said that EPA’s new              In December 2002, EPA published a final rule revising the Clean Air Act's new source
source review program was a deterrent to             review program that provides industrial facilities with alternatives to the program's
investment in new oil refinery and power             requirements to install modern pollution controls whenever they make major
generation capacity, and that even relatively        modifications that significantly increase emissions. EPA asserts that the rule will
modest modifications that improve                    remove obstacles to investments in cleaner and more efficient processes, and provide
environmental performance could trigger the          greater certainty and administrative flexibility. Certain environmental groups and state
reviews.                                             and local governments petitioned EPA to reconsider specific aspects of the rule, and
                                                     EPA has agreed to reconsider and take public comment on several of the issues raised
                                                     by these parties. Also in December 2002, EPA published a proposed rule that would
                                                     revise an exemption from the rule for projects involving routine maintenance, repair, and
                                                     replacement.
The Mercatus Center said that while                  In January 2001, EPA published a proposed rule changing the Clean Water Act
concentrated animal feeding operations are a         permitting requirements for concentrated animal feeding operations and strengthening
problem in some areas, the benefits of a             the effluent guidelines for those facilities. In February 2003, EPA published a final rule
national rule establishing effluent guidelines do    that OIRA said had been significantly scaled back from the proposal, but would still
not justify the costs.                               more than triple the number of operations that would have to obtain permits. However,
                                                     environmental groups said the new rule weakened the existing standard and said they
                                                     were considering a lawsuit.
The Mercatus Center and the Association of           EPA’s January 2001 final rule lowered the allowable level of arsenic in drinking water
Metropolitan Water Agencies said the benefits        from 50 parts per billion to 10 parts per billion. In May 2001, EPA delayed the rule’s
of EPA’s rule on arsenic in drinking water did       implementation to review the science and cost factors associated with changing the
not justify the costs.                               standard. In September 2001, the National Academy of Sciences published a report
                                                     indicating that low levels of arsenic can result in higher incidences of cancer. In October
                                                     2001, EPA announced that it would publish a final standard at the 10 parts per billion
                                                     level.
The Mercatus Center said that the Department         A January 2001 Forest Service final rule prohibited road construction, reconstruction,
of Agriculture’s Forest Service rule on roadless     and timber harvesting in inventoried roadless areas on nearly 60 million acres of
area conservation would cause unnecessary            National Forest System land. In May 2001, the Idaho District Court granted a
economic and environmental costs.                    preliminary injunction enjoining the Forest Service from implementing all aspects of the
                                                     rule. According to OIRA, in December 2002, the U.S. Court of Appeals for the Ninth
                                                     Circuit lifted the injunction and remanded the decision to the District Court. As of May
                                                     2003 its decision was pending. Also, in July 2003, the Wyoming District Court granted a
                                                     permanent injunction enjoining the Forest Service from implementing this rule.
The Mercatus Center said the Forest Service’s In December 2002, the Forest Service published a rule proposing changes to its
planning procedures polarize the public and   November 2000 rule on forest planning. A review conducted at the direction of the
are a drain on Forest Service resources.      Office of the Secretary concluded that the 2000 rule was “neither straightforward nor
                                              easy to implement,” and “did not clarify the programmatic nature of land and resource
                                              planning.” The new proposed rule would, among other things, allow federal land
                                              managers to disregard previously established scientific requirements for wildlife
                                              protection and expedite the environmental review process when developing plans.
                                              According to OIRA, a final rule is expected in the fall of 2003.
Notre Dame University said the Department of         In November 2002, the Department of Education published a final rule amending the
Education’s regulations under title IV of the        department’s regulations under the Higher Education Act and other statutes. According
Higher Education Act are redundant and place         to the department, the amendments were designed to “reduce administrative burden for
inappropriate administrative burden on               program participants, and to provide them with greater flexibility to serve students and
institutions of higher education.                    borrowers.”




