28 CFR Parts 35 and 36 Amendment of ADA Title II and Title III Regulations To Implement ADA Amendments Act of 2008 - Final Rule

VII. Regulatory Process Matters

A. Executive Order 13563 and 12866—Regulatory Planning and Review

This final rule has been drafted in accordance with Executive Order 13563 of January 18, 2011, 76 FR 3821, Improving Regulation and Regulatory Review, and Executive Order 12866 of September 30, 1993, 58 FR 51735, Regulatory Planning and Review. Executive Order 13563 directs agencies, to the extent permitted by law, to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; tailor the regulation to impose the least burden on society, consistent with obtaining the regulatory objectives; and, in choosing among alternative regulatory approaches, select those approaches that maximize net benefits. Executive Order 13563 recognizes that some benefits and costs are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.

The Department has determined that this rule is a ‘‘significant regulatory action’’ as defined by Executive Order 12866, section 3(f). The Department has determined, however, that this rule is not an economically significant regulatory action, as it will not 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, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. This rule has been reviewed by the Office of Management and Budget (OMB) pursuant to Executive Orders 12866 and 13563.

Purpose and Need for Rule and Scope of Final Regulatory Assessment

This rule is necessary in order to incorporate into the Department’s ADA regulations implementing titles II (nondiscrimination in State and local government services) and III (nondiscrimination by public accommodations and commercial facilities) the ADA Amendments Act’s changes to the ADA and to provide additional guidance on how to apply those changes. The ADA Amendments Act, which took effect on January 1, 2009, was enacted in response to earlier Supreme Court decisions that significantly narrowed the application of the definition of ‘‘disability’’ under the ADA. See Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999); Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184 (2002). The ADA Amendments Act clarifies the proper interpretation of the term ‘‘disability’’ in the ADA and fulfills congressional intent to restore the broad scope of the ADA by making it easier for individuals to establish that they have a disability within the meaning of the statute. See Public Law 110–325, sec. 2(a)(3)–(7).  The Act authorizes the Attorney General to issue regulations under title II and title III of the ADA to implement sections 3 and 4 of the Act, including the rules of construction presented in section 3. 42 U.S.C. 12205a. The Department is making several revisions to the title II and title III ADA regulations that are based on specific provisions in the ADA Amendments Act.

The Department notes that the Supreme Court cases limiting the application of the definition of ‘‘disability’’ had the most significant impact on individuals asserting coverage under title I of the ADA with respect to employment. The legislative history of the ADA Amendments Act is replete with examples of how individuals with a range of disabilities were unable to successfully challenge alleged discriminatory actions by employers because courts found that they did not qualify as individuals with disabilities under the Supreme Court’s narrow standards. See, e.g., S. 154 Cong. Rec. S8840–44 (daily ed. Sept. 16, 2008) (Statement of the Managers). With respect to titles II and III, while the statutory amendments required by the ADA Amendments Act affect persons with all types of disabilities and across all titles of the ADA, Congress anticipated that the ADA Amendments Act’s expanded definition would especially impact persons with learning disabilities who assert ADA rights in education and testing situations. See H.R. Rep. No. 110–730, pt. 1, at 10–11 (2008); see also 154 Cong. Rec. S8842 (daily ed. Sept. 16, 2008). Congress was concerned about the number of individuals with learning disabilities who were denied reasonable modifications or testing accommodations (e.g., extra exam time) because covered entities claimed these individuals did not have disabilities covered by the ADA.

In the NPRM, the Department requested public comments on whether the changes made by the ADA Amendments Act to titles II and III and that are addressed in the proposed rule would have benefits or costs in areas other than additional time for postsecondary students and national examination test takers with ADHD or learning disabilities. Those comments and the Department’s response are discussed below. The Department wishes to stress that, although its economic analysis is focused on estimating costs for processing requests and providing extra time on exams as a direct result of the ADA Amendments Act, the ADA, as amended, extends coverage to individuals with the full range of disabilities and affords such individuals the full range of nondiscrimination protections under the ADA.⁵ The Department is aware that the accommodation of those individuals might entail some economic costs; however, it appears that in light of the legislative history and the experience of the Department in resolving ADA claims from 1990 to the present, the above-referenced exam costs represent the only category of measurable compliance costs that the ADA Amendments Act will impose and the Department was able to assess. While other ADA Amendments Act compliance costs might also ensue, the Department has not been able to specifically identify and measure these potential costs. The Department believes, however, that any other potential costs directly resulting from restoration of coverage to individuals with disabilities who assert their rights under other ADA nondiscrimination provisions will likely be minimal and have little impact on the overall results of this analysis.

Public Comments on Regulatory Assessment and Department Responses

This section discusses public comments to the Initial RA that accompanied the NPRM, as well as changes made to the estimation of likely costs of this rule in response to those comments.

While more than 50 comments were received during the NPRM comment period, only a few of those directly addressed the assumptions, data, or methodology used in the Initial RA. The Department received comments from persons with disabilities, organizations representing educational institutions and testing entities, individual academics, and other private individuals. The preamble to this final rule provides the primary forum for substantive responses to these comments.

General and Recurring Concerns Expressed in Comments

Many commenters expressed appreciation for the proposed regulation, with several noting that the regulation would offer qualitative and quantitative benefits. Some of the quantitative benefits noted by commenters were a reduction in litigation costs as well as access to educational opportunities for persons with disabilities that would enhance employment prospects, productivity, and future earnings and investments. Qualitative benefits referenced in the comments included enhanced personal self-worth and dignity, as well as the values of equity, fairness, and full participation. Other commenters expressed concern about costs associated with implementation of the regulation.

The Department reviewed a number of comments suggesting that it underestimated the costs that postsecondary schools or national testing entities will incur to comply with the ADA Amendments Act. Commenters stated that the ADA Amendments Act will lead to a significant increase in the number of students seeking accommodations from postsecondary schools, which will lead to substantially increased direct costs (e.g., the costs of providing additional exam time and other accommodations to students with disabilities) and indirect costs (e.g., the costs of processing these requests, complaints to the Office for Civil Rights at the U.S. Department of Education, and lawsuits). Commenters further stated that the Department overlooked the costs that postsecondary schools will incur in providing accommodations other than additional exam time, such as tutors, note takers, auxiliary aids, e-books, etc. These commenters suggested that postsecondary schools will need to hire additional staff to manage the additional administrative burden that the ADA Amendments Act imposes.

Those comments and as well as other related comments, are specifically addressed below. But, as a threshold matter, the Department believes that the concerns predicated on the assumption of a significant rise in students seeking accommodations due to changes brought about by the ADA Amendments Act are overstated. One of the primary purposes of the ADA Amendments Act was to restore ADA coverage to a subset of individuals with disabilities who lost ADA protection as a result of a series of Supreme Court decisions dating back to 1999.

