Number: 

DAO 218-7

SECTION 1. PURPOSE.

.01 The purpose of this Order is to implement Executive Order 12044, of March 23, 1978, "Improving Government Regulations.

.02 It is the policy of the Department that regulations:

a. be as simple and clear as possible;

b. achieve legislative goals effectively and efficiently; and

c. not impose unnecessary burdens on the economy, individuals, public or private organizations, or State or local governments.

.03 To achieve these objective, regulations shall be developed by following procedures which ensure that:

a. the need for and purpose of the regulation are clearly established;

b. heads of agencies and policy officials exercise effective oversight;

c. opportunity exists for early and meaningful participation and comment by other Federal agencies, State and local governments, businesses, organizations and individual members of the public;

d. meaningful alternatives are considered and analyzed before the regulation is issued; and

e. compliance costs, paperwork and other burdens on the public are minimized.

SECTION 2. SCOPE.

.01 This Order applies to all regulations of the Department published in the Federal Register, except as provided in paragraph .02 of this section.

.02 This Order does not apply to:

a. regulations issued in accordance with the formal rulemaking provisions of the Administrative Procedure Act (5 U.S.C. 556, 557);

b. regulations issued with respect to a military or foreign affairs function of the United States (see paragraph 9.06 of this Order);

c. matters related to agency management or personnel;

d. regulations related to Federal Government procurement; or

e. regulations that are issued in response to an emergency or which are governed by short-term (less the 91 days) statutory or judicial deadlines (see paragraphs 9.05 and 9.06 of this Order).

.03 Whenever two or more agencies plan to jointly promulgate regulations, the agency heads or program officials involved shall designate one agency as lead agency for the purpose of determining whose rulemaking procedures will be utilized. That agency shall be responsible for compliance with, and its procedures implementing Executive Order 12044 shall apply. Regardless of who is designated as lead, each Department of Commerce agency involved in a joint rulemaking will separately comply with the requirements of sections 7. and 8. of this Order.

SECTION 3. DEFINITIONS.

.01 Agency head. In this Order, agency head means: the head of each operating unit of the Department; Secretarial Officers, and Deputy Under Secretary, and the Special Assistant to the Secretary for Regional Economic Development, for Departmental offices under their jurisdiction; or persons acting in those positions. The functions of the agency head may not be delegated.

.02 Regulation(s). In this Order, regulation(s) means both rules and regulations issued by components of the Department including those which establish conditions for financial assistance. Closely related sets of regulations shall be treated as a single package.

SECTION 4. SIGNIFICANT REGULATIONS.

.01 Agency heads shall establish criteria for identifying which regulations are significant.

.02 In establishing criteria for identifying significant regulations, agency heads shall consider, among other things:

the type and number of individuals, businesses, organizations, or State and local governments affected;

the compliance and reporting requirements likely to be involved;

the direct and indirect effects of the regulation, including the effect on competition;

the relationship of the regulation to those of other programs and agencies;

the relationship of the regulation to major Departmental policy issues; and

the degree of controversy over, or public interest in, the regulation.

.03 Agency heads may delegate authority to initially determine that a regulation is not significant. Any such determinations shall be reviewed by the agency head prior to the submission of the next agency agenda required by paragraph 7.01 of this Order or the notification required by paragraph 7.09 of this Order, which ever occurs first.

.04 An agency head may conclude that a regulation is not significant, even if it meets the criteria established for identifying significant regulations, if the agency head determines, in writing, that the degree of discretion available to the agency is so limited by underlying legislation or executive branch directives (e.g., Executive Orders, OMB Circulars, etc.) that no significant options for implementation are available to the agency. A copy of this determination shall be sent promptly to the Assistant Secretary for Policy, and an explanation of the determination shall be included in the preamble to the notice of proposed rulemaking.

.05 Before proceeding to develop significant regulations, the agency head shall review: the issues to be considered; the alternative approaches to be explored; whether a regulatory analysis, as provided for in section 5. of this Order, is required; a tentative plan for obtaining public comment; where applicable a tentative plan for consulting with State and local governments (see DAO 201-9); and target dates for completion of steps in the development of the regulation.

