5515
United States
Environmental Protection
Agency
June, 1979
905R79116
xvEPA
Improving Environmental
Regulations;
Final Report Implementing
Executive Order 12044
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Federal Register / Vol. 44, No. 104 / Tuesday, May 29, 1979 / Notices
ENVIRONMENTAL PROTECTION AGENCY
IFRL 990-8]
Improving Environmental Regulations
Agency: Environmental Protection Agency.
Action: Final report
Summary: The Environmental Protection Agency (EPA)
presents its report on how it will implement Executive Order
12044, Improving Government Regulations. The report
describes procedures to improve management oversight in
the development of regulations, to involve the public and
other governmental organizations in evaluating regulatory
proposals, to analyze the effects of new and existing
regulations, and to avoid unnecessary regulatory burdens on
the public.
A request for public comments on EPA's plan appeared in
the Federal Register on Ju?y 11,1978 (Vol. 43, pp. 29891-
29900), and the Agency held public meetings in San
Francisco, Kansas City, and Washington, D.C. in August. A
summary of EPA's response to major comments appears as
Appendix B.
Dated: March 29, 1979
Douglas M. Costle,
Administrator.
Organization of this Report:
Preface.
A. Agency Administrator's Oversight.
B. External Participation.
C. Analysis.
D. Reporting Burdens Reduction.
Appendix A—Sunset Policy for New Reporting
Requirements.
Appendix B—Response to Public Comments.
PREFACE
EPA is now using an efficient system for drafting and
reviewing regulations, parts of which have served as models
for the President's Order. This report presents ways in which
we are modifying that system to comply with the Order.
EPA's internal and external review procedures ensure that
new EPA regulations meet the Order's standards for quality
of analysis of regulatory impacts, openness to participation
by outside parties, and avoidance of undue regulatory
burdens.
Part A of this report describes EPA's internal procedures
for writing regulations. Key features are the priority
classification for all EPA regulations and the use of
management controls that systematically focus attention on
the most important regulations. Part B describes how EPA
will involve interested citizens and outside groups (both
private and public organizations and local, State and Federal
agencies) in developing regulations, and presents EPA's plan
to formulate a new Agency-wide policy for external
participation in regulation development. Part C sets out
guidelines for economic analysis of regulations in each
priority class. It also describes a one-year project to screen
all existing EPA regulations to identify those that require
revision to eliminate unnecessary burdens or improve
effectiveness. Part D describes how EPA will avoid
unnecessary paperwork burdens on the public in the
reporting and recordkeeping requirements of new and
existing regulations.
The parts of this report describing EPA 's mechanisms for
public participation are printed in italics.
EPA has received and considered a large number of public
comments on its proposed plan, including those submitted at
public discussion meetings in three cities. Appendix B
describes EPA's response to major comments and tells ho\.
to obtain a detailed analysis of all comments.
EPA is now implementing portions of this plan. Many
other parts will be implemented through revision of the
Agency's Manual for Regulation Development. The Manual
will provide detailed instructions to those developing new
regulations. It will be publicly available in order to facilitate
outside participation. To receive a copy when it is
completed, write to Philip Schwartz, Standards and
Regulations Evaluation Division (PM-223), EPA,
Washington, D.C. 20460.
The process described in this report meets all
requirements of the Order. Table 1 lists sections of the Order
and shows where to find a description of our plan to
implement it. As indicated in Section 7 of the Order, failure
to comply with procedures established in response to the
Order is not grounds for judicial review of EPA regulations.
Procedures described in this part will not apply when they
conflict with statutory requirements.
TABI.K 1—Relationship of This Report to Executive Order
Requirements
Executive Order
Section
2 Reform of the Process
(a) Semiannual Agenda
(b) Agency Head Oversight.
(c) Public Participation
(d) Approval of Significant
Regulations
(1) Necessity of the
Regulation
Corresponding Part(s) of This
Report
B Agency Participation Policy
A(2) Development Plan
B Agency Participation Policy
(2) Consideration of
Impacts
(3) Evaluation of
Alternatives ...
(4) Response to Public
Comment
(5) Use of Plain English.
(6) Reporting Burden
Assessment
(7) Name of Responsible
Official
(8) Evaluation Plan.
(e) Criteria for Significant
Regulations
3 Regulatory Analysis
(a) Criteria
(b) Procedures.
4 Review of Existing Regulations
(a) Selection Criteria
(b) List of Possible
Candidates
. A(2) Development Plan: A(3)
Decision Package
. A(3) Decision Package;
C(l) Analysis of New
Regulations
. A(3) Decision Package;
C(l) Analysis of New
Regulations
A(3) Decision Package;
B Agency Participation Policy
A(3) Decision Package;
A(4) Internal Review;
B Agency Participation Policy
A(3) Decision Package;
D Reducing Burdens on the
Public
A(3) Decision Package;
B Agency Participation Policy
A(3) Decision Package;
C(2) Review of Existing
Regulations
A(l) Initiation of Work; Chart 1
C(l) Analysis of New
Regulations; Chart 4
C[TL] Analysis of New
Regulations
C(2) Review of Existing
Regulations
C(2) Review of Existing
Regulations
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Federal Register / Vol. 44, No. 104 / Tuesday, May 29. 1979 / Notices
30989
PART A: AGENCY ADMINISTRATOR'S OVERSIGHT
This Part describes how EPA will strengthen top
management oversight for the development of new
regulations. It emphasizes EPA's internal processes and only
touches on (see italicized sections) the way the Agency will
involve outside parties in its decisions. Part B is entirely
devoted to external participation in EPA regulation
development.
In outlining the steps for EPA's process the following
definitions may be useful:
—Lead Office: The Assistant Administrator for the
relevant program (the Office of Air, Noise and Radiation,
the Office of Enforcement, the Office of Toxic
Substances, or the Office of Water and Waste
Management) has the lead responsibility for initiating
and writing most new regulations.
—Work Group: This is a group of specialists drawn from
various offices within EPA to advise and assist the lead
office in preparing each significant regulation and its
support materials.
