Congressional Review Act (Testimony, 03/06/97, GAO/T-OGC-97-29).

GAO discussed its responsibilities in the congressional review of agency
rulemakings under the Small Business Regulatory Enforcement Fairness Act
(SBREFA), and its experience since the statute was enacted.

GAO noted that: (1) its primary role in this new mechanism is to provide
the Congress with a quick review of all "major" rules submitted to
determine if the promulgating agencies have complied with the procedural
steps governing the regulatory process; (2) SBREFA defines a "major"
rule as one which has resulted in or is likely to results in: (a) an
annual effect on the economy of $100 million or more; (b) a major
increase in costs or prices for consumers, individual industries,
government agencies, or geographic regions; or (c) significant adverse
effects on competition, employment, investment, productivity, innovation
or on the ability of U.S.-based enterprises to compete with
foreign-based enterprise in domestic and export markets; (3) GAO has
received 58 major rules from federal agencies, and all of its reports on
these rules have been submitted by the statutory deadline; (4) with few
exceptions, federal agencies have sought to comply with the requirements
of SBREFA, and, for the most part, they have been successful; (5) on
some occasions, where federal agencies failed to comply with SBREFA,
when GAO brought the matter to the attention of agency officials,
corrective action was taken; (6) one difficulty GAO has noted on a few
occasions is the apparent failure of some federal agencies to budget
enough time into the regulatory process to allow for the 60-day delay in
the effective date of a major rule; (7) to date, GAO has received 3,609
nonmajor rules; and (8) GAO has established a database that would give
minimal information about the 25 rules it receives on the average each
day.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-OGC-97-29
     TITLE:  Congressional Review Act
      DATE:  03/06/97
   SUBJECT:  Reporting requirements
             Federal regulations
             Congressional/executive relations
             Legislative bodies
             Cost effectiveness analysis

             
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Cover
================================================================ COVER


Before the Subcommittee on Commercial and Administrative Law,
Committee on the Judiciary, House of Representatives

For Release on Delivery
Expected at
10:30 a.m.  EDT
Thursday,
March 6, 1997

-

CONGRESSIONAL REVIEW ACT

Statement of Robert P.  Murphy, General Counsel

GAO/T-OGC-97-29

GAO/OGC-97-29T



Abbreviations
=============================================================== ABBREV

  SBREFA - x
  HUD - x
  EPA - x
  HCFA - x
  OMB - x
  OIRA - x

============================================================ Chapter 0

Chairman Gekas, Mr.  Nadler, and Members of the Committee: 

I am pleased to appear before you today to discuss the General
Accounting Office's responsibilities in the congressional review of
agency rulemakings under the Small Business Regulatory Enforcement
Fairness Act (SBREFA), and our experience in the 11 months since the
statute was enacted. 

Congressional oversight of rulemaking as contemplated by SBREFA can
be an important and useful tool for balancing and accommodating the
concerns of American citizens and businesses with federal agency
rulemaking.  It is important to assure that Executive branch agencies
are responsive to citizens and businesses about the reach, cost, and
impact of regulations without compromising the statutory mission
given to those agencies.  SBREFA seeks to accomplish this by giving
the Congress an opportunity to review rules before they take effect
and to disapprove those found to be too burdensome, excessive,
inappropriate, duplicative, or otherwise objectionable. 

Under SBREFA, before a rule can take effect, the federal agency must
submit the rule to both Houses of Congress and the GAO.  GAO's
primary role in this new mechanism is to provide the Congress with a
quick review of all "major" rules submitted to determine if the
promulgating agencies have complied with the procedural steps
governing the regulatory process.  For rules that are determined to
be "major," GAO must provide its report to the congressional
committees of jurisdiction within 15 calendar days. 


   MAJOR RULES
---------------------------------------------------------- Chapter 0:1

SBREFA defines a "major" rule as one which 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 on the ability of
U.S.-based enterprises to compete with foreign-based enterprise in
domestic and export markets.  SBREFA specifies that the determination
of what rules are "major" is to be made by the Office of Information
and Regulatory Affairs, Office of Management and Budget.  These rules
cannot be effective until 60 days after publication in the Federal
Register or submission to Congress and GAO, whichever is later. 

