Federal Rulemaking: Agencies Often Published Final Actions Without
Proposed Rules (Letter Report, 08/31/1998, GAO/GGD-98-126).
Federal agencies issue more than 4,000 regulatory actions each year on
everything from the timing of bridge openings to the permissible levels
of contaminants in drinking water. Agencies are required to (1) publish
a notice of proposed rulemaking in the Federal Register; (2) allow
interested persons an opportunity to provide "written data, views, or
arguments;" and (3) publish the final rule 30 days before it becomes
effective. Agencies are allowed to issue final rules without notices of
proposed rulemaking in certain cases, such as when the agency determines
for "good cause" that notice and comment procedures are "impracticable,
unnecessary, or contrary to the public interest." GAO has previously
reported that agencies have published a number of final regulatory
actions without having published notices of proposed rulemaking. This
report (1) identifies the extent to which agencies published final
regulatory actions without notices of proposed rulemaking during 1997
and the characteristics of those cases, (2) describes the reasons that
agencies gave for not publishing notices, and (3) discusses the
implications of publishing final actions without notices of proposed
rulemaking.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-98-126
TITLE: Federal Rulemaking: Agencies Often Published Final Actions
Without Proposed Rules
DATE: 08/31/1998
SUBJECT: Proposed legislation
Federal regulations
Agency proceedings
Legislative procedures
Reporting requirements
Executive orders
Regulatory agencies
Small business assistance
Government information dissemination
Administrative law
IDENTIFIER: National Performance Review
Federal Agency Major Rules
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GAO/GGD-98-126
Cover
================================================================ COVER
Report to Congressional Committees
August 1998
FEDERAL RULEMAKING - AGENCIES
OFTEN PUBLISHED FINAL ACTIONS
WITHOUT PROPOSED RULES
GAO/GGD-98-126
Federal Rulemaking
(410221)
Abbreviations
=============================================================== ABBREV
APA - Administrative Procedure Act
ACUS - Administrative Conference of the United States
DOC - Department of Commerce
DOT - Department of Transportation
EPA - Environmental Protection Agency
FAA - Federal Aviation Administration
FCC - Federal Communications Commission
HHS - Department of Health and Human Services
HUD - Department of Housing and Urban Development
NPR - National Performance Review
NPRM - Notice of Proposed Rulemaking
OIRA - Office of Information and Regulatory Affairs
OMB - Office of Management and Budget
OSHA - Occupational Safety and Health Administration
RFA - Regulatory Flexibility Act of 1980
RISC - Regulatory Information Service Center
SBREFA - Small Business Regulatory Enforcement Fairness Act of 1996
UMRA - Unfunded Mandates Reform Act of 1995
USDA - Department of Agriculture
Letter
=============================================================== LETTER
B-278880
August 31, 1998
The Honorable Fred Thompson
Chairman, Committee on Governmental Affairs
United States Senate
The Honorable Christopher Bond
Chairman, Committee on Small Business
United States Senate
The Honorable David McIntosh
Chairman, Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs
Committee on Government Reform and Oversight
House of Representatives
The Honorable George W. Gekas
Chairman, Subcommittee on Commercial and
Administrative Law
Committee on the Judiciary
House of Representatives
Federal agencies issue more than 4,000 regulatory actions each year
on topics ranging from the timing of bridge openings to the
permissible levels of certain contaminants in drinking water.\1 The
basic process by which federal agencies develop and issue regulations
is spelled out in section 553 of the Administrative Procedure Act of
1946 (APA).\2 Among other things, the APA requires agencies to (1)
publish a notice of proposed rulemaking (NPRM) in the Federal
Register; (2) allow interested persons an opportunity to participate
in the rulemaking process by providing "written data, views, or
arguments"; and (3) publish the final rule 30 days before it becomes
effective. The APA allows agencies to issue final rules without the
use of NPRMs in certain cases, such as when the agency determines for
"good cause" that notice and comment procedures are "impracticable,
unnecessary, or contrary to the public interest." Although the good
cause exception provides agencies with needed flexibility to dispense
with notice and comment procedures in appropriate circumstances, the
APA's legislative history and case law suggest that the exception is
to be narrowly construed. When agencies use the good cause
exception, the APA requires agencies to include a brief statement of
their reasons for doing so in the preamble to the final rule when it
is issued.\3
In several previous assignments, we reported that agencies had
published a number of final regulatory actions without having
published NPRMs for those actions. To explore this subject further,
you requested that we (1) identify the extent to which agencies
published final regulatory actions without NPRMs during calendar year
1997, and the characteristics of those cases; (2) describe the
reasons that the agencies gave for not publishing NPRMs; and (3)
discuss the implications of publishing final actions without NPRMs.
We addressed these issues by, among other things, examining a
representative sample of all final rulemaking actions that were
published in the Federal Register in 1997.
--------------------
\1 Throughout this report, we use the term "actions" to refer to the
items agencies publish in the "Rules and Regulations" section of the
Federal Register because not all of those items are rules. We also
refer to the actions published in that section, including interim and
direct final rules, as "final" actions because they are published for
legal effect, in contrast to those items published in the "Proposed
Rules" section regarding anticipated agency rulemaking.
\2 5 U.S.C. 553.
\3 In this report, the "preamble" refers to the supplementary
information that is printed in the Federal Register before the
revisions to the text of the Code of Federal Regulations.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
We estimate that about half of the 4,658 final regulatory actions
published in the Federal Register during 1997 were published without
NPRMs. Seven agencies accounted for about 70 percent of both the
final actions in our sample and the actions without NPRMs. Most of
the actions without NPRMs appeared to involve administrative or
technical issues with limited applicability. However, 11 of the 61
final rules published during 1997 that were "major" rules under the
congressional review provisions of the Small Business Regulatory
Enforcement Fairness Act also did not have NPRMs.
The agencies most commonly cited the APA's good cause exception as
their justification for not publishing NPRMs for final regulatory
actions, frequently noting the time-sensitive nature of the actions
being taken. The agencies also appeared to use categorical
exceptions permitted in the APA (e.g., actions involving agencies'
management or personnel) and, to a much lesser extent, specific
statutory exceptions in other laws, as reasons for not publishing
NPRMs. When an agency uses the good cause exception, the APA
requires the agency to include a statement in the rule as to why an
NPRM was impracticable, unnecessary, or not in the public interest.
In the bulk of the good cause cases that we examined, the agencies
provided clear explanations in the preambles to the actions.
However, in other cases, the agencies' explanations in the preambles
for why NPRMs were not used were not so clear or understandable. For
example, in some of the actions, the agencies only made broad
assertions in the preambles that an NPRM would delay the issuance of
rules that were, in some general sense, in the public interest.
The APA recognizes that NPRMs are not always practical, necessary, or
in the public interest. Sometimes, public safety or other factors
require rules to be issued quickly. NPRMs may also be unnecessary or
not in the public interest when minor, noncontroversial actions are
being promulgated, or for other reasons. However, publishing rules
without NPRMs generally limits the public's opportunity to
participate in and have an impact on the regulatory decisions that
agencies make and may restrict the ability of agencies to obtain new
perspectives on their rules. Also, final actions that are published
without NPRMs are not subject to statutory analytical or procedural
requirements in the Regulatory Flexibility Act and other statutes
that are triggered by the publication of a notice. At least two
pieces of pending legislation would, if enacted, add to these current
NPRM-triggered requirements. Some agencies specifically cited the
absence of an NPRM as the reason they did not have to evaluate the
impact on small entities of some of their rules under the Regulatory
Flexibility Act.
BACKGROUND
------------------------------------------------------------ Letter :2
The APA provides for both formal and informal rulemaking procedures.
Formal rulemaking is used in ratemaking proceedings and in a limited
number of other cases in which rules are required by statute to be
made "on the record" after an opportunity for a trial-type agency
hearing. Because few statutes require on-the-record hearings, formal
rulemaking is used infrequently.
Informal rulemaking, also known as notice and comment rulemaking, has
become standard practice for most agency rulemaking proceedings. In
informal rulemaking, the APA generally requires that the agency
publish an NPRM in the Federal Register containing (1) a statement of
the time, place, and nature of public rulemaking proceedings; (2)
reference to the legal authority under which the rule is proposed;
and (3) either the terms or substance of the proposed rule or a
description of the subjects and issues involved. After giving
"interested persons" an opportunity to comment on the proposed rule,
and after considering the public comments, the agency may then
publish the final rule, incorporating a general statement of its
basis and purpose. Although the APA does not specify the length of
this comment period, agencies commonly allow at least 30 days.
Finally, the act states that the rule cannot become effective until
at least 30 days after its publication unless (1) the rule grants or
recognizes an exemption or relieves a restriction, (2) the rule is an
interpretative rule or a statement of policy, or (3) the agency
determines that the rule should take effect sooner for good cause and
publishes that determination with the rule.
Other statutes also affect the APA informal rulemaking process. For
example, the congressional review provisions in the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA) require that
agencies submit all of their final rules to each House of Congress
and the Comptroller General before the rules take effect. SBREFA
also requires agencies to delay the effective dates of major rules
for at least 60 days after their publication in the Federal Register
or their submission to Congress, whichever is later.\4
Under SBREFA, Congress can disapprove those rules that it believes
are too burdensome, excessive, inappropriate, duplicative, or
otherwise objectionable. Major rules can become effective in less
than 60 days under SBREFA if the agencies issue the rules without
NPRMs, based on the use of the APA's good cause exception to the
notice and comment requirements.\5
In addition to these statutory requirements, Executive Order 12866
also affects the informal rulemaking process. Under the executive
order, the Office of Management and Budget's (OMB) Office of
Information and Regulatory Affairs (OIRA) is identified as "the
repository of expertise concerning regulatory issues, including
methodologies and procedures that affect more than one agency . . .
