19–006 

112TH CONGRESS REPT. 112–289 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2011 

NOVEMBER 16, 2011.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. SMITH of Texas, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 527] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 527) 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 an amendment and recommends that the bill as 

amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Purpose and Summary ............................................................................................ 8 

Background and Need for the Legislation ............................................................. 8 

Hearings ................................................................................................................... 15 

Committee Consideration ........................................................................................ 16 

Committee Votes ...................................................................................................... 16 

Committee Oversight Findings ............................................................................... 20 

New Budget Authority and Tax Expenditures ...................................................... 21 

Congressional Budget Office Cost Estimate .......................................................... 21 

Performance Goals and Objectives ......................................................................... 24 

Advisory on Earmarks ............................................................................................. 24 

Section-by-Section Analysis .................................................................................... 24 

Changes in Existing Law Made by the Bill, as Reported ..................................... 29 

Dissenting Views ..................................................................................................... 43 


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The Amendment 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Regulatory Flexibility Improvements Act of 2011’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows: 

Sec. 1. Short title; table of contents. 

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

Sec. 3. Requirements providing for more detailed analyses. 

Sec. 4. Repeal of waiver and delay authority; additional powers of the Chief Counsel for Advocacy. 

Sec. 5. Procedures for gathering comments. 

Sec. 6. Periodic review of rules. 

Sec. 7. Judicial review of compliance with the requirements of the Regulatory Flexibility Act available after 

publication of the final rule. 

Sec. 8. Jurisdiction of court of appeals over rules implementing the Regulatory Flexibility Act. 

Sec. 9. Clerical amendments. 

SEC. 2. CLARIFICATION AND EXPANSION OF RULES COVERED BY THE REGULATORY FLEXIBILITY ACT. 

(a) IN GENERAL.—Paragraph (2) of section 601 of title 5, United States Code, is 

amended to read as follows: 

‘‘(2) RULE.—The term ‘rule’ has the meaning given such term in section 551(4) 

of this title, except that such term does not include a rule of particular (and 

not general) applicability relating to rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services, or allowances therefor or to valuations, costs or accounting, or practices relating to such 

rates, wages, structures, prices, appliances, services, or allowances.’’. 

(b) INCLUSION OF RULES WITH INDIRECT EFFECTS.—Section 601 of title 5, United 

States Code, is amended by adding at the end the following new paragraph: 

‘‘(9) ECONOMIC IMPACT.—The term ‘economic impact’ means, with respect to 

a proposed or final rule— 

‘‘(A) any direct economic effect on small entities of such rule; and 

‘‘(B) any indirect economic effect on small entities which is reasonably 

foreseeable and results from such rule (without regard to whether small entities will be directly regulated by the rule).’’. 

(c) INCLUSION OF RULES WITH BENEFICIAL EFFECTS.— 

(1) INITIAL REGULATORY FLEXIBILITY ANALYSIS.—Subsection (c) of section 603 

of title 5, United States Code, is amended by striking the first sentence and inserting ‘‘Each initial regulatory flexibility analysis shall also contain a detailed 

description of alternatives to the proposed rule which minimize any adverse significant economic impact or maximize any beneficial significant economic impact 

on small entities.’’. 

(2) FINAL REGULATORY FLEXIBILITY ANALYSIS.—The first paragraph (6) of section 604(a) of title 5, United States Code, is amended by striking ‘‘minimize the 

significant economic impact’’ and inserting ‘‘minimize the adverse significant 

economic impact or maximize the beneficial significant economic impact’’. 

(d) INCLUSION OF RULES AFFECTING TRIBAL ORGANIZATIONS.—Paragraph (5) of 

section 601 of title 5, United States Code, is amended by inserting ‘‘and tribal organizations (as defined in section 4(l) of the Indian Self-Determination and Education 

Assistance Act (25 U.S.C. 450b(l))),’’ after ‘‘special districts,’’. 

(e) INCLUSION OF LAND MANAGEMENT PLANS AND FORMAL RULEMAKING.— 

(1) INITIAL REGULATORY FLEXIBILITY ANALYSIS.—Subsection (a) of section 603 

of title 5, United States Code, is amended in the first sentence— 

(A) by striking ‘‘or’’ after ‘‘proposed rule,’’; and 

(B) by inserting ‘‘or publishes a revision or amendment to a land management plan,’’ after ‘‘United States,’’. 

(2) FINAL REGULATORY FLEXIBILITY ANALYSIS.—Subsection (a) of section 604 of 

title 5, United States Code, is amended in the first sentence— 

(A) by striking ‘‘or’’ after ‘‘proposed rulemaking,’’; and 

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

(3) LAND MANAGEMENT PLAN DEFINED.—Section 601 of title 5, United States 

Code, is amended by adding at the end the following new paragraph: 

‘‘(10) LAND MANAGEMENT PLAN.— 

‘‘(A) IN GENERAL.—The term ‘land management plan’ means— 

‘‘(i) any plan developed by the Secretary of Agriculture under section 

6 of the Forest and Rangeland Renewable Resources Planning Act of 

1974 (16 U.S.C. 1604); and 


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‘‘(ii) any plan developed by the Secretary of Interior under section 

202 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 

1712). 

‘‘(B) REVISION.—The term ‘revision’ means any change to a land management plan which— 

‘‘(i) in the case of a plan described in subparagraph (A)(i), is made 

under section 6(f)(5) of the Forest and Rangeland Renewable Resources 

Planning Act of 1974 (16 U.S.C. 1604(f)(5)); or 

‘‘(ii) in the case of a plan described in subparagraph (A)(ii), is made 

under section 1610.5–6 of title 43, Code of Federal Regulations (or any 

successor regulation). 

‘‘(C) AMENDMENT.—The term ‘amendment’ means any change to a land 

management plan which— 

‘‘(i) in the case of a plan described in subparagraph (A)(i), is made 

under section 6(f)(4) of the Forest and Rangeland Renewable Resources 

Planning Act of 1974 (16 U.S.C. 1604(f)(4)) and with respect to which 

the Secretary of Agriculture prepares a statement described in section 

102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 

4332(2)(C)); or 

‘‘(ii) in the case of a plan described in subparagraph (A)(ii), is made 

under section 1610.5–5 of title 43, Code of Federal Regulations (or any 

successor regulation) and with respect to which the Secretary of the Interior prepares a statement described in section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).’’. 

(f) INCLUSION OF CERTAIN INTERPRETIVE RULES INVOLVING THE INTERNAL REVENUE LAWS.— 

(1) IN GENERAL.—Subsection (a) of section 603 of title 5, United States Code, 

is amended by striking the period at the end and inserting ‘‘or a recordkeeping 

requirement, and without regard to whether such requirement is imposed by 

statute or regulation.’’. 

(2) COLLECTION OF INFORMATION.—Paragraph (7) of section 601 of title 5, 

United States Code, is amended to read as follows: 

‘‘(7) COLLECTION OF INFORMATION.—The term ‘collection of information’ has 

the meaning given such term in section 3502(3) of title 44.’’. 

(3) RECORDKEEPING REQUIREMENT.—Paragraph (8) of section 601 of title 5, 

United States Code, is amended to read as follows: 

‘‘(8) RECORDKEEPING REQUIREMENT.—The term ‘recordkeeping requirement’ 

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

(g) DEFINITION OF SMALL ORGANIZATION.—Paragraph (4) of section 601 of title 5, 

United States Code, is amended to read as follows: 

‘‘(4) SMALL ORGANIZATION.— 

‘‘(A) IN GENERAL.—The term ‘small organization’ means any not-for-profit 

enterprise which, as of the issuance of the notice of proposed rulemaking— 

‘‘(i) in the case of an enterprise which is described by a classification 

code of the North American Industrial Classification System, does not 

exceed the size standard established by the Administrator of the Small 

Business Administration pursuant to section 3 of the Small Business 

Act (15 U.S.C. 632) for small business concerns described by such classification code; and 

‘‘(ii) in the case of any other enterprise, has a net worth that does 

not exceed $7,000,000 and has not more than 500 employees. 

‘‘(B) LOCAL LABOR ORGANIZATIONS.—In the case of any local labor organization, subparagraph (A) shall be applied without regard to any national 

or international organization of which such local labor organization is a 

part. 

‘‘(C) AGENCY DEFINITIONS.—Subparagraphs (A) and (B) shall not apply to 

the extent that an agency, after consultation with the Office of Advocacy 

of the Small Business Administration and after opportunity for public comment, establishes one or more definitions for such term which are appropriate to the activities of the agency and publishes such definitions in the 

Federal Register.’’. 

SEC. 3. REQUIREMENTS PROVIDING FOR MORE DETAILED ANALYSES. 

(a) INITIAL REGULATORY FLEXIBILITY ANALYSIS.—Subsection (b) of section 603 of 

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

‘‘(b) Each initial regulatory flexibility analysis required under this section shall 

contain a detailed statement— 

‘‘(1) describing the reasons why action by the agency is being considered; 

‘‘(2) describing the objectives of, and legal basis for, the proposed rule; 


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‘‘(3) estimating the number and type of small entities to which the proposed 

rule will apply; 

‘‘(4) describing the projected reporting, recordkeeping, and other compliance 

requirements of the proposed rule, including an estimate of the classes of small 

entities which will be subject to the requirement and the type of professional 

skills necessary for preparation of the report and record; 

‘‘(5) describing all relevant Federal rules which may duplicate, overlap, or 

conflict with the proposed rule, or the reasons why such a description could not 

be provided; 

‘‘(6) estimating the additional cumulative economic impact of the proposed 

rule on small entities beyond that already imposed on the class of small entities 

by the agency or why such an estimate is not available; and 

‘‘(7) describing any disproportionate economic impact on small entities or a 

specific class of small entities.’’. 

(b) FINAL REGULATORY FLEXIBILITY ANALYSIS.— 

(1) IN GENERAL.—Section 604(a) of title 5, United States Code, is amended— 

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

(B) in each of paragraphs (4), (5), and the first paragraph (6), by inserting 

‘‘detailed’’ before ‘‘description’’; and 

(C) by adding at the end the following: 

‘‘(7) describing any disproportionate economic impact on small entities or a 

specific class of small entities.’’. 

(2) INCLUSION OF RESPONSE TO COMMENTS ON CERTIFICATION OF PROPOSED

RULE.—Paragraph (2) of section 604(a) of title 5, United States Code, is amended by inserting ‘‘(or certification of the proposed rule under section 605(b))’’ after 

‘‘initial regulatory flexibility analysis’’. 

(3) PUBLICATION OF ANALYSIS ON WEBSITE.—Subsection (b) of section 604 of 

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

‘‘(b) The agency shall make copies of the final regulatory flexibility analysis available to the public, including placement of the entire analysis on the agency’s 

website, and shall publish in the Federal Register the final regulatory flexibility 

analysis, or a summary thereof which includes the telephone number, mailing address, and link to the website where the complete analysis may be obtained.’’. 

(c) CROSS-REFERENCES TO OTHER ANALYSES.—Subsection (a) of section 605 of title 

5, United States Code, is amended to read as follows: 

‘‘(a) A Federal agency shall be treated as satisfying any requirement regarding the 

content of an agenda or regulatory flexibility analysis under section 602, 603, or 

604, if such agency provides in such agenda or analysis a cross-reference to the specific portion of another agenda or analysis which is required by any other law and 

which satisfies such requirement.’’. 

(d) CERTIFICATIONS.—Subsection (b) of section 605 of title 5, United States Code, 

is amended— 

(1) by inserting ‘‘detailed’’ before ‘‘statement’’ the first place it appears; and 

(2) by inserting ‘‘and legal’’ after ‘‘factual’’. 

(e) QUANTIFICATION REQUIREMENTS.—Section 607 of title 5, United States Code, 

is amended to read as follows: 

‘‘§ 607. Quantification requirements 

‘‘In complying with sections 603 and 604, an agency shall provide— 

‘‘(1) a quantifiable or numerical description of the effects of the proposed or 

final rule and alternatives to the proposed or final rule; or 

‘‘(2) a more general descriptive statement and a detailed statement explaining 

why quantification is not practicable or reliable.’’. 

SEC. 4. REPEAL OF WAIVER AND DELAY AUTHORITY; ADDITIONAL POWERS OF THE CHIEF 

COUNSEL FOR ADVOCACY. 

(a) IN GENERAL.—Section 608 is amended to read as follows: 

‘‘§ 608. Additional powers of Chief Counsel for Advocacy 

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

Flexibility Improvements Act of 2011, the Chief Counsel for Advocacy of the Small 

Business Administration shall, after opportunity for notice and comment under section 553, issue rules governing agency compliance with this chapter. The Chief 

Counsel may modify or amend such rules after notice and comment under section 

553. This chapter (other than this subsection) shall not apply with respect to the 

issuance, modification, 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 AdvoVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6621 E:\HR\OC\HR289P1.XXX HR289P1

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cacy to ensure that such supplemental rules comply with this chapter and the rules 

issued under paragraph (1). 

‘‘(b) Notwithstanding any other law, the Chief Counsel for Advocacy of the Small 

Business Administration may intervene in any agency adjudication (unless such 

agency is authorized to impose a fine or penalty under such adjudication), and may 

inform the agency of the impact that any decision on the record may have on small 

entities. The Chief Counsel shall not initiate an appeal with respect to any adjudication in which the Chief Counsel intervenes under this subsection. 

‘‘(c) The Chief Counsel for Advocacy may file comments in response to any agency 

notice requesting comment, regardless of whether the agency is required to file a 

general notice of proposed rulemaking under section 553.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Section 611(a)(1) of such title is amended by striking ‘‘608(b),’’. 

(2) Section 611(a)(2) of such title is amended by striking ‘‘608(b),’’. 

(3) Section 611(a)(3) of such title is amended— 

(A) by striking subparagraph (B); and 

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

‘‘(3) A small entity’’. 

SEC. 5. PROCEDURES FOR GATHERING COMMENTS. 

Section 609 of title 5, United States Code, is amended by striking subsection (b) 

and all that follows through the end of the section and inserting the following: 

‘‘(b)(1) Prior to publication of any proposed rule described in subsection (e), an 

agency making such rule shall notify the Chief Counsel for Advocacy of the Small 

Business Administration and provide the Chief Counsel with— 

‘‘(A) all materials prepared or utilized by the agency in making the proposed 

rule, including the draft of the proposed rule; and 

‘‘(B) information on the potential adverse and beneficial economic impacts of 

the proposed rule on small entities and the type of small entities that might 

be affected. 

‘‘(2) An agency shall not be required under paragraph (1) to provide the exact language of any draft if the rule— 

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

‘‘(B) is proposed by an independent regulatory agency (as defined in section 

3502(5) of title 44). 

‘‘(c) Not later than 15 days after the receipt of such materials and information 

under subsection (b), the Chief Counsel for Advocacy of the Small Business Administration shall— 

‘‘(1) identify small entities or representatives of small entities or a combination of both for the purpose of obtaining advice, input, and recommendations 

from those persons about the potential economic impacts of the proposed rule 

and the compliance of the agency with section 603; and 

‘‘(2) convene a review panel consisting of an employee from the Office of Advocacy of the Small Business Administration, an employee from the agency making the rule, and in the case of an agency other than an independent regulatory 

agency (as defined in section 3502(5) of title 44), an employee from the Office 

of Information and Regulatory Affairs of the Office of Management and Budget 

to review the materials and information provided to the Chief Counsel under 

subsection (b). 

‘‘(d)(1) Not later than 60 days after the review panel described in subsection (c)(2) 

is convened, the Chief Counsel for Advocacy of the Small Business Administration 

shall, after consultation with the members of such panel, submit a report to the 

agency and, in the case of an agency other than an independent regulatory agency 

(as defined in section 3502(5) of title 44), the Office of Information and Regulatory 

Affairs of the Office of Management and Budget. 

‘‘(2) Such report shall include an assessment of the economic impact of the proposed rule on small entities and a discussion of any alternatives that will minimize 

adverse significant economic impacts or maximize beneficial significant economic 

impacts on small entities. 

‘‘(3) Such report shall become part of the rulemaking record. In the publication 

of the proposed rule, the agency shall explain what actions, if any, the agency took 

in response to such report. 

‘‘(e) A proposed rule is described by this subsection if the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget, 

the head of the agency (or the delegatee of the head of the agency), or an independent regulatory agency determines that the proposed rule is likely to result in— 

‘‘(1) an annual effect on the economy of $100,000,000 or more; 

‘‘(2) a major increase in costs or prices for consumers, individual industries, 

Federal, State, or local governments, tribal organizations, or geographic regions; 


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‘‘(3) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to 

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

‘‘(4) a significant economic impact on a substantial number of small entities. 

‘‘(f) Upon application by the agency, the Chief Counsel for Advocacy of the Small 

Business Administration may waive the requirements of subsections (b) through (e) 

if the Chief Counsel determines that compliance with the requirements of such subsections are impracticable, unnecessary, or contrary to the public interest.’’. 

SEC. 6. PERIODIC REVIEW OF RULES. 

