    Rulemaking: OMB's Role in Reviews of Agencies' Draft Rules and
    the Transparency of Those Reviews (22-SEP-03, GAO-03-929).

    Under Executive Order 12866, the Office of Management and
    Budget's Office of Information and Regulatory Affairs (OIRA)
    reviews hundreds of agency rules each year before they are
    published in the Federal Register. Those reviews can have a
    significant effect on a broad array of public policies. GAO was
    asked to (1) describe OIRA's review process and any changes in
    its policies or processes in recent years, (2) provide detailed
    information about rules submitted by nine health, safety, or
    environmental agencies that were returned, withdrawn, or changed
    at OIRA's suggestion, and (3) describe how OIRA decided that
    certain existing rules merited high priority review.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-03-929
        ACCNO:   A08755
      TITLE:     Rulemaking: OMB's Role in Reviews of Agencies' Draft
    Rules and the Transparency of Those Reviews
         DATE:   09/22/2003
      SUBJECT:   Federal agencies
    	     Federal regulations
    	     Regulatory agencies
    	     Policy evaluation
    	     Policies and procedures

    ******************************************************************
    ** This file contains an ASCII representation of the text of a  **
    ** GAO Product.                                                 **
    **                                                              **
    ** No attempt has been made to display graphic images, although **
    ** figure captions are reproduced.  Tables are included, but    **
    ** may not resemble those in the printed version.               **
    **                                                              **
    ** Please see the PDF (Portable Document Format) file, when     **
    ** available, for a complete electronic file of the printed     **
    ** document's contents.                                         **
    **                                                              **
    ******************************************************************
    GAO-03-929

    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

                                           a

    GAO-03-929

    Highlights of GAO-03-929, a report to congressional requesters

    Under Executive Order 12866, the Office of Management and Budget's Office
    of Information and Regulatory Affairs (OIRA) reviews hundreds of agency
    rules each year before they are published in the Federal Register. Those
    reviews can have a significant effect on a broad array of public policies.
    GAO was asked to (1) describe OIRA's review process and any changes in its
    policies or processes in recent years, (2) provide detailed information
    about rules submitted by nine health, safety, or environmental agencies
    that were returned, withdrawn, or changed at OIRA's suggestion, and (3)
    describe how OIRA decided that certain existing rules merited high
    priority review.

    GAO recommends that the OMB Director build on recent improvements that
    have been made in the transparency of the OIRA review process. In
    particular, GAO recommends that agencies be instructed to document
    substantive changes made at OIRA's suggestion to draft rules submitted for
    review whenever they occur, not just changes that OIRA recommended during
    formal reviews.

    OMB said the factual foundations of our report were well grounded but
    disagreed with most of our recommendations, saying that the report had not
    demonstrated the need or desirability of changing the agency's existing
    level of transparency.

    www.gao.gov/cgi-bin/getrpt?GAO-03-929.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact Victor Rezendes at (202)
    512-6806, or rezendesv@gao.gov.

    September 2003

    RULEMAKING

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

    The formal process by which OIRA reviews agencies' proposed and final
    rules is essentially unchanged since Executive Order 12866 was issued in
    1993. However, there have been several changes in OIRA's policies in
    recent years, including increased use of public letters explaining why
    rules were returned to the agencies and prompting the development of new
    rules, increased emphasis on economic analysis, stricter adherence to the
    90-day time limit for OIRA review, and improvements in the transparency of
    the OIRA review process (although some elements of that process are still
    unclear). Underlying many of these changes is a shift in how recent OIRA
    administrators view the office's role in the rulemaking process-from
    "counselor" to "gatekeeper." OIRA sometimes reviews drafts of rules before
    they are formally submitted, and OIRA has said it can have its greatest
    influence on agencies' rules during this informal review period. However,
    OIRA contends that agencies need only document the changes made to rules
    during what are sometimes very brief formal review periods.

    Because about 400 rules were changed, returned, or withdrawn during the
    1-year period that GAO examined, the review focused on 85 rules from the
    nine health, safety, or environmental agencies with five or more such
    rules. OIRA significantly affected 25 of those 85 rules. The Environmental
    Protection 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 costs and benefits or the
    agencies' estimates of those costs and benefits. Outside parties contacted
    OIRA before or during its formal review regarding 11 of the 25 rules that
    OIRA significantly affected. In 7 of these 11 cases, at least some of
    OIRA's recommendations were similar to those of the outside parties, but
    we could not determine whether those contacts influenced OIRA's actions.
    The agencies' docket files did not always provide clear and complete
    documentation of the changes made during OIRA's review or at OIRA's
    suggestion, as required by the executive order. However, some agencies
    clearly documented these changes, sometimes including changes suggested
    during OIRA's informal 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 review. As explained to GAO, OIRA desk officers made the initial
    determinations regarding issues with which they were familiar, subject to
    the approval by OIRA management. The Mercatus Center at George Mason
    University made most of the nominations overall and in the high priority
    group. Regulatory agencies or OIRA have at least begun to address the
    issues raised in many of the 23 suggestions. OIRA's 2002 nomination and
    review process was different from the 2001 process in several respects
    (e.g., broader request for reforms, more responses from more commentors,
    prioritization of the suggestions being made by the agencies, and clearer
    discussion of process and criteria).

    Contents

                                        Letter 1

         Executive Summary                     Purpose                        3 3
                                             Background                         3
                                          Results in Brief                      5
                                         Principal Findings                     7
                                Recommendations for Executive Action           14
                                 Agency Comments and Our Evaluation            16
             Chapter 1                       Background                     17 17
                                 Objectives, Scope, and Methodology            26

    Chapter 2
    Some of OIRA's
    Regulatory Review
    Policies Have Changed

    OIRA Regulatory Review Process 29 Changes in Regulatory Review Policies 38

    Chapter 3
    OIRA's Effects on Rules
    Submitted for
    Executive Order
    Review Varied

    69 OIRA Significantly Affected About One-Third of the Rules That the
    Selected Agencies Submitted for Review 69 OIRA Affected the Costs and
    Benefits or Estimates in Some Rules 84 Outside Parties Contacted OIRA
    Regarding about Half of the Rules 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 forMany Rules Nominated High
    Priority Review in 2001 Report 103 for Reform Are Being How High Priority
    Review Selections Were Made 106 Changed Status of Rules Selected for High
    Priority Review 107

    Second Round of Nominations Was Different 108

                                        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
                                    Summary Information on Selected Rules
                   Appendix II:               Submitted to OIRA
                                for Executive Order Review between July 2001
                                                  and June
                                                    2002                      132
                                        Explanation of Table Contents         132
                                Case Studies on Significantly Affected Rules
                  Appendix III:                 With Evidence
                                 That OIRA Was Contacted by External Parties  188
                                Control of Emissions from Nonroad Large Spark 188
                                                   Engines
                                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 191
                                                 (Manganese)
                                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       199
                                            Development Category
                                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
                                Comments from the Office of the Information
                    Appendix V: and Regulatory
                                                   Affairs                    212

    Tables Table 1:	Selected Agencies' Regulatory Submissions by
    Outcome 71

                                        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: Figure 2: Figure 3:

    Figure 4: Figure 5:

    Figure 6:

    Figure 7:

    Figure 8: Figure 9:

    OIRA Is One of the Statutory Offices within OMB
    Organization of OIRA
    Number of Rules That OIRA Reviewed Dropped Under
    Executive Order 12866
    The OIRA Regulatory Review Process
    OIRA Returned More Rules to Agencies in Calendar Year
    2001 Than in the 7 Previous Years Combined
    OIRA Returned Only Two Rules Between February 2002
    and May 2003
    The Number of OIRA Reviews Lasting More Than 90 Days
    Dropped Sharply in 2002
    OIRA Recently Reversed a 20-year Decline in Staffing
    EPA Air and Water Rules Were More Often Significantly
    Changed at the Suggestion of OIRA

                                         18 19

                                         24 30

                                           42

                                           44

                                         46 60

                                           76

                                           90

    Figure 10: Outside Parties Most Often Contacted OIRA Regarding EPA Rules

    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

    USDA Department of Agriculture
    VSL value of a statistical life
    VSLY value of a statistical life year
    WRAP Western Regional Air Partnership

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    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.

    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

    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

    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.

    1U.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).

                                   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

    2Our 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.

    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).

    3OIRA defines outside parties as "persons not employed by the executive
    branch."

    4The 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.

                                   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 Process and Changes in Policies/Practices

    OIRA's formal regulatory review process begins when the rulemaking 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 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

                                   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, Withdrawn, and Returned Rules

    Because of the large number of draft rules that had been changed,
    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,
    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;

    5Most 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).

    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:

    o 	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).

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

    o 	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).

    o 	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

    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.

    6NHTSA 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).

                                   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:

    o 	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).

    o 	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 Programs Selected for High Priority Review

    Congress has required OMB to submit "recommendations for reform" with 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
    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

    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:

    o 	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.

    o 	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.

                                   Executive Summary

        Improvements Notwithstanding, OIRA's Review Process Is Still Not Well
        Documented or Clear

    OIRA and some of the agencies whose rules we examined have taken several
    steps to improve the transparency of the regulatory review process and its
    outcomes since our last review. For example, OIRA's disclosure of its
    contacts with outside parties is now triggered by the start of informal
    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:

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

    o 	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.

    o 	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.

                                   Executive Summary

    o 	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.

    o 	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.

    o 	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  o 	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

    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.

    o 	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.

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

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

    o 	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.

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

    o 	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:

    o 	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).

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

                                   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.

    o 	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 Our Evaluation

    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
    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.)

    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

                                       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

    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.

    1For 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).

                                       Chapter 1

                             Figure 2: Organization of OIRA

    Source: GAO.

                     The Rulemaking Process and Presidential Review

    The basic process by which federal agencies develop and issue regulations
    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

    2We 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).

    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:

    o 	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.

    o 	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.

    o 	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

    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

    3See, 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.

    4The 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.

    5For 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).

    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

    6National Academy of Public Administration, Presidential Management of
    Rulemaking in Regulatory Agencies (January 1987).

    7The 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.

                                       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."

                                       Chapter 1

    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

    2,790

    2,500

    2,000

    1,500

    1,000

    500

    0

    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

                                       Chapter 1

    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 Transparency Requirements

    In January 1998, we reported on the implementation of some of the
    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

    8For 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.

    9GAO/GGD-98-31.

                                       Chapter 1

    (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 Methodology

    The overall objective of this assignment was to determine how OIRA
    conducts its regulatory reviews. The requesters indicated that little was
    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:

    o 	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.

    o 	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.

    o 	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

    10As 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.

    Chapter 1

    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.

    11These 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.

    Chapter 1

    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.

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

    Chapter 2

    Some of OIRA's Regulatory Review Policies Have Changed

    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
                                     Review Process

    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 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.

    1Representatives 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.

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    Source: GAO.

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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    3As 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."

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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:

    o  Identify and assess available alternatives to direct regulation;

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

    o 	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;

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

    o  identify and assess alternative forms of regulation; and

    o  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."

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    4For 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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    5OIRA 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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    6The 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.)

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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.

    7Office 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).

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

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

      Changes in Regulatory Review Policies

    According to OIRA representatives, the process that OIRA uses to review
    draft rules has been essentially the same since that process was
    established 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 "Gatekeeper"

    Overall, there has been a notable change in how recent Administrators (and
    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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    9Testimony before the Senate Committee on Governmental Affairs, September
    25, 1996.

    10William Niskanen, "Clinton's Regulatory Record: Policies, Process, and
    Outcomes," Regulation (1996), 27-28.

    11Office 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).

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

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

        Increased Use of Return Letters

    One clear indication of the emergence of OIRA's "gatekeeper" role is the
    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.

    12Others 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."

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    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

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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.

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    Figure 6: OIRA Returned Only Two Rules Between February 2002 and May 2003

                12 Number of draft regulatory actions returned to agency

                                           11

    Some of the officials from rulemaking agencies who regularly interact with
    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

                                          10 8

                                           6

                                           4

                                           2

                                      0 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 Economic Analysis

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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 for Review

    Another clear change in OIRA regulatory review policy since the current
    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

    13The 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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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
    140
    130
    120
    110
    100

    90

    80

    70

    60

    50

    40

    30

    20

    10

    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

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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:

    o 	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."

    14OIRA 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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    o 	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.

    o 	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.

    o 	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.

    o 	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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    15See 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."

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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:

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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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."

    o 	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.

    o 	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 Improvements

    On numerous occasions, the current OIRA Administrator has identified
    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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    "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

    16The 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.

    17An OIRA representative told us that the office had not made this
    information available electronically during previous administrations
    because of resource constraints.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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:

    o 	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)."

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

    o 	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."

    o 	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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

    18However, 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.

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    "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 on Meetings with Outside Parties

    In its December 2002 report on the costs and benefits of federal
    regulations, OIRA said that it had adopted an "open door approach to
    meeting with outside parties." In explanation, OIRA representative told us
    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

    19Agency 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.

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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 Specialists

    OIRA has also changed the office's human capital strategy in recent years,
    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.

    20The 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).

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

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

    90 80 70 60 50 40 30 20 10 0

    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:

    o 	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.

    o 	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.

    21OIRA'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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    o 	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.

    o 	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.

    o 	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

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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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 Office of Advocacy

    In March 2002, the OIRA Administrator and the SBA chief counsel for
    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.

