Federal Rulemaking: Agencies Could Take Additional Steps to Respond to Public Comments
Released: 2013-01-22T00:00:00

Letter

Background

APA outlines the process for informal rulemaking, commonly referred to as notice-and-comment rulemaking. APA includes six broad categorical exceptions to this process, including, for example, rules dealing with agency organization and procedure (see sidebar).

5 U.S.C. § 553(b)(B). Agencies may also find “good cause” to exempt a rule from APA’s requirement for a 30-day delay of effective date. 5 U.S.C. § 553(d)(3). However, agencies’ use of that good cause exception was not within the scope of this review. circumstances presented in the rules. In other cases, statutes, such as the 2008 Farm Bill, have authorized or required agencies to issue rules without notice and comment.exceptions they are not required to request comments from the public or conduct certain regulatory analyses.

When agencies invoke any of these CRA, which applies to all agencies, distinguishes between two types of rules, major and nonmajor. CRA defines a “major” rule as one that, among other things, has resulted in or is likely to result in an annual effect on the economy of $100 million or more. Throughout this report, we present results using the CRA distinction between major and nonmajor rules. The Office of Information and Regulatory Affairs (OIRA) within OMB is responsible for determining whether a rule is major.

OIRA also is responsible for providing meaningful guidance and oversight so that each agency’s regulations are consistent with applicable law, the President’s priorities, and the principles set forth in executive orders, and that decisions made by one agency do not conflict with the policies or actions taken or planned by another agency. Under Executive Order 12866 (reaffirmed by Executive Order 13563), OIRA reviews significant proposed and final rules from agencies, other than independent regulatory agencies, before they are published in the Federal Register. OIRA also provides guidance to agencies on regulatory requirements. For example, on August 15, 2011, OIRA issued a primer instructing agencies how best to conduct a regulatory impact analysis. In addition to OIRA’s previously mentioned responsibilities, according to Executive Order 12866, OIRA is to be the “repository of expertise concerning regulatory issues.” Executive Order 12866, other executive orders, and OIRA guidance have all reiterated the importance of public participation and regulatory analysis in rulemaking.

Agencies Issued about 35 Percent of Major Rules and about 44 Percent of Nonmajor Rules without an NPRM from 2003 to 2010

During calendar years 2003 through 2010, agencies published 568 major rules and about 30,000 nonmajor rules. As shown in figure 1, agencies published about 35 percent of major rules and about 44 percent of nonmajor rules without an NPRM during those years.

Examples of major rules without an NPRM include a May 2010 Department of the Treasury final rule prohibiting certain consumer credit practices, for which the agency invoked the good cause exception, and a September 2008 Department of Health and Human Services (HHS) notice that announced Medicare cost-sharing amounts, for which the agency cited an exception in the Social Security Act and good cause.As we observed in our 1998 report, many nonmajor rules without an NPRM appeared to involve routine, administrative, or technical issues.

Similar examples of nonmajor rules without an NPRM that we identified during this review included a January 2007 Department of Homeland Security (DHS) temporary final rule changing drawbridge operation hours for certain bridges in Florida, and a July 2009 Federal Election Commission rule allowing a committee that is being audited by the Commission to have a hearing prior to the Commission’s adoption of a final audit report.

As illustrated in figure 2, the percentage of nonmajor final rules without an NPRM was very consistent across the 8-year period we reviewed; varying only slightly among individual years, but the percentage of major rules without an NPRM was less consistent. In particular, from 2008 to 2009, the percentage of major rules without an NPRM increased from 26 percent to 40 percent. Agencies issued the largest numbers of major rules without an NPRM in 2009 and 2010 (34 in each year), though the percentage was higher in 2009 than in 2010. (See app. II for more detailed results of the analyses we conducted during this review, including numbers, percentages, and confidence intervals.)