." The executive order also makes OIRA responsible for providing
"meaningful guidance and oversight" to ensure that each agency's
regulatory actions are consistent with applicable law, the
president's priorities, and the principles in the order. Finally,
the executive order requires OIRA to review all significant
regulatory actions from executive departments and agencies (other
than independent regulatory agencies). The order defines
"significant regulatory actions" as ones that may (1) have an annual
effect on the economy of $100 million or more or have other adverse
economic effects; (2) create a serious inconsistency or interfere
with an action planned or taken by another agency; (3) materially
alter the budgetary impact of entitlements, grants, user fees, or
loan programs or alter the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues. According to
data from the Regulatory Information Service Center (RISC), OIRA
reviewed about 500 regulatory actions in 1997, of which 237 were
final actions.\6
--------------------
\4 SBREFA defines a "major" rule as one that the Administrator of the
Office of Management and Budget's Office of Information and
Regulatory Affairs finds has resulted in or is likely to result in
(1) an annual effect on the economy of $100 million or more; (2) a
major increase in costs or prices for consumers, individual
industries, government agencies, or geographic regions; or (3)
significant adverse effects on competition, employment, investment,
productivity, innovation, or the ability of U.S.-based enterprises to
compete with foreign-based enterprises in domestic and export
markets.
\5 For a discussion of this issue, see Congressional Review Act:
Update on Implementation and Coordination (GAO/T-OGC-98-55, June 17,
1998).
\6 RISC is part of the General Services Administration and works
closely with OMB to provide information to the president, Congress,
and the public about federal regulations. RISC maintains a database
that includes information on all regulatory actions reviewed by OIRA.
EXCEPTIONS TO NPRM
REQUIREMENT
---------------------------------------------------------- Letter :2.1
Although the APA generally requires agencies to publish NPRMs before
promulgating a final rule, the act provides exceptions to this
requirement. For example, the APA states that the notice and comment
procedures generally do not apply when an agency finds, for "good
cause," that those procedures are "impracticable, unnecessary, or
contrary to the public interest." When agencies use the good cause
exception, the act requires that they explicitly say so and provide a
rationale for the exception's use when the rule is published in the
Federal Register. The APA also provides explicit exceptions to the
NPRM requirement for certain categories of regulatory actions, such
as rules dealing with military or foreign affairs; agency management
or personnel; or public property, loans, grants, benefits, or
contracts. Further, the APA says that the NPRM requirements do not
apply to interpretive rules; general statements of policy; or rules
of agency organization, procedure, or practice. In addition to the
APA exceptions, Congress sometimes includes specific exemptions from
notice and comment procedures in other statutes. For example,
section 161(d) under title I of the Federal Agriculture Improvement
and Reform Act of 1996 instructed the Secretary of Agriculture and
the Commodity Credit Corporation to issue regulations not later than
90 days after the date of enactment of the title, without regard to
the notice and comment provisions of section 553 of the APA.\7 An
agency's invocation of an exception to notice and comment procedures
is subject to judicial review.
The legislative history of the APA makes it clear that Congress did
not believe that the act's good cause exception to the notice and
comment requirements should be used as an "escape clause." According
to the Senate committee report accompanying the APA, a "true and
supported or supportable finding of necessity or emergency must be
made and published" when an agency uses the good cause exception.\8
Also, as previously noted, federal agencies' use of the good cause
exception is subject to judicial review. After having reviewed the
totality of circumstances, the courts can and sometimes do determine
that the agencies' reliance on the good cause exception was not
authorized under the APA.\9 The case law has generally reinforced the
view that the good cause exception should be "narrowly construed."\10
The APA's legislative history also indicates that Congress envisioned
agencies using the notice and comment procedures even in some cases
in which the act's exceptions applied, and some agencies have
indicated that they intend to do so. For example, in 1971, the
Secretary of Agriculture issued a statement of policy that said the
APA exceptions would be used "sparingly," and that it was the
Department's policy to "give notice of proposed rule making and to
invite the public to participate in rule making where not required by
law." The Administrative Conference of the United States (ACUS) also
encouraged the use of notice and comment procedures where not
strictly required, and recommended that Congress eliminate or narrow
several of the exceptions in the APA.\11
ACUS also encouraged agencies to use two procedures for
noncontroversial and expedited rulemaking actions that, although not
specifically mentioned in the APA, were designed not to involve
NPRMs.\12 One of these procedures, known as "direct final"
rulemaking, involves agency publication of a rule in the Federal
Register with a statement that the rule will be effective on a
particular date unless an adverse comment is received within a
specified period of time (e.g., 30 days). However, if an adverse
comment is filed, the direct final rule is withdrawn and the agency
may publish the rule as a proposed rule under normal NPRM
procedures.\13 Direct final rulemaking can be viewed as a particular
application of the APA good cause exception in which agencies claim
NPRMs are "unnecessary." One of the Vice-President's National
Performance Review (NPR) recommendations encouraged agencies to use
direct final rulemaking for noncontroversial rules.\14
ACUS also endorsed the use, in certain circumstances, of what is
known as "interim final" rulemaking, in which an agency issues a
final rule without an NPRM that is generally effective immediately,
but with a post-promulgation opportunity for the public to
comment.\15 If the public comments persuade the agency that changes
are needed in the interim final rule, the agency may revise the rule
by publishing a final rule reflecting those changes. Interim final
rulemaking can be viewed as another particular application of the
good cause exception in the APA, but with the addition of a comment
period after the rule has become effective.
--------------------
\7 Public Law No. 104-127, 110 Stat. 934-935 (1996).
\8 Senate Committee on the Judiciary, "Administrative Procedure Act:
Legislative History," Senate Document 248, 79th Congress, 2nd Session
(1946).
\9 For discussions of these court cases, see Ellen R. Jordan, "The
Administrative Procedure Act's `Good Cause' Exemption,"
Administrative Law Review, 36 (Spring 1984), pp. 113-178; and
Catherine J. Lanctot, "The Good Cause Exception: Danger to Notice
and Comment Requirements Under the Administrative Procedure Act,"
Georgetown Law Journal, 68 (February 1980), pp. 765-782.
\10 American Federation of Government Employees, AFL-CIO v. Block,
655 F.2d 1153, 1156 (D.C. Cir. 1981). See also Mobay Chemical
Corp. v. Gorsuch, 682 F.2d 419, 426 (3rd Cir.), cert. denied, 459
U.S. 988 (1982). In another case (Action on Smoking and Health v.
CAB, 713 F. 2d 795, 800 [D.C. Cir. 1983]), the court said that
allowing broad use of the good cause exception would "carve the heart
out of the statute."
\11 ACUS was established by statute as an independent agency in 1964
to promote improvements in the efficiency, adequacy, and fairness of
procedures by which federal agencies conduct regulatory programs,
administer grants and benefits, and perform related governmental
functions. ACUS was abolished in 1995.
\12 See recommendation 95-4 at 60 FR 43108 (Aug. 18, 1995).
\13 As will be discussed later in this report, the Environmental
Protection Agency's method of direct final rulemaking varies somewhat
from this general procedure.
\14 Improving Regulatory Systems: Accompanying Report of the
National Performance Review, Office of the Vice President, September
1993.
\15 ACUS said that "agencies should use post-promulgation comment
procedures (so called 'interim final rulemaking') for all legislative
rules that are issued without pre-promulgation notice and comment
because such procedures are either `impracticable' or `contrary to
the public interest.'"
PREVIOUS STUDIES INDICATED
FINAL RULES WERE ISSUED
WITHOUT NPRMS
---------------------------------------------------------- Letter :2.2
In several previous reviews of agencies' rulemaking actions, we
reported that agencies had not issued NPRMs before publishing certain
final rules. For example, in our January 1998 report on the extent
to which agencies documented changes made to their rules, we focused
on 82 significant final rules that OIRA reviewed between January 1,
1996, and March 1, 1997.\16 Because the documentation requirements in
Executive Order 12866 apply to both the proposed and final rulemaking
stages, we obtained a list of any related NPRMs for these final rules
from RISC. The RISC data indicated that there were 40 associated
proposed rules for the 82 final rules included in our review.
In February 1998, we reported on the implementation of the Unfunded
Mandates Reform Act of 1995 (UMRA) with regard to 110 economically
significant rules that were promulgated in the first 2 years of
UMRA's implementation, of which 66 were final rulemaking actions.\17
The RISC database and other information indicated that there were no
associated NPRMs for 18 of these 66 final actions.
In April 1998, we reported on the 122 major rules that agencies
submitted to us in the first 2 years of the congressional review
requirements in SBREFA (April 1996 through March 1998).\18 We noted
that 23 of these 122 major rules (19 percent) were issued without a
previous NPRM. Nine of these 23 rules were interim final rules, and
8 others were final rules based on previous interim final rules. Two
other rules were direct final rules. The remaining four rules were
notices published by the Department of Health and Human Services
related to the Medicare program for which the agency contended that
the statutes provided no discretion.
In one of the few quantitative analyses of federal agencies' use of
the NPRM exceptions, a study published in the Administrative Law
Journal in 1989 concluded that NPRMs were not published for about
one-third of the 2,190 regulatory actions in the "Rules and
Regulations" section of the Federal Register during a 6-month period
in 1987.\19 The study found that agencies invoked the good cause
exception in about one-quarter of the actions, and that about 9
percent of the actions were issued using NPRM exceptions other than
good cause.
