Regulatory Flexibility Act
Congress Should Revisit and Clarify Elements of the Act to Improve Its Effectiveness Gao ID: GAO-06-998T July 20, 2006Federal regulation is one of the basic tools of government used to implement public policy. In 1980, the Regulatory Flexibility Act (RFA) was enacted in response to concerns about the effect that regulations can have on small entities, including small businesses, small governmental jurisdictions, and certain small not-for-profit organizations. Congress amended RFA in 1996, and the President issued Executive Order 13272 in 2002, to strengthen requirements for agencies to consider the impact of their proposed rules on small entities. However, concerns about the regulatory burden on small entities persist, prompting legislative proposals such as H.R. 682, the Regulatory Flexibility Improvements Act, which would amend RFA. At the request of Congress, GAO has prepared many reports and testimonies reviewing the implementation of RFA and related policies. On the basis of that body of work, this testimony (1) provides an overview of the basic purpose and requirements of RFA, (2) highlights the main impediments to the Act's implementation that GAO's reports identified, and (3) suggests elements of RFA that Congress might consider amending to improve the effectiveness of the Act. GAO's prior reports and testimonies contain recommendations to improve the implementation of RFA and related regulatory process requirements.
RFA established a principle that agencies should endeavor to fit their regulatory requirements to the scale of small entities. Among other things, RFA requires regulatory agencies to assess the impact of proposed rules on small entities, consider regulatory alternatives that will accomplish the agencies' objectives while minimizing the impacts on small entities, and ensure that small entities have an opportunity to participate in the rulemaking process. Further, RFA requires agencies to review existing rules within 10 years of promulgation that have or will have a significant impact on small entities to determine whether they should be continued without change or amended or rescinded to minimize their impact on small entities. RFA also requires the Chief Counsel for Advocacy of the Small Business Administration (Office of Advocacy) to monitor agencies' compliance. In response to Executive Order 13272, the Office of Advocacy published guidance in 2003 on how to comply with RFA. In response to congressional requests, GAO reviewed agencies' implementation of RFA and related requirements on many occasions, with topics ranging from specific statutory provisions to the overall implementation of RFA. Generally, GAO found that the Act's results and effectiveness have been mixed; its reports illustrated both the promise and the problems associated with RFA. On one hand, RFA and related requirements clearly affected how federal agencies regulate and produced benefits, such as raising expectations regarding the analytical support for proposed rules. However, GAO also found that compliance with RFA varied across agencies, within agencies, and over time. A recurring finding was that uncertainties about RFA's requirements and key terms, and varying interpretations by federal agencies, limited the Act's application and effectiveness. GAO's past work suggests that Congress might wish to review the procedures, definitions, exemptions, and other provisions of RFA to determine whether changes are needed to better achieve the purposes Congress intended. In particular, GAO's reports indicate that the full promise of RFA may never be realized until Congress revisits and clarifies elements of the Act, especially its key terms, or provides an agency or office with the clear authority and responsibility to do so. Attention should also be paid to the domino effect that an agency's initial determination of whether RFA is applicable to a rulemaking has on other statutory requirements, such as preparing compliance guides for small entities and periodically reviewing existing regulations. GAO also believes that Congress should reexamine not just RFA but how all of the various regulatory reform initiatives fit together and influence agencies' regulatory actions. Recent developments, such as the Office of Advocacy's RFA guidance, may help address some of these long-standing issues and merit continued monitoring by Congress
GAO-06-998T, Regulatory Flexibility Act: Congress Should Revisit and Clarify Elements of the Act to Improve Its Effectiveness
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Testimony:
Before the SubCommittee on Commercial and Administrative Law, Committee
on the Judiciary, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 11:30 a.m. EDT:
Thursday, July 20, 2006:
Regulatory Flexibility Act:
Congress Should Revisit and Clarify Elements of the Act to Improve Its
Effectiveness:
Statement of J. Christopher Mihm:
Managing Director, Strategic Issues:
GAO-06-998T:
GAO Highlights:
Highlights of GAO-06-998T, a testimony before the Subcommittee on
Commercial and Administrative Law, Committee on the Judiciary, House of
Representatives
Why GAO Did This Study:
Federal regulation is one of the basic tools of government used to
implement public policy. In 1980, the Regulatory Flexibility Act (RFA)
was enacted in response to concerns about the effect that regulations
can have on small entities, including small businesses, small
governmental jurisdictions, and certain small not-for-profit
organizations. Congress amended RFA in 1996, and the President issued
Executive Order 13272 in 2002, to strengthen requirements for agencies
to consider the impact of their proposed rules on small entities.