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

‘‘§ 610. Periodic review of rules 

‘‘(a) Not later than 180 days after the enactment of the Regulatory Flexibility Improvements Act of 2011, each agency shall publish in the Federal Register and place 

on its website a plan for the periodic review of rules issued by the agency which 

the head of the agency determines have a significant economic impact on a substantial number of small entities. Such determination shall be made without regard to 

whether the agency performed an analysis under section 604. The purpose of the 

review shall be to determine whether such rules should be continued without 

change, or should be amended or rescinded, consistent with the stated objectives of 

applicable statutes, to minimize any adverse significant economic impacts or maximize any beneficial significant economic impacts on a substantial number of small 

entities. Such plan may be amended by the agency at any time by publishing the 

revision in the Federal Register and subsequently placing the amended plan on the 

agency’s website. 

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

date of the enactment of the Regulatory Flexibility Improvements Act of 2011 within 

10 years of the date of publication of the plan in the Federal Register and for review 

of rules adopted after the date of enactment of the Regulatory Flexibility Improvements Act of 2011 within 10 years after the publication of the final rule in the Federal Register. If the head of the agency determines that completion of the review 

of existing rules is not feasible by the established date, the head of the agency shall 

so certify in a statement published in the Federal Register and may extend the review for not longer than 2 years after publication of notice of extension in the Federal Register. Such certification and notice shall be sent to the Chief Counsel for 

Advocacy of the Small Business Administration and the Congress. 

‘‘(c) Each agency shall annually submit a report regarding the results of its review 

pursuant to such plan to the Congress, the Chief Counsel for Advocacy of the Small 

Business Administration, and, in the case of agencies other than independent regulatory agencies (as defined in section 3502(5) of title 44) to the Administrator of the 

Office of Information and Regulatory Affairs of the Office of Management and Budget. Such report shall include the identification of any rule with respect to which the 

head of the agency made a determination described in paragraph (5) or (6) of subsection (d) and a detailed explanation of the reasons for such determination. 

‘‘(d) In reviewing a rule pursuant to subsections (a) through (c), the agency shall 

amend or rescind the rule to minimize any adverse significant economic impact on 

a substantial number of small entities or disproportionate economic impact on a specific class of small entities, or maximize any beneficial significant economic impact 

of the rule on a substantial number of small entities to the greatest extent possible, 

consistent with the stated objectives of applicable statutes. In amending or rescinding the rule, the agency shall consider the following factors: 

‘‘(1) The continued need for the rule. 

‘‘(2) The nature of complaints received by the agency from small entities concerning the rule. 

‘‘(3) Comments by the Regulatory Enforcement Ombudsman and the Chief 

Counsel for Advocacy of the Small Business Administration. 

‘‘(4) The complexity of the rule. 

‘‘(5) The extent to which the rule overlaps, duplicates, or conflicts with other 

Federal rules and, unless the head of the agency determines it to be infeasible, 

State, territorial, and local rules. 

‘‘(6) The contribution of the rule to the cumulative economic impact of all Federal rules on the class of small entities affected by the rule, unless the head 

of the agency determines that such calculations cannot be made and reports 

that determination in the annual report required under subsection (c). 

‘‘(7) The length of time since the rule has been evaluated or the degree to 

which technology, economic conditions, or other factors have changed in the 

area affected by the rule. 

‘‘(e) The agency shall publish in the Federal Register and on its website a list of 

rules to be reviewed pursuant to such plan. Such publication shall include a brief 


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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. 7. JUDICIAL REVIEW OF COMPLIANCE WITH THE REQUIREMENTS OF THE REGULATORY 

FLEXIBILITY ACT AVAILABLE AFTER PUBLICATION OF THE FINAL RULE. 

(a) IN GENERAL.—Paragraph (1) of section 611(a) of title 5, United States Code, 

is amended by striking ‘‘final agency action’’ and inserting ‘‘such rule’’. 

(b) JURISDICTION.—Paragraph (2) of such section is amended by inserting ‘‘(or 

which would have such jurisdiction if publication of the final rule constituted final 

agency action)’’ after ‘‘provision of law,’’. 

(c) TIME FOR BRINGING ACTION.—Paragraph (3) of such section is amended— 

(1) by striking ‘‘final agency action’’ and inserting ‘‘publication of the final 

rule’’; and 

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

(d) INTERVENTION BY CHIEF COUNSEL FOR ADVOCACY.—Subsection (b) of section 

612 of title 5, United States Code, is amended by inserting before the first period 

‘‘or agency compliance with section 601, 603, 604, 605(b), 609, or 610’’. 

SEC. 8. JURISDICTION OF COURT OF APPEALS OVER RULES IMPLEMENTING THE REGULATORY FLEXIBILITY ACT. 

(a) IN GENERAL.—Section 2342 of title 28, United States Code, is amended— 

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

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

and 

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

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

(b) CONFORMING AMENDMENTS.—Paragraph (3) of section 2341 of title 28, United 

States Code, is amended— 

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

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

and’’; and 

(3) by adding at the end the following new subparagraph: 

‘‘(F) the Office of Advocacy of the Small Business Administration, when 

the final rule is under section 608(a) of title 5.’’. 

(c) AUTHORIZATION TO INTERVENE AND COMMENT ON AGENCY COMPLIANCE WITH

ADMINISTRATIVE PROCEDURE.—Subsection (b) of section 612 of title 5, United States 

Code, is amended by inserting ‘‘chapter 5, and chapter 7,’’ after ‘‘this chapter,’’. 

SEC. 9. CLERICAL AMENDMENTS. 

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

(1) in paragraph (1)— 

(A) by striking the semicolon at the end and inserting a period; and 

(B) by striking ‘‘(1) the term’’ and inserting the following: 

‘‘(1) AGENCY.—The term’’; 

(2) in paragraph (3)— 

(A) by striking the semicolon at the end and inserting a period; and 

(B) by striking ‘‘(3) the term’’ and inserting the following: 

‘‘(3) SMALL BUSINESS.—The term’’; 

(3) in paragraph (5)— 

(A) by striking the semicolon at the end and inserting a period; and 

(B) by striking ‘‘(5) the term’’ and inserting the following: 

‘‘(5) SMALL GOVERNMENTAL JURISDICTION.—The term’’; and 

(4) in paragraph (6)— 

(A) by striking ‘‘; and’’ and inserting a period; and 

(B) by striking ‘‘(6) the term’’ and inserting the following: 

‘‘(6) SMALL ENTITY.—The term’’. 

(b) The heading of section 605 of title 5, United States Code, is amended to read 

as follows: 

‘‘§ 605. Incorporations by reference and certifications’’. 

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

(1) by striking the item relating to section 605 and inserting the following 

new item: 

‘‘605. Incorporations by reference and certifications.’’; 


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1See, e.g., U.S. General Accounting Office, Regulatory Flexibility Act: Agencies’ Interpretations 

of Review Requirements Vary, GAO/GGD–99–55 (Apr. 2, 1999); U.S. General Accounting Office, 

Federal Rulemaking: Agencies Often Published Final Actions Without Proposed Rules, GAO/ 

GGD–98–126 (Aug. 31, 1998); U.S. General Accounting Office, Regulatory Flexibility Act: Status 

of Agencies’ Compliance, GAO/T–GGD–95–112 (Mar. 8, 1995). 2See Figure 2: Federal Register Pages: 1940–2010, in Susan E. Dudley, ‘‘Prospects for Regulatory Reform in 2011,’’ ENGAGE 11:1 (June 2011). 3The finding on disproportionate impact was substantiated by an Office of Advocacy study in 

1984; this was re-affirmed by a 2010 study. See Nicole V. Crain & W. Mark Crain, ‘‘The Impact 

(2) by striking the item relating to section 607 and inserting the following 

new item: 

‘‘607. Quantification requirements.’’; 

and 

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

‘‘608. Additional powers of Chief Counsel for Advocacy.’’. 

(d) Chapter 6 of title 5, United States Code, is amended as follows: 

(1) In section 603, by striking subsection (d). 

(2) In section 604(a) by striking the second paragraph (6). 

Purpose and Summary 

On February 8, 2011, Chairman Lamar Smith introduced H.R. 

527, the Regulatory Flexibility Improvements Act of 2011 (‘‘the Act’’ 

or ‘‘the Bill’’). The Bill reforms the Regulatory Flexibility Act of 

1980 (‘‘RFA’’) and the Small Business Regulatory Enforcement 

Fairness Act of 1996 (‘‘SBREFA’’). The RFA and SBREFA were 

passed to require agencies to account for the impacts of proposed 

regulations on ‘‘small entities’’—and on small businesses in particular—and to tailor final regulations to minimize the impact on 

small business. 

The need for reform is apparent from the increasing number and 

scope of regulations issued by Federal regulatory agencies; the disproportionate burden these regulations place on small businesses; 

and, the failure of agencies heretofore to comply fully with the RFA 

and SBREFA.1 The Act updates the RFA and SBREFA to close 

loopholes and to reduce the disproportionate burden that over-regulation places on small businesses, thereby enhancing job creation 

and hastening economic recovery. 

Background and Need for the Legislation 

Genesis and Early History of the RFA 

During the 1970’s, Congress enacted numerous regulatory statutes that dramatically increased the regulatory burden on businesses—and especially on small businesses. Regulatory requirements stifled innovation, limited small business growth, and contributed to the general economic malaise that permeated the latter 

half of the decade. Between 1970 and 1980, the Federal Register 

more than quadrupled from a 20,000-page publication for the 

arcana of the Federal Government to a nearly 90,000-page blueprint for regulating many aspects of modern American life.2

In a series of hearings during the late 1970’s, Congress began to 

focus on the ever-growing burden Federal regulation imposed upon 

small businesses. Small businesses reiterated two major themes: 

(1) they were under-represented in Federal regulatory proceedings; 

and (2) Federal agency efforts to impose a ‘‘one-size-fits-all’’ body 

of regulation imposed disproportionate burdens on small businesses.3 These findings were supported and reinforced during the 

1980 White House Conference on Small Business. 


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of Regulatory Costs on Small Firms,’’ (Sept. 2010), available at http://www.sba.gov/sites/default/ 

files/rs371tot.pdf (last accessed July 25, 2011). 4See 5 U.S.C. §§ 603, 604. 5See id. § 605(b). 6See, e.g., U.S. General Accounting Office, Regulatory Flexibility Act: Key Terms Still Need 

to Be Clarified, GAO–01–669T (Apr. 24, 2001), at 2 (‘‘Over the past decade, we have recommended several times that Congress provide greater clarity with regard to these terms, but 

to date Congress has not acted on our recommendations.’’). 7 U.S. General Accounting Office, Regulatory Flexibility Act: Implementation in EPA Program 

Offices and Proposed Lead Rule, GAO–GGD–00–193 (Sept. 2000), at 16. 8See, e.g., Mid-Tex Elec. Co-op., Inc. v. FERC, 773 F.2d 327, 343 (D.C. Cir. 1985) (‘‘the legislative history [of the RFA] . . . also gives rise to an inference that Congress did not intend to 

require that every agency consider every indirect effect that any regulation might have on small 

businesses in any stratum of the national economy.’’). 9See 5 U.S.C. § 602. 10See id. § 612(a), (b). 11See id. § 610. 12For example, the EPA only reviews rules that it previously concluded had a significant economic impact on a substantial number of small entities when the final rules were promulgated. 

The Department of Transportation, on the other hand, interprets this section to require a review 

of all of its rules. See U.S. General Accounting Office, Regulatory Flexibility Act: Agencies’ Interpretations of Review Requirements Vary, GAO/GGD–99–55 (Apr. 2, 1999), at 24. 

To address these concerns, Congress enacted the RFA as an additional component of a significantly broader mechanism to control 

agency decision-making: The Administrative Procedure Act of 1946 

(‘‘APA’’). In general, the RFA requires Federal agencies, when proposed and final rules are published in the Federal Register, to prepare a regulatory flexibility analysis that describes the rule’s impact on small entities, including on small businesses.4 These analytical requirements are not triggered, however, if the head of the 

agency issuing the rule certifies, under Section 605(b) of the RFA 

that the rule would not have a ‘‘significant economic impact on a 

substantial number of small entities,’’ 5 an undefined term of art in 

the RFA. The lack of a uniform definition for this term is a shortcoming that the U.S. Government Accountability Office (‘‘GAO,’’ 

formerly the U.S. General Accounting Office) repeatedly has found 

contributes to inconsistent compliance across Federal agencies.6

Further, although the Congressional Research Service advises that 

the annual total number of certifications by all agencies is not 

known (or even knowable), the GAO has found that in the 3-year 

period after SBREFA was enacted the certification rate at four 

EPA offices increased from 78% to 96%.7 Thus, the EPA avoided 

complying with the RFA and SBREFA by certifying more of its 

rules pursuant to Section 605(b). Finally, agencies only need to assess a new regulation’s direct impact on small entities; courts have 

held that indirect impacts are irrelevant under the RFA.8

The RFA also requires each Federal agency to publish a ‘‘regulatory flexibility agenda’’ in the Federal Register twice a year,9

similar to the Unified Agenda of Federal Regulatory and Deregulatory Actions required by Executive Order 12866. The Small Business Administration (‘‘SBA’’) Chief Counsel for Advocacy is required to monitor and report on agency compliance, and is authorized to appear as amicus curiae ‘‘in any action brought in a court 

of the United States to review a rule’’ and to present his or her 

views regarding the agency’s compliance with the RFA and the 

rule’s impact on small entities.10 The RFA also requires agencies 

to conduct decennial rule reviews to identify whether the impact of 

rules on small entities can be mitigated further.11 The extent of 

this requirement remains unclear, however, as indicated by inconsistent agency practice.12


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13See, e.g., Thompson v. Clark, 741 F.2d 401, 405 (D.C. Cir. 1984); Colo. State Banking Bd. 

v. Resolution Trust Corp., 926 F.2d 931, 948 (10th Cir. 1991); Lehigh Valley Farmers v. Block, 

640 F. Supp. 1497, 1520 (E.D. Pa. 1986), aff’d on other grounds, 829 F.2d 409 (3d Cir. 1987). 14See, e.g., Strengthening the Regulatory Flexibility Act: Hearing on H.R. 9 Before H. Comm. 

on Small Business, 104th Cong., Serial No. 104–5, at 45–46 (Jan. 23, 1995) (statement of James 

P. Carty, Vice President, Small Manufacturers, National Association of Manufacturers) (identifying instances where the EPA and Pension Benefit Guaranty Corporation failed to comply with 

the RFA); Job Creation and Wage Enhancement Act of 1995: Hearing on H.R. 9 Before the 

Subcomm. on Comm. and Admin. Law of the H. Comm. on the Judiciary, 104th Cong., Serial 

No. 104–3, at 76 (Feb. 3 & 6, 1995) (statement of Benny L. Thayer, President, National Association for the Self-Employed) (noting that confusion under the RFA ‘‘has led to an apparent belief 

on the part of some agencies that compliance with the RFA is entirely voluntary’’). 15See ‘‘Contract with America Advancement Act,’’ 104 P.L. 141, § 212 (Mar. 29, 1996); see also 

5 U.S.C. § 601 note. 16 5 U.S.C. § 610(a). 17The RFA only requires agency compliance if the regulation is required to be issued pursuant 

to notice and comment pursuant to Section 553 of the APA or some other statute. Interpretative 

regulations are exempt from the notice and comment requirements. 5 U.S.C. § 553(b)(A). 18 In fact, some would argue that the notice and comment period was not a critical component 

of rational rulemaking but the keystone of rationale rulemaking in which the agency uses the 

public comment process to find further support for the foregone conclusion of its proposed regulation. 19See 5 U.S.C. § 609. 

