S. 1938 (112th): Regulatory Flexibility Improvements Act of 2011

112th Congress, 2011–2013. Text as of Dec 01, 2011 (Introduced).

Status & Summary | PDF | Source: GPO

II

112th CONGRESS

1st Session

S. 1938

IN THE SENATE OF THE UNITED STATES

December 1, 2011

introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs

A BILL

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.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Regulatory Flexibility Improvements Act of 2011.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Clarification and expansion of rules covered by the Regulatory Flexibility Act.

Sec. 3. Expansion of report of regulatory agenda.

Sec. 4. Requirements providing for more detailed analyses.

Sec. 5. Repeal of waiver and delay authority; Additional powers of the Chief Counsel for Advocacy.

Sec. 6. Procedures for gathering comments.

Sec. 7. Periodic review of rules.

Sec. 8. Judicial review of compliance with the requirements of the Regulatory Flexibility Act available after publication of the final rule.

Sec. 9. Jurisdiction of court of appeals over rules implementing the Regulatory Flexibility Act.

Sec. 10. Clerical amendments.

Sec. 11. Agency preparation of guides.

2.

Clarification and expansion of rules covered by the Regulatory Flexibility Act

(a)

In general

Paragraph (2) of section 601 of title 5, United States Code, is amended to read as follows:

(2)

Rule

The term rule has the meaning given such term in section 551(4) of this title, except that such term does not include a rule of particular (and not general) applicability relating to rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services, or allowances therefor or to valuations, costs or accounting, or practices relating to such rates, wages, structures, prices, appliances, services, or allowances.

.

(b)

Inclusion of rules with indirect effects

Section 601 of title 5, United States Code, is amended by adding at the end the following new paragraph:

(9)

Economic impact

The term economic impact means, with respect to a proposed or final rule—

(A)

any direct economic effect on small entities of such rule; and

(B)

any indirect economic effect on small entities that is reasonably foreseeable and results from such rule (without regard to whether small entities will be directly regulated by the rule).

.

(c)

Inclusion of rules with beneficial effects

(1)

Initial regulatory flexibility analysis

Subsection (c) of section 603 of title 5, United States Code, is amended by striking the first sentence and inserting Each initial regulatory flexibility analysis shall also contain a detailed description of alternatives to the proposed rule which minimize any adverse significant economic impact or maximize any beneficial significant economic impact on small entities..

(2)

Final regulatory flexibility analysis

Section 604(a) of title 5, United States Code, is amended, in the first paragraph designated as paragraph (6), by striking minimize the significant economic impact and inserting minimize the adverse significant economic impact or maximize the beneficial significant economic impact.

(d)

Inclusion of rules affecting tribal organizations

Paragraph (5) of section 601 of title 5, United States Code, is amended by striking or special districts and inserting special districts, or tribal organizations (as defined in section 4(l) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(l))).

(e)

Inclusion of land management plans and formal rule making

(1)

Initial regulatory flexibility analysis

Subsection (a) of section 603 of title 5, United States Code, is amended in the first sentence—

(A)

by striking or after proposed rule,; and

(B)

by inserting or publishes a revision or amendment to a land management plan, after United States,.

(2)

Final regulatory flexibility analysis

Subsection (a) of section 604 of title 5, United States Code, is amended, in the first sentence—

(A)

by striking or after proposed rulemaking,; and

(B)

by inserting or adopts a revision or amendment to a land management plan, after section 603(a),.

(3)

Land management plan defined

Section 601 of title 5, United States Code, is amended by adding at the end the following new paragraph:

(10)

Land management plan

(A)

In general

The term land management plan means—

(i)

any plan developed by the Secretary of Agriculture under section 6 of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1604); and

(ii)

any plan developed by the Secretary of Interior under section 202 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1712).

(B)

Revision

The term revision, when used with respect to a land management plan, 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, when used with respect to a land management plan, means any change to a land management plan which—

(i)

in the case of a plan described in subparagraph (A)(i), is made under section 6(f)(4) of the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1604(f)(4)) and with respect to which the Secretary of Agriculture prepares a statement described in section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)); or

(ii)

in the case of a plan described in subparagraph (A)(ii), is made under section 1610.5–5 of title 43, Code of Federal Regulations (or any successor regulation) and with respect to which the Secretary of the Interior prepares a statement described in section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).

.

(f)

Inclusion of certain interpretive rules involving the internal revenue laws

(1)

In general

Subsection (a) of section 603 of title 5, United States Code, is amended by striking the period at the end and inserting or a recordkeeping requirement, and without regard to whether such requirement is imposed by statute or regulation..

(2)

Collection of information

Paragraph (7) of section 601 of title 5, United States Code, is amended to read as follows:

(7)

Collection of information

The term collection of information has the meaning given such term in section 3502(3) of title 44.

.

(3)

Recordkeeping requirement

Paragraph (8) of section 601 of title 5, United States Code, is amended to read as follows:

(8)

Recordkeeping requirement

The term recordkeeping requirement has the meaning given such term in section 3502(13) of title 44.

.

