[Congressional Record Volume 157, Number 31 (Thursday, March 3, 2011)]
[Senate]
[Pages S1224-S1228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mr. Coburn, Ms. Ayotte, Mr. Enzi, and 
        Mr. Brown, of Massachusetts):
  S. 474. A bill to reform the regulatory process to ensure that small 
businesses are free to compete and to create jobs, and for other 
purposes; to the Committee on Homeland Security and Governmental 
Affairs.
  Ms. Snowe. Mr. President, I rise today, with Senators Coburn, Ayotte, 
Enzi, and Brown of Massachusetts, to introduce the Small Business 
Regulatory Freedom Act of 2011, a vital measure that will help ensure 
that the federal government fully consider small business job creation 
in the bills we pass here in Congress and in the rules and regulations 
that agencies promulgate.
  As the former Chair and now Ranking Member of the Senate Committee on 
Small Business and Entrepreneurship, I believe there is no more urgent 
imperative than job creation in our country. For the past 21 months, 
the unemployment rate has stood at 9 percent or above. We cannot allow 
these outrageous levels of unemployment to become the new normal. 
Therefore, it is essential that we focus like a laser on jumpstarting 
our economy. Now is the time to tear down barriers to job creation, not 
build them higher.
  Unfortunately, recent data suggests that not only is this 
administration failing to tear down barriers to small business job 
creation, but rather is actively constructing new obstacles. In fiscal 
year 2010 alone, this administration embarked on nothing short of 
regulatory rampage, stampeding over small business, through the 
promulgation of 43 new major regulations promulgated in fiscal year 
2010, imposing $26.5 billion in new regulatory compliance costs, and 
that's on top of the $1.75 trillion in annual compliance costs that the 
SBA Office of Advocacy recently reported.
  Simply put, this is unacceptable. Too often, the Federal Government 
considers the regulatory impact on small firms merely as an 
afterthought rather than a top priority. In my recent street tours and 
meetings in Maine, aside from taxes, small businesses complain most 
about the onerous regulations emanating from every agency, every sphere 
of Washington, DC. Consider that, according to the U.S. Chamber of 
Commerce, the health reform law, which I opposed, mandates 41 separate 
rulemakings, at least 100 additional regulatory guidance documents, and 
129 reports. What's most alarming, small firms with fewer than 20 
employees bear a disproportionate burden of complying with federal 
regulations, paying an annual regulatory cost of $10,585 per employee, 
which is 36 percent higher than the regulatory cost facing larger 
firms.
  This must change, and the ``Small Business Regulatory Freedom Act of 
2011,'' aims to do just that. Our bill reforms the flawed rulemaking 
process to ensure that federal agencies consider small business impact 
before a rule is promulgated, not after. Our legislation, which is 
strongly supported by the National Federation of Independent Business, 
NFIB, would amend the Regulatory Flexibility Act, RFA, the seminal 
legislation enacted in 1980 that requires Federal agencies to conduct 
small business analyses for any proposed or final regulation that would 
impose a significant impact on a substantial number of small firms.
  The first provision in our bill would enhance these small business 
analyses, by requiring agencies to draw in rules with foreseeable 
``indirect'' economic effects under the definition of rules covered by 
the RFA. Such rules are currently exempt from the RFA, which currently 
only applies to ``direct'' economic impact. The RFA has already saved 
billions for small businesses by forcing government regulators to be 
sensitive to their direct impact on small firms. If billions of dollars 
can be filtered out of direct regulatory mandates upon small business 
while improving workplace safety and environmental conditions, even 
more can be saved by filtering out unnecessary or duplicative costs to 
those small businesses indirectly impacted by regulation.
  The bill would also expand judicial review requirements currently in 
the RFA to allow small entities to seek review and an injunction at the 
proposed rule stage if agencies fail to fully consider small business 
impact as they are required to by law. This will help to ensure that 
federal agencies complete meaningful initial analyses under the RFA. 
Currently, small entities can only seek review on the date of the final 
regulatory action.
  In addition, our legislation would amend and clarify the requirements 
under the RFA for the periodic review of rules. Many questions have 
arisen as a result of the ambiguous language in the RFA that have 
caused some confusion as to what rules require periodic review and 
when. Our bill clarifies the requirements for ``periodic review'' under 
Section 610 of the RFA so that both existing rules and rules that are 
promulgated after enactment of the Small Business Regulatory Freedom 
Act of 2011 are periodically reviewed within 10 years and every ten 
years thereafter. Along with each review, an agency must also create 
and update small business compliance guides to assist small businesses 
comply with that agencies regulations. The requirements of periodic 
review would also apply to these compliance guides and must be updated 
when the rule is reviewed.
  Unfortunately, past efforts to encourage agencies to periodically 
review their regulations have failed because of