    23In August 2002, the President signed Executive Order 13272, which also
    urged agencies to give proper consideration to small entities in their
    rulemaking.

    24U.S. General Accounting Office, Regulatory Flexibility Act: Status of
    Agencies' Compliance, GAO/GGD-94-105 (Washington, D.C.: Apr. 27, 1994).

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

        Proposed New Guidelines on Economic Analysis

    One of the more controversial elements of OIRA's regulatory review
    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:

    25The 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).

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    o 	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).

    o 	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.

    o 	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)

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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 Assessment

    Some (but by no means all) of OIRA's regulatory reviews evaluate whether
    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

    27The 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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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

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

            Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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 Regulatory Analyses

    In his September 2001 memorandum on "Presidential Review of Agency
    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

    29For a copy of these guidelines, see 67 Fed. Reg. 8452 (Feb. 22, 2002).

    30Shortly 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.

    Chapter 2 Some of OIRA's Regulatory Review Policies Have Changed

    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.

    Chapter 3

    OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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 Affected About One-Third of the Rules That the Selected
      Agencies Submitted for Review

    Our second objective was to provide detailed information on rules that
    were significantly changed by OIRA, withdrawn at OIRA's initiative, or
    returned to the agencies for reconsideration. According to the OIRA
    database, from July 1, 2001, through June 30, 2002, OIRA completed 642
    reviews of agencies' draft regulatory actions submitted under Executive
    Order 12866. The dispositions of these reviews were as follows:

    o 	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.

    1Our 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.

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    o 	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.

    o  About 8 percent (50) were coded as "withdrawn" by the agency.

    o  About 3 percent (21) were coded as "returned" to the agency by OIRA.

    o 	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

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

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

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

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

    o 	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.

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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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
                  FDA                                                 7 0 2
                 OSHA                                                 5 0 0
                DOT-FAA                                               5 6 1
               DOT-FMCSA                                              6 0 0
               DOT-NHTSA                                              5 1 1
         EPA Office of Air and                                       14 1 0
               Radiation
    EPA Office of Solid Waste                                      9 0 0
        and Emergency Response
          EPA Office of Water                                         8 1 0
                 Total                                               71 9 5    85

    Source:OIRA's database.

    3See, for example, Arthur Allen, "Where the Snowmobiles Roam," Washington
    Post Magazine (Aug. 18, 2002).

    4OIRA'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.

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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.

    o 	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."

    o 	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.

    o 	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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

        OIRA Did Not Significantly Affect Many of the "Changed" Rules

    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 coded as "consistent with change" into one of three categories:

    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

    5The agencies sometimes attributed suggested changes to OMB and sometimes
    specifically to OIRA. In a few instances, OMB staff outside of OIRA
    suggested the changes.

    6Because 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.

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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.)

    7For 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."

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

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

                                                              Total rules changed
                          Number of rules by most significant after submission to
                                                     level of
                Agency        change suggested by OIRA                       OIRA
                                       Other
                             Significant material Minor or no
                                      changes changes changes
                 APHIS                                  2 9 1
                   FDA                                  0 6 1
                  OSHA                                  0 2 3
               DOT-FAA                                  0 2 3
                  DOT-                                  0 3 3
                 FMCSA
                  DOT-                                  1 2 2
                 NHTSA
            EPA Office                                  7 4 3
            of Air and
             Radiation

                          EPA Office       1              4                     4
                            of Solid
                           Waste and
                           Emergency
                            Response

    EPA Office 6 2 0 of Water

    Total 17 34 20

    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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    Types of Significant Changes Made at OIRA's Suggestion/Recommendation

    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
    WaterAgency

    Significant changes

    Other material changes

    Minor or no changes

    Source: GAO.

    In 6 of the 14 EPA rules that were significantly changed, the primary
    effect of OIRA's suggestions or recommendations was to delay or eliminate
    certain regulatory provisions that were included in the draft rules as
    submitted to OIRA. For example:

    o 	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).

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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

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

    o 	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:

    o 	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.

    o 	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:

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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    Rules With "Other Material Changes" Attributable to OIRA

    o 	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).

    o 	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).

    We concluded that in 34 (about 48 percent) of the 71 "consistent with
    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:

    o 	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).

    o 	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).

    o 	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).

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    o 	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:

    o 	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).

    o 	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).

    o 	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 Reconsideration improperly
    submitted for review. The other seven rules were returned to

    the issuing agencies for reconsideration-five rules from FAA, one from

    NHTSA, and one from EPA.

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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:

    o 	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).

    o 	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).

    o 	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).

    o 	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

    9FAA 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."

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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, Initiated Most Withdrawals

    Neither OIRA nor the regulatory agencies are required to document why
    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

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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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 Office of Water
    Were and EPA's Office of Air and Radiation and Office of Water were most
    often

    significantly affected by OIRA's review. During the period covered by
    ourMore Often Significantly review, about 56 percent of the rules from
    these agencies (20 of 36) wereAffected 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 Agency Total

    Significantly affected by OIRA Number Percent

                                       APHIS    13             2
                                         FDA     9             0
                                        OSHA     5             0
                                     DOT-FAA    12             6
                                   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.
                                     Page 82                           GAO-03-929

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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
                                 significant
                            Not economically         71                        20
                                 significant
                                       Total         85                        25

    Source: GAO analysis.

    11We 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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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 Costs and Benefits or Estimates in Some Rules

    In 22 of the 25 rules that we concluded had been significantly affected by
    OIRA's suggestions or recommendations, OIRA appeared to have influenced
    either (1) the expected costs and/or benefits of the rules and/or (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 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 That Appeared to Have Affected Costs and Benefits

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

    o 	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.

    o 	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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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:

    o 	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

    o 	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.

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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    o 	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).

    o 	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 that Affected Agencies' Estimates of Costs and
        Benefits

    In 14 rules (including some of the ones described above with regulatory
    text changes), OIRA specifically commented on and requested changes in the
    agencies' analyses of the economic impacts of the draft regulations. Six
    of the seven rules that OIRA returned to agencies for reconsideration fell
    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:

    o 	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.

    o 	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.

    o 	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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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-Effectiveness, and Net Benefits

    In general, the focus of OIRA's changes in most of these cases appeared to
    be on reducing costs and regulatory burdens, improving the
    cost-effectiveness of the rules, or maximizing the rules' net benefits.
    For 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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

      Outside Parties Contacted OIRA Regarding about Half of the Rules OIRA
      Significantly Affected

    Another part of this objective was to determine whether there was any
    evidence that the actions that OIRA took (e.g., to suggest significant
    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, 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.

    13In 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.

    14The 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).

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    Figure 10: Outside Parties Most Often Contacted OIRA Regarding EPA Rules

    No contact by outside parties

    Contact on EPA rule

    Contact on FAA rule

    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:

    o 	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.

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    o 	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.

    o 	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

    15Direct 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.

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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:

    o 	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.

    o 	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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    OIRA Generally Disclosed Outside Contacts

    As noted in chapter 2 of this report, Executive Order 12866 requires OIRA
    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:

    o 	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.)

    o 	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.)

    o 	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.)

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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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
    satisfiedOIRA's Reviews Varied, those requirements for most of their
    rules. However, having materials inbut Some Agencies' the agencies'
    rulemaking dockets does not necessarily mean that OIRA's Practices
    Improved effects on the rules were fully transparent. The executive order
    also

    requires OIRA to disclose certain information about its review process,
    andTransparency we concluded that OIRA generally satisfied those
    requirements regarding the rules that we reviewed.

        Agencies Varied in Extent to Which Documentation Requirements Were Satisfied

    One of the stated purposes of Executive Order 12866 is to make the federal
    rulemaking process more accessible and open to the public. Toward that
    end, the executive order places certain public disclosure and
    documentation requirements on regulatory agencies or OIRA. However, 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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

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

    o 	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.

    o 	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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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.

    17We conducted a similar exercise in our previous GAO report on this
    subject. See GAO/GGD-98-31.

    18In 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.

    19It 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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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       recommendation          rules
                           review period
                             Not clear                Not clear
                          All that all No          All that all No
                      changes changes changes  changes changes changes
                              clearly had been         clearly had been
                                identified Not           identified Not
                     identified identified in  identified identified in
                     docket applicable         docket applicable
           APHIS                       1 8 0 3                  4 5 0 3
            FDA                        7 0 0 0                  6 0 0 1
           OSHA                        0 0 4 1                  0 0 2 3
          DOT/FAA                      0 0 2 3                  0 0 2 3
         DOT/FMSCA                     4 0 0 2                  2 0 0 4
         DOT/NHTSA                     0 1 0 4                  1 0 0 4
    EPA Office of                   1 9 1 3                  2 7 1 4
          Air and
         Radiation

         EPA Office of      2      3      0      4      5      0      0      4
          Solid Waste
              and
           Emergency
            Response

    EPA Office of 800 0800 0 Water

    Total 2321 7202812 526

    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

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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 Changes to Draft Rules Were Documented

    Executive Order 12866 does not specify how agencies should document the
    changes made to draft rules after their submission to OIRA, nor is there
    any governmentwide guidance that directs agencies how to do so. OIRA
    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.

    20As 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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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.

    o 	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.

    o 	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.

    o 	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.

     Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review Varied

    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:

    o 	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.

    o 	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.

    o 	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 Demonstrated "Best Practices"

    Overall, we often found it difficult to identify the changes that had been
    made to agencies' rules during OIRA's review and/or at the suggestion or
    recommendation of OIRA by reviewing material in the agencies' 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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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.

    o 	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.

    o 	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

    Chapter 3 OIRA's Effects on Rules Submitted for Executive Order Review
    Varied

    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).

    o 	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.

    Chapter 4

    Many Rules Nominated for Reform Are Being Changed

    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 High Priority Review in said
    it did not have enough information to make recommendations for the

    reform of specific regulations or regulatory programs, and asked for2001
    Report recommendations and comments on rules and regulatory programs that
    could be "of concern to the public." Specifically, OIRA said the
    following:

    Chapter 4
    Many Rules Nominated for Reform Are Being
    Changed

    "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.

    1For 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).

    Chapter 4
    Many Rules Nominated for Reform Are Being
    Changed

    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  HHS/Food and Drug
                                    acids in
                                            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

                                       Chapter 4
                       Many Rules Nominated for Reform Are Being
                                        Changed

    (Continued From Previous Page)

    Commenter Regulation at issue Agency issuing regulation

    EPF/National Partnership for Women and Families Record keeping and
    notification regulations under the Family and Medical Leave Act DOL/Wage
    and Hour Division 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 Review Selections Were Made

    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 how it decided that 23 of the suggestions merited high priority
    review. 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.

    2She 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.

                                       Chapter 4
                       Many Rules Nominated for Reform Are Being
                                        Changed

    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 Selected for High Priority Review

    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 that, in some cases, the agencies had "convinced us that reform is
    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:

    o 	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.

    o 	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.

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

                                       Chapter 4
                       Many Rules Nominated for Reform Are Being
                                        Changed

    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.

    o 	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 Nominations Was Different

    Section 624 of the Treasury and General Government Appropriations Act of
    2001, also known as the "Regulatory Right-to-Know Act," required OIRA to
    include "recommendations for reform" in its cost-benefit report each year.
    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.

    o 	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

    Chapter 4
    Many Rules Nominated for Reform Are Being
    Changed

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

    o 	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.

    o 	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."

    o 	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.

    Chapter 5

                            Conclusions and Recommendations

    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 Documentation Not Always Clear

    Concerns about the effect that OIRA was having on agencies' rules led to
    the adoption of transparency requirements in section 6 of Executive Order
    12866. For nearly 10 years the executive order has required agencies to
    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:

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

    Chapter 5 Conclusions and Recommendations

    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.

    o 	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).

    o 	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).

    o 	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.

    o 	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,

    Chapter 5 Conclusions and Recommendations

    o 	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.

    o 	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.

    o 	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

                       Chapter 5 Conclusions and Recommendations

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

      Opportunity to Build on Improvements in Transparency

    The current OIRA Administrator has made several notable improvements in
    the transparency of the office's regulatory reviews. For example, by
    placing information about the rules under review and OIRA's contacts with
    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

    Chapter 5 Conclusions and Recommendations

    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).

                       Chapter 5 Conclusions and Recommendations

    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:

    o 	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.

    o 	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.

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

                       Chapter 5 Conclusions and Recommendations

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

    o 	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.

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

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

    o 	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).

    o 	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.

    o 	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

    Chapter 5 Conclusions and Recommendations

    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.

    o 	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.

    Chapter 5 Conclusions and Recommendations

    o 	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.

    o 	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).

    o 	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

    Chapter 5 Conclusions and Recommendations

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

    o 	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 erulemaking 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

    1For 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).

    Chapter 5 Conclusions and Recommendations

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

    Appendix I

                           Objectives, Scope, and Methodology

    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.

    2.

    3.

    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, 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.

    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

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

                                       Appendix I
                           Objectives, Scope, and Methodology

    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

                                       Appendix I
                           Objectives, Scope, and Methodology

    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:

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

    o 	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).

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

    o 	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.

    Appendix I
    Objectives, Scope, and Methodology

    o 	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.

    2See, for example, Arthur Allen, "Where the Snowmobiles Roam," Washington
    Post Magazine (Aug. 18, 2002).

    3OIRA'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.

                                       Appendix I
                           Objectives, Scope, and Methodology

    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.

    4The 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.

                                       Appendix I
                           Objectives, Scope, and Methodology

    2.

    3.

    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.