While the Department recognizes that there has been an increase in the number of students with disabilities requesting accommodations at postsecondary institutions, much of this increase is likely not attributable to the passage of the ADA Amendments Act. Commenters and existing data suggest that, for the most part, increases in the number of students with disabilities attending college and seeking accommodations are likely related to the following factors:

• There are more diagnoses of disabilities in children overall since 1997; ⁶

• More students are attending college generally; ⁷

• Other laws such as the Individuals with Disabilities Education Act (IDEA) and section 504 are causing students with disabilities to be identified more widely and at a younger age; ⁸

• The stigma of identifying as a person with a disability appears to have diminished since the passage of the ADA in 1990;

• Diagnoses of autism spectrum disorders among children have increased significantly since 1997, perhaps as a result of improved diagnostic tools and protocols; ⁹ and

• Postsecondary schools have improved their ability to accommodate students with disabilities, thus encouraging more students to seek such accommodations, and empowering students with disabilities to enroll in college and remain enrolled there.¹⁰

Most of the students affected by the ADA Amendments Act are students whose impairments did not clearly meet the definition of ‘‘disability’’ under the ADA after the series of Supreme Court decisions beginning in 1999 reduced the scope of that coverage. For instance, under the narrowed scope of coverage, some individuals with learning disabilities or ADHD may have been denied accommodations or failed to request them in the belief that such requests would be denied. As a result, the most likely impact of the ADA Amendments Act is seen in the number of students with disabilities eligible to request and receive accommodations in testing situations. There are different types of accommodations requested in testing situations, but requests for additional exam time appear to be the type of accommodation most likely to have a significant, measurable cost impact. Other types of accommodations requested in testing situations are expected to incur few to no additional costs as a result of the ADA Amendments Act and this rule. For instance, requests for accommodations such as the use of assistive technology or the need for alternative text formats were the types of accommodations that would have been granted prior to the passage of the ADA Amendments Act because students with sensory disabilities needing these types of accommodations would have been covered by the ADA even under the narrower scope of coverage arising from the application of the Supreme Court’s decisions in Toyota and Sutton. As a result, those types of accommodations cannot be directly attributed to the ADA Amendments Act. In addition, other types of accommodations such as adjustments to the testing environment (e.g., preferential seating or alternative locations) or the ability to have snacks or drinks would result in minimal or no costs. Therefore, the Department’s examination of the costs of this rule is confined to those accommodations that individuals at postsecondary institutions or taking national examinations are most likely to request as a result of the ADA Amendments Act and that are most likely to incur measurable costs—extra time on tests and examinations.

One commenter, however, asserted that costs should be estimated for entities other than postsecondary institutions and testing entities, such as elementary and secondary schools, courthouses, etc. Certain concerns related to elementary and secondary schools are addressed below, but the Department found no direct evidence to indicate that institutions other than postsecondary institutions and testing entities will incur any significant economic impact as a result of accommodating individuals now covered under the ADA after passage of the ADA Amendments Act. Even after conducting further research, the Department was unable to identify any accommodations that would result in compliance costs that could be specifically attributable to the ADA Amendments Act other than those identified and measured in this analysis—i.e., accommodations for extra time on exams. While the Department anticipates that other individuals with disabilities will benefit from the ADA Amendments Act, no specific subsets of individuals with disabilities or specific accommodations were identified. Accordingly, it appears that the economic impact of ADA Amendments Act compliance for entities other than postsecondary schools and testing entities will not significantly affect the overall economic impact of the rule, and thus those costs are not analyzed here.

One commenter cited the 2013–2014 Institutional Disability Access Management Strategic Plan at Cornell University¹¹ as an example of the kind of careful planning done by postsecondary institutions to address the needs of students with disabilities as a basis for determining that the costs of implementing the ADA Amendments Act will be very high. This document focuses almost exclusively on initiatives taken in furtherance of ADA compliance generally, rather than compliance with the ADA Amendments Act specifically. Further, this document discloses that Cornell University annually updates its plans and policies toward individuals with disabilities. Nothing in this document indicates that Cornell University is absorbing high costs as a result of such ongoing updates, or that the ADA Amendments Act has presented Cornell University with an unusually high burden, over and above the ordinary obligations that the ADA itself imposes. It is true that this document reflects careful, comprehensive, and possibly costly planning on the behalf of students with disabilities, but the expense inherent in such planning is attributable to the overall requirements of the ADA itself, rather than the implementation of the ADA Amendments Act. 

Comments Regarding the ADA and Related Laws

Many of the commenters’ points regarding increased costs appear to apply to concerns about the costs of complying with the ADA generally and not to costs related to expanded coverage due to the ADA Amendments Act. It is true that in some cases the costs of accommodating some students with more severe mobility and sensory disabilities could be significant, but these students were clearly covered even under the restrictive standards set forth by Sutton and Toyota, and accordingly, such costs cannot be attributed to the implementation of the ADA Amendments Act. One commenter expressed a concern that there has been an increase in requests for ‘‘exotic or untrained animals as service or emotional support animals’’ in student housing provided by postsecondary institutions. The Department notes that neither ‘‘exotic animals’’ nor ‘‘emotional support animals’’ qualify as service animals under the existing regulations implementing titles II and III of the ADA and thus, any costs related to allowing such animals are not due to the application of the requirements of this rule.¹² And, similar to the observation noted above, the vast majority of students who use service animals as defined under the ADA have disabilities that would have been covered prior to passage of the ADA Amendments Act, even under the Supreme Court’s more narrow application of the definition of ‘‘disability.’’ So, although such costs may be measurable, they cannot fairly be attributed to the implementation of the ADA Amendments Act.

Comments Regarding the Costs for the Adjustment of Existing Policies

The Department acknowledges that postsecondary schools and national testing entities will incur some costs to update their written policies and training procedures to ensure that the definition of ‘‘disability’’ is interpreted in accordance with the requirements of the ADA Amendments Act, but has found no evidence to indicate that such costs would be high. The Department also notes that even prior to passage of the ADA Amendments Act, many postsecondary schools had policies in place that were broader and more comprehensive than would have been required under the more restrictive coverage set forth in Sutton and Toyota. As a result, their policies and procedures may require few, if any, updates to conform to the ADA Amendments Act and the revised regulations. The Department has found no evidence to suggest that the changes required by the ADA Amendments Act have placed or will place a significant burden upon the ongoing processes of evaluating and updating policies that already exist at postsecondary schools or with national testing entities. Nevertheless, the Department has attempted in this Final RA to quantify the cost of training staff members and updating policies as a result of the changes that the ADA Amendments Act final rule may require.

