[House Report 113-288]
[From the U.S. Government Publishing Office]


113th Congress                                            Rept. 113-288
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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



 
            REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2013

                                _______
                                

 December 11, 2013.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 2542]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2542) 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, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page

The Amendment....................................................     2
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................    12
Committee Consideration..........................................    12
Committee Votes..................................................    12
Committee Oversight Findings.....................................    17
New Budget Authority and Tax Expenditures........................    17
Congressional Budget Office Cost Estimate........................    17
Duplication of Federal Programs..................................    20
Disclosure of Directed Rule Makings..............................    20
Performance Goals and Objectives.................................    20
Advisory on Earmarks.............................................    20
Section-by-Section Analysis......................................    20
Changes in Existing Law Made by the Bill, as Reported............    25
Dissenting Views.................................................    42

                             The Amendment

    The amendment (stated in terms of the page and line numbers 
of the introduced bill) is as follows:
  Page 27, line 14, strike ``(6)'' and insert ``(9)''.

                          Purpose and Summary

    The Regulatory Flexibility Improvements Act of 2013, H.R. 
2542, provides needed reforms to the Regulatory Flexibility Act 
of 1980 (RFA) and the Small Business Regulatory Enforcement 
Fairness Act of 1996 (SBREFA). The RFA and SBREFA attempted to 
require agencies to account better for the impacts of proposed 
regulations on small businesses and other small entities and to 
tailor final regulations to minimize adverse impacts on these 
entities, but have not commanded full agency compliance.\1\ The 
RFIA updates the RFA and SBREFA to close loopholes and more 
effectively reduce the disproportionate burden that over-
regulation places on small entities, thereby enhancing job 
creation and hastening economic recovery.
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    \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).
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                Background and Need for the Legislation

                I. 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\
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    \2\See Figure 2: Federal Register Pages: 1940-2010, in Susan E. 
Dudley, ``Prospects for Regulatory Reform in 2011,'' Engage 11:1 (June 
2011).
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    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.
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    \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).
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    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 to prepare a regulatory flexibility analysis when 
proposed and final rules are published in the Federal Register 
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 pursuant to section 605(b) of the Act 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) 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\
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    \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.'').
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    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 effectiveness of this requirement 
remains unclear, however, as indicated by inconsistent agency 
practice.\12\
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    \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.
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    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 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\
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    \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'').
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             II. 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 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\
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    \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).
---------------------------------------------------------------------------
    With regard to advocacy review panels, 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 impact 
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.
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    \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).
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    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\
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    \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.
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    \23\67 Fed. Reg. 53,462 (Aug. 16, 2002).
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    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.
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    \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].'').
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    Testimony at hearings held by the Committee on Small 
Business during the 106th, 107th and 108th Congresses supports 
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 and H.R. 2542. This 
Committee's Subcommittee on Commercial and Administrative Law 
and the Committee on Small Business both held hearings on H.R. 
682.\28\
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    \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).
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         III. 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.
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    \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).
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    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 imposed a cumulative burden of $1.75 trillion on our 
economy--a figure that equaled fourteen percent of national 
income.\30\ That burden, moreover, falls disproportionately on 
small businesses:
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    \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\
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    \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\
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    \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).
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    Recent regulatory expansions and the future threat of 
further excessive Federal regulation--such as under the waves 
of regulation occurring 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\
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    \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/
SB100014240527487042882045753631626648357
80.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/SB10001424052748703779704576074193214999
486.html?utm_source
=Newsletter&utm_medium=Email&utm_campaign=Heritage%2BHotsheet (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).
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    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\37\ 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 impact 
small businesses.\38\ When former Judiciary Committee Chairman 
Lamar 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.\39\
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    \37\``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).
    \38\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).
    \39\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).
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    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.''\40\ 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.''\41\ This falls 
well short of convening the advocacy review panel that OSHA is 
required by law to hold.\42\
---------------------------------------------------------------------------
    \40\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).
    \41\Id.
    \42\See 5 U.S.C. Sec. 609.
---------------------------------------------------------------------------

      IV. CUMULATIVE HEARING RECORD ON THE REGULATORY FLEXIBILITY 
                            IMPROVEMENTS ACT

    On February 10, 2011, the Subcommittee on Courts, 
Commercial and Administrative Law held a legislative hearing on 
H.R. 527.\43\ 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's Rights for the Public 
Welfare Foundation; and, Karen R. Harned, Executive Director of 
the National Federation of Independent Business (NFIB).
---------------------------------------------------------------------------
    \43\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.\44\ Mr. Gimmell called for ``more 
detailed statements in the RFA process and requirements to 
identify redundant, overlapping, or conflicting 
regulations.''\45\ 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.\46\
---------------------------------------------------------------------------
    \44\Id. at 56.
    \45\Id.
    \46\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.''\47\ 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.\48\
---------------------------------------------------------------------------
    \47\Id. at 65.
    \48\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.''\49\ 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.''\50\ 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.''\51\
---------------------------------------------------------------------------
    \49\Id. at 85.
    \50\Id.
    \51\Id. at 77.
---------------------------------------------------------------------------
    The Committee on Small Business also held a legislative 
hearing on H.R. 527.\52\ 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.
---------------------------------------------------------------------------
    \52\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).
---------------------------------------------------------------------------
    The Regulatory Flexibility Improvements Act was 
reintroduced on June 27, 2013, as H.R. 2542, the ``Regulatory 
Flexibility Improvements Act of 2013.'' On June 28, 2013, the 
Subcommittee on Regulatory Reform, Commercial and Antitrust Law 
held a legislative hearing on H.R. 2542.\53\ Testimony was 
received from NFIB Exec. Dir. Harned; Carl Harris, co-founder 
of Carl Harris Co., Inc., Kansas national area chairman for the 
National Association of Home Builders, and president of the 
Kansas Building Industry Association; Rosario Palmieri, Vice 
President, Infrastructure, Legal and Regulatory Policy, 
National Association of Manufacturers; and, Amit Narang, 
Regulatory Policy Advocate, Public Citizen.
---------------------------------------------------------------------------
    \53\See ``Legislative Hearing on H.R. 2542, the Regulatory 
Flexibility Improvements Act of 2013'' Before the Subcomm. on 
Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the 
Judiciary, 113th Cong., Serial No. 113-__ (June. 26, 2013) (hearing 
record available at http://judiciary.house.gov/hearings/113th/
hear_06282013.html).
---------------------------------------------------------------------------
    Ms. Harned testified that overzealous regulation remains a 
constant concern, and that, as of June 20, 2013, 23 percent of 
small businesses cited red tape as their most important 
concern, second only to taxes.\54\ Ms. Harned emphasized that, 
according to analysis of recent figures released by OIRA, the 
costs imposed by new regulations under the Obama administration 
in 2012 alone exceeded the costs of new regulations promulgated 
by both the George W. Bush and Clinton administrations.\55\ 
Meanwhile, Ms. Harned stressed, job creation in the U.S. has 
remained stagnant, and small businesses had reported a drop in 
willingness to hire since November 2012.\56\ In Ms. Harned's 
view, regulatory reform like the RFIA would ``go a long way'' 
towards resolving the adverse impacts of regulation on small 
businesses, who are responsible for most job creation in the 
economy.\57\
---------------------------------------------------------------------------
    \54\Statement of Karen Harned at ``Legislative Hearing on H.R. 
2542, the Regulatory Flexibility Improvements Act of 2013'' Before the 
Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. 
Comm. on the Judiciary, 113th Cong., Serial No. 113-__ at 2 (June. 26, 
2013) (available at http://judiciary.house.gov/hearings/113th/
hear_06282013.html).
    \55\Id. at 2-3.
    \56\Id. at 3.
    \57\Id.
---------------------------------------------------------------------------
    Mr. Harris testified that the costs of regulation at all 
levels account for 25 percent of the cost of new homes, and 
that it can be very difficult for a small business to comply 
with the myriad of regulations affecting its business.\58\ 
Based on his experience with the RFA and SBREFA, including as a 
SBREFA small business review panelist, Mr. Harris testified 
that the concepts of the RFA and SBREFA were constructive, but 
that, under existing law, agencies too frequently reduced RFA 
and SBREFA compliance to a ``check the box'' exercise that 
produced insufficiently meaningful results.\59\ Mr. Harris 
submitted that the RFIA's reforms to the RFA and SBREFA would 
substantially contribute to the realization of these statutes' 
promise.\60\
---------------------------------------------------------------------------
    \58\Statement of Carl Harris at ``Legislative Hearing on H.R. 2542, 
the Regulatory Flexibility Improvements Act of 2013'' Before the 
Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. 
Comm. on the Judiciary, 113th Cong., Serial No. 113-__ at 2 (June. 26, 
2011) (available at http://judiciary.house.gov/hearings/113th/
hear_06282013.html).
    \59\Id.
    \60\Id.
---------------------------------------------------------------------------
    Mr. Palmieri testified that nearly 95 percent of U.S. 
manufacturers have fewer than 100 employees, and that ``to 
compete on a global stage, manufacturing in the United States 
needs policies that enable it to thrive and create jobs.''\61\ 
Mr. Palmieri directed the Subcommittee's attention to a 2011 
study by the Manufacturers Institute and the Manufacturers 
Alliance for Productivity and Innovation, which found that U.S. 
manufacturers ``face a 20 percent structural cost burden 
compared to nine major trading partners because of government 
imposed policies, including regulations.''\62\ Mr. Palmieri 
also cited recent evidence that 67 percent of manufacturers 
cited an unfavorable business climate due to regulations and 
taxes as a primary challenge that they faced.\63\ Mr. Palmieri 
submitted that, when regulatory agencies did comply with the 
RFA and SBREFA, positive results could occur, but that agencies 
far too often were able to evade meaningful RFA compliance.\64\ 
Like Ms. Harned and Mr. Harris, he testified that the RFIA 
would greatly help to solve this problem.\65\
---------------------------------------------------------------------------
    \61\Statement of Rosario Palmieri at ``Legislative Hearing on H.R. 
2542, the Regulatory Flexibility Improvements Act of 2013'' Before the 
Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. 
Comm. on the Judiciary, 113th Cong., Serial No. 113-__ at 3 (June. 26, 
2011) (available at http://judiciary.house.gov/hearings/113th/
hear_06282013.html).
    \62\Id. at 4.
    \63\Id.
    \64\Id. at 5-7.
    \65\Id. at 6.
---------------------------------------------------------------------------
    Mr. Narang, by contrast, submitted that, in his view, the 
RFIA would slow down the regulatory process unnecessarily.\66\ 
In his view, a more productive path forward would be to provide 
more compliance guidance and assistance to small businesses, 
rather than additional analysis of regulations before they are 
imposed.\67\
---------------------------------------------------------------------------
    \66\Statement of Amit Narang at ``Legislative Hearing on H.R. 2542, 
the Regulatory Flexibility Improvements Act of 2013'' Before the 
Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. 
Comm. on the Judiciary, 113th Cong., Serial No. 113-_ at 9 (June. 26, 
2011) (available at http://judiciary.house.gov/hearings/113th/
hear_06282013.html).
    \67\Id. at 10.
---------------------------------------------------------------------------

