Hundreds of Rules May Be Void after Agencies Miss Procedural Step

Regulatory agencies are routinely violating federal law by not submitting final regulations to Congress, according to a recent Congressional Research Service (CRS) report. Any rule agencies have not submitted to Congress could be susceptible to a lawsuit.

According to CRS, in FY 2008, 28 federal agencies and cabinet departments failed to send copies of 101 final rules to the Government Accountability Office (GAO), the investigative arm of Congress. As of Oct. 26, 2009, 96 of the 101 rules still had not been submitted, raising questions about their legality.

The rules in question cover a broad range of regulatory policy issues. Among the 96 rules still not submitted:

• A February 2008 regulation changing the rules for leasing and management in the Alaska National Petroleum Reserve.
• A June 2008 rule changing procedures for employee drug and alcohol testing in the transportation sector.
• Multiple habitat preservation rules for species covered under the Endangered Species Act.

Typically, when agencies publish final rules in the Federal Register, they also identify a future date when the rule will take effect, often 30 or 60 days after the publication date. When the rule takes effect, it is considered to have the full force of law. However, the Congressional Review Act [1] (CRA), passed in 1996, added another step that requires that final rules "shall be submitted to Congress before a rule can take effect." The act also requires submission to the Comptroller General, the head of GAO. The law's intent is to give Congress an opportunity to review regulations. If Congress objects to the regulation, the act spells out procedures for congressional disapproval of the rule.

According to the CRS report, agencies' failure to submit rules to Congress was not limited to FY 2008. On five separate occasions from 1999 to 2009, the GAO compared its log of submitted rules to those published in the Federal Register and found significant discrepancies. For example, in 2005, GAO identified 460 regulations that had been published but that GAO had not received. Overall, "GAO said that it (and presumably Congress) did not receive more than 1,000 final rules during 7 of the past 10 years," the report says.

CRS more recently reviewed GAO's data for the early part of FY 2009 and identified 22 rules that had not been submitted. GAO's log of rules it has received is available online at www.gao.gov/fedrules [2].

The repeated failure of agencies to submit rules raises questions as to why a seemingly simple problem has not been rectified. Agencies should be aware of the problem: GAO has regularly transmitted its findings to past administrations, according to the CRS report, and has mentioned the problem in congressional testimony.

After each of its five reviews, GAO wrote to the Office of Information and Regulatory Affairs (OIRA), a branch of the White House Office of Management and Budget (OMB) in charge of executive branch regulatory policy. The letters discussed the implications of CRA compliance and included lists of rules not submitted to GAO.

Although OIRA oversees agency rulemaking activity, it has failed to respond to GAO's concerns. "GAO and OIRA officials said they were not aware of any effort by OIRA to contact federal agencies regarding the missing rules during the time periods covered by" four letters sent between 1999 and 2008, the CRS report says.

The most recent GAO-to-OIRA letter was sent May 26, 2009, and included the list of 101 rules not submitted to GAO during FY 2008. When contacted by CRS, OIRA denied having received the letter. "Subsequently, however, on November 12, 2009, the Deputy Administrator of OIRA sent an e-mail to federal agencies saying that it 'had come to my attention that your agency may not have submitted final rules to Congress and to [GAO] as required by the Congressional Review Act,'" the report says. "He urged the agencies to 'contact the GAO to determine which rules they have not yet received from your agency'," but did not include the list of rules prepared by GAO.

OMB spokesperson Tom Gavin told BNA news service [3] (subscription required), "We take very seriously our statutory responsibilities and encourage agencies to follow the law, including the Congressional Review Act. Agency compliance is not something we have direct control over. When we do hear of problems, we try to encourage agencies to follow the law."

The fate of rules that have been published in the Federal Register but not submitted to Congress is uncertain. Under the CRA, agencies' responsibility and ability to submit a rule does not expire. Submitting the rule now, even if it had been published years earlier, should, from a purely legal standpoint, cause it to go into effect immediately.

However, if agencies fail to submit rules, they will be susceptible to judicial review. Because of the plain language of the act, any regulated entity could make a case that it need not comply with a rule that has not been submitted to Congress. Regulated entities could also use an agency's failure to submit a rule as an argument for defying enforcement action, such as a fine or lawsuit, under that rule.

Despite the requirement that rules "shall be submitted to Congress before a rule can take effect," a separate section of the CRA injects confusion into judicial review of the effectiveness of a rule. Section 805 of the act states, "No determination, finding, action, or omission under this chapter shall be subject to judicial review."

Case law for the act is both limited and inconsistent. At least two U.S. district courts, citing Section 805, have ruled that courts may not decide whether a rule can be enforced based on its submission status under the act. However, a different court rejected those courts' interpretation and found that the judicial review exception does not apply to an agency's failure to submit a rule to Congress. That court placed a greater weight on congressional intent, citing a statement by then-Sen. Don Nickles (R-OK) printed in the Congressional Record after passage of the bill; the statement says, "The limitation on judicial review in no way prohibits a court from determining whether a rule is in effect." (For further discussion, see the May 2008 CRS report, Congressional Review of Agency Rulemaking: An Update and Assessment of The Congressional Review Act after a Decade, available at, www.fas.org/sgp/crs/misc/RL30116.pdf [4]).

According to the CRS report, "The issue of whether a court may prevent an agency from enforcing a covered rule that was not reported to Congress has not been resolved conclusively."

The CRS report, Congressional Review Act: Rules Not Submitted to GAO and Congress, was written by specialist Curtis W. Copeland and published on Dec. 29, 2009. A copy of the report obtained by OMB Watch (with an incomplete appendix) is available at www.ombwatch.org/files/regs/PDFs/CRS122909.pdf [5].