[House Report 112-289]
[From the U.S. Government Publishing Office]


112th Congress                                            Rept. 112-289
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
            REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2011

                                _______
                                

 November 16, 2011.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

       Mr. Smith of Texas, from the Committee on the Judiciary, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 527]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 527) to amend chapter 6 of title 5, United States 
Code (commonly known as the Regulatory Flexibility Act), to 
ensure complete analysis of potential impacts on small entities 
of rules, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     8
Background and Need for the Legislation..........................     8
Hearings.........................................................    15
Committee Consideration..........................................    16
Committee Votes..................................................    16
Committee Oversight Findings.....................................    20
New Budget Authority and Tax Expenditures........................    21
Congressional Budget Office Cost Estimate........................    21
Performance Goals and Objectives.................................    24
Advisory on Earmarks.............................................    24
Section-by-Section Analysis......................................    24
Changes in Existing Law Made by the Bill, as Reported............    29
Dissenting Views.................................................    43

                             The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Regulatory 
Flexibility Improvements 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. Clarification and expansion of rules covered by the Regulatory 
Flexibility Act.
Sec. 3. Requirements providing for more detailed analyses.
Sec. 4. Repeal of waiver and delay authority; additional powers of the 
Chief Counsel for Advocacy.
Sec. 5. Procedures for gathering comments.
Sec. 6. Periodic review of rules.
Sec. 7. Judicial review of compliance with the requirements of the 
Regulatory Flexibility Act available after publication of the final 
rule.
Sec. 8. Jurisdiction of court of appeals over rules implementing the 
Regulatory Flexibility Act.
Sec. 9. Clerical amendments.

SEC. 2. CLARIFICATION AND EXPANSION OF RULES COVERED BY THE REGULATORY 
                    FLEXIBILITY ACT.

  (a) In General.--Paragraph (2) of section 601 of title 5, United 
States Code, is amended to read as follows:
          ``(2) Rule.--The term `rule' has the meaning given such term 
        in section 551(4) of this title, except that such term does not 
        include a rule of particular (and not general) applicability 
        relating to rates, wages, corporate or financial structures or 
        reorganizations thereof, prices, facilities, appliances, 
        services, or allowances therefor or to valuations, costs or 
        accounting, or practices relating to such rates, wages, 
        structures, prices, appliances, services, or allowances.''.
  (b) Inclusion of Rules With Indirect Effects.--Section 601 of title 
5, United States Code, is amended by adding at the end the following 
new paragraph:
          ``(9) Economic impact.--The term `economic impact' means, 
        with respect to a proposed or final rule--
                  ``(A) any direct economic effect on small entities of 
                such rule; and
                  ``(B) any indirect economic effect on small entities 
                which is reasonably foreseeable and results from such 
                rule (without regard to whether small entities will be 
                directly regulated by the rule).''.
  (c) Inclusion of Rules With Beneficial Effects.--
          (1) Initial regulatory flexibility analysis.--Subsection (c) 
        of section 603 of title 5, United States Code, is amended by 
        striking the first sentence and inserting ``Each initial 
        regulatory flexibility analysis shall also contain a detailed 
        description of alternatives to the proposed rule which minimize 
        any adverse significant economic impact or maximize any 
        beneficial significant economic impact on small entities.''.
          (2) Final regulatory flexibility analysis.--The first 
        paragraph (6) of section 604(a) of title 5, United States Code, 
        is amended by striking ``minimize the significant economic 
        impact'' and inserting ``minimize the adverse significant 
        economic impact or maximize the beneficial significant economic 
        impact''.
  (d) Inclusion of Rules Affecting Tribal Organizations.--Paragraph (5) 
of section 601 of title 5, United States Code, is amended by inserting 
``and tribal organizations (as defined in section 4(l) of the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 450b(l))),'' 
after ``special districts,''.
  (e) Inclusion of Land Management Plans and Formal Rulemaking.--
          (1) Initial regulatory flexibility analysis.--Subsection (a) 
        of section 603 of title 5, United States Code, is amended in 
        the first sentence--
                  (A) by striking ``or'' after ``proposed rule,''; and
                  (B) by inserting ``or publishes a revision or 
                amendment to a land management plan,'' after ``United 
                States,''.
          (2) Final regulatory flexibility analysis.--Subsection (a) of 
        section 604 of title 5, United States Code, is amended in the 
        first sentence--
                  (A) by striking ``or'' after ``proposed 
                rulemaking,''; and
                  (B) by inserting ``or adopts a revision or amendment 
                to a land management plan,'' after ``section 603(a),''.
          (3) Land management plan defined.--Section 601 of title 5, 
        United States Code, is amended by adding at the end the 
        following new paragraph:
          ``(10) Land management plan.--
                  ``(A) In general.--The term `land management plan' 
                means--
                          ``(i) any plan developed by the Secretary of 
                        Agriculture under section 6 of the Forest and 
                        Rangeland Renewable Resources Planning Act of 
                        1974 (16 U.S.C. 1604); and
                          ``(ii) any plan developed by the Secretary of 
                        Interior under section 202 of the Federal Land 
                        Policy and Management Act of 1976 (43 U.S.C. 
                        1712).
                  ``(B) Revision.--The term `revision' means any change 
                to a land management plan which--
                          ``(i) in the case of a plan described in 
                        subparagraph (A)(i), is made under section 
                        6(f)(5) of the Forest and Rangeland Renewable 
                        Resources Planning Act of 1974 (16 U.S.C. 
                        1604(f)(5)); or
                          ``(ii) in the case of a plan described in 
                        subparagraph (A)(ii), is made under section 
                        1610.5-6 of title 43, Code of Federal 
                        Regulations (or any successor regulation).
                  ``(C) Amendment.--The term `amendment' means any 
                change to a land management plan which--
                          ``(i) in the case of a plan described in 
                        subparagraph (A)(i), is made under section 
                        6(f)(4) of the Forest and Rangeland Renewable 
                        Resources Planning Act of 1974 (16 U.S.C. 
                        1604(f)(4)) and with respect to which the 
                        Secretary of Agriculture prepares a statement 
                        described in section 102(2)(C) of the National 
                        Environmental Policy Act of 1969 (42 U.S.C. 
                        4332(2)(C)); or
                          ``(ii) in the case of a plan described in 
                        subparagraph (A)(ii), is made under section 
                        1610.5-5 of title 43, Code of Federal 
                        Regulations (or any successor regulation) and 
                        with respect to which the Secretary of the 
                        Interior prepares a statement described in 
                        section 102(2)(C) of the National Environmental 
                        Policy Act of 1969 (42 U.S.C. 4332(2)(C)).''.
  (f) Inclusion of Certain Interpretive Rules Involving the Internal 
Revenue Laws.--
          (1) In general.--Subsection (a) of section 603 of title 5, 
        United States Code, is amended by striking the period at the 
        end and inserting ``or a recordkeeping requirement, and without 
        regard to whether such requirement is imposed by statute or 
        regulation.''.
          (2) Collection of information.--Paragraph (7) of section 601 
        of title 5, United States Code, is amended to read as follows:
          ``(7) Collection of information.--The term `collection of 
        information' has the meaning given such term in section 3502(3) 
        of title 44.''.
          (3) Recordkeeping requirement.--Paragraph (8) of section 601 
        of title 5, United States Code, is amended to read as follows:
          ``(8) Recordkeeping requirement.--The term `recordkeeping 
        requirement' has the meaning given such term in section 
        3502(13) of title 44.''.
  (g) Definition of Small Organization.--Paragraph (4) of section 601 
of title 5, United States Code, is amended to read as follows:
          ``(4) Small organization.--
                  ``(A) In general.--The term `small organization' 
                means any not-for-profit enterprise which, as of the 
                issuance of the notice of proposed rulemaking--
                          ``(i) in the case of an enterprise which is 
                        described by a classification code of the North 
                        American Industrial Classification System, does 
                        not exceed the size standard established by the 
                        Administrator of the Small Business 
                        Administration pursuant to section 3 of the 
                        Small Business Act (15 U.S.C. 632) for small 
                        business concerns described by such 
                        classification code; and
                          ``(ii) in the case of any other enterprise, 
                        has a net worth that does not exceed $7,000,000 
                        and has not more than 500 employees.
                  ``(B) Local labor organizations.--In the case of any 
                local labor organization, subparagraph (A) shall be 
                applied without regard to any national or international 
                organization of which such local labor organization is 
                a part.
                  ``(C) Agency definitions.--Subparagraphs (A) and (B) 
                shall not apply to the extent that an agency, after 
                consultation with the Office of Advocacy of the Small 
                Business Administration and after opportunity for 
                public comment, establishes one or more definitions for 
                such term which are appropriate to the activities of 
                the agency and publishes such definitions in the 
                Federal Register.''.

SEC. 3. REQUIREMENTS PROVIDING FOR MORE DETAILED ANALYSES.

  (a) Initial Regulatory Flexibility Analysis.--Subsection (b) of 
section 603 of title 5, United States Code, is amended to read as 
follows:
  ``(b) Each initial regulatory flexibility analysis required under 
this section shall contain a detailed statement--
          ``(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;
          ``(6) estimating the additional cumulative economic impact of 
        the proposed rule on small entities beyond that already imposed 
        on the class of small entities by the agency or why such an 
        estimate is not available; and
          ``(7) describing any disproportionate economic impact on 
        small entities or a specific class of small entities.''.
  (b) Final Regulatory Flexibility Analysis.--
          (1) In general.--Section 604(a) of title 5, United States 
        Code, is amended--
                  (A) in paragraph (4), by striking ``an explanation'' 
                and inserting ``a detailed explanation'';
                  (B) in each of paragraphs (4), (5), and the first 
                paragraph (6), by inserting ``detailed'' before 
                ``description''; and
                  (C) by adding at the end the following:
          ``(7) describing any disproportionate economic impact on 
        small entities or a specific class of small entities.''.
          (2) Inclusion of response to comments on certification of 
        proposed rule.--Paragraph (2) of section 604(a) of title 5, 
        United States Code, is amended by inserting ``(or certification 
        of the proposed rule under section 605(b))'' after ``initial 
        regulatory flexibility analysis''.
          (3) Publication of analysis on website.--Subsection (b) of 
        section 604 of title 5, United States Code, is amended to read 
        as follows:
  ``(b) The agency shall make copies of the final regulatory 
flexibility analysis available to the public, including placement of 
the entire analysis on the agency's website, and shall publish in the 
Federal Register the final regulatory flexibility analysis, or a 
summary thereof which includes the telephone number, mailing address, 
and link to the website where the complete analysis may be obtained.''.
  (c) Cross-References to Other Analyses.--Subsection (a) of section 
605 of title 5, United States Code, is amended to read as follows:
  ``(a) A Federal agency shall be treated as satisfying any requirement 
regarding the content of an agenda or regulatory flexibility analysis 
under section 602, 603, or 604, if such agency provides in such agenda 
or analysis a cross-reference to the specific portion of another agenda 
or analysis which is required by any other law and which satisfies such 
requirement.''.
  (d) Certifications.--Subsection (b) of section 605 of title 5, United 
States Code, is amended--
          (1) by inserting ``detailed'' before ``statement'' the first 
        place it appears; and
          (2) by inserting ``and legal'' after ``factual''.
  (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 and alternatives to the proposed 
        or final rule; or
          ``(2) a more general descriptive statement and a detailed 
        statement explaining why quantification is not practicable or 
        reliable.''.

SEC. 4. REPEAL OF WAIVER AND DELAY AUTHORITY; ADDITIONAL POWERS OF THE 
                    CHIEF COUNSEL FOR ADVOCACY.

  (a) In General.--Section 608 is amended to read as follows:

``Sec. 608. Additional powers of Chief Counsel for Advocacy

  ``(a)(1) Not later than 270 days after the date of the enactment of 
the Regulatory Flexibility Improvements Act of 2011, the Chief Counsel 
for Advocacy of the Small Business Administration shall, after 
opportunity for notice and comment under section 553, issue rules 
governing agency compliance with this chapter. The Chief Counsel may 
modify or amend such rules after notice and comment under section 553. 
This chapter (other than this subsection) shall not apply with respect 
to the issuance, modification, and amendment of rules under this 
paragraph.
  ``(2) An agency shall not issue rules which supplement the rules 
issued under subsection (a) unless such agency has first consulted with 
the Chief Counsel for Advocacy to ensure that such supplemental rules 
comply with this chapter and the rules issued under paragraph (1).
  ``(b) Notwithstanding any other law, the Chief Counsel for Advocacy 
of the Small Business Administration may intervene in any agency 
adjudication (unless such agency is authorized to impose a fine or 
penalty under such adjudication), and may inform the agency of the 
impact that any decision on the record may have on small entities. The 
Chief Counsel shall not initiate an appeal with respect to any 
adjudication in which the Chief Counsel intervenes under this 
subsection.
  ``(c) The Chief Counsel for Advocacy may file comments in response to 
any agency notice requesting comment, regardless of whether the agency 
is required to file a general notice of proposed rulemaking under 
section 553.''.
  (b) Conforming Amendments.--
          (1) Section 611(a)(1) of such title is amended by striking 
        ``608(b),''.
          (2) Section 611(a)(2) of such title is amended by striking 
        ``608(b),''.
          (3) Section 611(a)(3) of such title is amended--
                  (A) by striking subparagraph (B); and
                  (B) by striking ``(3)(A) A small entity'' and 
                inserting the following:
  ``(3) A small entity''.

SEC. 5. PROCEDURES FOR GATHERING COMMENTS.

  Section 609 of title 5, United States Code, is amended by striking 
subsection (b) and all that follows through the end of the section and 
inserting the following:
  ``(b)(1) Prior to publication of any proposed rule described in 
subsection (e), an agency making such rule shall notify the Chief 
Counsel for Advocacy of the Small Business Administration and provide 
the Chief Counsel with--
          ``(A) all materials prepared or utilized by the agency in 
        making the proposed rule, including the draft of the proposed 
        rule; and
          ``(B) information on the potential adverse and beneficial 
        economic impacts of the proposed rule on small entities and the 
        type of small entities that might be affected.
  ``(2) An agency shall not be required under paragraph (1) to provide 
the exact language of any draft if the rule--
          ``(A) relates to the internal revenue laws of the United 
        States; or
          ``(B) is proposed by an independent regulatory agency (as 
        defined in section 3502(5) of title 44).
  ``(c) Not later than 15 days after the receipt of such materials and 
information under subsection (b), the Chief Counsel for Advocacy of the 
Small Business Administration shall--
          ``(1) identify small entities or representatives of small 
        entities or a combination of both for the purpose of obtaining 
        advice, input, and recommendations from those persons about the 
        potential economic impacts of the proposed rule and the 
        compliance of the agency with section 603; and
          ``(2) convene a review panel consisting of an employee from 
        the Office of Advocacy of the Small Business Administration, an 
        employee from the agency making the rule, and in the case of an 
        agency other than an independent regulatory agency (as defined 
        in section 3502(5) of title 44), an employee from the Office of 
        Information and Regulatory Affairs of the Office of Management 
        and Budget to review the materials and information provided to 
        the Chief Counsel under subsection (b).
  ``(d)(1) Not later than 60 days after the review panel described in 
subsection (c)(2) is convened, the Chief Counsel for Advocacy of the 
Small Business Administration shall, after consultation with the 
members of such panel, submit a report to the agency and, in the case 
of an agency other than an independent regulatory agency (as defined in 
section 3502(5) of title 44), the Office of Information and Regulatory 
Affairs of the Office of Management and Budget.
  ``(2) Such report shall include an assessment of the economic impact 
of the proposed rule on small entities and a discussion of any 
alternatives that will minimize adverse significant economic impacts or 
maximize beneficial significant economic impacts on small entities.
  ``(3) Such report shall become part of the rulemaking record. In the 
publication of the proposed rule, the agency shall explain what 
actions, if any, the agency took in response to such report.
  ``(e) A proposed rule is described by this subsection if the 
Administrator of the Office of Information and Regulatory Affairs of 
the Office of Management and Budget, the head of the agency (or the 
delegatee of the head of the agency), or an independent regulatory 
agency determines that the proposed rule is likely to result in--
          ``(1) an annual effect on the economy of $100,000,000 or 
        more;
          ``(2) a major increase in costs or prices for consumers, 
        individual industries, Federal, State, or local governments, 
        tribal organizations, or geographic regions;
          ``(3) significant adverse effects on competition, employment, 
        investment, productivity, innovation, or on the ability of 
        United States-based enterprises to compete with foreign-based 
        enterprises in domestic and export markets; or
          ``(4) a significant economic impact on a substantial number 
        of small entities.
  ``(f) Upon application by the agency, the Chief Counsel for Advocacy 
of the Small Business Administration may waive the requirements of 
subsections (b) through (e) if the Chief Counsel determines that 
compliance with the requirements of such subsections are impracticable, 
unnecessary, or contrary to the public interest.''.

SEC. 6. PERIODIC REVIEW OF RULES.

