[Federal Register Volume 66, Number 85 (Wednesday, May 2, 2001)]
[Notices]
[Pages 22041-22054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11006]



[[Page 22041]]

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OFFICE OF MANAGEMENT AND BUDGET


Draft Report to Congress on the Costs and Benefits of Federal 
Regulations

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice and request for comments.

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SUMMARY: OMB requests comments on the attached Draft Report to Congress 
on the Costs and Benefits of Federal Regulation. The Draft Report is 
divided into an Introduction and three chapters. The Introduction sets 
the context and provides the background for the next three chapters. 
Chapter I discusses the various types of regulations and the problems 
we have encountered in our past attempts to estimate the total costs 
and benefits of Federal regulations, especially in the aggregate and by 
regulatory program. The chapter also proposes several new approaches to 
produce better estimates and asks for comments on these proposals as 
well as other suggestions to improve our estimates. Chapter II provides 
data on the costs and benefits of each of the major regulations 
reviewed by OMB under Executive Order 12866 from April 1, 1999 through 
March 31, 2000 as well as information on the costs and benefits of the 
major regulations issued by the independent agencies during this 
period. Chapter III discusses last year's recommendation to improve the 
regulatory information provided by the agencies. It also asks for 
comments on that proposal as well as for suggestions that would improve 
the transparency and the public's understanding of the regulatory 
analyses provided by the agencies.

DATES: To ensure consideration of comments as OMB prepares this Draft 
Report for submission to Congress, comments must be in writing and 
received by OMB no later than July 2, 2001.

ADDRESSES: Comments on this Draft Report should be addressed to John F. 
Morrall III, Office of Information and Regulatory Affairs, Office of 
Management and Budget, NEOB, Room 10235, 725 17th Street, NW., 
Washington, DC 20503.
    You may also submit comments by facsimile to (202) 395-6974, or by 
electronic mail to [email protected].

FOR FURTHER INFORMATION CONTACT: John F. Morrall III, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
NEOB, Room 10235, 725 17th Street, NW., Washington, DC 20503. 
Telephone: (202) 395-7316.

SUPPLEMENTARY INFORMATION: Congress directed the Office of Management 
and Budget (OMB) to prepare a Report to Congress on the Costs and 
Benefits of Federal Regulations. Specifically, Section 628 of the 
FY2000 Treasury and General Government Appropriations Act (the Act) 
requires OMB to submit a report on the costs and benefits of Federal 
regulations together with recommendation for reform. The Act says that 
the report should contain estimates of the costs and benefits of 
regulations in the aggregate, by agency and agency program, and by 
major rule, as well as an analysis of impacts of Federal regulation on 
State, local, and tribal government, small business, wages, and 
economic growth. The Act also states that the report should go through 
notice and comment and peer review.

Donald R. Arbuckle,
Acting Administrator, Office of Information and Regulatory Affairs.

Draft Report to Congress on the Costs and Benefits of Federal 
Regulations Introduction