    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

                                       Appendix I
                           Objectives, Scope, and Methodology

    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

    Appendix I
    Objectives, Scope, and Methodology

    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.

                                       Appendix I
                           Objectives, Scope, and Methodology

    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.

    7It 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.

                                       Appendix I
                           Objectives, Scope, and Methodology

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

    o 	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.

    o 	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.

    o 	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.

    o 	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.

    o 	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.

    Appendix I
    Objectives, Scope, and Methodology

    o 	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.

    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 Findings and Determinations for Changed Rules

    o 	GAO ID - This column provides a unique GAO case identification number
    for each executive order submission to OIRA that we reviewed to address
    our second reporting objective. Note that our unit of analysis was the
    submission of a draft regulation for OIRA's review, not the rule 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.

    o 	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

    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

    o 	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).

                                      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.

    o 	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.

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

    3We 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.

    Appendix II
    Summary Information on Selected Rules
    Submitted to OIRA for Executive Order
    Review between July 2001 and June 2002

    o 	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.

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

    o 	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 Findings and Determinations for Withdrawn Rules

    o 	GAO ID and Executive Order Review Submission - (As described under
    table 7, except that information about the publication of the rule, if
    applicable, appears under a separate column on subsequent activity.)

    o 	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.

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

    o 	Evidence of subsequent activity regarding this submission - (As
    described under table 8.)

                                      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 Mexican Hass Avocado Import Program

    Proposed rule

    RIN 0579-AB27

    OIRA review period: 06/13/2001 to 07/05/2001

    Published 07/13/2001 (66 FR 36892) Other material changes

    Information was added to the preamble regarding several topics-e.g., a
    previous amendment to Hass avocado regulations, an APHIS review of the
    Hass avocado import program, a study on fruit flies, responses to
    commenter concerns, and a new section summarizing the regulatory impact
    analysis. Also, there were minor rewording changes throughout. An APHIS
    official characterized most OIRA changes to the rule as minor editorial
    comments but said that other changes strengthened the agency's explanation
    for the rule. There were no substantive changes to the regulatory
    language.

                                         No No

    Karnal Bunt; Compensation for the 1999-2000 and Subsequent Crop Seasons

    Final rule

    RIN 0579-AA83

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

    Published 08/06/2001 (66 FR 40839) Minor editoral changes or no changes No
    No

    Changes were limited to minor clarifications and a sentence change in the
    Paperwork Reduction Act section in the preamble. There were no changes in
    the regulatory language.

                                      Appendix II
                         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

    Importation Prohibitions Because of Bovine Spongiform Encephalopathy (BSE)

    Interim final rule

    RIN 0579-AB26

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

    Published 08/14/2001 (66 FR 42595) Other material changes No No

    A section was added to the preamble noting that APHIS would obtain BSE
    risk factor data from trading partners and, if significant risk was
    indicated, APHIS would take action to restrict animal product imports from
    the risky areas.

    Scrapie in Sheep and Goats; Interstate Movement Restrictions and Indemnity
    Program

    (Listed in OIRA's database as: Interstate Movement of Sheep and Goats From
    States That Do Not Quarantine Scrapie-Infected and Source Flocks)

    Final rule

    RIN 0579-AA90

    OIRA review period: 04/18/2001 to 08/07/2001

    Published 08/21/2001 (66 FR 43964) Other material changes

    OMB suggested several changes to the preamble that added or clarified
    descriptions of issues such as (a) the increase in paperwork burden caused
    by this rule, (b) how to calculate animal and human health risks
    associated with scrapie, and (c) how to estimate the effectiveness of
    indemnity as an incentive. OMB also suggested that APHIS clarify how much
    of the rule's activities could be funded from currently projected agency
    budgets and how much would require additional funds. According to APHIS,
    these additional discussions caused no significant changes to the scope of
    the rule or the benefits it provided. The regulatory language was not
    changed.

    No No

                                      Appendix II
                         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

    Phytosanitary Certificates for Imported Fruits and Vegetables

    Proposed rule

    RIN 0579-AB18

    OIRA review period: 03/21/2001 to 08/15/2001

    Published 08/29/2001 (66 FR 45637) Other material changes

    In a memo prepared for GAO, APHIS identified eight specific changes that
    OMB requested, all in the preamble. These changes mainly provided more
    specific information, additional examples, and expanded discussions about
    the economic impacts of this rule.

    No

    The actual costs and benefits did not appear to change as a result of the
    revisions made at the request of OMB, but the revisions did provide more
    information on and support for APHIS' analysis of the economic impacts of
    the rule.

                                           No

    Plant Pest Regulations; Update of Current Provisions

    Proposed rule

    RIN 0579-AA80

    OIRA review period: 03/21/2001 to 09/26/2001

    Published 10/09/2001 (66 FR 51340) Other material changes

    APHIS identified five main changes that OMB requested to the preamble of
    the rule, such as adding explanations and soliciting comments and
    alternatives on certain issues, all focused on improving the clarity of
    the rule. There were no changes to the regulatory language.

    No No

    Although the paperwork burden estimates were revised downward in the final
    version, there is no indication that OIRA was the source of the revisions.

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

                                      Appendix II
                         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

    Interstate Movement of Swine Within a Production System

    Final rule

    RIN 0579-AB28

    OIRA review period: 09/25/2001 to 12/11/2001

    Published 12/20/2001 (66 FR 65598) Other material changes No No

    There were inserts in the Federalism and Paperwork Reduction Act sections
    of the preamble. Inserts in the Paperwork Reduction Act section added
    information about changes made from proposed rule in terms of paperwork
    and information collection requirements.

    Chronic Wasting Disease in Cervids; Payment of Indemnity

    (Listed in OIRA's database as: Chronic Wasting Disease in Elk; Interstate
    Movement Restrictions and Payment of Indemnity)

    Interim final rule

    RIN 0579-AB35

    OIRA review period: 01/07/2002 to 02/04/2002

    Published 02/08/2002 (67 FR 5925) Significant changes

    The most significant change made at the suggestion of OMB affected the
    cost-sharing formula, limiting the federal indemnity payment to 95
    percent. Other changes made in response to OMB were related to cost,
    benefit, and risk data. Both the preamble and the CFR section of the rule
    were affected by OMB-suggested changes.

    Yes

    OMB changed the 100-percent reimbursement that APHIS had proposed for the
    indemnity to be 95 percent. OMB also asked APHIS to avoid citing the
    possible avoidance of a human disease caused by chronic wasting disease as
    a benefit of this rule because this possibility was considered remote by a
    Harvard risk analysis.

                                           No

                                      Appendix II
                         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

    Animals Destroyed Because of Tuberculosis; Payment of Indemnity

    Interim final rule

    RIN 0579-AB29

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

    Published 02/20/2002 (67 FR 7583) Other material changes No No

    Changes were made to the preamble for clarification, particularly
    regarding APHIS's cost-sharing policy. However, no changes were made to
    the regulatory language in the CFR amendments section of the rule.

    Infectious Salmon Anemia; Payment of Indemnity

    Interim final rule

    RIN 0579-AB37

    OIRA review period: 03/08/2002 to 04/02/2002

    Published 04/11/2002 (67 FR 17605) Other material changes

    OMB requested changes related to future (post-2002) funding for the
    infectious salmon anemia indemnity and a control and eradication program
    (e.g., clarifying that the administration was examining how the costs of
    program activities, including the payment of indemnity, are shared among
    the federal government and others and, therefore, that in the future the
    indemnity rate provided under this rule might change). OMB further
    requested that APHIS make clear that all 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.)

    Unclear No

    The preamble changes suggest that indemnity rates and program funding in a
    second indemnity/program year might change.

                                      Appendix II
                         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

    Foot-and-Mouth Disease; Payment of Indemnity

    (Listed in OIRA's database as: Foot-and-Mouth Disease, Pleuropneumonia,
    Rinderpest, and Certain Other Communicable Diseases of Livestock or
    Poultry; Payment of Indemnity)

    Proposed rule

    RIN 0579-AB34

    OIRA review period: 01/17/2002 to 04/16/2002

    Published 05/01/2002 (67 FR 21934) Significant changes

    The most substantive changes attributed to OMB affected the regulatory
    language in the Code of Federal Regulations (CFR) amendments
    section-specifically, eliminating language in the original version of the
    rule that would have provided compensation for care and feeding of
    "official vaccinates" (livestock vaccinated as part of a foot-and-mouth
    eradication program) and compensation "relating to cleaning and
    disinfecting non-susceptible animals." OMB suggested other changes in the
    preamble that generally provided additional justifications for the rule
    and added explanations in the Regulatory Flexibility Act and Executive
    Order 12866 sections. OMB also requested substantial changes to the
    economic analysis and APHIS's approach in evaluating the proposed rule's
    impact.

    Yes

    APHIS made substantial changes to the economic analysis in response to
    OIRA's suggestion. Further, limiting compensation by not covering the care
    and feeding of official vaccinates or the cleaning and disinfection of
    non-susceptible animals lowered the potential costs to the government of
    the indemnity program.

    However, according to an APHIS official (and as explained in the preamble
    of the proposed rule), removing these compensation provisions 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.

                                           No

                                      Appendix II
                         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

    FDA Exports; Notification and Recordkeeping Requirements

    Final rule

    RIN 0910-AB16

    OIRA review period: 08/28/2001 to 11/27/2001

    Published 12/19/2001 (66 FR 65429) Other material changes No No

    Some of the OMB-suggested changes in the preamble added or revised
    information to clarify FDA's responses to public comments on the proposed
    rule. There were no changes to the regulatory language in the CFR section
    of the rule.

    Additional Criteria and Procedures for Classifying Over-the-Counter Drugs
    as Generally Recognized as Safe and Effective and Not Misbranded

    Final rule

    RIN 0910-AA01

    OIRA review period: 09/27/2001 to 12/21/2001

    Published 01/23/2002 (67 FR 3060) Other material changes

    Most changes were minor editorial revisions in the preamble, but some more
    substantive changes included (a) repeating information from the analysis
    of impacts section at the end of the rule on page 2, (b) inserting
    clarifying material about the General Agreement on Tariffs and Trade and
    the World Trade Organization to a response to comments on the proposed
    rule, and (c) inserting a sentence to note that, over the next several
    years, FDA expects to be able to accept electronic submissions. There were
    no changes in the regulatory language of the CFR section.

    No No

                                      Appendix II
                         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

    Records and Reports Concerning Experience with Approved New Animal Drugs;
    Interim Final Rule

    (Listed in OIRA's database at time of GAO's review as: New Animal Drug
    Approval Process; Implementation of Title I of the Generic Animal Drug and
    Patent Term Restoration Act (GADPTRA))

    Interim final rule

    RIN 0910-AA02

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

    Published 02/04/2002 (67 FR 5046) Other material changes

    Some of the changes to the preamble that were attributed to OMB added new
    clarifying information or examples to the original text. OMB also revised
    some of the text on the estimated reporting and recordkeeping burdens,
    specifically characterizing two sections of the rule as posing new
    information collection requirements over the existing requirements. The
    changes attributed to OMB in the regulatory language of the CFR section
    appeared to be mainly editorial in nature, although the language in one
    provision on reporting requirements was changed from "must" to "should."
    (Note: this rule was previously withdrawn. See GAO ID 82.)

    Unclear No

    Updated information on the estimated reporting and recordkeeping burdens
    was included in the revised version of the rule (replacing data from 1999
    fiscal year submission reports with data from 2000 fiscal year reports),
    but the source of this change is not clear in the documentation. FDA,
    rather than OIRA, might have initiated this change.

    Requirements for Submission of Labeling for Human Prescription Drugs and
    Biologics in Electronic Format

    Proposed rule

    RIN 0910-AB91

    OIRA review period: 12/14/2001 to 03/05/2002

    Published 05/03/2002 (67 FR 22367) Other material changes

    The changes made in response to OIRA included (a) how electronic
    signatures would be handled and how this would be described in the rule
    and (b) the treatment and description of the onetime capital costs
    associated with the reporting burden for this rule. There were also some
    clarifying changes to the proposed regulatory language in the CFR section.

    No No

    Although the OIRA changes affected the categorization and description of
    the costs of this rule-identifying them as onetime capital costs
    associated with the reporting burdens of this proposal, where FDA's
    original text had said there were no capital costs associated with this
    information collection-this re-categorization did not change FDA's
    estimate of total costs.

                                      Appendix II
                         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

    Food Additives: Food Contact Substances Notification System

    Final rule

    RIN 0910-AB94

    OIRA review period: 02/19/2002 to 05/14/2002

    Published 05/21/2002 (67 FR 35724) Minor editoral changes or no changes

    Only a few minor changes were attributed to OMB, such as rewording an
    introductory paragraph regarding comments received on the proposed rule
    and inserting one sentence in an illustration of how FDA expected its
    review of notifications to proceed in the future. The Executive Order
    12866 statement in the rule was also revised to note that it was a
    significant regulatory action that was reviewed by OMB, rather than the
    original statement that it was not. All of these changes were in the
    preamble; OMB requested no changes in the regulatory language.

    (However, a substantive FDA change is reflected in the documentation.)

                                         No No

    Efficacy Evidence Needed for Products To Be Used Against Toxic Substances
    When Human Studies Are Unethical or Unfeasible

    Final rule

    RIN 0910-AC05

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

    Published 05/31/2002 (67 FR 37988) Other material changes

    Additional material was inserted in the preamble to better explain the
    legal authority and rationale for taking this regulatory action. Other
    changes were made to FDA's response to some public comments on the
    proposed version of this rule. However, no changes were made to the
    regulatory language.

