U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

79–010 

" ! SENATE 115TH CONGRESS

1st Session 

REPORT

2017

115–194 

Calendar No. 284 

SMALL BUSINESS REGULATORY 

FLEXIBILITY IMPROVEMENTS ACT OF 2017 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

WITH MINORITY VIEWS 

TO ACCOMPANY

S. 584 

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 

DECEMBER 14, 2017.—Ordered to be printed 


congress.#13
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

JOHN HOEVEN, North Dakota 

STEVE DAINES, Montana 

CLAIRE MCCASKILL, Missouri 

THOMAS R. CARPER, Delaware 

JON TESTER, Montana 

HEIDI HEITKAMP, North Dakota 

GARY C. PETERS, Michigan 

MAGGIE HASSAN, New Hampshire 

KAMALA D. HARRIS, California 

CHRISTOPHER R. HIXON, Staff Director 

GABRIELLE D’ADAMO SINGER, Chief Counsel 

CATHARINE A. BAILEY, Director of Governmental Affairs 

SATYA P. THALLAM, Chief Economist 

MARGARET E. DAUM, Minority Staff Director 

STACIA M. CARDILLE, Minority Chief Counsel 

CHARLES A. MOSKOWITZ, Minority Senior Legislative Counsel 

KATHERINE C. SYBENGA, Minority Counsel 

LAURA W. KILBRIDE, Chief Clerk 

Calendar No. 284 

115TH CONGRESS SENATE REPORT " ! 1st Session 115–194 

SMALL BUSINESS REGULATORY FLEXIBILITY 

IMPROVEMENTS ACT OF 2017 

DECEMBER 14, 2017.—Ordered to be printed 

Mr. JOHNSON, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany S. 584] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Homeland Security and Governmental Affairs, to which was referred the bill (S. 584) to amend chapter 6 

of title 5, United States Code (commonly known as the ‘‘Regulatory 

Flexibility Act’’), to ensure complete analysis of potential impacts 

on small entities of rules, and for other purposes, having considered the same, reports favorably thereon with amendments and 

recommends that the bill, as amended, do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 2 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 6 

IV. Section-by-Section Analysis .......................................................................... 7 

V. Evaluation of Regulatory Impact .................................................................. 10 

VI. Congressional Budget Office Cost Estimate ................................................ 10 

VII. Minority Views ............................................................................................... 14 

VIII. Changes in Existing Law Made by the Bill, as Reported ........................... 19 

2 

1 An Act to Create the Small Business Administration and to Preserve Small Business Institutions and Free, Competitive Enterprise, Pub. L. No. 83–163, 67 Stat., Title II. 2 Id. at § 202. 3 Records of the Reconstruction Finance Corporation [RFC], NAT. ARCHIVES, § 234.1, https:// 

www.archives.gov/research/guide-fed-records/groups/234.html (The Corporation was established 

in 1932 and eliminated via the Small Business Act). 4 Active from 1942 through 1945 during World War II, id. at 240.1. 5 C. Steven Bradford, Does Size Matter? An Economic Analysis of Small Business Exemptions 

from Regulation, 8 J. OF SMALL AND EMERGING BUS. L. 6 (2004). 6This is the canonical example, explored more in depth in, see, e.g. id. at 7. 

I. PURPOSE AND SUMMARY

S. 584, the Small Business Regulatory Flexibility Improvements 

Act (SBRFIA), follows previous attempts by Congress to build into 

the Federal regulatory policymaking process a voice for, and consideration of the potential impacts on, small businesses, non-profits, and local governments. It also addresses deficiencies in the extant laws by making more robust the requirements and review 

mechanisms applicable to agencies when contemplating rules which 

may have a significant effect on small entities. 

II. BACKGROUND AND THE NEED FOR LEGISLATION

Small Business Act 

The formal recognition of the unique impact of Federal policy on 

small enterprises goes back to at least 1953 with the establishment 

of the Small Business Administration via enactment of the Small 

Business Act of 1953.1 That act states, in describing the underlying 

goal of the legislation: 

The essence of the American economic system of private enterprise is free competition. Only through full and free competition can free markets, free entry into business, and opportunities for the expression and growth of personal initiative 

and individual judgment be assured. The preservation and expansion of such competition is basic not only to the economic 

well-being but to the security of this Nation. Such security and 

well-being cannot be realized unless the actual and potential 

capacity of small business is encouraged and developed.2

The Small Business Act, and its establishment of the Small Business Administration (SBA), was a successor to previous Federal efforts to aid small enterprises, including the Reconstruction Finance 

Corporation 3 and the Smaller War Plants Corporation.4 These initiatives, along with the earliest iteration of the SBA, had missions 

which concerned primarily providing financing, facilitating credit, 

and enhancing access to Federal projects and contracts for small 

businesses and federal contractors. These early efforts, however, 

did not explicitly address the issue of regulation’s disproportionate 

effect on small businesses. 

Effect of regulation on small businesses 

Regulations can have an overall aggregate effect that differs from 

their particular effects on specific sectors or types of entities, and, 

‘‘[t]he cost of government regulation almost always includes both 

variable and fixed components, with variable costs being a function 

of the size of the regulated transaction.’’ 5 In the simplest fixed cost 

case, where costs are invariant to a firm’s size or activity-level, 

such as a one-time capital outlay for a smokestack scrubber,6 the 

3 

7 Id. at 8–9. 8Office of Advocacy, U.S. Small Business Administration, Report on The Changing Burden of 

Regulation, Paperwork, and Tax Compliance on Small Business (1995), (‘‘A significant body of 

knowledge must be gained by a firm to determine whether a regulation applies to it, whether 

it is in compliance, or what action must be taken to be in compliance. For example, a firm must 

first learn that a form is required by rule, determine if the firm is required to submit that form, 

and then determine how to complete the form correctly. These fixed information-gathering costs 

are the same for all firms, whether large or small.’’). 9 An Act to Create the Small Business Administration and to Preserve Small Business Institutions and Free, Competitive Enterprise, Pub. L. No. 83–163, § 202, 67 Stat. 4. 10STEVEN HACKETT, ENVIRONMENTAL AND NATURAL RESOURCE ECONOMICS: THEORY, POLICY, AND THE SUSTAINABLE SOCIETY 154 (2d ed.) (2001). 11Patrick McLaughlin, Oliver Sherouse & Daniel Francis, Dodd-Frank is One of the Biggest 

Regulatory Events Ever, QuantGov, https://quantgov.org/charts/dodd-frank-is-one-of-the-biggestregulatory-events-ever. 12 Joe Wiesenthal, The 4 Things That Worry Jamie Dimon . . . , BUS. INSIDER, Feb. 4, 2013, 

http://www.businessinsider.com/the-four-things-that-worry-jamie-dimon-2013-2. 13Opinion, Regulation is Good for Goldman,WALL ST. J., Feb. 11, 2015, https://www.wsj.com/ 

articles/regulation-is-good-for-goldman-1423700859, (citing comments made by Mr. Blankfein at 

an investor conference). 14See, e.g., Marshall Lux & Robert Greene, The State and Fate of Community Banking 13 

(Mossaver-Rahmani Center for Business and Government, M–RCBG Associate Working Paper 

Series, No. 37, 2015) (‘‘[T]he discrepancy in performance between large and small community 

banks in part stems from the disproportionate cost of regulation on smaller institutions.’’). 

regulation will impose a proportionately higher cost on smaller 

firms, with the proportionate cost of compliance decreasing in firm 

size (or firm output). That is, a fixed cost will require a larger 

share of the small firm’s resources (labor or capital) to be reallocated toward compliance and away from wages and investment— 

the same cost will have a smaller effect the larger the firm and the 

average cost (per employee or transaction) is lower. 