  Section 610 of title 5, United States Code, is amended to read as 
follows:

``Sec. 610. Periodic review of rules

  ``(a) Not later than 180 days after the enactment of the Regulatory 
Flexibility Improvements Act of 2011, each agency shall publish in the 
Federal Register and place on its website a plan for the periodic 
review of rules issued by the agency which the head of the agency 
determines have a significant economic impact on a substantial number 
of small entities. Such determination shall be made without regard to 
whether the agency performed an analysis under section 604. The purpose 
of the review shall be to determine whether such rules should be 
continued without change, or should be amended or rescinded, consistent 
with the stated objectives of applicable statutes, to minimize any 
adverse significant economic impacts or maximize any beneficial 
significant economic impacts on a substantial number of small entities. 
Such plan may be amended by the agency at any time by publishing the 
revision in the Federal Register and subsequently placing the amended 
plan on the agency's website.
  ``(b) The plan shall provide for the review of all such agency rules 
existing on the date of the enactment of the Regulatory Flexibility 
Improvements Act of 2011 within 10 years of the date of publication of 
the plan in the Federal Register and for review of rules adopted after 
the date of enactment of the Regulatory Flexibility Improvements Act of 
2011 within 10 years after the publication of the final rule in the 
Federal Register. If the head of the agency determines that completion 
of the review of existing rules is not feasible by the established 
date, the head of the agency shall so certify in a statement published 
in the Federal Register and may extend the review for not longer than 2 
years after publication of notice of extension in the Federal Register. 
Such certification and notice shall be sent to the Chief Counsel for 
Advocacy of the Small Business Administration and the Congress.
  ``(c) Each agency shall annually submit a report regarding the 
results of its review pursuant to such plan to the Congress, the Chief 
Counsel for Advocacy of the Small Business Administration, and, in the 
case of agencies other than independent regulatory agencies (as defined 
in section 3502(5) of title 44) to the Administrator of the Office of 
Information and Regulatory Affairs of the Office of Management and 
Budget. Such report shall include the identification of any rule with 
respect to which the head of the agency made a determination described 
in paragraph (5) or (6) of subsection (d) and a detailed explanation of 
the reasons for such determination.
  ``(d) In reviewing a rule pursuant to subsections (a) through (c), 
the agency shall amend or rescind the rule to minimize any adverse 
significant economic impact on a substantial number of small entities 
or disproportionate economic impact on a specific class of small 
entities, or maximize any beneficial significant economic impact of the 
rule on a substantial number of small entities to the greatest extent 
possible, consistent with the stated objectives of applicable statutes. 
In amending or rescinding the rule, the agency shall consider the 
following factors:
          ``(1) The continued need for the rule.
          ``(2) The nature of complaints received by the agency from 
        small entities concerning the rule.
          ``(3) Comments by the Regulatory Enforcement Ombudsman and 
        the Chief Counsel for Advocacy 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, territorial, 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 calculations cannot be made and reports that 
        determination in the annual report required under subsection 
        (c).
          ``(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.
  ``(e) The agency shall publish in the Federal Register and on its 
website a list of rules to be reviewed pursuant to such plan. Such 
publication shall include a brief description of the rule, the reason 
why the agency determined that it has a significant economic impact on 
a substantial number of small entities (without regard to whether it 
had prepared a final regulatory flexibility analysis for the rule), and 
request comments from the public, the Chief Counsel for Advocacy of the 
Small Business Administration, and the Regulatory Enforcement Ombudsman 
concerning the enforcement of the rule.''.

SEC. 7. JUDICIAL REVIEW OF COMPLIANCE WITH THE REQUIREMENTS OF THE 
                    REGULATORY FLEXIBILITY ACT AVAILABLE AFTER 
                    PUBLICATION OF THE FINAL RULE.

  (a) In General.--Paragraph (1) of section 611(a) of title 5, United 
States Code, is amended by striking ``final agency action'' and 
inserting ``such rule''.
  (b) Jurisdiction.--Paragraph (2) of such section is amended by 
inserting ``(or which would have such jurisdiction if publication of 
the final rule constituted final agency action)'' after ``provision of 
law,''.
  (c) Time for Bringing Action.--Paragraph (3) of such section is 
amended--
          (1) by striking ``final agency action'' and inserting 
        ``publication of the final rule''; and
          (2) by inserting ``, in the case of a rule for which the date 
        of final agency action is the same date as the publication of 
        the final rule,'' after ``except that''.
  (d) Intervention by Chief Counsel for Advocacy.--Subsection (b) of 
section 612 of title 5, United States Code, is amended by inserting 
before the first period ``or agency compliance with section 601, 603, 
604, 605(b), 609, or 610''.

SEC. 8. JURISDICTION OF COURT OF APPEALS OVER RULES IMPLEMENTING THE 
                    REGULATORY FLEXIBILITY ACT.

  (a) In General.--Section 2342 of title 28, United States Code, is 
amended--
          (1) in paragraph (6), by striking ``and'' at the end;
          (2) in paragraph (7), by striking the period at the end and 
        inserting ``; and''; and
          (3) by inserting after paragpraph (7) the following new 
        paragraph:
          ``(8) all final rules under section 608(a) of title 5.''.
  (b) Conforming Amendments.--Paragraph (3) of section 2341 of title 
28, United States Code, is amended--
          (1) in subparagraph (D), by striking ``and'' at the end;
          (2) in subparagraph (E), by striking the period at the end 
        and inserting ``; and''; and
          (3) by adding at the end the following new subparagraph:
                  ``(F) the Office of Advocacy of the Small Business 
                Administration, when the final rule is under section 
                608(a) of title 5.''.
  (c) Authorization To Intervene and Comment on Agency Compliance With 
Administrative Procedure.--Subsection (b) of section 612 of title 5, 
United States Code, is amended by inserting ``chapter 5, and chapter 
7,'' after ``this chapter,''.

SEC. 9. CLERICAL AMENDMENTS.

  (a) Section 601 of title 5, United States Code, is amended--
          (1) in paragraph (1)--
                  (A) by striking the semicolon at the end and 
                inserting a period; and
                  (B) by striking ``(1) the term'' and inserting the 
                following:
          ``(1) Agency.--The term'';
          (2) in paragraph (3)--
                  (A) by striking the semicolon at the end and 
                inserting a period; and
                  (B) by striking ``(3) the term'' and inserting the 
                following:
          ``(3) Small business.--The term'';
          (3) in paragraph (5)--
                  (A) by striking the semicolon at the end and 
                inserting a period; and
                  (B) by striking ``(5) the term'' and inserting the 
                following:
          ``(5) Small governmental jurisdiction.--The term''; and
          (4) in paragraph (6)--
                  (A) by striking ``; and'' and inserting a period; and
                  (B) by striking ``(6) the term'' and inserting the 
                following:
          ``(6) Small entity.--The term''.
  (b) The heading of section 605 of title 5, United States Code, is 
amended to read as follows:

``Sec. 605. Incorporations by reference and certifications''.

  (c) 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 new item:

``605. Incorporations by reference and certifications.'';
          (2) by striking the item relating to section 607 and 
        inserting the following new item:

``607. Quantification requirements.'';
        and
          (3) by striking the item relating to section 608 and 
        inserting the following:

``608. Additional powers of Chief Counsel for Advocacy.''.
  (d) Chapter 6 of title 5, United States Code, is amended as follows:
          (1) In section 603, by striking subsection (d).
          (2) In section 604(a) by striking the second paragraph (6).

                          Purpose and Summary

    On February 8, 2011, Chairman Lamar Smith introduced H.R. 
527, the Regulatory Flexibility Improvements Act of 2011 (``the 
Act'' or ``the Bill''). The Bill reforms the Regulatory 
Flexibility Act of 1980 (``RFA'') and the Small Business 
Regulatory Enforcement Fairness Act of 1996 (``SBREFA''). The 
RFA and SBREFA were passed to require agencies to account for 
the impacts of proposed regulations on ``small entities''--and 
on small businesses in particular--and to tailor final 
regulations to minimize the impact on small business.
    The need for reform is apparent from the increasing number 
and scope of regulations issued by Federal regulatory agencies; 
the disproportionate burden these regulations place on small 
businesses; and, the failure of agencies heretofore to comply 
fully with the RFA and SBREFA.\1\ The Act updates the RFA and 
SBREFA to close loopholes and to reduce the disproportionate 
burden that over-regulation places on small businesses, thereby 
enhancing job creation and hastening economic recovery.
---------------------------------------------------------------------------
    \1\See, e.g., U.S. General Accounting Office, Regulatory 
Flexibility Act: Agencies' Interpretations of Review Requirements Vary, 
GAO/GGD-99-55 (Apr. 2, 1999); U.S. General Accounting Office, Federal 
Rulemaking: Agencies Often Published Final Actions Without Proposed 
Rules, GAO/GGD-98-126 (Aug. 31, 1998); U.S. General Accounting Office, 
Regulatory Flexibility Act: Status of Agencies' Compliance, GAO/T-GGD-
95-112 (Mar. 8, 1995).
---------------------------------------------------------------------------

                Background and Need for the Legislation

Genesis and Early History of the RFA
    During the 1970's, Congress enacted numerous regulatory 
statutes that dramatically increased the regulatory burden on 
businesses--and especially on small businesses. Regulatory 
requirements stifled innovation, limited small business growth, 
and contributed to the general economic malaise that permeated 
the latter half of the decade. Between 1970 and 1980, the 
Federal Register more than quadrupled from a 20,000-page 
publication for the arcana of the Federal Government to a 
nearly 90,000-page blueprint for regulating many aspects of 
modern American life.\2\
---------------------------------------------------------------------------
    \2\See Figure 2: Federal Register Pages: 1940-2010, in Susan E. 
Dudley, ``Prospects for Regulatory Reform in 2011,'' Engage 11:1 (June 
2011).
---------------------------------------------------------------------------
    In a series of hearings during the late 1970's, Congress 
began to focus on the ever-growing burden Federal regulation 
imposed upon small businesses. Small businesses reiterated two 
major themes: (1) they were under-represented in Federal 
regulatory proceedings; and (2) Federal agency efforts to 
impose a ``one-size-fits-all'' body of regulation imposed 
disproportionate burdens on small businesses.\3\ These findings 
were supported and reinforced during the 1980 White House 
Conference on Small Business.
---------------------------------------------------------------------------
    \3\The finding on disproportionate impact was substantiated by an 
Office of Advocacy study in 1984; this was re-affirmed by a 2010 study. 
See Nicole V. Crain & W. Mark Crain, ``The Impact of Regulatory Costs 
on Small Firms,'' (Sept. 2010), available at http://www.sba.gov/sites/
default/files/rs371tot.pdf (last accessed July 25, 2011).
---------------------------------------------------------------------------
    To address these concerns, Congress enacted the RFA as an 
additional component of a significantly broader mechanism to 
control agency decision-making: The Administrative Procedure 
Act of 1946 (``APA''). In general, the RFA requires Federal 
agencies, when proposed and final rules are published in the 
Federal Register, to prepare a regulatory flexibility analysis 
that describes the rule's impact on small entities, including 
on small businesses.\4\ These analytical requirements are not 
triggered, however, if the head of the agency issuing the rule 
certifies, under Section 605(b) of the RFA that the rule would 
not have a ``significant economic impact on a substantial 
number of small entities,''\5\ an undefined term of art in the 
RFA. The lack of a uniform definition for this term is a 
shortcoming that the U.S. Government Accountability Office 
(``GAO,'' formerly the U.S. General Accounting Office) 
repeatedly has found contributes to inconsistent compliance 
across Federal agencies.\6\ Further, although the Congressional 
Research Service advises that the annual total number of 
certifications by all agencies is not known (or even knowable), 
the GAO has found that in the 3-year period after SBREFA was 
enacted the certification rate at four EPA offices increased 
from 78% to 96%.\7\ Thus, the EPA avoided complying with the 
RFA and SBREFA by certifying more of its rules pursuant to 
Section 605(b). Finally, agencies only need to assess a new 
regulation's direct impact on small entities; courts have held 
that indirect impacts are irrelevant under the RFA.\8\
---------------------------------------------------------------------------
    \4\See 5 U.S.C. Sec. Sec. 603, 604.
    \5\See id. Sec. 605(b).
    \6\See, e.g., U.S. General Accounting Office, Regulatory 
Flexibility Act: Key Terms Still Need to Be Clarified, GAO-01-669T 
(Apr. 24, 2001), at 2 (``Over the past decade, we have recommended 
several times that Congress provide greater clarity with regard to 
these terms, but to date Congress has not acted on our 
recommendations.'').
    \7\U.S. General Accounting Office, Regulatory Flexibility Act: 
Implementation in EPA Program Offices and Proposed Lead Rule, GAO-GGD-
00-193 (Sept. 2000), at 16.
    \8\See, e.g., Mid-Tex Elec. Co-op., Inc. v. FERC, 773 F.2d 327, 343 
(D.C. Cir. 1985) (``the legislative history [of the RFA] . . . also 
gives rise to an inference that Congress did not intend to require that 
every agency consider every indirect effect that any regulation might 
have on small businesses in any stratum of the national economy.'').
---------------------------------------------------------------------------
    The RFA also requires each Federal agency to publish a 
``regulatory flexibility agenda'' in the Federal Register twice 
a year,\9\ similar to the Unified Agenda of Federal Regulatory 
and Deregulatory Actions required by Executive Order 12866. The 
Small Business Administration (``SBA'') Chief Counsel for 
Advocacy is required to monitor and report on agency 
compliance, and is authorized to appear as amicus curiae ``in 
any action brought in a court of the United States to review a 
rule'' and to present his or her views regarding the agency's 
compliance with the RFA and the rule's impact on small 
entities.\10\ The RFA also requires agencies to conduct 
decennial rule reviews to identify whether the impact of rules 
on small entities can be mitigated further.\11\ The extent of 
this requirement remains unclear, however, as indicated by 
inconsistent agency practice.\12\
---------------------------------------------------------------------------
    \9\See 5 U.S.C. Sec. 602.
    \10\See id. Sec. 612(a), (b).
    \11\See id. Sec. 610.
    \12\For example, the EPA only reviews rules that it previously 
concluded had a significant economic impact on a substantial number of 
small entities when the final rules were promulgated. The Department of 
Transportation, on the other hand, interprets this section to require a 
review of all of its rules. See U.S. General Accounting Office, 
Regulatory Flexibility Act: Agencies' Interpretations of Review 
Requirements Vary, GAO/GGD-99-55 (Apr. 2, 1999), at 24.
---------------------------------------------------------------------------
    From the time of enactment until 1996, agency compliance 
with the RFA was at best sporadic. Agencies faced little threat 
from non-compliance since judicial review of regulatory 
flexibility analyses was very limited, and an agency's 
certification decision could not be challenged in court.\13\ 
Without the possibility of court orders, agencies only had to 
comply when it would benefit their rulemakings or when they 
could be cajoled by the Chief Counsel for Advocacy or the 
Office of Management and Budget's (``OMB'') Office of 
Information and Regulatory Affairs (``OIRA''). Both the 
Committee on the Judiciary and the Committee on Small Business 
held hearings at which witnesses confirmed the systemic failure 
by many agencies to comply with the RFA.\14\
---------------------------------------------------------------------------
    \13\See, e.g., Thompson v. Clark, 741 F.2d 401, 405 (D.C. Cir. 
1984); Colo. State Banking Bd. v. Resolution Trust Corp., 926 F.2d 931, 
948 (10th Cir. 1991); Lehigh Valley Farmers v. Block, 640 F. Supp. 
1497, 1520 (E.D. Pa. 1986), aff'd on other grounds, 829 F.2d 409 (3d 
Cir. 1987).
    \14\See, e.g., Strengthening the Regulatory Flexibility Act: 
Hearing on H.R. 9 Before H. Comm. on Small Business, 104th Cong., 
Serial No. 104-5, at 45-46 (Jan. 23, 1995) (statement of James P. 
Carty, Vice President, Small Manufacturers, National Association of 
Manufacturers) (identifying instances where the EPA and Pension Benefit 
Guaranty Corporation failed to comply with the RFA); Job Creation and 
Wage Enhancement Act of 1995: Hearing on H.R. 9 Before the Subcomm. on 
Comm. and Admin. Law of the H. Comm. on the Judiciary, 104th Cong., 
Serial No. 104-3, at 76 (Feb. 3 & 6, 1995) (statement of Benny L. 
Thayer, President, National Association for the Self-Employed) (noting 
that confusion under the RFA ``has led to an apparent belief on the 
part of some agencies that compliance with the RFA is entirely 
voluntary'').
---------------------------------------------------------------------------
Enactment of SBREFA and Subsequent History
    Congress enacted SBREFA in response to this collective 
disregard by Federal agencies, adding several important 
features to the RFA: compliance guides, advocacy review panels, 
and judicial review. Agencies must develop and publish 
compliance guides for all rules for which the agency is 
required to develop a final regulatory flexibility analysis. 
The compliance guide explains the steps a small entity must 
take to comply with new regulations.\15\ SBREFA also authorized 
direct judicial review of agency compliance with the RFA, 
including challenges to agency certifications that a rule would 
not have a ``significant economic impact on a substantial 
number of small entities.''\16\ SBREFA also subjected certain 
Internal Revenue Service interpretative regulations to the 
RFA.\17\
---------------------------------------------------------------------------
    \15\See ``Contract with America Advancement Act,'' 104 P.L. 141, 
Sec. 212 (Mar. 29, 1996); see also 5 U.S.C. Sec. 601 note.
    \16\5 U.S.C. Sec. 610(a).
    \17\The RFA only requires agency compliance if the regulation is 
required to be issued pursuant to notice and comment pursuant to 
Section 553 of the APA or some other statute. Interpretative 
regulations are exempt from the notice and comment requirements. 5 
U.S.C. Sec. 553(b)(A).
---------------------------------------------------------------------------
    Congress recognized that, by the time a proposed rule is 
published for notice and comment, the agency has substantial 
intellectual capital invested in the proposed rule and is 
unlikely to change the core of its proposal during the notice 
and comment period.\18\ Thus, under SBREFA, Congress required 
the Environmental Protection Agency (``EPA'') and the 
Occupational Safety and Health Administration (``OSHA'')--two 
of the agencies that most affect small entities--to obtain 
input from small entities before publishing a proposed rule 
that would have a significant economic impact on a substantial 
number of small entities.\19\ The Dodd-Frank Wall Street Reform 
and Consumer Protection Act further required the new Consumer 
Financial Protection Bureau to convene advocacy review 
panels.\20\ Before publishing an initial regulatory flexibility 
analysis, the agency is required to notify the SBA's Chief 
Counsel for Advocacy and provide information on the draft 
rule's potential impacts on small entities. The Chief Counsel 
for Advocacy then assembles a panel consisting of 
representatives from OIRA, the agency promulgating the rule and 
the SBA. The panel gathers input from small entities' 
representatives and issues a report within 60 days, which 
becomes part of the record.
---------------------------------------------------------------------------
    \18\In fact, some would argue that the notice and comment period 
was not a critical component of rational rulemaking but the keystone of 
rationale rulemaking in which the agency uses the public comment 
process to find further support for the foregone conclusion of its 
proposed regulation.
    \19\See 5 U.S.C. Sec. 609.
    \20\See P.L. 111-203, Sec. 1100G(a) (July 21, 2010).
---------------------------------------------------------------------------
    Congressional intent notwithstanding, SBREFA's changes have 
had only a modest effect on agency compliance.\21\ According to 
the GAO, the most significant stumbling block to improved 
compliance is the lack of definitions in the RFA and SBREFA for 
the terms ``significant economic impact'' and ``substantial 
number of small entities.'' GAO also noted that the threshold 
determination of whether a rule will have a significant 
economic impact on a substantial number of small entities is 
critical to compliance with other RFA requirements, including 
periodic review of rules under Section 610 and the receipt of 
small-entity input under SBREFA prior to the publication of 
proposed rules by EPA and OSHA.
---------------------------------------------------------------------------
    \21\See, e.g., Sarah E. Shive, If You've Always Done It That Way, 
It's Probably Wrong: How the Regulatory Flexibility Act Has Failed To 
Change Agency Behavior, and How Congress Can Fix It, 1 Entrepren. Bus. 
L.J. 153, 164 (2006) (``[W]hile one Department of Labor official noted 
that the judicial review permitted by the SBREFA would likely result in 
a `significant impact,' judges have rarely ruled in favor of small 
businesses, granting substantial deference to agencies in all but the 
most egregious of cases.''); Christopher M. Grengs, Making the Unseen 
Seen: Issues and Options in Small Business Regulatory Reform, 85 Minn. 
L. Rev. 1957, 1973 (June 2001) (``Some observers expressed high 
optimism about SBREFA's prospects for holding Federal agencies more 
accountable for their treatment of small businesses. Although this 
optimism was perhaps not entirely deserved, SBREFA has spurred moderate 
progress in improving the regulatory treatment of small businesses. In 
particular, since SBREFA's enactment in 1996, judicial review of 
Federal agency action under SBREFA has proved to be a promising 
lynchpin for remedying irrational or glaringly mistaken agency 
action.''); Jeffrey J. Polich, Judicial Review and the Small Business 
Regulatory Enforcement Fairness Act: An Early Examination of When and 
Where Judges Are Using Their Newly Granted Power Over Federal 
Regulatory Agencies, 41 Wm. & Mary L. Rev. 1425, 1426, 1461 (Apr. 2000) 
(``A review of existing case law demonstrates that small entities have 
prevailed using SBREFA in cases in which there was a gross violation of 
Federal rulemaking procedures by an agency, but failed when using 
SBREFA in cases in which the agency made some effort to comply with 
those requirements. . . . The SBREFA amendments succeed in refining the 
requirements of the RFA and, in particular, the judicial review 
provision grants small businesses a weapon to insure that Federal 
agencies comply with the RFA. Judicial deference to agency decisions, 
however, limits the power of judicial review. In the end, true 
regulatory relief depends upon the agencies' own commitment to fairness 
and balance for the small businesses they regulate.'') (Emphasis 
added.)
---------------------------------------------------------------------------
    President George W. Bush also recognized the problems with 
RFA and SBREFA compliance in a 2002 speech:

        Every agency is required to analyze the impact of new 
        regulations on small businesses before issuing them. 
        That is an important law. The problem is it is often 
        being ignored. The law is on the books; the regulators 
        do not care that the law is on the books. From this day 
        forward they will care that the law is on the books. . 
        . . We want to enforce the law.\22\
---------------------------------------------------------------------------
    \22\``President Unveils Small Business Plan at Women's 
Entrepreneurship Summit,'' (Mar. 19, 2002), available at http://
georgewbush-whitehouse.archives.gov/news/releases/2002/03/20020319-
2.html (last accessed July 25, 2011).