--------------------
\16 Regulatory Reform: Changes Made to Agencies' Rules Are Not
Always Clearly Documented (GAO/GGD-98-31, Jan. 8, 1998).
\17 Unfunded Mandates: Reform Act Has Had Little Effect on Agencies'
Rulemaking Actions (GAO/GGD-98-30, Feb. 4, 1998). "Economically
significant" rules are those that have an annual effect on the
economy of $100 million or more or have other adverse economic
effects.
\18 Regulatory Reform: Major Rules Submitted for Congressional
Review During the First 2 Years (GAO/GGD-98-102R, Apr. 24, 1998).
\19 Juan J. Lavilla, "The Good Cause Exemption to Notice and Comment
Rulemaking Requirements Under the Administrative Procedure Act," The
Administrative Law Journal, 3 (Fall 1989), pp. 317-423.
OBJECTIVES, SCOPE, AND
METHODOLOGY
------------------------------------------------------------ Letter :3
The objectives of our review were to (1) identify the extent to which
agencies published final regulatory actions without NPRMs during
calendar year 1997, and the characteristics of those cases; (2)
describe the reasons that the agencies gave for not publishing NPRMs,
and (3) discuss the implications of publishing final regulatory
actions without NPRMs. To address the first objective and part of
the second objective, we used a commercial electronic Federal
Register database to develop a list of all 4,658 final regulatory
actions published in the "Rules and Regulations" section of the
Federal Register during 1997. We tested the reliability of the
database we used to generate our list of all final regulatory actions
by duplicating our search parameters using other Federal Register
databases, and the results were generally consistent.
Based on our previous work identifying and reviewing major and
significant rules and using database search parameters designed to
identify interim and direct final regulatory actions, we selected a
stratified sample of 250 final regulatory actions and analyzed their
regulatory histories to determine if they had been published without
NPRMs. The sample was composed of three strata to permit further
analyses on interim and direct final actions and major rules
submitted to us pursuant to the congressional review requirements in
SBREFA. One strata contained all 61 major rules published in 1997.
A second strata was a sample of 40 actions from the 718 interim and
direct final regulatory actions published in 1997. A third strata
was a sample of 149 actions from all other remaining final regulatory
actions published during 1997.\20 For the latter two strata, we
selected actions using a random-start systematic sampling procedure.
To determine whether NPRMs were published, we reviewed any preambles
for the final actions that were published; checked corresponding
entries in the Unified Agenda of Federal Regulatory and Deregulatory
Actions; and followed up on any cited notices, including notices for
related rules published before 1997.\21 We also compared our findings
with those of another quantitative study of NPRM rulemaking, and
obtained data on interim final and direct final rulemaking actions in
previous years.
To further address our second objective, we first reviewed the APA
and its legislative history, relevant court cases, and the general
procedural requirements that govern federal agency rulemaking. For
those actions that we determined were published without an NPRM, we
coded the reasons the agencies gave for not having NPRMs into one of
three types of NPRM exceptions--good cause, categorical, and
statute-specific. We also noted the clarity of agencies' good cause
explanations and how the agencies addressed certain regulatory reform
requirements (e.g., the Regulatory Flexibility Act) in these actions.
The results of our analysis are generalizable to final regulatory
actions published in 1997. They are not generalizable to regulatory
actions published in years other than 1997. Our estimates for 1997
are subject to some uncertainty or sampling error. Our estimate of
the number of 1997 final regulatory actions published without NPRMs
has a 95 percent confidence interval of �7 percent. In other words,
if we had reviewed all of the 4,658 final actions published during
1997, the chances are 95 out of 100 that the results obtained would
not differ from our sample estimate by more than � 7 percentage
points. Depending on the particular analysis of actions without
NPRMs, our estimates have confidence intervals ranging from � 1.5 to
� 15 percent around the estimate. Confidence intervals are reported
in subsequent sections of this report either in footnotes or in
parentheses following the percent estimate.
We supplemented our work addressing the second objective by
conducting the just described analysis on the 60 major and
significant rules without NPRMs identified in our previous work.\22
These 60 rules are not a sample, and confidence intervals cannot be
computed. Also, the results from our review of these rules are not
generalizable to the universe of all significant or major rules.
We obtained additional information on the reasons no NPRMs were
published from agency officials in four agencies with large numbers
and varieties of regulatory actions in our reviews of both the 1997
sample and the 60 rules identified from our previous work--the
Departments of Agriculture (USDA), Housing and Urban Development
(HUD), and Transportation (DOT), and the Environmental Protection
Agency (EPA). Our judgments regarding the clarity or
understandability of the agencies' explanations were subjective
determinations based on the language in the rulemaking preambles.
Although we reviewed the preambles of the rules in which agencies
relied on the good cause exception in order to note the agencies'
stated rationales for using the exception, we did not examine the
legality of any of these agency actions in this respect or determine
whether they were authorized under the APA.
We addressed the third objective by reviewing the analytical and
procedural requirements in existing statutes and pending regulatory
reform legislation, analyzing the individual regulatory actions
identified in our sample and previous jobs, and meeting with
cognizant agency officials.
We conducted our work between January 1998 and June 1998 at OMB,
USDA, HUD, DOT, and EPA headquarters in Washington, D.C., in
accordance with generally accepted government auditing standards. We
provided a draft of this report to the Director Designate of OMB; the
Secretaries of Agriculture, Housing and Urban Development, and
Transportation; and the Administrator of EPA for their review and
comment. Their views are presented at the end of this letter, along
with our evaluation.
--------------------
\20 We originally selected 150 actions for the third strata, but upon
detailed review of our sample, we determined that one of these
sampled actions had been actually and appropriately published under
the "Presidential Documents" section of the Federal Register, not the
"Rules and Regulations" section. This action was eliminated from our
sample because it was not in the population of interest and therefore
was outside of the scope of this review. Consequently, there were
149 sampled actions from the third strata and 250 actions in the
total sample.
\21 Since 1978, federal agencies have been required by executive
orders to publish agendas of regulatory and deregulatory activities.
The Unified Agenda is published in the Federal Register twice each
year by RISC and provides uniform reporting of data on the regulatory
activities under development throughout the federal government.
\22 The number of actions without an NPRM from all three previous
assignments is less than the sum of such actions in each assignment
because of overlaps in the rules covered. Also, because we used a
different methodology in this review, we discovered notices for some
of the regulatory actions in the previous assignments that we had
previously reported did not have NPRMs. This total set of 60 major
and significant rules from previous assignments included 12 rules
published in 1997 that were also part of our overall sample of final
regulatory actions.
ABOUT HALF OF THE FINAL ACTIONS
IN 1997 WERE PUBLISHED WITHOUT
NPRMS
------------------------------------------------------------ Letter :4
On the basis of our analysis, we estimated that agencies published
about half of the final regulatory actions during calendar year 1997
without NPRMs. Most of these actions without NPRMs were published by
seven agencies, and most appeared to involve routine, administrative,
or technical issues. However, nearly one-fifth of the major final
rules published during 1997 did not have NPRMs. Some data suggest
that the proportion of regulatory actions being published without
NPRMs may be increasing. Furthermore, the number of direct final
rules increased between 1992 and 1997.
MOST ACTIONS WITHOUT NPRMS
INVOLVED ROUTINE OR MINOR
ISSUES
---------------------------------------------------------- Letter :4.1
During calendar year 1997, federal agencies published 4,658 final
regulatory actions in the Federal Register. Analysis of our sample
of 250 of these actions indicated that about 51 percent, or 2,360,
were published without NPRMs. Therefore, applying the 95 percent
confidence interval of � 7 percent, we estimated that there were no
associated proposed rules for between 44 and 58 percent of the final
regulatory actions published during 1997. Within the overall sample,
there appeared to be differences in the extent to which different
types of final actions did not have proposed rules. For example,
nearly 63 (� 15) percent of the interim and direct final rules
published during 1997 did not have an associated NPRM, compared with
about 49 (� 8) percent of all other final actions.\23
As figure 1 shows, we estimated that seven agencies published about
70 (� 9) percent of the final regulatory actions without NPRMs in
1997. These agencies were DOT, the Department of Commerce (DOC),
EPA, USDA, the Department of Health and Human Services (HHS), the
Department of the Treasury (Treasury), and the Federal Communications
Commission (FCC). That these agencies accounted for the bulk of the
actions without NPRMs is not surprising given that these agencies
accounted for nearly three-quarters of all final regulatory actions
published in 1997.
Figure 1: Seven Agencies
Accounted for the Bulk of Final
Regulatory Actions Without
NPRMs in 1997
(See figure in printed
edition.)
Note: For estimated percentages of less than 10 percent, the
sampling error is � 5 percent. Estimated percentages of 10 percent
or more have sampling errors ranging from � 6 percent to � 9 percent.
Source: GAO analysis of a sample of Federal Register notices for
final regulatory actions.
The Unified Agenda of Federal Regulatory and Deregulatory Actions
classifies the priority of agencies' regulatory actions into five
categories of descending significance: (1) economically significant;
(2) other significant; (3) substantive, nonsignificant; (4) routine
and frequent; and (5) informational/administrative/other. Although
the agencies did not assign a priority to every action without an
NPRM in our sample, about a fifth of the actions without NPRMs were
"substantive," "significant," or "economically significant." Our
review of the actions in our sample also indicated that most of the
actions involved routine matters or minor amendments and corrections
to previously issued rules. For example, the actions without NPRMs
in our sample included the following:
-- DOC's National Marine Fishery Service issued a number of routine
regulatory actions that involved temporarily limiting the
harvesting of certain species of fish within particular economic
zones.
-- DOT's U.S. Coast Guard published a temporary final rule to
establish a safety zone during the Astoria Regatta fireworks
display on the Columbia River in Oregon.
