May 25, 2010

Nondiscrimination on the Basis of Disability by Public Accommodations and in Commercial Facilities

Proposed Rule
Summary

Score: 34 / 60

Additional details
Agency
Department of Justice
Regulatory Identification Number
1190-AA44
Agency Name
Department of Justice
Rule Publication Date
06/17/2008

RULE SUMMARY

The Department of Justice (Department) is issuing this notice of proposed rulemaking (NPRM) in order to adopt enforceable accessibility standards under the Americans with Disabilities Act of 1990 (ADA) that are ‘‘consistent with the minimum guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board’’ (Access Board); and perform periodic reviews of any rule judged to have a significant economic impact on a substantial number of small entities and a regulatory assessment of the costs and benefits of any significant regulatory action as required by the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
A link to the RIA is four clicks away from the DOJ home page via very intuitive links. The RIA can be found on regulations.gov using keywords or RIN. The RIA is located in a separate website on the Department of Justice website, which is mentioned in the rule.
5/5
2. How verifiable are the data used in the analysis?
The analysis includes an extensive list of data and sources, but only some sources include links.
3/5
3. How verifiable are the models and assumptions used in the analysis?
Many assumptions are supported by references to literature. Some appear to be reasonable but not supported. Models are mostly simple economic relationships explained with graphs.
3/5
4. Was the analysis comprehensible to an informed layperson?
The analysis offers a very detailed explanation of every step, but often in economist's language with lots of acronyms.
3/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
3/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
Yes; accessibility by people with disabilities.
3/5
Does the analysis identify how these outcomes are to be measured?
There is no real discussion of how accessibility is to be measured, other than complying with the standards. Theoretically, the "benefits" are measured which lead to the implicit outcome: "Benefits—the economic value people derive from accessibility—can be divided into three categories: Use value: the value that people with disabilities derive from the use of accessible facilities; Option value: the value that people both with and without disabilities derive from the opportunity to obtain the benefit of accessible facilities; and, Existence value: the value that people both with and without disabilities derive from the guarantees of equal protection and nondiscrimination that are accorded through the provision of accessible facilities." The RIA attempts to measure use value. The analysts deserve credit for finding a way to model the benefits as a price change via the use of time costs. Appendix 4 in particular does an excellent job of demonstrating how the regulation would affect the price of goods and services in addition to time cost monetized. This is a best practice.
4/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
It provides occasional references to the new standards resulting in easier access for disabled people, but this is assumed to be true by definition. The measurement of use value is based on a coherent and creative theory.
2/5
Does the analysis present credible empirical support for the theory?
There are occasional discussion of previous standards improving access, but they are rare and not explicit.
1/5
Does the analysis adequately assess uncertainty about the outcomes?
It analyzes extensively the uncertainties in the benefit estimate, including sensitivity analysis and Monte Carlo analysis.
5/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
0/5
Does the analysis identify a market failure or other systemic problem?
The stated purpose is simply to implement the ADA.
0/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
There is no explanation of why facility owners cannot collect value from disabled people when benefits exceed costs. One can infer that the main problem is that facility owners cannot charge disabled people differentially high prices, either for transaction cost or civil rights reasons.
1/5
Does the analysis present credible empirical support for the theory?
The analysis does not address this topic.
0/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
The analysis does not address this topic.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
3/5
Does the analysis enumerate other alternatives to address the problem?
Alternatives and alternative baselines are discussed in the result section more thoroughly: "Several dimensions of uncertainty in how the proposed rule applies to actual facilities are captured as independent scenarios (21). These dimensions include: SH vs. No SH; readily achievable levels [0%, 50%, 100%]; and baselines [1991 ADA, IBC 2000, IBC 2003, IBC 2006]. These varying dimensions are shown in the results chapter."
4/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
Principal alternatives were safe harbor using 1991 guidelines vs. no safe harbor, which had significant cost-benefit differences. The rule mentions some other smaller tweaks to lessen impact on small entities and states that the federal regulation sets a floor and consulted extensively with state and local governments.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
Analysis shows NPV for safe harbor vs. no safe harbor scenarios, but does not really break out benefits separately.
2/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
Yes, the analysis gives a couple different scenarios of baselines (2000, 2003, and 2006), and chooses the one it deems most appropriate. This could be seen as at least one example of a best practice.
4/5
8. How well does the analysis assess costs and benefits?
3/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
Yes, but some of the cost breakouts get lost because comparisons often focus on NPV.
4/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
It appears to be pretty thorough. However, a lot of provisions are assumed to have no cost because they do not affect typical facilities. Cost figures used are fully covered in the appendices with full citations—there are definitely a couple best practices here.
4/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
It explicitly assumes no effect because the costs are presumed to be "small." This is unsupported and debatable, but at least it's transparent.
1/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
Behavior is rarely mentioned at all, therefore there's no examination of the costs that would stem from it—in this case, accessibility would decrease the cost since it's a benefit. Still, there's no explicit or relevant content on the subject.
1/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Extensive analysis of uncertainties in input values, including sensitivity analysis and Monte Carlo analysis. Results are displayed in graph format to indicate the sensitivities for many of the adjustments that would result from the regulation. This is a best practice.
5/5
Does the analysis identify the alternative that maximizes net benefits?
Of the several scenarios offered (as a means of sensitivity analysis for the discount rate and differing base years), all appear to demonstrate that benefits exceed costs, but this is not evidence of net benefit maximization. While there's an explicit comparison of the net benefits of the safe harbor vs. non safe harbor approach, it is a pretty narrow range.
3/5
Does the analysis identify the cost-effectiveness of each alternative considered?
The analysis does not calculate dollar of value per dollar of cost, but one could do so using the results of the analysis.
1/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The analysis includes an extensive breakdown of cost incidence by type of facility, public vs. private, etc. It identified three main cost drivers for each type of facility.
5/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
The analysis initially identified different types of disabled users but did not reveal how benefits would be divided among them. There is a discussion of the main drivers of the benefits which lends some clues into the parties receiving the benefits; however, there is no explicit discussion on this topic.
1/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
For the private sector rule, the safe harbor option appears to have been chosen because of cost considerations revealed by the analysis.
4/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Safe harbor appears to have been chosen because it generates a much larger net benefit.
4/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
DOJ could, perhaps, monitor use of facilities by disabled persons to see if the increase matches what was predicted in the RIA.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
The fact that DOJ undertook a retrospective review under the Regulatory Flexibility Act as part of this proceeding sets a precedent for future retrospective review. However, the review appears to have taken the form of response to public comments rather than a full assessment of the need for the regulation and the benefits and costs that actually occurred.
2/5
 
Total 34 / 60