House Report 118-852 - REGULATORY AGENDA CLARITY ACT

[House Report 118-852]
[From the U.S. Government Publishing Office]

118th Congress } { Rept. 118-852
HOUSE OF REPRESENTATIVES
2d Session } { Part 1

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REGULATORY AGENDA CLARITY ACT

_______

December 10, 2024.--Ordered to be printed

_______

Mr. Williams of Texas, from the Committee on Small Business, submitted
the following

R E P O R T

together with

MINORITY VIEWS

[To accompany H.R. 9030]

[Including cost estimate of the Congressional Budget Office]

The Committee on Small Business, to whom was referred the
bill (H.R. 9030) to amend chapter 6 of title 5, United States
Code (commonly known as the ``Regulatory Flexibility Act''), to
ensure complete disclosure of an agency's annual regulatory
agenda, having considered the same, reports favorably thereon
without amendment and recommends that the bill do pass.

CONTENTS

Page
I. Purpose and Bill Summary........................................2
II. Need for Legislation............................................2
III. Hearings........................................................2
IV. Committee Consideration.........................................2
V. Committee Votes.................................................2
VI. Section-by-Section of H.R. 9030.................................9
VII. Congressional Budget Office Cost Estimate.......................9
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditur12
IX. Oversight Findings & Recommendations...........................12
X. Performance Goals and Objectives...............................12
XI. Statement of Duplication of Federal Programs...................12
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits.......................................................12
XIII. Federal Mandates Statement.....................................12
XIV. Federal Advisory Committee Statement...........................12
XV. Applicability to Legislative Branch............................13
XVI. Statement of Constitutional Authority..........................13
XVII. Changes in Existing Law, Made by the Bill, As Reported.........13
XVIII.Minority views.................................................15

I. Purpose and Bill Summary

On July 15, 2024, Rep. Alford introduced H.R. 9030. The
purpose of H.R. 9030, the ``Regulatory Agenda Clarity Act,'' is
to require agencies to include in their annual regulatory
agenda the North American Industry Classification System
(NAICS) codes of small entities primarily impacted by any rule
and a plain language summary within three days of its
publication in the Federal Register.

II. Need for Legislation

Agencies publish their regulatory agenda in the Fall and
Spring each year which is publicly available on the Office of
Information and Regulatory Affairs' (OIRA) website. This
legislation requires agencies to include the North American
Industry Classification System (NAICS) codes of small entities
primarily impacted by any rule and a plain language summary on
the agency's website within three days of the agenda's
publication in the Federal Register.
Throughout the Committee's investigation, we repeatedly
found that agencies underestimated the number of effected
entities as well as industries that will be impacted by
regulations. By forcing agencies to take this additional step,
it would allow for a more accurate and wholistic view into the
businesses that will be forced to comply with a new rule.
This information is important for small businesses to be
aware of so they know precisely who is impacted by a proposed
rule and might be required to comply with a rule should it
become final.

III. Hearings

In the 118th Congress, the Committee held one hearing
examining the issues covered in H.R. 9030. On May 22, 2024, the
Committee held a hearing titled ``Burdensome Regulations:
Examining the Biden Administration's Failure to Consider Small
Businesses'' which examined the impacts of the Biden
Administration's burdensome regulatory landscape and explored
ways to support small businesses and overcome agencies'
noncompliance with the RFA.

IV. Committee Consideration

The Committee on Small Business met in open session, with a
quorum being present, on September 10, 2024 and ordered H.R.
9030 reported to the House of Representatives. During the
markup two amendments were offered.

V. Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted to favorably report H.R. 9030 to
the House of Representatives at 2:35 PM.

VI. Section-by-Section of H.R. 9030

Section 1: Short title

This bill may be cited as the ``Regulatory Agenda Clarity
Act.''

Section 2: Expansion of report of regulatory agenda

Requires a brief description of the NAICS codes impacted by
the rule to be included in the regulatory agenda.
Requires a plain language summary of the rule/regulatory
flexibility agenda to be posted in the Federal Register and the
agency's website within 3 days of publishing the rule. The
Office of Advocacy must then post the summaries on the SBA's
website.

VII. Congressional Budget Office Cost Estimate

Pursuant to clause 3(d)(1) of House rule XIII, the
Committee adopts as its own the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
The Congressional Budget Act of 1974 requires the
Congressional Budget Office, to the extent practicable, to
prepare estimates of the budgetary effects of legislation
ordered reported by Congressional authorizing committees. In
order to provide the Congress with as much information as
possible, the attached table summarizes information about the
estimated direct spending and revenue effects of some of the
legislation that has been ordered reported by the House
Committee on Small Business during the 118th Congress. The
legislation listed in the table generally would have small
effects, if any, on direct spending or revenues, CBO estimates.
Where possible, the table also provided information about the
legislation's estimated effects on spending subject to
appropriation and on intergovernmental and private-sector
mandates as defined in the Unfunded Mandates Reform Act.