Subsequently, the President issued Executive Order 13272,\23\ 
which required agencies to adopt standards for complying with 
the RFA, to make those standards known to the public and to 
give the Office of Advocacy the opportunity to comment on 
proposed rules prior to publication in the Federal Register. 
The Executive Order, however, did not address the RFA's 
loopholes or prevent agencies from adopting strained 
interpretations to avoid doing the required analysis.
---------------------------------------------------------------------------
    \23\67 Fed. Reg. 53,462 (Aug. 16, 2002).
---------------------------------------------------------------------------
    Courts similarly have not been the antidotes that the 
authors of SBREFA contemplated. For example, courts have not 
given agency compliance with the RFA the same searching 
scrutiny that they have given to compliance with the National 
Environmental Policy Act (``NEPA''),\24\ even though it was 
expected that judicial review would have the same impact on 
agency decision-making that it had on agency compliance with 
NEPA.\25\ Agencies still have broad latitude to interpret and 
implement the RFA.
---------------------------------------------------------------------------
    \24\Compare Associated Fisheries v. Daley, 127 F.3d 104, 112-18 
(1st Cir. 1997) (holding SBREFA does not mandate courts to conduct a 
substantive judicial review of final decisions), and U.S. Cellular 
Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001) (``Regulatory 
Flexibility Act, which requires Federal agencies to assess the impact 
of their regulations on small businesses, is purely procedural in 
nature, requiring nothing more than filing of statement demonstrating 
good-faith effort to carry out its mandate.'') with Dubois v. U.S. 
Dep't of Agric., 102 F.3d 1273, 1285 (1st Cir. 1996) (reviewing an 
agency's compliance to NEPA requires a ```thorough, probing, indepth 
[sic] review' and a `searching and careful' inquiry into the record'').
    \25\Regulatory Flexibility Amendments Act of 1995 on S. 350: 
Hearing Before S. Comm. on Small Business, 104th Cong., Serial No. 104-
103, at 24 (Mar. 8, 1995) (statement of Jere W. Glover, Chief Counsel 
for Advocacy, U.S. Small Business Administration) (``A more substantial 
and ongoing threat, potential judicial review of agency compliance with 
the RFA, would certainly lead to scrupulous compliance with the RFA, 
just as similar attentiveness is paid to the impact statement 
requirements of the [NEPA].'').
---------------------------------------------------------------------------
    Testimony at hearings held by the Committee on Small 
Business during the 106th, 107th and 108th Congresses support 
additional reform,\26\ revealing that considerable confusion 
still reigns among agencies and that agencies still find ways 
to avoid complying with the RFA, even after the enactment of 
SBREFA.\27\ In the 109th Congress, H.R. 682 sought to achieve 
most of the reforms contained in H.R. 527. This Committee's 
Subcommittee on Commercial and Administrative Law, and the 
Committee on Small Business, both held hearings on H.R. 
682.\28\
---------------------------------------------------------------------------
    \26\IRA Compliance with the Regulatory Flexibility Act: Hearing 
Before the H. Comm. on Small Business, 108th Cong., 108-10 (May 1, 
2003); Improving the Regulatory Flexibility Act: H.R. 2345: Hearing 
Before the H. Comm. on Small Business, 108th Cong., Serial No. 108-62 
(May 5, 2004); Can Improved Compliance with the Regulatory Flexibility 
Act Resuscitate Small Healthcare Providers?: Hearing Before the H. 
Comm. on Small Business, 107th Cong., Serial No. 107-53 (Apr. 10, 
2002); Regulatory Reform Initiatives and Their Impact on Small 
Business: Hearing Before the H. Comm. on Small Business, 106th Cong., 
Serial No. 106-60 (June 7, 2000).
    \27\See, e.g., IRS Compliance with the Regulatory Flexibility Act: 
Hearing Before the H. Comm. on Small Business, 108th Cong., Serial No. 
108-10, at 38 (May 1, 2003) (statement of Juanita Millender-McDonald, 
Member, House Comm. on Small Business) (``The IRS has generally avoided 
the requirements of SBREFA, even though the law was, in part, 
specifically written to address IRS compliance with the RFA.''); Can 
Improved Compliance with the Regulatory Flexibility Act Resuscitate 
Small Healthcare Providers?: Hearing Before the H. Comm. on Small 
Business, 107th Cong., Serial No. 107-53, at 15 (Apr. 10, 2002) 
(statement of Zachary Evans, President, National Association of 
Portable X-Ray Providers) (``CMS refuses to consider the impact upon 
our industry of their rulemaking, consult with us during the rulemaking 
process, or in any way evaluate industry costs prior to setting our 
reimbursement rates.''); Regulatory Reform Initiatives and Their Impact 
on Small Business: Hearing Before the Comm. on Small Business, 106th 
Cong., Serial No. 106-60, at 40 (June 7, 2000) (statement of Duncan 
Thomas, President, National Association of Convenience Stores) 
(explaining that SBREFA ``leads often to confusion, inadvertent 
noncompliance and considerable expense'').
    \28\The RFA at 25: Needed Improvements for Small Business 
Regulatory Relief: Hearing on H.R. 682 Before the H. Comm. on Small 
Business, 109th Cong., Serial No. 109-5 (Mar. 16, 2005); Regulatory 
Flexibility Improvements Act: Hearing on H.R. 682 Before the H. Comm. 
on the Judiciary, 109th Cong., Serial No. 109-134 (July 30, 2006).
---------------------------------------------------------------------------
The Obama Administration and the Continuing Need for Reform
    On January 18, 2011, President Obama issued a Presidential 
Memorandum to agency heads entitled ``Regulatory Flexibility, 
Small Business, and Job Creation,'' stating that his 
``Administration is firmly committed to eliminating excessive 
and unjustified burdens on small businesses, and to ensuring 
that regulations are designed with careful consideration of 
their effects, including their cumulative effects, on small 
businesses.''\29\ The President also directed agency heads to 
publish explanations of their decisions not to provide 
regulatory flexibility for small businesses, if those decisions 
were not based on legal limitations. The President's 
memorandum, however, added nothing meaningful to existing 
agency requirements, and it explicitly stated that the 
memorandum did not create any legal rights. Even if it had, any 
of its provisions could be revoked at any time, as it is merely 
an executive memorandum, not a law.
---------------------------------------------------------------------------
    \29\``Presidential Memoranda--Regulatory Flexibility, Small 
Business, and Job Creation,'' (Jan. 18, 2011), available at http://
www.whitehouse.gov/the-press-office/2011/01/18/presidential-memoranda-
regulatory-flexibility-small-business-and-job-cre (last accessed July 
25, 2011).
---------------------------------------------------------------------------
    Meanwhile, the need for additional RFA reform has grown. In 
2010, for example, Federal agencies promulgated 3,312 final 
rules, while Congress passed and the President signed into law 
only 385 statutes. Recently, the SBA reported that Federal 
rulemaking now imposes a cumulative burden of $1.75 trillion on 
our economy--a figure that equals 14 percent of national 
income.\30\ That burden, moreover, falls disproportionately on 
small businesses:
---------------------------------------------------------------------------
    \30\Crain, supra note 3, at 6, 48.

        While all citizens and businesses pay some portion of 
        these costs, the distribution of the burden of 
        regulations is quite uneven. The portion of regulatory 
        costs that falls initially on businesses was $8,086 per 
        employee in 2008. Small businesses, defined as firms 
        employing fewer than 20 employees, bear the largest 
        burden of Federal regulations. As of 2008, small 
        businesses face an annual regulatory cost of $10,585 
        per employee, which is 36 percent higher than the 
        regulatory cost facing large firms (defined as firms 
        with 500 or more employees).\31\
---------------------------------------------------------------------------
    \31\See id. at iv.

Another recent study found that ``[e]ach million-dollar 
increase in the regulatory budget costs the economy 420 private 
sector jobs.''\32\
---------------------------------------------------------------------------
    \32\T. Randolph Beard et al., Regulatory Expenditures, Economic 
Growth and Jobs: An Empirical Study, Phoenix Center Policy Bulletin No. 
28 (Apr. 2011), at 5, available at http://www.phoenix-center.org/
PolicyBulletin/PCPB28Final.pdf (last accessed July 25, 2011).
---------------------------------------------------------------------------
    The future threat of excessive Federal regulation--such as 
under the waves of regulation intended to implement the Patient 
Protection and Affordable Care Act\33\ and the Dodd-Frank Wall 
Street Reform and Consumer Protection Act\34\--have created 
immense regulatory burdens and uncertainty for the economy, 
chilling job creation, investment and economic growth and 
suppressing America's economic freedom and standing among the 
world's economies.\35\ These effects are particularly 
burdensome on small businesses--and since start-up firms are 
the source of net job creation in the U.S. economy, it is only 
logical that the impact of these effects on small businesses 
contributes substantially to the economy's inability to create 
sufficient levels of new jobs.\36\ OIRA currently has under its 
review 22 economically significant rules, which translates into 
a minimum potential economic impact of $2.2 billion.\37\ In the 
past 12 months, since the Dodd-Frank financial legislation was 
enacted on July 21, 2010, OIRA has reviewed 125 economically 
significant rules.\38\
---------------------------------------------------------------------------
    \33\111 P.L. 148 (Mar. 23, 2010).
    \34\111 P.L. 203 (July 21, 2010).
    \35\See, e.g., Editors, The Uncertainty Principle, Wall Street 
Journal (July 14, 2010), available at http://online.wsj.com/article/
SB10001424052748704288204575363162664835780.html?
KEYWORDS=rulemakings (last accessed July 25, 2011); Chamber of 
Commerce, Jobs for America: an Open Letter to the President of the 
United States, the United States Congress, and the American People 
(July 14, 2010) (stating, e.g., that, substantially due to regulatory 
uncertainty, American corporations are sitting on well over $1 trillion 
that they could otherwise invest); Terry Miller & Kim R. Holmes, 
``Mostly Free''--The Startling Decline of America's 
Economic Freedom and What to Do About It, Heritage Foundation (July 14, 
2010), available 
at http://www.heritage.org/Research/Reports/2010/07/Mostly-Free-The-
Startling-Decline-of-Americas-Economic-Freedom-and-What-to-Do-About-It 
(summary) (last accessed July 25, 2011); http://
thf_media.s3.amazonaws.com/2010/pdf/sr0082.pdf (full report) (last 
accessed July 25, 2011); Terry Miller, The U.S. loses Ground on 
Economic Freedom, Wall Street Journal (Jan. 13, 2011), available at 
http://online.wsj.com/article/SB1000142405274870377970457607419321499
9486.html?utm_source=Newsletter&utm_medium= Email&utm_campaign = 
Heritage%2BHot
sheet (last accessed July 25, 2011); Heritage Foundation and Wall 
Street Journal, 2011 Index of Economic Freedom: Executive Highlights 
(Jan. 2011) at 6 (placing America as ninth in economic freedom among 
countries surveyed and recording a further decline in U.S. economic 
freedom).
    \36\Tim Kane, The Importance of Start-ups in Job Creation and Job 
Destruction, Ewing Marion Kaufmann Foundation (July 2010) at 6, 
available at http://www.kauffman.org/uploadedFiles/
firm_formation_importance_of_startups.pdf (last accessed July 25, 
2011).
    \37\Office of Information and Regulatory Affairs, List of 
Regulatory Actions under Review, Reginfo.gov, available at http://
www.reginfo.gov/public/jsp/EO/eoDashboard.jsp (last accessed July 22, 
2011).
    \38\See id.
---------------------------------------------------------------------------
    Agencies continue to ignore their obligations under the 
RFA. For example, EPA has found carbon dioxide to be a threat 
to public health and welfare\39\ and initiated an inexorable 
series of additional regulatory actions that, under existing 
environmental laws, will impose large adverse impacts on small 
businesses. EPA, however, refused to comply with the RFA--even 
when the Chief Counsel for Advocacy pointed out to the EPA 
Administrator (and, by copy, to OIRA) that EPA had failed to 
convene advocacy review panels before imposing its rules, 
failed to develop and evaluate regulatory alternatives to 
minimize its actions' impacts on small businesses, and 
inappropriately certified that its actions will not affect 
small businesses.\40\ When Chairman Smith and Small Business 
Committee Chairman Sam Graves brought to OIRA's attention their 
concerns over these violations, the potential for EPA's 
regulations to impose particularly heavy burdens on small 
businesses, and the need for OIRA to intervene and assure RFA 
compliance, OIRA's response was simply to refer the matter to 
EPA.\41\
---------------------------------------------------------------------------
    \39\``Endangerment and Cause or Contribute Findings for Greenhouse 
Gases under Section 202(a) of the Clean Air Act,'' EPA Docket No. EPA-
HQ-OAR-2009-0171, RIN 2060-ZA14 (Dec. 7, 2009).
    \40\Letter from Susan Walthall, Acting Chief Counsel, Office of the 
Chief Counsel for Advocacy, Small Business Administration to the 
Honorable Lisa Jackson, EPA Administrator, (Dec. 23, 2009) (letter on 
file).
    \41\Letter from Reps. Lamar Smith and Sam Graves to Cass R. 
Sunstein, OIRA Administrator (Jan. 21, 2010); response letter from 
Administrator Sunstein to Reps. Smith and Graves (Apr. 29, 2010) 
(letters on file).
---------------------------------------------------------------------------
    Similarly, on January 25, 2011, OSHA announced that it had 
temporarily withdrawn from OMB review a proposed rule on 
injury-related employer recordkeeping. The stated reason for 
the withdrawal was to ``seek greater input from small 
businesses on the impact of the proposal.''\42\ Yet, rather 
than commit itself to full RFA/SBREFA compliance, OSHA promised 
to hold a meeting ``to engage and listen to small businesses 
about the agency's proposal'' and to ``conduct a stakeholder 
meeting with other members of the public if requested.''\43\ 
This response falls well short of convening the advocacy review 
panel that OSHA is required by law to hold.\44\
---------------------------------------------------------------------------
    \42\U.S. Dep't of Labor, Office of Public Affairs, News Release: US 
Labor Department's OSHA temporarily withdraws proposed column for work-
related musculoskeletal disorders, reaches out to small businesses 
(Jan. 25, 2011).
    \43\Id.
    \44\See 5 U.S.C. Sec. 609.
---------------------------------------------------------------------------

                                Hearings

    On February 10, 2011, the Subcommittee on Courts, 
Commercial and Administrative Law held a legislative hearing on 
H.R. 527.\45\ Testimony was received from Rich Gimmell, 
President of Atlas Machine & Supply, Inc.; Thomas M. Sullivan, 
Counsel for Nelson, Mullins, Riley, Scarborough LLP; J. Robert 
Shull, Program Officer of Worker Right's for the Public Welfare 
Foundation; and, Karen R. Harned, Executive Director of the 
National Federation of Independent Business (NFIB).
---------------------------------------------------------------------------
    \45\See ``Regulatory Flexibility Improvements Act of 2011''--
Unleashing Small Businesses to Create Jobs: Hearing on H.R. 527 Before 
the Subcomm. on Courts, Commercial and Administrative Law of the H. 
Comm. on the Judiciary, 112th Cong., Serial No. 112-16 (Feb. 10, 2011).
---------------------------------------------------------------------------
    Mr. Gimmell, also representing the National Association of 
Manufacturers, noted that the current recession had to that 
point resulted in a loss of 2.2 million jobs in the 
manufacturing sector.\46\ Mr. Gimmell called for ``more 
detailed statements in the RFA process and requirements to 
identify redundant, overlapping, or conflicting 
regulations.''\47\ Incorporating this sort of ``lean thinking'' 
into the regulatory process would change the current wasteful 
policy practices of most agencies and, in turn, improve the 
economy by allowing businesses to create jobs and expand.\48\
---------------------------------------------------------------------------
    \46\Id. at 56.
    \47\Id.
    \48\Id.
---------------------------------------------------------------------------
    Mr. Sullivan testified, ``One size fits all Federal 
mandates do not work when applied to small business; second, 
small business face higher costs per employee to comply with 
Federal regulation than their larger competitors, and, third, 
small business is critically important to the American 
economy.''\49\ According to Mr. Sullivan, H.R. 527 would enable 
the Office of Advocacy to ensure that agencies properly 
consider how their regulations impact small businesses, and 
would provide clarity to courts on judicial review.\50\
---------------------------------------------------------------------------
    \49\Id. at 65.
    \50\Id. at 66.
---------------------------------------------------------------------------
    According to Ms. Harned, ``[o]verzealous regulation is a 
perennial cause for concern for small business owners and is 
particularly burdensome in times like these when the Nation's 
economy remains sluggish.''\51\ Including a $1.75 trillion cost 
of regulations on the economy every year, Ms. Harned stated 
that ``small businesses face an annual regulatory cost of 
$10,585 per employee which is 36 percent more than the 
regulatory cost facing businesses with more than 500 
employees.''\52\ In opposition to H.R. 527, Mr. Shull alleged 
the bill would ``paralyze the regulatory agencies we need to 
protect the public and keep them from getting things done to 
protect the public.''\53\
---------------------------------------------------------------------------
    \51\Id. at 85.
    \52\Id.
    \53\Id. at 77.
---------------------------------------------------------------------------
    The Committee on Small Business also held a legislative 
hearing on H.R. 527.\54\ Testimony was received from Bill 
Squires, Senior Vice President and General Counsel for 
Blackfoot Telecommunications Group; David Frulla of Kelley Drye 
& Warren LLP; Craig Fabian, Vice President of Regulatory 
Affairs and Assistant General Counsel at the Aeronautical 
Repair Station Association; and, Rich D. Draper, CEO of the Ice 
Cream Club, Inc.
---------------------------------------------------------------------------
    \54\See Reducing Federal Agency Overreach: Modernizing the 
Regulatory Flexibility Act Before the H. Comm. on Small Business, 112th 
Cong., Serial No. 112-007 (Mar. 30, 2011).
---------------------------------------------------------------------------

                        Committee Consideration

    On July 7, 2011, the Committee met in open session and 
ordered the bill H.R. 527 favorably reported with an amendment, 
by a rollcall vote of 18 to 8, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 527.
    1. Amendment #7, offered by Mr. Cohen. The amendment 
requires that a member of the public or a representative of a 
public interest organization who is able to provide relevant 
information about the economic and non-economic impact of a 
proposed rule be added as a member of the review panels 
contemplated in H.R. 527. Failed by a rollcall of 9-13.

