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A Summary of The Truth in Regulating Act 2000, Public Law No. 106-312

S.1198,the Truth in Regulating Act 2000, was signed into law by President Clinton on October 17, 2000, (Public Law No: 106-312). However, so far Congress has refused to implement it.

The main objective of the bill is to require the General Accounting Office to report to Congress upon request on "economically significant rules" of Federal agencies. The Act will only be effective for three years.

The three main stated aims of the bill are to:

• increase the transparency of regulatory decisions;
  
• to facilitate congressional oversight to ensure that agency rules fulfill statutory requirements in an efficient, effective, and fair manner;

• and to increase the accountability of Congress and the agencies to the people.

This bill covers most federal agencies, defined by section 551(1) of title 5 of the U.S.C., and its main exceptions are independent regulatory agencies and commissions.

The scope of the bill only considers "economically significant rules " (ESR), and this term is defined as

• a proposed or final rule, including an interim or direct final rule or for which an agency has prepared an initial or final regulatory flexibility analysis pursuant to section 603 or 604 of title 5, United States Code,

• that may have an annual effect on the economy of $100,000,000 or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

When an agency publishes an ESR, a chairman or ranking member of a committee of jurisdiction of either House of Congress may request the Comptroller General of the United States (CG) to review the rule.

The CG has 180 days to create a report that includes an "independent review" (IR) and submit it to the authority in Congress. GAO has discretion in prioritizing evaluations and (possibly not fulfilling requests).

An IR must contain an explanation of an agency's data and assumptions and an analysis that considers their strengths and weaknesses and their potential effects on the rulemaking.

The report must state if the agency's conclusions are supported by their analysis of the strengths and weaknesses of their rulemaking.

Then, potential benefits and costs of the rule are analyzed by considering quantitative and qualitative effects on the potential affected parties, which must be clearly defined. The independent review must also analyze alternatives that the agency considered and published in the public record as well the rule's impact on the regulatory process and federalism.

The text of the bill did not explicitly state that the CG must use an economic analysis to compare the costs and benefits of the final rules versus proposed alternatives. Furthermore, the CG only has to respond requests of review of ERS's by a chairman or a ranking member of a committee of jurisdiction of that rule of either House of Congress

The pilot project will expire after three years and the CG must submit to Congress a report of its effectiveness with a recommendation of whether or not the project should continue.

The act does not specify whether a cost/benefit analysis should be performed to determine its effectiveness.

Congress has authorized the General Accounting Office spend $5.2 million in fiscal years 2000 through 2002 to execute this act.

Click Here for Public Law No: 106-312

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