ESTIMATED BUDGETARY EFFECTS AND MANDATES INFORMATION
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Direct Spending subject Pay-as-you-go Budgetary
Bill number Title Status Last Budget spending, Revenues, 2025- to appropriation, procedures effects after Mandates Contact
action function 2025-2034 2034 2025-2029 apply? 2034
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H.R. 9030... Regulatory Agenda Ordered reported... 09/10/24 Multiple Between Between - Not estimated Yes Insignificant Yes Margot Berman
Clarity Act. functions zero and $500,000 and
$500,000 zero
H.R. 9030 would require federal agencies to describe the type of business that would be affected by a proposed rule, explain whether the rule would impose significant economic
effects on a substantial number of small entities, and display that information on their website. CBO estimates that enacting H.R. 9030 could increase direct spending by some
regulatory agencies, a few of which are allowed to charge fees to cover their operating costs. CBO estimates that the net increase in direct spending would be insignificant.
Enacting H.R. 9030 could reduce revenues because costs incurred by the Federal Reserve reduce remittances to the Treasury, which are recorded in the budget as revenues. However,
CBO estimates that any reduction in revenues would be insignificant. CBO has not estimated the bill's effects on spending subject to appropriation. If federal regulators
increase annual fees to offset the costs of implementing the bill, H.R. 9030 would increase the costs of an existing private-sector mandate on entities required to pay those
fees. CBO estimates that the incremental cost of the mandate would be small and would fall well below the annual threshold established in the Unfunded Mandates Reform Act (UMRA)
for private-sector mandates ($200 million in 2024, adjusted annually for inflation). The bill contains no intergovernmental mandates as defined in UMRA.
H.R. 9031... Assurance for Small Ordered reported... 09/10/24 Multiple Between Between - Not estimated Yes Insignificant Yes Margot Berman
Business Act of functions zero and $500,000 and
2024. $500,000 zero
H.R. 9031 would require each rulemaking agency to report to the Congress on how the agency determines whether a rule would impose significant economic effects on a substantial
number of small entities. Enacting H.R. 9031 could increase direct spending by some regulatory agencies, a few of which are allowed to charge fees to cover their operating
costs. CBO estimates that the net increase in direct spending would be insignificant. Enacting H.R. 9031 could reduce revenues because costs incurred by the Federal Reserve
reduce remittances to the Treasury, which are recorded in the budget as revenues. However, CBO estimates that any reduction in revenues would be insignificant. CBO has not
estimated the bill's effects on spending subject to appropriation. If federal regulators increase annual fees to offset the costs of implementing the bill, H.R. 9031 would
increase the costs of an existing private-sector mandate on entities required to pay those fees. CBO estimates that the incremental cost of the mandate would be small and would
fall well below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($200 million in 2024, adjusted annually for inflation).
The bill contains no intergovernmental mandates as defined in UMRA.
H.R. 9033... LABOR Act of 2024.. Ordered reported... 09/10/24 500 0 0 Not estimated No No No Margot Berman
H.R. 9033 would require the Department of Labor to convene a small business advocacy review panel before proposing rules that would have significant economic effects on a
substantial number of small entities. Under current law, only the Occupational Safety and Health Administration within the Department of Labor is required to do so. CBO
estimates that enacting H.R. 9033 would not affect direct spending or revenues. CBO has not estimated the bill's effects on spending subject to appropriation. The bill contains
no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
H.R. 9085... Regulatory Review Ordered reported... 09/10/24 Multiple Between Between - Not estimated Yes Insignificant Yes Margot Berman
Improvement Act of functions zero and $500,000 and
2024. $500,000 zero
H.R. 9085 would expand the information that agencies must include in a 10-year review of a rule's effect on small entities, including the cost for entities to comply with the
rule once it goes into effect and an analysis of public comments an agency receives about the rule. The bill also would reduce the time from 5 years to 1 year for an agency to
complete a review. CBO estimates that enacting H.R. 9085 could increase direct spending by some agencies, a few of which are allowed to charge fees to cover their operating
costs. CBO estimates that the net increase in direct spending would be insignificant. Enacting H.R. 9085 could reduce revenues because costs incurred by the Federal Reserve
reduce remittances to the Treasury, which are recorded in the budget as revenues. However, CBO estimates that any reduction in revenues would be insignificant. CBO has not
estimated the bill's effects on spending subject to appropriation. If federal regulators increase annual fees to offset the costs of implementing the bill, H.R. 9085 would
increase the costs of an existing private-sector mandate on entities required to pay those fees. CBO estimates that the incremental cost of the mandate would be small and would
fall well below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($200 million in 2024, adjusted annually for inflation).
The bill contains no intergovernmental mandates as defined in UMRA.
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VIII. New Budget Authority, Entitlement Authority,
and Tax Expenditures

Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a)(I) of the
Congressional Budget Act of 1974, the Committee provides the
following opinion and estimate with respect to new budget
authority, entitlement authority, and tax expenditures. The
Committee does not believe that there will be any additional
costs attributable to this legislation.
H.R. 9030 does not direct new spending, but instead
reallocates funding independently authorized and appropriated.

IX. Oversight Findings & Recommendations

In accordance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the oversight findings and recommendations of the Committee on
Small Business with respect to the subject matter contained in
the H.R. 9030 are incorporated into the descriptive portions of
this report.

