[Congressional Record Volume 144, Number 6 (Wednesday, February 4, 1998)]
[Senate]
[Pages S402-S409]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMENDMENTS SUBMITTED

                                 ______
                                 

                 THE REGULATORY IMPROVEMENT ACT OF 1997

                                 ______
                                 

                 LEVIN (AND OTHERS) AMENDMENT NO. 1644

  (Ordered referred to the Committee on Governmental Affairs.)
  Mr. LEVIN (for himself, Mr. Thompson, Mr. Glenn, Mr. Abraham, Mr. 
Robb, Mr. Roth, Mr. Rockefeller, Mr. Stevens, Mr. Grams, and Mr. 
Cochran) submitted an amendment intended to be proposed by them to the 
bill (S. 981) to provide for analysis of major rules; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Regulatory Improvement Act 
     of 1998''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Effective regulatory programs provide important 
     benefits to the public, including improving the environment, 
     worker safety, and public health. Regulatory programs also 
     impose significant costs on the public, including 
     individuals, businesses, and State, local, and tribal 
     governments.
       (2) Improving the ability of Federal agencies to use 
     scientific and economic analysis in developing regulations 
     should yield increased benefits and more effective 
     protections while minimizing costs.
       (3) Cost-benefit analysis and risk assessment are useful 
     tools to better inform agencies in developing regulations, 
     although they do not replace the need for good judgment and 
     consideration of values.
       (4) The evaluation of costs and benefits must involve the 
     consideration of the relevant information, whether expressed 
     in quantitative or qualitative terms, including factors such 
     as social values, distributional effects, and equity.
       (5) Cost-benefit analysis and risk assessment should be 
     presented with a clear statement of the analytical 
     assumptions and uncertainties, including an explanation of 
     what is known and not known and what the implications of 
     alternative assumptions might be.
       (6) The public has a right to know about the costs and 
     benefits of regulations, the risks addressed, the risks 
     reduced, and the quality of scientific and economic analysis 
     used to support decisions. Such knowledge will promote the 
     quality, integrity and responsiveness of agency actions.
       (7) The Administrator of the Office of Information and 
     Regulatory Affairs should oversee regulatory activities to 
     raise the quality and consistency of cost-benefit analysis 
     and risk assessment among all agencies.
       (8) The Federal Government should develop a better 
     understanding of the strengths, weaknesses, and uncertainties 
     of cost-benefit analysis and risk assessment and conduct the 
     research needed to improve these analytical tools.

     SEC. 3. REGULATORY ANALYSIS.

       (a) In General.--Chapter 6 of title 5, United States Code, 
     is amended by adding at the end the following:

                  ``SUBCHAPTER II--REGULATORY ANALYSIS

     ``Sec. 621. Definitions

       ``For purposes of this subchapter the definitions under 
     section 551 shall apply and--
       ``(1) the term `Administrator' means the Administrator of 
     the Office of Information and Regulatory Affairs of the 
     Office of Management and Budget;
       ``(2) the term `benefit' means the reasonably identifiable 
     significant favorable effects, quantifiable and 
     nonquantifiable, including social, health, safety, 
     environmental, economic, and distributional effects, that are 
     expected to result from implementation of, or compliance 
     with, a rule;
       ``(3) the term `cost' means the reasonably identifiable 
     significant adverse effects, quantifiable and 
     nonquantifiable, including social, health, safety, 
     environmental, economic, and distributional effects, that are 
     expected to result from implementation of, or compliance 
     with, a rule;
       ``(4) the term `cost-benefit analysis' means an evaluation 
     of the costs and benefits of a rule, quantified to the extent 
     feasible and appropriate and otherwise qualitatively 
     described, that is prepared in accordance with the 
     requirements of this subchapter at the level of detail 
     appropriate and practicable for reasoned decisionmaking on 
     the matter involved, taking into consideration uncertainties, 
     the significance and complexity of the decision, and the need 
     to adequately inform the public;
       ``(5) the term `Director' means the Director of the Office 
     of Management and Budget, acting through the Administrator of 
     the Office of Information and Regulatory Affairs;
       ``(6) the term `flexible regulatory options' means 
     regulatory options that permit flexibility to regulated 
     persons in achieving the objective of the statute as 
     addressed by the rule making, including regulatory options 
     that use market-based mechanisms, outcome oriented 
     performance-based standards, or other options that promote 
     flexibility;
       ``(7) the term `major rule' means a rule that--
       ``(A) the agency proposing the rule or the Director 
     reasonably determines is likely to have an annual effect on 
     the economy of $100,000,000 or more in reasonably 
     quantifiable costs; or
       ``(B) is otherwise designated a major rule by the Director 
     on the ground that the rule is likely to adversely affect, in 
     a material way, the economy, a sector of the economy, 
     including small business, productivity, competition, jobs, 
     the environment, public health or safety, or State, local or 
     tribal governments, or communities;
       ``(8) the term `reasonable alternative' means a reasonable 
     regulatory option that would achieve the objective of the 
     statute as addressed by the rule making and that the agency 
     has authority to adopt under the statute granting rule making 
     authority, including flexible regulatory options;
       ``(9) the term `risk assessment' means the systematic 
     process of organizing hazard and exposure information to 
     estimate the potential for specific harm to an exposed 
     population, subpopulation, or natural resource including, to 
     the extent feasible, a characterization of the distribution 
     of risk as well as an analysis of uncertainties, 
     variabilities, conflicting information, and inferences and 
     assumptions;
       ``(10) the term `rule' has the same meaning as in section 
     551(4), and shall not include--
       ``(A) a rule exempt from notice and public comment 
     procedure under section 553;
       ``(B) a rule that involves the internal revenue laws of the 
     United States, or the assessment or collection of taxes, 
     duties, or other debts, revenue, or receipts;
       ``(C) a rule of particular applicability that approves or 
     prescribes for the future rates, wages, prices, services, 
     corporate or financial structures, reorganizations, mergers, 
     acquisitions, accounting practices, or disclosures bearing on 
     any of the foregoing;
       ``(D) a rule relating to monetary policy proposed or 
     promulgated by the Board of Governors of the Federal Reserve 
     System or by the Federal Open Market Committee;
       ``(E) a rule relating to the operations, safety, or 
     soundness of federally insured depository institutions or any 
     affiliate of such an institution (as defined in section 2(k) 
     of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(k)); 
     credit unions; the Federal Home Loan Banks; government-
     sponsored housing enterprises; a Farm Credit System 
     Institution; foreign banks, and their branches, agencies, 
     commercial lending companies or representative offices that 
     operate in the United States and any affiliate of such 
     foreign banks (as those terms are defined in the 
     International Banking Act of 1978 (12 U.S.C. 3101)); or a 
     rule relating to the payments system or the protection of 
     deposit insurance funds or Farm Credit Insurance Fund;
       ``(F) a rule relating to the integrity of the securities or 
     commodities futures markets or to the protection of investors 
     in those markets;
       ``(G) a rule issued by the Federal Election Commission or a 
     rule issued by the Federal Communications Commission under 
     sections 312(a)(7) and 315 of the Communications Act of 1934 
     (47 U.S.C. 312(a)(7) and 315);
       ``(H) a rule required to be promulgated at least annually 
     pursuant to statute;
       ``(I) a rule or agency action relating to the public debt 
     or fiscal policy of the United States; or
       ``(J) a rule or agency action that authorizes the 
     introduction into commerce, or recognizes the marketable 
     status of, a product; and
       ``(11) the term `substitution risk' means a significant 
     increased risk to health, safety, or the environment 
     reasonably likely to result from a regulatory option.