Two agencies, HHS and the Department of Agriculture (USDA), published 62 (plus or minus 11) percent of major rules in our sample without an NPRM, as shown in figure 3. Other agencies accounted for much lower percentages of the total, all 7 percent or less. The Environmental Protection Agency (EPA) issued 30 major rules from 2003 through 2010, but none of these were issued without an NPRM. For the nonmajor rules, the Department of Transportation (DOT), Department of Commerce, DHS, and EPA together accounted for almost two-thirds of nonmajor rules without an NPRM. All other agencies accounted for 7 percent or less of the total.

The agencies that published rules in our sample used interim rulemaking for a substantial portion of final major rules without an NPRM. As noted earlier, an interim rule becomes effective without an NPRM, but the public generally may provide comments after the rule’s issuance. Across the 8- year time period, agencies issued 47 percent of all major final rules and 8 percent of all nonmajor rules without an NPRM as interim rules. The percentage of major rules without an NPRM that used interim rulemaking increased from 2007 through 2010 but was more variable for nonmajor rules (see fig. 4). Appendix III provides more information on the frequency of agencies’ use of interim rulemaking in general.

Across the 554 rules in our sample without an NPRM, agencies used 109 distinct terms, many of which had only slight wording variations within a broad category, to identify the rulemaking action. The majority of these terms were variations of five broad categories: final rules, interim rules, temporary rules, direct final rules, and notices. In practice, however, there may be little distinction between interim rules and certain other rules without an NPRM that were described using different terminology. For example, a “final rule, request for comments” and an “interim rule with request for comments” both provide an opportunity for the public to comment only after the rule has been published; these rules are in essence the same type of rule. As a result of the inconsistent terminology, it would be difficult for Congress to enact legislation on, or for the public to easily identify, rules without an NPRM based on what agencies call those rules. For example, in legislation to revise rulemaking procedures being considered by the 112th Congress, certain provisions would apply when agencies, for good cause, issue “interim rules.” If the intent is to address all rules using the good cause exception, this proposed legislation would not achieve that goal since our analysis showed that not all rules for which agencies claimed good cause were called “interim rules.” To facilitate public participation in the rulemaking process, OMB officials told us that they are working with the Office of the Federal Register to standardize terminology for agencies to use when publishing rules in the Federal Register.

Agencies Most Often Invoked the Good Cause Exception When Publishing Rules without an NPRM

Good Cause Exception Commonly Used

The agencies that published rules in our sample claimed the good cause exception in 77 (plus or minus 11) percent of major rules and 61 (plus or minus 10) percent of nonmajor rules without an NPRM, as shown in figure 5 below.

74 Fed. Reg. 20,210 (May 1, 2009). 75 Fed. Reg. 69,348 (Nov. 12, 2010). federal waters.Deepwater Horizon oil spill in the Gulf of Mexico on April 20, 2010.

The department published this rule in light of the For the rules in our sample, agencies most often said that issuing an NPRM would be contrary to the public interest, but they also frequently cited multiple grounds for invoking the good cause exception (see table 1). They cited multiple reasons more often for major rules than for nonmajor rules—63 (plus or minus 14) percent of major rules and 44 (plus or minus) percent of the nonmajor rules.

Ninety-two of the 123 major rules without an NPRM in our sample invoked the good cause exception. In examining these 92 rules we identified five primary categories of explanations (more than one category sometimes applies to a given rule): a law imposed a deadline either requiring the agency to issue a rule or requiring a program to be implemented by a date that agencies claimed would provide insufficient time to provide prior notice and comment—36 rules; a law prescribed the content of the rule issued—31 rules; the agency said it was responding to an emergency—19 rules; the rule implemented technical changes—5 rules; and all other explanations (for example, an agency issued a final rule without an NPRM in response to a court decision)—14 rules.

