Executive Order 12866 Regulatory Planning and Review  October 1993 

      Ex. Ord. No. 12866, Sept. 30, 1993, 58 F.R. 51735, as amended by

    Ex. Ord. No. 13258, Feb. 26, 2002, 67 F.R. 9385

Original  

see also Circular A-4  September 17, 2003  TO THE HEADS OF EXECUTIVE AGENCIES AND ESTABLISHMENTS Subject: Regulatory Analysis The Presumption Against Economic Regulation

The American people deserve a regulatory system that works for    them, not against them: a regulatory system that protects and    improves their health, safety, environment, and well-being and  improves the performance of the economy without imposing    unacceptable or unreasonable costs on society; regulatory policies that recognize that the private sector and private markets are the best engine for economic growth; regulatory approaches that respect    the role of State, local, and tribal governments; and regulations  that are effective, consistent, sensible, and understandable.  We do not have such a regulatory system today.

With this Executive order, the Federal Government begins a  program to reform and make more efficient the regulatory process.  The objectives of this Executive order are to enhance planning and  coordination with respect to both new and existing regulations; to    reaffirm the primacy of Federal agencies in the regulatory    decision-making process; to restore the integrity and legitimacy of    regulatory review and oversight; and to make the process more    accessible and open to the public.  In pursuing these objectives, the regulatory process shall be conducted so as to meet applicable  statutory requirements and with due regard to the discretion that  has been entrusted to the Federal agencies.

Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1. Statement of Regulatory Philosophy and Principles.

      (a) The Regulatory Philosophy. Federal agencies should promulgate  only such regulations as 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 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 shall be understood to 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.  Further, in choosing among alternative regulatory    approaches, agencies should select those approaches that maximize    net benefits (including potential economic, environmental, public    health and safety, and other advantages; distributive impacts; and    equity), unless a statute requires another regulatory approach.

      (b) The Principles of Regulation. To ensure that the agencies' regulatory programs are consistent with the philosophy set forth  above, agencies should adhere to the following principles, to the  extent permitted by law and where applicable:

      (1) Each agency shall identify the problem that it intends to  address (including, where applicable, the failures of private  markets or public institutions that warrant new agency action) as well as assess the significance of that problem.

      (2) Each agency shall examine whether existing regulations (or other law) have created, or contributed to, the problem that a new regulation is intended to correct and whether those regulations (or other law) should be modified to achieve the intended goal of  regulation more effectively.

      (3) Each agency shall identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable  permits, or providing information upon which choices can be made by  the public.

      (4) In setting regulatory priorities, each agency shall consider, to the extent reasonable, the degree and nature of the risks posed by various substances or activities within its jurisdiction.

      (5) When an agency determines that a regulation is the best    available method of achieving the regulatory objective, it shall 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.

      (6) Each agency shall 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.

      (7) Each agency shall base its decisions on the best reasonably    obtainable scientific, technical, economic, and other information    concerning the need for, and consequences of, the intended regulation.

      (8) Each agency shall 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.

      (9) Wherever feasible, agencies shall seek views of appropriate    State, local, and tribal officials before imposing regulatory requirements that might significantly or uniquely affect those    governmental entities.  Each agency shall assess the effects of    Federal regulations on State, local, and tribal governments,    including specifically the availability of resources to carry out    those mandates, and seek to minimize those burdens that uniquely or    significantly affect such governmental entities, consistent with    achieving regulatory objectives.  In addition, as appropriate, agencies shall seek to harmonize Federal regulatory actions with  related State, local, and tribal regulatory and other governmental    functions.

      (10) Each agency shall avoid regulations that are inconsistent,    incompatible, or duplicative with its other regulations or those of    other Federal agencies.

      (11) Each agency shall 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.

      (12) Each agency shall draft its regulations to be simple and  easy to understand, with the goal of minimizing the potential for    uncertainty and litigation arising from such uncertainty.

Section . 2. Organization. An efficient regulatory planning and review    process is vital to ensure that the Federal Government's regulatory    system best serves the American people.

      (a) The Agencies. Because Federal agencies are the repositories    of significant substantive expertise and experience, they are responsible for developing regulations and assuring that the  regulations are consistent with applicable law, the President's  priorities, and the principles set forth in this Executive order.