Information costs—the costs to review and understand regulations—can sometimes exhibit fixed cost characteristics.7 A firm 

may need to hire lawyers, compliance officers, or human resources 

managers to ensure compliance with the regulatory framework applicable to their industry. While these labor costs may be incurred 

on an hourly or part-time basis, absent special considerations in 

the law, the firm (large or small) is still responsible for knowing 

and complying with all relevant portions of the body of regulations.8

One result of this phenomenon, consistent with the policy statement contained in the Small Business Act,9 is an anti-competitive 

effect: ‘‘large fixed costs can lead to market structures with fewer, 

larger firms (increased market concentration)’’ because ‘‘[w]hen 

fixed costs increase substantially, it requires that a firm have a 

larger output level to maintain profitability.’’ 10 Indeed, from one of 

the largest single increases in Federal regulation 11 came what one 

prominent CEO of a large financial institution identified as a 

‘‘moat’’ defending his company from competition.12 Another prominent investment bank executive put it in more direct terms when 

he identified the effects of regulatory requirements as ‘‘hav[ing] 

raised the barriers to entry.’’ 13 The reason for this is because regulatory compliance often entails differential impacts and economies 

of scale.14

Variable costs are typically proportional (linear) or decreasing 

(convex) in firm size. Consider a rule which requires a construction 

company to provide a hardhat for each jobsite employee—this cost 

increases at a rate directly proportional to the number of employees. But a variable cost may also be ‘‘lumpy’’ or discontinuous. For 

example a rule may require providing one outdoor toilet per 50 employees—if a firm has fewer than 50 employees, it has no way of 

4 

15 Bradford, supra note 6, at 7–8. 16See, e.g., NICOLE V. CRAIN & W. MARK CRAIN, SMALL BUS. ADMIN., THE IMPACT OF REGULATORY COSTS ON SMALL FIRMS iv (2010) (‘‘As of 2008, small business 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).’’); BEN GITIS & SAM BATKINS, REGULATORY

IMPACT ON SMALL BUSINESS ESTABLISHMENTS, AMERICAN ACTION FORUM, (2015) (‘‘The results 

. . . indicate that regulations cumulatively have a highly regressive effect on businesses.’’). 17 Aggregate economic data may obscure underlying forgone economic activity, such as a 

‘‘missing generation’’ of new firms. See, e.g., Francois Gourio, Todd Messer & Michael Siemer, 

What is the economic impact of the slowdown in new business formation?, 326 CHI. FED. LETTER

(2014); Leora Klapper, Luc Laeven & Raghuram Rajan, Entry regulation as a barrier to entrepreneurship, 82 J. OF FIN. ECON. 2006, (‘‘We find that costly regulations hamper the creation of 

new firms, especially in industries that should naturally have high entry. These regulations also 

force new entrants to be larger and cause incumbent firms in naturally high-entry industries 

to grow more slowly.’’); Lee Branstatter, et. al., Do Entry Regulations Deter Entrepreneurship 

and Job Creation? Evidence from Recent Reforms in Portugal, 124 THE ECON. J. 805 (2014); 

Jamal Ibrahim Haidar, The Impact of Business Regulatory Reforms on Economic Growth, 26 J. OF THE JAPANESE AND INT’L ECONOMIES 285 (2012); and James Bailey & Diana Thomas, Regulating Away Competition: The Effect of Regulation on Entrepreneurship and Employment (2015) 

(Mercatus Center working paper). 18See generally, Jason Wiens and Chris Jackson, Ewing Marion Kauffman Foundation, The 

Importance of Young Firms for Economic Growth, ENTREPRENEURSHIP POLICY DIGEST (2015); 

Alexander S. Kritikos, Entrepreneurs and their impact on jobs and economic growth, IZA WORLD

OF LABOR (2014); John Haltiwanger, Ron S. Jarmin & Javier Miranda, Who Creates Jobs? Small 

versus Large versus Young, 95 THE REV. OF ECON. AND STATISTICS 347 (2013); Ryan Decker, 

et. al., The Role of Entrepreneurship in US Job Creation and Economic Dynamism, 28 J. OF

ECON. PERSPECTIVES 3 (2014); Zoltan Acs and Catherine Armington, Employment Growth and 

Entrepreneurial Activity in Cities, 38 REG’L STUDIES 911 (2004) (‘‘Findings indicate that higher 

rates of entrepreneurial activity were strongly associated with faster growth of local economies.’’); ANDRE VAN STEL, EMPIRICAL ANALYSIS OF ENTREPRENEURSHIP AND ECONOMIC GROWTH

(2006). 19 Regulatory Flexibility Act, Pub. L. No. 96–354, 94 Stat. 1164. 

proportionately reducing its cost.15 Or consider a license for a tax 

accounting program which may be subject to pricing per user but 

not per usage, resulting in a relatively higher cost for less intensive 

users of the product. 

Taken together, the fixed and certain variable components of a 

regulation’s costs can result in an economic outcome that is suboptimal and to which policymakers should pay particular attention. 

Numerous analysts have attempted to quantify the scale of this differential regulatory impact.16 One difficulty in doing so is fully accounting for the effective ‘‘shadow price’’ on the creation of new 

firms in the absence of a regulation (or relaxing its requirements). 

In other words, calculating the costs to a business to fully comply 

with a regulation may only partially capture the rule’s economic effect because it does not account for those firms that may have 

formed in the absence of those costs (the aforementioned barriers 

to entry).17 And a growing body of literature points toward the importance of new firms (moreso than small ones, though most are 

by nature small at inception) for producing jobs and economic 

growth.18

Regulatory Flexibility Act 

In 1980, Congress formally acknowledged this regulatory effect 

phenomenon and passed the Regulatory Flexibility Act (RFA) 

which placed into statute requirements that Federal agencies consider the impacts on small entities of proposed Federal regulations.19 The RFA formalized a longstanding recognition of the potentially differential and disproportionate impacts regulations may 

have on small entities vis-a`-vis large ones, and further 

‘‘establish[ed] as a principle of regulatory issuance that agencies 

shall endeavor . . . to fit regulatory and informational requireVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
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20 Id., at Sec. 2(b). Here ‘‘organizations’’ refers to not-for-profit enterprises. 21 5 U.S.C. § 603. 22 Id. at § 602. 23 Id. at § 609. 24 Id. at § 612. 25 Contract with America Advancement Act of 1996, Pub. L. No. 104–121, 110 Stat. 847, 

amended by U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability 

Appropriations Act, 2007, Pub. L. No. 110–28, 121 Stat. 112. 26 H.R. Rep. 114–12, pt. 1, at 4 (2015). citing 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). 27 Id. at § 244. 28 Id. citing 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 ENTREPRENEURIAL 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 

Continued 

ments to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.’’ 20

Among other things, the RFA outlines particular considerations 

agencies must address as part of what it calls a ‘‘regulatory flexibility analysis.’’ 21 It requires agencies to publicly preview likely 

forthcoming rules that are ‘‘likely to have a significant economic 

impact on a substantial number of small entities’’ in a semi-annual 

report,22 as well as solicit public input as part of the rule’s development.23 It also directs the SBA’s Chief Counsel for Advocacy to 

monitor ‘‘agency compliance with’’ the RFA and report thereon to 

the President and Congress, as well as authorizes the Chief Counsel ‘‘to appear as amicus curiae in any action brought in a court 

of the United States to review a rule.’’ 24

S. 584, the Small Business Regulatory Flexibility Improvements Act 

SBRFIA aims to address perceived deficiencies in the RFA, later 

amended by the Small Business Regulatory Enforcement Fairness 

Act) in 1996.25 One issue with the RFA was that ‘‘agency compliance . . . was at best sporadic’’ because ‘‘[a]gencies 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.’’ 26

While RFA created a basic analytical lens and framework 

through which to consider Federal policy impacts on small businesses, the 1996 Act sought to alter the policymaking structure 

whereby small businesses would have a more robust voice in the 

process, for example, through establishment of ‘‘small business advocacy review panels’’ (so-called SBREFA panels).27 It also included 

a requirement that agencies, when they are required to publish a 

final regulatory flexibility analysis, develop a ‘‘compliance guide’’ 

for each rule (or group of related rules) which explain to small entities how to comply. It also included judicial review for some agency 

actions under the RFA in order to improve agency compliance. Unfortunately, even these later ‘‘changes have had only a modest effect on agency compliance with regulatory flexibility requirements.’’ 28 As a witness at a recent Senate hearing put it: 

6 

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.’’). 29 Examining How Small Businesses Confront and Shape Regulations: Hearing Before the S. 

