[Congressional Record Volume 170, Number 139 (Monday, September 9, 2024)]
[Senate]
[Pages S5872-S5875]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GOVERNMENT ACCOUNTABILITY OFFICE LEGAL OPINION
Mr. CRUZ. Mr. President, I ask unanimous consent that the attached
legal opinion of the Government Accountability Office, no. B-336512,
titled ``Office of Management and Budget--Applicability of the
Congressional Review Act to Controller Alert CA-23-6, Enhancing
Transparency Through Use of the Investing in America Emblem on Signs,''
issued on August 29, 2024, be printed in the Congressional Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Decision
Matter of: Office of Management and Budget--Applicability of
the Congressional Review Act to Controller Alert CA-23-6,
Enhancing Transparency Through Use of the Investing in
America Emblem on Signs
File: B-336512
Date: August 29, 2024
digest
The Office of Management and Budget (OMB) issued an updated
Controller Alert entitled CA-23-6, Enhancing Transparency
Through Use of the Investing in America Emblem on Signs
(UPDATED) (Controller Alert). The Controller Alert was
directed to Chief Financial Officers across the federal
government and recommended actions for agencies to take, such
as adopting signage and public acknowledgement requirements
in the terms and conditions of financial assistance awards,
to promote openness and transparency of projects funded in
whole or in part by specified pieces of legislation.
The Congressional Review Act (CRA) requires that before a
rule can take effect, an agency must submit the rule to both
the House of Representatives and the Senate, as well as the
Comptroller General. CRA incorporates the Administrative
Procedure Act's (APA's) definition of a rule for this
purpose, with three exceptions. We conclude that the
Controller Alert is a rule for purposes of CRA because it
meets the APA definition of a rule, and no CRA exception
applies. Therefore, the Controller Alert is subject to CRA's
submission requirements.
decision
On February 24, 2023, the Office of Management and Budget
(OMB) published an updated Controller Alert entitled CA-23-6,
Enhancing Transparency Through Use of the Investing in
America Emblem on Signs (UPDATED) (Controller Alert).\1\ We
received a request for a decision as to whether the
Controller Alert is a rule for purposes of the Congressional
Review Act (CRA). Letter from Senator Ted Cruz to the
Comptroller General (June 20, 2024). We also received a
follow-up communication from Senator Cruz further explaining
his views. Letter from Senator Ted Cruz to the Comptroller
General (Aug. 1, 2024). As discussed below, we conclude that
the Controller Alert is a rule subject to CRA's submission
requirements.
Our practice when rendering decisions is to contact the
relevant agencies to obtain their legal views on the subject
of the request. GAO, GAO's Protocols for Legal Decisions and
Opinions, GAO-24-107329 (Washington, D.C.: Feb. 2024),
available at https://www.gao.gov/products/gao-24-107329.
Accordingly, we reached out to OMB to obtain the agency's
legal views. Letter from Assistant General Counsel, GAO, to
General Counsel, OMB (July 9, 2024). We received a response
from OMB on August 6, 2024. Letter from General Counsel, OMB
to Assistant General Counsel, GAO (Response Letter).
background
Controller Alert
According to OMB, Controller Alerts are designed to inform
Chief Financial Officers (CFOs) at agencies across the
federal government of financial issues that may require
attention, ``but do not constitute official guidance or
prescribe specific tasks for agencies beyond consideration of
appropriate steps to address the issue.'' Controller Alert,
at 1. The Controller Alert at issue here was intended to
``suggest strategies, including the use of public signage, to
increase the transparency of projects funded in whole or in
part'' by the American Rescue Plan Act of 2021 (ARPA), Pub.
L. No. 117-2, 135 Stat. 4 (Mar. 11, 2021); the Infrastructure
Investment and Jobs Act (IIJA), Pub. L. No. 117-58, 135 Stat.
429 (Nov. 15, 2021); the Creating Helpful Incentives to
Produce Semiconductors and Science Act of 2022 (CHIPS and
Science Act), Pub. L. No. 117-167, 136 Stat. 1366 (Aug. 9,
2022); the Inflation Reduction Act of 2022 (IRA), Pub. L. No.
117-169, 136 Stat. 1818 (Aug. 16, 2022); and ``other
appropriations as appropriate.'' Controller Alert, at 1.
