As the regulatory freeze begins to thaw, agencies are preparing to begin proposing regulations. In our previous article in the series on regulatory process, we explained the kind of work agencies do to develop the administrative record and get ready to issue a proposed rule. In this article, we will examine the contents of a notice of proposed rulemaking (NPRM), paying particular attention to cost-benefit analysis.
In most cases, agencies are required to issue a proposed rule before making a regulation effective. The Administrative Procedure Act (APA) does, however, recognize that in certain situations there is “good cause” for skipping the usual procedures and making a regulation effective immediately. The APA allows agencies to skip notice and comment procedures when it is “unnecessary, impracticable, or contrary to the public interest.” President Trump issued a memo directing the agencies to use this exemption when making changes to regulations following a Supreme Court decision. Courts are usually hesitant to allow agencies to take advantage of the good cause exemption, preferring patience and transparency.
AGC plays an active role in shaping proposed regulations on behalf of the commercial construction industry. By submitting detailed comments, AGC aims to ensure that federal rules are grounded in real-world construction practices, are legally sound, and avoid unintended consequences that can hinder job creation or infrastructure delivery. In the coming weeks, AGC will be weighing in on several high-profile rulemakings, including the Federal Acquisition Regulation rewrite, the Environmental Protection Agency’s proposal to reissue and modify nationwide permits, and the definition of “Waters of the United States.” AGC’s advocacy in these proceedings helps safeguard our members’ interests while promoting sound, workable regulatory policies.
When agencies do publish an NPRM, they typically include the following information:
SUMMARY: Agencies are required by the APA to include a summary that is 100 words or less. This helps readers figure out if they need to continue reading.
DATES/ADDRESSES: Provides instructions for providing public comments on the proposed rule. Typically includes a physical address as well as a link to regulations.gov, which is the easiest way to submit public comments.
FOR FURTHER INFORMATION CONTACT: This is the contact information for an agency official who worked closely on the rule. They are allowed to take questions from the public and provide further information about a rule. At AGC of America, we use this information often to learn more about a proposal or to make contacts with the agency.
BASIS AND PURPOSE: Agencies are required to include the legal basis for the rule. That means they must identify which law gives them the authority to regulate in this area. The purpose of the rule identifies the policy issue the agency hopes to address.
REGULATORY ANALYSIS: To make sure all the impacts of a rule are properly anticipated, there is a litany of required regulatory analysis. Over the years, through executive orders and statutes, the White House and Congress have piled up different issues that need to be addressed in the preamble. The issues range from things like Tribal issues, fairness for small businesses, protection of children, impacts to the nation’s energy supply, and more.
COST-BENEFIT ANALYSIS: The most substantial of the regulatory analyses is Executive Order 12866’s requirement that any significant regulation must contain a cost-benefit analysis. A regulation’s significance is usually quantified in terms of economic impact, >$200M being significant, but the White House can designate any rule significant if it thought the nation would benefit from the extra leg work. We will discuss the contents of a cost-benefit analysis in more detail in a later edition of this series.
REGULATORY TEXT: At the very bottom of the document is the proposed regulatory text. Editors at the Office of the Federal Register work with agency staff to make sure the proposed text is accurate and will be properly edited into the Code of Federal Regulations. Everything above the regulatory text is called the preamble, where the agency explains its thinking. The regulatory text lays out what is actually being changed.
Stay tuned for Part Four in this series, where we’ll break down how to read and evaluate a cost-benefit analysis — and why it matters to the construction industry. If you missed the first two parts, catch up below:
- Part One: The Oval Office and Beyond – Inside the Executive Branch
- Part Two: The Deregulatory Push Begins – Building the Administrative Record to Prevent the Pendulum Swing
If you have any questions about the information presented here or about the executive branch at large, or have information that you would like to see explained in a future part of this series, please reach out to Spencer Phillips, spencer.phillips@agc.org.