Regulatory ReformWaiver of Penalties and Reduction of Reports

This April 21, 1995 presidential memorandum directs federal agencies to implement two regulatory reform policies: (1) exercising enforcement discretion to waive penalties for small businesses that correct violations in good faith, and (2) reducing by half the frequency of public reporting requirements, with both policies requiring implementation plans to OMB by June 15, 1995 and policy implementation by July 14, 1995. The memorandum excludes law enforcement, national security, foreign affairs, trade restrictions, tax/revenue matters, and statistical agencies from its scope.

Federal Register Open PDF 60 FR 20621

Impact dates

Jul 14, 1995
Agencies must implement penalty waiver and reporting reduction policies
Jun 15, 1995
Agency plans due to OMB Director for penalty waiver and reporting reduction implementation

Key directives

Agencies shall use enforcement discretion to waive penalties for small businesses that correct violations within appropriate time periods
Agencies shall waive up to 100% of financial penalties if waived amounts are used to bring entity into compliance for longer-term violations
Good faith effort to comply required; exclusion for criminal wrongdoing or significant threats to health, safety, or environment
Agencies shall reduce by one-half the frequency of regularly scheduled public reports (quarterly to semiannually, semiannually to annually, etc.)
Department/agency head must make nondelegable determination if exclusion from reporting reduction is claimed
Agency plans due to OMB Director by June 15, 1995
Policy implementation required on or before July 14, 1995

Who is ordered

Timeline

Immediate

Memorandum issued to all cabinet secretaries and major agency heads
Exclusions from scope take effect (law enforcement, national security, foreign affairs, trade, tax/revenue, statistical agencies)

Near term (90d)

June 15, 1995: Agency plans due to OMB for both penalty waiver and reporting reduction policies
July 14, 1995: Agencies must implement penalty waiver and reporting reduction policies

Long term

Potential structural shift in regulatory enforcement culture toward flexibility for small businesses
Sustained reduction in paperwork burden if reporting frequency cuts persist

Risks & tensions

Nondelegable determination requirement creates bottleneck at agency head level and may delay implementation
Good faith and 'significant threat' standards are vague and likely to produce inconsistent agency application
Exclusion for 'importation or exportation of prohibited or restricted items' may create boundary disputes with trade agencies
No private right of action means small businesses lack enforcement mechanism if agencies fail to comply
Potential tension between regulatory flexibility and environmental/health/safety enforcement priorities