                                                 ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................
Ms. Chu.........................................................                              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................              9              13
----------------------------------------------------------------------------------------------------------------

    2. Amendment #6, offered by Ms. Jackson Lee. The amendment 
requires a GAO study of the potential impact of implementation 
on agencies' resources, the rulemaking process and the 
rulemaking in the event of an emergency. Failed by a rollcall 
of 11-15.

                                                 ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             11              15
----------------------------------------------------------------------------------------------------------------

    3. Amendment #9, offered by Mr. Johnson. The amendment 
creates an exception for any rulemaking to carry out the FDA 
Food Safety Modernization Act. Failed by a rollcall of 10-16.

                                                 ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             10              16
----------------------------------------------------------------------------------------------------------------

    4. Amendment #10, offered by Mr. Johnson. The amendment 
creates an exception for any rulemaking to carry out the 
Patient Protection and Affordable Care Act. Failed by a 
rollcall of 10-15.

                                                 ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             10              15
----------------------------------------------------------------------------------------------------------------

    5. Amendment #12, offered by Mr. Nadler. The amendment 
requires an agency to consider the direct and indirect benefits 
of proposed rules. Failed by a rollcall of 8-17.

                                                 ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................              8              17
----------------------------------------------------------------------------------------------------------------

    6. Reporting H.R. 527 as amended. The bill ensures complete 
analysis of potential impacts on small entities of rules, and 
for other purposes. Reported by a rollcall of 18-8.

                                                 ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................              X
Mr. Chabot......................................................              X
Mr. Issa........................................................              X
Mr. Pence.......................................................
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................              X
Mr. Griffin.....................................................              X
Mr. Marino......................................................              X
Mr. Gowdy.......................................................              X
Mr. Ross........................................................              X
Ms. Adams.......................................................              X
Mr. Quayle......................................................              X
Mr. Conyers, Jr., Ranking Member................................                              X
Mr. Berman......................................................
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................
Ms. Lofgren.....................................................                              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................                              X
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................                              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
                                                                 -----------------------------------------------
    Total.......................................................             18               8
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 527, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 24, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 527, the 
``Regulatory Flexibility Improvements Act of 2011.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 527--Regulatory Flexibility Improvements Act of 2011.

                                SUMMARY

    H.R. 527 would amend the Regulatory Flexibility Act (RFA). 
The bill would expand the number of rules covered by the RFA 
and require agencies to perform additional analysis of 
regulations that affect small businesses. Finally, the 
legislation would provide new authorities to the Small Business 
Administration's (SBA's) Office of Advocacy to intervene in 
agency rulemaking.
    CBO estimates that implementing H.R. 527 would cost $80 
million over the 2012-2016 period to expand the RFA, assuming 
appropriation of the necessary funds. Enacting the bill could 
affect direct spending by agencies not funded through annual 
appropriations; therefore, pay-as-you-go procedures apply. CBO 
estimates, however, that any net increase in spending by those 
agencies would not be significant. Enacting H.R. 527 would not 
affect revenues.
    H.R. 527 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of State, local, or tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 527 is shown in the 
following table. The costs of this legislation fall within 
budget functions 370 (commerce and housing credit), 800 
(general government), and all budget functions that include 
agencies that issue regulations affecting small businesses.

                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                            2012     2013     2014     2015     2016   2012-2016
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level                                  10       15       20       20       20        85

Estimated Outlays                                               8       14       18       20       20        80
----------------------------------------------------------------------------------------------------------------

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the legislation will be 
enacted near the end of fiscal year 2011, that the necessary 
amounts will be appropriated near the start of each fiscal 
year, and that spending will follow historical patterns for 
similar activities.
    CBO is unaware of any comprehensive information on the 
current costs of spending for regulatory activities 
governmentwide. However, according to the Congressional 
Research Service, Federal agencies issue 3,000 to 4,000 final 
rules each year. Most are promulgated by the Departments of 
Transportation, Homeland Security, and Commerce, and the 
Environmental Protection Agency (EPA). Agencies that issue the 
most major rules (those with an estimated economic impact on 
the economy of more than $100 million per year) include the 
Department of Health and Human Services, the U.S. Department of 
Agriculture, and EPA.
    H.R. 527 would broaden the definition of a ``rule'' for 
rulemaking purposes to include agency guidance documents and 
policy statements. The bill also would expand the scope of the 
regulatory analysis for proposed and final rules to examine any 
indirect economic effects on small businesses and to provide a 
more detailed analysis of the possible economic consequences of 
the rule to small businesses. The legislation equates indirect 
economic effects with any impact that is reasonably 
foreseeable. The legislation also would require agencies to 
publicly report on the cumulative economic impact of any new 
regulations on the costs of existing regulations to small 
businesses. Implementing H.R. 527 would increase the number of 
agencies that need to prepare regulatory analysis and also 
would increase the role of the SBA's Office of Advocacy and the 
Office of Information and Regulatory Affairs (OIRA) in the 
rulemaking process. Finally, the legislation would require more 
Federal agencies to use panels of experts to evaluate 
regulations and to prepare reports on the economic impact of 
proposed regulations on small business.
    Information from OIRA, SBA, and some Federal regulatory 
agencies indicates that the new requirements under the bill 
would increase the cost to issue a few hundred of the thousands 
of Federal regulations issued annually. Based on that 
information, CBO estimates that requiring the additional 
analysis would increase administrative costs to regulatory 
agencies, the SBA's Office of Advocacy, and OIRA by $20 million 
annually, subject to the availability of appropriated funds. We 
expect that it would take about three years to reach that level 
of effort.
    Under current law and executive orders, all agencies must 
prepare a regulatory analysis prior to issuing a final rule. 
That analysis includes the purpose of the regulatory action, 
the number and types of small businesses to which the rule will 
apply, the projected reporting and compliance costs of the 
rule, and any significant alternatives that would accomplish 
the objectives of the rule while minimizing the economic impact 
on small business and other activities.
    An agency can waive the requirement for a part of the 
regulatory analysis if it can certify that the proposed rule 
will not have a significant economic impact on a substantial 
number of small businesses. If a proposed rule is expected to 
have a significant economic impact, the agency is required to 
notify the Small Business Administration's Office of Advocacy 
and provide it with an opportunity to comment on the rule. In 
addition, EPA, the Occupational Safety and Health 
Administration, and the Consumer Financial Protection Bureau 
are required to convene panels of experts to evaluate any 
proposed regulation that may have a significant economic 
impact. Those panels consist of Federal employees from the 
rulemaking agency, the Office of Management and Budget, and SBA 
who work to ensure that small business viewpoints are 
considered prior to the issuance of a final rule. Moreover, 
under current law, agencies are required to periodically review 
the economic impact of existing rules that may have an impact 
on small businesses.

                      PAY-AS-YOU-GO CONSIDERATIONS

    The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. Enacting H.R. 527 could affect 
direct spending by agencies not funded through annual 
appropriations; therefore, pay-as-you-go procedures apply. CBO 
estimates, however, that any net increase in spending by those 
agencies would not be significant.

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    H.R. 527 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
State, local, or tribal governments.

                         PREVIOUS CBO ESTIMATE

    On August 24, 2011, CBO transmitted a cost estimate for 
H.R. 527 as ordered reported by the House Committee on Small 
Business on July 13, 2011. The pieces of legislation are 
similar, and the CBO cost estimates are the same.

                         ESTIMATE PREPARED BY:

Federal Spending: Matthew Pickford
Impact on State, Local, and Tribal Governments: Melissa Merrell
Impact on the Private Sector: Paige Piper/Bach

                         ESTIMATE APPROVED BY:

Peter H. Fontaine
Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
527 will update the RFA and SBREFA to close loopholes and 
reduce the disproportionate burden that over-regulation places 
on small businesses thereby enhancing job creation and 
hastening America's economic recovery.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 527 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

Section 1. Short title; table of contents.
    This Act may be cited as the ``Regulatory Flexibility 
Improvements Act of 2011.''
Section 2. Clarification and Expansion of Rules Covered by the 
        Regulatory Flexibility Act.
    Section 2(a) expands the RFA and SBREFA to apply to all 
rules within the meaning of 5 U.S.C. Sec. 551(4), except for 
certain rules of particular applicability. The RFA currently 
defines a ``rule'' as one that is issued pursuant to the notice 
and comment rulemaking provisions of Section 553(b) of the APA. 
The Committee believes this definition is unjustifiably narrow; 
the definition of a ``rule'' under the RFA should be the same 
as under the APA.
    Section 2(b) clarifies the term ``economic impact.'' The 
RFA requires agencies to prepare a regulatory flexibility 
analysis if the agency determines that the rule will have a 
``significant economic impact on a substantial number of small 
entities.'' But this term is not defined in current law, and 
courts have held that agencies do not need to consider indirect 
economic impacts on small entities. The Committee doubts that 
Congress originally intended the regulatory flexibility 
analysis to be so limited.\55\ Indirect effects are no less 
burdensome on small entities than direct effects. Moreover, 
agencies already measure their regulations' indirect effects 
under the National Environmental Policy Act,\56\ upon which the 
RFA is modeled, and when performing the cost-benefit analysis 
required by Executive Order 12,866. Section 2(b) thus clarifies 
that the term ``economic impact'' covers both direct and 
indirect effects that are reasonably foreseeable.
---------------------------------------------------------------------------
    \55\See 126 Cong. Rec. S21458 (daily ed. Aug. 6, 1980) (section-by-
section analysis of S. 299, the Regulatory Flexibility Act of 1980: 
``Agencies should not give a narrow reading to what constitutes a 
`significant economic impact' for purposes of this section or other 
sections in which the term is used.'').
    \56\See 40 C.F.R. Sec. 1508.8.
---------------------------------------------------------------------------
    Section 2(c) clarifies that an agency must perform a 
regulatory flexibility analysis when a proposed rule's effects 
are significant but beneficial. Agencies interpret the current 
law to require a regulatory flexibility analysis only when a 
proposed rule has significant costs to small entities. 
Requiring a regulatory flexibility analysis when a proposed 
rule has significant benefits will encourage agencies to pick 
the most beneficial alternative.
    Section 2(d) adds tribal organizations to the list of 
``small entities'' within the RFA's purview. The same 
considerations that necessitate requiring agencies to perform 
regulatory flexibility analyses when small governmental bodies 
are concerned apply with equal force to tribal organizations.
    Section 2(e) clarifies that the RFA applies to land 
management plans developed by the U.S. Forest Service and the 
Bureau of Land Management. This clarification reflects the 
GAO's view of current law,\57\ although the Forest Service and 
the BLM disagree. Because these agencies already collect 
economic data for NEPA reports, this clarification will not be 
burdensome.
---------------------------------------------------------------------------
    \57\U.S. General Accounting Office, Congressional Review Act: 
Application to the Tongass National Forest Land and Resource Plan, T-
OGC-97-54 (1997), at 2.
---------------------------------------------------------------------------
    Section 2(f)(1) clarifies that the IRS must comply fully 
with the RFA. The IRS has previously concluded that it is not 
required to follow the RFA when issuing an ``interpretative'' 
rule outside of the notice-and-comment process. Adopted in 
1996, SBREFA required the IRS to comply with the RFA when an 
interpretative rule imposes a collection-of-information 
requirement on a small entity. The IRS misinterprets this 
statute to apply only when the taxpayer is required to complete 
a brand new, never-used form. Section 2(f)(1) makes clear that 
the IRS is required to comply with the RFA whenever the IRS 
intends to codify a regulation in the Code of Federal 
Regulations and the regulation (or statute that the regulation 
is interpreting) imposes a collection-of-information 
requirement. Moreover, the ensuing regulatory flexibility 
analysis should not be limited to the cost associated with the 
``collection of information;'' rather, the ``collection of 
information'' is a trigger for a full analysis of the rule's 
economic effects. Section 2(f)(2)-(3) establishes that the 
terms ``collection of information'' and ``recordkeeping 
requirement'' have the same meaning under the RFA as under the 
Paperwork Reduction Act.
    Section 2(g) adopts the definition of ``small 
organization'' under the RFA that the Equal Access to Justice 
Act uses, focusing on the resources available to the 
organization, i.e., its net worth and number of employees. The 
current definition of ``small organization'' is unwieldy. Like 
the RFA, one purpose of the EAJA is to protect small entities 
from overzealous regulatory enforcement. Thus, both statutes 
should define ``small organization'' in the same way. Section 
2(g) extends the RFA's protections to local labor organizations 
as well.
Section 3. Requirements for Providing More Detailed Analyses.
    The NEPA, which was the model when Congress adopted the RFA 
in 1980, requires agencies to develop a ``detailed statement'' 
regarding the environmental impact of a proposed rule. Courts 
have interpreted the NEPA to require agencies to take a ``hard 
look'' at environmental impacts.\58\ The RFA, however, only 
requires agencies to develop a ``statement'' regarding the 
impact of a new regulation on small entities.
---------------------------------------------------------------------------
    \58\See, e.g., Robertson v. Methow Valley Citizens Council, 490 
U.S. 332, 350 (1989) (citing Kleppe v. Sierra Club, 427 U.S. 390, 410 
n.21 (1976)).
---------------------------------------------------------------------------
    After finding that agencies were not fulfilling their 
responsibilities under the RFA, Congress amended it in 1996 to 
allow for judicial review, to create the same compliance 
incentives that exist under the NEPA. Unfortunately, courts 
reviewing agency compliance with SBREFA and RFA have not 
applied the same level of searching scrutiny as they have given 
to compliance with the NEPA. Consequently, agencies are 
performing the bare minimum of analysis to satisfy judicial 
review, without focusing on the most important issue: how to 
minimize the negative economic impact of regulations on small 
entities.
    Section 3 is intended to increase agency scrutiny directly, 
by amending the statute, rather than indirectly, as was 
attempted in SBREFA by adding a judicial review component. 
Thus, Section 3(a) amends Section 603 by requiring the initial 
regulatory flexibility analysis (``IFRA'') to contain a 
``detailed statement'' rather than merely a ``statement;'' by 
striking the term ``succinct'' from Section 603(b)(2); by 
striking the term ``where feasible'' from Section 603(b)(3); 
and, by striking the phrase ``to the extent practicable'' from 
Section 603(b)(5). Agencies exploit these terms to avoid 
following the law's clear purpose. Section 3(a) also adds a new 
paragraph (6) to Section 603(b), requiring agencies to consider 
the cumulative economic impact of the proposed rule in light of 
existing rules. Finally, recognizing that a rule could affect 
some small entities more than others, Section 3(a)(7) requires 
agencies to describe any disproportionate economic impact on a 
specific class of small entities.
    Regarding the final regulatory flexibility analysis 
(``FRFA''), Section 3(b)(1) amends Section 604 to require the 
``description'' and ``explanation'' required by Section 
604(b)(4), (5) and (6) to be ``detailed.'' This new requirement 
comports with the ``detailed statement'' required of agencies 
by NEPA. The bill also requires agencies to describe in the 
FRFA any disproportionate economic impact on a class of small 
entities. Section 3(b)(2) closes an oversight in the RFA to 
require an agency, when preparing an FRFA, to summarize all 
comments received throughout the process, not just comments 
received in response to an IFRA. Section 3(b)(3) updates the 
RFA technologically by requiring agencies to post FRFAs online.
    Section 3(c) allows agencies to satisfy the RFA by making 
reference to already-completed analyses (for example, under 
NEPA) that satisfy the RFA's criteria. If the necessary 
analysis already has been completed, then there is no reason to 
force an agency to go through the rote exercise of performing 
it again. Nevertheless, agencies must cite to the pre-existing 
analysis with specificity; vague or casual references will not 
suffice. Thus, Section 3(c) requires the agency to identify the 
``specific portion of another agenda or analysis.'' In the same 
vein, when an agency certifies that a proposed rule will not 
have a ``significant economic impact on a substantial number of 
small entities,'' Section 3(d) requires the agency to give a 
``detailed statement'' and to identify the supporting ``factual 
and legal'' basis for the certification.
    Finally, Section 3(e) makes quantifiable data (of the 
caliber required under the Information Quality Act\59\) the 
standard for measuring the economic impact of a proposed rule 
on small entities. This will make agencies' IRFAs and FRFAs 
more transparent, including for courts at the judicial review 
stage. If quantifiable data is unavailable then the agency must 
provide a ``detailed statement explaining why quantification is 
not practicable or reliable'' as well as ``a more general 
descriptive statement'' of the rule's effects. The Chief 
Counsel for Advocacy will have the authority to promulgate 
regulations fleshing out these data quality standards.
---------------------------------------------------------------------------
    \59\See ``Consolidated Appropriations Act, 2001,'' 106 P.L. 554, 
Sec. 515 (Dec. 21, 2000).
---------------------------------------------------------------------------
Section 4. Repeal of Waiver Authority and Additional Powers of Chief 
        Counsel.
    Section 4 empowers the Chief Counsel for Advocacy to make 
rules governing agency compliance with the RFA. The status quo 
of agency compliance with the RFA is best described as 
inconsistent and recalcitrant. To address this problem, the 
Chief Counsel will promulgate rules regarding agency compliance 
within 270 days of enactment. This parallels the authority of 
the Council on Environmental Quality to issue regulations 
governing agency compliance with the NEPA.\60\ The Chief 
Counsel's regulations will be promulgated according to notice-
and-comment rulemaking and consequently will receive Chevron 
deference. Agencies can issue supplementary compliance 
protocols, but no agency can overturn the Chief Counsel's 
compliance rules.
---------------------------------------------------------------------------
    \60\See Exec. Order 11,991, 42 Fed. Reg. 26,967 (May 24, 1977).
---------------------------------------------------------------------------
    Section 4 clarifies that the Chief Counsel may intervene in 
agency adjudications, like an amicus curiae, to advise the 
agency of how its decision will affect small entities. The 
Chief Counsel is not authorized to appeal any decision or 
otherwise to act as counsel for the small entity concerned. 
Section 4 also allows the Chief Counsel to file comments on any 
notice of proposed rulemaking, which will strengthen the Chief 
Counsel's role as the main advocate for small entities in all 
Federal agency decision-making (not just when the RFA is 
concerned).
    Section 4 repeals agencies' authority to waive IRFAs and 
delay FRFAs by 180 days in emergency situations. The waiver 
provision of Section 608 of the RFA is redundant with Section 
553 of the APA. The entire RFA process for determining the 
impact of a rule on small entities--advocacy review panels, 
IRFAs and FRFAs--is triggered by notice and comment 
rulemaking.\61\ The RFA's current waiver provision is 
unnecessary in light of 5 U.S.C. Sec. 553(b)(B), which allows 
an agency to bypass notice and comment rulemaking ``for good 
cause,'' which would apply in an emergency.
---------------------------------------------------------------------------
    \61\See 5 U.S.C. Sec. 609(b) (Advocacy review panels: ``Prior to 
publication of an initial regulatory flexibility analysis which a 
covered agency is required to conduct. . . .''); 5 U.S.C. Sec. 603(a) 
(IRFAs: ``Whenever an agency is required by [5 U.S.C. Sec. 553], or any 
other law, to publish general notice of proposed rulemaking for any 
proposed rule. . . .''); 5 U.S.C. Sec. 604(a) (FRFAs: ``When an agency 
promulgates a final rule under [5 U.S.C. Sec. 553], after being 
required by that section or any other law to publish a general notice 
of proposed rulemaking. . . .'').
---------------------------------------------------------------------------
Section 5. Procedures for Gathering Comments.
    Section 5 clarifies, improves and expands the advocacy 
review panel process. Currently, as amended by SBREFA, Section 
609 requires OSHA and the EPA to hold advocacy review panels 
before publishing an IRFA, to receive input directly from small 
entities. The new Consumer Financial Protection Bureau also is 
required to conduct advocacy review panels.
    Building on these reforms, Section 5 expands the use of 
advocacy review panels to all Federal agencies, including 
independent regulatory agencies, for any major rule (as defined 
by the Congressional Review Act) or for any rule that will have 
a significant economic impact on a substantial number of small 
entities. Section 5 clarifies the type of information the 
agency must provide to the Office of Advocacy (with an 
appropriate accommodation made for IRS rules) and describes the 
content and focus of the report itself, which is to be drafted 
by the Chief Counsel for Advocacy in consultation with other 
panel members. Rather than simply listing concerns raised by 
small entities in the panel process, the report should discuss 
in detail the regulation's economic impact and analyze 
alternatives that will minimize costs or maximize benefits. 
Section 5 slightly reforms the panel's composition and 
clarifies that the Office of Advocacy is solely responsible for 
selecting small entity representatives to advise the panel. 
Finally, Section 5 empowers the Chief Counsel for Advocacy to 
waive the panel process when it is ``impractical, unnecessary, 
or contrary to the public interest.''
Section 6. Periodic Review of Rules.
    Section 6 of H.R. 527 reforms Section 610 to clarify how 
agencies must perform the periodic regulatory review. The law 
as currently written contains a number of ambiguities and 
shortcomings that warrant clarification and revision. Section 6 
requires agencies to develop new periodic review plans within 
180 days and to publish these plans online. Section 6 clarifies 
that the agency must review all rules that have a significant 
economic impact on a substantial number of small entities--
regardless of whether the agency originally prepared an FRFA 
for the rule. The trigger is whether the rule currently has a 
significant economic impact on a substantial number of small 
entities.
    Pursuant to this periodic review, the agency should amend 
the rule as necessary to maximize its benefits or minimize its 
costs to small entities, considering the factors given in the 
new Section 610(d). Finally, the agency must report the results 
of the review and publish in the Federal Register a list of 
rules to be reviewed and request comments.
Section 7. Judicial Review of Compliance with the RFA.
    Under Section 7, judicial review is available when the 
agency publishes the final rule; the current law requires small 
entities to wait until the ``final agency action'' is complete 
before bringing suit alleging a violation of the RFA. Taken 
together, Sections 7(a) and (b) ensure that small entities will 
have prompt access to judicial review without procedural delays 
from agency-imposed exhaustion requirements. Section 7(c) makes 
appropriate conforming and technical corrections to Section 
611. Lastly, Section 7(d) clarifies the Chief Counsel for 
Advocacy's authority to file an amicus brief regarding agency 
compliance with the RFA.
Section 8. Jurisdiction of Court of Appeals for Challenges to Rules 
        Implementing RFA.
    Section 8(a) grants jurisdiction to the U.S. Courts of 
Appeals to review challenges by small entities to rules 
promulgated by the Chief Counsel for Advocacy to implement the 
RFA. Section 8(b) makes technical conforming amendments. 
Section 8(c) clarifies the Chief Counsel's authority to file an 
amicus brief in a lawsuit challenging an agency's compliance 
with the Chief Counsel's rules implementing the RFA.
Section 9. Clerical Amendments.
    Section 9 contains necessary clerical amendments to make 
the U.S. Code consistent with the foregoing changes.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 italics, 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.
601. Definitions.
     * * * * * * *
[605. Avoidance of duplicative or unnecessary analyses.]
605. Incorporations by reference and certifications.
     * * * * * * *
[607. Preparation of analyses.
[608. Procedure for waiver or delay of completion.]
607. Quantification requirements.
608. Additional powers of Chief Counsel for Advocacy.