Agencies’ Use of Exceptions in Statutes Other than APA

After good cause, agencies most often cited specific exceptions in statutes other than APA. Such exceptions were cited in 9 (plus or minus 4) percent of nonmajor rules and in 34 (plus or minus13) percent of all major rules without an NPRM. More specifically, in 38 of the 123 major rules in our sample, we identified 18 different statutory authorities that either required or authorized agencies to issue rules without notice and comment. For example, the 2008 Farm Bill required the issuance of final rules to implement provisions of the law without prior notice and comment. HHS, the Department of Labor (DOL), and the Department of the Treasury issued several joint rules to implement provisions in the Patient Protection and Affordable Care Act as interim rules. In another type of example, a provision of the Social Security Act provides an exception to notice-and-comment rulemaking when a statute establishes a specific deadline for implementation of a rule and the deadline is less than 150 days after its enactment. This provision allowed HHS to issue several Medicare rules without an NPRM because the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required some rules to be issued within shorter time frames than 150 days. Table 2 provides additional information on all of the statutory exceptions that agencies cited for major rules in our sample.

As mentioned earlier, in addition to the good cause exception, APA includes six broad categorical exceptions to notice-and-comment rulemaking. Agencies that published rules in our sample invoked these broad categorical exceptions infrequently. They did so in 11 (plus or minus 5) percent of nonmajor rules (most often for rules of agency organization, procedure, or practice), and in 8 (plus or minus 11) percent of major rules (most often citing the exception for rules on public property, loans, grants, benefits, or contracts). These exceptions were cited in 8 of the 123 major rules without an NPRM in our sample. The following are examples of rules in which agencies cited the six APA categorical exceptions:

Military and foreign affairs—cited by a Department of Commerce 2007 final rule that made several corrections to the Export Administration Regulations regarding Libya and terrorist-supporting countries.

Agency management or personnel—cited by a General Services Administration 2005 rule regarding the Federal Travel Regulation to clarify various provisions on temporary duty travel.

Public property, loans, grants, benefits, or contracts—cited by the Board of Directors of the HOPE for Homeowners Program in a rule establishing a temporary Federal Housing Administration program providing mortgage insurance for refinanced loans made to avoid foreclosure.

Interpretative rules—cited by a DOL 2008 rule revising regulations implementing the nondiscrimination and affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended.interpretation of a mandatory job listing requirement.

According to DOL, it published this rule to codify its

General statements of policy—cited by an HHS 2010 rule revising standard federal rates and the extension of wage indexes under the Patient Protection and Affordable Care Act for Medicare payments in conformance with congressional policy.

Agency organization, procedure, or practice—cited by a DOL 2007 rule amending Occupational Safety and Health Administration procedures for handling retaliation complaints.

In sum, our review of reasons agencies gave for issuing major rules in our sample without an NPRM showed that they cited grounds relating to statutes for most of the 123 rules we analyzed. Specifically, we found that in 84 of the 123 major rules without an NPRM in our sample, agencies described circumstances in which a statute: (1) required or authorized them to issue the rule without an NPRM, (2) prescribed the content of the rule, or (3) set a deadline for a rule or program which the agency stated did not allow sufficient time to issue an NPRM. About 70 percent of the 123 major rules in our sample involved, at least in part, the distribution of federal payments to the public, such as disaster assistance and reimbursement for health care costs. By foregoing notice and comment in these cases, agencies expedited the flow of funds to beneficiaries.

When Agencies Publish Major Rules without an NPRM, They Often Provide Information on Economic Effects and Request Comments, But Do Not Always Respond to Comments

Agencies Provided Information on Economic Effects of Most Major Rules without an NPRM

Of the 123 major rules without an NPRM that we reviewed, 113 provided some estimates of economic effects, such as on the potential costs or benefits. Agencies do this because Executive Order 12866 directs non- independent regulatory agencies to assess economic effects, including costs and benefits for all significant rules, whether or not those rules are issued with an NPRM.requirements of the Executive Order apply only “as practicable.” Of the remaining 10 of the 123 rules that we sampled, 5 provided some economic information but did not include estimates of the costs or benefits, and 5 were issued by independent agencies which are not required to comply with the Executive Order.

