[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 474 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 474

 To reform the regulatory process to ensure that small businesses are 
      free to compete and to create jobs, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 2011

Ms. Snowe (for herself, Mr. Coburn, Ms. Ayotte, Mr. Enzi, and Mr. Brown 
 of Massachusetts) introduced the following bill; which was read twice 
  and referred to the Committee on Homeland Security and Governmental 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
 To reform the regulatory process to ensure that small businesses are 
      free to compete and to create jobs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Regulatory Freedom Act of 2011''.
    (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. Including indirect economic impact in small entity analyses.
Sec. 4. Judicial review to allow small entities to challenge proposed 
                            regulations.
Sec. 5. Periodic review and sunset of existing rules.
Sec. 6. Requiring small business review panels for all agencies.
Sec. 7. Expanding the Regulatory Flexibility Act to agency guidance 
                            documents.
Sec. 8. Requiring the Internal Revenue Service to consider small entity 
                            impact.
Sec. 9. Mitigating penalties on small entities.
Sec. 10. Requiring more detailed small entity analyses.
Sec. 11. Ensuring that agencies consider small entity impact during the 
                            rulemaking process.
Sec. 12. Qualifications of the Chief Counsel for Advocacy and authority 
                            for the Office of Advocacy .
Sec. 13. Technical and conforming amendments.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) A vibrant and growing small business sector is critical 
        to the recovery of the economy of the United States.
            (2) Regulations designed for application to large-scale 
        entities have been applied uniformly to small businesses and 
        other small entities, sometimes inhibiting the ability of small 
        entities to create new jobs.
            (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, 
        thereby threatening the viability of small entities and the 
        ability of small entities to compete and create new jobs in a 
        global marketplace.
            (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 in many instances have 
        failed to do so.
            (5) In 2009, there were nearly 70,000 pages in the Federal 
        Register, and, according to research by the Office of Advocacy 
        of the Small Business Administration, the annual cost of 
        Federal regulations totals $1,750,000,000,000. Small firms bear 
        a disproportionate burden, paying approximately 36 percent more 
        per employee than larger firms in annual regulatory compliance 
        costs.
            (6) All agencies in the Federal Government should fully 
        consider the costs, including indirect economic impacts and the 
        potential for job creation and job loss, of proposed rules, 
        periodically review existing regulations to determine their 
        impact on small entities, and repeal regulations that are 
        unnecessarily duplicative or have outlived their stated 
        purpose.
            (7) 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, enhance economic 
        benefits, and fully address potential job creation or job loss.

SEC. 3. INCLUDING INDIRECT ECONOMIC IMPACT IN SMALL ENTITY ANALYSES.

    Section 601 of title 5, United States Code, is amended by adding at 
the end the following:
            ``(9) the term `economic impact' means, with respect to a 
        proposed or final rule--
                    ``(A) any direct economic effect of the rule on 
                small entities; and
                    ``(B) any indirect economic effect on small 
                entities, including potential job creation or job loss, 
                that is reasonably foreseeable and that results from 
                the rule, without regard to whether small entities are 
                directly regulated by the rule.''.

SEC. 4. JUDICIAL REVIEW TO ALLOW SMALL ENTITIES TO CHALLENGE PROPOSED 
              REGULATIONS.

    Section 611(a) of title 5, United States Code, is amended--
            (1) in paragraph (1), by inserting ``603,'' after ``601,'';
            (2) in paragraph (2), by inserting ``603,'' after ``601,'';
            (3) by striking paragraph (3) and inserting the following:
    ``(3) A small entity may seek such review during the 1-year period 
beginning on the date of final agency action, except that--
            ``(A) if a provision of law requires that an action 
        challenging a final agency action be commenced before the 
        expiration of 1 year, the lesser period shall apply to an 
        action for judicial review under this section; and
            ``(B) in the case of noncompliance with section 603 or 
        605(b), a small entity may seek judicial review of agency 
        compliance with such section before the close of the public 
        comment period.''; and
            (4) in paragraph (4)--
                    (A) in subparagraph (A), by striking ``, and'' and 
                inserting a semicolon;
                    (B) in subparagraph (B), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(C) issuing an injunction prohibiting an agency from 
        taking any agency action with respect to a rulemaking until 
        that agency is in compliance with the requirements of section 
        603 or 605.''.