However, concerns about the regulatory burden on small entities
persist, prompting legislative proposals such as H.R. 682, the
Regulatory Flexibility Improvements Act, which would amend RFA.
At the request of Congress, GAO has prepared many reports and
testimonies reviewing the implementation of RFA and related policies.
On the basis of that body of work, this testimony (1) provides an
overview of the basic purpose and requirements of RFA, (2) highlights
the main impediments to the Act‘s implementation that GAO‘s reports
identified, and (3) suggests elements of RFA that Congress might
consider amending to improve the effectiveness of the Act. GAO‘s prior
reports and testimonies contain recommendations to improve the
implementation of RFA and related regulatory process requirements.
What GAO Found:
RFA established a principle that agencies should endeavor to fit their
regulatory requirements to the scale of small entities. Among other
things, RFA requires regulatory agencies to assess the impact of
proposed rules on small entities, consider regulatory alternatives that
will accomplish the agencies‘ objectives while minimizing the impacts
on small entities, and ensure that small entities have an opportunity
to participate in the rulemaking process. Further, RFA requires
agencies to review existing rules within 10 years of promulgation that
have or will have a significant impact on small entities to determine
whether they should be continued without change or amended or rescinded
to minimize their impact on small entities. RFA also requires the Chief
Counsel for Advocacy of the Small Business Administration (Office of
Advocacy) to monitor agencies‘ compliance. In response to Executive
Order 13272, the Office of Advocacy published guidance in 2003 on how
to comply with RFA.
In response to congressional requests, GAO reviewed agencies‘
implementation of RFA and related requirements on many occasions, with
topics ranging from specific statutory provisions to the overall
implementation of RFA. Generally, GAO found that the Act‘s results and
effectiveness have been mixed; its reports illustrated both the promise
and the problems associated with RFA. On one hand, RFA and related
requirements clearly affected how federal agencies regulate and
produced benefits, such as raising expectations regarding the
analytical support for proposed rules. However, GAO also found that
compliance with RFA varied across agencies, within agencies, and over
time. A recurring finding was that uncertainties about RFA‘s
requirements and key terms, and varying interpretations by federal
agencies, limited the Act‘s application and effectiveness.
GAO‘s past work suggests that Congress might wish to review the
procedures, definitions, exemptions, and other provisions of RFA to
determine whether changes are needed to better achieve the purposes
Congress intended. In particular, GAO‘s reports indicate that the full
promise of RFA may never be realized until Congress revisits and
clarifies elements of the Act, especially its key terms, or provides an
agency or office with the clear authority and responsibility to do so.
Attention should also be paid to the domino effect that an agency‘s
initial determination of whether RFA is applicable to a rulemaking has
on other statutory requirements, such as preparing compliance guides
for small entities and periodically reviewing existing regulations. GAO
also believes that Congress should reexamine not just RFA but how all
of the various regulatory reform initiatives fit together and influence
agencies‘ regulatory actions. Recent developments, such as the Office
of Advocacy‘s RFA guidance, may help address some of these long-
standing issues and merit continued monitoring by Congress.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-998T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact J. Christopher Mihm at
(202) 512-6806 or mihmj@gao.gov.
[End of Section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to contribute to your review of H.R. 682,
the Regulatory Flexibility Improvements Act, and your continuing
general agenda to review administrative law, process, and procedure
issues. In my statement today, I will summarize findings from our past
body of work on the Regulatory Flexibility Act (RFA),[Footnote 1] which
H.R. 682 would amend, and related policies. Specifically, I will
provide an overview of the basic purpose and requirements of RFA,
highlight the main impediments to the Act's implementation that our
work identified, and suggest elements of RFA that Congress might
consider amending to improve the effectiveness of the Act.