From the time of enactment until 1996, agency compliance with 

the RFA was at best sporadic. Agencies faced little threat from 

non-compliance since judicial review of regulatory flexibility analyses was very limited, and an agency’s certification decision could 

not be challenged in court.13 Without the possibility of court orders, 

agencies only had to comply when it would benefit their 

rulemakings or when they could be cajoled by the Chief Counsel for 

Advocacy or the Office of Management and Budget’s (‘‘OMB’’) Office 

of Information and Regulatory Affairs (‘‘OIRA’’). Both the Committee on the Judiciary and the Committee on Small Business held 

hearings at which witnesses confirmed the systemic failure by 

many agencies to comply with the RFA.14

Enactment of SBREFA and Subsequent History 

Congress enacted SBREFA in response to this collective disregard by Federal agencies, adding several important features to 

the RFA: compliance guides, advocacy review panels, and judicial 

review. Agencies must develop and publish compliance guides for 

all rules for which the agency is required to develop a final regulatory flexibility analysis. The compliance guide explains the steps 

a small entity must take to comply with new regulations.15

SBREFA also authorized direct judicial review of agency compliance with the RFA, including challenges to agency certifications 

that a rule would not have a ‘‘significant economic impact on a substantial number of small entities.’’ 16 SBREFA also subjected certain Internal Revenue Service interpretative regulations to the 

RFA.17

Congress recognized that, by the time a proposed rule is published for notice and comment, the agency has substantial intellectual capital invested in the proposed rule and is unlikely to change 

the core of its proposal during the notice and comment period.18

Thus, under SBREFA, Congress required the Environmental Protection Agency (‘‘EPA’’) and the Occupational Safety and Health 

Administration (‘‘OSHA’’)—two of the agencies that most affect 

small entities—to obtain input from small entities before publishing a proposed rule that would have a significant economic impact on a substantial number of small entities.19 The Dodd-Frank 

Wall Street Reform and Consumer Protection Act further required 


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20See P.L. 111–203, § 1100G(a) (July 21, 2010). 21See, e.g., Sarah E. Shive, If You’ve Always Done It That Way, It’s Probably Wrong: How the 

Regulatory Flexibility Act Has Failed To Change Agency Behavior, and How Congress Can Fix 

It, 1 ENTREPREN. BUS. L.J. 153, 164 (2006) (‘‘[W]hile one Department of Labor official noted that 

the judicial review permitted by the SBREFA would likely result in a ‘significant impact,’ judges 

have rarely ruled in favor of small businesses, granting substantial deference to agencies in all 

but the most egregious of cases.’’); Christopher M. Grengs, Making the Unseen Seen: Issues and 

Options in Small Business Regulatory Reform, 85 MINN. L. REV. 1957, 1973 (June 2001) (‘‘Some 

observers expressed high optimism about SBREFA’s prospects for holding Federal agencies more 

accountable for their treatment of small businesses. Although this optimism was perhaps not 

entirely deserved, SBREFA has spurred moderate progress in improving the regulatory treatment of small businesses. In particular, since SBREFA’s enactment in 1996, judicial review of 

Federal agency action under SBREFA has proved to be a promising lynchpin for remedying irrational or glaringly mistaken agency action.’’); Jeffrey J. Polich, Judicial Review and the Small 

Business Regulatory Enforcement Fairness Act: An Early Examination of When and Where 

Judges Are Using Their Newly Granted Power Over Federal Regulatory Agencies, 41 WM. &

MARY L. REV. 1425, 1426, 1461 (Apr. 2000) (‘‘A review of existing case law demonstrates that 

small entities have prevailed using SBREFA in cases in which there was a gross violation of 

Federal rulemaking procedures by an agency, but failed when using SBREFA in cases in which 

the agency made some effort to comply with those requirements. . . . The SBREFA amendments succeed in refining the requirements of the RFA and, in particular, the judicial review 

provision grants small businesses a weapon to insure that Federal agencies comply with the 

RFA. Judicial deference to agency decisions, however, limits the power of judicial review. In the 

end, true regulatory relief depends upon the agencies’ own commitment to fairness and balance 

for the small businesses they regulate.’’) (Emphasis added.) 22 ‘‘President Unveils Small Business Plan at Women’s Entrepreneurship Summit,’’ (Mar. 19, 

2002), available at http://georgewbush-whitehouse.archives.gov/news/releases/2002/03/20020319– 

2.html (last accessed July 25, 2011). 23 67 Fed. Reg. 53,462 (Aug. 16, 2002). 

the new Consumer Financial Protection Bureau to convene advocacy review panels.20 Before publishing an initial regulatory flexibility analysis, the agency is required to notify the SBA’s Chief 

Counsel for Advocacy and provide information on the draft rule’s 

potential impacts on small entities. The Chief Counsel for Advocacy 

then assembles a panel consisting of representatives from OIRA, 

the agency promulgating the rule and the SBA. The panel gathers 

input from small entities’ representatives and issues a report within 60 days, which becomes part of the record. 

Congressional intent notwithstanding, SBREFA’s changes have 

had only a modest effect on agency compliance.21 According to the 

GAO, the most significant stumbling block to improved compliance 

is the lack of definitions in the RFA and SBREFA for the terms 

‘‘significant economic impact’’ and ‘‘substantial number of small entities.’’ GAO also noted that the threshold determination of whether a rule will have a significant economic impact on a substantial 

number of small entities is critical to compliance with other RFA 

requirements, including periodic review of rules under Section 610 

and the receipt of small-entity input under SBREFA prior to the 

publication of proposed rules by EPA and OSHA. 

President George W. Bush also recognized the problems with 

RFA and SBREFA compliance in a 2002 speech: 

Every agency is required to analyze the impact of new regulations on small businesses before issuing them. That is 

an important law. The problem is it is often being ignored. 

The law is on the books; the regulators do not care that 

the law is on the books. From this day forward they will 

care that the law is on the books. . . . We want to enforce 

the law.22

Subsequently, the President issued Executive Order 13272,23 which 

required agencies to adopt standards for complying with the RFA, 

to make those standards known to the public and to give the Office 

of Advocacy the opportunity to comment on proposed rules prior to 


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24 Compare Associated Fisheries v. Daley, 127 F.3d 104, 112–18 (1st Cir. 1997) (holding 

SBREFA does not mandate courts to conduct a substantive judicial review of final decisions), 

and U.S. Cellular Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001) (‘‘Regulatory Flexibility Act, 

which requires Federal agencies to assess the impact of their regulations on small businesses, 

is purely procedural in nature, requiring nothing more than filing of statement demonstrating 

good-faith effort to carry out its mandate.’’) with Dubois v. U.S. Dep’t of Agric., 102 F.3d 1273, 

1285 (1st Cir. 1996) (reviewing an agency’s compliance to NEPA requires a ‘‘‘thorough, probing, 

indepth [sic] review’ and a ‘searching and careful’ inquiry into the record’’). 25Regulatory Flexibility Amendments Act of 1995 on S. 350: Hearing Before S. Comm. on 

Small Business, 104th Cong., Serial No. 104–103, at 24 (Mar. 8, 1995) (statement of Jere W. 

Glover, Chief Counsel for Advocacy, U.S. Small Business Administration) (‘‘A more substantial 

and ongoing threat, potential judicial review of agency compliance with the RFA, would certainly lead to scrupulous compliance with the RFA, just as similar attentiveness is paid to the 

impact statement requirements of the [NEPA].’’). 26 IRA Compliance with the Regulatory Flexibility Act: Hearing Before the H. Comm. on Small 

Business, 108th Cong., 108–10 (May 1, 2003); Improving the Regulatory Flexibility Act: H.R. 

2345: Hearing Before the H. Comm. on Small Business, 108th Cong., Serial No. 108–62 (May 

5, 2004); Can Improved Compliance with the Regulatory Flexibility Act Resuscitate Small 

Healthcare Providers?: Hearing Before the H. Comm. on Small Business, 107th Cong., Serial No. 

107–53 (Apr. 10, 2002); Regulatory Reform Initiatives and Their Impact on Small Business: 

Hearing Before the H. Comm. on Small Business, 106th Cong., Serial No. 106–60 (June 7, 2000). 27See, e.g., IRS Compliance with the Regulatory Flexibility Act: Hearing Before the H. Comm. 

on Small Business, 108th Cong., Serial No. 108–10, at 38 (May 1, 2003) (statement of Juanita 

Millender-McDonald, Member, House Comm. on Small Business) (‘‘The IRS has generally avoided the requirements of SBREFA, even though the law was, in part, specifically written to address IRS compliance with the RFA.’’); Can Improved Compliance with the Regulatory Flexibility 

Act Resuscitate Small Healthcare Providers?: Hearing Before the H. Comm. on Small Business, 

107th Cong., Serial No. 107–53, at 15 (Apr. 10, 2002) (statement of Zachary Evans, President, 

National Association of Portable X–Ray Providers) (‘‘CMS refuses to consider the impact upon 

our industry of their rulemaking, consult with us during the rulemaking process, or in any way 

evaluate industry costs prior to setting our reimbursement rates.’’); Regulatory Reform Initiatives and Their Impact on Small Business: Hearing Before the Comm. on Small Business, 106th 

Cong., Serial No. 106–60, at 40 (June 7, 2000) (statement of Duncan Thomas, President, National Association of Convenience Stores) (explaining that SBREFA ‘‘leads often to confusion, inadvertent noncompliance and considerable expense’’). 28The RFA at 25: Needed Improvements for Small Business Regulatory Relief: Hearing on H.R. 

682 Before the H. Comm. on Small Business, 109th Cong., Serial No. 109–5 (Mar. 16, 2005); 

Regulatory Flexibility Improvements Act: Hearing on H.R. 682 Before the H. Comm. on the Judiciary, 109th Cong., Serial No. 109–134 (July 30, 2006). 

publication in the Federal Register. The Executive Order, however, 

did not address the RFA’s loopholes or prevent agencies from 

adopting strained interpretations to avoid doing the required analysis. 

Courts similarly have not been the antidotes that the authors of 

SBREFA contemplated. For example, courts have not given agency 

compliance with the RFA the same searching scrutiny that they 

have given to compliance with the National Environmental Policy 

Act (‘‘NEPA’’),24 even though it was expected that judicial review 

would have the same impact on agency decision-making that it had 

on agency compliance with NEPA.25 Agencies still have broad latitude to interpret and implement the RFA. 

Testimony at hearings held by the Committee on Small Business 

during the 106th, 107th and 108th Congresses support additional 

reform,26 revealing that considerable confusion still reigns among 

agencies and that agencies still find ways to avoid complying with 

the RFA, even after the enactment of SBREFA.27 In the 109th Congress, H.R. 682 sought to achieve most of the reforms contained in 

H.R. 527. This Committee’s Subcommittee on Commercial and Administrative Law, and the Committee on Small Business, both held 

hearings on H.R. 682.28

The Obama Administration and the Continuing Need for Reform 

On January 18, 2011, President Obama issued a Presidential 

Memorandum to agency heads entitled ‘‘Regulatory Flexibility, 

Small Business, and Job Creation,’’ stating that his ‘‘Administration is firmly committed to eliminating excessive and unjustified 


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29 ‘‘Presidential Memoranda—Regulatory Flexibility, Small Business, and Job Creation,’’ (Jan. 

18, 2011), available at http://www.whitehouse.gov/the-press-office/2011/01/18/presidential-memoranda-regulatory-flexibility-small-business-and-job-cre (last accessed July 25, 2011). 30 Crain, supra note 3, at 6, 48. 31See id. at iv. 32T. Randolph Beard et al., Regulatory Expenditures, Economic Growth and Jobs: An Empirical Study, Phoenix Center Policy Bulletin No. 28 (Apr. 2011), at 5, available at http:// 

www.phoenix-center.org/PolicyBulletin/PCPB28Final.pdf (last accessed July 25, 2011). 33 111 P.L. 148 (Mar. 23, 2010). 34 111 P.L. 203 (July 21, 2010). 35See, e.g., Editors, The Uncertainty Principle, WALL STREET JOURNAL (July 14, 2010), available at http://online.wsj.com/article/SB10001424052748704288204575363162664835780.html? 

KEYWORDS=rulemakings (last accessed July 25, 2011); Chamber of Commerce, Jobs for America: an Open Letter to the President of the United States, the United States Congress, and the 

American People (July 14, 2010) (stating, e.g., that, substantially due to regulatory uncertainty, American corporations are sitting on well over $1 trillion that they could otherwise invest); 

Terry Miller & Kim R. Holmes, ‘‘Mostly Free’’—The Startling Decline of America’s 

Economic Freedom and What to Do About It, Heritage Foundation (July 14, 2010), available at http://www.heritage.org/Research/Reports/2010/07/Mostly-Free-The-Startling-Decline-of-Americas-Economic-Freedom-and-What-to-Do-About-It (summary) (last accessed July 25, 2011); http:// 

thflmedia.s3.amazonaws.com/2010/pdf/sr0082.pdf (full report) (last accessed July 25, 2011); 

Continued 

burdens on small businesses, and to ensuring that regulations are 

designed with careful consideration of their effects, including their 

cumulative effects, on small businesses.’’ 29 The President also directed agency heads to publish explanations of their decisions not 

to provide regulatory flexibility for small businesses, if those decisions were not based on legal limitations. The President’s memorandum, however, added nothing meaningful to existing agency requirements, and it explicitly stated that the memorandum did not 

create any legal rights. Even if it had, any of its provisions could 

be revoked at any time, as it is merely an executive memorandum, 

not a law. 

Meanwhile, the need for additional RFA reform has grown. In 

2010, for example, Federal agencies promulgated 3,312 final rules, 

while Congress passed and the President signed into law only 385 

statutes. Recently, the SBA reported that Federal rulemaking now 

imposes a cumulative burden of $1.75 trillion on our economy—a 

figure that equals 14 percent of national income.30 That burden, 

moreover, falls disproportionately on small businesses: 

While all citizens and businesses pay some portion of these 

costs, the distribution of the burden of regulations is quite 

uneven. The portion of regulatory costs that falls initially 

on businesses was $8,086 per employee in 2008. Small 

businesses, defined as firms employing fewer than 20 employees, bear the largest burden of Federal regulations. As 

of 2008, small businesses face an annual regulatory cost of 

$10,585 per employee, which is 36 percent higher than the 

regulatory cost facing large firms (defined as firms with 

500 or more employees).31

Another recent study found that ‘‘[e]ach million-dollar increase in 

the regulatory budget costs the economy 420 private sector jobs.’’ 32

The future threat of excessive Federal regulation—such as under 

the waves of regulation intended to implement the Patient Protection and Affordable Care Act 33 and the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 34—have created immense 

regulatory burdens and uncertainty for the economy, chilling job 

creation, investment and economic growth and suppressing America’s economic freedom and standing among the world’s economies.35 These effects are particularly burdensome on small busiVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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Terry Miller, The U.S. loses Ground on Economic Freedom, WALL STREET JOURNAL (Jan. 13, 

2011), available at http://online.wsj.com/article/SB1000142405274870377970457607419321499 

9486.html?utmlsource=Newsletter&utmlmedium= Email&utmlcampaign = Heritage%2BHot 

sheet (last accessed July 25, 2011); Heritage Foundation and Wall Street Journal, 2011 Index 

of Economic Freedom: Executive Highlights (Jan. 2011) at 6 (placing America as ninth in economic freedom among countries surveyed and recording a further decline in U.S. economic freedom). 36Tim Kane, The Importance of Start-ups in Job Creation and Job Destruction, Ewing Marion 

Kaufmann Foundation (July 2010) at 6, available at http://www.kauffman.org/uploadedFiles/ 

firmlformationlimportanceloflstartups.pdf (last accessed July 25, 2011). 37Office of Information and Regulatory Affairs, List of Regulatory Actions under Review, 

Reginfo.gov, available at http://www.reginfo.gov/public/jsp/EO/eoDashboard.jsp (last accessed 

July 22, 2011). 38See id. 39 ‘‘Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 

202(a) of the Clean Air Act,’’ EPA Docket No. EPA–HQ–OAR–2009–0171, RIN 2060–ZA14 (Dec. 

7, 2009). 40Letter from Susan Walthall, Acting Chief Counsel, Office of the Chief Counsel for Advocacy, 

Small Business Administration to the Honorable Lisa Jackson, EPA Administrator, (Dec. 23, 

2009) (letter on file). 41Letter from Reps. Lamar Smith and Sam Graves to Cass R. Sunstein, OIRA Administrator 

(Jan. 21, 2010); response letter from Administrator Sunstein to Reps. Smith and Graves (Apr. 