—Steering Committee: This is a continuing group
representing the six Assistant Administrators, General
Counsel, and appropriate Office Directors on the
Administrator's staff. It oversees the mechanics of the
process and conducts the first internal review of
materials prepared by the lead office.
—Red Bi)/•n to
Administi ator
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EPA is changing this process in response to the President's
Executive Order according to two general principles. First,
EPA will establish priorities for all regulations and introduce
management controls that reflect those priorities. Priorities
and different degrees of attention are essential at EPA
because of the large volume of regulations. More than 400
regulations are already in one stage or another of the
drafting process.
EPA uses the label "Significant" (as recommended in the
Executive Order) for about 200 of its regulations. These
regulations are subject to the formal EPA procedures
outlined in this report. Regulations that are not classified as
Significant are not subject to the uniform procedures
described in this report. They follow other specialized
procedures that include provisions for public review and
comment.
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Federal Register / Vol. 44, No. 104 / Tuesday, May 29, 1979 / Notices
Significant regulations are subdivided as "Routine" and
"Major". Routine regulations will include most of the
Significant actions in the drafting process. The Major
subclass of Significant regulations (about 50 at present)
receive extra attention from senior management, allowing
EPA and the public to focus their attention on the most
important policy areas.
The criteria we use to classify regulations appear in Charts
1 and 2. Figure 2 shows how the classes are related.
Some of EPA's Major regulations require Regulatory
Analyses as specified in Section 3 of the Executive Order.
This requirement is the only factor distinguishing these
regulations from other Major regulations for purposes of
management oversight.
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CHART 1
CRITERIA FOR SIGNIFICANT AND SPECIALIZED
REGULATIONS
EPA presumes that all new regulations are Significant
unless they fall into one of the specialized exclusion
categories below. Significant regulations follow the uniform
development process described in this report. Other
regulations follow separate specialized procedures.
Exclusions:
1. Regulations that are administrative or procedural in nature and
do not affect stringency, compliance costs, or the environmental
(health) benefits of EPA programs.
2. Minor amendments to existing regulations when the amendment
does not affect the stringency, compliance costs, or the
environmental (health) benefits of the regulation.
3. Regulatory actions resulting from detailed Congressional
mandates (e.g., deadline changes) that leave EPA no discretion
to evalua.e alternatives.
4. Regulations designated by a lead office Assistant Administrator
in the notification form as not sufficiently important to require
formal development procedures. Any senior manager may
request a change in the classification to Significant.
5. EPA actions on regulations developed by State and local
governments.* Some of these actions have large impacts;
however, adding this report's procedures to State/local
* These actions do not require the notification form described in Part A(l).
regulation development procedures would introduce
unnecessary duplication of effort and excessive delay. Such
actions include:
a. Approval or disapproval of the following plans and their
revisions: (a) State implementation Plans (SIP) under section 110
of the Clean Air Act and (b) plans for designated pollutants
from designated facilities under section lll(d) of the Clean Air
Act. Although the approval of a SIP or a lll(d) plan with
national policy implications is not subject to full regulation
development procedures, additional EPA review is required. All
SIPs, lll(d) plans, and their revisions are subject to specialized
EPA review procedures that include public participation.
b. Water Quality Standards set by States or by EPA in the event
a State fails to set an acceptable standard. These local
standards are subject to specialized EPA review procedures
that include public participation.
6. Pesticide tolerances and regulations to exempt pesticides from
the provisions of the pesticide statute (the Federal Insecticide,
Fungicide, and Rodenticide Act—FIFRA) under its section 25(b)
because of a determination that: (a) the pesticide is adequately
regulated by another agency, or (b) it is of a character which
need not be subject to FIFRA in order to carry out the purposes
of FIFRA.* (Note: Many important decisions in EPA's pesticide
program do not take the form of regulations and are not
therefore subject to this report. These include pesticide
registrations, cancellations, suspensions, "rebuttable
presumptions against registration", experimental use permits
and emergency exemptions. These actions follow specialized
requirements for public notification and comment.)
CHART 2
CRITERIA FOR MAJOR REGULATIONS
For internal management purposes EPA will divide all
Significant regulations into two classes, Major and Routine.
Both types will follow the uniform regulation development
process. However, Major regulations will receive extra
attention from senior Agency management. We will classify
a regulation as Major if it is likely to:
1. Address a major health or ecological problem.
2. Result in a major health, ecological, or economic impact.
3. Cause substantial urban impact, including constraints on
transportation mobility.
4. Initiate a substantial regulatory program or change in policy.
5. Cause a substantial impact on another EPA program or another
Federal agency program.
6. Cause a substantial change on a national scale in the scope of
State-administered environmental programs or in the
relationship between EPA and States or localities.
7. Cause a disproportionate impact on a particular region of the
United States.
8. Implement a regulatory program central to the basic purpose of
the statute under which it is adopted.
The second general principle of the internal process is
extensive and continuous participation by various EPA
offices. Participatory decisionmaking continues to be
important at EPA because systematic review by other offices
provides several types of valuable input. Scientists and
economists check data and analyses; lawyers check
procedures, clarity and consistency with the law; and other
program managers will know how proposed regulations
would affect their programs. This process starts when the
lead office invites Assistant Administrators, the General
Counsel, Regional Offices, and Staff Offices to send
representatives to a work group to participate in writing a
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30991
Significant regulation. The lead office seeks to identify and
resolve issues at each stage, in work groups. Steering
Committee review, and senior management review. The lead
office retains primary responsibility for new regulations.
When consensus is not reached at a particular level, the
disagreement is spelled out and the matter is taken to a
higher level for review. When consensus is reached on major
issues at lower management levels, the lead office identifies
for senior management the nature of the issue and the
consensus that has been reached. As a result, final decisions
remain with publicly responsible appointed officials at the
top of the Agency. The lead office may withdraw a particular
regulation from parts of the formal process, or use some
modification of the process, as long as it justifies the need
and meets legal and Executive Order requirements. Before
making such changes, the lead office Assistant
Administrator must notify the other Assistant
Administrators, the General Counsel, and Office Directors
and consult with them if requested. The Administrator
resolves any differences of opinion.