    No No

                                      Appendix II
                         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

    Investigational New Drugs; Export Requirements for Unapproved New Drug
    Products

    Proposed rule

    RIN 0910-AA61

    OIRA review period: 03/07/2002 to 05/29/2002

    Published 06/19/2002 (67 FR 41642) Other material changes

    The only changes attributed to OMB were (a) expanding the citations of
    relevant legal authority in the background section of the preamble and (b)
    updating references to a previous Federal Register notice with a related
    record keeping requirement-and noting that this particular rule,
    therefore, would not contain any new record keeping requirements. There
    were no changes at OMB's request in the regulatory language.

                                         No No

    OSHA Occupational Injury and Illness Recording and Reporting Requirements

    Final rule

    RIN 1218-AC00

    OIRA review period: 09/24/2001 to 10/04/2001

    Published 10/12/2001 (66 FR 52031) Minor editoral changes or no changes

    OIRA did not suggest or recommend any substantive changes to this rule.

    (However, OSHA initiated a substantive change to delay the effective date
    of Section 1904.29(b)(7)(vi), and new language was included in the
    preamble and regulatory text to accomplish this change.)

    No No

    No changes were suggested by OIRA.

                                      Appendix II
                         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

    Procedures for Handling of Discrimination Complaints Under Section 519 of
    the Wendal H. Ford Aviation Investment and Reform Act for the 21st Century

    Interim final

    RIN 1218-AB99

    OIRA review period: 12/21/2001 to 03/20/2002

    Published 04/01/2002 (67 FR 15454) Other material changes

    Three sets of changes were attributed to OIRA. In the preamble of the
    rule, the changes included (a) adding information and a request for public
    comment regarding the whistle-blower model that OSHA chose for this rule
    and (b) identifying this rule as a significant regulatory action
    (originally labeled "not significant" by OSHA). In the CFR section,
    language was added to three provisions to clarify that certain procedures
    would be triggered at the "request of the named person" (the person
    alleged to have violated the act).

                                         No No

    Safety Standards for Signs, Signals, and Barricades

    Final rule

    RIN 1218-AB88

    OIRA review period: 12/31/2001 to 03/07/2002

    Published 04/15/2002 (67 FR 18145) Minor editoral changes or no changes No
    No

    The only changes attributed to OMB affected two sentences regarding EO
    12866 in the preamble-identifying this as a significant regulatory action
    that was reviewed by OMB, but also noting that the rule was not an
    economically significant action within the meaning of the executive order.

                                      Appendix II
                         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

    Occupational Injury and Illness Recording and Reporting Requirements;
    Occupational Hearing Loss

    Final rule

    RIN 1218-AC06

    Economically significant

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

    Published 07/01/2002 (67 FR 44037) Other material changes

    OIRA requested an additional explanation of OSHA's method of estimating
    the number of recordable hearing loss cases. OSHA added a section in the
    preamble in response to OIRA's request.

    No No

    However, the substantive insert in the preamble explained OSHA's
    estimation of recordable hearing loss cases.

    Occupational Injury and Illness Recording and Reporting Requirements

    Proposed rule

    RIN 1218-AC06

    Economically significant

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

    Published 07/01/2002 (67 FR 44124) Minor editoral changes or no changes

    OIRA did not suggest or recommend any substantive changes to this rule.

    (OSHA initiated the only substantive change made to the rule after it was
    submitted for OIRA's review, deleting a section on state occupational
    safety and health plans in the preamble. A section on state plans was
    later reinserted in the version of the rule that was published in the
    Federal Register. Documentation in the OIRA file for this rule showed that
    OSHA had informed OIRA before reinserting the state plans section before
    publication.)

    No No

    No changes were suggested by OIRA.

                                      Appendix II
                         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

    DOT-FAA Fees for FAA Services for Certain Flights

    Final rule

    RIN 2120-AG17

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

    Published 08/20/2001 (66 FR 43680) Minor editoral changes or no changes No
    No

    No substantive changes were made to this rule.

    Flight Operational Quality Assurance Program

    Final rule

    RIN 2120-AF04

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

    Published 10/31/2001 (66 FR 55042) Minor editoral changes or no changes No
    No

    The only changes made to this rule were minor editorial revisions, such as
    changing section headings.

    Traffic Alert Collision Avoidance System

    Proposed rule

    RIN 2120-AG90

    OIRA review period: 08/01/2001 to 10/18/2001

    Published 11/01/2001 (66 FR 55506) Other material changes

    FAA officials provided evidence that indicates that OIRA suggested
    clarification to the cost-benefit section to be more explicit on how the
    benefits were determined. Direct questions from OIRA indicate that OIRA
    wanted the regulation evaluation to be more explicit regarding the rule's
    likely benefits. According to FAA officials, changes made to the rule were
    not major, although the rule did receive a postreview letter.

    No No

    (However, OIRA did suggest that DOT develop a more transparent analysis of
    the benefits of the proposal.)

                                      Appendix II
                         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

    Certification of Pilots, Aircraft, and Repairmen for the Operation of
    Light Sport Aircraft

    Proposed rule

    RIN 2120-AH19

    OIRA review period: 12/17/2001 to 01/03/2002

    Published 02/05/2002 (67 FR 5368) Other material changes

    In response to issues raised by OIRA, FAA added a footnote to this rule
    that explained consumer surplus benefits and also clarified that specific
    accident data were not counted more than once. FAA officials characterized
    these changes as clarifications.

    (Note that a previous version of this rule was returned by OIRA to FAA for
    reconsideration [see GAO ID 73 in the table on returned rules].)

    No No

    (However, in response to OIRA's review, FAA added information to clarify
    and explain some of the information on benefits discussed in the rule.)

    Reduced Vertical Separation Minimum in Domestic United States Airspace

    Proposed rule

    RIN 2120-AH63 (in the published rule) RIN 2120-AH68 (in OIRA's list of
    reviewed rules)

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

    Published 05/10/2002 (67 FR 31920) Minor editoral changes or no changes

    According to FAA officials, only one paragraph was changed in the
    regulatory evaluation, and FAA officials could not determine whether that
    change was due to OIRA's suggestion. Further, the one change to the rule
    was not substantive; it broke out components of a cost estimate without
    changing the estimate itself.

    No No

                                      Appendix II
                         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

    DOT-FMCSA Revision of Regulations and Application Form for
    Mexican-Domiciled Motor Carriers to Operate in U.S. Municipalities and
    Commercial Zones on the U.S.-Mexico Border

    Final rule

    RIN 2126-AA33

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

    Published 03/19/2002 (67 FR 12652) Minor editoral changes or no changes

    FMCSA considered the OIRA-suggested changes to be primarily editorial or
    clarifying in nature and not substantive (such as substituting numbers for
    percentages in a discussion of the cost-effectiveness of this rule).
    However, there were substantive changes made by FMCSA.

    No No

    (However, FMCSA made changes to the burden-hour estimates for the
    information collection associated with this rule.)

    Application by Certain Mexican Motor Carriers to Operate Beyond U.S.
    Municipalities and Commercial Zones on the U.S.-Mexico Border

    Interim final rule

    RIN 2126-AA34

    OIRA review period: 01/15/2002 to 03/1/2002

    Published 03/19/2002 (67 FR 12702) Other material changes

    OIRA suggested some revisions or clarifications to descriptions in the
    preamble and regulatory language of this rule, including noting the
    applicability of immigration law, revising the rationale in some of
    FMCSA's explanations or responses to public comments, and clarifying that,
    under the North American Free Trade Agreement Annex, Mexican-domiciled
    motor carriers may not provide point-to-point transportation services,
    including express delivery services, within the United States, other than
    international cargo. Other OIRA-suggested 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.

    No No

    (However, FMCSA initiated changes to the Paperwork Reduction Act section
    of the preamble after submission of the draft to OIRA. FMCSA's changes
    slightly reduced the estimated burden of the information collection
    associated with this rule.)

                                      Appendix II
                         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

    Safety Monitoring System and Compliance Initiative for Mexico-Domiciled
    Motor Carriers Operating in the United States

    Interim final rule

    RIN 2126-AA35

    OIRA review period: 01/15/2002 to 03/1/2002

    Published 03/19/2002 (67 FR 12758) Other material changes

    Although most of the changes OIRA suggested were minor (e.g., word
    choice), one change in the preamble appeared to be material. At OIRA's
    suggestion, FMCSA added Appendix A to Part 385 for clarification. This new
    appendix informed Mexico-domiciled motor carriers of the evaluation
    criteria that FMCSA would use to ensure compliance with the requirements
    of this rule. A statement in the original draft that the statute requires
    an examination of each Mexico-domiciled carrier's drivers upon entry was
    also revised to say that the examination 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.

                                         No No

    Certification of Safety Auditors, Safety Investigators, and Safety
    Inspectors

    Interim final rule

    RIN 2126-AA64

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

    Published 03/19/2002 (67 FR 12776) Minor editoral changes or no changes

    The two changes attributed to OIRA were not substantive as they dealt with
    minor corrections to the rule. One of the suggested changes deleted a
    redundant statement, and the other corrected the citation of a relevant
    executive order (changing the citation from Executive Order 12866 to
    Executive Order 13211).

    No No

    OIRA did not suggest or recommend any substantive changes to this rule.

                                      Appendix II
                         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

    Parts and Accessories Necessary for Safe Operation; Certification of
    Compliance with Federal Motor Vehicle Safety Standards (FMVSS)

    Proposed rule

    RIN 2126-AA69

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

    Published 03/19/2002 (67 FR 12782) Minor editoral changes or no changes No
    No

    The only change that was attributed as being made at the request of OIRA
    was the deletion of a redundant statement in the preamble- regarding the
    boilerplate section on the National Environmental Policy Act.

    35 New Entrant Safety Other material changes 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.

                                           No

                                      Appendix II
                         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

    DOT-NHTSA Tire Pressure Monitoring Systems

    Proposed rule

    RIN 2127-AI33

    Economically significant

    OIRA review period: 07/05/2001 to 07/23/2001

    Published 07/26/2001 (66 FR 38982) Significant changes

    Changes identified in the material found in the NHTSA docket indicate that
    OIRA suggested changes to discussions of cost and benefit estimates in the
    proposed rule, in particular (a) adding statements to the preamble
    regarding unquantified benefits and costs that might exist, (b) adding
    estimates of total estimated costs of the two regulatory alternatives in
    the proposal (original draft only provided estimates of average cost per
    vehicle), (c) inserting additional information about the calculation of
    some benefit estimates (e.g., range of injuries and deaths prevented,
    stopping distance effects, and average tire life increases), and (d)
    adding a discussion regarding the effect of human factors on the 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.

    Yes No

    At OIRA's suggestion, statements were added that unquantified benefits and
    costs may exist due to this rule, and public comments were requested on
    this issue. OIRA also suggested the insertion of (a) additional estimates
    of some costs and benefits, (b) added clarification or explanation of some
    economic effects, and (c) requests for public comments on benefits and
    costs of the proposed regulatory alternatives.

    Light Truck Average Fuel Economy Standard Model Year 2004

    Proposed rule

    2127-AI68

    Economically significant

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

    Published 01/24/2002 (67 FR 3470) Other material changes No No

    OIRA suggested the addition of an Energy Impact section. Although NHTSA
    did not consider the addition of this section to be a substantive change,
    it met our criteria for classifying the nature of the change in this rule
    to be an "other material change."

                                      Appendix II
                         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

    Federal Motor Vehicle Improved Tire Safety Standards

    Proposed rule

    RIN 2127-AI54

    Economically significant

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

    Published 03/05/2002 (67 FR 10050) Minor editoral changes or no changes No
    No

    NHTSA officials could not recall any changes, substantive or
    nonsubstantive, to this rule during OIRA's review.

    Automotive Fuel Economy Manufacturing Incentives for Dual Fuel Vehicles

    Proposed rule

    RIN 2127-AI41

    Economically significant

    OIRA review period: 12/19/2001 to 02/22/2002

    Published 03/11/2002 (67 FR 10873) Other material changes

    Additional information was added to the introduction and background
    sections of the preamble referring to the Energy Task Force and additional
    public comments. There were also minor editorial changes throughout the
    revised draft.

    Although NHTSA did not consider OIRA's suggested changes to be
    substantive, we classified the changes made to this rule as an "other
    material change" to Other material changesbe consistent with our coding of
    the level of changes observed in other rules.

                                         No No

    Federal Motor Vehicle Safety Standards; Child Restraint Systems

    Proposed rule

    RIN 2127-AI34

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

    Published 05/01/2002 (67 FR 21806) Minor editoral changes or no changes No
    No

    NHTSA officials confirmed that OIRA only suggested editorial changes on
    two or three pages.

                                      Appendix II
                         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

    EPA-Office of Air and Radiation

    Control of Emissions From Nonroad Large Spark-Ignition Engines and
    Recreational Engines (Marine and Land-Based)

    Proposed rule

    RIN 2060-AI11

    Economically significant

    OIRA review period: 08/01/2001 to 09/14/2001

    Published 10/05/2001 (66 FR 51098) Significant changes Yes

    There were substantive comments and Deleting some of the changes from OMB
    on the preamble, CFR regulatory scope from the section, and regulatory
    support document for original version of this this rule. The most
    substantive issue/change rule-covering regulation was "OMB's desire to not
    move forward with of highway motorcycles the marine and highway motorcycle
    portions and marine engines- of the proposal." would reduce the potential

    total costs and benefits of the rule as originally submitted for OMB's
    review.