In brief, RFA was enacted in response to concerns about the effect that
federal regulations can have on small entities. Among other things, RFA
prompts regulatory agencies to analyze the potential effects of their
rules on small entities, consider alternatives to reduce the burden of
those rules, and ensure that small entities have an opportunity to
participate in the rulemaking process. In response to congressional
requests, we have reviewed RFA's implementation on many occasions over
the years. Our reports illustrated both the promise and the problems
associated with the Act, with a recurring theme being the varying
interpretations of RFA's requirements by federal agencies. Although
some progress has been made to address issues we identified, the full
promise of RFA may never be realized until Congress clarifies key terms
and definitions in the Act, such as "a substantial number of small
entities," or provides an agency or office with the clear authority and
responsibility to do so. It is also important to keep in mind the
domino effect that an agency's initial determination of whether RFA is
applicable to a rulemaking has on other statutory requirements, such as
preparing compliance guides for small entities and periodically
reviewing existing regulations.
RFA and Related Requirements Are Intended to Promote Attention to
Regulations' Effects on Small Entities:
Federal regulation is one of the basic tools of government. Agencies
issue thousands of rules and regulations each year to implement
statutes enacted by Congress. The public policy goals and benefits of
regulations include, among other things, ensuring that workplaces, air
travel, foods, and drugs are safe; that the nation's air, water, and
land are not polluted; and that the appropriate amount of tax is
collected. The costs of these regulations are estimated to be in the
hundreds of billions of dollars, and the benefits estimates are much
higher.[Footnote 2] Given the size and impact of federal regulation,
Congresses and Presidents have taken a number of actions to refine and
reform the regulatory process within the past 25 years.[Footnote 3]
In September 1980, RFA was enacted in response to concerns about the
effect that federal regulations can have on "small entities," defined
by the Act as including small businesses, small governmental
jurisdictions, and certain small not-for-profit organizations. As we
have previously noted, small businesses are a significant part of the
nation's economy, and small governments make up the vast majority of
local governments in the United States.[Footnote 4] However, there have
been concerns that these small entities may be disproportionately
affected by federal agencies' regulatory requirements. RFA established
the principle that agencies should endeavor, consistent with the
objectives of applicable statutes, to fit regulatory and informational
requirements to the scale of these small entities.
RFA requires regulatory agencies--including the independent regulatory
agencies--to assess the potential impact of their rules on small
entities. Under RFA, an agency must prepare an initial regulatory
flexibility analysis at the time a proposed rule is issued unless the
head of the agency determines that the proposed rule would not have a
"significant economic impact upon a substantial number of small
entities."[Footnote 5] Further, agencies must consider alternatives to
their proposed rules that will accomplish the agencies' objectives
while minimizing the impacts on small entities. The Act also requires
agencies to ensure that small entities have an opportunity to
participate in the rulemaking process and requires the Chief Counsel
for Advocacy of the Small Business Administration (Office of Advocacy)
to monitor agencies' compliance. Among other things, RFA also requires
regulatory agencies to review, within 10 years of promulgation,
existing rules that have or will have a significant impact on small
entities to determine whether they should be continued without change
or amended or rescinded to minimize their impact on small entities.
Congress amended RFA with the Small Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA). [Footnote 6] SBREFA made certain agency
actions under RFA judicially reviewable. Other provisions in SBREFA
added new requirements. For example, SBREFA requires agencies to
develop one or more compliance guides for each final rule or group of
related final rules for which the agency is required to prepare a
regulatory flexibility analysis, and it requires agencies to provide
small entities with some form of relief from civil monetary penalties.
SBREFA also requires the Environmental Protection Agency (EPA) and the
Occupational Safety and Health Administration to convene advocacy
review panels before publishing an initial regulatory flexibility
analysis.