[[Page S1225]]

the lack of an enforcement mechanism. Our bill rectifies this issue. To 
ensure agency compliance the bill includes a sunset provision. If the 
Chief Counsel for the SBA Office of Advocacy determines that an agency 
has failed to conduct the necessary periodic review of a rule, then 
that rule will sunset and cease to have effect.
  Moreover, the bill would expand the small business review panel 
process requirement, SBREFA panels, to apply to all agencies. These 
panels currently only apply to the Environmental Protection Agency, 
EPA, Occupational Safety and Health Administration, OSHA, and, thanks 
to an amendment that I included in the Wall Street Reform legislation, 
the new Consumer Financial Protection Bureau, CFPB. These panels have 
worked well at EPA and OSHA since 1996, so why not apply this 
stipulation to every federal agency, so small businesses are considered 
first, and not as an afterthought?
  Furthermore, our bill would extend the RFA to informal agency 
guidance documents, so that Federal agencies must conduct small 
business economic analyses before publishing informal guidance 
documents. Many agencies, including the OSHA, have repeatedly subverted 
the rulemaking process through the use of guidance documents or 
``reinterpretations'' so that they don't have to adhere to their RFA 
obligations, including small business review panels--this provision 
will help to end that practice.
  This legislation also seeks to clarify language included in the RFA 
that has led to a great deal of confusion regarding RFA applicability 
to the IRS, and would once and for all ensure that indeed the IRS is 
covered under the RFA ending the longstanding practice of the IRS 
utilizing some unprecedented interpretations to circumvent compliance 
with the RFA--this bill closes those loopholes. For example, the IRS 
has argued that paperwork requirements are mandated by Congress and 
thus it is Congress that is creating the requirement, not the IRS. Our 
bill would clarify the definitions so the IRS and other agencies can no 
longer dodge conducting its RFA obligations.
  Our bill will also update a dormant provision of the Small Business 
Regulatory Enforcement Fairness Act, SBREFA, by requiring that federal 
agencies review existing penalty structures within 6 months of 
enactment and every two years thereafter to mitigate penalty provisions 
on small firms. Too often agencies, like OSHA, set or update their 
penalty structures without considering small business economic impact. 
Our provision should end this practice.
  Strengthening how Federal agencies execute their small business 
analyses is also a central requirement for real reform. This 
legislation will accomplish this goal through three fundamental 
reforms:
  First, it would require a calculation of the additional cumulative 
impact the proposed rule will impose on small entities, including job 
creation and employment effects, beyond what is already imposed on 
small firms by the agency.
  Second, the bill would require federal agencies to notify the Chief 
Counsel for the SBA Office Advocacy about any draft rule that will 
trigger an RFA analysis when the agency submits the draft rule to OMB's 
Office of Information and Regulatory Affairs, OIRA.
  Third, our legislation would strengthen final regulatory flexibility 
analyses under RFA. Currently, small business analyses in final rules 
are only required to produce a summary analysis, general statement, or 
explanation regarding a rule's effect on small entities. In practice 
this has allowed agencies to avoid an in depth analysis of a rule's 
effect. Our legislation would enhance reporting so an agency must 
include a detailed analysis. It also would require the promulgating 
agency to publish the entire final analysis on its web site and in the 
Federal Register.
  Our bill will also ensure that before an agency certifies that a 
proposed rule will not impose an economic impact on small business, it 
must first determine the average cost of the rule for small entities 
affected or reasonably presumed to be affected; the number of small 
firms affected or presumed to be affected; and the number of affected 
small entities for which the cost of the rule will be significant. 
Also, before a certification statement can be published the agency must 
send a copy of the certification to, and consult with, the Chief 
Counsel for Advocacy on the accuracy of the certification and 
statement.
  Finally, the bill will clarify that the Chief Counsel for the SBA 
Office of Advocacy to be an attorney with expertise or knowledge of the 
regulatory process. This will ensure that the President nominates a 
qualified individual who will be the most effective advocate for small 
business possible. We also provide additional powers to the Chief 
Counsel by allowing him or her to comment on any regulatory action, not 
just during the notice and comment rulemaking process. In the past, the 
Office of Advocacy has refused to weigh in on matters outside the 
rulemaking process--e.g., guidance documents--citing a lack of 
authority to do so.
  In a November 2010 Senate Small Business Committee hearing, it was 
noted that if there were a 30 percent cut in regulatory costs, an 
average 10-person firm would save, on average nearly $32,000, enough to 
hire one additional person. There is no doubt, reducing the regulatory 
burden on American small businesses will create jobs. After 21 straight 
months with unemployment at or above nine percent, it is more 
imperative than ever that we finally liberate American small businesses 
from the regulatory burden holding them down.
  It is essential that we pass this legislation. I urge my colleagues 
to support my bill so we can ensure that our nation's small businesses 
and their employees are provided with much needed relief.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

                                 S. 474

       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

[[Page S1226]]

     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--

[[Page S1227]]

       (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.''.

[[Page S1228]]

     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.''.
                                 ______