Sec. 601. Definitions

     For purposes of this chapter--
            [(1) the term]
            (1) Agency.--The term ``agency'' means an agency as 
        defined in section 551(1) of this title [;].
            [(2) the term ``rule'' means any rule for which the 
        agency publishes a general notice of proposed 
        rulemaking pursuant to section 553(b) of this title, or 
        any other law, including any rule of general 
        applicability governing Federal grants to State and 
        local governments for which the agency provides an 
        opportunity for notice and public comment, except that 
        the term ``rule'' does not include a rule of particular 
        applicability relating to rates, wages, corporate or 
        financial structures or reorganizations thereof, 
        prices, facilities, appliances, services, or allowances 
        therefor or to valuations, costs or accounting, or 
        practices relating to such rates, wages, structures, 
        prices, appliances, services, or allowances;]
            (2) Rule.--The term ``rule'' has the meaning given 
        such term in section 551(4) of this title, except that 
        such term does not include a rule of particular (and 
        not general) applicability relating to rates, wages, 
        corporate or financial structures or reorganizations 
        thereof, prices, facilities, appliances, services, or 
        allowances therefor or to valuations, costs or 
        accounting, or practices relating to such rates, wages, 
        structures, prices, appliances, services, or 
        allowances.
            [(3) the term]
            (3) Small business.--The term ``small business'' 
        has the same meaning as the term ``small business 
        concern'' under section 3 of the Small Business Act, 
        unless an agency, after consultation with the Office of 
        Advocacy of the Small Business Administration and after 
        opportunity for public comment, establishes one or more 
        definitions of such term which are appropriate to the 
        activities of the agency and publishes such 
        definition(s) in the Federal Register [;].
            [(4) the term ``small organization'' means any not-
        for-profit enterprise which is independently owned and 
        operated and is not dominant in its field, unless an 
        agency establishes, after opportunity for public 
        comment, one or more definitions of such term which are 
        appropriate to the activities of the agency and 
        publishes such definition(s) in the Federal Register;]
            (4) Small organization.--
                    (A) In general.--The term ``small 
                organization'' means any not-for-profit 
                enterprise which, as of the issuance of the 
                notice of proposed rulemaking--
                            (i) in the case of an enterprise 
                        which is described by a classification 
                        code of the North American Industrial 
                        Classification System, does not exceed 
                        the size standard established by the 
                        Administrator of the Small Business 
                        Administration pursuant to section 3 of 
                        the Small Business Act (15 U.S.C. 632) 
                        for small business concerns described 
                        by such classification code; and
                            (ii) in the case of any other 
                        enterprise, has a net worth that does 
                        not exceed $7,000,000 and has not more 
                        than 500 employees.
                    (B) Local labor organizations.--In the case 
                of any local labor organization, subparagraph 
                (A) shall be applied without regard to any 
                national or international organization of which 
                such local labor organization is a part.
                    (C) Agency definitions.--Subparagraphs (A) 
                and (B) shall not apply to the extent that an 
                agency, after consultation with the Office of 
                Advocacy of the Small Business Administration 
                and after opportunity for public comment, 
                establishes one or more definitions for such 
                term which are appropriate to the activities of 
                the agency and publishes such definitions in 
                the Federal Register.
            [(5) the term]
            (5) Small governmental jurisdiction.--The term 
        ``small governmental jurisdiction'' means governments 
        of cities, counties, towns, townships, villages, school 
        districts, or special districts, and tribal 
        organizations (as defined in section 4(l) of the Indian 
        Self-Determination and Education Assistance Act (25 
        U.S.C. 450b(l))), with a population of less than fifty 
        thousand, unless an agency establishes, after 
        opportunity for public comment, one or more definitions 
        of such term which are appropriate to the activities of 
        the agency and which are based on such factors as 
        location in rural or sparsely populated areas or 
        limited revenues due to the population of such 
        jurisdiction, and publishes such definition(s) in the 
        Federal Register[;].
            [(6) the term]
            (6) Small entity.--The term ``small entity'' shall 
        have the same meaning as the terms ``small business'', 
        ``small organization'' and ``small governmental 
        jurisdiction'' defined in paragraphs (3), (4) and (5) 
        of this section [; and].
            [(7) the term ``collection of information''--
                    [(A) means the obtaining, causing to be 
                obtained, soliciting, or requiring the 
                disclosure to third parties or the public, of 
                facts or opinions by or for an agency, 
                regardless of form or format, calling for 
                either--
                            [(i) answers to identical questions 
                        posed to, or identical reporting or 
                        recordkeeping requirements imposed on, 
                        10 or more persons, other than 
                        agencies, instrumentalities, or 
                        employees of the United States; or
                            [(ii) answers to questions posed to 
                        agencies, instrumentalities, or 
                        employees of the United States which 
                        are to be used for general statistical 
                        purposes; and
                    [(B) shall not include a collection of 
                information described under section 3518(c)(1) 
                of title 44, United States Code.
            [(8) Recordkeeping requirement.--The term 
        ``recordkeeping requirement'' means a requirement 
        imposed by an agency on persons to maintain specified 
        records.]
            (7) Collection of information.--The term 
        ``collection of information'' has the meaning given 
        such term in section 3502(3) of title 44.
            (8) Recordkeeping requirement.--The term 
        ``recordkeeping requirement'' has the meaning given 
        such term in section 3502(13) of title 44.
            (9) Economic impact.--The term ``economic impact'' 
        means, with respect to a proposed or final rule--
                    (A) any direct economic effect on small 
                entities of such rule; and
                    (B) any indirect economic effect on small 
                entities which is reasonably foreseeable and 
                results from such rule (without regard to 
                whether small entities will be directly 
                regulated by the rule).
            (10) Land management plan.--
                    (A) In general.--The term ``land management 
                plan'' means--
                            (i) any plan developed by the 
                        Secretary of Agriculture under section 
                        6 of the Forest and Rangeland Renewable 
                        Resources Planning Act of 1974 (16 
                        U.S.C. 1604); and
                            (ii) any plan developed by the 
                        Secretary of Interior under section 202 
                        of the Federal Land Policy and 
                        Management Act of 1976 (43 U.S.C. 
                        1712).
                    (B) Revision.--The term ``revision'' means 
                any change to a land management plan which--
                            (i) in the case of a plan described 
                        in subparagraph (A)(i), is made under 
                        section 6(f)(5) of the Forest and 
                        Rangeland Renewable Resources Planning 
                        Act of 1974 (16 U.S.C. 1604(f)(5)); or
                            (ii) in the case of a plan 
                        described in subparagraph (A)(ii), is 
                        made under section 1610.5-6 of title 
                        43, Code of Federal Regulations (or any 
                        successor regulation).
                    (C) Amendment.--The term ``amendment'' 
                means any change to a land management plan 
                which--
                            (i) in the case of a plan described 
                        in subparagraph (A)(i), is made under 
                        section 6(f)(4) of the Forest and 
                        Rangeland Renewable Resources Planning 
                        Act of 1974 (16 U.S.C. 1604(f)(4)) and 
                        with respect to which the Secretary of 
                        Agriculture prepares a statement 
                        described in section 102(2)(C) of the 
                        National Environmental Policy Act of 
                        1969 (42 U.S.C. 4332(2)(C)); or
                            (ii) in the case of a plan 
                        described in subparagraph (A)(ii), is 
                        made under section 1610.5-5 of title 
                        43, Code of Federal Regulations (or any 
                        successor regulation) and with respect 
                        to which the Secretary of the Interior 
                        prepares a statement described in 
                        section 102(2)(C) of the National 
                        Environmental Policy Act of 1969 (42 
                        U.S.C. 4332(2)(C)).

           *       *       *       *       *       *       *


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, [or] publishes a notice of 
proposed rulemaking for an interpretative rule involving the 
internal revenue laws of the United States, or publishes a 
revision or amendment to a land management plan, 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 the case of an interpretative rule 
involving the internal revenue laws of the United States, this 
chapter applies to interpretative rules published in the 
Federal Register for codification in the Code of Federal 
Regulations, but only to the extent that such interpretative 
rules impose on small entities a collection of information 
requirement[.] or a recordkeeping requirement, and without 
regard to whether such requirement is imposed by statute or 
regulation.
    [(b) Each initial regulatory flexibility analysis required 
under this section shall contain--
            [(1) a description of the reasons why action by the 
        agency is being considered;
            [(2) a succinct statement of the objectives of, and 
        legal basis for, the proposed rule;
            [(3) a description of and, where feasible, an 
        estimate of the number of small entities to which the 
        proposed rule will apply;
            [(4) a description of 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 or record;
            [(5) an identification, to the extent practicable, 
        of all relevant Federal rules which may duplicate, 
        overlap or conflict with the proposed rule.]
    (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;
            (6) estimating the additional cumulative economic 
        impact of the proposed rule on small entities beyond 
        that already imposed on the class of small entities by 
        the agency or why such an estimate is not available; 
        and
            (7) describing any disproportionate economic impact 
        on small entities or a specific class of small 
        entities.
    (c) [Each initial regulatory flexibility analysis shall 
also contain a description of any significant alternatives to 
the proposed rule which accomplish the stated objectives of 
applicable statutes and which minimize any significant economic 
impact of the proposed rule on small entities.] Each initial 
regulatory flexibility analysis shall also   contain a detailed 
description of alternatives to the proposed rule which   
minimize any adverse significant economic impact or maximize 
any beneficial   significant economic impact on small entities. 
Consistent with the stated objectives of applicable statutes, 
the analysis shall discuss significant alternatives such as--
            (1) * * *

           *       *       *       *       *       *       *

    [(d)(1) For a covered agency, as defined in section 
609(d)(2), each initial regulatory flexibility analysis shall 
include a description of--
            [(A) any projected increase in the cost of credit 
        for small entities;
            [(B) any significant alternatives to the proposed 
        rule which accomplish the stated objectives of 
        applicable statutes and which minimize any increase in 
        the cost of credit for small entities; and
            [(C) advice and recommendations of representatives 
        of small entities relating to issues described in 
        subparagraphs (A) and (B) and subsection (b).
    [(2) A covered agency, as defined in section 609(d)(2), 
shall, for purposes of complying with paragraph (1)(C)--
            [(A) identify representatives of small entities in 
        consultation with the Chief Counsel for Advocacy of the 
        Small Business Administration; and
            [(B) collect advice and recommendations from the 
        representatives identified under subparagraph (A) 
        relating to issues described in subparagraphs (A) and 
        (B) of paragraph (1) and subsection (b).]

