United States General Accounting Office

GAO Testimony

Before the Committee on Small Business

House of Representatives

For Release on Delivery

Expected at

10:00 a.m. EST

Thursday

February 12, 1998

REGULATORY REFORM

Agencies’ Section 610

Review Notices Often Did

Not Meet Statutory

Requirements

Statement of

L. Nye Stevens

Director, Federal Management and Workforce Issues

General Government Division

GAO/T-GGD-98-64

Statement 

Regulatory Reform: Agencies’ Section 610

Review Notices Often Did Not Meet

Statutory Requirements

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss our recent studies of federal

agencies’ attempts to use the Unified Agenda of Federal Regulatory and

Deregulatory Actions to satisfy the notification requirements of the

Regulatory Flexibility Act (RFA) of 1980. However, before I get into our

specific findings, some background is necessary regarding the RFA’s

notice requirements and the Unified Agenda.

Background Section 610 of the RFA requires each federal agency to develop a plan for

the periodic review of its rules that have or will have a significant

economic impact on a substantial number of small entities. The purpose of

the review is to determine whether each such rule should be continued

without change, amended, or rescinded to minimize its impact on small

entities. All rules in existance at the time this section of the RFA became

effective generally had to be reviewed within 10 years, and any new rule

must be reviewed within 10 years of the date it becomes final.

As part of that review process, section 610 requires federal agencies to

publish annually in the Federal Register a list of their existing rules that

have a significant effect on small entities and that they plan to review in

the next year. Agencies must describe these rules, note why they are

needed, and invite public comments on them. Therefore, section 610 of the

RFA is essentially a notice requirement that is designed to make it easier

for the public to comment on the impact of agencies’ existing rules at a

time when the greatest opportunity exists for possible changes to those

rules.

Although the RFA does not require agencies to use the Unified Agenda to

publish the required notices, the Agenda is a convenient and efficient

mechanism by which agencies can do so. The Unified Agenda is published

in the Federal Register twice each year and consolidates information for

the public on all regulatory activities under development throughout the

federal government. As a result, the agenda is extremely

voluminous—typically covering more than 1,300 pages in the Federal

Register. Agencies use the Agenda to satisfy several statutory and

executive order notification requirements in addition to the RFA’s.

Executive Order 12866 requires the Administrator of the Office of

Management and Budget’s (OMB) Office of Information and Regulatory

Affairs (OIRA) to specify how federal agencies should prepare their

Page 1 GAO/T-GGD-98-64
Statement 

Regulatory Reform: Agencies’ Section 610

Review Notices Often Did Not Meet

Statutory Requirements

Unified Agenda entries. The Regulatory Information Service Center (RISC)

within the General Services Administration compiles the Agenda for OIRA

and issues instructions to the agencies on how the entries are to be

prepared. However, RISC does not review agencies’ Agenda entries to

determine compliance with statutory or other requirements before they

are printed.

Entries in November

1996 Unified Agenda

Often Did Not Meet

Section 610

Requirements

Because of concerns about whether agencies’ use of the Unified Agenda

satisfied the notification requirements in the RFA, the Chairman of the

Senate Committee on Small Business asked us to review the November

1996 edition of the Agenda. In our April 1997 report resulting from that

review we noted that, of the more than 4,600 entries in that edition of the

Agenda, the agencies indicated that only 21 of them were section 610

reviews.1

 Those 21 entries were from 3 of the 59 agencies with actions

listed in the Agenda—the Departments of Labor (DOL) and Transportation

(DOT) and the Small Business Administration (SBA).

We examined all 21 of these entries and concluded that none of them met

all of the requirements that section 610 of the RFA established. Some of

the entries involved rules that the agencies said would not have a

significant effect on small entities. Because section 610 reviews are

supposed to be conducted only for rules that have a significant effect on

small entities, these entries should not have been identified as section 610

reviews. Most commonly, however, the three agencies had identified new

rules they intended to issue or changes they had already decided to make

to existing rules, not reviews of existing rules to determine whether

changes were needed.