Some commenters argued that the Department’s estimate of a one-time cost of $500 per institution to change policies and procedures in compliance with the ADA Amendments Act was too low. Instead, one commenter proposed an estimated one-time cost of $2,500 per institution, and another commenter suggested an estimated one-time cost of $5,000 per institution for the first year’s training costs. The underlying data and methodology to support these estimates were not provided by these commenters.

The Department has found no data to substantiate the claims that the cost of changing existing policies and training procedures to comply with the ADA Amendments Act will be $2,500 or $5,000 per institution. The commenters proposing those costs did not provide any detailed evidence or arguments in support of such costs, and the Department’s research found no evidence to indicate that any institutions have incurred training or policy revision costs of that magnitude since the ADA Amendments Act became effective in 2009. The commenter suggesting a $5,000 cost cites to one institution’s disability access plan to suggest some of the types of costs that might be incurred. The referenced document, however, does not provide specific dollar figures and is not ADA Amendments Act specific. Therefore, the Department does not believe that the commenter’s projected cost increases are correct because, as discussed above, the programmatic concerns identified in this document pertained to ADA compliance as a whole, but not with changes to the ADA created by the ADA Amendments Act specifically. The Department acknowledges that the absence of evidence of such costs, however, is not necessarily conclusive that some costs do not or will not exist. Nevertheless, the Department believes that, had postsecondary schools incurred $2,500 to $5,000 in such compliance costs since 2009 or if they expected to incur such costs going forward, some indicia of these costs would be readily apparent.

Because no relevant supporting information regarding the commenters’ estimates was provided, the Department conducted additional independent research and interviewed representatives at two postsecondary institutions to determine whether any additional formal or informal training had been needed to understand the implications of the ADA Amendments Act (and make adjustments to existing policies and procedures to conform to the Act’s requirements). One of those two institutions stated that no additional training had been needed. The second institution said that additional training had been provided during meetings with staff. Approximately two hours per staff member (i.e., two hours per meeting) had been dedicated to this training. Approximately two part-time staff and six graduate students (working part time) received this training. In addition, the staff member providing the training had to attend a one-day conference to receive the information to pass along to the other staff. The Department conducted research to determine the costs of attending such a conference and receiving training on the changes to the law resulting from the ADA Amendments Act. Based on this independent research and feedback from representatives of two postsecondary institutions, the Department increased its estimate for one-time training costs from approximately $500 to $1,371 (see below for greater details on how the $1,371 was derived).

Comments Regarding the Costs of Additional Staff Time for the Administration of the Rule

Some commenters argued that the rule will lead to a significant increase in postsecondary institution accessibility support staff time devoted to disability accommodation issues, perhaps even requiring postsecondary institutions to hire additional personnel. One commenter representing higher educational institutions estimated that each affected institution would be required to hire one new full-time staff member, at $40,000 per year, to address increased student requests. This commenter cited a study that indicated that the mean number of staff who assist students with disabilities is four per campus. The Department questions the commenter’s estimate that each affected institution would have to increase their staff by one full-time staff person, or approximately 25 percent of the mean entire staff, to address the incremental changes created by the ADA Amendments Act. The general increase in accommodation requests is likely attributable to a number of other factors not related to the ADA Amendments Act, including higher enrollment of students with disabilities. While there will likely be an incremental increase in the number of testing accommodations requested and granted as a direct result of the ADA Amendments Act, this incremental increase is unlikely to be the driving factor for hiring additional staff.

Similarly, some commenters argued that the Department needed to incorporate estimates of the additional administrative time needed to review and administer additional requests for testing accommodations for both postsecondary and national testing entities. To address these concerns, the Department contacted several universities and testing entities, but received responses from only one school and one testing entity, and those responses were inconclusive. The postsecondary school said that there has been no noticeable increase in applications for accommodations since the passage of the ADA Amendments Act, but the testing entity stated that it has detected a large increase in requests for additional testing time since the passage of the ADA Amendments Act. In light of the uncertainty regarding any potential additional staff time needed to review additional requests for accommodations, the Department has made several assumptions based on research and discussions with subject matter experts and impacted entities so as to incorporate estimated costs for this item. This information is presented further below.

Comments Regarding the Costs of Additional Disputes

Some commenters argued that the ADA Amendments Act would lead to increased litigation and internal disputes against institutions, as the scope of potential litigants would expand due to the increase in individuals covered by the ADA as a result of the passage of the ADA Amendments Act. Other commenters disagreed, stating that the new regulation would reduce the volume of complaints and litigation and streamline outstanding complaints and litigation due to increased consistency and predictability in judicial interpretation and executive enforcement. The Department does not agree with the commenters who asserted that the impact of the ADA Amendments Act will lead to an increase in litigation and disputes. The ADA Amendments Act clarified several contentious or uncertain aspects of the ADA, and thus may have decreased the overall amount of ADA litigation by reducing ambiguities in the law. However, assessing the impact of covered entities’ failures to comply (or alleged failures to comply) with the requirements of the ADA, as amended, and the legal challenges that may result from compliance failures, are not properly within the ambit of the Final RA, nor do we have any relevant information that would assist in an analysis of such issues even if it they were appropriate to include in the Final RA.

Comments Regarding the Computation of Costs for Additional Examinations and Testing

One commenter stated that the Department placed too much emphasis on the cost of proctor supervision when assessing the cost of extra exam time in postsecondary institutions. The commenter posited that many tests are administered electronically; accordingly, the costs of those tests are appropriately based on the cost of ‘‘seat time’’ and not the cost of proctor supervision. Unfortunately, no commenter provided a description of what the additional costs per student might be in such circumstances, nor did any commenter explain how such costs could be computed. The Department contacted several postsecondary institutions and testing entities for approximations of seat time costs, but did not receive any relevant information.

Two commenters noted that for some long national examinations, additional testing time would necessitate the provision of an additional testing day that would increase costs substantially. This potential cost was not estimated in the Initial RA because research indicated that prior to the passage of the ADA Amendments Act, national examination institutions were already accommodating individuals who required additional time because of disabilities already explicitly covered by the ADA. As a result, testing entities were already providing an additional testing day where necessary. Therefore, any individuals who would now request additional time on national exams lasting six hours or more as a direct result of the ADA Amendments Act would be accommodated alongside those individuals who would have been covered prior to the ADA Amendments Act, and any potential costs would likely be minimal. Despite this conclusion, the Department has nonetheless conducted a sensitivity analysis to assess these potential costs with the assumption that testing entities were not already providing an additional testing day to accommodate certain individuals with disabilities. Because an additional testing day for these examinations was likely already provided prior to passage of the ADA Amendments Act, the Department continues to believe that the costs of accommodating any additional students who are now seeking additional exam time as a direct result of the ADA Amendments Act will be minimal. As a result, the sensitivity analysis the Department has conducted likely overestimates these potential costs. Further information on the potential range of these costs can be found below.

