Regulatory Agencies Get Guidance on Guidance'.

• Author: Cohrssen, John J.
• Position: BRIEFLY NOTED

A persistent criticism of government is that it unfairly imposes obscure requirements on individuals, organizations, and companies that can lead to inappropriate prosecution and penalties. Last October, the Trump administration issued two executive orders (EOs) intended to prevent that from happening.

Federal agencies must develop rules to implement congressional mandates. The Administrative Procedure Act (APA) requires agencies to follow a precise regulatory roadmap with notice to the public and an opportunity to comment--"notice and comment"--before rules become final. The APA process can be cumbersome and take years to complete, especially if political influences intervene.

To simplify and expedite such government intervention, agencies often use less formal, non-binding "guidance documents," which describe an agency's policies, procedures, and requirements in the absence of formal rules. Guidance documents can be variously designated "proposed," "draft," or "final." Policies can also be established via announcements, speeches, various government documents, and the like.

Guidance documents can be a boon to regulated entities that wish to understand the current thinking of regulators, and they can provide much greater flexibility for agencies than formal rulemaking. However, they also offer the temptation for bureaucratic abuse because they can be created without an opportunity for the public to comment on them, and because they can provide the basis for enforcement actions.

Trump EOs / A pair of EOs issued October 9, 2019 by the Trump administration police the policy content of guidance documents and rein in opportunities for their abuse in enforcement. The EOs very broadly define a "guidance document" to include all regulation-related documents and communications that are "intended to have future effect on the behavior of regulated parties," with several exceptions.

The EOs strengthen the oversight of executive branch agencies by the White House Office of Management and Budget while providing the OMB discretion to waive various requirements. They also direct the OMB to issue memoranda and even regulations in order to implement the EOs. And they require that issued guidances be signed personally by the agency head or the head of an agency component appointed by the president instead of delegating that work to lesser officials, which is intended to ensure that new guidances will conform to administration-approved policies.

One of the...