36 CFR Part 1194 Electronic and Information Technology Accessibility Standards (Section 508 Standards) - Preamble

Regulatory Process Matters

Executive Order 12866: Regulatory Planning and Review and Congressional Review Act

This final rule is an economically significant regulatory action under Executive Order 12866 and has been reviewed by the Office of Management and Budget (OMB). The final rule is also a major rule under the Congressional Review Act. The Board has prepared a regulatory assessment for the final rule which has been placed in the docket and is available for public inspection. The regulatory assessment is also available on the Board's Internet site (http://www.access-board.gov/sec508/assessment.htm). In the NPRM, the Board sought comment on the regulatory assessment which was prepared in conjunction with the proposed rule. The Board received four comments that specifically addressed concerns with that economic assessment. A summary of the comments received and the Board's responses can be found in Chapter Six of the Board's final regulatory assessment.

Section 508 covers the development, procurement, maintenance or use of electronic and information technology by Federal agencies. Exemptions are provided by statute for national security systems and for instances where compliance would impose an undue burden on an agency. The final rule improves the accessibility of electronic and information technology used by the Federal government and will affect Federal employees with disabilities, as well as members of the public with disabilities who seek to use Federal electronic and information technologies to access information. The final rule is based largely on the recommendations of the Electronic and Information Technology Access Advisory Committee.

The standards in the final rule will be incorporated into the Federal Acquisition Regulation (FAR). Failure of a Federal agency to comply with the standards may result in a complaint under the agency's existing complaint procedures under section 504 of the Rehabilitation Act or a civil action seeking to enforce compliance with the standards.

Estimated Baseline of Federal Spending for Electronic and Information Technology

According to OMB figures, Federal government expenditures for information technology products was $37.6 billion in fiscal year 1999. The defense agencies appear to have the highest information technology budgets, while civilian agency budgets are expected to increase rapidly. It was not possible however, to disaggregate this data such that it was useful for purposes of a regulatory assessment. Instead, the regulatory assessment uses annual sales data collected from the General Services Administration (GSA) as a proxy for the actual number of products in each applicable technology category. Using the GSA data, the regulatory assessment estimates that the Federal government spends approximately $12.4 billion annually on electronic and information technology products covered by the final rule. This estimate likely understates the actual spending by the Federal government because it is limited to the GSA data. Agencies are not required to make purchases through the GSA supply service, thus many items are purchased directly from suppliers. As a result, the government costs for software and compatible hardware products may actually be higher than estimates would indicate.

The regulatory assessment also examines historical budgetary obligations for information technology tracked by OMB until fiscal year 1998. Two scenarios were examined to develop an upper and lower bound to represent the proportion expected to be potentially affected by the final rule. During a five year period from fiscal year 1994 through fiscal year 1998, the average proportion of the total information technology obligations potentially covered by the final rule ranged between 25 percent and 50 percent. The $12.4 billion GSA estimate falls within this range, representing 33 percent of the total fiscal year 1999 information technology obligations of $37.6 billion. One limitation of these ranges is that they are based on gross classifications of information technology obligations and do not provide the level of disaggregation necessary to parallel the GSA data assessment. As a result, the two scenarios likely include expenditures on products and services that would not be effected by the final rule to a higher degree than the data obtained from GSA.

The degree to which the potential understatement of baseline spending leads to an understatement of the cost of the final rule is unclear. Some of the components of the estimated cost of the final rule rely heavily on the level of Federal spending while others are independent of this number.

Estimated Cost of the Final Rule

The regulatory assessment includes both direct and opportunity costs associated with the final rule. Major sources of cost include:

• Costs of modifying electronic and information technology to meet the substantive requirements of the standards;

• Training of staff, both Federal and manufacturers, to market, support, and use technologies modified in response to the standards; and

• Translation of documentation and instructions into alternate formats.

