Day 10: The Institutional Setting

Daniel J. Mallinson

School of Public AffairsPenn State Harrisburgmallinson@psu.edu

PUBPL 481

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Road map

Finish discussing the regulatory process

Start outlining the institutional setting forenvironmental policymaking

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Statutory Mandates

Vague/Broad Language

“just and reasonable rates”

“eliminate unfair and deceptive practices”

“reasonably be anticipated to endanger”

Result?

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Be the Regulator

1 For the purpose of establishing national primary andsecondary ambient air quality standards, theAdministrator shall within 30 days, publish, and shallfrom time to time thereafter revise, a list whichincludes each air pollutant–

A emissions of which, in his judgment, cause orcontribute to air pollution which may reasonably beanticipated to endanger public health or welfare;

B the presence of which in the ambient air results fromnumerous or diverse mobile or stationary sources; and

C for which air quality criteria had not been issued, butfor which he plans to issue air quality criteria underthis section.

Clean Air Act (42 U.S.C. §7408)

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Process (Simplified)

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Process (Real)

The Reg MapInformal Rulemaking

Administrative ProcedureAct Provisions

Under the Administrative ProcedureAct provisions that are included aspart of the Freedom of InformationAct at 5 U.S.C. 552, agencies arerequired to publish in the FederalRegister:

• Substantive rules of generalapplicability

• Interpretive rules• Statements of general policy• Rules of procedure• Information about forms• Information concerning

agency organization andmethods of operation

Proposed Rule

A notice of proposed rulemakingproposes to add, change, or deleteregulatory text and contains arequest for public comments.

OMB Review UnderExecutive Order 12866

OMB reviews only those rulemakingactions determined to be“significant.”

Independent agencies are exemptfrom OMB review.

Administrative ProcedureAct Provisions

The Administrative Procedure Actprovisions at 5 U.S.C. 553 requireproposed rules to be published inthe Federal Register.

Final Rule

A final rule adds, changes, deletes,or affirms regulatory text.

OMB Review UnderExecutive Order 12866

OMB reviews only those rulemakingactions determined to be“significant.”

Independent agencies are exemptfrom OMB review.

Congressional Review Act(5 U.S.C. 801-808)

An agency must submit most finalrules, interim final rules, and directfinal rules, along with supportinginformation, to both houses ofCongress and the General AccountingOffice before they can take effect.

Major rules are subject to a delayed effective date (with certainexceptions).

Action by Congress and the Presidentcould have an impact on the rule.

Determination Whether a Rule

Is Needed

Step TwoPreparation ofProposed Rule

Step ThreeOMB Review ofProposed Rule

Step FourPublication ofProposed Rule

Step FivePublic Comments

Step SixPreparation of

Final Rule,Interim Final

Rule, or DirectFinal Rule

Step SevenOMB Review of Final Rule,Interim Final

Rule, or DirectFinal Rule

Step EightPublication of

Final Rule,Interim Final

Rule, or DirectFinal Rule

Step Nine

Regulatory Planning and Review (E.O. 12866)

Would the rule have a $100 million annual impact, raise novel issues, and/or have other significant impacts? ➔ If yes Prepare economic impact analysis.

Regulatory Planning andReview (E.O. 12866)

Rulemaking documents must complywith the specified regulatory phi-losophy and principles of regulation.

DraftingRequirements

for RulemakingDocuments

Unified Regulatory Agenda

The Unified Regulatory Agendaprovides information concerningagency rules under development or review.

The Unified Regulatory Agenda ispublished in the Federal Register inthe spring and fall of each year.

Agendas for Rules Under

Development orReview

Experts in drafting rulemaking documentsand preparing supporting analyses

Visit us at www.regsupport.com. Also, check out www.CommentWorks.com for afaster, cheaper, and better way to respond to publiccomments on proposed rules.

Copyright ©2003 by ICF Incorporated.

All rights reserved. This document may not bereproduced in any form without permission.

Specific Analyses for Steps Three and Seven

Agency Initiatives

Agency initiatives for rulemakingoriginate from such things as:

• Agency priorities and plans• New scientific data• New technologies• Accidents

Initiating Events

Step One

Required Reviews

Statutory Mandates

Recommendations fromOther Agencies/ExternalGroups/States/FederalAdvisory Committees

Lawsuits

Petitions

OMB Prompt Letters

Optional SupplementaryProcedures to Help

Prepare a Proposed Rule

Advance Notice of Proposed Rulemaking An advance notice of proposedrulemaking requests informationneeded for developing a proposed rule.