                        V. INCLUSION OF H.R. 585

    In conjunction with the House's consideration of H.R. 527 
during the 112th Congress, the House also considered a 
companion bill, H.R. 585, the ``Small Business Size Standard 
Flexibility Act of 2011.'' H.R. 585 amended the Small Business 
Act by transferring certain size standard determination 
functions from the Administrator of the Small Business 
Administration (SBA) to the Office of the Chief Counsel for 
Advocacy.
    The reasons for this amendment are straightforward. 
Currently, the SBA Administrator, pursuant to Sec. 3(a)(2) of 
the Small Business Act (15 U.S.C. 632(a)(2), has the authority 
to determine what constitutes a small business for the purposes 
of the Small Business Act or any other Federal statute. If an 
agency proposes to draft a regulation that adopts a size 
standard different from one already adopted by the 
Administrator in regulations that implement the Small Business 
Act, the agency must obtain the Administrator's approval. To 
consider approval, however, the Administrator requires a full 
understanding of the regulatory regime that SBA's sister agency 
proposes to implement, encompassing knowledge outside of the 
SBA's ordinary expertise. The SBA's Office of the Chief Counsel 
for Advocacy, however--an independent office within the SBA--
has such expertise, because it represents the interests of 
small businesses in other agencies' rulemaking proceedings as 
part of its responsibility to monitor agency compliance with 
the RFA. It is therefore logical to transfer the limited 
function of determining size standards of small businesses for 
purposes other than the Small Business Act and Small Business 
Investment Act of 1958 to the Office of the Chief Counsel for 
Advocacy.
    The Judiciary Committee and the Small Business Committee 
share jurisdiction over the RFIA, meaning that both committees 
may hold hearings on and markup the legislation. For efficiency 
in the committees' and the House's consideration of related 
issues, H.R. 2542 incorporates into the Regulatory Flexibility 
Improvements Act the terms of the Small Business Size Standard 
Flexibility Act, as passed by the House during the 112th 
Congress.

                                Hearings

    The Committee's Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law held 1 day of hearings on H.R. 
2542, on June 28, 2013. Testimony was received from Karen R. 
Harned, Executive Director, National Federation of Independent 
Business; Carl Harris, co-founder, Carl Harris Co., Inc., 
Kansas national area chairman for the National Association of 
Home Builders, and president of the Kansas Building Industry 
Association; Rosario Palmieri, Vice President, Infrastructure, 
Legal and Regulatory Policy, National Association of 
Manufacturers; and, Amit Narang, Regulatory Policy Advocate, 
Public Citizen, with additional material submitted by the 
Associated Builders and Contractors, Inc.

                        Committee Consideration

    On July 10, 2013, the Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law met in open session and ordered 
the bill H.R. 2542 favorably reported, without amendment, by 
voice vote, a quorum being present. On July 31, 2013, the 
Committee met in open session and ordered the bill H.R. 2542 
favorably reported without amendment, by a rollcall vote of 15 
to 9, 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. 2542.
    1. The amendment offered by Mr. Conyers strikes section 5 
of H.R. 2542, which provides compliance-related rulemaking 
authority to the Small Business Administration's Chief Counsel 
for Advocacy and repeals waiver provisions of the RFA. The 
amendment was defeated by a rollcall vote of 11-17.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................
Mr. Smith (MO).................................              X

Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................      X
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................      X
Ms. Lofgren (CA)...............................      X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................     11      17
------------------------------------------------------------------------

    2. The amendment offered by Mr. Nadler adds requirements 
that agencies identify direct and indirect benefits of covered 
regulations. The amendment was defeated by a rollcall vote of 
12-17.

                             ROLLCALL NO. 2
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................
Mr. Smith (MO).................................              X

Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................      X
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................      X
Ms. Lofgren (CA)...............................      X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................     12      17
------------------------------------------------------------------------

    3. The amendment offered by Mr. Johnson exempts regulations 
to implement the Patient Protection and Affordable Care Act 
from the requirements of H.R. 2542. The amendment was defeated 
by a rollcall vote of 5-11.

                             ROLLCALL NO. 3
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................
Mr. King (IA)..................................
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................

Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................      X
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................      5      11
------------------------------------------------------------------------

    4. The amendment offered by Ms. Jackson Lee exempts Food 
and Drug Administration regulations from the requirements of 
H.R. 2542. The amendment was defeated by a rollcall vote of 8-
14.

                             ROLLCALL NO. 4
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X

Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................      X
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................
Mr. Jeffries (NY)..............................      X
                                                ------------------------
    Total......................................      8      14
------------------------------------------------------------------------

    5. The bill was reported by a rollcall vote of 15-9.

                             ROLLCALL NO. 5
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................      X
Mr. Sensenbrenner, Jr. (WI)....................      X
Mr. Coble (NC).................................      X
Mr. Smith (TX).................................      X
Mr. Chabot (OH)................................      X
Mr. Bachus (AL)................................      X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................
Mr. King (IA)..................................      X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................      X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................      X
Mr. Gowdy (SC).................................      X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................      X
Ms. Farenthold (TX)............................      X
Mr. Holding (NC)...............................      X
Mr. Collins (GA)...............................
Mr. DeSantis (FL)..............................      X
Mr. Smith (MO).................................      X

Mr. Conyers, Jr. (MI), Ranking Member..........              X
Mr. Nadler (NY)................................              X
Mr. Scott (VA).................................              X
Mr. Watt (NC)..................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................              X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................              X
Mr. Pierluisi (PR).............................              X
Ms. Chu (CA)...................................              X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................              X
Mr. Garcia (FL)................................
Mr. Jeffries (NY)..............................              X
                                                ------------------------
    Total......................................     15       9
------------------------------------------------------------------------

                      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. 2542, 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, September 5, 2013.
Hon. Bob Goodlatte, 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. 2542, the 
``Regulatory Flexibility Improvements Act of 2013.''
    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. 2542--Regulatory Flexibility Improvements Act of 2013.

      As ordered reported by the House Committee on the Judiciary 
                         on September 5, 2013.




                                SUMMARY

    H.R. 2542 would amend the Regulatory Flexibility Act (RFA) 
by expanding the number of rules covered by the RFA and 
requiring agencies to perform additional analysis of 
regulations that affect small businesses. The legislation also 
would provide new authorities to the Small Business 
Administration's (SBA's) Office of Advocacy to intervene and 
provide support for agency rulemaking.
    CBO estimates that implementing H.R. 2542 would cost $45 
million over the 2014-2018 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. 2542 would not 
affect revenues.
    H.R. 2542 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. 2542 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
----------------------------------------------------------------------------------------------------------------
                                                                     2014   2015   2016   2017   2018  2014-2018
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level                                           5      9     12     12     12       50
Estimated Outlays                                                       4      7     10     12     12       45
----------------------------------------------------------------------------------------------------------------

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the legislation will be 
enacted near the start of fiscal year 2014, that the necessary 
amounts will be appropriated each year, and that spending will 
follow historical patterns for similar activities.
    CBO is unaware of any comprehensive information on the 
current level 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 rules, regardless of size, are 
promulgated by the Departments of Transportation, Homeland 
Security, and Commerce, and the Environmental Protection Agency 
(EPA). Most major rules (those with an estimated economic 
impact on the economy of more than $100 million per year) are 
issued by the Departments of Health and Human Services and 
Agriculture, and EPA.
    H.R. 2542 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 include an 
examination of indirect economic effects on small businesses 
and a more detailed analysis of the possible economic 
consequences of the rule for small businesses. The legislation 
defines indirect economic effects as any impact that is 
reasonably foreseeable. The legislation also would require 
agencies to prepare reports on the cumulative economic impact 
on small businesses of new and existing regulations.
    Implementing H.R. 2542 would increase the amount of 
regulatory analysis that agencies would need to prepare and it 
would expand the role of the SBA's Office of Advocacy, and the 
Office of Management and Budget's 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 agencies 
indicates that the new requirements would increase the cost to 
issue a few hundred of the thousands of Federal regulations 
issued annually. Based on that information, CBO estimates that 
administrative costs in some regulatory agencies, the SBA's 
Office of Advocacy, and OIRA would increase by a total of about 
$12 million annually, subject to the availability of 
appropriated funds. We expect that it would take about three 
years to reach that level of effort.