    (Note, however, that EPA then covered those engines in a separate rule-see
    GAO ID 54.)

    Yes

    Many outside parties contacted OIRA regarding this rule, including
    representatives of several environmental organizations (Natural Trails and
    Waters Coalition, PIRG, Sierra Club, Bluewater Network, National Parks
    Conservation Association - meeting held 08/29/2001); the National Marine
    Maritime Association (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.)

                                      Appendix II
                         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

    National Ambient Air Quality Standard for Ozone; Proposed Response to
    Remand

    Proposed rule

    RIN 2060-ZA11

    Economically significant

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

    Published 11/14/2001 (66 FR 57268) Minor editoral changes or no changes

    There were only three minor changes in the preamble attributed to OMB. All
    three changes appeared to be rewording (rather than deleting or adding
    information) of statements in the submitted version regarding EPA's views
    about effects "using plausible but highly uncertain assumptions."

                                         No No

    Regulation to Establish New Date Receipt of Summer Grade Reformulated
    Gasoline at Terminals

    Proposed rule

    RIN 2060-AJ79

    OIRA review period: 10/24/2001 to 11/16/2001

    Published 12/03/2001 (66 FR 60163) Other material changes

    Changes were made to the preamble, CFR section, and regulatory support
    document, although the CFR changes would probably not be considered
    substantive even using a "possibly substantive" definition. In the
    preamble, material was added regarding (a) the dates when terminals can
    receive summer grade reformulated gasoline (RFG), (b) explanations of the
    costs of producing more summer grade and less winter grade RFG, (c) an
    explanation of the requirement to petition EPA for approval to transfer
    dirty blendstocks (with a request for comment on 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.

    No No

                                      Appendix II
                         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

    National Emission Standards for Hazardous Air Pollutants: Organic Liquid
    Distribution (Non-Gasoline)

    Proposed rule

    RIN 2060-AH41

    OIRA review period: 06/18/2001 to 09/19/2001

    Published 04/02/2002 (67 FR 15674) Other material changes

    Changes attributed to OMB in the preamble of the rule included (a) a new
    section regarding Executive Order 13211, discussing energy effects of the
    rule, (b) new language reflecting the rule's impact on organic liquid
    distribution sources, and (c) a request for comments from the public
    regarding the accuracy of EPA's cost impact estimates. There were also
    minor editorial changes throughout the preamble. There were no changes to
    the regulatory language in the CFR section of the proposed rule.

                                         No No

    National Emission Standards for Hazardous Air Pollutants: Miscellaneous
    Organic Chemical Manufacturing and Miscellaneous Coating Manufacturing

    Proposed rule

    RIN 2060-AE82

    OIRA review period: 06/18/2001 to 09/21/2001

    Published 04/04/2002 (67 FR 16154) Minor editoral changes or no changes

    EPA docket materials appeared to identify many changes suggested by the
    Small Business Administration's (SBA) Office of Advocacy, but the only
    evidence of a change suggested by OMB was an e-mail message suggesting a
    rewrite of two explanatory sentences in the preamble.

    (A side-by-side comparison of the submitted and cleared versions of this
    rule in OIRA's files indicated that there were many changes but without
    attribution of the sources of those changes.)

    No No

    Although there was no evidence of OMB/OIRA contacts with outside parties
    during the formal review period for this proposal, the EPA docket files
    did document a presentation by industry representatives to OMB and SBA's
    Office of Advocacy (not attended by EPA) in August 2000.

                                      Appendix II
                         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

    NESHAP: Petroleum Refineries; Catalytic Cracking Units, Catalytic
    Reforming Units and Sulfur Recovery Units

    Final rule

    RIN 2060-AF28

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

    Published 04/11/2002 (67 FR 17762) Minor editoral changes or no changes No
    No

    The EPA docket had an OMB review cover sheet indicating "no substantive
    changes." The person in charge of developing this rule confirmed that
    OMB's review resulted in only a few very minor editorial changes.

                                      Appendix II
                         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

    National Emission Standards for Hazardous Air Pollutants; Surface Coating
    of Metal Furniture (Surface Coating)

    Proposed rule

    RIN 2060-AG55

    OIRA review period: 06/18/2001 to 10/24/2001

    Published 04/24/2002 (67 FR 20206) Other material changes

    Changes in the preamble to address OMB comments primarily inserted
    material for clarification and to request comments. For example, language
    was added to ask for comments on EPA's maximum achievable control
    technology (MACT) floor, EPA's conclusion that the creation of
    subcategories was not warranted for these standards, EPA's decision to
    reject regulatory options more stringent than the MACT floor, and 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. In response to OMB's comments, EPA also asked
    that commenters provide information 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.)

    No No

    (Substantive changes to the potential costs and benefits of the rule were
    not attributed to a change suggested by OMB but rather to a change EPA
    made to the proposed emission limits after reanalysis of emissions data
    submitted by facilities. The revised limits were less stringent than
    originally proposed, leading to lower costs and lower projected emission
    reductions.)

                                      Appendix II
                         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

    Revisions to Regional Haze Rule to Incorporate Sulfur Dioxide Milestones
    and Backstop Emissions Trading Program for Nine Western States and
    Eligible Indian Tribes

    Proposed rule

    RIN 2060-AJ50

    OIRA review period: 11/29/2001 to 02/22/2002

    Published 05/06/2002 (67 FR 30418) Other material changes

    There were only a few changes in the preamble-for example, deleting some
    requests for comments and an explanatory section on why EPA was deferring
    to the Western Regional Air Partnership's (WRAP) judgment on the issue of
    critical mass and inserting a footnote in response to issues raised in a
    meeting with the Center for Energy and Economic Development (CEED). There
    were no changes in the CFR section.

    (WRAP is a collaborative effort of tribal governments, state governments,
    and various federal agencies to implement the Grand Canyon Visibility
    Transport Commission's recommendations and develop tools to comply with
    EPA's regional haze regulations. CEED is a national, nonprofit
    organization formed by the nation's coal-producing companies, railroads, a
    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.)

    No Yes

    WRAP and CEED sent letters to OIRA on this rule, and CEED requested an EO
    12866 meeting with OMB on the rule. The EPA docket included a copy of a
    02/05/2002 CEED letter to Dr. Graham (not found in the OIRA files) and an
    e-mail from OIRA to EPA noting that a meeting had been scheduled at CEED's
    request on that date (no record found in OIRA's files). A 02/15/2002
    letter from WRAP to Dr. Graham appeared in OIRA's docket.

    Control of Emissions of Air Pollution From New Marine Compression Ignition
    Engines At or Above 30 Liters/Cylinder

    Proposed rule

    RIN 2060-AJ89

    OIRA review period: 04/15/2002 to 04/30/2002

    Published 05/29/2002 (67 FR 37548) Significant changes

    Docket materials indicated that EPA moved from proposing to considering
    second tier emission standards. Specifically, OIRA edits systematically
    suggested changing language regarding certain emission [Tier 2] standards
    from statements "proposing" the adoption of these standards to statements
    that EPA was only "considering" adoption of the standards.

    Unclear

    Material in the OIRA files indicated that, although the regulatory support
    document was amended, the revisions did not affect the estimates of costs
    and benefits for this proposed rule. However, it seems that a shift from
    actually proposing to just considering adoption of particular emission
    standards should have had some effect on the rule's potential costs and
    benefits.

                                           No

                                      Appendix II
                         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

    Consolidated Emissions Reporting Rule

    Final rule

    RIN 2060-AH25

    OIRA review period: 08/27/2001 to 11/26/2001

    Published 06/10/2002 (67 FR 39602) Significant changes

    Per review of the Paperwork Reduction Act portion of this rule, OMB raised
    concerns about one portion of the Information Collection Request (ICR). In
    response, EPA elected to delay compliance with that portion of the ICR,
    rather than delay the compliance date of the rule. With this change,
    states would not have to commence reporting point source emissions for two
    types of emissions until 06/01/2004, or later, if EPA fails to publish an
    approved revised ICR.

    Unclear No

    Delaying commencement of reporting for one subsection of the rule might
    have a marginal effect on the projected costs and benefits of states'
    reporting on emissions.

    National Emission Standards for Hazardous Air Pollutants; Surface Coating
    for Wood Building Products

    Proposed rule

    RIN 2060-AH02

    OIRA review period: 09/07/2001 to 12/07/2001

    Published 06/21/2002 (67 FR 42400) Significant changes

    Changes were made in both the preamble and CFR sections of the proposal.
    The most substantive change attributed to a request from OMB was in the
    CFR section-delaying the compliance dates in two provisions from 2 years
    to 3 years after the date of publication of the final rule.

    At OMB's request, language also was inserted throughout the preamble
    requesting specific comments on various aspects of products and activities
    EPA selected for coverage in this rule. Requests were also inserted for
    data on potential costs and burdens of the rule and how they might differ
    by subcategories of emission sources.

    Yes No

    The most substantive change in the proposed regulatory language would
    delay compliance dates for two of the rule's provisions.

    (Note also that some of the changes in the preamble raised questions and
    solicited comments about the cost-effectiveness of elements of this
    proposal.)

                                      Appendix II
                         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

    Proposed Rule for Compliance Program Fees for Light-Duty Vehicles and
    Engines; Heavy-Duty Vehicles and Engines; and Nonroad Engines and
    Motorcycles

    Proposed rule

    RIN 2060-AJ62

    OIRA review period: 02/01/2002 to 04/22/2002

    Published 08/07/2002 (67 FR 51402) Significant changes

    Lengthy inserts were made to the preamble and the regulatory language in
    the CFR section. The most substantive change appeared to be the insertion
    of an entire new section on how to qualify for reduced fees within the
    regulatory provisions of the CFR section. The changes that appeared to be
    most substantive in the preamble included: (a) inserting requests for
    comments regarding many aspects of the proposed fee system (e.g., on
    minimum fees, alternative ways to adjust fees for inflation, various
    process questions, and EPA's cost analysis), (b) adding material on
    special provision fee payments and applications for certain types of
    manufacturers (and deleting the previous 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.

    No No

    The changes primarily affected the explanations of fee payments and
    application processes, including clarification of how to qualify for
    reduced fees, but did not change EPA's estimated costs of the proposed
    rule.

                                      Appendix II
                         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

    Proposed Non-Conformance Penalties for 2004 and Later Model Year Emission
    Standards for Heavy-Duty Diesel Engines and Heavy-Duty Diesel Vehicles

    Proposed rule

    RIN 2060-AJ73

    OIRA review period: 12/10/2001 to 12/20/2001

    Published 08/08/2002 (67 FR 51464) Significant changes

    The most significant comments and edits conveyed from OIRA to EPA on this
    rule addressed: (a) rewriting a section about an additional adjustment to
    "level the playing field" and the assumptions used by EPA (OIRA's position
    was that this secondary adjustment was not necessary), (b) discount rate
    (OIRA's position was that, per OMB Circular A-94, it was more appropriate
    to use a discount rate of 7 percent consistently throughout the rule and
    regulatory impact analysis-in some instances EPA had used a 3 percent
    discount rate, citing a recommendation by EPA's Science Advisory Board),
    (c) fuel prices (OIRA's position was that the estimated fuel price EPA
    used in its draft was excessive, and OIRA suggested that EPA instead use a
    3-to 5-year average of nationwide fuel prices), (d) significance of this
    proposed rule (OIRA's position was that the proposed rule was significant
    and potentially economically significant in light of the estimated
    nonconformance penalties), and (e) cost estimation (OIRA's position was
    that the basis for the cost estimates was unclear, among other issues, and
    OIRA suggested that EPA clarify and explicitly discuss its estimation
    method).

    (The proposed rule as published solicited comments on use of discount rate
    other than 7 percent and on using a 5-year average of fuel prices. In the
    final rule, EPA based its analysis on use of a 7 percent discount rate and
    a 5-year average for the price of fuel.)

    Unclear

    Overall, the actual economic impact of the rule (and any changes made to
    it) is unclear because the use of nonconformance penalties by
    manufacturers is optional. According to EPA, manufacturers are likely to
    choose whether or not to use nonconformance penalties based on their
    ability to comply with emissions standards. Nevertheless, changes
    regarding the discount rate and fuel price could have an effect on the
    potential costs and benefits of this rule. (A higher discount rate reduces
    the present value of future costs and benefits compared to more immediate
    costs and benefits.) In particular, the discount rate changes appeared to
    result in a slight decrease in the penalty amounts cited in the rule once
    the discount rate is changed to 7 percent. (As noted in the revised
    version of the Technical Support Document section, "Penalty Sensitivity to
    Discount Rate" the net effect of using a smaller discount rate would
    generally be penalties that were higher.)

    Yes

    OIRA was contacted before the formal review period by industry
    representatives from Cummins Inc. (letters to OIRA on 09/13/2001,
    10/12/2001, and 11/07/2001; meeting with OIRA on 10/01/2001) and
    Caterpillar Inc. (letter on 10/25/2001 and meeting on 11/14/2001), but
    there was no evidence of outside contacts within the formal review period
    for this proposed rule.

    (There were also many other documents on outside contacts in the dockets
    for this rulemaking, but they were dated during OIRA's formal review
    period for the final version of the rule.)

