Regulatory Reform: Implementation of the Regulatory Review Executive
Order (Testimony, 09/25/96, GAO/T-GGD-96-185).

Pursuant to a congressional request, GAO discussed the implementation of
Executive Order 12866, which is intended to improve regulatory planning
and review. GAO noted that: (1) the extent of federal agencies'
cost-benefit analyses of proposed regulations depends on whether the
regulatory action is economically significant or significant for
noneconomic reasons; (2) agencies are required to provide the Office of
Information and Regulatory Affairs (OIRA) with their cost-benefit
analyses of the regulatory action, but agencies often do not perform
these analyses because they believe the analyses are not worth the time
and effort; (3) OIRA provided cost-benefit analyses for 28 of 29
economically significant regulatory actions reviewed, but 2 of these
analysis did not contain all required elements; (4) 14 significant
noneconomic regulatory actions did not have cost-benefit analyses for
various reasons; (5) although there was evidence of OIRA involvement in
all regulations reviewed, the data was insufficient to determine whether
OIRA-recommended changes were made; (6) at present, OIRA reviews are
limited to only significant regulatory actions; (7) OIRA works
informally with agencies during regulations' development and its
influence may often be indirect and subtle; (8) for 21 of 32 rules,
OIRA-suggested changes appear to have been substantive; and (9) periodic
agency reviews of regulations have resulted in the elimination or
revision of some regulations, but the overall regulatory burden appears
not to have been significantly reduced because of regulatory
obsolescence and duplication and the addition of new regulations.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-96-185
     TITLE:  Regulatory Reform: Implementation of the Regulatory Review 
             Executive Order
      DATE:  09/25/96
   SUBJECT:  Regulatory agencies
             Federal regulations
             Reengineering (management)
             Executive orders
             Paperwork
             Economic analysis
             Cost effectiveness analysis
             Legislative procedures
             Interagency relations
             Evaluation methods
IDENTIFIER:  EPA National Emissions Standards for Hazardous Air 
             Pollutants
             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed 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.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Before the Subcommittee on Financial
Management and Accountability
Committee on Governmental Affairs
United States Senate

For Release on Delivery
Expected at
10:00 a.m.  EDT
Wednesday
September 25, 1996

REGULATORY REFORM - IMPLEMENTATION
OF THE
REGULATORY REVIEW
EXECUTIVE ORDER

Statement of
L.  Nye Stevens
Director, Federal Management and Workforce Issues
General Government Division

GAO/T-GGD-96-185

GAO/GGD-96-185T


(410062)


Abbreviations
=============================================================== ABBREV

  CFR - Code of Federal Regulations
  DOT - Department of Transportation
  EPA - Environmental Protection Agency
  FDA - Food and Drug Administration
  HUD - Department of Housing and Urban Development
  MRB - Mortgagee Review Board
  OFR - Office of the Federal Register
  OIRA - Office of Information and Regulatory Affairs
  OMB - Office of Management and Budget
  OSHA - Occupational Safety and Health Administration
  RISC - Regulatory Information Service Center
  VA - Department of Veterans Affairs

REGULATORY REFORM:  IMPLEMENTATION
OF THE REGULATORY REVIEW EXECUTIVE
ORDER
====================================================== Chapter SUMMARY

Executive Order 12866 was intended to improve regulatory planning and
coordination and is administered by OMB's Office of Information and
Regulatory Affairs (OIRA).  At the Committee's request, GAO examined
three issues:  (1) implementation of the order's cost-benefit
analysis requirements, (2) OIRA changes to agencies' proposed
regulations, and (3) agencies' efforts to eliminate and revise
regulations.  GAO did not attempt to assess the quality of the
cost-benefit analyses or their effect on rules, the quality of the
regulatory reviews OIRA conducted, or the ultimate value of the
administration's regulatory reform effort. 

The executive order states that agencies should submit detailed
cost-benefit analyses to OIRA for all economically significant
regulatory actions, and GAO found such analyses at OIRA for 28 of the
29 such final rules issued in 1995.  OIRA said the other such rule
did not need a full cost-benefit analysis because it was implementing
a statutory requirement.  The order also states that all regulatory
actions that are significant for noneconomic reasons should have an
"assessment of costs and benefits." GAO found that 14 of the 23
significant rules that it examined did not have such an assessment,
and OIRA said these rules did not need an assessment because of
particular circumstances in each case. 

Although aggregate statistics indicate that the proportion of
regulations that changed while under OIRA review has increased, the
source of those changes is not clear.  GAO examined OIRA and agency
files for the Environmental Protection Agency (EPA) and Department of
Transportation (DOT) regulations that the aggregate data indicated
had changed.  It appeared that most of these rules were changed at
least in part because of suggestions or recommendations by OIRA, and
most of the changes appeared significant.  However, in about a third
of the cases it was unclear whether any OIRA-recommended changes had
been made.  In contrast to the executive order's requirement, only a
few of the files clearly indicated what changes had been made to the
rules because of OIRA. 

GAO found that EPA and DOT reports on the number of pages of
regulations they had eliminated were generally accurate.  However,
because new regulations are being added at the same time that
regulations are being eliminated, the total number of pages of
regulations may actually increase in some agencies.  Page
eliminations are often being done because the rules are obsolete or
duplicative; revisions are often intended to clarify or update rules. 
GAO's analysis indicated that many of the page eliminations did not
appear to reduce regulatory burden, but GAO could not determine
whether burden was likely to be reduced as a result of most of the
revisions. 


REGULATORY REFORM:  IMPLEMENTATION
OF THE REGULATORY REVIEW EXECUTIVE
ORDER
==================================================== Chapter STATEMENT

Mr.  Chairman and Members of the Committee: 

We are pleased to be here today to discuss the implementation of
Executive Order 12866, "Regulatory Planning and Review." Issued on
September 30, 1993, the order was designed to, among other things,
"enhance planning and coordination with respect to both new and
existing regulations." It outlines the administration's regulatory
philosophy and principles, describes the organization of the federal
regulatory system, and initiated a process to review and revise or
eliminate certain existing regulations.  That review process
ultimately became part of the administration's overall regulatory
reform effort.\1 The order also allocates responsibilities to both
federal agencies and the Office of Management and Budget (OMB) in a
centralized regulatory review process, and recognizes OMB's Office of
Information and Regulatory Affairs (OIRA) as the repository of
expertise on regulatory issues.\2

As the Chairman and Ranking Member of this Subcommittee requested, we
focused our review on three issues:  (1) the extent to which agencies
are adhering to and OIRA is applying the executive order's
cost-benefit analysis requirements; (2) whether OIRA is significantly
changing agencies' proposed regulations during its review process;
and (3) whether agencies are eliminating regulations and, if so,
whether the elimination and revision of regulations are reducing
regulatory burden.  The methodology we used concerning each issue
will be discussed in detail later, but in general we met with OIRA
and agency officials and reviewed OIRA and agency files regarding
specific regulations. 