Comm. on Small Bus. and Entrepreneurship, 115th Cong., 115–21 (2017) (testimony of Randy 

Noel) (‘‘Under the RFA and subsequent amendments of the SBRFA, an agency may certify that 

a rule is not expected to have a significant economic impact on a substantial number of small 

entities. This allows the agency to skip the SBREFA requirements. Unfortunately there is no 

check on whether the agency certification of no impact on small businesses is correct. Increasingly, agencies have improperly claimed that small businesses were not affected by their proposed 

rule, even when that clearly was not the case.’’) (emphasis added). 30 Hearing on H.R. 2542 Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th Cong.113–29 (2013) (statement of Carl Harris). 

While the Regulatory Flexibility Act requires agencies to 

consider the effect of their actions on small entities, agencies regularly neglect input from the regulated community 

and, as a result, produce very poor analysis. Even with 

these flaws, the rules go into place and businesses are 

forced to divert precious resources to lengthy and uncertain legal challenges. Unfortunately there is no other way 

to hold agencies accountable when they ignore the effects 

of regulation on small businesses, and agencies are not required to confirm their economic analysis with a respected, 

neutral third party.29

Another Congressional hearing witness put it thusly: 

While the original Congressional intent and subsequent 

additions/enhancements to the Regulatory Flexibility Act 

(RFA) are to be lauded, the reality is that far too often 

agencies either view compliance with the Act as little more 

than a procedural ‘‘check-the-box’’ exercise or they artfully 

avoid compliance by other means.30

SBRFIA seeks to strengthen the framework established in RFA 

and the Small Business Regulatory Enforcement Fairness Act 

while also narrowing avenues for agencies to de facto or even explicitly avoid those acts’ requirements. It does this in part by providing more clarity through expanded definitions where previously 

these were subject to agency’s own interpretation, providing for expanded judicial review of agency compliance with RFA requirements, and expanded authorities for the SBA’s Office of Advocacy. 

The overall effect is to drive regulatory agencies toward a process 

and analysis which meaningfully accounts for—and to the extent 

possible accommodates—the impact on small entities before finalizing a rule. 

III. LEGISLATIVE HISTORY

Senator James Lankford (R–OK) introduced S. 584 on March 8, 

2017, with Senators James E. Risch (R–ID) and Chuck Grassley 

(R–IA). Senators Orrin G. Hatch (R–UT), John Hoeven (R–ND), 

and Pat Roberts (R–KS) later joined as cosponsors. The bill was reVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
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ferred to the Committee on Homeland Security and Governmental 

Affairs. The Committee considered S. 584 at a May 17, 2017 business meeting. 

The Committee ordered S. 584 reported favorably on May 17, 

2017, by a roll call vote of 8 yeas to 6 nays. Senators voting in the 

affirmative were Johnson, McCain, Portman, Paul, Lankford, Enzi, 

Hoeven, and Daines. Senators voting in the negative were McCaskill, Tester, Heitkamp, Peters, Hassan, and Harris. For the record 

only, Senator Carper voted nay by proxy. Consistent with Committee Rule 11, the Committee reports the bill with a technical 

amendment by mutual agreement of the Chairman and Ranking 

Member. 

IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title 

This section provides the bill’s short title, the ‘‘Small Business 

Regulatory Flexibility Improvements Act.’’ 

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

This section clarifies and expands the rules covered by the Regulatory Flexibility Act by amending Section 601 of title 5 of the 

United States Code. This section defines ‘‘economic impact’’ as any 

direct or indirect economic effect on small entities; defines ‘‘land 

management plan’’ to mean any plan developed by the Secretary of 

Agriculture under the Forest and Rangeland Renewable Resources 

Planning Act of 1974 or Section 202 of the Federal Land Policy and 

Management Act of 1976; defines ‘‘revision’’ and ‘‘amendment;’’ defines ‘‘small organization’’ pursuant to a size standard established 

by the Administrator of the Small Business Administration for entities described by the North American Industrial Classification 

System or, if this is not available, as any entity whose net worth 

does not exceed $7,000,000 and 500 employees. 

Section 3. Expansion of report of regulatory agenda 

This section requires that the SBA describe which sector of the 

North American Industrial Classification System is primarily affected by any rule proposed by the agency that is likely to have a 

significant economic impact on small entities. Furthermore, within 

three days after an agency publishes a regulatory flexibility agenda, it must publicize a plain language summary of the agenda on 

its website. The SBA must also publish on its website a plain language summary of each regulatory flexibility agenda within three 

days of their publication in the Federal Register. 

Section 4. Requirements providing for more detailed analyses 

This section lays out the requirements for what must be included 

in a regulatory flexibility analysis. These analyses must include (1) 

a description of the reasons the action is being considered, (2) a description of the proposed rule’s objectives and legal basis, (3) an estimate of the number and type of small entities the rule will apply 

to, (4) a description of the compliance requirements of the proposed 

rule, (5) a description of all potentially duplicate, overlapping, or 

conflicting federal rules, (6) an estimate of the added economic burVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
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den of the rule on small entities, (7) a description of any disproportionate impact on small entities or a specific class thereof, and (8) 

a description of any hindrance on small entity’s ability to have access to credit. An agency may satisfy these requirements by crossreferencing to a specific portion of another agenda required by law 

which meets these stipulations. The agency shall also publish the 

final regulatory flexibility analysis available on its website and in 

the Federal Register. The agency shall further provide a quantifiable description of the impacts of the proposed rule or a statement 

as to why the effects are not quantifiable. This section also includes 

changes to the syntax of 5 U.S.C. 604(a) and 605(b). 

Section 5. Repeal of waiver and delay authority; additional powers 

of the Chief Counsel for Advocacy 

This section mandates that Chief Counsel for Advocacy of the 

SBA, after taking public comment, issue rules within 270 days of 

enactment of this bill to govern agency compliance with the Regulatory Flexibility Act, and these rules cannot be altered without the 

Chief Counsel’s consultation. It further empowers the Chief Counsel to intervene in any agency adjudication and to file comments 

in response to any agency notice requesting a statement. 

Section 6. Procedures for gathering comments 

This section requires that an agency, prior to making a rule, 

must provide the Chief Counsel for Advocacy of the SBA with (1) 

all materials prepared and utilized by the agency in making the 

proposed rule, (2) information on the potential economic effects of 

the proposed rule. Within 15 days of receiving these materials, the 

Chief Counsel must (1) identify the small entities from whom to solicit input about the potential economic impact of the proposed rule 

and (2) convene a review panel to review these materials consisting 

of an employee from the SBA Office of Advocacy, an employee from 

the agency making the rule and, in the case of an agency other 

than an independent regulatory agency, an employee from the Office of Information and Regulatory Affairs of OMB. Within 60 days 

of this committee being convened, the Chief Counsel shall submit 

a report to the agency including an assessment of the economic impact of the proposed rule and this report shall become part of the 

rule making record. This section applies to a proposed rule if (1) 

its annual effect on the economy is $100,000,000 or more, (2) it creates a major increase in costs or prices for consumers, industry, or 

the government (3) it results in significant adverse effects on competition, employment, investment, productivity, innovation, or the 

ability for American enterprises to compete in domestic markets, or 

(4) it results in a significant economic impact on a substantial 

number of small entities. The Chief Counsel can waive these reporting requirements if he or she determines that compliance is impracticable, unnecessary, or contrary to the public interest. A small 

entity may request that the agency provide it with all of the documentation discussed in this subsection which will be delivered to 

the entity within ten days. 

Section 7. Periodic review of rules 

This section requires that, within 180 days, each agency must 

publish in the Federal Register and place on its website a plan for 

9 

the periodic review of rules issued by the agency which the agency 

head determines have a significant economic impact to a substantial number of small entities. The purpose of the review is to determine whether rules should be continued, amended, or rescinded. 