More recently, in August 2002, President George W. Bush issued
Executive Order 13272, which requires federal agencies to establish
written procedures and policies on how they would measure the impact of
their regulatory proposals on small entities and to vet those policies
with the Office of Advocacy. The order also requires agencies to notify
the Office of Advocacy before publishing draft rules expected to have a
significant small business impact, to consider its written comments on
proposed rules, and to publish a response with the final rule. The
order requires the Office of Advocacy to provide notification of the
requirements of the Act and training to all agencies on how to comply
with RFA. The Office of Advocacy published guidance on the Act in 2003
and reported training more than 20 agencies on RFA compliance in fiscal
year 2005.[Footnote 7]
GAO Reviews Found that Varying Interpretations of RFA Requirements
Hampered Effective Implementation of the Act:
In response to congressional requests, we have reviewed agencies'
implementation of RFA and related requirements on many occasions over
the years, with topics ranging from specific statutory provisions to
the overall implementation of RFA.[Footnote 8] Generally, we found that
the Act's overall results and effectiveness have been mixed. This is
not unique to RFA; we found similar results when reviewing other
regulatory reform initiatives, such as the Unfunded Mandates Reform Act
of 1995.[Footnote 9] Our past reports illustrated both the promise and
the problems associated with RFA. RFA and related requirements have
clearly affected how federal agencies regulate, and we identified
important benefits of these initiatives, such as increasing attention
on the potential impacts of rules and raising expectations regarding
the analytical support for proposed rules. However, a recurring theme
in our findings was that uncertainties about RFA's requirements and
varying interpretations of those requirements by federal agencies
limited the Act's application and effectiveness.
Some of the topics we reviewed, and our main findings regarding
impediments to RFA's implementation, are illustrated in the following
examples:
* We examined 12 years of annual reports from the Office of Advocacy
and concluded that the reports indicated variable compliance with RFA
across agencies, within agencies, and over time--a conclusion that the
Office of Advocacy also reached in subsequent reports on implementation
of RFA (on the 20th and 25th anniversaries of RFA's
enactment).[Footnote 10] We noted that some agencies had been
repeatedly characterized as satisfying RFA requirements, but other
agencies were consistently viewed as recalcitrant. Agencies'
performance also varied over time or varied by offices within the
agencies. We said that one reason for agencies' lack of compliance with
RFA requirements was that the Act did not expressly authorize the Small
Business Administration (SBA) to interpret key provisions and did not
require SBA to develop criteria for agencies to follow in reviewing
their rules.
* We examined RFA implementation with regard to small governments and
concluded that agencies were not conducting as many regulatory
flexibility analyses for small governments as they might, largely
because of weaknesses in the Act.[Footnote 11] Specifically, we found
that each agency we reviewed had a different interpretation of key RFA
provisions. We also pointed out that RFA allowed agencies to interpret
whether their proposed rules affected small governments and did not
provide sufficiently specific criteria or definitions to guide agencies
in deciding whether and how to assess the impact of proposed rules on
small governments.
* We reviewed implementation of small business advocacy review panel
requirements under SBREFA and found that the panels that had been
convened were generally well received.[Footnote 12] However, we also
said that implementation was hindered--specifically, that there was
uncertainty over whether panels should have been convened for some
proposed rules--by the lack of agreed-upon governmentwide criteria as
to whether a rule has a significant impact.
* We examined other related requirements regarding agencies' policies
for the reduction and/or waiver of civil penalties on small entities
and the publication of small entity compliance guides.[Footnote 13]
Again, we found that implementation varied across and within agencies,
with some of the ineffectiveness and inconsistency traceable to
definitional problems in RFA. All of the agencies' penalty relief
policies that we reviewed were within the discretion that Congress
provided, but the policies varied considerably. Some policies covered
only a portion of agencies' civil penalty enforcement actions, and some
provided small entities with no greater penalty relief than large
entities. The agencies varied in how key terms were defined. Similarly,
we concluded that the requirement for small entity compliance guides
did not have much of an impact, and its implementation also varied
across, and sometimes within, agencies.