It is also important that I also describe what we did not do.  We did
not reach any overall conclusions regarding the quality of the
regulatory reviews OIRA conducted or the ultimate value of the
administration's regulatory reform effort.  Neither did we attempt to
assess the quality of the cost-benefit analyses that agencies
conducted or how those analyses affected agencies' decisionmaking. 
However, another GAO review currently underway is examining
qualitative aspects of selected cost-benefit analyses prepared by the
Environmental Protection Agency (EPA), including the extent to which
common assumptions are used in preparing such analyses, regulatory
alternatives are being evaluated, and potential benefits are
monetized.  Our review focused on the three issues I mentioned, and
as I will describe later, data limitations prevented us from fully
addressing some of those issues. 


--------------------
\1 Regulatory reform is one element of the administration's
"reinventing government" initiative.  For a discussion of the reform
proposals, see Regulatory Reform:  How Can Congress Assess the
Administration's Initiatives?  (GAO/T-GGD-95-206, July 18, 1995). 

\2 OIRA was created by the Paperwork Reduction Act of 1980.  It
oversees agency activity in three areas:  regulation, collection of
information, and information resources management.  Regulation and
information collection review staff currently include a deputy
administrator, 3 branch chiefs, 3 administrative support assistants,
and 20 analysts. 


   COST-BENEFIT ANALYSIS
   REQUIREMENTS
-------------------------------------------------- Chapter STATEMENT:1

Agencies' responsibilities in the executive order to assess the costs
and benefits of their proposed regulations vary depending on whether
the regulatory action involved is "significant" or "economically
significant."\3 A significant regulatory action is defined in the
order as any 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 this
Executive order."

Any regulatory action that meets the first of these criteria is
considered "economically significant." If the action does not meet
the first criterion but meets any of the other three criteria, it is
considered "significant for noneconomic reasons."


--------------------
\3 According to the executive order, a "regulatory action" is any
substantive action by an agency, normally published in the Federal
Register, that promulgates or is expected to lead to the promulgation
of a final rule or regulation, including notices of inquiry, advance
notices of proposed rulemaking, and notices of proposed rulemaking. 


      OIRA'S INTERPRETATION OF THE
      ORDER'S COST-BENEFIT
      REQUIREMENTS
------------------------------------------------ Chapter STATEMENT:1.1

For each significant regulatory action, the executive order requires
the issuing agency to provide OIRA with "an assessment of the
potential costs and benefits of the regulatory action."\4 OIRA
officials told us that the degree to which agencies should assess
regulatory cost and benefits varies depending on the nature of the
regulatory action at issue.  However, they said that agencies should,
at a minimum, include a statement in the preamble to proposed
significant regulations indicating that they considered the potential
costs and benefits of the regulations during their development. 

For economically significant actions, the order requires agencies to
provide to OIRA

     "(i) An assessment, including the underlying analysis, of
     benefits anticipated from the regulatory action (such as, but
     not limited to, the promotion of the efficient functioning of
     the economy and private markets, the enhancement of health and
     safety, the protection of the natural environment, and the
     elimination or reduction of discrimination or bias) together
     with, to the extent feasible, a quantification of those
     benefits;

     (ii) An assessment, including the underlying analysis, of costs
     anticipated from the regulatory action (such as, but not limited
     to, the direct cost both to the government in administering the
     regulation and to businesses and others in complying with the
     regulation, and any adverse effects on the efficient functioning
     of the economy, private markets (including productivity,
     employment, and competitiveness), health, safety, and the
     natural environment), together with, to the extent feasible, a
     quantification of those costs; and

     (iii) An assessment, including the underlying analysis, of costs
     and benefits of potentially effective and reasonably feasible
     alternatives to the planned regulation, identified by the
     agencies or the public (including improving the current
     regulation and reasonably viable nonregulatory actions), and an
     explanation why the planned regulatory action is preferable to
     the identified potential alternatives."

OIRA officials told us that these provisions mean that agencies
should provide OIRA with a copy of a cost-benefit analysis when
economically significant proposed regulations are submitted to OIRA
for review.  However, they also said that, in practice, agencies do
not do cost-benefit analyses for all economically significant
proposed rules.  For example, they said that it would not be worth
the time and effort required for an agency to do a cost-benefit
analysis for economically significant crop price support regulations
based on legislated formula. 

As interpreted and administered by OIRA, the cost-benefit
requirements in Executive Order 12866 are similar to the requirements
in the order it replaced.  Executive Order 12291, issued by President
Reagan in 1981, required agencies to submit a "regulatory impact
analysis" with every "major rule." A major rule was defined as one
that was 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, individual industries, federal, state, or local government
agencies, or geographic regions; or (3) significant adverse effects
on competition, employment, investment, productivity, innovation, or
the international competitiveness of U.S.  enterprises--criteria
similar to those used to describe "economically significant" rules in
Executive Order 12866.  Like the cost-benefit requirements in the
Clinton executive order, the Reagan order said regulatory impact
analyses should contain descriptions of the potential costs and
benefits of the rule and of the costs and benefits of alternative
approaches. 


--------------------
\4 The executive order permits the OIRA Administrator to waive review
of any significant regulatory action, in which case the agency need
not comply with the order's cost-benefit requirements. 


      IMPLEMENTATION OF
      COST-BENEFIT REQUIREMENTS
      FOR ECONOMICALLY SIGNIFICANT
      RULES
------------------------------------------------ Chapter STATEMENT:1.2

To determine the extent to which agencies provide a copy of a cost-
benefit analysis for each economically significant rule, we asked the
Regulatory Information Service Center (RISC) to provide us with a
listing of all such rules that were published in the Federal Register
as final rules during calendar year 1995.\5 RISC provided us with a
listing of 39 rules that it said met those criteria.\6 However, we
discovered that 10 of these 39 rules were not economically
significant and/or were not final rules, and therefore should not
have been part of our analysis.\7

Of the remaining 29 rules, the largest number were from the
Department of Agriculture (13 rules), followed by the Department of
Transportation (DOT) (5 rules), and EPA (4 rules).  The subject
matter of the rules ranged widely, including

  -- agricultural regulations (e.g., rice acreage reduction; wheat,
     feed grain, and oilseed programs; and crop sugarcane and sugar
     beet price support loan rates);

  -- standards for the use of double hull tankers carrying oil in
     bulk;

  -- migratory bird hunting regulations;

  -- National Emission Standards for Hazardous Air Pollutants for
     petroleum refineries; and

  -- regulations on the payment of covered outpatient drugs under
     rebate agreements with manufacturers. 

