[Federal Register Volume 68, Number 91 (Monday, May 12, 2003)]
[Notices]
[Pages 25357-25359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11762]


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DEPARTMENT OF EDUCATION


Regulatory Flexibility Act

AGENCY: Department of Education.

ACTION: Notice of procedures and policies.

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SUMMARY: This notice announces Department of Education procedures and 
policies to promote compliance with the Regulatory Flexibility Act. 
This notice is issued in accordance with Executive Order 13272 on 
``Proper Consideration of Small Entities in Agency Rulemaking.'' 
Executive Order 13272 provides that draft rules must be thoroughly 
reviewed ``to assess and take appropriate account of the potential 
impact on small businesses, small governmental jurisdictions, and small 
organizations.''

FOR FURTHER INFORMATION CONTACT: Kenneth C. Depew, Office of the 
General Counsel, U.S. Department of Education, 400 Maryland Avenue, 
SW., room 6E227, Washington, DC 20202-2241. Telephone: (202) 401-8300.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed

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under FOR FURTHER INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act, as amended 
(Act), 5 U.S.C. 601 et seq., applies, with certain limited exceptions, 
to any rule for which an agency issues a notice of proposed rulemaking 
pursuant to 5 U.S.C. 553(b) or any other law, including any rule of 
general applicability governing Federal grants to State and local 
governments for which the agency provides an opportunity for notice and 
public comment.
    Except in those cases that the Secretary of Education can certify 
the rule will not, if promulgated, have a significant economic impact 
on a substantial number of small entities, the Department must publish 
an initial regulatory flexibility analysis (IRFA) or a summary of an 
IRFA in the Federal Register with the proposed rule. A final regulatory 
flexibility analysis (FRFA) or a summary of an FRFA must be published 
with the final rule.
    The IRFA must include the following:
    (1) A description of the reasons why action by the Department is 
being considered;
    (2) A succinct statement of the objectives of, and legal basis for, 
the proposed rule;
    (3) A description of and, where feasible, an estimate of the number 
of small entities to which the proposed rule will apply;
    (4) A description of the projected reporting, recordkeeping, and 
other compliance requirements of the proposed rule, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record;
    (5) An identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap or conflict with the 
proposed rule; and
    (6) A description of any significant alternatives to the proposed 
rule which accomplish the stated objectives of applicable statutes and 
which minimize any significant economic impact of the proposed rule on 
small entities.
    The FRFA must include the following:
    (1) A succinct statement of the need for, and objectives of, the 
rule;
    (2) A summary of the significant issues raised by the public 
comments in response to the IRFA, a summary of the assessment of the 
Department of such issues, and a statement of any changes made in the 
proposed rule as a result of such comments;
    (3) A description of and an estimate of the number of small 
entities to which the rule will apply or an explanation of why no such 
estimate is available;
    (4) A description of the projected reporting, recordkeeping and 
other compliance requirements of the rule, including an estimate of the 
classes of small entities which will be subject to the requirement and 
the type of professional skills necessary for preparation of the report 
or record; and
    (5) A description of the steps the Department has taken to minimize 
the significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each one of the other significant 
alternatives to the rule considered by the Department which affect the 
impact on small entities was rejected.