      (b) The Office of Management and Budget. Coordinated review of    agency rulemaking is necessary to ensure that regulations are   consistent with applicable law, the President's priorities, and the    principles set forth in this Executive order, and that decisions    made by one agency do not conflict with the policies or actions    taken or planned by another agency.  The Office of Management and    Budget (OMB) shall carry out that review function.  Within OMB, the  Office of Information and Regulatory Affairs (OIRA) is the   repository of expertise concerning regulatory issues, including   methodologies and procedures that affect more than one agency, this   Executive order, and the President's regulatory policies.  To the  extent permitted by law, OMB shall provide guidance to agencies and   assist the President and regulatory policy advisors to the  President in regulatory planning and shall be the entity that  reviews individual regulations, as provided by this Executive    order.

      (c) Assistance. In fulfilling his responsibilities under this  Executive order, the President shall be assisted by the regulatory  policy advisors within the Executive Office of the President and by    such agency officials and personnel as the President may, from time to time, consult.

Section. 3. Definitions. For purposes of this Executive order:

      (a) ''Advisors'' refers to such regulatory policy advisors to the    President as the President may from time to time consult,    including, among others: (1) the Director of OMB; (2) the Chair (or    another member) of the Council of Economic Advisers; (3) the    Assistant to the President for Economic Policy; (4) the Assistant    to the President for Domestic Policy; (5) the Assistant to the    President for National Security Affairs; (6) the Director of the    Office of Science and Technology Policy; (7) the Deputy Assistant    to the President and Director for Intergovernmental Affairs; (8)    the Assistant to the President and Staff Secretary; (9) the    Assistant to the President and Chief of Staff to the Vice    President; (10) the Assistant to the President and Counsel to the    President; (11) the Chairman of the Council on Environmental    Quality and Director of the Office of Environmental Quality; (12)    the Assistant to the President for Homeland Security; and (13) the    Administrator of OIRA, who also shall coordinate communications    relating to this Executive order among the agencies, OMB, the other    Advisors, and the Office of the Vice President.

      (b) ''Agency,'' unless otherwise indicated, means any authority    of the United States that is an ''agency'' under 44 U.S.C. 3502(1),    other than those considered to be independent regulatory agencies,    as defined in 44 U.S.C. 3502(10).

      (c) ''Director'' means the Director of OMB.

      (d) ''Regulation'' or ''rule'' means an agency statement of  general applicability and future effect, which the agency intends  to have the force and effect of law, that is designed to implement,  interpret, or prescribe law or policy or to describe the procedure  or practice requirements of an agency.  It does not, however,  include:

      (1) Regulations or rules issued in accordance with the formal    rulemaking provisions of 5 U.S.C. 556, 557;

      (2) Regulations or rules that pertain to a military or foreign  affairs function of the United States, other than procurement    regulations and regulations involving the import or export of    non-defense articles and services;

      (3) Regulations or rules that are limited to agency organization,    management, or personnel matters; or

      (4) Any other category of regulations exempted by the    Administrator of OIRA.

      (e) ''Regulatory action'' means 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.

      (f) ''Significant regulatory action'' means any regulatory action that is likely to result in a rule that may:

      (1) Have an annual effect on the economy of $100 million or more    or adversely affect in a material way the economy, a sector of the    economy, productivity, competition, jobs, the environment, public    health or safety, or State, local, or tribal governments or    communities;

      (2) Create a serious inconsistency or otherwise interfere with an    action taken or planned by another agency;

      (3) Materially alter the budgetary impact of entitlements,  grants, user fees, or loan programs or the rights and obligations  of recipients thereof; or

      (4) Raise novel legal or policy issues arising out of legal  mandates, the President's priorities, or the principles set forth    in this Executive order.

      Sec. 4. Planning Mechanism. In order to have an effective    regulatory program, to provide for coordination of regulations, to    maximize consultation and the resolution of potential conflicts at  an early stage, to involve the public and its State, local, and   ribal officials in regulatory planning, and to ensure that new or  revised regulations promote the President's priorities and the    principles set forth in this Executive order, these procedures    shall be followed, to the extent permitted by law:

      (a) Agencies' Policy Meeting. Early in each year's planning  cycle, the Director shall convene a meeting of the Advisors and the  heads of agencies to seek a common understanding of priorities and  to coordinate regulatory efforts to be accomplished in the upcoming    year.

      (b) Unified Regulatory Agenda. For purposes of this subsection,    the term ''agency'' or ''agencies'' shall also include those  considered to be independent regulatory agencies, as defined in 44    U.S.C. 3502(10). Each agency shall prepare an agenda of all    regulations under development or review, at a time and in a manner    specified by the Administrator of OIRA. The description of each    regulatory action shall contain, at a minimum, a regulation    identifier number, a brief summary of the action, the legal    authority for the action, any legal deadline for the action, and    the name and telephone number of a knowledgeable agency official.    Agencies may incorporate the information required under 5 U.S.C. 602 and (former) 41 U.S.C. 402 into these agendas.