We reviewed OIRA's files for each of these rules to see if they
contained a cost-benefit analysis.  If we could not locate the
analysis in OIRA's files, we asked OIRA staff for a copy of the
analysis.  For 28 of the 29 economically significant rules, a
cost-benefit analysis document was either in OIRA's files or was
provided by OIRA staff.  Although we did not attempt to assess the
quality of the analyses conducted, the analyses for 26 of the 28
rules appeared to have all three of the elements the executive order
requires--assessments of costs, benefits, and the costs and benefits
of alternative approaches.  One analysis covering two rules (the
early- and late-season migratory bird hunting rules) appeared to lack
a discussion of the costs and benefits of alternative approaches. 

The one economically significant final rule for which we could not
find a cost-benefit analysis was issued by the Department of Veterans
Affairs (VA) in response to a Supreme Court decision interpreting a
statutory requirement that VA provide compensation for disability or
death resulting from VA hospitalization, medical or surgical
treatment, or examination.  The file for the rule did contain a
discussion of the rule's "costs and budgetary impact" that centered
on how to calculate the overall cost of the payments.  OIRA officials
said that the file contained no discussion of the benefits of the
payments or alternative approaches because the payments were
statutorily required, and therefore the cost discussion alone met the
requirements of the executive order. 


--------------------
\5 RISC works closely with OMB to provide information to the
president, Congress, and the public about federal regulatory
policies.  Its primary role is to coordinate the development of the
Unified Agenda of Federal Regulatory and Deregulatory Actions, a
comprehensive listing of proposed and final regulations. 

\6 In this review, we did not attempt to determine whether other
rules should have been classified as "economically significant" or
"significant."

\7 OIRA staff told us that 8 of the 10 rules were not economically
significant, and the text of some of the rules also indicated that
they were not economically significant.  One rule was a proposed
rule, not a final rule, and another rule was neither economically
significant nor final.  None of the files for these 10 rules
contained a cost-benefit analysis. 


      IMPLEMENTATION OF
      COST-BENEFIT REQUIREMENTS
      FOR RULES SIGNIFICANT FOR
      NONECONOMIC REASONS
------------------------------------------------ Chapter STATEMENT:1.3

We also asked RISC to provide us with a list of all final rules
issued in 1995 that were significant for noneconomic reasons.  RISC
provided a list of 259 such rules, from which we randomly selected a
10 percent sample (26 rules).  Although the size of this sample
prevents us from generalizing our findings to all 259 rules, the
sample can demonstrate the kinds of cost-benefit "assessments" OIRA
said satisfied the executive order's requirement. 

We determined that three of the 26 significant rules were proposed,
not final, rules and therefore should not have been part of our
review.\8 Of the remaining 23 rules, 4 had a separate cost- benefit
analysis document in the OIRA files, and 5 other rules contained
language discussing the costs and benefits of the regulatory action. 
The remaining 14 rules contained neither a cost- benefit analysis nor
language in the rule discussing the rules' costs or benefits. 

OIRA officials said a cost-benefit assessment was not prepared for
these 14 rules because of particular circumstances in each case. 
They said that some of the rules were simply implementing a detailed
statutory or procedural requirement, some were essentially
administrative in nature (e.g., harmonizing two existing programs in
different agencies), one eliminated an outdated requirement, and one
was significant only because of its relation to a larger rule.  In
such cases, OIRA officials said they do not recommend that agencies
conduct a cost-benefit assessment because it would not contribute
substantially to decisionmaking.  In essence, they said, a blanket
requirement that agencies conduct a cost-benefit assessment would not
pass a cost-benefit test. 


--------------------
\8 All three of the proposed rules had either cost-benefit analyses
or language discussing the costs and benefits of the regulatory
action. 


   OIRA CHANGES TO REGULATIONS
-------------------------------------------------- Chapter STATEMENT:2

The second major issue we were asked to address was whether OIRA is
significantly changing agencies' proposed regulations during the
review process.  Although we found evidence of some OIRA involvement
in all of the regulations we investigated, the data available did not
provide sufficient evidence to conclusively determine whether
OIRA-recommended changes were made to all of the regulations. 
Aggregate data compiled by RISC indicate that the proportion of
regulations that were changed during the time period they were under
OIRA review increased substantially between 1981 and 1996, but the
data do not reveal the source of those changes.  OIRA and agency
files and interviews with OIRA staff indicated that most of the rules
that the aggregate data indicated had changed while at OIRA were
changed at least in part because of suggestions or recommendations by
OIRA, and most of those changes appeared significant.  However, in
many other cases it was unclear what changes had been made to the
rules during the review process or whether OIRA had recommended those
changes.  Despite this lack of documentation, OIRA and agency
officials said OIRA does affect the development of regulations
through discussions that occur before and during the rulemaking
process or simply by its presence in that process. 


      OIRA REGULATORY REVIEW
      PROCESS
------------------------------------------------ Chapter STATEMENT:2.1

OIRA has been responsible for reviewing proposed rules since its
creation in 1981.  Under Executive Order 12291, OIRA reviewed both
major and nonmajor rules (on average, about 2,300 regulatory actions
at proposed and final rulemaking per year) from all federal agencies
except independent regulatory agencies.  The order 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."\9 OIRA's reviews under this executive order were highly
controversial, with critics contending that OIRA exerted too much
control over the development of rules and that decisions were being
made without appropriate public scrutiny. 

Executive Order 12866 requires the OIRA Administrator 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." As
was the case under Executive Order 12291, the current order does not
authorize OIRA to review rules from independent agencies.  However,
instead of reviewing both major and nonmajor regulations, OIRA's
reviews are currently limited to significant regulatory actions
(about 800 per year at proposed and final rulemaking).  OIRA conducts
those reviews before the publication of the rule in the Federal
Register as a notice of proposed rulemaking and before its
publication as a final rule.  OIRA also sometimes reviews rules prior
to the proposed rulemaking stage.  In general, OIRA must complete its
review with an agency within 90 days of receiving the rule. 