SEC. 5. PERIODIC REVIEW AND SUNSET OF EXISTING RULES.

    Section 610 of title 5, United States Code, is amended to read as 
follows:
``Sec. 610. Periodic review of rules
    ``(a)(1) Not later than 180 days after the date of enactment of the 
Small Business Regulatory Freedom Act of 2011, each agency shall 
establish a plan for the periodic review of--
            ``(A) each rule issued by the agency that the head of the 
        agency determines has a significant economic impact on a 
        substantial number of small entities, without regard to whether 
        the agency performed an analysis under section 604 with respect 
        to the rule; and
            ``(B) any small entity compliance guide required to be 
        published by the agency under section 212 of the Small Business 
        Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601 
        note).
    ``(2) In reviewing rules and small entity compliance guides under 
paragraph (1), the agency shall determine whether the rules and guides 
should--
            ``(A) 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 (including an estimate of any adverse impacts on job 
        creation and employment by small entities); or
            ``(B) continue in effect without change.
    ``(3) Each agency shall publish the plan established under 
paragraph (1) in the Federal Register and on the Web site of the 
agency.
    ``(4) An agency may amend the plan established under paragraph (1) 
at any time by publishing the amendment in the Federal Register and on 
the Web site of the agency.
    ``(b)(1) Each plan established under subsection (a) shall provide 
for--
            ``(A) the review of each rule and small entity compliance 
        guide described in subsection (a)(1) in effect on the date of 
        enactment of the Small Business Regulatory Freedom Act of 
        2011--
                    ``(i) not later than 8 years after the date of 
                publication of the plan in the Federal Register; and
                    ``(ii) every 8 years thereafter; and
            ``(B) the review of each rule adopted and small entity 
        compliance guide described in subsection (a)(1) that is 
        published after the date of enactment of the Small Business 
        Regulatory Freedom Act of 2011--
                    ``(i) not later than 8 years after the publication 
                of the final rule in the Federal Register; and
                    ``(ii) every 8 years thereafter.
    ``(2)(A) If an agency determines that the review of the rules and 
guides described in paragraph (1)(A) cannot be completed before the 
date described in paragraph (1)(A)(i), the agency--
            ``(i) shall publish a statement in the Federal Register 
        certifying that the review cannot be completed; and
            ``(ii) may extend the period for the review of the rules 
        and guides described in paragraph (1)(A) for a period of not 
        more than 2 years, if the agency publishes notice of the 
        extension in the Federal Register.
    ``(B) An agency shall transmit to the Chief Counsel for Advocacy of 
the Small Business Administration and Congress notice of any statement 
or notice described in subparagraph (A).
    ``(c) In reviewing rules under the plan required under subsection 
(a), 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 of the Small Business 
        Administration;
            ``(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 a calculation cannot be made;
            ``(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 impact of the rule, including--
                    ``(A) the estimated number of small entities to 
                which the rule will apply;
                    ``(B) the estimated number of small entity jobs 
                that will be lost or created due to the rule; and
                    ``(C) 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.
    ``(d)(1) Each agency shall submit an annual report regarding the 
results of the review required under subsection (a) to--
            ``(A) Congress; and
            ``(B) in the case of an agency that is not an independent 
        regulatory agency (as defined in section 3502(5) of title 44), 
        the Administrator of the Office of Information and Regulatory 
        Affairs of the Office of Management and Budget.
    ``(2) Each report required under paragraph (1) shall include a 
description of any rule or guide with respect to which the agency made 
a determination of infeasibility under paragraph (5) or (6) of 
subsection (c), together with a detailed explanation of the reasons for 
the determination.
    ``(e) Each agency shall publish in the Federal Register and on the 
Web site of the agency a list of the rules and small entity compliance 
guides to be reviewed under the plan required under subsection (a) that 
includes--
            ``(1) a brief description of each rule or guide;
            ``(2) for each rule, the reason why the head of the agency 
        determined that the rule has a significant economic impact on a 
        substantial number of small entities (without regard to whether 
        the agency had prepared a final regulatory flexibility analysis 
        for the rule); and
            ``(3) a request for comments from the public, the Chief 
        Counsel for Advocacy of the Small Business Administration, and 
        the Regulatory Enforcement Ombudsman concerning the enforcement 
        of the rules or publication of the guides.
    ``(f)(1) With respect to each agency, not later than 6 months after 
each date described in subsection (b)(1), the Chief Counsel for 
Advocacy of the Small Business Administration shall determine whether 
the agency has completed the review required under subsection (b).
    ``(2) If, after a review under paragraph (1), the Chief Counsel for 
Advocacy of the Small Business Administration determines that an agency 
has failed to complete the review required under subsection (b), each 
rule issued by the agency that the head of the agency determined under 
subsection (a) has a significant economic impact on a substantial 
number of small entities shall immediately cease to have effect.''.