      (c) The Regulatory Plan. For purposes of this subsection, the  term ''agency'' or ''agencies'' shall also include those considered to be independent regulatory agencies, as defined in 44 U.S.C.  3502(10). (1) As part of the Unified Regulatory Agenda, beginning  in 1994, each agency shall prepare a Regulatory Plan (Plan) of the most important significant regulatory actions that the agency  reasonably expects to issue in proposed or final form in that  fiscal year or thereafter.  The Plan shall be approved personally    by the agency head and shall contain at a minimum:

      (A) A statement of the agency's regulatory objectives and    priorities and how they relate to the President's priorities;

      (B) A summary of each planned significant regulatory action    including, to the extent possible, alternatives to be considered  and preliminary estimates of the anticipated costs and benefits;

      (C) A summary of the legal basis for each such action, including    whether any aspect of the action is required by statute or court  order;

      (D) A statement of the need for each such action and, if  applicable, how the action will reduce risks to public health,  safety, or the environment, as well as how the magnitude of the    risk addressed by the action relates to other risks within the    jurisdiction of the agency;

      (E) The agency's schedule for action, including a statement of    any applicable statutory or judicial deadlines; and

      (F) The name, address, and telephone number of a person the    public may contact for additional information about the planned    regulatory action.

      (2) Each agency shall forward its Plan to OIRA by June 1st of   each year.

      (3) Within 10 calendar days after OIRA has received an agency's    Plan, OIRA shall circulate it to other affected agencies and the    Advisors.

      (4) An agency head who believes that a planned regulatory action    of another agency may conflict with its own policy or action taken    or planned shall promptly notify, in writing, the Administrator of    OIRA, who shall forward that communication to the issuing agency    and the Advisors.

      (5) If the Administrator of OIRA believes that a planned    regulatory action of an agency may be inconsistent with the    President's priorities or the principles set forth in this    Executive order or may be in conflict with any policy or action    taken or planned by another agency, the Administrator of OIRA shall    promptly notify, in writing, the affected agencies and the    Advisors.

      (6) The Director may consult with the heads of agencies with    respect to their Plans and, in appropriate instances, request    further consideration or inter-agency coordination.

      (7) The Plans developed by the issuing agency shall be published    annually in the October publication of the Unified Regulatory    Agenda. This publication shall be made available to the Congress;    State, local, and tribal governments; and the public.  Any views on    any aspect of any agency Plan, including whether any planned    regulatory action might conflict with any other planned or existing    regulation, impose any unintended consequences on the public, or  confer any unclaimed benefits on the public, should be directed to  the issuing agency, with a copy to OIRA.

      (d) Regulatory Working Group. Within 30 days of the date of this    Executive order, the Administrator of OIRA shall convene a  Regulatory Working Group (''Working Group''), which shall consist  of representatives of the heads of each agency that the  Administrator determines to have significant domestic regulatory  responsibility and the Advisors. The Administrator of OIRA shall  chair the Working Group and shall periodically advise the Director  on the activities of the Working Group. The Working Group shall  serve as a forum to assist agencies in identifying and analyzing    important regulatory issues (including, among others (1) the    development of innovative regulatory techniques, (2) the methods,    efficacy, and utility of comparative risk assessment in regulatory    decision-making, and (3) the development of short forms and other    streamlined regulatory approaches for small businesses and other    entities).The Working Group shall meet at least quarterly and may    meet as a whole or in subgroups of agencies with an interest in    particular issues or subject areas. To inform its discussions, the    Working Group may commission analytical studies and reports by    OIRA, the Administrative Conference of the United States, or any    other agency.

      (e) Conferences. The Administrator of OIRA shall meet quarterly    with representatives of State, local, and tribal governments to  identify both existing and proposed regulations that may uniquely  or significantly affect those governmental entities.  The    Administrator of OIRA shall also convene, from time to time,  conferences with representatives of businesses, nongovernmental    organizations, and the public to discuss regulatory issues of   common concern.