[[Page S403]]

     ``Sec. 622. Applicability and effect

       ``(a) Except as provided in section 623(f), this subchapter 
     shall apply to all proposed and final major rules.
       ``(b) Nothing in this subchapter shall be construed to 
     supersede any requirement for rule making or opportunity for 
     judicial review made applicable under any other Federal 
     statute.

     ``Sec. 623. Regulatory analysis

       ``(a)(1) Before publishing a notice of a proposed rule 
     making for any rule, each agency shall determine whether the 
     rule is or is not a major rule covered by this subchapter.
       ``(2) The Director may designate any rule to be a major 
     rule under section 621(7)(B), if the Director--
       ``(A) makes such designation no later than 30 days after 
     the close of the comment period for the rule; and
       ``(B) publishes such designation in the Federal Register, 
     together with a succinct statement of the basis for the 
     designation, within 30 days after such designation.
       ``(b)(1)(A) When an agency publishes a notice of proposed 
     rule making for a major rule, the agency shall prepare and 
     place in the rule making file an initial regulatory analysis, 
     and shall include a summary of such analysis consistent with 
     subsection (e) in the notice of proposed rule making.
       ``(B)(i) When the Director has published a designation that 
     a rule is a major rule after the publication of the notice of 
     proposed rule making for the rule, the agency shall promptly 
     prepare and place in the rule making file an initial 
     regulatory analysis for the rule and shall publish in the 
     Federal Register a summary of such analysis consistent with 
     subsection (e).
       ``(ii) Following the issuance of an initial regulatory 
     analysis under clause (i), the agency shall give interested 
     persons an opportunity to comment under section 553 in the 
     same manner as if the initial regulatory analysis had been 
     issued with the notice of proposed rule making.
       ``(2) Each initial regulatory analysis shall contain--
       ``(A) a cost-benefit analysis of the proposed rule that 
     shall contain--
       ``(i) an analysis of the benefits of the proposed rule, 
     including any benefits that cannot be quantified, and an 
     explanation of how the agency anticipates that such benefits 
     will be achieved by the proposed rule, including a 
     description of the persons or classes of persons likely to 
     receive such benefits;
       ``(ii) an analysis of the costs of the proposed rule, 
     including any costs that cannot be quantified, and an 
     explanation of how the agency anticipates that such costs 
     will result from the proposed rule, including a description 
     of the persons or classes of persons likely to bear such 
     costs;
       ``(iii) an evaluation of the relationship of the benefits 
     of the proposed rule to its costs, including the 
     determinations required under subsection (d), taking into 
     account the results of any risk assessment;
       ``(iv) an evaluation of the benefits and costs of a 
     reasonable number of reasonable alternatives reflecting the 
     range of regulatory options that would achieve the objective 
     of the statute as addressed by the rule making, including, 
     where feasible, alternatives that--
       ``(I) require no government action or utilize voluntary 
     programs;
       ``(II) provide flexibility for small entities under 
     subchapter I and for State, local, or tribal government 
     agencies delegated to administer a Federal program; and
       ``(III) employ flexible regulatory options; and
       ``(v) a description of the scientific or economic 
     evaluations or information upon which the agency 
     substantially relied in the cost-benefit analysis and risk 
     assessment required under this subchapter, and an explanation 
     of how the agency reached the determinations under subsection 
     (d);
       ``(B) if required, the risk assessment in accordance with 
     section 624; and
       ``(C) when scientific information on substitution risks to 
     health, safety, or the environment is reasonably available to 
     the agency, an identification and evaluation of such risks.
       ``(c)(1) When the agency publishes a final major rule, the 
     agency shall prepare and place in the rule making file a 
     final regulatory analysis.
       ``(2) Each final regulatory analysis shall address each of 
     the requirements for the initial regulatory analysis under 
     subsection (b)(2), revised to reflect--
       ``(A) any material changes made to the proposed rule by the 
     agency after publication of the notice of proposed rule 
     making;
       ``(B) any material changes made to the cost-benefit 
     analysis or risk assessment; and
       ``(C) agency consideration of significant comments received 
     regarding the proposed rule and the initial regulatory 
     analysis, including regulatory review communications under 
     subchapter IV.
       ``(d)(1) The agency shall include in the statement of basis 
     and purpose for a proposed or final major rule a reasonable 
     determination, based upon the rule making record considered 
     as a whole--
       ``(A) whether the rule is likely to provide benefits that 
     justify the costs of the rule; and
       ``(B) whether the rule is likely to substantially achieve 
     the rule making objective in a more cost-effective manner, or 
     with greater net benefits, than the other reasonable 
     alternatives considered by the agency.
       ``(2) If the agency head determines that the rule is not 
     likely to provide benefits that justify the costs of the rule 
     or is not likely to substantially achieve the rule making 
     objective in a more cost-effective manner, or with greater 
     net benefits, than the other reasonable alternatives 
     considered by the agency, the agency head shall--
       ``(A) explain the reasons for selecting the rule 
     notwithstanding such determination, including identifying any 
     statutory provision that required the agency to select such 
     rule; and
       ``(B) describe any reasonable alternative considered by the 
     agency that would be likely to provide benefits that justify 
     the costs of the rule and be likely to substantially achieve 
     the rule making objective in a more cost-effective manner, or 
     with greater net benefits, than the alternative selected by 
     the agency.
       ``(e) Each agency shall include an executive summary of the 
     regulatory analysis, including any risk assessment, in the 
     regulatory analysis and in the statement of basis and purpose 
     for the proposed and final major rule. Such executive summary 
     shall include a succinct presentation of--
       ``(1) the benefits and costs expected to result from the 
     rule and any determinations required under subsection (d);
       ``(2) if applicable, the risk addressed by the rule and the 
     results of any risk assessment;
       ``(3) the benefits and costs of reasonable alternatives 
     considered by the agency; and
       ``(4) the key assumptions and scientific or economic 
     information upon which the agency relied.
       ``(f)(1) A major rule may be adopted without prior 
     compliance with this subchapter if--
       ``(A) the agency for good cause finds that conducting the 
     regulatory analysis under this subchapter before the rule 
     becomes effective is impracticable or contrary to an 
     important public interest; and
       ``(B) the agency publishes the rule in the Federal Register 
     with such finding and a succinct explanation of the reasons 
     for the finding.
       ``(2) If a major rule is adopted under paragraph (1), the 
     agency shall comply with this subchapter as promptly as 
     possible unless compliance would be unreasonable because the 
     rule is, or soon will be, no longer in effect.
       ``(g) Each agency shall develop an effective process to 
     permit elected officers of State, local, and tribal 
     governments (or their designated employees with authority to 
     act on their behalf) to provide meaningful and timely input 
     in the development of regulatory proposals that contain 
     significant Federal intergovernmental mandates. The process 
     developed under this subsection shall be consistent with 
     section 204 of the Unfunded Mandates Reform Act of 1995 (2 
     U.S.C. 1534).