.06 Agency heads shall approve significant regulations before they are published in the Federal Register in final form. Before approving significant regulations, the agency head should be satisfied that:

the regulation is needed;

the direct and indirect effects of the regulation have been adequately considered;

alternative approaches have been considered and the least burdensome of the acceptable alternatives has been chosen;

public comments (including those from State, local or other public agencies) have been considered and an adequate response has been prepared;

the regulation is written clearly and as simply as possible and is understandable to those who must comply with it;

an estimate has been made of the new reporting burdens or recordkeeping requirements necessary for compliance with the regulation;

the name, address and telephone number of a knowledgeable official is includes in the publication; and

a plan has been developed for evaluating the regulation after its issuance.

.07 Agency heads may, in their discretion, refer significant regulations which they believe to be of particular importance to the Secretary for approval.

.08 Regulations which are not significant shall be accompanied by a statement to that effect in the preamble whenever published in the Federal Register.

SECTION 5. REGULATORY ANALYSIS.

.01 A regulatory analysis shall be prepared for each significant regulation which the agency head determines to have potential major economic consequences for the general economy, for individual industries, geographic regions, levels of government, or specific elements of the population.

.02 Agency heads shall establish criteria for determining which significant regulations require regulatory analysis. Since a regulatory analysis is designed to aid decisionmaking in promulgating effective relations, the criteria established should consider the characteristics of their specific programs. At a minimum, a regulatory analysis shall be prepared for any significant regulations which:

during any one year can be expected to result in an effect (direct or indirect) on the economy exceeding $50 million;

during any one year can be expected to result in an effect (direct or indirect) on either consumers, industries, levels of government, or geographic regions exceeding $25 million;

during any one year can be expected to result in an increase in costs or prices of five percent or more for the activity, product(s) and/or service(s) affected;

can be expected to reduce labor productivity by one percent or more in the economic activity or sector(s) affected;

can be expected to reduce employment by five percent or more in the economic activity or sector(s) affected;

for the particular market(s) affected, can be expected to result directly or indirectly in a one percent or more decline in supply of materials, products or services, or a one percent or more increase in consumption of these materials, products or services; or

for the particular market(s) affected, can be expected to result in a distinct decline in competition.

.03 A regulatory analysis may also be prepared when:

in the judgment of the agency head such an analysis would improve decisionmaking; or

the Secretary determines, in accordance with paragraph 7.05 of this Order, that such an analysis should be performed.

.04 A regulatory analysis shall involve a careful examination of alternative approaches early in the decisionmaking process. Thus, each analysis shall include, at a minimum:

a succinct statement of the problem;

a description of the major alternative ways of dealing with the problems that were considered;

a comparison of the economic and other consequences of each of these alternatives;

a detailed explanation of the reasons for choosing one alternative over the others; and

the urban and community impact analysis required by Executive Order 12074, of August 16, 1978 and OMB Circular A-116 which implements that Executive Order.

.05 The analysis in paragraph 5.04 of this Order may also include an examination of:

the need for specific requirements versus the benefits of allowing varying degrees of discretion by those subject to the regulation;

alternative types of compliance incentives;

alternative enforcement mechanisms; and

alternative governmental levels for implementation (Federal, State, or local).

.06 The notice of proposed rulemaking for each regulation for which a regulatory analysis is required shall include:

a succinct description of the alternatives considered;

an explanation of the regulatory approach that has been selected or is favored;

the major reasons for selecting, or favoring, a particular alternative(s); and

a statement of how the public may obtain a copy of the draft regulatory analysis.

.07 Public comments on the draft regulatory analysis shall be considered in preparing a final regulatory analysis, which shall be made available to the public when the final regulation is published. Significant public comments on the analysis shall be summarized and responded to in the preamble to the final regulation.

.08 These internal procedures shall apply:

the agency head shall inform the Chief Economist of the Department as early as possible of the nature and extent of the analysis being undertaken to assure adequate opportunity for consultation and assistance; and

the agency head shall transmit the draft regulatory analysis to the Chief Economist of the Department for review and comment at least 15 days prior to submission of a notice of proposed rulemaking to the Federal Register.

.09 Regulatory analyses are not required in rulemaking proceedings pending as of March 23, 1978, if an Economic Impact Statement has already been prepared in accordance with Executive Orders 11821 and 11949.

.10 New or accurate information may be needed from persons and businesses, in order to make informed decisions. In those instances only essential data is to be obtained in the least burdensome way.

SECTION 6. REVIEW OF EXISTING REGULATIONS.