The plan shall provide for the review of all such agency rules currently existing within ten years of the publication of the plan. If 

the agency head deems this unfeasible, he or she will certify this 

in a statement published in the Federal Register and may extend 

the review for no longer than two years. The plan shall include details on how the agency will include small businesses in the process. Agencies shall amend or rescind rules to minimize any adverse 

significant economic impact on a substantial number of small entities. Each agency must submit an annual report with the results 

of this review process and each year, each agency must publish on 

its website a list of the rules to be reviewed. 

Section 8. Judicial review of compliance with the requirements of 

the Regulatory Flexibility Act available after publication of the 

final rule 

This section contains syntax changes for 5 U.S.C. § 611(a) and 5 

U.S.C. § 612(b). 

Section 9. Jurisdiction of court of appeals over rules implementing 

the Regulatory Flexibility Act 

This section contains syntax changes for 28 U.S.C. § 2342, 28 

U.S.C. § 2341(3), and 5 U.S.C. § 612(b). 

Section 10. Establishment and approval of small business concern 

size standards by Chief Counsel for Advocacy 

This section establishes that the SBA Administrator may specify 

standards by which a business concern can be determined to be a 

small business concern for the purposes of this legislation. This section further specifies that in the case of an action for judicial review of a rule which includes definitions or standards approved by 

the Chief Counsel, the party seeking such a review shall be entitled 

to join as a party in the action. 

Section 11. Clerical Amendments 

This section contains clerical edits to 5 U.S.C. § 601, 5 U.S.C. 

§ 605, 5 U.S.C. § 607, 5 U.S.C. § 608, 5 U.S.C. § 603(d), and 5 U.S.C. 

§ 604(a). 

Section 12. Agency preparation of guides 

This section requires SBA to use sufficiently plain language in 

guides for affected small entities. The SBA shall solicit input from 

these entities when developing guides. 

Section 13. Comptroller General report 

This section requires the Comptroller General of the United 

States to publish a study within 90 days examining whether the 

Chief Counsel of the SBA has the resources to carry out that office’s duties under this act. 

10 

Section 14. Waiver of fines for first-time paperwork violations by 

small businesses 

This section edits the procedure for fining a small business for 

a first-time paperwork violation. A violation is a first-time violation 

if the small business has not previously violated any similar requirement by the same agency within five years. The head of the 

agency will not impose a fine on a small business for a first-time 

violation. This policy may be excepted if the agency head determines that (1) the violation can cause serious harm to the public 

interest, (2) failing to impose a fine would impede with the detection of criminal activity, (3) the violation is tax-related, (4) the violation was not corrected on or before the 6-month anniversary of 

being notified of their noncompliance, or (5) the violation presents 

a danger to public health or safety. In the case of a danger to public health and safety, the agency head may choose not to impose 

a fine if the concern is corrected within 24 hours. To determine 

whether to waive a fine in these cases, the agency head shall consider all of the facts including (1) the nature and seriousness of the 

violation, (2) whether the small business has made a good faith effort to comply, and (3) whether the small business has obtained a 

significant economic benefit from the violation. Should the agency 

head not decide to allow the small business 24 hours to correct the 

violation and avoid a fine, the agency head shall notify congress regarding this determination within 60 days of the imposition of the 

fine. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill and determined that the bill will 

have no regulatory impact within the meaning of the rules. The 

Committee agrees with the Congressional Budget Office’s statement that the bill contains no intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act and 

would impose no costs on state, local, or tribal governments. 

VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, August 18, 2017. 

Hon. RON JOHNSON, 

Chairman, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 584, the Small Business 

Regulatory Flexibility Improvements Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

KEITH HALL, Director. 

Enclosure. 

11 

S. 584—Small Business Regulatory Flexibility Improvements Act 

Summary: S. 584 would amend the Regulatory Flexibility Act 

(RFA) to expand the number of rules covered by that act and to require 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. 

Finally, S. 584 would require the Government Accountability Office 

(GAO) to report on the implementation of the bill. 

CBO estimates that implementing S. 584 would cost $65 million 

over the 2017–2022 period, assuming appropriation of the necessary funds. Enacting the bill could affect direct spending by agencies not funded through annual appropriations and would waive 

certain fines, which are recorded as revenues; therefore, pay-asyou-go procedures apply. CBO estimates, however, that any 

changes in direct spending and revenues would not be significant. 

CBO estimates that enacting S. 584 would not increase net direct 

spending or on-budget deficits in any of the four consecutive 10- 

year periods beginning in 2028. 

S. 584 contains no intergovernmental mandates as defined in the 

Unfunded Mandates Reform Act (UMRA) and would not affect the 

budgets of state, local, or tribal governments. 

If any federal agencies increase mandatory fees to offset the costs 

of implementing the additional analysis required by the bill, S. 584 

would increase the cost of an existing mandate on private entities 

to pay those fees. CBO expects that if fees are increased as a result 

of the bill, the additional cost of the mandate would fall well below 

the annual threshold established in UMRA for private-sector mandates ($156 million in 2017, adjusted annually for inflation). 

Estimated cost to the Federal Government: The estimated budgetary effect of S. 584 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 funding for agencies that issue regulations affecting 

small businesses. 

By fiscal year, in millions of dollars— 

2017 2018 2019 2020 2021 2022 2017– 

2022 

INCREASES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ....................... 0 10 15 15 15 15 70 

Estimated Outlays ......................................... 0 7 13 15 15 15 65 

Basis of Estimate: For this estimate, CBO assumes that the legislation will be enacted near the beginning of fiscal year 2017, 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. The Departments of Transportation, Homeland Security, and Commerce, and 

the Environmental Protection Agency (EPA) issue the most rules. 

Most major rules (those with an estimated economic impact on the 

economy of more than $100 million per year) are issued by the DeVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
12 

partments of Health and Human Services and Agriculture and the 

EPA. 

S. 584 would broaden the definition of a ‘‘rule’’ for rulemaking 

purposes to include agency guidance 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 effect that 

is reasonably foreseeable and would require agencies to prepare reports on the cumulative economic impact on small businesses of 

new and existing regulations. 

Implementing S. 584 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 Information and Regulatory Affairs (OIRA) within the Office of Management and Budget 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, the 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 an analysis of that information, CBO estimates that 

administrative costs of some regulatory agencies, the SBA and 

OIRA would eventually increase by a total of about $15 million annually. That amount would cover approximately 60 new employees 

at the SBA and OIRA as well as additional administrative expenses for several other agencies. We expect that it would take 

about two years to reach that level of effort. The GAO report on 

the effect of the legislation on the Office of Advocacy would cost 

less than $500,000 to complete. Additional spending would be subject to the availability of appropriated funds. 

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. Pay-as-you-go 

procedures apply because enacting S. 584 could affect direct spending by agencies not funded through annual appropriations and 

would decrease revenues by waiving certain fines. CBO estimates, 

however, that any net increase in direct spending by those agencies 

and the loss of revenues from the waving of fines would not be significant. 

Increase in long-term net direct spending and deficits: CBO estimates S. 584 would not increase net direct spending or on-budget 

deficits by more than $5 billion in any of the four consecutive 10- 

year periods beginning in 2028. 

Intergovernmental and private sector impact: S. 584 contains no 

intergovernmental mandates as defined in UMRA and would not 

affect the budgets of state, local, or tribal governments. 

If any federal agencies increase mandatory fees to offset the costs 

of implementing the additional analysis required by the bill, S. 584 

would increase the cost of an existing mandate on private entities 

to pay those fees. CBO expects that if such mandatory fees are increased as a result of the bill, the additional cost of the mandate 

in any one year would fall well below the annual threshold estabVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
13 

lished in UMRA for private-sector mandates ($156 million in 2017, 

adjusted annually for inflation). 

Estimate prepared by: Federal Spending: Matthew Pickford and 

Stephen Rabent; Impact on state, local, and tribal governments: 

Zach Byrum; Impact on the private sector: Paige Piper/Bach. 

Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

(14) 

1 Improving Small Business Input on Federal Regulations: Ideas for Congress and a New Administration: Hearing Before the Subcommittee on Regulatory Affairs and Federal Management, 

115th Cong, Jan. 19, 2017 (testimony of LaJuanna Russell). 2 ‘‘Frequently Asked Questions About Small Business,’’ Small Business Office of Advocacy, 

https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2017-WEB.pdf 3Supra, pt. 2 

VII. MINORITY VIEWS

MINORITY VIEWS OF SENATORS CLAIRE MCCASKILL, 

THOMAS R. CARPER, AND GARY C. PETERS 

Small businesses are the backbone of American communities. 