     ``Sec. 624. Principles for risk assessments

       ``(a)(1)(A) Subject to paragraph (2), each agency shall 
     design and conduct risk assessments in accordance with this 
     subchapter for--
       ``(i) each proposed and final major rule the primary 
     purpose of which is to address health, safety, or 
     environmental risk; or
       ``(ii) any risk assessment that is not the basis of a rule 
     making that the Director reasonably determines is anticipated 
     to have a substantial impact on a significant public policy 
     or on the economy.
       ``(B)(i) Risk assessments conducted under this subchapter 
     shall be conducted in a manner that promotes rational and 
     informed risk management decisions and informed public input 
     into and understanding of the process of making agency 
     decisions.
       ``(ii) The scope and level of analysis of such a risk 
     assessment shall be commensurate with the significance and 
     complexity of the decision and the need to adequately inform 
     the public, consistent with any need for expedition, and 
     designed for the nature of the risk being assessed.
       ``(2) If a risk assessment under this subchapter is 
     otherwise required by this section, but the agency determines 
     that--
       ``(A) a final rule subject to this subchapter is 
     substantially similar to the proposed rule with respect to 
     the risk being addressed;
       ``(B) a risk assessment for the proposed rule has been 
     carried out in a manner consistent with this subchapter; and
       ``(C) a new risk assessment for the final rule is not 
     required in order to respond to comments received during the 
     period for comment on the proposed rule,

     the agency may publish such determination along with the 
     final rule in lieu of preparing a new risk assessment for the 
     final rule.
       ``(b) Each agency shall consider in each risk assessment 
     reliable and reasonably available scientific information and 
     shall describe the basis for selecting such scientific 
     information.
       ``(c)(1) When a risk assessment involves a choice of 
     assumptions, the agency shall, with respect to significant 
     assumptions--
       ``(A) identify the assumption and its scientific and policy 
     basis, including the extent to which the assumption has been 
     validated by, or conflicts with, empirical data;
       ``(B) explain the basis for any choices among assumptions 
     and, where applicable, the basis for combining multiple 
     assumptions; and
       ``(C) describe reasonable alternative assumptions that--
       ``(i) would have had a significant effect on the results of 
     the risk assessment; and
       ``(ii) were considered but not selected by the agency for 
     use in the risk assessment.
       ``(2) As relevant and reliable scientific information 
     becomes reasonably available,

[[Page S404]]

     each agency shall revise its significant assumptions to 
     incorporate such information.
       ``(d) The agency shall notify the public of the agency's 
     intent to conduct a risk assessment and, to the extent 
     practicable, shall solicit relevant and reliable data from 
     the public. The agency shall consider such data in conducting 
     the risk assessment.
       ``(e) Each risk assessment under this subchapter shall 
     include, as appropriate, each of the following:
       ``(1) A description of the hazard of concern.
       ``(2) A description of the populations or natural resources 
     that are the subject of the risk assessment.
       ``(3) An explanation of the exposure scenarios used in the 
     risk assessment, including an estimate of the corresponding 
     population or natural resource at risk and the likelihood of 
     such exposure scenarios.
       ``(4) A description of the nature and severity of the harm 
     that could reasonably occur as a result of exposure to the 
     hazard.
       ``(5) A description of the major uncertainties in each 
     component of the risk assessment and their influence on the 
     results of the assessment.
       ``(f) To the extent scientifically appropriate, each agency 
     shall--
       ``(1) express the estimate of risk as 1 or more reasonable 
     ranges and, if feasible, probability distributions that 
     reflects variabilities, uncertainties, and lack of data in 
     the analysis;
       ``(2) provide the ranges and distributions of risks, 
     including central and high end estimates of the risks, and 
     their corresponding exposure scenarios for the potentially 
     exposed population and, as appropriate, for more highly 
     exposed or sensitive subpopulations; and
       ``(3) describe the qualitative factors influencing the 
     ranges, distributions, and likelihood of possible risks.
       ``(g) When scientific information that permits relevant 
     comparisons of risk is reasonably available, each agency 
     shall use the information to place the nature and magnitude 
     of a risk to health, safety, or the environment being 
     analyzed in relationship to other reasonably comparable risks 
     familiar to and routinely encountered by the general public. 
     Such comparisons should consider relevant distinctions among 
     risks, such as the voluntary or involuntary nature of risks, 
     well understood or newly discovered risks, and reversible or 
     irreversible risks.

     ``Sec. 625. Peer review

       ``(a) Each agency shall provide for an independent peer 
     review in accordance with this section of the cost benefit 
     analysis and risk assessment required by this subchapter.
       ``(b)(1) Peer review required under subsection (a) shall--
       ``(A) be conducted through panels, expert bodies, or other 
     formal or informal devices that are broadly representative 
     and involve participants--
       ``(i) with expertise relevant to the sciences, or analyses 
     involved in the regulatory decisions; and
       ``(ii) who are independent of the agency;
       ``(B) be governed by agency standards and practices 
     governing conflicts of interest of nongovernmental agency 
     advisors;
       ``(C) provide for the timely completion of the peer review 
     including meeting agency deadlines;
       ``(D) contain a balanced presentation of all 
     considerations, including minority reports and an agency 
     response to all significant peer review comments; and
       ``(E) provide adequate protections for confidential 
     business information and trade secrets, including requiring 
     panel members or participants to enter into confidentiality 
     agreements.
       ``(2) Each agency shall provide a written response to all 
     significant peer review comments. All peer review comments 
     and any responses shall be made--
       ``(A) available to the public; and
       ``(B) part of the rule making record for purposes of 
     judicial review of any final agency action.
       ``(3) If the head of an agency, with the concurrence of the 
     Director, publishes a determination in the rule making file 
     that a cost-benefit analysis or risk assessment, or any 
     component thereof, has been previously subjected to adequate 
     peer review, no further peer review shall be required under 
     this section for such analysis, assessment, or component.
       ``(c) For each peer review conducted by an agency under 
     this section, the agency head shall include in the rule 
     making record a statement by a Federal officer or employee 
     who is not an employee of the agency rule making office or 
     program--
       ``(1) whether the peer review participants reflect the 
     independence and expertise required under subsection 
     (b)(1)(A); and
       ``(2) whether the agency has adequately responded to the 
     peer review comments as required under subsection (b)(2).
       ``(d) The peer review required by this section shall not be 
     subject to the Federal Advisory Committee Act (5 U.S.C. 
     App.).

     ``Sec. 626. Deadlines for rule making

       ``(a) All statutory deadlines that require an agency to 
     propose or promulgate any major rule during the 2-year period 
     beginning on the effective date of this section shall be 
     suspended until the earlier of--
       ``(1) the date on which the requirements of this subchapter 
     are satisfied; or
       ``(2) the date occurring 6 months after the date of the 
     applicable deadline.
       ``(b) In any proceeding involving a deadline imposed by a 
     court of the United States that requires an agency to propose 
     or promulgate any major rule during the 2-year period 
     beginning on the effective date of this section, the United 
     States shall request, and the court may grant, an extension 
     of such deadline until the earlier of--
       ``(1) the date on which the requirements of this subchapter 
     are satisfied; or
       ``(2) the date occurring 6 months after the date of the 
     applicable deadline.
       ``(c) In any case in which the failure to promulgate a 
     major rule by a deadline occurring during the 2-year period 
     beginning on the effective date of this section would create 
     an obligation to regulate through individual adjudications, 
     the deadline shall be suspended until the earlier of--
       ``(1) the date on which the requirements of this subchapter 
     are satisfied; or
       ``(2) the date occurring 6 months after the date of the 
     applicable deadline.

     ``Sec. 627. Judicial review

       ``(a) Compliance by an agency with the provisions of this 
     subchapter shall be subject to judicial review only--
       ``(1) in connection with review of final agency action;
       ``(2) in accordance with this section; and
       ``(3) in accordance with the limitations on timing, venue, 
     and scope of review imposed by the statute authorizing 
     judicial review.
       ``(b) Any determination of an agency whether a rule is a 
     major rule under section 621(7)(A) shall be set aside by a 
     reviewing court only upon a showing that the determination is 
     arbitrary or capricious.
       ``(c) Any designation by the Director that a rule is a 
     major rule under section 621(7), or any failure to make such 
     designation, shall not be subject to judicial review.
       ``(d) The cost-benefit analysis, cost-benefit determination 
     under section 623(d), and any risk assessment required under 
     this subchapter shall not be subject to judicial review 
     separate from review of the final rule to which such analysis 
     or assessment applies. The cost-benefit analysis, cost-
     benefit determination under section 623(d), and any risk 
     assessment shall be part of the rule making record and shall 
     be considered by a court to the extent relevant, only in 
     determining whether the final rule is arbitrary, capricious, 
     an abuse of discretion, or is unsupported by substantial 
     evidence where that standard is otherwise provided by law.
       ``(e) If an agency fails to perform the cost-benefit 
     analysis, cost-benefit determination, or risk assessment, or 
     to provide for peer review, a court shall remand or 
     invalidate the rule.