                      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. 2542 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. 2542 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

                         ESTIMATE PREPARED BY:

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

                         ESTIMATE APPROVED BY:

Theresa A. Gullo
Deputy Assistant Director for Budget Analysis

                    Duplication of Federal Programs

    No provision of H.R. 2542 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 2542 specifically directs 
the Chief Counsel for Advocacy of the Small Business 
Administration to conduct one rule making proceeding within the 
meaning of 5 U.S.C. 551.

                    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. 
2542 is intended to promote job creation, economic growth by 
better protecting small entities from unnecessary Federal 
regulatory burdens.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2542 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

    The following discussion describes the bill as reported by 
the Committee.
Sec. 1. Short title; table of contents.
    Section 1 provides that the Act may be cited as the 
``Regulatory Flexibility Improvements Act of 2013.''
Sec. 2. Clarification and Expansion of Rules Covered by the Regulatory 
        Flexibility Act.
    Subsection 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.
    Subsection 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. 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, 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.
    Subsection 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.
    Subsection 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.
    Subsection 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 is the GAO's view, although the 
Forest Service and the BLM disagree. Since these agencies 
already collect economic data for NEPA reports, this 
clarification will not be burdensome.
    Subsection 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.
    Subsection 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.
Sec. 3. Expansion of Report of Regulatory Agenda.
    Section 3 expands the terms of 5 U.S.C. sec. 602, which 
requires agencies to publish regulatory agendas every April and 
October, including regulations that may have significant 
impacts on substantial numbers of small entities. Section 3 
requires the agendas to describe the North American Industrial 
Classification System sectors primarily affected by the rules. 
It also requires agencies and the SBA to publish plain language 
summaries of the information in the agendas on their websites.
Sec. 4. 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. The RFA, however, only 
requires agencies to develop a ``statement'' regarding the 
impact of a new regulation on small entities.
    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 4 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 4(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 intent. Subsection 4(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 4(a)(7) 
requires agencies to describe any disproportionate economic 
impact on a specific class of small entities.
    Regarding the final regulatory flexibility analysis 
(``FRFA''), Subsection 4(b)(1) amends Section 604 to require 
the ``description'' and ``explanation'' required by Section 
604(b)(4), (5) and (6) to be ``detailed.'' This 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. 
Subsection 4(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. Subsection 4(b)(3) updates the RFA 
technologically by requiring agencies to post FRFAs online.
    Subsection 4(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 4(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 4(d) requires the agency to give a 
``detailed statement'' and to identify the supporting ``factual 
and legal'' basis for the certification.
    Finally, Subsection 4(e) makes quantifiable data (of the 
caliber required under the Information Quality Act) 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.
Sec. 5. Repeal of Waiver Authority and Additional Powers of Chief 
        Counsel.
    Section 5 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. 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.
    Section 5 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 5 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 5 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. 
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.
Sec. 6. Procedures for Gathering Comments.
    Section 6 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 6 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 6 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 6 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 6 empowers the Chief Counsel for Advocacy to 
waive the panel process when it is ``impractical, unnecessary, 
or contrary to the public interest.''
Sec. 7. Periodic Review of Rules.
    Section 7 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 7 requires agencies 
to develop new periodic review plans within 180 days and to 
publish these plans online. Section 7 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.
Sec. 8. Judicial Review of Compliance with the RFA.
    Under Section 8, 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 8(a) and (b) ensure that small entities will 
have prompt access to judicial review without procedural delays 
from agency-imposed exhaustion requirements. Section 8(c) makes 
appropriate conforming and technical corrections to Section 
611. Lastly, Section 8(d) clarifies the Chief Counsel for 
Advocacy's authority to file an amicus brief regarding agency 
compliance with the RFA.
Sec. 9. Jurisdiction of Court of Appeals for Challenges to Rules 
        Implementing RFA.
    Section 9(a) grants jurisdiction to the U.S. Court of 
Appeals to review challenges by small entities to rules 
promulgated by the Chief Counsel for Advocacy to implement the 
RFA. Section 9(b) makes technical conforming amendments. 
Section 9(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.
Sec. 10. Establishment and Approval of Small Business Concern Size 
        Standards by Chief Counsel for Advocacy.
    Section 10 transfers from the SBA Administrator to the 
Chief Counsel for Advocacy the function of determining size 
standards of small businesses for purposes other than the Small 
Business Act and Small Business Investment Act of 1958.
Sec. 11. Clerical Amendments.
    Section 11 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 the 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. 602. Regulatory agenda

    (a) During the months of October and April of each year, 
each agency shall publish in the Federal Register a regulatory 
flexibility agenda which shall contain--
            (1) * * *
            (2) a summary of the nature of any such rule under 
        consideration for each subject area listed in the 
        agenda pursuant to paragraph (1), the objectives and 
        legal basis for the issuance of the rule, and an 
        approximate schedule for completing action on any rule 
        for which the agency has issued a general notice of 
        proposed rulemaking[, and];
            (3) a brief description of the sector of the North 
        American Industrial Classification System that is 
        primarily affected by any rule which the agency expects 
        to propose or promulgate which is likely to have a 
        significant economic impact on a substantial number of 
        small entities; and
            [(3)] (4) the name and telephone number of an 
        agency official knowledgeable concerning the items 
        listed in paragraph (1).

           *       *       *       *       *       *       *

    [(c) Each agency shall endeavor to provide notice of each 
regulatory flexibility agenda to small entities or their 
representatives through direct notification or publication of 
the agenda in publications likely to be obtained by such small 
entities and shall invite comments upon each subject area on 
the agenda.]
    (c) Each agency shall prominently display a plain language 
summary of the information contained in the regulatory 
flexibility agenda published under subsection (a) on its 
website within 3 days of its publication in the Federal 
Register. The Office of Advocacy of the Small Business 
Administration shall compile and prominently display a plain 
language summary of the regulatory agendas referenced in 
subsection (a) for each agency on its website within 3 days of 
their publication in the Federal Register.

           *       *       *       *       *       *       *


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. 605. [Avoidance of duplicative or unnecessary analyses] 
                    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 
2013, 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) 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, including an 
assessment of the proposed rule's impact on the cost that small 
entities pay for energy, 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 2013, 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 2013 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 2013 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) The plan shall include a section that details how an 
agency will conduct outreach to and meaningfully include small 
businesses for the purposes of carrying out this section. The 
agency shall include in this section a plan for how the agency 
will contact small businesses and gather their input on 
existing agency rules.
    (d) 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 (e) and a 
detailed explanation of the reasons for such determination.
    (e) In reviewing a rule pursuant to subsections (a) through 
(d), 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 (d).
            (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.
    (f) 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.

           *       *       *       *       *       *       *

                              ----------                              


                           SMALL BUSINESS ACT



           *       *       *       *       *       *       *
SEC. 3. DEFINITIONS.

    (a) Small Business Concerns.--
            (1) * * *
            (2) Establishment of size standards.--
                    [(A) In general.--In addition to the 
                criteria specified in paragraph (1), the 
                Administrator may specify detailed definitions 
                or standards by which a business concern may be 
                determined to be a small business concern for 
                the purposes of this Act or any other Act.]
                    (A) In general.--In addition to the 
                criteria specified in paragraph (1)--
                            (i) the Administrator may specify 
                        detailed definitions or standards by 
                        which a business concern may be 
                        determined to be a small business 
                        concern for purposes of this Act or the 
                        Small Business Investment Act of 1958; 
                        and
                            (ii) the Chief Counsel for Advocacy 
                        may specify such definitions or 
                        standards for purposes of any other 
                        Act.

           *       *       *       *       *       *       *

                    (C) Requirements.--Unless specifically 
                authorized by statute, no Federal department or 
                agency may prescribe a size standard for 
                categorizing a business concern as a small 
                business concern, unless such proposed size 
                standard--
                            (i) * * *

           *       *       *       *       *       *       *

                            [(iii) is approved by the 
                        Administrator.]
                            (iii) except in the case of a size 
                        standard prescribed by the 
                        Administrator, is approved by the Chief 
                        Counsel for Advocacy.
            (3) Variation by industry and consideration of 
        other factors.--When establishing or approving any size 
        standard pursuant to paragraph (2), the Administrator 
        or Chief Counsel for Advocacy, as appropriate shall 
        ensure that the size standard varies from industry to 
        industry to the extent necessary to reflect the 
        differing characteristics of the various industries and 
        consider other factors deemed to be relevant by the 
        Administrator or Chief Counsel for Advocacy.