29, 2010) (letters on file). 42 U.S. Dep’t of Labor, Office of Public Affairs, News Release: US Labor Department’s OSHA 

temporarily withdraws proposed column for work-related musculoskeletal disorders, reaches out 

to small businesses (Jan. 25, 2011). 

nesses—and since start-up firms are the source of net job creation 

in the U.S. economy, it is only logical that the impact of these effects on small businesses contributes substantially to the economy’s 

inability to create sufficient levels of new jobs.36 OIRA currently 

has under its review 22 economically significant rules, which translates into a minimum potential economic impact of $2.2 billion.37

In the past 12 months, since the Dodd-Frank financial legislation 

was enacted on July 21, 2010, OIRA has reviewed 125 economically 

significant rules.38

Agencies continue to ignore their obligations under the RFA. For 

example, EPA has found carbon dioxide to be a threat to public 

health and welfare 39 and initiated an inexorable series of additional regulatory actions that, under existing environmental laws, 

will impose large adverse impacts on small businesses. EPA, however, refused to comply with the RFA—even when the Chief Counsel for Advocacy pointed out to the EPA Administrator (and, by 

copy, to OIRA) that EPA had failed to convene advocacy review 

panels before imposing its rules, failed to develop and evaluate regulatory alternatives to minimize its actions’ impacts on small businesses, and inappropriately certified that its actions will not affect 

small businesses.40 When Chairman Smith and Small Business 

Committee Chairman Sam Graves brought to OIRA’s attention 

their concerns over these violations, the potential for EPA’s regulations to impose particularly heavy burdens on small businesses, 

and the need for OIRA to intervene and assure RFA compliance, 

OIRA’s response was simply to refer the matter to EPA.41

Similarly, on January 25, 2011, OSHA announced that it had 

temporarily withdrawn from OMB review a proposed rule on injury-related employer recordkeeping. The stated reason for the 

withdrawal was to ‘‘seek greater input from small businesses on 

the impact of the proposal.’’ 42 Yet, rather than commit itself to full 

RFA/SBREFA compliance, OSHA promised to hold a meeting ‘‘to 

engage and listen to small businesses about the agency’s proposal’’ 

and to ‘‘conduct a stakeholder meeting with other members of the 


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43 Id. 44See 5 U.S.C. § 609. 45See ‘‘Regulatory Flexibility Improvements Act of 2011’’—Unleashing Small Businesses to Create Jobs: Hearing on H.R. 527 Before the Subcomm. on Courts, Commercial and Administrative 

Law of the H. Comm. on the Judiciary, 112th Cong., Serial No. 112–16 (Feb. 10, 2011). 46 Id. at 56. 47 Id. 48 Id. 49 Id. at 65. 50 Id. at 66. 51 Id. at 85. 52 Id. 53 Id. at 77. 54See Reducing Federal Agency Overreach: Modernizing the Regulatory Flexibility Act Before 

the H. Comm. on Small Business, 112th Cong., Serial No. 112–007 (Mar. 30, 2011). 

public if requested.’’ 43 This response falls well short of convening 

the advocacy review panel that OSHA is required by law to hold.44

Hearings 

On February 10, 2011, the Subcommittee on Courts, Commercial 

and Administrative Law held a legislative hearing on H.R. 527.45

Testimony was received from Rich Gimmell, President of Atlas Machine & Supply, Inc.; Thomas M. Sullivan, Counsel for Nelson, 

Mullins, Riley, Scarborough LLP; J. Robert Shull, Program Officer 

of Worker Right’s for the Public Welfare Foundation; and, Karen 

R. Harned, Executive Director of the National Federation of Independent Business (NFIB). 

Mr. Gimmell, also representing the National Association of Manufacturers, noted that the current recession had to that point resulted in a loss of 2.2 million jobs in the manufacturing sector.46

Mr. Gimmell called for ‘‘more detailed statements in the RFA process and requirements to identify redundant, overlapping, or conflicting regulations.’’ 47 Incorporating this sort of ‘‘lean thinking’’ 

into the regulatory process would change the current wasteful policy practices of most agencies and, in turn, improve the economy 

by allowing businesses to create jobs and expand.48

Mr. Sullivan testified, ‘‘One size fits all Federal mandates do not 

work when applied to small business; second, small business face 

higher costs per employee to comply with Federal regulation than 

their larger competitors, and, third, small business is critically important to the American economy.’’ 49 According to Mr. Sullivan, 

H.R. 527 would enable the Office of Advocacy to ensure that agencies properly consider how their regulations impact small businesses, and would provide clarity to courts on judicial review.50

According to Ms. Harned, ‘‘[o]verzealous regulation is a perennial 

cause for concern for small business owners and is particularly burdensome in times like these when the Nation’s economy remains 

sluggish.’’ 51 Including a $1.75 trillion cost of regulations on the 

economy every year, Ms. Harned stated that ‘‘small businesses face 

an annual regulatory cost of $10,585 per employee which is 36 percent more than the regulatory cost facing businesses with more 

than 500 employees.’’ 52 In opposition to H.R. 527, Mr. Shull alleged 

the bill would ‘‘paralyze the regulatory agencies we need to protect 

the public and keep them from getting things done to protect the 

public.’’ 53

The Committee on Small Business also held a legislative hearing 

on H.R. 527.54 Testimony was received from Bill Squires, Senior 

Vice President and General Counsel for Blackfoot TelecommuniVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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cations Group; David Frulla of Kelley Drye & Warren LLP; Craig 

Fabian, Vice President of Regulatory Affairs and Assistant General 

Counsel at the Aeronautical Repair Station Association; and, Rich 

D. Draper, CEO of the Ice Cream Club, Inc. 

Committee Consideration 

On July 7, 2011, the Committee met in open session and ordered 

the bill H.R. 527 favorably reported with an amendment, by a rollcall vote of 18 to 8, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of H.R. 

527. 

1. Amendment #7, offered by Mr. Cohen. The amendment requires that a member of the public or a representative of a public 

interest organization who is able to provide relevant information 

about the economic and non-economic impact of a proposed rule be 

added as a member of the review panels contemplated in H.R. 527. 

Failed by a rollcall of 9–13. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Smith, Chairman ........................................................................................ X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren .......................................................................................................

Mr. Chabot ........................................................................................................ X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes .........................................................................................................

Mr. King ............................................................................................................ X 

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ......................................................................................................

Mr. Jordan .........................................................................................................

Mr. Poe ..............................................................................................................

Mr. Chaffetz ...................................................................................................... X 

Mr. Griffin ......................................................................................................... X 

Mr. Marino ......................................................................................................... X 

Mr. Gowdy ......................................................................................................... X 

Mr. Ross ............................................................................................................

Ms. Adams ........................................................................................................ X 

Mr. Quayle ......................................................................................................... X 

Mr. Conyers, Jr., Ranking Member .................................................................... X 

Mr. Berman .......................................................................................................

Mr. Nadler .........................................................................................................

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................ X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi ....................................................................................................... X 

Mr. Quigley ........................................................................................................

Ms. Chu ............................................................................................................. X 

Mr. Deutch ........................................................................................................

Ms. Sa ́nchez ......................................................................................................


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ROLLCALL NO. 1—Continued 

Ayes Nays Present 

Ms. Wasserman Schultz ....................................................................................

Total ................................................................................................ 9 13 

2. Amendment #6, offered by Ms. Jackson Lee. The amendment 

requires a GAO study of the potential impact of implementation on 

agencies’ resources, the rulemaking process and the rulemaking in 

the event of an emergency. Failed by a rollcall of 11–15. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Smith, Chairman ........................................................................................ X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly .......................................................................................................

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Chabot ........................................................................................................ X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ......................................................................................................

Mr. Jordan .........................................................................................................

Mr. Poe ..............................................................................................................

Mr. Chaffetz ...................................................................................................... X 

Mr. Griffin ......................................................................................................... X 

Mr. Marino ......................................................................................................... X 

Mr. Gowdy ......................................................................................................... X 

Mr. Ross ............................................................................................................ X 

Ms. Adams ........................................................................................................ X 

Mr. Quayle ......................................................................................................... X 

Mr. Conyers, Jr., Ranking Member .................................................................... X 

Mr. Berman .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................ X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi ....................................................................................................... X 

Mr. Quigley ........................................................................................................

Ms. Chu ............................................................................................................. X 

Mr. Deutch ........................................................................................................

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz ....................................................................................

Total ................................................................................................ 11 15 

3. Amendment #9, offered by Mr. Johnson. The amendment creates an exception for any rulemaking to carry out the FDA Food 

Safety Modernization Act. Failed by a rollcall of 10–16. 

ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Smith, Chairman ........................................................................................ X 


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ROLLCALL NO. 3—Continued 

Ayes Nays Present 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Chabot ........................................................................................................ X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ......................................................................................................

Mr. Jordan .........................................................................................................

Mr. Poe ..............................................................................................................

Mr. Chaffetz ...................................................................................................... X 

Mr. Griffin ......................................................................................................... X 

Mr. Marino ......................................................................................................... X 

Mr. Gowdy ......................................................................................................... X 

Mr. Ross ............................................................................................................ X 

Ms. Adams ........................................................................................................ X 

Mr. Quayle ......................................................................................................... X 

Mr. Conyers, Jr., Ranking Member .................................................................... X 

Mr. Berman .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................

Ms. Waters ........................................................................................................ X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi ....................................................................................................... X 

Mr. Quigley ........................................................................................................

Ms. Chu ............................................................................................................. X 

Mr. Deutch ........................................................................................................

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz ....................................................................................

Total ................................................................................................ 10 16 

4. Amendment #10, offered by Mr. Johnson. The amendment creates an exception for any rulemaking to carry out the Patient Protection and Affordable Care Act. Failed by a rollcall of 10–15. 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Smith, Chairman ........................................................................................ X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Chabot ........................................................................................................ X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Franks .........................................................................................................

Mr. Gohmert ......................................................................................................

Mr. Jordan .........................................................................................................

Mr. Poe ..............................................................................................................

Mr. Chaffetz ...................................................................................................... X 


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ROLLCALL NO. 4—Continued 

Ayes Nays Present 

Mr. Griffin ......................................................................................................... X 

Mr. Marino ......................................................................................................... X 

Mr. Gowdy ......................................................................................................... X 

Mr. Ross ............................................................................................................ X 

Ms. Adams ........................................................................................................ X 

Mr. Quayle ......................................................................................................... X 

Mr. Conyers, Jr., Ranking Member .................................................................... X 

Mr. Berman .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................

Ms. Waters ........................................................................................................ X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi ....................................................................................................... X 

Mr. Quigley ........................................................................................................

Ms. Chu ............................................................................................................. X 

Mr. Deutch ........................................................................................................

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz ....................................................................................

Total ................................................................................................ 10 15 

5. Amendment #12, offered by Mr. Nadler. The amendment requires an agency to consider the direct and indirect benefits of proposed rules. Failed by a rollcall of 8–17. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Smith, Chairman ........................................................................................ X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Chabot ........................................................................................................ X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ......................................................................................................

Mr. Jordan ......................................................................................................... X 

Mr. Poe ..............................................................................................................

Mr. Chaffetz ...................................................................................................... X 

Mr. Griffin ......................................................................................................... X 

Mr. Marino ......................................................................................................... X 

Mr. Gowdy ......................................................................................................... X 

Mr. Ross ............................................................................................................ X 

Ms. Adams ........................................................................................................ X 

Mr. Quayle ......................................................................................................... X 

Mr. Conyers, Jr., Ranking Member .................................................................... X 

Mr. Berman .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................

Ms. Waters ........................................................................................................ X 

Mr. Cohen .......................................................................................................... X 


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ROLLCALL NO. 5—Continued 

Ayes Nays Present 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi .......................................................................................................

Mr. Quigley ........................................................................................................

Ms. Chu ............................................................................................................. X 

Mr. Deutch ........................................................................................................

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz ....................................................................................

Total ................................................................................................ 8 17 

6. Reporting H.R. 527 as amended. The bill ensures complete 

analysis of potential impacts on small entities of rules, and for 

other purposes. Reported by a rollcall of 18–8. 

ROLLCALL NO. 6 

Ayes Nays Present 

Mr. Smith, Chairman ........................................................................................ X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Chabot ........................................................................................................ X 

Mr. Issa ............................................................................................................. X 

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ......................................................................................................

Mr. Jordan ......................................................................................................... X 

Mr. Poe ..............................................................................................................

Mr. Chaffetz ...................................................................................................... X 

Mr. Griffin ......................................................................................................... X 

Mr. Marino ......................................................................................................... X 

Mr. Gowdy ......................................................................................................... X 

Mr. Ross ............................................................................................................ X 

Ms. Adams ........................................................................................................ X 

Mr. Quayle ......................................................................................................... X 

Mr. Conyers, Jr., Ranking Member .................................................................... X 

Mr. Berman .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................

Ms. Waters ........................................................................................................ X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi .......................................................................................................

Mr. Quigley ........................................................................................................

Ms. Chu ............................................................................................................. X 

Mr. Deutch ........................................................................................................

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz ....................................................................................

Total ................................................................................................ 18 8 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 


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and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 527, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 24, 2011. 

Hon. LAMAR SMITH, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 527, the ‘‘Regulatory 

Flexibility Improvements Act of 2011.’’ 

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

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

can be reached at 226–2860. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 527—Regulatory Flexibility Improvements Act of 2011. 

SUMMARY

H.R. 527 would amend the Regulatory Flexibility Act (RFA). The 

bill would expand the number of rules covered by the RFA and require agencies to perform additional analysis of regulations that affect small businesses. Finally, the legislation would provide new 

authorities to the Small Business Administration’s (SBA’s) Office of 

Advocacy to intervene in agency rulemaking. 

CBO estimates that implementing H.R. 527 would cost $80 million over the 2012–2016 period to expand the RFA, assuming appropriation of the necessary funds. Enacting the bill could affect direct spending by agencies not funded through annual appropriations; therefore, pay-as-you-go procedures apply. CBO estimates, 

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

not be significant. Enacting H.R. 527 would not affect revenues. 

H.R. 527 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 


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and would not affect the budgets of State, local, or tribal governments. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 527 is shown in the following table. The costs of this legislation fall within budget functions 370 (commerce and housing credit), 800 (general government), 

and all budget functions that include agencies that issue regulations affecting small businesses. 

By Fiscal Year, in Millions of Dollars 

2012 2013 2014 2015 2016 2012– 

2016 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level 10 15 20 20 20 85 

Estimated Outlays 8 14 18 20 20 80 

BASIS OF ESTIMATE

For this estimate, CBO assumes that the legislation will be enacted near the end of fiscal year 2011, that the necessary amounts 

will be appropriated near the start of each fiscal year, and that 

spending will follow historical patterns for similar activities. 

CBO is unaware of any comprehensive information on the current costs of spending for regulatory activities governmentwide. 

However, according to the Congressional Research Service, Federal 

agencies issue 3,000 to 4,000 final rules each year. Most are promulgated by the Departments of Transportation, Homeland Security, and Commerce, and the Environmental Protection Agency 

(EPA). Agencies that issue the most major rules (those with an estimated economic impact on the economy of more than $100 million 

per year) include the Department of Health and Human Services, 

the U.S. Department of Agriculture, and EPA. 

H.R. 527 would broaden the definition of a ‘‘rule’’ for rulemaking 

purposes to include agency guidance documents and policy statements. The bill also would expand the scope of the regulatory analysis for proposed and final rules to examine any indirect economic 

effects on small businesses and to provide a more detailed analysis 

of the possible economic consequences of the rule to small businesses. The legislation equates indirect economic effects with any 

impact that is reasonably foreseeable. The legislation also would 

require agencies to publicly report on the cumulative economic impact of any new regulations on the costs of existing regulations to 

small businesses. Implementing H.R. 527 would increase the number of agencies that need to prepare regulatory analysis and also 

would increase the role of the SBA’s Office of Advocacy and the Office of Information and Regulatory Affairs (OIRA) in the rulemaking process. Finally, the legislation would require more Federal 

agencies to use panels of experts to evaluate regulations and to 

prepare reports on the economic impact of proposed regulations on 

small business. 

Information from OIRA, SBA, and some Federal regulatory agencies indicates that the new requirements under the bill would increase the cost to issue a few hundred of the thousands of Federal 


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regulations issued annually. Based on that information, CBO estimates that requiring the additional analysis would increase administrative costs to regulatory agencies, the SBA’s Office of Advocacy, 

and OIRA by $20 million annually, subject to the availability of appropriated funds. We expect that it would take about three years 

to reach that level of effort. 

Under current law and executive orders, all agencies must prepare a regulatory analysis prior to issuing a final rule. That analysis includes the purpose of the regulatory action, the number and 

types of small businesses to which the rule will apply, the projected 

reporting and compliance costs of the rule, and any significant alternatives that would accomplish the objectives of the rule while 

minimizing the economic impact on small business and other activities. 

An agency can waive the requirement for a part of the regulatory 

analysis if it can certify that the proposed rule will not have a significant economic impact on a substantial number of small businesses. If a proposed rule is expected to have a significant economic 

impact, the agency is required to notify the Small Business Administration’s Office of Advocacy and provide it with an opportunity to 

comment on the rule. In addition, EPA, the Occupational Safety 

and Health Administration, and the Consumer Financial Protection 

Bureau are required to convene panels of experts to evaluate any 

proposed regulation that may have a significant economic impact. 

Those panels consist of Federal employees from the rulemaking 

agency, the Office of Management and Budget, and SBA who work 

to ensure that small business viewpoints are considered prior to 

the issuance of a final rule. Moreover, under current law, agencies 

are required to periodically review the economic impact of existing 

rules that may have an impact on small businesses. 

PAY-AS-YOU-GO CONSIDERATIONS

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct 

spending or revenues. Enacting H.R. 527 could affect direct spending by agencies not funded through annual appropriations; therefore, pay-as-you-go procedures apply. CBO estimates, however, that 

any net increase in spending by those agencies would not be significant. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

H.R. 527 contains no intergovernmental or private-sector mandates as defined in UMRA and would not affect the budgets of 

State, local, or tribal governments. 

PREVIOUS CBO ESTIMATE

On August 24, 2011, CBO transmitted a cost estimate for H.R. 

527 as ordered reported by the House Committee on Small Business on July 13, 2011. The pieces of legislation are similar, and the 

CBO cost estimates are the same. 

ESTIMATE PREPARED BY: 

Federal Spending: Matthew Pickford 

Impact on State, Local, and Tribal Governments: Melissa Merrell 


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55See 126 CONG. REC. S21458 (daily ed. Aug. 6, 1980) (section-by-section analysis of S. 299, 

the Regulatory Flexibility Act of 1980: ‘‘Agencies should not give a narrow reading to what constitutes a ‘significant economic impact’ for purposes of this section or other sections in which 

the term is used.’’). 56See 40 C.F.R. § 1508.8. 