X. Performance Goals and Objectives

With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
performance goals and objectives of H.R. 9030 are to require
agencies to include in their annual regulatory agenda the North
American Industry Classification System (NAICS) codes of small
entities primarily impacted by any rule and a plain language
summary within three days of its publication in the federal
register.

XI. Statement of Duplication of Federal Programs

Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, no provision of H.R. 9030 is known to
be duplicative of another Federal program, including any
program that was included in a report to Congress pursuant to
section 21 of Public Law 111-139 or the most recent Catalog of
Federal Domestic Assistance.

XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits

With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee finds that the bill
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 of the Rules of the House of
Representatives.

XIII. Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

XIV. Federal Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

XV. Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

XVI. Statement of Constitutional Authority

Pursuant to clause 7 of rule XII of the Rules of the House,
the Committee finds that the authority for this legislation in
Art. I, Sec. 8, cl.1 of the Constitution of the United States.

XVII. 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, and existing law in which no
change is proposed is shown in roman):

Changes in Existing Law Made by the Bill, as Reported

TITLE 5, UNITED STATES CODE

* * * * * * *
PART I--THE AGENCIES GENERALLY

* * * * * * *

CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS

* * * * * * *

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) a brief description of the subject area of 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;
(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 each 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).
(b) Each regulatory flexibility agenda shall be transmitted
to the Chief Counsel for Advocacy of the Small Business
Administration for comment, if any.
[(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) Not later than 3 days after the date on which an agency
publishes a regulatory flexibility agenda in the Federal
Register under subsection (a)--
(1) such agency shall prominently display on the
website of such agency a plain language summary of the
information contained in the regulatory flexibility
agenda;
(2) the Chief Counsel for Advocacy shall compile, by
agency, and prominently display on the website of the
Small Business Administration a plain language summary
of each such regulatory flexibility agenda.
(d) Nothing in this section precludes an agency from
considering or acting on any matter not included in a
regulatory flexibility agenda, or requires an agency to
consider or act on any matter listed in such agenda.

* * * * * * *

XVIII. MINORITY VIEWS

Section 602 of the Regulatory Flexibility Act (RFA)
requires federal agencies to publish a regulatory flexibility
agenda in the Federal Register during the months of April and
October every year. Each agency is required to list all rules
it expects to propose or promulgate that are likely to have a
significant economic impact on a substantial number of small
entities, (SEISNSE). The regulatory agenda must include:
A brief description of the subject area of
any rule the agency expects to propose or promulgate
that is likely to have a significant economic impact on
a substantial number of small entities.
A summary of the nature of each such rule
under consideration, the objectives and the legal basis
for issuing each rule, and an approximate schedule for
completing action on any rule for which an agency has
issued a general notice of proposed rulemaking.
The name and telephone number of an agency
official knowledgeable about the rule.\1\
---------------------------------------------------------------------------
\1\Off. of Advocacy, A Guide for Government Agencies: How to Comply
with the Regulatory Flexibility Act, U.S. Small Bus. Admin. (Aug.
2017), https://advocacy.sba.gov/wp-
content/uploads/2019/06/How-to-Comply-with-the-RFA.pdf.
---------------------------------------------------------------------------
In addition, the regulatory flexibility agenda is published
on Regulations.gov with links to all the relevant information.
The Majority is concerned that agencies are not taking the
602 requirements seriously, and only providing links on their
websites to regulations.gov website. Their bill would require
(1) each federal agency to post a plain language summary of the
information contained in the regulatory flexibility agenda
prominently on their websites, (2) The Office of Advocacy
(Advocacy) to post the summaries on its website, and (3) each
federal agency to provide a brief description of the sector, by
NAICS code, that is affected by the rule.
I have concerns with the requirement for each federal
agency to provide a brief description of the sector, by NAICS
code. The regulatory flexibility agenda is a comprehensive
collection of rules the agencies are considering or currently
working on. Agencies do not always move forward with every
rule. Requiring more detailed information at this pre-planning
stage, like NAICS code, may lead agencies to exclude rules from
the regulatory flexibility agenda, unless they are certain to
move forward with the rulemaking process. This, in turn, would
hurt small businesses because they would not be able to weigh
in during the initial stages.
Committee Democrats offered common-sense legislation to
make regulations and regulatory processes more accessible to
small businesses. To that end, Mr. Thanedar and Ms. Chu each
proposed amendments in the nature of a substitute to this bill.
Mr. Thanedar's common sense amendment would require agencies to
publish their brief description of rules under consideration
that may have a significant economic impact on a substantial
number of small entities (SEISNSE) in plain language and
require that they publish the information on their website
within five days of the publication of the regulatory
flexibility agenda.
Ms. Chu's amendment would strike provisions in the text and
require agencies to conduct comprehensive outreach to small
businesses when developing their regulatory flexibility
agendas. The types of outreach include: community-based
outreach; outreach to organizations that work with small
entities; agency field offices; and the use of alternative
platforms and media for engaging with small entities. The Chu
amendment will encourage agencies to get out of the Capital
beltway and connect directly with small businesses. This is a
far better solution.

Nydia M. Velazquez,
Ranking Member.