           *       *       *       *       *       *       *

            (9) Judicial review of standards approved by chief 
        counsel.--In the case of an action for judicial review 
        of a rule which includes a definition or standard 
        approved by the Chief Counsel for Advocacy under this 
        subsection, the party seeking such review shall be 
        entitled to join the Chief Counsel as a party in such 
        action.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 212 OF THE SMALL BUSINESS REGULATORY ENFORCEMENT FAIRNESS ACT 
                                OF 1996

 SEC. 212. COMPLIANCE GUIDES.

    (a) Compliance Guide.--
            (1) * * *

           *       *       *       *       *       *       *

            [(5) Agency preparation of guides.--The agency 
        shall, in its sole discretion, taking into account the 
        subject matter of the rule and the language of relevant 
        statutes, ensure that the guide is written using 
        sufficiently plain language likely to be understood by 
        affected small entities. Agencies may prepare separate 
        guides covering groups or classes of similarly affected 
        small entities and may cooperate with associations of 
        small entities to develop and distribute such guides. 
        An agency may prepare guides and apply this section 
        with respect to a rule or a group of related rules.]
            (5) Agency preparation of guides.--The agency 
        shall, in its sole discretion, taking into account the 
        subject matter of the rule and the language of relevant 
        statutes, ensure that the guide is written using 
        sufficiently plain language likely to be understood by 
        affected small entities. Agencies may prepare separate 
        guides covering groups or classes of similarly affected 
        small entities and may cooperate with associations of 
        small entities to distribute such guides. In developing 
        guides, agencies shall solicit input from affected 
        small entities or associations of affected small 
        entities. An agency may prepare guides and apply this 
        section with respect to a rule or a group of related 
        rules.

           *       *       *       *       *       *       *


                            Dissenting Views

                              INTRODUCTION

    H.R. 2542, the ``Regulatory Flexibility Improvements Act of 
2013,'' (RFIA) 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. While H.R. 2542's proponents claim 
that these changes to the RFA will ease the alleged 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.
---------------------------------------------------------------------------
    \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, 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.
    H.R. 2542 does nothing to help small businesses and other 
small entities reduce compliance costs or to ensure agency 
compliance with the RFA. Instead, the bill imposes numerous and 
unnecessary burdens on agencies while ignoring the fact that 
small businesses, like their larger counterparts, can 
substantially impact the health and safety of their workers as 
well as that of the general public.\2\ Small businesses, like 
all businesses, provide services and goods that also affect our 
lives and can carry the same risk of harm as the services and 
goods that large businesses provide. 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.
---------------------------------------------------------------------------
    \2\For example, 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/. There were 4,383 fatal 
occupational injuries last year, according to the Bureau of Labor 
Statistics. Press Release, U.S. Dep't of Labor Bureau of Labor 
Statistics, National Census of Fatal Occupational Census of Fatal 
Occupational Injuries in 2012 (Preliminary Results), Aug. 13, 2013, 
available at http://www.bls.gov/news.release/pdf/cfoi.pdf. 
Additionally, an analysis by the National Institute for Occupational 
Safety and Health, the American Cancer Society, and Emory University's 
School of Public Health estimates that after factoring in disease and 
injury data ``there are a total of 55,200 US deaths annually resulting 
from occupational disease or injury (range 32,200-78,200).''Kyle 
Steenland et al., Dying for Work: The Magnitude of US Mortality from 
Selected Cases of Death Associated with Occupation, 43 Am. J. 
Industrial Medicine 461 (2003).
---------------------------------------------------------------------------
    Accordingly, we must oppose attempts like H.R. 2542 that 
create an unacceptable barrier to agency rulemaking. 
Specifically we are opposed to this legislation because it: (1) 
is based on the false premise that regulatory costs stifle 
economic growth and job creation; (2) will threaten public 
health and safety by severely undermining Federal agency 
rulemaking; (3) imposes additional duties on agencies while 
failing to provide for any additional resources to meet these 
burdens; and (4) allows more opportunities for industry to 
delay or defeat proposed rulemakings.
    Consumer groups and organizations concerned with protecting 
public health and safety have raised many of these same 
concerns. The Coalition for Sensible Safeguards, a broad 
coalition of 72 environmental, labor, and consumer 
organizations, including the AFL-CIO, the American Federation 
of State, County and Municipal Employees, the American Lung 
Association, Consumer Federation of America, Consumers Union, 
the League of Conservation Voters, Public Citizen, and the 
Union of Concerned Scientists, strongly opposed substantially 
similar legislation to H.R. 2542 in the 112th Congress.\3\
---------------------------------------------------------------------------
    \3\The other organizations include: Alliance for Justice, American 
Association of University Professors, American Federation of Teachers, 
Americans for Financial Reform, American Rivers, American Values 
Campaign, American Sustainable Business Council, BlueGreen Alliance, 
Campaign for Contract Agriculture Reform, Center for Effective 
Government, Center for Food Safety, Center for Foodborne Illness 
Research and Prevention, Center for Independent Living, Center for 
Science in the Public Interest, Citizens for Sludge-Free Land, Clean 
Air Watch, Clean Water Network, Consortium for Citizens with 
Disabilities, Countercorp, Cumberland Countians for Peace and Justice, 
Demos, Economic Policy Institute, Edmonds Institute, Environment 
America, Farmworker Justice, Free Press, Friends of the Earth, Green 
for All, Health Care for America Now, In the Public Interest, 
International Brotherhood of Teamsters, International Center for 
Technology Assessment, International Union of United Automobile, 
Aerospace, & Agricultural Implement Workers of America (UAW), Los 
Angeles Alliance for a New Economy, Main Street Alliance, National 
Association of Consumer Advocates, National Center for Healthy Housing, 
National Consumers League, National Council for Occupational Safety and 
Health, National Employment Law Project, National Lawyers Guild 
Louisville Chapter, National Women's Health Network, National Women's 
Law Center, Natural Resources Defense Council, Network for 
Environmental & Economic Responsibility of the United Church of Christ, 
New Jersey Work Environment Council, New York Committee for 
Occupational Safety and Health, Oregon Peaceworks, People for the 
American Way, Protect All Children's Environment, Reproductive Health 
Technologies Project, Safe Tables Our Priority (S.T.O.P.), Service 
Employees International Union, Southern Illinois Committee for 
Occupational Safety and Health, The Arc of the United States, The 
Partnership for Working Families, Trust for America's Health, U.S. 
Camber Watch, U.S. PIRG, Union Plus, United Food and Commercial Workers 
Union, United Steelworkers, Waterkeeper Alliance, Worksafe. See Letter 
from 72 organizations to Representative John Conyers, Jr. (D-MI), 
Ranking Member, Committee on the Judiciary (Nov. 29, 2011) (on file 
with the United States House of Representatives, Comm. on the 
Judiciary, Democrats).
---------------------------------------------------------------------------
    Moreover, the Obama administration issued a veto threat 
against the earlier iteration of the RFIA in the 112th 
Congress, explaining that the RFIA ``would impede the ability 
of agencies to provide the public with basic protections, and 
create needless confusion and delay that would prove disruptive 
for businesses, as well as for state, tribal and local 
governments.''\4\
---------------------------------------------------------------------------
    \4\Executive Office of the President, Office of Management and 
Budget, Statement of Administration Policy for H.R. 527--Regulatory 
Flexibility Improvements Act of 2011 (Nov. 29, 2011) (emphasis in 
original), available at http://www.whitehouse.gov/sites/default/files/
omb/legislative/sap/112/saphr527r_20111129.pdf.
---------------------------------------------------------------------------
    We wholeheartedly agree with the Administration's 
assessment of the RFIA and for the reasons discussed below, we 
respectfully dissent and urge our colleagues to reject this 
seriously flawed legislation.

                       BACKGROUND AND DESCRIPTION

                             I. BACKGROUND

    Enacted in 1980, the RFA requires Federal agencies to 
assess the impact of proposed regulations on ``small 
entities,'' which the Act defines as either a small business, 
small organization, or small governmental jurisdiction.\5\ 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.\6\ 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.''\7\ 
Whether a proposed rule will have such an impact is, therefore, 
the threshold inquiry under the RFA.
---------------------------------------------------------------------------
    \5\5 U.S.C. Sec. 601(6) (2013).
    \6\See 5 U.S.C. Sec. Sec. 603, 604 (2013).
    \7\5 U.S.C. Sec. 605(b) (2013).
---------------------------------------------------------------------------
    In addition, the RFA requires each agency to publish twice 
a year in the Federal Register a regulatory flexibility agenda 
identifying regulations that have a significant economic impact 
on a substantial number of small entities which the agency 
expects to propose.\8\ Further, the RFA requires agencies to 
conduct periodic reviews of rules having a significant economic 
impact on a substantial number of small entities\9\ and to 
ensure that small entities have an opportunity to participate 
in the rulemaking process.\10\
---------------------------------------------------------------------------
    \8\5 U.S.C. Sec. 602 (2013).
    \9\5 U.S.C. Sec. 610 (2013).
    \10\5 U.S.C. Sec. 609 (2013).
---------------------------------------------------------------------------
    Congress amended the RFA in 1996 with the enactment of the 
Small Business Regulatory Enforcement Fairness Act (SBREFA)\11\ 
to permit judicial review of an agency's regulatory flexibility 
analysis for a final rule and of an agency's certification that 
a rule would not have a significant economic impact on a 
substantial number of small entities. SBREFA also requires that 
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 the Small Business Administration, and 
the Office of Information and Regulatory Affairs (OIRA).\12\
---------------------------------------------------------------------------
    \11\Pub. L. No. 104-121, Sec. 242, 110 Stat. 847, 857 (1996).
    \12\5 U.S.C. Sec. 609(b) (2013). The review panel requirement was 
extended to the Consumer Financial Protection Bureau in 2010. See 5 
U.S.C. Sec. 609(d) (2013).
---------------------------------------------------------------------------