One of the stated objectives of Executive Order 12866 is "to make the
process more accessible and open to the public." In conjunction with
that objective, the order requires agencies to "[i]dentify for the
public those changes in the regulatory action that were made at the
suggestion or recommendation of OIRA" after the action has been
published in the Federal Register.  The OIRA Administrator pointed
out that requirement in guidance that was sent to the heads of
departments and agencies in October 1993. 

Another objective of the executive order is to "reaffirm the primacy
of federal agencies in the regulatory decisionmaking process." In a
May 1994 report to the President on the first 6 months of the
executive order, the OIRA Administrator 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." Agency officials we spoke with at both EPA and
DOT confirmed this perception.  OIRA officials told us that, during
this administration, they work with the agencies before the formal
submission of the rules.  Because of the often informal nature of
this process, the OIRA Administrator suggested in her May 1994 report
to the President that the order's requirement that agencies document
OIRA changes "may warrant further consideration" because "changes
that result from regulatory review are the product of collegial
discussions" often involving multiple agencies.  She said that after
such an extended process, "it is not clear that identifying changes
made at the suggestion of OIRA is accurate...or meaningful."

EPA and DOT officials told us that regulations are frequently
developed and changed as a result of meetings and telephone calls
between agency and OIRA staff at various stages of the rulemaking
process.  They also said that OIRA frequently affects the development
of rules in ways that may not be reflected in their or OIRA's files. 
For example, DOT officials said that they will not even propose
certain regulatory provisions because they know that OIRA will not
find them acceptable. 


--------------------
\9 For a description of and statistics relating to OIRA's review
process under Executive Order 12291, see Regulatory Review: 
Information on OMB's Review Process (GAO/GGD-89-101FS, July 14,
1989). 


      AGGREGATE STATISTICS
      INDICATE RULES CHANGE WHILE
      AT OIRA, BUT SOURCE OF
      CHANGES IS UNCLEAR
------------------------------------------------ Chapter STATEMENT:2.2

At the conclusion of each stage of the review process, OIRA staff
complete a regulatory review worksheet that indicates whether the
proposed rule was (1) "consistent (with the executive order) without
change," (2) "consistent with change," (3) "withdrawn" by the agency,
(4) "returned" by OIRA for further consideration, (5) required to be
issued under a statutory or judicial deadline (thereby attenuating
OIRA's review), or (6) whether some other action was taken.\10 OIRA
does not have the authority under the executive order to disapprove
regulatory actions. 

At our request, RISC provided data on the disposition of all rules
submitted to OIRA from 1981 through June 1996.\11 During this period,
an average of 92 percent of the regulatory actions were coded as
either "consistent with change" or "consistent without change."
Relatively few actions were withdrawn by the agencies (an average of
less than 3 percent per year), and even fewer were returned or fell
into some other status category.  The proportion of rules returned by
OIRA for further consideration appears somewhat less under Executive
Order 12866 than under Executive Order 12291.  Between 1981 and
September 30, 1993, OIRA returned an average of about 1.3 percent of
the rules it reviewed.  Between October 1, 1993, and June 30, 1996,
OIRA returned 0.2 percent (5 out of 2,366) of the rules it reviewed. 

The percentage of actions that fell into the "consistent with change"
or "without change" categories has varied dramatically over time. 
For example, in 1981, 87 percent of the regulatory actions were coded
"consistent without change," and only 5 percent were coded as having
been changed.  However, by the first half of 1996, a greater
percentage of regulatory actions were "changed" (48 percent) than
were described as "consistent without change" (45 percent).  Some of
the difference in the degree to which rules were changed was probably
due to the change in the number and type of rules that OIRA reviewed. 
Under Executive Order 12291, OIRA reviewed about 2,300 major and
nonmajor rules per year; under Executive Order 12866, OIRA has
reviewed fewer than 800 significant rules per year. 

However, these data do not necessarily mean that OIRA is more likely
to recommend changes to proposed rules than it did in the past.  OIRA
staff told us that they code regulatory actions as "consistent with
change" if any changes are made to the actions while under review at
OIRA, regardless of their source.  They said that a regulatory action
could be coded as "consistent with change" even if the changes were
solely at the initiative of the agency promulgating the rule. 
Therefore, it is unclear whether the increased rate of "changes" over
time means that OIRA is increasingly asking for changes in agencies'
rules or whether agencies are more likely to submit rules as "works
in progress," making further changes to the rules while they are
under review at OIRA. 


--------------------
\10 The proportion of regulatory actions with mandated deadlines has
increased between 1985 and 1992.  See Regulatory Reform:  Information
on Costs, Cost-Effectiveness, and Mandated Deadlines for Regulations
(GAO/PEMD-95-18BR, Mar.  8, 1995). 

\11 Up to October 1, 1993, OIRA reviews were done under Executive
Order 12291.  Subsequently, the reviews were done under Executive
Order 12866. 


      OIRA AND SELECTED AGENCIES'
      FILES OFTEN DID NOT CLEARLY
      INDICATE OIRA'S EFFECT
------------------------------------------------ Chapter STATEMENT:2.3

To better understand the nature of the changes being made to these
rules, we asked RISC to provide a list of all rules that were
initially submitted to OIRA for review during calendar year 1994.\12
RISC provided a list of 319 such rules and the action taken with
respect to each rule (e.g., "consistent with change" or "consistent
without change") at each stage of the rulemaking process (prerule,
notice of proposed rulemaking, and final rulemaking) between their
submission to OIRA in 1994 and the time we began our review in July
1996. 

The RISC data indicated that, at some point in the rulemaking
process, nearly 55 percent of the rules had changed while at OIRA. 
About 38 percent of the rules were coded "consistent without change"
throughout the process, and about 7 percent had some other type of
disposition (e.g., judicial deadline, withdrawn, or returned).  Major
differences existed in the number of rules that changed across the
agencies.  For example, 40 of the 54 EPA rules submitted to OIRA in
1994 (about 74 percent) were coded "consistent with change" in at
least one stage of the rulemaking process.\13 In contrast, only 9 (30
percent) of the 30 DOT rules were coded "consistent with change" at
some stage of the rulemaking process.\14 OIRA officials said that
some of the differences in the number of changes made to rules are
attributable to the level of centralized review at the agencies. 
They said that well-developed review processes in agencies reduce the
need for OIRA-suggested changes to rules. 

