	Executive Order and UMRA Had Little Effect on Agencies’ Rulemaking Actions

During the past 20 years, state, local, and tribal governments as well as businesses have expressed concerns about congressional and regulatory preemption of traditionally nonfederal functions and the costs of complying with federal regulations. The executive and the legislative branch have each attempted to respond to these concerns by issuing executive orders and enacting statutes requiring rulemaking agencies to take certain actions when they issue regulations with federalism or intergovernmental relations effects. Two prime examples of these responses are Executive Order 12612 (“Federalism”) and the Unfunded Mandates Reform Act of 1995 (UMRA). done to oversee federal agencies’ implementation of the order in the rulemaking process. Agencies Prepared Few Federalism Assessments During Review Timeframe

Our work showed that Executive Order 12612 had relatively little visible effect on federal agencies’ rulemaking actions during this time frame. To summarize the nearly 3 years of data depicted in figure 1, agencies covered by the order mentioned it in the preambles to about 26 percent of the 11,414 final rules they issued between April 1996 and December 1998. Many of the final rules that federal agencies issue are administrative or routine in nature, and therefore unlikely to have significant federalism implications. However, that does not appear to have been the case. As figure 3 shows, of the 117 major final rules issued by covered agencies between April 1996 and December 1998, the preambles indicated that only 1 had a federalism assessment. In response, the agencies said that their rules did not have sufficient federalism implications to trigger the executive order’s requirements. However, the criteria the agencies used to determine whether federalism assessments were needed varied among the agencies. OMB Has Taken Little Recent Action to Ensure Implementation of Executive Order 12612

OMB officials told us that they had taken little specific action to ensure implementation of the executive order, but said the order is considered along with other requirements as part of the regulatory review process under Executive Order 12866. The Results Act already requires agencies developing their strategic plans to “solicit and consider the views and suggestions of those entities potentially affected by or interested in the plan.” The Senate Governmental Affairs Committee report on the Results Act noted that the strategic plan “is intended to be the principal means for obtaining and reflecting, as appropriate, the views of Congress and those governmental and nongovernmental entities potentially affected by or interested in the agencies’ activities.”
In that regard, we believe that working with state and local governments or their representative organizations to develop goals and performance measures in federal grant-in-aid programs can strengthen the intergovernmental partnerships embodied in those programs.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed S. 1214, the Federalism Act of 1999, focusing on: (1) how often the preambles to covered agencies' final rules issued between April 1, 1996, and December 31, 1998, mentioned the executive order and how often they indicated the agencies had conducted Federalism assessments under the order; (2) what selected agencies have done to implement the requirements of the order; and (3) what Office of Management and Budget has done to oversee Federal agencies' implementation of the order in the rulemaking process.

What GAO Found

GAO noted that: (1) during the past 20 years, state, local, and tribal governments as well as businesses have expressed concerns about congressional and regulatory preemption of traditionally nonfederal functions and the costs of complying with federal regulations; (2) the executive and the legislative branch have each attempted to respond to these concerns by issuing executive orders and enacting statutes requiring rulemaking agencies to take certain actions when they issue regulations with federalism or intergovernmental relations effects; (3) two prime examples of these responses are Executive Order 12612 and the Unfunded Mandates Reform Act of 1995 (UMRA); (4) GAO's work showed that Executive Order 12612 had relatively little visible effect on federal agencies' rulemaking actions during this timeframe; (5) agencies covered by the order mentioned it in the preambles to about 26 percent of the 11,414 final rules they issued between April 1996 and December 1998; (6) however, mentioning the order in the preamble to a rule does not mean the agency took any substantive action; (7) the agencies usually just stated that no federalism assessment was conducted because the rules did not have federalism implications; (8) the preambles to only 5 of the 11,414 final rules that the agencies issued between April 1996 and December 1998 indicated that a federalism assessment had been done; (9) many of the final rules that federal agencies issue are administrative or routine in nature and therefore unlikely to have significant federalism implications; (10) the criteria the agencies used to determine whether federalism assessments were needed varied among the agencies; (11) Office of Management and Budget officials told GAO that they had taken little specific action to ensure implementation of the executive order, but said the order is considered along with other requirements as part of the regulatory review process under Executive Order 12866; (12) GAO reported that requirements in title II of UMRA appeared to have had only limited direct impact on agencies' rulemaking actions in the first 2 years of the act's implementation; and (13) GAO believes that working with state and local governments or their representative organizations to develop goals and performance measures in federal grant-in-aid programs can strengthen the intergovernmental partnerships embodied in those programs.