                            II. DESCRIPTION

    H.R. 2542's supporters contend that agencies have failed to 
comply with the RFA. In response to this purported concern, 
H.R. 2542 amends the RFA to expand the scope of its provisions 
and impose new procedural and analytical requirements on 
agencies whenever a rule is subject to the RFA.
    First, H.R. 2542 expands the type of rules covered by the 
RFA to include those that have a reasonably foreseeable 
indirect effect on small entities, which is a highly 
speculative requirement. It also includes documents like land 
management plans and certain guidance documents under the 
definition of ``rule,'' further expanding the RFA's scope. 
Second, the bill would require agencies to provide more detail 
and analysis in their initial and final regulatory analyses of 
proposed and final rules. Third, H.R. 2542 repeals the 
emergency authority that the RFA gives to agencies to waive or 
delay an initial regulatory flexibility analysis or to delay a 
final regulatory flexibility analysis. This provision will 
prevent agencies from quickly responding to a public health or 
safety emergency. Fourth, H.R. 2542 grants additional power to 
the Small Business Administration's (SBA's) Chief Counsel for 
Advocacy to promulgate rules governing agencies' RFA 
compliance, to intervene in agency adjudications, and to file 
comments on proposed rules. Fifth, the bill 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--not just rules issued by the EPA, 
OSHA, and the Consumer Financial Protection Bureau (CFPB), as 
is under current law--and would also apply to rules that would 
be considered ``major rules'' regardless of whether such rules 
would otherwise be subject to the RFA.
    Sixth, H.R. 2542 amends the RFA's requirement that agencies 
periodically review rules to require that agencies review all 
rules that exist on H.R. 2542's enactment date. The bill would 
also mandate that agencies amend or rescind those rules, 
regardless of the review's findings. In addition, H.R. 2542 
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. 2542 grants exclusive jurisdiction to the Federal 
courts of appeal 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 under this 
legislation.
    A detailed section-by-section analysis of H.R. 2542 appears 
later in our dissenting views.

                        CONCERNS WITH H.R. 2542

 I. H.R. 2542 IS BASED UPON THE FALSE PREMISE THAT REGULATIONS STIFLE 
                              JOB CREATION

    H.R. 2542 is based on the false premise that regulations 
impose overwhelmingly burdensome costs on small businesses that 
ultimately hampers economic growth and job creation. In 
particular, H.R. 2542's supporters rely almost exclusively on 
an SBA study conducted by economists Nicole and Mark Crain 
(Crain study)\13\ which 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.\14\
---------------------------------------------------------------------------
    \13\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/rs371
tot.pdf.
    \14\H.R. 527, the ``Regulatory Flexibility Improvements Act of 
2011''--Unleashing Small Businesses to Create Jobs: Hearing Before the 
Subcomm. on Courts, Commercial and Administrative L. of the H. Comm. on 
the Judiciary, 112th Cong. (2011) [hereinafter ``H.R. 527 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 thoroughly debunked 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.\15\ 
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.\16\ Moreover, the Crain 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.\17\
---------------------------------------------------------------------------
    \15\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), available at http://www.progressivereform.org/articles/
SBA_Regulatory_Costs_
Analysis_1103.pdf.
    \16\Id.
    \17\Id.
---------------------------------------------------------------------------
    The Congressional Research Service (CRS)--which is 
independent and nonpartisan--also conducted an extensive 
examination of the Crain study and criticized much of its 
methodology.\18\ CRS noted that the authors of the Crain study 
themselves admitted 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?)''\19\ 
Accordingly, CRS concluded that ``a valid, reasoned policy 
decision can only be made after considering information on both 
costs and benefits'' of regulation.\20\
---------------------------------------------------------------------------
    \18\Curtis W. Copeland, Analysis of an Estimate of the Total Costs 
of Federal Regulations, Congressional Research Service Report for 
Congress, R41763 (Apr. 6, 2011).
    \19\Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to 
the author of the CRS report).
    \20\Id.
---------------------------------------------------------------------------
    The Crain study's failure to account for the net benefits 
of regulation in general was particularly shortsighted given 
the fact 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.\21\ 
Much of that growth and prosperity was the result of business 
innovations relating to compliance with the rule.\22\ Indeed, 
the costs of the rule ended up being much smaller than 
predicted because of these innovations.\23\
---------------------------------------------------------------------------
    \21\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.
    \22\Id.
    \23\Id. at 38-39.
---------------------------------------------------------------------------
    Sally Katzen, a former OIRA Administrator during the 
Clinton administration, noted in testimony before the Judiciary 
Committee's Subcommittee on Courts, Commercial and 
Administrative Law, that the OMB regularly finds that the 
aggregate benefits of Federal regulations outweigh their 
costs.\24\ Katzen noted that:
---------------------------------------------------------------------------
    \24\The REINS Act--Promoting Jobs and Expanding Freedom by Reducing 
Needless Regulations Hearing Before the Subcomm. on Courts, Commercial 
and Administrative L. 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.\25\
---------------------------------------------------------------------------
    \25\Id.

    OMB's draft 2013 Report to Congress further bolsters the 
conclusion that the benefits of regulations far outweigh their 
costs. It found that the ``estimated annual benefits of major 
Federal regulations reviewed by OMB from October 1, 2002, to 
September 30, 2012, for which agencies estimated and monetized 
both benefits and costs, are in the aggregate between $193 
billion and $800 billion, while the estimated annual costs are 
in the aggregate between $57 billion and $84 billion.''\26\ The 
draft 2013 report further noted that some benefits and costs 
cannot be quantified or monetized.\27\
---------------------------------------------------------------------------
    \26\Office of Management and Budget, Draft 2013 Report to Congress 
on the Benefits and Costs of Federal Regulations and Agency Compliance 
with the Unfunded Mandates Reform Act, available at http://
www.whitehouse.gov/sites/default/files/omb/inforeg/2013_cb/
draft_2013_cost_
benefit_report.pdf.
    \27\Id.
---------------------------------------------------------------------------
    Representative Jerrold Nadler (D-NY) offered an amendment 
at the Committee's markup of H.R. 2542 that would have required 
agencies to assess the indirect benefits of a rule as part of 
the required regulatory flexibility analysis under H.R. 2542. 
The Majority, however, opposed this amendment and it was 
defeated by a 12 to 17 vote along party lines.