* RFA is unique among statutory requirements with general applicability
in having a provision, under section 610, for the periodic review of
existing rules. However, it is not clear that this look-back provision
in RFA has been consistently and effectively implemented. In a series
of reports on agencies' compliance with section 610, we found that the
required reviews were not being conducted.[Footnote 14] Meetings with
agencies to identify why compliance was so limited revealed significant
differences of opinion regarding key terms in RFA and confusion about
what was required to determine compliance with RFA. At the request of
the House Committee on Energy and Commerce, we have begun new work
examining the subject of regulatory agencies' retrospective reviews of
their existing regulations, including those undertaken in response to
Section 610, and will report on the results of this engagement in the
future.
We have not yet examined the effect of Executive Order 13272 and the
Office of Advocacy's subsequent guidance and training for agencies on
implementing RFA. Therefore, we have not done any evaluations that
would indicate whether or not those developments are helping to address
some of our concerns about the effectiveness of RFA.
Key Terms and Provisions of RFA Should Be Revisited and Clarified:
While RFA has helped to influence how agencies regulate small entities,
we believe that the full promise of the Act has not been realized. The
results from our past work suggest that the Subcommittee might wish to
review the procedures, definitions, exemptions, and other provisions of
RFA, and related statutory requirements, to determine whether changes
are needed to better achieve the purposes Congress intended. The
central theme of our prior findings and recommendations on RFA has been
the need to revisit and clarify elements of the Act, particularly its
key terms. Although more recent developments, such as the Office of
Advocacy's detailed guidance to agencies on RFA compliance, may help
address some of these long-standing issues, current legislative
proposals, such as H.R. 682, make it clear that concerns remain about
RFA's effectiveness--for example, that agencies are not assessing the
impacts of their rules or identifying less costly regulatory approaches
as expected under RFA--and the impact of federal regulations on small
entities.
Unclear terms and definitions can affect the applicability and
effectiveness of regulatory reform requirements. We have frequently
cited the need to clarify the key terms in RFA, particularly
"significant economic impact on a substantial number of small
entities." RFA's requirements do not apply if an agency head certifies
that a rule will not have a "significant economic impact on a
substantial number of small entities." However, RFA neither defines
this key phrase nor places clear responsibility on any party to define
it consistently across the government. It is therefore not surprising,
as I mentioned earlier, that we found compliance with RFA varied from
one agency to another and that agencies had different interpretations
of RFA's requirements.
We have recommended several times that Congress provide greater clarity
concerning the key terms and provisions of RFA and related
requirements, but to date Congress has not acted on many of these
recommendations. The questions that remain unresolved on this topic are
numerous and varied, including:
* Does Congress believe that the economic impact of a rule should be
measured in terms of compliance costs as a percentage of businesses'
annual revenues, the percentage of work hours available to the firms,
or other metrics?
* If so, what percentage or other measure would be an appropriate
definition of "significant?"
* Should agencies take into account the cumulative impact of their
rules on small entities, even within a particular program area?
* Should agencies count the impact of the underlying statutes when
determining whether their rules have a significant impact?
* What should be considered a "rule" for purposes of the requirement in
RFA that agencies review rules with a significant impact within 10
years of their promulgation?
* Should agencies review rules that had a significant impact at the
time they were originally published, or only those that currently have
that effect?
* Should agencies conduct regulatory flexibility analyses for rules
that have a positive economic impact on small entities, or only for
rules with a negative impact?
It is worth noting that the Office of Advocacy's 2003 RFA compliance
guide, while reiterating that RFA does not define certain key terms,
nevertheless provides some suggestions on the subject. Citing parts of
RFA's legislative history, the guidance indicates that exact standards
for such definitions may not be possible or desirable, and that the
definitions should vary depending on the context of each rule and
preliminary assessments of the rule's impact. For example, the guidance
points out that "significance" can be seen as relative to the size of a
business and its competitors, among other things. However, the guidance
does identify factors that agencies might want to consider when making
RFA determinations. In some ways, this mirrors other aspects of RFA,
such as section 610, where Congress did not explicitly define a
threshold for an agency to determine whether an existing regulation
should be maintained, amended, or eliminated but rather identified the
factors that an agency must consider in its reviews.[Footnote 15] We do
not yet know whether or to what extent the guidance and associated
training has helped agencies to clarify some of the long-standing
confusion about RFA requirements and terms. Additional monitoring of
RFA compliance may help to answer that question. Congress might also
want to consider whether the factors that the Office of Advocacy
suggested to help agencies define key terms and requirements are
consistent with congressional intent or would benefit from having a
statutory basis.