Sec. 604. Final regulatory flexibility analysis

    (a) When an agency promulgates a final rule under section 
553 of this title, after being required by that section or any 
other law to publish a general notice of proposed rulemaking, 
[or] promulgates a final interpretative rule involving the 
internal revenue laws of the United States as described in 
section 603(a), or adopts a revision or amendment to a land 
management plan, the agency shall prepare a final regulatory 
flexibility analysis. Each final regulatory flexibility 
analysis shall contain--
            (1) * * *
            (2) a statement of the significant issues raised by 
        the public comments in response to the initial 
        regulatory flexibility analysis (or certification of 
        the proposed rule under section 605(b)), a statement of 
        the assessment of the agency of such issues, and a 
        statement of any changes made in the proposed rule as a 
        result of such comments;

           *       *       *       *       *       *       *

            (4) a detailed description of and an estimate of 
        the number of small entities to which the rule will 
        apply or [an explanation] a detailed explanation of why 
        no such estimate is available;
            (5) a detailed description of the projected 
        reporting, recordkeeping and other compliance 
        requirements of the rule, including an estimate of the 
        classes of small entities which will be subject to the 
        requirement and the type of professional skills 
        necessary for preparation of the report or record;
            (6)   a detailed description of the steps the 
        agency has taken to [minimize the significant economic 
        impact] minimize the adverse significant economic 
        impact or maximize the beneficial significant economic 
        impact on small entities consistent with the stated 
        objectives of applicable statutes, including a 
        statement of the factual, policy, and legal reasons for 
        selecting the alternative adopted in the final rule and 
        why each one of the other significant alternatives to 
        the rule considered by the agency which affect the 
        impact on small entities was rejected; and
            [(6)   for a covered agency, as defined in section 
        609(d)(2), a description of the steps the agency has 
        taken to minimize any additional cost of credit for 
        small entities.]
            (7) describing any disproportionate economic impact 
        on small entities or a specific class of small 
        entities.
    [(b) The agency shall make copies of the final regulatory 
flexibility analysis available to members of the public and 
shall publish in the Federal Register such analysis or a 
summary thereof.]
    (b) The agency shall make copies of the final regulatory 
flexibility analysis available to the public, including 
placement of the entire analysis on the agency's website, and 
shall publish in the Federal Register the final regulatory 
flexibility analysis, or a summary thereof which includes the 
telephone number, mailing address, and link to the website 
where the complete analysis may be obtained.

[Sec. 605SEC. 605. AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES]

Sec. 605. INCORPORATIONS BY REFERENCE AND CERTIFICATIONS

    [(a) Any Federal agency may perform the analyses required 
by sections 602, 603, and 604 of this title in conjunction with 
or as a part of any other agenda or analysis required by any 
other law if such other analysis satisfies the provisions of 
such sections.]
    (a) A Federal agency shall be treated as satisfying any 
requirement regarding the content of an agenda or regulatory 
flexibility analysis under section 602, 603, or 604, if such 
agency provides in such agenda or analysis a cross-reference to 
the specific portion of another agenda or analysis which is 
required by any other law and which satisfies such requirement.
    (b) Sections 603 and 604 of this title shall not apply to 
any proposed or final rule if the head of the agency certifies 
that the rule will not, if promulgated, have a significant 
economic impact on a substantial number of small entities. If 
the head of the agency makes a certification under the 
preceding sentence, the agency shall publish such certification 
in the Federal Register at the time of publication of general 
notice of proposed rulemaking for the rule or at the time of 
publication of the final rule, along with a detailed statement 
providing the factual and legal basis for such certification. 
The agency shall provide such certification and statement to 
the Chief Counsel for Advocacy of the Small Business 
Administration.

           *       *       *       *       *       *       *


[Sec. 607. Preparation of analyses

    [In complying with the provisions of sections 603 and 604 
of this title, an agency may provide either a quantifiable or 
numerical description of the effects of a proposed rule or 
alternatives to the proposed rule, or more general descriptive 
statements if quantification is not practicable or reliable.

[Sec. 608. Procedure for waiver or delay of completion

    [(a) An agency head may waive or delay the completion of 
some or all of the requirements of section 603 of this title by 
publishing in the Federal Register, not later than the date of 
publication of the final rule, a written finding, with reasons 
therefor, that the final rule is being promulgated in response 
to an emergency that makes compliance or timely compliance with 
the provisions of section 603 of this title impracticable.
    [(b) Except as provided in section 605(b), an agency head 
may not waive the requirements of section 604 of this title. An 
agency head may delay the completion of the requirements of 
section 604 of this title for a period of not more than one 
hundred and eighty days after the date of publication in the 
Federal Register of a final rule by publishing in the Federal 
Register, not later than such date of publication, a written 
finding, with reasons therefor, that the final rule is being 
promulgated in response to an emergency that makes timely 
compliance with the provisions of section 604 of this title 
impracticable. If the agency has not prepared a final 
regulatory analysis pursuant to section 604 of this title 
within one hundred and eighty days from the date of publication 
of the final rule, such rule shall lapse and have no effect. 
Such rule shall not be repromulgated until a final regulatory 
flexibility analysis has been completed by the agency.]

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 and alternatives 
        to the proposed or final rule; or
            (2) a more general descriptive statement and a 
        detailed statement explaining why quantification is not 
        practicable or reliable.

Sec. 608. Additional powers of Chief Counsel for Advocacy

    (a)(1) Not later than 270 days after the date of the 
enactment of the Regulatory Flexibility Improvements Act of 
2011, the Chief Counsel for Advocacy of the Small Business 
Administration shall, after opportunity for notice and comment 
under section 553, issue rules governing agency compliance with 
this chapter. The Chief Counsel may modify or amend such rules 
after notice and comment under section 553. This chapter (other 
than this subsection) shall not apply with respect to the 
issuance, modification, and amendment of rules under this 
paragraph.
    (2) An agency shall not issue rules which supplement the 
rules issued under subsection (a) unless such agency has first 
consulted with the Chief Counsel for Advocacy to ensure that 
such supplemental rules comply with this chapter and the rules 
issued under paragraph (1).
    (b) Notwithstanding any other law, the Chief Counsel for 
Advocacy of the Small Business Administration may intervene in 
any agency adjudication (unless such agency is authorized to 
impose a fine or penalty under such adjudication), and may 
inform the agency of the impact that any decision on the record 
may have on small entities. The Chief Counsel shall not 
initiate an appeal with respect to any adjudication in which 
the Chief Counsel intervenes under this subsection.
    (c) The Chief Counsel for Advocacy may file comments in 
response to any agency notice requesting comment, regardless of 
whether the agency is required to file a general notice of 
proposed rulemaking under section 553.

Sec. 609. Procedures for gathering comments

    (a) * * *
    [(b) Prior to publication of an initial regulatory 
flexibility analysis which a covered agency is required to 
conduct by this chapter--
            [(1) a covered agency shall notify the Chief 
        Counsel for Advocacy of the Small Business 
        Administration and provide the Chief Counsel with 
        information on the potential impacts of the proposed 
        rule on small entities and the type of small entities 
        that might be affected;
            [(2) not later than 15 days after the date of 
        receipt of the materials described in paragraph (1), 
        the Chief Counsel shall identify individuals 
        representative of affected small entities for the 
        purpose of obtaining advice and recommendations from 
        those individuals about the potential impacts of the 
        proposed rule;
            [(3) the agency shall convene a review panel for 
        such rule consisting wholly of full time Federal 
        employees of the office within the agency responsible 
        for carrying out the proposed rule, the Office of 
        Information and Regulatory Affairs within the Office of 
        Management and Budget, and the Chief Counsel;
            [(4) the panel shall review any material the agency 
        has prepared in connection with this chapter, including 
        any draft proposed rule, collect advice and 
        recommendations of each individual small entity 
        representative identified by the agency after 
        consultation with the Chief Counsel, on issues related 
        to subsections 603(b), paragraphs (3), (4) and (5) and 
        603(c);
            [(5) not later than 60 days after the date a 
        covered agency convenes a review panel pursuant to 
        paragraph (3), the review panel shall report on the 
        comments of the small entity representatives and its 
        findings as to issues related to subsections 603(b), 
        paragraphs (3), (4) and (5) and 603(c), provided that 
        such report shall be made public as part of the 
        rulemaking record; and
            [(6) where appropriate, the agency shall modify the 
        proposed rule, the initial regulatory flexibility 
        analysis or the decision on whether an initial 
        regulatory flexibility analysis is required.
    [(c) An agency may in its discretion apply subsection (b) 
to rules that the agency intends to certify under subsection 
605(b), but the agency believes may have a greater than de 
minimis impact on a substantial number of small entities.
    [(d) For purposes of this section, the term ``covered 
agency'' means--
            [(1) the Environmental Protection Agency;
            [(2) the Consumer Financial Protection Bureau of 
        the Federal Reserve System; and
            [(3) the Occupational Safety and Health 
        Administration of the Department of Labor.
    [(e) The Chief Counsel for Advocacy, in consultation with 
the individuals identified in subsection (b)(2), and with the 
Administrator of the Office of Information and Regulatory 
Affairs within the Office of Management and Budget, may waive 
the requirements of subsections (b)(3), (b)(4), and (b)(5) by 
including in the rulemaking record a written finding, with 
reasons therefor, that those requirements would not advance the 
effective participation of small entities in the rulemaking 
process. For purposes of this subsection, the factors to be 
considered in making such a finding are as follows:
            [(1) In developing a proposed rule, the extent to 
        which the covered agency consulted with individuals 
        representative of affected small entities with respect 
        to the potential impacts of the rule and took such 
        concerns into consideration.
            [(2) Special circumstances requiring prompt 
        issuance of the rule.
            [(3) Whether the requirements of subsection (b) 
        would provide the individuals identified in subsection 
        (b)(2) with a competitive advantage relative to other 
        small entities.]
    (b)(1) Prior to publication of any proposed rule described 
in subsection (e), an agency making such rule shall notify the 
Chief Counsel for Advocacy of the Small Business Administration 
and provide the Chief Counsel with--
            (A) all materials prepared or utilized by the 
        agency in making the proposed rule, including the draft 
        of the proposed rule; and
            (B) information on the potential adverse and 
        beneficial economic impacts of the proposed rule on 
        small entities and the type of small entities that 
        might be affected.
    (2) An agency shall not be required under paragraph (1) to 
provide the exact language of any draft if the rule--
            (A) relates to the internal revenue laws of the 
        United States; or
            (B) is proposed by an independent regulatory agency 
        (as defined in section 3502(5) of title 44).
    (c) Not later than 15 days after the receipt of such 
materials and information under subsection (b), the Chief 
Counsel for Advocacy of the Small Business Administration 
shall--
            (1) identify small entities or representatives of 
        small entities or a combination of both for the purpose 
        of obtaining advice, input, and recommendations from 
        those persons about the potential economic impacts of 
        the proposed rule and the compliance of the agency with 
        section 603; and
            (2) convene a review panel consisting of an 
        employee from the Office of Advocacy of the Small 
        Business Administration, an employee from the agency 
        making the rule, and in the case of an agency other 
        than an independent regulatory agency (as defined in 
        section 3502(5) of title 44), an employee from the 
        Office of Information and Regulatory Affairs of the 
        Office of Management and Budget to review the materials 
        and information provided to the Chief Counsel under 
        subsection (b).
    (d)(1) Not later than 60 days after the review panel 
described in subsection (c)(2) is convened, the Chief Counsel 
for Advocacy of the Small Business Administration shall, after 
consultation with the members of such panel, submit a report to 
the agency and, in the case of an agency other than an 
independent regulatory agency (as defined in section 3502(5), 
United States Code), the Office of Information and Regulatory 
Affairs of the Office of Management and Budget.
    (2) Such report shall include an assessment of the economic 
impact of the proposed rule on small entities and a discussion 
of any alternatives that will minimize adverse significant 
economic impacts or maximize beneficial significant economic 
impacts on small entities.
    (3) Such report shall become part of the rulemaking record. 
In the publication of the proposed rule, the agency shall 
explain what actions, if any, the agency took in response to 
such report.
    (e) A proposed rule is described by this subsection if the 
Administrator of the Office of Information and Regulatory 
Affairs of the Office of Management and Budget, the head of the 
agency (or the delegatee of the head of the agency), or an 
independent regulatory agency determines that the proposed rule 
is likely to result in--
            (1) an annual effect on the economy of $100,000,000 
        or more;
            (2) a major increase in costs or prices for 
        consumers, individual industries, Federal, State, or 
        local governments, tribal organizations, or geographic 
        regions;
            (3) significant adverse effects on competition, 
        employment, investment, productivity, innovation, or on 
        the ability of United States-based enterprises to 
        compete with foreign-based enterprises in domestic and 
        export markets; or
            (4) a significant economic impact on a substantial 
        number of small entities.
    (f) Upon application by the agency, the Chief Counsel for 
Advocacy of the Small Business Administration may waive the 
requirements of subsections (b) through (e) if the Chief 
Counsel determines that compliance with the requirements of 
such subsections are impracticable, unnecessary, or contrary to 
the public interest.

           *       *       *       *       *       *       *


[Sec. 610. Periodic review of rules

    [(a) Within one hundred and eighty days after the effective 
date of this chapter, each agency shall publish in the Federal 
Register a plan for the periodic review of the rules issued by 
the agency which have or will have a significant economic 
impact upon a substantial number of small entities. Such plan 
may be amended by the agency at any time by publishing the 
revision in the Federal Register. The purpose of the review 
shall be to determine whether such rules should be continued 
without change, or should be amended or rescinded, consistent 
with the stated objectives of applicable statutes, to minimize 
any significant economic impact of the rules upon a substantial 
number of such small entities. The plan shall provide for the 
review of all such agency rules existing on the effective date 
of this chapter within ten years of that date and for the 
review of such rules adopted after the effective date of this 
chapter within ten years of the publication of such rules as 
the final rule. If the head of the agency determines that 
completion of the review of existing rules is not feasible by 
the established date, he shall so certify in a statement 
published in the Federal Register and may extend the completion 
date by one year at a time for a total of not more than five 
years.
    [(b) In reviewing rules to minimize any significant 
economic impact of the rule on a substantial number of small 
entities in a manner consistent with the stated objectives of 
applicable statutes, the agency shall consider the following 
factors--
            [(1) the continued need for the rule;
            [(2) the nature of complaints or comments received 
        concerning the rule from the public;
            [(3) the complexity of the rule;
            [(4) the extent to which the rule overlaps, 
        duplicates or conflicts with other Federal rules, and, 
        to the extent feasible, with State and local 
        governmental rules; and
            [(5) 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.
    [(c) Each year, each agency shall publish in the Federal 
Register a list of the rules which have a significant economic 
impact on a substantial number of small entities, which are to 
be reviewed pursuant to this section during the succeeding 
twelve months. The list shall include a brief description of 
each rule and the need for and legal basis of such rule and 
shall invite public comment upon the rule.]

Sec. 610. Periodic review of rules

    (a) Not later than 180 days after the enactment of the 
Regulatory Flexibility Improvements Act of 2011, each agency 
shall publish in the Federal Register and place on its website 
a plan for the periodic review of rules issued by the agency 
which the head of the agency determines have a significant 
economic impact on a substantial number of small entities. Such 
determination shall be made without regard to whether the 
agency performed an analysis under section 604. The purpose of 
the review shall be to determine whether such rules should be 
continued without change, or should be amended or rescinded, 
consistent with the stated objectives of applicable statutes, 
to minimize any adverse significant economic impacts or 
maximize any beneficial significant economic impacts on a 
substantial number of small entities. Such plan may be amended 
by the agency at any time by publishing the revision in the 
Federal Register and subsequently placing the amended plan on 
the agency's website.
    (b) The plan shall provide for the review of all such 
agency rules existing on the date of the enactment of the 
Regulatory Flexibility Improvements Act of 2011 within 10 years 
of the date of publication of the plan in the Federal Register 
and for review of rules adopted after the date of enactment of 
the Regulatory Flexibility Improvements Act of 2011 within 10 
years after the publication of the final rule in the Federal 
Register. If the head of the agency determines that completion 
of the review of existing rules is not feasible by the 
established date, the head of the agency shall so certify in a 
statement published in the Federal Register and may extend the 
review for not longer than 2 years after publication of notice 
of extension in the Federal Register. Such certification and 
notice shall be sent to the Chief Counsel for Advocacy of the 
Small Business Administration and the Congress.
    (c) Each agency shall annually submit a report regarding 
the results of its review pursuant to such plan to the 
Congress, the Chief Counsel for Advocacy of the Small Business 
Administration, and, in the case of agencies other than 
independent regulatory agencies (as defined in section 3502(5) 
of title 44) to the Administrator of the Office of Information 
and Regulatory Affairs of the Office of Management and Budget. 
Such report shall include the identification of any rule with 
respect to which the head of the agency made a determination 
described in paragraph (5) or (6) of subsection (d) and a 
detailed explanation of the reasons for such determination.
    (d) In reviewing a rule pursuant to subsections (a) through 
(c), the agency shall amend or rescind the rule to minimize any 
adverse significant economic impact on a substantial number of 
small entities or disproportionate economic impact on a 
specific class of small entities, or maximize any beneficial 
significant economic impact of the rule on a substantial number 
of small entities to the greatest extent possible, consistent 
with the stated objectives of applicable statutes. In amending 
or rescinding the rule, the agency shall consider the following 
factors:
            (1) The continued need for the rule.
            (2) The nature of complaints received by the agency 
        from small entities concerning the rule.
            (3) Comments by the Regulatory Enforcement 
        Ombudsman and the Chief Counsel for Advocacy 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, territorial, 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 calculations cannot be 
        made and reports that determination in the annual 
        report required under subsection (c).
            (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.
    (e) The agency shall publish in the Federal Register and on 
its website a list of rules to be reviewed pursuant to such 
plan. Such publication shall include a brief description of the 
rule, the reason why the agency determined that it has a 
significant economic impact on a substantial number of small 
entities (without regard to whether it had prepared a final 
regulatory flexibility analysis for the rule), and request 
comments from the public, the Chief Counsel for Advocacy of the 
Small Business Administration, and the Regulatory Enforcement 
Ombudsman concerning the enforcement of the rule.

Sec. 611. Judicial review

    (a)(1) For any rule subject to this chapter, a small entity 
that is adversely affected or aggrieved by [final agency 
action] such rule is entitled to judicial review of agency 
compliance with the requirements of sections 601, 604, 605(b), 
[608(b),] and 610 in accordance with chapter 7. Agency 
compliance with sections 607 and 609(a) shall be judicially 
reviewable in connection with judicial review of section 604.
    (2) Each court having jurisdiction to review such rule for 
compliance with section 553, or under any other provision of 
law, (or which would have such jurisdiction if publication of 
the final rule constituted final agency action) shall have 
jurisdiction to review any claims of noncompliance with 
sections 601, 604, 605(b), [608(b),] and 610 in accordance with 
chapter 7. Agency compliance with sections 607 and 609(a) shall 
be judicially reviewable in connection with judicial review of 
section 604.
    [(3)(A) A small entity]
    (3) A small entity may seek such review during the period 
beginning on the date of [final agency action] publication of 
the final rule and ending one year later, except that, in the 
case of a rule for which the date of final agency action is the 
same date as the publication of the final rule, where a 
provision of law requires that an action challenging a final 
agency action be commenced before the expiration of one year, 
such lesser period shall apply to an action for judicial review 
under this section.
    [(B) In the case where an agency delays the issuance of a 
final regulatory flexibility analysis pursuant to section 
608(b) of this chapter, an action for judicial review under 
this section shall be filed not later than--
            [(i) one year after the date the analysis is made 
        available to the public, or
            [(ii) where a provision of law requires that an 
        action challenging a final agency regulation be 
        commenced before the expiration of the 1-year period, 
        the number of days specified in such provision of law 
        that is after the date the analysis is made available 
        to the public.]