GAO is required to submit a report to the committees of jurisdiction
by the end of 15 calendar days containing GAO's assessment of the
federal agency's "compliance with the procedural steps" required by
the various acts and executive orders bearing on the regulatory
process enumerated in SBREFA.  These include the preparation of a
cost-benefit analysis, where required, and compliance with the
Regulatory Flexibility Act, the Unfunded Mandates Reform Act of 1995,
the Administrative Procedure Act, the Paperwork Reduction Act, and
Executive Order No.  12866.  Other acts and executive orders which
have been considered by federal agencies in major rules submitted to
GAO include executive orders about family considerations, federalism,
protected property rights, intergovernmental partnership and civil
justice, and the National Environmental Policy Act. 

Our reviews are based on the information given to us by the
promulgating federal agency and any additional information we obtain
during the 15-day report preparation period.  Because of the time
constraints imposed by SBREFA, GAO's role is necessarily limited to a
paper review of the processes employed in the rulemaking under
applicable statutory and regulatory mandates.  For example, in the
area of cost-benefit analysis, we assure that the federal agency has
conducted some type of analysis, whether it is called a cost-benefit
analysis, economic impact analysis, or economic analysis, and whether
the analysis contains the three elements of a cost-benefit analysis
required under Executive Order No.  12866.  These are (1) an
assessment of the costs and benefits, including the underlying
analysis, anticipated from the regulatory action, (2) the costs and
benefits, including the underlying analysis, of reasonably feasible
alternatives considered, and (3) why the planned regulatory action is
preferable. 

Also, we provide a copy of each major rule to the audit or evaluation
group within GAO that would be most interested to ascertain if GAO
has performed any work relevant to the rule which should be brought
to the attention of the Congress. 

From the March 29, 1996, enactment of SBREFA through February 28,
1997, GAO has received 58 major rules from federal agencies, and all
of our reports on these rules have been submitted by the statutory
deadline. 

Our major rule reports are available on the Internet within 24 hours
of transmittal to the committees of jurisdiction.  In a recent week,
our major rule reports on the Internet were accessed 938 times and
reports were downloaded 273 times.  In addition, the reports will be
included in the GAO Monthly List of Publications beginning next
month, at which time paper copies will be available through our
document distribution system. 

It has been our experience that, with few exceptions, federal
agencies have sought to comply with the requirements of SBREFA, and,
for the most part, they have been successful. 

On some occasions, where federal agencies failed to comply with
SBREFA, when we brought the matter to the attention of agency
officials, corrective action was taken.  For example, the
Environmental Protection Agency stated that its rule on the Nitrogen
Oxide Emission Reduction Program would become effective upon
publication in the Federal Register rather than after the 60-day
delay required by the statute.  When this was brought to the
attention of EPA, it published a correction in the Federal Register
and delayed the effective date the required 60 days.  Similarly, when
we pointed out to the Department of Housing and Urban Development
(HUD) that certain disclosure requirements should have been submitted
to the Office of Management and Budget (OMB) for review under the
Paperwork Reduction Act, HUD began steps to publish a correction to
the final rule and submit the matter for OMB approval. 

One difficulty we have noted on a few occasions is the apparent
failure of some federal agencies to budget enough time into the
regulatory process to allow for the 60-day delay in the effective
date of a major rule.  The Department of Health and Human Services,
Health Care Financing Administration did not allow for the 60-day
delay when issuing "Revisions to Payment Policies and Five Year
Review of and Adjustments to the Relative Value Units under the
Physician Fee Schedule for the Medicare Program," citing the "good
cause" exception found at 5 U.S.C.
ï¿½ 808(2) because Congress was not in session during most of the
60-day period and the effective date was established by the Medicare
statute.  We noted in our report to Congress that the "good cause"
exception is only available for rules that do not involve notice and
public comment procedures (those procedures normally followed in
rulemaking) and since HCFA had issued a notice of proposed rulemaking
and received public comments, the effective date could not be
accelerated. 

