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3432

Federal Register

/ Vol. 72, No. 16 / Thursday, January 25, 2007 / Notices

OFFICE OF MANAGEMENT ANDBUDGETFinal Bulletin for Agency GoodGuidance Practices

AGENCY

Office of Management andBudget, Executive Office of thePresident.

ACTION

Final bulletin.

SUMMARY

The Office of Managementand Budget (OMB) is publishing a finalBulletin entitled,

‘‘

Agency GoodGuidance Practices,

’’

which establishespolicies and procedures for thedevelopment, issuance, and use of significant guidance documents byExecutive Branch departments andagencies. This Bulletin is intended toincrease the quality and transparency of agency guidance practices and thesignificant guidance documentsproduced through them.On November 23, 2005, OMBproposed a draft Bulletin for publiccomment. 70 FR 71866 (November 30,2005). Upon request, OMB extended thepublic comment period from December23, 2005 to January 9, 2006. 70 FR76333 (December 23, 2005). OMBreceived 31 comments on the proposalfrom diverse public and privatestakeholders (see

http:// www.whitehouse.gov/omb/inforeg/ good

guid/c-index.html

) and input fromFederal agencies. The final Bulletinincludes refinements developed throughthe public comment process andinteragency deliberations.

DATES

The effective date of this Bulletinis 180 days after its publication in the

Federal Register

FOR FURTHER INFORMATION CONTACT

Margaret Malanoski, Office of Information and Regulatory Affairs,Office of Management and Budget, 72517th Street, NW., New Executive OfficeBuilding, Room 10202, Washington, DC20503. Telephone (202) 395

–

3122.

SUPPLEMENTARY INFORMATION

Introduction

As the scope and complexity of regulatory programs have grown,agencies increasingly have relied onguidance documents to inform thepublic and to provide direction to theirstaffs. As the impact of guidancedocuments on the public has grown, sotoo, has the need for good guidancepractices

—

clear and consistent agencypractices for developing, issuing, andusing guidance documents.OMB is responsible both forpromoting good management practicesand for overseeing and coordinating theAdministration

’

s regulatory policy.Since early in the Bush Administration,OMB has been concerned about theproper development and use of agencyguidance documents. In its 2002 draftannual Report to Congress on the Costsand Benefits of Regulations, OMBdiscussed this issue and solicited publiccomments regarding problematicguidance practices and specificexamples of guidance documents inneed of reform.

OMB has beenparticularly concerned that agencyguidance practices should be moretransparent, consistent and accountable.Such concerns also have been raised byother authorities, including Congressand the courts.

In its 2002 Report to Congress, OMBrecognized the enormous value of agency guidance documents in general.Well-designed guidance documents

U.S. Office of Management and Budget,

Draft Report to Congress on the Costs and Benefits of Federal Regulations,

67 FR 15,014, 15,034

–

35(March 28, 2002).

See, e.g.,

Food and Drug AdministrationModernization Act of 1997, 21 U.S.C.

371(h)(establishing FDA good guidance practices as law);

‘‘

Food and Drug Administration Modernization andAccountability Act of 1997,

’’

S. Rep. 105

–

43, at 26(1997) (raising concerns about public knowledge of,and access to, FDA guidance documents, lack of asystematic process for adoption of guidancedocuments and for allowing public input, andinconsistency in the use of guidance documents);House Committee on Government Reform,

‘‘

Non-Binding Legal Effect of Agency GuidanceDocuments,

’’

H. Rep. 106

–

1009 (106th Cong., 2dSess. 2000) (criticizing

‘‘

back-door

’’

regulation); theCongressional Accountability for RegulatoryInformation Act, H.R. 3521, 106th Cong.,

4 (2000)(proposing to require agencies to notify the publicof the non-binding effect of guidance documents);

Gen. Elec. Co.

EPA,

290 F.3d 377 (D.C. Cir. 2002)(striking down PCB risk assessment guidance aslegislative rule requiring notice and comment);

Appalachian Power Co.

