Regulatory Flexibility Act: Status of Agencies' Compliance

GAO discussed its report on agencies' compliance with the Regulatory Flexibility Act. GAO noted that: (1) the act requires federal agencies to assess the impact of proposed regulations on small entities, or certify that the rule will not have a significant economic impact on a substantial number of small entities; (2) the Small Business Administration (SBA) is responsible for monitoring and reporting on agencies' compliance under the act; (3) SBA reports indicate agencies' compliance with the act has varied widely; (4) SBA cited the Internal Revenue Service as repeatedly noncompliant, because it considered many of its rules to be interpretive and not subject to the act's requirements; (5) SBA has been hampered by its inability to review agricultural marketing orders and certain independent regulatory agency rules; (6) many agencies had not planned for or conducted regulatory flexibility reviews of their existing rules; and (7) SBA and the Office of Management and Budget have taken some actions in response to the report's recommendations, including committing to cooperating more closely and developing regulatory flexibility guidance, but congressional action is needed to strengthen the statutory authority for regulatory flexibility.