Notice to Public

    Semiannually, under section 602 of the Act, the Department 
publishes an Agenda of Federal Regulatory and Deregulatory Actions, 
which contains a list of all rules currently under development or 
review. The purpose of the agenda is to encourage more effective public 
participation in the regulatory process by providing the public with 
early information about pending regulatory activities.
    For each rule listed, the agenda provides the following 
information:
    [sbull] An abstract, which includes a description of the problem to 
be addressed, any principal alternatives being considered, and 
potential costs and benefits of the action.
    [sbull] An indication of whether the planned action is likely to 
have a significant economic impact on a substantial number of small 
entities as defined by the Act.
    [sbull] A reference to where the reader can find any current 
regulations in the Code of Federal Regulations.
    [sbull] A citation of legal authority.
    [sbull] The name, address, and telephone number of the contact 
person at the Department from whom a reader can obtain additional 
information regarding the planned regulatory action.
    In addition, the Department publishes its Regulatory Plan on an 
annual basis. The plan contains a statement of the Department's 
regulatory and deregulatory priorities for the coming year.
    In order to provide information and support enhanced exchange, the 
Department has instituted 1-800-USA-LEARN (1-800-872-5327) to connect 
our customers to a center for information about departmental programs 
and initiatives; 1-800-4FED-AID (1-800-433-3243) for information on 
student aid; and an on-line library of information on education 
legislation, research, statistics, and promising programs.
    The Department has an impressive record of successful communication 
and shared policy development with affected persons and groups, 
including parents, students, educators, representatives of State and 
local governments, neighborhood groups, schools, colleges, special 
education and rehabilitation service providers, professional 
associations, advocacy organizations, business, and labor.
    In particular, the Department continues to seek greater and more 
useful customer participation in its rulemaking activities through the 
use of consensual (negotiated) rulemaking and new technology. When 
rulemaking is determined to be absolutely necessary, customer 
participation is essential and sought at all stages--in advance of 
formal rulemaking, during rulemaking, and after rulemaking is 
completed--in anticipation of further improvements through statutory or 
regulatory changes. The Department has expanded its outreach efforts 
through the use of satellite broadcasts, electronic bulletin boards, 
and teleconferencing. For example, the Department invites comments on 
all proposed regulations through the Internet.
    The Department is streamlining information collections, reducing 
burden on information providers involved in our programs, and making 
information maintained by the Department easily available to the 
public. To the extent permitted by statute, regulations are being 
revised to eliminate barriers that inhibit coordination across programs 
(such as by creating common definitions), to reduce the frequency of 
reports, and to eliminate unnecessary data requirements.
    The Department has also piloted the use of two new Internet-based 
software applications, e-Application and e-Reports, that enable 
applicants, grantees, and grant teams to process applications and file 
performance reports online, and we have received positive feedback from 
participants in the pilot programs. Our goal over time is to encourage 
applicants and grantees to make electronic commerce, or the process of 
conducting business over the Internet, their preferred method of doing 
business with the Department.

Periodic Review of Rules

    Section 610 of the Act requires review of existing rules within 10 
years of the

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effective date of the Act and review of rules adopted after the 
effective date within 10 years of the adoption of the final rule. The 
purpose of the reviews is to determine if these rules should be 
continued without change, or should be amended or rescinded, consistent 
with the stated objectives of applicable statutes, to minimize any 
significant economic impact of the rules upon a substantial number of 
small entities. The Department considers the following factors in 
reviewing the rules:
    [sbull] The continued need for the rule.
    [sbull] The nature of complaints or comments received concerning 
the rule from the public.
    [sbull] The complexity of the rule.
    [sbull] The extent to which the rule overlaps, duplicates, or 
conflicts with other Federal rules, and to the extent feasible, with 
State and local governmental rules.
    [sbull] The length of time since the rule has been evaluated or the 
degree to which technology, economic conditions, or other factors have 
changed in the area affected by the rule.
    In accordance with section 610, on August 5, 1981 (46 FR 39882), 
the Department published a notice of its plan for review of its rules 
that might have a significant economic impact upon a substantial number 
of small entities. The plan for review established a deadline of 
January 1, 1991, for completing the review of all rules existing on 
January 1, 1981, and the Department met this deadline.
    The Department has reviewed all rules published after January 1, 
1981, prior to publication to determine if the rule would have a 
significant economic impact upon a substantial number of small 
entities. Periodic enactment of reauthorizing legislation for 
Department programs therefore ensures a review of existing regulations 
under section 610 at least every four or five years.