EPA,

208 F.3d 1015 (D.C.Cir. 2000) (striking down emissions monitoringguidance as legislative rule requiring notice andcomment);

Chamber of Commerce

Dep

’

t of Labor,

174 F.3d 206 (D.C. Cir. 1999) (striking down OSHADirective as legislative rule requiring notice andcomment); Administrative Conference of the UnitedStates, Rec. 92

–

2, 1 C.F.R. 305.92

–

2 (1992) (agenciesshould afford the public a fair opportunity tochallenge the legality or wisdom of policystatements and to suggest alternative choices);

American Bar Association, Annual Report Including Proceedings of the Fifty-Eighth Annual Meeting,

August 10

–

11, 1993, Vol. 118, No. 2, at 57(

‘‘

the American Bar Association recommends that:Before an agency adopts a nonlegislative rule thatis likely to have a significant impact on the public,the agency provide an opportunity for members of the public to comment on the proposed rule and torecommend alternative policies or interpretations,provided that it is practical to do so; whennonlegislative rules are adopted without priorpublic participation, immediately followingadoption, the agency afford the public anopportunity for post-adoption comment and givenotice of this opportunity.

’’

); 3 American BarAssociation,

‘‘

Recommendation on Federal AgencyWeb Pages

’’

(August 2001) (agencies shouldmaximize the availability and searchability of existing law and policy on their Web sites andinclude their governing statutes, rules andregulations, and all important policies,interpretations, and other like matters on whichmembers of the public are likely to request).

serve many important or even criticalfunctions in regulatory programs.

Agencies may provide helpful guidanceto interpret existing law through aninterpretive rule or to clarify how theytentatively will treat or enforce agoverning legal norm through a policystatement. Guidance documents, usedproperly, can channel the discretion of agency employees, increase efficiency,and enhance fairness by providing thepublic clear notice of the line betweenpermissible and impermissible conductwhile ensuring equal treatment of similarly situated parties.Experience has shown, however, thatguidance documents also may be poorlydesigned or improperly implemented.At the same time, guidance documentsmay not receive the benefit of carefulconsideration accorded under theprocedures for regulatory developmentand review.

These procedures include:(1) Internal agency review by a senioragency official; (2) public participation,including notice and comment underthe Administrative Procedure Act(APA); (3) justification for the rule,including a statement of basis andpurpose under the APA and variousanalyses under Executive Order 12866(as further amended), the RegulatoryFlexibility Act, and the UnfundedMandates Reform Act; (4) interagencyreview through OMB; (5) Congressionaloversight; and (6) judicial review.Because it is procedurally easier to issueguidance documents, there also may bean incentive for regulators to issueguidance documents in lieu of regulations. As the D.C. Circuit observedin

Appalachian Power:

The phenomenon we see in this case isfamiliar. Congress passes a broadly wordedstatute. The agency follows with regulationscontaining broad language, open-endedphrases, ambiguous standards and the like.Then as years pass, the agency issuescirculars or guidance or memoranda,explaining, interpreting, defining and oftenexpanding the commands in regulations. Oneguidance document may yield another andthen another and so on. Several words in aregulation may spawn hundreds of pages of text as the agency offers more and moredetail regarding what its regulations demandof regulated entities. Law is made, withoutnotice and comment, without publicparticipation, and without publication in the

Federal Register

or the Code of FederalRegulations.

See

U.S. Office of Management and Budget,

Stimulating Smarter Regulation: 2002 Report toCongress on the Costs and Benefits of Regulationsand Unfunded Mandates on State, Local and Tribal Entities,

–

74 (2002) (hereinafter

‘‘

2002 Report toCongress

’’

Id.,

at 72.

Appalachian Power,

208 F.3d at 1019.

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Federal Register

/ Vol. 72, No. 16 / Thursday, January 25, 2007 / Notices

Concern about whether agencies areproperly observing the notice-and-comment requirements of the APA hasreceived significant attention. Thecourts, Congress, and other authoritieshave emphasized that rules which donot merely interpret existing law orannounce tentative policy positions butwhich establish new policy positionsthat the agency treats as binding mustcomply with the APA

’

s notice-and-comment requirements, regardless of how they initially are labeled.

Moregeneral concerns also have been raisedthat agency guidance practices should be better informed and moretransparent, fair and accountable.

Poorly designed or misused guidancedocuments can impose significant costsor limit the freedom of the public. OMBhas received comments raising theseconcerns and providing specificexamples in response to its proposedBulletin,

its 2002 request for commentson problematic guidance

and its otherrequests for regulatory reformnominations in 2001

and 2004.

ThisBulletin and recent amendments toExecutive Order 12866 respond to theseproblems.