    This is a draft for public comment of the Office of Management and 
Budget's fourth report to Congress on the costs and benefits of Federal 
regulation.\1\ This report is required by Section 628(a) of the FY2000 
Treasury and General Government Appropriations Act (the Act). The Act 
requires OMB to submit ``an accounting statement and associated 
report'' containing:
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    \1\ This report uses the terms ``rule'' and ``regulation'' 
interchangeably.
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    ``(1) an estimate of the total annual costs and benefits (including 
quantifiable and nonquantifiable effects) of Federal rules and 
paperwork, to the extent feasible:
    ``(A) in the aggregate;
    ``(B) by agency and agency program; and
    ``(C) by major rule;
    ``(2) an analysis of impacts of Federal regulation on State, local, 
and tribal government, small business, wages, and economic growth; and
    ``(3) recommendations for reform.
    The Act at Section 628 (b), (c), and (d) also specifies how we are 
to produce the report. We must:
    ``(b) * * * provide public notice and an opportunity to comment on 
the statement and report,
    ``(c) * * * issue guidelines to agencies to standardize (1) 
measures of costs and benefits and (2) the format of accounting 
statements, and
    ``(d) * * * provide for independent and external review of the 
guidelines and each accounting statement and associated report under 
this section.''
    This draft report provides the public with an opportunity to 
comment on the ``statement and report'' before we submit it to 
Congress. We are also asking independent and external experts in the 
economics of Federal regulation to review this draft report. After 
taking the public comments and peer reviews into account, we will 
submit the final report to Congress.
    In early October 1999, we drafted ``Guidelines to Standardize 
Measures of Costs and Benefits and the Format of Accounting 
Statements'' (Guidelines). We circulated them for ``independent and 
external review'' by nine experts in the field of benefit cost 
analysis. Based on these comments we finalized the Guidelines and 
issued them as a Memorandum for the Heads of Departments and Agencies 
(M-00-08) on March 22, 2000.\2\ On August 7, 2000, we asked the 
Departments and Agencies to use the Guidelines to provide the 
``accounting statements'' on the benefits and costs of regulations that 
we would use to prepare the report to Congress on the costs and 
benefits of Federal regulations. Using this information as well as 
other information from the agencies and published literature on the 
costs, benefits, and impacts of Federal regulation, we prepared this 
draft report.
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    \2\ See http://www.whitehouse.gov/omb/memoranda/m00-08.pdf
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    This draft report is OMB's fourth report to Congress on the costs 
and benefits of Federal regulation required by a series of 
appropriations' riders that ask for substantially the same regulatory 
information. Starting next year, Section 624 of the Consolidated 
Appropriations Act of 2001 requires us to update this report and 
deliver it to Congress with the Budget on an annual basis. This 
requirement gives us an opportunity to develop a longer run and 
permanent strategy to produce more comprehensive and higher quality 
reports. In addition, we are aware of only a limited amount of 
additional information on aggregate effects that has become available 
since the third report was issued on June 2, 2000. The new information 
we present in this draft report for comment are the benefit and cost 
estimates, both quantitative and qualitative, of the major regulations 
issued between April 1, 1999, and March 31, 2000. This information was 
not included in the 2000 report. We are also taking this opportunity to 
ask for comments on the 2000 final report and for citations to any

[[Page 22042]]

pertinent articles of information left out of that report. Finally, we 
are asking for recommendations for regulatory reform, including areas 
where the public interest would be served by updating, revising, or 
rescinding Federal regulations.
    Chapter I discusses the 2000 report's estimates of total annual 
costs and benefits of Federal regulation and paperwork in the 
aggregate, and by agency and agency program, and asks for comments on 
them. It also asks for comments and discusses our analysis of the 
impacts of Federal regulation on State, local, and tribal government, 
small business, wages, and economic growth.
    Chapter II uses agency regulatory impact analyses to present new 
quantitative estimates and qualitative descriptions of the benefits and 
costs of the 31 major rules issued by Federal agencies for which we 
concluded review during the 12-month period between April 1, 1999 and 
March 31, 2000. It also discusses cost and benefit information for the 
ten major rules issued during this period by the independent agencies. 
This ``regulatory year'' is the same period we used for the first three 
reports.
    Chapter III discusses general recommendations for reform aimed at 
improving the agencies' estimates of costs and benefits and the quality 
of regulations that we included in last year's report. It also solicits 
suggestions and recommendations for reforms for existing regulations 
and regulatory programs and provides a format to summarize the 
recommendations. Finally, Chapter III asks for suggestions that would 
improve the regulatory development and oversight process.

Chapter I: Estimating the Total Annual Costs, Benefits, and Impacts 
of Federal Regulations and Paperwork