-- The Department of Justice's Immigration and Naturalization
Service published a final rule to add the Missouri Botanical
Garden to the listing of American Institutions of Research.
-- The Federal Communications Commission issued a final rule
amending the Table of FM Allotments under Minnesota to add
Channel 290A to Belview, Minnesota, as that community's first
local broadcast service.
-- DOT's Federal Aviation Administration (FAA) published a direct
final rule to confirm the effective date of an amendment to
"Class E Airspace" in Sidney, Nebraska.
FAA also issued a number of "airworthiness directives" without NPRMs
that it described as "routine and frequent" rules involving very
specific adjustments in parts of particular aircraft. For example,
one such directive required replacement of the main gear box input
bevel pinion in Eurocopter France Model SA-360C helicopters. This
amendment was prompted by service reports of bevel pinion fatigue
cracking. However, in a number of other cases, FAA issued
airworthiness directives after publishing proposed rules.
--------------------
\23 As explained later in this report, although direct final
rulemaking was envisioned as a means by which agencies could publish
final rules without an NPRM, at least one agency published NPRMs at
the same time that direct final rules were published.
SOME MAJOR RULES DID NOT
HAVE NPRMS
---------------------------------------------------------- Letter :4.2
Although most of the regulatory actions without NPRMs in the sample
appeared to involve routine or minor issues, our previous work
indicated that some of the most significant regulatory actions that
agencies have published in recent years also did not have NPRMs. As
previously noted, our April 1998 review of 122 major rules submitted
to us during the first 2 years of the congressional review provisions
of SBREFA indicated that 23 of the rules did not have associated
NPRMs. In order to have a common basis of comparison with our
overall sample, we examined the subset of 61 major rules that were
published during calendar year 1997. Of these, 11 did not have
NPRMs. Although the APA permits agencies to issue rules, including
major rules, without NPRMs in appropriate circumstances, it is
nonetheless notable that nearly one-fifth of the major rules
published during 1997 did not have notices.
USE OF DIRECT FINAL
RULEMAKING HAS INCREASED
---------------------------------------------------------- Letter :4.3
As previously noted, a study published in 1989 reported that about
one-third of the final regulatory actions published during a 6-month
period in 1987 did not have associated proposed rules. Comparison of
that study's results with ours suggests that the proportion of
regulatory actions being published without NPRMs may be increasing.
However, we cannot be sure of that conclusion because of differences
in the methodologies used in the studies and the limited amount of
research on this subject.
Although it is sometimes difficult to determine which final rules
were issued without NPRMs, it is relatively easy to identify two
specific types of regulatory actions that were designed to be
published without NPRMs--interim and direct final rules--and to
determine whether their prevalence in the rulemaking process has
increased or decreased over time. We electronically searched the
Federal Register and found that the percentage of all final
regulatory actions that were interim or direct final rules had
increased from 9.6 percent of all final actions published in 1992 to
16.0 percent in 1997.\24 As figure 2 shows, most of this increase was
caused by direct final rules being used more frequently. Agencies
published about 400 interim final rules per year throughout this
period, but the number of direct final rules increased steadily,
going from 47 in 1992 to 365 in 1997.
Figure 2: Agencies' Use of
Direct Final Rulemaking
Increased Between 1992 and 1997
(See figure in printed
edition.)
Source: GAO analysis of Federal Register database for final
regulatory actions.
EPA published at least 65 percent of the direct final rules in each
of these years, often using the approach for what it considered to be
noncontroversial amendments, such as approvals of state air quality
implementation plans and new chemical uses, and on which it
anticipated no adverse comments. EPA's use of this type of
rulemaking differed from the other agencies' (and from how it was
described by ACUS and NPR) in that the agency published an NPRM on
the same day as the direct final rule in the event that adverse or
critical comments were filed. Under the agency's procedure, if EPA
received adverse or critical comments about the direct final rule,
EPA would withdraw the direct final rule before its effective date by
publishing a subsequent document, and all public comments received
under the direct final rule then would be addressed in a subsequent
final rule based on the proposed rule. In doing so, EPA has only one
public comment period (the one for the direct final), not two periods
as in other agencies that republish the withdrawn direct final rule
as a proposed rule. Also, because there was an associated proposed
rule for each EPA direct final rule in our sample, we coded all of
the EPA direct final rules as having NPRMs. However, there was no
notice published in the Federal Register for these rules before they
were published as direct final rules.
--------------------
\24 EPA originally used the term "immediate final" rather than
"direct final" when it started using the rulemaking procedure in the
1980s. For purposes of this time-series research, we therefore
included "immediate final" rules in the direct final rule category.
AGENCIES MOST COMMONLY CITED
"GOOD CAUSE" AS THE REASON FOR
PUBLISHING FINAL ACTIONS
WITHOUT NPRMS
------------------------------------------------------------ Letter :5
As previously noted, agencies can publish final regulatory actions
without NPRMs using either good cause, categorical, or
statute-specific exceptions to the APA's notice and comment
requirements. Our review indicated that, in 1997, agencies most
commonly used the good cause exception. Within that category, the
agencies often determined that public notice and comment procedures
were "impracticable" because of the time-sensitive nature of the
actions being taken. Agencies also used the categorical and, to a
much lesser extent, statute-specific NPRM exceptions.
AGENCIES CITED GOOD CAUSE
FOR MULTIPLE REASONS
---------------------------------------------------------- Letter :5.1
Our analysis of the sample cases indicated that federal agencies
cited the good cause exception to the APA's notice requirement in
about 59 (� 10) percent, or about 1,400, of the final regulatory
actions published without NPRMs in 1997. The APA permits the use of
the good cause exception when the agency issuing the rule finds that
notice and comment procedures are "impracticable, unnecessary, or
contrary to the public interest." The act's legislative history
defines these terms as follows:
"'Impracticable' means a situation in which the due and required
execution of the agency functions would be unavoidably prevented
by its undertaking public rule-making proceedings.
'Unnecessary' means unnecessary so far as the public is
concerned, as would be the case if a minor or merely technical
amendment in which the public is not particularly interested
were involved. 'Public interest' supplements the terms
'impracticable' or 'unnecessary;' it requires that public
rule-making procedures shall not prevent an agency from
operating and that, on the other hand, lack of public interest
in rule-making warrants an agency to dispense with public
procedure."\25
In our review, the agencies often cited more than one reason per case
for why they used the good cause exception. However, the agencies
most frequently indicated that NPRMs were impracticable because of
the time-sensitive nature of the regulatory actions being taken. For
example, in eight of the actions, the agencies indicated that some
kind of emergency made issuance of an NPRM impracticable or contrary
to the public interest. In one such case, the Administrator of
USDA's Animal and Plant Health Inspection Service determined that an
emergency existed after a trapping survey revealed that the Oriental
fruit fly had moved into parts of Los Angeles County. The Service
then issued an interim final rule without an NPRM to expand an
existing quarantine area and thereby prevent the fruit fly from
spreading to noninfested areas of the United States. In seven of the
sample actions, the agencies cited statutory deadlines that required
the prompt promulgation of the action at issue. For example, the
Department of Veterans Affairs said that it published a final rule on
guidelines for furnishing veterans with "sensori-neural aids" (e.g.,
eyeglasses, contact lenses, and hearing aids) without an NPRM because
a provision in the Veteran's Health Care Eligibility Reform Act of
1996 required that the guidelines be established "(n)ot later than 30
days after the date of the enactment of this Act."\26
In eight of the cases in our sample, the agencies indicated that they
used the good cause exception because the regulatory actions being
taken were matters of public safety. For example, the Coast Guard
published a final rule without an NPRM that established a temporary
safety zone near the mouth of the Severn River in Annapolis,
Maryland, to protect marine traffic and spectators from potential
hazards during an event involving the U.S. Navy's Blue Angels. In
another case, the FAA published a final rule without an NPRM (but
with a request for subsequent public comments) that amended the
effective hours for airspace areas at Mount Clemens near the
Selfridge (Michigan) Air National Guard Base to coincide with the
associated control tower's hours of operation. FAA said that this
modification was needed "to promote the safe and efficient handling
of air traffic in these areas."
In still other cases in our sample, agencies indicated that an NPRM
was unnecessary and the good cause exception applied because the
action being taken was noncontroversial. A number of these cases
were FAA direct final changes to air space rules that the agency said
only involved "an established body of technical regulations that
require frequent and routine amendments to keep them operationally
current."
--------------------
\25 Senate Document No. 248, 79th Congress, 2d Session at 200 (1946)
.
\26 Public Law 104-262, sec. 103.
AGENCIES ALSO CITED
CATEGORICAL AND SPECIFIC
STATUTORY EXCEPTIONS
---------------------------------------------------------- Letter :5.2
We estimated that 30 (� 9) percent, or about 710, of the final
actions that federal agencies published without NPRMs in 1997 did not
have a notice because the agencies indicated that the actions were
covered by broad categorical exceptions permitted in the APA--e.g.,
actions involving military or foreign affairs; agency management or
personnel; or public property, loans, grants, benefits, or contracts.
For example, one of the sample cases that appeared to involve foreign
affairs was a final rule amendment issued by the Department of the
Treasury's Foreign Assets Control Office involving overflight
payments to North Korea. One of the final rules that appeared to
trigger the agency management or personnel exemption was issued by
the Office of the Secretary of Transportation and involved, among
other things, the organization and delegation of powers and duties to
the agency's chief information officer.
