Executive Order 12291

EO 12291 (46 FR 13193, 2-19-81) pp231-238.pdf

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Executive Order 12291

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Thursday
February 19, 1981

Part III

The President
Executive Order 12291—
Federal Regulation

13193
Federal Register

Presidential Documents

V ol. 46, No. 33 ,
Thursday, February 19, 1981

Title 3—

Executive Order 12291 o f February 17, 1981

The President

Federal Regulation
By the authority vested in me as President by the Constitution and law s o f the
United States o f A m erica, and in order to reduce the burdens o f existing and
future regulations, increase agency accountability for regulatory actions, provide for presidential oversight o f the regulatory process, minimize duplication
and conflict o f regulations, and insure w ell-reasoned regulations, it is hereby
ordered as follow s:
Section 1. D efinition s. For the purposes o f this Order:
(a) “ Regulation” or “ rule” m eans an agency statem ent o f general applicability
and future effect designed to implement, interpret, or prescribe law or policy
or describing the procedure or practice requirements o f an agency, but does
not include:
(1) Adm inistrative actions governed by the provisions o f Sections 556 and 557
o f Title 5 o f the United States Code;
(2) Regulations issued w ith respect to a m ilitary or foreign affairs function of
the U nited States; or
(3) Regulations related to agency organization, m anagem ent, or personnel.
(b) “ M ajor rule” m eans any regulation that is likely to result in:
(1) A n annual effect on the econom y o f $100 m illion or more;

(2) A m ajor increase in costs or prices for consum ers, individual industries,
Federal, State, or local governm ent agencies, or geographic regions; or
(3) Significant adverse effects on com petition, em ploym ent, investm ent, productivity, innovation, or on the ability o f United States-based enterprises to
compete w ith foreign-based enterprises in dom estic or export markets.
(c) “ Director” m eans the Director o f the O ffice of M anagem ent and Budget.
(d) “ A ge n cy ” m eans any authority o f the U nited States that is an “ agency”
under 44 U .S .C . 3502(1), excluding those agencies specified in 44 U .S .C .
3502(10).

(e) “ T ask Force” m eans the Presidential T a s k Force on Regulatory R elief.
Sec. 2. G en eral Requirem ents. In promulgating new regulations, reviewing
existing regulations, and developing legislative proposals concerning regulation, all agencies, to the extent permitted by law , shall adhere to the follow ing
requirements:
(a) Adm inistrative decisions sh a ll be b ased on adequate inform ation concerning the need for and consequences o f proposed government action;
(b) Regulatory action shall not be undertaken unless the potential benefits to
society for the regulation outweigh the potential costs to society;
(c) Regulatory objectives shall be chosen to m axim ize the net benefits to
society;
(d) Am ong alternative approaches to any given regulatory objective, the
alternative involving the least net cost to society shall be chosen; and
(e) A gencies shall set regulatory priorities w ith the aim o f m axim izing the
aggregate net benefits to society, taking into account the condition o f the