However, according to OMB officials, the Costs and benefits include both quantifiable measures as well as qualitative effects that may be difficult to quantify. The information provided on costs and benefits in the 123 rules we reviewed varied, and included both quantitative and qualitative information. Agencies gave quantitative measures of effects for 104 rules, information on effects for 44 rules included in our sample. Appendix IV provides summary information about each of the 123 major rules without an NPRM, including the potential benefits, costs, and other economic effects identified by the agencies.

Agencies quantified costs for 50 rules, benefits in 10, and transfers in 86. payments in whole or in part. In these cases, agencies typically reported only the estimated budgetary impacts of transfer payments.

Additionally, rules that have a significant effect on the economy, whether or not issued with an NPRM, are subject to review by OIRA. Agencies must submit detailed economic analyses of the costs and benefits of all reasonably feasible regulatory alternatives to OIRA for review. For 55 of the 123 major rules we examined, the rule stated that the agency had considered regulatory alternatives. the Conservation Stewardship Program, USDA identified and provided analyses on five policy options, as well as the option of no program. Of the 123 major rules we examined, all but 10 were subject to OIRA review. The 10 rules not subject to OIRA review were issued by independent regulatory agencies.

Agencies may have considered alternatives but did not summarize their findings in the published final rules, so there may be other rules among the 123 for which agencies considered regulatory alternatives.

Although Not Required, Agencies Often Requested Comments on Major Final Rules Issued without an NPRM, but Did Not Always Respond to Comments Received

Of the 123 major rules without an NPRM in our sample, we found that agencies requested comments for 77 rules where they had discretion over at least part of the regulation’s content. Agencies sometimes solicit public comments through the Federal Register on such rules, though not required to do so. If an agency solicits comments in these cases, the public’s opportunity to comment does not occur in advance of the rule’s issuance or, in some cases, the effective date for complying with the rule’s provisions. Major rules in which the agency has some discretion may benefit from consideration of public comments, because the public could add value by identifying issues, information, and analyses that the agency might not have initially considered. However, agencies were not obligated to respond to comments received on these rules, a key difference from comments received on proposed rules when those rules are finalized. In 26 of the 77 rules without an NPRM in our sample where the agency had discretion, the agency did not publish a follow-up rule or respond to any comments received (see figure 6).

Typically, agency responses to comments received from the public are published in the Federal Register when a follow-up rule is issued. We analyzed each of these 77 major rules to determine whether, by the end of June 2012, agencies had published a follow-up rule in the Federal Register and, if so, whether the agencies reported receiving comments and making changes to the original rules. In 26 of these 77 rules, there was no follow-up rule. We examined publicly available information and found that the public submitted comments for at least 15 of these 26 rules but the agencies did not respond to them. Each of these 26 rules has significant economic effects, with some of these rules having an impact of a billion dollars a year or more. These rules also cover important issues ranging from national health care policies to manufacturing incentive programs. For example, in one of the 26 rules, an agency defined a pre- existing condition to implement the Patient Protection and Affordable Care Act, and sought public comment. The agency received 4,627 comments, but has not published a response to them. When agencies do not publish their response to any comments received, the public record is incomplete. The public does not know whether the agency considered the comments, accepted or rejected the views or evidence presented, or if the agency intends to finalize and potentially change the rule. As the courts have recognized, the opportunity to comment is meaningless unless the agency responds to significant points raised by the public.

We found that when agencies did respond to public comments they often made changes to the rules. In the 51 major rules without NPRMs in our sample for which the agencies had discretion and requested comments, the agencies did issue a follow-up rule, and our analysis of those cases illustrates the potential benefits of follow-up efforts. The agencies reported receiving public comments on all but 3 of these 51 major rules, which indicates that the public usually takes advantage of the opportunity to comment on rules without an NPRM following publication. In addition, we found that agencies made changes to the text of 31 of the 51 rules, most often in response to public comments. For example, DHS finalized a September 2009 interim rule on air cargo screening in August 2011. In response to public comments, the agency removed two provisions of the original interim rule regarding air cargo screening requirements. These changes reduced the costs of the rule. In a similar example, in June 2011, the Department of the Treasury, DOL, and HHS followed up on a jointly- issued July 2010 rule on group health plans and health insurance issuers. The agencies stated that the amendments in the subsequent rule were being made in response to public comments received on the prior rule and that the primary effect of the amendments was to reduce the costs of compliance.

