
New Report Examines Agency Review of Regulations
by Sam Kim, 8/21/2007
The Government Accountability Office (GAO) has released a new report on the process by which federal regulatory agencies review regulations after they take effect. Agencies conduct reviews to comply with existing law, as a matter of agency policy, and in response to White House requests. The report finds the quality of reviews varies widely and determines the major barriers to more useful reviews are gaps in available data and problems with public participation.
In the report, Reexamining Regulations: Opportunities Exist to Improve Effectiveness and Transparency of Retrospective Reviews, GAO examined the reviews of nine regulatory agencies completed from 2001-2006.
GAO found the nine agencies reviewed at least 1,300 regulations. GAO acknowledged the number may be higher because agencies sometimes do not document reviews. Of the 1,300, the majority were conducted at the discretion of agencies, not as a result of statutory requirements.
GAO categorized regulatory reviews as either mandatory — those required by statute — or discretionary — those resulting from inter-agency policies or petitions from regulated entities or the public. The most common type of mandatory review is that which is required by Section 610 of the Regulatory Flexibility Act. Section 610 requires agencies to review every ten years rules having a "significant economic impact" on small businesses or other small entities.
A significant number of discretionary reviews were performed at the behest of the White House Office of Management and Budget (OMB), according to the report. Under President George W. Bush, OMB's Office of Information and Regulatory Affairs has frequently prepared lists of regulations the White House desires agencies to review. For the rules studied, the OMB initiative accounted for up to 20 percent of reviews. OMB's suggestions accounted for up to 74 percent of the rules EPA reviewed, according to the report.
The outcome of these reviews can be valuable to decision-makers, regulated entities and the public. Agencies most often evaluate "ways to improve the efficiency or effectiveness" of a rule and "options for reducing regulatory burdens on regulated entities." Review results may lead to changes in regulations or identification of the need for further study. If agencies determine no change is necessary, it is often seen as confirmation that the rule is effective and continues to provide public value.
Overall, agencies reported discretionary reviews to be more valuable than mandatory reviews in accomplishing these goals, according to GAO. The report stated, "A primary reason for this appears to be that discretionary reviews may better be suited to address emerging issues than mandatory reviews with a predetermined time frame." Agencies often conduct discretionary reviews in response to public petition or at the behest of regulated entities.
GAO identified three factors as characteristic of a quality review: use of uniform standards in selecting, conducting and reporting reviews; solicitation and consideration of public input; and documentation of the review process. For all three factors, GAO found variability among agencies and between mandatory and discretionary reviews.
GAO's findings related to public participation raise concerns over the access of the regulated community during the review process. For the selection of rules to review, GAO stated, "Agencies in our review more often reported that they solicit public input on which regulations to review during informal meetings with their regulated entities." For the conduct of the review, agencies often publish notices of intent to review a rule in the Federal Register allowing both the public and regulated entities to comment, according to the report.
Because reviews varied in the quality of their conduct and their usefulness, GAO identified barriers impeding more effective review. Among others, problems include a lack of necessary and useful data and a lack of public participation and transparency.
Agency officials complain of a lack of baseline data, according to the report. Baseline data provides information on conditions before a regulation took effect and is necessary to measure progress.
The Paperwork Reduction Act (PRA) impairs the ability of agencies to collect data and may be exacerbating data gaps. The PRA requires agencies to obtain approval from OMB before collecting data or other forms of information, and it creates requirements for reducing government paperwork on an annual basis. Another problem is the failure of agencies to plan for future review during development of a regulation.
Agency officials also believe a lack of public participation negatively impacts the quality and usefulness of reviews, according to GAO. Agencies report receiving little input despite outreach efforts. However, lack of awareness of reviews is still a problem. GAO stated, "We were not always able to track retrospective review activities, identify the outcome of the review, or link review results to subsequent follow-up activities." The lack of transparency may contribute to depressed public participation in the review process.
GAO made several recommendations for officials in the executive branch. GAO urged OMB to propose to agencies guidelines for the review process. GAO encouraged OMB to address how agencies should plan for future reviews during the development of a rule, how agencies can prioritize reviews, what standards should be set for reporting and documenting reviews, and how public participation can be stimulated.
GAO prepared the report for Reps. Joe Barton (R-TX) and Ed Whitfield (R-KY). GAO sent the report to the congressmen on July 16 and released it to the public Aug. 15.