II. H.R. 2542 THREATENS PUBLIC HEALTH AND SAFETY BY UNDERMINING FEDERAL 
                           AGENCY RULEMAKING

    H.R. 2542 will undermine the ability of agencies to protect 
public health and safety by imposing new and unnecessary 
requirements on the rulemaking process and will force these 
agencies to shift resources to this more complex, costly, and 
time-consuming rulemaking process. The bill will prevent 
agencies from effectively promulgating regulations designed to 
protect Americans' health and safety.
A. LH.R. 2542's Elimination of Agencies' Waiver and Delay Authority 
        Undermines the Agencies' Ability To Respond To Emergencies
    Section 5 of H.R. 2542 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. 2542 undermines an agency's ability to respond 
to emergency situations.
    The 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 absolutely 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.
    At the Committee markup, Ranking Member John Conyers, Jr. 
offered an amendment that would have preserved the waiver or 
delay authority agencies have under current law to quickly 
respond to emergencies, without being hampered or second-
guessed by others. The amendment was defeated by an 11 to 17 
party-line vote.
B. LH.R. 2542's Expanded Use of Advocacy Review Panels Creates a 
        Serious Impediment To Agency Rulemaking
    As discussed earlier, SBREFA\28\ amended the RFA to require 
that rules proposed by the EPA and OSHA be subject to an 
advocacy review panel consisting of a representative of the 
agency promulgating the rule, the Chief Counsel for Advocacy of 
SBA, and OIRA.\29\ The Dodd-Frank Act later added the CFPB to 
this list of agencies subject to advocacy review panels. 
Section 6 of H.R. 2542 significantly expands the reach of this 
requirement to make it apply to rules proposed by all agencies. 
In addition, section 6 would make the review panel requirement 
apply to all major rules regardless of whether they have a 
significant economic impact on a substantial number of small 
entities, that is, regardless of whether the RFA would apply. 
Under section 6, the review panel would review a proposed rule, 
solicit and obtain input from business interests, and then 
issue a report assessing the economic impact of the proposed 
rule on small entities, including the energy cost impact, as 
well as a discussion of regulatory alternatives. This report is 
then to be made part of the rulemaking record, and the agency 
must explain what, if anything, it did in response to the 
report.
---------------------------------------------------------------------------
    \28\Pub. L. No. 104-121, Sec. 242, 110 Stat. 847, 857 (1996).
    \29\5 U.S.C. Sec. 609(b) (2013). The review panel requirement was 
extended to the CFPB in 2010. See 5 U.S.C. Sec. 609(d) (2013).
---------------------------------------------------------------------------
    By requiring the cumbersome review panel process to apply 
to all agency rules having a significant economic impact on a 
substantial number of small entities, as well as by requiring 
this process to apply to all major rules--regardless of whether 
they have such an impact--this provision will slow down the 
rulemaking process and substantially empower business interests 
to throw sand into the gears of rulemaking. The use of advocacy 
review panels is already cumbersome. SBA's Office of Advocacy, 
which was established with the express purpose of acting as an 
independent advocate for business interests within the Federal 
Government,\30\ is already able to delay the issuance of final 
EPA, OSHA, and CFPB rules and to shape them in industry-
friendly ways.\31\ Expanding the use of these panels to include 
all agencies and all rules that do not necessarily have a 
significant economic impact on a substantial number of small 
entities would guarantee that most rulemakings would be delayed 
and reflect a less consumer-oriented perspective. Moreover, 
this expansion of the review panel process takes it well beyond 
the scope of the RFA.
---------------------------------------------------------------------------
    \30\Small Business Administration, Office of Advocacy, About Us, 
available at http://www.sba.gov/category/advocacy-navigation-structure/
about-us.
    \31\The Center for Progressive Reform prepared a report earlier 
this year detailing the Office of Advocacy's role in politicizing 
debates about regulation and ``funneling special interest pressure into 
agency rulemakings, even though such interests have already had ample 
opportunity to comment on proposed regulations.'' Sidney Shapiro & 
James Goodwin, Distorting the Interests of Small Business: How the 
Small Business Administration Office of Advocacy's Politicization of 
Small Business Concerns Undermines Public Health and Safety, Center for 
Progressive Reform White Paper #1302 (Jan. 2013), available at http://
www.progressivereform.org/articles/SBA_
Office_of_Advocacy_1302.pdf. Additionally, the Center for Effective 
Government issued a report detailing how the Office of Advocacy 
interfered with regulators' scientific assessments in order to promote 
the interests of large chemical companies having nothing to do with 
small business. Randy Rabinowitz, Katie Greenhaw, & Katie Weatherford, 
Small Business, Public Health, and Scientific Integrity: Whose 
Interests Does the Office of Advocacy at the Small Business 
Administration Serve?, Center for Effective Government (Jan. 2013), 
available at http://www.foreffectivegov.org/files/regs/office-of-
advocacy-report.pdf.
---------------------------------------------------------------------------
    Amit Narang, Regulatory Policy Advocate for Public Citizen, 
testified before the Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law (Subcommittee) that the ``dramatic 
expansion'' of review panels under the RFIA ``will result in 
these panels giving feedback on rules that have no application 
and place no requirements on small businesses. Once again, the 
RFIA stretches the boundaries of what is considered a 
regulation that impacts small businesses to such a degree that 
the distinction between what does and what does not impact 
small businesses is rendered meaningless.''\32\ Mr. Narang 
further noted that a Government Accountability Office report 
detailing the ``glacially slow pace of rulemaking at OSHA 
identified the SBREFA panel process as one of the factors 
delaying OSHA, finding that it takes about 8 months of work for 
OSHA to prepare for the panel''\33\ Greatly expanding use of 
these panels can only cause similar rulemaking delays at other 
agencies.
---------------------------------------------------------------------------
    \32\H.R. 2542, the ``Regulatory Flexibility Improvements Act of 
2013'': Hearing Before the Subcomm. on Regulatory Reform, Commercial 
and Antitrust L. of the H. Comm. on the Judiciary, 113th Cong. (2013) 
(statement of Amit Narang, Regulatory Policy Advocate, Public Citizen).
    \33\Id.
---------------------------------------------------------------------------

   III. H.R. 2542 FORCES AGENCIES TO ENGAGE IN WASTEFUL, SPECULATIVE 
                                ANALYSES

    Section 2 of H.R. 2542 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. In effect, H.R. 2542 could kill a rulemaking as a 
result of ``paralysis by analysis.''
    The bill's onerous requirements will prevent agencies from 
engaging in effective rulemaking. As Mr. Narang testified 
before the Subcommittee, the:

        RFIA does little to clarify what constitutes, and more 
        importantly, what does not constitute an indirect 
        economic effect, giving agencies only the vague and 
        perfunctory guidance that it be ``reasonably 
        foreseeable.'' This ill-defined and indeterminate new 
        mandate will exert strong pressure on agencies to 
        engage in a guessing game of sorts as they attempt to 
        identify all possible indirect effects of a rule, an 
        enterprise akin to ordering a meteorologist to discern 
        the effects on Washington, D.C. weather of a butterfly 
        flapping its wings in Japan.\34\
---------------------------------------------------------------------------
    \34\Id.
---------------------------------------------------------------------------
A. LH.R. 2542 Imposes Additional Duties on Agencies, But Fails To 
        Provide Any Additional Funding for Agencies to Comply with 
        Burdensome New Requirements
    In addition to requiring agency assessments of a rule's 
indirect effects and expanding the use of advocacy review 
panels, H.R. 2542 substantially increases other agency 
responsibilities with respect to rulemaking. For example, 
section 4 of the bill requires agencies, with respect to 
regulatory analyses, to:

         Lspecifically detail the required 
        descriptions;\35\
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    \35\H.R. 2542, 113th Cong., Sec. 4(b)(1)(B) (2013).

         Lprovide a detailed explanation of 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;\36\
---------------------------------------------------------------------------
    \36\H.R. 2542, 113th Cong., Sec. 4(b)(1)(A) (2013).

         Ldescribe any disproportionate economic impact 
        on small entities or a specific class of small 
        entities;\37\
---------------------------------------------------------------------------
    \37\H.R. 2542, 113th Cong., Sec. 4(a) (2013).

         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;\38\ and
---------------------------------------------------------------------------
    \38\H.R. 2542, 113th Cong., Sec. 4(d) (2013).

         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.\39\
---------------------------------------------------------------------------
    \39\H.R. 2542, 113th Cong., Sec. 4(e) (2013).

    These heightened responsibilities and other duties imposed 
by H.R. 2542 will force agencies to expend already-strained 
resources and incur considerable costs to implement the bill. 
Not surprisingly, the Congressional Budget Office (CBO) 
estimates that H.R. 2542 would cost American taxpayers $45 
million between 2014 and 2018.\40\ Meanwhile, the CBO 
identified no cost savings stemming from H.R. 2542.\41\
---------------------------------------------------------------------------
    \40\Congressional Budget Office, Cost Estimate for H.R. 2542, the 
Regulatory Flexibility Improvements Act of 2013 (Sept. 5, 2013), 
available at http://cbo.gov/sites/default/files/cbofiles/
attachments/hr2542.pdf.
    \41\Id.
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B. LH.R. 2542 Would Overwhelm Agencies by Requiring Them To Conduct 
        Exhaustive Reviews of All Existing Rules
    Section 7 of H.R. 2542 threatens to undermine agencies' 
ability to fulfill their regulatory responsibilities by 
requiring that all agencies review all rules--not just those 
subject to the RFA--existing on the bill's enactment date 
issued within 10 years of the publication of a required plan by 
each agency for retrospective review. 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, and workplace 
safety. Agencies will be forced to redirect their scarce 
resources to meet this burdensome requirement.
    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 that could be subjected to H.R. 
2542's look-back requirement. At a time when agencies are 
already under strain with limited resources, they can ill-
afford this substantial increase in their workload. Meanwhile, 
Congress continues to slash funding for critical child welfare, 
indigent assistance, and law enforcement programs.
    In addition, section 2 of H.R. 2542 expands the scope of 
rules subject to the RFA by including land management plans as 
well as rules pertaining to Tribal Organizations and certain 
Internal Revenue Service interpretive rules. These types of 
guidance documents traditionally are not ``rules'' subject to 
the RFA. Expanding the scope of items subject to review will 
require additional resources that would otherwise be used by 
the agency to carry out its duties as delegated by Congress.
    Further, section 7 imposes the absurd and wasteful 
requirement that agencies amend or rescind all existing rules. 
Specifically, section 7 of H.R. 2542 states that in ``reviewing 
a rule, the agency shall amend or rescind the rule to minimize 
any adverse significant economic impact on a substantial nuber 
of small entities or disproportionate economic impact on a 
specific class of small entities. . . .''\42\ In other words, 
regardless of the findings of any review of existing 
regulations, agencies must amend or rescind all existing rules, 
even when the review finds there is no need to amend or rescind 
a particular rule. 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 
force agencies to: (1) review the hundreds of thousands of 
pages of rules and guidance documents existing on H.R. 2542's 
enactment date, and (2) amend or rescind every rule in 
existence on that date regardless of the review's findings. As 
J. Robert Shull noted in testimony before the Subcommittee last 
Congress, the mandatory ``amend or rescind'' provision requires 
that ``the agency . . . embark upon new rulemakings for all of 
those [existing] regulations.''\43\ While we find much of the 
bill's provisions to be wasteful, surely, the sponsors of H.R. 
2542 hopefully could not have intended to include this absurd 
and monumental waste of taxpayer resources.
---------------------------------------------------------------------------
    \42\H.R. 2542, 113th Cong, Sec. 7 (2013) (emphasis added).
    \43\The Regulatory Flexibility Improvements Act of 2011--Unleashing 
Small Businesses to Create Jobs: Hearing Before the Subcomm. on 
Commercial and Administrative L. of the H. Comm. on the Judiciary, 
112th Cong. (2011) (statement of J. Robert Shull).
---------------------------------------------------------------------------

