needed information; and, (3) the possibility that premature disclosure of preliminary investigative findings might disrupt future data collection. Obviously, the need for public participation prior to the NPRM, and its timing, will vary from rulemaking to rulemaking, but the staff should consider the substantial benefits of early public involvement.

In 1976, the Administrative Conference recommended that agencies consider, in appropriate circumstances, voluntarily publishing an advance notice of proposed rulemaking (ANPRM) to solicit public comment or suggestions with respect to the contents 54 of a future rulemaking proposal." For rulemaking governed only by section 553 of the APA, an agency publishes an ANPRM, instead of a notice of proposed rulemaking, for mostly psychological-not legal-reasons. Section 553 does not require the agency to publish the terms or text of a proposed rule, and, in any event, the agency is free to change its mind about the contents of the rule. Nevertheless, an ANPRM may be useful if the agency is genuinely uncertain about the need for a regulatory response to a problem or about the regulatory approach it should take. This may be the case if the rulemaking is prompted by another agency or a public petition for rulemaking. The ANPRM suggests less of an agency commitment to do anything in the subject area.

55

The ANPRM technique may be more useful to agencies that are required by statute to make particular findings or complete certain analyses as a precondition to issuing a notice of proposed rulemaking or to include specific rule provisions in the NPRM. To comply with such requirements, or to test the soundness of specific proposals, the agency may want to solicit public comment by publishing an ANPRM. Public input may also be needed to

54/ ACUS Recommendation 76-3, Procedures in Addition to Notice and the Opportunity for Comment in Informal Rulemaking, 1 C.F.R. S 305.76-3 (1982).

55/ It has been suggested that some agencies use the ANPRM to threaten or "prod" regulated industries into undertaking voluntary action to remove risks. See Baram, Sandberg, et al., Managing Risks to Health, Safety and Environment by the Use of Alternatives to Regulation, 16 New Eng. L. Rev. 657, 686-687 (1980-81).

complete the preliminary regulatory impact analysis mandated for "major" rules by Executive Order 12291 and required to be 56 submitted to OMB 60 days prior to publication of the NPRM.

Public participation at the pre-NPRM stage may also be stimulated by describing the rule under development in the regulatory agendas that are required to be published semi-annually by the Regulatory Flexibility Act and Executive Order 12291.

Agency staff deciding which data collection or investigative techniques to use must also consider the requirements of the Privacy Act, the Paperwork Reduction Act, and the Federal Advisory Committee Act.

57

a. The Privacy Act. The Privacy Act" probably will not apply to most pre-rulemaking data collection activities, since that act is limited to collection and disclosure of information about individuals that is maintained by the agency in a system of records that uses the individual's name or identifier. 58

However, if the Privacy Act does apply, then collection, maintenance, and subsequent disclosure of the information must comply with the requirements of the Act. Generally, these involve disclosure of information to persons asked to supply information; inspection and correction rights for the submitters of information, and accounting for disclosure of the information to third persons.

60

b. The Federal Advisory Committee Act. The Federal Advisory Committee Act59 will affect agency use of outside groups to obtain advice and recommendations on the contents of a proposed rule. As discussed earlier in this chapter, the Act includes requirements for (1) chartering of advisory committees, (2) committee membership, including the participation of government employees, and (3) open meetings with notice and limited participation rights to members of the public. The Federal Advisory Committee Act's requirements, however, may be

56/ See text accompanying nn. 51-56, infra.

57/ 5 U.S.C. § 552a (1976).

58/

See 5 U.S.C. S 552a (a)(4) (definition of "record") and S 55 2a (aX5) (definition of "system of records").

59/ 5 U.S.C. App. 1.

60/ See discussion supra, text accompanying nn. 42-48.

superseded by specific statutes establishing different advisory committee requirements for agency programs.

C. The Paperwork Reduction Act. The Paperwork Reduction Act +61 requires agencies to obtain the approval of the Office of Management and Budget (OMB) before requesting private citizens to supply information or answers to identical questions; however, OMB clearance is only required if questions are directed to ten or more persons.

62

E. Information Management Considerations.

In the investigative stage, the rulemaking staff should already be anticipating the shape of the rulemaking record or file that will serve as the basis for a rulemaking decision."