Among the strategies recommended, the Controller Alert
encouraged agencies to develop signage and public
acknowledgement requirements to be included in the terms and
conditions of financial assistance awards provided through
the specified legislation, to develop public outreach
campaigns to communicate progress on projects funded through
the legislation, and to incorporate statements of
acknowledgement in published materials that cover activities
funded through the legislation. Id. at 2. For example, the
Controller Alert states that ``award terms and conditions
requirements should specify guidelines for use of the
official Investing in America emblem,'' ``should specify
guidelines for signage and communications materials to
identify the project as a
[[Page S5873]]
`project funded by [Insert name of the law],' '' and ``should
stipulate that costs associated with signage must be
reasonable and limited, and that recipients are encouraged to
use recycled or recovered materials when procuring signs.''
Id. at 2 (brackets in original). Further, the Controller
Alert notes that ``[s]igns should not be produced or
displayed if doing so results in unreasonable cost,
expense, or recipient burden.'' Id.
Additionally, the Controller Alert states that ``[w]hile
specific requirements regarding usage of signage must be
applied on an agency-by-agency and program-by-program basis,
Federal awarding agencies are strongly encouraged to seek
opportunities to employ'' the strategies explained in the
Controller Alert ``to the extent possible. . . .'' Id.
(footnote omitted).
The Controller Alert updated a previous Controller Alert
issued by OMB on August 22, 2022.\2\ According to OMB, the
2022 Controller Alert contained ``materially identical''
recommendations for agencies, but was only directed at
projects funded under IIJA. Response Letter, at 2.
The Congressional Review Act
CRA, enacted in 1996 to strengthen congressional oversight
of agency rulemaking, requires federal agencies to submit a
report on each new rule to both houses of Congress and to the
Comptroller General for review before a rule can take effect.
5 U.S.C. Sec. 801(a)(1)(A). The report must contain a copy of
the rule, ``a concise general statement relating to the
rule,'' and the rule's proposed effective date. Id. CRA
allows Congress to review and disapprove of federal agency
rules for a period of 60 days using special procedures. See 5
U.S.C. Sec. 802. If a resolution of disapproval is enacted,
then the new rule has no force or effect. 5 U.S.C.
Sec. 801(b)(1).
CRA adopts the definition of rule under the Administrative
Procedure Act (APA), 5 U.S.C. Sec. 551(4), which states that
a rule is ``the whole or a part of an agency statement of
general or particular applicability and future effect
designed to implement, interpret, or prescribe law or policy
or describing the organization, procedure, or practice
requirements of an agency.'' 5 U.S.C. Sec. 804(3). However,
CRA excludes three categories of rules from coverage: (1)
rules of particular applicability; (2) rules relating to
agency management or personnel; and (3) rules of agency
organization, procedure, or practice that do not
substantially affect the rights or obligations of non-agency
parties. Id.
OMB did not submit a CRA report to Congress or the
Comptroller General on the Controller Alert. In its response
to us, OMB stated that the Controller Alert was not a rule
for several reasons. First, OMB stated that the Controller
Alert does not satisfy the APA definition of rule. Response
Letter, at 3-6. Further, OMB stated that even if the
Controller Alert were a rule, it falls within two CRA
exceptions and is not subject to its submission requirements.
Id., at 6-9.
DISCUSSION
An agency action is subject to CRA if it meets the APA
definition of rule and no CRA exception applies. For the
reasons discussed below, we find that the Controller Alert as
a whole meets the APA definition of a rule and that no
exception applies. Therefore, it is subject to CRA's
submission requirements.
The Controller Alert Is a Rule as Defined by APA
The Controller Alert meets the APA definition of a rule.
First, the Controller Alert is an agency statement because it
is an announcement by OMB to agency CFOs across the
government. Controller Alert, at 1. We note that we have
previously found that OMB does not act as an agency where it
steps into the President's shoes in exercise of delegated
authority. B-333725, Mar. 17, 2022. However, when issuing the
Controller Alert, OMB was acting under its own authority, not
an authority delegated to it by the President. See also B-
335142, May 1, 2024 (finding that a joint memorandum issued
by the Department of Labor (DOL) and OMB was issued in their
respective capacities as agencies as defined by APA).
Therefore, OMB was acting as an agency subject to CRA when it
issued the Controller Alert.
