Summary of the Levin-Thompson Regulatory Improvement Act

(Summary provided to RiskWorld by the office of Senator Fred Thompson, June 27, 1997.)

The Levin-Thompson regulatory reform bill would put into statute requirements for cost-benefit analysis and risk assessment of major rules, a process for the review of existing rules, and executive oversight of the rulemaking process. It builds on the bipartisan Roth-Glenn bill unanimously reported out of the Governmental Affairs Committee in 1995.

It requires agencies when issuing rules that have a major impact on the economy or a sector of the economy to do a peer-reviewed cost-benefit analysis to determine whether the benefits of the rule justify its costs and to determine whether the regulatory option chosen by the agency is more cost effective or provides greater net benefits than other regulatory options considered by the agency. If the rule involves a risk to health, safety or the environment, the bill requires the agency to do a peer reviewed risk assessment as part of the analysis of the benefits of the rule.

The bill also requires agencies which issue major rules to establish advisory committees to identify existing rules that should be considered for review because they have the potential, if modified, to achieve significantly greater net benefits.

The bill codifies the review procedure now conducted by the Office of Information and Regulatory Affairs (OIRA) and requires public disclosure of OIRA's review process.

The bill is significantly different from the Dole-Johnston bill rejected by the Senate in the 104th Congress:

-- It does not create a "supermandate" that would amend existing laws or contain cost-benefit "decisional criteria" that would establish new standards for an agency to meet. It would require agencies to conduct cost-benefit analyses for major rules and explain whether the benefits of the rules justify the costs and whether the rule is more cost effective than the other alternatives considered by the agency. It does not mandate the outcome of the process, only the process itself.

-- It does not provide for judicial review of the process for, or contents of, the cost benefit analysis. The cost-benefit analysis and risk assessment, of course, are made part of the rulemaking record for judicial review of whether the final rule is reasonable.

-- It does not provide for a petition process for challenging existing rules. It provides for advisory committees to identify rules for possible review, gives the agency head the discretion to select rules for review, and requires the agency to review the rules scheduled for review in 5 years.

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