[House Report 104-49]
[From the U.S. Government Publishing Office]
104th Congress Rept. 104-49
HOUSE OF REPRESENTATIVES
1st Session Part 1
_______________________________________________________________________
REGULATORY FLEXIBILITY ACT AMENDMENTS
_______
February 23, 1995.--ordered to be printed
_______________________________________________________________________
Mrs. Meyers of Kansas, from the Committee on Small Business, submitted
the following
R E P O R T
[To accompany H.R. 937]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 937) to amend title 5, United States Code, to
clarify procedures for judicial review of Federal agency
compliance with regulatory flexibility analysis requirements,
and for other purposes, having considered the same, report
favorably thereon with amendments and recommend that the bill
as amended do pass.
The amendments (stated in terms of the page and line number
of the introduced bill) are as follows:
Page 6, line 17, strike the closing quotation marks and the
final period and insert the following:
``(4) Special rule.--Any proposed rules issued by an
appropriate Federal banking agency (as that term is
defined in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)), the National Credit
Union Administration, or the Office of Federal Housing
Enterprise Oversight, in connection with the
implementation of monetary policy or to ensure the
safety and soundness of federally insured depository
institutions, any affiliate of such an institution,
credit unions, or government sponsored housing
enterprises or to protect the Federal deposit insurance
funds shall not be subject to the requirements of this
subsection.''.
Purpose
The primary purpose of the bill is to provide and clarify
procedures for judicial review of agency compliance with the
Regulatory Flexibility Act, P.L. 96-354, 5 U.S.C. Sec. 601 et
seq. An additional purpose of the bill is to require federal
agencies to work more closely with the SBA Chief Counsel for
Advocacy, who is charged with monitoring compliance with the
Regulatory Flexibility Act, during the drafting of new rules.
Finally, the bill contains a ``sense of Congress'' provision
that the SBA Chief Counsel for Advocacy be allowed to appear as
amicus curiae in any federal court for the purpose of reviewing
a federal rule.
Summary
In brief, H.R. 937 is intended to do three basic things.
A. Judicial review
Section 1 would amend Section 611 of Title 5 to allow and
clarify the procedures for judicial review of agency compliance
with the Regulatory Flexibility Act (RFA). Section 611 as it
currently exists prohibits court challenge of an agency
determination of the applicability of the RFA, and prohibits
court review of any regulatory flexibility analysis or
certification prepared under the Act. In practice, this
prohibition on judicial challenges has allowed agencies to
ignore the letter and spirit of the RFA.
The primary features of the new judicial review provision
provided by this bill are:
(1) A small entity can only seek judicial review
arising from a final rule;
(2) The judicial review can be for either a wrongful
certification that the rule will not have a significant
economic impact on a substantial number of small
entities or a flawed or totally absent final regulatory
flexibility analysis;
(3) The small entity seeking judicial review must do
so within 180 days of the effective date of the final
rule. However, if some other provision of law requires
a lesser time for judicial review of a final agency
rulemaking action, then the lesser time prevails. This
additional feature is designed to avoid multiple
reviews of final agency actions by the courts; and
(4) Agencies will be allowed a short period (90 days)
in which to correct regulatory flexibility defects.
After that time, a reviewing court can stay the
operation of the rule or provide whatever relief it
deems appropriate.
B. Earlier involvement in the rulemaking process by the SBA Chief
Counsel for Advocacy
While the primary intention of this legislation is to
strengthen agency compliance with the Regulatory Flexibility
Act, it is also the intention to require agencies to work more
closely with the SBA Chief Counsel for Advocacy,\1\ who is
charged with monitoring compliance with the Act, during the
drafting of new rules.
\1\ The Office of Advocacy within the Small Business Administration
was created in 1976. The management of the Office is vested in a Chief
Counsel for Advocacy, who is a Senate-confirmed Presidential appointee.
P.L. 94-305, 15 U.S.C. Sec. 634a et seq. The original Regulatory
Flexibility Act placed oversight responsibility for implementation of
the RFA in the hands of the Chief Counsel for Advocacy. 5 U.S.C.
Sec. 612.
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Section 2 of the legislation would amend Section 612 of
Title 5 to require that, when an agency is drafting a new rule,
the agency must provide the SBA Chief Counsel for Advocacy with
an advance copy of the rule 30 days before publishing a general
notice of proposed rulemaking in the Federal Register pursuant
to the provisions of the Administrative Procedure Act. See 5
U.S.C. Sec. 553(b).
The purpose behind this provision of the legislation is to
attempt to involve the SBA Chief Counsel for Advocacy in
securing agency compliance with the Act at the earliest
possible time and to allow agencies to benefit from the Chief
Counsel's views before the rule is in the public domain. The
proponents of this provision believe that in certain
circumstances agencies may be reluctant to retreat from certain
regulatory approaches once those approaches have become public,
even if only in the form of preliminary rules.\2\
\2\ At the Committee's oversight hearing on the Regulatory
Flexibility Act held on July 28, 1993, James W. Morrison, appearing on
behalf of the National Association for the Self-Employed and the
Regulatory Flexibility Act Coalition, stated that this advance
notification provision would also serve to remedy the relative
inadequacy of the regulatory agendas provided to the SBA Chief Counsel
for Advocacy pursuant to the requirements of Section 602 of Title 5
(the RFA).
An exception to this advance notification approach is made
in this provision for draft proposed rules of certain banking
agencies. This exception or special rule is the result of the
only amendment to the bill considered by the Committee, which
was passed by voice vote.
C. Authority of the SBA Chief Counsel for Advocacy to appear as amicus
curiae
The RFA currently gives the Chief Counsel authority to file
amicus briefs in litigation involving federal rules, which
allows him to express the views of the Chief Counsel with
respect to the effect of the rule on small entities. In the
history of the RFA, this has only been done once, in the 1986
case of Lehigh Valley Farmers. At that time, the Justice
Department indicated that this amicus provision was
unconstitutional because it would impair the ability of the
Executive branch to fulfill its constitutional functions. The
SBA Chief Counsel for Advocacy countered this argument with
legal arguments of his own. The Justice Department also argued
that Executive Order 12146, section 1-402, prevents the Chief
Counsel from filing such briefs. Section 1-402 of Executive
Order 12146 requires that when such a legal dispute exists
between two agency heads which serve at the President's
discretion, such dispute shall be submitted to the Attorney
General for resolution. The SBA Chief Counsel countered with
case law supporting the principle that an Executive Order
cannot supersede a statute, and therefore Executive Order 12146
cannot prohibit the SBA Chief Counsel for Advocacy from
appearing as amicus curiae since 5 U.S.C. Sec. 612 provided for
such action.
After a great deal of debate between the Justice Department
and the SBA Chief Counsel for Advocacy, the Chief Counsel
eventually withdrew the amicus brief filed in the Lehigh Valley
Farmers case. No Chief Counsel has filed an amicus brief
since.\3\
\3\ See Appendix D to this report, which is a Memorandum prepared
by the American Law Division (Congressional Research Service) of the
Library of Congress, dated October 22, 1993, which provides an analysis
of the constitutional issue raised by the Justice Department concerning
5 U.S.C. Sec. 612(b).
In September of 1994, the SBA Chief Counsel for Advocacy filed
notice of intent to file an amicus brief in Time Warner Entertainment
Limited Partnership v. Federal Communications Commission, No. 93-1723
(D.C. Cir.), but came to an accord with the FCC, thereby avoiding the
need to file an amicus brief.
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The ability to appear as amicus curiae is important to the
ability of the SBA Chief Counsel for Advocacy to represent the
interests of small businesses in the rulemaking process.
Furthermore, if this bill should become law, with its provision
to permit judicial review of agency compliance with the
Regulatory Flexibility Act, the importance of the Chief
Counsel's ability to file amicus briefs will be magnified.
Section 3 of this bill is a ``sense of Congress'' provision
reaffirming what the Congress had already passed in 1980.
Need for Legislation
What is the Regulatory flexibility act?
The Regulatory Flexibility Act (RFA) was enacted in 1980 to
force federal agencies to take into consideration the impact
their regulations will have on small entities before they go
into effect, and to attempt to minimize that impact.
As stated in the text of the Act, ``[i]t is the purpose of
this Act * * * that agencies shall endeavor * * * to fit
regulatory and informational requirements to the scale of the
businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are
required to solicit and consider flexible regulatory proposals
and to explain the rationale for their actions to assure that
such proposals are given serious consideration.'' \4\
\4\ See Congressional Findings and Declaration of Purpose, Section
2 of P.L. 96-354, now codified in the footnote to 5 U.S.C. Sec. 601.
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Under the RFA, for proposed rules which are subject to
publication in the Federal Register and public comment under
the Administrative Procedure Act (APA), the rule-writing agency
must also prepare an initial regulatory flexibility analysis
describing the impact the rule may have on small entities. The
analysis must also outline alternatives to the proposed rule
which would accomplish the same objectives with a lesser impact
on small entities.
At the time of publication of the final rule, the RFA
requires agencies to publish a final regulatory flexibility
analysis, which summarizes public comments on the initial
analysis, the agency response, and changes made to the rule as
a result. If the agency did not adopt these less burdensome
alternatives, an explanation must be provided.
Proposed or final rules are not subject to these analyses
if the head of the agency certifies that the rule will not have
a significant economic impact on a substantial number of small
entities. This certification must be published in the Federal
Register and include an explanation of the reasons for the
certification.
