OIRA’s Expanded Review of Tax Regulations and Its Surprising Implications

Executive Order 12866 describes U.S. policy on regulatory planning and review. It directs agencies to identify the nature and significance of the problem they are trying to solve with regulation, to identify alternative solutions, to assess the quantifiable and non-quantifiable costs and benefits of each alternative, and then to choose the option that maximizes net benefits to society, taking into account distributional effects and other considerations. That policy, which has governed U.S. regulation for several decades, is managed by the Office of Information and Regulatory Affairs (“OIRA”). It is also subject to several exemptions. In April 2018, the U.S. Department of Treasury and the Office of Management and Budget signed a historic memorandum of agreement narrowing one of those exemptions. The memorandum expands the number of Internal Revenue Service regulatory actions for which the Service must comply with Executive Order 12866. This action moved tax rules out of the “presidential tax-policy blind spot.” This article offers a close study of that memorandum of agreement and reveals six striking features that not only affect tax regulation, but also offer intriguing possibilities for (1) scholarly understanding of OIRA as an institution and (2) the future of regulatory review of independent regulatory agencies, which are currently exempt from OIRA review

An Orphan Works Affirmative Defense to Copyright Infringement Actions

Laurence Peter once said that [o]riginality is the fine art of remembering what you hear but forgetting where you heard it. Yet that clever quip is itself unoriginal. Although there may be nothing new under the sun--the arrangement of different bits of existing cultural matter in new and interesting combinations is the source of much originality. Yet today much of our cultural raw material is outside the reach of creators because of the orphan works problem. This problem renders untouchable a large swath of existing artistic, literary, and other works because if a work\u27s copyright owner cannot be found to secure their permission to use the work, then no one will ultimately use the work lest they risk liability for copyright infringement. Several solutions to this problem have been suggested, but most proposals are cumbersome or incompatible with political and legal reality. However, there might be a simple solution to the orphan works problem that respects the rights of copyright owners while freeing up works for which the rightsholders cannot be found. If a would-be user of a copyrighted work completes a reasonable search in good faith and fails to find the rightsholder, the user should be able to use the work. If she is later sued, she should be able to defend in court by showing that she diligently did her best to find the copyright owner. Copyright law does not provide for such an affirmative defense right now. Part I of this Article defines the orphan works problem and provides examples of how it interferes with the use of creative works. Part II describes the causes and costs of the orphan works problem. Part III outlines and critiques four of the leading proposed solutions to the orphan works problem. Part IV proposes a new and practical solution to the orphan works problem

An Orphan Works Affirmative Defense to Copyright Infringement Actions

Laurence Peter once said that [o]riginality is the fine art of remembering what you hear but forgetting where you heard it. Yet that clever quip is itself unoriginal. Although there may be nothing new under the sun--the arrangement of different bits of existing cultural matter in new and interesting combinations is the source of much originality. Yet today much of our cultural raw material is outside the reach of creators because of the orphan works problem. This problem renders untouchable a large swath of existing artistic, literary, and other works because if a work\u27s copyright owner cannot be found to secure their permission to use the work, then no one will ultimately use the work lest they risk liability for copyright infringement. Several solutions to this problem have been suggested, but most proposals are cumbersome or incompatible with political and legal reality. However, there might be a simple solution to the orphan works problem that respects the rights of copyright owners while freeing up works for which the rightsholders cannot be found. If a would-be user of a copyrighted work completes a reasonable search in good faith and fails to find the rightsholder, the user should be able to use the work. If she is later sued, she should be able to defend in court by showing that she diligently did her best to find the copyright owner. Copyright law does not provide for such an affirmative defense right now. Part I of this Article defines the orphan works problem and provides examples of how it interferes with the use of creative works. Part II describes the causes and costs of the orphan works problem. Part III outlines and critiques four of the leading proposed solutions to the orphan works problem. Part IV proposes a new and practical solution to the orphan works problem

Regulatory Body Shops

Agencies do not always write their own rules. Contractors assist agencies in nearly all tasks relating to rulemaking, including reviewing public comments, conducting specialized research, and writing regulatory text. Despite perceptions that contractors’ roles are entirely ministerial, the reality is that contractors fulfill many more functions in the rulemaking process than is commonly understood, including everything right “up to pushing the big red policymaking button,” as one agency employee put it. The use of contractors in rulemaking fits within a broader pattern of increased government reliance on service contractors. Scholars have documented a bevy of governance concerns relating to ethics, capacity, and more, stemming from the fact that contractors are in privity with the government, not the public. This scholarship does not take up the implications of service contracting for rulemaking, the primary mode of executive branch lawmaking, nor does it delineate between types of contracting arrangements, which vary dramatically. This Article takes variation in rulemaking contracting arrangements seriously. We define three types: ministerial contractors, who perform administrative work; expertise contractors, who provide discrete scientific and technical inputs; and regulatory body shops, which are embedded into agencies and function like staff. We argue that while the former two arrangements pose minimal risks to an agency, regulatory body shops are a different story. Not only do they open the door to conflicts of interest that are not adequately addressed under current law, they also threaten the quality of agency reasoning and have the potential to hollow out an agency’s rulemaking apparatus over the long run. Reliance on regulatory body shops has the potential to put an agency’s rules in legal jeopardy by violating the Administrative Procedure Act and diminishing an agency’s claim to Chevron deference. These various risks, which pose challenges for the quality of public decision-making, sit in tension with the reality that some agencies lack adequate resources to staff their rulemakings and turn to regulatory body shops as a pragmatic matter. The Article concludes with reforms to help agencies responsibly manage the risks posed by regulatory body shops