(g)

Definition of small organization

Paragraph (4) of section 601 of title 5, United States Code, is amended to read as follows:

(4)

Small organization

(A)

In general

The term small organization means any not-for-profit enterprise that, 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.

.

3.

Expansion of report of regulatory agenda

Section 602 of title 5, United States Code, is amended—

(1)

in subsection (a)—

(A)

in paragraph (2), by striking , and at the end and inserting a semicolon;

(B)

by redesignating paragraph (3) as paragraph (4); and

(C)

by inserting after paragraph (2) the following:

(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

; and

(2)

in subsection (c), to read as follows:

(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), the agency shall prominently display a plain language summary of the information contained in the regulatory flexibility agenda on the website of the agency. The Office of Advocacy of the Small Business Administration shall compile and prominently display plain language summaries of each regulatory flexibility agenda published under subsection (a) on the website of the Office of Advocacy, not later than 3 days after the date on which the agency publishes the regulatory flexibility agenda the Federal Register.

.

4.

Requirements providing for more detailed analyses

(a)

Initial regulatory flexibility analysis

Subsection (b) of section 603 of title 5, United States Code, is amended to read as follows:

(b)

Each initial regulatory flexibility analysis required under this section shall contain a detailed statement—

(1)

describing the reasons why action by the agency is being considered;

(2)

describing the objectives of, and legal basis for, the proposed rule;

(3)

estimating the number and type of small entities to which the proposed rule will apply;

(4)

describing the projected reporting, recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report and record;

(5)

describing all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule, or the reasons why such a description could not be provided;

(6)

estimating the additional cumulative economic impact of the proposed rule on small entities beyond that already imposed on the class of small entities by the agency or why such an estimate is not available; and

(7)

describing any disproportionate economic impact on small entities or a specific class of small entities.

.

(b)

Final regulatory flexibility analysis

(1)

In general

Section 604(a) of title 5, United States Code, is amended—

(A)

in paragraph (4), by striking an explanation and inserting a detailed explanation;

(B)

in each of paragraphs (4), (5), and the first paragraph designated as paragraph (6), by inserting detailed before description; and

(C)

by adding at the end the following:

(7)

a description any disproportionate economic impact on small entities or a specific class of small entities.

.

(2)

Inclusion of response to comments on certification of proposed rule

Paragraph (2) of section 604(a) of title 5, United States Code, is amended by inserting (or certification of the proposed rule under section 605(b)) after initial regulatory flexibility analysis.

(3)

Publication of analysis on website

Subsection (b) of section 604 of title 5, United States Code, is amended to read as follows:

(b)

The agency shall make copies of the final regulatory flexibility analysis available to the public, including by making the entire analysis available on the website of the agency, and shall publish in the Federal Register the final regulatory flexibility analysis, or a summary thereof which includes the telephone number, mailing address, and link to the website where the complete analysis may be obtained.

.

(c)

Cross-References to other analyses

Subsection (a) of section 605 of title 5, United States Code, is amended to read as follows:

(a)

A Federal agency shall be treated as satisfying any requirement regarding the content of an agenda or regulatory flexibility analysis under section 602, 603, or 604, if such agency provides in such agenda or analysis a cross-reference to the specific portion of another agenda or analysis which is required by any other law and which satisfies such requirement.

.

(d)

Certifications

Subsection (b) of section 605 of title 5, United States Code, is amended, in the second sentence, by striking statement providing the factual and inserting detailed statement providing the factual and legal.

(e)

Quantification requirements

Section 607 of title 5, United States Code, is amended to read as follows:

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.

.

5.

Repeal of waiver and delay authority; Additional powers of the Chief Counsel for Advocacy

(a)

In general

Section 608 of title 5, United States Code, is amended to read as follows:

608.

Additional powers of Chief Counsel for Advocacy

(a)
(1)

Not later than 270 days after the date of the enactment of the Regulatory Flexibility Improvements Act of 2011, the Chief Counsel for Advocacy of the Small Business Administration shall, after opportunity for notice and comment under section 553, issue rules governing agency compliance with this chapter. The Chief Counsel may modify or amend such rules after notice and comment under section 553. This chapter (other than this subsection) shall not apply with respect to the issuance, modification, or 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 of the Small Business Administration to ensure that such supplemental rules comply with this chapter and the rules issued under paragraph (1).

(b)

Notwithstanding any other provision of 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 of the Small Business Administration may file comments in response to any agency notice requesting comment, regardless of whether the agency is required to file a general notice of proposed rulemaking under section 553.

.

(b)

Conforming amendments

Section 611(a) of title 5, United States Code, is amended—

(1)

in paragraph (1), by striking 608(b),;

(2)

in paragraph (2), by striking 608(b),; and

(3)

in paragraph (3)—

(A)

by striking subparagraph (B); and

(B)

by striking (3)(A) A small entity and inserting the following:

(3)

A small entity

.

6.