This Bulletin on

‘‘

Agency GoodGuidance Practices

’’

sets forth generalpolicies and procedures for developing,issuing and using guidance documents.The purpose of Good GuidancePractices (GGP) is to ensure thatguidance documents of ExecutiveBranch departments and agencies are:Developed with appropriate review andpublic participation, accessible andtransparent to the public, of high

See, e.g., Appalachian Power; Gen. Elec. Co.;Chamber of Commerce;

House Committee onGovernment Reform,

‘‘

Non-Binding Legal Effect of Agency Guidance Documents

’’

; ACUS Rec. 92

–

supra

note 2; Robert A. Anthony,

‘‘

InterpretiveRules, Policy Statements, Guidances, Manuals andthe Like

—

Should Federal Agencies Use Them toBind the Public?

’’

41 Duke L.J. 1311 (1992).

See, e.g.,

note 2,

supra.

U.S. Office of Management and Budget,

‘‘

Proposed Bulletin for Good Guidance Practices,

’’

70 FR 76333 (Dec. 23, 2005).

See

note 1,

supra.

U.S. Office of Management and Budget,

Draft Report to Congress on the Costs and Benefits of Federal Regulations,

66 FR 22041 (May 2, 2001).

U.S. Office of Management and Budget,

Draft Report to Congress on the Costs and Benefits of Federal Regulations,

69 FR 7987 (Feb. 20, 2004);

seealso

U.S. Office of Management and Budget,

Validating Regulatory Analysis: 2005 Report toCongress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State,Local and Tribal Entities

107

–

125 (2005).

President Bush recently signed Executive Order13422,

‘‘

Further Amendment to Executive Order12866 on Regulatory Planning and Review.

’’

Amongother things, E.O. 13422 addresses the potentialneed for interagency review of certain significantguidance documents by clarifying OMB

’

s authorityto have advance notice of, and to review, agencyguidance documents.

quality, and not improperly treated aslegally binding requirements. Moreover,GGP clarify what does and does notconstitute a guidance document toprovide greater clarity to the public. Alloffices in an agency should follow thesepolicies and procedures.There is a strong foundation forestablishing standards for the initiation,development, and issuance of guidancedocuments to raise their quality andtransparency. The formerAdministrative Conference of theUnited States (ACUS), for example,developed recommendations for thedevelopment and use of agencyguidance documents.

In 1997, theFood and Drug Administration (FDA)created a guidance document distillingits good guidance practices (GGP).

Congress then established certainaspects of the 1997 GGP document asthe law in the Food and DrugAdministration Modernization Act of 1997 (FDAMA; Public Law No. 105

–

115).

The FDAMA also directed FDAto evaluate the effectiveness of the 1997GGP document and then to develop andissue regulations specifying FDA

’

spolicies and procedures for thedevelopment, issuance, and use of guidance documents. FDA conducted aninternal evaluation soliciting FDAemployees

’

views on the effectiveness of GGP and asking whether FDAemployees had received complaintsregarding the agency

’

s development,issuance, and use of guidancedocuments since the development of GGP. FDA found that its GGP had been beneficial and effective in standardizingthe agency

’

s procedures fordevelopment, issuance, and use of guidance documents, and that FDAemployees had generally been followingGGP.

FDA then made some changes toits existing procedures to clarify itsGGP.

The provisions of the FDAMAand FDA

’

s implementing regulations, aswell as the ACUS recommendations,informed the development of thisgovernment-wide Bulletin.

Legal Authority for This Bulletin

This Bulletin is issued under statutoryauthority, Executive Order, and OMB

’

sgeneral authorities to oversee andcoordinate the rulemaking process. Inwhat is commonly known as theInformation Quality Act, Congress

See, e.g.,

note 2,

supra.

Notice,

‘‘

The Food and Drug Administration

’

sDevelopment, Issuance, and Use of GuidanceDocuments,

’’

62 FR 8961 (Feb. 27, 1997).

21 U.S.C. 371(h).

See

FDA,

‘‘

Administrative Practices andProcedures; Good Guidance Practices,

’’

65 FR 7321,7322

–

23 (proposed Feb. 14, 2000).

21 CFR 10.115; 65 FR 56468 (Sept. 19, 2000).

directed OMB to issue guidelines to

‘‘

provide policy and proceduralguidance to Federal agencies forensuring and maximizing the quality,utility, objectivity and integrity of information disseminated by Federalagencies.