In addition to these provisions, which function as part of
the regular rulemaking process, the RFA requires agencies to
publish regulatory flexibility agendas twice each year,
outlining rules which the agency believes it may propose in the
future that would significantly affect small entities. The RFA
requires agencies to take certain steps to afford small
entities the opportunity to participate in the rulemaking
process. Finally, the RFA provides for the review of rules with
a significant impact on small entities within ten years after
they have gone into effect.
The RFA charges the SBA Chief Counsel for Advocacy with the
responsibility of monitoring agency compliance with the Act.
why the regulatory flexibility act needs to be amended?
Currently, Section 611 of Title 5 states in part ``* * *
any determination by an agency concerning the applicability of
the provisions of this chapter to any action of the agency
shall not be subject to judicial review.''
The RFA allows agencies to certify that their rules do not
have a significant impact on small entities, and therefore
avoid conducting regulatory flexibility analyses. The
prohibition of judicial review allows no legal challenge to
such a determination nor does it allow a challenge to a flawed
regulatory flexibility analysis. The result is that compliance
with the RFA is voluntary and federal regulators do not face
court action for failure to comply.
Replacing the current Section 611 is the single most
important step which can be taken to force agencies to fully
consider the impact of their rules on small entities. Unless
regulators face the possibility of court challenge to their
actions they may not comply with the RFA. The Act needs to be
amended to provide judicial review so that needed ``teeth'' are
put into the law.
The RFA directs the SBA Chief Counsel for Advocacy to
monitor RFA compliance. However, the ability to do so has been
limited. The proposed legislation would force agencies to work
more closely with the Chief Counsel during the rulemaking
process. Agencies would be required to provide the Chief
Counsel with copies of rules 30 days before they are proposed,
and he would have the opportunity to present the concerns or
opposition of small entities to the proposed rule. The agency
would then be required to respond to these concerns. It is
hoped that the proposed provision will give greater
encouragement to regulators to minimize the impact of their
rules on small entities before the rules are proposed.
Finally, the RFA as passed in 1980 grants the SBA Chief
Counsel for Advocacy the authority to appear as amicus curiae
in court cases which involve the review of federal rules.
However, when the Chief Counsel filed an amicus brief in 1986,
the Justice Department challenged the constitutionality of this
authority. After much discussion, that brief was withdrawn and
the question has never been resolved. The ability of the Chief
Counsel to represent small entity views in court is critical.
The amendment to the RFA contained in this legislation contains
a ``sense of Congress'' provision reaffirming the position
Congress took in passing the original RFA: that the Chief
Counsel does have the authority to file amicus briefs in court
cases which involve the review of federal rules.
Background
A. The Regulatory Flexibility Act
The Administrative Procedure Act (APA) \5\ requires federal
agencies to promulgate rational rules. The APA provides the
primary mechanism for accomplishing this task--notice and
comment rulemaking. The Regulatory Flexibility Act, which was
signed into law in 1980,\6\ is another tool to assist agencies
in fulfilling their statutory mandate under the APA. The
regulatory Flexibility Act (RFA) is based on two premises: (1)
That federal agencies often do not recognize the impact that
their rules will have on small entities; \7\ and (2) that small
entities are disproportionately disadvantaged by federal
regulations compared to their larger counterparts.
\5\ 5 U.S.C. Sec. 551 et seq.
\6\ The Regulatory Flexibility Act was the result of efforts of
many small businesses throughout this country. The issues of regulatory
relief and regulatory flexibility were a dominant theme at the 1980
White House Conference on Small Business, and the participants involved
in that conference pushed for legislative action. In addition to these
grass roots activities, the U.S. Congress spent an extensive amount of
time during the late 1970's examining the need for regulatory
flexibility. See, generally, Regulatory Flexibility Act, S. 1974, Part
1: Hearings Before the Subcomm. on Administrative Practice and
Procedure of the Senate Judiciary Comm., 95th Cong., 1st Sess. (1977);
Regulatory Flexibility Act, S. 1974, part 2: Joint Hearings Before the
Subcomm. on Administrative Practice and Procedure of the Senate
Judiciary Comm. and the Senate Select Comm. on Small Business, 95th
Cong., 2d Sess. (1978); H.R. 7739 and H.R. 10632, Small Business Impact
Bill, Part 1: Hearings Before the Subcomm. on Special Small Business
Problems of the House Small Business Comm., 95th Cong., 2d Sess.
(1978); H.R. 7739 and H.R. 10632, Small Business Impact Bill, Part 1:
Hearings Before the Subcomm. on Special Small Business Problems of the
House Small Business Comm., 95th Cong., 2d Sess. (1978); H.R. 77399 and
H.R. 10632, Small Business Impact Bill, Part 2: Hearings Before the
Subcomm. on Special Small Business Problems of the House Small Business
Comm., 95th Cong., 2d Sess. (1978); Impact of Federal Regulation on
Small Business: Hearings Before the Subcomm. on Special Small Business
Problems of the House Small Business Comm., 96th Cong., 1st Sess.
(1979); Regulatory Reform, Part 3: Hearings Before the Subcomm. on
Administrative Practice and Procedure of the Senate Judiciary Comm.,
96th Cong., 1st Sess. (1979); Regulatory Reform, Part 4: Hearings
Before the Subcomm. on Administrative Practice and Procedure of the
Senate Judiciary Comm., 96th Cong., 1st Sess. (1979); Regulatory Reform
Act of 1979, Part 1: Hearings Before the Subcomm. on Administrative Law
and Governmental Relations of the House Judiciary Comm., 96th Cong.,
1st Sess. (1979); Regulatory Reform Act of 1979, Part 2: Hearings
Before the Subcomm. on Administrative Law and Governmental Relations of
the House Judiciary Comm., 96th Cong., 1st and 2d Sess. (1979 and
1980).
\7\ Under Sec. 601(6) of Title 5, the ``small entities'' intended
to benefit from the Act are ``small organizations,'' defined to include
any nonprofit enterprise which is independently owned and operated and
is not dominant in its field (5 U.S.C. Sec. 601(4)); ``small
governmental jurisdictions,'' defined to include governments of cities,
counties, towns, townships, villages, school districts, or special
districts with a population of less than 50,000 (5 U.S.C. Sec. 601(5));
and ``small businesses,'' which are the same as ``small business
concerns'' as defined in Section 3 of the Small Business Act (5 U.S.C.
Sec. 601(3)). See 15 U.S.C. Sec. 632 (as amended).
In the late 1970's, a study commissioned by the Office of
Advocacy of the U.S. Small Business Administration confirmed
that scale economies exist in complying with a diverse variety
of federal regulations. In each case, the study revealed that
larger firms can comply with various types of governmental
regulation at a lower cost than small businesses. The
explanation for this finding is simple--if the cost of
compliance with a federal regulation is primarily fixed, then
the smaller firm will suffer a more severe impact since it has
a smaller output over which to recover the costs of regulation.
The RFA was enacted to obtain federal agency recognition of
these effects and consequently to reduce them. The intention of
the Act is to have agencies approach the entities they regulate
with an eye to their size and take this into account in
drafting rules rather than approaching rulemaking with a ``one
size fits all'' attitude. If the RFA is properly complied with,
the primary goals of the APA should also be satisfied because
the RFA should cause agencies to write better rules. By
mitigating the impact of regulation on small businesses, the
viability and health of small businesses will be determined in
the marketplace and not in a distant federal office.
The RFA requires federal agencies to assess the impact of
their regulatory proposals on small entities. Agencies then
have two options under the statute--performing a regulatory
flexibility analysis or issuing a certification.
An agency certifies a rule if it determines that the rule
will not have a significant economic impact on a substantial
number of small entities. Announcement of the certification
must be published in the Federal Register and the certification
must be accompanied by ``a succinct statement explaining the
reasons for such certification. * * * '' \8\ Simple boilerplate
statements that the rule will not have such an effect are
patently inadequate under the RFA. Rather, sufficient analysis
must be performed to apprise the regulated community of the
reasons for the certification. Moreover, any doubt as to
whether a regulatory flexibility analysis should be performed
must be resolved in favor of performing the analysis.\9\
\8\ 5 U.S.C. Sec. 605(b).
\9\ Statement of Rep. Andy Ireland, 126 Cong. Rec. 24585 (September
8, 1980).
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An agency determination which reveals that the proposed
rule in question will have a significant economic impact on a
substantial number of small entities leads to a requirement
that the agency prepare an initial regulatory flexibility
analysis (IRFA) and publish it in the Federal Register. This
analysis must contain: (1) A description of the reasons why the
regulatory action is being considered; (2) a succinct statement
of the regulatory objectives and legal basis for the proposed
rule; (3) a description and estimate of the number of small
entities affected by the agency action; (4) a detailed
description of the reporting, record keeping, and other
compliance requirements of the proposed rule; and (5) an
identification of any duplicative, overlapping or conflicting
federal regulations.\10\
\10\ 5 U.S.C. Sec. 603(b)
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More important than any of these requirements is that the
analysis must describe and examine significant alternatives to
the proposal which accomplish the objectives of the agency but
minimize the economic impact on small entities. Significant
alternatives may include, but are not limited to: (1) the
establishment of differing compliance or reporting requirements
that take into account the resources available to small
entities; (2) the clarification, consolidation, or
simplification of compliance and reporting requirements under
the rule for small entities; (3) the use of performance rather
than design standards; and (4) exemption of small entities from
all or part of the rule.\11\
\11\ 5 U.S.C. Sec. 603(c).