About 11 (� 6) percent, or about 260, of the final actions published
without NPRMs in 1997 appeared exempt from the notice requirements
because of specific statutory exceptions in their underlying
statutes. For example, two of the actions in our sample were EPA
final rules promulgated in response to petitions to grant pesticide
tolerances. Under a 1996 amendment to the Federal Food, Drug, and
Cosmetic Act, tolerances established on the basis of a petition do
not require issuance of a proposed rule. Also, three of the final
rules in the sample that were published by HHS' Food and Drug
Administration involved new animal drugs, a subject that the agency
indicated was not subject to the APA public notice and comment
requirements because of language in the Federal Food, Drug, and
Cosmetic Act. In another action in our sample, HUD published a rule
without an NPRM because the underlying appropriations act directed
the department to issue interim regulations to implement loss
mitigation procedures within 30 days of the enactment of the act.
AGENCIES USED THE GOOD CAUSE
EXCEPTION FOR MOST "MAJOR"
OR "SIGNIFICANT" ACTIONS
WITHOUT NPRMS THAT WE
REVIEWED
---------------------------------------------------------- Letter :5.3
We also examined 60 "major" or "significant" regulatory actions
without NPRMs that we had identified in 3 previous assignments to
determine whether the reasons agencies published final regulatory
actions without NPRMs varied depending on the priority of the actions
taken. These 60 actions included 12 that were published without
NPRMs during 1997, as well as 48 other major or significant final
actions published in recent years. Our review indicated that, as was
the case in the overall sample, the agencies issuing these 60 rules
most often cited the good cause exception to the use of notice
procedures (see fig. 3). The agencies used categorical and specific
statutory exceptions for about 34 percent of the major and
significant rules that we reviewed, compared with about 41 percent in
the overall sample.
Figure 3: Agencies Cited the
Good Cause Exception for Most
Final Regulatory Actions
Without NPRMs
(See figure in printed
edition.)
Note 1: The data on all 1997 final actions without NPRMs show
percentages estimated on the basis of our sample results.
Note 2: The data on major and significant actions show the
percentages for final actions without NPRMs that were identified
during previous assignments. These actions were published between
March 1995 and March 1998.
Source: GAO analysis of Federal Register notices for final
regulatory actions.
As in the overall sample, the agencies that said they published major
and significant final rules without NPRMs for good cause most
frequently indicated that they did so because of the time-sensitive
nature of the regulatory actions being taken. However, the agencies
issuing these major or significant rules cited statutory deadlines as
the reason for their time sensitivity much more frequently than in
the overall sample.
AGENCIES' EXPLANATIONS IN
PREAMBLES FOR USING THE GOOD
CAUSE EXCEPTION WERE
SOMETIMES NOT CLEAR
---------------------------------------------------------- Letter :5.4
Section 553(b)(B) of the APA requires agencies using the good cause
exception to the notice and comment requirements to indicate in the
issued rules that they are using the exception and to include "a
brief statement of reasons therefor . . . ." We examined the
preambles to the rules in our review for which the agencies used the
good cause exception and, in the bulk of those cases, concluded that
it was clear why the agency had claimed that obtaining comments was
impracticable, unnecessary, or not in the public interest. As noted
previously, a number of the actions in our sample appeared to involve
routine or minor actions on which public comments would not seem to
be necessary. For example, in several of the actions we reviewed,
agencies were merely removing obsolete provisions or streamlining and
consolidating requirements in existing regulations. In other, more
substantive, cases in our review, it was clear from the agencies'
explanations in the preambles to the rules that waiting for public
comments would not have been in the public interest. For example,
regulations in our review cited the need to deal quickly with
emergency situations, such as incidents involving the transport of
oxygen generators as cargo on board passenger-carrying aircraft, the
outbreak of exotic Newcastle disease in nondomestic poultry that
might be imported into the United States, the spread of the
Mediterranean fruit fly in Florida, and damage that was being caused
to a reef within the Florida Keys National Marine Sanctuary.
However, in other rules in our review, the rationales that the
agencies offered in the preambles for using the good cause exception
were not as clear or understandable. In several of the rulemaking
actions, the agencies cited statutory or other deadlines that
prevented them from issuing NPRMs, some of which had already passed
by the time the rules were issued, and the preambles did not provide
a clear explanation for why an opportunity for notice and comment
could not have been provided. For example, the preamble to a May 31,
1995, significant interim rule that took effect immediately stated
that the rule was being issued without prior opportunity for comment
because an executive order, issued in October 1993, required the
implementation and incorporation of its policies into federal
regulations by April 1994. Other than the April 1994 deadline that
had been missed, the agencies issuing the rule provided no other
rationale for why an NPRM was not issued. In the case of another
significant rule that we reviewed, the agency issued the rule on
February 26, 1998, but said in the preamble that notice and public
comment before implementation of the regulation were "impracticable"
because of a January 1, 1997, statutory deadline for certain
provisions.\27 The preamble did not elaborate on this explanation or
explain why additional time for an NPRM period was impractical even
though the deadline had been missed by nearly 14 months.
In other cases that we examined, the regulations contained very
general assertions that the good cause exception applied because an
NPRM would delay the issuance of rules that were in the "public
interest." Those cases included the following:
-- In one of the cases from our sample, the preamble to the interim
rule stated that the agency was issuing the rule based on the
APA's good cause exception "[b]ecause this rule will facilitate
tourist and business travel to and from Slovenia," and therefore
delaying the rule to allow for public comments before the
interim rule was published "would be contrary to the public
interest."
-- In another case from our sample, the preamble to the interim
rule stated that use of notice and comment procedures would be
"contrary to the public interest" because the rule implemented
statutory provisions that were intended to protect the public
and American businesses from counterfeit copyrighted and
trademarked products.
-- In the preamble to a significant interim rule, the issuing
agency said that soliciting public comment on the rule before
publishing it for effect was "contrary to the public interest"
because the rule authorized a "new and creative method of
financing the development of public housing," which would help
alleviate low-income housing shortages. The preamble went on to
say that the development of public housing units within a
development would "promote the economic and social integration
of low income families within the broader community, thereby
providing greater opportunities for the upward mobility of such
families."
-- In the preamble to another significant interim rule, the issuing
agency said that good cause existed to dispense with public
comments because the rule added exclusions to the definitions of
annual income for purposes of enabling families to qualify for
housing assistance programs, which would benefit residents and
tenants "without adversely affecting any other group." The
preamble also said that delaying implementation of the interim
rule would be "contrary to the public interest" because it (1)
was "essential for achieving [the agency's] goals of ensuring
economic opportunity, empowering the poor and expanding
affordable housing opportunities"; and (2) would promote
"long-term upward mobility, educational achievement and
entrepreneurship," thereby possibly decreasing the number of
families dependent on social services programs and resulting in
future cost savings that could offset the short-term costs of
the changes.\28
-- The preamble to another significant interim final rule involving
a disaster assistance program stated that a prepublication
comment period was "impracticable" because "major disasters
continue to occur." The preamble also stated that obtaining
public comments on the final rule before its publication was
"contrary to the public interest" because of problems in the
agency's current regulations that would continue to be in effect
during the comment period. However, the preamble also said that
the agency had identified these problems in connection with
disasters that occurred 1 to 2 years before the interim final
rule was published.
We did not examine agencies' rationales beyond the preambles to the
rules to determine whether the good cause exception was used properly
in these cases.\29 However, these examples show that, in some cases,
rulemaking preambles do not contain enough detail to enable the
interested public to clearly understand the agencies' rationales for
asserting "good cause."
As noted previously, Executive Order 12866 gives OIRA a significant
role in the rulemaking process. In commenting on a draft of this
report, the Acting Director of OIRA said that the good cause
exception should only be used when good cause truly exists, and that
agencies can consult with the Justice Department if they need
guidance on this issue.\30 He also said that, as part of their review
of significant final rules, OIRA staff typically examine the preamble
explanation when an agency uses the good cause exception. However,
OIRA officials said that OIRA does not currently notify agencies that
they should clearly explain in the rules why they used the good cause
exception or that OIRA will address whether agencies clearly
explained why the good cause exception was being used in its reviews
of agencies' significant rules.
--------------------
\27 The agency also said that prior notice and comment would "serve
no practical purpose," and were therefore unnecessary, because the
other provisions in the rule were nondiscretionary.
\28 In the final rule, the agency said that the cost of the rule
"would not exceed $10 million."
\29 As noted previously, agencies' use of the good cause exception is
subject to judicial review. Courts reviewing agencies' assertions of
good cause look to the totality of the circumstances relating to the
regulation in question and the factors that led the agency to rely on
the exception. See Petry v. Block, 732 F. 2d 1193 (D.C. 1984).
\30 The only written governmentwide guidance that we are aware of is
the Attorney General's Manual on the Administrative Procedure Act,
which was issued by the Department of Justice in 1947 but that has
not been updated to reflect subsequent case law.
IMPLICATIONS OF PUBLISHING
FINAL RULES WITHOUT NPRMS
------------------------------------------------------------ Letter :6
The APA represents an attempt by Congress to strike a balance between
the public's right to be involved in the process by which rules are
developed and the agencies' need to carry out their missions in an
efficient and effective manner. In particular, the APA recognizes
that it is not always practical, necessary, or in the public interest
to publish an NPRM in the Federal Register and allow interested
persons an opportunity to provide comments before the proposed rule
becomes effective. In those situations, issuing a final rule without
an NPRM is an appropriate course of action. Frequently, there are
situations in which agencies must act quickly to, for example, ensure
the safety of food products or respond to natural disasters. Many
agency rules are essentially administrative or ministerial in nature
and may involve issues in which the public has no particular
interest. In these and other appropriate cases, the APA provides
agencies with needed flexibility to publish regulations without
issuing an NPRM.