                                      Appendix II
                         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

    Control of Emissions from Spark Ignition Marine Vessels and Highway
    Motorcycles

    Proposed rule

    RIN 2060-AJ90

    OIRA review period: 01/16/2002 to 04/16/2002

    Published 08/14/2002 (67 FR 53050) Significant changes

    There were substantive changes in the preamble and the regulatory support
    document, along with minor editorial changes. However, there did not
    appear to be any substantive changes in the regulatory language of the CFR
    section.

    Substantive changes were made in the regulatory support document regarding
    some of the cost-benefit, and cost-effectiveness estimates (e.g., cost per
    motorcycle, cost increases, and fuel savings rates). In the preamble, the
    sections on regulatory flexibility alternatives and the Paperwork
    Reduction Act were expanded, while original 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.

    Yes

    The docket materials identified changes in cost-benefit and
    cost-effectiveness estimates for this rule. In aggregate, the estimated
    annual cost to manufacturers was reduced by $4 million per year and the
    estimated annual fuel savings was increased by $4.3 million per year.

    Yes

    Although there was no evidence of direct contact from outside parties
    during the formal review period for this rule, OMB had meetings with and
    received letters from several groups (representing both industry and
    environmental interests) on a previous related rule-GAO ID 41, from which
    this rule was spun off.

                                      Appendix II
                         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

                    EPA-Office of Solid Waste and Emergency Response

    Hazardous Waste Management System; Standardized Permit Corrective Action;
    and Financial Responsibility for RCRA Hazardous Waste Management
    Facilities

    Proposed rule

    RIN 2050-AE44

    OIRA review period: 05/10/2001 to 07/19/2001

    Published 10/12/2001 (66 FR 52192) Other material changes

    Among the revisions attributed to OMB in the preamble were (a) adding
    several inserts requesting comments on various aspects of the rule (e.g.,
    on ways to reduce the burden and cost of the permitting process), (b)
    adding a statement that storage of hazardous waste military munitions
    should continue under the individual permitting program, (c) deleting a
    short section proposing that "the regulatory agency may itself choose to
    initiate your conversion to a standardized permit," (d) adding an
    explanation of current regulatory responsibilities if a generator sends
    waste off-site for land disposal, (e) adding several paragraphs explaining
    the option of not requiring a closure plan, (f) 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.

    No No

                                      Appendix II
                         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

    Identification and Listing of Hazardous Waste; Addition of Manganese to
    Appendix VIII; Inorganic Chemical Manufacturing Waste; and CERCLA
    Hazardous Substance Designation and Reportable Quantities

    Final rule

    RIN 2050-AE49

    OIRA review period: 09/26/2001 to 10/31/2001

    Published 11/20/2001 (66 FR 58258) Significant changes

    Substantive changes were made throughout the preamble and CFR section of
    the notice in response to OMB's comments. Specifically, the rule as
    cleared by OMB deferred final action on all elements of the original
    proposal related to the waste constituent manganese (e.g., adding
    manganese as a regulated hazardous constituent).

    Yes

    Deferring regulatory action on manganese would also defer potential costs
    and benefits of the regulatory actions originally proposed by EPA.

    Yes

    OIRA was contacted by industry representatives from the Steel
    Manufacturers Association and American Iron and Steel Institute (sent
    letters 09/28/2001 and 10/19/2001; met with OIRA 10/16/2001), Cookson
    Group (sent letters 09/26/2001 and 10/18/2001), and Eastman (sent letter
    10/08/2001).

    The OIRA files also indicated that OIRA reviewed materials sent by some of
    these groups to the RCRA Information Center. Cookson Group also requested
    a meeting with OIRA.

    Resource Conservation and Recovery Act Burden Reduction Initiative; Office
    of Solid Waste Burden Reduction Project

    Proposed rule

    RIN 2050-AE50

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

    Published 01/17/2002 (67 FR 2518) Minor editoral changes or no changes No
    No

    EPA told us they made no substantive changes to the rule. The sensitivity
    analysis requested by OMB also did not result in any changes to the rule.

                                      Appendix II
                         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

    Amendments to the Corrective Action Management Unit [CAMU] Rule

    Final rule

    RIN 2050-AE77

    OIRA review period: 11/14/2001 to 12/19/2001

    Published 01/22/2002 (67 FR 2962) Other material changes

    The changes attributed to OMB in the redline/strikeout document were all
    in the preamble of the rule. In addition to several minor editorial
    changes (e.g., correcting spelling), changes attributed to OMB included
    (a) adding a couple of sentences to a paragraph discussing differences
    between generic minimum national design and operation standards for
    disposal units and requirements for site-specific clean-ups, (b) rewording
    and clarifying some statements and responses to public comments regarding
    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.)

                                         No No

    NESHAPS: Standards for Hazardous Air Pollutants for Hazardous Waste
    Combustors

    Interim final rule

    RIN 2050-AE79

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

    Published 02/13/2002 (67 FR 6792) Minor editoral changes or no changes No
    No

    The only changes marked were in the preamble, and all appeared to be
    minor. There were no changes in the CFR section of the rule.

                                      Appendix II
                         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

    NESHAPS: Standards for Hazardous Air Pollutants for Hazardous Waste
    Combustors

    Final rule

    RIN 2050-AE79

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

    Published 02/14/2002 (67 FR 6968) Minor editoral changes or no changes No
    No

    The only two changes clearly marked in the redline/strikeout document were
    in the preamble and appeared to be minor. There were no changes in the CFR
    section of the rule.

    Gasification of Hazardous Oil-Bearing Secondary Materials from the
    Petroleum Refining Industry to Produce Synthesis Gas Fuel

    Proposed rule

    RIN 2050-AE78

    OIRA review period: 10/17/2001 to 01/15/2002

    Published 03/25/2002 (67 FR 13684) Other material changes

    There were changes on most of the pages in the revised version of the
    rule. All of the substantive changes were in the preamble, including
    sizeable insertions of text that provided explanatory information not in
    the original version of the rule. In particular, there were lengthy
    inserts requesting comments on a variety of issues and options and also
    new text regarding the potential economic impacts. There were also many
    minor editorial changes throughout the preamble and some rewording in the
    CFR section.

    No No

    The changes regarding potential economic impacts just provided more
    explanation of the potential benefits of this rule. The estimated costs
    and benefits did not change.

                                      Appendix II
                         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

    Hazardous Waste Management System; Modification of the Hazardous Waste
    Program; Cathode Ray Tubes and Mercury-Containing Equipment

    Proposed rule

    RIN 2050-AE52

    OIRA review period: 12/21/2001 to 02/13/2002

    Published 06/12/2002 (67 FR 40508) Minor editoral changes or no changes

    According to EPA, the only change made at the suggestion of OMB was that
    EPA solicited comments on extending the speculative accumulation time of
    used, broken CRTs to "two or more years" instead of just "two years." A
    line-by-line comparison of the revised and original versions of the rule
    in the OIRA docket confirmed only minor changes in the preamble and no
    changes evident in the CFR section of this rule.

    No No

                                      Appendix II
                         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

    Oil Pollution Prevention Regulation: Non-Transportation-Related Onshore
    and Offshore Facilities; Revisions

    Final rule

    RIN 2050-AC62

    OIRA review period: 04/27/2001 to 10/15/2001

    Published 07/17/2002 (67 FR 47042) Other material changes

    The following changes were attributed to OMB in the preamble of the rule:
    (a) added two sentences to note that EPA will continue to evaluate and
    intends to request additional data and comments on the issue of modifying
    secondary containment requirements for small electrical and other types of
    equipment that use oil for operating purposes, (b) deleted a total of 10
    sentences in a section about discretionary provisions in the rule-all
    appeared to be related to wording changes or additional clarifications in
    response to comments, (c) expanded a paragraph 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.

    No No

    (However, the docket materials did show that EPA provided OIRA
    supplemental cost analyses as part of the revised version of the rule.)

                                      Appendix II
                         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

                                  EPA-Office of Water

    National Primary Drinking Water Regulations: Arsenic and Clarifications to
    Compliance and New Source Contaminant Monitoring

    Proposed rule

    RIN 2040-AB75

    OIRA review period: 06/22/2001 to 07/13/2001

    Published 07/19/2001 (66 FR 37617) Other material changes

    The significant OMB changes identified by the EPA memo were all in the
    preamble. (There was no regulatory language associated with this
    proposal.) EPA made changes to the following seven aspects of the preamble
    as a result of discussions with OMB: (1) changed questions in the requests
    for comments to be identical to the language used in the charges to the
    three review panels, (2) expanded the description of uncertainties in risk
    analysis, (3) included information specific to the recommendations from
    the Science Advisory Board on treatment technologies and from a Science
    Advisory Board advisory committee on 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.)

    No No

    (However, the OMB docket did include copies of letters and comments dated
    prior to the publication of the previous related rulemaking on
    01/22/2001.)

                                      Appendix II
                         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

    Minimizing Adverse Environmental Impact From Cooling Water Intake
    Structures at New Facilities Under Section 316(b) of the Clean Water Act,
    Phase I

    Final rule

    RIN 2040-AC34

    OIRA review period: 09/10/2001 to 11/08/2001

    Published 12/18/2001 (66 FR 65256) Significant changes

    Five major changes to the rule were attributed to OIRA, all of which
    appeared to provide greater flexibility and more alternatives to
    compliance with requirements and standards in the original draft of the
    rule. OIRA's five main changes were to (a) add criteria that would allow
    more facilities to qualify for lower performance standards, (b) change
    requirements so that facilities withdrawing between 2 million gallons per
    day (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, (c) change a requirement so that facilities only needed to
    use screens to minimize 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."

    Yes

    OIRA's changes would likely reduce the costs of the rule by providing
    regulated entities more flexibility and alternatives to compliance with
    the original standards and requirements of the rule. Their effect on
    potential benefits is not clear. Changes to the cost estimates were
    evident in the published version of the rule.

    Yes

    OMB met with Riverkeeper on 09/27/2001, and with representatives from
    Edison Electric Institute and EOP Group) on 10/29/2001.

                                      Appendix II
                         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

    National Primary Drinking Water Regulations: Long-Term 1 Enhanced Surface
    Water Treatment Rule

    Final rule

    RIN 2040-AD18

    OIRA review period: 06/13/2001 to 09/24/2001

    Published 01/14/2002 (67 FR 1812) Significant changes

    Although the EPA docket memo first stated that OMB had no significant
    comments on this rule, it went on to a long discussion about two major
    policy issues raised by OMB concerning (a) special primacy requirements
    for states and (b) the valuation of the cost of Cryptospirdiosis used in
    the economic analysis accompanying the final rule. The memo noted that
    both of these issues were elevated to Dr. Graham (OIRA) and Tracy Mehan
    (EPA Office of Water). OMB agreed to remove their objections to the
    special primacy requirements in this rule, but indicated intent to raise
    this issue in subsequent Safe Drinking Water Act regulatory packages. To
    address OMB's concerns about the valuation issue, the Office of Water and
    OMB agreed to expand this rule's benefit range by using two
    cost-of-illness values instead of one. The memo stated that other OMB
    comments were editorial in nature.

    (Note that the redline/strikeout document also shows many other changes in
    the 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.)

    Yes No

    In response to OMB's concern about EPA's valuation of the cost of
    Cryptospirdiosis used in the economic analysis, OMB and the Office of
    Water agreed to expand the rule's benefit range by using two
    cost-of-illness values instead of one. This second COI estimate that was
    added was lower and only valued lost work time and medical costs
    associated with Cryptospirdiosis. The other estimate remained the same as
    EPA's original and valued all loss categories included in the original
    published study used by EPA (valuing losses for medical costs, work time,
    productivity, and leisure time).

    Effluent Guidelines and Standards for the Meat Products Point Source
    Category (Revisions)

    Proposed rule

    RIN 2040-AD56

    OIRA review period: 12/21/2001 to 01/28/2002

    Published 02/25/2002 (67 FR 8582) Other material changes

    OMB and SBA suggested changes in two sections of the preamble of the
    proposed rule. In response to those suggestions, EPA: (a) revised the
    pretreatment discussion in the preamble to restate the results from EPA's
    preliminary data collection on meat and poultry product indirect
    dischargers and related POTW interference events and (b) added a lengthy
    paragraph in response to OMB's and SBA's request to provide a more
    thorough explanation of how EPA developed four different production size
    classifications for each meat and poultry product subcategory.

    No No

                                      Appendix II
                         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

    National Pollutant Discharge Elimination System: Proposed Regulations to
    Establish Requirements for Large Cooling Water Intake Structure at
    Existing Power Generating Facilities

    Proposed rule

    RIN 2040-AD62

    Economically significant

    OIRA review period: 12/28/2001 to 02/28/2002

    Published 04/09/2002 (67 FR 17122) Significant changes

    EPA identified major changes made at the suggestion or recommendation of
    OIRA in both the preamble and CFR sections of the proposed rule. Overall,
    these OIRA changes lowered the performance standard in the rule and made
    compliance requirements more flexible by allowing, among other things,
    options for a site-specific approach to minimizing environmental harm. The
    changes also broadened a restoration option, whereby firms may restore
    environmental harm rather than comply with the designated performance
    standard.

    Many changes to the proposed rule language in eight sections of the
    proposed CFR amendments were attributed to OIRA. The most extensive
    changes were to sections 125.94 (10 of 14 major changes in this section
    were attributed to OIRA) and 125.95 (previously 125.96 - all 7 major
    changes 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.