Second, the Controller Alert is of future effect, as it
suggests prospective changes for agencies to make with
respect to federal funding agreements under the specified
legislation. Controller Alert, at 1. While the Controller
Alert does not have a stated effective date, it seeks to
``inform the [CFO] community of key issues where [OMB]
believes further action may be warranted . . .'' Id.
(emphasis added). Additionally, the Controller Alert suggests
actions for agencies to take with respect to future funding
agreements through forward-looking recommendations to
``develop'' and ``incorporate'' certain terms into those
agreements. Id. at 2.
Finally, the Controller Alert implements, interprets, or
prescribes policy and describes the organization, procedure,
or practice requirements of an agency. OMB argues that the
Controller Alert does not reflect a change in agency
discretion, and does not change official policy because it
replaced a similar alert issued in August 2022. Response
Letter, at 4. We have recognized that `` `a statement by an
agency that simply restates an established interpretation
`tread[s] no new ground' and `le[aves] the world just as it
found it, and thus cannot be fairly described as
implementing, interpreting, or prescribing law or policy.' ''
B-336217, Aug. 6, 2024 (quoting Golden & Zimmerman, LLC v.
Domenech, 599 F.3d 426, 432 (4th Cir. 2010) (alterations in
original)). In that decision, we determined that part of
Supervision and Regulation Letter 23-8 (SR 23-8) issued by
the Board of Governors of the Federal Reserve System (FRB)
restated established FRB policy regarding FRB's supervisory
nonobjection process. Id. However, SR 23-8 also
contained statements that went beyond what was in FRB's
earlier policy statements, including expanding the scope
of which entities were subject to its supervisory
nonobjection process and clarification of the process
through more detailed description of existing policy. Id.
While we determined that the portions of SR 23-8 that
largely restated existing policy would not satisfy this
element of the APA definition because they did not
prescribe new policy, the letter taken as a whole did
implement, interpret, or prescribe law or policy given
that there were additional provisions of SR 23-8 that went
beyond restating existing policy decisions. Id.
Similarly in this case, both the Controller Alert at issue
here and the 2022 Controller Alert apply to funding
agreements under IIJA. 2022 Controller Alert, at 1;
Controller Alert, at 1. With respect to IIJA, both Controller
Alerts contain many of the same recommendations relating to
signage, public acknowledgement, and communications
initiatives. For example, both ``strongly encourage[ ]''
agencies to develop ``signage and public acknowledgement
requirements'' ``for inclusion in the terms and conditions of
award agreements between agencies and recipients of'' awards
funded under the applicable legislation. Compare 2022
Controller Alert, at 1, with, Controller Alert, at 1-2.
Additionally, both state that ``[t]erms and conditions should
stipulate that costs associated with signage must be
reasonable and limited, and that recipients are encouraged to
use recycled or recovered materials when procuring signs.''
Compare 2022 Controller Alert, at 2, with, Controller Alert,
at 2. While the Controller Alert includes some additional
suggestions, with respect to the recommended actions for
funding agreements under IIJA, it largely restates
established OMB policy. For these recommendations under IIJA,
the Controller Alert does not satisfy the APA definition of
rule.
However, the updated Controller Alert is broader in its
coverage than the 2022 Controller Alert. While the 2022
Controller Alert applied only to IIJA, the Controller Alert
at issue here applies to several additional pieces of
legislation, including ARPA, the CHIPS and Science Act, and
IRA. Controller Alert, at 1. Though many of the provisions
contained within the Controller Alert mirror those in the
2022 Controller Alert, it expands the coverage to projects
funded under other significant pieces of legislation and
announces recommendations for a larger number of funding
agreements. As a result, these new recommendations do more
than merely restate existing policy.
As such, we must evaluate whether the recommendations for
agreements under statutes other than IIJA prescribe or
implement policy or describe agency procedure and practice
requirements. OMB stated in its response to us that the
Controller Alert does not satisfy this element of the APA
definition because in addition to merely restating existing
policy, it is also informational rather than prescriptive,
giving agencies ``complete discretion'' as to whether they
choose to adopt the recommendations. Response Letter, at 4-5.
We disagree.