The four stages of regulation writing and review are as
follows:
Stage 1: Starting Work on a Regulation
When the Assistant Administrator for a lead office
determines that he or she is required by law or otherwise
decides to start work on a new regulation, he or she sends a
notification form to senior management. This brief standard
form requires .u analysis. The lead office submits this
notification form as soon as possible, usually within 45 days
of the time it learns (through passage of new legislation, a
court order, etc.) that regulation may be necessary.
The notification form tells interested persons that a
regulation is contemplated and allows them to plan
accordingly.
The notification form indicates whether or not the new
regulation is Significant based on the criteria in Chart 1. At
the request of another office the Administrator may
reclassify a regulation as Significant. Submitting this form
places Significant regulations on EPA's Regulatory Agenda,
which is printed quarterly in the Federal Register and
distributed to the public.
NOTE: Regulations not classified as Significant are not subject to
the requirements described below for a development plan and a
decision package. These regulations do not pass through Steering
Committee review. When published in the Federal Register, EPA
will indicate that they do not meet the criteria for Significant EPA
regulations and are subject to specialized development procedures.
Notification forms invite interested offices to assign
appropriate personnel as work group members. (See Chart 3
for a list of EPA offices with formal responsibilities for
regulation development. These offices receive a notification
form.)
The notification forms set a date for submitting a
development plan for Significant regulations to the Steering
Committee.
CHART 3
Office of Planning and Management
Office of Research and Development
Office of Toxic Substances
Office of Water and Waste Management**
The Office of International Activities, Office of Civil Rights. Office
of Environme.nt.il Review, unii Office of Public Awareness will servi
an appropriate work groups.
"Previously called the Office of Air and Waste Management.
"Previously called the Office of Water and Hazardous Materials.
WORK GROUP REPRESENTATION
EPA Regional Offices
Office of Air, Noise and Radiation*
Office of Enforcement
Office of General Counsel
Office of Legislation
Certain actions, such as revisions in State Implementation
Plans, State water quality standards, and some pesticide
actions, are initiated by other organizations and reviewed by
EPA. They do not require a notification form.
Stage 2: Preparation of a Development Plan
The Assistant Administrator for th«: lead office (or
someone, such as a Deputy Assistant Administrator, to
whom such authority is delegated) appoints a chairperson
for the work group assigned to work on a particular
Significant regulation. In the event that special expertise
exists in a Regional Office, the lead office; Assistant
Administrator considers asking the Regional Administrator
to concur in the appointment of an expert in the Regional
Office to serve as chairperson. The lead office puts together
a development plan with the advice and assistance of the
work group. An early step in this process is deciding whether
the Significant regulation falls into the Routine or Major
class (see Chart 2 for criteria). At the request of another
office the Administrator may change this classification.
Development plans for Routine regulations are approved
by the lead office and reviewed by the Steering Committee
before substantial work begins. These development plans
are sent to senior managers for their information.
Development plans for Major regulations are reviewed by
the lead office and the Steering Committee but must pass
through Red Border review and receive the Administrator's
approval before substantial work begins.
The format for the development plan varies according to
the type of regulation. Development plans include the
following items when they are applicable.
• Purpose: This is a brief description of the possible need to
regulate and the consequences of not regulating.
• Schedule: This is a timetable with target dates for:
identifying and notifying interested outside parties,
completion of required analyses of the impacts of the
proposed actions (including a Regulatory Analysis when
required [See Chart 4], an Environmental Impact
Statement when required by Agency policy, and such
other analyses as the lead office will include in the
decision package), completion of the initial draft, internal
and external review of drafts, award and completion of
contract work, any required progress reports, Steering
Committee review, publication of the proposed
regulation, end of the public comment period, and
promulgation of the final regulation.
• Public Notice: This is the text of a Federal Register notice
(usually an Advance Notice of Proposed Rulemaking)
that describes the purpose of the proposed action, the
development schedule, the issues that must be resolved,
the alternatives to be considered, the special analyses
that will be conducted, the plan to obtain external
participation, and the name and location of an
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appropriate Agency contact person. It invites comments
and solicits the submission of needed information.
* Priority Classification. This reports whether the
Significant regulation is Routine or Major according to
EPA criteria (Chart 2).
• Issues: This is a list of issues to be resolved.
• Alternatives: This is a summary of the major options
(available under the authorizing statute) that will be
evaluated, including a discussion of whether alternatives
or supplements to direct regulation are feasible (such as
economic incentives; see the discussion of alternatives in
Part C.I).
• Exclusions: This is a list of any normally required
materials that the work group expects to omit from the
decision package, with a brief explanation.
• Internal Participation: This is a list of offices within EPA
whose expertise and assistance will be needed, und a
plan for coordination with EPA Regional Offices.
• External Participation: This is a plan to involve those
parties outside the Agency in the regulation
development process. It indicates how persons
interested in and affected by the regulation will be
identified, notified, and brought into the process. It notes
any interest by other Interagency Regulatory Liaison
Group members or other Federal agencies and lists
contact persons. It lists actions planned for coordination
with State and local governments.
• Resources: This is an estimate of EPA money and personnel
needed to develop the regulation, with a specific estimate of
resources coming from EPA offices outside the lead office.
Stage 3: Preparation of a Decision Package
After the development plan is completed, the lead office
with the advice and assistance of the work group begins
analyzing alternatives, assembling support materials and
writing the preamble and regulation. These make up the
decision package.
Members of the work group may, in some cases, write
portions of the document. They review drafts as they are
prepared and keep in close touch with their offices' senior
management and Steering Committee representatives.
The work group chairperson has overall responsibility for
regulation drafting and is accountable to lead office
superiors (Division Director, Deputy Assistant
Administrator, and Assistant Administrator), who provide
guidance on the substance, procedures, and policy of the
regulation.