Over the years, the Administrative Conference of the United States (ACUS), an advisory agency in administrative law and procedure, has also highlighted the potential benefits of following up on final rules issued without an NPRM. In particular, to ensure public participation and limit undesirable effects regarding final rules issued without notice and comment, ACUS recommended that agencies request comments whenever they invoke the “impracticable” or “contrary to the public interest” reasons under the good cause exemption and publish a responsive statement on significant and relevant issues raised by such comments. ACUS noted that in such cases public comments could provide both useful information to the agency and enhanced public acceptance of the rule. Although this recommendation has not been implemented, ACUS continues to support it in an effort to improve transparency and public participation in rulemaking.

Conclusions

Agencies issue thousands of final rules each year that affect many aspects of citizens’ lives. The rulemaking procedures that agencies follow balance the public’s right to be involved in the rulemaking process against agencies’ need to carry out their missions in an efficient and effective manner. When rulemaking is expedited, there is a trade-off between obtaining the benefits of advanced notice and comment and the goal of issuing the rule quickly. The consequences of such trade-offs could be most significant for major rules issued without an NPRM, given their substantial annual effects on society.

Agencies often lessened this trade-off by requesting public comments on rules issued without an NPRM for which they had some discretion. This is a positive practice that promotes the benefits of public participation. However, if agencies and the public are to fully benefit from the process of public comments, what matters is not simply providing an opportunity for comment but also public understanding of whether comments were considered. For more than a third of the major rules published without an NPRM between 2003 and 2010 where agencies had discretion and requested comments, the agencies did not respond to comments received. Some of these rules related to significant national issues such as health care. When agencies solicit but leave unclear whether comments were considered, the public record is incomplete. Though such follow-up is not required, agencies may be missing an opportunity to fully obtain for themselves, and provide to the public, the benefits of public participation. Further, agencies may create the perception that they are making final decisions about the substance of major rules without considering data, views, or arguments submitted in public comments. The benefit of follow-up efforts is demonstrated by our finding that, when agencies did issue follow-up rules, they often made substantive changes to the original rules, usually in response to public comments.

Recommendation for Executive Action

To better balance the benefits of expedited rulemaking procedures with the benefits of public comments that are typically part of regular notice- and-comment rulemakings, and improve the quality and transparency of rulemaking records, we recommend that the Director of OMB, in consultation with the Chairman of ACUS, issue guidance to encourage agencies to respond to comments on final major rules, for which the agency has discretion, that are issued without a prior notice of proposed rulemaking.

Agency Comments and Our Evaluation

We provided a draft of this report to the Director of OMB and the Chairman of ACUS for their review and comment. We received written comments on the draft report from OMB, which are reprinted in Appendix V. OMB also provided a technical comment which we incorporated as appropriate. ACUS provided technical comments, which we also incorporated as appropriate.

OMB disagreed with our recommendation to issue guidance to encourage agencies to respond to comments on final major rules, for which the agency has discretion, that are issued without a prior notice of prior rulemaking. OMB stated that it does not believe it is necessary to issue guidance on this topic at this time. In its response, OMB reiterated the value of public participation during the rulemaking process and noted that it routinely encourages agencies to establish procedures to consider public comments received on interim final rules. However, OMB believes that the timing and extent of an agency’s responses is a discretionary matter that an agency must consider in the context of the nature and substance of the particular rulemaking, as well as the particular agency’s resource constraints and competing priorities. OMB further stated that this case-specific approach is generally appropriate—especially given the often unique circumstances faced by agencies issuing rules without a prior notice of proposed rulemaking—and that it is not aware of compelling evidence that a more general, undiscriminating policy, set out in guidance, would offer substantial benefits.