I. Overview

    This chapter discusses the estimates of the total annual costs and 
benefits of Federal rules and paperwork in the aggregate and by agency 
and agency program presented in Chapter II of last year's Report, 
Report to Congress On the Costs and Benefits of Federal Regulations 
(OMB, 2000).\3\ After discussing some of the problems we have 
encountered in estimating their costs and benefits, we explain why we 
decided to take a fresh and thorough look at our approach to 
aggregating these estimates. We then propose various new approaches to 
estimation and ask for comments on them and any other suggestions on 
how to improve our estimates.
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    \3\ The June 2000 report may be found on OMB's home page at: 
http://www.whitehouse.gov/omb/inforeg/2000fedreg-report.pdf. The 
charts are in a separate file at: http://www.whitehouse.gov/omb/inforeg/2000fedreg-charts.pdf.
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    Last year's estimates represented our third estimation attempt. 
Each successive report added new information, both on new and existing 
regulations, as it became available during the intervening period. The 
new information significantly affected our estimates. Because of 
uncertainty, we characterized the estimates with wide ranges. Even 
then, we pointed out that wide gaps remained in both the cost and 
benefit estimates due to our inability to quantify and monetize many 
types of costs and benefits. Many commenters including the peer 
reviewers expressed doubts about the accuracy of the estimates and 
suggested ways to improve the estimates, but few offered alternative 
estimates.\4\
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    \4\ See Chapter I of last year's report, which presents a 
discussion of the peer reviewers' and public's comments on last 
year's draft report (OMB 2000).
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    Given the concerns with our estimates, the relatively short time 
that has passed since we issued our last report on June 2, 2000, and 
new statutory requirements to do this report on an annual basis, we are 
taking this opportunity to step back and take a more careful look at 
both the methodologies and assumptions behind the hundred or so 
individual studies upon which our estimates are based and our approach 
to aggregating them.
    On March 22, 2000, we issued ``Guidelines to Standardize Measures 
of Costs and Benefits and the Formats of Accounting Statements'' (OMB 
Memorandum M-00-08), which dealt with many of the problems that 
analysts face in estimating the costs and benefits of individual 
regulations. Most analyses of the impacts of regulations are not simple 
or clear cut.
    Clearly we cannot identify fully the aggregate estimates of the 
costs and benefits of all Federal regulation. In particular, we are 
most uncertain about the costs and benefits of regulations issued 
before 1990. At that time, OMB and others began systematically keeping 
track of the total costs and benefits of major regulations by using 
estimates from agency regulatory impact analyses. Before that time, the 
aggregate estimates were a combination of studies from academics, 
agencies, and industry using a variety of methods and assumptions. 
Moreover, some of the studies were retrospective, others prospective.
    In addition, using the standards of our new Guidelines, it is 
apparent that many of the regulatory estimates for regulations issued 
since 1990 are also not fully satisfactory. Thus, for the reasons 
discussed above, we have decided this year to reassess the approach and 
methodology we have used to estimate the aggregate costs and benefits 
of Federal regulation. To do this, we are asking for advice and 
guidance from the public and peer reviewers on ways to improve our past 
estimates and implementation of the Act.

II. Developing Aggregate Estimates of the Benefits and Costs of 
Regulation

    Although we expressed significant methodological concerns with 
aggregate estimates of the benefits and costs of regulation in our 
previous three reports, we did present estimates of the total benefits 
and costs of Federal rules and paperwork in the three reports.\5\ We 
are not aware of new information that would provide the basis for a 
major revision to these estimates. We are interested, though, in 
identifying appropriate next steps in supporting a major overhaul of 
these estimates. To this end, we are considering several possibilities.
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    \5\ See the detailed discussions of the various problems 
encountered in estimating aggregate costs and benefits that caveated 
the estimates in the previous reports (OMB 1997, 1998, and 2000). 
These reports are on our home page at http://www.whitehouse.gov/omb/inforeg/index.html.
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    Should We Assess Older Regulations? One possibility would be to 
drop the benefits and costs of Federal regulatory action for 
regulations issued prior to 1990. Several peers and commenters on the 
draft of last year's report expressed concern with the methodology used 
to estimate the costs and benefits of some of the most important 
regulations issued before 1990. Also, in a dynamic economy changes in 
product mix, consumer taste, per capita income, production 
technologies, etc., all operate to change the effect of regulations 
adopted two or three decades ago. Over time, these requirements become 
absorbed in a broader economic milieu and the merits of identifying 
independent benefit and cost estimates for these older rules is at 
least arguable.
    Should We Focus on Specific Statutes or Categories of Regulations? 
A second possibility would be to focus efforts on developing estimates 
of the benefits and costs of specific programs--for example, regulation 
of automobile safety or drinking water systems. This approach could 
yield estimates of benefits and costs associated with a specific 
program and at the same time offer some insight into specific areas 
where the program is

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effective and, perhaps, areas where the program is less effective.
    This approach is similar to the approach adopted by EPA in its 
Report to Congress on the Benefits and Costs of the 1990 Clean Air Act 
Amendments. In this case, EPA identified a well-defined baseline--the 
Clean Air Act prior to adoption of the 1990 amendments. However, we 
believe a review of this type ought to go beyond just providing 
estimates of total benefits and costs to assess the specific regulatory 
provisions that make up the regulatory program.
    This approach, of course, will not yield aggregate estimates of the 
benefits and costs of Federal regulations unless all regulatory 
programs are evaluated. However, it may help to bring into focus the 
effects of specific programs and help to identify what elements of the 
program are working--and what elements are not working and need to be 
over-hauled.