Impact on the Private Sector: Paige Piper/Bach 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Assistant Director for Budget Analysis 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 527 will update 

the RFA and SBREFA to close loopholes and reduce the disproportionate burden that over-regulation places on small businesses 

thereby enhancing job creation and hastening America’s economic 

recovery. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 527 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section-by-Section Analysis 

Section 1. Short title; table of contents. 

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

Section 2. Clarification and Expansion of Rules Covered by the Regulatory Flexibility Act. 

Section 2(a) expands the RFA and SBREFA to apply to all rules 

within the meaning of 5 U.S.C. § 551(4), except for certain rules of 

particular applicability. The RFA currently defines a ‘‘rule’’ as one 

that is issued pursuant to the notice and comment rulemaking provisions of Section 553(b) of the APA. The Committee believes this 

definition is unjustifiably narrow; the definition of a ‘‘rule’’ under 

the RFA should be the same as under the APA. 

Section 2(b) clarifies the term ‘‘economic impact.’’ The RFA requires agencies to prepare a regulatory flexibility analysis if the 

agency determines that the rule will have a ‘‘significant economic 

impact on a substantial number of small entities.’’ But this term 

is not defined in current law, and courts have held that agencies 

do not need to consider indirect economic impacts on small entities. 

The Committee doubts that Congress originally intended the regulatory flexibility analysis to be so limited.55 Indirect effects are no 

less burdensome on small entities than direct effects. Moreover, 

agencies already measure their regulations’ indirect effects under 

the National Environmental Policy Act,56 upon which the RFA is 

modeled, and when performing the cost-benefit analysis required 

by Executive Order 12,866. Section 2(b) thus clarifies that the term 


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57 U.S. General Accounting Office, Congressional Review Act: Application to the Tongass National Forest Land and Resource Plan, T–OGC–97–54 (1997), at 2. 

‘‘economic impact’’ covers both direct and indirect effects that are 

reasonably foreseeable. 

Section 2(c) clarifies that an agency must perform a regulatory 

flexibility analysis when a proposed rule’s effects are significant 

but beneficial. Agencies interpret the current law to require a regulatory flexibility analysis only when a proposed rule has significant 

costs to small entities. Requiring a regulatory flexibility analysis 

when a proposed rule has significant benefits will encourage agencies to pick the most beneficial alternative. 

Section 2(d) adds tribal organizations to the list of ‘‘small entities’’ within the RFA’s purview. The same considerations that necessitate requiring agencies to perform regulatory flexibility analyses when small governmental bodies are concerned apply with 

equal force to tribal organizations. 

Section 2(e) clarifies that the RFA applies to land management 

plans developed by the U.S. Forest Service and the Bureau of Land 

Management. This clarification reflects the GAO’s view of current 

law,57 although the Forest Service and the BLM disagree. Because 

these agencies already collect economic data for NEPA reports, this 

clarification will not be burdensome. 

Section 2(f)(1) clarifies that the IRS must comply fully with the 

RFA. The IRS has previously concluded that it is not required to 

follow the RFA when issuing an ‘‘interpretative’’ rule outside of the 

notice-and-comment process. Adopted in 1996, SBREFA required 

the IRS to comply with the RFA when an interpretative rule imposes a collection-of-information requirement on a small entity. The 

IRS misinterprets this statute to apply only when the taxpayer is 

required to complete a brand new, never-used form. Section 2(f)(1) 

makes clear that the IRS is required to comply with the RFA 

whenever the IRS intends to codify a regulation in the Code of Federal Regulations and the regulation (or statute that the regulation 

is interpreting) imposes a collection-of-information requirement. 

Moreover, the ensuing regulatory flexibility analysis should not be 

limited to the cost associated with the ‘‘collection of information;’’ 

rather, the ‘‘collection of information’’ is a trigger for a full analysis 

of the rule’s economic effects. Section 2(f)(2)-(3) establishes that the 

terms ‘‘collection of information’’ and ‘‘recordkeeping requirement’’ 

have the same meaning under the RFA as under the Paperwork 

Reduction Act. 

Section 2(g) adopts the definition of ‘‘small organization’’ under 

the RFA that the Equal Access to Justice Act uses, focusing on the 

resources available to the organization, i.e., its net worth and number of employees. The current definition of ‘‘small organization’’ is 

unwieldy. Like the RFA, one purpose of the EAJA is to protect 

small entities from overzealous regulatory enforcement. Thus, both 

statutes should define ‘‘small organization’’ in the same way. Section 2(g) extends the RFA’s protections to local labor organizations 

as well. 

Section 3. Requirements for Providing More Detailed Analyses. 

The NEPA, which was the model when Congress adopted the 

RFA in 1980, requires agencies to develop a ‘‘detailed statement’’ 


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58See, e.g., Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989) (citing 

Kleppe v. Sierra Club, 427 U.S. 390, 410 n.21 (1976)). 

regarding the environmental impact of a proposed rule. Courts 

have interpreted the NEPA to require agencies to take a ‘‘hard 

look’’ at environmental impacts.58 The RFA, however, only requires 

agencies to develop a ‘‘statement’’ regarding the impact of a new 

regulation on small entities. 

After finding that agencies were not fulfilling their responsibilities under the RFA, Congress amended it in 1996 to allow for judicial review, to create the same compliance incentives that exist 

under the NEPA. Unfortunately, courts reviewing agency compliance with SBREFA and RFA have not applied the same level of 

searching scrutiny as they have given to compliance with the 

NEPA. Consequently, agencies are performing the bare minimum 

of analysis to satisfy judicial review, without focusing on the most 

important issue: how to minimize the negative economic impact of 

regulations on small entities. 

Section 3 is intended to increase agency scrutiny directly, by 

amending the statute, rather than indirectly, as was attempted in 

SBREFA by adding a judicial review component. Thus, Section 3(a) 

amends Section 603 by requiring the initial regulatory flexibility 

analysis (‘‘IFRA’’) to contain a ‘‘detailed statement’’ rather than 

merely a ‘‘statement;’’ by striking the term ‘‘succinct’’ from Section 

603(b)(2); by striking the term ‘‘where feasible’’ from Section 

603(b)(3); and, by striking the phrase ‘‘to the extent practicable’’ 

from Section 603(b)(5). Agencies exploit these terms to avoid following the law’s clear purpose. Section 3(a) also adds a new paragraph (6) to Section 603(b), requiring agencies to consider the cumulative economic impact of the proposed rule in light of existing 

rules. Finally, recognizing that a rule could affect some small entities more than others, Section 3(a)(7) requires agencies to describe 

any disproportionate economic impact on a specific class of small 

entities. 

Regarding the final regulatory flexibility analysis (‘‘FRFA’’), Section 3(b)(1) amends Section 604 to require the ‘‘description’’ and 

‘‘explanation’’ required by Section 604(b)(4), (5) and (6) to be ‘‘detailed.’’ This new requirement comports with the ‘‘detailed statement’’ required of agencies by NEPA. The bill also requires agencies to describe in the FRFA any disproportionate economic impact 

on a class of small entities. Section 3(b)(2) closes an oversight in 

the RFA to require an agency, when preparing an FRFA, to summarize all comments received throughout the process, not just comments received in response to an IFRA. Section 3(b)(3) updates the 

RFA technologically by requiring agencies to post FRFAs online. 

Section 3(c) allows agencies to satisfy the RFA by making reference to already-completed analyses (for example, under NEPA) 

that satisfy the RFA’s criteria. If the necessary analysis already 

has been completed, then there is no reason to force an agency to 

go through the rote exercise of performing it again. Nevertheless, 

agencies must cite to the pre-existing analysis with specificity; 

vague or casual references will not suffice. Thus, Section 3(c) requires the agency to identify the ‘‘specific portion of another agenda 

or analysis.’’ In the same vein, when an agency certifies that a proposed rule will not have a ‘‘significant economic impact on a subVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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59See ‘‘Consolidated Appropriations Act, 2001,’’ 106 P.L. 554, § 515 (Dec. 21, 2000). 60See Exec. Order 11,991, 42 Fed. Reg. 26,967 (May 24, 1977). 61See 5 U.S.C. § 609(b) (Advocacy review panels: ‘‘Prior to publication of an initial regulatory 

flexibility analysis which a covered agency is required to conduct. . . .’’); 5 U.S.C. § 603(a) 

(IRFAs: ‘‘Whenever an agency is required by [5 U.S.C. § 553], or any other law, to publish general notice of proposed rulemaking for any proposed rule. . . .’’); 5 U.S.C. § 604(a) (FRFAs: 

‘‘When an agency promulgates a final rule under [5 U.S.C. § 553], after being required by that 

section or any other law to publish a general notice of proposed rulemaking. . . .’’). 

stantial number of small entities,’’ Section 3(d) requires the agency 

to give a ‘‘detailed statement’’ and to identify the supporting ‘‘factual and legal’’ basis for the certification. 

Finally, Section 3(e) makes quantifiable data (of the caliber required under the Information Quality Act 59) the standard for 

measuring the economic impact of a proposed rule on small entities. This will make agencies’ IRFAs and FRFAs more transparent, 

including for courts at the judicial review stage. If quantifiable 

data is unavailable then the agency must provide a ‘‘detailed statement explaining why quantification is not practicable or reliable’’ 

as well as ‘‘a more general descriptive statement’’ of the rule’s effects. The Chief Counsel for Advocacy will have the authority to 

promulgate regulations fleshing out these data quality standards. 

Section 4. Repeal of Waiver Authority and Additional Powers of 

Chief Counsel. 

Section 4 empowers the Chief Counsel for Advocacy to make 

rules governing agency compliance with the RFA. The status quo 

of agency compliance with the RFA is best described as inconsistent and recalcitrant. To address this problem, the Chief Counsel 

will promulgate rules regarding agency compliance within 270 days 

of enactment. This parallels the authority of the Council on Environmental Quality to issue regulations governing agency compliance with the NEPA.60 The Chief Counsel’s regulations will be promulgated according to notice-and-comment rulemaking and consequently will receive Chevron deference. Agencies can issue supplementary compliance protocols, but no agency can overturn the 

Chief Counsel’s compliance rules. 

Section 4 clarifies that the Chief Counsel may intervene in agency adjudications, like an amicus curiae, to advise the agency of how 

its decision will affect small entities. The Chief Counsel is not authorized to appeal any decision or otherwise to act as counsel for 

the small entity concerned. Section 4 also allows the Chief Counsel 

to file comments on any notice of proposed rulemaking, which will 

strengthen the Chief Counsel’s role as the main advocate for small 

entities in all Federal agency decision-making (not just when the 

RFA is concerned). 

Section 4 repeals agencies’ authority to waive IRFAs and delay 

FRFAs by 180 days in emergency situations. The waiver provision 

of Section 608 of the RFA is redundant with Section 553 of the 

APA. The entire RFA process for determining the impact of a rule 

on small entities—advocacy review panels, IRFAs and FRFAs—is 

triggered by notice and comment rulemaking.61 The RFA’s current 

waiver provision is unnecessary in light of 5 U.S.C. § 553(b)(B), 

which allows an agency to bypass notice and comment rulemaking 

‘‘for good cause,’’ which would apply in an emergency. 


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Section 5. Procedures for Gathering Comments. 

Section 5 clarifies, improves and expands the advocacy review 

panel process. Currently, as amended by SBREFA, Section 609 requires OSHA and the EPA to hold advocacy review panels before 

publishing an IRFA, to receive input directly from small entities. 

The new Consumer Financial Protection Bureau also is required to 

conduct advocacy review panels. 

Building on these reforms, Section 5 expands the use of advocacy 

review panels to all Federal agencies, including independent regulatory agencies, for any major rule (as defined by the Congressional 

Review Act) or for any rule that will have a significant economic 

impact on a substantial number of small entities. Section 5 clarifies 

the type of information the agency must provide to the Office of Advocacy (with an appropriate accommodation made for IRS rules) 

and describes the content and focus of the report itself, which is to 

be drafted by the Chief Counsel for Advocacy in consultation with 

other panel members. Rather than simply listing concerns raised 

by small entities in the panel process, the report should discuss in 

detail the regulation’s economic impact and analyze alternatives 

that will minimize costs or maximize benefits. Section 5 slightly reforms the panel’s composition and clarifies that the Office of Advocacy is solely responsible for selecting small entity representatives 

to advise the panel. Finally, Section 5 empowers the Chief Counsel 

for Advocacy to waive the panel process when it is ‘‘impractical, unnecessary, or contrary to the public interest.’’ 

Section 6. Periodic Review of Rules. 

Section 6 of H.R. 527 reforms Section 610 to clarify how agencies 

must perform the periodic regulatory review. The law as currently 

written contains a number of ambiguities and shortcomings that 

warrant clarification and revision. Section 6 requires agencies to 

develop new periodic review plans within 180 days and to publish 

these plans online. Section 6 clarifies that the agency must review 

all rules that have a significant economic impact on a substantial 

number of small entities—regardless of whether the agency originally prepared an FRFA for the rule. The trigger is whether the 

rule currently has a significant economic impact on a substantial 

number of small entities. 

Pursuant to this periodic review, the agency should amend the 

rule as necessary to maximize its benefits or minimize its costs to 

small entities, considering the factors given in the new Section 

610(d). Finally, the agency must report the results of the review 

and publish in the Federal Register a list of rules to be reviewed 

and request comments. 

Section 7. Judicial Review of Compliance with the RFA. 

Under Section 7, judicial review is available when the agency 

publishes the final rule; the current law requires small entities to 

wait until the ‘‘final agency action’’ is complete before bringing suit 

alleging a violation of the RFA. Taken together, Sections 7(a) and 

(b) ensure that small entities will have prompt access to judicial review without procedural delays from agency-imposed exhaustion 

requirements. Section 7(c) makes appropriate conforming and technical corrections to Section 611. Lastly, Section 7(d) clarifies the 


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Chief Counsel for Advocacy’s authority to file an amicus brief regarding agency compliance with the RFA. 

Section 8. Jurisdiction of Court of Appeals for Challenges to Rules 

Implementing RFA. 

Section 8(a) grants jurisdiction to the U.S. Courts of Appeals to 

review challenges by small entities to rules promulgated by the 

Chief Counsel for Advocacy to implement the RFA. Section 8(b) 

makes technical conforming amendments. Section 8(c) clarifies the 

Chief Counsel’s authority to file an amicus brief in a lawsuit challenging an agency’s compliance with the Chief Counsel’s rules implementing the RFA. 

Section 9. Clerical Amendments. 

Section 9 contains necessary clerical amendments to make the 

U.S. Code consistent with the foregoing changes. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

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

TITLE 5, UNITED STATES CODE 

* * * * * * * 

PART I—THE AGENCIES GENERALLY 

* * * * * * * 

CHAPTER 6—THE ANALYSIS OF REGULATORY FUNCTIONS 

Sec. 

601. Definitions. 

* * * * * * * 

ø605. Avoidance of duplicative or unnecessary analyses.¿ 

605. Incorporations by reference and certifications. 

* * * * * * * 

ø607. Preparation of analyses. 

ø608. Procedure for waiver or delay of completion.¿ 

607. Quantification requirements. 

608. Additional powers of Chief Counsel for Advocacy. 

§ 601. Definitions 

For purposes of this chapter— 

ø(1) the term¿ 

(1) AGENCY.—The term ‘‘agency’’ means an agency as defined in section 551(1) of this title ø;¿. 

ø(2) the term ‘‘rule’’ means any rule for which the agency 

publishes a general notice of proposed rulemaking pursuant to 

section 553(b) of this title, or any other law, including any rule 

of general applicability governing Federal grants to State and 

local governments for which the agency provides an opporVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00029 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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tunity for notice and public comment, except that the term 

‘‘rule’’ does not include a rule of particular applicability relating to rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services, or allowances therefor or to valuations, costs or accounting, or practices relating to such rates, wages, structures, prices, appliances, services, or allowances;¿ 

(2) RULE.—The term ‘‘rule’’ has the meaning given such 

term in section 551(4) of this title, except that such term does 

not include a rule of particular (and not general) applicability 

relating to rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services, or 

allowances therefor or to valuations, costs or accounting, or 

practices relating to such rates, wages, structures, prices, appliances, services, or allowances. 

ø(3) the term¿ 

(3) SMALL BUSINESS.—The term ‘‘small business’’ has the 

same meaning as the term ‘‘small business concern’’ under section 3 of the Small Business Act, unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register ø;¿. ø(4) the term ‘‘small organization’’ means any not-for-profit 

enterprise which is independently owned and operated and is 

not dominant in its field, unless an agency establishes, after 

opportunity for public comment, one or more definitions of such 

term which are appropriate to the activities of the agency and 

publishes such definition(s) in the Federal Register;¿ 

(4) SMALL ORGANIZATION.— (A) IN GENERAL.—The term ‘‘small organization’’ 

means any not-for-profit enterprise which, as of the 

issuance of the notice of proposed rulemaking— 

(i) in the case of an enterprise which is described 

by a classification code of the North American Industrial Classification System, does not exceed the size 

standard established by the Administrator of the Small 

Business Administration pursuant to section 3 of the 

Small Business Act (15 U.S.C. 632) for small business 

concerns described by such classification code; and 

(ii) in the case of any other enterprise, has a net worth that does not exceed $7,000,000 and has not 

more than 500 employees. 