IV. 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 8 of H.R. 2542 creates the opportunity for well-
funded anti-regulatory business interests to engage in 
frivolous litigation. It does this by expanding the scope of 
judicial review to include court challenges to agency actions 
to issuance of a final rule, including agency compliance with 
H.R. 2542's numerous, vague, speculative, and cumbersome 
analytical and other requirements. Current law limits such 
judicial review to final agency actions.
    As Mr. Narang noted at the Subcommittee's hearing on H.R. 
2542, the bill's expansion of judicial review to include 
challenges to the adequacy of regulatory flexibility analyses 
would open the door to endless litigation, stating, in the 
context of discussing the bill's requirement that agencies 
assess a rule's indirect effects, that:

        the RFIA ensures that if agencies guess wrong on 
        indirect effects, regulated entities will have the 
        ability to draft the agency into court and overturn a 
        rule because the agency wasn't able to satisfy this new 
        and highly speculative mandate of determining all 
        indirect effects. Thus, the RFIA opens the floodgates 
        of litigation and transforms a statute that is supposed 
        to target rules that apply to small businesses into one 
        that forces agencies, by default, to assume that their 
        rules will in some indirect and attenuated fashion 
        apply to small businesses.\44\
---------------------------------------------------------------------------
    \44\H.R. 2542, the ``Regulatory Flexibility Improvements Act of 
2013'': Hearing Before the Subcomm. on Regulatory Reform, Commercial 
and Antitrust L. of the H. Comm. on the Judiciary, 113th Cong. (2013) 
(statement of Amit Narang, Regulatory Policy Advocate, Public Citizen).

    Similarly, Mr. Shull testified that the RFIA would 
``dramatically'' expand the RFA's judicial review provisions 
``to allow corporate special interests to challenge the 
adequacy of analysis over a wide range of agency activities, 
not limited to the `final agency actions' that normally are the 
decision point that must be reached before an agency can be 
dragged into court.''\45\
---------------------------------------------------------------------------
    \45\The Regulatory Flexibility Improvements Act of 2011--Unleashing 
Small Businesses to Create Jobs: Hearing Before the Subcomm. on 
Commercial and Administrative L. of the H. Comm. on the Judiciary, 
112th Cong. (2011) (statement of J. Robert Shull).
---------------------------------------------------------------------------
    To address the threat to public health and safety posed by 
the various provisions of H.R. 2542 outlined above, 
Representative Hank Johnson (D-GA) offered at markup an 
amendment that would have exempted rules implementing the 
Patient Protection and Affordable Care Act from H.R. 2542. The 
Majority opposed this amendment and it was defeated by a 5 to 
11 party-line vote. Similarly, Representative Sheila Jackson 
Lee (D-TX) offered an amendment that would have exempted rules 
issued by the Food and Drug Administration from H.R. 2542. The 
Majority opposed this amendment and it was defeated by an 8 to 
14 party-line vote.

                     SECTION-BY-SECTION EXPLANATION

    A section-by-section explanation of the bill's substantive 
provisions follows. Section 2(a) amends 5 U.S.C. Sec. 601(2) to 
provide that the term ``rule'' does not include a rule of 
particular applicability related to rates, wages, corporate or 
financial structures (or reorganizations thereof), prices, 
facilities, appliances, services, or allowances.
    Section 2(b) amends 5 U.S.C. Sec. 601 to define ``economic 
impact''as any direct economic effect on small entities by a 
proposed or final rule and any indirect economic effect on 
small entities that is reasonably foreseeable and results from 
such rule, without regard to whether small entities will be 
directly regulated by the rule.
    Section 2(c) amends 5 U.S.C. Sec. Sec. 603(c) and 604(a)(7) 
to require each initial and final regulatory flexibility 
analysis to contain a detailed description of alternatives to 
the rule that minimize any significant adverse economic impact 
or maximize any significant beneficial economic impact on small 
entities.
    Section 2(d) amends 5 U.S.C. Sec. 601(5) (which defines 
small governmental jurisdiction) to expand its applicability to 
tribal organizations.
    Section 2(e) amends 5 U.S.C. Sec. Sec. 603(a) and 604(a) to 
make the requirement to prepare an initial and final regulatory 
impact analysis applicable to instances where an agency 
publishes a revision or amendment to a land management plan or 
issues a proposed rule made on the record after opportunity for 
an agency hearing. In addition, section 2(e) amends 5 U.S.C. 
Sec. 601 to define land management plan, revision of a land 
management plan, and amendment of a land management plan.
    Section 2(f)(1) amends 5 U.S.C. Sec. 603(a) with respect to 
its requirement for an initial regulatory flexibility analysis 
for Internal Revenue Service interpretative rules published in 
the Federal Register for codification in the Code of Federal 
Regulations the bill provides, to the extent that such 
interpretative rules require small entities to collect 
information. Section 603(a) applies to recordkeeping 
requirements imposed by such rules on small entities, without 
regard to whether such requirements are imposed by statute or 
regulation.
    Section 2(f)(2) amends 5 U.S.C. Sec. 601(7), which defines 
the term ``collection of information'' to provide that the term 
has the same meaning as set forth in 44 U.S.C. 
Sec. 3502(3).\46\
---------------------------------------------------------------------------
    \46\Section 3502(3) defines ``collection of information'' as 
follows:

(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, ten 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).

44 U.S.C. Sec. 3502(3) (2013).
    Section 2(f)(3) amends 5 U.S.C. Sec. 601(8), which defines 
the term ``recordkeeping requirement'' ``as a requirement 
imposed by an agency on persons to maintain specified 
records.'' Section 2(f)(3) amends the definition to provide 
that the term has the same meaning as set forth in 44 U.S.C. 
Sec. 3502(13).\47\
---------------------------------------------------------------------------
    \47\Section 3502(13) defines ``recordkeeping requirement'' as 
follows:

[A] requirement imposed by or for an agency on persons to maintain 
---------------------------------------------------------------------------
specified records, including a requirement to--

      (A) retain such records;

      (B) notify third parties, the Federal Government, or the 
      public of the existence of such records;

      (C) disclose such records to third parties, the Federal 
      Government, or the public; or