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When an agency issues its final rule, it must either
prepare a final regulatory flexibility analysis (FRFA) or again
certify that the rule will not have a significant economic
impact on a substantial number of small entities. The FRFA must
thoroughly discuss comments received by the agency from the
regulated community and others (i.e., trade associations, other
agencies or Members of Congress) as well as the alternatives
considered by the agency while preparing the final rule. The
most important feature of the provision governing final
analysis is that in the FRFA agencies must give reasons why
they did not adopt the alternatives which were presented to the
agency during the rulemaking process.\12\ While the FRFA is
normally made available at the same time as the final rule is
published in the Federal Register, an emergency provision
contained in the Act provides that the public availability of
the FRFA can be delayed for up to 180 days.\13\
\12\ 5 U.S.C. Sec. 604(a).
\13\ 5 U.S.C. Sec. Sec. 604(b) and 608(b).
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Both the regulatory flexibility analysis and certification
process are designed to force federal agencies to articulate
the potential effects of proposed rules on small entities. This
process should not be viewed in isolation but rather as an
integral component of the administrative process and as a
procedural tool for assisting in the goal of rational
rulemaking.
Other substantive provisions of the RFA provide for
regulatory agendas \14\ and the periodic review of rules.\15\
However, these provisions are not now the subject of amendments
to the Act.
\14\ 5 U.S.C. Sec. 602.
\15\ 5 U.S.C. Sec. 610.
During the 1980's, the implementation of the Regulatory
Flexibility Act was the subject of several reports by the SBA
Chief Counsel for Advocacy, as required by 5 U.S.C.
Sec. 612(a). The Regulatory Flexibility Act was also the
subject of extensive Congressional oversight.\16\
\16\ See, generally, Oversight of the Regulatory Flexibility Act
(Part 1): Hearings before the Subcomm. on Export Opportunities and
Special Small Business Problems of the House Comm. on Small Business,
97th Cong., 1st Sess. (1981); Oversight of the Regulatory Flexibility
Act (Part 2): Hearings before the Subcomm. on Export Opportunities and
Special Small Business Problems of the House Comm. on Small Business,
97th Cong., 2d Sess. (1982); Regulatory Flexibility Act: Joint Hearings
Before the Subcomm. on Regulatory Reform of the Senate Judiciary Comm.
and the Subcomm. on Government Regulation and Paperwork of the Senate
Comm. on Small Business, 97th Cong., 2d Sess. (1982); Implementation of
the Regulatory Flexibility Act: Hearings Before the Subcomm. on Export
Opportunities and Special Small Business Problems of the House Comm. on
Small Business, 99th Cong., 2d Sess. (1986).
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B. Recent developments which led to the current legislation
The current legislative effort to amend the RFA has a
history which begins almost three years ago.
On May 1, 1992, a day-long hearing was held before the
House Republican Research Committee's Task Force on Small
Business. The focus of that hearing was the impact of federal
regulations on small business and much of the testimony
centered on the need to strengthen the Regulatory Flexibility
Act (RFA). Shortly after that hearing, Rep. Tom Ewing (R-IL),
having analyzed the materials from the May 1, 1992 hearing,
began an effort to introduce legislation that would address
certain problems with the RFA.
On September 18, 1992, near the end of the 102d Congress,
Rep. Ewing introduced H.R. 5977, the Regulatory Flexibility
Amendments Act of 1992. With only a few weeks left in the 102d
Congress, no action was taken on that measure.
At the beginning of the 103d Congress, on February 4, 1993,
Rep. Ewing introduced H.R. 830, the Regulatory Flexibility
Amendments Act of 1993. This proposal, which was substantively
identical to H.R. 5977 from the previous Congress, eventually
garnered 255 bipartisan cosponsors.
On July 28, 1993, the Committee on Small Business held an
oversight hearing on the Regulatory Flexibility Act which
specifically addressed some of the provisions contained in H.R.
830.\17\
\17\ Hearing Before the Committee on Small Business on the
Regulatory Flexibility Act, 103d Cong., 1st Sess. (1993). Serial No.
103-38.
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Testifying at this hearing were: Rep. Tom Ewing (R-IL);
Doris S. Freedman, Acting Chief Counsel for Advocacy, U.S.
Small Business Administration; William S. Busker, Senior Vice
President for Law land Finance, and General Counsel and Chief
Financial Officer, the American Trucking Associations, Inc.;
Mark W. Isakowitz, Legislative Representative, National
Federation of Independent Business; Frank E. Lawson, President,
National Roofing Contractors Association; Leo McDonough,
President, TEC/Pennsylvania Small Business United, on behalf of
National Small Business United; James W. Morrison, Director of
Government Relations, National Association for the Self-
Employed, and representing the Regulatory Flexibility Act
Coalition.
The months following the Committee's July 28th hearing
involved much work by members of the Regulatory Flexibility Act
Coalition, who pressed for a hearing on H.R. 830 before the
Committee on the Judiciary's Subcommittee on Administrative Law
and Governmental Relations.
In September of 1993, the Report of the National
Performance Review conducted by Vice President Gore made
judicial review for the Regulatory Flexibility Act its number
one recommendation for the Small Business Administration.\18\
\18\ See Appendix C to this report.
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On November 18, 1993, the Judiciary Subcommittee on
Administrative Law and Government Relations held a hearing on
H.R. 830. In addition to testimony by Rep. Tom Ewing in support
of his legislation, Rep. Ike Skelton (D-MO) testified on the
need for strengthening the RFA, and in support of H.R. 830.\19\
The witnesses testifying at the Judiciary Subcommittee hearing
on November 18, 1993 included Ms. Doris Freedman, the Acting
Chief Counsel for Advocacy, representatives from the Regulatory
Flexibility Act Coalition and some of its member groups,
academics and other interested parties.\20\
\19\ In his testimony, Rep. Skelton specifically mentioned a
Congressional oversight initiative by the Committee on Small Business
which led to a report by the Committee which contains the most
extensive analysis thus far concerning implementation of the Regulatory
Flexibility Act. Rep. Skelton led that effort as Chairman of the Small
Business Subcommittee on Exports, Tourism, and Special Problems. See
Report of the Committee on Small Business: ``Implementation of the
Regulatory Flexibility Act--A Five-Year Report,'' 100th Cong., 1st
Sess. (1987). H. Rep. 100-273.
\20\ See Hearing Report on H.R. 830, Regulatory Flexibility
Amendments Act of 1993, before Subcommittee on Administrative Law and
Governmental Relations, November 18, 1993. Serial No. 69.
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No further action was taken on H.R. 830 by the Committee on
the Judiciary during the 103d Congress. However, there was
substantial other activity involving the issue of strengthening
the Regulatory Flexibility Act during the last Congress.
On March 17, 1994, during consideration of S. 4 (the Senate
version of the National Competitiveness Act), Senator Malcolm
Wallop (R-WY) introduced an amendment which, among other
things, provided for judicial review of the RFA. After a motion
to table the Wallop amendment was defeated by a vote of 67 to
31, the amendment passed by voice vote. Shortly after
provisions amending the Regulatory Flexibility Act were
included in the Senate version of the National Competitiveness
Act, efforts began in the House to develop a motion to instruct
the House conferees that would embrace judicial review for the
RFA.\21\
\21\ In addition to these efforts to fashion a motion to instruct
for use when House conferees were chosen, efforts continued to attempt
to move Rep. Ewing's legislation, H.R. 830. Rep. Ewing filed a
discharge petition in May of 1994, which was ultimately signed by 100
Members.
Only July, 19, 1994, the House conferees on the National
Competitiveness Act were named. At that time, a motion to
instruct the conferees to accept the Senate's approach and
provide judicial review for the RFA was offered by Rep. Robert
Walker (R-PA). After debate on the House floor, the motion to
instruct offered by Rep. Walker passed by a recorded vote of
380 to 36. The National Competitiveness Act died in conference.
Committee Action
On January 4, 1995, H.R. 9 was introduced as one of the
bills which makes up the ``Contract with America.'' The bill,
entitled the ``Job Creation and Wage Enhancement Act of 1995,''
contained several provisions aimed at improving the regulatory
system. Divided into twelve titles, the bill was referred for
consideration to several Committees of the House. The Committee
on Small Business received a re-referral of Title VI, along
with other provisions, on February 9, 1995. Title VI, relating
to strengthening the Regulatory Flexibility Act, was the
subject of hearings by the Committee on Small Business on
January 23 and February 10, 1995.\22\
\22\ Title VI was among several titles of H.R. 9 referred to the
Committee on the Judiciary on January 4, 1995 and was the subject of a
hearing held before the Judiciary Subcommittee on Commercial and
Administrative Law on February 3, 1995.
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The hearing held by the Committee on Small Business on
January 23, 1995 involved the testimony of the following
witnesses: the Honorable Jere Glover, Chief Counsel for
Advocacy of the U.S. Small Business Administration; Mr. Jack
Faris, President and CEO, National Federation of Independent
Business; Mr. Charles N. ``Rusty'' Griffiths, Jr. of
Binghampton Slag Roofing Co. Inc., a member of the National
Roofing Contractors Association; Mr. James P. Carty. V.P.--
Small Manufacturers, National Association of Manufacturers; Mr.