Comments Regarding the Estimate of ADHD Prevalence Among Postsecondary Students

Several commenters questioned the Department’s approach of reducing the portion of students with ADHD who would be impacted by the ADA Amendments Act. In the Initial RA, the Department had assumed based on some available research that 30 percent of those who self-identify as having ADHD as their primary disability would not need additional testing time because they would not meet the clinical definition of the disability. One commenter raised concern about presenting a specific percentage of students with ADHD who would not meet that clinical definition, because that number might inadvertently become a benchmark for postsecondary institutions and national testing entities to deny accommodations to a similar percentage of applicants requesting additional exam time because of their ADHD. The Department did not intend for this percentage to establish a benchmark. Covered entities should continue to evaluate requests for additional exam time by all individuals with disabilities on an individualized basis. In direct response to these concerns, the Department has decided not to reduce the number of individuals with ADHD who could now receive testing accommodations as a direct result of the ADA Amendments Act.

Comments Regarding the Economic Impact of the Rule on Industries

A commenter representing institutions of higher education stated that the rule would have a significant impact on higher education as an industry, such that the rule should be considered ‘‘economically significant.’’ For the reasons indicated throughout the Final RA, however, the Department does not believe that this commenter’s points were persuasive. Based on the Department’s own research and evaluation, it is convinced that the cost of ADA Amendments Act compliance will be far less than $100 million dollars in any given year.

The commenter stated that the Department erred in its analysis by focusing primarily on college students with learning disabilities or ADHD and did not factor in potential costs related to students with other impairments including depression, schizophrenia, obsessive compulsive disorder, traumatic brain injuries, post-traumatic stress disorder, visual impairments not rising to the level of blindness, anxiety, autism, food allergies, or transitory impairments. Prior to passage of the ADA Amendments Act, higher educational institutions already were incurring costs to accommodate students with the above-referenced impairments that constituted disabilities. These costs are not attributable to this rulemaking and thus not analyzed as such. For the relatively small number of students with the above-referenced disabilities who might not have been covered prior to the passage of the ADA Amendments Act, the Department was unable to specifically identify or measure any potential costs that postsecondary institutions would incur in accommodating these students.

The commenter also stated that the Department’s Initial RA should have considered the costs of academic accommodations other than extended testing time, such as ‘‘note takers, tutors, technology-based auxiliary aids, electronic versions of text-books and class materials, and other accommodations and aids,’’ as well as ‘‘significant costs resulting from accommodation requests outside the classroom context, such as those involving residence halls, food services or athletics.’’ The Department notes that, as with reasonable modifications and testing accommodations required prior to the ADA Amendments Act, the accommodations or auxiliary aids or services described by the commenter were being provided before the passage of the ADA Amendments Act and will not entail new costs specifically attributable to the ADA Amendments Act.

Comments Regarding ADA/IDEA Concerns

Several commenters addressed the possibility that the expanded definition of ‘‘disability’’ could result in more cases arising under the ADA, rather than under the IDEA, in elementary and secondary schools. An association focusing on children with learning disabilities noted that students who manage their disabilities well often find that school districts challenge their IDEA claims of disability, but that such claims may meet with more success under the ADA or section 504 of the Rehabilitation Act. One commenter, whose comments were endorsed by several other groups, noted that particular subsets of children may be eligible for benefits under the ADA but not under the IDEA. These include students with episodic conditions, mitigated conditions, and conditions such as diabetes and seizure impairments that may require maintenance support, such as diet or medications. A national association of kindergarten through twelfth-grade educators indicated that, increasingly, in its view, some parents are more likely to seek school-related modifications for their child under the ADA, rather than the IDEA. This commenter suggested, accordingly, that ADA litigation would increase once parents become aware of the application of a broader definition of ‘‘disability’’ due to the ADA Amendments Act.

The Department recognizes that the definition of ‘‘disability’’ under the IDEA is different than that under the ADA.¹³ While many students will be covered by both statutes, some students covered by the ADA will not be eligible for special education services under the IDEA; however, such students are covered by section 504 of the Rehabilitation Act and are entitled to a ‘‘free appropriate public education’’ (FAPE) under the Department of Education’s section 504 regulation. The Department acknowledges commenters’ views that some parents may assert rights for their elementary, middle, and high school students under the ADA due to the expanded definition of ‘‘disability.’’ However, the Department believes that the overall number of additional requests for reasonable modifications by elementary and secondary students that can be attributed to the ADA Amendments Act will be small and that any resulting economic impact is likely to be extremely limited. Students with ADHD and learning disabilities who already are covered by section 504 and, in many instances, the IDEA as well, are entitled to needed special education, related aids and services, modifications or auxiliary aids or services under those statutes. Further, prior to filing suit under the ADA, any student that is covered under both the ADA and the IDEA must exhaust administrative remedies under the IDEA if seeking a remedy that is available under that statute. Thus, while the ADA is critical to ensuring that students with disabilities have a full and equal opportunity to participate in and benefit from public education, when viewed in concert with the protections already afforded by section 504 and the IDEA, the economic impact of implementing the ADA Amendments Act in K–12 schools will be minimal. The Department also notes that none of these commenters provided any data demonstrating that elementary and secondary schools have incurred additional costs due to the passage of the ADA Amendments Act more than six years ago.

Comments Regarding Possible Fraudulent Claims of Disability

A number of commenters stated that the rule might encourage some people without learning disabilities to claim that they have learning disabilities, so that they can take advantage of extra exam time. The Department has not identified any study suggesting that the release of this rule—more than six years after the effective date of the ADA Amendments Act—likely will motivate a spike in false claims for students seeking extra time on examinations. While individuals with learning disabilities previously denied accommodations may be motivated to seek recognition of their disabilities under this rule, because it may offer an improved opportunity for consideration of their unmet needs, the Department does not believe that individuals who might feign disabilities in pursuit of extra time would modify their behavior as a result of this rule; to the contrary, the motivation and opportunity to feign such disabilities would have existed prior to the passage of the ADA Amendments Act. The Department acknowledges that there will always be some individuals who seek to take advantage of rules that extend benefits to particular classes of individuals. However, the Department has determined that the costs of such fraudulent behavior cannot readily be computed. It appears that there is no generally accepted metric for determining how many claims of disability are fraudulent, or how the cost of such fraudulent activity should be computed. And, the Department found no evidence to indicate that the rate of fraudulent claims of disability has increased since the implementation of the ADA Amendments Act in 2009. It should be emphasized that individuals seeking accommodations for their disabilities in testing situations under the ADA will still undergo an individualized assessment to determine whether they have disabilities covered by the statute. Extended exam time is an accepted reasonable modification or testing accommodation under the ADA for persons whose disabilities inhibit their ability to complete timed tests. Because the Department is not able to identify or measure an increase in fraudulent claims associated with this rule, those potential costs are not reflected in the economic analysis.

