Federal agencies make binding rules through a process called rulemaking. The process sets out how an agency proposes a rule, takes public comments, and issues a final rule that can be enforced. It matters because a regulation has the force and effect of law, according to the Office of Information and Regulatory Affairs (OIRA) on Reginfo.gov.
What a regulation is and the legal framework
A regulation is a general statement issued by an agency, board, or commission that implements and enforces laws enacted by Congress, OIRA says. Congress often grants or requires agencies to issue regulations and also sets procedures for how they are made. The Administrative Procedure Act (APA) governs how agencies propose and establish new regulations and provides for judicial review of rules in federal court, according to OIRA.
Step by step: From proposal to final rule
Once an agency decides a regulatory action is needed, it develops and typically publishes a proposed rule in the Federal Register, OIRA explains. The proposed rule describes the regulatory proposal and asks the public for comments. After considering public feedback and making changes where appropriate, the agency publishes a final rule in the Federal Register with a specific effective date, and must describe and respond to the comments it received.
The Reg Map, posted by OIRA, outlines the informal rulemaking steps: initiating events, determining whether a rule is needed, preparing a proposed rule, Office of Management and Budget (OMB) review where applicable, publication of the proposed rule, public comments, preparation of a final, interim final, or direct final rule, OMB review where applicable, and publication of the final, interim final, or direct final rule. Agencies can also use an advance notice of proposed rulemaking to ask early questions before proposing a rule, according to OIRA’s descriptions of rule stages. A rule generally becomes enforceable on the effective date stated in the final rule notice in the Federal Register.
OIRA review and significant rules
OIRA, within the Office of Management and Budget in the Executive Office of the President, reviews draft proposed and final regulations under Executive Order 12866, OIRA says. For significant regulatory actions, the Executive Order requires OIRA review before actions take effect, and requires agencies to analyze costs and benefits and act, to the extent permitted by law, only when benefits justify costs. Executive Order 13563 reaffirms those principles and directs agencies to promote public participation, reduce redundant requirements, consider flexible approaches, promote scientific integrity, and review existing significant regulations, according to OIRA.
Under Executive Order 12866 as amended by Executive Order 14094, OIRA determines which actions are “significant.” Significant actions include those likely to have an annual effect on the economy of $200 million or more (adjusted every three years by OIRA for changes in gross domestic product) or that materially affect the economy, public health or safety, governments or communities; create inconsistencies with other agency actions; materially alter budgetary impacts or recipients’ rights and obligations; or raise legal or policy issues where centralized review would further the President’s priorities, OIRA says. A subset, called “economically significant,” includes actions likely to have an annual effect on the economy of $100 million or more or similar material effects, and these require a more detailed assessment of benefits, costs, and alternatives. OIRA review is limited by Executive Order 12866 to 90 days, with possible extensions as specified by the Order, according to OIRA.
OIRA may return a draft rule to an agency for reconsideration if it is not compatible with law, the analysis is inadequate, it is not justified by analysis, it is inconsistent with the Executive Order’s principles or priorities, or it conflicts with other agency efforts, OIRA says. An agency may also withdraw its rule from review at any time.
Publication and public participation
The Federal Register is the official daily publication for agency rules, proposed rules, and notices, and is published by the Office of the Federal Register within the National Archives and Records Administration, according to OIRA. Agencies generally seek public comment on proposed rules through the Federal Register and receive comments through Regulations.gov, which is the government-wide portal for reviewing and commenting on published regulatory actions. Reginfo.gov, by contrast, displays the status of agency documents under OIRA review and hosts a Regulatory Dashboard that shows actions under review by agency, length of review, economic significance, and stage of rulemaking, OIRA explains.
According to OIRA, common rulemaking stages include pre-rule (advance notice of proposed rulemaking), proposed rule, and final rule. Agencies may also issue an interim final rule that becomes effective soon after publication when a statute allows or when the APA’s “good cause” exception applies because notice and comment would be impracticable, unnecessary, or contrary to the public interest; this process typically allows for public comment after publication so the agency can consider input and revise the rule. A direct final rule is similar but used for uncontroversial actions and, as described by OIRA, is treated as a final rule for display purposes on the dashboard.
Oversight by Congress and the courts
Congress enacts the laws that mandate or authorize agencies to regulate and sets procedures through the APA and other statutes, OIRA says. The Congressional Review Act (5 U.S.C. Chapter 8) requires agencies to submit all new final rules to both the House and Senate and allows Congress to begin a process to reconsider and vote to overturn a rule, according to OIRA. The APA also lays out the process for judicial review of rules in federal court, providing a legal check on agency regulations, OIRA explains.