Section . 5. Existing Regulations. In order to reduce the regulatory    burden on the American people, their families, their communities,   their State, local, and tribal governments, and their industries;    to determine whether regulations promulgated by the executive  branch of the Federal Government have become unjustified or  unnecessary as a result of changed circumstances; to confirm that  regulations are both compatible with each other and not duplicative  or inappropriately burdensome in the aggregate; to ensure that all  regulations are consistent with the President's priorities and the  principles set forth in this Executive order, within applicable  law; and to otherwise improve the effectiveness of existing  regulations: 

(a) Within 90 days of the date of this Executive    order, each agency shall submit to OIRA a program, consistent with    its resources and regulatory priorities, under which the agency    will periodically review its existing significant regulations to    determine whether any such regulations should be modified or    eliminated so as to make the agency's regulatory program more    effective in achieving the regulatory objectives, less burdensome,    or in greater alignment with the President's priorities and the    principles set forth in this Executive order.  Any significant    regulations selected for review shall be included in the agency's    annual Plan. The agency shall also identify any legislative    mandates that require the agency to promulgate or continue to    impose regulations that the agency believes are unnecessary or    outdated by reason of changed circumstances.

      (b) The Administrator of OIRA shall work with the Regulatory    Working Group and other interested entities to pursue the    objectives of this section.  State, local, and tribal governments    are specifically encouraged to assist in the identification of    regulations that impose significant or unique burdens on those    governmental entities and that appear to have outlived their    justification or be otherwise inconsistent with the public    interest.

      (c) The Director, in consultation with the Advisors, may identify    for review by the appropriate agency or agencies other existing    regulations of an agency or groups of regulations of more than one    agency that affect a particular group, industry, or sector of the    economy, or may identify legislative mandates that may be    appropriate for reconsideration by the Congress.

      Sec. 6. Centralized Review of Regulations. The guidelines set    forth below shall apply to all regulatory actions, for both new and    existing regulations, by agencies other than those agencies    specifically exempted by the Administrator of OIRA:

      (a) Agency Responsibilities. (1) Each agency shall (consistent    with its own rules, regulations, or procedures) provide the public    with meaningful participation in the regulatory process.  In    particular, before issuing a notice of proposed rulemaking, each    agency should, where appropriate, seek the involvement of those who    are intended to benefit from and those expected to be burdened by    any regulation (including, specifically, State, local, and tribal    officials).  In addition, each agency should afford the public a    meaningful opportunity to comment on any proposed regulation, which   in most cases should include a comment period of not less than 60   days.  Each agency also is directed to explore and, where    appropriate, use consensual mechanisms for developing regulations,    including negotiated rulemaking.

      (2) Within 60 days of the date of this Executive order, each    agency head shall designate a Regulatory Policy Officer who shall    report to the agency head.  The Regulatory Policy Officer shall be    involved at each stage of the regulatory process to foster the    development of effective, innovative, and least burdensome    regulations and to further the principles set forth in this    Executive order.

      (3) In addition to adhering to its own rules and procedures and    to the requirements of the Administrative Procedure Act (5 U.S.C.    551 et seq., 701 et seq.), the Regulatory Flexibility Act (5 U.S.C.    601 et seq.), the Paperwork Reduction Act (44 U.S.C. 3501 et seq.),    and other applicable law, each agency shall develop its regulatory    actions in a timely fashion and adhere to the following procedures    with respect to a regulatory action:

      (A) Each agency shall provide OIRA, at such times and in the    manner specified by the Administrator of OIRA, with a list of its    planned regulatory actions, indicating those which the agency    believes are significant regulatory actions within the meaning of    this Executive order.  Absent a material change in the development    of the planned regulatory action, those not designated as    significant will not be subject to review under this section    unless, within 10 working days of receipt of the list, the    Administrator of OIRA notifies the agency that OIRA has determined    that a planned regulation is a significant regulatory action within    the meaning of this Executive order.  The Administrator of OIRA may    waive review of any planned regulatory action designated by the    agency as significant, in which case the agency need not further    comply with subsection (a)(3)(B) or subsection (a)(3)(C) of this    section.

      (B) For each matter identified as, or determined by the Administrator of OIRA to be, a significant regulatory action, the  issuing agency shall provide to OIRA:

      (i) The text of the draft regulatory action, together with a    reasonably detailed description of the need for the regulatory    action and an explanation of how the regulatory action will meet    that need; and

      (ii) An assessment of the potential costs and benefits of the    regulatory action, including an explanation of the manner in which    the regulatory action is consistent with a statutory mandate and,    to the extent permitted by law, promotes the President's priorities    and avoids undue interference with State, local, and tribal    governments in the exercise of their governmental functions.

      (C) For those matters identified as, or determined by the    Administrator of OIRA to be, a significant regulatory action within    the scope of section 3(f)(1), the agency shall also provide to OIRA    the following additional information developed as part of the    agency's decision-making process (unless prohibited by law):

      (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.