Of the 84 combined EPA and DOT rules, the RISC data indicated that 49
had changed while at OIRA, 21 were "consistent with no change," and
14 had some other disposition.  We then focused our review on the 49
rules that the aggregate data indicated had changed.  We first
reviewed OIRA files and interviewed OIRA staff regarding each of the
rules to determine the nature of the changes made and whether the
changes were made at the suggestion or recommendation of OIRA.  We
also reviewed EPA and DOT files for these rules to determine whether
agencies had identified for the public the changes that were made at
the suggestion or recommendation of OIRA. 

OIRA or agency files indicated that OIRA suggested changes that were
made to 29 of the 49 combined EPA and DOT rules, and OIRA staff said
that they had suggested changes that were made to 3 other rules.  The
file for one rule indicated OIRA had no suggested changes.  For the
remaining 16 rules, though, it was unclear whether OIRA had
recommended any changes that were made to the rules. 

The OIRA and DOT files frequently did not indicate what changes were
made to the rules or, if they did, whether the changes were made at
the suggestion or recommendation of OIRA.  The EPA files were usually
more complete and often indicated substantial discussions between
agency and OIRA representatives.  They also sometimes contained
copies of drafts of the rules indicating the changes that had been
made during the review process.  However, some of the EPA files did
not have this type of documentation, and even those that did
frequently did not clearly indicate whether OIRA had recommended
those changes.  For example, the EPA file for one of the 16 rules for
which we could not determine OIRA changes contained more than two
dozen faxes, letters, memos, or other forms of communication between
the EPA and OIRA officials.  Many of those documents referred to
changes that had been made to the rule, but it was not clear whether
the changes had been suggested by OIRA. 

For those 29 files that we determined resulted in OIRA-suggested
changes, we sometimes made those determinations by accumulating
evidence from different sources or by reading notes written in the
margins of documents.  None of the DOT files and only a few of the
EPA files contained a memo clearly documenting for the public that
changes were made to the rules at the suggestion or recommendation of
OIRA.  Therefore, we do not believe that either EPA or DOT has
closely adhered to the executive order's requirement to document
changes made at the suggestion or recommendation of OIRA.  As a
result, the public would frequently find it difficult to determine
what changes were made to regulatory actions because of OIRA. 


--------------------
\12 We focused on 1994 rules to allow time for OIRA to review the
rules at both the proposed and final rule stages. 

\13 Only 1 rule was "consistent without change" throughout the
process, and the remaining 13 rules were deadline cases, withdrawn,
or returned or had one of those codes in conjunction with a
"consistent with change" or "consistent without change" code. 

\14 Twenty of the 30 DOT rules were "consistent without change"
throughout the process, and 1 rule was withdrawn. 


      MOST OIRA CHANGES APPEARED
      SUBSTANTIVE
------------------------------------------------ Chapter STATEMENT:2.4

In 21 of the 32 rules for which evidence existed of OIRA-suggested
changes, the changes made to the rules appeared to be substantive in
nature.  For example: 

  -- One EPA file indicated that EPA decided to make four
     "significant changes" to the rule's compliance criteria because
     of OMB's comments.  The changes included limiting the technical
     and scientific information the rule required to be submitted and
     reducing the list of conditions that must be monitored from
     seven to three. 

  -- Another EPA file indicated that OMB's comments resulted in the
     elimination of recordkeeping requirements from the rule and that
     language was added to the rule allowing waiver of certain
     requirements to avoid conflicts with requirements from another
     agency. 

  -- An OIRA file indicated that DOT redrafted a rule's
     implementation schedule in response to an OMB request, allowing
     a more gradual implementation of the rule for certain elements
     of the regulated community. 

In the other 11 rules, the changes appeared relatively minor.  For
example, one of the EPA files stated that the only changes made
during the OMB review were "minor deletions of preamble language" and
that "[n]o substantive changes to the proposal were suggested or
recommended by OMB."

The lack of documentation of OIRA changes to the rules or
documentation that reflects only a relatively minor change does not
necessarily mean that OIRA did not play a significant role in the
development of the rules in question.  As I mentioned earlier, OIRA
officials told us that during this administration they work with the
agencies before rules are formally submitted.  These kinds of
discussions may not be reflected in documents at either the agencies
or OIRA. 


   ELIMINATION AND REVISION OF
   REGULATIONS
-------------------------------------------------- Chapter STATEMENT:3

The third major issue we were asked to address was whether agencies
were eliminating the regulations that the administration claimed were
being eliminated, and whether the eliminations and revisions of rules
were reducing regulatory burden.  We found that EPA and DOT reports
on the number of pages of regulations they had eliminated were
generally accurate.  However, because new regulations are being added
at the same time that regulations are being eliminated and revised,
the total number of pages of regulations may actually increase in
some agencies.  Available data indicate a variety of reasons why the
regulations are being eliminated (e.g., because rules are outdated or
are duplicative of other requirements) and revised (e.g., to clarify
or update rules or to establish new procedures).  Most of the page
eliminations did not appear to reduce regulatory burden, but it was
often unclear whether the regulatory revisions would do so. 


      ORDER'S REQUIREMENT FOR
      REVIEW LEADS TO PAGE
      ELIMINATION AND REVISION
      GOALS
------------------------------------------------ Chapter STATEMENT:3.1

Section 5 of Executive Order 12866 required each agency to submit a
program to OIRA by December 31, 1993, under which it would
periodically review its existing significant regulations to determine
whether any should be modified or eliminated.  According to the
order, the purpose of the review was to make the agency's regulatory
program more effective, less burdensome, or better aligned with the
President's priorities and the principles in the order. 

There had been several previous requirements that federal agencies
review their existing regulations.  For example, Executive Order
12044 ("Improving Government Regulations"), issued by President
Carter in 1979, required agencies to review their existing rules
"periodically." The Regulatory Flexibility Act of 1980 required
agencies to publish in the Federal Register a plan for the periodic
review of rules that "have or will have a significant economic impact
upon a substantial number of small entities."\15 In 1992, President
Bush sent a memorandum to all federal departments and agencies
calling for a 90-day moratorium on new proposed or final rules during
which agencies were "to evaluate existing regulations and programs
and to identify and accelerate action on initiatives that will
eliminate any unnecessary regulatory burden or otherwise promote
economic growth."