I also want to point out the potential domino effect of agencies'
determinations of whether or not RFA applies to their rules. This is
related to the lack of clarity on key terms mentioned above, the
potential for agencies to waive or delay analysis under RFA, and the
limitation of RFA's applicability to only rules for which there was a
notice of proposed rulemaking. The impact of an agency head's
determination that RFA is not applicable is not only that the initial
and final regulatory flexibility analyses envisioned by the Act would
not be done, but also that other related requirements would not apply.
These requirements include, for example, the need for agencies to
prepare small entity compliance guides, convene SBREFA advocacy panels,
and conduct periodic reviews of certain existing regulations. While we
recognize, as provided by the Administrative Procedure Act, that
notices of proposed rulemaking are not always practical, necessary, or
in the public interest, this still raises the question of whether such
exemptions from notice and comment rulemaking should preclude future
opportunities for public participation and other related procedural and
analytical requirements. Our prior work has shown that substantial
numbers of rules, including major rules (for example, those with an
impact of $100 million or more), are promulgated without going through
a notice of proposed rulemaking.[Footnote 16]
We also believe it is important for Congress to reexamine, not just
RFA, but how all of the various regulatory reform initiatives fit
together and influence agencies' regulatory actions. As I previously
testified before this Subcommittee, we have found the effectiveness of
most regulatory reform initiatives to be limited and that they merit
congressional attention.[Footnote 17] In addition, we have stated that
this is a particularly timely point to reexamine the federal regulatory
framework, because significant trends and challenges establish the case
for change and the need to reexamine the base of federal government and
all of its existing programs, policies, functions, and
activities.[Footnote 18]
Our September 2000 report on EPA's implementation of RFA illustrated
the importance of considering the bigger picture and interrelationships
between regulatory reform initiatives.[Footnote 19] On the one hand, we
reported about concerns regarding the methodologies EPA used in its
analyses and its conclusions about the impact on small businesses of a
proposed rule to lower certain reporting thresholds for lead and lead
compounds.[Footnote 20] The bigger picture, though, was our finding
that after SBREFA took effect EPA's four major program offices
certified that almost all (96 percent) of their proposed rules would
not have a significant impact on a substantial number of small
entities. EPA officials told us this was because of a change in EPA's
RFA guidance prompted by the SBREFA requirement to convene an advocacy
review panel for any proposed rule that was not certified. Prior to
SBREFA, EPA's policy was to prepare a regulatory flexibility analysis
for any rule that the agency expected to have any impact on small
entities. According to EPA officials, the SBREFA panel requirement made
continuation of the agency's more inclusive RFA policy too costly and
impractical. In other words, a statute Congress enacted to strengthen
RFA caused the agency to use the discretion permitted in RFA to conduct
fewer regulatory flexibility analyses.[Footnote 21]
In closing, I would reiterate that we believe Congress should revisit
aspects of RFA and that our prior reports have indicated ample
opportunities to refine the Act. Despite some progress in implementing
RFA and other regulatory reform initiatives since 1980, it is clear
from the introduction of H.R. 682 and related bills that Members of
Congress remain concerned about the impact of regulations on small
entities and the extent to which the rulemaking process encourages
agencies to consider ways to reduce the burdens of new and existing
rules, while still achieving the objectives of the underlying statutes.
Mr. Chairman, this concludes my prepared statement. Once again, I
appreciate the opportunity to testify on these important issues. I
would be pleased to address any questions you or other Members of the
Subcommittee might have at this time.