Final Results of the Primary Analysis

This section presents the calculations used to estimate the total costs resulting from the revisions to the title II and title III regulations to incorporate the changes made by the ADA Amendments Act. Costs are first presented for postsecondary institutions and then for national testing entities. For a more detailed explanation of the Department’s methodology and data used to calculate these costs, please refer to relevant sections in the Final RA. The Final RA is available on Department’s Web site at www.ada.gov.

As explained above, total costs to postsecondary institutions will include three components:

• One-time cost of training staff on relevant impact of ADA Amendments Act;

• Annual cost of processing additional accommodation requests for extra exam time made as a direct result of the ADA Amendments Act; and

• Annual cost of proctoring additional time on exams as a direct result of the ADA Amendments Act.

To calculate the annual costs to all postsecondary institutions for processing these additional accommodation requests and proctoring additional exam time as a direct result of the ADA Amendments Act, the potential number of students who could request and receive these accommodations needs to be calculated. Calculations for the three costs listed above plus the number of students who are eligible to receive and likely to request accommodations for extra exam time as a direct result of the ADA Amendments Act are presented below.

The annual one-time training cost for all postsecondary institutions is presented in Table 1 below. The methodology used to calculate this cost is explained further in Section 2.1 of the Final RA, and the sources for the data used are provided in Section 3.1.1 of the Final RA.

TABLE 1—CALCULATION OF ONE-TIME TRAINING COSTS FOR POSTSECONDARY INSTITUTIONS

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

The number of additional eligible students likely to request and receive extra time on exams at postsecondary institutions as a direct result of the ADA Amendments Act is calculated in Tables 2 and 3 below. The methodology used for this calculation is explained further in Section 2.2 of the Final RA, and the sources for the data used are provided in Section 3.1.2 of the Final RA.

TABLE 2—CALCULATION OF NUMBER OF STUDENTS WHO ARE ELIGIBLE TO RECEIVE ACCOMMODATIONS FOR EXTRA EXAM TIME AT POSTSECONDARY INSTITUTIONS
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

TABLE 3—CALCULATION OF NUMBER OF STUDENTS WHO ARE ELIGIBLE TO RECEIVE AND LIKELY TO REQUEST ACCOMMODATIONS FOR EXTRA EXAM TIME AT POSTSECONDARY INSTITUTIONS
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

Table 4 below presents the calculations of the annual cost to postsecondary institutions for processing new accommodation requests for extra exam time. These requests are in addition to the ones currently received and processed by postsecondary institutions that are not being made as a direct result of the ADA Amendments Act. Costs depend on the number of students who will now be eligible to request and receive an accommodation for extra time on an exam as a direct result of the ADA Amendments Act revisions. The methodology used to calculate this cost is explained further in Section 2.3 of the Final RA, and the sources for the data used are provided in Section 3.1.3 of the Final RA.

TABLE 4—CALCULATION OF ANNUAL COST TO POSTSECONDARY INSTITUTIONS FOR PROCESSING ADDITIONAL ACCOMMODATION REQUESTS FOR EXTRA EXAM TIME
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

Tables 5 and 6 calculate the annual costs to postsecondary institutions for proctoring additional time on exams requested by eligible students as a direct result of the ADA Amendments Act. The methodology used to calculate this cost is explained further in Section 2.4 of the Final RA, and the sources for the data used are provided in Section 3.1.4 of the Final RA.

TABLE 5—CALCULATION OF ANNUAL COST TO POSTSECONDARY INSTITUTIONS FOR PROCTORING EXTRA TIME ON EXAMS, PER STUDENT
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

TABLE 6—TOTAL ANNUAL COST TO POSTSECONDARY INSTITUTIONS FOR PROCTORING EXTRA TIME ON EXAMS
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

Just as with postsecondary institutions, the costs to national testing entities from the revisions to the ADA Amendments Act will include three components:

• One-time cost of training staff on relevant impact of ADA Amendments Act;

• Annual cost of processing additional accommodation requests for extra exam time made as a direct result of the ADA Amendments Act; and

• Annual cost of proctoring additional time on exams as a direct result of the ADA Amendments Act.

The annual costs of processing additional accommodation requests and proctoring the extra exam time depends on the number of test takers who will request accommodations for extra exam time as a direct result of the ADA Amendments Act. Calculations for the three costs listed above plus the number of test takers who are eligible to receive and likely to request accommodations of extra exam time as a direct result of the ADA Amendments Act are presented below.

The annual one-time training cost for all national testing entities is presented in Table 7 below. The methodology used to calculate this cost is explained further in Section 2.1 of the Final RA, and the sources for the data used are provided in Section 3.2.1 of the Final RA.

TABLE 7—CALCULATION OF ONE-TIME TRAINING COSTS FOR NATIONAL TESTING ENTITIES

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

The number of test takers who are now eligible to receive and likely to request extra time on national exams is calculated in Tables 8 and 9 below. The methodology used to calculate this number is explained further in Section 2.2 of the Final RA, and the sources for the data used are provided in Section 3.2.2 of the Final RA.

TABLE 8—CALCULATION OF NUMBER OF TEST TAKERS WHO ARE ELIGIBLE TO RECEIVE ACCOMMODATIONS FOR EXTRA EXAM TIME FROM NATIONAL TESTING ENTITIES
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.
* For these assumptions, the Final RA assumes the same values for national test takers as found for postsecondary students, since no specific data for national examinations was found and many national exams are designed for students or recent graduates.

TABLE 9—CALCULATION OF NUMBER OF TEST TAKERS WHO ARE ELIGIBLE TO RECEIVE AND LIKELY TO REQUEST ACCOMMODATIONS FOR EXTRA EXAM TIME FROM NATIONAL TESTING ENTITIES

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

Table 10 illustrates the calculations of the annual cost to national testing entities for processing additional accommodation requests for extra exam time made as a direct result of the ADA Amendments Act. The methodology used to calculate this cost is explained further in Section 2.3 of the Final RA, and the sources for the data used are provided in Section 3.2.3 of the Final RA.

TABLE 10—CALCULATION OF ANNUAL COST TO NATIONAL TESTING ENTITIES FOR PROCESSING ADDITIONAL ACCOMMODATION REQUESTS FOR EXTRA EXAM TIME
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

Finally, Tables 11 and 12 calculate the annual costs to national testing entities for allowing test takers to receive additional time on exams. Again, the cost here may be calculated as the opportunity cost of the seat occupied by the test taker for the additional hours of testing. However, because the seat cost per test taker was not available for this Final RA analysis, the additional time spent by a test proctor to oversee the exam is used as a proxy for the cost. The methodology used to calculate this cost is explained further in Section 2.4 of the Final RA, and the sources for the data used are provided in Section 3.2.4 of the Final RA.

