Regulatory Flexibility Act: Inherent Weaknesses May Limit Its Usefulness for Small Governments

HRD-91-16 Published: Jan 11, 1991. Publicly Released: Jan 11, 1991.
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Pursuant to a congressional request, GAO reviewed weaknesses in the Regulatory Flexibility Act of 1980, intended to limit regulatory burdens on small governments.

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Matter for Congressional Consideration

Matter Status Comments
If Congress wishes to strengthen the implementation of the Regulatory Flexibility Act, it should consider amending the act to require that, in consultation with the Office of Management and Budget (OMB), SBA develop criteria as to whether and how federal agencies should conduct Regulatory Flexibility Act analyses for small governments. Also, Congress should consider expanding existing SBA authority to review and comment on proposed agency regulations affecting small governments. This expansion should direct SBA to work with OMB to ensure agency compliance with the act's provisions.
Closed - Implemented
H.R. 830 has been introduced in the House by Representative Ewing. This bill will strengthen the Regulatory Flexibility Act to include the legal right to review agencies' analyses in the courts. In the Senate, a similar measure has been attached to the National Competitiveness Act, which is awaiting joint conference. The provisions in this amendment strengthen the act's regulatory review process by allowing the judicial review of regulatory analyses. The act also strengthens SBA authority to publically oppose an agency's proposed review and analysis. Additionally, activities by OMB and SBA were initiated to improve the regulatory review process. OMB published Executive Order 12875 which has impact on the entire regulatory rulemaking process, including regulatory flexibility. SBA has issued further guidance to agencies on the development of regulatory flexibility analyses. SBA has also sponsored working groups and conferences on regulatory reform.

Recommendations for Executive Action

Agency Affected Recommendation Status
Small Business Administration The Administrator, SBA, should enhance SBA ability to monitor proposed regulations affecting small governments by developing small-government expertise within the Office of the Chief Counsel for Advocacy.
Closed - Not Implemented
Recent downsizing throughout the federal government agencies, including SBA, limits the usefulness of this recommendation.

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