FEDERAL REGULATION: STRUCTURE, PROCESS AND ECONOMICS

1. FEDERAL REGULATION: STRUCTURE, PROCESS AND ECONOMICS • How does the regulatory process work? • What are the costs and benefits of government regulation? • How can business be part of the process? • Claudia H. Thurber, Esq. • Consultant in Occupational Safety and Health Policy • Former Counsel for Health Standards • Office of the Solicitor of Labor

2. Government Regulations Affect nearly everything you do and most things that you own! Radio – FCC Electricity – FERC Labels (clothes, bedding, etc) – CPSC + USDA (price supports + tariffs Personal care + drugs – FDA Water – EPA Toilet – DoE Coffee – FDA, USDA CFTA Fruit – EPA, FDA, USDA Car – ITC (import restrictions), OSHA, NHTSA, EPA

3. Law and Policy Meet in Implementation • Charge to agencies • Example: OSH Act (Section 5(a) • Broad mandates from Congress • Standards flesh out the congressional intent • Congress chooses not to narrowly specify • Reasons: support for passage; agency expertise; administrative flexibility; legislator’s credit or blame • Exceptions: Hazwoper/Needlestick Safety Act

4. Regulation • What is federal rulemaking? • Why can’t we just follow the laws? • Who makes the rules? • How do they make them? • What are examples of agency rulemaking?

5. Rulemaking • Rule: prescribed guide for conduct or action • Agency action which regulates the future conduct of either groups of persons or a single person • Legislative in nature because it operates in the future and because it is primarily concerned with policy consideration • Implements the laws

6. A Brief History • Administrative Procedures Act 1946 • Specific Regulatory Statutes beginning in the 1970s (OSHA, CPSA, FTCA, MSHA) • Modifications from Agencies, Congress, Court Decisions, Executive Orders • Most common: Informal Rulemaking

7. APA Requirements • APA requires: • Publication of notice • Opportunity for public participation by written comments • Publication of final rule with statement of bases not less than 30 days before effective date • Now many more requirements for all agencies – Resource, time extensive

8. Costs and Benefits of Major RulesOctober 1, 1997 to September 30, 2007 (millions of 2001 dollars) • Agency (Rules) Benefits Costs • EPA (40) 83,298-592,567 32,252-35,058 • HHS (18) 20,565-32,850 3,834-3,080 • DOE (5) 4,834-5,209 3,033-3,080 • DOA (6) 906-1,315 1,014-1,315 • DOT (15) 10,407-18,149 5,029-8756 • DOL (6) 1,173-4,302 449-458 • Others (3) 1,098-3,051 449-458 • DOE, DOJ, HUD • Totals: (93) 122,190-655,556 46,219-53,894 • Source: Draft 2008 OMB Report to Congress on the Benefits and Costs of Federal Regulation and Unfunded Mandates on State, Local, and Tribal Entities

9. Impacts on State, Local and Tribal Governments • In last decade, 7 rules, all EPA, cost over 100 million/year • Municipal wastes – 2 • Drinking water – 4 • Water Pollution – 1 • Small Business - impact per employee on businesses with <20 employees is 45% greater than on businesses with > 500 employees • Wages – costs must be borne by workers, owners, consumers but can be offset by benefits of job safety and health, safer product and cleaner environment • Source: Draft 2006 OMB Report to Congress

10. The Process • Congress passes a law • Federal agencies fill in the blanks with specific proposed rules • Public participation • The President, through his Office of Management and Budget, reviews the rules before they are proposed and promulgated • Rules can be challenged in the courts and, if found to be unfair, can be vacated or sent back to the agency for further work.

11. Without OSHA Prior to 1970 • More than 14,000 worker deaths annually • 2.5 million workers disabled by work-related injuries • Estimated 300,000 cases of work-related illness

12. OSHA • • Occupational Safety and Health Administration • • Created in 1970 by Occupational Safety and Health Act • Intended to help employers and employees reduce job-related injuries, illnesses and deaths • To promote a safe and healthful working environment for the nation’s workforce

13. OSHA’s Jurisdiction • Nearly all private sector employers and employees in the 50 states and US Territories • Excludes self-employed, family farm workers, most government employees. (Applies to federal workers by executive order).

14. Responsibilities • Encouraging the establishment of safety and health management programs to reduce workplace hazards • Developing mandatory job safety and health standards (rules) • Conducting workplace inspections • Providing safety and health information, training and compliance assistance • Promoting cooperative programs

15. OSHA Success Since 1970 • Work-related fatalities cut by more than 60 percent • Overall injury and illness rate down by 42 percent

16. Strong, Fair and Effective Enforcement • Inspections conducted without advance notice • Focus on high injury rate workplaces, recalcitrant employers • Highly-trained CSHOs • But, 8,000,000 workplaces, 115,000,000 workers, and about 1100 inspectors

17. Inspection Priorities • Imminent danger • Catastrophes • Employee complaints and referrals • Targeted inspection – high injury/illness rates • Follow-up inspections

18. Standard Setting • Semi-annual regulatory agenda and Annual Regulatory Plan (Nov. 22, 2008) • Priority rulemaking projects: Si, Cranes and Derricks, (Reg Plan) Be, Hazard Communication Global Harmonization, Power Transmission, General Working Conditions, VTLs, Diacetyl & Food Flavorings Containing • Rulemaking process • Lengthy, frequent, opportunities for participation

19. Rulemaking Process • Catalyst: petition, catastrophe, law • Request for information and SBREFA • Major issues: costs, benefits, risks and quality of data, peer reviews, if needed (Si) • Draft Standard • Reviews – department, OMB • Formal proposal published • Comment period and hearings • Draft final rule with new information • OMB review • Publish final rule • Submit to Congress for Review • Outreach and training • Enforcement

20. Public comment opportunities • Prior to proposal • In response to RFI • Through SBREFA • Through Peer Review Request • In response to proposed standard • At the public hearing • Post hearing • To Agency or OMB

21. After the Rule is Promulgated • Post promulgation challenges: • Congressional Review Act • Administrative challenge • Judicial challenge • Enforcement challenge :

22. How Can Businesses Participate in the Rulemaking Process • Know regulatory agencies that deal with your business (e.g. financial, environmental, health and safety) • Track agency actions through the Regulatory Agenda in the FR or on line at regulations.gov, agency web pages, and omb.gov • Participate with written comments, testimony and other evidence at every opportunity • Present specific information to assist agency in developing regulations or guidelines (i.e. how this will affect your company, new scientific studies, statistics, exhibits . . .)

23. Participation (cont’d) • Work through your trade or professional association • Some advocate commenting at last minute so others can not challenge • For most agencies, litigation can be in instituted within certain time of promulgation (i.e. 59 days) or whenever by a company when the regulation is enforced against them • Litigation should be the last option, better to promulgate a good rule

24. Midnight Regulations • Unfinished Business – last 3 months • Carter, G Bush >%, Clinton >pages, GW Bush – characterized by deregulation • Megalomania – influence next administration • Distraction – “didn’t get it done on time” • November 20=60 days to effect (Proposed rules can be held for review, records reopened, modifications made or withdrawn. • Difficult: CRA (1996-1 success) or New Rulemaking (Resource intensive)