The RFA requires agencies to prepare an initial regulatory flexibility analysis for each draft rule, unless the head of the agency certifies in the Federal Register that “the rule will not have a significant economic impact on a substantial number of small entities.” If a draft rule is expected to have a significant economic impact on a substantial number of small entities, agencies must publish their initial regulatory flexibility analysis, or a summary of it, in the Federal Register when they publish the proposed rule. To determine whether the EPA and OSHA panels, the regulatory agencies themselves, and SBA’s Chief Counsel for Advocacy followed the advocacy review panel procedural requirements and whether there were differences in how the panels were conducted, we interviewed (1) selected officials from EPA, OSHA, SBA’s Office of Advocacy, and OIRA who participated in the panels that had been convened as of November 1, 1997, and (2) 32 of the 63 small entity representatives who were identified by the agencies and were asked to provide advice and recommendations to the panels. Whether EPA Should Have Convened Additional Advocacy Review Panels Is Unclear

We reviewed a total of 19 notices of proposed rulemaking that EPA and OSHA published (17 and 2 notices, respectively) during the first year’s implementation of SBREFA’s advocacy review panel requirements. SBA’s Chief Counsel for Advocacy agreed with OSHA’s certifications that neither of its two proposed rules required an advocacy review panel. EPA convened panels between June 1996 and November 1, 1997, to review the following four draft rules: (1) control of emissions of air pollution from nonroad diesel engines (Mar. The EPA and OSHA panels, the regulatory agencies themselves, and the SBA Chief Counsel for Advocacy generally followed SBREFA’s procedural requirements in these five panels, as shown in the examples below. Implementation of the Panels Differed

Although the five advocacy review panels convened as of November 1, 1997, generally followed SBREFA’s procedural requirements, there were differences among the panels in how those requirements were implemented and in the general operation of the panels. Some of those differences appeared to occur because the panel process was new and evolving, and the panels made adjustments to their procedures as they gained experience. In the five panels convened as of November 1, 1997, EPA and OSHA provided the small entity representatives with information about the draft rules before the representatives provided input to the panels. The SBA Chief Counsel for Advocacy and some small entity representatives believe that EPA should have convened advocacy review panels for two rules for which advocacy review panels were not held. EPA and three of the five panels that were held did not meet some of the specific time requirements of the statute. Many of the suggestions that small entity representatives made regarding the panel process would not require changes to SBREFA. Selected EPA- and OSHA-Proposed Rules for Which Panels Were Not Held

This appendix lists the proposed rules that the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) published under notices of proposed rulemaking in the Federal Register during the first year’s implementation of the Small Business Regulatory Enforcement Fairness Act (SBREFA) advocacy review panel process. EPA and OSHA did not convene advocacy review panels for these proposed rules because they certified that the rules would not have a significant economic impact on a substantial number of small entities.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Environmental Protection Agency's (EPA) and the Occupational Safety and Health Administration's (OSHA) implementation of the Small Business Regulatory Enforcement Fairness Act's (SBREFA) advocacy review panel requirements, focusing on: (1) whether EPA and OSHA had applied the advocacy review panel requirements to all rules that they proposed between June 28, 1996, and June 28, 1997, that may have a significant economic impact on a substantial number of small entities; (2) whether the EPA and OSHA panels, the regulatory agencies themselves, and SBA's Chief Counsel for Advocacy followed the statute's procedural requirements for panels convened between June 28, 1996, and November 1, 1997, and whether there were differences among the panels in how the statute's requirements were implemented; (3) the changes, if any, that EPA and OSHA made to notices of proposed rulemaking as a result of the panels' recommendations; and (4) any suggestions that EPA and OSHA agency officials and small entity representatives may have regarding how the advocacy review panel process could be improved.

What GAO Found

GAO noted that: (1) during the first year of the SBREFA advocacy review panel requirements' implementation, OSHA convened a panel for one draft rule and published two other proposed rules for which panels were not held; (2) the Small Business Administration's (SBA) Chief Counsel for Advocacy agreed with OSHA's certification that neither of these two proposed rules required an advocacy review panel; (3) as of November 1, 1997, EPA had convened advocacy review panels for four draft rules; (4) EPA published 17 other proposed rules during the first year of the panel requirements that were reviewed by the Office of Information and Regulatory Affairs and for which panels were not held because EPA certified that the proposed rules would not have a significant economic impact on a substantial number of small entities; (5) the Chief Counsel said EPA should have convened panels for 2 of these 17 proposed rules; (6) it is unclear whether EPA should have convened panels for these rules because there are no criteria for determining whether a draft rule will have an impact on small entities; (7) EPA and OSHA panels, the regulatory agencies themselves, and the SBA Chief Counsel for Advocacy generally followed SBREFA's advocacy review panel procedural requirements in the five panels that had been convened as of November 1, 1997; (8) however, the panels did not meet some of the specific deadlines that SBREFA established; (9) there were some differences in how the five panels were conducted; (10) some of these differences appeared to occur because the panel process is new and evolving; however, the panels have made adjustments to their procedures as they have gained experience; (11) the five panels' recommendations to the regulatory agency heads focused on the agencies' consideration of additional regulatory alternatives and clarification of what the draft rules would require; (12) as of November 1, 1997, EPA and OSHA each had published one notice of proposed rulemaking for which they had convened advocacy review panels; (13) the agencies primarily responded to the panels' recommendations in the preambles of those notices, soliciting public comments on issues that the panels had recommended; and (14) many of the small entity representatives that GAO interviewed suggested ways to improve the panel process.