II 109th CONGRESS 1st Session S. 1388 IN THE SENATE OF THE UNITED STATES July 13, 2005 Ms. Snowe introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To amend chapter 6 of title 5, United States Code (commonly known as the Regulatory Flexibility Act), to ensure complete analysis of potential impacts on small entities of rules, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Regulatory Flexibility Reform Act of 2005. (b)

Table of contents

The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Findings. Sec. 3. Clarification and expansion of rules covered by the Regulatory Flexibility Act. Sec. 4. Requirements providing for more detailed analyses. Sec. 5. Periodic review of rules. Sec. 6. Clerical amendments.

2.

Findings

Congress finds the following: (1)A vibrant and growing small business sector is critical to creating jobs in a dynamic economy. (2)Regulations designed for application to large-scale entities have been applied uniformly to small businesses and other small entities, even though the problems sought to be solved by such regulations are not always caused by these small businesses and other small entities. (3)Uniform Federal regulatory and reporting requirements in many instances have imposed on small businesses and other small entities unnecessary and disproportionately burdensome demands, including legal, accounting, and consulting costs. (4)Since 1980, Federal agencies have been required to recognize and take account of the differences in the scale and resources of regulated entities, but have failed to do so. (5)Alternative regulatory approaches that do not conflict with the stated objectives of the statutes the regulations seek to implement may be available and may minimize the significant economic impact of regulations on small businesses and other small entities. (6)Federal agencies have failed to analyze and uncover less-costly alternative regulatory approaches, despite the fact that the chapter 6 of title 5, United States Code (commonly known as the Regulatory Flexibility Act), requires them to do so. (7)Federal agencies continue to interpret chapter 6 of title 5, United States Code, in a manner that permits them to avoid their analytical responsibilities. (8)The existing oversight of the compliance of Federal agencies with the analytical requirements to assess regulatory impacts on small businesses and other small entities and obtain input from the Chief Counsel for Advocacy has not sufficiently modified the Federal agency regulatory culture. (9)Significant changes are needed in the methods by which Federal agencies develop and analyze regulations, receive input from affected entities, and develop regulatory alternatives that will lessen the burden or maximize the benefits of final rules to small businesses and other small entities. (10)It is the intention of Congress to amend chapter 6 of title 5, United States Code, to ensure that all impacts, including foreseeable indirect effects, of proposed and final rules are considered by agencies during the rulemaking process and that the agencies assess a full range of alternatives that will limit adverse economic consequences or enhance economic benefits. (11)Federal agencies should be capable of assessing the impact of proposed and final rules without delaying the regulatory process or impinging on the ability of Federal agencies to fulfill their statutory mandates.

3.

Clarification and expansion of rules covered by the Regulatory Flexibility Act

Section 601 of title 5, United States Code, is amended by adding at the end the following: (9)

Economic impact

The term economic impact means, with respect to a proposed or final rule— (A)any direct economic effect on small entities of such rule; and (B)any indirect economic effect on small entities which is reasonably foreseeable and results from such rule (without regard to whether small entities will be directly regulated by the rule). .

4.

Requirements providing for more detailed analyses

(a)

Initial regulatory flexibility analysis

Section 603 of title 5, United States Code, is amended— (1)by striking subsection (b) and inserting the following: (b)Each initial regulatory flexibility analysis required under this section shall contain a detailed statement— (1)describing the reasons why action by the agency is being considered; (2)describing the objectives of, and legal basis for, the proposed rule; (3)estimating the number and type of small entities to which the proposed rule will apply; (4)describing the projected reporting, recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report and record; (5)describing all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule, or the reasons why such a description could not be provided; and (6)estimating the additional cumulative economic impact of the proposed rule on small entities beyond that already imposed on the class of small entities by the agency or why such an estimate is not available. ; and (2)by adding at the end the following: (d)An agency shall notify the Chief Counsel for Advocacy of the Small Business Administration of any draft rules that may have a significant economic impact on a substantial number of small entities either— (1)when the agency submits a draft rule to the Office of Information and Regulatory Affairs at the Office of Management and Budget under Executive Order 12866, if that order requires such submission; or (2)if no submission to the Office of Information and Regulatory Affairs is so required, at a reasonable time prior to publication of the rule by the agency. . (b)

Final regulatory flexibility analysis

(1)

In general

Section 604(a) of title 5, United States Code, is amended— (A)in paragraph (1), by striking succinct; (B)in paragraph (2), by striking summary each place it appears and inserting statement; (C)in paragraph (3), by— (i)striking an explanation and inserting a detailed explanation; and (ii)inserting detailed before description; (D)in paragraph (4), by inserting detailed before description; and (E)in paragraph (5), by inserting detailed before description. (2)

Inclusion of response to comments on certification of proposed rule

Section 604(a)(2) of title 5, United States Code, is amended by inserting (or certification of the proposed rule under section 605(b)) after initial regulatory flexibility analysis. (3)

Inclusion of response to comments filed by Chief Counsel for Advocacy

Section 604(a) of title 5, United States Code, is amended by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6), respectively, and inserting after paragraph (2) the following: (3)the agency’s response to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule, and a detailed statement of any changes made to the proposed rule in the final rule as a result of such comments; . (4)

Publication of analysis on web site, etc

Section 604(b) of title 5, United States Code, is amended to read as follows: (b)The agency shall make copies of the final regulatory flexibility analysis available to the public, including placement of the entire analysis on the agency’s Web site, and shall publish in the Federal Register the final regulatory flexibility analysis, or a summary thereof that includes the telephone number, mailing address, and link to the Web site where the complete analysis may be obtained. . (c)

Cross-References to other analyses

Section 605(a) of title 5, United States Code, is amended to read as follows: (a)A Federal agency shall be treated as satisfying any requirement regarding the content of an agenda or regulatory flexibility analysis under section 602, 603, or 604, if such agency provides in such agenda or analysis a cross-reference to the specific portion of another agenda or analysis that is required by any other law and which satisfies such requirement. . (d)

Certifications

The second sentence of section 605(b) of title 5, United States Code, is amended— (1)by inserting detailed before statement; and (2)by inserting and legal after factual. (e)

Quantification requirements

Section 607 of title 5, United States Code, is amended to read as follows:

607.

