Overview of Regulatory Assessment Process
Presentation to Telecommunications and Electronic and Information Technology Advisory Committee by Lisa Fairhall, Deputy General Counsel, Access Board, 8 November 2006.
Good morning. I plan to talk this morning about Regulatory Analysis.
- Provide some background for you on what this is.
- Why the Access Board has to do it.
- And then talk a little about how we believe it is also important to the committee’s work.
Basic goals of the regulatory review process:
- Maximize net benefits to society — or at least ensure that benefits justify costs.
- Increase transparency of the regulatory system.
Regulatory development is subject to many requirements.
The most important, for us, are from the President, and spelled out in Executive Order 12866, “Regulatory planning and review.”
- This Executive Order requires OMB review of significant agency regulatory actions before they are proposed for public comment, and again before they are issued in final form.
- The Executive Order also requires a Regulatory Impact Analysis of each regulation that OMB or the agency designates as “economically significant” — this means an annual impact of over $100 million.
- As part of its review, OMB will assess the impacts of the proposed regulation on other federal agencies.
- OMB will also often seek the views of the Small Business Administration and the SBA chief counsel for advocacy, to determine the impact of the proposed regulation on small businesses.
These and other requirements are spelled out at OIRA Review Process.
We will provide links to all these key materials on the TEITAC web page.
The Executive Order:
- Spells out the Government’s regulatory philosophy; and
- Outlines principles of regulation.
- Federal agencies should promulgate only regulations that are:
- required by law, are
- necessary to interpret the law, or are
- made necessary by compelling public need,
- such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people.
In our case, the Access Board was required by law to regulate on both 508 and 255.
- The EO goes on to say 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.
- Costs and benefits include both quantifiable measures (to the fullest extent that these can be usefully estimated) and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider.
For the 508 and 255 rulemakings, a good example of a benefit that falls in this category is “equal opportunity.”
- The EO says that in choosing among alternative regulatory approaches, agencies should select those approaches that maximize net benefits.
We will look to you to explain how your recommendations achieve this goal.
The EO also lays out Principles of Regulation for the agency to follow:
- The agency must identify the problem that it intends to address.
- For the current rulemaking, the questions for us are: Where are the gaps or failures under the current regulation?
- The agency must design its regulations in the most cost-effective manner to achieve the regulatory objective. In doing so, each agency shall consider incentives for innovation, consistency, predictability, the costs of enforcement and compliance (to the government, regulated entities, and the public), flexibility, distributive impacts, and equity.
These are all important issues for the advisory committee – and we are interested in your views on all of them.
- The agency must assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.
For each major change that the advisory committee recommends, you should be able to explain:
- What alternatives you considered,
- Why you chose the approach you ended up with,
- And why you rejected the other options.
You should also, to the extent that you can, describe either quantitatively or qualitatively, what the impacts of the changes will be, and who will be affected.
- The agency must identify and assess alternative forms of regulation and shall, to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt.
This issue – of how to frame the regulations – is already a question very much before the advisory committee.
- The agency must tailor its regulations to impose the least burden on society, including individuals, businesses of differing sizes, and other entities (including small communities and governmental entities), consistent with obtaining the regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations.
By working together and coming to consensus on a package of recommendations, you will probably do just this — come up with a regulatory package that maximizes benefits and minimizes burdens. If you explain to us, as part of your recommendations, what your thinking was behind each recommendation, we will be able to do a much better job of explaining the recommendations to OMB.