Should We Seek to Develop A Better Way to Estimate the Aggregate Cost 
of Federal Regulation?

    Rather than using the bottom up approach of adding up individual 
estimates of regulatory programs and regulations, a top down approach 
could be used to estimate the costs of all regulation. At least for 
some regulations, survey techniques could be used to ask firms and 
other entities what expenditures they make to comply with Federal 
regulation. In this regard, the Department of Commerce has recently 
reinstated (after a five year lapse) its national survey for pollution 
abatement costs and expenditures (know as the PACE survey for short). 
This approach could be expanded for other regulations.

How Should We Estimate Effects on State, Local, and Tribal Government, 
Small Business, Wages, and Economic Growth?

    Last year we presented a general theoretical discussion of the 
effects of regulation on State, Local, and Tribal Government, Small 
Business, Wages, and Economic Growth without any empirical estimates. 
We received several comments on last year's report asking for empirical 
estimates. We have asked agencies to provide this information in their 
reports and accounting statements to us. We would also appreciate 
receiving any additional information that commenters would like to 
provide us.

How Can We Improve the Estimates of Costs and Benefits of Major 
Regulations?

    In our previous reports, we relied heavily on agency estimates for 
major regulations. Our approach has been to work with the agencies as 
we reviewed their regulatory impact analyses to help them improve their 
estimates. As mentioned, we also issued Guidance to help them 
standardize and improve their estimates of costs and benefits of 
regulations. And in some instances we monetize agency estimates where 
they had provided quantified information, but for whatever reason had 
not monetized themselves. We also made attempts to use consistent 
discount rates. Still, many commenters continue to ask us to do a 
better job of assuring consistency in the methodologies and assumptions 
used by the agencies in their estimates. We will continue to emphasize 
to the agencies the importance of complying with the Guidelines.
    Some commenters have also urged us to provide our own independent 
estimates of costs and benefits in the place of agency estimates. We of 
course will continue to work with the agencies to improve the agency 
estimates at the time we review their regulations. But the question 
arises whether we should include the agency estimates in our report if, 
with the passage of time and the addition of new information in the 
course of preparing the Report to Congress, we find that revised 
estimates would be more accurate.

How Should We Treat EPA's Aggregate Estimates of the Benefits of the 
Clean Air Act?

    The aggregate estimate of the benefits of Federal Regulations 
reported in the last two Reports is dominated by EPA's estimates of the 
benefits of regulations required by the Clean Air Act (CAA) from their 
two Reports to Congress on the Benefits and Costs of the Clean Air Act. 
The magnitude and importance of these estimates demand careful 
attention to their derivation and accuracy.
    These Reports were developed through an EPA Science Advisory Board 
(SAB) peer review process. In both cases, the SAB panels reviewing 
these two Reports concluded review by stating that these Reports were 
serious, careful studies employing sound methods and data. The SAB 
panel also stated that ``While we do not endorse all details of the 
study, we believe that the study's conclusions are generally consistent 
with the weight of available evidence.'' \6\
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    \6\ See council review closure letter to EPA Administrator 
Browner, p. 1, EPA-SAB-Council-ADV-00-003, Nov. 19, 1999.
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    Public commenters on both of those reports criticized the 
methodology and several of the key assumptions in those reports. We 
share some of those concerns and spent considerable time in our last 
two reports discussing them.

II. Summary

    In order to improve our estimates of the total annual costs and 
benefits of Federal rules and paperwork in the aggregate and by agency 
and agency program presented in last year's Report, we are asking for 
comments and suggestions on those estimates, as well as for comments 
and suggestions on how to improve the ongoing estimation of the costs 
and benefits of agency rules. In addition to the questions and issues 
raised above, we also invite comments on any other aspect of last 
year's report (see Chapter II) that commenters feel would improve 
future reports.