In an October 1993 memo to the heads of federal departments and
agencies, the Administrator of OIRA noted that previous
administrations had undertaken similar review efforts but said that
some of those efforts had been "so broad in scope that necessary
analytic focus has been diffused, or needed followup has not
occurred." She said the effort under the new executive order should
be more productive because, among other things, "it focuses only on
significant regulations and the legislation that mandates them." In
its report on the first year of implementation of the order, OIRA
further clarified the intent of this effort. 

     "It is important to emphasize what the lookback effort is and is
     not.  It is not directed at a simple elimination or expunging of
     specific regulations from the Code of Federal Regulations.  Nor
     does it envision tinkering with regulatory provisions to
     consolidate or update provisions.  Most of this type of change
     has already been accomplished, and the additional dividends are
     unlikely to be significant.  Rather, the lookback provided for
     in the Executive Order speaks to a fundamental reengineering of
     entire regulatory systems...."

On March 4, 1995, the President sent a memorandum to the heads of
departments and agencies describing plans for changing the federal
regulatory system because "not all agencies have taken the steps
necessary to implement regulatory reform." Among other things, the
President directed each agency to conduct a page-by-page review of
all its regulations in force and eliminate or revise those that were
outdated or in need of reform.  In June 1995, 28 agencies provided
reports to the President describing the status of their regulatory
reform efforts, often noting the number of pages of federal
regulations that would be eliminated or revised.  On June 12, 1995,
the President told participants at the White House Conference on
Small Business that the page-by-page review effort had resulted in
commitments to eliminate 16,000 pages of regulations from the 140,000
page Code of Federal Regulations (CFR), and another 31,000 pages
would be modified either through administrative or legislative means. 

Since that time, agencies have periodically reported to OIRA on their
progress in eliminating and revising rules.  As of June 30, 1996, the
agencies reported that 11,569 pages of the CFR had been eliminated
(72 percent of the 16,000-page goal) and another 1,421 pages (9
percent) had been proposed for elimination.  The agencies also
indicated that 13,216 pages of the CFR had been "reinvented" (43
percent of the 31,000-page goal), and another 5,271 pages (17
percent) had been proposed for reinvention. 


--------------------
\15 See 5 U.S.C.  601, 610.  In Regulatory Flexibility Act:  Status
of Agencies' Compliance (GAO/GGD-94-105, Apr.  27, 1994), we reported
the results of a study by the Small Business Administration that
indicated many agencies had not planned for or conducted a review of
their rules. 


      PAGE ELIMINATION TOTALS
      APPEAR GENERALLY ACCURATE,
      BUT METHODOLOGY DIFFERS
------------------------------------------------ Chapter STATEMENT:3.2

Any analysis of the effect of reductions in the number of pages of
regulatory text must recognize that one sentence of a regulation can
impose more burden than 100 pages of regulations that are
administrative in nature.\16 Thus, the number of pages eliminated in
the CFR is, at best, an indirect measure of burden reduction. 
Nonetheless, it is one of the measures that the administration is
using to gauge its own efforts. 

To determine whether agencies were actually eliminating the number of
pages of regulations that they claimed in their reports to OIRA, we
obtained details of two agencies' page elimination efforts-- EPA's
and DOT's.\17 Specifically, the agencies provided us with Federal
Register citations for actions related to the pages that they claimed
to have eliminated as of June 30, 1996.  We then reviewed those
citations, confirmed that the actions were final or interim final
rules, noted what CFR parts or sections they eliminated, and then
counted the eliminated pages in the CFR that were designated for
removal. 

Our analysis indicated that these agencies' page elimination claims
were generally valid.  EPA claimed to have eliminated 1,292 pages
from the CFR (89 percent of the 1,457 pages it had promised in its
1995 report to the President), and we counted a total of 1,230 pages
that had been removed.  DOT claimed to have eliminated 1,247 pages
(102 percent of the 1,221 pages it had promised), and we counted
1,232 pages that had been removed. 

OIRA officials said that they had not provided guidance to the
agencies in how to carry out the CFR page elimination and revision
exercise.  Perhaps as a consequence, the agencies we visited differed
in the manner in which they counted the pages being eliminated and
revised.  EPA officials said they only counted CFR changes that
occurred in 1995 (primarily after their June report to the President)
or 1996.  However, DOT officials said they counted any regulatory
elimination or revision since the start of the Clinton administration
in coming up with their tally of CFR pages eliminated or revised. 
Officials in both agencies also said there were differences within
each of the agencies in the manner in which CFR pages were counted. 
For example, an EPA official said that some units within EPA simply
"eyeballed" the pages being eliminated, whereas other units used more
sophisticated methods of measuring the number of CFR pages being
removed. 


--------------------
\16 See Regulatory Reform:  How Can Congress Assess the
Administration's Initiatives?  (GAO/T-GGD-95-206, July 18, 1995) for
a more complete discussion of this issue. 

\17 We selected these agencies because we were already examining the
changes made to their regulations in another part of this review.  We
did not attempt to verify the number of pages being revised because
of the difficulty involved in making that determination.  Elimination
of pages seemed more straightforward and, therefore, verifiable. 


      PAGE ELIMINATION EFFORT DOES
      NOT COUNT PAGES ADDED
------------------------------------------------ Chapter STATEMENT:3.3

OIRA officials said that the administration's goal was to eliminate
16,000 pages from the CFR as it existed at the start of the
reinvention effort.  They said the page elimination total does not
take into account any pages that were added to the CFR during that
effort, and therefore the CFR may not have 16,000 fewer pages than at
the start of the administration's effort.  However, they added that
many of the pages being added to the CFR are statutorily mandated
regulations, not new rules developed at the initiative of regulatory
agencies. 

The effect of pages being added to the CFR at the same time they were
being eliminated can be seen at one of the agencies included in our
review.  An EPA official said that the agency had 14,384 pages of
regulations in the CFR as of July 1, 1995.  As of July 1, 1996, EPA
said it had eliminated 1,292 pages in the CFR, but an EPA official
told us in August 1996 that the number of pages of EPA regulations
had expanded to 14,690 pages--a growth of more than 300 pages.  The
official said this growth was primarily driven by statutory
requirements to develop new Clean Air Act regulations. 