Moreover, Executive Order13422,

‘‘

Further Amendment toExecutive Order 12866 on RegulatoryPlanning and Review,

’’

recentlyclarified OMB

’

s authority to overseeagency guidance documents. As furtheramended, Executive Order 12866affirms that

‘‘

[c]oordinated review of agency rulemaking is necessary toensure that regulations and guidancedocuments are consistent withapplicable law, the President

’

spriorities, and the principles set forth inthis Executive order,

’’

and the Orderassigns that responsibility to OMB.

E.O. 12866 also establishes OMB

’

sOffice of Information and RegulatoryAffairs as

‘‘

the repository of expertiseconcerning regulatory issues, includingmethodologies and procedures thataffect more than one agency.

’’

Finally,OMB has additional authorities tooversee the agencies in theadministration of their programs.

The Requirements of the Final Bulletinand Response to Public Comments

A. Overview

This Bulletin establishes: a definitionof a significant guidance document;standard elements for significantguidance documents; practices fordeveloping and using significantguidance documents; requirements foragencies to enable the public tocomment on significant guidancedocuments or request that they becreated, reconsidered, modified orrescinded; and ways for makingguidance documents available to thepublic. These requirements should beinterpreted and implemented in amanner that, consistent with the goals of improving the quality, accountabilityand transparency of agency guidancedocuments, provides sufficientflexibility for agencies to take those

Pub. L. 106

–

554,

515(a) (2000). TheInformation Quality Act was developed as asupplement to the Paperwork Reduction Act, 44U.S.C. 3501

et seq.

, which requires OMB, amongother things, to

‘‘

develop and overseeimplementation of policies, principles, standards,and guidelines to

—

(1) Apply to Federal agencydissemination of public information, regardless of the form or format in which such information isdisseminated; and (2) promote public access topublic information and fulfill the purposes of thissubchapter, including through the effective use of information technology.

’’

44 U.S.C. 3504(d).

Executive Order 12866, as further amended,

2(b).

Id.

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3434

Federal Register

/ Vol. 72, No. 16 / Thursday, January 25, 2007 / Notices

actions necessary to accomplish theiressential missions.

B. Definitions

Section I provides definitions for thepurposes of this Bulletin. Several termsare identical to or based on those inFDA

’

s GGP regulations, 21 CFR 10.115;the Paperwork Reduction Act, 44 U.S.C.3501 et seq.; Executive Order 12866, asfurther amended; and OMB

’

sGovernment-wide Information QualityGuidelines, 67 FR 8452 (Feb. 22, 2002).Section I(1) provides that the term

‘‘

Administrator

’’

means theAdministrator of the Office of Information and Regulatory Affairs(OIRA) in the Office of Management andBudget.Section I(2) provides that the term

‘‘

agency

’’

has the same meaning as it hasunder the Paperwork Reduction Act, 44U.S.C. 3502(1), other than those entitiesconsidered to be independent agencies,as defined in 44 U.S.C. 3502(5).Section I(3) defines the term

‘‘

guidance document

’’

as an agencystatement of general applicability andfuture effect, other than a regulatoryaction (as defined in Executive Order12866, as further amended), that setsforth a policy on a statutory, regulatory,or technical issue or an interpretation of a statutory or regulatory issue. Thisdefinition is used to comport withdefinitions used in Executive Order12866, as further amended. Nothing inthis Bulletin is intended to indicate thata guidance document can impose alegally binding requirement.Guidance documents often come in avariety of formats and names, includinginterpretive memoranda, policystatements, guidances, manuals,circulars, memoranda, bulletins,advisories, and the like. Guidancedocuments include, but are not limitedto, agency interpretations or policiesthat relate to: the design, production,manufacturing, control, remediation,testing, analysis or assessment of products and substances, and theprocessing, content, and evaluation/approval of submissions or applications,as well as compliance guides. Guidancedocuments do not include solelyscientific research. Although adocument that simply summarizes theprotocol and conclusions of a specificresearch project (such as a clinical trialfunded by the National Institutes of Health) would not qualify as a guidancedocument, such research may be the basis of a guidance document (such asthe HHS/USDA

‘‘

Dietary Guidelines forAmericans,

’’

which provides guidanceto Americans on what constitutes ahealthy diet).Some commenters raised the concernthat the term