Chapter II: Estimates of Benefits and Costs of This Year's 
``Major'' Rules

    In this chapter, we examine the benefits and costs of each ``major 
rule,'' as required by section 628(a)(1)(C). We have included in our 
review those final regulations on which OMB concluded review during the 
12-month period April 1, 1999, through March 31, 2000. This 
``regulatory year'' is the same calendar period we have used for our 
three previous reports.
    For purposes of section 628(a)(1)(C), we have interpreted ``major 
rule'' to include all final rules promulgated by an Executive branch 
agency that meet any one of the following three measures:
     Rules designated as ``economically significant'' under 
section 3(f)(1) of Executive Order 12866.
     Rules designated as ``major'' under 5 U.S.C. 804(2) 
(Congressional Review Act).
     Rules designated as meeting the threshold under Title II 
of the Unfunded Mandates Reform Act (2 U.S.C. 1531-1538).
    We also include a discussion of major rules issued by independent 
regulatory agencies, although OMB does not review these rules under 
Executive Order 12866. This discussion is based on data provided by 
these agencies to the General Accounting Office (GAO) under the 
Congressional Review Act.
    During the regulatory year, OMB reviewed 31 final rules that met 
the criteria noted above. Of these final rules, HHS submitted eight; 
EPA six; USDA six; DOT three; DOI three; and DOC, HUD, FEMA, and the 
Emergency Oil and Gas Guarantee Loan Board and the Emergency Steel 
Guarantee Loan Board, one each. These 31 rules represent about 16 
percent of the 190 final rules reviewed by OMB between April 1, 1999, 
and March 31, 2000, and less than

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one percent of the 4,679 final rule documents published in the Federal 
Register during this period. Nevertheless, because of their scale and 
scope, we believe that they represent the vast majority of the costs 
and benefits of new Federal regulations issued during this period.

I. Overview

    We found that the benefit cost analyses accompanying the 31 final 
rules listed in Table 1 vary substantially in type, form, and format of 
the estimates the agencies generated and presented. For example, 
agencies developed estimates of benefits, costs, and transfers that 
were sometimes monetized, sometimes quantified but not monetized, 
sometimes qualitative, and, most often, some combination of the three.

II. Benefits and Costs of Economically Significant/Major Final Rules 
(April 1999 to March 2000)

A. Social Regulation
    Of the 31 rules reviewed by OMB, 12 are regulations requiring 
substantial additional private expenditures and/or providing new social 
benefits,\7\ as described in Table 1.\8\ EPA issued six of these rules; 
DOI two; and USDA, DOC, HUD, and DOT one each. Agency estimates and 
discussion are presented in a variety of ways, ranging from a purely 
qualitative discussion, for example, the benefits of USDA's irradiation 
rule, to a more complete benefit-cost analysis, for example, EPA's 
storm water discharges rule.
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    \7\ The other 19 are ``transfer'' rules that set terms for 
monetary payments from one group to another that do not directly 
affect total resources available to society.
    \8\ Note that all dollar figures Table 1 are in 1996 dollars 
unless otherwise noted.
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1. Benefits Analysis

    Agencies monetized at least some benefit estimates for seven of the 
12 rules including: (1) HUD's estimate of $715.6 million over the first 
five years from reduced lead exposure; (2) DOI's estimate of $50 
million to $192 million per year in benefits from it's migratory bird 
hunting regulations; and (3) EPA's $800 million to $19.3 billion per 
year in human health and visibility improvements from its regional haze 
rule. In one case, the agency provided some of the benefit estimates in 
monetized and quantified form, but did not monetize other, important 
quantified components of benefits. EPA's analysis of its handheld 
engines rule monetized the projected fuel savings, but not the 
estimated hydrocarbon and nitrogen oxide emission reductions.
    In three cases, agencies did not report any quantified (or 
monetized) benefit estimates. In one case, the agency provided a 
qualitative description of benefits. USDA's irradiation rule discusses 
the benefits associated with the reductions in diseases associated with 
reduced pathogen exposure.
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2. Cost Analysis

    For eight of the 12 rules, agencies provided monetized cost 
estimates. These include such items as USDA's estimate of $35 million 
to $105 million per year as the cost of its irradiation rule and EPA's 
estimate of $5.3 billion in the year 2030 as the cost of its Tier 2 
rule.
    For the remaining four rules, the agencies did not estimate costs. 
These rules included DOI's two migratory bird hunting rules, DOC's 
endangered species rule and NHTSA's light truck fuel economy rule.