The chairperson is responsible for resolving any issues or
problems that may arise during the drafting process. This
may be done through progress reports to senior management
or by consultation with lead office superiors and other
appropriate EPA managers. For Major regulations the lead
office has an affirmative duty to keep EPA senior
management periodically informed of issues that the work
group has under consideration and to seek their policy
guidance.
The lead office actively seeks the views of outside groups
and consults with them both before and after formal
publication of regulatory proposals. These groups include
those persons directly affected by the regulation,
environmental and other interested groups, industry
representatives, other Federal agencies and State and local
governments. This last group, State and local governments,
often have a major role in the process because they
implement and enforce many EPA regulations and have
special knowledge of local conditions and available program
resources. Whenever possible, the lead office provides an
opportunity (and adequate time) for the outside parties to
re\ u'\\ re\;ulati>r\ proposal* und support documents.
iiu'luditii; the lit'^iihiton .\iuil\sis \\lien one in prepared,
Thr decision package contains the following items:
•Action Memorandum This is a brief summary of the
regulation, and includes >i description of alternatives
considered, em ironiuental. economic, and resource
impacts, unresolved issues, anticipated reactions by the
public, and recommended ac.titm. The alternatives
described should include realistic options that the lead
office and work group have considered seriously. Where
feasible, a summary of incremental environmental and
economic effects should accompany the discussion of
each alternative. The action memorandum contains a
summary of why the recommended alternative is the
least burdensome way to accomplish environmental
goals.
•Federal He^ister Documents: These include a preamble
written in plain Knglish that describes the facts and
rationale for the decision to regulate; and how the
regulation fits into the larger regulatory program; it
shows how the recommended action is the least
burdensome way to accomplish environmental goals. For
final regulations the preamble .iiiiiiiiuirixim public and
inter-governmenlul comments und the A^ency'a msponsR
to each mil/or point ra/seil. The regulation itself is
written in a manner clearly understandable to those it
affects and complies with the Federal Ruyisler Document
Drafting Handbook. The name und address of tin EPA
contact is included.
•Analyses: These; are support documents that lay out the
major issues and show how alternatives wen; analyzed.
The analyses identify and quantify (where possible) the
regulation's environmental effects, economic (including
incremental) impacts, energy impacts, technical
feasibility, anticipated barriers to implementation,
alternatives and supplements to direct regulation, and,
for selected Major regulations, urban and community
impacts. When any of these impacts cannot be
determined exactly, the documents include; the operating
assumptions the; Af>e;ne:y has made; The; analyses show
how unnecessary duplication with either EPA e>r Federal
programs has be;e;n ave>ide:d. The Regulatory Analysis,
when one is required, summarizes the; re:suits of seve;ral
of these analyses. An Environmental Impact Statement is
written when necessary lei ce>mply with Agency policy.
The support documents are avuilublt: to the public or the
reason for confidentiality is explained.
•Resource Requirements Summary: This is a summary of
money and personnel that EPA, State, and local
governments will need to implement the regulation.
(Affected officials and the, public have an opportunity to
review a draft of this assessment.) Where possible, this
includes (or refers to) portiejns of Agency program
guidance and zero base budgeting documents that show
necessary short term and long term adjustments in EPA
resources.
•Reporting Impacts Statement: This details the impacts of
reporting and record-keeping on those subject to the
regulation, including staffing projections and required
expertise. New EPA reporting and record-keeping
requirements have "sunset" expiration schedules fSee
Part D.)
•Public Participation Summary: This is a summary of
comments, including comments from other Federal
agencies and State and local governments received
during the process, and the Agency's response to each
major comment.
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30993
'Evaluation Plan: This is a plan and schedule for
subsequent evaluation of the effects of the regulation.
(See Part C.2.)
Stage 4: Conducting Internal Reviews
After the lead office Assistant Administrator approves the
decision package, he or she submits it for prepublication
review. This process has three parts: Steering Committee
review, Red Border review and final review by the
Administrator.
The Steering Committee reviews all Significant regulations
to help resolve any issues on which the work group does not
reach consensus and to make sure the decision package
meets standards of completeness, quality, and
comprehensibility. When the Steering Committee resolves a
major issue it identifies for senior management the nature of
the issue and the resolution reached. The Steering
Committee makes sure all components of the decision
package are prepared and that material to be published is
cl»ar and understandable. It is the Steering Committee's
responsibility to see that the regulation meets the eight
specific requirements set forth in Section 2(d) of Executive
Order 12044.
For Routine regulations, EPA's senior managers rely on the
Steering Committee to see that decision packages are in
order. They are notified when the Steering Committee
reviews Routine regulations. Unless a senior manager
requests a full Red Border review period, any Routine
decision package that has received consensus approval from
the Steering Committee is scheduled for an expedited Red
Border review of eight working days. At the end of the eighth
day it goes to the Administrator for signature. If the Steering
Committee does not reach a consensus the package enters
normal Red Border review.
During the Red Border process EPA senior management
reviews all Major regulations regardless of concurrence at
lower levels. For Major regulations, the Steering Committee
checks the completeness of decision packages and makes
sure any unresolved issues are clearly and fairly presented
to senior management.
Red Border review of Major regulations does not exceed
three weeks. The lead office Assistant Administrator may
request a shorter review period. The lead office reports to
the senior management on how formal objections or
comments by senior managers have been resolved.
When all top-level reviews are complete or the review
time has lapsed, the regulation goes to the Administrator.
When the Administrator has signed it, it is published in the
Federal Register.
PART B. EXTERNAL PARTICIPATION
EPA will continue to place a high priority on improved
public awareness and public participation in its decision
making processes.
The Administrator will continue to approve Regulatory
Agendas and will see that they are published four times a
year. Each Regulatory Agenda will list the title and status of
all Significant regulations for which notification forms have
been filed and that will be issued in the next year. It will
cite the appropriate statutory authority, say whether a
Regulatory Analysis is required, and give the name and
telephone number of a person to contact at EPA. The Agenda
will show the status of regulations removed from the list
since the last Agenda was published. It will list existing
regulations that are scheduled for review (see Part C.2) and
reporting requirements that will reach their sunset date (see
Part D). In addition to publishing the Agenda in the Federal
Register, EPA will distribute it directly to interested and
affected parties.