      (D) In emergency situations or when an agency is obligated by law    to act more quickly than normal review procedures allow, the agency    shall notify OIRA as soon as possible and, to the extent    practicable, comply with subsections (a)(3)(B) and (C) of this    section.  For those regulatory actions that are governed by a    statutory or court-imposed deadline, the agency shall, to the    extent practicable, schedule rulemaking proceedings so as to permit    sufficient time for OIRA to conduct its review, as set forth below    in subsection (b)(2) through (4) of this section.

      (E) After the regulatory action has been published in the Federal    Register or otherwise issued to the public, the agency shall:

      (i) Make available to the public the information set forth in    subsections (a)(3)(B) and (C);

      (ii) Identify for the public, in a complete, clear, and simple    manner, the substantive changes between the draft submitted to OIRA    for review and the action subsequently announced; and

      (iii) Identify for the public those changes in the regulatory    action that were made at the suggestion or recommendation of OIRA.

      (F) All information provided to the public by the agency shall be    in plain, understandable language.

      (b) OIRA Responsibilities. The Administrator of OIRA shall    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.  OIRA shall, to the extent permitted by law, adhere    to the following guidelines:

      (1) OIRA may review only actions identified by the agency or by    OIRA as significant regulatory actions under subsection (a)(3)(A)    of this section.

      (2) OIRA shall waive review or notify the agency in writing of    the results of its review within the following time periods:

      (A) For any notices of inquiry, advance notices of proposed    rulemaking, or other preliminary regulatory actions prior to a    Notice of Proposed Rulemaking, within 10 working days after the    date of submission of the draft action to OIRA;

      (B) For all other regulatory actions, within 90 calendar days    after the date of submission of the information set forth in  subsections (a)(3)(B) and (C) of this section, unless OIRA has previously reviewed this information and, since that review, there    has been no material change in the facts and circumstances upon    which the regulatory action is based, in which case, OIRA shall    complete its review within 45 days; and

      (C) The review process may be extended (1) once by no more than  30 calendar days upon the written approval of the Director and (2)    at the request of the agency head.

      (3) For each regulatory action that the Administrator of OIRA    returns to an agency for further consideration of some or all of    its provisions, the Administrator of OIRA shall provide the issuing    agency a written explanation for such return, setting forth the    pertinent provision of this Executive order on which OIRA is    relying.  If the agency head disagrees with some or all of the    bases for the return, the agency head shall so inform the    Administrator of OIRA in writing.

      (4) Except as otherwise provided by law or required by a Court,    in order to ensure greater openness, accessibility, and    accountability in the regulatory review process, OIRA shall be    governed by the following disclosure requirements:

      (A) Only the Administrator of OIRA (or a particular designee)    shall receive oral communications initiated by persons not employed    by the executive branch of the Federal Government regarding the    substance of a regulatory action under OIRA review;

      (B) All substantive communications between OIRA personnel and    persons not employed by the executive branch of the Federal    Government regarding a regulatory action under review shall be    governed by the following guidelines:

 (i) A representative from the    issuing agency shall be invited to any meeting between OIRA    personnel and such person(s);

  (ii) OIRA shall forward to the issuing agency, within 10 working    days of receipt of the communication(s),  all written    communications, regardless of format, between OIRA personnel and    any person who is not employed by the executive branch of the    Federal Government, and the dates and names of individuals involved    in all substantive oral communications (including meetings to which    an agency representative was invited, but did not attend, and    telephone conversations between OIRA personnel and any such    persons); and

  (iii) OIRA shall publicly disclose relevant information about    such communication(s), as set forth below in subsection (b)(4)(C)    of this section.

      (C) OIRA shall maintain a publicly available log that shall    contain, at a minimum, the following information pertinent to    regulatory actions under review:

      (i) The status of all regulatory actions, including if (and if    so, when and by whom) Presidential consideration was requested;

      (ii) A notation of all written communications forwarded to an    issuing agency under subsection (b)(4)(B)(ii) of this section; and

      (iii) The dates and names of individuals involved in all    substantive oral communications, including meetings and telephone conversations, between OIRA personnel and any person not employed by the executive branch of the Federal Government, and the subject  matter discussed during such communications.

      (D) After the regulatory action has been published in the Federal    Register or otherwise issued to the public, or after the agency has announced its decision not to publish or issue the regulatory action, OIRA shall make available to the public all documents exchanged between OIRA and the agency during the review by OIRA under this section.