TABLE 11—CALCULATION OF ANNUAL COST TO NATIONAL TESTING ENTITIES FOR PROCTORING EXTRA TIME ON EXAMS, PER TEST TAKER
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

TABLE 12—TOTAL ANNUAL COST TO NATIONAL TESTING ENTITIES FOR PROCTORING EXTRA TIME ON EXAMS
[First year]

Note: Due to rounding, totals may not equate exactly to the product of the inputs provided in the table.

Based on the calculations provided above, total costs to society for implementing the ADA Amendments Act revisions into the title II and title III regulations will range between $31.4 million and $47.1 million in the first year. The first year of costs will be higher than all subsequent years because the first year includes the onetime cost of training. Note that even the high end of this first-year cost range is well below the $100 million mark that signifies an ‘‘economically significant’’ regulation. The breakdown of total costs by entity is provided in Table 13 below.

TABLE 13—TOTAL COSTS FIRST YEAR (2016) IN PRIMARY ANALYSIS, NON-DISCOUNTED
[$ millions]

Note: Due to rounding, totals may not equate exactly to the sum of the inputs provided in the table.

Taking these costs over the next 10 years and discounting to present value terms at a rate of 7 percent, the total cost of implementing the ADA Amendments Act revisions is approximately $214.2 million over 10 years, as shown in Table 14 below.

TABLE 14—TOTAL COSTS OVER 10 YEARS, PRIMARY ANALYSIS

Potential Additional Costs to National Testing Entities

The ADA Amendments Act revisions will allow eligible individuals with disabilities to receive additional time on exams, both for course-work exams at postsecondary institutions and standardized national examinations. Some national examinations are long and can last up to eight hours per test. Thus, when test takers request additional time on these longer exams, such requests will inevitably push the exam into an additional day.

As commenters pointed out in response to the Initial RA, there are costs associated with providing exams on an additional day. While there is no data to predict which exams will extend to an additional day, especially given that specific accommodations are determined individually, this Final RA assumes that exams that normally would take six hours or more to administer and be scheduled for one day may require an additional day of testing if the test taker seeks more time as an accommodation. To quantify the total costs of providing an additional day of testing for those individuals who would not previously have received this additional time, prior to the passage of the ADA Amendments Act, the following two costs are quantified:

Exam Revision Costs

While it appears that many national testing entities do not revise the content of exams that span an additional day, the exam format and materials can be affected by such an extension. For instance, computer-based exams are programmed to span a certain amount of time, allowing for timed break periods throughout. When more time is provided to take the exam, the exam must be reprogrammed to span the new amount of time, with planned breaks for the test taker. For paper-based exams, test booklets are often reprinted to allow one set of questions for one day of testing, and another set for the extra day of testing. This form of printing prevents test takers from going home and looking up the answers for the next set of questions.

Room Rental Cost

Exams are delivered in different settings depending on the type of national exam. Some exams are delivered at testing centers where different types of exams are administered at once in the same room. In this case, the cost of an extra day of testing could be captured by the seat cost per test taker. Other exams are delivered to test takers exclusively taking that exam, and those exams are often administered in rooms rented out at a university, hotel, or other building. This cost could be captured by the room rental cost. The Final RA takes a conservative approach, using the room rental cost to approximate the cost of delivering an exam over an additional day, as this is the larger of the two costs.

Based on the calculations provided in Sections 4.2.1 and 4.2.2 of the Final RA, the total additional costs of providing an extra testing day to eligible test takers will likely range between $2.7 and $4.8 million per year. Table 15 adds this into the total costs in the first year to approximate the range of total costs to society from implementing the ADA Amendments Act revisions. For further information on the methodology, data, and assumptions used to analyze these potential additional costs for national testing entities, please refer to Section 4.2 of the Final RA.

TABLE 15—TOTAL COSTS FIRST YEAR, PLUS POTENTIAL ADDITIONAL COSTS FOR ADDITIONAL DAY OF TESTING, NONDISCOUNTED
[$ millions]

Note: Due to rounding, totals may not equate exactly to the sum of the inputs provided in the table.

Benefits Discussion

The Department believes that the enactment of the ADA Amendments Act benefits millions of Americans, and the benefits to those individuals are nonquantifiable but nonetheless significant. The Department determined, however, that there was a group of individuals with disabilities who would be able to receive benefits in the form of increased access to accommodations in testing from postsecondary institutions and national testing entities, and that these benefits would be associated with specific costs to those institutions and entities, which are analyzed above.

With respect to specific benefits, in the first year, our analysis estimates that approximately 148,261 to 266,870 postsecondary students will take advantage of accommodations for extra exam time that they otherwise would not have received but for this rule. Over 10 years, approximately 1.6 million to 2.8 million students will benefit. An additional 802,196 to 1.4 million national exam test takers would benefit over that same 10 years (assuming that people take an exam one time only).

Some number of these individuals could be expected to earn a degree or license that they otherwise would not have as a result of the testing accommodations they are now eligible to receive as a direct result of the ADA Amendments Act. The Department was unable to find robust data to estimate the number of students who would receive a bachelor’s degree or licenses after this rule goes into effect that would not otherwise have received one. However, extensive research has shown notably higher earnings for those with college degrees over those who do not have degrees. Estimates of this lifetime earnings vary, with some studies estimating an earning differential ranging from approximately $300,000 to $1 million.¹⁴ In addition, some number of students may be able to earn a degree in a higher-paying field than they otherwise could, and yet other students would get the same degree, but perhaps finish their studies faster or more successfully (i.e., higher grades) than otherwise would be the case. All of these outcomes would be expected to lead to greater lifetime productivity and earnings.

In addition to these quantitative benefits, this rule will have significant non-quantifiable benefits to individuals with disabilities who, prior to the passage of the ADA Amendments Act and this rule, were denied the opportunity for equal access to an education or to become licensed in their chosen professions because of their inability to receive needed testing accommodations. As with all other improvements in access for individuals with disabilities, the ADA Amendments Act is expected to generate psychological benefits for covered individuals, including reduced stress and an increased sense of personal dignity and self-worth, as more individuals with disabilities are able to successfully complete tests and exams and more accurately demonstrate their academic skills and abilities. Some individuals will now be more likely to pursue a favored career path or educational pursuit, which will in turn lead to greater personal satisfaction.