Contact and Acknowledgements:
If additional information is needed regarding this testimony, please
contact J. Christopher Mihm, Managing Director, Strategic Issues, on
(202) 512-6806 or at mihmj@gao.gov. Tim Bober, Jason Dorn, Andrea
Levine, Latesha Love, Joseph Santiago, and Michael Volpe contributed to
this statement.
[End of section]
Related GAO Products:
Federal Rulemaking: Past Reviews and Emerging Trends Suggest Issues
That Merit Congressional Attention. GAO-06-228T. Washington, D.C.:
November 1, 2005.
Regulatory Reform: Prior Reviews of Federal Regulatory Process
Initiatives Reveal Opportunities for Improvements. GAO-05-939T.
Washington, D.C.: July 27, 2005.
Regulatory Flexibility Act: Clarification of Key Terms Still Needed.
GAO-02-491T. Washington, D.C.: March 6, 2002.
Regulatory Reform: Compliance Guide Requirement Has Had Little Effect
on Agency Practices. GAO-02-172. Washington, D.C.: December 28, 2001.
Federal Rulemaking: Procedural and Analytical Requirements at OSHA and
Other Agencies. GAO-01-852T. Washington, D.C.: June 14, 2001.
Regulatory Flexibility Act: Key Terms Still Need to Be Clarified. GAO-
01-669T. Washington, D.C.: April 24, 2001.
Regulatory Reform: Implementation of Selected Agencies' Civil Penalty
Relief Policies for Small Entities. GAO-01-280. Washington, D.C.:
February 20, 2001.
Regulatory Flexibility Act: Implementation in EPA Program Offices and
Proposed Lead Rule. GAO/GGD-00-193. Washington, D.C.: September 20,
2000.
Regulatory Reform: Procedural and Analytical Requirements in Federal
Rulemaking. GAO/T-GGD/OGC-00-157. Washington, D.C.: June 8, 2000.
Regulatory Flexibility Act: Agencies' Interpretations of Review
Requirements Vary. GAO/GGD-99-55. Washington, D.C.: April 2, 1999.
Federal Rulemaking: Agencies Often Published Final Actions Without
Proposed Rules. GAO/GGD-98-126. Washington, D.C.: August 31, 1998.
Regulatory Reform: Implementation of the Small Business Advocacy Review
Panel Requirements. GAO/GGD-98-36. Washington, D.C.: March 18, 1998.
Regulatory Reform: Agencies' Section 610 Review Notices Often Did Not
Meet Statutory Requirements. GAO/T-GGD-98-64. Washington, D.C.:
February 12, 1998.
Regulatory Flexibility Act: Agencies' Use of the October 1997 Unified
Agenda Often Did Not Satisfy Notification Requirements. GAO/GGD-98-61R.
Washington, D.C.: February 12, 1998.
Regulatory Flexibility Act: Agencies' Use of the November 1996 Unified
Agenda Did Not Satisfy Notification Requirements. GAO/GGD/OGC-97-77R.
Washington, D.C.: April 22, 1997.
Regulatory Flexibility Act: Status of Agencies' Compliance. GAO/GGD-94-
105. Washington, D.C.: April 27, 1994.
Regulatory Flexibility Act: Inherent Weaknesses May Limit Its
Usefulness for Small Governments. GAO/HRD-91-16. Washington, D.C.:
January 11, 1991.
FOOTNOTES
[1] 5 U.S.C. §§ 601-612.
[2] The Office of Management and Budget reported that the estimated
quantified and monetized annual benefits of the major federal
regulations it reviewed from October 1995 through September 2005 range
from $94 billion to $449 billion, while estimated annual costs range
from $37 billion to $44 billion. See Office of Management and Budget,
Draft 2006 Report to Congress on the Costs and Benefits of Federal
Regulations (Washington, D.C.: April 2006).
[3] See GAO, Regulatory Reform: Prior Reviews of Federal Regulatory
Process Initiatives Reveal Opportunities for Improvements, GAO-05-939T
(Washington, D.C.: July 27, 2005) for summary descriptions of major
regulatory reform initiatives implemented since 1980.
