When it comes to informal rulemaking, agencies last week got instructions from the White House, via two new executiveorders, to essentially get their house in order.
The Trump administration used more dramatic language, describing the current regulatory and rulemaking process as one that ran “roughshod” over individuals’ and companies’ legal and constitutional rights.
But the executive orders collectively charge agencies to treat guidance as non-binding, develop procedures to seek public input when developing new, “significant” guidance and then make all documents public on a single, searchable database on their websites.
In addition, agencies are expected to review all guidance documents and rescind any that aren’t needed. Guidance that isn’t posted on an agency’s website is considered rescinded.
Ask transparency, industry and regulations experts about the executive orders and the potential impact they might have on the agencies asked to implement them, and their reactions vary.
On one hand, experts acknowledge the role guidance can play in advising stakeholders about agencies’ plans and policy views.
On the other, regulations policy and law experts see these executive orders as a long time coming, given the attempts agencies have made to use guidance as a stand-in for formal regulations.
Susan Dudley, a former Office of Information and Regulatory Affairs (OIRA) administrator during the George W. Bush administration, said she’s seen concern build over agencies’ use of guidance over the years.
She pointed to past recommendations the Administrative Conference of the United States, an independent federal agency designed to make recommendations about administrative process and procedures, had issued on how guidance should be used. The Office of Management and Budget and Government Accountability Office have weighed in on the topic too in recent years.
“I’ve been hearing about it for a long time,” Dudley said. “Non-partisan bodies have for a long time said agencies seem to be avoiding the notice and comment requirements of the Administrative Procedure Act by issuing what they call guidance, and then they use the guidance as if they’re really binding, and they should not be.”
The Administrative Procedure Act, which dates back to 1946, requires agencies to give the public an opportunity to read and comment on proposed regulations before publishing them in the Federal Register.
The trouble kicks in when agencies do avoid the notice and comment expectations of the APA to issue guidance documents, but then treat them as legally binding.
In an op-ed for Bloomberg, former Obama-era OIRA Administrator Cass Sunstein acknowledged guidance documents were often helpful to outside stakeholders but said agencies often used informal guidance to the formal notice and comment procedures the APA demands.
Executive order implementation is key
Policy and legal experts said implementation of the new EOs will be especially important, as agencies will likely need to conduct a top-to-bottom review of their guidance documents.
Dudley said agencies often reassess past guidance when new administrations come in, and review documents from the prior regime.
“Unlike regulations, a guidance document, until now, didn’t have to go through all the steps to put it in place. It was easy to change policy through guidance documents,” she said. “Going forward, I can see agencies would use this to review a little more carefully what existing policies might be out there in guidance. My guess is that the really hot button ones they’ve probably already looked at and addressed. It’s something that administrations would do when they come in, if they’re aware of them.”
The creation of a single website may pose challenges for some agencies, but others already have created similar single databases. The Environment Protection Agency, for example, allows the public to sort EPA guidance based on topic.
Guidance from other agencies, however, is more difficult to find. Knowing where to go should clear up confusion among stakeholders.
“We like the idea of providing greater transparency and greater visibility of administration guidance or rules,” David Berteau, president and CEO of the Professional Services Council, said. “We welcome the chance to provide input and comment on any agency guidance, and to the extent that’s what these executive orders are aiming for, then we would applaud that.”
Still, the executive orders, in some places, are vague. The EOs don’t specify how agencies are going to accept public input on future guidance documents that aren’t required to go through typical notice and comment procedures.
Dudley said executive orders are often intentionally vague and simply describe high-level principles in the beginning, leaving the details to another agency — the Office of Management and Budget in this case — to provide specific implementation guidelines at a later date.
The guidance EO doesn’t give OMB a specific deadline to issue such guidance. Agencies, however, have 120 days following the release of implementation instructions to establish an online guidance database, which Dudley said isn’t much time for agencies to conduct a top-to-bottom review of prior guidance and organize it on a single website.
Experts say the two new executive orders will likely have a greater impact on companies and other stakeholders who do business with certain agencies over others. Agencies that, by their nature, have more of a regulatory focus with a direct impact on the public will likely have more applicable guidance to review.
Guidance that addresses the internal workings of agency or government is excluded from the EO requirements. Guidance from the General Services Administration and OMB could fall under this category.
For Bill Weisberg, a government contracts attorney with Centre Law & Consulting, the executive orders are a solution in search of a problem.
Though he praised the desire for more transparency, he said guidance often helps his clients better understand new laws or better meet the needs of agency priorities.
Dudley acknowledged this concern.
“Everybody recognizes or everybody should recognize that by the mere fact of it being a guidance document, does not mean it’s illegitimate,” she said. “There are very legitimate roles for guidance, and regulated parties want guidance.”
Agencies may, for example, issue performance standards and then clarify those standards with subsequent guidance. That guidance can provide safe harbor for stakeholders, who want to ensure they’re in compliance.
The executive orders shouldn’t discourage agencies from disseminating this kind of guidance, she said.
“Often, small entities in particular value that,” Dudley said. “You wouldn’t want this to have that unintended consequence of agencies not being willing to provide information that is valuable and maybe does not need to go through notice and comment.”