United States General Accounting Office

GAO Testimony

Subcommittee on National Economic Growth, Natural

Resources, and Regulatory Affairs, Committee on

Government Reform and Oversight, House of

Representatives

For Release on Delivery

Expected at

10:00 a.m., EST

Tuesday,

March 10, 1998

CONGRESSIONAL REVIEW

ACT

Implementation and

Coordination

Statement of Robert P. Murphy, General Counsel

GAO/T-OGC-98-38

Chairman McIntosh, Mr. Tierney, and Members of the Subcommittee:

I am pleased to appear before you today to discuss the General

Accounting Office’s experience in fulfilling its responsibilities under the

Congressional Review Act (CRA). I will also address our efforts to

coordinate implementation of the act with the Office of Management and

Budget’s Office of Information and Regulatory Affairs (OIRA). Finally, we

will offer some suggestions on how OIRA could more effectively exercise its

leadership and guidance responsibilities, as required by Executive Order

12866, to enhance the effectiveness of this act.

Congressional oversight of rulemaking as contemplated by CRA can be an

important and useful tool for balancing and accommodating the concerns

of American citizens and businesses with federal agency rulemaking. It is

important to assure that Executive branch agencies are responsive to

citizens and businesses about the reach, cost, and impact of regulations

without compromising the statutory mission given to those agencies. CRA

seeks to accomplish this by giving the Congress an opportunity to review

rules before they take effect and to disapprove those found to be too

burdensome, excessive, inappropriate, duplicative, or otherwise

objectionable.

Under CRA two types of rules, major and nonmajor, must be submitted to

both Houses of Congress and the GAO before either can take effect. CRA

defines a “major” rule as one which has resulted in or is likely to result in

(1) an annual effect on the economy of $100 million or more; (2) a major

increase in costs or prices for consumers, individual industries,

government agencies, or geographic regions; or (3) significant adverse

effects on competition, employment, investment, productivity, innovation,

or on the ability of U.S.-based enterprises to compete with foreign-based

enterprises in domestic and export markets. CRA specifies that the

determination of what rules are major is to be made by OIRA. Major rules

cannot be effective until 60 days after publication in the Federal Register

or submission to Congress and GAO, whichever is later. Nonmajor rules

become effective when specified by the agency, but not before they are

filed with the Congress and GAO.

GAO’s primary role under CRA is to provide the Congress with a report on

each major rule concerning GAO’s assessment of the promulgating federal

agency’s “compliance with the procedural steps” required by various acts

and Executive orders governing the regulatory process. These include

preparation of a cost-benefit analysis, when required, and compliance with

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the Regulatory Flexibility Act, the Unfunded Mandates Reform Act of 1995,

the Administrative Procedure Act, the Paperwork Reduction Act, and

Executive Order No. 12866. GAO’s report must be sent to the congressional

committees of jurisdiction within 15 calendar days.

Although the law is silent as to GAO’s role relating to the nonmajor rules,

we believe that basic information about the rules should be collected in a

manner that can be of use to Congress and the public. To do this, we have

established a database that gathers basic information about the 15-20 rules

we receive on the average each day. Our database captures the title, the

agency, the Regulation Identification Number, the type of rule, the

proposed effective date, the date published in the Federal Register, the

congressional review trigger date, and any joint resolutions of disapproval

that may be enacted. We have recently made this database available, with

limited research capabilities, on the Internet. I will discuss in a minute our

belief that this database would have more significant value to the Congress

if the Executive branch agencies would file their reports with us in a

standard format either electronically or in a manner amenable to modern

scanning techniques.

Since the congressional rulemaking review provisions of CRA were enacted

on March 29, 1996, our Office has received 115 major and 7,605 nonmajor

rules from Executive branch and independent agencies.

Unfiled Rules As noted earlier, before a rule can become effective, it must be filed in

accordance with the statute. GAO conducted a review to determine whether

all final rules covered by CRA and published in the Register were filed with

the Congress and GAO. We performed this review to both verify the

accuracy of our database and to ascertain the degree of agency

compliance with CRA. We were concerned that regulated entities may have

been led to believe that rules published in the Federal Register were

effective when, in fact, they were not unless filed in accordance with CRA.

Our review covered the 10-month period from October 1, 1996, to July 31,

1997. In November 1997, we submitted to OIRA a computer listing of the

rules that we found published in the Federal Register but not filed with our

Office. This initial list included 498 rules from 50 agencies. OIRA distributed

this list to the affected agencies and departments and instructed them to

contact GAO if they had any questions regarding the list. Beginning in

mid-February, because 321 rules remained unfiled, we followed up with

each agency that still had rules which were unaccounted for.

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Our Office has experienced varying degrees of responses from the

agencies. Several agencies, notably the Environmental Protection Agency

and the Department of Transportation, took immediate and extensive

corrective action to submit rules that they had failed to submit and to

establish fail-safe procedures for future rule promulgation. Other agencies

responded by submitting some or all of the rules that they had failed to

previously file. Several agencies are still working with us to assure

100 percent compliance with CRA. Some told us they were unaware of CRA

or of the CRA filing requirement.