(B) LOCAL LABOR ORGANIZATIONS.—In the case of any 

local labor organization, subparagraph (A) shall be applied 

without regard to any national or international organization of which such local labor organization is a part. 

(C) AGENCY DEFINITIONS.—Subparagraphs (A) and (B) 

shall not apply to the extent that an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions for such term which are 

appropriate to the activities of the agency and publishes 

such definitions in the Federal Register. 


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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. 450b(l))), with a population of less than fifty thousand, 

unless an agency establishes, after opportunity for public comment, one or more definitions of such term which are appropriate to the activities of the agency and which are based on 

such factors as location in rural or sparsely populated areas or 

limited revenues due to the population of such jurisdiction, and 

publishes such definition(s) in the Federal 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 section ø; and¿. 

ø(7) the term ‘‘collection of information’’— 

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

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

of form or format, calling for either— 

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 

ø(B) shall not include a collection of information described under section 3518(c)(1) of title 44, United States 

Code. 

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

agency on persons to maintain specified records.¿ 

(7) COLLECTION OF INFORMATION.—The term ‘‘collection of 

information’’ has the meaning given such term in section 

3502(3) of title 44. 

(8) RECORDKEEPING REQUIREMENT.—The term ‘‘recordkeeping requirement’’ has the meaning given such term in section 3502(13) of title 44. 

(9) ECONOMIC IMPACT.—The term ‘‘economic impact’’ 

means, with respect to a proposed or final rule— 

(A) any direct economic effect on small entities of such 

rule; and 

(B) any indirect economic effect on small entities which 

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

(10) LAND MANAGEMENT PLAN.— 

(A) IN GENERAL.—The term ‘‘land management plan’’ 

means— 


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(i) any plan developed by the Secretary of Agriculture under section 6 of the Forest and Rangeland 

Renewable Resources Planning Act of 1974 (16 U.S.C. 

1604); and 

(ii) any plan developed by the Secretary of Interior 

under section 202 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1712). 

(B) REVISION.—The term ‘‘revision’’ means any change 

to a land management plan which— 

(i) in the case of a plan described in subparagraph 

(A)(i), is made under section 6(f)(5) of the Forest and 

Rangeland Renewable Resources Planning Act of 1974 

(16 U.S.C. 1604(f)(5)); or 

(ii) in the case of a plan described in subparagraph (A)(ii), is made under section 1610.5–6 of title 

43, Code of Federal Regulations (or any successor regulation). 

(C) AMENDMENT.—The term ‘‘amendment’’ means any 

change to a land management plan which— 

(i) in the case of a plan described in subparagraph 

(A)(i), is made under section 6(f)(4) of the Forest and 

Rangeland Renewable Resources Planning Act of 1974 

(16 U.S.C. 1604(f)(4)) and with respect to which the 

Secretary of Agriculture prepares a statement described 

in section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)); or 

(ii) in the case of a plan described in subparagraph (A)(ii), is made under section 1610.5–5 of title 

43, Code of Federal Regulations (or any successor regulation) and with respect to which the Secretary of the 

Interior prepares a statement described in section 

102(2)(C) of the National Environmental Policy Act of 

1969 (42 U.S.C. 4332(2)(C)). 

* * * * * * * 

§ 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, øor¿ publishes a notice of proposed rulemaking for an interpretative rule involving the internal revenue 

laws of the United States, or publishes a revision or amendment to 

a land management plan, the agency shall prepare and make available for public comment an initial regulatory flexibility analysis. 

Such analysis shall describe the impact of the proposed rule on 

small entities. The initial regulatory flexibility analysis or a summary shall be published in the Federal Register at the time of the 

publication of general notice of proposed rulemaking for the rule. 

The agency shall transmit a copy of the initial regulatory flexibility 

analysis to the Chief Counsel for Advocacy of the Small Business 

Administration. In the case of an interpretative rule involving the 

internal revenue laws of the United States, this chapter applies to 

interpretative rules published in the Federal Register for codification in the Code of Federal Regulations, but only to the extent that 

such interpretative rules impose on small entities a collection of information requirementø.¿ or a recordkeeping requirement, and 


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without regard to whether such requirement is imposed by statute 

or regulation. 

ø(b) Each initial regulatory flexibility analysis required under 

this section shall contain— 

ø(1) a description of the reasons why action by the agency 

is being considered; 

ø(2) a succinct statement of the objectives of, and legal 

basis for, the proposed rule; 

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

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

ø(4) a description of the projected reporting, recordkeeping 

and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will 

be subject to the requirement and the type of professional 

skills necessary for preparation of the report or record; 

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

with the proposed rule.¿ 

(b) Each initial regulatory flexibility analysis required under 

this section shall contain a detailed statement— 

(1) describing the reasons why action by the agency is being 

considered; 

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

(3) estimating the number and type of small entities to 

which the proposed rule will apply; 

(4) describing the projected reporting, recordkeeping, and 

other compliance requirements of the proposed rule, including 

an estimate of the classes of small entities which will be subject 

to the requirement and the type of professional skills necessary 

for preparation of the report and record; 

(5) describing all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule, or the reasons 

why such a description could not be provided; 

(6) estimating the additional cumulative economic impact 

of the proposed rule on small entities beyond that already imposed on the class of small entities by the agency or why such 

an estimate is not available; and 

(7) describing any disproportionate economic impact on 

small entities or a specific class of small entities. 

(c) 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— 

(1) * * * 

* * * * * * * 


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

each initial regulatory flexibility analysis shall include a description of— 

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

entities; 

ø(B) any significant alternatives to the proposed rule 

which accomplish the stated objectives of applicable statutes 

and which minimize any increase in the cost of credit for small 

entities; and 

ø(C) 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).¿ 

§ 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 

of the United States as described in section 603(a), or adopts a revision or amendment to a land management plan, the agency shall 

prepare a final regulatory flexibility analysis. Each final regulatory 

flexibility analysis shall contain— 

(1) * * * 

(2) a statement of the significant issues raised by the public comments in response to the initial regulatory flexibility 

analysis (or certification of the proposed rule under section 

605(b)), a statement of the assessment of the agency of such 

issues, and a statement of any changes made in the proposed 

rule as a result of such comments; 

* * * * * * * 

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

of small entities to which the rule will apply or 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 economic impact on small entities consistent 

with the stated objectives of applicable statutes, including a 

statement of the factual, policy, and legal reasons for selecting 

the alternative adopted in the final rule and why each one of 


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the other significant alternatives to the rule considered by the 

agency which affect the impact on small entities was rejected; 

and 

ø(6) for a covered agency, as defined in section 609(d)(2), 

a description of the steps the agency has taken to minimize 

any additional cost of credit for small entities.¿ 

(7) describing any disproportionate economic impact on 

small entities or a specific class of small entities. 

ø(b) The agency shall make copies of the final regulatory flexibility analysis available to members of the public and shall publish 

in the Federal Register such analysis or a summary thereof.¿ 

(b) The agency shall make copies of the final regulatory flexibility analysis available to the public, including placement of the 

entire analysis on the agency’s website, and shall publish in the 

Federal Register the final regulatory flexibility analysis, or a summary thereof which includes the telephone number, mailing address, 

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

ø§ 605SEC. 605. AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES¿ 

§ 605. INCORPORATIONS BY REFERENCE AND CERTIFICATIONS 

ø(a) Any Federal agency may perform the analyses required by 

sections 602, 603, and 604 of this title in conjunction with or as a 

part of any other agenda or analysis required by any other law if 

such other analysis satisfies the provisions of such sections.¿ 

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

analysis under section 602, 603, or 604, if such agency provides in 

such agenda or analysis a cross-reference to the specific portion of 

another agenda or analysis which is required by any other law and 

which satisfies such requirement. 

(b) Sections 603 and 604 of this title shall not apply to any proposed or final rule if the head of the agency certifies that the rule 

will not, if promulgated, have a significant economic impact on a 

substantial number of small entities. If the head of the agency 

makes a certification under the preceding sentence, the agency 

shall publish such certification in the Federal Register at the time 

of publication of general notice of proposed rulemaking for the rule 

or at the time of publication of the final rule, along with a detailed 

statement providing the factual and legal basis for such certification. The agency shall provide such certification and statement 

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

* * * * * * * 

ø§ 607. Preparation of analyses 

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. 


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ø§ 608. Procedure for waiver or delay of completion 

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, 

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.¿ 

§ 607. Quantification requirements 

In complying with sections 603 and 604, an agency shall provide— 

(1) a quantifiable or numerical description of the effects of 

the proposed or final rule and alternatives to the proposed or 

final rule; or 

(2) a more general descriptive statement and a detailed 

statement explaining why quantification is not practicable or 

reliable. 

§ 608. Additional powers of Chief Counsel for Advocacy 

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

of the Regulatory Flexibility Improvements Act of 2011, the Chief 

Counsel for Advocacy of the Small Business Administration shall, 

after opportunity for notice and comment under section 553, issue 

rules governing agency compliance with this chapter. The Chief 

Counsel may modify or amend such rules after notice and comment 

under section 553. This chapter (other than this subsection) shall 

not apply with respect to the issuance, modification, and amendment of rules under this paragraph. 

(2) An agency shall not issue rules which supplement the rules 

issued under subsection (a) unless such agency has first consulted 

with the Chief Counsel for Advocacy to ensure that such supplemental rules comply with this chapter and the rules issued under 

paragraph (1). 

(b) Notwithstanding any other law, the Chief Counsel for Advocacy of the Small Business Administration may intervene in any 

agency adjudication (unless such agency is authorized to impose a 

fine or penalty under such adjudication), and may inform the agency of the impact that any decision on the record may have on small 

entities. The Chief Counsel shall not initiate an appeal with respect 


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to any adjudication in which the Chief Counsel intervenes under 

this subsection. 

(c) The Chief Counsel for Advocacy may file comments in response to any agency notice requesting comment, regardless of 

whether the agency is required to file a general notice of proposed 

rulemaking under section 553. 

§ 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 

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 


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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 such rule shall notify the Chief 

Counsel for Advocacy of the Small Business Administration and 

provide the Chief Counsel with— 

(A) all materials prepared or utilized by the agency in making the proposed rule, including the draft of the proposed rule; 

and 

(B) information on the potential adverse and beneficial economic impacts of the proposed rule on small entities and the 

type of small entities that might be affected. 

(2) An agency shall not be required under paragraph (1) to provide the exact language of any draft if the rule— 

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

States; or 

(B) is proposed by an independent regulatory agency (as defined in section 3502(5) of title 44). 

(c) Not later than 15 days after the receipt of such materials 

and information under subsection (b), the Chief Counsel for Advocacy of the Small Business Administration shall— 

(1) identify small entities or representatives of small entities 

or a combination of both for the purpose of obtaining advice, 

input, and recommendations from those persons about the potential economic impacts of the proposed rule and the compliance of the agency with section 603; and 

(2) convene a review panel consisting of an employee from 

the Office of Advocacy of the Small Business Administration, 

an employee from the agency making the rule, and in the case 

of an agency other than an independent regulatory agency (as 

defined in section 3502(5) of title 44), an employee from the Office of Information and Regulatory Affairs of the Office of Management and Budget to review the materials and information 

provided to the Chief Counsel under subsection (b). 

(d)(1) Not later than 60 days after the review panel described 

in subsection (c)(2) is convened, the Chief Counsel for Advocacy of 


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the Small Business Administration shall, after consultation with 

the members of such panel, submit a report to the agency and, in 

the case of an agency other than an independent regulatory agency 

(as defined in section 3502(5), United States Code), the Office of Information and Regulatory Affairs of the Office of Management and 

Budget. 

(2) Such report shall include an assessment of the economic impact of the proposed rule on small entities and a discussion of any 

alternatives that will minimize adverse significant economic impacts or maximize beneficial significant economic impacts on small 

entities. 

(3) Such report shall become part of the rulemaking record. In 

the publication of the proposed rule, the agency shall explain what 

actions, if any, the agency took in response to such report. 

(e) A proposed rule is described by this subsection if the Administrator of the Office of Information and Regulatory Affairs of the 

Office of Management and Budget, the head of the agency (or the 

delegatee of the head of the agency), or an independent regulatory 

agency determines that the proposed rule is likely to result in— (1) an annual effect on the economy of $100,000,000 or 

more; 

(2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local governments, tribal 

organizations, or geographic regions; 

(3) significant adverse effects on competition, employment, 

investment, productivity, innovation, or on the ability of United 

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

(4) a significant economic impact on a substantial number 

of small entities. 

(f) Upon application by the agency, the Chief Counsel for Advocacy of the Small Business Administration may waive the requirements of subsections (b) through (e) if the Chief Counsel determines 

that compliance with the requirements of such subsections are impracticable, unnecessary, or contrary to the public interest. 

* * * * * * * 

ø§ 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, 


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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. 

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.¿ 

§ 610. Periodic review of rules 

(a) Not later than 180 days after the enactment of the Regulatory Flexibility Improvements Act of 2011, each agency shall publish in the Federal Register and place on its website a plan for the 

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

agency determines have a significant economic impact on a substantial number of small entities. Such determination shall be made 

without regard to whether the agency performed an analysis under 

section 604. The purpose of the review shall be to determine whether 

such rules should be continued without change, or should be 

amended or rescinded, consistent with the stated objectives of applicable statutes, to minimize any adverse significant economic impacts or maximize any beneficial significant economic impacts on a 

substantial number of small entities. Such plan may be amended by 

the agency at any time by publishing the revision in the Federal 

Register and subsequently placing the amended plan on the agency’s 

website. 

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

rules existing on the date of the enactment of the Regulatory Flexibility Improvements Act of 2011 within 10 years of the date of publication of the plan in the Federal Register and for review of rules 

adopted after the date of enactment of the Regulatory Flexibility Improvements Act of 2011 within 10 years after the publication of the 

final rule in the Federal Register. If the head of the agency determines that completion of the review of existing rules is not feasible 

by the established date, the head of the agency shall so certify in 

a statement published in the Federal Register and may extend the 

review for not longer than 2 years after publication of notice of extension in the Federal Register. Such certification and notice shall 


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be sent to the Chief Counsel for Advocacy of the Small Business Administration and the Congress. 

(c) Each agency shall annually submit a report regarding the 

results of its review pursuant to such plan to the Congress, the Chief 

Counsel for Advocacy of the Small Business Administration, and, in 

the case of agencies other than independent regulatory agencies (as 

defined in section 3502(5) of title 44) to the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget. Such report shall include the identification of 

any rule with respect to which the head of the agency made a determination described in paragraph (5) or (6) of subsection (d) and a 

detailed explanation of the reasons for such determination. 

(d) In reviewing a rule pursuant to subsections (a) through (c), 

the agency shall amend or rescind the rule to minimize any adverse 

significant economic impact on a substantial number of small entities or disproportionate economic impact on a specific class of small 

entities, or maximize any beneficial significant economic impact of 

the rule on a substantial number of small entities to the greatest extent possible, consistent with the stated objectives of applicable statutes. In amending or rescinding the rule, the agency shall consider 

the following factors: 

(1) The continued need for the rule. 

(2) The nature of complaints received by the agency from 

small entities concerning the rule. 

(3) Comments by the Regulatory Enforcement Ombudsman 

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

(4) The complexity of the rule. 

(5) The extent to which the rule overlaps, duplicates, or conflicts with other Federal rules and, unless the head of the agency determines it to be infeasible, State, territorial, and local 

rules. 

(6) The contribution of the rule to the cumulative economic 

impact of all Federal rules on the class of small entities affected 

by the rule, unless the head of the agency determines that such 

calculations cannot be made and reports that determination in 

the annual report required under subsection (c). 

(7) The length of time since the rule has been evaluated or 

the degree to which technology, economic conditions, or other 

factors have changed in the area affected by the rule. 

(e) The agency shall publish in the Federal Register and on its 

website a list of rules to be reviewed pursuant to such plan. Such 

publication shall include a brief description of the rule, the reason 

why the agency determined that it has a significant economic impact on a substantial number of small entities (without regard to 

whether it had prepared a final regulatory flexibility analysis for 

the rule), and request comments from the public, the Chief Counsel 

for Advocacy of the Small Business Administration, and the Regulatory Enforcement Ombudsman concerning the enforcement of the 

rule. 

§ 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 reVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00041 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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quirements 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 

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— 

ø(i) one year after the date the analysis is made available 

to the public, or 

ø(ii) where a provision of law requires that an action challenging a final agency regulation be commenced before the expiration of the 1-year period, the number of days specified in 

such provision of law that is after the date the analysis is 

made available to the public.¿ 

* * * * * * * 

§ 612. Reports and intervention rights 

(a) * * * 

(b) The Chief Counsel for Advocacy of the Small Business Administration is authorized to appear as amicus curiae in any action 

brought in a court of the United States to review a rule or agency 

compliance with section 601, 603, 604, 605(b), 609, or 610. In any 

such action, the Chief Counsel is authorized to present his or her 

views with respect to compliance with this chapter, chapter 5, and 

chapter 7, the adequacy of the rulemaking record with respect to 

small entities and the effect of the rule on small entities. 