To correct these deficiencies, we recommended that the OIRA

Administrator instruct agencies that choose to use the Unified Agenda to

satisfy the RFA notification requirements on what the statute requires. In

response to our recommendation, the OIRA Administrator issued that

guidance to federal departments and agencies in June 1997.

We also concluded in our April 1997 report that the size of the Unified

Agenda and the lack of any index or special section in the document made

the agencies’ section 610 entries difficult for the public to find and

comment on. We recommended that the Executive Director of RISC

develop an Agenda index that specifically identifies the rules that agencies

1

Regulatory Flexibility Act: Agencies’ Use of the November 1996 Unified Agenda Did Not Satisfy

Notification Requirements (GAO/GGD/OGC-97-77R, Apr. 22, 1997).

Page 2 GAO/T-GGD-98-64
Statement 

Regulatory Reform: Agencies’ Section 610

Review Notices Often Did Not Meet

Statutory Requirements

plan to review under section 610 so that the public could comment on

those rules. RISC agreed to do so, and the October 1997 edition of the

Unified Agenda contained such an index that listed, by agency, the entries

the agencies said were section 610 reviews.

Only Three Entries in

the October 1997

Unified Agenda

Satisfied Section 610

Requirements

Mr. Chairman, at your request we have updated our April 1997 report by

examining the October 1997 edition of the Unified Agenda. We are issuing

our report to you today on the results of our review.2

 In this latest edition

of the Agenda, there were 34 entries from 7 agencies with a “Section 610

Review” notation following the title. More than half of these 34 entries

were from DOT.

We reviewed these 34 entries and concluded that 31 of them did not satisfy

all of the notification requirements in the RFA. The same problems that

were evident during our earlier review were again prevalent. Fifteen of the

31 entries, according to their plain text, did not involve rules that would

have a significant economic impact on a substantial number of small

entities. Fifteen of the remaining 16 entries announced regulatory actions

the agencies had already taken or planned to take, not a review to

determine what actions to take. For example, one of the Environmental

Protection Agency’s “section 610” entries announced the pending

publication of final rules making more than 50 modifications, additions,

and deletions to its existing polychlorinated biphenyls management

program. This entry did not involve notifying the public of an upcoming

RFA review. The remaining entry did not satisfy the RFA requirement that

the agency describe the rule and state why it was needed.

Three Entries Satisfied All

Section 610 Requirements

Three of the 34 entries in the October 1997 Unified Agenda that the

agencies characterized as section 610 reviews—1 from DOL and 2 from

DOT—did appear to satisfy all of the RFA’s notification requirements. Our

examination of those entries indicated that satisfying the RFA’s section

610 requirements does not appear to be that difficult. The agencies

indicated that the rules at issue would have an impact on small entities

and stated that they were planning to review the rules (or continue to

review them) in the future. The agencies described the rules, noted why

they were needed, and identified an agency contact to whom comments

could be addressed.

2

Regulatory Flexibility Act: Agencies’ Use of the October 1997 Unified Agenda Often Did Not Satisfy

Notification Requirements (GAO/GGD-97-61R, Feb. 12, 1998).

Page 3 GAO/T-GGD-98-64
Statement 

Regulatory Reform: Agencies’ Section 610

Review Notices Often Did Not Meet

Statutory Requirements

Conclusions and New

Recommendation

The OIRA Administrator’s June 1997 guidance to federal agencies on how

to use the Unified Agenda to satisfy the requirements of section 610 did

not prevent agencies from continuing to mischaracterize Agenda entries as

section 610 reviews. Those mischaracterizations, combined with the

Agenda index of entries that the agencies characterized as section 610

reviews, can result in the public’s being misled about their ability to

comment on RFA regulatory reviews.

Therefore, in our report being issued today, we recommend that the

Executive Director of RISC, in consultation with OIRA and other agencies,

ensure that entries characterized as section 610 reviews in future editions

of the Unified Agenda meet the requirements of the RFA. The RISC

Executive Director and the Acting OIRA Administrator told us that they

agreed with the recommendation, and said that they would explore ways

to improve the Agenda’s notice provisions.

Mr. Chairman, this completes my prepared statement. I would be pleased

to answer any questions.

(410264) Page 4 GAO/T-GGD-98-64
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100