Overall, our review disclosed that:

• 279 rules should have been filed with us; 264 of these have subsequently

been filed;

• 182 were found not to be covered by CRA as rules of particular applicability

or agency management and thus were not required to be filed;

• 37 rules had been submitted timely and our database was corrected; and

• 15 rules from six agencies have thus far not been filed.

We do not know if OIRA ever followed up with the agencies to ensure

compliance with the filing requirement; we do know that OIRA never

contacted GAO to determine if all rules were submitted as required. As a

result of GAO’s compliance audit, however, 264 rules now have been filed

with GAO and the Congress and are thus now effective under CRA. In our

view, OIRA should have played a more proactive role in ensuring that

agencies were both aware of the CRA filing requirements and were

complying with them.

Sixty-Day Delay and

“Good Cause”

One area of consistent difficulty in implementing CRA has been the failure

of some agencies to delay the effective date of major rules for 60 days as

required by section 801(a)(3)(A) of the act. Eight major rules have not

permitted the required 60-day delay, including the Immigration and

Naturalization Service’s major rule regarding the expedited removal of

aliens. Also, this appears to be a continuing problem since one of the eight

rules was issued in January 1998. We find agencies are not budgeting

enough time into their regulatory timetable to allow for the delay and are

misinterpreting the “good cause” exception to the 60-day delay period

found in section 808(2).

Section 808(2) states that, notwithstanding section 801, “any rule which an

agency for good cause finds (and incorporates the finding and a brief

Page 3 GAO/T-OGC-98-38
statement of reasons therefor in the rule issued) that notice and public

procedure thereon are impracticable, unnecessary, or contrary to the

public interest” shall take effect at such time as the federal agency

promulgating the rule determines. This language mirrors the exception in

the Administrative Procedure Act (APA) to the requirement for notice and

comment in rulemaking. 5 U.S.C. § 553(b)(3)(B). In our opinion, the “good

cause” exception is only available if a notice of proposed rulemaking was

not published and public comments were not received. Many agencies,

following a notice of proposed rulemaking, have stated in the preamble to

the final major rule that “good cause” existed for not providing the 60-day

delay. Examples of reasons cited for the “good cause” exception include

(1) that Congress was not in session and thus could not act on the rule,

(2) that a delay would result in a loss of savings that the rule would

produce, or (3) that there was a statutorily mandated effective date.

The former administrator of OIRA disagreed with our interpretation of the

“good cause” exception. She believed that our interpretation of the “good

cause” exception would result in less public participation in rulemaking

because agencies would forgo issuing a notice of proposed rulemaking

and receipt of public comments to be able to invoke the CRA “good cause”

exception. OIRA contends that the proper interpretation of “good cause”

should be the standard employed for invoking section 553(d)(3) of the APA,

“as otherwise provided by the agency for good cause found and published

with the rule,” for avoiding the 30-day delay in a rule’s effective date

required under the APA.

Since CRA’s section 808(2) mirrors the language in section 553(b)(B), not

section 553(d)(3), it is clear that the drafters intended the “good cause”

exception to be invoked only when there has not been a notice of

proposed rulemaking and comments received.

Definitions of Rules

and Major Rules

One early question about implementation of CRA was whether Executive

agencies or OIRA would attempt to avoid designating rules as major and

thereby avoid GAO’s review and the 60-day delay in the effective date. While

we are unaware of any rule that OIRA misclassified to avoid the major rule

designation, the failure of agencies to identify some issuances as “rules” at

all has meant that some major rules have not been identified.

CRA contains a broad definition of “rule,” including more than the usual

“notice and comment” rulemakings under the Administrative Procedure

Act which are published in the Federal Register. “Rule” means the whole

Page 4 GAO/T-OGC-98-38
or part of an agency statement of general applicability and future effect

designed to implement, interpret, or prescribe law or policy.

The legislative history of CRA makes clear that the authors intended a

broad interpretation of what constitutes a rule. As Chairman McIntosh

noted in his floor statement during the final consideration of CRA,

“All too often, agencies have attempted to circumvent the notice and comment

requirements of the Administrative Procedure Act by trying to give legal effect to general

policy statements, guidelines, and agency policy and procedure manuals. Although agency

interpretative rules, general statements of policy, guideline documents, and agency and

procedure manuals may not be subject to the notice and comment provisions of section

553(c) of title 5, United States Code, these types of documents are covered under the

congressional review provisions of the new chapter 8 of title 5.”

On occasion, our Office has been asked whether certain agency action,

issuance, or policy constitutes a “rule” under CRA such that it would not

take effect unless submitted to our Office and the Congress in accordance

with CRA. For example, in response to a request from the Chairman of the

Subcommittee on Forests and Public Land Management, Senate

Committee on Energy and Resources, we found that a memorandum

issued by the Secretary of Agriculture in connection with the Emergency

Salvage Timber Sale Program constituted a “rule” under CRA and should

have been submitted to the Houses of Congress and GAO before it could

become effective. Likewise, we found that the Tongass National Forest

Land and Resource Management Plan issued by the United States Forest

Service was a “rule” under CRA and should have been submitted for

congressional review. OIRA stated that, if the plan was a rule, it would be a

major rule.