Negotiated Rulemaking Negotiated rulemaking is amechanism under the NegotiatedRulemaking Act (5 U.S.C. 561-570)for bringing together representa-tives of an agency and the variousinterests to negotiate the text of aproposed rule.

Administrative ProcedureAct Provisions

Under the Administrative ProcedureAct provisions at 5 U.S.C. 553, rulesmay be established only afterproposed rulemaking procedures(steps three through six) have beenfollowed, unless an exemptionapplies. The following are exempted:

• Rules concerning military orforeign affairs functions

• Rules concerning agencymanagement or personnel

• Rules concerning publicproperty, loans, grants,benefits, or contracts

• Interpretive rules• General statements of policy• Rules of agency organization,

procedure, or practice• Nonsignificant rules for which

the agency determines thatpublic input is not warranted

• Rules published on anemergency basis

Note: Even if an exemption appliesunder the Administrative ProcedureAct provisions, other statutoryauthority or agency policy mayrequire that proposed rulemakingprocedures be followed.

Special Types of Final Rules

Interim Final Rule An interim final rule adds, changes,or deletes regulatory text andcontains a request for comments.The subsequent final rule may makechanges to the text of the interimfinal rule.

Direct Final Rule A direct final rule adds, changes, or deletes regulatory text at aspecified future time, with a duty towithdraw the rule if the agencyreceives adverse comments within the period specified by the agency.

Administrative ProcedureAct Provisions

Under the Administrative ProcedureAct provisions that are included aspart of the Freedom of InformationAct at 5 U.S.C. 552, agencies arerequired to publish final rules, inter-im final rules, and direct final rulesin the Federal Register.

Federal Register Act (44 U.S.C. 1501-1511)

The Federal Register Act at 44U.S.C. 1510 (implemented at 1 CFR8.1) requires rules that have generalapplicability and legal effect to bepublished in the Code of FederalRegulations.

Paperwork Reduction Act (44 U.S.C. 3501–3520)

Does the rule contain a “collection of information” (reporting, disclosure, or recordkeeping)? ➔ If yes Prepare information collection clearance

package for OMB review and approval, andprepare request for public comments.

Unfunded Mandates Reform Act (2 U.S.C. Chs. 17A, 25)

Does the rulemaking process include a proposed rule? ➔ If yes

Does the rule include any Federal mandate that may resultin the expenditure (direct costs minus direct savings) by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million in any one year ➔ and yes Prepare unfunded mandates analysis (adjusted annually)? (unless an exclusion applies).

Federalism (E.O. 13132)

Is the rule a discretionary rule that has federalism impli-cations and imposes substantial unreimbursed direct compliance costs on State and local governments? ➔ If yes Prepare federalism summary impact statement.

Does the rule have federalism implications and preempt State law? ➔ If yes Prepare federalism summary impact statement.

Indian Tribal Governments (E.O. 13175)

Is the rule a discretionary rule that has tribal implications and imposes substantial unreimbursed direct compliance costs on Indian tribal governments? ➔ If yes Prepare tribal summary impact statement.

Does the rule have tribal implications and preempt tribal law? ➔ If yes Prepare tribal summary impact statement.

National Technology Transfer and Advancement Act (15 U.S.C. 272 note)

Does the rule contain provisions for which the use of voluntary standards is applicable? ➔ If yes Adopt voluntary consensus standards or

explain why not.

Governmental Actions and Interference with Constitutionally Protected Property Rights (E.O. 12630)

Does the rule regulate private property use for the protection of public health or safety? ➔ If yes Prepare takings analysis.

Is the rulemaking a proposed regulatory action that has takings implications (other than regulating private property for the protection of public health and safety)? ➔ If yes Prepare takings analysis.

Protection of Children from Environmental Health Risks and Safety Risks (E.O. 13045)

Is the rulemaking a “covered regulatory action”? ➔ If yes Prepare analysis of the environmental healthor safety effects on children.

Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (E.O. 13211)

Is the rulemaking action a “significant energy action”? ➔ If yes Prepare statement of energy effects.

Federal RegisterPublications

Rulemaking documents must complywith the Federal Register regulations(1 CFR). Additional guidance andrequirements are contained in theFederal Register’s Document DraftingHandbook.

Presidential Memorandumon Plain Language

(63 FR 31885)

Rulemaking documents mustcomply with plain languageprinciples.

Civil Justice Reform (E.O. 12988)

Rulemaking documents must bewritten in clear language designedto help reduce litigation.

Regulatory Plan

The Regulatory Plan providesinformation concerning the mostimportant significant regulatoryactions that the agency is planningto take.

