Administrative Procedure Reform Act of 1994

Summary: Administrative Procedure Reform Act of 1994 - Amends Federal law to require a Federal agency head to publish in the Federal Register a notice of intent to engage in major rulemaking which contains a Regulatory Impact Analysis.  Requires a final Regulatory Impact Analysis for any final proposal for a major rule. Specifies the contents of such an Analysis, as well as hearing and comment period requirements. 
Defines major rule as any proposed regulatory action:  (1) which affects more than 100 persons; or (2) compliance with which will require the expenditure of over $1 million by any person which is not a Federal agency. 
Prohibits an agency from adopting a major rule unless its final Regulatory Impact Analysis is approved by the Director of the Office of Management and Budget. 
Sets forth a standard of clarity for major rules. 
Directs the Administrator of the Office of Information and Regulatory Affairs to report to the Congress an analysis of the rulemaking procedures of Federal agencies and their impact on the regulated public and regulatory process.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Administrative Procedure Reform Act 
of 1994''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds the following:
            (1) The cost and burden of regulations have risen to 
        historic highs.
            (2) The number of people writing Federal regulations has 
        grown dramatically from 106,000 in 1989 to 122,440 in 1992--a 
        15 percent increase in just 3 years.
            (3) The Federal Government currently has 125,000 
        bureaucrats working on 5,000 regulations promulgated by 59 
        different Federal agencies.
            (4) The 1993 regulatory output of the Federal Government 
        numbered 69,688 pages of regulations, with the Code of Federal 
        Regulations taking up 21 feet of shelf space.
            (5) The Office of the Federal Register, the publisher of 
        the journal of Federal agency rule making, now teaches classes 
        to assist manufacturers in reading new regulations and 
        proposals.
            (6) The total cost of administering the Federal regulatory 
        apparatus in fiscal year 1993 was $11,300,000,000.
            (7) It is estimated that the total cost of regulation of 
        manufacturing approximated, and in some studies exceeded, 
        aggregate after-tax manufacturing profits.
            (8) The cost of regulatory compliance drains funds for 
        research, job creation, training, wages, and employment 
        benefits.
            (9) In a February 1993 survey of leading manufacturing 
        chief executive officers, government mandates, including 
        regulations, were identified as the government policies which 
        have done the most to harm United States manufacturing 
        employment in the past 5 years.
            (10) The vast scope, rigid construction, and costly impact 
        of State and Federal regulatory schemes has created the 
        perception of a hostile climate for manufacturing.

SEC. 3. RULE MAKING NOTICES FOR MAJOR RULES.

    Section 553 of title 5, United States Code, is amended by adding at 
the end the following:
    ``(f)(1)(A) The head of an agency shall publish in the Federal 
Register, at least 90 days before the date of publication of general 
notice under subsection (b) for a proposed major rule, a notice of 
intent to engage in rule making.
    ``(B) A notice under subparagraph (A) for a proposed major rule 
shall include, to the extent possible, the information required to be 
included in a Regulatory Impact Analysis for the rule under section 
5(c) (1), (2), and (8) of the Administrative Procedure Reform Act of 
1994.
    ``(2) The head of an agency shall include in a general notice under 
subsection (b) for a major rule proposed by the agency--
            ``(A) a final Regulatory Impact Analysis for the rule 
        prepared in accordance with section 5 of the Administrative 
        Procedure Reform Act of 1994; and
            ``(B) clear delineation of all changes in the information 
        included in the final Regulatory Impact Analysis under section 
        5(c)(1) and (2) of the Administrative Procedure Reform Act of 
        1994 from any such information that was included in the notice 
        for the rule under paragraph (1)(B) of this subsection.
    ``(3) In this subsection, the term `major rule' has the meaning 
given that term in section 5(b) of the Administrative Procedure Reform 
Act of 1994.''.

SEC. 4. HEARING REQUIREMENT FOR PROPOSED RULES; EXTENSION OF COMMENT 
              PERIOD.

    (a) Hearing Requirement.--Section 553 of title 5, United States 
Code, is further amended--
            (1) in subsection (b), in the matter following paragraph 
        (3), by inserting ``(except subsection (g))'' after ``this 
        subsection''; and
            (2) by adding after subsection (f) (as added by section 3 
        of this Act) the following:
    ``(g) If more than 100 interested persons acting individually 
submit comments to an agency regarding any rule proposed by the agency, 
the agency shall hold a public hearing on the proposed rule.''.
    (b) Extension of Comment Period.--Section 553 of title 5, United 
States Code, is further amended by adding after subsection (g) (as 
added by subsection (a)(2) of this section) the following:
    ``(h) If during the 30-day period beginning on the date of 
publication of notice under subsection (f)(1)(A) for a proposed major 
rule, or if during the 30-day period beginning on the date of 
publication or service of notice required by subsection (b) for a 
proposed rule, more than 100 persons individually contact the agency to 
request an extension of the period for making submissions under 
subsection (c) pursuant to the notice, the agency--
            ``(1) shall provide an additional 30-day period for making 
        those submissions; and
            ``(2) may not adopt the rule until after that additional 
        period.''.
    (c) Response to Comments.--Section 553(c) of title 5, United States 
Code, is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding at the end the following:
    ``(2) The head of an agency shall publish in the Federal Register 
with each rule published under section 552(a)(1)(D) of this title, 
responses to the substance of all comments received by the agency 
regarding the rule.''.

SEC. 5. REGULATORY IMPACT ANALYSIS.

