By Cindy Skrzycki
Tuesday, December 20, 2005

The Office of Management and Budget wants to give agencies guidance on their guidance.

The OMB's Office of Information and Regulatory Affairs is trying to address an accepted practice in which many agencies issue policy statements and other documents as "guidance" to interpret their rules and set out expectations for compliance.

Unlike traditional rulemaking, guidance is not subject to notice and comment procedures or judicial review. It's faster to issue and, normally, not reviewed by the OIRA. Though not legally binding, guidance is sometimes considered practically binding by regulated industries, a sort of "backdoor" rulemaking.

The exercise has become controversial at times when guidance takes on the practical meaning and enforceability of a rule. For instance, in the late 1990s, business groups blew up when the Environmental Protection Agency issued guidance on how to handle complaints alleging disparate impacts on minority populations living near industrial facilities and when the Occupational Safety and Health Administration issued a policy letter on how to regulate work done at home.

More recently, business groups have complained that OSHA's ergonomic guidelines, which set out practices for several industries to follow, are too much like a rule. The U.S. Chamber of Commerce last year challenged the EPA on its authority to assert regulatory control over prions, infectious agents made primarily of protein that the EPA wants to treat as "pests." The chamber told the EPA that the agency should subject its decision to notice-and-comment rulemaking.

Agencies have lost several court cases in which it has been found that guidance was masquerading as a rule. A 2003 appeals court opinion found that the EPA made a major policy change in an existing rule involving pesticides with a news release that it issued in December 2001. The court told the agency that it failed to "engage in the requisite notice-and-comment rulemaking" and that it should reinstate the old rule.

"Guidance is a good thing," said Jeffrey Lubbers , fellow in law and government at the American University Washington College of Law . "The problem comes in when agencies treat them as binding on the public without notice and comment." He added that there is a natural tension between agencies using the practice for good reasons and them abusing it by avoiding the real rulemaking process.

To clear up the ambiguity, the OMB proposes that agencies get approval from their top officials before issuing "significant" guidance, which it defines as dealing with issues that would cost the economy more than $100 million annually or are "highly controversial" or technically "novel or complex." Guidance documents should be available to the public on agency Web sites.

Agency comments on the proposed "good guidance practices" or GGP, are due Dec. 23.

"The new guidance will enhance the opportunity for the public to participate in the most important regulatory guidance notices issued by federal agencies," John D. Graham , OIRA administrator, said in an e-mail.

Some agencies already are doing what the OMB is asking. EPA divisions routinely release guidance for comment, an official said. The Agriculture Department asked for comments on guidance it issued last February for its National Organic Program . The Food and Drug Administration has "good guidance procedures" in place.

The proposal could have widespread effect. In 2000, the House Committee on Government Reform published a report that found that between 1996 and 1999, the Labor Department issued 3,374 guidelines, manuals, policy statements, handbooks and such that qualified as guidance.

Despite its complaints, business has a love-hate relationship with guidance.

Randy Johnson , vice president for labor and immigration at the U.S. Chamber of Commerce, said business values guidance when it clarifies compliance or technical issues. It is less enthusiastic when courts pay attention to it or it is used for enforcement purposes.

"Many employers want a hint of how a rule will be enforced . . . but then guidance is the official word of the agency and the courts defer to it," Johnson said. Business wants guidance to have disclaimers as to its enforceability.

Public-interest groups come to a different conclusion. They are concerned that the new procedures would further add to the burdens of agencies trying to do rulemakings.

Graham said groups worried about the new requirements should weigh that concern against the time consumed on court cases addressing "confusion about what is a rule and what is guidance."

The Natural Resources Defense Council said it supports the idea of accountability by the agencies but is concerned that the new approach might allow too much interference by executive reviewers.

"We are concerned that this will subordinate agency decision-making to industry at the public's expense," said Chris Murray , consulting NRDC attorney on the issue. "It has the potential to burden agencies with a lot more work . . . and create a role for business to exert a lot more influence." The OMB proposal gives industry a chance to oppose guidance as being too costly but doesn't require that the benefits of the guidance be included in weighing the issue.

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Out for comment: David Sparkman , spokesman for the American Moving and Storage Association, dropped a helpful online acronym finder in some of his friends' virtual stockings. He assumes that most professionals in Washington dealing with regulatory issues run into TLAs all the time -- Three Letter Acronyms such as DOT, MMS, FCC, FDA, FCA, BXA and on and on. He advises dashing over to http://www.acronymfinder.com to find out just what those letters stand for.