Regulatory Burden

Some Agencies' Claims Regarding Lack of Rulemaking Discretion Have Merit Gao ID: GGD-99-20 January 8, 1999

GAO recently reported what officials from 15 private sector companies said were the most problematic federal regulations for their businesses. (See GAO/GGD-97-2, Nov. 1996, and GAO/GGD-97-26R, Dec. 1996.) The 125 concerns cited by these officials included the perceived high cost of regulatory compliance; excessive paperwork; unreasonable, unclear, and inflexible requirements; and severe penalties for noncompliance. GAO also obtained responses from the 19 federal agencies that issued the regulations underlying the companies' concerns. This report examines agency assertions that some of the 125 regulatory concerns were, at least in part, attributable to the underlying statutes. For each of the 27 concerns that GAO focused on, this report determines (1) the amount of discretion the underlying statutes gave the rulemaking agencies in developing the regulatory requirements that the agencies had attributed to the underlying statutes, (2) whether the regulatory requirements at issue were within the authority granted by the underlying statutes, and (3) whether the rulemaking agencies could have developed regulatory approaches that would have been less burdensome to the regulated entities while still meeting the underlying statutory requirements.

GAO noted that: (1) the statutes underlying 13 of the 27 regulatory concerns that it examined gave the rulemaking agencies no discretion in establishing the regulatory requirements at issue; (2) in these cases, the underlying statutes specifically stated what the regulated entities must do, and, by inference, what the related regulations must require; (3) the underlying statutes for 12 of the 27 concerns gave the agencies some discretion in developing the regulatory requirements at issue; (4) in these cases, the agencies often had no rulemaking discretion with regard to certain issues but had some or broad discretion regarding other issues; (5) the agencies had broad discretion in developing the regulatory requirements at issue in the two remaining concerns; (6) the regulatory provisions the agencies developed in relation to all of the 27 company concerns were within the authorities granted by the underlying statutes; (7) for those concerns in which the underlying statements gave the agencies no discretion as to how the associated regulations could be developed, those regulations were consistent with, and often mirrored, the specific requirements in the statutes; (8) for those concerns in which the statutes gave the agencies some or broad rulemaking discretion, the regulations did not appear to exceed the discretion allowed in those statutes; (9) for the 13 concerns for which GAO concluded agencies had no discretion, it also concluded that there were no less burdensome regulatory approaches available to the agencies that would have met the requirements of the statutes; (10) GAO could not determine whether less burdensome regulatory approaches were available for the remaining 14 of the 27 concerns, for which the statutes gave the agencies some or broad rulemaking discretion; (11) to make those determinations, GAO would have had to conduct a detailed examination of the implementation of each of the regulatory provisions that the agencies had said were attributable to the underlying statutes and the implications of alternative approaches--analyses that would have required time and resource commitments that were beyond the scope of this review; and (12) although this review focused on only 27 regulatory concerns, GAO believes that it can offer insights into some broader issues.

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