Legal E-Bulletin - October 2018

Impact of Two-for-One Executive Order to Reduce Regulation Costs on Americans with Disabilities Act Proposed Regulations

Diego Demaya, J.D.

On January 30, 2017, President Donald Trump signed an Executive Order for Reducing Federal Regulation and Controlling Regulatory Costs. Requiring a massive shift in how Federal agencies promulgate new regulations, the Executive Order carries important implications for the development of future regulations -- such as those implementing the Americans With Disabilities Act (ADA). Put simply, the order is known as the “2-for-1 rule,” and requires agencies to offset the costs of a new regulation by modifying or eliminating at least two existing regulations. See, 82 FR 9339; February 3, 2017

Executive Order Overview

Executive Order 13771 sets forth the following requirements for new “executive department or agency” regulations:

  • A covered agency must repeal two existing regulations for any new regulation proposed or promulgated during fiscal year 2017.
  • The total incremental cost of any new regulation during fiscal year 2017 must be zero.
  • The incremental cost of a new regulation may be offset by eliminating the current costs resulting from two or more prior regulations.
  • In future years, for any regulation that increases the incremental cost, the agency head must identify “offsetting regulations” and the costs or savings from any new or repealed regulation.

The Executive Order states that these requirements must be implemented “to the extent permitted by law.” Further, the EO exempts regulations relating to the military, national security, or foreign affairs. Also exempted are regulations that relate to agency operations, or that are exempted by the Director of the Office of Management and Budget (OMB).

White House OMB Issues Interim Guidance on the Executive Order

Ambiguity in the Executive Order raised questions concerning how the order will be enforced. Thus, on February 2, 2017 the Office of Information and Regulatory Affairs (OIRA), a department in the Office of Management and Budget’s (OMB), issued interim guidance in a questions and answers format (Q&A) to implement President Trumps’s Executive Order regarding the costs of agency rulemaking: Memorandum: Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, Titled “Reducing Regulation and Controlling Regulatory Costs.” )

Yet, since the inception of EO 13771, the few rules identified by agencies requiring offsets reflect uncertainty about enforcement, with agencies unsure how to comply with the Executive Order. For instance, the EO is unclear about what types of regulations are subject to the order. The OMB Guidance limits the Executive Order to “significant regulatory action” as defined by Executive Order No. 12866 (EO 12866), signed by President Clinton in 1993. Under EO 12866, significant regulatory actions include those that “Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs. . . .”

The Interim Guidance further provides that for any new significant regulatory action that imposes costs before September 30, 2017, there must be “two ‘deregulatory’ actions” that “fully offset the costs” of the regulation. The primary goal of the order’s initial phase was to achieve zero dollars in new, net regulatory costs across the various executive agencies by the end of FY 2017. Moreover, the language of EO 13771 is also unclear as to the type of agency that is subject to the order. The Guidance states that the Executive Order only applies to agencies required by EO 12866 to submit their regulatory actions to the Office of Information and Regulatory Affairs (OIRA). Still, independent regulatory agencies not subject to the Executive Order are encouraged to comply; e.g., the EEOC, NLRB, Federal Reserve, CFPB, etc.

The Executive Order Only Focuses on Cost and Makes it Difficult for Promulgation of Future Regulation

Proposing a new rule under the purview of the Executive Order has become forbiddingly burdensome, because covered agencies must now conduct a cost assessment for two existing regulations when developing a new regulation. Indeed, neither the EO nor the OMB guidance address the central issue of the quality of agencies’ cost assessment standards for both new and old rules. Moreover, given that the lengthy rulemaking process is typically used to repeal existing regulations, an agency must undertake the rulemaking process for three rules to promulgate one new rule. As a practical matter, the Executive Order will likely halt promulgation of new regulations in the foreseeable future. Critics of the Executive Order indicate that significant agency rules already went through a detailed analysis by OMB. However, under the 2 for 1 Executive Order only costs will be measured without consideration to the necessity or benefits of a regulation -- regardless how needed they might be relative to costs. Hence, the EO will likely have a deleterious effect on critical regulations with important public benefits.

