Under the executive order [58 Fed. Reg. 51,735 (October 4, 1993)], each federal agency must determine whether a regulatory action is "significant" and therefore subject to review by the Office of Management and Budget (OMB) and the analytical requirements of the executive order. The executive order defines "significant regulatory action" as one that is likely to result in a rule that may:

1. 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;
2. create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
3. materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
4. raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the executive order.

On January 11, 1996 OMB issued guidelines to federal agencies outlining the "best practices" for preparing economic analysis of significant regulatory actions under the executive order. The aim of the guide was to ensure that the analysis of the risks, benefits, and costs associated with a regulation would be guided by the principles of transparency and full disclosure.