Robert Pool, Homestyle Publishing, appearing on behalf of the
National Association for the Self-Employed; and Mr. Lee
Taddonio, V.P.--TEC/Pennsylvania Small Business United,
appearing on behalf of National Small Business United.
The hearing held by the Committee on February 10, 1995
involved the testimony of the Honorable Jere Glover, Chief
Counsel for Advocacy of the U.S. Small Business
Administration;\23\ Mr. John T. Spotila, General Counsel of the
U.S. Small Business Administration, appearing on behalf of the
Clinton Administration; Mr. Frank S. Swain, the SBA Chief
Counsel for Advocacy during the Reagan Administration; and
several government representatives who appeared on behalf of
several federal regulatory agencies.
\23\ In connection with the hearing held on February 10, 1995,
Committee staff reviewed the Annual Reports of the Chief Counsel for
Advocacy on implementation of the Regulatory Flexibility Act for the
years 1981 through 1993. See 5 U.S.C. Sec. 612(a).
---------------------------------------------------------------------------
Subsequent to hearings by the Committee, and re-referral of
Title VI of H.R. 9, H.R. 937 was introduced on February 14,
1995 by Mrs. Meyers and was referred to the Committee on the
Judiciary and the Committee on Small Business. The bill
contains the substance of Title VI of H.R. 9 as revised and
improved, taking into consideration comments offered by
witnesses at the hearings and suggestions proposed by other
Members.
On February 15, 1995, the Committee on Small Business, with
a quorum present, reported H.R. 937 by voice vote, after having
adopted one amendment, also by voice vote.
Section-by-Section Analysis
section 1--judicial review
Currently, 5 U.S.C. Sec. 611 generally prohibits judicial
review of agency compliance with the Regulatory Flexibility Act
(RFA). Judicial review is provided only in those limited
instances when a petition for judicial review is instituted on
other grounds, and only to the extent that the regulatory
flexibility analysis has been made part of the record of agency
action to be considered by the reviewing court. An agency's
certification that a regulatory flexibility analysis is not
required is not reviewable by a court, nor is the adequacy of a
regulatory flexibility analysis unless it is considered as a
part of a larger challenge.
Section 1 of H.R. 937 creates a new 5 U.S.C. Sec. 611,
which in subsection (a)(1) grants judicial review of compliance
with the RFA to affected small entities, but requires that they
must petition for review within 180 days after the effective
date of the final rule they seek to challenge. The challenge
must be brought to the court having jurisdiction, or which
would have jurisdiction, to review such rule for compliance
with the provisions of the Administrative Procedure Act or any
other provision of law.
Subsection (a)(2)(A) provides that where another provision
of law requires that an action challenging a final agency
regulation be commenced before 180 days, a regulatory
flexibility challenge must be brought within that shorter time
period. Subsection (a)(2)(B) covers those situations where an
agency has delayed the issuance of a final regulatory
flexibility analysis because it was operating under an
emergency situation. In those cases, an affected small entity
has 180 days from the date the analysis is made available to
the public or within a shorter period if another provision of
law requires a challenge be brought in a shorter time.
Subsection (a)(3) defines ``affected small entity'' as one
that is or will be adversely affected by the final rule.
Subsection (a)(4) states that nothing in subsection (a) of
Section 611 shall be construed to affect a court's authority to
stay the effective date of any rule because of any other
provision of law.
Subsection (a)(5)(A) gives a court reviewing a challenge
under the RFA the authority to order an agency to prepare a
regulatory flexibility analysis if the agency has improperly
certified that a proposed rule would not have a significant
economic impact on a substantial number of small entities. The
standard that the court is to follow is that, on the basis of
the rulemaking record, the certification was ``arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.'' This standard is identical to the
standard of review for the Administrative Procedure Act.
If the agency has prepared a final regulatory flexibility
analysis, subsection (a)(5)(B) authorizes the court to order
the agency to take corrective action consistent with Section
604 of Title 5 (the section describing what should be in a
final regulatory flexibility analysis).
Subsection (a)(6) gives agencies a 90 day grace period in
which to take corrective action as a result of an order of the
court pursuant to subsection (a)(5). If after that period the
agency has not complied, the court may stay the rule or grant
such other relief as it deems appropriate.
Subsection (a)(7) requires the court to take due account of
the rule of prejudicial error.
Subsection (b) of the new Section 611 provides that in an
action for judicial review of a rule, any regulatory
flexibility analysis for such rule shall be considered part of
the whole record of agency action in connection with such
review.
Subsection (c) of the new Section 611 states that nothing
contained in Section 611 of Title 5 bars judicial review of any
other impact statement or analysis required or permitted by any
other law.
The effective date of the amended judicial review
provisions contained in the new Section 611 applies to final
agency rules issued after the date of enactment of H.R. 937.
section 2--rules commented on by sba chief counsel for advocacy
It is the intention of this legislation to strengthen
agency compliance with the RFA. It is also the intention to
require agencies to work more closely with the SBA Chief
Counsel for Advocacy, who is charged with monitoring RFA
compliance, during the drafting of new rules.
Section 2 of H.R. 937 would amend Section 612 of the RFA to
require that when an agency is drafting a new rule, the agency
must provide the SBA Chief Counsel for Advocacy with an advance
copy of the rule 30 days before publishing a general notice of
proposed rulemaking in the Federal Register. (General Notices
of Proposed Rulemaking are required under the APA, 5 U.S.C.
Sec. 553(b).) At that time, the agency must also provide the
SBA Chief Counsel for Advocacy with a draft of the initial
regulatory flexibility analysis for the rule or if the agency
determines that a regulatory flexibility analysis will not be
necessary the agency must provide an explanation for that
determination.
Following receipt of the above information, the SBA Chief
Counsel for Advocacy may review the proposed rule and
regulatory flexibility analysis or other explanation. The SBA
Chief Counsel for Advocacy will have 15 days to transmit, in
writing, to the agency, any opposition or comments on the
proposed rule or regulatory flexibility analysis or agency
determination that an analysis is not necessary.
If the SBA Chief Counsel for Advocacy submits such a
statement, the agency shall publish that statement, together
with the response to the agency, if the Federal Register at the
same time the general notice of the proposed rulemaking for the
rule is published. The failure of the SBA Chief Counsel for
Advocacy to submit any statement to an agency during this
advance notification procedure should not be construed as an
approval by the Chief Counsel of the agency's initial
regulatory flexibility analysis or certification.
New Section 612(d)(4) of Title 5, which was added by the
amendment adopted in the Committee by voice vote, contains a
narrowly drawn exception for any proposed rules issued in
connection with implementation of monetary policy or actions
taken to ensure the safety and soundness of federally insured
depository institutions, affiliates of such institutions,
credit unions, or government sponsored housing enterprises (as
the term ``enterprise'' is defined in Sec. 1303(6) of the
Housing and Community Development Act of 1992 or to protect the
deposit insurance funds. Safety and soundness regulations are
designed to ensure proper supervision of banking operations and
promote prudential standards designed to guard against undue
risk or loss to banking instutitions and, potentially, the
deposit insurance funds. The SBA Chief Counsel for Advocacy's
review could add considerable time to the rulemaking process,
thereby delaying the promulgation of regulations necessary to
ensure that safety and soundness of the nation's financial
institutions or actions taken in connection with monetary
policy. A delay in promulgating these type of regulations,
which in some instances may require expeditious treatment,
could put the taxpayer-backed deposit insurance funds at risk.
section 3--sense of congress regarding the sba chief counsel for
advocacy
Section 3 of this bill is a ``sense of Congress'' provision
reaffirming what is presently contained in 5 U.S.C.
Sec. 612(b).
The Regulatory Flexibility Act currently gives the SBA
Chief Counsel for Advocacy authority to file amicus briefs in
litigation involving federal rules. In the history of the RFA
this has only been done once, in the 1986 case of Lehigh Valley
Farmers. At that time, the Justice Department indicated that
this amicus authority was unconstitutional because it would
impair the ability of the Executive branch to fulfill its
constitutional functions.
After a great deal of wrangling between the Department of
Justice and the Chief Counsel, the Chief Counsel eventually
withdrew the amicus brief filed in the Lehigh Valley Farmers
case.
The ability to appear as amicus curiae is important to the
ability of the SBA Chief Counsel for Advocacy to represent the
interests of Small businesses in the rulemaking process.
Furthermore, if H.R. 937 becomes law, with its provision to
permit judicial review of agency compliance with the Regulatory
Flexibility Act, the importance of the SBA Chief Counsel's
ability to file amicus briefs will be magnified.
Discussion
At the two hearings held by the Committee on the regulatory
flexibility provisions contained in Title VI of H.R. 9, several
witnesses and many Members of the Committee, including the
Chair, the Ranking Member, and Reps. Wyden and Sisisky, raised
concerns over a provision contained in Title IV of H.R. 9.
Title IV of H.R. 9 was designed to provide for federal
regulatory budget cost control through amendments to the
Congressional Budget Act of 1974. However, the last provision
in this Title, Section 4003, goes substantially beyond this
goal. Section 4003 of H.R. 9 would make substantive changes to
the Regulatory Flexibility Act which would expand the
protections of the Act to big business.