Governmentwide data on changes in the number of regulatory pages are
incomplete, but the data that are available suggest that, despite the
contemporaneous addition of new regulations, the page elimination
effort is having some effect on the size of the CFR.  According to
the Office of the Federal Register (OFR), the total number of pages
in the CFR increased from 105,935 pages in 1985 to 138,186 in 1995. 
Data on the number of pages in the entire CFR for 1996 will not be
available until the spring of 1997.  However, an OFR official said
that 1996 data for about half of the CFR volumes (titles 1 through
27) that have been revised indicate that the number of pages in those
sections dropped from 68,282 in 1995 to 64,802 in 1996--a decline of
3,480 pages (about 5 percent).  Those titles include regulations
involving such topics as agriculture, banks and banking, energy,
commerce and foreign trade, employees' benefits, food and drugs,
highways, and housing and urban development. 


      REASONS FOR CFR PAGE
      ELIMINATIONS AND REVISIONS
------------------------------------------------ Chapter STATEMENT:3.4

We also attempted to assess the reasons why the page eliminations and
revisions were undertaken and whether those actions appeared to
reduce substantive regulatory burden.  To do so, we analyzed the
Unified Agenda of Federal Regulatory and Deregulatory Actions, which
provides uniform reporting of data on regulatory activities under
development throughout the federal government.\18 The October 1995
and April 1996 editions of the Unified Agenda contained a
"reinventing government" data element that indicated whether the
regulatory action was part of the administration's reinventing
government effort and, if so, whether the result would be elimination
of CFR text or revision of CFR text.  In those entries, brief
abstracts were usually included describing the action or proposed
action.  We discovered during our review that at least one agency
(EPA) did not list all of its page elimination and revision efforts
in the Unified Agenda.  Nevertheless, the Unified Agenda is the most
complete governmentwide compendium of those activities available. 

Of the 5,354 separate entries in the October 1995 and April 1996
editions of the Unified Agenda, a total of 1,562 entries had a
"reinventing government" data element.  Of these, 211 entries
indicated that the action involved the elimination of text in the
CFR, and 1,351 entries said that the action would revise text.  The
agencies with the most reinvention entries were DOT (212 entries),
the Department of the Interior (171 entries), and the Department of
Health and Human Services (165 entries).  Of the 211 rule elimination
entries in the Unified Agenda, only 1 was considered economically
significant, and 22 were classified as significant for noneconomic
reasons.  Forty-three of the 1,351 revisions were considered
economically significant, and 386 were considered significant for
noneconomic reasons. 

Twenty-nine of the 211 page elimination entries did not contain an
abstract describing the elimination effort.  In about half of the
remaining 182 entries, the abstracts indicated that the pages were
being eliminated because the regulations were obsolete.  In some
cases, the agencies indicated that the regulations had not been
enforced for some time.  For example: 

  -- VA said it was eliminating a regulation providing lump-sum
     payments to veterans involved in an incident in Texas in 1906. 

  -- The Department of Energy said it was removing regulations
     "related to defunct programs of financial assistance for
     electric and hybrid vehicle research and methane transportation
     research."

  -- A proposed Department of Agriculture rule would eliminate the
     import licensing system for sugar exempted from an import
     licensing fee, which the Department said had been suspended in
     1985 and eliminated on January 1, 1995. 

  -- Another Department of Agriculture action removed its regulation
     pertaining to the Special Agricultural Workers program because
     "the program expired on December 1, 1988."

  -- FDA said it was proposing to eliminate certain regulations "that
     refer to substances no longer used in product formulations or to
     products that are no longer marketed."

The abstracts also frequently indicated that CFR text was being
eliminated because the requirements were duplicative of other
requirements that remained in the CFR (about 28 percent of the rule
elimination abstracts). 

The remaining 1,351 "Reinventing Government" entries indicated they
would revise text in the CFR "to reduce burden or duplication, or
streamline requirements." Of these, 287 did not contain an abstract
describing the nature of the reinvention effort.  Of the 1,064
entries that did have an abstract, the most common reason given for
the action being taken was to clarify a regulatory requirement (about
28 percent of the entries).  For example: 

  -- The Department of the Interior said it was rewriting its civil
     penalty procedures "in plain English."

  -- The Occupational Safety and Health Administration said it was
     proposing to revise its regulations on confined spaces "to state
     more clearly the employer's duty to ensure effective rescue
     capability."

  -- The Department of the Treasury said revisions to one of its
     rules would "provide greater clarity by defining previously
     undefined terms."

  -- The Department of Justice proposed an amendment to "clarify the
     requirement for installation of curb ramps at existing
     pedestrian walkways" in response to "public concerns about the
     unique and significant capital expense" of such ramps. 

  -- The Department of Labor said it was giving guidance to employers
     on the information they must keep to determine compliance with
     the Fair Labor Standards Act "to ensure that applicable
     standards are easily understandable and reasonable."

Other commonly cited reasons for the revisions were to update
requirements to reflect current statutes, science, or conditions
(about 26 percent); to establish new regulatory procedures or
standards (about 18 percent); and to change a regulation found to be
overly burdensome to industry, state or local governments, or federal
agencies (about 14 percent).\19 In 110 of the entries (about 10
percent), the changes appeared to be implementing statutory
requirements.  For example, one of the Department of the Treasury
entries indicated that its Office of Thrift Supervision had issued an
interim final rule that revised its risk-based capital standards "as
required by Sections 208 and 350 of the Riegle Community Development
and Regulatory Improvement Act of 1994." In these and other cases,
the revisions appeared less like "reinventions" than part of the
standard rulemaking process. 


--------------------
\18 The Regulatory Flexibility Act (5 U.S.C.  601-612) requires that
agencies publish semiannual regulatory agendas describing regulatory
actions that they are developing.  Executive Order 12866 and OMB
memorandums implementing section 4 of the order establish minimum
standards for agencies' agendas.  The Office of Federal Procurement
Policy Act Amendments of 1988 (41 U.S.C.  421[g]) require the
development and semiannual publication of a report on procurement
regulations.  The Unified Agenda helps agencies fulfill all of these
requirements. 

\19 The most common beneficiary of the burden reduction efforts
appeared to be private industry, followed by state and local
governments and then federal agencies. 