Responding to Mass, Computer-Generated, and Malattributed Comments

A number of technological and political forces have transformed the once staid and insider dominated notice-and-comment process into a forum for large scale, sometimes messy, participation in regulatory decisionmaking. It is not unheard of for agencies to receive millions of comments on rulemakings; often these comments are received as part of organized mass comment campaigns. In some rulemakings, questions have been raised about whether public comments were submitted under false names, or were automatically generated by computer “bot” programs. In this Article, we examine whether and to what extent such submissions are problematic and make recommendations for how rulemaking agencies should respond as a matter of law, policy, and technology.Our overarching conclusion is that agencies should adopt both low- and high-tech measures to limit the negative impact of these sorts of comments. Mass, malattributed, and computer-generated comments, however, do not represent a crisis for the regulatory state at this time. They have not been found to violate federal law and do not generally undermine the integrity of notice-and-comment rulemaking, and we are not aware of evidence of widespread substantive harms in particular rulemaking efforts or to the rulemaking system overall. However, appropriate responses, especially those that take advantage of new technology, could reduce the cost and negative impacts of technology-enabled comments. Adopting such techniques could, for example, improve the opportunity for a diverse public to participate in the federal rulemaking process meaningfully and augment current practices with new forms of citizen engagement. Indeed, in addition to exploring how new technologies—the very same technologies that enable mass, malattributed, and computer-generated comments—can help with analyzing those comments, we also explore throughout how technology can help regulatory officials make sense of public input and draw greater insights from public comments of all kinds. Finally, other jurisdictions at the state and local level and internationally are turning to new technology to enable innovative forms of public participation, thus improving the quality of rule and policymaking. These activities illustrate hopeful opportunities for future experimentation.This Article, based on a report commissioned by the Administrative Conference of the United States, expresses the authors’ views only and does not necessarily reflect those of the Administrative Conference or the federal government

Legal Issues in E-Rulemaking

Since the enactment of the Administrative Procedure Act (APA) in 1946, the technological landscape has changed dramatically while the basic framework for notice-and-comment rulemaking has largely gone unchanged. Federal regulators, looking to embrace the benefits of electronic rulemaking, face considerable ambiguity about how established, procedural legal requirements apply to the web. For example, does the APA permit agencies to require comments to be submitted online? Are agencies required to screen the content of public comments before they are placed on Regulations.gov? Are electronic dockets a legally sufficient means of preserving the rulemaking record? Many of these issues and others have been swirling around electronic rulemaking (e-Rulemaking) since its inception, and exist whether rulemaking is accomplished entirely on paper or using more electronic means. This Article focuses on the legal issues that present themselves entirely, or more prominently, when agencies engage in e-Rulemaking. Following a short background section on e-Rulemaking, Part I explains why updating the APA to address e-Rulemaking is unnecessary. Part II explores whether and how agencies should screen public comments before sharing them online and suggests a fundamental change to the way comments are posted on the biggest online rulemaking website, Regulations.gov. Part III analyzes the legal issues associated with using an electronic docket to compile the rulemaking record, finding that well-designed electronic dockets pose no significant legal risks but that the courts could probably do more to embrace electronic filing. Part IV shows that the most basic of federal requirements, the recordkeeping requirements of the Federal Records Act, apply to e-Rulemaking and suggests ways to ensure compliance. The Article concludes with a recap of the Article’s recommendations

OIRA’s Expanded Review of Tax Regulations and Its Surprising Implications

Executive Order 12866 describes U.S. policy on regulatory planning and review. It directs agencies to identify the nature and significance of the problem they are trying to solve with regulation, to identify alternative solutions, to assess the quantifiable and non-quantifiable costs and benefits of each alternative, and then to choose the option that maximizes net benefits to society, taking into account distributional effects and other considerations. That policy, which has governed U.S. regulation for several decades, is managed by the Office of Information and Regulatory Affairs (“OIRA”). It is also subject to several exemptions. In April 2018, the U.S. Department of Treasury and the Office of Management and Budget signed a historic memorandum of agreement narrowing one of those exemptions. The memorandum expands the number of Internal Revenue Service regulatory actions for which the Service must comply with Executive Order 12866. This action moved tax rules out of the “presidential tax-policy blind spot.” This article offers a close study of that memorandum of agreement and reveals six striking features that not only affect tax regulation, but also offer intriguing possibilities for (1) scholarly understanding of OIRA as an institution and (2) the future of regulatory review of independent regulatory agencies, which are currently exempt from OIRA review