.01 Agency heads shall establish procedures to ensure that their organization's existing regulations are reviewed periodically to determine whether they are achieving the policy goals of Executive Order 12044.

.02 Agency heads shall establish criteria for selecting existing regulations to be reviewed and the order in which the review and the order in which the review will be conducted.

.03 In developing criteria for selecting regulations to be reviewed, agency heads shall consider:

the continued need for the regulation;

the type and number of complaints or suggestions received;

the burdens imposed on those directly or indirectly affected by the regulations;

the need to simplify or clarify language;

the need to eliminate overlapping and duplicative regulations; and

the length of time since the regulation has been evaluated or the degree to which technology, economic conditions or other factors have changed.

.04 The review of existing regulations shall, at a minimum, contain the following procedural steps:

inclusion of notice of the review in the semi-annual agenda as required by paragraph 7.02 of this Order, or as appropriate, supplementing the Department Agenda as called for in paragraph 7.08 of this Order, and notification to the Assistant Secretary for Policy as called for in paragraph 7.09 of this Order;

a determination whether the regulation meets the criteria established for identifying significant regulations, and, if so, agency head oversight as called for in paragraph 4.04 of this Order before proceeding with the review;

a determination whether the regulation meets the criteria established for determining if a regulatory analysis must be performed, and, if so, preparing a regulatory analysis; and

if the review results in a determination that a regulation should be amended or rewritten, compliance with public notice and participation requirements of this Order and DAO 201-9 concerning consultation with State and local governments; and if the regulation is determines to be significant, agency head approval before final publication, as set forth in paragraph 4.06 of this Order.

.05 Agency heads should review their organization's significant regulations not less than every four years.

SECTION 7. REGULATORY AGENDA.

.01 On January 15 and July 15, of each year, each agency head shall submit a regulatory agenda to the Assistant Secretary for Policy.

.02 Each agency agenda shall include:

a description of each regulation covered by this Order which is under development or being considered for development, including, to the extent feasible:

1. a statement whether the regulation has been determined to be a significant regulation;

2. the need and the legal basis for the action being taken;

3. a statement whether or not a regulatory analysis will be required;

4. the name and telephone number of a knowledgeable official;

5. a listing of major issues likely to be considered in developing the regulation;

6. a tentative plan for obtaining public comment and, where applicable, for consulting with State and local governments;

7. target dates for completing steps in the development process; and

8. information on the status (including changes to the information required by subparagraph .02a. of this section) of proposed significant regulations listed in previous agendas which are not yet published as final in the Federal Register.

a list of each existing regulation scheduled to be reviewed, under section 6. of this Order, during the next six months, including the name and telephone number of a knowledgeable official for each regulation;

information on the status of existing regulations listed for review in previous agendas; and

a list, including the date and Federal Register citation, of all final regulations published in the Federal Register during the previous six months.

.03 If there are no plans for developing or reviewing regulations, the agency head will so report to the Assistant Secretary for Policy.

.04 The Assistant Secretary for Policy shall review all agendas and, after consultation with appropriate Department officials, recommend to the Secretary:

which regulations determined not to be significant by the agency heads should be treated as significant;

which regulations being considered or developed should be approved by the Secretary prior to being published in the Federal Register in final form; and

which regulations, in addition to those identified by the agency heads, require a regulatory analysis.

.05 After consulting, as appropriate, with concerned Department officials, the Secretary will inform the Assistant Secretary for Policy and the relevant agency head of decisions made with regard to the recommendations submitted under paragraph .04 of this section.

.06 Using the agendas of agency heads, as may be modified by the Secretary's decisions under paragraph .05 of this section, the Assistant Secretary for Policy shall prepare an overall Department Agenda. The Department Agenda, after approval by the Secretary, shall be submitted for publication in the Federal Register on or about February 15, 1979, and every six months thereafter.

.07 The Department Agenda shall include the following:

for proposed significant regulations being considered or developed:

1. a description of the regulation;

2. the need and the legal basis for the action being taken;

3. a statement as to whether or not a regulatory analysis will be required;

4. the name and telephone number of a knowledgeable official to whom comments on that planned regulation may be addressed;

5. a discussion of the issues to be considered in developing the regulation;

6. a tentative plan for obtaining public comments and, where applicable, for consulting with State and local governments; and

7. target dates for completing steps in the development process.

information on the status (including changes to the information required in subparagraph .07a. of this section) of all proposed significant regulations listed in previous agendas which are not yet published in the Federal Register;

a list of existing regulations scheduled to be reviewed during the next six months, including the name and telephone number of a knowledgeable official for each regulation;

information on the status of existing regulations previously scheduled for review; and

the name and telephone number of an official to whom general comments about the Department Agenda should be addressed.