The direct costs that were quantified are shown in Table 1. The total quantified costs to society range from $177 million to $1,068 million annually. The Federal proportion of these costs is estimated to range between $85 million and $691 million. The ability of manufacturers, especially software manufacturers, to distribute these costs over the general consumer population will determine the actual proportion shared by the Federal government. Assuming that the addition of accessibility features add value to the products outside the Federal government, it is expected that the costs will be distributed across society thereby setting a lower bound cost to the Federal government of $85 million. If manufacturers do not distribute the costs across society, the upper bound of the Federal cost will increase to an estimated $1,068 million. These costs must be placed in appropriate context by comparing them with the total Federal expenditures for information technology. By comparison, the lower and upper bound of the incremental costs represent a range of 0.23 percent to 2.8 percent of the $37.6 billion spent by the Federal government on information technology in fiscal year 1999. Although the regulatory assessment does not analyze the timing of expenditures or reductions in costs over time, it is expected that the costs will decrease over time as a proportion of total electronic and information technology spending.

Table 1

¹ As noted above, if manufacturers do not distribute the costs across society, the upper bound of the Federal cost will increase to an estimated $1,068 million.

Accessible alternatives are available to satisfy the requirements of the final rule for many types of electronic and information technologies, particularly computers and software products. Some electronic and information technology products will require modifications to meet the requirements of the final standards.

For many types of electronic and information technology, the final rule focuses on compatibility with existing and future assistive devices, such as screen readers. The final rule does not require that assistive technologies be provided universally. Provision of assistive technologies is still governed by the reasonable accommodation requirements contained in sections 501 and 504 of the Rehabilitation Act. Section 508 does not require that assistive devices be purchased, but it does require that covered electronic and information technology be capable of having such devices added at some later time as necessary.

Software products represent the largest part of the estimated costs. The regulatory assessment assumes that Federal software expenditures can be divided into two major subcategories: general office applications and mission-specific applications. Internet applications are assumed to be represented within each of these subcategories. General office applications include operating systems, wordprocessors, and spreadsheets, and are assumed to represent 80 percent of the total software category. The remaining 20 percent covers mission- specific or proprietary applications that have limited distribution outside the Federal government. Within each subcategory, the estimated costs of the final rule are distributed according to the level or degree of accessibility already being achieved in the private sector.

The general office application subcategory is broken into three groups based on discussions with several industry experts. The first 30 percent is expected to require very little modification to satisfy the final standards and therefore no incremental cost is associated with this group. The middle 40 percent is expected to require minor to medium alterations to satisfy the final rule. The cost of modifying a particular general office application in this category is estimated to be in the range of 0.4 percent to 1 percent based on discussions with several manufacturers. This assumption is based on the ratio of employees dedicated to accessibility issues. The methodology uses employee classification as a proxy for cost or expense of accessibility research and development, labor, and design that are all factored into the final product cost. The remaining 30 percent is expected to require significant modifications to meet the requirements of the final rule, which is estimated to cost in the range of 1 percent to 5 percent based on discussion with industry experts.

The regulatory assessment assumes that the remaining 20 percent of the software products purchased by the Federal government represent proprietary or mission-specific software with limited distribution outside the government. These products will require significant modification to satisfy the final rule. Based on discussions with industry experts, the cost increase associated with achieving the level of accessibility required by the final rule is estimated to range from 1 percent to 5 percent.

Estimated Benefits of the Final Rule

The benefits associated with the final rule results from increased access to electronic and information technology for Federal employees with disabilities and members of the public seeking Federal information provided using electronic and information technology. This increased access reduces barriers to employment in the Federal government for persons with disabilities, reduces the probability that Federal employees with disabilities will be underemployed, and increases the productivity of Federal work teams. The final standards may also have benefits for people outside the Federal workforce, both with and without disabilities, as a result of spillover of technology from the Federal government to the rest of society.

Two methods are presented in the regulatory assessment for evaluating the quantifiable benefits of the final rule. The first is a wage gap analysis that attempts to measure the difference in wages between the general Federal workforce and Federal workers with targeted and reportable disabilities. While this analysis is limited to white collar Federal workers due to data constraints, the potential change in productivity is measured by the difference between the weighted average salary for all white collar Federal employees and the average within the two disability classes. This assumes that an increase in accessibility will help diminish this wage gap by increasing worker productivity.

