Summary: The Office of Prevention, Pesticides and Toxic Substances (OPPTS) implements the current Regulatory Flexibility Act (RFA) guidance document with what appears to be a high threshold for what constitutes a significant economic impact on a substantial number of small entities (SEISNSE). This report: (1) reviews guidance that OPPTS and the Environmental Protection Agency's (EPA) three other major program offices have used during the past 10 years to determine whether their proposed rules could be certified as not having a SEISNSE, (2) compares the rate at which OPPTS certified that its substantive proposed rules published during 1994 through 1999 would not have a SEISNSE with the rates in EPA's other major program offices, and (3) discusses the methodology that OPPTS used in the economic analysis for the proposed lead rule. GAO found that OPPTS and EPA's other major program offices have adopted three very different sets of guidance documents during the past 10 years to determine if their proposed rules could be certified as not having a SEISNSE. The RFA certification rate in OPPTS and in each of the three other major program offices increased after the implementation of the Small Business Regulatory Enforcement Fairness Act in 1996. According to the summary of the draft revised economic analysis, OPPTS expected that the proposed lead rule would affect more than 8,600 small companies and that as many as 464 of them would experience first-year compliance costs of at least one percent of their annual revenues. Therefore, if OPPTS had used this analytic approach and the discretion permitted in EPA's RFA guidance, it could have chosen not to certify the rule. The Office's initial and draft revised analyses and the conclusions that it based on those analyses were within the discretion permitted under the RFA and the EPA guidance.