Section 4003 of H.R. 9 adds requirements calling for
monetary cost assessments to be provided as an additional
product of the analyses required by Sections 603 and 604 of
Title 5 of the U.S. Code (the RFA). However, instead of
limiting the assessment of costs of compliance with a proposed
or final rule to the costs to small entities, Section 4003 of
H.R. 9 goes further and requires the cost assessment to set
forth the monetary costs to ``small entities, other businesses,
and individuals.'' Since the term ``small entities'' contained
in the RFA is defined to include small businesses, the new term
``other businesses'' set forth in Section 4003 must include big
businesses.
Since this ``cost assessment'' provision contained in
Section 4003 of H.R. 9 is designed to amend the two
substantive, analytical sections of the RFA, it was perceived
by Members of the Committee that the intent of Section 4003 was
to expand the reach of the RFA to big business.
At both of the Committee's hearings on the regulatory
flexibility provisions of H.R. 9, the Committee heard universal
disapproval concerning expanding the reach of the Regulatory
Flexibility Act to big businesses. This included testimony by
the Honorable Jere Glover, the Chief Counsel for Advocacy of
the U.S. Small Business Administration, who is charged by
statute with overseeing implementation of the RFA, and
testimony by Mr. John T. Spotila, General Counsel of the U.S.
Small Business Administration, who appeared before the
Committee to provide the Clinton Administration's position on
the regulatory flexibility provisions contained in H.R. 9.
At the Committee mark-up on February 15, 1995, Chair Meyers
represented to the Members of the Committee that it was her
understanding from the House Leadership that Section 4003 of
H.R. 9 would not be reported out by any committee of the House.
It is the position of the Committee on Small Business that
the benefits of the Regulatory Flexibility Act should be
preserved solely for small entities as that term is currently
defined in the Act and that the RFA should not be extended to
big business.
Another issue which was raised during the Committee's
consideration of H.R. 937 (and Title VI of H.R. 9) concerns
what standards should be applied by courts in their review of
agency compliance with the Regulatory Flexibility Act. The
simple answer is that reviewing courts should draw upon
precedents and decisions interpreting the Administrative
Procedure Act and, specifically, its judicial review
provisions. See 5 U.S.C. Sec. 701 et seq.\24\ For example, if
H.R. 937 becomes law, the new Section 611 (a)(7) of Title 5 of
the U.S. Code will refer to the ``rule of prejudicial error.''
The ``rule of prejudicial error'' is also referred to in 5
U.S.C. Sec. 706 (the APA) and its definition and application
can be found throughout the case law analyzing principles of
administrative law both before and after adoption of the
Administrative Procedure Act in 1946.\25\
\24\ While reviewing courts should give the deference to agency
judgments required by APA precedents, the Committee believes that real
and effective review within these limits is necessary to accomplish the
purposes of the Regulatory Flexibility Act.
\25\ See, Generally, Riverbend Farms, Inc. v. Madigan, 958 F.2d
1479 (9th Cir. 1992); Shelton v. Marsh, 902 F.2d 1201 (6th Cir. 1990);
and Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506 (D.C.
Cir. 1986).
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(3)(C) of rule XI of the
House of Representatives, the Committee sets forth, with
respect to H.R. 937, the following statement received from the
Director of the Congressional Budget Office under Section 403
of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 23, 1995.
Hon. Jan Meyers,
Chair, Committee on Small Business,
House of Representatives, Washington, DC.
Dear Madam Chair: The Congressional Budget Office has
reviewed H.R. 937, a bill to amend title 5, United States Code,
to clarify procedures for judicial review of Federal agency
compliance with regulatory flexibility analysis requirements,
and for other purposes, as ordered reported by the House
Committee on Small Business on February 15, 1995. CBO estimates
that implementing the provisions of H.R. 937 would cost the
Federal Government approximately $1 million over the next five
years, assuming appropriation of the necessary funds. Because
enactment of H.R. 937 could affect direct spending, pay-as-you-
go procedures would apply to the bill. Enacting H.R. 937 would
not affect the budgets of State or local governments.
H.R. 937 would permit small entities to petition for
judicial review of a Federal agency's compliance with the
requirements of the Regulatory Flexibility Act. The bill also
would require that a Federal agency transmit to the Small
Business Administration (SBA) a copy of any proposed rule (and
the agency's initial regulatory flexibility analysis, if
required) at least 30 days prior to the publication of the
notice of proposed rulemaking. The SBA would be permitted to
transmit to the proposing agency the SBA's analysis of the
proposed rule's effects on small businesses.
Federal agencies required to file regulatory flexibility
analyses would incur some additional costs in transmitting the
required documents to the SBA, but CBO does not expect these
costs to be significant. Based on information from the SBA, CBO
estimates that reviewing proposed rules and preparing analyses
of their effects on small businesses would cost the Federal
Government approximately $200,000 per year over the next five
years, assuming appropriation of the necessary amounts.
Enactment of H.R. 937 could result in additional lawsuits
against the Federal Government requesting judicial review of
Federal agency compliance with the requirements of the
Regulatory Flexibility Act. To the extent that the additional
lawsuits were successful and the plaintiffs were awarded
attorney's fees, enactment of H.R. 937 could result in
additional direct spending because these fees are paid from the
Claims, Judgments and Relief Acts account. CBO cannot estimate
either the likelihood or the magnitude of the direct spending,
because there is no basis for predicting either the outcome of
possible litigation or the amount of potential compensation.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John Webb.
Sincerely,
James L. Blum
(For Robert D. Reischauer, Director).
Inflationary Impact Statement
Pursuant to clause 2(l)(4) of rule XI of the House of
Representatives, the Committee estimates that H.R. 937 will
have no inflationary impact on prices and costs in the
operation of the national economy.
Oversight Findings
In accordance with clause 2(l)(3)(D) of rule XI of the
House of Representatives, the Committee states that no
oversight findings or recommendations have been made by the
Committee on Government Reform and Oversight with respect to
the subject matter contained in H.R. 937.
In accordance with clause 2(l)(3)(A) of rule XI and clause
2(b)(1) of rule X of the House of Representatives, the
oversight findings and recommendations of the Committee on
Small Business with respect to the subject matter contained in
H.R. 937 are incorporated into the descriptive portions of this
report.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
PART I--THE AGENCIES GENERALLY
* * * * * * *
CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS
* * * * * * *
Sec. 603. Initial regulatory flexibility analysis
(a) Whenever an agency is required by section 553 of this
title, or any other law, to publish general notice of proposed
rulemaking for any proposed rule, the agency shall prepare and
make available for public comment an initial regulatory
flexibility analysis. Such analysis shall describe the impact
of the proposed rule on small entities. The initial regulatory
flexibility analysis or a summary shall be published in the
Federal Register at the time of the publication of general
notice of proposed rulemaking for the rule. The agency shall
transmit a copy of the initial regulatory flexibility analysis
to the Chief Counsel for Advocacy of the Small Business
Administration in accordance with section 612(d).
* * * * * * *
[Sec. 611. Judicial review
[(a) Except as otherwise provided in subsection (b), any
determination by an agency concerning the applicability of any
of the provisions of this chapter to any action of the agency
shall not be subject to judicial review.
[(b) Any regulatory flexibility analysis prepared under
sections 603 and 604 of this title and the compliance or
noncompliance of the agency with the provisions of this chapter
shall not be subject to judicial review. When an action for
judicial review of a rule is instituted, any regulatory
flexibility analysis for such rule shall constitute part of the
whole record of agency action in connection with the review.
[(c) Nothing in this section bars judicial review of any
other impact statement or similar analysis required by any
other law if judicial review of such statement or analysis is
otherwise provided by law.]
Sec. 611. Judicial review
(a)(1) Except as provided in paragraph (2), not later than
180 days after the effective date of a final rule with respect
to which an agency--
(A) certified, pursuant to section 605(b) of this
title, that such rule would not have a significant
economic impact on a substantial number of small
entities; or
(B) prepared a final regulatory flexibility analysis
pursuant to section 604 of this title,
an affected small entity may petition for the judicial review
of such certification or analysis in accordance with the terms
of this subsection. A court having jurisdiction to review such
rule for compliance with the provisions of section 553 or under
any other provision of law shall have jurisdiction to review
such certification or analysis.
(2)(A) Except as provided in subparagraph (B), in the case
where a provision of law requires that an action challenging a
final agency regulation be commenced before the expiration of
the 180 day period provided in paragraph (1), such lesser
period shall apply to a petition for the judicial review under
this subsection.
(B) In the case where an agency delays the issuance of a
final regulatory flexibility analysis pursuant to section
608(b) of this title, a petition for judicial review under this
subsection shall be filed not later than--
(i) 180 days; or
(ii) in the case where a provision of law requires
that an action challenging a final agency regulation be
commenced before the expiration of the 180 day period
provided in paragraph (1), the number of days specified
in such provision of law,
after the date the analysis is made available to the public.
(3) For purposes of this subsection, the term ``affected
small entity'' means a small entity that is or will be
adversely affected by the final rule.
(4) Nothing in this subsection shall be construed to affect
the authority of any court to stay the effective date of any
rule or provision thereof under any other provision of law.
(5)(A) In the case where the agency certified that such rule
would not have a significant economic impact on a substantial
number of small entities, the court may order the agency to
prepare a final regulatory flexibility analysis pursuant to
section 604 if the court determines, on the basis of the
rulemaking record, that the certification was arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.