They are the local car dealership, laundromat, and favorite family 

restaurant. Small businesses are critical to creating jobs and driving economic growth. That is why, when Congress considers legislation it should always be our goal to consider the impact on small 

businesses, and ensure a level playing field so small businesses 

have the opportunity to thrive. Unfortunately, the Small Business 

Regulatory Flexibility Improvements Act of 2017 (SBRFIA) does 

not meet that standard. This bill will introduce more uncertainty 

into the regulatory process and make it more difficult to create that 

level playing field. 

Contrary to the rhetoric often heard, most small businesses are 

not opposed to all forms of regulation. According to polling conducted by Small Business Majority, nearly eight in ten small employers agree regulations are important. These business owners believe that regulations protect small businesses from unfair competition and level the playing field with big businesses so they can 

compete. The same poll found that 86% of small employers feel that 

certain government regulations play an important role and are necessary for a modern economy.1 These polls are significant since the 

Small Business Office of Advocacy finds that over 99% of all businesses qualify as small businesses (using the basic Advocacy definition of a small business being any business entity with less than 

500 employees).2

The focus of SBRFIA is to make changes and expand upon the 

rulemaking and analytical requirements developed under the Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement Fairness Act (SBREFA). The majority’s committee report 

states that SBRFIA seeks to strengthen the RFA framework while 

narrowing the ability of agencies to inappropriately avoid these requirements. Further, the report argues that SBRFIA drives regulatory agencies toward a process where agencies meaningfully account for and, to the extent possible, accommodate small entities 

when analyzing the impacts of rules.3

Unfortunately, in an attempt to accomplish those laudable goals, 

SBRFIA injects vagueness and overly broad requirements into a 

15 

4 5 U.S.C. 605(b). 

5 Exec. Order No. 12291. 46 C.F.R. 13193 (Feb. 17, 1981). 

6 Exec. Order No. 12866, 58 C.F.R. 51735 (Sept. 20, 1993). 

7See e.g. Shapiro, S., The Regulatory Accountability Act of 2011: Way Too Much of a Good 

Thing, Administrative & Regulatory Law News, 37(3), 10–11 (2012). 

well-understood statute. The net result is uncertainty for small 

businesses, and eventually harm to those small businesses as the 

regulatory process becomes unable to effectively meet their needs. 

Agencies should always comply with the RFA when developing 

rules, and agencies that incorrectly waive RFA requirements if a 

rule does have a significant impact on a significant number of 

small entities should be held accountable for their actions. In fact, 

there are already substantial incentives for agencies to properly 

certify rules. Entities that believe an agency has improperly certified a rule, waiving RFA requirements, can challenge the certification in federal court.4 This provides the necessary check on agency actions and helps ensure RFA compliance. 

The importance of benefits in the rulemaking process 

In order to actually improve outcomes for small businesses, reforms to the rulemaking process must take into account the benefits of regulations in addition to the costs. While it is easy to focus 

on the costs of regulations, the benefits are just as important, since 

the benefits are the foundational rationale behind requiring a 

group to incur any regulatory costs at all. Accounting for the benefits of a regulation has been enshrined in the regulatory process 

since President Reagan issued Executive Order 12291 in 1981 5 and 

the importance of benefits in regulatory process was further solidified when Executive Order 12866 was issued in 1993,6 that executive order that has been reaffirmed and kept in effect by both 

Democratic and Republican presidents. To focus on costs without 

giving equal consideration to the benefits provided, as this legislation does, is shortsighted and harmful to small businesses. 

Furthermore, the benefits should not be thought of as a redistribution of power, but as a reduction of societal costs—such as ensuring that a parent has a safe workplace or is protected from exposure to hazardous chemicals. A serious workplace injury to a parent who is unable to care for a young child creates immeasurable 

harm to the family, but it also means potentially significant societal burdens as well—children may end up in foster care, or families may lose their only income and be forced to rely on welfare 

benefits. These types of regulatory benefits demonstrate the effectiveness of regulations that mitigate the unavoidable risks our society encounters every day. Throughout SBRFIA, there is an emphasis on costs over benefits, which will hurt small businesses and the 

entire regulatory process. 

Any reform of the rulemaking process must also consider the 

time it takes to promulgate a regulation. The rulemaking process 

is now more time consuming than ever before, and Administrative 

Law experts have been sounding the alarm for years—with estimated promulgation times for significant regulations taking up to 

eight years, in a best case scenario.7

Of the alterations SBRFIA makes to the federal regulatory process, there are a number of concerns that deserve closer examinaVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00017 Fmt 6604 Sfmt 6604 E:\HR\OC\SR194.XXX SR194
16 

8Section-by-Section Analysis, S. 584, the Small Business Regulatory Flexibility Improvement 

Act of 2017, Center for Progressive Reform (hereinafter ‘‘CPR Analysis’’). 9S. 584, Sec. 2. 

10 CPR Analysis. 11 Agric. Retailers Ass’n v. U.S. Dep’t of Labor & OSHA, 837 F.3d 60, 2016; Perez v. Mortg. 

Bankers Ass’n, 135 S. Ct. 1199 (2015). 

tion, including the expansion of the definition of what constitutes 

a rule, the true impact of analyzing indirect effects, providing excessive authority to the Small Business Office of Advocacy, the impact on public health and safety of waiving certain paperwork requirements, and unnecessary analytical requirements that will not 

improve regulations. These five subjects do not represent the sum 

total of the concerns with SBRFIA but do represent some of the 

most critical problems that need to be addressed. 

S. 584 Creates an overly-broad definition of covered rules 

Under the SBRFIA definition of ‘‘rules,’’ direct final and interim 

final rules would be subject to the expanded RFA requirements, a 

significant change from current law. Most often these types of rulemaking processes are utilized in emergency situations, to protect 

public health and safety, and during routine and noncontroversial 

rulemakings. They are important tools that aid agencies in many 

situations and help protect the public, and they are used in situations in which compliance with the RFA would do nothing more 

than waste scarce resources.8 SBRFIA also repeals the ability of 

agencies to waive applicable RFA requirements when responding to 

an emergency or when it would otherwise be impracticable.9

Additionally, SBRFIA would require many agency guidance documents to go through the expanded RFA analytical requirements— 

including, for the first time, documents that do not have the force 

and effect of law since they are not regulations.10 Agencies use 

guidance documents to clarify the meaning of regulations, and 

businesses rely on these documents, and the fast issuance of these 

documents, to ensure compliance with complex regulations. Guidance can be used by both the regulators and regulated to ensure 

that all parties understand the requirements and responsibilities 

spelled out in regulatory text. SBRFIA’s departure from current 

practice would inevitably cause significant delays in the issuance 

of guidance, leading to less certainty for businesses. 

In addition, agency guidance documents are already regularly examined by the courts, and when these texts are found to create additional burdens beyond those examined in the underlying regulation, the action is struck down.11 As such, codifying the additional 

RFA requirements in this bill would add uncertainty without adding additional oversight. 

Taken together, these changes to current law regarding direct 

and interim final rules and guidance documents will significantly 

hamper an agency’s ability to respond to emergency situations and 

put a strain on agency resources. By requiring that agencies complete a lengthy RFA analysis, even when using these commonsense, well-understood and accepted rulemaking procedures, agencies will likely abandon these practices and, at best, needlessly subject the American people to lengthened rulemaking and public 

risks. 

17 

12S. 584, Sec. 2. 13S. Rpt. 96–878 to accompany S. 299, which was signed into law as P.L. 96–354 (1980). 