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Federal Register / V o l. 46, N o. 33 / Thursday, February 19, 1981 / Presidential Docum ents
particular industries affected b y regulations, the condition o f the national
econom y, and other regulatory actions contem plated for the future.
Sec. 3. Regulatory Im pact A n a ly sis and R eview .
(a) In order to implement Section 2 o f this O rder, each agency shall, in
connection w ith every m ajor rule, prepare, and to the extent permitted by law
consider, a Regulatory Im pact A n a ly sis. Such A n aly se s m ay be com bined with
any Regulatory Flexib ility A n aly se s performed under 5 U .S .C . 603 and 604.
(b) E ach agency shall initially determine whether a rule it intends to propose
or to issue is a m ajor rule, p ro vid ed that, the Director, subject to the direction
o f the T a sk Force, shall have authority, in accordance w ith Sections 1(b) and 2
o f this Order, to prescribe criteria for m aking such determ inations, to order a
rule to be treated as a m ajor rule, and to require any set o f related rules to be
considered together as a m ajor rule.
(c) E xcept as provided in Section 8 o f this O rder, agencies shall prepare
Regulatory Im pact A n aly se s o f m ajor rules and transmit them, along w ith all
notices o f proposed rulemaking and all final rules, to the Director as follow s:
(1) If no notice o f proposed rulemaking is to be published for a proposed major
rule that is not an em ergency rule, the agency shall prepare only a final
Regulatory Im pact A n aly sis, w hich shall be transm itted, along w ith the proposed rule, to the Director at least 60 days prior to the publication o f the major
rule as a final rule;
(2) W ith respect to all other m ajor rules, the agency shall prepare a preliminary Regulatory Im pact A n a ly sis, w hich shall be transm itted, along w ith a
notice o f proposed rulemaking, to the Director at least 60 days prior to the
publication o f a notice o f proposed rulem aking, and a final Regulatory Impact
A n aly sis, w hich shall be transm itted along w ith the final rule at least 30 days
prior to the publication o f the m ajor rule as a final rule;
(3) For all rules other than m ajor.rules, agencies shall submit to the Director, at
least 10 days prior to publication, every notice o f proposed rulem aking and
final rule.
(d) T o permit each proposed m ajor rule to be analyzed in light o f the
requirements stated in Section 2 o f this Order, each prelim inary and final
Regulatory Im pact A n a ly sis shall contain the follow ing information:
(1) A description o f the potential benefits o f the rule, including any beneficial
effects that cannot be quantified in m onetary terms, and the identification of
those likely to receive the benefits;
(2) A description o f the potential costs o f the rule, including any adverse
effects that cannot be quantified in m onetary terms, and the identification of
those likely to bear the costs;
(3) A determ ination o f the potential net benefits o f the rule, including an
evaluation o f effects that cannot be quantified in m onetary terms;
(4) A description o f alternative approaches that could substantially achieve
the sam e regulatory goal at low er cost, together w ith an analysis o f this
potential benefit and costs and a b rief explanation o f the legal reasons why
such alternatives, if proposed, could not be adopted; and
(5) U nless covered b y the description required under paragraph (4) o f this
subsection, an explanation o f any legal reasons w hy the rule cannot be based
on the requirements set forth in Section 2 o f this Order.
(e) (1) The Director, subject to the direction o f the T a sk Force, w hich shall
resolve any issues raised under this Order or ensure that they are presented to
the President, is authorized to review any prelim inary or fin a l Regulatory
Im pact A n a ly sis, notice o f proposed rulemaking, or fin al rule based on the
requirements o f this Order.
(2) The Director shall be deem ed to have concluded review unless the Director
advises an agency to the contrary under subsection (f) o f this Section:

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(A) W ithin 60 days o f a subm ission under subsection (c)(1) or a subm ission o f
a prelim inary Regulatory Im pact A n aly sis or notice o f proposed rulemaking
under subsection (c)(2);
(B) W ithin 30 days o f the subm ission o f a final Regulatory Im pact A n aly sis
and a final rule under subsection (c)(2); and
(C) W ithin 10 days of the subm ission o f a notice o f proposed rulemaking or
final rule under subsection (c)(3).
(f) (1) U pon the request o f the Director, an agency shall consult w ith the
Director concerning the review o f a prelim inary Regulatory Im pact A n aly sis
or notice o f proposed rulemaking under this Order, and shall, subject to
Section 8(a)(2) o f this Order, refrain from publishing its prelim inary Regulatory
Im pact A n aly sis or notice o f proposed rulemaking until such review is concluded.
(2) U pon receiving notice that the Director intends to submit view s with
respect to any final Regulatory Im pact A n aly sis or final rule, the agency shall,
subject to Section 8(a)(2) o f this Order, refrain from publishing its final
Regulatory Im pact A n aly sis or final rule until the agency has responded to the
Director’s view s, and incorporated those view s and the agency’s response in
the rulemaking file.
(3) Nothing in this subsection shall be construed as displacing the agencies’
responsibilities delegated b y law .
(g) For every rule for w hich an agency publishes a notice o f proposed
rulemaking, the agency shall include in its notice:
(1) A brief statem ent setting forth the agency’s initial determ ination whether
the proposed rule is a m ajor rule, together w ith the reasons underlying that
determination; and
(2) For each proposed m ajor rule, a b rief summary o f the agency’s prelim inary
Regulatory Im pact A n aly sis.
(h) A gencies shall m ake their prelim inary and final Regulatory Im pact A n a ly ses available to the public.
(i) A gencies shall initiate review s o f currently effective rules in accordance
w ith the purposes o f this Order, and perform Regulatory Im pact A n aly se s o f
currently effective m ajor rules. The Director, subject to the direction o f the
T ask Force, m ay designate currently effective rules for review in accordance
w ith this Order, and establish schedules for review s and A n aly se s under this
Order.
Sec. 4. Regulatory R eview . Before approving any final m ajor rule, each agency
shall:
(a) M ake a determ ination that the regulation is clearly w ithin the authority
delegated by law and consistent w ith congressional intent, and include in the
Federal Register at the time o f prom ulgation a memorandum o f law supporting
that determination.
(b) M ake a determ ination that the factual conclusions upon w hich the rule is
based have substantial support in the agency record, view ed as a w hole, w ith
full attention to public comments in general and the comments o f persons
directly affected b y the rule in particular.
Sec. 5. Regulatory A gendas.
(a) E ach agency shall publish, in O ctober and A pril o f each year, an agenda of
proposed regulations that the agency has issued or expects to issue, and
currently effective rules that are under agency review pursuant to this Order.
These agendas m ay be incorporated w ith the agendas published under 5
U .S .C . 602, and must contain at the minimum:
(1) A summary o f the nature o f each m ajor rule being considered, the
objectives and legal basis for the issuance o f the rule, and an approxim ate