We continue to believe that enhanced guidance would improve the quality and transparency of rulemaking procedures. We recognize the fact that OMB encourages agencies to establish procedures to consider public comments but believe that OMB needs to go further to encourage all agencies to respond to public comments on the record. We believe that there is compelling evidence that such guidance would offer substantial benefits. ACUS identified this as an issue of concern in 1995, and our current review confirmed that agencies still do not always follow up on rules issued without an NPRM. For more than a third of the major rules published without an NPRM between 2003 and 2010 where agencies had discretion and requested comments, we found that the agencies did not respond to comments received. As our evidence demonstrated, some of these rules had economic impacts in the billions of dollars, attracted over 4,000 comments, and addressed significant national issues, such as health care. When it is unclear whether agencies considered comments, rulemaking is less transparent to the public, and, as courts have recognized, the opportunity to comment is meaningless unless the agency responds to significant points raised by the public. Further, we disagree with OMB’s characterization of the scope of our recommendation. We are not suggesting an undiscriminating policy, instead we are recommending that OMB work with ACUS to develop appropriate guidance. Such guidance could maintain the flexibility for agencies that OMB believes is necessary. Also, following up on rules issued without an NPRM is not necessarily resource intensive. For example, an agency could simply post a summary response to public comments on regulations.gov.

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If you or your staff has any questions concerning this report, please contact Melissa Emrey-Arras at (617) 788-0534 or emreyarrasm@gao.gov, or Robert Cramer at (202) 512-7227 or cramerr@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors are listed in Appendix VI.

Appendix I: Scope and Methodology

For final rules published during calendar years 2003 through 2010, the objectives of this report were to: 1. Identify how often agencies issued final rules, including interim rules, without a notice of proposed rulemaking (NPRM), whether this changed over time, and which agencies most often issued such rules. 2. Identify which exceptions agencies used when issuing final rules without an NPRM. 3. Assess whether agencies, when issuing final major rules without an NPRM (a) provided information on the rule’s economic effects, (b) solicited public comments, and (c) responded to public comments.

To address each of these objectives, we selected and reviewed a representative sample of final regulatory actions published during calendar years 2003 through 2010 to estimate the prevalence of certain characteristics in this population. We used the Government Printing Office’s (GPO) Federal Digital System database on the Federal Register to compile a list of 30,583 final regulatory actions published in the Rules and Regulations section during those years. We defined our units of analysis as “actions” rather than “final rules,” because not all of the individual documents published in the Rules and Regulations section of the Federal Register are rules (e.g., some extended comment periods or made editorial corrections). Further, one published action may include multiple rules, and there is no way to determine the total number of rules published short of reviewing each action. However, for simplicity of presentation, we use the term “final rules” instead of “final regulatory actions” throughout this report. We supplemented information from GPO’s Federal Register database with information from our database on rules submitted to us under the CRA.used to generate our list of all final rules by reviewing related documentation, interviewing knowledgeable agency officials, testing for missing data, and tracing a sample of entries to source documents. We concluded that the data were sufficiently reliable for our purposes.

We tested the reliability of the databases From this population of 30,583 final rules published in the Rules and Regulations section from 2003 through 2010, we selected a generalizeable stratified sample of 1,311 final rules. To ensure that we reviewed the rules expected to have the most significant effects, we selected all major rules, as identified under the CRA for calendar years The remaining rules during this period were stratified 2007 through 2010. and sampled by year (2007 through 2010) and by whether they contained the term “interim” in the text of the Federal Register action.included rules for calendar years 2003-2006 in our sample. For this period, we grouped the rules into three additional strata: major rules, “interim” rules, and other rules. Table 3 summarizes the population and sample size by stratum.

Based on this sample, we are able to estimate characteristics of the population of all final rules published in the Rules and Regulations section of the Federal Register. To ensure that all the rules expected to have the most significant effects were reviewed, we also included an additional 27 major rules that were not published in the Rules and Regulations section, but instead were published as Notices (bringing the total number of rules For this report, when we present estimates for all we reviewed to 1,338).major rules, we are projecting to the major rules published in both the Rules and Regulations section and those published in Notices. All other estimates presented in this report are estimates of the population of rules published in the Rules and Regulations section for 2003 through 2010.