SEC. 6. REQUIRING SMALL BUSINESS REVIEW PANELS FOR ALL AGENCIES.

    (a) Agencies.--Section 609 of title 5, United States Code, is 
amended--
            (1) in subsection (b), by striking ``a covered agency'' 
        each place it appears and inserting ``an agency''; and
            (2) in subsection (e)(1), by striking ``the covered 
        agency'' and inserting ``the agency''.
    (b) Technical and Conforming Amendments.--
            (1) Section 609.--Section 609 of title 5, United States 
        Code, is amended--
                    (A) by striking subsection (d), as amended by 
                section 1100G(a) of Public Law 111-203 (124 Stat. 
                2112); and
                    (B) by redesignating subsection (e) as subsection 
                (d).
            (2) Section 603.--Section 603(d) of title 5, United States 
        Code, as added by section 1100G(b) of Public Law 111-203 (124 
        Stat. 2112), is amended--
                    (A) in paragraph (1), by striking ``a covered 
                agency, as defined in section 609(d)(2)'' and inserting 
                ``the Bureau of Consumer Financial Protection''; and
                    (B) in paragraph (2), by striking ``A covered 
                agency, as defined in section 609(d)(2),'' and 
                inserting ``The Bureau of Consumer Financial 
                Protection''.
            (3) Section 604.--Section 604(a) of title 5, United States 
        Code, is amended--
                    (A) by redesignating the second paragraph 
                designated as paragraph (6) (relating to covered 
                agencies), as added by section 1100G(c)(3) of Public 
                Law 111-203 (124 Stat. 2113), as paragraph (7); and
                    (B) in paragraph (7), as so redesignated--
                            (i) by striking ``a covered agency, as 
                        defined in section 609(d)(2)'' and inserting 
                        ``the Bureau of Consumer Financial 
                        Protection''; and
                            (ii) by striking ``the agency'' and 
                        inserting ``the Bureau''.
            (4) Effective date.--The amendments made by this subsection 
        shall take effect on the date of enactment of this Act and 
        apply on and after the designated transfer date established 
        under section 1062 of Public Law 111-203 (12 U.S.C. 5582).

SEC. 7. EXPANDING THE REGULATORY FLEXIBILITY ACT TO AGENCY GUIDANCE 
              DOCUMENTS.

    Section 601(2) of title 5, United States Code, is amended by 
inserting after ``public comment'' the following: ``and any significant 
guidance document, as defined in the Office of Management and Budget 
Final Bulletin for Agency Good Guidance Procedures (72 Fed. Reg. 3432; 
January 25, 2007)''.

