Regulatory Reform:

Compliance Guide Requirement Has Had Little Effect on Agency Practices

GAO-02-172: Published: Dec 28, 2001. Publicly Released: Jan 28, 2002.

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Section 212 of the Small Business Regulatory Enforcement Fairness Act requires agencies to publish compliance guides for each rule or group of related rules for which the agency is required to prepare a final regulatory flexibility analysis. GAO found that Section 212 has had little impact, and its implementation has varied across and sometimes within the agencies. None of the agencies in GAO's review provided GAO with guidance documents that met all of the statutory requirements for all of their 1999 and 2000 final rules. The agencies indicated that they tried to put their compliance guides in plain language--just as they have for all their regulatory materials. The guidance documents that the agencies gave GAO were often published on the agencies' web sites. Direct mail, electronic list servers, agency/regional offices, and workshops were also used for distribution.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Through the U.S. Troop Worthiness, Veteran's Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (H.R. 2206), enacted in Public Law 110-28, on May 25, 2007, Congress amended section 212 of the Small Business Regulatory Enforcement Act of 1996 and incorporated this recommendation into the Act.

    Matter: GAO also believes that Congress can strengthen the implementation of section 212 by clarifying other key terms in the statute, either by directly amending the statute or by directing some other entity to provide such clarity. For example: Section 212 also does not indicate when the compliance guides should be published--before the related final rule is published, coincident with the publication of the rule, or even before the rule takes effect. GAO does not believe that compliance guides should be published prior to the publication of a final rule, as changes to rules are sometimes made at the last minute. Neither does GAO believe that agencies should wait to publish compliance guides until the compliance requirements for their final rules take effect. Agencies could be instructed to publish the compliance guides coincident with or as soon as possible after the final rule is published, provided that the guides must be published no later than the effective date of the rule's compliance requirements.

  2. Status: Closed - Implemented

    Comments: Through the U.S. Troop Worthiness, Veteran's Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (H.R. 2206), enacted in Public Law 110-28, on May 25, 2007, Congress amended section 212 of the Small Business Regulatory Enforcement Act of 1996 and incorporated this recommendation into the Act.

    Matter: GAO also believes that Congress can strengthen the implementation of section 212 by clarifying other key terms in the statute, either by directly amending the statute or by directing some other entity to provide such clarity. For example: Section 212 currently says agencies "shall publish" the guides, but does not indicate where they should be published. At least one agency has published the guides as part of the preamble to the subject rule, thereby requiring affected small entities to read the Federal Register to obtain the guides. If Congress does not want agencies to publish the guides in this manner, it could require publication in some venue separate from the rule. Although publication on the agencies' web sites has certain advantages, other more proactive forms of publication could also be permitted and encouraged (e.g., sending the guides out to affected parties).

  3. Status: Closed - Implemented

    Comments: Through the U.S. Troop Worthiness, Veteran's Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (H.R. 2206), enacted in Public Law 110-28, on May 25, 2007, Congress amended section 212 of the Small Business Regulatory Enforcement Act of 1996 and incorporated this recommendation into the Act.

    Matter: GAO also believes that Congress can strengthen the implementation of section 212 by clarifying other key terms in the statute, either by directly amending the statute or by directing some other entity to provide such clarity. For example: Section 212 currently says that agencies must "designate" the publications prepared under the section as small entity compliance guides. However, the form in which those designations should occur is not clear. If Congress want agencies to make "small entity compliance guides" part of these publications' titles, Congress could change the word "designate" in the statute to "entitle." Consistent use of this phrase in the title could make it easier for small entities to locate the guides that the agencies develop. On the other hand, if Congress envisions another meaning to the term "designate," it could direct some other entity to clarify the issue.

  4. Status: Closed - Not Implemented

    Comments: Although other recommendations were implemented through P.L. 110-28, Congress took no action in that statute to amend the Regulatory Flexibility Act (RFA; 5 U.S.C. 601-612) to address this matter for consideration.

    Matter: Section 212 could also be clarified regarding its applicability to rules that have no compliance requirements. Some of the rules that agencies issue have no compliance requirements but require a compliance guide because they have a significant impact on small entities and require a FRFA. GAO does not believe that agencies should be required to prepare compliance guides for these types of rules. Therefore, the language of section 212 could be changed to limit its application to rules that agencies do not certify under subsection 605(b) of title 5 and that have compliance requirements applicable to small entities.

  5. Status: Closed - Not Implemented

    Comments: Through the U.S. Troop Worthiness, Veteran's Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (H.R. 2206), enacted in Public Law 110-28, on May 25, 2007, Congress amended section 212 of the Small Business Regulatory Enforcement Act of 1996, but it did not incorporate this recommendation into the Act.

    Matter: GAO also believes that changes are needed with regard to the requirements in section 212. For example, to address the question of whether an agency must prepare a compliance guide when it prepares a voluntary FRFA, section 212 could be amended to require a guide whenever the agency does not certify the rule under section 605(b) of title 5, United States Code. Doing so would exclude rules for which a FRFA was prepared (either voluntary or otherwise) but that the agency ultimately certified as not having a significant impact on small entities.

  6. Status: Closed - Not Implemented

    Comments: Through the U.S. Troop Worthiness, Veteran's Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (H.R. 2206), enacted in Public Law 110-28, on May 25, 2007, Congress amended section 212 of the Small Business Regulatory Enforcement Act of 1996, but it did not incorporate this recommendation into the Act.

    Matter: As GAO has said many times in the past, it believes that there needs to be greater clarity and consistency with regard to how key terms in the Requirement Flexibility Act (RFA) are defined and implemented. Such clarity and consistency becomes even more important when RFA determinations serve as the trigger for requirements such as section 212. The requirement in S. 849 directing the Small Business Administration (SBA) Chief Counsel for Advocacy to promulgate a rule to define the terms "significant economic impact" and "substantial number of small entities" can go a long way toward defining what rules require a final regulatory flexibility analysis (FRFA) and therefore, require a small entity compliance guide. Although a single, rigid definition may not be feasible for all agencies or even all rulemaking within a single agency, the rule could establish some reasonable parameters and provide useful examples of what types of regulatory effects should and should not be considered "significant" and how broadly those effects must be felt to be considered affecting a "substantial" number of small entities.

  7. Status: Closed - Implemented

    Comments: Through the U.S. Troop Worthiness, Veteran's Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 (H.R. 2206), enacted in Public Law 110-28, on May 25, 2007, Congress amended section 212 of the Small Business Regulatory Enforcement Act of 1996 and incorporated this recommendation into the Act.

    Matter: GAO also believes that Congress can strengthen the implementation of section 212 by clarifying other key terms in the statute, either by directly amending the statute or by directing some other entity to provide such clarity. For example: If Congress decides to limit the applicability of section 212 to uncertified rules with compliance requirements applicable to small entities, Congress could also clarify what is meant by the term "compliance requirements." Part of this clarification could include delineation of how relatively straightforward compliance requirements should be treated. For example, if a National Marine Fisheries Service rule simply bans fishing within a particular geographic area, should the agency prepare a compliance guide? If so, the guide could be very short, essentially taking the form of a public notice.

 

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