Additional benefits to society arise from improved testing accessibility. For instance, if some persons with disabilities are able to increase their earnings, they may need less public support—either direct financial support or support from other programs or services. This, in turn, would lead to cross-sector benefits from resource savings arising from reduced social service agency outlays. Others, such as family members of individuals with disabilities, may also benefit from reduced financial and psychological pressure due to the greater independence and earnings of the family member whose disability is now covered by the ADA under the revised definition of ‘‘disability.’’

In addition to the discrete group of individuals with learning disabilities and ADHD who will benefit from the changes made to the definition of ‘‘disability,’’ there is a class of individuals who will now fall within the nondiscrimination protections of the ADA if they are refused access to or participation in the facilities, programs, services, or activities of covered entities. The benefits to these individuals are significant, but unquantifiable. The Department believes (as did Congress when it enacted the ADA) that there is inherent value that results from greater accessibility for all Americans. Economists use the term ‘‘existence value’’ to refer to the benefit that individuals derive from the plain existence of a good, service, or resource—in this case, the increased accessibility to postsecondary degrees and specialized licenses that would arise from greater access to testing accommodations or the increased accessibility to covered entities’ facilities, programs, services, or activities as a result of the ADA Amendments Act. This value can also be described as the value that people both with and without disabilities derive from the guarantees of equal protection and nondiscrimination. In other words, people value living in a country that guarantees the rights of persons with disabilities, whether or not they themselves are directly or indirectly affected by disabilities. There can be a number of reasons why individuals might value accessibility even if they do not require it now and do not ever anticipate needing it in the future. These reasons include bequest motives and concern for relatives or friends who require accessibility. People in society value equity, fairness, and human dignity, even if they cannot express these values in terms of money. These are the exact values that agencies are directed to consider in Executive Order 13563.

B. Regulatory Flexibility Act

In the NPRM, the Department stated that, based on its analysis, it ‘‘can certify that the rule will not have a significant economic impact on a substantial number of small entities.’’ The Department sought public comment on this proposed certification and its underlying analysis, including the costs to small entities, but received no public comments on these issues. The Attorney General has again reviewed this regulation in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), and by approving it hereby certifies that it will not have a significant economic impact on a substantial number of small entities for the reasons discussed more fully below.

First, the ADA Amendments Act took effect on January 1, 2009; all covered entities have been required to comply with the Act since that date and thus should be familiar with the requirements of the law. Second, the rule does not include reporting requirements and imposes no new recordkeeping requirements. Third, as shown above, the only title II and title III entities that would be significantly affected by the proposed changes to the ADA regulations are national testing entities and postsecondary institutions. The type of accommodations that most likely will be requested and required by those whose coverage has been clarified under titles II and III of ADA Amendments Act will be additional time in testing situations. While many of these national testing or postsecondary institutions are small businesses or small governmental entities, the costs associated with additional testing time are minimal; therefore, the Department believes the economic impact of this rule will be neither significant for these small entities nor disproportionate relative to the costs for larger entities.

The Department estimates that approximately 7,234 postsecondary institutions could be impacted based on data from the U.S. Department of Education National Center for Education Statistics.¹⁵ The Department used data from the U.S. Census Bureau¹⁶ from 2012 for Junior Colleges (NAICS¹⁷ 6112) and Colleges, Universities, and Professional Schools (NAICS 6113) to estimate the proportion of those entities that would meet the Small Business Administration’s criteria for small business or small governmental entity.¹⁸ As shown in Table 18 and Table 19 below, small postsecondary institutions are estimated to account for approximately 35.3 percent of all postsecondary institutions. Therefore, the Department estimates that 2,556 small postsecondary institutions would be impacted by this rule.

The overall costs of this rule for postsecondary institutions were calculated based on the number of entities and number of postsecondary students affected. The cost of processing additional accommodation requests for extra exam time and the cost of additional time spent proctoring exams depend on the number of students. This methodology assumes that per-student costs are roughly the same for institutions of differing sizes. Because larger entities have more students on average than smaller ones, the Department used the proportion of the industry sub-group’s revenues for small and large entities as a proxy for the number of students. Thus, using receipts for Junior Colleges (NAICS 6112) and Colleges, Universities, and Professional Schools (NAICS 6113) as a proxy for number of students, small postsecondary institutions are estimated to bear 4 percent of the processing and proctoring costs for providing additional exam time for that industry sub-group—or approximately $726,534 of the $17.95 million first-year costs. Additionally, postsecondary institutions are expected to incur one-time costs for additional training of $1,371 per entity (see Tables 6–8 in the Final RA). In total, small postsecondary institutions would incur $4.2 million in costs in the first year, which would average approximately $1,655 for each of the 2,556 small postsecondary institutions. The average annual revenue for each these small postsecondary institutions is $501,600. The cost is 0.33 percent of their revenue. Therefore, the costs will not be substantial for these small entities.

In comparison to the number of small postsecondary entities, there are approximately 4,678 postsecondary institutions (64.7 percent of the 7,234) that would be considered larger entities, and these larger entities would incur $23.6 million in costs during the first year, which would average out to approximately $5,053 per large postsecondary institution during the first year. This $5,053 per large postsecondary institution during the first year is approximately 3.1 times higher than the cost that would be incurred by small postsecondary institutions during that same time.

TABLE 16—FIRM, ESTABLISHMENT, AND RECEIPTS DATA FOR JUNIOR COLLEGES (NAICS 6112) IN 2012

* SBA small business standard is $20.5 million; small business totals here include those with receipts under $25 million. This is due to data being reported in size categories that do not exactly match industry small business classifications: i.e. from $10 million to $14.99 million, and from $15 million to $19.99 million; and from $20 million to $24.99 million, and from $25 million to $29.99 million.
Source: Calculated from data provided by the U.S. Census Bureau, Statistics of U.S. Businesses. See SBA Office of Advocacy and U.S. Census Bureau, Statistics of U.S. Businesses, Table 2—Number of firms, establishment, receipts, employment, and payroll by firm size (in receipts) and industry, 2012, available at https://www.sba.gov/advocacy/firm-size-data (last visited April 22, 2016).

TABLE 17—FIRM, ESTABLISHMENT, AND RECEIPTS DATA FOR COLLEGES, UNIVERSITIES, AND PROFESSIONAL SCHOOLS (NAICS 6113) IN 2012

* SBA small business standard is $27.5 million; small business totals here include those with receipts under $30 million. This is due to data being reported in size categories that do not exactly match industry small business classifications: i.e. from $10 million to $14.99 million, and from $15 million to $19.99 million; and from $20 million to $24.99 million, and from $25 million to $29.99 million.
Source: Calculated from data provided by the U.S. Census Bureau, Statistics of U.S. Businesses. See SBA Office of Advocacy and U.S. Census Bureau, Statistics of U.S. Businesses, Table 2—Number of firms, establishment, receipts, employment, and payroll by firm size (in receipts) and industry, 2012, available at https://www.sba.gov/advocacy/firm-size-data (last visited April 22, 2016).