While the Controller Alert states that it ``do[es] not
constitute official guidance or prescribe specific tasks for
agencies beyond consideration of appropriate steps to address
the issue,'' the Controller Alert urges agencies to change
their existing practices, both with respect to signage and
public acknowledgement requirements as well as for public
affairs and communications strategies, beyond what is
required by the underlying program laws. Controller Alert, at
1. The Controller Alert notes that ``[federal awarding
agencies are strongly encouraged to seek opportunities to
employ the following strategies, to the extent possible . .
.'' Id. (emphasis added). With respect to the signage and
public acknowledgement recommendations, the Controller Alert
provides new recommendations in terms that are more
prescriptive than informative. For example, the Controller
Alert makes the following recommendations: ``Federal award
terms and conditions requirements should specify guidelines
for use of the official Investing in America emblem,''
``[t]erms and conditions should stipulate that costs
associated with signage must be reasonable and limited, and
that recipients are encouraged to use recycled or recovered
materials when procuring signs,'' and ``a project award
funded by the Bipartisan Infrastructure Law should include
an acknowledgement that it is `funded by President Biden's
Bipartisan Infrastructure Law.' '' Id. at 2 (emphasis added).
With respect to the public affairs and communications
recommendations, the Controller Alert strongly encourages
agencies to ``[e]ngage agency public affairs and
communications offices to . . . develop public outreach
campaigns'' and ``incorporate statements of acknowledgement
in all published materials covering activities funded by
these laws.'' Controller Alert, at 2. These new agency
procedure and practice recommendations are similarly
prescriptive.
Taken together, we conclude that the Controller Alert's
recommendations for agreements under statutes other than IIJA
prescribe or implement policy and describe agency procedure
and practice requirements. These recommendations encourage
agencies
[[Page S5874]]
to change their existing practices by prescribing
requirements for the terms and conditions of federal awards
funded by legislation, such as ARPA, the CHIPS and Science
Act, and IRA, as well as for public relations and
communications strategies with regard to projects funded by
such legislation. See B-335115, Sept. 26, 2023 (finding that
memoranda satisfied this element of the definition by
establishing new policies and procedures that did not exist
prior to the memoranda).\3\ Accordingly, we conclude that the
Controller Alert meets the APA definition of a rule.
CRA Exceptions
After determining that the Controller Alert satisfies the
APA definition of a rule, we must next determine whether any
of CRA's three exceptions apply. For the reasons described
below, we determine that part of the Controller Alert
satisfies the exception for rules relating to agency
management or personnel, but other parts do not satisfy any
of the exceptions. As a result, the Controller Alert as a
whole is subject to CRA's submission requirements.
Rule of Particular Applicability
The Controller Alert is not a rule of particular
applicability. Rules of particular applicability are ``those
rules that are addressed to an identified entity and also
address actions that entity may or may not take, taking into
account facts and circumstances specific to the entity.'' B-
334995, July 6, 2023. See also B-335781, Feb. 27, 2024; B-
330843, Oct. 22, 2019. Here, the Controller Alert applies
generally to agencies across the federal government \4\
without individualized requirements accounting for
differences in the facts or circumstances of agencies or
program applicants. Therefore, the Controller Alert is not a
rule of particular applicability.
Rule of Agency Management or Personnel
Second, the Controller Alert's recommendations for public
affairs and communications initiatives satisfy the exception
for rules relating to agency management or personnel, but the
recommendations for signage and public acknowledgement do
not.
We have previously held that CRA's exception for rules of
agency management or personnel applies to rules relating to
``purely internal agency matters.'' B-335142, May 1, 2024. In
reaching that conclusion, we have relied on cases
interpreting a similar APA exception that exempts matters
relating to agency management or personnel from notice and
comment rulemaking. See 5 U.S.C. Sec. 553(a)(2). In addition,
we've relied on the description of rules of personnel in
Attorney General's Manual on the Administrative Procedure Act
as those that describe matters relating to agency personnel
as including ``rules as to leaves of absence, vacation,
travel, etc.'' U.S. Department of Justice, Attorney General's
Manual on the Administrative Procedure Act (Manual), at 18
(1947).
We relied on the Manual in B-335115, Sept. 26, 2023, to
find that three Department of Defense (DOD) memoranda dealing
with notification requirements for pregnant service members,
leave to access reproductive care, and travel and
transportation allowances to access reproductive care fell
into the exception for rules relating to management or
personnel. We determined that the memoranda clearly and
directly implicated agency personnel matters such as
communications between employees and managers, leave, and
benefits. Id. We also noted that courts have held this
exemption applies even if the agency action has an effect on
the outside public when agency management or personnel issues
are clearly and directly implicated Id. (citing Stewart v.