Procedures for gathering comments

Section 609 of title 5, United States Code, is amended by striking subsection (b) and all that follows through the end of the section and inserting the following:

(b)
(1)

Prior to publication of any proposed rule described in subsection (e), the agency making such rule shall notify the Chief Counsel for Advocacy of the Small Business Administration and provide the Chief Counsel for Advocacy with—

(A)

all materials prepared or utilized by the agency in making the proposed rule, including the draft of the proposed rule, except as provided in paragraph (2); 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 may provide a summary 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 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 for Advocacy of the Small Business Administration 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 for Advocacy of the Small Business Administration determines that compliance with the requirements of such subsections are impracticable, unnecessary, or contrary to the public interest.

.

7.

Periodic review of rules

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

610.

Periodic review of rules

(a)

Not later than 180 days after the enactment of the Regulatory Flexibility Improvements Act of 2011, each agency shall publish in the Federal Register and make available on the website of the agency 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 making the amended plan available on the website of the agency.

(b)

The plan shall provide for the review of all such agency rules existing on the date of the enactment of the Regulatory Flexibility Improvements Act of 2011 within 10 years of the date of publication of the plan in the Federal Register and for review of rules adopted after the date of enactment of the Regulatory Flexibility Improvements Act of 2011 within 10 years after the publication of the final rule in the Federal Register. If the head of the agency determines that completion of the review of existing rules is not feasible by the established date, the head of the agency shall so certify in a statement published in the Federal Register and may extend the review for not longer than 2 years after publication of notice of extension in the Federal Register. Such certification and notice shall be sent to the Chief Counsel for Advocacy of the Small Business Administration and the Congress.

(c)

The plan shall include a section that details how an agency will conduct outreach to and meaningfully include small entities for the purposes of carrying out this section. The agency shall include in this section a plan for how the agency will contact small entities 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 the website of the agency 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 the rule 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.

.

8.

Judicial review of compliance with the requirements of the Regulatory Flexibility Act available after publication of the final rule

(a)

In general

Paragraph (1) of section 611(a) of title 5, United States Code, is amended by striking final agency action and inserting such rule.

(b)

Jurisdiction

Paragraph (2) of section 611(a) of title 5, United States Code, is amended by inserting (or which would have such jurisdiction if publication of the final rule constituted final agency action) after provision of law,.

(c)

Time for bringing action

Paragraph (3) of section 611(a) of title 5, United States Code, is amended—

(1)

by striking final agency action and inserting publication of the final rule; and

(2)

by inserting , in the case of a rule for which the date of final agency action is the same date as the publication of the final rule, after except that.

(d)

Intervention by Chief Counsel for Advocacy

Subsection (b) of section 612 of title 5, United States Code, is amended by inserting before the first period or agency compliance with section 601, 603, 604, 605(b), 609, or 610.

9.

Jurisdiction of court of appeals over rules implementing the Regulatory Flexibility Act

(a)

In general

Section 2342 of title 28, United States Code, is amended—

(1)

in paragraph (6), by striking and at the end;

(2)

in paragraph (7), by striking the period at the end and inserting ; and; and

(3)

by inserting after paragraph (7) the following new paragraph:

(8)

all final rules under section 608(a) of title 5.

.

(b)

Conforming amendments

Paragraph (3) of section 2341 of title 28, United States Code, is amended—

(1)

in subparagraph (D), by striking and at the end;

(2)

in subparagraph (E), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following new subparagraph:

(F)

the Office of Advocacy of the Small Business Administration, when the final rule is under section 608(a) of title 5.

.

(c)

Authorization To intervene and comment on agency compliance with administrative procedure

Subsection (b) of section 612 of title 5, United States Code, is amended by inserting chapter 5, and chapter 7, after this chapter,.

10.

Technical and conforming amendments

(a)

Definitions

Section 601 of title 5, United States Code, is amended—

(1)

in paragraph (1)—

(A)

by striking the semicolon at the end and inserting a period; and

(B)

by striking (1) the term and inserting the following:

(1)

Agency

The term

;

(2)

in paragraph (3)—

(A)

by striking the semicolon at the end and inserting a period; and

(B)

by striking (3) the term and inserting the following:

(3)

Small business

The term

;

(3)

in paragraph (5)—

(A)

by striking the semicolon at the end and inserting a period; and

(B)

by striking (5) the term and inserting the following:

(5)

Small governmental jurisdiction

The term

; and

(4)

in paragraph (6)—

(A)

by striking ; and and inserting a period; and

(B)

by striking (6) the term and inserting the following:

(6)

Small entity

The term

.

(b)

Section 605

The heading of section 605 of title 5, United States Code, is amended to read as follows:

605.

Incorporations by reference and certifications

.

(c)

Table of sections

The table of sections for chapter 6 of title 5, United States Code, is amended—

(1)

by striking the item relating to section 605 and inserting the following new item:

605. Incorporations by reference and certifications.

;

(2)

by striking the item relating to section 607 and inserting the following new item:

607. Quantification requirements.

;

and
(3)

by striking the item relating to section 608 and inserting the following:

608. Additional powers of Chief Counsel for Advocacy.

.

(d)

Other amendments

Chapter 6 of title 5, United States Code, is amended—

(1)

in section 603, by striking subsection (d); and

(2)

in section 604(a) by striking the second paragraph designated as paragraph (6).

11.

Agency preparation of guides

Section 212(a)(5) the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601 note) is amended to read as follows:

(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.

.