For each Significant regulation, EPA will:
(1) Draw up a plan for external participation (as part of
the development plan) that shows in detail how interested
and affected parties will be identified and notified.
(2) Provide early notice that regulation development is
under way. This includes publishing a Federal Register
notice (usually an Advance Notice of Proposed Rulemaking),
which informs the public that work is beginning, provides
the general approach and schedules, and identifies
particular areas where additional information is needed.
This notice describes the purpose, schedule, issues,
available alternatives, analyses, external participation
measures, and the name, address and telephone number of
an EPA contact person for the regulation. EPA will mail this
Notice directly to interested and affected groups and will
use appropriate news articles and radio and television spots
to provide timely notice that regulation development is
beginning.
(3) Meet to discuss issues and alternatives during the
development of the regulation with representatives of
consumer, environmental and minority associations; trade,
industrial, and labor organizations; public health, scientific
and professional societies; educational associations and
other appropriate individuals or groups of interested and
affected parties from outside the Agency.
(4) Hold open conferences, workshops, hearings, meetings,
and arrange direct mailings as appropriate to supplement
other opportunities for public participation, and keep a
mailing list of those interested in receiving draft regulations
and background materials.
(5) Provide suitable background information prior to any
meeting to those who will be attending. This information
may include such material as a description of EPA's
regulation development process; a summary of the draft
regulation and key supporting materials; a list of major
issues; and the name, address and telephone number of
persons who can supply additional information.
(6J Consult with State and local governments. On the day
that he signed Executive Order 12044, President Carter also
signed a memorandum that terminated existing procedures
for the review of Federal regulations by State and local
governments. He asked that each Agency develop substitute
measures. EPA is currently working with national
organizations of State and local public officials to replace
the former review procedures according to the President's
memorandum. For particular regulations EPA also
coordinates with particular States and localities and
consults with groups of non-Federal environmental officials.
A summary of intergovernmental consultation appears in the
Federal Register preambles for new regulations that have
major intergovernmental consequences.
(7) Track any Agency overlap or joint interest with other
members of the Interagency Regulatory Liaison Group. For
regulations of interest to other IRLC members, the preamble
will describe coordination efforts and how they have
affected the substance and procedure of the regulation.
(8) Communicate with other Federal agencies affected by
a planned regulatory action. EPA's lead office contacts
another Federal agency when the other agency (a) has a
statutory mandate in the area'to be regulated, (b) will
require additional resources because of the EPA action, or
(c) has important expertise relevant to the matter to be
regulated. (Note: where possible, any interagency
differences will be resolved at the staff level).
(9) Write the regulation and explanatory materials
clearly. To help lead offices write regulations that people
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can understand. EPA is developing a s/\ le book for
regulation writers, selecting several regulations and
developing them as models of good writing, and hiring
editors to assist work groups write selected regulations.
(10) Make available a draft of the Regulators Analvsis
(when one is required) by the time we publish a Notice of
Proposed Rulemaking. The Federal Register preamble will
have a summary of the Regulatory Analysis and information
on how the public can obtain it. (Note: EPA will make public
a final Regulatory Analysis when it publishes the final rule.)
(11) Provide at least 60 days for public comment.
measured from the date the proposal is published, and
refrain from requiring commenters to supply multiple copies
of their comments. When a 60-day comment period is not
possible the proposal will contain a brief statement of the
reasons for using a shorter time period.
(12) Summarize outside comments, indicate EPA 's
response to major points and distribute both to interested
and affected individuals and groups. (We summarize
comments and our responses in preambles to our final
regulations.)
As stated in the July 11, 1978 version of this report, EPA
will adopt an Agency-wide public participation policy and
write specific guidance to its employees for ensuring public
participation in the regulation writing process. We intend to
adopt the policy and corresponding guidance using a process
that will fully and effectively involve interested and affected
persons outside EPA. Although we don't now know the form
the overall policy or the guidance will take, they will
contain at a minimum the twelve elements listed above.
PART C. ANALYSIS
The Executive Order calls for careful analysis of available
regulatory alternatives. In this Part we describe criteria and
procedures for EPA analysis of (1) the economic effects of
new Significant regulations and (2) regulations the Agency
has already issued.
(1) Economic Analysis for New Significant Regulations
Other parts of this report (see Part A) describe the range of
analyses that EPA will provide for all Significant regulations:
EPA assesses health, ecological, economic, urban, energy,
and program resource impacts. This subpart provides further
detail on EPA's economic analysis requirements. In each
economic analysis the lead office indicates by reference the
other parts of the decision package that analyze the benefits
the regulation will generate. This provides to the extent
possible a clear identification of *he regulation's costs and
benefits. The economic analysis itself examines, in
appropriate cases, positive as well as negative economic
consequences.
The extent of analysis of the economic impact of new
Significant regulations depends on whether the regulation is
Routine, Major, or subject to the Regulatory Analysis
requirements of the Executive Order. Guidelines based on
our current internal requirements are presented for each of
these categories. The guidelines in section (a) apply to those
Major regulations that trigger a Regulatory Analysis (see
Chart 4). Not all'regulations requiring a Regulatory Analysis
lend themselves to the analytic approach in the guidelines. In
these cases, the lead office with the advice and assistance of
the work group may amend the approach to suit the
circumstances. For other Major regulations a less intensive
analysis is sufficient, as described in section (b). For Routine
regulations the basic guidelines in section (c) apply.
CHART 4
CRITERIA FOR CONDUCTING REGULATORY ANALYSES
The lead office prepares a Regulatory Analysis of
potential economic impacts for any regulation that triggers
i>ne of the following criteria:
1 Additional annual costs of (.ompli.mrr, including capital charges
(interest and depreciation), total $1(M) million (i) within any one
of the first five years of implementation. 01 (ii). if applicable.
withm any calendar year up to the date liy which the law
re()inres attainment of the lelevant pollution standard.