Smith, 673 F.2d 485, 496-97 (D.C. Cir. 1982)).
Neither APA nor CRA define ``management'' within the
context of the exception, nor have courts interpreted such
term. However, we note that ``management'' is defined as
``the conducting or supervising of something.'' Merriam-
Webster, Management, available at https://www.merriam-
webster.com/dictionary/management (last visited Aug. 26,
2024). See also Dictionary.com, Management, available at
https://www.dictionary.com/browse/management (last visited
Aug. 26, 2024) (defining management as ``the act or manner of
managing; handling, direction, or control''). Therefore,
rules relating to management include those related to
controlling, directing, or supervising internal management
issues.
Many of the functions OMB carries out for the government
fall into the category of agency management. See B-334221,
Feb. 9, 2023 (noting that APA's analogous exception relating
to internal management of an agency'' `should not be
construed as intra-agency only; it includes functions of
internal Federal management, such as most of the functions of
the Bureau of the Budget [now OMB] '' (citing Manual, at
18)). Here, the Controller Alert's suggestions relate
primarily to two categories of actions: (1) public affairs
and communications initiatives, and (2) public signage and
acknowledgement requirements.
With respect to the first category, the public affairs and
communications initiatives fall under the exception. The
suggestions for these initiatives recommend that agencies
``engage agency public affairs and communications offices to
. . . develop public outreach campaigns'' and ``incorporate
statements of acknowledgement in all published materials
covering activities funded by these laws.'' Controller Alert,
at 2. The Controller Alert notes that examples of these
materials include press releases, project fact sheets,
reports, agency-developed project websites, flyers,
brochures, blogs, and editorials. Id.
Like our decision in B-334221, Feb. 9, 2023, the Controller
Alert contemplates the direction of internal communications
staff by recommending particular job tasks and allocation of
resources. While it is possible that a third-party may
eventually receive agency communications adopting these
suggestions, an agency's communications strategy regarding
the programs it implements is a purely internal matter.
Similarly, as the definition of management suggests, the
direction of agency communications personnel squarely falls
within the conducting or supervising of interagency business.
As a result, the portions of the Controller Alert
recommending public affairs and communications strategies
under the applicable laws satisfy this exception.
With respect to the second category of recommendations, the
Controller Alert's suggestions relating to signage and public
acknowledgment requirements do not satisfy the requirements
of this exception. Unlike the recommendations relating to
public affairs and communications, the Controller Alert's
recommendations regarding signage and public acknowledgement
do not primarily relate to agency management or personnel;
instead, they implicate requirements that would be imposed on
program grantees or recipients beyond what is required by
law. As a result, the Controller Alert as a whole does not
fall into this exception.
Rule of Agency Organization, Procedure, or Practice With No
Substitutional Non-Agency Parties
Finally, the Controller Alert does not satisfy the
exception for rules of agency organization, procedure, or
practice with no substantial effect on the rights or
obligations of non-agency parties. This exception was modeled
off the APA exception to notice-and-comment requirements for
rules of agency organization, procedure, or practice. 5
U.S.C. Sec. 553(b)(A). Some courts have limited this
exception only to rules that do not have a substantial impact
on non-agency parties. See e.g., B-336217, Aug. 6, 2024; B-
330190, Dec. 19, 2018 (citing Brown Express, Inc., v. United
States, 607 F.2d 695, 702 (5th Cir. 1979)). The text of the
CRA exception adopts this limitation. 5 U.S.C.
Sec. 804(3)(C).
First, we must determine whether the Controller Alert is a
rule of agency organization, procedure, or practice. Rules
that satisfy this requirement are ``limited to an agency's
methods of operation or how the agency organizes its internal
operations.'' B-336217, Aug. 6, 2024. Like with rules
relating to agency management or personnel, this exception
also applies to interagency rules. B-334221, Feb. 9, 2023
(concluding, in part, that nothing in the text of CRA
suggests that CRA's exception for rules of agency management
or personnel applies only to intra-agency rules and that the
exception is couched to include any rule relating to agency
management or personnel). Here, the Controller Alert provides
recommendations for agencies on the implementation of funding
agreements under the specified statutes. Controller Alert, at
1-2. These determinations regarding the contents of funding
agreements describe the agency's procedures and practices for
carrying out their programs.