SEC. 8. REQUIRING THE INTERNAL REVENUE SERVICE TO CONSIDER SMALL ENTITY 
              IMPACT.

    (a) In General.--Section 603(a) of title 5, United States Code, is 
amended, in the fifth sentence, by striking ``but only'' and all that 
follows through the period at the end and inserting ``but only to the 
extent that such interpretative rules, or the statutes upon which such 
rules are based, impose on small entities a collection of information 
requirement or a recordkeeping requirement.''.
    (b) Definitions.--Section 601 of title 5, United States Code, as 
amended by section 3 of this Act, is amended--
            (1) in paragraph (6), by striking ``and'' at the end; and
            (2) by striking paragraphs (7) and (8) and inserting the 
        following:
            ``(7) the term `collection of information' has the meaning 
        given that term in section 3502(3) of title 44;
            ``(8) the term `recordkeeping requirement' has the meaning 
        given that term in section 3502(13) of title 44; and''.

SEC. 9. MITIGATING PENALTIES ON SMALL ENTITIES.

    Section 223 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (Public Law 104-121; 110 Stat. 862) is amended by adding at 
the end the following:
    ``(d) Review of Policies and Programs.--
            ``(1) Review required.--Not later than 6 months after the 
        date of enactment of this subsection, and every 2 years 
        thereafter, each agency regulating the activities of small 
        entities shall review the policy or program established by the 
        agency under subsection (a) and make any modifications to the 
        policy or program necessary to comply with the requirements 
        under this section.
            ``(2) Report.--Not later than 6 months after the date of 
        enactment of this subsection, and every 2 years thereafter, 
        each agency described in paragraph (1) shall submit a report on 
        the review and modifications required under paragraph (1) to--
                    ``(A) the Committee on Small Business and 
                Entrepreneurship and the Committee on Homeland Security 
                and Governmental Affairs of the Senate; and
                    ``(B) the Committee on Small Business and the 
                Committee on the Judiciary of the House of 
                Representatives.''.

SEC. 10. REQUIRING MORE DETAILED SMALL ENTITY ANALYSES.

    (a) Initial Regulatory Flexibility Analysis.--Section 603 of title 
5, United States Code, as amended by section 1100G(b) of Public Law 
111-203 (124 Stat. 2112), 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, including job creation 
        and employment by small entities, beyond that already imposed 
        on the class of small entities by the agency, or the reasons 
        why such an estimate is not available.''; and
            (2) by adding at the end the following:
    ``(e) 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--
            ``(1) when the agency submits a draft rule to the Office of 
        Information and Regulatory Affairs of the Office of Management 
        and Budget under Executive Order 12866, if that order requires 
        the submission; or
            ``(2) if no submission to the Office of Information and 
        Regulatory Affairs is required--
                    ``(A) a reasonable period before publication of the 
                rule by the agency; and
                    ``(B) in any event, not later than 3 months before 
                the date on which the agency publishes the rule.''.
    (b) Final Regulatory Flexibility Analysis.--
            (1) In general.--Section 604(a) of title 5, United States 
        Code, is amended--
                    (A) by inserting ``detailed'' before 
                ``description'' each place it appears;
                    (B) in paragraph (2)--
                            (i) by inserting ``detailed'' before 
                        ``statement'' each place it appears; and
                            (ii) by inserting ``(or certification of 
                        the proposed rule under section 605(b))'' after 
                        ``initial regulatory flexibility analysis'';
                    (C) in paragraph (4), by striking ``an 
                explanation'' and inserting ``a detailed explanation''; 
                and
                    (D) in paragraph (6) (relating to a description of 
                steps taken to minimize significant economic impact), 
                as added by section 1601 of the Small Business Jobs Act 
                of 2010 (Public Law 111-240; 124 Stat. 2251), by 
                inserting ``detailed'' before ``statement''.
            (2) 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--
            ``(1) make copies of the final regulatory flexibility 
        analysis available to the public, including by publishing the 
        entire final regulatory flexibility analysis on the Web site of 
        the agency; and
            ``(2) publish in the Federal Register the final regulatory 
        flexibility analysis, or a summary of the analysis that 
        includes the telephone number, mailing address, and address of 
        the Web site where the complete final regulatory flexibility 
        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 deemed to have satisfied a 
requirement regarding the content of a regulatory flexibility agenda or 
regulatory flexibility analysis under section 602, 603, or 604, if the 
Federal agency provides in the agenda or regulatory flexibility 
analysis a cross-reference to the specific portion of an agenda or 
analysis that is required by another law and that satisfies the 
requirement under section 602, 603, or 604.''.
    (d) Certifications.--Section 605(b) of title 5, United States Code, 
is amended, in the second sentence, by striking ``statement providing 
the factual'' and inserting ``detailed statement providing the factual 
and legal''.
    (e) Quantification Requirements.--Section 607 of title 5, United 
States Code, is amended to read as follows:
``Sec. 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, including an estimate of 
        the potential for job creation or job loss, and alternatives to 
        the proposed or final rule; or
            ``(2) a more general descriptive statement regarding the 
        potential for job creation or job loss and a detailed statement 
        explaining why quantification under paragraph (1) is not 
        practicable or reliable.''.