3. Net Monetized Benefits

    Six of the 12 rules provided at least some monetized estimates of 
both benefits and costs. Of those, three have positive net monetized 
benefits, that is, estimated monetized benefits that unambiguously 
exceed the estimated monetized costs of the rules. For example, HUD's 
lead-based paint rule will generate an estimated net benefit of about 
$150 million (present value) over its first five years. EPA's tier 2 
rule will result in an estimated net benefit of between $8.4 billion 
and $19.9 billion in 2030. One, EPA's handheld engines rule, has 
negative net monetized benefits.
    Two EPA rules yielded estimates that included the possibility of 
both positive or negative net benefits. For example, EPA's storm water 
rule was estimated to generate between $671.5 million and $1.63 billion 
in benefits and between $848 million and $981 million in costs. The 
monetized benefit and cost estimates for EPA's Section 126 rule are 
essentially equal.

4. Rules Without Quantified Effects

    Two of the rules in Table 1 are classified as economically 
significant even though the agency did not provide any quantified 
estimates of their effects.
    DOC--Threatened Status for Two Chinook Salmon ESUs: Based upon 
publicly available information, OMB determined that rules covering 
these species were major. Citing the Conference Report on the 1982 
amendments to the Endangered Species Act, the agency did not perform a 
benefit-cost analysis of the final rules.
    DOT--Light Truck CAFE: For each model year, DOT must establish a 
corporate average fuel economy (CAFE) standard for light trucks, 
including sport-utility vehicles and minivans. (DOT also sets a 
separate standard for passenger cars, but is not required to revisit 
the standard each year.) For the past five years, however, 
appropriations language has prohibited NHTSA from spending any funds to 
change the standards. In effect, it has frozen the light truck standard 
at its existing level of 20.7 miles per gallon (mpg) and has prohibited 
NHTSA from analyzing effects at either 20.7 mpg or alternative levels. 
Although DOT did not estimate the benefits and costs of the standards, 
the agency's experience in previous years indicates that they may be 
substantial. Over 5 million new light trucks are subject to these 
standards each year, and the standard, at 20.7 mpg, is binding on 
several manufacturers. In view of these likely, substantial effects, we 
designated the rule as economically significant.
B. Transfer Regulations
    Of the 31 rules listed in Table 1, 19 implement Federal budgetary 
programs. The budget outlays associated with these rules are 
``transfers'' to program beneficiaries. Of the 19, three are USDA rules 
implementing Federal appropriations language regarding disaster aid for 
farmers; one deals with the food stamp program; five are HHS rules 
implementing Medicare and Medicaid policy; three deal with social 
security eligibility; two are DOT rules regarding grants to states to 
pay for highway projects and reduce intoxicated driving; one is a BIA 
rule regarding funding for road-building on Indian reservations; two 
are loan guarantees (oil and gas, and steel); and one is a FEMA rule 
providing assistance to the victims of Hurricane Floyd.

III. Major Rules for Independent Agencies

    The Congressional review provisions of the Small Business 
Regulatory Enforcement Fairness Act (SBREFA) require the General 
Accounting Office (GAO) to submit reports on major rules to the 
Committees of jurisdiction in both Houses of Congress, including rules 
issued by agencies not subject to Executive Order 12866 (the 
``independent'' agencies). We reviewed the information on the costs and 
benefits of major rules contained in GAO reports for the period of 
April 1, 1999 to March 31, 2000. GAO reported that four independent 
agencies issued ten major rules during this period. GAO reported that 
the agencies said they were not required to do benefit-cost analysis 
for the ten rules. We list the agencies and the type of information 
provided by them (as summarized by GAO) in Table 2.
    In comparison to the agencies subject to E.O. 12866, the 
independent agencies provided relatively little quantitative 
information on the costs and benefits of the major rules. As Table 2 
indicates, seven of the ten rules included some discussion of benefits 
and costs. None of the ten regulations had any monetized cost 
information; one regulation monetized the benefits associated with the 
regulation.
    The one rule that estimated benefits was ``Regional Transmission 
Organizations (RTO)'' by the Federal Energy Regulatory Commission. The 
rule cited an estimate that EPA produced in connection with the 
environmental assessment that RTO formation would result in annual 
benefits of $2.4 billion.