‘‘

guidance document

’’

reflected too narrow a focus on writtenmaterials alone. While the final Bulletinadopts the commonly used term

‘‘

guidance document,

’’

the definition isnot limited only to written guidancematerials and should not be soconstrued. OMB recognizes thatagencies are experimenting withoffering guidance in new and innovativeformats, such as video or audio tapes, orinteractive web-based software. Thedefinition of

‘‘

guidance document

’’

encompasses all guidance materials,regardless of format. It is not the intentof this Bulletin to discourage thedevelopment of promising alternativemeans to offer guidance to the publicand regulated entities.A number of commenters raisedconcerns that the definition of

‘‘

significant guidance document

’’

in theproposed Bulletin was too broad insome respects. In particular, theproposed definition included guidancethat set forth initial interpretations of statutory and regulatory requirementsand changes in interpretation or policy.The definition in the proposed Bulletinwas adapted from the definition of

‘‘

Level 1 guidance documents

’’

in FDA

’

sGGP regulations.Upon consideration of the comments,the need for clarity, and the broadapplication of this Bulletin to diverseagencies, the definition of

‘‘

significantguidance document

’’

has been changed.Section I(4) defines the term

‘‘

significantguidance document

’’

as a guidancedocument disseminated to regulatedentities or the general public that mayreasonably be anticipated to: (i) Lead toan annual effect on the economy of $100million or more or adversely affect in amaterial way the economy, a sector of the economy, productivity, competition,jobs, the environment, public health orsafety, or State, local, or tribalgovernments or communities; or (ii)Create a serious inconsistency orotherwise interfere with an action takenor planned by another agency; or (iii)Materially alter the budgetary impact of entitlements, grants, user fees, or loanprograms or the rights and obligations of recipients thereof; or (iv) Raise novellegal or policy issues arising out of legalmandates, the President

’

s priorities, orthe principles set forth in ExecutiveOrder 12866, as further amended. Underthe Bulletin, significant guidancedocuments include interpretive rules of general applicability and statements of general policy that have the effectsdescribed in Section I(4)(i)

–

(iv).The general definition of

‘‘

significantguidance document

’’

in the finalBulletin adopts the definition inExecutive Order 13422, which recentlyamended Executive Order 12866 toclarify OMB

’

s role in overseeing andcoordinating significant guidancedocuments. This definition, in turn,closely tracks the general definition of

‘‘

significant regulatory action

’’

in E.O.12866, as further amended. Oneadvantage of this definition is thatagencies have years of experience in theregulatory context applying the paralleldefinition of

‘‘

significant regulatoryaction

’’

under E.O. 12866, as furtheramended. However, a few importantchanges were made to the definitionused in E.O. 12866, as further amended,to make it better suited for guidance. Forexample, in recognition of the non- binding nature of guidance the words

‘‘

may reasonably be anticipated to

’’

preface all four prongs of the

‘‘

significant guidance document

’’

definition. This prefatory languagemakes clear that the impacts of guidanceoften will be more indirect andattenuated than binding legislativerules.Section I(4) also clarifies what is nota

‘‘

significant guidance document

’’

under this Bulletin. For purposes of thisBulletin, documents that would not beconsidered significant guidancedocuments include: Legal advisoryopinions for internal Executive Branchuse and not for release (such asDepartment of Justice Office of LegalCounsel opinions); briefs and otherpositions taken by agencies ininvestigations, pre-litigation, litigation,or other enforcement proceedings;speeches; editorials; media interviews;press materials; Congressionalcorrespondence; guidances that pertainto a military or foreign affairs functionof the United States (other thanguidance on procurement or the importor export of non-defense articles andservices); grant solicitations; warningletters; case or investigatory lettersresponding to complaints involving fact-specific determinations; purely internalagency policies; guidances that pertainto the use, operation or control of agovernment facility; and internaloperational guidances directed solely toother Federal agencies (including Officeof Personnel Management personnelissuances, General ServicesAdministration Federal TravelRegulation bulletins, and most of theNational Archives and RecordsAdministration

’

s records management bulletins). The Bulletin also exemptsspeeches of agency officials.Information collections, discretionarygrant application packages, andcompliance monitoring reports also arenot significant guidance documents.Though the Bulletin does not cover

of 00

USDA: 012507 good guidance

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