      PAGE ELIMINATIONS APPEAR
      UNLIKELY TO REDUCE BURDEN,
      BUT EFFECT OF REVISIONS IS
      UNCLEAR
------------------------------------------------ Chapter STATEMENT:3.5

We also examined the Unified Agenda abstracts to determine whether
the actions being announced appeared to reduce substantive regulatory
burden.  We defined the term "regulatory burden" broadly to include
the cost of compliance, any lack of flexibility allowed by the rule,
and related paperwork requirements.  We also said the regulatory
burden could be on industry, state or local governments, or the
federal government.  Although we attempted to determine as
objectively as possible whether the actions described in the
abstracts were likely to decrease regulatory burden, our results
should be viewed as informed opinions rather than the result of
rigorous analysis because (1) no commonly agreed-upon way to measure
regulatory burden exists, (2) the determination of whether burden is
increased or decreased by a related action is an inherently
subjective process, and (3) the abstracts in the Unified Agenda
sometimes provided only cursory information about the regulatory
action at issue. 

Nevertheless, in more than 60 percent of the page elimination
entries, it did not appear that the CFR pages being eliminated would
reduce substantive regulatory burden.  As noted previously, most of
these actions were being taken because the regulations being
eliminated were obsolete, and many of these did not appear to have
been enforced for some time.  Therefore, for these entries there did
not appear to be any reduction in substantive regulatory burden.  In
some cases, the agencies themselves indicated that the page
eliminations would not alter existing regulatory requirements, as
shown in the following examples: 

  -- The Department of Justice said one of its actions to eliminate
     obsolete sections was "editorial and non-substantive in nature
     and ...[has] no impact on governmental or nongovernmental
     entities."

  -- The Department of Commerce said that although an entire part
     within the CFR was being removed, "(t)his final rule does not
     make substantive changes to the existing regulations."

  -- The Department of Housing and Urban Development (HUD) said it
     was eliminating provisions that were unnecessary because they
     were redundant of the Mortgagee Review Board (MRB) statute, and
     would "not change the substantive requirements of the MRB
     regulations." HUD also said it was eliminating provisions that
     were redundant of the Community Development Block Grant's
     regulations without substantively changing the requirements. 

  -- Another HUD rule removed "nearly identical provisions" in
     various parts of the CFR, but again HUD said it did not change
     the substance of the provisions. 

Officials from both EPA and DOT told us that at least one of the
goals of their rule elimination effort was to remove "dead wood" and
that no substantive regulatory burden was being eliminated in many
instances.  One EPA official said that no substantive regulatory
burden would be eliminated by any of EPA's rule elimination efforts. 

In about a quarter of the cases, the Unified Agenda abstracts did not
provide enough information to allow us to determine whether the rule
elimination action would reduce burden.  However, 19 of the rule
elimination actions (about 10 percent) appeared to reduce substantive
regulatory burden.  For example: 

  -- The Food Safety Inspection Service proposed removal of a
     requirement that it approve facilities and equipment before they
     are used in official establishments.  The agency also proposed
     amending its prior approval of most voluntary, plant-operated
     partial quality control programs. 

  -- The Department of Health and Human Services issued a proposed
     rule to "revoke the requirement for increased frequency reports
     to FDA for postmarketing adverse experience reporting."

  -- DOT proposed rescinding its standards regarding the location,
     identification, and illumination of motor vehicle controls and
     displays, relying on market forces instead of regulatory
     requirements to ensure proper markings. 

We could not clearly determine whether substantive regulatory burden
would be reduced for more than half of the 1,064 CFR revisions for
which there was an abstract.  In about 26 percent, the revisions did
not appear to reduce burden, and in about 21 percent, the action did
appear to reduce burden.  Actions that did not appear to reduce
substantive regulatory burden include the following: 

  -- A proposal by the Bureau of Alcohol, Tobacco, and Firearms to
     permit the use of the word "unaged" as an alternative to
     "immature" to describe grape brandy that has not been stored in
     oak containers. 

  -- A National Park Service proposal to "recognize an official
     United States Park Police insignia, provide for its future
     protection, and prevent the unauthorized use of the insignia."

  -- A VA action to "update various cross-references and authority
     citations and to make other nonsubstantive changes."

  -- An OSHA action to extend a general industry rule on preventing
     suffocation and explosions in confined spaces to the
     construction industry. 

  -- A DOT action to correct obsolete references in field office
     addresses and terminology. 

  -- A DOT plan to remove an appendix to a rule, which was described
     by the Department as an administrative action that "has no
     impact on the marine industry as it does not change any
     requirements imposed upon them."

  -- A DOT plan to change a regulation on state matching of planning
     and administration costs from a regulation to an "agency
     directive."

  -- DOT's plan to remove a regulation that implemented a statutory
     provision for which funds have not been authorized since 1994. 

  -- An EPA action implementing the Asbestos School Hazard Abatement
     Reauthorization Act extending training and accreditation
     requirements and increasing the number of training hours
     required, which EPA said "will increase regulatory costs" for
     the owners and managers of public and commercial buildings. 

Entries that appeared to reduce substantive regulatory burden include
the following: 

  -- A proposal by the Department of the Treasury to exempt
     depository institutions from currency transaction reporting
     obligations with respect to transactions with certain
     businesses. 

  -- A Department of Justice proposal to waive a requirement for
     registration and allow the use of records required to be kept
     under FDA regulations instead of maintaining separate records
     for the Drug Enforcement Administration. 

  -- A DOT rule permitting official filing of international air
     carrier rules tariffs in an electronic format. 

  -- An EPA proposal to exempt certain pesticides from registration
     requirements and another proposal to remove isopropyl alcohol
     from the list of chemicals for which reporting is required under
     the Emergency Planning and Community Right-to-Know Act. 

  -- An EPA proposal to allow the use of a financial test rather than
     more expensive mechanisms such as surety bonds or letters of
     credit to ensure that adequate funds are available to cover
     certain closure costs.  EPA estimated this change would save
     owners and operators of municipal solid waste landfills about
     $45 million annually.  Another EPA proposal in this area would
     reportedly save local governments $138 million annually. 

Again, I would like to emphasize that our characterizations of
actions that appear to reduce substantive regulatory burden and those
that do not appear to reduce burden are based on a review of what
was, at times, very limited information.  Also, even though an action
to eliminate or revise a regulation may not reduce the substantive
regulatory burden imposed by that regulation, it may result in a
reduction in other types of burden by making the regulation clearer
or easier to find.  Some of the proposed changes may also make the
regulatory process more effective or results oriented, even though
their effect on regulatory burden may be unclear or negligible.  A
final verdict regarding the value of these initiatives will have to
await the reaction of the regulated community. 


------------------------------------------------ Chapter STATEMENT:3.6

Mr.  Chairman, this completes my prepared statement.  We would be
pleased to answer any questions. 

*** End of document. ***