The Department of Agriculture, Rural Housing Service argued that the
60-day delay in the effective date of a rule entitled "Reengineering
and Reinvention of the Direct Section 502 and 504 Single Family
Housing Program" would result in a loss of the savings the rule would
produce and be contrary to the public interest.  As with the Medicare
payment revisions, the rule had been previously issued as a notice of
proposed rulemaking and the section 808(2) "good cause" exception
could not be invoked. 

Most recently, HUD in issuing a regulation entitled "Sale of HUD-Held
Single Family Mortgages" allowed for a 60-day delay in the effective
date from the date of publication in the Federal Register, January
24, 1997.  Since HUD did not file its report on the rule with
Congress until February 6, 1997, the rule was not delayed the
required 60 days. 

In addition to the major rule reports, GAO responded on September 16,
1996, to a request from the Chairman of the Subcommittee on Forests
and Public Land Management, Senate Committee on Energy and Resources,
addressing whether a memorandum issued by the Secretary of
Agriculture in connection with the Emergency Salvage Timber Sale
Program constituted a "rule" under SBREFA and should have been
submitted to the Houses of Congress and GAO before it could become
effective.  We concluded that the Department of Agriculture erred in
believing that the memorandum was not a rule. 


   NONMAJOR RULES
---------------------------------------------------------- Chapter 0:2

SBREFA requires that agencies file with GAO and both Houses of
Congress copies of all rules, not just "major" rules.  To date, we
have received 3,609 nonmajor rules.  Although the law is silent as to
GAO's role relating to the nonmajor rules, we have established a
database that would give minimal information about the 15 rules we
receive on the average each day.  Our database captures the title,
the agency, the Regulation Identification Number, the type of rule,
the proposed effective date, date published in the Federal Register,
the congressional review trigger date, and any joint resolutions of
disapproval that may be enacted.  We are working on a system that
would allow us to post the information currently contained in our
database on the Internet. 

An expansion of this database could make it more useful, not only to
GAO for use in its oversight work, but to the Congress and to the
public.  We have been working with executive agencies to get more
substantive information about the rules.  Attached to this testimony
is a copy of a questionnaire designed to obtain the basic information
about each rule required by SBREFA (5 U.S.C.  ï¿½ 801(a)(1)(B)).  This
questionnaire asks the agencies to report on such items as (1)
whether the agency provided an opportunity for public participation,
(2) whether the agency prepared a cost-benefit analysis or a risk
assessment, (3) whether the rule was reviewed under executive orders
for federalism or takings implications, and (4) whether the rule was
economically significant. 

In developing this questionnaire we consulted with Executive branch
officials to insure that the requested information would not be
unnecessarily burdensome.  We circulated the questionnaire for
comment to 20 agency officials with substantial involvement in the
regulatory process, including, of course, officials from the Office
of Information and Regulatory Affairs.  The Administrator of OIRA
submitted a response in her capacity as Chair of the Regulatory
Working Group, consolidating comments from all the agencies
represented in that group.  It is the position of the group that the
completion of this questionnaire for each of the 4,000 to 5,000 rules
we expect to be filed each year is too burdensome for the agencies
concerned.  The group points out that the majority of rules submitted
each year are routine or administrative or are very narrowly focused
regional, site-specific, or highly technical rules. 

We continue to believe that it would further the purposes of SBREFA
for a database of all rules submitted to GAO to be available for
review by Members of Congress and the public.  We will continue our
efforts to obtain agreement of the Executive branch on this matter. 

If the Internet database is to be of optimal use to interest groups
or the general public, it should direct the public to the
congressional committees of jurisdiction so comments about pending
rules can be forwarded to the legislators most able to address them. 
Ascertaining the committees of jurisdiction for the nonmajor rules
has been difficult because of the sheer number of rules submitted and
the lack of consistency in which the rules are cited in the
Congressional Record.  We have initiated discussions with the House
Parliamentarian to more efficiently obtain this information
electronically.  We hope at some point to tie GAO's database to that
used by the Parliamentarian, so that one comprehensive body of
information is available concerning regulations.  We plan to initiate
similar discussions with the Senate Parliamentarian. 

Thank you, Mr.  Chairman.  This concludes my prepared remarks.  I
would be happy to answer any questions you may have. 




(See figure in printed edition.)
============================================================ Chapter 0



(See figure in printed edition.)


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