Our sample contained rules by 52 different agencies, including every cabinet-level agency issuing regulations and every agency that published a major rule during the 8-year period.

Because this is a probability sample, our sample is only one of a large number of samples that we might have drawn. Since each sample could have provided different estimates, we express our confidence in the precision of our particular sample’s results as a 95 percent confidence interval (for example, plus or minus 7 percentage points). This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn.

We reviewed the published text of all selected final rules to determine if they had been published in whole or in part without NPRMs (referred to in the rest of this report simply as rules without NPRMs). Our analysis included rules where only a part of the rule was issued without an NPRM to ensure that our results reflected all instances when agencies cited an exception to notice and comment. To address our third objective we focused primarily on whether agencies issuing major rules without an NPRM: (a) provided information on the economic effects of the rules, (b) solicited public comments when issuing final rules without an NPRM, and (c) responded to comments received on major rules without an NPRM by June 30, 2012. We used standardized data collection instruments and applied criteria from the Administrative Procedure Act, Regulatory Flexibility Act, Unfunded Mandates Act, and Executive Order 12866 to collect and analyze information to address each key question. If the final rule in our sample was not itself a rule, but was related to a rulemaking (e.g., if it extended a comment period) we used the underlying rule to address our questions if sufficient information was provided to identify the underlying rule. In addition to using our sample to generate estimates for the entire population on these objectives, we also did additional content analyses of the major rules without NPRMs in our sample to help address the objectives. Unlike the generalizable results from our reviews of the broader sample of rules, the results of these content analyses are not generalizable to the entire population. They only represent the facts and circumstances of the specific rules we reviewed. We also met with officials from the Office of Management and Budget (OMB) and Administrative Conference of the United States (ACUS) who are knowledgeable about federal regulatory and administrative law procedures.

We did not assess the agencies’ decisions regarding claims of good cause and other exceptions or their determinations regarding the effects of their rules; instead, we are providing information about what the agencies published in the Federal Register as the basis for their findings. Further, we limited our analysis to only what agencies specifically stated in Federal Register notices. For example, we counted a particular exception only if the agency specifically cited it or quoted from part of APA’s description. We did not assume that an agency meant to claim a particular exemption based on the general content of the rule. Therefore, our results may understate the frequency with which APA’s good cause and categorical exceptions applied.

We conducted this performance audit from June 2011 to December 2012 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Detailed Results of GAO Analyses of Final Rules Issued without an NPRM, 2003 through 2010

Tables 4 and 5 in this appendix provide more detailed information on the results of various analyses we completed for this report, including the upper and lower bounds of confidence intervals for estimated values, as appropriate. Figures 7 through 9 in this appendix provide more detailed information on how agencies addressed the RFA, UMRA, and Executive Order 12866, reported by agencies under the Congressional Review Act (CRA), including confidence intervals for our estimates.

RFA applies to all agencies, but the requirements under RFA to prepare initial and final regulatory flexibility analyses only apply to rules for which an agency is required to publish an NPRM. Nevertheless, agencies often discussed RFA in their rules without NPRMs.

UMRA applies to agencies other than independent regulatory agencies, and UMRA’s requirements only apply to rules for which an agency published an NPRM. Nevertheless, agencies often discussed UMRA in their rules without NPRMs.

Executive Order 12866 procedural and analytical requirements only apply to significant rules, and the requirement to provide the underlying analysis of benefits and costs only applies to rules that are economically significant (generally those with an annual impact of $100 million or more). The executive order does not apply to independent regulatory agencies.

Appendix III: Frequency of Interim Rulemaking, 2003 through 2010

Interim final rules are rules that agencies often, but not always, issue without an NPRM and provide the public an opportunity to comment after the rule has taken effect. APA does not address interim rulemaking, although in 1995, ACUS recommended that agencies adopt a form of interim rulemaking, and Congress has expressly authorized this procedure in legislation. In our 1998 report on final actions without NPRMs, we had estimated that agencies published about 400 interim final rules per year from 1992 to 1997 (out of approximately 4,000 total final rules each of those years).