A

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Federal Register / V o l. 46, N o. 33 / Thursday, February 19, 1981 / Presidential Docum ents
schedule for completing action on any m ajor rule for w hich the agency has
issued a notice o f proposed rulemaking;
(2) The nam e and telephone number o f a know ledgeable agency official for
each item on the agenda; and
(3) A list o f existing regulations to be review ed under the terms o f this Order,
and a brief discussion o f each such regulation.
(b) The Director, subject to the direction o f the T ask Force, m ay, to the extent
permitted by law :
(1) Require agencies to provide additional inform ation in an agenda; and
(2) Require publication o f the agenda in any form.
Sec. 6. The Task Force and O ffice o f M anagem ent and Budget.
(a) To the extent permitted by law , the Director shall have authority, subject
to the direction o f the T a sk Force, to:
(1) Designate any proposed or existing rule as a m ajor rule in accordance with
Section 1(b) o f this Order;
(2) Prepare and promulgate uniform standards for the identification o f m ajor
rules and the development o f Regulatory Im pact A n aly ses;
(3) Require an agency to obtain and evaluate, in connection w ith a regulation,
any additional relevant data from any appropriate source;
(4) W aive the requirements o f Sections 3, 4, or 7 o f this O rder w ith respect to
any proposed or existing m ajor rule;
(5) Identify duplicative, overlapping and conflicting rules, existing or proposed, and existing or proposed rules that are inconsistent w ith the policies
underlying statutes governing agencies other than the issuing agency or with
the purposes o f this Order, and, in each such case, require appropriate
interagency consultation to minimize or elim inate such duplication, overlap, or
conflict;
(6) Develop procedures for estim ating the annual benefits and costs o f agency
regulations, on both an aggregate and econom ic or industrial sector basis, for
purposes o f com piling a regulatory budget;
(7) In consultation w ith interested agencies, prepare for consideration b y the
President recom m endations for changes in the agencies’ statutes; and
(8) M onitor agency com pliance w ith the requirements o f this O rder and advise
the President w ith respect to such com pliance.
(b) The Director, subject to the direction o f the T a sk Force, is authorized to
establish procedures for the perform ance o f all functions vested in the Director by this Order. The Director shall take appropriate steps to coordinate the
im plem entation o f the analysis, transm ittal, review , and clearance provisions
o f this O rder w ith the authorities and requirements provided for or imposed
upon the Director and agencies under the Regulatory Flexibility A c t, 5 U .S .C .
601 et seq ., and the Paperw ork Reduction Plan A c t o f 1980, 44 U .S .C . 3501 et

seq.
Sec. 7. Pending Regulations.
(a) To the extent necessary to permit reconsideration in accordance w ith this
Order, agencies shall, except as provided in Section 8 o f this Order, suspend
or postpone the effective dates o f all m ajor rules that they have promulgated
in final form as o f the date o f this Order, but that have not yet becom e
effective, excluding:
(1) M ajor rules that cannot legally be postponed or suspended;
(2) M ajor rules that, for good cause, ought to becom e effective as final rules
without reconsideration. A gencies shall prepare, in accordance w ith Section 3
o f this Order, a final Regulatory Im pact A n a ly sis for each m ajor rule that they
suspend or postpone.