      (D) report to third parties, the Federal Government, or the 
      public regarding such records[.]
    Section 2(g) amends 5 U.S.C. Sec. 601(4), which defines the 
term ``small organization'' as ``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[.]'' Section 2(g) 
provides that this term includes any not-for-profit enterprise 
that ``as of the issuance of the notice of proposed 
rulemaking'' does not exceed the specified size standard for 
small business concerns established by the SBA Administrator 
applicable to a classification code of the North American 
Industrial Classification System, providing such enterprise has 
a net worth of less than $7 million and has fewer than 500 
employees. For a local labor organization, the definition 
applies regardless of whether the organization is a part of a 
national or international organization. These definitions do 
not apply to the extent that an agency, after consulting the 
Office of Advocacy of the Small Business Administration and 
public comments, establishes its own definition of ``small 
organization'' and publishes such definition in the Federal 
register.
    Section 3 amends 5 U.S.C. Sec. 602 by adding a requirement 
for a brief description of the sector that is primarily 
affected by a rule in its regulatory flexibility agenda and a 
requirement that the agenda contain a plain-language summary to 
be published on the agency's website within 3 days of its 
publication in the Federal Register.
    Section 4(a) amends 5 U.S.C. Sec. 603(b) to require an 
initial regulatory flexibility analysis to contain a detailed 
statement: (1) describing the reasons why the 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 businesses to which the rule will 
apply; (4) describing the rule's projected reporting, 
recordkeeping, and other compliance requirements; (5) 
describing all relevant Federal rules that may duplicate, 
overlap, or conflict with the rule or the reasons why such 
description was not provided; (6) estimating the rule's 
additional cumulative economic impact on small entities beyond 
that already imposed on the class of small entities (or an 
explanation of why such an estimate is not available); and (7) 
describing any disproportionate economic impact on small 
entities or a specific class of small entities.
    Section 4(b)(1) amends 5 U.S.C. Sec. 604(a), which sets 
forth the requirements of a final regulatory flexibility 
analysis, by requiring more detailed descriptions and 
explanations specyfying that an agency describe any 
disproportionate economic impact on small entities or a 
specific class of small entities.
    Section 4(b)(2) amends 5 U.S.C. Sec. 604(a)(2) to provide 
that it applies to instances where the agency certifies a 
proposed rule. Section 4(b)(3) amends 5 U.S.C. Sec. 604(b), 
which requires an agency to make copies of the final regulatory 
flexibility analysis available to the public and to publish it 
(or a summary thereof) in the Federal Register. Section 4(b)(3) 
expands this requirement to include posting the entire analysis 
on the agency's website. In addition, the final analysis must 
also include the telephone number, mailing address, and link to 
the website where the complete analysis may be found.
    Section 4(c) amends 5 U.S.C. Sec. 605(a), which provides 
that an agency must be treated as having satisfied any 
requirement regarding an agenda or regulatory flexibility 
analysis, to require a cross-reference to the specific portion 
of the other agenda or analysis that satisfies this 
requirement.
    Section 4(d) amends 5 U.S.C. Sec. 605(b), which permits an 
agency, in lieu of complying with sections 603 and 604, to 
certify that the rule will not have a significant economic 
impact on a substantial number of small entities. As amended, 
section 605(b) requires such certification to be accompanied by 
a detailed statement providing the factual and legal basis for 
it.
    Section 4(e) amends 5 U.S.C. Sec. 607, which allows an 
agency to provide either a quantifiable or numerical 
description of the effects of a proposed rule or alternatives 
to a proposed rule, or more general descriptive statements if 
quantification is not practicable or reliable. This amendment 
makes section 607 mandatory and specifies that in instances 
where an agency provides a general descriptive statement, the 
agency must also provide a detailed statement explaining why 
quantification is not practicable or reliable.
    Section 5(a) replaces current 5 U.S.C. Sec. 608, which 
allows an agency to waive or delay the completion of some or 
all of the requirements of section 603 (pertaining to initial 
regulatory flexibility analyses) and to delay the requirements 
of section 604 (pertaining to final regulatory flexibility 
analyses), with a new provision allowing for additional powers 
of the Chief Counsel for Advocacy of the Small Business 
Administration.
    New Section 608(a)(1) requires the Chief Counsel for 
Advocacy to issue rules governing compliance with chapter 6, 
after opportunity for notice and comment, within 270 days after 
enactment of the RFIA. New section 608(a)(2) provides that an 
agency may not issue rules that supplement those promulgated by 
the Chief Counsel unless such agency has first consulted with 
the Chief Counsel to ensure that the supplemental rules comply 
with chapter 6 and the Counsel's rules.
    New section 608(b) provides that the Chief Counsel, 
notwithstanding any other law, may intervene in any 
adjudication before any Federal agency (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 provision prohibits 
the Chief Counsel from initiating an appeal with respect to any 
adjudication in which the Chief Counsel intervenes pursuant to 
new section 613(b).
    New section 608(c) authorizes the Chief Counsel to 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 5 U.S.C. Sec. 553.
    Section 6 replaces 5 U.S.C. Sec. 609(b), which sets out 
procedures that an agency must follow prior to the publication 
of an initial regulatory flexibility analysis. As amended, 
section 609(b) requires the agency to provide to the Chief 
Counsel for Advocacy with the following: (1) all materials 
prepared by the agency in promulgating the proposed rule, 
including any drafts of such rule (with certain exceptions); 
and (2) information on the rule's potential adverse and 
beneficial impacts on small entities that might be affected.
    New section 609(c) requires that within 15 days of receipt 
of such information, the Chief Counsel must identify small 
entities or representatives thereof (or a combination of both) 
for the purpose of obtaining advice, input and recommendations 
about the rule's potential economic impact and compliance with 
sections 603 or 605(b) of title 5. The Chief Counsel must also 
convene a review panel staffed by an Office of Advocacy 
employee and an employee for the agency promulgating the rule. 
If the agency is not an independent regulatory agency, the 
panel must also include an employee from OIRA.
    New section 609(d) requires that within 60 days after the 
panel is convened, the Chief Counsel must, after consultation 
with the panel, submit a report to the agency (or to OIRA if 
the agency is an independent regulatory agency). The report 
must include an assessment of the proposed rule's impact on 
small entities as well as a discussion of any alternatives that 
will minimize adverse economic impacts on small entities.
    In addition, section 6 mandates that the report become part 
of the rulemaking record. In the publication of the proposed 
rule, the agency must explain what actions, if any, the agency 
took in response to such report.
    Section 6 further provides that new section 609(e) applies 
to a proposed rule if the OIRA Administrator or an agency head 
(or delegate) determines that the rule is likely to result in 
any of the following: (1) an annual effect on the economy of 
$100 million 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.
    Finally, section 6(f) permits the Chief Counsel for 
Advocacy to waive the requirements of subsections (b) through 
(e) of section 609 if the Counsel determines that compliance 
with these requirements are impracticable, unnecessary, or 
contrary to the public interest.
    Section 7 amends 5 U.S.C. Sec. 610, pertaining to the 
periodic review of rules. In addition to publishing a plan for 
the periodic review of rules issued by an agency in the Federal 
Register, the plan must also appear on the agency's website. 
Section 7 requires the agency's head, rather than the agency, 
to make the determination of whether the rule has a significant 
economic impact on a substantial number of small entities. Such 
determination must be made without regard to whether the agency 
performed an analysis under section 604. Section 7 revises the 
objectives of the determination to require consideration of 
whether the rule maximizes any significant beneficial impacts 
on a substantial number of small entities. If an agency head 
determines that the periodic review cannot be performed within 
the stated time frames, then section 7 permits the agency head 
to so certify and extend the review period for 2 years after 
publication of the notice of extension in the Federal Register. 
In addition, such notice and certification must be provided to 
the Chief Counsel and Congress. Section 7 also directs the 
agency to amend or rescind a rule to minimize adverse 
significant economic impact on a substantial number of small 
entities or a disproportionate economic impact on a specific 
class of small entities, or to maximize beneficial significant 
economic impact on a substantial number of small entities.
    As amended, section 610 requires an agency to annually 
submit a report regarding the results of its review to Congress 
and to OIRA, if the agency is an independent regulatory agency. 
Section 7 requires the agency to include comments by the 
Regulatory Enforcement Ombudsman and the Chief Counsel for 
Advocacy. In addition, the agency must consider the rule's 
contribution to the cumulative economic impact of all Federal 
rules on the class of small entities affected by the rule, 
unless the agency head determines that such calculations cannot 
be made and reports that determination in the annual report 
required under section 610(c).
    In addition to publication in the Federal Register, section 
7 requires each agency to publish a list of rules to be 
reviewed on its website and to include an explanation of why 
the agency determined such rules have a significant economic 
impact on a substantial number of small entities. In addition, 
this publication must request comments from the public, Chief 
Counsel for Advocacy, and the Regulatory Enforcement Ombudsman 
concerning enforcement of such rules.
    Section 8(a) amends 5 U.S.C. Sec. 611(a)(1) to provide that 
a small entity that is adversely affected or aggrieved by any 
rule under chapter 6 is entitled to judicial review of agency 
compliance. Section 611(a)(1) currently applies only to ``final 
agency action.'' Section 8(b) amends 5 U.S.C. Sec. 611(a)(2) to 
provide that a court may review a rule if publication of the 
final rule constituted final agency action.
    Section 8(c) amends 5 U.S.C. Sec. 611(a)(3) to provide that 
the time within which judicial review may be sought begins from 
publication of a final rule. It also specifies that the 
exception applies in the case of a rule for which the date of 
final agency action is the same date as the publication date of 
the final rule.
    Section 8(d) amends 5 U.S.C.Sec. 612(b), which authorizes 
the Chief Counsel for Advocacy to appear as amicus curiae in 
any action brought in a court of the United States to review a 
rule. As amended, the provision permits the Chief Counsel to 
also appear as amicus curiae in any action to review agency 
compliance with sections 601, 604, 605(b), 609, or 610.
    Section 9(a) amends 28 U.S.C. Sec. 2342 to give the United 
States Court of Appeals (other than the United States Court of 
Appeals for the Federal Circuit) exclusive jurisdiction to 
enjoin, set aside, suspend, or to determine the validity of all 
final rules under 5 U.S.C. Sec. 608(a) (as amended by this 
Act).
    Section 9(b) amends 28 U.S.C. Sec. 2341(3), which defines 
the term, ``agency''. As amended, the definition includes the 
Office of Advocacy of the Small Business Administration, when a 
final rule is promulgated under section 608(a) of title 5 of 
the United States Code (as amended by this Act).
    Section 9(c) amends 5 U.S.C. Sec. 612(b), which sets out 
certain intervention rights of the Chief Counsel for Advocacy 
pertaining to matters under chapter 6. As amended, section 
612(b) extends this provision to apply to compliance under 
chapters 5 and 7, in addition to chapter 6.
    Section 10 of the bill amends the Small Business Act to 
give the SBA's Chief Counsel for Advocacy the authority to 
establish small business size standards. This text is identical 
to the text of H.R. 585, the Small Business Size Standard 
Flexibility Act of 2011, from the 112th Congress, which was 
referred to the Committee on Small Business and over which this 
Committee did not have jurisdiction.
    Section 11 makes a number of clerical amendments.
    Section 12 amends SBREFA to require that agency guides be 
written in plain language.

                               CONCLUSION

    H.R. 2542 is the latest iteration of the Majority's ongoing 
attack on Federal regulation. Since the beginning of the 112th 
Congress, the Committee's Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law has held 22 hearings and 
considered at least six bills designed to hobble Federal agency 
rulemaking and to increase the influence of business interests 
over the rulemaking process. The Majority's use of pro-small 
business rhetoric cannot obscure the fact that H.R. 2542, like 
previous anti-regulatory proposals, will erect significant 
barriers to rulemaking that will hinder the promulgation of 
critical public health and safety protections.
    We share the Majority's belief that small business plays an 
important role in our economy, but H.R. 2542 does nothing to 
alleviate the purported burden on small entities of complying 
with Federal regulations. In fact, 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. 2542 
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.
    There are other meaningful ways to assist small businesses 
and small entities to navigate the regulatory landscape that 
would not threaten agencies' ability to protect public health 
and safety. We urge our colleagues to shift their attention to 
these alternatives and to oppose this ill-conceived 
legislation.

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

                                  