Agencies that frequently engage in rulemaking probably have standardized indexing and filing systems for classes of proceedings. Whether such systems currently exist or not, it is highly desirable that there be a standardized system in place before the notice of proposed rulemaking (NPRM) is published. The rulemaking staff should work with the agency's information management specialists to establish the organization of the investigative file, with a view towards converting all or part of the file into a publicly-available rulemaking record after the NPRM is published.

The information management system for collecting and storing information must be responsive to the retrieval demands of the rulemaking staff. As people become aware of the investigation, they may file Freedom of Information Act and Privacy Act requests for information in the investigation file. Following are the kinds of questions the rulemaking staff should ask before data collection begins:

(1) If computer analysis of information

61/

Pub. L. No. 96-511, 94 Stat. 2812 (codified at 44 U.S. C. SS 3501-3520 (Supp. V 1981)).

62/ These requirements are discussed at length in Chapter Two, at text accompanying nn. 188-197.

63/ See generally Chapter Six for a discussion of the rulemaking "record" or file.

is contemplated, has the information
been collected in an easily-coded form?

(2) If a rulemaking proceeding is begun
by the agency, will the file meet the
needs of persons who wish to use it when
preparing comments on the proposed

rule?

(3) Can the system accommodate use by
the public and the agency staff at the
same time?

(4) Will the system be adequate for the
needs of the rulemaking staff at the end
of the public proceeding when decision
documents and the rule's statement of
basis and purpose are written?

(5) Can the information be organized or
indexed to facilitate responding to FOIA
requests for the information?

(6) Is the system designed to facilitate pre-
paring for judicial review of a final rule?

F. Pre-NPRM Analysis and Clearance Requirements.

For rules likely to have a significant economic impact on small businesses or "major" rules subject to Executive Order 12291, an agency must be prepared, at the time it authorizes publication of a NPRM, to defend its initial choice of a preferred regulatory approach to a problem. The Regulatory Flexibility Act requires the agency's initial analysis accompanying the NPRM to describe in detail the expected impact of the proposed rule on small entities and to evaluate significant alternatives to the proposed rule.64 Executive Order 12291 requires an initial analysis for "major" rules that evaluates the potential costs and benefits of the proposed rule. It also requires a description of alternative approaches "that could substantially achieve the same regulatory goal at lower cost . and a brief explanation of the legal reasons why such

64/ See discussion of the Regulatory Flexibility Act in Chapter Two, at text accompanying nn. 142-165.

1. The threshold analysis: Is a regulatory analysis required? Though the President's Executive Order and the Regulatory Flexibility Act cover a broad range of rulemaking activity, only a small fraction of rules by covered agencies are subjected to a regulatory flexibility analysis or a regulatory impact analysis.

Under the Regulatory Flexibility Act, the agency only needs to prepare an initial regulatory flexibility analysis if the proposed rule would have a "significant economic impact upon a substantial number of small entities." To avoid the analysis requirement, the head of the agency need only certify in the NPRM that the proposed rule will not have such impact, and send the certification and supporting statement of reasons to the Chief Counsel for 66 Advocacy of the Small Business Administration. The 67 certification decision is not subject to judicial review. Early experience under the Act indicated that the vast majority of rules were certified as not having a significant impact upon a substantial number of small entities.68

Executive Order 12291 requires executive branch agencies to prepare a preliminary regulatory impact analysis for all "major" rules, unless the rules are covered by an exemption in section 8 of the order. The exemptions are for (1) regulations that respond to emergency situations (though deferred compliance is required); (2) regulations for which consideration under the order would conflict with deadlines imposed by statute or court order; and (3) regulations that are exempted from any or all of the Order's requirements by the Director of the Office of Management and 69 Budget (OMB). The agency determines initially whether the

65/ Exec. Order No. 12,291, S 3(dX4). 66/ 5 U.S.C. S 605(b) (Supp. V 1981). 67/ 5 U.S.C. S 611 (Supp. V 1981).

68/ Of 489 Regulatory Flexibility Act dispositions between July 1, 1981 to October 1, 1981, 412 were certifications, 19 were initial regulatory flexibility analyses, and 18 were periodic reviews. See Verkuil, A Critical Guide to the Regulatory Flexibility Act, 1982 Duke L.J. 213, 242 (authority cited at n. 171).

69/ Exec. Order No. 12,291, § 8. The regulatory impact analysis (Continued)