     ``Sec. 628. Guidelines, interagency coordination, and 
       research

       ``(a)(1) No later than 9 months after the date of enactment 
     of this section, the Director, in consultation with the 
     Council of Economic Advisors, the Director of the Office of 
     Science and Technology Policy, and relevant agency heads, 
     shall issue guidelines for cost-benefit analyses, risk 
     assessments, and peer reviews as required by this subchapter. 
     The Director shall oversee and periodically revise such 
     guidelines as appropriate.
       ``(2) As soon as practicable and no later than 18 months 
     after issuance of the guidelines required under paragraph 
     (1), each agency subject to section 624 shall adopt detailed 
     guidelines for risk assessments as required by this 
     subchapter. Such guidelines shall be consistent with the 
     guidelines issued under paragraph (1). Each agency shall 
     periodically revise such agency guidelines as appropriate.
       ``(3) The guidelines under this subsection shall be 
     developed following notice and public comment. The 
     development and issuance of the guidelines shall not be 
     subject to judicial review, except in accordance with section 
     706(1) of this title.
       ``(b) To promote the use of cost-benefit analysis and risk 
     assessment in a consistent manner and to identify agency 
     research and training needs, the Director, in consultation 
     with the Council of Economic Advisors and the Director of the 
     Office of Science and Technology Policy, shall--
       ``(1) oversee periodic evaluations of Federal agency cost-
     benefit analysis and risk assessment;
       ``(2) provide advice and recommendations to the President 
     and Congress to improve agency use of cost-benefit analysis 
     and risk assessment;
       ``(3) utilize appropriate interagency mechanisms to improve 
     the consistency and quality of cost-benefit analysis and risk 
     assessment among Federal agencies; and
       ``(4) utilize appropriate mechanisms between Federal and 
     State agencies to improve cooperation in the development and 
     application of cost-benefit analysis and risk assessment.
       ``(c)(1) The Director, in consultation with the head of 
     each agency, the Council of Economic Advisors, and the 
     Director of the Office of Science and Technology Policy, 
     shall periodically evaluate and develop a strategy to meet 
     agency needs for research and training in cost-benefit 
     analysis and risk assessment, including research on 
     modelling, the development of generic data, use of 
     assumptions and the identification and quantification of 
     uncertainty and variability.
       ``(2)(A) No later than 6 months after the date of enactment 
     of this section, the Director, in consultation with the 
     Director of the Office of Science and Technology Policy, 
     shall enter a contract with an accredited scientific 
     institution to conduct research to--
       ``(i) develop a common basis to assist risk communication 
     related to both carcinogens and noncarcinogens; and

[[Page S405]]

       ``(ii) develop methods to appropriately incorporate risk 
     assessments into related cost-benefit analyses.
       ``(B) No later than 24 months after the date of enactment 
     of this section, the results of the research conducted under 
     this paragraph shall be submitted to the Director and 
     Congress.

     ``Sec. 629. Risk based priorities study

       ``(a) No later than 1 year after the date of enactment of 
     this section, the Director, in consultation with the Director 
     of the Office of Science and Technology Policy, shall enter 
     into a contract with an accredited scientific institution to 
     conduct a study that provides--
       ``(1) a systematic comparison of the extent and severity of 
     significant risks to human health, safety, or the environment 
     (hereafter referred to as a comparative risk analysis);
       ``(2) a study of methodologies for using comparative risk 
     analysis to compare dissimilar risks to human health, safety, 
     or the environment, including development of a common basis 
     to assist comparative risk analysis related to both 
     carcinogens and noncarcinogens; and
       ``(3) recommendations on the use of comparative risk 
     analysis in setting priorities for the reduction of risks to 
     human health, safety, or the environment.
       ``(b) The Director shall ensure that the study required 
     under subsection (a) is--
       ``(1) conducted through an open process providing peer 
     review consistent with section 625 and opportunities for 
     public comment and participation; and
       ``(2) no later than 3 years after the date of enactment of 
     this section, completed and submitted to Congress and the 
     President.
       ``(c) No later than 4 years after the date of enactment of 
     this section, each relevant agency shall, as appropriate, use 
     the results of the study required under subsection (a) to 
     inform the agency in the preparation of the agency's annual 
     budget and strategic plan and performance plan under section 
     306 of this title and sections 1115, 1116, 1117, 1118, and 
     1119 of title 31.
       ``(d) No later than 5 years after the date of enactment of 
     this section, and periodically thereafter, the President 
     shall submit a report to Congress recommending legislative 
     changes to assist in setting priorities to more effectively 
     and efficiently reduce risks to human health, safety, or the 
     environment.

                   ``SUBCHAPTER III--REVIEW OF RULES

     ``Sec. 631. Definitions

       ``For purposes of this subchapter--
       ``(1) the definitions under section 551 shall apply; and
       ``(2) the term `economically significant rule' means a rule 
     that--
       ``(A) is likely to have an annual effect on the economy of 
     $100,000,000 or more in reasonably quantifiable costs; or
       ``(B) is likely to adversely affect, in a material way, the 
     economy, a sector of the economy, including small business, 
     productivity, competition, jobs, the environment, public 
     health or safety, or State, local or tribal governments, or 
     communities.

     ``Sec. 632. Review of rules

       ``(a)(1) No later than 1 year after the date of enactment 
     of this section (and no later than every 5th year following 
     the year in which this section takes effect) each agency 
     shall publish in the Federal Register a preliminary schedule 
     for the review of economically significant rules previously 
     promulgated by the agency. The preliminary schedule shall be 
     subject to public comment for 60 days after the date of 
     publication. Within 120 days after the close of the public 
     comment period, each agency shall publish a final schedule in 
     the Federal Register.
       ``(2) In selecting which economically significant rules it 
     shall review, each agency shall consider the extent to 
     which--
       ``(A) the rule could be revised to be substantially more 
     cost-effective or to substantially increase net benefits, 
     including through flexible regulatory options;
       ``(B) the rule is important relative to other rules being 
     considered for review; and
       ``(C) the agency has discretion under the statute 
     authorizing the rule to modify or repeal the rule.
       ``(3) Each preliminary and final schedule shall include--
       ``(A) a brief description of each rule selected for review;
       ``(B) a brief explanation of the reasons for the selection 
     of each such rule for review; and
       ``(C) a deadline for the review of each rule listed 
     thereon, and such deadlines shall occur no later than 5 years 
     after the date of publication of the final schedule.
       (4) No later than 6 months after the deadline for a rule as 
     provided under paragraph (3)(C), the agency shall publish in 
     the Federal Register the determination made with respect to 
     the rule and an explanation of such determination.
       ``(5)(A) If an agency makes a determination to amend or 
     repeal a rule, the agency shall complete final agency action 
     with regard to such rule no later than 2 years after the 
     deadline established for such rule under paragraph (3).
       (B) The Director may extend a deadline under this section 
     for no more than 1 year if the Director--
       ``(i) for good cause finds that compliance with such 
     deadline is impracticable; and
       ``(ii) publishes in the Federal Register such finding and a 
     succinct explanation of the reasons for the finding.
       ``(b) The agency shall include with the publication under 
     subsection (a) the identification of any legislative mandate 
     that requires the agency to impose rules that the agency 
     determines are unnecessary, outdated or unduly burdensome.
       ``(c)(1) The Administrator shall work with interested 
     entities, including small entities and State, local, and 
     tribal governments, to pursue the objectives of this 
     subchapter.
       ``(2) Consultation with representatives of State, local, 
     and tribal governments shall be governed by the process 
     established under section 204 of the Unfunded Mandates Reform 
     Act of 1995 (2 U.S.C. 1534).

