Audit, Compliance and Risk Blog

President Trump Restricts Agencies’ Use of Guidelines

Posted by Jon Elliott on Tue, Nov 12, 2019

Regulation keySince assuming office, President Trump and his administration have generally sought to reduce and repeal formal federal regulations, and to tighten appointed agency heads’ direct control over their agencies’ regulatory actions. These efforts have included executive orders (EO) from the President providing government-wide mandates and priorities (For example, I wrote about EO 13777, “Reducing Regulation and Controlling Regulatory Costs”, here). They have also included formal regulatory proceedings, mostly directed toward reducing or revoking requirements adopted during President Obama’s tenure (for example, I wrote about the latest changes to national vehicle emission standards here). Individual agencies have followed and reinforced these efforts (For example, I wrote about the Environmental Protection Agency “Back to Basics” initiative here).

But agencies also issue – and sometimes try to enforce –informal “guidelines” published without formal rulemaking proceedings that would have complied with the Administrative Procedures Act (APA).  On the plus side for regulated entities, agencies often use these less-formal means to provide useful guidance, offer model compliance examples (plans, programs, etc.), and to signal activities that they do or do not consider compliant for purposes of future enforcement. On the negative side, agencies sometimes treat non-binding guidance as though they reflect actual regulations, enforcing against entities that are not explicitly noncompliance with ambiguous regulations but which have not taken the agency’s hint and modelled activities to follow such guidelines. On October 9, 2019, President Trump issued two additional EOs to restrict agencies’ use of “guidelines,” focusing on the possible abuses and enforcement “gotchas.”

EO 13891 (Promoting the Rule of Law Through Improved Agency Guidance Documents)

This Executive Order emphasizes APA requirements that agencies follow applicable notice and comment procedures before adopting binding regulatory interpretations of the statutes they administer. It notes that non-binding guidance documents can provide useful clarifications, but emphasizes the possibility for implicit threats and even (abusive) enforcement against entities that don’t follow guidelines. Accordingly, the EO re-emphasizes a hard distinction between:

  • Legally enforceable regulations adopted through APA-compliant public proceedings.

  • Un-enforceable guidance documents, which do not require public development and adoption, but still must be widely and transparently available.

The EO requires the following actions, with specified deadlines:

  • The Office of Management and Budget (OMB) is to issue an implementing memorandum, or if necessary regulations, to distinguish appropriate regulations and guidelines, and define appropriate terms, procedure and, responsibilities, and to provide procedures for individual exceptions.

  • Within 120 days after OMB’s memo, each agency or agency component is to:

    • Assemble a single website with a searchable data base of text of or links to all its guidance documents.

    • Review all existing documents and rescind any that do not meet OMB’s criteria.

  • Within 240 days after OMB’s memo, an agency can readopt a rescinded guidance following OMB-specified criteria and procedures.

  • Within 300 days after OMB’s memo, each agency is to issue final regulations (or amend existing regulations) with its processes and procedures for issuing guidance documents and “significant guidance documents.” These must include procedures for petitions to modify or withdraw such documents, and statements on each guidance document that they are not binding.

The EO states that its requirements do not reduce any agency’s statutory authority. It does not assign OMB a deadline for promulgating the required memo or regulations.

Executive Order 13892 (Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication)

This EO notes that federal agencies do not always meet standards for what it calls “transparency,” based on a U.S. Supreme Court decision from 1974 (Morton v. Ruiz): ‘‘… administrative policies affecting individual rights and obligations [must] be promulgated pursuant to certain stated procedures so as to avoid the inherently arbitrary nature of unpublished ad hoc determinations.” This EO notes that notice and publication requirements in the Freedom of Information Act (FOIA) generally prohibits agency that adversely affects a person with a rule or policy that does not meet those standards. However, the EO asserts that some agencies violate these standards, and so promulgates more detailed requirements. These include:

  • Agencies cannot use guidance documents to define compliance requirements, or to penalize or enforce anyone for noncompliance. Enforcement must be based only on statutes and adopted regulations.

  • Agencies can only cite to guidance documents to establish understandings of statutory and regulatory requirements if the document has been publicized through a searchable online repository [this EO does not cite the requirement for such data bases established the same day by EO 12891, but it seems safe to assume that’s what it means]

  • Agency enforcement must be based on “standards of conduct that have been publicly stated in a manner that would not cause unfair surprise.” This includes agency claims of legal jurisdiction based on application of statutes, regulations and previously published standards.

  • Defendants and targets of administrative enforcement can assert claims that agency actions violate these standards.

  • Reinforcing that agencies must comply with standards in APA and the Small Business Regulatory Enforcement Fairness Act

  • Within 120 days (i.e., by February 2020) each agency that conducts civil administrative inspections must publish appropriate rules for such procedures, if none already exist.

  • Within 270 days (i.e., by July 2020) each agency is to propose procedures to:

    • Encourage voluntary self-reporting of regulatory violations in exchange for reductions or waivers of civil penalties.

    • Encourage voluntary information sharing by regulated parties.

    • Provide pre-enforcement rulings to regulated parties.

What’s Next?

The scope of these new provisions will be clarified when OMB issues its guidance, but implementation of these EOs will clarify the scope of enforceable divergence from statutory and regulatory standards, and produce the required online information on agency websites. It remains to be seen how much useful informational guidance will be rescinded as the price to reduce “unfair surprises.” At least during the remainder of President Trump’s term(s) of office, implementation of these requirements is likely to provide another way in which the Administration is reducing regulation and enforcement.

Self-Assessment Checklist

Has the organization identified federal compliance provisions in which “guidance” documents are treated by agencies as enforceable provisions?

  • If so, has the organization been the object of inspections or enforcement hinging on such provisions?

Has the organization identified federal “guidance” documents that it uses as important building blocks for its compliance efforts?

  • If so, would the organization’s compliance efforts be eased or complicated, clarified or made more uncertain, if the appropriate agency rescinded the guidance?

Where Can I Go For More Information?

Specialty Technical Publishers (STP) provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. 

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About the Author

Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 30 years. 

Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).

Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).

You may contact Mr. Elliott directly at:

photo credit: CreditDebitPro Regulation Key via photopin (license)

Tags: Business & Legal, Audit Standards, Environmental, EHS