The alternative is a team based approach for measuring the productivity of Federal workers. This approach is based on the assumption that a Federal workers wage rate reflects their productivity and the scarcity of their skills in the labor market. However this may not apply to Federal wage rates, thus the average productivity of a Federal team is assumed to be equivalent to the average Federal wage rate. Based on this average rate, it is assumed that the final rule will produce an increase in productivity ranging between 5 percent and 10 percent.

Since no data have been identified to support the increase in productivity in the team based approach, the wage gap analysis is used to represent the benefits generated by the final rule shown in Table 2. Keeping in mind certain data limitations with this analysis, the benefits derived from the wage gap method do not account for benefits that may be accrued by the general public or other Federal workers due to spillover effects of increased accessibility resulting from the final standards.

Table 2

Not all government policies are based on maximizing economic efficiency. Some policies are based on furthering the rights of certain classes of individuals to achieve more equitable results, regardless of the effect on economic efficiency. Accessibility to electronic information and technology is an essential component of civil rights for persons with disabilities. The final rule will ensure that Federal employees with disabilities will have access to electronic and information technology used by the Federal government that is comparable to that of Federal employees without disabilities; and that members of the public with disabilities will have comparable access to information and services provided to members of the public without disabilities through the use of Federal electronic and information technology.

Based on Bureau of Census statistics from 1994, 20.6 percent or 54 million persons in the United States have some level of disability. By increasing the accessibility of electronic and information technology used by the Federal government, the final rule may also improve future employment opportunities in the Federal government for persons with disabilities currently employed by the Federal government, and for persons that are working in the private sector or are classified as not being active in the labor force. Increasing the accessibility of electronic and information technology increases the productivity and mobility of the disabled sector of the labor pool that, under existing conditions, may face barriers to their employment and advancement within the Federal workforce and in the private sector. The standards will allow other Federal workers who become temporarily disabled to maintain their productivity during their illness. In addition, accessible features of electronic and information technology may also enhance the productivity of Federal workers without disabilities and therefore be a benefit to the workforce in general.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), as amended, generally requires Federal agencies to conduct a regulatory flexibility analysis describing the impact of the regulatory action on small entities. However, section 605(b) of the RFA, provides that a regulatory flexibility analysis is not required if the rule will not have a significant economic impact on a substantial number of small entities. This final rule imposes requirements only on the Federal Government and the Board certifies that it does not impose any requirements on small entities. As a result, a regulatory flexibility analysis is not required.

Executive Order 13132: Federalism

By its terms, this rule applies to the development, procurement, maintenance or use by Federal agencies of electronic and information technology. As such, the Board believes that it does not have federalism implications within the meaning of Executive Order 13132. In the proposed rule, the Board referred to the Department of Education's interpretation of the Assistive Technology Act (the "AT Act"), 29 U.S.C. 3001. The Board received approximately five responses from various State organizations regarding the relationship between the AT Act and Section 508 of the Rehabilitation Act. The Department of Education, the agency responsible for administering the AT Act, has advised the Board that it plans to work with States to address the relationship between the AT Act and section 508, and specifically how the Board's standards would apply to the States for purposes of the AT Act. As part of this process, the Department of Education will address issues raised in the five responses the Board received on the relationship between the AT Act and section 508 of the Rehabilitation Act.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act does not apply to proposed or final rules that enforce constitutional rights of individuals or enforce any statutory rights that prohibit discrimination on the basis of race, color, sex, national origin, age, handicap, or disability. Since the final rule is issued under the authority of section 508, part of title V of the Rehabilitation Act of 1973 which establishes civil rights protections for individuals with disabilities, an assessment of the rule's effects on State, local, and tribal governments, and the private sector is not required by the Unfunded Mandates Reform Act.