(B) In the case where the agency prepared a final regulatory
flexibility analysis, the court may order the agency to take
corrective action consistent with the requirements of section
604 if the court determines, on the basis of the rulemaking
record, that the final regulatory flexibility analysis was
prepared by the agency without observance of procedure required
by section 604 of this title.
(6) If, by the end of the 90-day period beginning on the date
of the order of the court pursuant to paragraph (5) (or such
longer period as the court may provide), the agency fails, as
appropriate--
(A) to prepare the analysis required by section 604
of this title; or
(B) to take corrective action consistent with the
requirements of section 604 of this title,
the court may stay the rule or grant such other relief as it
deems appropriate.
(7) In making any determination or granting any relief
authorized by this subsection, the court shall take due account
of the rule of prejudicial error.
(b) In an action for the judicial review of a rule, any
regulatory flexibility analysis for such rule (including an
analysis prepared or corrected pursuant to subsection (a)(5))
shall constitute part of the whole record of agency action in
connection with such review.
(c) Nothing in this section bars judicial review of any other
impact statement or similar analysis required by any other law
if judicial review of such statement or analysis is otherwise
provided by law.
Sec. 612. Reports and intervention rights
(a) * * *
* * * * * * *
(d) Action by SBA Chief Counsel for Advocacy.--
(1) Transmittal of proposed rules and initial
regulatory flexibility analysis to sba chief counsel
for advocacy.--On or before the 30th day preceding the
date of publication by an agency of general notice of
proposed rulemaking for a rule, the agency shall
transmit to the Chief Counsel for Advocacy of the Small
Business Administration--
(A) a copy of the proposed rule; and
(B)(i) a copy of the initial regulatory
flexibility analysis for the rule if required
under section 603; or
(ii) a determination by the agency that an
initial regulatory flexibility analysis is not
required for the proposed rule under section
603 and an explanation for the determination.
(2) Statement of effect.--On or before the 15th day
following receipt of a proposed rule and initial
regulatory flexibility analysis from an agency under
paragraph (1), the Chief Counsel for Advocacy may
transmit to the agency a written statement of the
effect of the proposed rule on small entities.
(3) Response.--If the Chief Counsel for Advocacy
transmits to an agency a statement of effect of a
proposed rule in accordance with paragraph (2), the
agency shall publish the statement, together with the
response of the agency to the statement, in the Federal
Register at the time of publication of general notice
of proposed rulemaking for the rule.
(4) Special rule.--Any proposed rules issued by an
appropriate Federal banking agency (as that term is
defined in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)), the National Credit
Union Administration, or the Office of Federal Housing
Enterprise Oversight, in connection with the
implementation of monetary policy or to ensure the
safety and soundness of federally insured depository
institutions, any affiliate of such an institution,
credit unions, or government sponsored housing
enterprises or to protect the Federal deposit insurance
funds shall not be subject to the requirements of this
subsection.
* * * * * * *
APPENDIX A
----------
[Letter from Representative Tom Ewing to President Clinton, dated
February 4, 1993]
Congress of the United States,
House of Representatives,
Washington, DC, February 4, 1993.
The President,
The White House,
Washington, DC.
Dear Mr. President: I was excited to learn of your
commitment during a September 30 speech at Clinton, Maryland to
``enforce the Regulatory Flexibility Act's requirements'' as a
way to help small businesses cope with federal regulation. I
would like to work with you on this issue.
As you know the Regulatory Flexibility Act (RFA) was
designed to minimize the impact of federal regulations on small
businesses. The RFA requires agencies to prepare analyses of
the potential effect, including compliance costs of proposed
rules on small businesses and develop final rules which
minimize that impact. However, agencies in many cases have not
complied with the spirit or letter of the RFA, in part because
of some flaws in the original legislation. The most glaring
problem is that there is no method to force agencies to heed
the RFA as the Act contains a provision prohibiting judicial
review of agency compliance.
Over the past year I have developed legislation to improve
the RFA, which is being introduced today. This bill has
received strong bi-partisan support so far in Congress,
including the Chairman and Ranking Member of the House Small
Business Committee. It has also received strong support from
the small business community.
I would be honored to work with you in a bi-partisan spirit
to pass this legislation which is critically important to small
businesses if we are to ease the burden of excessive and costly
federal regulations. Enclosed is detailed information about the
Regulatory Flexibility Amendments Act of 1993.
Thank you for your consideration.
Sincerely,
Thomas W. Ewing,
Member of Congress.
APPENDIX B
----------
[Letter from President Clinton to Representative Tom Ewing, dated April
22, 1993]
The White House,
Washington, DC, April 22, 1993.
Hon. Thomas W. Ewing,
House of Representatives,
Washington, DC
Dear Representative Ewing: Thank you for your letter
informing me that you had introduced H.R. 830, the ``Regulatory
Flexibility Amendments Act of 1993.''
The Regulatory Flexibility Act (RFA) has played an
important role in many rulemakings by ensuring that the effects
on small businesses and small governmental entities are
considered during the rulemaking process. However, experience
with the RFA suggests that improvements may be needed in its
implementation, particularly in agency compliance with the
requirements to perform adequate regulatory flexibility
analysis.
My Administration looks forward to working with you and the
Congress on this important issue. I appreciate your interest in
small business, and want you to know that the concerns of small
business are a very high priority in my Administration.
With best wishes,
Sincerely,
Bill Clinton.
APPENDIX C
----------
[Excerpt from the Report of the National Performance Review, dated
September, 1993]
SBA01: Allow Judicial Review of the Regulatory Flexibility Act
background
Small businesses often feel overwhelmed by well-intentioned
regulations that burden them with needless costs. Congress and
the President recognized this problem in 1980 and enacted the
Regulatory Flexibility Act (RFA). The RFA requires agencies to
seek alternative regulatory solutions when their rules have a
disproportionately severe impact on small entities, including
small businesses and nonprofit organizations and relatively
small government jurisdictions. However, most agencies have
failed to perform the required RFA analysis. Rules continue to
be issued even though the harm that resulted could have been
alleviated had they been examined according to RFA
guidelines.1
For example, in 1986, Congress enacted the Emergency
Planning and Community Right-To-Know Act, requiring local
reporting of hazardous chemicals. The initial Environmental
Protection Agency (EPA) implementation instructions required
reporting ``any amount'' of hazardous chemicals. The potential
impact on small business was staggering. Even hot-dog stands
would have been required to report bottles of solvent or metal
polish.
The Small Business Administration's (SBA's) Office of
Advocacy, which is directed by law to monitor compliance with
the RFA, coordinated small business comments with EPA, which
explored less burdensome alternatives. As a result of this
process, EPA raised the threshold for reporting to 10,000
pounds of hazardous chemicals. This threshold eliminated
hundreds of thousands of unnecessary reports, yet still covered
more than 95 percent of the total quantity of stored chemicals
and 100 percent of those in quantities likely to produce the
sort of hazard that was the concern of the legislation.
The RFA, which works in conjunction with the fundamental
agency rulemaking law, the Administrative Procedure Act (APA),
leads rulemakers to one of two outcomes:
(1) For rules that will have a significant economic impact
upon a substantial number of small entities, the agency is
required to perform a regulatory flexibility analysis. This
analysis defines the burdens of the rule and examines
alternatives that will lessen those burdens for small entities.
(2) For rules that will not have a significant economic
impact upon a substantial number of small entities, the agency
must so certify, with a brief statement explaining the
rationale behind this conclusion.
While SBA's Office of Advocacy can ask agencies to follow
the RFA, no mechanism for enforcing compliance exists. As a
result, federal agency compliance is spotty at best. A few
agencies, such as the EPA, the Food Safety Inspection Service,
and the Nuclear Regulatory Commission, now consistently use the
RFA to reduce the regulatory burden imposed on small entities.
Most agencies employ simplistic analysis that barely meet even
the minimal requirements of the RFA. Others, including the
Internal Revenue Service, define their rulemaking activities in
the Federal Register as ``interpretative, a category excluded
from RFA responsibilities.''
Several administrative efforts have been made to improve
the level of responsiveness to the RFA, but with little
success. The fundamental solution is judicial review, an
approach favored by small business. Such review is permitted
for agency rulemaking under the APA. However, the RFA itself
prohibits judicial review of agency compliance with the RFA.
Courts have further restricted the use of RFA analysis as
evidence in suits brought under the APA.
For the RFA to succeed at its goal of avoiding needless
government regulatory burdens on small entities, sanctions for
non-compliance with the RFA must be created.
With judicial review, small entities could challenge an
agency's failure to perform an RFA review or a flawed RFA
review. They could sue in the appropriate federal court and, if
they won, the court could order the agency to explain its RFA
determination or develop appropriate alternatives under the
RFA. A credible threat of lawsuits would give agencies a strong
motive to ensure that the RFA is followed.
Judicial review is supported by all major small business
associations, including the American Small Business
Association, the American Trucking Association, the National
Association for the Self-Employed, the National Association of
Manufacturers, the National Federation of Independent Business,
National Small Business United, the National Society of Public
Accountants, the Small Business Legislative Council, and the
U.S. Chamber of Commerce.\2\
To create better compliance with the RFA and avoid needless
lawsuits, the availability of judicial review must be
accompanied by systematic compliance guidelines for agencies
concerning how to conduct RFA reviews. For more than a decade,
most agencies have failed to develop such guidelines on their
own.
actions
1. The Regulatory Flexibility Act of 1980 should be amended
to allow for judicial review of agency determinations under the
RFA.\3\
This approach would allow small entities that have been
injured by an agency action to seek judicial relief. This would
be possible only after an agency has published a final rule,
not at any earlier point in the rulemaking process.