2 Total additional cost of production of any major industry
product or service exceeds !i percent of the selling price of the
product
3. The Administrator requests such an analysis (for example.
when there appear to lie major imparts on geographical regions
or local govcrnmenls|.
(a) Guidelines for Regulators Anulvsitt
The lead office bases its Regulatory Analysis on the
general approach described below. KPA has used this
approach to determine the costs of such regulations as
effluent guidelines and new source performance standards.
Some types of regulations may require a modified approach.
Sewage treatment plant regulations and some solid waste
regulations that affect primarily other government agencies
are examples that do not require industry segmentation as
part of the analysis.
General Approach
t Prepare an economic profile of the affected sectors
(producers and/or consumers), including the industry
structure (e.g., degree of concentration, the way prices are
determined), the type of competition in the affected sectors,
and performance trends (e.g., financial rates, growth trends)
of the affected sectors.
2. Segment the industry (or other affected groups) into
categories of economic units that will be similarly-impacted
(e.g., according to size distribution, pollution control process,
age).
3. Develop marginal (incremental) cost affactivcnuss
curves for each process/strategy for each affected industry
segment.
4. Analyze the economic impact of proposed standards
and of alternatives including any economic benefits from
regulation such as the generation of new product markets
and newemployment opportunities. It may not be necessary
to analyze all alternatives in the same level of detail. The
following impacts are analyzed when feasible:
(a) price effects
(b) production effects
(c) industry growth, profitability, capital availability
effects
(d) employment effects
(e) community effects, including disproportionate effects
on particular regions or localities
(f) balance of trade effects
(g) energy effects
When feasible, effects on productivity are described.
For grant programs, some impact categories are not
applicable, although user charges (as an analogue to
price), effects on communities (affordability,
employment, growth), and energy effects may be
applicable.
EPA has developed more detailed internal working
guidance to assist program offices in conducting their
economic analyses. It is available upon request from Frans I.
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Kok, Director, Economic Analysis Division, EPA,
Washington, D.C. 20460.
Alternatives
Although the decision package for a regulation addresses
alternatives available under the authorizing statute, the lead
office and work group may, during their analysis, identify
attractive regulatory alternatives that cannot be
implemented under existing law. EPA will review such
alternatives and, where appropriate, develop (apart from the
regulation development process) legislative proposals that
would permit their use.
The analysis covers the important alternatives that EPA
has considered. Such alternatives may include:
1. Alternative types of regulations
—taking no additional regulatory action.
—relying on market forces (e.g., use of a marketable rights
approach).
—using an informational requirement where applicable
(e.g., product labeling).
—specifying performance levels (e.g., an allowable level of
emissions) but allowing those regulated to achieve
attainment by whatever means they prefer.
—using engineering design approaches that specify how a
proposed outcome is to be achieved.
2. Alternative stringency levels
—making the standard or regulation either more or less
stringent.
—tailoring the degree of stringency to stages of processing,
particular h.uustries or other pertinent groups.
3. Alternative timing
—using different effective dates.
—phasing in the requirement more or less rapidly.
4. Alternative methods of ensuring compliance
—using economic incentives.
—employing various enforcement options (e.g., on-site
inspections vs. periodic reporting, sharing
implementation responsibilities variously among the
different levels of government).
—using different compliance methods for different
industry segments or types of economic activity where
costs of compliance vary sharply (e.g.. treating small
firms and large firms differently).
(b) Other Major Regulations
For Major regulations that do not require a Regulatory
Analysis, the lead office conducts an analysis for EPA
purposes. This analysis follows the same general approach
as outlined above, but it need not provide the same level of
detail as a formal Regulatory Analysis.
(c) Routine Regulations
EPA will continue to analyze all Routine regulations for
insights into the potential effects on the economy and on
those who are affected.
To minimize the burden on lead offices, this analysis is
less sophisticated. It includes the following estimates:
—the number of establishments that will be affected
—an estimate of the total costs that will be borne by each
affected industry segment
—an estimate of the price impacts under an assumption
that cost changes will be reflected in prices
—an estimate of revenue changes for each segment if costs
are not fully reflected in price changes
—an estimate of job gains and losses
—an estimate of total energy impacts for each affected
industry segment
—an estimate of impacts on any particular regions and
localities that will be more seriously affected than
others.
This analysis covers both the proposed regulation and, if
applicable, the alternatives considered; however some
alternatives may be analyzed in less detail.
(2) Review of Existing Regulations
Section 4 of the Executive Order calls for the review of
existing regulations. To comply, EPA has established criteria
and processes to select regulations for immediate review and
to identify additional regulations for subsequent review.
Section 2 of the Executive Order requires that each new
Significant regulation include a plan for its future evaluation.
(a) Selection Criteria and Process
Many of EPA's most important regulations have recently
been reviewed or scheduled for review in response to
statutory or judicial direction:
Air Program
—Ambient Air Quality Standards
—New Source Performance Standards
—Approval of State Implementation Plans
Water Program
—Best Available Technology for Primary Industries
—Water Quality Management and Standards Regulations
—NPDES Permit Regulations
—Construction Grants Regulations
This set of reviews is either under way or completed. To
make the review of existing regulations a comprehensive
program, EPA has begun to screen all of its existing
regulations. The screening will conclude in November 1979.
The EPA program office responsible for each part (or
subpart) of Title 40 of the Code of Federal Regulations
(which contains almost all of EPA's regulations) has formed
work groups to conduct the screening.
The lead office, with the advice and assistance of the work
group, is relying on currently available data for this initial
screening. The selection criteria are:
—Estimated high actual costs to the public of the
regulation;
—Estimated low actual benefits;
—Existence of overlap with other regulations (issued by
EPA or other agencies);
—Need for integration with other programs;
—Existence of preferable alternatives;
—Low degree of compliance;
—Low enforceability;
—High reporting burden;
—Lack of clear language;
—Length of time since the regulation became effective or
was last substantively amended; *
—Intensity of public sentiment in favor of changing the
regulation;
—Availability of adequate data for analysis of the
effectiveness and cost of the regulation.