S. 584 requires unbalanced analysis of indirect economic effects 

SBRFIA’s requirement to expand regulatory analysis to include 

the indirect effects of regulation on small entities represents a significant increase in the number of regulations subject to the analytical requirements under the RFA, and could potentially result in 

every regulation being subject to the RFA. The bill does not clearly 

define ‘‘indirect effects,’’ saying only that the indirect effect should 

be ‘‘reasonably foreseeable and results from such rule (without regard to whether small entities will be directly regulated by the 

rule).’’ 12 Under such a wide definition, even rules with only very 

minor indirect impacts on small entities would have to complete 

the same analytical analysis as rules with significant impact on 

small entities. Since it was first enacted, and through several legislative updates, the RFA was specifically designed and targeted at 

the rules which had the most significant direct impact on small entities.13 By changing this standard, the original purpose of the RFA 

is lost. 

Requiring so many additional rules to undergo such scrutiny also 

threatens the quality of all regulatory actions. A situation may 

very easily arise where agencies simply do not receive the resources necessary to perform the required analysis with the attention to detail required under this bill. Even with additional appropriations to the agencies, such detailed requirements will continue 

to elongate an already backlogged process. This will undoubtedly 

create additional delays which will further risk the public health 

and safety, as well as a level playing field for small businesses, 

within our Nation. 

It is also notable that the bill actually refers to ‘‘indirect economic effect’’ rather than ‘‘indirect effects.’’ This is nothing more 

than an attack on the fair consideration of both the costs and benefits of a proposed rule. Benefits, by their nature, are not as easily 

quantifiable as costs to the regulated entities, and many benefits 

are not 100 percent economic in nature. Under this bill’s requirement, it is not difficult to see how agencies will be bound to consider regulatory costs at a higher rate than the benefits to society. 

As we already discussed, consideration of benefits in regulatory 

analysis is critical to understanding the true impact of a rule, and 

just looking at economic impacts presents an incomplete analysis. 

S. 584 provides excessive authority to the Office of Advocacy 

SBRFIA gives wide-ranging authority to the Small Business Office of Advocacy (Advocacy) to develop regulations regarding agency 

implementation of the RFA, as amended by SBRFIA. This would 

give Advocacy significant authority over rulemaking of every federal agency, since potentially every rule would be impacted by the 

RFA. It is not clear that Advocacy wishes to have such authority, 

nor is it clear that giving it such authority would improve regulatory outcomes for small businesses. Recent actions taken by Advocacy have created doubt in the decision-making ability and objectivity of the Office. Advocacy recently chose to award an important 

research contract to individuals who developed a previous report 

18 

14 ‘‘Backlash to SBA Regulatory Research Contract Is Growing’’, Bloomberg BNA, By Cheryl 

Bolen, Nov. 2, 2017; and ‘‘Controversial Research Contract Faces Possible Bid Protest,’’ 

Bloomberg BNA, By Cheryl Bolen, Nov. 9, 2017. 15https://www.sba.gov/advocacy/impact-regulatory-costs-small-firms. 16 CPR Analysis. 17 Asbestos in Construction Standard (29 CFR 1926.1101) (1218–0134), U.S. Department of 

Labor, Occupational Safety and Health Administration, August 2016. 18 5 U.S.C. 3506. 19S. 584, Sec. 14. 20 Id. 21Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Regulatory Affairs and Federal Management, The Unfunded Mandates Reform Act: Opportunities 

for Advocacy that was debunked and eventually disclaimed by Advocacy because it significantly overstated the costs of regulations.14

That Advocacy would choose to pursue another critical regulatory 

analysis research effort with the same individuals who previously 

produced a widely debunked report 15 gives rise to concerns about 

Advocacy’s judgement and ability to oversee regulatory activity 

across the federal government. 

S. 584 weakens enforcement of public health and safety requirements 

SBRFIA also weakens public health and safety requirements by 

amending the Paperwork Reduction Act (PRA) and creating a requirement that agencies waive fines for a significant number of paperwork violations. The definition of paperwork violations under 

the PRA is broad and captures a significant number of recordkeeping and reporting requirements, as well as disclosures to third 

parties.16 For example, consider all of the safety requirements of 

the asbestos standard in construction and the provisions requiring 

the environmental monitoring of exposures, the medical examinations of workers, the communication of employers, and the training 

of workers. Those requirements would be deemed paperwork under 

SBRFIA and could therefore be waived, as could similar requirements.17 Agencies have considerable flexibility to waive paperwork 

requirements for small businesses. For example, as part of the 

Small Business Paperwork Relief Act of 2002, agencies can aggressively seek out ways to reduce burdens for the smallest businesses, 

those with fewer than 25 employees.18 However, SBRFIA eliminates much of that flexibility and undermines agencies’ efforts to 

protect public health and safety. 

These paperwork violations also cannot be accurately defined as 

‘‘first-time’’ violations since the legislative language actually states 

that a business is eligible for a waiver if they have not committed 

a similar violation in the past five years.19 Even if a violation occurred more than five years ago, a responsible business should take 

steps to comply with the requirements, and waiving these requirements removes an important incentive for businesses to do so. 

S. 584 creates unnecessary analytical requirements 

Throughout, SBRFIA features an expansion of analytical requirements under the RFA. For example, it adds the term ‘‘detailed’’ to 

several requirements 20 but invites uncertainty by offering no explanation what constitutes a detailed analysis. While such a 

change may seem inconsequential, inside the courtroom legislative 

word choice matters and can have lasting impacts.21 SBRFIA reVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00020 Fmt 6604 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
19 

for Improvement to Support State and Local Governments. 114th Cong. (Feb. 24, 2016) (S. Hrg. 

114–266). 22Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Regulatory Affairs and Federal Management, Improving Small Business Input on Federal Regulations: Ideas for Congress and a New Administration, Testimony of LaJuanna Russell, 115th 

Cong (Jan. 19, 2017). 

quires consideration of the ‘‘cumulative economic impact,’’ and ‘‘disproportionate economic impacts’’ such overly broad terms could 

very easily lead to additional rulemaking delays and highly speculative analysis. Taken as a whole, these requirements lead to what 

some have referred to as ‘‘paralysis by analysis,’’ causing harm to 

businesses and families alike. 

Conclusion 

Finally, we note that SBRFIA misses sufficient consideration of 

key concepts that should be in any legislative update of the RFA. 

First, the bill makes no provision regarding how to provide agencies additional resources or capabilities to produce the additional 

analysis called for in the bill. Further, the bill does not provide 

enough focus or direction to agencies regarding additional compliance assistance for small entities. As noted earlier, small entities 

see the value in regulations that level the playing field.22

It should be our goal to have an effective, and transparent regulatory process, and to ensure that process results in common-sense 

regulations, which are promulgated in a timely fashion, protect 

public health and safety, and maximize benefits. We remain open 

to considering legislation that will actually improve regulatory outcomes for small businesses, and we look forward to such efforts in 

the future. However, we do not believe this bill would improve the 

regulatory process, and the superfluous analytical requirements 

would slow down an already slow process without improving outcomes. For these reasons we oppose S. 584 and urge our colleagues 

to join us in opposition. 

VIII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by S. 584 as reported are shown as follows (existing law proposed to be omitted 

is enclosed in brackets, new matter is printed in italic, and existing 

law in which no change is proposed is shown in roman): 

20 

UNITED STATES CODE 

* * * * * * * 

TITLE 5—GOVERNMENT ORGANIZATION 

AND EMPLOYEES 

* * * * * * * 

PART I—THE AGENCIES GENERALLY 

* * * * * * * 

CHAPTER 6—THE ANALYSIS OF REGULATORY 

FUNCTIONS 

Sec. 

601. Definitions. 

602. Regulatory agenda. 

603. Initial regulatory flexibility analysis. 

604. Final regulatory flexibility analysis. 

605. øAvoidance of duplicative or unnecessary analyses.¿ Incorporations by reference 

and certifications. 

606. Effect on other law. 

607. øPreparation of analyses.¿ Quantification requirements. 

608. øProcedure for waiver or delay of completion.¿ Additional powers of Chief 

Counsel for Advocacy. 

609. Procedures for gathering comments. 

610. Periodic review of rules. 

611. Judicial review. 

612. Reports and intervention rights. 

SEC. 601. DEFINITIONS. 

* * * * * * * 

ø(1) the term¿(1) AGENCY.—The term ‘‘agency’’ means an 

agency as defined in section 551(1) of this titleø;¿. 

