oversight

Congressional Review Act

Published by the Government Accountability Office on 1997-03-06.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          United States General Accounting Office

GAO                       Testimony
                          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
              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.


              SBREFA  defines a “major” rule as one which has resulted in or is likely to
Major Rules   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



              Page 1                                                       GAO/T-OGC-97-29
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.




Page 2                                                        GAO/T-OGC-97-29
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.
§ 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.




Page 3                                                      GAO/T-OGC-97-29
                 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.


                 SBREFA requires that agencies file with GAO and both Houses of Congress
Nonmajor Rules   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. § 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.




                 Page 4                                                        GAO/T-OGC-97-29
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.




Page 5                                                      GAO/T-OGC-97-29
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