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(b) A gencies sh a ll report to the Director no later than 15 days prior to the
effective date o f any rule that the agency has promulgated in final form as o f
the date o f this Order, and that has not yet becom e effective, and that w ill not
be reconsidered under subsection (a) o f this Section:
(1) T hat the rule is excepted from reconsideration under subsection (a),
including a brief statement o f the legal or other reasons for that determination;
or
(2) That the rule is not a m ajor rule.
(c) The Director, subject to the direction o f the T ask Force, is authorized, to
the extent permitted by law , to:
(1) Require reconsideration, in accordance w ith this Order, o f any m ajor rule
that an agency has issued in final form as o f the date o f this O rder and that
has not becom e effective; and
(2) Designate a rule that an agency has issued in final form as o f the date of
this O rder and that has not yet becom e effective as a m ajor rule in accordance
with Section 1(b) of this Order.
(d) A gencies m ay, in accordance w ith thé Adm inistrative Procedure A c t and
other applicable statutes, permit m ajor rules that they have issued in final
form as o f the date o f this Order, and that have not yet becom e effective, to
take effect as interim rules w hile they are being reconsidered in accordance
w ith this Order, p ro vid ed that, agencies shall report to the Director, no later
than 15 days before any such rule is proposed to take effect as an interim rule,
that the rule should appropriately take effect as an interim rule w hile thermie
is under reconsideration.
(e) Except as provided in Section 8 o f this Order, agencies shall, to the extent
permitted by law , refrain from prom ulgating as a final rule any proposed
m ajor rule that has been published or issued as o f the date o f this O rder until
a final Regulatory Im pact A n aly sis, in accordance w ith Section 3 o f this Order,
has been prepared for the proposed m ajor rule.
(f) A gencies shall report to the Director, no later than 30 days prior to
promulgating as a final rule any proposed rule that the agency has published
or issued as o f the date o f this O rder and that has not been considered under
the terms o f this Order:

(1) That the rule cannot legally be considered in accordance with this Order,
together with a brief explanation of the legal reasons barring such consideration; or
(2) That the rule is not a major rule, in which case the agency shall submit to
the Director a copy of the proposed rule.
(g) The Director, subject to the direction of the T a sk Force, is authorized, to
the extent permitted by law , to:

(1) Require consideration, in accordance with this Order, of any proposed
major rule that the agency has published or issued as of the date of this Order;
and
(2) Designate a proposed rule that an agency has published or issued as of the
date of this Order, as a major rule in accordance with Section 1(b) of this
Order.
(h) The Director shall be deem ed to have determ ined that an agency’s report
to the Director under subsections (b), (d), or (f) o f this Section is consistent
with the purposes o f this Order, unless the Director advises the agency to the
contrary:
(1) W ithin 15 days o f its report, in the case of any report under subsections (b)
or (d); or
(2) W ithin 30 days of its report, in the case o f any report under subsection (f).

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Federal Register / V o l. 46, N o. 33 / Thursday, February 19,1981 / Presidential Docum ents
(i) This Section does not supersede the President’s M em orandum o f January
29,1981, entitled “ Postponem ent o f Pending R egulations” , w hich shall rem ain
in effect until M arch 30,1981.
(j) In com plying w ith this Section, agencies shall com ply w ith all applicable
provisions o f the Adm inistrative Procedure A c t, and w ith any other procedural requirements m ade applicable to the agencies by other statutes.

Sec. 8. Exem ptions.
(a) The procedures prescribed by this Order shall not apply to:
(1) A n y regulation that responds to an em ergency situation, p ro vid ed that, any
such regulation shall be reported to the Director as soon as is practicable, the
agency shall publish in the Federal Register a statem ent o f the reasons w hy it
is im practicable for the agency to follow the procedures o f this O rder w ith
respect to such a rule, a n d the agency shall prepare and transmit as soon as is
practicable a Regulatory Im pact A n a ly sis o f any such m ajor rule; and
(2) A n y regulation for w hich consideration or reconsideration under the terms
o f this Order w ould co n flict w ith deadlines im posed b y statute or b y judicial
order, p ro vid ed that, any such regulation shall be reported to the Director
together w ith a b rief explanation o f the co nflict, the agency shall publish in
the Federal Register a statem ent o f the reasons w hy it is im practicable for the
agency to follow the procedures o f this O rder w ith respect to such a rule, and
the agency, in consultation w ith the Director, shall adhere to the requirements
o f this O rder to the extent permitted b y statutory or jud icial deadlines.
(b) T he Director, subject to the direction o f the T a sk Force, m ay, in accordance
w ith the purposes o f this O rder, exem pt any class or category o f regulations
from any or all requirements o f this O rder.
S e c. 9. Ju d icia l R eview . T h is O rder is intended only to improve the internal
m anagem ent o f the Federal governm ent, an d is not intended to create any
right or b e n e fit substantive or procedural, enforceable at la w b y a party
against the U nited States, its agencies, its officers or any person. The determinations m ade b y agencies under Sectio n 4 o f this O rder, and an y Regulatory
Im pact A n aly se s for any rule, shall be m ade part o f the w hole record o f
agency action in connection w ith the rule.

Sec. 10 . R evocation s. Executive Orders No. 12044, as amended, and No. 12174
are revoked.

T H E W H IT E H O U S E ,

February 17, 1981.

[FR Doc. 81-5790
Filed 2-17-81; 3:19 pm]
Billing code 3195-01-M


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