The Regulatory Plan is published inthe Unified Regulatory Agenda inthe fall of each year.

Regulatory FlexibilityAgenda

The Regulatory Flexibility Agendaprovides information concerningany rule that an agency expects toprepare or promulgate that is likelyto have a significant economicimpact on a substantial number ofsmall entities.

Agency regulatory flexibility agendasare published as part of the UnifiedRegulatory Agenda in the springand fall of each year.

National Environmental Policy Act (42 U.S.C. 4321–4347)

Is the rule categorically excluded from review? ➔ If no

Does the rule constitute a major Federal action that could significantly affect the quality of the human environment? ➔ and yes Prepare environmental assessment or

environmental impact statement, asappropriate.

Comments

Under the Administrative ProcedureAct provisions of 5 U.S.C. 553, anagency must provide the public theopportunity to submit written comments for consideration by theagency.

As required by Public Law No. 107-347,agencies must provide for submissionof comments by electronic means andmust make available online thecomments and other materialsincluded in the rulemaking docketunder 5 U.S.C. 553 (c).

Executive Order 12866 established60 days as the standard for thecomment period.

The holding of a public hearing isdiscretionary unless required bystatute or agency policy.

Using The Reg MapThe Reg Map is based on general requirements.In some cases, more stringent or less stringentrequirements are imposed by statutory provisionsthat are agency specific or subject matter specific.Also, in some cases more stringent requirementsare imposed by agency policy.

In a typical case, a rulemaking action wouldproceed from step one through step nine with aproposed rule and a final rule.

However, if a rulemaking action is exempt fromthe proposed rulemaking procedures under theAdministrative Procedure Act provisions(explained under step three) or under otherstatutory authority, an agency may:

• promulgate a final rule omitting steps threethrough six, or

• promulgate an interim final rule omitting stepsthree through six, but providing a commentperiod and a final rule after step nine.

Also, if an agency determines that a rule likelywould not generate adverse comment, theagency may promulgate a direct final rule,omitting steps three through six, but with aduty to withdraw the rule if the agency receivesadverse comments within the period specifiedby the agency.

Regulatory Flexibility Act (5 U.S.C. 601–612)

Is a notice of proposed rulemaking required by law? ➔ If yes

Would the rule “have a significant economic impact on a substantial number of small entities”? ➔ and yes Prepare regulatory flexibility analysis.

Note: Under limited circumstances analyses also are required for certain interpretive rules involving internal revenue laws (5 U.S.C. 603, 604).

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Procedure, Procedure, Procedure

Fair procedure is important

Often makes process less efficient

Courts more often than not review procedure, notsubstance of rulemakings when they are challenged

Requirements for standing: injury, ability of court toremedy

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Resources for Regulation

Science and Risk Analysis

How does what Smith writes about science and riskanalysis echo and/or disagree with what we discussed onTuesday in Carolan (2008)?

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Resources for Regulation

Science and Risk Analysis

Key points from Smith:

1 Analysis is as political as it is scientific - conflict ofvalues

2 Modeling future events inevitably includes uncertainty

3 Interpretations vary across scientific disciplinesregarding pollution risk/harm

4 Focuses on “acceptable” risk, not potentialalternatives to risky activity

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Resources for Regulation

Cost-Benefit Analysis

Striving for certainty

Some costs and benefits cannot be quantifiedHow much is a human life worth (2016)?

EPA: $10 millionUSDA: $8.9 millionFDA: $9.5 millionDOT: $9.6 million

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Resources for Regulation

Cost-Benefit Analysis

Striving for certainty

Some costs and benefits cannot be quantifiedHow much is a human life worth (2016)?

EPA: $10 millionUSDA: $8.9 millionFDA: $9.5 millionDOT: $9.6 million

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Resources for Regulation

Marginal Utility

Source: economnomnomics.com, CC BY-NC 2.5 Source: Surbhi S. (2016)

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Final Point on Regulation

Do not forget that both science and politics/policyinvolve values. Need to understand value conflicts, notjust scientific evidence.

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Institutional Setting

Let’s break into two teams: (1) Team Formal and (2)Team Informal. Discuss how your team contributes to theformation of public policy. Use the process modelpresented in the text:

Policy Process Model

Agenda Setting → Policy Making → Implementation

Think about how each of your team’s institutionscontribute resources/inputs into each stage of the process.

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Iron Triangles or Issue Networks?

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Institutional Biases

Why do these biases exist? How do they affect policyoutcomes?

Incrementalism

Decentralization

Short-term Bias

Ideological Bias

Private Nature of Policymaking

Crisis and Reforms

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