Next, we look at whether the Controller Alert substantially
affects the rights or obligations of non-agency parties. We
have previously said that with respect to this prong of the
exception, ``the critical question is whether the agency
action alters the rights or interests of the regulated
entities.'' B-329926, Sept. 10, 2018. Similarly, courts have
determined that ``[a]n agency rule that modifies substantive
rights and interests can only be nominally procedural, and
the exemption for such rules of agency procedure cannot
apply.'' United States Department of Labor v. Kast Metals
Corp., 744 F.2d 1145, 1153 (5th Cir. 1984).
OMB stated in its response to us that the Controller Alert
does not substantially affect the rights or obligations of
non-agency parties because it is directed only at agencies
and their internal decisions, rather than funding recipients
or third parties. Response Letter, at 8. OMB noted that any
potential downstream effects on non-agency parties did not
change the underlying legal rights or obligations of those
parties. Id., at 9.
We agree that the Controller Alert differs from other
federal funding requirements we have analyzed under this
exception because it directs these recommendations to other
agencies, rather than directly imposing new conditions of
federal funding on recipients or applicants. See, e.g. B-
334032, Dec. 15, 2022 (finding that a non-binding Federal
Highway Administration memorandum setting out preferred
projects for federal funding had the substantial effect of
directing non-agency parties' behavior). Nonetheless, the
legislative history of CRA instructs us to consider both the
direct and indirect effects of a given action when assessing
its impacts. 142 Cong. Rec. H3005 (daily ed. Mar. 28, 1996)
(statement of Rep. McIntosh) (``A statement of agency
procedure or practice with a truly minor, incidental effect
on non-agency parties is excluded from the definition of a
rule. Any other effect, whether direct or indirect, on the
rights or obligations of non-agency parties is a substantial
effect within the meaning of the exception. Thus, this
exception should be read narrowly and resolved in favor of
non-agency parties who can demonstrate that the rule will
have a nontrivial effect on their rights or obligations``);
see also Batterton v. Marshall, 648 F.2d 694, n.58
[[Page S5875]]
(D.C. Cir. 1980) (``Where necessary, the court will look
behind the particular label applied by the agency to
challenge action in order to discern its real intent and
effect''). Therefore, we must look at the effects of the
Controller Alert.
When an agency's actions ``directly determine whether and
in what amount an entity may receive funding under the
program,'' that action has a substantial effect on the rights
or obligations of those non-agency parties. B-334146, June 5,
2023. In that decision, we examined documents from the United
States Department of Agriculture (USDA) implementing four new
financial assistance programs. Id. The documents, which
included notices of funding opportunities, a request for
applications, and a policy memorandum, established
eligibility and application requirements for the new
programs, defined selection criteria, imposed reporting
requirements, and set funding ranges, among other things. Id.
There, we determined that the documents failed to satisfy
this exception because they each had a substantial effect on
non-agency parties. Id. We had previously concluded that
agency rules amending or clarifying the requirements of
financial assistance programs had a substantial effect on
non-agency parties. See B-333732, July 28, 2022. Because the
USDA documents went even further than amending or clarifying
existing requirements in establishing new programs, the
documents clearly had a substantial effect on the rights or
obligations of non-agency parties. B-334146, June 5, 2023.
Here, the Controller Alert does not establish federal
funding programs under any of the statutes it covers.
However, by ``strongly'' encouraging agencies to adopt
the recommendations in the Controller Alert, it is
intended to and has led agencies to incorporate new
signage and public acknowledgement requirements into the
terms and conditions of federal funding agreements beyond
what is required by law. Controller Alert, at 1. Following
issuance of the Controller Alert, several agencies
implemented terms and conditions of their funding
agreements that directly adopted its language.\5\ For
example, a notice of funding opportunity issued by the
Federal Railroad Administration contains the following
language recommended by the Controller Alert: ``In
addition, recipients employing project signage are
required to use the official Investing in America emblem
in accordance with the Official Investing in America
Emblem Style Guide. Costs associated with signage and
public acknowledgements must be reasonable and limited.