* * * * * * * 

TITLE 28, UNITED STATES CODE 

* * * * * * * 


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1Pub. L. No. 96–354, 94 Stat. 1164 (codified at 5 U.S.C. §§ 601–612). The RFA requires Federal agencies to assess the impact of proposed rules on ‘‘small entities,’’ which it defines as either a small business, small organization, or small governmental jurisdiction.The RFA requires 

agencies to prepare a regulatory flexibility analysis at the time certain proposed and final rules 

are promulgated. The analysis must: (1) describe the reasons why action by the agency is necessary; (2) include a succinct statement of the regulation’s objectives and legal basis; (3) describe 

which small entities are affected by the rule as well as provide an estimate of the number of 

such entities so affected; (4) describe anticipated reporting, recordkeeping, and other compliance 

requirements, (5) identify any relevant Federal regulations that may duplicate, overlap, or conflict with the rule, and (6) identify any significant alternatives to the rule. This analysis is not 

Continued 

PART VI—PARTICULAR PROCEEDINGS 

* * * * * * * 

CHAPTER 158—ORDERS OF FEDERAL AGENCIES; 

REVIEW 

§ 2341. Definitions 

As used in this chapter— 

(1) * * * 

* * * * * * * 

(3) ‘‘agency’’ means— 

(A) * * * 

* * * * * * * 

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

of the Fair Housing Act; øand¿ 

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

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

title 5. 

§ 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. 

* * * * * * * 

Dissenting Views 

I. INTRODUCTION

H.R. 527, the ‘‘Regulatory Flexibility Improvements Act of 2011,’’ 

amends the Regulatory Flexibility Act 1 (RFA) in ways that will sigVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00043 Fmt 6659 Sfmt 5602 E:\HR\OC\HR289P1.XXX HR289P1

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required, however, if the agency certifies that the rule will not have a ‘‘significant economic impact on a substantial number of small entities.’’ 

In 1996, the RFA was amended by Small Business Regulatory Enforcement Fairness Act of 

1996 (SBREFA), Pub. L. No. 104–121, § 242, 110 Stat. 847, 857 (1996), to permit judicial review 

under certain circumstances of, among other matters, an agency’s regulatory flexibility analysis 

for a final rule and any certification by an agency averring that a rule will not have a significant 

economic impact on a substantial number of small entities. 2Small Business Administration, How Important Are Small Businesses to the U.S. Economy? 

available at http://www.sba.gov/advocacy/7495/8420. 3 Id. 

4 In all, there are 29.6 million businesses in the United States, of which 99.9% are ‘‘small’’ 

businesses. See U.S. Small Business Administration, How Many Small Businesses Are There?, 

available at http://www.sba.gov/content/how-many-small-businesses-are-there. It should also be 

noted that not all small businesses are ‘‘mom and pop’’ operations. According to the SBA, a 

‘‘small business’’ can be a firm with up to 500 employees, although the definition varies by industry. SBA looks to two different factors for determining what is a ‘‘small business’’ based on 

the North American Industry Classification System (NAICS) codes, which vary by industry. For 

some industries, the number of employees over the past 12 months (e.g., ‘‘petrochemical manufacturers’’ can have 1,000 employees and still be small businesses) is determinative, and for 

other industries, SBA looks to revenue over the past 3 years (e.g., ‘‘packing and crating’’ services 

can have $25.5 million in revenue and still be small businesses). The full table is available at: 

http://www.sba.gov/sites/default/files/sizelstandardslmethodology.pdf. 5Workplace safety rules may impact tens of millions of Americans who work for small businesses. As of 2008, there were 5.93 million small firms employing 120,903,551 workers, including 5,294,970 firms of 20 or fewer employees, employing 21,461,733 workers and 5,684,120 firms 

of 50 or fewer employees, employing 33,453,284 workers, according to the SBA. See U.S. Census 

Bureau, Statistics of U.S. Businesses, U.S. NAICS Sectors, small employment sizes, 2008, available at http://www.census.gov/econ/susb/. 6The Role of Social Security Administrative Law Judges: Hearing Before the Subcomm. on 

Courts, Commercial and Administrative Law of the H. Comm. on the Judiciary and Subcomm. 

on Social Security of the H. Comm. on Ways and Means, 112th Cong. (2011); Formal Rulemaking and Judicial Review: Protecting Jobs and the Economy with Greater Regulatory Transparency and Accountability: Hearing Before the Subcomm. on Courts, Commercial and Administrative Law of the H. Comm. on the Judiciary, 112th Cong. (2011); Cost-Justifying Regulations: 

nificantly hinder the promulgation of critical public health and 

safety rules by Federal administrative agencies—even in emergency situations—while failing to help small businesses and other 

small entities reduce compliance costs or to ensure agency compliance with the RFA. Specifically, we oppose H.R. 527 because: (1) 

it is based on a faulty study; (2) taken as a whole, it will severely 

undermine Federal agency rulemaking, thereby threatening public 

health and safety; (3) it fails to address shortcomings in current 

law; (4) it offers no real assistance to small businesses in complying 

with regulations; and (5) it imposes additional duties on agencies 

while failing to provide any additional resources to agencies. 

Without question, small businesses play a major role in our Nation’s economy and in our society. They employ more than half of 

all private sector workers 2 and are among the principal drivers of 

innovation and economic growth, producing 13 times more patents 

than larger firms.3 Indeed, according to the Small Business Administration (SBA), the vast majority of our Nation’s businesses are 

small businesses.4 Like their larger counterparts, however, small 

businesses can substantially impact the health and safety of their 

workers as well as that of the general public.5 Accordingly, attempts to undermine the ability of Federal agencies charged with 

protecting public health and safety through the rulemaking process 

should be strongly opposed. 

H.R. 527 must also be viewed as part of the Majority’s broader 

anti-regulatory agenda in the 112th Congress. To date, the Committee’s Subcommittee on Courts, Commercial and Administrative 

Law (CCAL) has already held eight hearings focusing on various 

ways to hobble Federal agency rulemaking and to increase the influence of business interests over the rulemaking process without 

actually improving the quality of proposed rules.6 While the proVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00044 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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Protecting Jobs and the Economy by Presidential and Judicial Review of Costs and Benefits: 

Hearing Before the Subcomm. on Courts, Commercial and Administrative Law of the H. Comm. 

on the Judiciary, 112th Cong. (2011); Raising the Agencies’ Grades—Protecting the Economy, 

Assuring Regulatory Quality and Improving Assessments of Regulatory Need: Hearing Before 

the Subcomm. on Courts, Commercial and Administrative Law of the H. Comm. on the Judiciary, 112th Cong. (2011); The Regulations From the Executive in Need of Scrutiny Act of 2011: 

Hearing on H.R. 10 Before the Subcomm. on Courts, Commercial and Administrative Law of 

the H. Comm. on the Judiciary, 112th Cong. (2011); The APA at 65—Is Reform Needed to Create Jobs, Promote Economic Growth and Reduce Costs?: Hearing Before the Subcomm. on 

Courts, Commercial and Administrative Law of the H. Comm. on the Judiciary, 112th Cong. 

(2011); The Regulatory Flexibility Improvements Act of 2011- Unleashing Small Businesses to 

Create Jobs: Hearing on H.R. 527 Before the Subcomm. on Courts, Commercial and Administrative Law of the H. Comm. on the Judiciary, 112th Cong. (2011) (hereinafter ‘‘H.R. 527 Legislative Hearing’’); The REINS Act—Promoting Jobs and Expanding Freedom by Reducing Needless 

Regulations Hearing Before the Subcomm. on Courts, Commercial and Administrative Law of 

the H. Comm. on the Judiciary, 112th Cong. (2011). 7The other members of the Coalition, as of July 2, 2011, were: Ability Production, Alliance 

for Justice, American Association of University Professors, American Rivers American Values 

Campaign, ATTIC, Inc., BlueGreen Alliance, Campaign for Contract Agriculture Reform 

(CCAR), Center for Food Safety, Center for Independent Living of South Florida, Inc., Citizens 

for Sludge-Free Land, Clean Air Watch, Consortium for Citizens with Disabilities, CounterCorp, 

Cumberland Countians for Peace & Justice, Demos, Edmonds Institute, Health Care for America Now, In the Public Interest, International Center for Technology Assessment, Jam On! Music 

Production & Recording, League of Conservation Voters, Los Angeles Alliance for a New Economy, National Center for Healthy Housing, National Consumers League, National Employment 

Law Project, National Lawyers Guild, Louisville Chapter, National Women’s Health Network, 

Network for Environmental & Economic Responsibility of United Church of Christ, New Jersey 

Work Environment Council, New York Committee for Occupational Safety and Health 

(NYCOSH), Oregon PeaceWorks, Protect All Children’s Environment, Reproductive Health Technologies Project, STOP Foodborne Illness (Formerly known as Safe Tables Our Priority), Southern Illinois Committee for Occupational Safety and Health, The Partnership for Working Families, Union Plus, Worksafe. 

ponents of H.R. 527 claim that the bill’s purpose is to ease the burden of regulatory compliance on small businesses and other small 

entities, an examination of the bill’s provisions makes clear that 

the bill is really intended to slow down, if not halt, most agency 

rulemaking. This explains why the Coalition for Sensible Safeguards strongly opposes the bill. The Coalition consists of nearly 60 

labor and consumer organizations, including the AFL-CIO, 

AFSCME, the American Lung Association, the Center for Science 

in the Public Interest, the Consumer Federation of America, the 

Consumers Union, the Economic Policy Institute, the Environmental Defense Fund, Free Press, Friends of the Earth, International Brotherhood of Teamsters, the UAW, the National Council 

for Occupational Safety and Health, the National Women’s Law 

Center, Natural Resources Defense Council, OMB Watch, People 

for the American Way, Public Citizen, the Service Employees International Union, the Union of Concerned Scientists, the United Food 

and Commercial Workers International Union, and U.S. PIRG.7

For these reasons, and those discussed below, we respectfully dissent and urge our colleagues to reject this seriously flawed legislation. 

II. DESCRIPTION OF H.R. 527

H.R. 527 expands the type of rules covered by the RFA to include 

those that have a reasonably foreseeable indirect effect on small 

entities. It also includes documents like land management plans 

and certain guidance documents under the definition of ‘‘rule.’’ Additionally, H.R. 527 would heighten the level of detail that agencies 

must provide in their initial and final regulatory analyses and adds 

additional analytical requirements. H.R. 527 also repeals agencies’ 

emergency authority to waive or delay an initial regulatory flexibility analysis or to delay a final regulatory flexibility analysis and 


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8 Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs on Small Firms, Rep. 

No. SBAHQ–08–M–0466 (Sept. 2010), available at http://archive.sba.gov/advo/research/ 

rs371tot.pdf. 9 H.R. 527 Legislative Hearing (prepared statements of Richard Gimmel, President, Atlas Machine & Supply, Inc., on behalf of the National Association of Manufacturers, pp. 4–5; Thomas 

Sullivan, former Chief Counsel for Advocacy, Small Business Administration, p. 3; and Karen 

R. Harned, Executive Director, Small Business Legal Center, National Federation of Independent Businesses, unnumbered p. 1). 10Sid Shapiro, Ruth Ruttenberg, & James Goodwin, Setting the Record Straight: The Crain 

and Crain Report on Regulatory Costs, Center for Progressive Reform White Paper #1103 (Feb. 

2011). 11 Id. 12 Id. 

grants additional power to the SBA’s Chief Counsel for Advocacy 

to promulgate rules governing agencies’ RFA compliance, intervene 

in agency adjudications, and file comments on proposed rules. H.R. 

527 expands the use of advocacy review panels to cover rules with 

a significant economic impact on a substantial number of small entities that are proposed by all agencies and would also apply to 

rules that would be considered ‘‘major rules.’’ H.R. 527 also amends 

the RFA’s requirement that agencies periodically review rules to 

also require that agencies review all rules that exist on H.R. 527’s 

enactment date and amend or rescind those rules, regardless of the 

review’s findings. H.R. 527 expands the availability of judicial review to include any agency action taken to comply with the RFA, 

and not just ‘‘final agency action,’’ as is the case under current law. 

Finally, H.R. 527 grants exclusive jurisdiction to the Federal courts 

of appeals to enjoin, set aside, suspend, or determine the validity 

of all final rules concerning RFA implementation that have been 

promulgated by the SBA’s Chief Counsel for Advocacy under the 

authority granted to it by H.R. 527. 

III. H.R. 527 IS BASED UPON A FAULTY STUDY

H.R. 527 is based on the faulty premise that regulation imposes 

overwhelmingly burdensome costs on small businesses that ultimately hamper economic growth and job creation. In particular, 

H.R. 527’s supporters rely almost exclusively on a study by economists Nicole and Mark Crain (Crain study)8 that concluded that 

Federal regulations impose a $1.75 trillion cost on all businesses 

and that a disproportionate share of these costs are borne by small 

businesses.9

The Crain study, however, has been roundly criticized for exaggerating the costs of Federal rulemaking on small businesses. For 

example, the Center for Progressive Reform (CPR) notes that the 

$1.75 trillion cumulative burden cited by the study fails to account 

for any benefits of regulation.10 CPR observes that the Office of 

Management and Budget (OMB) estimated in 2008 that major 

rules imposed $46 billion to $54 billion in costs, but also produced 

$122 billion to $656 billion in benefits.11 Moreover, the study’s 

methodology is flawed with respect to how it calculated economic 

costs. The study, which relied on international public opinion polling by the World Bank on how friendly a particular country was 

to business interests, ignored actual data on costs imposed by Federal regulation in the United States.12

The Congressional Research Service (CRS) also conducted an extensive examination of the Crain study and criticized much of its 


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13 Curtis W. Copeland, Analysis of an Estimate of the Total Costs of Federal Regulations, Congressional Research Service Report for Congress, R41763 (Apr. 6, 2011). 14 Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to the author of the CRS report). 15 Id. The Economic Policy Institute also issued a critique of the Crain study outlining additional concerns with the study’s methodology and data. See John Irons and Andrew Green, 

Flaws Call for Rejecting Crain and Crain Model: Cited $1.75 Trillion Cost of Regulations Is Not 

Worth Repeating, Economic Policy Institute, July 19, 2011, available at http://w3.epi-data.org/ 

temp2011/IssueBrief308.pdf. 16Occupational Safety and Health Administration, Regulatory Review of OSHA’s Cotton Dust 

Standard, at 35–38 (Sept. 2000), available at http://www.osha.gov/dea/lookback/cottondust 

lfinal2000.pdf. 

17 Id. 18 Id. at 38–39. 19The REINS Act—Promoting Jobs and Expanding Freedom by Reducing Needless Regulations Hearing Before the Subcomm. on Courts, Commercial and Administrative Law of the H. 

Comm. on the Judiciary, 112th Cong. 3 (2011) (prepared statement of Sally Katzen, former Administrator of the Office of Information and Regulatory Affairs). 

methodology.13 Moreover, CRS noted that the authors of the Crain 

study themselves told CRS that their study was ‘‘not meant to be 

a decision-making tool for lawmakers or Federal regulatory agencies to use in choosing the ’right’ level of regulation. In no place in 

any of the reports do we imply that our reports should be used for 

this purpose. (How could we recommend this use when we make 

no attempt to estimate the benefits?)’’ 14 CRS concluded that ‘‘a 

valid, reasoned policy decision can only be made after considering 

information on both costs and benefits’’ of regulation.15

The Crain study’s failure to account for the net benefits of regulation in general was particularly shortsighted given evidence that 

regulation can result in net economic benefits for business. For example, promulgation of OSHA’s Cotton Dust Standard resulted in 

the affected industry growing and prospering in the aftermath of 

the rule’s promulgation.16 Much of that growth and prosperity was 

the result of business innovations relating to compliance with the 

rule.17 Indeed, the costs of the rule ended up being much smaller 

than predicted because of these innovations.18

Sally Katzen, a former Administrator of the Office of Information 

and Regulatory Affairs (OIRA) during the Clinton Administration, 

noted in testimony before the CCAL Subcommittee that OMB regularly finds that the aggregate benefits of Federal regulation outweigh its costs.19 In words that are apt with respect to consideration of H.R. 527, Katzen noted the following in her prepared statement: 

OMB’s Report to Congress does include data on benefits, 

and the numbers are striking: according to OMB, the benefits from the regulations issued during the 10-year period 

ranged from $128 billion to $616 billion. Therefore, even if 

one uses OMB’s highest estimate of costs and its lowest estimate of benefits, the regulations issued over the past 10 

years have produced net benefits of $73 billion to our society. This cannot be dismissed as a partisan report by the 

current administration, because OMB issued reports with 

similar results (benefits greatly exceeding costs) throughout the George W. Bush Administration (e.g., for FY 1998– 

2008, major regulations cost between $51 and $60 billion, 

with benefits estimated to be $126 to $663 billion dollars). 