(2) RULE.—The term ‘‘rule’’— 

(A) has the meaning given the term in section 551(4); and 

(B) does not include— 

(i) a rule pertaining to the protection of the rights of 

and benefits for veterans or part 232 of title 32, Code 

of Federal Regulations (as in effect on July 1, 2014), or 

any successor provisions thereto; or 

(ii) a rule of particular (and not general) applicability relating to rates, wages, corporate or financial 

structures or reorganizations thereof, prices, facilities, 

appliances, services, allowances therefor or to valuations, costs or accounting, or practices relating to such 

rates, wages, structures, prices, appliances, services, or 

allowances. 

(3) 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 

21 

of the agency and publishes such definition(s) in the Federal 

Registerø;¿. 

(4) øthe 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;¿ SMALL

ORGANIZATION.— 

(A) IN GENERAL.—The term ‘‘small organization’’ means 

any nonprofit enterprise which, as of the issuance of a notice of proposed rule making— 

(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. 

ø(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. 5304(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 

Registerø;¿. 

ø(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 sectionø; and¿. 

(7) øthe term ‘‘collection of information’’— 

ø(A) means the obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the 

22 

public, of facts or opinions by or for an agency, regardless 

of form or format, calling for either— 

ø(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 

ø(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.¿ 

COLLECTION OF INFORMATION.—The term ‘‘collection of information’’ has the meaning given the term in section 3502 

of title 44. 

(8) RECORDKEEPING REQUIREMENT.—The term ‘‘recordkeeping requirement’’ ømeans a requirement imposed by an 

agency on persons to maintain specified records.¿ has the 

meaning given the term in section 3502 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 (including compliance 

costs and effects on revenue) 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 

(A0(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. 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 

23 

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)). 

* * * * * * * 

Small Business Regulatory Fairness Act of 1996 

* * * * * * * 

SEC. 212. COMPLIANCE GUIDES. 

(a) * * * 

(1) * * * 

* * * * * * * 

(5) øAGENCY PREPARATION OF GUIDES.—¿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 ødevelop and¿ 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. 

* * * * * * * 

SEC. 602. REGULATORY AGENDA. 

(a) * * * 

(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 rulemakingø, 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 

ø(3)¿ (4) the name and telephone number of an agency official knowledgeable concerning the items listed in paragraph 

(1). 

(b) * * * 

24 

ø(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)(1) 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 on the 

website of the agency a plain language summary of the information 

contained in the regulatory flexibility agenda. 

(2) The Office of Advocacy of the Small Business Administration 

shall compile, by agency, and prominently display on the website of 

the Small Business Administration a plain language summary of 

each regulatory flexibility agenda published under subsection (a) 

not later than 3 days after the date of 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, 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 

requirementø.¿ 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 containø—¿ a detailed statement— (1) øa description of the reasons why action by the agency is 

being considered;¿ describing the reasons why action by the 

agency is being considered; 

(2) øa succinct statement of the objectives of, and legal basis 

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

basis for, the proposed rule; 

(3) øa description of and, where feasible, an estimate of the 

number of small entities to which the proposed rule will 

apply;¿ estimating the number and type of small entities to 

which the proposed rule will apply; 

(4) øa 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;¿ describing the projected reporting, recordkeeping, and other comVerDate Sep 11 2014 07:07 Dec 19, 2017 Jkt 079010 PO 00000 Frm 00026 Fmt 6602 Sfmt 6602 E:\HR\OC\SR194.XXX SR194
25 

pliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the 

requirements and the type of professional skills necessary for 

preparation of the report and record; 

(5) øan identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap or conflict 

with the proposed rule.¿ 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; 

(7) describing any disproportionate economic impact on small 

entities or a specific class of small entities; and 

(8) describing any impairment of the ability of small entities 

to have access to credit. 

(c) øEach 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— 

(d)ø(1) For a covered agency, as defined in section 609(d)(2), each 

initial regulatory flexibility analysis¿ Each initial regulatory flexibility analysis by an agency shall include a description of— 

ø(A) any¿(1) any projected increase in the cost of credit for 

small entities; 

ø(B) any¿(2) 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 

ø(C) advice¿ (3) advice and recommendations of representatives of small entities relating to issues described in subparagraphs (A) and (B) and subsection (b). 

ø(2) A covered agency, as defined in section 609(d)(2), shall, for 

purposes of complying with paragraph (1)(C)— 

ø(A) identify representatives of small entities in consultation with the Chief Counsel for Advocacy of the Small 

Business Administration; and 

ø(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, øor¿ promulgates a final interpretative rule involving the internal revenue laws 

26 

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; 

(3) * * * 

(4) a detailed description of and an estimate of the number 

of small entities to which the rule will apply or øan 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 øminimize the significant economic impact¿ minimize the 

adverse significant economic impact or maximize the beneficial 

significant 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; øand¿ 

ø(6)¿(7) øfor 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 entitiesø.¿; and 

(8) a detailed description of 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 ømembers of¿ the public, including placement 

of the entire analysis on the website of the agency, and shall publish 

in the Federal Register the final regulatory flexibility øsuch¿ analysis, or a summary thereof which included the telephone number, 

mailing address, and link to the website where the complete analysis may be obtained. 

SEC. 605. øAVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES¿ INCORPORATIONS BY REFERENCE AND CERTIFICATIONS. 

(a) øAny 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 

Federal agency shall be treated as satisfying any requirement regarding the content of a regulatory flexibility agenda or regulatory 

flexibility analysis under section 602, 603, or 604 if the Federal 

agency provides in the agenda or analysis a cross-reference to the 

27 

specific portion of another agenda or analysis which is required by 

any other law and which satisfies the 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 østatement providing the factual basis for such certification.¿ detailed 

statement providing the factual and legal basis for such certification. The detailed statement shall include an economic assessment 

or a summary thereof that is sufficiently detailed to support the certification of the agency. The agency shall provide such certification 

and statement to the Chief Counsel for Advocacy of the Small Business Administration. 

SEC. 606. * * * 

SEC. 607. øPREPARATION OF ANALYSES¿ QUANTIFICATION REQUIREMENTS. 

øIn 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.¿ 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. øPROCEDURE FOR WAIVER OR DELAY OF COMPLETION¿ ADDITIONAL POWERS OF CHIEF COUNSEL FOR ADVOCACY. 

ø(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. 

ø(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, 

28 

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.¿ 

(a)(1) Not later than 270 days after the date of enactment of the 

Small Business Regulatory Flexibility Improvements Act, 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 the 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 rule making 

under section 553. 

SEC. 609. PROCEDURES FOR GATHERING COMMENTS. 

(a) * * * 

ø(b) Prior to publication of an initial regulatory flexibility analysis which a covered agency is required to conduct by this chapter— 

ø(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; 

ø(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; 

ø(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; 

ø(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 

29 

after consultation with the Chief Counsel, on issues related to 

subsections 603(b), paragraphs (3), (4) and (5) and 603(c); 

ø(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 

ø(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. 

ø(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. 

ø(d) For purposes of this section, the term ‘‘covered agency’’ 

means— 

ø(1) the Environmental Protection Agency; 

ø(2) the Consumer Financial Protection Bureau of the Federal Reserve System; and 

ø(3) the Occupational Safety and Health Administration of 

the Department of Labor. 

ø(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: 

ø(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. 

ø(2) Special circumstances requiring prompt issuance of the 

rule. 

ø(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 the 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— 

30 

(A) relates to the internal revenue laws of the United States; 

or 

(B) is proposed by an independent regulatory agency. 

(c) Not later than 15 days after the receipt of the 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 the 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, 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 the panel, submit a report to the agency and, in the vase 

of an agency other than an independent regulatory agency, the Office of Information and Regulatory Affairs of the Office of Management and Budget. 

(2) Each report described in paragraph (1) shall include an assessment of the economic impact of the proposed rule on small entities, including— 

(A) an assessment of the impact of the proposed rule on the 

cost that small entities pay for energy; 

(B) an assessment of the impact of the proposed rule on startup costs for small entities; and 

(C) a discussion of any alternatives that will minimize adverse significant economic impacts or maximize beneficial significant economic impacts on small entities. 