    Yes

    OIRA recommended that EPA select a regulatory alternative that OIRA
    believed would yield substantially greater net benefits. 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.

    Yes

    Industry groups, such as Edison Electric Institute, EOP Group, and
    Cinergy, sent letters and provided materials to OIRA. Representatives of
    those groups and Public Service Electric and Gas, TXU, Progress Energy,
    Teco Energy, Constellation Energy Group, Allegheny Energy, Minnesota
    Power, and Migrant Corp. met with OIRA on 02/08/2002. Riverkeeper (an
    environmental interest group) met with OMB on 02/07/2002.

                                      Appendix II
                         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

    Final Revisions to the Clean Water Act Regulatory Definition of "Fill
    Material" and "Discharge of Fill Material"

    Final rule

    RIN 2040-AD51

    OIRA review period: 05/01/2002 to 05/02/2002

    Published 05/09/2002 (67 FR 31129)

    (Note that this was a joint rulemaking of the Department of the Army's
    Corps of Engineers and EPA.)

    Significant changes

    The most substantive change attributed to OIRA in the preamble and
    regulatory language of the rule revised the definition of fill material as
    follows - "The term fill material does not include trash,or garbage, or
    similar materials unless such materials are to be used to create any
    structure or infrastructure in waters of the United States, such as an
    artificial reef or berm. (According to an EPA official, the impact of the
    change was to make the definition clearer so that fill material permit
    applicants could not ask to use trash or garbage as fill material in
    creating a structure or infrastructure.) Many of the other OIRA-suggested
    changes revised discussions of relevant court actions and decisions
    related to this rulemaking.

    Unclear No

    Revising original regulatory There was no evidence

    language to exclude the of contact before or

    possible use of trash, during OIRA's formal

    garbage, or similar review. However, in a

    materials as fill material for joint letter dated

    some purposes might 05/03/2002, one day

    affect potential costs and after OIRA cleared this

    environmental benefits.	rule, 10 environmental groups-American Rivers,
    Clean Water Action, Earthjustice, Friends of the Earth, League of
    Conservation Voters, Mineral Policy Center, National Audubon Society,
    National Wildlife Federation, Natural Resources Defense Council, and the
    Sierra 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 andOMB 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.)

                                      Appendix II
                         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

    70 Effluent Limitation Significant changes Unclear
          Guidelines and New
           Source Performance There were substantive changes in both the The memo
                                                                  in EPA's docket
          Standards for the proposed regulatory options in the CFR regarding OIRA
          changes
          Construction and amendments and the preamble discussion of did not
          directly address
          Development Category those regulatory options. At the suggestion
          whether there were
                 or recommendation of OIRA, the proposed changes in the potential
          Proposed rule regulation no longer included the storm water costs and
          benefits of the
               management or postconstruction regulatory rule. The EPA docket did
          RIN 2040-AD42 options from the original draft. Also, the not include
          sufficient
           active construction options were changed to information to allow for a
          Economically significant identify and discuss the following three
          detailed comparison of
                  regulatory options: (1) inspection and revised cost and benefit
               OIRA review period: certification of construction site erosion and
                                                        data. However, the nature
            03/01/2002 to sediment controls, for sites one acre or of the changes
                                                                      made to the
               05/15/2002 larger, (2) codification of the Construction regulatory
                                                                   options should
                       General permit plus inspection and have had some effect on
          Published 06/24/2002 certification requirements, for sites five acres
          the proposed rule's
          (67 FR 42644) or larger, and (3) no regulation. The potential costs and
                  revisions to the regulatory proposal required benefits.
                         corresponding revisions to the preamble.

    Yes

    The OIRA files on this rulemaking included a document from the ELG Working
    Group (a coalition of interested trade associations) entitled "Issues
    Raised By The Construction and Development Effluent Limitations Guidelines
    Working Group Before the White House Office of Management and Budget
    Office of Information and Regulatory Affairs" (dated 02/04/2002 - about 1
    month prior to the formal review period).

                                      Appendix II
                         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

    Effluent Limitations Guidelines, Pretreatment Standards, and New Source
    Performance Standards for the Iron and Steel Manufacturing Point Source
    Category

    Final rule

    RIN 2040-AC90

    OIRA review period: 03/29/2002 to 04/30/2002

    Published 10/17/2002 (67 FR 64216) Significant changes Unclear

    At the suggestion of OMB, EPA revised the As described in the existing
    regulation and supporting preamble regulation that this rule was
    discussion for the "water bubble" provision (a amending, the water
    voluntary regulatory flexibility mechanism to bubble provision had a allow
    for trading of identical pollutants at any minimum net reduction single
    steel facility with multiple compliance provision-if a facility used
    points). This change eliminated an existing this tool, the amount of the
    minimum net reduction provision that had pollutant discharges applied if
    facilities used the water bubble pursuant to the bubble had alternative.
    to be 10 percent to 15

    percent less than the discharges otherwise authorized by the rule without
    the bubble. At the suggestion of OMB, the revised final rule eliminated
    this minimum net reduction provision.

    However, the net effect on costs and benefits of this rule are unclear.
    While this change eliminated a requirement for additional reductions in
    pollutant discharges if the water bubble tool is used, it also provided
    greater flexibility for facilities to use this tool to achieve the overall
    pollutant reductions required by 40 CFR 420 at the least cost.

    Yes

    Representatives of industry groups contacted OIRA prior to OIRA's formal
    review period for this rulemaking. On 03/04/2002, representatives of the
    Steel Manufacturers Association and the Specialty Steel Industry of North
    America sent a letter to Dr. Graham with comments anda request for a
    meeting. On 03/19/2002, OIRA held a meeting with steel industry
    representatives (including those who requested the meeting on March 4).

    (Note also that the OIRA files on its review of this rule indicated that
    OIRA had reviewed the substantive comments from the proposed rule stage.
    The water bubble provision was the subject of some of the public comments
    on the 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.

                                      Appendix II
                         Summary Information on Selected Rules
                         Submitted to OIRA for Executive Order
                         Review between July 2001 and June 2002

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

                                                                    Evidence of
                                             Evidence that outside     subsequent
                                                           parties       activity
              Executive order                contacted or met with regarding this
                  review                                      OIRA
    GAO ID   submission     Reason for       regarding this       submission
                              OIRA's return       submission

    DOT-FAA Part 145 Review: Repair Stations

    Final rule

    RIN 2120-AC38

    OIRA review period: 07/13/2001 to 07/20/2001 OIRA cited concerns from
    other federal agencies and unease about complicating relations with other
    countries in its rationale for returning the rule.

    DOT officials confirmed that the Department of State voiced concerns about
    the wording of certain provisions. However, they pointed out that FAA had
    worked out wording changes with the Department of State prior to
    submitting the rule for OIRA's review. They believed that OIRA's request
    that FAA withdraw the rule (see GAO ID 84) and OIRA's subsequent return of
    the resubmitted rule (this case) were based on an OIRA misunderstanding
    that the Department of State's concerns had not been addressed.

    Yes

    On 07/09/2001-2 days before FAA withdrew the original submission of this
    rule-the Aeronautical Repair Station Association, the Airline Suppliers
    Association and other business representatives sent a letter to the OMB
    Director with a copy to OIRA asking that OIRA send the rule back to FAA
    with instructions to prepare a Supplemental Notice of Proposed Rulemaking.

    On 07/26/2001-about 1 week after OIRA returned the rule to FAA and FAA
    resubmitted to rule to OIRA-OIRA met with representatives from the
    Aeronautical Repair Station Association, Aerospace Industries Association,
    Air Transport Association of America, Aircraft Electronics Association,
    Aircraft Owners and Pilots Association, Airline Suppliers Association,
    General Aviation Manufacturers Association, National Air Carrier
    Association, National Air Transport Association, Professional Aviation
    Maintenance Association, The Boeing Company, General Electric Aircraft
    Engines, Goodrich, Honeywell, Rockwell Collins, and United Technologies
    Corporation.

    There were a series of activities regarding this rule both before and
    after this return. On 07/02/2001, FAA submitted a draft of this rule for
    OIRA's review. On 07/11/2001, FAA withdrew the rule (at OIRA's suggestion
    according to FAA officials.) (This withdrawal is covered by GAO ID 84.)

    On 07/13/2001, FAA resubmitted the rule for OIRA's review, and OIRA
    returned it on 07/20/2001 (the sequence covered by this particular case).
    That same day FAA resubmitted the rule to OIRA.

    On 07/30/2001, OIRA completed its review of the rule (with the outcome
    coded "consistent with no change"). The rule was published on 08/06/2001
    (66 FR 41088).

    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     subsequent
                                                           parties       activity
              Executive order                contacted or met with regarding this
                  review                                      OIRA
    GAO ID   submission     Reason for       regarding this       submission
                              OIRA's return       submission

    Certification of Pilots, Aircraft and Repairmen for the Operation of Light
    Sport Aircraft

    Proposed rule

    RIN 2120-AH19

    OIRA review period: 07/06/2001 to 08/09/2001 OIRA returned this rule
    because of concerns that the regulatory analysis did not adequately
    support the rule. OIRA noted that FAA used a baseline with which to
    compare the rule that assumed that, in the absence of this rule, FAA would
    propose a more stringent set of standards than in the proposal. Although
    OIRA had no objection to FAA analyzing an alternative that was more
    stringent than the proposal, OIRA believed that the benefits of the
    proposal should be compared with a status quo that did not include the
    artificial "baseline" assumption of increased stringency. OIRA also
    suggested that, as part of an improved analysis of alternatives, FAA 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.

    No 	FAA reexamined its regulatory evaluation and resubmitted the rule to
    OIRA on 12/17/2001.

    OIRA completed its review of the resubmitted rule on 01/03/2002 (outcome
    code "consistent with change") (see GAO ID 28).

    The proposed rule was published on 02/05/2002 (67 FR 5368).

    Corrosion Control Plan

    Proposed rule

    RIN 2120-AE92

    OIRA review period: 03/02/2001 to 09/18/2001 OIRA returned this rule
    because of concerns about the agency's regulatory analysis, primarily
    related to the cost-benefit analysis. Many of these same concerns applied
    to the analysis of a related FAA rule on aging aircraft. (See related rule
    at GAO ID 76.) Although FAA responded to some of these concerns in a
    revised regulatory evaluation on 07/27/2001, OIRA suggested that a
    concurrent review of this rule and the aging aircraft rule would help
    resolve OIRA's concerns and assist in determining the most cost-effective
    way to detect and correct 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.

    No 	On 06/18/2002, FAA resubmitted this rule to OIRA.

    On 09/16/2002, OIRA completed its review of the resubmitted rule (outcome
    code "consistent with no change").

    The proposed rule was published on 10/03/2002 (67 FR 62142).

    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     subsequent
                                                           parties       activity
              Executive order                contacted or met with regarding this
                  review                                      OIRA
    GAO ID   submission     Reason for       regarding this       submission
                              OIRA's return       submission

    Retrofit of Improved Seats in Air Carrier Transport Category Airplanes

    Proposed rule

    RIN 2120-AC84

    OIRA review period: 05/14/2002 to 05/16/2002 According to the OIRA
    database, this rule was returned to FAA because it was an improper
    submission.

    However, FAA officials disputed that characterization. They stated that
    OIRA "had a slew of questions" to which FAA gave a 12-page response. They
    said that, after the return and an exchange of OIRA suggestions and FAA's
    response, FAA added language to further explain the plan for improving the
    seat certification process.

    No 	On 06/17/2002, FAA resubmitted this rule for OIRA's review.

    OIRA completed its review of the resubmitted version on 09/24/2002
    (outcome code "consistent with change").

    The proposed rule was published on 10/04/2002 (67 FR 62294).

    Aging Airplane Safety

    Final rule

    RIN 2120-AE42

    OIRA review period: 07/27/2001 to 09/18/2001 OIRA returned this rule due
    to concerns about the regulatory analysis. Many of these same concerns
    applied to the analysis of a related FAA corrosion control plan rule (GAO
    ID 74). Although FAA responded to some of these concerns in a revised
    regulatory evaluation on 07/27/2001, OIRA believed that a concurrent
    review of this rule and the corrosion control plan rule would help resolve
    OIRA's concerns and assist in determining the most cost-effective way to
    detect and correct problems affecting the safety of aging aircraft.
    Because resolution of these concerns would take additional time, OIRA
    returned the two rules to DOT-FAA for reconsideration.

    No 	On 06/18/2002, FAA resubmitted this rule to OIRA.

    On 09/24/2002, OIRA completed its review (outcome code "consistent with
    change"). According to FAA, the changes were to issue this as an interim
    final rule with a request for comment, instead of as a final rule, and to
    expand the benefit analysis in the regulatory evaluation.

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

    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     subsequent
                                                           parties       activity
              Executive order                contacted or met with regarding this
                  review                                      OIRA
    GAO ID   submission     Reason for       regarding this       submission
                              OIRA's return       submission

    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 Tire Pressure
    Monitoring Systems

    Final rule

    RIN 2127-AI33

    Economically significant

    OIRA review period: 12/17/2001 to 02/12/2002 OIRA returned this rule
    because it did not believe the analysis performed by NHTSA adequately
    demonstrated that the agency selected the best available alternative.