Given that the benefits of regulations consistently exceed 

the costs, the need for any legislation that would make the 


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20 Id. 21 H.R. 527 Legislative Hearing (prepared statement of J. Robert Shull) (hereinafter ‘‘Shull 

statement’’). 22OMB Watch, Statement on the Regulatory Flexibility Improvements Act of 2011, on file 

with the House Committee on the Judiciary, Minority staff. 

issuance of regulations more difficult or time consuming is 

certainly in question.20

An amendment offered by Rep. Jerrold Nadler (D–NY) would 

have required agencies to assess the indirect benefits of a rule as 

part of the required regulatory flexibility analysis under H.R. 527. 

The amendment was opposed by the Majority and was not adopted. 

IV. H.R. 527 WILL CAUSE FEDERAL AGENCY RULEMAKING TO BE SEVERELY UNDERMINED, THEREBY THREATENING PUBLIC HEALTH AND

SAFETY

H.R. 527 will overwhelm regulatory agencies with unnecessary 

analytical requirements, reduced agency discretion and flexibility, 

and numerous opportunities for business interests to hamstring the 

rulemaking process. By shifting resources to a more complex, costly, and time-consuming rulemaking process, this legislation will 

prevent agencies from effectively promulgating regulations designed to protect the health and public safety of Americans. 

The bill’s onerous requirements will prevent agencies from engaging in effective rulemaking. As the Minority witness testified at 

the legislative hearing on H.R. 527, these new mandates will prevent agencies from being able to engage in effective rulemaking.21

Consumer advocates likewise are concerned that H.R. 527 generally ‘‘adds yet another analytical layer to the rulemaking process, 

further complicating agencies’ abilities to implement statutes, fulfill their missions, and serve the public interest.’’ 22

In recognition of these problems, Rep. Hank Johnson (D–GA) offered at markup two amendments that would have exempted rules 

implementing the FDA Food Safety Modernization Act and the Patient Protection and Affordable Care Act from H.R. 527. The Majority opposed both amendments and neither was adopted. 

V. H.R. 527 FAILS TO ADDRESS SHORTCOMINGS IN CURRENT LAW

UNDER THE RFA

Whether a rule has a ‘‘significant economic impact on a substantial number of small entities’’ is the threshold inquiry for determining whether the RFA applies to a proposed or final rule. The 

RFA does not define ‘‘significant economic impact’’ or ‘‘substantial 

number of small entities.’’ These terms are left to agencies to determine. Some critics suggest that because of the undefined standard 

and the discretion that agencies have to determine whether the 

standard is met, agencies are essentially able to ‘‘game the system’’ 

and avoid triggering RFA obligations. 

To the extent that proponents of H.R. 527 contend that it is 

needed because agencies currently do not apply the RFA in a consistent manner, H.R. 527 does nothing to address that concern. The 

Government Accountability Office (GAO) has on several occasions 

noted that ‘‘Congress may need to clearly delineate—or have some 

other organization delineate—what is meant by the terms ‘significant economic impact’ and ‘substantial number of small entiVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00048 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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23SBREFA Compliance—Is It the Same Old Story?: Hearing Before the H. Comm. on Small 

Business, 107th Cong. 51 (2002) (statement of Victor Rezendes, Managing Director—Strategic 

Issues Team, U.S. Government Accountability Office). 24 H.R. 527, 112th Cong., § 3(b)(1)(B) (2011). 25 H.R. 527, 112th Cong., § 3(b)(1)(C) (2011). 26 H.R. 527, 112th Cong., § 3(b)(1)(D) (2011). 27 H.R. 527, 112th Cong., § 3(b)(1)(E) (2011). 28 H.R. 527, 112th Cong., § 3(d) (2011). 

ties.’ ’’ 23 H.R. 527, however, fails to clarify either of these terms. Instead, the bill serves to institutionalize a pro-business regime at 

the expense of public health and safety. H.R. 527 does not concern 

agency compliance with the RFA or assist small entities with regulatory compliance. Rather, H.R. 527 is intended simply to slow 

down rulemaking. 

VI. H.R. 527 OFFERS NO REAL ASSISTANCE TO SMALL BUSINESSES IN

COMPLYING WITH REGULATIONS

H.R. 527 does nothing to alleviate the burden on small entities 

of complying with Federal regulations. It includes no provision that 

offers assistance to small entities, whether through subsidies, government-guaranteed loans, preferential tax treatment for small 

firms, or fully funded compliance assistance offices. Instead, the bill 

merely aggrandizes the power of the SBA’s Office of Advocacy and 

of the professional lobbying class in Washington. If the proponents 

of H.R. 527 were serious about helping small entities deal with the 

regulatory system, they would support instituting mechanisms for 

small entities that actually help them participate directly in rulemaking, without having to rely on Washington-based intermediaries. 

VII. H.R. 527 IMPOSES ADDITIONAL DUTIES AND COSTS ON AGENCIES, 

BUT FAILS TO AUTHORIZE ANY ADDITIONAL FUNDING OR OFFSET IMPLEMENTATION COST

H.R. 527 substantially increases the responsibilities of agencies 

with respect to rulemaking. For example, section 3 of the bill requires agencies, with respect to final regulatory analyses, to: 

• describe significant issues raised by any public comments 

submitted in response to the initial regulatory flexibility 

analysis, provide the agency’s assessment of the issues, and 

explain any changes made in the proposed rule as a result 

of such comments;24

• describe in detail why an agency did not provide an estimate 

of the number of small entities anticipated to be affected by 

the rule;25

• specify that the required descriptions be detailed;26

• describe any disproportionate economic impact on small entities or a specific class of small entities;27

• supply a detailed statement—including the factual and legal 

bases—of the reasons why an agency has determined that a 

proposed or final rule will not have a significant economic 

impact;28 and 

• provide in every instance (rather than simply making discretionary, as under current law) a quantifiable or numerical 


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29 H.R. 527, 112th Cong., § 3(e) (2011). 

description of the effects of a proposed rule and alternatives 

to a proposed rule or a general description of such effects 

with a detailed statement explaining why quantification is 

not practicable or reliable.29

These heightened responsibilities and other duties imposed by 

the bill will force agencies—and, therefore, taxpayers—to incur considerable costs to implement H.R. 527. In fact, the Congressional 

Budget Office estimates that implementing H.R. 527 will cost taxpayers $80 million over fiscal years 2012 through 2016. H.R. 527, 

however, fails to authorize any funding for agencies to pay for the 

additional responsibilities imposed on them by the bill. Moreover, 

it violates House rules by failing to include any offset for its $80 

million cost. Unfortunately, the Majority refused to even consider 

how much implementation of H.R. 527 would cost taxpayers when 

it rejected an amendment offered by Rep. Sheila Jackson Lee (DTX) that would have merely required a GAO study on the cost impact on agencies of implementing H.R. 527. 

VIII. OTHER CONCERNS WITH H.R. 527

A. H.R. 527’s Elimination of Agencies’ Waiver and Delay Authority 

Undermines the Agencies’ Ability To Respond To Emergencies 

Section 4 of H.R. 527 eliminates agencies’ ability to waive or 

delay any required initial regulatory flexibility analysis or to delay 

any required final regulatory flexibility analysis in the event of an 

emergency. By eliminating this safeguard, H.R. 527 threatens to 

undermine an agency’s ability to respond to emergency situations. 

In place of the emergency waiver or delay authority, the bill empowers the Chief Counsel for Advocacy to issue regulations about 

how agencies in general should comply with the Act. The absurdity 

of this scheme is evident with this illustration: in the event of an 

epidemic E. coli or listeria infection caused by some item in our Nation’s food distribution network, or if there is an imminent environmental disaster that could be addressed systemically through regulation, H.R. 527 mandates that an agency’s response must be to 

ask the Chief Counsel for Advocacy at SBA for guidance on whether and how to respond. 

This override of an agency’s authority to respond to emergencies 

without having to first go through the arduous and time-consuming 

task of review and analysis is simply wrong. Federal agencies are 

charged with promulgating regulations that impact virtually every 

aspect of our lives, including the air we breathe, the water we 

drink, the food we eat, the cars we drive, and the play toys we give 

our children. 

Small businesses, like all businesses, provide services and goods 

that also affect our lives. It makes no difference to someone who 

is breathing dirty air or drinking poisoned water, whether the hazards come from a small or large business. 

At the Committee markup, Rep. John Conyers, Jr., the Committee’s Ranking Member, offered an amendment that would have restored the waiver or delay authority that allowed agencies to quickly respond to emergencies without being hampered or secondVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00050 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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30 5 U.S.C. § 609(b) (2010). 

guessed by others. The Majority opposed this amendment and it 

was not adopted. 

B. H.R. 527’s Expanded Use of SBREFA Review Panels Creates a 

Serious Impediment To Agency Rulemaking 

SBREFA amended the RFA in 1996 to require proposed rules of 

the Environmental Protection Agency (EPA) and the Occupational 

Safety and Health Administration (OSHA) be subject to an advocacy review panel consisting of representatives of the agency promulgating the rule, the Chief Counsel for Advocacy of SBA, and 

OIRA.30 Section 5 of H.R. 527 expands this requirement to major 

rules. As a result, this provision will greatly slow down the rulemaking process and substantially empower business interests to 

throw sand into the gears of rulemaking. While the Majority argues that there is a need for greater public participation in the 

rulemaking process, section 5 evidences what they actually mean, 

namely, that they want to give a greater opportunity to business 

interests to influence the rulemaking process. 

The use of SBREFA panels is already cumbersome. SBA’s Office 

of Advocacy, essentially a taxpayer-funded lobby for businesses and 

small entity representatives, is already able to delay the issuance 

of final EPA and OSHA rules and to shape them in industry-friendly ways. Expanding the use of these panels to include all agencies 

and rules that do not necessarily have a significant economic effect 

on a substantial number of small entities would guarantee that 

most rulemaking would grind to a halt. Moreover, expanding review panels to rules that do not necessarily have a significant economic effect on a substantial number of small entities takes this 

review panel process beyond the scope of the RFA. 

In an effort to lessen the pernicious impact of this provision, Rep. 

Steve Cohen (D–TN), Ranking Member of the CCAL Subcommittee, 

offered two amendments at markup. One amendment would have 

required that the panels include a representative of the public or 

a public interest organization to ensure that a consumer perspective be heard in the consideration of proposed rules by these review 

panels. The second amendment would have raised the dollar 

threshold contained in section 5 from $100 million in annual economic effect to $250 million because the $100 million threshold for 

determining what would constitute a ‘‘major rule’’ was set back in 

1981. The $250 million threshold reflected an adjustment for inflation, but would have captured the same universe of rules as those 

that would have been captured by the $100 million threshold in 

1981. The Majority opposed both amendments and they were not 

adopted. 

C. H.R. 527 Forces Agencies To Engage in Wasteful, Speculative 

Analyses 

Section 2 of H.R. 527 defines, among other things, ‘‘economic impact’’ to include any reasonably foreseeable ‘‘indirect economic effect’’ that a proposed rule may have on a small entity. This provision would force agencies to conduct highly speculative and laborintensive assessments, all of which could be subject to litigation by 

well-financed business interests. The bill effectively would require 


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31 H.R. 527, 112th Cong, § 6 (2011). 

an agency to engage in a virtual guessing game to divine the indirect effects of a proposed regulation, which, of course, would be 

subject to judicial review. In effect, H.R. 527 could kill a rulemaking as a result of ‘‘paralysis by analysis.’’ 

D. H.R. 527 Would Overwhelm Agencies by Requiring Them To 

Conduct Exhaustive Reviews of All Existing Rules 

Section 6 of H.R. 527 threatens to undermine ability of the agencies to fulfill their regulatory responsibilities because of its requirement that agencies review all rules existing on bill’s enactment 

date. The review must consist of a determination of whether these 

rules have a significant economic impact on a substantial number 

of small entities, regardless of whether they already went through 

a final regulatory flexibility analysis previously. 

As a result of this provision, agencies would be forced to re-justify safeguards like regulations designed to ensure clean air, clean 

water, food safety, automobile safety, ensure workplace safety. 

Moreover, this unlimited look-back requirement is a wasteful expenditure of taxpayer dollars as it forces agencies to redirect their 

scarce resources to meet this unhelpful and burdensome requirement. This substantial increase in the workload of the agencies 

would occur while Congress continues to slash funding for critical 

child welfare, indigent assistance, and law enforcement programs. 

To put this requirement in context, it should be noted that there 

are currently more than 165,000 pages of regulations in the Code 

of Federal Regulations, as well as several hundred thousand guidance documents, some of which could also be subjected to H.R. 

527’s look-back requirement. 

In addition, section 2 of H.R. 527 expands the scope of rules subject to the RFA by including amendments to land management 

plans as well as Indian tribes and Internal Revenue Service recordkeeping requirements. These types of guidance documents traditionally are not ‘‘rules’’ subject to the RFA. Expanding the scope of 

regulations subject to review will require resources to go to the review process that would otherwise be used by the agency to carry 

out their duties as delegated by Congress. 

E. H.R. 527 Imposes an Absurd and Wasteful Requirement that 

Agencies Amend or Rescind all Existing Regulations, Even If 

They Are Not Burdensome or Unnecessary 

Section 6 of H.R. 527 requires agencies to review all existing 

rules to determine whether they should be amended or rescinded 

to minimize significant adverse impacts on small entities. The section also requires that agencies amend or rescind a rule, regardless 

of the findings of its review.31

On its face, this appears to be an absurd and wasteful requirement. Why require agencies to engage in a review to determine 

whether a rule should be amended or rescinded if amending or rescinding the rule is required regardless of what the review would 

find? Taken literally, this provision would require agencies to: (1) 

review all rules existing on H.R. 527’s enactment date, and (2) 

amend or rescind every rule in existence on that date regardless 

of the review’s findings. While we find much of H.R. 527’s proviVerDate Mar 15 2010 00:54 Nov 17, 2011 Jkt 019006 PO 00000 Frm 00052 Fmt 6659 Sfmt 6601 E:\HR\OC\HR289P1.XXX HR289P1

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32Shull statement, unnumbered p. 5. 33Federal Regulation: A Review of Legislative Proposals, Part I: Hearing Before the S. Comm. 

on Homeland Security and Government Affairs, 112th Cong. 3 (2011) (statement of the Honorable Cass R. Sunstein, Administrator, Office of Information and Regulatory Affairs, Office of 

Management and Budget). 

sions to be wasteful, surely, the sponsors of H.R. 527 could not 

have intended to include this absurd and monumental waste of taxpayer resources. 

Giving the sponsors the benefit of the doubt, Rep. Nadler offered 

an amendment to change the ‘‘shall’’ to a ‘‘may’’ to correct this apparent drafting error. The Majority inexplicably opposed Rep. 

Nadler’s amendment. In opposing the amendment, the Chairman 

claimed that agencies must be given less discretion to determine 

their course of conduct under H.R. 527. 

While reasonable minds can differ as to the extent to which Congress should give agencies decision-making discretion, in this case, 

the Chairman’s contention is misplaced, as this amendment had 

nothing to do with agency discretion. Rather, it simply sought to 

avoid either requiring a pointless review of rules or pointless 

changes to all existing rules. 

F. The Expansion of Judicial Review to Include All Agency Actions, 

and Not Just ‘‘Final Agency Action,’’ Allows Special Interests 

To Obstruct Rulemaking by Challenging Agency Action Before 

a Rule Is Finalized 

Section 7 of H.R. 527 creates the opportunity for well-funded 

anti-regulatory business interests to engage in frivolous litigation. 

It does this by expanding judicial review to include review of agency actions prior to final agency action. At the hearing before the 

Subcommittee, the Minority witness expressed concern that H.R. 

527’s expansion of judicial review to include challenges to the adequacy of regulatory flexibility analyses would simply open the door 

to endless litigation.32 Current law limits judicial review to final 

agency actions. 

Cass Sunstein, the current OIRA Administrator, aptly summarized concerns about expanding judicial review of agency rulemaking when he stated that 

while there is an important role for judicial review of regulations, a significant expansion of judicial review in rulemaking could create unintended complexity in the regulatory system, preventing important rules from taking effect. An increase in litigation and judicial authority might 

also increase regulatory uncertainty, which would be most 

unwelcome in the current economic situation. At the same 

time, additional litigation and uncertainty can undermine 

important safeguards of public health, welfare, and safety, 

including safeguards that prevent illnesses and deaths. 33

IX. CONCLUSION

For the numerous reasons stated above, H.R. 527 is a flawed 

piece of legislation. There are more meaningful ways to assist small 

businesses and other small entities in navigating the regulatory 

landscape without threatening agencies’ ability to protect public 

health and safety. We urge our colleagues to shift their attention 

to these alternatives. 


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JOHN CONYERS, JR. HOWARD L. BERMAN. JERROLD NADLER. ROBERT C. ‘‘BOBBY’’ SCOTT. MELVIN L. WATT. ZOE LOFGREN. SHEILA JACKSON LEE. STEVE COHEN. HENRY C. ‘‘HANK’’ JOHNSON, JR. MIKE QUIGLEY. 

Æ 


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