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(Continued From Previous Page)
Regulation/issue and concern (as reported
by OIRA)                                            Status
The Equal Employment Advisory Council said          In January 2003, the Employment Standards Administration within DOL announced a
that DOL’s Office of Federal Contract               “preclearance consultation program” in which the public was allowed to provide
Compliance Programs’ (OFCCP) equal                  comment on the equal opportunity survey. Comments were due by the end of March
opportunity survey is excessively burdensome        2003. The announcement indicated that OFCCP had engaged an outside contractor to
and ineffective in targeting contractors for        study the survey submissions, and that the study would be completed in 2004. In
compliance audits.                                  addition, OFCCP requested a 2-year extension to its authorization for the survey under
                                                    the Paperwork Reduction Act (until the end of March 2005).
The EEAC said the Equal Employment                  DOL said it and the other signatories to the Uniform Guidelines (EEOC, the Department 

Opportunity Commission’s (EEOC) Uniform             of Justice, and the Office of Personnel Management) have been meeting for more than 3 

Guidelines on Employee Selection Procedures         years on the applicant redefinition issue, particularly as it relates to recordkeeping and 

should establish a standard definition of a “job    reporting requirements. The department also said that reauthorization responsibility 

applicant” that does not impose undue burden        rests with EEOC in consultation with the other signatory agencies, and said OMB has 

on employers to solicit race and gender             requested resolution of this issue by the end of September 2003.

information. 

The Employment Policy Foundation (EPF) said         In May 2002, the Employment and Training Administration within DOL published a 

that regulations affecting most employment-         proposed rule that would, among other things, amend its regulations governing the filing 

based immigration cause needless effort and         and processing of labor certification applications for the permanent employment of 

delays, and recommended replacing the               aliens in the United States. In December 2002, OIRA indicated that DOL was in the 

certification process with a simpler attestation    process of addressing comments and finalizing the rule.

procedure.

LPA, Inc. said DOL requirements regarding           OIRA indicated in its December 2002 report that DOL was considering whether 

overtime compensation are a disincentive for        revisions to these regulations would be appropriate. 

providing bonuses.

EPF and the National Partnership for Women          In December 2002, OIRA said that DOL was considering whether revisions to these
and Families said record keeping and                regulations would be appropriate. In February 2003, the Employment Standards
notification regulations under the Family           Administration within DOL announced that it was conducting a preclearance
Medical Leave Act are burdensome and                consultation program (allowing the public and federal agencies to comment) regarding
ambiguous.                                          information collections under the Family and Medical Leave Act. The department said it
                                                    was particularly interested in, among other things, “whether the proposed collection of
                                                    information is necessary for the proper performance of the functions of the agency.”
The American Chemistry Council said that            In April 2003, EPA published a proposed rule adding two chemicals—benzene and 2-

EPA’s “mixture and derived from” rule under         ethoxyelthanol—to the list of solvents that can be mixed with wastewater without 

the Resource Conservation and Recovery Act          causing it to be defined as hazardous waste. The proposed rule also would provide 

is necessarily inclusive, and recommended           flexibility in the way compliance is determined, and would make additional listed 

exempting certain waste streams resulting           hazardous wastes eligible for the de minimus exemption. 

from the treatment of hazardous waste from 

the requirements.

The City of Austin said EPA needed to improve In its December 2002 report, OIRA indicated that it was addressing the issues raised in

its cost-benefit estimates for drinking water    this suggestion in its new analytic guidance. (See chapter 2 of this report for a

regulations under the Safe Drinking Water Act discussion of that guidance.)

in three areas (overly conservative

assumptions, inappropriate discount rates, and 

inadequate consideration of latency) and 

should change the way fatal risk reduction is 

valued.





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(Continued From Previous Page)
Regulation/issue and concern (as reported
by OIRA)                                                   Status
The American Petroleum Institute said EPA                  In its December 2002 report, OIRA said EPA was considering several options to

needed to make several changes to its                      address this issue and said EPA had established a new web page that contains 

requirements regarding the notification of                 guidance, previous submissions, and new submissions posed within 2 weeks of receipt. 

substantial risk under section 8(e) of the Toxic           OIRA also said that EPA was working on a package that would make policy 

Substances Control Act (e.g., limit reporting to           clarifications. 

information that truly meets the statutory 

standard of substantial risk). 

Source: OIRA and GAO analysis of published information.




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