The goal of preserving agency flexibility can sometimes compete with
other goals the APA is intended to serve. When a regulation is
published without an NPRM, the public's ability to participate in the
regulatory process is limited. Also, because NPRMs can allow
agencies to obtain information and perspectives on their rules that
they might not otherwise obtain, publishing final rules without NPRMs
may limit the ability of agencies to improve the quality of their
rules and build public support for them.\31
Agencies can and do solicit the public's input in ways other than
NPRMs, such as allowing the public to comment on final, direct final,
and interim final rules when they are published without NPRMs. In
about 45 (� 9) percent, or about 1,060, of the final regulatory
actions published without NPRMs in 1997, the agencies requested some
form of public comments or provided for a public comment period. In
the major or significant regulatory actions without NPRMs that we
reviewed, agencies requested or provided an opportunity for public
comments in about 70 percent of the cases. However, none of these
post-publication comment procedures allows the public to comment on
the agencies' rules until after they are published in the Federal
Register as final rules. By that point in the rulemaking process,
agencies have already determined the regulatory approaches they plan
to take. NPRMs, on the other hand, permit the public to comment on
agencies' intentions before they are announced as final actions and
at a point when public participation is most likely to have the
greatest impact on agencies' decisionmaking. As one court said in a
case involving the timing of public comments, the APA notice and
comment procedures "ensure that affected parties have an opportunity
to participate in and influence agency decisionmaking at an early
stage, when the agency is more likely to give real consideration to
alternative ideas."\32 Agencies' actions that only allow the public
to comment on their regulatory decisions after they are made, while
not prohibited by the APA, are not likely to be as effective as NPRMs
in allowing meaningful public participation in the rulemaking
process.
--------------------
\31 For a discussion of this issue, see Asbestos Information
Association v. OSHA, 727 F.2d 415, 426 (5th Cir. 1984).
\32 U.S. Steel Corp. v. U.S. Environmental Protection Agency, 595
F.2d 207, 214 (5th Cir. 1979).
ACTIONS WITHOUT NPRMS DO NOT
TRIGGER REGULATORY REFORM
REQUIREMENTS
---------------------------------------------------------- Letter :6.1
During the past 20 years, Congress has enacted a number of statutes
that were designed to improve the operation of the federal rulemaking
process. Those statutes typically require agencies to undertake some
form of analysis or require that certain procedures be followed
during the rulemaking process, with the ultimate goals being better
regulations and greater consideration by agencies of the effects of
their rules on regulated entities. In several of those statutes, the
required analyses and regulatory procedures are triggered (either
directly or indirectly) by the publication of an NPRM. Therefore, if
an agency does not publish an NPRM either because of the good cause
or categorical exceptions that are permitted in the APA, or because
Congress directs an agency not to use notice and comment procedures,
the foregoing regulatory reform requirements do not take effect.
For example, Congress passed the Regulatory Flexibility Act (RFA) of
1980 (5 U.S.C. 601-612) in response to concerns about the effect
that federal regulations can have on small entities. The RFA states
that federal agencies must either (1) certify that their rules will
not have a "significant economic impact on a substantial number of
small entities" or (2) prepare and make available for public comment
initial regulatory flexibility analyses that describe the anticipated
effects of their proposed rules on small entities, and (3) prepare
final regulatory flexibility analyses at the end of the rulemaking
process. However, the RFA stipulates that the initial analysis must
be done "[w]henever an agency is required by section 553 of [the
APA], or any other law, to publish a general notice of proposed
rulemaking." The act also says that the final regulatory flexibility
analysis is required "[w]hen an agency promulgates a final rule under
section 553 of [the APA], after being required by that section or any
other law to publish a general notice of proposed rulemaking."
Therefore, if an agency is not required to publish an NPRM for one of
its rules, the agency is not required to prepare a regulatory
flexibility analysis. An agency that uses one of the APA exceptions
to the notice and comment requirements, or that is expressly
prohibited from following these procedures in authorizing
legislation, is therefore not required to conduct a regulatory
flexibility analysis.
In 1996, Congress passed SBREFA to strengthen the RFA's protections
for small entities. Among other things, SBREFA requires that, before
publishing their initial regulatory flexibility analyses, EPA and the
Occupational Safety and Health Administration (OSHA) convene a small
business advocacy review panel for any draft rule that they believe
will have a significant economic impact on a substantial number of
small entities.\33 However, those analyses are only triggered when
the agencies are required to publish an NPRM. Therefore, EPA and
OSHA are not required to convene an advocacy review panel on any rule
for which they were not required to publish an NPRM.
SBREFA also requires federal agencies to delay the effective dates of
their major rules for 60 days after their publication in the Federal
Register or their submission to Congress, whichever is later. SBREFA
allows agencies to be excepted from the 60-day delay period if the
agency "for good cause finds . . . that notice and public
procedure thereon are impracticable, unnecessary, or contrary to the
public interest . . . ." The language of this "good cause"
exception under SBREFA mirrors the APA's good cause exception for
NPRMs. Therefore, the SBREFA good cause exception is only available
if an NPRM was not published pursuant to the APA's good cause
exception. As a result, under SBREFA, a rule could become effective
in fewer than 60 days if the agency had used the good cause exception
to NPRMs.
The Unfunded Mandates Reform Act (UMRA) of 1995 requires federal
agencies to take certain actions during the rulemaking process for
certain types of rules. For example, section 202 of UMRA generally
requires agencies to prepare "written statements" containing specific
information for any rule that includes a federal mandate that may
result in the expenditure of $100 million or more by state, local,
and tribal government, in the aggregate, or by the private sector, in
any 1 year. One of the elements that the act requires the written
statements to contain is a qualitative and quantitative assessment of
the anticipated costs and benefits of the mandate. Section 205 of
the act states that, before promulgating any rule for which a written
statement is required under section 202, agencies must identify and
consider a reasonable number of regulatory alternatives and select
the one that is least costly, most cost-effective, or least
burdensome. However, the act says that the section 202 written
statements are required "before promulgating any general notice of
proposed rulemaking" and "before promulgating any final rule for
which a general notice of proposed rulemaking was published."
Therefore, if an agency issues a final rule without an NPRM, the
requirements in sections 202 and 205 of UMRA do not apply to the
rule.
In addition to these existing statutes, at least two pieces of
regulatory reform legislation currently pending before Congress
would, if enacted, also use the publication of an NPRM as the trigger
for certain analytical requirements. Section 623 of S. 981, the
"Regulatory Improvement Act of 1998," states that agencies must
prepare and place in the rulemaking file a cost-benefit analysis and,
if required, a risk assessment for each major rule that it issues.
However, the bill says that these actions must be taken "[w]hen an
agency publishes a notice of proposed rule making for a major rule."
Similarly, section 623 of S. 1728, the "Federal Regulatory Risk
Assessment Act of 1997," states that "[w]hen an agency publishes a
notice of proposed rule making for a major rule," the agency must
prepare and place in the rulemaking file an initial risk assessment,
"and shall include a summary of such assessment in the notice of
proposed rule making." However, the analytical requirements that
would be imposed by these bills would not apply to a rule if the
agency issuing the rule did not publish an NPRM.
The inapplicability of regulatory reform requirements when NPRMs are
not published, combined with the fact that agencies frequently
publish final regulatory actions without NPRMs, initially suggests
that many rules may not be subject to these requirements because of
the absence of NPRMs. However, even if NPRMs had been published for
all final actions, some of those requirements would not have been
applicable to many of these actions. For example, the UMRA written
statement requirements do not apply to independent regulatory
agencies, such as the FCC and the Securities and Exchange Commission.
Also, the written statement requirements only apply to issued rules
that require "expenditures" of $100 million or more in any 1 year by
state, local, and tribal government, in the aggregate, or by the
private sector. The number of rules that require $100 million in
expenditures by these groups is a subset of "economically
significant" rules that have a $100 million impact on the economy,\34
and RISC data indicate that nonindependent agencies only issued 36
economically significant rules during 1997. Even if a nonindependent
agency's rule required $100 million in expenditures by the public or
private sectors, the UMRA written statement requirements would only
apply if the rule also imposed an "enforceable duty" that was not a
condition of federal financial assistance or that did not arise from
participation in a voluntary federal program. The SBREFA advocacy
review panel requirements only apply to two agencies (EPA and OSHA),
so the absence of NPRMs may also have a limited effect on these
requirements. Also, the SBREFA requirement that agencies delay the
effective dates of their rules for 60 days only applies to major
rules for which the agencies have not used the good cause exception
to the APA's notice and comment requirements--again, only a small
portion of all rules.
However, the absence of NPRMs may have a more substantial effect on
whether agencies prepare regulatory flexibility analyses under the
RFA. In a recent edition of the Unified Agenda, agencies indicated
that more than 800 of their pending and recently completed regulatory
actions would have a significant economic impact on a substantial
number of small entities, thereby triggering the initial and final
regulatory flexibility analysis requirements.\35 More than 300 of
these actions were "significant" rules as defined in Executive Order
12866.
As figure 4 shows, we estimated that in about 28 (� 9) percent, or
about 650, of the regulatory actions published without NPRMs in 1997,
the agencies included an explicit statement that, because an NPRM was
not required, the RFA was not applicable or that a regulatory
flexibility analysis was not required. In about 37 (� 9) percent, or
about 870, of the actions, the agencies did not mention the RFA.
However, agency officials told us that they did not have to mention
the RFA when they had previously indicated that an NPRM was not
required. In about 34 (� 9) percent, or about 800, of the actions,
the agencies certified that the actions would not have a significant
economic impact on a substantial number of small entities. In most
of these cases, the agencies explained why they made their
determinations, sometimes including detailed information on the
numbers of small entities likely to be affected by the actions and
their estimated costs and benefits. In a few cases, the agencies did
a regulatory flexibility analysis, even though they technically did
not have to do so.