Review of All Proposed and Final Rules

    It is the policy of the Secretary of Education that all proposed 
and final rules be thoroughly reviewed to assess their impact on small 
entities. To ensure this review, the Department has established a 
clearance process for all regulatory documents managed by the Division 
of Regulatory Services (DRS) in the Office of the General Counsel.
    While it is Department policy to regulate only when absolutely 
necessary and in the least burdensome way possible, it is necessary for 
the Department to issue a limited number of proposed and final rules 
each year. Each rule is carefully screened under the Act to determine 
if it will have an impact on any small entities and, if so, what this 
impact will be.
    In most cases the analysis supports a determination the rule can be 
certified by the Secretary as not having a significant economic impact 
upon a substantial number of small entities. The certification and a 
supporting explanation are then included with both the proposed and 
final rules.
    For a proposed rule with a certification by the Secretary, all of 
the comments received are carefully screened to determine if any of 
them specifically address the certification or relate to the 
consequences of the rule or the alternatives considered by the 
Department. If comments are received on the certification or the 
supporting rationale for the certification, the Department analyzes the 
impact of the rule on small entities in light of the additional 
information provided by the commenters, prepares an appropriate 
response to the comments, and certifies the final rule or prepares a 
regulatory impact analysis, as appropriate.
    A significant rule, following Department clearance, is also sent to 
the Office of Management and Budget (OMB) for further review under 
Executive Order 12866 (Regulatory Planning and Review). Similarly, a 
draft rule that has a significant economic impact on a substantial 
number of small entities under the Act will be sent to the Small 
Business Administration Office of Advocacy (Advocacy), and Advocacy 
comments will be given appropriate consideration by the Department, as 
required by Executive Order 13272. As necessary, OMB may consult with 
Advocacy on the impact on small entities under the March 29, 2002, 
Memorandum of Understanding between those offices.
    For those rules where a certification is not supported by the 
analysis of the impact on small entities, the Department prepares an 
IRFA and FRFA, as appropriate, in accordance with the following 
procedures.

Procedures for Compliance With the Regulatory Flexibility Act and 
Executive Order 13272

    (1) Determine whether the rule is subject to the Act. Generally, 
the Act applies in all cases in which the Department is required to 
publish a notice of proposed rulemaking (NPRM).
    (2) If the rule is subject to the Act, prepare an IRFA for the rule 
incorporating the necessary information. Some of this information will 
be available from the initial analysis of the proposed rule and the 
preamble to the NPRM, other information will require identifying the 
specific actions a small entity must take in order to comply with the 
rule.
    (3) Notify the Chief Counsel for Advocacy of the Small Business 
Administration (SBA) and provide a copy of the draft NPRM and IRFA a 
reasonable time prior to publication. This notification will usually 
occur at the time the draft NPRM is submitted to the Office of 
Management and Budget for review under Executive Order 12866.
    (4) Publish the IRFA or a summary of the IRFA with the NPRM in the 
Federal Register. Unless the IRFA is extremely lengthy or complex, it 
is preferable to publish the entire analysis rather than a summary.
    (5) In preparing the final rule, consider and respond to all 
comments on the impact of the rule on small entities, including 
comments from the SBA.
    If a determination is made at this time that the rule will not have 
a significant economic impact on a substantial number of small 
entities, a certification and statement of factual basis of support may 
be included with the final rule. Otherwise, a FRFA incorporating the 
required information must be prepared. Publish the FRFA or a summary in 
the Federal Register with the final rule. Unless the FRFA is extremely 
lengthy or complex, it is preferable to publish the entire analysis 
rather than a summary.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
www.ed.gov/legislation/FedRegister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.

    Note: The official version of this document is published in the 
Federal Register. Free Internet access to the official edition of 
the Federal Register and the Code of Federal Regulations is 
available on GPO Access at: http://www.access.gpo.gov/nara/index.html.


(Catalog of Federal Domestic Assistance Number does not apply.)

    Dated: May 6, 2003.
Rod Paige,
Secretary of Education.
[FR Doc. 03-11762 Filed 5-9-03; 8:45 am]
BILLING CODE 4000-01-P