           *       *       *       *       *       *       *


Sec. 612. Reports and intervention rights

    (a) * * *
    (b) The Chief Counsel for Advocacy of the Small Business 
Administration is authorized to appear as amicus curiae in any 
action brought in a court of the United States to review a rule 
or agency compliance with section 601, 603, 604, 605(b), 609, 
or 610. In any such action, the Chief Counsel is authorized to 
present his or her views with respect to compliance with this 
chapter, chapter 5, and chapter 7, the adequacy of the 
rulemaking record with respect to small entities and the effect 
of the rule on small entities.

           *       *       *       *       *       *       *

                              ----------                              


                      TITLE 28, UNITED STATES CODE



           *       *       *       *       *       *       *
PART VI--PARTICULAR PROCEEDINGS

           *       *       *       *       *       *       *


            CHAPTER 158--ORDERS OF FEDERAL AGENCIES; REVIEW

Sec. 2341. Definitions

     As used in this chapter--
            (1) * * *

           *       *       *       *       *       *       *

            (3) ``agency'' means--
                    (A) * * *

           *       *       *       *       *       *       *

                    (D) the Secretary, when the order is under 
                section 812 of the Fair Housing Act; [and]
                    (E) the Board, when the order was entered 
                by the Surface Transportation Board[.]; and
                    (F) the Office of Advocacy of the Small 
                Business Administration, when the final rule is 
                under section 608(a) of title 5.

Sec. 2342. Jurisdiction of court of appeals

     The court of appeals (other than the United States Court 
of Appeals for the Federal Circuit) has exclusive jurisdiction 
to enjoin, set aside, suspend (in whole or in part), or to 
determine the validity of--
            (1) * * *

           *       *       *       *       *       *       *

            (6) all final orders under section 812 of the Fair 
        Housing Act; [and]
            (7) all final agency actions described in section 
        20114(c) of title 49[.]; and
            (8) all final rules under section 608(a) of title 
        5.
Jurisdiction is invoked by filing a petition as provided by 
section 2344 of this title.

           *       *       *       *       *       *       *


                            Dissenting Views

                            I. INTRODUCTION

    H.R. 527, the ``Regulatory Flexibility Improvements Act of 
2011,'' amends the Regulatory Flexibility Act\1\ (RFA) in ways 
that will significantly hinder the promulgation of critical 
public health and safety rules by Federal administrative 
agencies--even in emergency situations--while failing to help 
small businesses and other small entities reduce compliance 
costs or to ensure agency compliance with the RFA. 
Specifically, we oppose H.R. 527 because: (1) it is based on a 
faulty study; (2) taken as a whole, it will severely undermine 
Federal agency rulemaking, thereby threatening public health 
and safety; (3) it fails to address shortcomings in current 
law; (4) it offers no real assistance to small businesses in 
complying with regulations; and (5) it imposes additional 
duties on agencies while failing to provide any additional 
resources to agencies.
---------------------------------------------------------------------------
    \1\Pub. L. No. 96-354, 94 Stat. 1164 (codified at 5 U.S.C. 
Sec. Sec. 601-612). The RFA requires Federal agencies to assess the 
impact of proposed rules on ``small entities,'' which it defines as 
either a small business, small organization, or small governmental 
jurisdiction.The RFA requires agencies to prepare a regulatory 
flexibility analysis at the time certain proposed and final rules are 
promulgated. The analysis must: (1) describe the reasons why action by 
the agency is necessary; (2) include a succinct statement of the 
regulation's objectives and legal basis; (3) describe which small 
entities are affected by the rule as well as provide an estimate of the 
number of such entities so affected; (4) describe anticipated 
reporting, recordkeeping, and other compliance requirements, (5) 
identify any relevant Federal regulations that may duplicate, overlap, 
or conflict with the rule, and (6) identify any significant 
alternatives to the rule. This analysis is not required, however, if 
the agency certifies that the rule will not have a ``significant 
economic impact on a substantial number of small entities.''
---------------------------------------------------------------------------
  In 1996, the RFA was amended by Small Business Regulatory Enforcement 
Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Sec. 242, 110 Stat. 
847, 857 (1996), to permit judicial review under certain circumstances 
of, among other matters, an agency's regulatory flexibility analysis 
for a final rule and any certification by an agency averring that a 
rule will not have a significant economic impact on a substantial 
number of small entities.
    Without question, small businesses play a major role in our 
Nation's economy and in our society. They employ more than half 
of all private sector workers\2\ and are among the principal 
drivers of innovation and economic growth, producing 13 times 
more patents than larger firms.\3\ Indeed, according to the 
Small Business Administration (SBA), the vast majority of our 
Nation's businesses are small businesses.\4\ Like their larger 
counterparts, however, small businesses can substantially 
impact the health and safety of their workers as well as that 
of the general public.\5\ Accordingly, attempts to undermine 
the ability of Federal agencies charged with protecting public 
health and safety through the rulemaking process should be 
strongly opposed.
---------------------------------------------------------------------------
    \2\Small Business Administration, How Important Are Small 
Businesses to the U.S. Economy? available at http://www.sba.gov/
advocacy/7495/8420.
    \3\Id.
    \4\In all, there are 29.6 million businesses in the United States, 
of which 99.9% are ``small'' businesses. See U.S. Small Business 
Administration, How Many Small Businesses Are There?, available at 
http://www.sba.gov/content/how-many-small-businesses-are-there. It 
should also be noted that not all small businesses are ``mom and pop'' 
operations. According to the SBA, a ``small business'' can be a firm 
with up to 500 employees, although the definition varies by industry. 
SBA looks to two different factors for determining what is a ``small 
business'' based on the North American Industry Classification System 
(NAICS) codes, which vary by industry. For some industries, the number 
of employees over the past 12 months (e.g., ``petrochemical 
manufacturers'' can have 1,000 employees and still be small businesses) 
is determinative, and for other industries, SBA looks to revenue over 
the past 3 years (e.g., ``packing and crating'' services can have $25.5 
million in revenue and still be small businesses). The full table is 
available at: http://www.sba.gov/sites/default/files/
size_standards_methodology.pdf.
    \5\Workplace safety rules may impact tens of millions of Americans 
who work for small businesses. As of 2008, there were 5.93 million 
small firms employing 120,903,551 workers, including 5,294,970 firms of 
20 or fewer employees, employing 21,461,733 workers and 5,684,120 firms 
of 50 or fewer employees, employing 33,453,284 workers, according to 
the SBA. See U.S. Census Bureau, Statistics of U.S. Businesses, U.S. 
NAICS Sectors, small employment sizes, 2008, available at http://
www.census.gov/econ/susb/.
---------------------------------------------------------------------------
    H.R. 527 must also be viewed as part of the Majority's 
broader anti-regulatory agenda in the 112th Congress. To date, 
the Committee's Subcommittee on Courts, Commercial and 
Administrative Law (CCAL) has already held eight hearings 
focusing on various ways to hobble Federal agency rulemaking 
and to increase the influence of business interests over the 
rulemaking process without actually improving the quality of 
proposed rules.\6\ While the proponents of H.R. 527 claim that 
the bill's purpose is to ease the burden of regulatory 
compliance on small businesses and other small entities, an 
examination of the bill's provisions makes clear that the bill 
is really intended to slow down, if not halt, most agency 
rulemaking. This explains why the Coalition for Sensible 
Safeguards strongly opposes the bill. The Coalition consists of 
nearly 60 labor and consumer organizations, including the AFL-
CIO, AFSCME, the American Lung Association, the Center for 
Science in the Public Interest, the Consumer Federation of 
America, the Consumers Union, the Economic Policy Institute, 
the Environmental Defense Fund, Free Press, Friends of the 
Earth, International Brotherhood of Teamsters, the UAW, the 
National Council for Occupational Safety and Health, the 
National Women's Law Center, Natural Resources Defense Council, 
OMB Watch, People for the American Way, Public Citizen, the 
Service Employees International Union, the Union of Concerned 
Scientists, the United Food and Commercial Workers 
International Union, and U.S. PIRG.\7\
---------------------------------------------------------------------------
    \6\The Role of Social Security Administrative Law Judges: Hearing 
Before the Subcomm. on Courts, Commercial and Administrative Law of the 
H. Comm. on the Judiciary and Subcomm. on Social Security of the H. 
Comm. on Ways and Means, 112th Cong. (2011); Formal Rulemaking and 
Judicial Review: Protecting Jobs and the Economy with Greater 
Regulatory Transparency and Accountability: Hearing Before the Subcomm. 
on Courts, Commercial and Administrative Law of the H. Comm. on the 
Judiciary, 112th Cong. (2011); Cost-Justifying Regulations: Protecting 
Jobs and the Economy by Presidential and Judicial Review of Costs and 
Benefits: Hearing Before the Subcomm. on Courts, Commercial and 
Administrative Law of the H. Comm. on the Judiciary, 112th Cong. 
(2011); Raising the Agencies' Grades--Protecting the Economy, Assuring 
Regulatory Quality and Improving Assessments of Regulatory Need: 
Hearing Before the Subcomm. on Courts, Commercial and Administrative 
Law of the H. Comm. on the Judiciary, 112th Cong. (2011); The 
Regulations From the Executive in Need of Scrutiny Act of 2011: Hearing 
on H.R. 10 Before the Subcomm. on Courts, Commercial and Administrative 
Law of the H. Comm. on the Judiciary, 112th Cong. (2011); The APA at 
65--Is Reform Needed to Create Jobs, Promote Economic Growth and Reduce 
Costs?: Hearing Before the Subcomm. on Courts, Commercial and 
Administrative Law of the H. Comm. on the Judiciary, 112th Cong. 
(2011); The Regulatory Flexibility Improvements Act of 2011- Unleashing 
Small Businesses to Create Jobs: Hearing on H.R. 527 Before the 
Subcomm. on Courts, Commercial and Administrative Law of the H. Comm. 
on the Judiciary, 112th Cong. (2011) (hereinafter ``H.R. 527 
Legislative Hearing''); The REINS Act--Promoting Jobs and Expanding 
Freedom by Reducing Needless Regulations Hearing Before the Subcomm. on 
Courts, Commercial and Administrative Law of the H. Comm. on the 
Judiciary, 112th Cong. (2011).
    \7\The other members of the Coalition, as of July 2, 2011, were: 
Ability Production, Alliance for Justice, American Association of 
University Professors, American Rivers American Values Campaign, ATTIC, 
Inc., BlueGreen Alliance, Campaign for Contract Agriculture Reform 
(CCAR), Center for Food Safety, Center for Independent Living of South 
Florida, Inc., Citizens for Sludge-Free Land, Clean Air Watch, 
Consortium for Citizens with Disabilities, CounterCorp, Cumberland 
Countians for Peace & Justice, Demos, Edmonds Institute, Health Care 
for America Now, In the Public Interest, International Center for 
Technology Assessment, Jam On! Music Production & Recording, League of 
Conservation Voters, Los Angeles Alliance for a New Economy, National 
Center for Healthy Housing, National Consumers League, National 
Employment Law Project, National Lawyers Guild, Louisville Chapter, 
National Women's Health Network, Network for Environmental & Economic 
Responsibility of United Church of Christ, New Jersey Work Environment 
Council, New York Committee for Occupational Safety and Health 
(NYCOSH), Oregon PeaceWorks, Protect All Children's Environment, 
Reproductive Health Technologies Project, STOP Foodborne Illness 
(Formerly known as Safe Tables Our Priority), Southern Illinois 
Committee for Occupational Safety and Health, The Partnership for 
Working Families, Union Plus, Worksafe.
---------------------------------------------------------------------------
    For these reasons, and those discussed below, we 
respectfully dissent and urge our colleagues to reject this 
seriously flawed legislation.

                      II. DESCRIPTION OF H.R. 527

    H.R. 527 expands the type of rules covered by the RFA to 
include those that have a reasonably foreseeable indirect 
effect on small entities. It also includes documents like land 
management plans and certain guidance documents under the 
definition of ``rule.'' Additionally, H.R. 527 would heighten 
the level of detail that agencies must provide in their initial 
and final regulatory analyses and adds additional analytical 
requirements. H.R. 527 also repeals agencies' emergency 
authority to waive or delay an initial regulatory flexibility 
analysis or to delay a final regulatory flexibility analysis 
and grants additional power to the SBA's Chief Counsel for 
Advocacy to promulgate rules governing agencies' RFA 
compliance, intervene in agency adjudications, and file 
comments on proposed rules. H.R. 527 expands the use of 
advocacy review panels to cover rules with a significant 
economic impact on a substantial number of small entities that 
are proposed by all agencies and would also apply to rules that 
would be considered ``major rules.'' H.R. 527 also amends the 
RFA's requirement that agencies periodically review rules to 
also require that agencies review all rules that exist on H.R. 
527's enactment date and amend or rescind those rules, 
regardless of the review's findings. H.R. 527 expands the 
availability of judicial review to include any agency action 
taken to comply with the RFA, and not just ``final agency 
action,'' as is the case under current law. Finally, H.R. 527 
grants exclusive jurisdiction to the Federal courts of appeals 
to enjoin, set aside, suspend, or determine the validity of all 
final rules concerning RFA implementation that have been 
promulgated by the SBA's Chief Counsel for Advocacy under the 
authority granted to it by H.R. 527.

               III. H.R. 527 IS BASED UPON A FAULTY STUDY

    H.R. 527 is based on the faulty premise that regulation 
imposes overwhelmingly burdensome costs on small businesses 
that ultimately hamper economic growth and job creation. In 
particular, H.R. 527's supporters rely almost exclusively on a 
study by economists Nicole and Mark Crain (Crain study)\8\ that 
concluded that Federal regulations impose a $1.75 trillion cost 
on all businesses and that a disproportionate share of these 
costs are borne by small businesses.\9\
---------------------------------------------------------------------------
    \8\Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs 
on Small Firms, Rep. No. SBAHQ-08-M-0466 (Sept. 2010), available at 
http://archive.sba.gov/advo/research/rs371tot.pdf.
    \9\H.R. 527 Legislative Hearing (prepared statements of Richard 
Gimmel, President, Atlas Machine & Supply, Inc., on behalf of the 
National Association of Manufacturers, pp. 4-5; Thomas Sullivan, former 
Chief Counsel for Advocacy, Small Business Administration, p. 3; and 
Karen R. Harned, Executive Director, Small Business Legal Center, 
National Federation of Independent Businesses, unnumbered p. 1).
---------------------------------------------------------------------------
    The Crain study, however, has been roundly criticized for 
exaggerating the costs of Federal rulemaking on small 
businesses. For example, the Center for Progressive Reform 
(CPR) notes that the $1.75 trillion cumulative burden cited by 
the study fails to account for any benefits of regulation.\10\ 
CPR observes that the Office of Management and Budget (OMB) 
estimated in 2008 that major rules imposed $46 billion to $54 
billion in costs, but also produced $122 billion to $656 
billion in benefits.\11\ Moreover, the study's methodology is 
flawed with respect to how it calculated economic costs. The 
study, which relied on international public opinion polling by 
the World Bank on how friendly a particular country was to 
business interests, ignored actual data on costs imposed by 
Federal regulation in the United States.\12\
---------------------------------------------------------------------------
    \10\Sid Shapiro, Ruth Ruttenberg, & James Goodwin, Setting the 
Record Straight: The Crain and Crain Report on Regulatory Costs, Center 
for Progressive Reform White Paper #1103 (Feb. 2011).
    \11\Id.
    \12\Id.
---------------------------------------------------------------------------
    The Congressional Research Service (CRS) also conducted an 
extensive examination of the Crain study and criticized much of 
its methodology.\13\ Moreover, CRS noted that the authors of 
the Crain study themselves told CRS that their study was ``not 
meant to be a decision-making tool for lawmakers or Federal 
regulatory agencies to use in choosing the 'right' level of 
regulation. In no place in any of the reports do we imply that 
our reports should be used for this purpose. (How could we 
recommend this use when we make no attempt to estimate the 
benefits?)''\14\ CRS concluded that ``a valid, reasoned policy 
decision can only be made after considering information on both 
costs and benefits'' of regulation.\15\
---------------------------------------------------------------------------
    \13\Curtis W. Copeland, Analysis of an Estimate of the Total Costs 
of Federal Regulations, Congressional Research Service Report for 
Congress, R41763 (Apr. 6, 2011).
    \14\Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to 
the author of the CRS report).
    \15\Id. The Economic Policy Institute also issued a critique of the 
Crain study outlining additional concerns with the study's methodology 
and data. See John Irons and Andrew Green, Flaws Call for Rejecting 
Crain and Crain Model: Cited $1.75 Trillion Cost of Regulations Is Not 
Worth Repeating, Economic Policy Institute, July 19, 2011, available at 
http://w3.epi-data.org/temp2011/IssueBrief308.pdf.
---------------------------------------------------------------------------
    The Crain study's failure to account for the net benefits 
of regulation in general was particularly shortsighted given 
evidence that regulation can result in net economic benefits 
for business. For example, promulgation of OSHA's Cotton Dust 
Standard resulted in the affected industry growing and 
prospering in the aftermath of the rule's promulgation.\16\ 
Much of that growth and prosperity was the result of business 
innovations relating to compliance with the rule.\17\ Indeed, 
the costs of the rule ended up being much smaller than 
predicted because of these innovations.\18\
---------------------------------------------------------------------------
    \16\Occupational Safety and Health Administration, Regulatory 
Review of OSHA's Cotton Dust Standard, at 35-38 (Sept. 2000), available 
at http://www.osha.gov/dea/lookback/cottondust
_final2000.pdf.
    \17\Id.
    \18\Id. at 38-39.
---------------------------------------------------------------------------
    Sally Katzen, a former Administrator of the Office of 
Information and Regulatory Affairs (OIRA) during the Clinton 
Administration, noted in testimony before the CCAL Subcommittee 
that OMB regularly finds that the aggregate benefits of Federal 
regulation outweigh its costs.\19\ In words that are apt with 
respect to consideration of H.R. 527, Katzen noted the 
following in her prepared statement:
---------------------------------------------------------------------------
    \19\The REINS Act--Promoting Jobs and Expanding Freedom by Reducing 
Needless Regulations Hearing Before the Subcomm. on Courts, Commercial 
and Administrative Law of the H. Comm. on the Judiciary, 112th Cong. 3 
(2011) (prepared statement of Sally Katzen, former Administrator of the 
Office of Information and Regulatory Affairs).