During the screening the lead office will summarize its
assessment of each regulation and designate appropriate •
regulations for formal review. It will prepare a plan to
review all regulations so selected within five years. When
possible the lead office will schedule related regulations for
review at the same time.
The review plan will include an estimate of the necessary
dollar resources and identify data needed for the review.
Where there are not sufficient data for review, the plan will
include provisions for obtaining them. The lead office should
make any request for additional or reprogrammed resources
* EPA is now writing regulations that will be adopted during the screening
project, including regulations to implement a hazardous waste control
program, identify criteria for acceptable landfills, and set various new air
quality and drinking water standards Such new regulations are not subject to
the screening or review requirements listed in this Part They are subject to
section (c) of this Part which asks that each new Significant regulation contain
an evaluation plan.
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to carry out its review plan through the zero base budget
process.
The lead office will submit designated regulations and
review plans to the Steering Committee for review and to
senior management for approval.
EPA will publish its five-year review schedule in 1979 and
will indicate upcoming reviews as a regular part of its
quarterly Regulatory Agendas.
(b) Nature of the Review
Once it has selected a regulation for review, the lead office
will conduct the review at the time scheduled in the five year
plan with the advice and assistance of a work group.
The review of existing regulations will follow the
procedures for the development of new regulations, including
measures to assure public participation. The review will not
duplicate any analyses made when the regulation was first
issued if the analyses are still valid and meet current quality
standards.
(c) Development of Evaluation Plans
Section 2(d)(8) of the Executive Order requires that each
new Significant regulation have a plan for evaluating its
effectiveness. In compliance with this requirement, the lead
office for each Significant regulation develops a plan to
evaluate the regulation within five years of implementation.
Evaluation plans indicate the resource needs, data
requirements, and a schedule for conducting the subsequent
evaluation. One objective of the evaluation is to improve the
relevance and adequacy of data collected over time to
support the analysis of regulatory effectiveness. In order to
invite public involvement in these evaluations, a schedule of
upcoming assessments will appear regularly in EPA's
Regulatory Agenda.
If an evaluation leads to modification of the regulation, the
full procedures of this report (including provisions for
external participation) will apply.
Part of each evaluation will be a plan and schedule for
subsequent evaluation. In this way EPA regulations will
receive continuing retrospective reviews.
PART D: REPORTING BURDENS REDUCTION
To carry out its statutory mandates, EPA must obtain data
from the public, industry, and State and local governments.
We often request data on environmental (health) effects,
economic parameters, pollutant discharge and emission
rates, and much more. EPA's permit and grant programs also
require submission of applications that often contain
detailed requests for information.
While this information remains essential, EPA has
installed mechanisms to minimize paperwork, record-
keeping and reporting burdens wherever possible. These
devices comply with Section 2(d) of the Executive Order,
which requires an analysis of new reporting or record-
keeping burdens before Significant new regulations are
adopted; and with Section 4 which requires a review of
burdens imposed by existing regulations.
First, EPA has established a "sunset" policy on reporting
and recordkeeping requirements contained in new
regulations. This will terminate automatically those reports
that cannot be justified after a set period, usually five years.
If a lead office requests renewal of a reporting requirement,
EPA will conduct an internal review (not to exceed six
months) of its costs and its benefits. The reporting
requirement will not expire during the time it is under
review. The review process will include an early opportunity
for public comment. Only after this review, and upon order
of the Administrator, will a reporting requirement continue
beyond its sunset date. (See Appendix A for details of this
policy.)
Second, EPA requires a "reports impact analysis" for all
new Significant regulations. This analysis is part of the
decision package that moves through the review stages
described in Part A. The analysis describes the reason for
the reports, evaluates major alternatives (including the use
of existing sources of information), outlines the information
requested and the form of the report, and estimates the costs
for the Agency and for those reporting to collect, prepare and
analyze the data. The analysis describes any known
overlapping data requirements imposed by other government
agencies in order to prevent duplication of burdens. EPA
considers public comments on the analysis before it issues
the regulation.
Third, EPA continues to include a request for public
comment on reporting burdens in the Federal Register
preambles for proposed new regulations. In the past, EPA
has sent these comments to the Office of Management and
Budget when seeking OMB clearance for the report. The lead
office and work group consider these comments in drafting
the final regulation.
Fourth, as part of its screening and review of existing
regulations (according to subpart C.2 of this report) EPA is
re-examining reporting and record-keeping requirements.
These reviews follow the public participation measures used
for new regulations.
APPENDIX A—SUNSET POLICY FOR NEW REPORTING
REQUIREMENTS
I. Coverage
New regulations that impose a reporting or record-keeping
requirement contain a provision for repeal of that
requirement on a specific date unless action is taken by EPA
to renew or modify it.
This policy places a continuing burden of proving the
report's desirability on those who advocate its retention. The
process will include participation by affected parties and
the general public.
The lead office proposing a new regulation that imposes a
reporting requirement must include a sunset provision. The
lead office has three options:
(1) To set as a termination date the semiannual sunset
date (May 1 or November 1) that falls within 5 years
after reporting begins (e.g., a reporting requirement
• taking effect on January 1, 1979 would expire no later
than November 1,1983).
(2) To set an earlier or later sunset date, depending on
such factors as the life-span of the program for which the
information is being sought; the time needed to evaluate
the usefulness of the report; and the burden that frequent
changes in the reporting requirement might impose.
(3) To exempt the reporting requirement from the sunset
process if the resources that would be needed for a
sunset review are greater than the burdens imposed by
the report itself, or if the report is required by statute.
II. Review
The review process will begin six months before the
scheduled sunset date. At that time, EPA will publish in its
Regulatory Agenda a list of reporting requirements due to
expire on the next semiannual sunset date. This notice will
invite public comment on the need to review, modify or
terminate any of the requirements scheduled to expire. The
EPA lead office administering the requirement and any
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30997
outside party affected by the program may request renewal
for an appropriate period.