Quantification requirements

In complying with sections 603 and 604, an agency shall provide— (1)a quantifiable or numerical description of the effects of the proposed or final rule and alternatives to the proposed or final rule; or (2)a more general descriptive statement and a detailed statement explaining why quantification is not practicable or reliable.

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5.

Periodic review of rules

Section 610 of title 5, United States Code, is amended to read as follows:

610.

Periodic review of rules

(a)Not later than 180 days after the enactment of the Regulatory Flexibility Reform Act of 2005, each agency shall publish in the Federal Register and place on its Web site a plan for the periodic review of rules issued by the agency that the head of the agency determines has a significant economic impact on a substantial number of small entities. Such determination shall be made without regard to whether the agency performed an analysis under section 604. The purpose of the review shall be to determine whether such rules should be continued without change, or should be amended or rescinded, consistent with the stated objectives of applicable statutes, to minimize any significant adverse economic impacts on a substantial number of small entities. Such plan may be amended by the agency at any time by publishing the revision in the Federal Register and subsequently placing the amended plan on the agency’s Web site. (b)The plan shall provide for the review of all such agency rules existing on the date of the enactment of the Regulatory Flexibility Reform Act of 2005 within 10 years after the date of publication of the plan in the Federal Register and every 10 years thereafter and for review of rules adopted after the date of enactment of the Regulatory Flexibility Reform Act of 2005 within 10 years after the publication of the final rule in the Federal Register and every 10 years thereafter. If the head of the agency determines that completion of the review of existing rules is not feasible by the established date, the head of the agency shall so certify in a statement published in the Federal Register and may extend the review for not longer than 2 years after publication of notice of extension in the Federal Register. Such certification and notice shall be sent to the Chief Counsel for Advocacy and Congress. (c)Each agency shall annually submit a report regarding the results of its review pursuant to such plan to Congress and, in the case of agencies other than independent regulatory agencies (as defined in section 3502(5) of title 44, United States Code), to the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget. Such report shall include the identification of any rule with respect to which the head of the agency made a determination of infeasibility under paragraph (5) or (6) of subsection (d) and a detailed explanation of the reasons for such determination. (d)In reviewing rules under such plan, the agency shall consider— (1)the continued need for the rule; (2)the nature of complaints received by the agency from small entities concerning the rule; (3)comments by the Regulatory Enforcement Ombudsman and the Chief Counsel for Advocacy; (4)the complexity of the rule; (5)the extent to which the rule overlaps, duplicates, or conflicts with other Federal rules and, unless the head of the agency determines it to be infeasible, State and local rules; (6)the contribution of the rule to the cumulative economic impact of all Federal rules on the class of small entities affected by the rule, unless the head of the agency determines that such calculations cannot be made and reports that determination in the annual report required under subsection (c); (7)the length of time since the rule has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule; and (8)the current impact of the rule, including— (A)the number of small entities to which the rule will apply; and (B)the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including— (i)an estimate of the classes of small entities that will be subject to the requirement; and (ii)the type of professional skills necessary for preparation of the report or record. (e)The agency shall publish in the Federal Register and on its Web site a list of rules to be reviewed pursuant to such plan. Such publication shall include a brief description of the rule, the reason why the agency determined that it has a significant economic impact on a substantial number of small entities (without regard to whether it had prepared a final regulatory flexibility analysis for the rule), and request comments from the public, the Chief Counsel for Advocacy, and the Regulatory Enforcement Ombudsman concerning the enforcement of the rule.

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6.

Clerical amendments

(a)

In general

Section 601 of title 5, United States Code, is amended— (1)in paragraph (1)— (A)by striking the semicolon at the end and inserting a period; and (B)by striking (1) the term and inserting the following: (1)

Agency

The term ; (2)in paragraph (2)— (A)by striking the semicolon at the end and inserting a period; and (B)by striking (2) the term and inserting the following: (2)

Rule

The term ; (3)in paragraph (3)— (A)by striking the semicolon at the end and inserting a period; and (B)by striking (3) the term and inserting the following: (3)

Small business

The term ; (4)in paragraph (4)— (A)by striking the semicolon at the end and inserting a period; and (B)by striking (4) the term and inserting the following: (4)

Small organizations

The term ; (5)in paragraph (5)— (A)by striking the semicolon at the end and inserting a period; and (B)by striking (5) the term and inserting the following: (5)

Small governmental jurisdiction

The term ; (6)in paragraph (6)— (A)by striking ; and and inserting a period; and (B)by striking (6) the term and inserting the following: (6)

Small entity

The term ; (7)in paragraph (7), by striking (7) the term and inserting the following: (7)

Collection of information

The term ; and (8)in the matter preceding paragraph (1), by striking chapter— and inserting chapter, the following definitions apply:. (b)

Heading

The heading of section 605 of title 5, United States Code, is amended to read as follows:

605.

Incorporations by reference and certifications

. (c)

Table of sections

The table of sections for chapter 6 of title 5, United States Code, is amended— (1)by striking the item relating to section 605 and inserting the following: 605. Incorporations by reference and certifications. ; and(2)by striking the item relating to section 607 and inserting the following: 607. Quantification requirements. .