                  ``SUBCHAPTER IV--EXECUTIVE OVERSIGHT

     ``Sec. 641. Definitions

       ``For purposes of this subchapter--
       ``(1) the definitions under sections 551 and 621 shall 
     apply; and
       ``(2) the term `regulatory action' means any one of the 
     following:
       ``(A) Advance notice of proposed rule making.
       ``(B) Notice of proposed rule making.
       ``(C) Final rule making, including interim final rule 
     making.

     ``Sec. 642. Presidential regulatory review

       ``(a) The President shall establish a process for the 
     review and coordination of Federal agency regulatory actions. 
     Such process shall be the responsibility of the Director.
       ``(b) For the purpose of carrying out subsection (a), the 
     Director shall--
       ``(1) develop and oversee uniform regulatory policies and 
     procedures, including those by which each agency shall comply 
     with the requirements of this chapter;
       ``(2) develop policies and procedures for the review of 
     regulatory actions by the Director; and
       ``(3) develop and oversee an annual governmentwide 
     regulatory planning process that shall include review of 
     planned significant regulatory actions and publication of--
       ``(A) a summary of and schedule for promulgation of planned 
     agency major rules;
       ``(B) agency specific schedules for review of existing 
     rules under subchapter III and section 610;
       ``(C) a summary of regulatory review actions undertaken in 
     the prior year;
       ``(D) a list of major rules promulgated in the prior year 
     for which an agency could not make the determinations that 
     the benefits of a rule justify the costs under section 
     623(d);
       ``(E) identification of significant agency noncompliance 
     with this chapter in the prior year; and
       ``(F) recommendations for improving compliance with this 
     chapter and increasing the efficiency and effectiveness of 
     the regulatory process.
       ``(c)(1) The review established under subsection (a) shall 
     be conducted as expeditiously as practicable and shall be 
     limited to no more than 90 days.
       ``(2) A review may be extended longer than the 90-day 
     period referred to under paragraph (1) by the Director or at 
     the request of the rule making agency to the Director. Notice 
     of such extension shall be published promptly in the Federal 
     Register.

     ``Sec. 643. Public disclosure of information

       ``(a) The Director, in carrying out the provisions of 
     section 642, shall establish procedures to provide public and 
     agency access to information concerning review of regulatory 
     actions under this subchapter, including--
       ``(1) disclosure to the public on an ongoing basis of 
     information regarding the status of regulatory actions 
     undergoing review;
       ``(2) disclosure to the public, no later than publication 
     of a regulatory action, of--
       ``(A) all written communications relating to the substance 
     of a regulatory action, including drafts of all proposals and 
     associated analyses, between the Administrator or employees 
     of the Administrator and the regulatory agency;
       ``(B) all written communications relating to the substance 
     of a regulatory action between the Administrator or employees 
     of the Administrator and any person not employed by the 
     executive branch of the Federal Government;
       ``(C) a list identifying the dates, names of individuals 
     involved, and subject matter discussed in substantive 
     meetings and telephone conversations relating to the 
     substance of a regulatory action between the Administrator or 
     employees of the Administrator and any person not employed by 
     the executive branch of the Federal Government; and
       ``(D) a written explanation of any review action and the 
     date of such action; and
       ``(3) disclosure to the regulatory agency, on a timely 
     basis, of--
       ``(A) all written communications relating to the substance 
     of a regulatory action between the Administrator or employees 
     of the Administrator and any person not employed by the 
     executive branch of the Federal Government;
       ``(B) a list identifying the dates, names of individuals 
     involved, and subject matter discussed in substantive 
     meetings and telephone conversations, relating to the 
     substance of a regulatory action between the Administrator or 
     employees of the Administrator and any person not employed by 
     the executive branch of the Federal Government; and
       ``(C) a written explanation of any review action taken 
     concerning an agency regulatory action and the date of such 
     action.
       ``(b) Before the publication of any proposed or final rule, 
     the agency shall include in the rule making record--

[[Page S406]]

       ``(1) a document identifying in a complete, clear, and 
     simple manner, the substantive changes between the draft 
     submitted to the Administrator for review and the rule 
     subsequently announced;
       ``(2) a document identifying and describing those 
     substantive changes in the rule that were made as a result of 
     the regulatory review and a statement if the Administrator 
     suggested or recommended no changes; and
       ``(3) all written communications relating to the substance 
     of a regulatory action between the Administrator and the 
     agency during the review of the rule, including drafts of all 
     proposals and associated analyses.
       ``(c) In any meeting relating to the substance of a 
     regulatory action under review between the Administrator or 
     employees of the Administrator and any person not employed by 
     the executive branch of the Federal Government, a 
     representative of the agency submitting the regulatory action 
     shall be invited.

     ``Sec. 644. Judicial review

       ``The exercise of the authority granted under this 
     subchapter by the President, the Director, or the 
     Administrator shall not be subject to judicial review in any 
     manner.''.
       (b) Periodic Review of Rules.--Section 610 of title 5, 
     United States Code, is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a)(1)(A) No later than 60 days after the effective date 
     of this section (and every fifth year following the year in 
     which this section takes effect) each agency shall submit to 
     the Administrator of the Office of Information and Regulatory 
     Affairs and the Chief Counsel for Advocacy of the Small 
     Business Administration a proposed plan describing the 
     procedures and timetables for the periodic review of rules 
     issued by the agency that have or will have a significant 
     economic impact on a substantial number of small entities. No 
     later than 60 days after the submission of the proposed plan 
     to the Administrator and the Chief Counsel, such plan shall 
     be published in the Federal Register and shall be subject to 
     public comment for 60 days after the date of publication.
       ``(B) No later than 120 days after the publication of the 
     plan under subparagraph (A), each agency shall submit a final 
     plan to the Administrator and the Chief Counsel. No later 
     than 60 days after the date of such submission of the plan to 
     the Administrator and Chief Counsel, each agency shall 
     publish the agency's final plan in the Federal Register.
       ``(C) Each agency's plan shall provide for the review of 
     such rules no later than 5 years after publication of the 
     final plan.
       ``(2)(A) Each year, each agency shall publish in the 
     Federal Register a list of rules that will be reviewed under 
     the plan during the succeeding fiscal year.
       ``(B) The publication of the list under subparagraph (A) 
     shall include--
       ``(i) a brief description of each rule and the basis for 
     the agency's determination that the rule has or will have a 
     significant economic impact on a substantial number of small 
     entities;
       ``(ii) the need for and legal basis of each rule; and
       ``(iii) an invitation for public comment on each rule.
       ``(3)(A) Each agency shall conduct a review of each rule on 
     the list published under paragraph (2) in accordance with the 
     plan maintained under paragraph (1) and pursuant to the 
     factors under subsection (b). After the completion of the 
     review, the agency shall determine whether the rule should be 
     continued without change, or should be amended or rescinded, 
     consistent with the stated objectives of the applicable 
     statutes, to minimize any significant economic impact of the 
     rule upon a substantial number of small entities.
       ``(B) No later than 18 months after the date of the 
     publication of the list of rules referred to under paragraph 
     (2)(A), each agency shall publish in the Federal Register the 
     determinations made with respect to such rules under 
     subparagraph (A) and an explanation for each determination.
       ``(4) If the head of an agency determines that the 
     completion of a review of a rule under this subsection is not 
     feasible within the period described under paragraph (1)(C), 
     the head of the agency--
       ``(A) shall certify such determination in a statement 
     published in the Federal Register; and
       ``(B) may extend the completion date of the review by 1 
     year at a time for a total of not more than 2 years.''; and
       (2) by striking subsection (c) and inserting the following:
       ``(c) The Administrator and the Chief Counsel shall work 
     with small entities to achieve the objectives of this 
     section.''.
       (c) Presidential Authority.--Nothing in this Act shall 
     limit the exercise by the President of the authority and 
     responsibility that the President otherwise possesses under 
     the Constitution and other laws of the United States with 
     respect to regulatory policies, procedures, and programs of 
     departments, agencies, and offices.
       (d) Technical and Conforming Amendments.--
       (1) Part I of title 5, United States Code, is amended by 
     striking the chapter heading and table of sections for 
     chapter 6 and inserting the following:

           ``CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS

           ``SUBCHAPTER I--ANALYSIS OF REGULATORY FLEXIBILITY

``Sec.
``601. Definitions.
``602. Regulatory agenda.
``603. Initial regulatory flexibility analysis.
``604. Final regulatory flexibility analysis.
``605. Avoidance of duplicative or unnecessary analyses.
``606. Effect on other law.
``607. Preparation of analysis.
``608. Procedure for waiver or delay of completion.
``609. Procedures for gathering comments.
``610. Periodic review of rules.
``611. Judicial review.
``612. Reports and intervention rights.

                  ``SUBCHAPTER II--REGULATORY ANALYSIS

``621. Definitions.
``622. Applicability and effect.
``623. Regulatory analysis.
``624. Principles for risk assessments.
``625. Peer review.
``626. Deadlines for rule making.
``627. Judicial review.
``628. Guidelines, interagency coordination, and research.
``629. Risk based priorities study.

                   ``SUBCHAPTER III--REVIEW OF RULES

``631. Definitions.
``632. Review of rules.

                  ``SUBCHAPTER IV--EXECUTIVE OVERSIGHT

``641. Definitions.
``642. Presidential regulatory review.
``643. Public disclosure of information.
``644. Judicial review.''.
       (2) Chapter 6 of title 5, United States Code, is amended by 
     inserting immediately before section 601, the following 
     subchapter heading:

         ``SUBCHAPTER I--ANALYSIS OF REGULATORY FLEXIBILITY''.

     SEC. 4. COMPLIANCE WITH THE UNFUNDED MANDATES REFORM ACT OF 
                   1995.

       Compliance with the requirements of subchapter II of 
     chapter 6 of title 5, United States Code (as added by section 
     3 of this Act), shall constitute compliance with the 
     requirements pertaining to the costs and benefits of a 
     Federal mandate to the private sector in sections 202, 
     205(a)(2), and 208 of the Unfunded Mandates Reform Act of 
     1995 (2 U.S.C. 1532, 1535(a)(2), and 1538).

     SEC. 5. EFFECTIVE DATE.

       Except as otherwise provided in this Act, this Act shall 
     take effect 180 days after the date of enactment of this Act, 
     but shall not apply to any agency rule for which a notice of 
     proposed rule making is published on or before 60 days before 
     the date of enactment of this Act.

  There being no objection, the material was ordered to be printed in 
the Record, as follows:
  Mr. LEVIN. Mr. President, today Senator Thompson and I and the 
cosponsors to S. 981, Senators Glenn, Abraham, Robb, Roth, Rockefeller, 
Stevens, Grams, and Cochran are putting in the Record a substitute we 
will be offering in the Governmental Affairs Committee to S. 981, the 
Regulatory Improvement Act of 1997.
  The substitute is the product of several months of dialogue with 
interested parties, including the Administration; environmental, labor 
and public interest groups; the business community; the National 
Governors' Association; academic experts and various associations. I 
hope that a number of these persons and groups will support the 
substitute.
  This dialogue began with the Committee's hearing on the bill on 
September 12th and continued through the end of January. The substitute 
does not make any radical changes to the bill as introduced, but it 
does clarify a number of important issues and lay to rest areas of 
possible uncertainty.
  The major changes in the substitute are:
  (1) We have added a so-called ``savings clause'' that affirms that 
nothing in the bill is intended to supersede any requirement for 
rulemaking or opportunity for judicial review applicable under any 
other Federal law. That was our intent all along with this bill, but 
various groups asked that we make it explicit, so we did.
  (2) We modified the judicial review section to conform it to current 
judicial review principles, by eliminating, for example, the 
requirement for showing of non-materiality with respect to the cost-
benefit analysis or risk assessment. The regulatory analysis is part of 
the whole rulemaking record and shall be considered by the court, to 
the extent relevant, only in determining whether the final rule is 
arbitrary or capricious. Agency failure to comply with the procedural 
requirements of S. 981 would not, in and of itself, be grounds for 
remanding or invalidating the rule. However, if an agency totally fails 
to perform a required analysis, including peer review, the court shall 
remand or invalidate the rule.
  (3) We modified the cost-benefit determination provision to make 
absolutely clear that the agency determination is a disclosure 
requirement and

[[Page S407]]

does not dictate the substantive outcome of a rule.
  (4) We changed the definition of ``substitution risk'' to require 
that it be a ``significant'' increased risk instead of just an 
increased risk, and we eliminated the requirement of a full risk 
assessment under the procedures of the bill for significant 
substitution risks.
  (5) We changed the principles for risk assessment to be less 
prescriptive to the agencies and to be more accommodating for non-
carcinogenic risks. The risk assessment provisions more accurately 
reflect the diversity and uncertainties in risk assessment while adding 
the requirement that agencies identify central and high-end estimates 
of risk.
  (6) We added a requirement that agencies develop an effective process 
for State, local and tribal governments to consult with agencies and 
provide input as new rules containing federal mandates are developed 
and old rules are modernized.
  (7) We enhanced the independence and quality of the peer review 
process, and require agencies to apply current standards for conflicts 
of interest.
  (8) We modified the review of rules procedures to reduce the 
bureaucracy in the bill as introduced by eliminating the need for 
agency advisory committees. We also include an amendment to the 
Regulatory Flexibility Act to enhance the review of rules affecting 
small businesses and small governments.
  Those are some of the most important changes made by this substitute.
  I believe this bill will improve the regulatory process, will build 
confidence in the regulatory programs that are so important to this 
society's well-being, and will result in a better--and I believe--a 
less contentious regulatory process.
  Mr. President, many people think that when many of us fought hard 
against the Dole-Johnston bill that we didn't really want to reform the 
regulatory process. Well they are wrong. Many of us were disappointed 
that we were unable to pass a comprehensive regulatory reform bill in 
the last Congress. We weren't going to support bad reform, but that 
doesn't mean we didn't want to see good reform. Those of us who believe 
in the benefits of regulation to protect health and safety have a 
particular responsibility to make sure that regulations are sensible 
and cost-effective. When they aren't, the regulatory process--which is 
so vital to our health and well being--comes under constant attack. By 
providing a common sense, moderate and open regulatory process, we are 
contributing to the well being of that process and immunizing it from 
the attacks on excess.
  Mr. President, I ask unanimous consent that major changes in the 
substitute and a summary of the substitute to S. 981 be printed in the 
Record.