2. An Executive Order should be issued requiring the SBA
Office of Advocacy to issue governmentwide guidance on
appropriate processes for complying with the analytical
requirements of RFA.\4\
This approach would provide consistent technical guidance--
the foundation for avoiding lawsuits.
implications
The potential for judicial review would give agencies
greater incentive to meet their present statutory obligations
to consider the impact of their rules on small entities. Agency
lawyers would ensure that the agency would properly comply with
the RFA to avoid the valid threat of litigation.
Judicial review is not expected to lead to a large number
of lawsuits. No basis for suits would exist if agencies
conducted an appropriate RFA review. As a practical matter,
most regulations to which small entities have significant
objections are already in litigation; judicial review of RFA
would at most add another ground to these challenges. A few new
cases based solely on RFA failure might result, in instances in
which the impact of rules on small entities is sufficiently
negative to impose greater costs than the cost of litigation--a
fairly high threshold. In these rare cases, a challenge may be
in the nation's best interests.
In the most extreme cases, judicial review of RFA could
lead to an initial flurry of lawsuits. Once the first few cases
are decided, however, the boundaries between acceptable and
unacceptable agency behavior under RFA would become well-known
to agency attorneys and the administrative law bar. After that,
legal challenges could be expected to fall off dramatically.
Both the process for developing SBA guidance and the
guidance itself would help achieve compliance with the RFA. The
notice, comment, and public hearings phase would raise the
level of awareness in federal agencies about the RFA.
Furthermore, the Office of Advocacy expects that the guidance
ultimately developed will provide agencies with a map
sufficiently detailed to allow them to navigate their way
through the RFA with minimal effort.
The RFA does not impose a requirement for an agency to
collect additional data except in rare instances in which data
originally collected was insufficient to understand the problem
the rule was trying to solve. In such cases, the additional
task of information collection should not be attributed to the
RFA but to an agency's failure to meet its obligations for
reasoned decisionmaking.
fiscal impact
Judicial review of the RFA imposes no costs outside the
government. In rare cases where there is no court challenge of
regulations on grounds other than the RFA and the cost of
unnecessary or overly burdensome regulations is greater than
the cost of litigation, small entities may choose to incur the
cost of bringing suit based solely on an RFA violation. The
cost to these entities cannot be estimated but would be seen by
them as a net savings.
Procedures to implement the RFA would be limited to federal
agencies. The costs inside the federal government are difficult
to estimate because the costs of rulemaking are not a line item
and are generally not well-measured. The best estimates
available suggest a maximum average of one work day per rule
when there is no substantial impact on small entities, a total
effort that should be absorbed in the current personnel
ceiling. Over the years, SBA has found that only 30 to 50 rules
a year have significant negative impact on small entities.
If agencies do not comply with RFA, costs for litigation
would certainly accrue. The marginal cost of RFA suits cannot
be calculated in advance. Additional funds should not be
budgeted for such costs.
endnotes
\1\ See annual reports on the implementation of the
Regulatory Flexibility Act, U.S. Small Business Administration,
Office of Advocacy, 1981-1992.
\2\ U.S. Congress, House Committee on Small Business,
testimony of James Morrison, July 28, 1993. The organizations
listed are the Regulatory Flexibility Act Coalition, which
supports judicial review of RFA.
\3\ Judicial review can be established with the following
language: (a) Section 611 of title 5, United States Code is
amended by striking subsections (a), (b), and (c) and inserting
a new subsection (a): ``For purposes of section 702 of title 5,
determinations made pursuant to this chapter shall only be
reviewable upon publication or service of a rule as required by
section 553(d) of title 5.''
\4\ Implementing instructions for complying with the
analytical requirements in sections 603, 604, and 605 of the
RFA can be brought about by the following executive order:
``The Small Business Administration Office of Advocacy shall:
Issue guidance to federal agencies for the implementation of
the Regulatory Flexibility Act. Such guidance shall be
developed after consultation with affected agencies and after
such public hearings as may be appropriate. The guidance will
be designed to ensure that the analysis conducted under the Act
provide data and reasonable alternatives.'' This approach was
used successfully in 1977 to provide a framework for all
federal agencies in meeting the requirement to examine
environmental impacts of federal actions mandated by the
National Environmental Policy Act of 1969 (NEPA). This approach
was tested in the Supreme Court, and has been favorably
commented on by that court several times. Such guidance would
help agencies defend their actions in any legal challenges
under the RFA.
APPENDIX D
----------
[Memorandum of the American Law Division (Congressional Research
Service) of the Library of Congress, dated October 22, 1993]
Subject: Constitutional Analysis of Sec. 612(b) of the Regulatory
Flexibility Act Authorizing the Chief Counsel for Advocacy of
the Small Business Administration to Appear as Amicus Curiae in
Any Court Action to Review an Agency Rule.
Author: John Contrubis.
This memorandum has been prepared in order to analyze the
constitutionality of Sec. 612(b) of the Regulatory Flexibility
Act \1\ which authorizes the Chief Counsel for Advocacy (the
Chief Counsel) of the Small Business Administration to appear
as amicus curiae in any court action to review an agency rule.
Specifically, this memorandum responds to past determinations
by the Department of Justice (DOJ) indicating that Sec. 612(b)
is limited to certain circumstances.\2\
\1\ U.S.C.A. Sec. 601 et seq.
\2\ DOJ has stated that ``the litigation authority granted to the
Chief Counsel by Sec. 612(b) is limited to litigation challenging rules
promulgated by independent agencies, and then, only if the Attorney
General, or any other Executive Branch officer, has not already taken a
position in the litigation on behalf of the United States, which is
inconsistent with that which the Chief Counsel seeks to present. In
litigation involving Executive Branch agencies, the Chief Counsel's
authority to present his views to the court is limited to the
presentation of views which would not conflict with those presented by
the defendant agency.'' Memorandum from Theodore B. Olson, Assistant
Attorney General, Office of Legal Counsel, to J. Paul McGrath,
Assistant Attorney General, Civil Division, re: ``Amicus Curiae Role of
the Small Business Administration's Chief Counsel for Advocacy under
the Regulatory Flexibility Act'' (May 17, 1983).
---------------------------------------------------------------------------
Traditionally, DOJ has based its opposition on two
theories. The first theory states that the Chief Counsel's
authority to appear as amicus curiae may, in certain
circumstances, interfere with the President's constitutional
obligation to ``take care that the laws be faithfully
executed.* * *'' \3\ The second theory suggests that
intrabranch litigation would create a nonjusticiable issue,
thus, running afoul of the Constitution's requirement that a
case or controversy exist before a matter be presented before a
United States court.\4\ Neither of these theories are likely to
be held to limit the Chief Counsel's authority to appear as
amicus curiae in any court action to review an agency rule.
\3\ U.S. CONST. art. II, Sec. 3.
\4\ U.S. CONST. art. III.
---------------------------------------------------------------------------
In advocating the ``take care'' clause of Article II, DOJ
is relying on the assumption that the executive power is
hierarchical in nature and uniquely vested in the President
alone (the unitary executive theory \5\). However, a pure
unitary executive theory has arguably been undermined by the
Supreme Court's rulings in Morrison v. Olson \6\ and Mistretta
v. United States.\7\
\5\ See Rosenberg, ``Congress's Prerogative Over Agencies and
Agency Decisionmakers: The Rise and Demise of the Reagan
Administration's Theory of the Unitary Executive,'' 57 Geo. Wash. L.
Rev. 627 (1989).
\6\ Morrison v. Olson, 487 U.S. 654 (1988).
\7\Mistretta v. United States, 488 U.S. 361 (1989).
---------------------------------------------------------------------------
In Morrison, the appellees argued that since an independent
counsel is removable by the executive, through the Attorney
General, only for ``good cause,'' such statutory limitation on
the President's at-will removal authority of an officer who is
exercising purely executive functions unduly interferes with
the President's constitutional duties and prerogatives and
thereby violates separation of powers principles. The Court
held that the validity of insulating an inferior officer from
at-will removal by the President can no longer turn on whether
such an officer is performing ``purely executive'' or ``quasi
legislative'' or ``quasi judicial'' functions.\8\ Instead, the
``good cause'' removal limitation will turn on whether such
limitation interferes with the President's ability to perform
his constitutional duty.\9\ Addressing the independent
counsel's powers, the Court noted that the exercise of
prosecutorial discretion is not ``central'' to the functioning
of the executive branch.\10\ Moreover, since the independent
counsel could be removed by the Attorney General, this is
sufficient to ensure that he is performing his statutory
duties, which is all that is required by the ``take care''
clause.\11\ Furthermore, the limited ability of the President
to remove the independent counsel, through the Attorney
General, was also seen as leaving enough control in his hands
to reject the argument that the scheme of the Ethics in
Government Act impermissibly undermines executive powers or
disrupts the proper constitutional balance by preventing the
executive from performing his functions.\12\
\8\ Morrison, supra at 687.
\9\ Id. at 687-91.
\10\ Id. at 691-92.
\11\ Id. at 692-93.
\12\ Id. at 695-96.
