CRA defines a “major” rule as one that,  among other things, has resulted in or is likely to result in an annual effect  on the economy of $100 million or more. OIRA also provides guidance to agencies on regulatory requirements. Agencies Issued about 35 Percent of Major Rules and about 44 Percent of Nonmajor Rules without an NPRM from 2003 to 2010

During calendar years 2003 through 2010, agencies published 568 major  rules and about 30,000 nonmajor rules. Agencies Most Often Invoked the Good Cause Exception When Publishing Rules without an NPRM

		Good Cause Exception Commonly Used

The agencies that published rules in our sample claimed the good cause  exception in 77 (plus or minus 11) percent of major rules and 61 (plus or  minus 10) percent of nonmajor rules without an NPRM, as shown in figure  5 below. In examining these 92 rules we  identified five primary categories of explanations (more than one category  sometimes applies to a given rule): a law imposed a deadline either requiring the agency to issue a rule or  requiring a program to be implemented by a date that agencies  claimed would provide insufficient time to provide prior notice and  comment—36 rules; a law prescribed the content of the rule issued—31 rules;  the agency said it was responding to an emergency—19 rules;  the rule implemented technical changes—5 rules; and all other explanations (for example, an agency issued a final rule  without an NPRM in response to a court decision)—14 rules. Specifically, we found that  in 84 of the 123 major rules without an NPRM in our sample, agencies  described circumstances in which a statute: (1) required or authorized  them to issue the rule without an NPRM, (2) prescribed the content of the  rule, or (3) set a deadline for a rule or program which the agency stated  did not allow sufficient time to issue an NPRM. When Agencies Publish Major Rules without an NPRM, They Often Provide Information on Economic Effects and Request Comments, But Do Not Always Respond to Comments

		Agencies Provided Information on Economic Effects of Most Major Rules without an NPRM

Of the 123 major rules without an NPRM that we reviewed, 113 provided  some estimates of economic effects, such as on the potential costs or  benefits. Although Not Required, Agencies Often Requested Comments on Major Final Rules Issued without an NPRM, but Did Not Always Respond to Comments Received

Of the 123 major rules without an NPRM in our sample, we found that  agencies requested comments for 77 rules where they had discretion  over at least part of the regulation’s content. Agencies sometimes solicit  public comments through the Federal Register on such rules, though not  required to do so. Typically, agency responses to comments received from the public are  published in the Federal Register when a follow-up rule is issued. Each of these 26 rules has  significant economic effects, with some of these rules having an impact of  a billion dollars a year or more. These rules also cover important issues  ranging from national health care policies to manufacturing incentive  programs. For example, in one of the 26 rules, an agency defined a pre- existing condition to implement the Patient Protection and Affordable  Care Act, and sought public comment. The agency received 4,627  comments, but has not published a response to them. The public does not know whether the agency  considered the comments, accepted or rejected the views or evidence  presented, or if the agency intends to finalize and potentially change the  rule. We found that when agencies did respond to public comments they often  made changes to the rules. Recommendation for Executive Action

To better balance the benefits of expedited rulemaking procedures with  the benefits of public comments that are typically part of regular notice- and-comment rulemakings, and improve the quality and transparency of  rulemaking records, we recommend that the Director of OMB, in  consultation with the Chairman of ACUS, issue guidance to encourage  agencies to respond to comments on final major rules, for which the  agency has discretion, that are issued without a prior notice of proposed  rulemaking. OMB disagreed with our recommendation to issue guidance to encourage  agencies to respond to comments on final major rules, for which the  agency has discretion, that are issued without a prior notice of prior  rulemaking. When it is unclear whether agencies considered comments,  rulemaking is less transparent to the public, and, as courts have  recognized, the opportunity to comment is meaningless unless the  agency responds to significant points raised by the public. Appendix I: Scope and Methodology

