GAO-01-467R

United States General Accounting Office

Washington, DC 20548

B-287304

March 2, 2001

The Honorable Richard G. Lugar

Chairman

The Honorable Tom Harkin

Ranking Member

Committee on Agriculture, Nutrition, and Forestry

United States Senate

The Honorable Larry Combest

Chairman

The Honorable Charles W. Stenholm

Ranking Minority Member

Committee on Agriculture

House of Representatives

Subject: Department of Agriculture, Agricultural Marketing Service: National Organic

Program

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a

major rule promulgated by the Department of Agriculture (USDA), Agricultural

Marketing Service, entitled “National Organic Program” (RIN: 0581-AA40). We

received the rule on February 20, 2001. It was published in the Federal Register as a

final rule with request for comments on December 21, 2000. 65 Fed. Reg. 80548.

The final rule establishes the National Organic Program with national standards for

the production and handling of organically produced products including, among

other provisions, a national list of substances approved for and prohibited from use

in organic production and handling.

The final rule has an announced effective date of February 20, 2001. While the rule

was published in the Federal Register on December 21, 2000, it was not received by

Congress until February 21, 2001. The Congressional Review Act requires a 60-day

delay in the effective date of a major rule from the date of publication in the Federal

Register or receipt of the rule by Congress, whichever is later. 5 U.S.C. 801(a)(3)(A).

Therefore, the rule does not have the required 60-day delay in its effective date to

permit congressional review.
Page 2 GAO-01-467R

Enclosed is our assessment of the USDA’s compliance with the procedural steps

required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.

Our review indicates that, with the exception of the effective date, the USDA

complied with the applicable requirements.

If you have any questions about this report, please contact James W. Vickers,

Assistant General Counsel, at (202) 512-8210. The official responsible for GAO

evaluation work relating to the subject matter of the rule is Robert A. Robinson,

Managing Director, Natural Resources and Environment. Mr. Robinson can be

reached at (202) 512-3841.

signed

Kathleen E. Wannisky

Managing Associate General Counsel

Enclosure

cc: Mr. Kenneth C. Clayton

Acting Administrator

Agricultural Marketing Service

Department of Agriculture
GAO-01-467R

ENCLOSURE

ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE

ISSUED BY THE

DEPARTMENT OF AGRICULTURE,

AGRICULTURAL MARKETING SERVICE

ENTITLED

"NATIONAL ORGANIC PROGRAM"

(RIN: 0581-AA40)

(i) Cost-benefit analysis

As part of its Regulatory Impact Analysis, the USDA performed a cost-benefit

analysis of the final rule. USDA has quantified the costs of fees and recordkeeping

but the anticipated benefits and other costs are not quantified because of limited

market data.

The direct accreditation costs to an estimated 59 certifying agents during the first

18 months are estimated to be approximately $92,000 to $124,000 and are being

subsidized with appropriated funds. In addition, $270,000 to $448,000 in hourly

charges for site evaluation will be covered by appropriated funds. The cost of the

recordkeeping, as submitted under the Paperwork Reduction Act, is estimated at

$13 million annually.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,

607, and 609

Because the National Organic Program will primarily affect small entities, the USDA

prepared both an Initial Regulatory Flexibility Analysis and a Final Regulatory

Flexibility Analysis in connection with the proposed rule and the final rule,

respectively. The analyses satisfy the requirements of the Act and provide the

needed information regarding the size and number of the entities affected and the

steps taken to minimize the impact of the final rule on them.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform

Act of 1995, 2 U.S.C. §§ 1532-1535

The final rule does not contain either an intergovernmental or private sector

mandate, as defined in title II, of more than $100 million in any one year.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

The final rule was issued using the notice and comment procedures contained at

5 U.S.C. 553. On March 13, 2000, USDA published a Notice of Proposed Rulemaking
Page 2 GAO-01-467R

in the Federal Register. 65 Fed. Reg. 13512. USDA received 40,774 comments in

response to the Notice, which it considered in drafting the final rule. USDA

discusses the changes in the preamble of the final rule.

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

The final rule contains information collections that are subject to review and

approval by the Office of Management and Budget (OMB) under the Paperwork

Reduction Act. The collections have been approved by OMB and assigned OMB

Control No. 0581-0191.

Statutory authorization for the rule

The final rule was promulgated pursuant to the authority contained in 7 U.S.C. 6501-

6522.

Executive Order No. 12866

The final rule was reviewed by OMB and found to be an “economically significant”

regulatory action under the order.

Executive Order No. 13132 (Federalism)

USDA has determined that the final rule will have federalism implications under the

order because it establishes national standards that will preempt state statutes and

regulations. Therefore, USDA has prepared a federalism impact statement, which is

attached as an appendix to the final rule. The statement also includes a discussion

of the steps taken to obtain input from the states in formulating the final rule.