TREASURY DIRECTIVE

28-03

DATE:

December 12,2007

SUBJECT: Review and Clearance of Regulations
Purpose. This Directive establishes a process for consistent, effective, and expeditious review and clearance of regulations.
1.

2. Scope. This Directive covers all regulations, as defined below, issued by the Department ofthe Treasury, solely or jointly. This Directive, however, does not cover regulations issued by the Office of the Comptroller of the Currency (OCC) or the Office of Thrift Supervision (OTS), except that OCC and OTS shall submit information on their annual regulatory plan to the Assistant General Counsel for General Law, Ethics, and Regulation for inclusion with the Department-wide plan. 3. Definitions.

A.

Regulation, as that term is used herein, refers to:

(1) any advance notice of proposed rulemaking (ANPR) or other substantive regulatory action preliminary to a notice of proposed rulemaking, notice of proposed rulemaking (NPRM), temporary (interim) rule, or final rule intended for publication in the Federal Register; (2) any other statement of general applicability and future effect intended to have the force and effect oflaw that is designed to implement, interpret, or prescribe law or policy, or to describe the procedure or practice requirements of an office or bureau; (3) any document that withdraws or substantively amends a previously issued regulation; (4) any document published in the Notice section of the Federal Register that: (a) requires or authorizes any action on the part of any person to participate in a program, avoid a penalty, or obtain a benefit; (b) contains a collection of information subject to the Paperwork Reduction Act; (c) establishes or revises policy; (d) could limit the policymaking discretion of states; or (e) could infringe upon a constitutionally protected property right; and

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(5) any other document or category of documents to the extent determined by a bureau or office head, policy official, the General Counsel, or the Executive Secretary. Notwithstanding the above, the term "regulation" as used in this directive does not include: (1) documents making nonsubstantive technical corrections to a previously issued regulation; (2) documents extending or reopening the public comment period for a previously published regulation, provided that no new regulatory provisions or options are proposed; (3) amendments to the Internal Revenue Service Statement of Procedural Rules (26 CFR Part 601) that are not subject to the Paperwork Reduction Act of 1995; (4) notices in the Internal Revenue Bulletin, revenue rulings, revenue procedures, decisions, announcements, notices, legal determinations, Alcohol and Tobacco Tax and Trade Bureau (TTB) rulings, and other similar documents; (5) internal regulations, directives, and similar documents relating to agency organization, management, practice, or personnel that are not published in the Federal Register provided that they do not substantially affect the rights or obligations of persons outside the issuing office or bureau; (6) for purposes of the provisions of this Directive relating to advance review and approval by the Department, notices of proposed rulemaking published by TTB relating to the establishment of American viticultural areas (27 CFR Part 9), provided that such notices are not controversial and do not involve policy issues; and
(7) other documents specifically designated by the Secretary or by the General Counsel in consultation with the Executive Secretary.

B.

The Bureau refers to the bureau that desires to publish a regulation. For regulations that originate within the Departmental Offices (DO), the DO office or the Tax Counsel originating the regulation will be considered the bureau. Bureau Counsel refers to the chieflegal officer ofthe Bureau, or designee. For regulations originating within DO, the Assistant General Counsel with legal responsibility for the policy matter is responsible for clearance of the regulation as discussed below.

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D.

The Unified Agenda is published in the Federal Register twice a year, and includes a listing of regulations under development or review for the next twelve months. The fall Unified Agenda includes the annual Regulatory Plan.

4.

Responsibilities. A. Commencement of Regulations.

(1) Unless an exception to Executive Order (E.O.) 12866 applies, the Bureau, or as appropriate the cognizant DO policy office or Tax Counsel, shall obtain approval of the General Counsel prior to commencing a regulation. Approval shall be obtained by submitting a "Request for Approval of a Regulatory Project," including: (a) the title of the regulatory project; (b) a brief description of the objective(s) of, and the need for, the regulatory project; and (c) the name, phone number, and e-mail address of a person who can be contacted for further information concerning the project. A regulation will be deemed to be ready to commence at the time an office or bureau determines, as an institutional matter, that it will engage in a regulation. At the latest, a regulation will be deemed to commence at the time an office or bureau determines to obtain a Regulation Identification Number (RIN) from the Regulatory Information Service Center (RISC). The Request shall be submitted to the Assistant General Counsel for General Law, Ethics, and Regulation for transmission to the General Counsel. In the case of a regulatory project originating in a bureau (other than the United States Mint or the Bureau of Engraving and Printing), the Request shall be transmitted through the appropriate policy official in DO. Commencement of a regulatory project shall be deemed approved by the General Counsel five (5) working days after submission of the Request to the Assistant General Counsel for General Law, Ethics, and Regulation, unless the office or bureau making the request is advised that the request has been disapproved within such time. (2) Unless an exception to E.O. 12866 applies, the Bureau, or as appropriate the cognizant DO policy office or Tax Counsel, shall obtain the approval ofthe General Counsel prior to including a regulation in Part II of the Regulatory Plan.
B. Prior to Submission of a Regulation for Clearance.

Unless an exception to E.O. 12866 applies, the Bureau, or as appropriate, the cognizant DO policy office or Tax Counsel, shall prepare, prior to submitting any Federal Register publication for review, a memorandum to be forwarded to the Assistant General Counsel for General Law, Ethics, and Regulation for transmission to the Office of Management and Budget (OMB) containing: (a) a short description of the proposed regulation; (b) a statement as to the nature of the planned publication (e.g. "notice of proposed rulemaking"); (c) the planned publication date; (d) the applicable statutory or judicial deadline, or a statement that none exists; (e) the assigned Regulation Identifier Number
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(RIN); (t) a statement as to whether the regulation is significant for purposes of E. O. 12866; and (g) the name and telephone number of the Bureau contact person.