     Summary of the Regulatory Improvement Act of 1998 (Substitute)

       1. Regulatory Analysis (Sec. 623)
       When issuing major rules (costing over $100 million or 
     deemed by OMB to have a significant impact on the economy), 
     Federal agencies must conduct a regulatory analysis, 
     including a cost-benefit analysis and, if relevant, a risk 
     assessment.
       a. Cost-benefit analysis
       The cost-benefit analysis shall consider: The expected 
     benefits of the rule quantifiable and nonquantifiable); the 
     expected costs of the rule quantifiable and nonquantifiable); 
     and reasonable alternatives, including flexible regulatory 
     options--such as market-based mechanisms or outcome-oriented 
     performance-based standards;
       b. Cost-benefit determination
       The agency shall include in the statement of basis and 
     purpose for the rule a reasonable determination: (1) whether 
     the rule is likely to provide benefits that justify its 
     costs; and (2) whether the rule is likely to substantially 
     achieve the rule making objective in a more cost-effective 
     manner, or with greater net benefits, then the other 
     reasonable alternatives considered by the agency.
       If the agency determines that the rule is not likely to 
     provide benefits that justify its costs or to substantially 
     achieve the rule making objective in a more cost-effective 
     manner, or with greater net benefits, than the other 
     reasonable alternatives, it shall: (1) explain the reasons 
     for selecting the rule notwithstanding such determination; 
     (2) identify any statutory provision that required the agency 
     to select such rule; and (3) describe any reasonable 
     alternative considered by the agency that would be likely to 
     provide such benefits.
       The agency shall include an executive summary in the 
     regulatory analysis and in the statement of basis and purpose 
     for the rule.
       There is an exception from the regulatory analysis 
     requirements when the agency for good cause finds that 
     conducting the regulatory analysis before the rule becomes 
     effective is impracticable or contrary to an important public 
     interest.
       Each agency shall develop an effective process to allow 
     elected representatives of State, local and tribal 
     governments to provide meaningful and timely input into 
     regulatory proposals, consistent with the Unfunded Mandates 
     Reform Act of 1995.
       2. Risk assessment principles (Sec. 624)
       Agencies shall conduct risk assessments under Sec. 624 for 
     (1) major rules that have the primary purpose of addressing 
     health, safety, or environmental risks, and (2) risk 
     assessments not related to a rule making that the OMB 
     Director determines would have a substantial impact on a 
     significant public policy or the economy. To promote 
     transparent and scientifically sound risk assessments, 
     agencies would be required to--identify and explain 
     significant assumptions made when measuring risks; notify the 
     public about upcoming risk assessments and allow people to 
     submit relevant and reliable information; disclose relevant 
     information about the risk, including the range and 
     distribution of risks and corresponding exposure scenarios, 
     for the potentially exposed population and for any more 
     highly exposed or sensitive subpopulations; and when 
     scientific information permits, compare the risk being 
     analyzed with other reasonable comparable risks familiar to 
     and routinely encountered by the general public.
       3. Peer review (Sec. 625)
       Agencies shall conduct independent peer review for required 
     cost-benefit analyses and risk assessments. Agency standards 
     governing conflicts of interest apply. Peer review can be 
     formal or informal, as warranted. Peer review is not required 
     where the agency and OMB certify that an assessment or 
     analysis has previously been subjected to adequate peer 
     review.
       4. Deadlines for rule making (Sec. 626)
       For two years after the Act becomes effective, agencies 
     have the opportunity for a 6-month extension from a 
     regulatory deadline if needed to satisfy the requirements of 
     the Act.
       5. Judicial Review (Sec. 627)
       Judicial review will ensure that agencies perform cost-
     benefit analyses, risk assessments, and peer reviews. The 
     cost-benefit analysis and risk assessment are included in the 
     rule making record for purposes of judicial review of the 
     final rule only under the deferential arbitrary and 
     capricious standard. Failure to comply with a specific 
     procedural requirement of S. 981 regarding how to perform a 
     risk assessment or cost-benefit analysis would not, in and of 
     itself, be grounds for invalidating a rule.
       6. Guidelines, interagency coordination, and research 
     (Sec. 628)
       Within 9 months, OMB is required to consult with CEA, OSTP 
     and relevant agencies to develop broad guidelines for cost-
     benefit analyses, risk assessments and peer reviews as 
     required by the Act.
       Within 18 months after issuance of the general guidelines, 
     each agency subject to Sec. 624 shall develop detailed 
     guidelines for risk assessments tailored to agency programs, 
     consistent with the general guidelines.
       OMB shall consult with CEA and OSTP to evaluate and improve 
     agency cost-benefit analysis and risk assessment practices.
       Within 6 months, OMB shall consult with OSTP to enter a 
     contract for research to develop common basis to assist risk 
     communication, and to develop methods to appropriately 
     incorporate risk assessments into cost-benefit analyses.
       7. Risk-based priorities study (Sec. 629)
       OMB, in consultation with OSTP, shall enter into a contract 
     with an accredited scientific institution to conduct a study 
     that provides a comparison of significant health, safety and 
     environmental risks, the methodologies for such comparisons, 
     including development of a common basis to assist comparative 
     risk analysis related to both carcinogens and noncarcinogens, 
     and recommendations on the use of comparative risk analysis 
     to set priorities to reduce risks to human health, safety, or 
     the environment.
       Within 5 years, the President shall submit a report to 
     Congress recommending legislative changes to assist in 
     setting priorities to more effectively and efficiently reduce 
     risks to health, safety and the environment.
       8. Review of Rules (Sec. Sec. 631-632; Sec. (b))
       To periodically review economically significant rules, each 
     agency shall publish a review schedule every 5 years. In 
     selecting rules for review, the agency shall consider the 
     extent to which the rule could be revised to be substantially 
     more cost-effective, or to substantially increase net 
     benefits, as well as whether the agency has statutory 
     authority to modify or repeal the rule. If, as a result of 
     the review, the agency determines to amend or repeal a rule, 
     it shall complete the rulemaking within 2 years. For good 
     cause, the OMB Director may extend the deadline for 1 year. 
     Consultation with representatives of State, local and tribal 
     governments shall be governed by the process established 
     under section 204 of the Unfunded Mandates Reform Act.
       To provide for the review of rules affecting small 
     entities, S. 981 amends Section 610 of the Regulatory 
     Flexibility Act. Agencies would review Reg-Flex rules every 5 
     years, and the Chief Counsel for Advocacy of the Small 
     Business Administration and the Administrator of OMB's Office 
     of Information

[[Page S408]]

     and Regulatory Affairs would oversee the review process.
       9. Executive Oversight (Sec. Sec. 641-644)
       The bill codifies the regulatory review process and sets 
     out responsibilities and authority of OMB's Office of 
     Information and Regulatory Affairs (OIRA) to develop policies 
     and procedures to review regulatory actions and to develop 
     and oversee an annual government-wide regulatory planning 
     process that includes the review of major rules and other 
     significant regulatory actions.
       OIRA shall establish procedures to provide public and 
     agency access to information concerning regulatory review 
     actions.
       Information to be disclosed to the public includes: the 
     status of regulatory actions; written communications between 
     OIRA and the agency on the regulatory action; written 
     communications between OIRA and persons outside the Executive 
     Branch; and a list identifying the dates, names of 
     individuals involved, and subject matter discussed in 
     meetings and telephone conversations relating to the 
     regulatory action between OIRA and persons not employed by 
     the Executive Branch.
       Information to be disclosed to the regulatory agency 
     includes: written communications between OIRA and persons 
     outside the Executive Branch on a regulatory action; a list 
     identifying the dates, names of individuals involved, and 
     subject matter discussed in meetings and telephone 
     conversations relating to the regulatory action between OIRA 
     and persons not employed by the Executive Branch; and a 
     written explanation of any review action taken.
       The agency shall include in the rule making record: (1) a 
     document identifying the substantive changes between the 
     draft submitted to OIRA for review and the rule subsequently 
     announced; (2) a document identifying and describing those 
     substantive changes in the rule that were made as a result of 
     the regulatory review and a statement if the Administrator 
     suggested or recommended no changes; and (3) all written 
     communications exchanged between OIRA and the agency during 
     the review of the rule, including drafts of all proposals and 
     associated analyses.
       10. Effective Date (Section 4)
       The Act shall take effect 180 days after the date of 
     enactment, but shall not apply to any agency rule for which a 
     notice of proposed rule making is published on or before 60 
     days before enactment.
                                                                    ____