                       Table 2.--Benefit and Cost Information on Independent Agency Rules
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                                                                    Rules with
                                                                       some          Monetized       Monetized
                     Agency                         Total rules   information on  information on  information on
                                                                     costs or          costs         benefits
                                                                     benefits
----------------------------------------------------------------------------------------------------------------
Federal Communications Commission (FCC).........               5               2               0               0
Securities and Exchange Commission (SEC)........               3               3               0               0
Nuclear Regulatory Commission (NRC).............               1               1               0               0
Federal Energy Regulatory Commission (FERC).....               1               1               0               1
                                                 ---------------------------------------------------------------
    Total.......................................              10               7               0               1
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[[Page 22054]]

Chapter III: Recommendations for Reform

    Section 628(a)(3) of the FY2000 Treasury and General Government 
Appropriations Act (the Act) requires OMB to submit ``recommendations 
for reform'' with its report on the costs and benefits of Federal 
regulations. As we have pointed out in our previous reports, much of 
OMB's job in reviewing regulations and regulatory impact analyses 
submitted by the agencies is to suggest regulatory reforms and 
improvements.
    Last year we issued guidelines for the agencies to use in preparing 
the regulatory impact analyses that accompany major regulatory actions. 
We hoped that The Guidelines to Standardize Measures of Costs and 
Benefits and the Format of Accounting Statements, issued in final form 
as Memorandum M-00-08 on March 22, 2000, would improve the quality of 
the data and analyses underlying major regulations, thereby leading to 
improvements in Federal regulation. In order to improve transparency 
and understanding of regulatory impacts by the public, we asked the 
agencies last year to use the format of the accounting statements to 
summarize regulatory impacts in the preambles to the Federal Register 
notices announcing their rules. We believe these guidelines and the 
accounting statement provide a sound foundation for estimating and 
presenting the benefits and costs of Federal regulation. OMB expects 
agencies to use the guidelines and the format of the accounting 
statements as they prepare regulatory impact analyses in the coming 
months. We are interested in suggestions on further actions we should 
take to improve the overall performance of the agencies in their 
responsibility to provide transparent and understandable regulatory 
analyses to the public.
    In addition, in our previous reports to Congress, we highlighted 
some of the individual and incremental reforms that were underway by 
drawing from the key entries in the Regulatory Plan that is published 
in the Federal Register each Fall. With the change in Administrations, 
we are now in the process of reviewing a variety of existing 
regulations and regulatory programs in an effort to identify areas 
where sensible changes will yield greater benefits for the public at 
lower costs. At this point in the process, we do not have enough 
information to present a set of recommendations for the reform of 
specific regulations or regulatory programs. To help us in this effort, 
we are asking for recommendations and comments on regulations and 
regulatory programs that may be of concern to the public.
    Specifically, 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. If 
possible we would appreciate commenters being as specific as possible 
in their suggested reforms including whether the reform could be 
accomplished by agencies through rulemaking or would require statutory 
changes. In addition to supplying whatever documentation and supporting 
materials (including citations to published studies) you feel is 
appropriate, we would appreciate it if you used the following suggested 
format to summarize the recommendations.

Format for Suggested Regulatory Reform Improvements

    Name of Regulation:
    Agency Regulating: (Include any subagency).
    Citation: (Code of Federal Regulations).
    Authority: (Statute).
    Description of Problem: (Harmful impact and on whom).
    Proposed Solution: (Both the fix and the procedure to fix it).
    Estimate of Economic Impacts (Quantified benefits and costs if 
possible).
    Finally, we also invite commenters to suggest any other reforms to 
the regulatory development and oversight processes that would improve 
regulatory outcomes.

[FR Doc. 01-11006 Filed 5-1-01; 8:45 am]
BILLING CODE 3110-01-P