Figure 4: Agencies Addressed
RFA Requirements in a Variety
of Ways in Final Regulatory
Actions in 1997 Without NPRMs
(See figure in printed
edition.)
Note 1: The RFA requirements do not apply to any action for which an
NPRM was not required to be published.
Note 2: The "did not mention" category may imply that the agency
considered the RFA requirements not applicable if the agency had
indicated elsewhere in the Federal Register notice that an NPRM was
not required for that action. Because the agency did not include any
explicit statement, however, we are reporting this category
separately from the "said did not apply" category.
Note 3: Percentages do not add up to 100 percent due to rounding.
Note 4: Estimated confidence interval for actions with RFA analysis
is 0.1 percent to 5.6 percent.
Source: GAO analysis of a representative sample of Federal Register
notices for final regulatory actions.
In 30 percent of the 60 major and significant regulatory actions that
we reviewed, the issuing agencies specifically stated that, because
an NPRM was not required, the RFA was not applicable or that a
regulatory flexibility analysis was not required. The agencies did
not mention the RFA in about 7 percent of the major and significant
actions. In nearly 52 percent of the actions, the agencies certified
that the actions would not have a significant impact on a substantial
number of small entities, and in about 12 percent of the actions, the
agencies did a regulatory flexibility analysis.
--------------------
\33 For a discussion of these panels, see Regulatory Reform:
Implementation of the Small Business Advocacy Review Panel
Requirements (GAO/GGD-98-36, Mar. 18, 1998).
\34 For example, rules that involve $100 million in expenditures by
the federal government or that will result in $100 million in savings
to the public or private sectors would be economically significant
under Executive Order 12866, but would not require $100 million in
expenditures by the public or private sectors and therefore would not
require a written statement under UMRA.
\35 Some agency officials told us that they believed the Unified
Agenda overstates the number of regulatory actions that would trigger
regulatory flexibility analyses. For example, an EPA official said
that its entries in the Unified Agenda reflect whether the rules will
have any impact on small entities, not just a significant impact on a
substantial number of small entities.
CONCLUSIONS
------------------------------------------------------------ Letter :7
The informal rulemaking process established by the APA generally
requires agencies to involve the public in that process by publishing
an NPRM and allowing the public to provide comments on the proposed
rule. The APA does provide for exceptions to the general requirement
that permits agencies to publish final rules without NPRMs in
appropriate cases. Our analysis indicated that about half of all
final regulatory actions in 1997 were published by federal agencies
without NPRMs, and that the agencies most commonly used the APA's
good cause exception. Furthermore, some data suggest that the
proportion of regulatory actions being published without NPRMs may be
increasing. Use of these exceptions was not confined to minor
regulatory actions; almost 20 percent of the major rules issued in
the past 2 years were published without NPRMs.
Agencies need the flexibility to publish final rules without NPRMs in
order to respond quickly to emergencies and in other appropriate
situations. However, when agencies issue final rules without NPRMs
and cite the good cause exception, the APA requires the agencies to
explicitly say so and provide an explanation for the exception's use
when the rule is published in the Federal Register. In the bulk of
the final regulatory actions that agencies issued without NPRMs in
1997, the explanations that the agencies presented in the preambles
to the rules clearly stated why the agencies used the exceptions to
the APA's notice and comment requirements. The agencies did not
publish NPRMs for many rules when they involved routine or minor
issues on which public comments did not seem to be necessary, or when
obtaining public comments was impracticable because of the need to
respond to emergencies or statutory deadlines. In other cases, the
regulatory actions involved issues on which NPRMs were either
specifically not required (e.g., foreign or military affairs) or were
expressly prohibited by certain statutes.
However, in some of the actions that we reviewed, the rationales that
the agencies offered in the preambles for using the good cause
exception were not clear or understandable. For example, in one such
action, the agencies said in the preamble that a 1993 executive order
that imposed a 1994 deadline for implementation and incorporation of
its policies into regulations prevented the agencies from obtaining
public comments before issuing a final rule in 1995. In other
actions, the agencies only made broad assertions in the preambles
that an NPRM would delay the issuance of rules that were, in some
general sense, in the public interest.
When an agency issues a final rule without an NPRM, the public's
opportunity to comment on the rule during the period when those
comments can be most effective may be limited or absent. In issuing
final rules without NPRMs, agencies also limit their ability to
obtain new perspectives and to build public support for their rules.
Final rules without NPRMs are also not subject to analytical and
procedural requirements in several regulatory reform statutes that
were designed to improve the operation of the federal rulemaking
process, but are only triggered when agencies issue NPRMs.
Agencies' extensive issuance of rules without NPRMs appears to
particularly affect the coverage of the regulatory flexibility
analysis requirements in the RFA. Federal agencies recently
indicated that more than 800 of their pending and recently completed
regulatory actions (300 of which involved significant rules) may be
subject to those requirements. We estimate that in over one-fourth
of the more than 2,000 regulatory actions published in 1997 without
NPRMs, the agencies specifically stated that the RFA was not
applicable or that a regulatory flexibility analysis was not required
because the action was not preceded by an NPRM. On the other hand,
some agencies conducted RFA analyses even when they did not publish
an NPRM and, therefore, were not required to do so.
OIRA can help ensure that agencies' issuance of rules without NPRMs
is consistent with the APA's requirements. Executive Order 12866
states that OIRA is the repository of expertise concerning regulatory
issues, including procedures that affect more than one agency. The
executive order also requires the Administrator of OIRA to provide
meaningful guidance and oversight so that agencies' regulatory
actions are consistent with, among other things, applicable laws.
OIRA is also required to review all significant rules (other than
those issued by independent regulatory agencies) before they are
published as proposed and final rules. Thus, OIRA has a significant
role to play in improving the process that agencies follow in issuing
rules. For example, OIRA could take steps to ensure that, when
agencies use the good cause exception, they provide a clear
explanation for why an NPRM should not have been issued.
RECOMMENDATIONS
------------------------------------------------------------ Letter :8
We recommend that the Acting Administrator of OIRA notify executive
departments and agencies that the statements in the rules providing
the agencies' reasons for using the good cause exception should
clearly explain why notice and comment was impracticable,
unnecessary, or not in the public interest. We also recommend that
the Acting Administrator notify executive departments and agencies
that OIRA will, as part of its review of significant final rules,
focus on whether agencies clearly explained why the good cause
exception was being used.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
On June 18, 1998, we sent a draft of this report for their review and
comment to the Director Designate of OMB; the Secretaries of the
Departments of Agriculture, Housing and Urban Development, and
Transportation; and the Administrator of EPA. HUD officials told us
that they had no comments on the draft report. On July 2, 1998, the
Acting Administrator of OIRA provided OMB's comments on the draft
report, which are reprinted in appendix I. The draft report he
reviewed recommended that OIRA issue guidance to executive
departments and agencies on how to use the APA notice and comment
exceptions properly, particularly the good cause exception. The
Acting Administrator said that OIRA strongly supports the idea of
obtaining public comments during the development of rules, and
appreciated our concerns about the agencies' use of the good cause
exception to the notice and comment requirements. However, he did
not agree with our recommendation, and stated that the APA vests with
the rulemaking agencies the authority to determine whether good cause
exists. He further stated that guidance is available from court
decisions construing the exception and from the Department of
Justice. If additional guidance is needed, he said, it is not clear
that OIRA is the appropriate agency to provide that guidance.
Nevertheless, the Acting Administrator said that OIRA would, as part
of its regulatory review, "address the agencies' reliance on the
'good cause' exception and will reiterate to the agencies, as
appropriate, that the exception should be used only when 'good cause'
truly exists." He also said that OIRA staff typically examine the
explanations in the preambles to the rules they review and, if
necessary, can raise any questions with the agencies about those
explanations.
The Acting Administrator's statement that OIRA will, as part of its
regulatory review and "as appropriate," inform agencies about the use
of the good cause exception and continue to examine the agencies'
preamble explanations addresses some but not all of the issues that
we believe are important. First, the only final rules that OIRA
reviews are those that are "significant" under Executive Order
12866--a small portion of all actions in which the good cause
exception could be claimed. RISC data indicate that OIRA reviewed
237 final rules during 1997--about 5 percent of all final actions
published that year. Also, the Acting Administrator did not indicate
that OIRA would notify agencies that they must clearly explain why
they used the good cause exception. However, in light of the Acting
Administrator's comments and our recognition that, under the APA, it
is the primary responsibility of the rulemaking agencies to determine
whether good cause exists, we changed our recommendation to state
that the OIRA Acting Administrator should notify executive
departments and agencies that the statements in the rules providing
the agencies' reasons for using the good cause exception should
clearly explain why notice and comment was impracticable,
unnecessary, or not in the public interest. We also recommended that
the Acting Administrator notify executive departments and agencies
that OIRA will focus part of its review of significant final rules on
whether agencies clearly explained why the good cause exception was
being used.
On June 26, 1998, the Director of the Office of Budget and Program
Analysis within the Office of the Secretary of Agriculture provided
written comments on the report. The Director said that, given its
diverse regulatory missions, it was not surprising that USDA was one
of the seven agencies that accounted for the bulk of regulatory
actions published without an NPRM. He noted that, as the draft
report indicated, most of the USDA actions in our sample involved
administrative or technical issues not requiring advance notice. The
Director said that USDA has detailed procedures by which NPRM
exceptions are reviewed within the Department. However, the Director
said that the concerns raised in the draft report would be brought to
the attention of senior agency management to ensure that USDA fully
justifies the publication of final rules without prior NPRMs.