Signs or public acknowledgements should not be produced,
displayed, or published if doing so results in
unreasonable cost, expense, or recipient burden.
Recipients are encouraged to use recycled or recovered
materials when procuring signs.'' Compare 89 Fed. Reg.
42594 (May 15, 2024), with, Controller Alert, at 2.\6\
The adoption of the recommendations in the Controller
Alert, in turn, results in the imposition of additional
requirements on recipients of federal funding under the
specified legislation. The Controller Alert has a substantial
effect on the rights or interests of non-agency parties by
providing new criteria for the receipt of federal funding.
See B-334146, June 5, 2023; B-333732, July 28, 2022. Where
agencies adopt the Controller Alert's recommendations, such
recommendations have a substantial effect on non-agency
parties. See B-275178, July 3, 1997 (finding that the Forest
Service's Tongass National Forest Land and Resource
Management Plan had a substantial impact on non-agency
parties even though there were two layers of implementation
involved before the Plan affected any given area of the
forest).
Because this exception requires us to consider both the
direct and indirect effects of an agency action, and because
the imposition of new conditions on the receipt of federal
funding has a substantial effect on the rights or obligations
of non-agency parties, the Controller Alert fails to satisfy
the exception.
Based on the foregoing, we conclude that the Controller
Alert is a rule of agency organization, procedure, or
practice, but that it does not satisfy the exception because
it has a substantial effect on the rights or obligation of
non-agency parties. Therefore, no CRA exception applies.
conclusion
The Controller Alert meets the APA definition of a rule and
no exception applies. Therefore, the Controller Alert is
subject to CRA's requirement that it be submitted to Congress
before it can take effect.
Edda Emmanuelli Perez,
General Counsel.
endnotes
1. The Controller Alert is available at https://
www.cfo.gov/assets/files/CA-23-06__
Enhancing%20Transparency %20Through %20Use%20of
%20the%20Investing %20in%20 America%20Emblem
%20on%20Signs.pdf (last visited Aug. 26, 2024).
2. The original Controller Alert, OMB, Enhancing
Transparency Through Use of the Building a Better America
Emblem on Construction Signs (Aug. 22, 2022)(2022 Controller
Alert), is available at https://www.cfo.gov/assets/files/
Controller%20Alert%20 EnhancingTransparency Bipartisan
InfrastructureLaw.pdf (last visited Aug. 26, 2024).
3. The legislative history of CRA is also instructive when
evaluating what actions are intended to be covered by the
Act. It states: ``The committees intend this chapter to be
interpreted broadly with regard to the type and scope of
rules that are subject to conressional review.'' 142 Cong.
Rec. E571, E578 (daily ed. Apr. 19, 1996) (statement of Rep.
Hyde). The legislative history also notes that the committees
were concerned, in particular, with ``general statements of
policy, `guidelines,' and agency policy and procedure
manuals'' being given legal effect without review. Id.
4. The Controller Alert is directed to agency CFOs.
Controller Alert, at 1. Twenty-four federal agencies across
the government currently have CFOs designated under the Chief
Financial Officers Act. 31 U.S.C. Sec. 901(b).
5. Although here we cite the impact of the Controller Alert
on non-agency behavior, such evidence is not necessary to
determine that an agency action has a substantial effect on
non-agency parties for purposes of the third exception. For
example, we have previously held that ``[w]hen an agency rule
actively attempts to induce the regulated community to take
preferred steps, the rule has a substantial impact on the
regulated community and does not qualify for the third CRA
exception.'' B-334032, Dec. 15, 2022. Moreover, in many
instances, the type of direct evidence that we have here will
not be readily available at the time of our review.
6. Other agencies have also adopted provisions of the
Controller Alert. For example, the Environmental Protection
Agency (EPA) requires that ``[f]or construction projects
funded in whole or in part by the Bipartisan Infrastructure
Law or Inflation Reduction Act through [EPA], recipients must
place a sign at construction sites that display the Investing
in America emblem and identify the project as a `project
funded by President Biden's Bipartisan Infrastructure Law' or
`project funded by President Biden's Inflation Reduction
Act.' '' Compare EPA, Investing in America Signage, available
at https://www.epa.gov/invest/investing-america-
signage (last visited Aug. 26, 2024), with, Controller Alert,
at 2.
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