        OMB's Report to Congress does include data on benefits, 
        and the numbers are striking: according to OMB, the 
        benefits from the regulations issued during the 10-year 
        period ranged from $128 billion to $616 billion. 
        Therefore, even if one uses OMB's highest estimate of 
        costs and its lowest estimate of benefits, the 
        regulations issued over the past 10 years have produced 
        net benefits of $73 billion to our society. This cannot 
        be dismissed as a partisan report by the current 
        administration, because OMB issued reports with similar 
        results (benefits greatly exceeding costs) throughout 
        the George W. Bush Administration (e.g., for FY 1998-
        2008, major regulations cost between $51 and $60 
        billion, with benefits estimated to be $126 to $663 
        billion dollars). Given that the benefits of 
        regulations consistently exceed the costs, the need for 
        any legislation that would make the issuance of 
        regulations more difficult or time consuming is 
        certainly in question.\20\
---------------------------------------------------------------------------
    \20\Id.

    An amendment offered by Rep. Jerrold Nadler (D-NY) would 
have required agencies to assess the indirect benefits of a 
rule as part of the required regulatory flexibility analysis 
under H.R. 527. The amendment was opposed by the Majority and 
was not adopted.

   IV. H.R. 527 WILL CAUSE FEDERAL AGENCY RULEMAKING TO BE SEVERELY 
        UNDERMINED, THEREBY THREATENING PUBLIC HEALTH AND SAFETY

    H.R. 527 will overwhelm regulatory agencies with 
unnecessary analytical requirements, reduced agency discretion 
and flexibility, and numerous opportunities for business 
interests to hamstring the rulemaking process. By shifting 
resources to a more complex, costly, and time-consuming 
rulemaking process, this legislation will prevent agencies from 
effectively promulgating regulations designed to protect the 
health and public safety of Americans.
    The bill's onerous requirements will prevent agencies from 
engaging in effective rulemaking. As the Minority witness 
testified at the legislative hearing on H.R. 527, these new 
mandates will prevent agencies from being able to engage in 
effective rulemaking.\21\ Consumer advocates likewise are 
concerned that H.R. 527 generally ``adds yet another analytical 
layer to the rulemaking process, further complicating agencies' 
abilities to implement statutes, fulfill their missions, and 
serve the public interest.''\22\
---------------------------------------------------------------------------
    \21\H.R. 527 Legislative Hearing (prepared statement of J. Robert 
Shull) (hereinafter ``Shull statement'').
    \22\OMB Watch, Statement on the Regulatory Flexibility Improvements 
Act of 2011, on file with the House Committee on the Judiciary, 
Minority staff.
---------------------------------------------------------------------------
    In recognition of these problems, Rep. Hank Johnson (D-GA) 
offered at markup two amendments that would have exempted rules 
implementing the FDA Food Safety Modernization Act and the 
Patient Protection and Affordable Care Act from H.R. 527. The 
Majority opposed both amendments and neither was adopted.

 V. H.R. 527 FAILS TO ADDRESS SHORTCOMINGS IN CURRENT LAW UNDER THE RFA

    Whether a rule has a ``significant economic impact on a 
substantial number of small entities'' is the threshold inquiry 
for determining whether the RFA applies to a proposed or final 
rule. The RFA does not define ``significant economic impact'' 
or ``substantial number of small entities.'' These terms are 
left to agencies to determine. Some critics suggest that 
because of the undefined standard and the discretion that 
agencies have to determine whether the standard is met, 
agencies are essentially able to ``game the system'' and avoid 
triggering RFA obligations.
    To the extent that proponents of H.R. 527 contend that it 
is needed because agencies currently do not apply the RFA in a 
consistent manner, H.R. 527 does nothing to address that 
concern. The Government Accountability Office (GAO) has on 
several occasions noted that ``Congress may need to clearly 
delineate--or have some other organization delineate--what is 
meant by the terms `significant economic impact' and 
`substantial number of small entities.'''\23\ H.R. 527, 
however, fails to clarify either of these terms. Instead, the 
bill serves to institutionalize a pro-business regime at the 
expense of public health and safety. H.R. 527 does not concern 
agency compliance with the RFA or assist small entities with 
regulatory compliance. Rather, H.R. 527 is intended simply to 
slow down rulemaking.
---------------------------------------------------------------------------
    \23\SBREFA Compliance--Is It the Same Old Story?: Hearing Before 
the H. Comm. on Small Business, 107th Cong. 51 (2002) (statement of 
Victor Rezendes, Managing Director--Strategic Issues Team, U.S. 
Government Accountability Office).
---------------------------------------------------------------------------

VI. H.R. 527 OFFERS NO REAL ASSISTANCE TO SMALL BUSINESSES IN COMPLYING 
                            WITH REGULATIONS

    H.R. 527 does nothing to alleviate the burden on small 
entities of complying with Federal regulations. It includes no 
provision that offers assistance to small entities, whether 
through subsidies, government-guaranteed loans, preferential 
tax treatment for small firms, or fully funded compliance 
assistance offices. Instead, the bill merely aggrandizes the 
power of the SBA's Office of Advocacy and of the professional 
lobbying class in Washington. If the proponents of H.R. 527 
were serious about helping small entities deal with the 
regulatory system, they would support instituting mechanisms 
for small entities that actually help them participate directly 
in rulemaking, without having to rely on Washington-based 
intermediaries.

  VII. H.R. 527 IMPOSES ADDITIONAL DUTIES AND COSTS ON AGENCIES, BUT 
FAILS TO AUTHORIZE ANY ADDITIONAL FUNDING OR OFFSET IMPLEMENTATION COST

    H.R. 527 substantially increases the responsibilities of 
agencies with respect to rulemaking. For example, section 3 of 
the bill requires agencies, with respect to final regulatory 
analyses, to:

         Ldescribe significant issues raised by any 
        public comments submitted in response to the initial 
        regulatory flexibility analysis, provide the agency's 
        assessment of the issues, and explain any changes made 
        in the proposed rule as a result of such comments;\24\
---------------------------------------------------------------------------
    \24\H.R. 527, 112th Cong., Sec. 3(b)(1)(B) (2011).

         Ldescribe in detail why an agency did not 
        provide an estimate of the number of small entities 
        anticipated to be affected by the rule;\25\
---------------------------------------------------------------------------
    \25\H.R. 527, 112th Cong., Sec. 3(b)(1)(C) (2011).

         Lspecify that the required descriptions be 
        detailed;\26\
---------------------------------------------------------------------------
    \26\H.R. 527, 112th Cong., Sec. 3(b)(1)(D) (2011).

         Ldescribe any disproportionate economic impact 
        on small entities or a specific class of small 
        entities;\27\
---------------------------------------------------------------------------
    \27\H.R. 527, 112th Cong., Sec. 3(b)(1)(E) (2011).

         Lsupply a detailed statement--including the 
        factual and legal bases--of the reasons why an agency 
        has determined that a proposed or final rule will not 
        have a significant economic impact;\28\ and
---------------------------------------------------------------------------
    \28\H.R. 527, 112th Cong., Sec. 3(d) (2011).

         Lprovide in every instance (rather than simply 
        making discretionary, as under current law) a 
        quantifiable or numerical description of the effects of 
        a proposed rule and alternatives to a proposed rule or 
        a general description of such effects with a detailed 
        statement explaining why quantification is not 
        practicable or reliable.\29\
---------------------------------------------------------------------------
    \29\H.R. 527, 112th Cong., Sec. 3(e) (2011).

    These heightened responsibilities and other duties imposed 
by the bill will force agencies--and, therefore, taxpayers--to 
incur considerable costs to implement H.R. 527. In fact, the 
Congressional Budget Office estimates that implementing H.R. 
527 will cost taxpayers $80 million over fiscal years 2012 
through 2016. H.R. 527, however, fails to authorize any funding 
for agencies to pay for the additional responsibilities imposed 
on them by the bill. Moreover, it violates House rules by 
failing to include any offset for its $80 million cost. 
Unfortunately, the Majority refused to even consider how much 
implementation of H.R. 527 would cost taxpayers when it 
rejected an amendment offered by Rep. Sheila Jackson Lee (D-TX) 
that would have merely required a GAO study on the cost impact 
on agencies of implementing H.R. 527.

                   VIII. OTHER CONCERNS WITH H.R. 527

A. H.R. 527's Elimination of Agencies' Waiver and Delay Authority 
        Undermines the Agencies' Ability To Respond To Emergencies
    Section 4 of H.R. 527 eliminates agencies' ability to waive 
or delay any required initial regulatory flexibility analysis 
or to delay any required final regulatory flexibility analysis 
in the event of an emergency. By eliminating this safeguard, 
H.R. 527 threatens to undermine an agency's ability to respond 
to emergency situations.
    In place of the emergency waiver or delay authority, the 
bill empowers the Chief Counsel for Advocacy to issue 
regulations about how agencies in general should comply with 
the Act. The absurdity of this scheme is evident with this 
illustration: in the event of an epidemic E. coli or listeria 
infection caused by some item in our Nation's food distribution 
network, or if there is an imminent environmental disaster that 
could be addressed systemically through regulation, H.R. 527 
mandates that an agency's response must be to ask the Chief 
Counsel for Advocacy at SBA for guidance on whether and how to 
respond.
    This override of an agency's authority to respond to 
emergencies without having to first go through the arduous and 
time-consuming task of review and analysis is simply wrong. 
Federal agencies are charged with promulgating regulations that 
impact virtually every aspect of our lives, including the air 
we breathe, the water we drink, the food we eat, the cars we 
drive, and the play toys we give our children.
    Small businesses, like all businesses, provide services and 
goods that also affect our lives. It makes no difference to 
someone who is breathing dirty air or drinking poisoned water, 
whether the hazards come from a small or large business.
    At the Committee markup, Rep. John Conyers, Jr., the 
Committee's Ranking Member, offered an amendment that would 
have restored the waiver or delay authority that allowed 
agencies to quickly respond to emergencies without being 
hampered or second-guessed by others. The Majority opposed this 
amendment and it was not adopted.
B. H.R. 527's Expanded Use of SBREFA Review Panels Creates a Serious 
        Impediment To Agency Rulemaking
    SBREFA amended the RFA in 1996 to require proposed rules of 
the Environmental Protection Agency (EPA) and the Occupational 
Safety and Health Administration (OSHA) be subject to an 
advocacy review panel consisting of representatives of the 
agency promulgating the rule, the Chief Counsel for Advocacy of 
SBA, and OIRA.\30\ Section 5 of H.R. 527 expands this 
requirement to major rules. As a result, this provision will 
greatly slow down the rulemaking process and substantially 
empower business interests to throw sand into the gears of 
rulemaking. While the Majority argues that there is a need for 
greater public participation in the rulemaking process, section 
5 evidences what they actually mean, namely, that they want to 
give a greater opportunity to business interests to influence 
the rulemaking process.
---------------------------------------------------------------------------
    \30\5 U.S.C. Sec. 609(b) (2010).
---------------------------------------------------------------------------
    The use of SBREFA panels is already cumbersome. SBA's 
Office of Advocacy, essentially a taxpayer-funded lobby for 
businesses and small entity representatives, is already able to 
delay the issuance of final EPA and OSHA rules and to shape 
them in industry-friendly ways. Expanding the use of these 
panels to include all agencies and rules that do not 
necessarily have a significant economic effect on a substantial 
number of small entities would guarantee that most rulemaking 
would grind to a halt. Moreover, expanding review panels to 
rules that do not necessarily have a significant economic 
effect on a substantial number of small entities takes this 
review panel process beyond the scope of the RFA.
    In an effort to lessen the pernicious impact of this 
provision, Rep. Steve Cohen (D-TN), Ranking Member of the CCAL 
Subcommittee, offered two amendments at markup. One amendment 
would have required that the panels include a representative of 
the public or a public interest organization to ensure that a 
consumer perspective be heard in the consideration of proposed 
rules by these review panels. The second amendment would have 
raised the dollar threshold contained in section 5 from $100 
million in annual economic effect to $250 million because the 
$100 million threshold for determining what would constitute a 
``major rule'' was set back in 1981. The $250 million threshold 
reflected an adjustment for inflation, but would have captured 
the same universe of rules as those that would have been 
captured by the $100 million threshold in 1981. The Majority 
opposed both amendments and they were not adopted.
C. H.R. 527 Forces Agencies To Engage in Wasteful, Speculative Analyses
    Section 2 of H.R. 527 defines, among other things, 
``economic impact'' to include any reasonably foreseeable 
``indirect economic effect'' that a proposed rule may have on a 
small entity. This provision would force agencies to conduct 
highly speculative and labor-intensive assessments, all of 
which could be subject to litigation by well-financed business 
interests. The bill effectively would require an agency to 
engage in a virtual guessing game to divine the indirect 
effects of a proposed regulation, which, of course, would be 
subject to judicial review. In effect, H.R. 527 could kill a 
rulemaking as a result of ``paralysis by analysis.''
D. H.R. 527 Would Overwhelm Agencies by Requiring Them To Conduct 
        Exhaustive Reviews of All Existing Rules
    Section 6 of H.R. 527 threatens to undermine ability of the 
agencies to fulfill their regulatory responsibilities because 
of its requirement that agencies review all rules existing on 
bill's enactment date. The review must consist of a 
determination of whether these rules have a significant 
economic impact on a substantial number of small entities, 
regardless of whether they already went through a final 
regulatory flexibility analysis previously.
    As a result of this provision, agencies would be forced to 
re-justify safeguards like regulations designed to ensure clean 
air, clean water, food safety, automobile safety, ensure 
workplace safety. Moreover, this unlimited look-back 
requirement is a wasteful expenditure of taxpayer dollars as it 
forces agencies to redirect their scarce resources to meet this 
unhelpful and burdensome requirement. This substantial increase 
in the workload of the agencies would occur while Congress 
continues to slash funding for critical child welfare, indigent 
assistance, and law enforcement programs.
    To put this requirement in context, it should be noted that 
there are currently more than 165,000 pages of regulations in 
the Code of Federal Regulations, as well as several hundred 
thousand guidance documents, some of which could also be 
subjected to H.R. 527's look-back requirement.
    In addition, section 2 of H.R. 527 expands the scope of 
rules subject to the RFA by including amendments to land 
management plans as well as Indian tribes and Internal Revenue 
Service recordkeeping requirements. These types of guidance 
documents traditionally are not ``rules'' subject to the RFA. 
Expanding the scope of regulations subject to review will 
require resources to go to the review process that would 
otherwise be used by the agency to carry out their duties as 
delegated by Congress.
E. H.R. 527 Imposes an Absurd and Wasteful Requirement that Agencies 
        Amend or Rescind all Existing Regulations, Even If They Are Not 
        Burdensome or Unnecessary
    Section 6 of H.R. 527 requires agencies to review all 
existing rules to determine whether they should be amended or 
rescinded to minimize significant adverse impacts on small 
entities. The section also requires that agencies amend or 
rescind a rule, regardless of the findings of its review.\31\
---------------------------------------------------------------------------
    \31\H.R. 527, 112th Cong, Sec. 6 (2011).
---------------------------------------------------------------------------
    On its face, this appears to be an absurd and wasteful 
requirement. Why require agencies to engage in a review to 
determine whether a rule should be amended or rescinded if 
amending or rescinding the rule is required regardless of what 
the review would find? Taken literally, this provision would 
require agencies to: (1) review all rules existing on H.R. 
527's enactment date, and (2) amend or rescind every rule in 
existence on that date regardless of the review's findings. 
While we find much of H.R. 527's provisions to be wasteful, 
surely, the sponsors of H.R. 527 could not have intended to 
include this absurd and monumental waste of taxpayer resources.
    Giving the sponsors the benefit of the doubt, Rep. Nadler 
offered an amendment to change the ``shall'' to a ``may'' to 
correct this apparent drafting error. The Majority inexplicably 
opposed Rep. Nadler's amendment. In opposing the amendment, the 
Chairman claimed that agencies must be given less discretion to 
determine their course of conduct under H.R. 527.
    While reasonable minds can differ as to the extent to which 
Congress should give agencies decision-making discretion, in 
this case, the Chairman's contention is misplaced, as this 
amendment had nothing to do with agency discretion. Rather, it 
simply sought to avoid either requiring a pointless review of 
rules or pointless changes to all existing rules.
F. The Expansion of Judicial Review to Include All Agency Actions, and 
        Not Just ``Final Agency Action,'' Allows Special Interests To 
        Obstruct Rulemaking by Challenging Agency Action Before a Rule 
        Is Finalized
    Section 7 of H.R. 527 creates the opportunity for well-
funded anti-regulatory business interests to engage in 
frivolous litigation. It does this by expanding judicial review 
to include review of agency actions prior to final agency 
action. At the hearing before the Subcommittee, the Minority 
witness expressed concern that H.R. 527's expansion of judicial 
review to include challenges to the adequacy of regulatory 
flexibility analyses would simply open the door to endless 
litigation.\32\ Current law limits judicial review to final 
agency actions.
---------------------------------------------------------------------------
    \32\Shull statement, unnumbered p. 5.
---------------------------------------------------------------------------
    Cass Sunstein, the current OIRA Administrator, aptly 
summarized concerns about expanding judicial review of agency 
rulemaking when he stated that

        while there is an important role for judicial review of 
        regulations, a significant expansion of judicial review 
        in rulemaking could create unintended complexity in the 
        regulatory system, preventing important rules from 
        taking effect. An increase in litigation and judicial 
        authority might also increase regulatory uncertainty, 
        which would be most unwelcome in the current economic 
        situation. At the same time, additional litigation and 
        uncertainty can undermine important safeguards of 
        public health, welfare, and safety, including 
        safeguards that prevent illnesses and deaths.\33\
---------------------------------------------------------------------------
    \33\Federal Regulation: A Review of Legislative Proposals, Part I: 
Hearing Before the S. Comm. on Homeland Security and Government 
Affairs, 112th Cong. 3 (2011) (statement of the Honorable Cass R. 
Sunstein, Administrator, Office of Information and Regulatory Affairs, 
Office of Management and Budget).
---------------------------------------------------------------------------

                             IX. CONCLUSION

    For the numerous reasons stated above, H.R. 527 is a flawed 
piece of legislation. There are more meaningful ways to assist 
small businesses and other small entities in navigating the 
regulatory landscape without threatening agencies' ability to 
protect public health and safety. We urge our colleagues to 
shift their attention to these alternatives.

                                   John Conyers, Jr.
                                   Howard L. Berman.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Melvin L. Watt.
                                   Zoe Lofgren.
                                   Sheila Jackson Lee.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.
                                   Mike Quigley.

                                  