C.

Clearance of Regulations Prior to Publication.

(1) The Executive Secretary shall approve a regulation before it is published in the Federal Register. All regulations to be published in the Federal Register shan first be cleared (a) by the appropriate Assistant General Counsel and the appropriate DO policy office(s) or (b) by Tax Counsel. The Assistant General Counsel for General Law, Ethics, and Regulation clears all regulations before being submitted to the General Counsel. The General Counsel clears the regulation and forwards it to the Executive Secretary for clearance by the front office. The Executive Secretary returns the regulation to the Assistant General Counsel for General Law, Ethics, and Regulation upon clearance. (2) The Bureau, or as appropriate the cognizant DO policy office or Tax Counsel, is responsible for: (a) Drafting all regulations in accordance with the instructions in the Federal Register Document Drafting Handbook (http://www.archives.gov/federa1register/write/handbook). In addition to writing the substance of the rule, the Bureau shan also be responsible for the technical formatting of the rule in accordance with the Handbook; (b) Assessing whether a regulation is significant under E.O. 12866; (c) Assessing whether a regulation implicates fundamental federalism principles under E.O. 13132; (d) Assessing whether a regulation is "major" under 5 US.c. §§ 801 and 804 and thus subject to the 60-day deferral requirement; (e) Assessing whether a regulation is subject to the Regulatory Flexibility Act, and, if it is, preparing, as appropriate, an initial regulatory flexibility analysis (5 US. C. § 603), a final regulatory flexibility analysis (5 US.c. § 604), or a certification (5 U.S.c. § 605(b));

(t) Assessing whether a regulation implicates the Paperwork Reduction Act of 1995, and, if it does, preparing all necessary infonnation for submission to the Office of the ChiefInfonnation Officer (OCIO) to permit the OCIO to obtain OMB clearance for any collections of infonnation contained in a regulation;
(g) Ensuring that the regulation complies with all other requirements imposed by statute, regulation, or executive order;

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(h) Ensuring that all regulations are cleared by Bureau counsel prior to forwarding to DO for review; (i) Through the procedures reflected herein, obtaining clearance of the document in the following order from: (a) the Bureau through the necessary hierarchy as established therein, (b) either (1) the Assistant General Counsel with subject matter responsibility and the appropriate DO policy office(s) or (2) Tax Counsel, (c) the Assistant General Counsel for General Law, Ethics, and Regulation, and (d) the Executive Secretary; (j) Making any necessary edits to the rule requested by the Assistant General Counsel for General Law, Ethics, and Regulation or other parties from whom clearance is sought; (k) Preparing a brief executive summary in memorandum form to the Executive Secretary to accompany the document when submitted for clearance by DO. The executive summary shall state whether the regulation is economically significant under E.O. 12866, indicate whether political or media interest has been expressed in the subject matter of the regulation, state that the regulation complies with this Directive and that Bureau counsel has opined that the regulation complies with paragraphs 4.C(2)(b) through (g), above, and include a recommendation as to whether the regulation should be brought to the attention of the Secretary or Deputy Secretary;

(1) Posting any public comments received in response to a request for comments in a regulation to the regulations.gov website. The Bureau must maintain copies of comments as required under the applicable National Archives and Records Administration schedule;
(m) Arranging for publication in the Federal Register of all documents to be published in the Federal Register; (n) Sending copies of regulations to the Speaker of the House of Representatives, the President of the Senate, and the General Counsel of the Government Accountability Office, in accordance with the Congressional Review Act, 5 U. S. C. §§ 801 et seq; and

(0) Providing all necessary information to the OCIO to permit the OCIO to obtain clearance for any collections of information contained in a regulation.

D.

The OCIO is responsible for obtaining the necessary approvals for regulations containing collections of information as required by the Paperwork Reduction Act.
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The OCIO shall inform the Assistant General Counsel for General Law, Ethics, and Regulation when a request for clearance of a collection of information contained in a new regulation is received from the Bureau, and shall await clearance from the Assistant General Counsel for General Law, Ethics, and Regulation before submitting the request to OMB. In addition, the OCIO shall notifY the Bureau and the Assistant General Counsel for General Law, Ethics, and Regulation when a collection of information contained in a new regulation is cleared by OMB. E. The Assistant General Counsel for General Law, Ethics, and Regulation is responsible for:

(1) Reviewing regulations for compliance with the procedural requirements set forth in this Directive; (2) Submitting all regulations to the General Counsel and Executive Secretary for final clearance prior to publication in the Federal Register; (3) Coordinating clearance, as necessary, with OMB; (4) Communicating any edits recommended by OMB, or the Small Business Administration's Office of Advocacy; and (5) Serving as the Treasury point of contact with OMB and the Small Business Administration's Office of Advocacy. 5. The U nmed Agenda. A. The Unified Agenda is intended to include regulations and publications under development or review for the next twelve-month period. The Bureau shall compile and prepare information related to the Unified Agenda as directed by the Assistant General Counsel for General Law, Ethics, and Regulation.

B.

6.

Effect on Other Directives. This Directive supersedes Treasury Directive 28-0 I to the extent that the two Directives are inconsistent.

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7.

Office of Primary Interest. Office of the General Counsel.

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Robert F. Hoyt General Counsel

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