[4] GAO, Regulatory Reform: Implementation of the Small Business
Advocacy Review Panel Requirements, GAO/GGD-98-36 (Washington, D.C.:
Mar. 18, 1998).
[5] RFA generally applies only where notice and comment rulemaking
under the Administrative Procedure Act (APA) is required. When
promulgating a final rule, agencies must also prepare a final
regulatory flexibility analysis unless the agency finds that the rule
will not have a significant economic impact on a substantial number of
small entities.
[6] 5 U.S.C. § 601 note.
[7] See U.S. Small Business Administration, Office of Advocacy, A Guide
for Government Agencies: How to Comply with the Regulatory Flexibility
Act (Washington, D.C.: May 2003).
[8] A list of related GAO products appears at the end of this
statement.
[9] 2 U.S.C. §§ 658-658(g), 1501-1571. See GAO, Federal Rulemaking:
Past Reviews and Emerging Trends Suggest Issues That Merit
Congressional Attention, GAO-06-228T (Washington, D.C.: Nov. 1, 2005)
and GAO-05-939T.
[10] See GAO, Regulatory Flexibility Act: Status of Agencies'
Compliance, GAO/GGD-94-105 (Washington, D.C.: Apr. 27, 1994).
[11] See GAO, Regulatory Flexibility Act: Inherent Weaknesses May Limit
Its Usefulness for Small Governments, GAO/HRD-91-16 (Washington, D.C.:
Jan. 11, 1991).
[12] See GAO, Regulatory Reform: Implementation of the Small Business
Advocacy Review Panel Requirements, GAO/GGD-98-36 (Washington, D.C.:
Mar. 18, 1998).
[13] See GAO, Regulatory Reform: Implementation of Selected Agencies'
Civil Penalty Relief Policies for Small Entities, GAO-01-280
(Washington, D.C.: Feb. 20, 2001), and Regulatory Reform: Compliance
Guide Requirement Has Had Little Effect on Agency Practices, GAO-02-172
(Washington, D.C.: Dec. 28, 2001).
[14] See, for example, GAO, Regulatory Flexibility Act: Agencies'
Interpretations of Review Requirements Vary, GAO/GGD-99-55 (Washington,
D.C.: Apr. 2, 1999).
[15] In conducting their reviews of existing rules under section 610,
agencies are to consider the following factors: (1) the continuing need
for the rule; (2) the nature of complaints or comments received
concerning the rule from the public; (3) the complexity of the rule;
(4) the extent to which the rule overlaps, duplicates, or conflicts
with other federal rules and, to the extent feasible, with state and
local government rules; and (5) the length of time since the rule has
been evaluated or the degree to which technology, economic conditions,
or other factors have changed since adoption of the rule.
[16] See, for example, GAO, Federal Rulemaking: Agencies Often
Published Final Actions Without Proposed Rules, GAO/GGD-98-126
(Washington, D.C.: Aug. 31, 1998).
[17] GAO-06-228T.
[18] See GAO, 21st Century Challenges: Reexamining the Base of the
Federal Government, GAO-05-325SP (Washington, D.C.: February 2005) and
GAO-05-939T.
[19] See GAO, Regulatory Flexibility Act: Implementation in EPA Program
Offices and Proposed Lead Rule, GAO/GGD-00-193 (Washington, D.C.: Sept.
20, 2000).
[20] EPA had certified that the proposed rule would not have a
significant impact and, therefore, did not trigger RFA's analytical and
procedural requirements. Although we raised questions, we concluded
that the analytic methods that EPA's program office used in its
original and revised economic analysis, as well as the conclusions the
office drew as a result of those analyses, were within the discretion
provided by both RFA and EPA guidance.
[21] We made no new recommendations in GAO/GGD-00-193, but we referred
to our prior recommendations, noting that clarifying what Congress
intends the term "significant economic impact on a substantial number
of small entities" to mean would make the implementation of RFA more
consistent and help to prevent concerns about how agencies are
implementing the Act.
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