Regulatory Reform

Agencies' Section 610 Review Notices Often Did Not Meet Statutory Requirements Gao ID: T-GGD-98-64 February 12, 1998

Section 610 of the Regulatory Flexibility Act of 1980 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 large number of small entities. As part of the review process, federal agencies must 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. The Unified Agenda of Federal Regulatory and Deregulatory Actions, which is published twice yearly in the Federal Register, is a convenient way for agencies to publish the required notices. The Unified Agenda consolidates information on regulatory activities under development throughout the federal government and is, consequently, voluminous--typically covering more than 1,300 pages in the Federal Register. This testimony discusses attempts by federal agencies to use the Unified Agenda to satisfy the act's requirements.

GAO noted that: (1) 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 GAO to review the November 1996 edition of the Agenda; (2) in GAO's April 1997 report resulting from that review it 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; (3) those 21 entries were from 3 of the 59 agencies with actions listed in the Agenda--the Department of Labor (DOL), the Department of Transportation (DOT), and the Small Business Administration; (4) GAO examined all 21 of these entries and concluded that none of them met all of the requirements that section 610 of the RFA established; (5) some of the entries involved rules that the agencies said would not have a significant effect on small entities; (6) 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; (7) GAO updated its April 1997 report by examining the October 1997 edition of the Unified Agenda; (8) in this latest edition of the Agenda, there were 34 entries from 7 agencies with a Section 610 review notation following the title; (9) more than half of these 34 entries were from DOT; (10) GAO reviewed these 34 entries and concluded that 31 of them did not satisfy all of the notification requirements in the RFA; (11) 15 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; (12) 15 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; (13) 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; (14) GAO's examination of those entries indicated that satisfying the RFA's section 610 requirements does not appear to be that difficult; (15) 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 in the future; and (16) the agencies described the rules, noted why they were needed, and identified an agency contact to whom comments could be addressed.


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