                 major changes in substitute to s. 981

       SAVINGS CLAUSE: Adds a ``savings'' clause which affirms 
     that nothing in the bill is intended to supersede any 
     requirement for rulemaking or opportunity for judicial review 
     applicable under any other Federal law.
       JUDICIAL REVIEW: Conforms the judicial review section to 
     current judicial review principles, by eliminating, for 
     example, requirement for showing of non-materiality with 
     respect to the cost-benefit analysis or risk assessment. The 
     regulatory analysis is part of the whole rule making record 
     and shall be considered by the court, to the extent relevant, 
     only in determining whether the final rule is arbitrary or 
     capricious. Agency failure to comply with the procedural 
     requirements of S. 981 would not, in and of itself, be 
     grounds for remanding or invalidating the rule. However, if 
     an agency fails to perform a required analysis, including 
     peer review, the court shall remand or invalidate the rule.
       COST-BENEFIT DETERMINATION: Modifies the cost-benefit 
     determination provision to make absolutely clear that the 
     agency determination is a disclosure requirement and does not 
     dictate the substantive outcome of a rule.
       SUBSTITUTION RISK: Changes the definition of ``substitution 
     risk'' to require that it be a ``significant'' increased risk 
     instead of just an increased risk. Eliminates the requirement 
     of a full risk assessment under the procedures of the bill 
     for significant substitution risks. Requires that an agency 
     identify and evaluate substitution risks in the regulatory 
     analysis where information on such risks is reasonably 
     available to the agency.
       RISK ASSESSMENT: Changes the principles for risk assessment 
     to be less prescriptive to the agencies and to be more 
     accommodating for non-carcinogenic risks. More accurately 
     reflects diversity and uncertainties in risk assessment while 
     adding requirement for agencies to identify central and high-
     end estimates of risk. Provides a more accurate definition of 
     ``risk assessment''. Applies the risk assessment procedures 
     in the bill to important risk assessments, which are not 
     related to a rule making, if designated by the OMB Director. 
     Requires agencies to notify the public of upcoming risk 
     assessments and to solicit relevant data.
       COMPARATIVE RISK STUDY: Simplifies comparative risk study. 
     Agencies are to use the results of study to inform the 
     preparation of their budgets and strategic planning under the 
     Government Performance and Results Act.
       STATE/LOCAL GOVERNMENT: Requires agencies to develop an 
     effective process for State, local and tribal governments to 
     consult with agencies and provide input as new rules 
     containing federal mandates are developed and old rules are 
     modernized.
       Strikes the requirement that an agency evaluate the 
     benefits and costs of alternative approaches to regulating 
     that inter alia ``accommodate differences among geographic 
     regions and among persons with differing levels of 
     resources'' and substitutes the requirement that 
     consideration be given to alternatives that provide 
     flexibility for small entities and state, local and tribal 
     governments.
       PEER REVIEW: Enhances the independence and quality of the 
     peer review process. Applies current standards for conflicts 
     of interest.
       REVIEW OF RULES: Modifies review of rules procedures to 
     reduce the bureaucracy in the bill as introduced by 
     eliminating the need for agency advisory committees. Also 
     amends the Regulatory Flexibility Act to enhance the review 
     of rules affecting small businesses and small governments.
       OTHER:
       Provides more accurately worded exceptions to the 
     definition of ``rule''; adds as an exception a rule that 
     authorizes the introduction of a product into commerce.
       Modifies definition of ``major rule'' to strike ``or a 
     group of closely related rules''.
       Findings better reflect the value of regulatory programs 
     and how cost-benefit analysis can result in more benefits at 
     less cost.
       Modifies the ``good cause exception'' for meeting the 
     regulatory analysis requirements of the bill by striking the 
     limitations on what could be considered to be ``contrary to 
     the public interest.''
       Adds Council of Economic Advisors to entities required to 
     be consulted by OMB Director when issuing cost-benefit 
     analysis guidelines.
       Provides that compliance with the Regulatory Improvement 
     Act shall constitute compliance with the provisions of the 
     Unfunded Mandates Reform Act as they relate to the private 
     sector.

  Mr. THOMPSON. Mr. President, I am pleased to join Senator Levin and 
eight of our colleagues in submitting a substitute for S. 981, the 
Regulatory Improvement Act. This substitute incorporates some 
clarifications and improvements to the bill as result of our Committee 
hearing, written statements and letters, and a series of discussions 
with the Administration, environmental and public interest groups, 
State and local government, scholars, and other interested parties. I 
ask unanimous consent that a summary of the substitute and a list of 
the major changes to the substitute be included in the Record following 
my remarks. The substitute is the text that we will use as the basis 
for our Committee markup. This bill is an effort by many of us who want 
to improve the quality of government to find a common solution. The 
supporters of this bill represent a real diversity of political 
viewpoints, but we share the same goals. We want an effective 
government that protects public health, well-being and the environment. 
We want our government to achieve those goals in the most sensible and 
efficient way possible. We want to do the best we can with what we've 
got, and to do more good at less cost if possible. The Regulatory 
Improvement Act will help us do just that.
  The Regulatory Improvement Act is based on a simple premise: that 
people have a right to know how and why government agencies make their 
most important and expensive regulatory decisions. The S. 981 not only 
gives people the right to know; it gives them the right to see--to see 
how the government works, or how it doesn't. And by providing people 
with information the government uses to make decisions, it gives people 
a real opportunity to influence those decisions. So much of what goes 
on right now is pretty much done in secret. We're going to change that.
  Second, the bill will make government more accountable to the people 
it serves. S. 981 is based on the idea that increased public scrutiny 
of government decision making--and people who make those decisions--
will lead to better and more accountable government performance. It 
gives people the ability to look over the Federal government's 
shoulder.
  The Regulatory Improvement Act will deliver more decisionmaking power 
closer to home--and into the hands of State and local governments. The 
bill empowers people and their State and local officials to provide 
input into the Federal system. It will make the Federal government more 
mindful of how unfunded mandates can burden communities and interfere 
with local priorities. When I became Chairman of the Governmental 
Affairs Committee last year, I asked the General Accounting Office to 
investigate whether the Unfunded Mandates Reform Act of 1995 was 
improving regulations, which was one of its goals. Unfortunately, the 
answer is ``No.'' GAO released the report today. It is entitled, 
Unfunded Mandates: Reform Act Has Had Little Effect on Agencies'

[[Page S409]]

Rulemaking Actions. I view S. 981 as really phase two of the unfunded 
mandates reform effort, because it will make Federal regulators--not 
just Congress--more sensitive to local needs.
  Finally, the Regulatory Improvement Act will improve the quality of 
government decision making--which will lead to a more effective and 
efficient Federal government. The Regulatory Improvement Act will 
require the Federal government to make better use of modern 
decisionmaking tools (such as risk assessment and cost-benefit 
analysis), which are currently under-used. Right now, these tools are 
simply options--options that aren't used as much or as well as they 
should be. The bill also will help the Federal government to set 
smarter priorities--to better focus money and other resources on the 
most serious problems.
  The Regulatory Improvement Act bill builds on the Clinton 
Administration's government-wide reinvention efforts. It codifies many 
of the requirements of Executive Order 12866 and the principles of 
other Reinventing Regulation initiatives. It will give some needed 
horsepower to these efforts. This will help us reach our common goal: 
improving the quality of government. That's why the bill has broad 
bipartisan support, including myself and Senator Levin, as well as 
Senators Glenn, Abraham, Robb, Roth, Rockefeller, Stevens, Grams, and 
Cochran. This is a common sense effort we all can be proud of.

                          ____________________