Impact on ADA Regulations

Federal Access Board. A significant set of ADA proposed regulations impacted by the Executive Order are those that would implement the Accessibility Guidelines for Pedestrian Facilities in the Public Right-of-Way (PROWAG) long under development by the Architectural and Transportation Barriers Compliance Board (Access Board), the independent agency responsible for developing accessibility guidelines applicable to the built environment. The Access Board has been working on PROWAG for many years, with the most recent draft rule published in 2011. Indeed, the Access Board was hoping to submit a final rule in mid-2017.

The Access Board submits its significant regulatory actions to OIRA, and the U.S. Department of Justice (DOJ) and the U.S. Department of Transportation (DOT) must adopt PROWAG as regulations in order for them to become enforceable standards. DOJ and DOT are federal executive branch departments covered by the Executive Order and, therefore, PROWAG has been halted by the Executive Order.

Equal Employment Opportunity Commission.

Pursuant to Executive Order 13777, the EEOC has established a Regulatory Reform Task Force that will be charged with evaluating existing regulations (as defined in Section 4 of Executive Order 13771) and making recommendations regarding their repeal, replacement, or modification. The Regulatory Reform Task Force will attempt to identify regulations that:

  1. eliminate jobs, or inhibit job creation;
  2. are outdated, unnecessary, or ineffective;
  3. impose costs that exceed benefits;
  4. create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies;
  5. are inconsistent with the requirements of Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision, in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility; or
  6. derive from or implement Executive Orders or other Presidential directives that have been substantially rescinded or substantially modified.

Some significant EEOC proposed rules that may be affected include:

  • Final Rule on Affirmative Action for People with Disabilities in Federal Employment and Q &A;
  • Final Rule on Employer Wellness Programs and Title I of the Americans with Disabilities Act and Q &A;
  • Final Rule on Employer-Sponsored Wellness Programs and Title II of the Genetic Information Nondiscrimination Act
  • Sample Notice for Employer-Sponsored Wellness Programs, and
  • Questions and Answers about the Sample Notice for Employer-Sponsored Wellness Programs

U.S. Department of Justice

Other important ADA regulations under development by DOJ are also unlikely to move forward. Examples include the Accessibility of Equipment and Furniture and Accessibility of Web Information and Services of Public Accommodations (the private business sector). Still, it is important to note that DOJ has proactively continued to enforce ADA Title III barrier removal compliance regarding business web sites and related applications without enforceable web accessibility standards. While it employs the W3C Web Accessibility Standards in Settlement Agreements, the Title III regulations are silent on web site accessibility. Indeed, the Executive Order seems to worsen an already precarious business web site ADA compliance landscape.

Legal Challenge to Executive Order Dismissed for Lack of Standing

Several organizations filed a lawsuit challenging the Executive Order in the United States District Court for the District of Columbia, Public Citizen, Inc. v. Trump, No. 1:17-cv-00253 (D.D.C.filed Feb. 8, 2017). The plaintiffs had asked for the Executive Order to be invalidated because it would block or require the repeal of important regulatory protections. The complaint alleged that the order was unconstitutional and would force executive agencies to violate a variety of statutory requirements in order to comply with the Executive Order. For example, the Executive Order “requires… agencies to consider factors not specified in or inconsistent with their governing statutes.” Additionally, personnel and leadership changes at DOJ may also impact the extent to which new ADA Title III regulations will be promulgated and existing regulations enforced.

However, Federal judge Randolph D. Moss of the U.S. District Court for the District of Columbia dismissed the challenge in February 2018 and ruled that the plaintiffs failed to show how the order would harm their organizations or members. Nonetheless, Judge Moss stated in his decision that Public Citizen, the Natural Resources Defense Council and the Communication Workers of America could have the proper standing to challenge the Executive Order in the future.

The Southwest ADA Center is a program of ILRU (Independent Living Research Utilization), at TIRR Memorial Hermann in Houston, Texas. The Center is funded by a grant (90DP0092) from the National Institute on Disability, Independent Living, and Rehabilitation Research. NIDILRR is a Center within the Administration for Community Living (ACL), Department of Health and Human Services (HHS). The contents of this e-bulletin do not necessarily represent the policy of NIDILRR, ACL, HHS, and you should not assume endorsement by the Federal Government.