H.R. 3263, The Regulation Reform Act of 1979

Legislation has been proposed which would require that regulatory agencies evaluate carefully and comprehensively the effects of proposed and existing major rules. The bill defines a major rule as one likely to result in a $100 million effect on the economy, or causes a substantial change in costs or prices for individual industries, geographic regions or levels of government, or is determined by an agency to have a major impact. As presently drafted, the bill is not clear about the meaning of a $100 million effect. Because continuing inflation would result in an increasing number of regulations coming under this standard, it is suggested that the impact standard be indexed to an appropriate inflation index, so that the monetary threshold will be implemented in constant dollars. A proposed rule falling short of having a $100 million impact nationally might still be of crucial importance to a small industry, State, or local governments. Therefore, rules with such concentrated impacts should be carefully analyzed. The definition of a major rule should also include rules that the proposing agency estimates will have a substantial impact on the structure of an affected industry. The current effects of existing rules should be evaluated in the light of experience and changing circumstances. Since regulatory review may produce adverse effects, revisions and new regulations should provide for a realistic lead time and a schedule for compliance that takes into account the planning horizon of industries. An explicit role for Congressional oversight is not set forth. GAO believes this is essential because the proposed legislation would not permit judicial review of the regulatory analysis provided for in this bill. Congress should be prepared to provide the added resources necessitated by the imposition of greater analytic requirements on regulatory agencies. Title II of the bill addresses issues concerning administrative law judge (ALJ) selection and evaluation. GAO believes the legislation could be improved by clearly stating the purpose of ALJ performance appraisal.