TABLE 18—FIRM, ESTABLISHMENT, AND RECEIPTS DATA FOR BOTH JUNIOR COLLEGES (NAICS 6112) AND SMALL COLLEGES, UNIVERSITIES, AND PROFESSIONAL SCHOOLS (NAICS 6113), COMBINED, IN 2012

* SBA small business standard for Junior Colleges is $20.5 million; small business totals here include Junior Colleges with receipts under $25 million. This is due to data being reported in size categories that do not exactly match industry small business classifications: i.e. from $10 million to $14.99 million, and from $15 million to $19.99 million; and from $20 million to $24.99 million, and from $25 million to $29.99 million. The SBA small business standard for Colleges, Universities, and Professional Schools is $27.5 million; small business totals here include Colleges, Universities, and Professional Schools with receipts under $30 million. This is due to data being reported in size categories that do not exactly match industry small business classifications: i.e. from $10 million to $14.99 million, and from $15 million to $19.99 million; and from $20 million to $24.99 million, and from $25 million to $29.99 million.
Source: Calculated from data provided by the U.S. Census Bureau, Statistics of U.S. Businesses. See SBA Office of Advocacy and U.S. Census Bureau, Statistics of U.S. Businesses, Table 2—Number of firms, establishment, receipts, employment, and payroll by firm size (in receipts) and industry, 2012, available at https://www.sba.gov/advocacy/firm-size-data (last visited April 22, 2016).

TABLE 19—ESTIMATED SMALL ENTITY ESTABLISHMENTS FOR POSTSECONDARY INSTITUTIONS IN 2011–12

U.S. Department of Education, National Center for Education Statistics, (2015), Digest of Education Statistics, 2013 (NCES 2015–011), available at https://nces.ed.gov/fastfacts/display.asp?id=84 (last visited Feb. 3, 2016).
** Derived from Tables 16–18 above.
*** Estimated using percentage of small establishments for NAICS sectors 6112 and 6113.

In addition to postsecondary institutions, some national testing entities would also be impacted. The Department used data on Educational Test Development and Evaluation Services (NAICS 6117102)¹⁹ to estimate the number of affected entities. Approximately 1,397 national testing entities would be impacted by this rule, irrespective of size. Small entity establishments are estimated to account for 923 (66.1 percent) of these.

TABLE 20—FIRM AND RECEIPTS DATA FOR NATIONAL TESTING ENTITIES IN 2007: EDUCATIONAL TEST DEVELOPMENT AND EVALUATION SERVICES (NAICS 6117102)

* Includes only those entities which were categorized by annual revenue in the available data.
** Data is reported in size categories that do not exactly match industry small business classifications: i.e. from $5 million to $9.99 million, and from $10 million to $24.99 million. SBA small business standard is $15.0 million for all Educational Support Services; small business totals here include those with receipts under $25 million.
*** Applying the estimated percentage of small entities to the total number of entities. Source: Calculated from data provided by the U.S. Census Bureau. See U.S. Census Bureau, 2007 Economic Census, Educational Services: Subject Series—Estab and Firm Size: Receipts/Revenue Size of Establishments for the United States: 2007 (EC0761SSSZ4), available at http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_61SSSZ1&prodType=tableE: (last visited Feb. 3, 2016).

Small entity establishments in the Educational Test Development and Evaluation Services industry group account for 24.8 percent of that industry’s receipts. If receipts are used as a proxy for number of test takers in a manner similar to that described above for postsecondary institutions, then small national testing entities can be expected to bear 24.8 percent of the industry’s $9.49 million first-year costs of processing additional accommodation requests for extra exam time and additional time spent proctoring exams—or approximately $2.35 million. Additionally, national testing entities are expected to incur a fixed cost for additional training of $1,371 per entity. Thus, for the approximately 923 small national testing entities, total costs in the first year are estimated to average $3,918 each. Average revenue for these entities is $780,264. The cost is 0.50 percent of their revenue. Therefore, the costs will not be substantial for these small entities.

In comparison to the number of small testing entities, approximately 474 national testing center establishments (33.9 percent of the 1,397) would be considered larger entities, and they would incur $7.79 million in costs during the first year, which would average out to approximately $16,440 per large national testing center establishment during the first year. This $16,440 per large national testing center establishment is approximately 4.2 times as high as the cost that would be incurred by small national testing center establishments during that same time.

As explained above, the Department estimates that approximately 2,556 small postsecondary establishments and 923 small national testing establishments would be impacted by this rule, for a total of approximately 3,479 small business establishments. The estimates were based on average estimates for all entities, irrespective of size. The Department notes that the average first-year cost estimates presented above for small entities are higher than the first-year cost estimates presented in the NPRM because the Department’s estimates for the initial training costs (which will be incurred during the first year) are now higher based on public comment and further research and analysis conducted by the Department. However, the overall costs of this rule for small entities over the 10-year period are lower because the Department’s final overall cost estimates in the Final RA are lower as a result of refinements made to the analysis in response to public comment and based on further research conducted by the Department.

Based on the above analysis, the Attorney General can certify that the rule will not have a significant economic impact on a substantial number of small entities.

C. Executive Order 13132: Federalism

Executive Order 13132 of August 4, 1999, Federalism, directs that, to the extent practicable and permitted by law, an agency shall not promulgate any regulation that has federalism implications, that imposes substantial direct compliance costs on State and local governments, that is not required by statute, or that preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. Because this rule does not have federalism implications as defined in the Executive Order, does not impose direct compliance costs on State and local governments, is required by statute, and does not preempt State law within the meaning of the Executive Order, the Department has concluded that compliance with the requirements of section 6 is not necessary.

D. Plain Language Instructions

The Department makes every effort to promote clarity and transparency in its rulemaking. In any regulation, there is a tension between drafting language that is simple and straightforward and drafting language that gives full effect to issues of legal interpretation. The Department operates a toll-free ADA Information Line (800) 514–0301 (voice); (800) 514–0383 (TTY) that the public is welcome to call to obtain assistance in understanding anything in this final rule.

E. Paperwork Reduction Act

This final rule does not contain any new or revised ‘‘collection[s] of information’’ as defined by the Paperwork Reduction Act of 1995. 44 U.S.C. 3501 et seq.

F. Unfunded Mandates Reform Act

Section 4(2) of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1503(2), excludes from coverage under that Act any proposed or final Federal regulation that ‘‘establishes or enforces any statutory rights that prohibit discrimination on the basis of race, color, religion, sex, national origin, age, handicap, or disability.’’ Accordingly, this rulemaking is not subject to the provisions of the Unfunded Mandates Reform Act.