The Court's support for broad congressional authority over
agency structure was furthered in Mistretta. Here, the Court
was presented with a broad ranging separation of powers
challenge to the United States Sentencing Commission.
Petitioners argued that the Commission, an independent agency
in the judicial branch vested with power to promulgate binding
sentencing guidelines, violated the separation doctrine by its
placement in the judicial branch, by requiring federal judges
to serve on the Commission and to share their authority with
nonjudges, and by empowering the President to appoint
Commission members but limiting his power to remove them only
for cause. The Court, in describing this separation of powers
dilemma, explained that the issue involved whether there exists
``the accumulation of excessive authority in a single branch''
through encroachment and aggrandizement by one branch against
another.\13\ In cases where statutory provisions commingled the
functions of the Branches, but pose no danger of either
aggrandizement or encroachment \14\ the Court has developed a
balancing test. This test determines whether the challenged
arrangement `` `prevents the Executive Branch from
accomplishing its assigned functions,' '' \15\ and if so, ``
`whether that impact is justified by an overriding need to
promote objectives within the constitutional authority of
Congress.' '' \16\ Applying this test, the Court found that
although the Commission is located in the judicial branch, its
rulemaking powers are separate from those of the judiciary.
Moreover, the Commission is an independent agency accountable
to Congress, which can revoke any or all of the guidelines at
any time, its members are subject to the President's limited
removal powers, and its rules are subject to the notice and
comment requirements of the Administrative Procedure Act. Thus,
the Court concluded, ``because Congress vested the power to
promulgate sentencing guidelines in an independent agency, not
a court, there can be no serious argument that Congress
combined legislative and judicial power within the Judicial
Branch.'' \17\
\13\ 488 U.S. at 381.
\14\ Id. at 382.
\15\ Id. (quoting Nixon v. Administrator of Gen. Servs., 433 U.S.
425, 443 (1979)).
\16\ Id.
\17\ Id. at 383.
---------------------------------------------------------------------------
Similar to the situation in Morrison and Mistretta, the
Small Business Administration Act also arguably leaves enough
control in the President's hands so that it does not undermine
the executive's powers or disrupt the proper constitutional
balance by preventing the executive from performing his
functions. Comparing the independent counsel in Morrison to the
Chief Counsel of the SBA demonstrates that the President
actually has more control over the latter.\18\ Moreover, since
the exercise of prosecutorial discretion is not ``central'' to
the functioning of the executive branch, the Chief Counsel's
appearance as amicus curiae may not interfere with the
executive's ``take care'' responsibilities. The fact that the
Chief Counsel would appear simply as amicus curiae is further
evidence that the executive's power is not likely to be waived
as being usurped.\19\ Therefore, opposition to the Chief
Counsel's statutorily authorized appearance as amicus curiae
will likely fail.
\18\ The Chief Counsel of the SBA, unlike an independent counsel,
is appointed by the President, by and with the advice and consent of
the Senate, and is subject to removal at will. 15 U.S.C.A. Sec. 634a.
\19\ An amicus curiae is not a litigant to a suit, but an
interested party who wishes to convey its views upon the court.
---------------------------------------------------------------------------
Furthermore, the proposition that executive powers are
solely vested in the President has been discounted well before
this century. In Kendall v. United States ex rel. Stokes, the
Court was quick to point out that Congress may impose upon an
officer statutory duties that ``grow out of and are subject to
the control of the law, and not to the direction of the
president.'' \20\ The Court also rejected the proposition that
``every officer in every branch of [the executive] department
is under the exclusive direction of the president. * * * Such
a principle, we apprehend, is not, and certainly cannot be
claimed by the president.'' \21\ In a more recent case, the
Tenth Circuit stated that ``[i]t is a matter of fundamental law
that the Constitution assigns to Congress the power to
designate duties of particular officers. The President is not
obligated under the Constitution to exercise absolute control
over our government executives. The President is not required
to execute laws; he is required to take care they be executed
faithfully.'' \22\
\20\ Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.)
524, 610 (1838).
\21\ Id.
\22\ SEC v. Blinder & Co., 855 F.2d 677 (10th Cir. 1988). cert.
denied 109 S. Ct. 1172 (1989).
---------------------------------------------------------------------------
Upon forming the SBA, Congress authorized the Chief Counsel
to appear as amicus curiae in any court action to review an
agency rule.\23\ In pursuance of his ``take care''
responsibilities, the President may not limit the Chief
Counsel's authority to appear as amicus curiae. Instead, the
President is required to take care that the Chief Counsel's
right to appear as amicus curiae be faithfully executed.
\23\ Supra at n.1.
---------------------------------------------------------------------------
Another issue which need be briefly mentioned is the
argument that the SBA's appearance as amicus curiae may create
litigation between SBA and DOJ which would be held to be
nonjusticiable because one executive agency suing another would
not present the requisite constitutional ``case or
controversy.'' \24\ This issue is moot in the present situation
since the SBA would not be a party to the action, but instead
would appear as a friend of the court (amicus curiae). Thus,
where a party (X) challenges an agency rule, DOJ represents the
United States and SBA appears as an amicus curiae, the
litigation are X and DOJ, and SBA and DOJ. In other words, the
only parties in litigation are X and DOJ. Even if SBA and DOJ
were opposing parties, an article III challenge would likely be
unsuccessful.\25\ There are innumerable instances in which
Congress has specifically authorized litigation between
executive agencies, none of which have been challenged on
constitutional grounds.\26\
\24\ Supra at n.4.
\25\ See United States v. Nixon, 418 U.S. 683 (1974).
\26\ See, e.g., Mail Order Association of America v. United States
Postal Service, 986 F.2d 509 (D.C. Cir. 1993); and Rosenberg, supra n.5
at pp. 662-688.
---------------------------------------------------------------------------
In sum, it is not likely to be held that Congress may not
vest in the Chief Counsel the authority to appear as an amicus
curiae should a court action to review an agency rule arise.
John Contrubis, Legislative Attorney.
APPENDIX E
---------- --
--------
[Letter from the Honorable Leon E. Panetta, White House Chief of Staff,
to Senator Malcolm Wallop, dated October 7, 1994]
The White House,
Washington, DC, October 7, 1994.
Hon. Malcolm Wallop,
U.S. Senate,
Washington, DC.
Dear Senator Wallop: Your particular question about the
Administration's position on judicial review of actions taken
under the Regulatory Flexibility Act has come to my attention.
As you have discussed with Senator Bumpers, the
Administration supports such judicial review of ``Reg Flex.''
The Administration supports a strong judicial review
provision that will permit small business to challenge agencies
and receive meaningful redress when they choose to ignore the
protections afforded by this important statute.
In fact, the National Performance Review endorsed this
policy to ensure that the Act's intent is achieved and the
regulatory and paperwork burdens on small business, states, and
other entities are reduced.
Ironically, Phil Lader, our nominee for Administrator of
the Small Business Administration (whose nomination was voted
favorably today by a 22-0 vote of the Senate Small Business
Committee) has been a principal champion of judicial review of
``Reg Flex.'' In his capacity as Chairman of the Policy
Committee on the National Performance Review, Phil vigorously
advocated this position. I know that, if confirmed, as SBA
Administrator, he would join us in continued efforts to win
Congressional support for such judicial review.
Sincerely,
Leon E. Panetta,
Chief of Staff.
APPENDIX F
----------
[Letter from the Honorable Philip Lader, Administrator-Designate, Small
Business Administration, to Senator Malcolm Wallop, dated October 8,
1994]
October 8, 1994.
Hon. Malcolm Wallop,
U.S. Senate,
Washington, DC.
Dear Senator Wallop: The Administration supports strong
judicial review of agency determinations under the Regulatory
Flexibility Act that will permit small businesses to challenge
agencies and receive strong remedies when agencies do not
comply with the protections afforded by this important statute.
In fact, the National Performance Review publicly endorsed
this policy to ensure that the Act's intent is achieved and the
regulatory and paperwork burdens on small businesses, states,
and other entities are reduced.
As Chairman of the Policy Committee of the National
Performance Review, under Vice President Gore's leadership I
vigorously advocated this position. I have continued to
champion this policy within the Administration.
If confirmed as Administrator of the U.S. Small Business
Administration, I will join the Congress and the small business
community in continued efforts to pass legislation for such
judicial review.
Thank you for your leadership on this important issue to
small business.
Sincerely,
Philip Lader,
Administrator-Designate,
Small Business Administration.
APPENDIX G
----------
[Letter from President Clinton to Senator Malcolm Wallop, dated October
8, 1994]
The White House
Washington, DC, October 8, 1994.
Hon. Malcolm Wallop,
U.S. Senate,
Washington, DC.
Dear Senator Wallop: My Administration strongly supports
judicial review of agency determinations under the Regulatory
Flexibility Act, and I appreciate your leadership over the past
years in fighting for this reform on behalf of small business
owners.
Although legislation establishing such review was not
enacted during the 103rd Congress, my Administration remains
committed to securing this very important reform. Toward that
end, my Administration will continue to work with the Congress
and the small business community next year for enactment of a
strong judicial review that will permit small businesses to
challenge agencies and receive meaningful redress when agencies
ignore the protections afforded by this statute.
As you know, the National Performance Review endorsed this
policy to ensure that the Act's intent is achieved and the
regulatory and paperwork burdens on small business, states, and
other entities are reduced.
Again, thank you for your continued leadership in this
area.
Sincerely,
Bill Clinton.