For final rules published during calendar years 2003 through 2010, the  objectives of this report were to:  1. 2. Identify which exceptions agencies used when issuing final rules  without an NPRM. 3. Our sample contained rules by 52 different agencies, including every  cabinet-level agency issuing regulations and every agency that published  a major rule during the 8-year period.
Why GAO Did This Study

Agencies publish thousands of rules each year, with significant benefits and costs. Before issuing a final rule, agencies are generally required to publish an NPRM in the Federal Register. Agencies must then respond to public comments when issuing final rules. Agencies may use exceptions in certain circumstances to forgo this NPRM process to expedite rulemaking. The Office of Management and Budget (OMB) has authority to provide guidance on regulatory issues. GAO was asked to provide information on the rulemaking process. This report addresses (1) how often agencies issued final rules without an NPRM; (2) which exceptions agencies used to do this; and (3) whether agencies took certain actions when issuing major rules without an NPRM, including voluntarily requesting and responding to public comments. GAO reviewed a generalizable random sample of 1,338 final rules published during calendar years 2003 through 2010. The sample contained rules by 52 agencies, including all cabinet departments issuing regulations. GAO completed more detailed analyses of 123 major rules without an NPRM, including every such rule published from 2007 through 2010, to obtain additional information to answer the objectives.

What GAO Found

Agencies did not publish a notice of proposed rulemaking (NPRM), enabling the public to comment on a proposed rule, for about 35 percent of major rules and about 44 percent of nonmajor rules published during 2003 through 2010. A major rule has significant economic impact and may, for example, have an annual effect on the economy of $100 million or more. Agencies published a total of 568 major rules from 2003 through 2010. Agencies also published about 30,000 nonmajor rules during this period, which have less economic significance and can involve routine administrative issues.
Agencies frequently cited the "good cause" exception and other statutory exceptions for publishing final rules without an NPRM. Agencies in GAO's sample used the "good cause" exception for 77 percent of major rules and 61 percent of nonmajor rules published without an NPRM. Agencies may use the good cause exception when they find that notice and comment procedures are "impracticable, unnecessary, or contrary to the public interest." In practice, agencies may find an NPRM "impracticable" when the rule must be issued by a statutory deadline, "unnecessary" when the rule pertains to technical corrections, and "contrary to the public interest" in an emergency situation. To a lesser extent, agencies also used other statutory exceptions to issue a rule without an NPRM. For example, in 84 of the 123 major rules that GAO analyzed, agencies described circumstances in which a statute: (1) either required or authorized them to issue the rule without an NPRM, (2) prescribed the content of the rule, or (3) set a deadline for a rule or program which the agency stated did not allow sufficient time to issue an NPRM.
GAO found that agencies, though not required, often requested comments on major final rules issued without an NPRM, but they did not always respond to the comments received. Agencies may solicit comments through the Federal Register when publishing a final rule without an NPRM, but the public does not have an opportunity to comment before the rule's issuance, nor is the agency obligated to respond to comments it has received. For example, agencies requested comments on 77 of the 123 major rules issued without an NPRM in GAO's sample. The agencies did not issue a follow-up rule or respond to comments on 26 of these 77 rules. This is a missed opportunity, because GAO found that when agencies did respond to public comments they often made changes to improve the rules. In addition, each of these 26 rules is economically significant and some of these rules have an impact of a billion dollars a year or more. These rules also cover important issues ranging from national health care policies to manufacturing incentive programs. For example, in one of the 26 rules, an agency defined a pre-existing condition to implement the Patient Protection and Affordable Care Act and sought public comment. The agency received 4,627 comments, but has not published a response to them. When agencies do not respond to comments requested, the public does not know whether the agency considered their comments, or if it intends to change the rule. As the courts have recognized, the opportunity to comment is meaningless unless the agency responds to significant points raised by the public.

What GAO Recommends

GAO recommends that OMB issue guidance to encourage agencies to respond to comments on final major rules, for which the agency has discretion, that are issued without a prior NPRM. OMB disagreed that guidance would offer substantial benefits. GAO believes the recommendation remains valid, as further discussed in the report.