    Specifically, OIRA returned the rule for reconsideration of two analytic
    concerns related to safety. First, OIRA identified a regulatory
    alternative that NHTSA had not explicitly analyzed-considering the impact
    of regulatory alternatives on the availability of anti-lock brake systems.
    Second, OIRA said that the technical foundation for NHTSA's estimates of
    safety benefits needed to be better explained and subjected to sensitivity
    analysis.

    Yes, prior to the formal review period

    On 10/26/2001, OIRA and DOT officials met with representatives of the
    Alliance of Automobile Manufacturers and various member companies,
    including Daimler-Chrysler, Ford, Toyota, and VW of America.

    (There was also a meeting after the formal review period - on 02/21/2002 -
    with the Rubber Manufacturers' Association.)

    On 05/28/2002, NHTSA submitted a final rule to OIRA that contained the
    changes suggested by OIRA in the return letter.

    OIRA completed its review of the rule on 05/29/2002 (outcome code
    "consistent with no change").

    The final rule was published on 06/05/2002 (67 FR 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).

                                      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     subsequent
                                                           parties       activity
              Executive order                contacted or met with regarding this
                  review                                      OIRA
    GAO ID   submission     Reason for       regarding this       submission
                              OIRA's return       submission

    EPA-Office of Air and Radiation

    FY 2000 Report to Congress on EPA's 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 OIRA returned this item
    because it was No N/A an improper submission.

                                  EPA-Office of Water

    Federal Water Quality Standards for Indian Country and Other Provisions
    Regarding Federal Water Quality Standards

    Proposed rule

    RIN 2040-AD46

    OIRA review period: 06/29/2001 to 10/02/2001 OIRA's return letter cited a
    number of concerns about this rule. In particular, the return letter noted
    that EPA did not provide a quantitative analysis of the costs and benefits
    that would result from this action. OIRA pointed out that the preamble
    identified nearly 300 point sources on tribal lands that would be directly
    affected by the rule and that there might be substantial numbers of
    nonpoint sources and point sources upstream of tribal lands that could
    also 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. No No

    According to an EPA official, EPA has not resubmitted this rule to OIRA.

    Source: GAO analysis.

                                      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 Evidence of
                                                         met
                                                          with OIRA    subsequent
                        suggestion or                                    activity
    GAO Executive  recommendation of Reason for        regarding    regarding
             order                      withdrawal of        this        this
           review                        the submitted
    ID  submission       OIRA?             rule        submission  submission

    APHIS Importation of The withdrawal was

    Clementines From characterized by APHIS

    Spain as a mutual decision by APHIS and OIRA. Proposed rule

    RIN 0579-AB40

    OIRA review period: 04/26/2002 to 05/21/2002 According to APHIS, OIRA No
    APHIS resubmitted the

    and APHIS mutually rule to OIRA on

    decided to withdraw this 06/28/2002.

    rule to avoid violating the

    90-day limit on reviews OIRA completed

    under Executive Order review of the rule on

    12866. 	07/05/2002 (outcome code "consistent with change"). According to
    APHIS, OIRA had some changes to better explainthe 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).

    Appendix II
    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 Evidence of
                                                         met
                                                          with OIRA    subsequent
                        suggestion or                                    activity
    GAO Executive  recommendation of Reason for        regarding    regarding
             order                      withdrawal of        this        this
           review                        the submitted
    ID  submission       OIRA?             rule        submission  submission

    FDA

    Records and Reports FDA characterized the
    Concerning withdrawal as a mutual
    Experience with decision by FDA and
    Approved New Animal OIRA.
    Drugs; Final Rule

    (Listed in OIRA's
    database at time of
    GAO's review as:
    Records and Reports
    Concerning
    Experience with
    Approved New Animal
    Drugs; Implementing of
    Title I of the Generic
    Animal Drug and
    Patient [sic] Term
    Restoration Act)

    Final rule

    RIN 0910-AA02

    OIRA review period:
    08/28/2001 to
    11/26/2001

    According to FDA, OIRA and FDA made a mutual decision to withdraw the
    original final rule and reissue it as an interim final rule. Issuing this
    rule as an interim final rule with an opportunity for public comment was a
    compromise decision to address OMB's concerns regarding the length of time
    since publication of the proposed rule (12/17/1991) while not further
    delaying the rule by reproposing it.

    No 	FDA resubmitted the rule to OIRA on 11/29/2001.

    OIRA completed review of the rule on 01/08/2002 (outcome code "consistent
    with change"). According to FDA, OIRA had some clarifying comments, but
    these were not substantive (see GAO ID 15 in this appendix for additional
    details).

    An interim final rule was published on 02/04/2002 (67 FR 5046). (The
    interim final rule was published again on 07/31/2002, delaying the
    effective date indefinitely in order to address Paperwork Reduction Act of
    1995 requirements and comments received on the interim final rule.)

    Appendix II
    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 Evidence of
                                                         met
                                                          with OIRA    subsequent
                        suggestion or                                    activity
    GAO Executive  recommendation of Reason for        regarding    regarding
             order                      withdrawal of        this        this
           review                        the submitted
    ID  submission       OIRA?             rule        submission  submission

    Current Good Manufacturing Practice in Manufacturing, Packing, or Holding
    Dietary Ingredients and Dietary Supplements

    Proposed rule

    RIN 0910-AB88

    Economically significant

    OIRA review period: 03/28/2001 to 12/19/2001 No

    The Department of Health and Human Services (HHS) withdrew the rule.

    According to FDA, this rule previously had been submitted to OIRA for
    review but was initially withdrawn in response to the Card memo. Although
    FDA then resubmitted this rule to OIRA in March 2001, new policy makers in
    HHS wanted to reconsider the rule. Therefore, HHS decided to again
    withdraw the rule from OIRA's review.

    No 	FDA resubmitted a version of this rule to OIRA on 10/04/2002.

    OIRA completed review of the resubmitted rule on 01/16/2003 (outcome code
    "consistent with change").

    The proposed rule was published on 03/13/2003 (68 FR 12158).

    Appendix II
    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 Evidence of
                                                         met
                                                          with OIRA    subsequent
                        suggestion or                                    activity
    GAO Executive  recommendation of Reason for        regarding    regarding
             order                      withdrawal of        this        this
           review                        the submitted
    ID  submission       OIRA?             rule        submission  submission

    DOT-FAA

    Part 145 Review: Yes Repair Stations According to FAA, the Final rule
    agency withdrew the rule at OIRA's RIN 2120-AC38 suggestion.

    OIRA review period: 07/02/2001 to 07/11/2001

    FAA officials stated that Yes

    OIRA suggested the

    withdrawal due to "concerns On 07/09/2001- 2

    from industry and the State days before the

    department."	withdrawal-the Aeronautical Repair Station Association, the
    Airline Suppliers Association, and 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.)

    (See chronology presented under GAO ID 72, which covers the version of
    this rule that was returned by OIRA for reconsideration by DOT-FAA.)

    Appendix II
    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 Evidence of
                                                         met
                                                          with OIRA    subsequent
                        suggestion or                                    activity
    GAO Executive  recommendation of Reason for        regarding    regarding
             order                      withdrawal of        this        this
           review                        the submitted
    ID  submission       OIRA?             rule        submission  submission

                                       DOT-NHTSA

          Light Truck      No         According to NHTSA    No  NHTSA resubmitted
              Average                                                           a
        Fuel Economy                officials, they              proposed rule to
                                    withdrew the                             OIRA
    Standard Model NHTSA         rule because the agency      on 01/10/2002.
                 Year withdrew the
            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           "consistent with
                                    freeze
        Economically                would soon be lifted        change" - see GAO
                                    (as it                                     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.

    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 with OIRA

    In communications with OIRA, marine and highway motorcycle industry
    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

                                      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 Nonconformance Penalties for 2004 and Later Model Year Emission
      Standards for Heavy-duty Diesel Engines and Heavy-duty Diesel Vehicles

    GAO ID 53
    Agency: EPA
    RIN: 2060-AJ73
    Rulemaking stage at time of review: Proposed
    Date submitted to OMB for review: December 10, 2001
    Date OMB review completed: December 20, 2001
    Result of Reviews: Consistent With Change

    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

                                      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 with OIRA

    Regulated parties sent comments to OIRA and met with OIRA officials on
    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's Suggestion

    OIRA initiated an increase (from 3 percent to 7 percent) in the discount
    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.

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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 with OIRA

    Also on September 26, 2001, legal counsel for the Cookson Group (an
    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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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 OIRA's Suggestion

    On October 31, 2001, OIRA's review of the rule ended, and the rule was
    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.

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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    Minimizing Adverse GAO ID 65

    Agency: EPA

      Environmental Impact RIN: 2040-AC34

    from Cooling Water Rulemaking stage at time of review: Final

    Intake Structures at 	Date submitted to OMB for review: September 10, 2001
    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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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 OIRA's Suggestion

    Five substantive changes were made to the rule due to OIRA's suggestions.

    o 	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.

    o 	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).

    o 	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.)

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    o 	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)."

    o 	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

    Intake Structures)	Date submitted to OMB for review: December 28, 2001
    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-

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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 with OIRA

    On January 15, 2002, EPA provided OIRA with a copy of slides from a
    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."

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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 OIRA's Suggestion

    On February 14, 2002, EPA submitted a summary of the revised regulatory
    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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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

    Standards for the 	Date submitted to OMB for review: March 1, 2002 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

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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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 OIRA's Suggestion

    In a memo regarding interagency review, dated May 22, 2002 with no author
    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.

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    Effluent Limitations GAO ID 71

    Agency: EPA

      Guidelines for the Iron RIN: 2040-AC90

    and Steel Rulemaking stage at time of review: Final

    Manufacturing Point 	Date submitted to OMB for review: March 29, 2002 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 with OIRA

    Counsel for Steel Manufacturers Association and Specialty Steel Industry
    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 eliminated the existing minimum net
    reduction provision that applied if facilities used a "water bubble"
    alternative. Because of the elimination of

        OIRA's Suggestion

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

    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

    Appendix III
    Case Studies on Significantly Affected Rules
    With Evidence That OIRA Was Contacted by
    External Parties

    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).

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

      Part 145 Review: Repair Stations

    GAO IDs 84 and 72
    Agency: DOT-FAA
    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 with OIRA

    On July 9, 2001, the Aeronautical Repair Station Association (ARSA) and
    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.

                                      Appendix III
                      Case Studies on Significantly Affected Rules
                        With Evidence That OIRA Was Contacted by
                                    External Parties

        Actions Taken at OIRA's Suggestion

    On July 11, 2001, FAA withdrew the rule from OIRA review. An FAA
    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.

    Appendix IV

                        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."

                                      Appendix IV
                        Status of 23 High Priority Review Rules

                             (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.

                                      Appendix IV
                        Status of 23 High Priority Review Rules

                             (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."

                                      Appendix IV
                        Status of 23 High Priority Review Rules

                             (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.

                                      Appendix IV
                        Status of 23 High Priority Review Rules

                             (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.

    Appendix V

    Comments from the Office of the Information and Regulatory Affairs

    Appendix V
    Comments from the Office of the Information
    and Regulatory Affairs

    Appendix V
    Comments from the Office of the Information
    and Regulatory Affairs

    Appendix V
    Comments from the Office of the Information
    and Regulatory Affairs

    Appendix V
    Comments from the Office of the Information
    and Regulatory Affairs

    (450138)

    GAO's Mission	The General Accounting Office, the audit, evaluation and
    investigative arm of Congress, exists to support Congress in meeting its
    constitutional responsibilities and to help improve the performance and
    accountability of the federal government for the American people. GAO
    examines the use of public funds; evaluates federal programs and policies;
    and provides analyses, recommendations, and other assistance to help
    Congress make informed oversight, policy, and funding decisions. GAO's
    commitment to good government is reflected in its core values of
    accountability, integrity, and reliability.

      Obtaining Copies of GAO Reports and Testimony

    The fastest and easiest way to obtain copies of GAO documents at no cost
    is through the Internet. GAO's Web site (www.gao.gov) contains abstracts
    and full-text files of current reports and testimony and an expanding
    archive of older products. The Web site features a search engine to help
    you locate documents using key words and phrases. You can print these
    documents in their entirety, including charts and other graphics.

    Each day, GAO issues a list of newly released reports, testimony, and
    correspondence. GAO posts this list, known as "Today's Reports," on its
    Web site daily. The list contains links to the full-text document files.
    To have GAO e-mail this list to you every afternoon, go to www.gao.gov and
    select "Subscribe to e-mail alerts" under the "Order GAO Products"
    heading.

    Order by Mail or Phone	The first copy of each printed report is free.
    Additional copies are $2 each. A check or money order should be made out
    to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
    Orders for 100 or more copies mailed to a single address are discounted 25
    percent. Orders should be sent to:

    U.S. General Accounting Office 441 G Street NW, Room LM Washington, D.C.
    20548

    To order by Phone: 	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
    512-6061

    To Report Fraud, 	Contact: Web site: www.gao.gov/fraudnet/fraudnet.htm

      Waste, and Abuse in E-mail: fraudnet@gao.gov

    Federal Programs Automated answering system: (800) 424-5454 or (202)
    512-7470

    Public Affairs	Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202)
    512-4800 U.S. General Accounting Office, 441 G Street NW, Room 7149
    Washington, D.C. 20548

                                   Presorted Standard
                                  Postage & Fees Paid
                                          GAO
                                    Permit No. GI00

    United States
    General Accounting Office
    Washington, D.C. 20548-0001

    Official Business
    Penalty for Private Use $300

    Address Service Requested
    *** End of document. ***