    (a) Application of Executive Order as Statutory Requirement.--
Except as otherwise provided in this section, Executive Order 12866 
(relating to Federal regulation requirements and regulatory impact 
analysis), as in effect on September 30, 1993, shall apply to each 
agency in accordance with the provisions of the Order.
    (b) Definition of Major Rule in Order.--Notwithstanding section 
1(b) of the Order, for purposes of subsection (a) of this section, the 
term ``major rule'' means any proposed regulatory action--
            (1) which affects more than 100 persons; or
            (2) compliance with which will require the expenditure of 
        more than $1,000,000 by any person which is not a Federal 
        agency.
    (c) Contents of Regulatory Impact Analyses.--In lieu of the 
information specified in section 3(d) of the Order, each preliminary 
and final Regulatory Impact Analysis required under section 3 of the 
Order for a rule shall contain the following:
            (1) An explanation of the necessity, appropriateness and 
        reasonableness of the rule.
            (2) A description of the current condition that the rule 
        will address and how that condition will be affected by the 
        rule.
            (3) A statement that the rule does not conflict with nor 
        duplicate any other rule, or an explanation of why the conflict 
        or duplication exists.
            (4) A statement of whether the rule is in accord with or in 
        conflict with any legal precedent.
            (5) A statement of the factual, scientific, or technical 
        basis for the agency's determination that the rule will 
        accomplish its intended purpose.
            (6) A statement that describes and, to the extent 
        practicable, quantifies the risks to human health or the 
        environment to be addressed by the rule.
            (7) A demonstration that the rule provides the least costly 
        or least intrusive approach for meeting its intended purpose.
            (8) A description of any alternative approaches considered 
        by the agency or suggested by interested persons and the 
        reasons for their rejection.
            (9) An estimate of the nature and number of persons to be 
        regulated or affected by the rule.
            (10) An estimate of the costs that will be incurred by 
        persons in complying with the rule.
            (11) An evaluation of the costs versus the benefits derived 
        from the rule, including evaluation of how those benefits 
        outweigh the cost.
            (12) Whether the rule will require onsite inspections.
            (13) An estimate of the paperwork burden on persons 
        regulated or affected by the rule, such as the number of forms, 
        impact statements, surveys, and other documents required to be 
        completed by the person under the rule.
            (14) Whether persons will be required by the rule to 
        maintain any records which will be subject to inspection.
            (15) Whether persons will be required by the rule to obtain 
        licenses, permits, or other certifications, and the fees and 
        fines associated therewith.
            (16) Whether persons will be required by the rule to appear 
        before the agency.
            (17) Whether persons will be required by the rule to 
        disclose information on materials or processes, including trade 
        secrets.
            (18) Whether persons will be required by the rule to report 
        any particular type of incidents.
            (19) Whether persons will be required by the rule to adhere 
        to design or performance standards.
            (20) Whether persons may need to retain or utilize any 
        lawyer, accountant, engineer, or other professional consultant 
        in order to comply with the regulations.
            (21) An estimate of the costs to the agency for 
        implementation and enforcement of the regulations.
            (22) Whether the agency can be reasonably expected to 
        implement the rule with the current level of appropriations.
            (23) A statement that any person may submit comments on the 
        Regulatory Impact Analysis to the Administrator of the Office 
        of Information and Regulatory Affairs.
    (d) Definitions.--In this section--
            (1) the term ``Order'' means Executive Order 12866, as in 
        effect on September 30, 1993; and
            (2) each of the terms ``agency'', ``regulation'', and 
        ``rule'' has the meaning given that term in section 1 of the 
        Order.

SEC. 6. ADDITIONAL RESPONSIBILITIES OF DIRECTOR OF THE OFFICE OF 
              MANAGEMENT AND BUDGET.

    An agency may not adopt a major rule unless the final Regulatory 
Impact Analysis for the rule is approved in writing by the Director of 
the Office of Management and Budget or by an individual designated by 
the Director for that purpose.

SEC. 7. STANDARD OF CLARITY.

    The head of an agency may not publish in the Federal Register any 
proposed major rule, summary of a proposed major rule, or Regulatory 
Impact Analysis unless the Director of the Office of Management and 
Budget certifies that the proposed major rule, summary, or Analysis--
            (1) is written in a reasonably simple and understandable 
        manner and is easily readable;
            (2) is written to provide adequate notice of the content of 
        the rule, summary, or Analysis to affected persons and 
        interested persons that have some subject matter expertise;
            (3) conforms to commonly accepted principles of grammar;
            (4) contains only sentences that are as short as practical 
        and organized in a sensible manner; and
            (5) does not contain any double negatives, confusing cross 
        references, convoluted phrasing, unreasonably complex language, 
        or term of art or word with multiple meanings that may be 
        misinterpreted and is not defined in the rule, summary, or 
        analysis, respectively.

SEC. 8. REPORT BY OIRA.

    The Administrator of the Office of Information and Regulatory 
Affairs shall submit a report to the Congress no later than 12 months 
after the date of the enactment of this Act containing an analysis of 
rule making procedures of Federal agencies and an analysis of the 
impact of those rule making procedures on the regulated public and 
regulatory process.

SEC. 9. DEFINITIONS.

    For purposes of this Act--
            (1) except as provided in section 5(d)(2), each of the 
        terms ``agency'', ``rule'', and ``rule making'' has the meaning 
        given that term in section 551 of title 5, United States Code; 
        and
            (2) the term ``major rule'' has the meaning given that term 
        in section 5(b).