.08 Agency heads shall, in order to prevent undue delay, publish supplements to the Department Agenda whenever it becomes apparent that development or review of significant regulations not listed in the previous Department Agenda will commence before publication of the next Department Agenda or development or review of a regulation listed in the previous Department Agenda will not commence as scheduled.

.09 Agency heads shall immediately notify the Assistant Secretary for Policy whenever it becomes apparent that development or review of regulations not listed in their previous agency agenda will commence before publication of the next Department Agenda, or significant changes have occurred in the status of items listed in their previous agency agenda.

.10 Comments received on items in the Department Agenda shall be considered in developing any proposed regulations and included in the public record of the relevant proposed rulemaking.

.11 The information in any agenda is only that which is reasonably expected to be known at the time.

.12 Every year, on the first Monday in October, the Assistant Secretary for Policy will publish in the Federal Register a schedule showing the times during the coming fiscal year when the Department Agenda will be published.

SECTION 8. SECRETARIAL APPROVAL.

.01 Whenever, under paragraphs 4.07 and 7.05 of this Order, Secretarial approval of a regulation is requested or required before it is published in final form, the appropriate agency head shall, no later than 15 days before the proposed date for publication in the Federal Register in final form, submit the regulation to the Secretary for approval.

.02 The Secretary shall review the regulation in accordance with paragraph 4.06 of this Order, and shall either:

approve the regulation; or

disapprove the regulation, indicate the reasons for disapproval, and return the regulation to the appropriate agency head.

SECTION 9. PUBLIC PARTICIPATION.

.01 The public, and, for regulations with significant intergovernmental impact, State and local governments, shall be given an early and meaningful opportunity to participate in the development of the regulations of the Department.

.02 Agency heads shall consider a variety of ways to provide this opportunity, including, but not limited to:

publishing an advance notice of proposed rulemaking;

holding open conferences or public hearings;

sending notices of proposed regulations to publications likely to be read by those affected;

notifying interested parties directly; and

providing for more than one cycle of public comments.

.03 The preamble of any proposed rulemaking covered by this Order shall contain a brief description of plans for obtaining public, and, if applicable, State and local government participation. If none of the methods listed in paragraph .02 of this section are used in a rulemaking covered by this Order, the preamble accompanying the final regulation shall briefly explain the reasons and indicate what other steps were taken to assure adequate opportunity for public and State and local government participation.

.04 The public shall be given at least 60 days to comment on proposed significant regulations. Exceptions to this requirement may be granted only by the agency head and only in those few instances where it is determined that compliance is not possible. When an exception is made, the preamble to the proposed regulation shall include a brief statement of the reasons for the shorter time period.

.05 Regulations exempted by subparagraph 2.02e. of this Order (emergencies or short-term deadlines) shall, when published in the Federal Register, be accompanied by a statement of the reasons why it is impracticable or contrary to the public interest to follow the procedures of this Order. This statement shall include the name of the policy official responsible for the determination.

.06 Regulations exempted by subparagraphs 2.02b. (military or foreign affairs functions) or 2.02e. of this Order may be made effective on issuance. However, the Federal Register publication of these regulations shall provide for a public comment period of at least 60 days after issuance and republication after pubic comments have been considered and appropriate modifications, if any, are made.

SECTION 10. EFFECT ON OTHER ORDERS.

.01 This Order supersedes Department Administrative Order 216-7 of January 17, 1972, "Interagency Coordination of Issuances on Environmental Quality, Consumer Protection, and Occupational and Public Health and Safety," and Department Administrative Order 218-6 of November 28, 1974, "Inflationary Impact of Legislation and Regulatory Proposals."

.02 Nothing in this Order shall affect the procedures set forth in Department Administrative Order 205-11 of May 12, 1971, as amended, "Publishing Documents in the Federal Register."

Signed by: Secretary of Commerce

Office of Primary Interest: Office of the General Counsel

Index Changes:

Add.
Departmental Regulations, Issuing 218-7
Issuing Departmental Regulations 218-7
Regulations
Issuing Departmental 218-7