Short title

This Act may be cited as the

Small Business Regulatory Improvement Act

Findings

Congress finds the following: (1)Small businesses are frequently the source of new products, methods, and innovations. (2)A vibrant and growing small business sector is critical to creating jobs in a dynamic economy. (3)Regulations designed for application to large-scale entities have been applied uniformly to small businesses and other small entities. (4)Uniform Federal regulatory and reporting requirements in many instances have imposed on small businesses and other small entities disproportionately burdensome demands, including legal, accounting, and consulting costs. (5)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. (6)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. (7)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. (8)Federal agencies continue to interpret chapter 6 of title 5, United States Code, in a manner that permits them to avoid their analytical responsibilities. (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 the 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.

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 new paragraph:

(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).

Requirements providing for more detailed analyses

(a)

Initial regulatory flexibility analysis

Subsection (b) of section 603 of title 5, United States Code, is amended to read as follows:

(b)Each initial regulatory flexibility analysis required under this section shall contain a detailed statement describing— (1)the reasons why the action by the agency is being considered; (2)the objectives of, and legal basis for, the proposed rule; (3)the type of small entities to which the proposed rule will apply; (4)the number of small entities to which the proposed rule will apply or why such estimate is not available; (5)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, the costs, and the type of professional skills necessary to comply with the rule; and (6)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.

(b)

Final regulatory flexibility analysis

(1)Paragraph (1) of section 604(a) of title 5, United States Code, is amended by striking succinct. (2)Paragraph (3) of such section is amended by striking an explanation and inserting a detailed explanation. (3)Paragraph (4) of such section is amended to read as follows:

(4)a description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement, the costs, and the type of professional skills necessary to comply with the rule; and

(c)

Certification of no impact

Subsection (b) of section 605 of title 5, United States Code, is amended by inserting detailed before statement both places such term appears.

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 Small Business Regulatory Improvement Act, each agency shall publish in the Federal Register and place on its website a plan for the periodic review of rules issued by the agency which the head of the agency determines have 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 significant 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 website. (b)The plan shall provide for the review of all such agency rules existing on the date of the enactment of the Small Business Regulatory Improvement Act within 10 years of the date of publication of the plan in the Federal Register and for review of rules adopted after the date of enactment of the Small Business Regulatory Improvement Act within 10 years after the publication of the final rule in the Federal Register. 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 the Congress. (c)Each agency shall annually submit a report regarding the results of its review pursuant to such plan to the 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 described in 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 the following factors: (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 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. (e)The agency shall publish in the Federal Register and on its website 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.

Changes to the Regulatory Flexibility Act to Comport with Executive Order 13272

(a)

Initial regulatory flexibility analysis

Section 603 of title 5, United States Code, is amended 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, if submission is required; 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)

Inclusion of response to comments on certification of proposed rule

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

Inclusion of response to comments filed by Chief Counsel for Advocacy

Subsection (a) of section 604 of title 5, United States Code, is amended by redesignating paragraphs (3) through (5) as (4) through (6), respectively, and by 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;