After 60 days, another public notice will list those
reporting requirements for which renewal has been
requested. It will invite further public comment to be
included in a public docket for each requirement.
The lead office that administers the requirement will
evaluate it, inviting other interested EPA offices (including
the office with responsibility for reports management) to
participate on a work group. The evaluation will resemble
the reports impact analysis for new regulations, but will
reflect the actual costs, burdens, and usefulness of the
reporting requirement. The program office and work group
either must provide a justification for renewing the
requirement or recommend that it be modified or terminated.
The Steering Committee will review the assessment along
with public comment and Agency responses to those
comments and recommend to the Administrator that he
renew, modify, or terminate the reporting requirement. Upon
his approval the Administrator will sign an order
implementing the decision.
On the sunset date, a Federal Register notice will list
those regulations repealed and those renewed. Reporting
requirements will not lapse while they are under review. In
the case of a regulation for which modification is proposed
EPA will retain it until the Agency completes procedures to
implement the modified regulation.
APPENDIX B-RESPONSE TO PUBLIC COMMENTS
I. Background
In the two months following publication of its draft report
on improving the regulation writing process, EPA received 65
written comments from interested organizations and
individuals. These suggestions and critiques came from
private companies, trade associations, governmental
agencies, public interest groups and citizens. They were
carefully considered along with transcripts from public
meetings in San Francisco, Kansas City and Washington,
D.C., as the EPA staff prepared the final report on the
regulatory process.
This summary of public comments cannot begin to catalog
the depth and variety of thoughtful comments EPA received.
All of the public comments, however, have been compiled
for internal use, especially in drafting public participation
provisions of the proposed "EPA Guidelines for Regulatory
Development." For a detailed compilation of public
comments please contact Chris Kirtz, EPA, (PM-223),
Washington, D.C. 20460.
II. Analysis for New Regulations
One of the most important revisions had to do with the
impact of EPA regulations on local communities. As a result
of comments, a new criterion has been added to the list of
items to be considered in the Regulatory Analysis conducted
for new regulations. In the future each new regulation will be
examined for any disproportionate effects it might have on
particular regions or localities. Similarly, regulations that do
not require a Regulatory Analysis will also be studied for an
estimate of the impacts on particular regions or localities
that are most severely affected.
In addition EPA has specified that economic analyses of
new regulations consider the positive as well as any
negative economic consequences of the regulation being
proposed. This suggestion came from several commenters.
Because EPA has to regulate in situations where
information is imperfect or incomplete, certain assumptions
must be made. In the future, the analyses will state these
assumptions explicitly and their rationale.
A number of commenters suggested that the quantitative
criteria for preparing a formal Regulatory Analysis—$100
million in annual costs or 5% impact on product costs—are
too high. We retained these criteria, which EPA has used for
preparing Economic Impact Assessments in the past. EPA
will subject all regulations to rigorous economic analysis, but
feels it must marshal its analytic resources to provide the
most thorough analysis on the regulations with greatest
potential impact.
III. Review of Existing Regulations
The public's concern with procedures for reviewing
existing regulations led to modifications in the final report.
Those commenting on the review process agreed that EPA
. must take into account the cumulative effects of related
regulations. In the future, lead offices will schedule existing
related regulations for review at the same time when
possible. Because the public expressed interest in which
regulations will be reviewed and when the review will take
place, EPA will publish a five year review plan that will list
all the major existing regulations scheduled for scrutiny.
Upcoming reviews of individual regulations will also be
listed in EPA's quarterly Regulatory Agenda.
Several commenters recommended a "sunset" policy for
all EPA regulations. EPA believes that the existence of
expiration dates for its regulations could give those regulated
an incentive to delay compliance. However, the final report
clarifies the Agency's intent to conduct a fresh evaluation of
regulations every 5 years.
IV. Paperwork Burdens
Some commenters expressed concern that EPA regulations
might impose reporting or record-keeping burdens
duplicating those of other government agencies. In response
to this concern, EPA lead offices are now required to
describe in their "reports impact analysis," known data
requirements imposed by other agencies so that duplication
can be avoided. This reports impact analysis will be
presented for Administrator and senior management review
in each decision package going to the Administrator for
signature.
There was extremely broad support for EPA's proposed
"sunset" provision that will set a five-year time limit for
reporting and record-keeping requirements unless a need for
their continuance is demonstrated. The final report clarifies
that "sunset" covers both reporting and record-keeping and
makes it clear that the burden of proof rests with those
advocating retention of the requirements.
V. External Participation
Most commenters, particularly the participants in the
public meetings, were interested in the public participation
procedures for EPA regulation writing. Based on their
suggestions, EPA has made several modifications for this
final report. To make sure there is no delay in informing the
public about a proposed regulation, a new requirement has
been added. Whenever a lead office Assistant Administrator
learns that a new regulation will be required—due to new
legislation, a court order, etc.—the lead office will submit a
notification form within 45 days. The next Regulatory
Agenda will provide public notice that action is intended.
As another step to keep the public regularly informed of
work in progress, EPA has expanded the publication of its
Regulatory Agenda from twice a year to four times a year.
Comments on the importance of early and informed public
participation generated additional procedural changes,
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including requirements that (1) the lead office keep lists of
interested and affected people outside the Agency for use as
contact points for each regulation; (2) the Agency provide
appropriate background information for public use prior to
public meetings; and (3) the Agency distribute Advance
Notices of Proposed Rulemaking as widely as possible.
There were several comments that a 60-day public
comment period for proposed regulations is too short, that
EPA should more frequently hold meetings and hearings in
relevant field locations, and that State and local
governments should be invited to consult on new
regulations. The final report does not address these
suggestions; the Agency will investigate these points more
carefully as it develops its Agency-wide guidance on
external participation and as it formulates its new inter-
governmental consultation procedures in compliance with
the President's March 1978 memorandum.
Opinion was divided on whether EPA should fund
external participation in regulation development. The final
report takes no position on this matter. EPA has undertaken
a pilot funding program and will base its policy on the
results of the test program.
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