Overall, agencies appeared to use interim rulemaking infrequently. Between 2003 and 2010, agencies published about 4 (plus or minus 2) percent of nonmajor rules as interim rules. There was relatively little variation across the individual years in the percentage of nonmajor interim rules (see fig. 14). However, for major rules, we found that 15 percent (actual) of all major rules from 2003 through 2010 were issued as interim rules. The number of major interim rules increased starting in 2008 and was highest in 2010, when 23 of 100 major rules were an interim rule or included an interim rule among other final rules. A few of the cases involving interim rules that we reviewed (17 of the 120) had prior proposed rules.

We reviewed a total of 120 interim rules within our sample, 56 of which were major and 64 nonmajor. Three agencies issued more than half of the major interim rules we reviewed, with the Department of Health and Human Services (HHS) accounting for 23 percent, the Department of Agriculture (USDA) 18 percent, and the Department of Homeland Security (DHS) 11 percent. All other agencies in our sample accounted for less than 7 percent each of the total major interim rules we reviewed. For the nonmajor interim rules, four agencies accounted for approximately two-thirds of these rules, with USDA accounting for 22 percent, DHS 22 percent, the Department of Defense (DOD) 14 percent, and HHS 11 percent. All others counted for less than 5 percent each of the total. There may be other agencies that issued interim rules that did not appear in our sample. Table 6 provides the detailed results of our analysis, by time period, with confidence intervals.

There is no general requirement for agencies to finalize interim rules, but we did a “look forward” analysis for each of the 120 interim rules in our sample to determine how many of those rules agencies had subsequently finalized and, if so, whether the agencies reported receiving comments or making changes to those rules. By the end of June 2012, agencies in our sample had finalized almost half of the interim rules—29 of the 56 major interim rules in our sample and 37 of the 64 nonmajor interim rules. It took these agencies on average 452 days (about 1 year, 3 months) after publication of the original interim rules to finalize the rules, so agencies may eventually finalize additional interim rules from our sample. Agencies in our sample frequently reported receiving comments on and making changes to interim rules that they finalized, especially in the case of major interim rules. These agencies received public comments on all but 2 of the major interim rules that were subsequently finalized. In addition, agencies in our sample made changes to the text of 15 of the 29 major interim rules when they were finalized, most often in response to public comments.

Appendix IV: Summary Information on Final Major Rules Issued without an NPRM, in Whole or in Part—2003 through 2010

The following tables provide information about each of the 123 major rules issued without an NPRM from 2003 through 2010 that we reviewed for this report. Rules for which agencies waived NPRMs for only part of the rule are designated with (P) where we identify the exceptions to NPRMs that were cited. The narratives on each rule are summarized primarily from the relevant major rule reports that we submitted to Congress under CRA. CRA requires us to report on the issuing agency’s compliance with procedural steps required by various acts and executive orders governing the rulemaking process. Links to those reports are provided in the Rule column. In some cases where the published rule contained other relevant summary information on estimated economic effects that was not reflected in the major rule report, we added that information to the summary. The entries are sorted by agency and presented chronologically by the published date of the rule. Joint rules issued by more than one agency are listed at the end of each table. Because of differences in methods and assumptions (for example, discount rates, inflation), the agencies’ estimates may not be comparable.

Appendix V: Comments from the Office of Management and Budget

Appendix VI: GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

In addition to the individuals named above, Tom Beall, Tim Bober, Sara Daleski, Janet Dolen, Clifton G. Douglas Jr., Denise Fantone, Rob Gebhart, Tim Guinane, Lois Hanshaw, Shirley Jones, Andrea Levine, Donna Miller, Mark Ramage, Beverly Ross, Cynthia Saunders, Wesley Sholtes, Lou V.B. Smith, Andrew Stephens, and Sabrina Streagle made key contributions to this report.