A Wolf in Sheep’s Skin

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The Early Participation in Regulations Act will further complicate the rulemaking process.

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The Early Participation in Regulations Act (EPRA), which the U.S. Senate Committee on Homeland Security and Governmental Affairs recently reported out, would require agencies to publish an advance notice of proposed rulemaking (ANPRM) for all “major” rules. At first blush, this proposal sounds positive. Giving the public advance notice of significant rules could increase public participation and yield better rules. But on closer inspection, such a requirement could prove disastrous, and the EPRA should not become law.

Advance notice can be useful. For instance, under the National Environmental Policy Act, agencies engage in “scoping” before drafting an Environmental Impact Statement (EIS). Through the scoping process, the agency collaborates with state, local, and tribal governments and the public to identify issues, potential impacts, and alternatives. Scoping may save time and resources by reducing the possibility that an agency will issue an inadequate draft EIS and have to issue a revised draft.

By the same token, giving advance notice of proposed rulemakings might help agencies to define the contours of their proposals, anticipate issues, and develop alternatives, thus saving time and resources and yielding a better rule. That is why so many agencies already issue ANPRMs (163 in the past year, by my count), even though the notices are not required.

Yet the EPRA’s requirement mandating that all agencies issue ANPRMs before proposing “major” rules is highly problematic. (The Regulatory Accountability Act also would require agencies to issue ANPRMs in certain circumstances, but it differs from the EPRA sufficiently to require separate treatment.)

First, the definition of “major rule” in the EPRA is asking for trouble. “Major rule” includes not only rules that the White House Office of Information and Regulatory Affairs (OIRA) determines are likely to impose “an annual effect on the economy of $100,000,000 or more,” but also rules that OIRA determines are likely to impose “a major increase in costs or prices” or “significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.” That definition would encompass a tremendous number of rulemakings. Further, such an ambiguous provision almost certainly would spur litigation.

Second, requiring ANPRMs would increase significantly the time and cost of rulemaking. That is why the American Bar Association’s (ABA) Section of Administrative Law and Regulatory Practice opposed a similar proposal in 2011. Existing rulemaking procedures already make it difficult for agencies to produce significant rules in a four-year presidential term.

The EPRA would require agencies to issue an ANPRM at least 90 days before issuing a notice of proposed rulemaking (NPRM) and to give a 60-day public comment period. Ninety days is a substantial amount of time for a preliminary process, particularly because the current Administrative Procedure Act (APA) imposes no such timing requirement on public comment periods whatsoever. But the EPRA would necessarily extend the rulemaking process far longer than 90 days because the agency would likely have to read and process all of the public comments it receives before issuing the NPRM. Allowing agencies to seek an exemption from OIRA, as the bill provides, would do little to ease this effect, as simply obtaining an exemption from OIRA could take far longer than the additional public comment period. For these reasons, the EPRA would make it nearly impossible to complete any significant rulemaking in a four-year presidential term.

Moreover, the EPRA would require ANPRMs to include, among other things, “data and other evidence and information on which the agency expects to rely for the proposed major rule.” The sheer volume of information produced in rulemakings already is impregnable to the general public. This requirement would further empower the sophisticated entities that can hire an army of young lawyers to sift through the mass of material.

Congress spent many years in the 1930s and 1940s debating whether to impose strict controls on federal agencies or leave decisions about process largely to agency discretion. The debate involved a broad array of interested parties and led to a monumental compromise: the Administrative Procedure Act of 1946. Through that debate, Congress settled on a formula for informal rulemaking that requires notice and an opportunity for public comment, but left much else to agency discretion. That simple formula encouraged agencies to make policy through rules, which is good because it gives the regulated community and the public an opportunity to participate in the policy-making process and notice of how an agency interprets its statutory responsibilities.

Overburdening the rulemaking process, on the other hand, drives agencies to make policy via other means. New rulemaking requirements already have driven agencies to make policy through guidance documents, which come into existence with little or no public involvement. Further burdening the rulemaking process also could drive agencies toward greater use of adjudication, which similarly affords little opportunity for public involvement and even less notice to the regulated community.

One might argue that the increased number of presidential instructions to agencies in recent years results from an overly burdensome rulemaking process. Agencies are less nimble and hence less able to respond to elections in a timely fashion. So the President makes key decisions instead, leaving the public out of the process entirely. Certainly, the many Congressional Review Act resolutions that passed this year would not have been worth the legislative time they required if agencies could rescind rules more easily than current law allows.

For all these reasons, any proposal that would further complicate, delay, or otherwise burden the rulemaking process should be approached with caution. In 1981, the ABA supported amending the APA to encourage “informal consultative procedures” before issuing a notice of a proposed rulemaking. But the ABA specified that decisions about whether to engage in pre-notice consultations and how to structure those consultations should be vested “within the unreviewable discretion of the agency.”

That is still a sound recommendation. Agencies should be enabled and encouraged to scope out significant rules before publishing notice of the proposed rulemaking. But eliminating agency discretion over such procedures would change our basic administrative charter significantly, overburden the rulemaking process, exacerbate the outsized role sophisticated entities play in agency policy making, and spur additional litigation. The EPRA should not become law.

Kathryn E. Kovacs

Kathryn E. Kovacs is a professor of law at Rutgers Law School.