(3) Each report described in paragraph (1) shall become part of 

the rule making record. In the publication of the proposed rule, the 

agency shall explain what actions, if any, the agency took in response to the 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 delegate 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 the ability of United 

States-based enterprises to compete with foreign-based enterprises in domestic and export markets; or 

31 

(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. 

(g) A small entity or a representative of a small entity may submit 

a request that the agency provide a copy of the report prepared 

under subsection (d) and all materials and information provided to 

the Chief Counsel for Advocacy of the Small Business Administration under subsection (b). The agency receiving such request shall 

provide the report, materials, and information to the requesting 

small entity or representative of a small entity not later than 10 

business days after receiving such request, except that the agency 

shall not disclose any information that is prohibited from disclosure 

to the public pursuant to section 552(b) of this title. 

(h) In this section, the term ‘‘independent regulatory agency’’ has 

the meaning given the term in section 3502 of title 44. 

SEC. 610. PERIODIC REVIEW OF RULES. 

ø(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. 

ø(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— 

ø(1) the continued need for the rule; 

ø(2) the nature of complaints or comments received concerning the rule from the public; 

ø(3) the complexity of the rule; 

ø(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 

ø(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. 

32 

ø(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.¿ 

(a) Not later than 180 days after the date of enactment of the 

Small Business Regulatory Flexibility Improvements Act, each agency shall publish in the Federal Register and place on website of the 

agency a plan for periodic review of rules issued by the agency 

which the head of the agency determined 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 

states 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 website of the agency. 

(b) The plan shall provide for the review of all such agency rules 

existing on the date of enactment of the Small Business Regulatory 

Flexibility Improvements Act 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 Congress. 

(c) The plan shall include a section that details how an agency 

will conduct outreach to and meaningfully include small businesses 

(including small business concerns owned and controlled by women, 

small business concerns owned and controlled by veterans, and 

small business concerns owned and controlled by socially and economically disadvantaged individuals (as such terms are defined in 

section 3 and section 8(d)(3)(C))) 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 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 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. 

33 

(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 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 determined 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 changes in the area affected by the rule. 

(f) Each year, each agency shall publish in the Federal Register 

and on its website a list of rules to be reviewed pursuant to such 

plan. The agency shall include in the publication a solicitation of 

public comments on any further inclusions or exclusions of rules 

from the list and shall respond to such comments. 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 øfinal agency action¿ such rule 

is entitled to judicial review of agency compliance with the requirements of sections 601, 604, 605(b), ø608(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), 

ø608(b),¿ and 610 in accordance with chapter 7. Agency compliance 

34 

with sections 607 and 609(a) shall be judicially reviewable in connection with judicial review of section 604. 

ø(3)(A) A small entity¿ (3) A small entity may seek such review 

during the period beginning on the date of øfinal 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. 

ø(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—¿ 

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. 

(c) * * * 

* * * * * * * 

TITLE 15—COMMERCE AND TRADE 

* * * * * * * 

PART VI—PARTICULAR PROCEEDINGS 

* * * * * * * 

CHAPTER 14A—AID TO SMALL BUSINESS 

* * * * * * * 

SEC. 632. DEFINITIONS. 

(a) * * * 

(1) * * * 

(2) * * * 

(A) øIn 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 chapter or any other Act.¿ IN GENERAL.— 

(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 

(15 U.S.C. 661 et seq.); and 

35 

(ii) the Chief Counsel for Advocacy may specify such 

definitions or standards for purposes of any other Act. 

(B) * * * 

(C) * * * 

(i) * * * 

(ii) * * * 

(iii) øis approved by the Administrator.¿ 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) * * * 

(10) 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. 

* * * * * * * 

TITLE 28—JUDICIARY AND JUDICIAL 

PROCEDURE 

* * * * * * * 

PART VI—PARTICULAR PROCEEDINGS 

* * * * * * * 

CHAPTER 158—ORDERS OF FEDERAL AGENCIES; 

REVIEW 

* * * * * * * 

SEC. 2341. JURISDICTION OF COURT OF APPEALS. 

As used in this chapter— 

(1) * * * 

(2) * * * 

(3) * * * 

(A) * * * 

* * * * * * * 

(D) the Secretary, when the order is under section 812 

of the Fair Housing Act; øand¿ 

(E) the Board, when the order was entered by the Surface Transportation Boardø.¿; and 

36 

(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; 

øand¿ 

(7) all final agency actions described in section 20114(c) of 

title 49ø.¿; and 

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

Jurisdiction is invoked by filing a petition as provided by section 

2344 of this title. 

* * * * * * * 

TITLE 44—PUBLIC PRINTING AND 

DOCUMENTS 

* * * * * * * 

CHAPTER 35—COORDINATION OF FEDERAL 

INFORMATION POLICY 

* * * * * * * 

Subchapter I—Federal Information Policy 

* * * * * * * 

SEC. 3506. FEDERAL AGENCY RESPONSIBILITIES. 

(a) * * * 

* * * * * * * 

(i) * * * 

(j) SMALL BUSINESSES.— (1) DEFINITIONS.—In this subsection: 

(A) FIRST-TIME VIOLATION.—The term ‘‘first-time violation’’ means a violation by a small business concern of a requirement regarding collection of information by an agency, 

where the small business concern has not previously violated any similar requirement regarding collection of information by that same agency during the 5-year period preceding the violation. 

(B) SMALL BUSINESS CONCERN.—The term ‘‘small business concern’’ has the meaning given the term in section 3 

of the Small Business Act (15 U.S.C. 632). 

(2) FIRST-TIME VIOLATION.— (A) IN GENERAL.—Except as provided in paragraph (3), 

in the case of a first-time violation by a small business concern of a requirement regarding collection of information by 

37 

an agency, the head of the agency shall not impose a civil 

fine on the small business concern. 

(B) DETERMINATION.—For purposes of determining 

whether to impose a civil fine on a small business concern 

under subparagraph (A), the head of an agency shall not 

take into account any violation by the small business concern of a requirement regarding collection of information by 

another agency. 

(C) EXCEPTION.—An agency may impose a civil fine on a 

small business concern for a first-time violation if the head 

of the agency determines that— 

(i) the violation has the potential to cause serious 

harm to the public interest; 

(ii) failure to impose a civil fine would impede or 

interfere with the detection of criminal activity; 

(iii) the violation is a violation of an internal revenue 

law or a law concerning assessment or collection of any 

tax, debt, revenue, or receipt. 

(iv) the violation was not corrected on or before the 

date that is 6 months after the date on which the small 

business concern received notification of the violation 

in writing from the agency; or 

(v) except as provided in paragraph (3), the violation 

presents a danger to the public health or safety. 

(3) DANGER TO PUBLIC HEALTH OR SAFETY.— 

(A) IN GENERAL.—In any case in which the head of an 

agency determines under paragraph (2)(C)(v) that a violation presents a danger to the public health or safety, the 

head of the agency may determine not to impose a civil fine 

on the small business concern if the violation is corrected 

not later than 24 hours after receipt by the owner of the 

small business concern of notification of the violation in 

writing. 

(B) CONSIDERATIONS.—In determining whether to allow a 

small business concern 24 hours to correct a violation 

under subparagraph (A), the head of an agency shall take 

into account all of the facts and circumstances regarding 

the violation, including— 

(i) the nature and seriousness of the violation, including whether the violation is technical or inadvertent or involves willful or criminal conduct; 

(ii) whether the small business concern had made a 

good faith effort to comply with applicable laws and to 

remedy the violation within the shortest practicable period of time; and 

(iii) whether the small business concern has obtained 

a significant economic benefit from the violation. 

(C) NOTICE TO CONGRESS.—In any case in which the 

head of an agency imposes a civil fine on a small business 

concern for a violation that presents a danger to the public 

health or safety and does not allow the small business concern 24 hours to correct the violation under subparagraph 

(A), the head of the agency shall notify Congress regarding 

38 

the determination not later than 60 days after the date on 

which the civil fine is imposed by the agency. 

Æ