The Forest Service has in excess of 100 such plans promulgated or revised

which are not treated as rules under CRA. Many of these may actually be

major rules that should be subject to CRA filing and, if major rules, subject

to the 60-day delay for congressional review.

In testimony before the Senate Committee on Energy and Natural

Resources and the House Committee on Resources regarding the Tongass

Plan, the Administrator of OIRA stated that, as was the practice under the

APA, each agency made its own determination of what constituted a rule

under CRA and by implication, OIRA was not involved in these

determinations.

Page 5 GAO/T-OGC-98-38
We believe that for CRA to achieve what the Congress intended, OIRA must

assume a more active role in guiding or overseeing these types of agency

decisions. Other than an initial memorandum following the enactment of

CRA, we are unaware of any further OIRA guidance. Because each agency or

commission issues many manuals, documents, and directives which could

be considered “rules” and these items are not collected in a single

document or repository such as the Federal Register, for informal

rulemakings, it is difficult for our Office to ascertain if agencies are fully

complying with the intent of CRA. Having another set of eyes reviewing

agency actions, especially one which has desk officers who work on a

daily basis with certain agencies, would be most helpful.

Database

Enhancement

We have attempted to work with Executive agencies to get more

substantive information about the rules and to get such information

supplied in a manner that would enable quick assimilation into our

database. An expansion of our database could make it more useful not

only to GAO for its use in supporting congressional oversight work, but

directly to the Congress and to the public. Attached to this testimony is a

copy of a questionnaire designed to obtain basic information about each

rule covered by CRA. This questionnaire asks the agencies to report on

such items as (1) whether the agency provided an opportunity for public

participation, (2) whether the agency prepared a cost-benefit analysis or a

risk assessment, (3) whether the rule was reviewed under Executive

orders for federalism or takings implications, and (4) whether the rule was

economically significant. Such a questionnaire would be prepared in a

manner that facilitates incorporation into our database by electronic filing

or by scanning.

In developing and attempting to implement the use of the questionnaire,

we consulted with Executive branch officials to insure that the requested

information would not be unnecessarily burdensome. We circulated the

questionnaire for comment to 20 agency officials with substantial

involvement in the regulatory process, including officials from OIRA. The

Administrator of OIRA submitted a response in her capacity as Chair of the

Regulatory Working Group, consolidating comments from all the agencies

represented in that group. It is the position of the group that the

completion of this questionnaire for each of the 4,000 to 5,000 rules filed

each year is too burdensome for the agencies concerned. The group points

out that the majority of rules submitted each year are routine or

administrative or are very narrowly focused regional, site-specific, or

highly technical rules.

Page 6 GAO/T-OGC-98-38
We continue to believe that it would further the purpose of CRA for a

database of all rules submitted to GAO to be available for review by

Members of Congress and the public and to contain as much information

as possible concerning the content and issuance of the rules. We believe

that further talks with the Executive branch, led by OIRA, can be productive

and that there may be alternative approaches, such as submitting one

questionnaire for repetitive or routine rules. If a routine rule does not fit

the information on the submitted questionnaire, a new questionnaire could

be submitted for only that rule. For example, the Department of

Transportation could submit one questionnaire covering the numerous air

worthiness directives it issues yearly. If a certain action does not fit the

overall questionnaire, a new one for only that rule would be submitted.

We note that almost all agencies have devised their own forms for the

submission of rules, some of which are as long or almost as extensive as

the form we recommend. Additionally, some agencies prepare rather

comprehensive narrative reports on nonmajor rules. We are unable to

easily capture data contained in such narrative reports with the resources

we have staffing this function now. The reports are systematically filed

and the information contained in them essentially is lost. Our staff could,

however, incorporate an electronic submission or scan a standardized

report into our database and enable the data contained therein to be used

in a meaningful manner.

Conclusion CRA gives the Congress an important tool to use in monitoring the

regulatory process, and we believe that the effectiveness of that tool can

be enhanced. Executive Order 12866 requires that OIRA, among other

things, provide meaningful guidance and oversight so that each agency’s

regulatory actions are consistent with applicable law. After almost 2 years’

experience in carrying out our responsibilities under the act, we can

suggest four areas in which OIRA should exercise more leadership within

the Executive branch regulatory community, consistent with the intent of

the Executive Order, to enhance CRA’s effectiveness and its value to the

Congress and the public. We believe that OIRA should:

• require standardized reporting in a GAO-prescribed format that can readily

be incorporated into GAO’s database;

• establish a system to monitor compliance with the filing requirement on an

ongoing basis;

Page 7 GAO/T-OGC-98-38
• provide clarification on the “good cause” exception to the 60-day delay

provision and oversee agency compliance during its Executive Order

12866 review; and

• provide clarifying guidance as to what is a rule that is subject to CRA and

oversee the process of identifying such rules.

Thank you, Mr. Chairman. This concludes my prepared remarks. I would

be happy to answer any questions you may have.

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Attachment 

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Attachment 

(996216) Page 11 GAO/T-OGC-98-38
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