SEC. 11. ENSURING THAT AGENCIES CONSIDER SMALL ENTITY IMPACT DURING THE 
              RULEMAKING PROCESS.

    Section 605(b) of title 5, United States Code, is amended--
            (1) by inserting ``(1)'' after ``(b)''; and
            (2) by adding at the end the following:
    ``(2) If, after publication of the certification required under 
paragraph (1), the head of the agency determines that there will be a 
significant economic impact on a substantial number of small entities, 
the agency shall comply with the requirements of section 603 before the 
publication of the final rule, by--
            ``(A) publishing an initial regulatory flexibility analysis 
        for public comment; or
            ``(B) re-proposing the rule with an initial regulatory 
        flexibility analysis.
    ``(3) The head of an agency may not make a certification relating 
to a rule under this subsection, unless the head of the agency has 
determined--
            ``(A) the average cost of the rule for small entities 
        affected or reasonably presumed to be affected by the rule;
            ``(B) the number of small entities affected or reasonably 
        presumed to be affected by the rule; and
            ``(C) the number of affected small entities for which that 
        cost will be significant.
    ``(4) Before publishing a certification and a statement providing 
the factual basis for the certification under paragraph (1), the head 
of an agency shall--
            ``(A) transmit a copy of the certification and statement to 
        the Chief Counsel for Advocacy of the Small Business 
        Administration; and
            ``(B) consult with the Chief Counsel for Advocacy of the 
        Small Business Administration on the accuracy of the 
        certification and statement.''.

SEC. 12. QUALIFICATIONS OF THE CHIEF COUNSEL FOR ADVOCACY AND AUTHORITY 
              FOR THE OFFICE OF ADVOCACY.

    (a) Qualifications of Chief Counsel for Advocacy.--Section 201 of 
Public Law 94-305 (15 U.S.C. 634a) is amended by adding at the end the 
following: ``The Chief Counsel for Advocacy shall be an attorney with 
business experience and expertise in or knowledge of the regulatory 
process.''.
    (b) Additional Powers of Office of Advocacy.--Section 203 of Public 
Law 94-305 (15 U.S.C. 634c) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (6) the following:
            ``(7) at the discretion of the Chief Counsel for Advocacy, 
        comment on regulatory action by an agency that affects small 
        businesses, without regard to whether the agency is required to 
        file a notice of proposed rulemaking under section 553 of title 
        5, United States Code, with respect to the action.''.

SEC. 13. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Heading.--Section 605 of title 5, United States Code, is 
amended in the section heading by striking ``Avoidance'' and all that 
follows and inserting the following: ``Incorporations by reference and 
certification.''.
    (b) 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 inserting 
        the following:

``607. Quantification requirements.''.
                                 <all>