On June 29, 1998, we received written comments from the Assistant
General Counsel for Regulation and Enforcement, Office of the
Secretary of Transportation, indicating that his major concern was
not with the substance of the draft report, but rather how it
presented two issues. First, he said that the information in the
report on the extent to which agencies published rules without NPRMs
should be presented alongside our conclusion that many of these
actions were minor rulemaking actions, and were therefore justified.
However, we believe that the report does not need altering in this
respect. In several places, the report notes in the same sentence
that most of the actions that were published without NPRMs involved
routine or minor issues. Also, full discussions of the frequency of
rulemaking without NPRMs and the reasons for such actions are
presented in separate sections of the report, because they were
separate reporting objectives. The Assistant General Counsel's
second concern was that the report should not separately note that
some agencies (1) did not do RFA analyses when NPRMs were not issued
and (2) were doing the analyses even though not technically required
to do so. However, we disagree that these two issues are separately
presented because the report presents them within the same
paragraphs. Therefore, we did not change the report. However, we
made several clarifying and correcting changes to the report as a
result of the Assistant General Counsel's other specific comments.
For example, we made it clear that SBREFA requires agencies to delay
the effective dates of major rules (not all rules) for 60 days. We
also changed the report to note that use of the good cause exception
is not the only way in which major rules can be made effective in
less than 60 days.
On June 30, 1998, we received written comments from the Director of
EPA's Regulatory Management Division, which are reproduced in full as
appendix II. The Director noted the nature of each of EPA's actions
without an NPRM, which coincided with our determinations of how each
of the actions should be coded. He also said that it is EPA's policy
to consider the impact of every rule on small entities, minimizing
that impact to the extent feasible. For EPA actions without an NPRM,
the Director said that the requirements that apply to traditional
notice and comment rulemakings are met because EPA generally uses
this type of action only for technical amendments, temporary
regulatory relief, and other rulemakings to which the affected
parties are unlikely to object. He said that performing a regulatory
flexibility analysis in such cases "is unlikely to mitigate impacts
on small entities, which is the intended purpose of such analyses."
We disagree with the thrust of the Director's comments. First, the
analytical and procedural requirements in the RFA and other
regulatory reform statutes that apply to NPRM rulemakings do not
apply to rules issued without NPRMs, and therefore are not "met." For
example, for each of their draft rules for which an NPRM is required,
the RFA requires agencies either to prepare a regulatory flexibility
analysis or to certify that the rule will not have a significant
economic impact on a substantial number of small entities. However,
agencies are not required either to conduct the analysis or issue the
certification if the final rule is appropriately issued without an
NPRM. Also, in the absence of either a certification or a regulatory
flexibility analysis, the public does not know whether the rule has a
significant economic impact on a substantial number of small
entities. The Director also suggested changing the title of the
report to "Agencies' Use of Exceptions to Notice and Comment
Requirements is Legitimate." We did not change the title because the
conclusion suggested by his proposal is outside of the scope of the
report. Finally, the Director provided a number of detailed comments
on the draft report as an enclosure. Those comments, and our
responses, are included in appendix II.
---------------------------------------------------------- Letter :9.1
We are sending copies of this report to the Ranking Minority Members
of the Senate Committee on Governmental Affairs, the Senate Committee
on Small Business, the House Committee on Small Business, the House
Committee on the Judiciary's Subcommittee on Commercial and
Administrative Law, and the House Committee on Government Reform and
Oversight's Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs; the Director of OMB; the
Secretaries of the Departments of Agriculture, Housing and Urban
Development, and Transportation; and the Administrator of EPA. We
will also make copies available to others on request
Major contributors to this report are listed in appendix III. Please
contact me on (202) 512-8676 if you have any questions concerning
this report.
L. Nye Stevens
Director, Federal Management
and Workforce Issues
(See figure in printed edition.)Appendix I
COMMENTS FROM OIRA
============================================================== Letter
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)Appendix II
COMMENTS FROM EPA
============================================================== Letter
(See figure in printed edition.)
(See figure in printed edition.)
Now on p. 14.
Now on p. 16.
(See figure in printed edition.)
See comment 5.
Now on p. 13.
Now on p. 24.
Now on p. 25.
(See figure in printed edition.)
Now on p. 27.
Now on p. 27.
The following are GAO's comments on the Environmental Protection
Agency's June 30, 1998, letter.
GAO COMMENTS
1. EPA commented that it would be helpful if the draft report
indicated how many rules were statutorily exempted from notice and
comment, and to discuss those rules separately. However, the draft
report that we provided to EPA separately identified and discussed
the proportion of rules in our sample that used the good cause and
specific statutory exceptions. Therefore, we did not change the
report.
2. EPA commented that the draft report should recognize EPA's
practice of issuing a proposed rule when it issues a direct final
rule as early as possible. We added a footnote in the background
section of this report indicating that EPA's direct final rulemaking
procedures vary somewhat from the general direct final rulemaking
procedures as described by ACUS and NPR.
3. EPA commented that the draft report indicates that agencies
frequently do not publish direct final rules without NPRMs, but also
notes that EPA does publish NPRMs with its direct final rules. We
amended the report to state that direct final regulatory actions
"were designed to be" published without an NPRM.
4. EPA commented that the draft report was in error in stating that
there was no prior notice in the Federal Register for EPA's direct
final rules. Although EPA is correct in that the public is allowed
to comment on its direct final rules before they take effect, we do
not believe that this procedure is substantively the same as allowing
the public to comment on proposed rules. EPA's own justifications
for these actions frequently stated that the agency was "publishing
this action without prior proposal . . . ." However, we clarified
the language in the final report to note that there was no notice
published in the Federal Register prior to the publication of the
direct final rule.
5. EPA suggested that we indicate what explanations agencies gave
for the major rules issued without NPRMs, for example, how many of
these rules Congress expressly exempted from notice and comment
rulemaking procedures versus those that contained "good cause"
findings. The draft report already provided the information that EPA
suggested, noting that agencies used the good cause exception for
about two-thirds of the major and significant actions that we
reviewed without NPRMs. Furthermore, the draft report indicated that
categorical and specific statutory exceptions each accounted for 17
percent of major and significant rules without NPRMs. Therefore, we
did not change the report.
6. EPA said the draft report's statement that the public's
opportunity to participate is restricted when agencies issue final
rules without NPRMS could imply that this is the reason for agencies'
use of this method. EPA also said the report failed to acknowledge
that, in a number of rulemakings, it is Congress, not an agency, that
has determined that public comment is unnecessary. We disagree that
the referenced statement in the draft report can be read in the
manner that EPA suggested. The statement is factual, and does not
suggest that agencies were attempting to limit public participation
in the rulemaking process. Also, the draft report that we provided
to EPA clearly stated that Congress determines that public comment is
unnecessary in a number of rulemaking actions. Therefore, we did not
substantively change the report.
7. EPA said the draft report's statement that ". . . final,
direct final, and interim final rules that allow the public to
comment on agencies' decisions after they are made are inherently
inferior to NPRMs as ways to allow the public to participate in the
rulemaking process" was too broad and fails to recognize EPA's use of
direct final rules. We disagree. As we indicated in the draft
report, allowing the public to comment on agencies' final rules after
they are published in the Federal Register cannot be considered
equivalent to allowing the public to comment on proposed rules at a
point in the rulemaking process when the agency is more likely to
give real consideration to alternative ideas. However, in order to
encompass rulemaking actions other than interim, direct final, and
final rules, we changed the above-referenced sentence in the report
to state that agencies' actions that only allow the public to comment
on their regulatory decisions after they are made are not as likely
to be as effective as NPRMs in allowing meaningful public
participation in the rulemaking process (emphasis added).
8. EPA commented on the draft report section in which we noted that
rules may not be subject to regulatory requirements because of the
absence of NPRMs. EPA noted that, when it publishes a direct final
rule, it addresses these regulatory requirements. EPA's discussion
of the referenced paragraph in the draft report focuses on what
actions EPA takes in reference to regulatory requirements that they
are not strictly required to address. However, the paragraph in the
draft report focused on explaining why some of those requirements
would not have been applicable to many rules issued without NPRMs.
The paragraph did not discuss actions that EPA or any other agency
chooses to take over and above those requirements. Therefore, we did
not change the report.
9. EPA commented, with regard to regulatory requirements triggered
by NPRMs, that agencies generally use direct final rules for routine
administrative matters, and that such rules generally are not
economically significant nor do they impose a significant economic
impact on a substantial number of entities. EPA suggested that
agencies could expressly comply with the regulatory reform statutes,
not avoid them, by their use of direct final rules. We disagree.
The determination of whether rulemaking actions will have a
significant economic impact on a substantial number of small entities
must be made on a case-by-case basis. Even rules that appear, on the
surface, to be routine or administrative in nature may have a
significant effect on small entities. Therefore, we did not change
the report as EPA suggested.
10. EPA suggested that we use full case citations in the footnotes
of the report. We used full case citations the first time that each
case was mentioned. However, we used abbreviated citations for
subsequent references.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
GENERAL GOVERNMENT DIVISION
Curtis Copeland, Assistant Director, (202) 512-8101
Amber Roos, Intern
Thomas M. Beall, Technical Advisor
James M. Fields, Senior Statistician
OFFICE OF THE GENERAL COUNSEL
Alan N. Belkin, Assistant General Counsel
James M. Rebbe, Senior Attorney
OFFICE OF INFORMATION MANAGEMENT
AND COMMUNICATIONS
Audrey Ruge, Legal and Legislative Librarian
*** End of document. ***