II 

109TH CONGRESS 

1ST SESSION S. 1388 

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. 

IN THE SENATE OF THE UNITED STATES 

JULY 13, 2005 

Ms. SNOWE introduced the following bill; which was read twice and referred 

to the Committee on Homeland Security and Governmental Affairs 

A BILL 

To amend chapter 6 of title 5, United States Code (commonly known as the Regulatory Flexibility Act), to ensure complete analysis of potential impacts on small entities of rules, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Regulatory Flexibility Reform Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 
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Sec. 3. Clarification and expansion of rules covered by the Regulatory Flexibility Act. 

Sec. 4. Requirements providing for more detailed analyses. 

Sec. 5. Periodic review of rules. 

Sec. 6. Clerical amendments. 

1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) A vibrant and growing small business sector 

4 is critical to creating jobs in a dynamic economy. 

5 (2) Regulations designed for application to 

6 large-scale entities have been applied uniformly to 

7 small businesses and other small entities, even 

8 though the problems sought to be solved by such 

9 regulations are not always caused by these small 

10 businesses and other small entities. 

11 (3) Uniform Federal regulatory and reporting 

12 requirements in many instances have imposed on 

13 small businesses and other small entities unneces14 sary and disproportionately burdensome demands, 

15 including legal, accounting, and consulting costs. 

16 (4) Since 1980, Federal agencies have been re17 quired to recognize and take account of the dif18 ferences in the scale and resources of regulated enti19 ties, but have failed to do so. 

20 (5) Alternative regulatory approaches that do 

21 not conflict with the stated objectives of the statutes 

22 the regulations seek to implement may be available 

23 and may minimize the significant economic impact 
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1 of regulations on small businesses and other small 

2 entities. 

3 (6) Federal agencies have failed to analyze and 

4 uncover less-costly alternative regulatory approaches, 

5 despite the fact that the chapter 6 of title 5, United 

6 States Code (commonly known as the Regulatory 

7 Flexibility Act), requires them to do so. 

8 (7) Federal agencies continue to interpret chap9 ter 6 of title 5, United States Code, in a manner 

10 that permits them to avoid their analytical respon11 sibilities. 

12 (8) The existing oversight of the compliance of 

13 Federal agencies with the analytical requirements to 

14 assess regulatory impacts on small businesses and 

15 other small entities and obtain input from the Chief 

16 Counsel for Advocacy has not sufficiently modified 

17 the Federal agency regulatory culture. 

18 (9) Significant changes are needed in the meth19 ods by which Federal agencies develop and analyze 

20 regulations, receive input from affected entities, and 

21 develop regulatory alternatives that will lessen the 

22 burden or maximize the benefits of final rules to 

23 small businesses and other small entities. 

24 (10) It is the intention of Congress to amend 

25 chapter 6 of title 5, United States Code, to ensure 
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1 that all impacts, including foreseeable indirect ef2 fects, of proposed and final rules are considered by 

3 agencies during the rulemaking process and that the 

4 agencies assess a full range of alternatives that will 

5 limit adverse economic consequences or enhance eco6 nomic benefits. 

7 (11) Federal agencies should be capable of as8 sessing the impact of proposed and final rules with9 out delaying the regulatory process or impinging on 

10 the ability of Federal agencies to fulfill their statu11 tory mandates. 

12 SEC. 3. CLARIFICATION AND EXPANSION OF RULES COV13 ERED BY THE REGULATORY FLEXIBILITY 

14 ACT. 

15 Section 601 of title 5, United States Code, is amend16 ed by adding at the end the following: 

17 ‘‘(9) ECONOMIC IMPACT.—The term ‘economic 

18 impact’ means, with respect to a proposed or final 

19 rule— 

20 ‘‘(A) any direct economic effect on small 

21 entities of such rule; and 

22 ‘‘(B) any indirect economic effect on small 

23 entities which is reasonably foreseeable and re24 sults from such rule (without regard to whether 
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1 small entities will be directly regulated by the 

2 rule).’’. 

3 SEC. 4. REQUIREMENTS PROVIDING FOR MORE DETAILED 

4 ANALYSES. 

5 (a) INITIAL REGULATORY FLEXIBILITY ANALYSIS.— 

6 Section 603 of title 5, United States Code, is amended— 

7 (1) by striking subsection (b) and inserting the 

8 following: 

9 ‘‘(b) Each initial regulatory flexibility analysis re10 quired under this section shall contain a detailed state11 ment— 

12 ‘‘(1) describing the reasons why action by the 

13 agency is being considered; 

14 ‘‘(2) describing the objectives of, and legal basis 

15 for, the proposed rule; 

16 ‘‘(3) estimating the number and type of small 

17 entities to which the proposed rule will apply; 

18 ‘‘(4) describing the projected reporting, record19 keeping, and other compliance requirements of the 

20 proposed rule, including an estimate of the classes of 

21 small entities which will be subject to the require22 ment and the type of professional skills necessary 

23 for preparation of the report and record; 

24 ‘‘(5) describing all relevant Federal rules which 

25 may duplicate, overlap, or conflict with the proposed 
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1 rule, or the reasons why such a description could not 

2 be provided; and 

3 ‘‘(6) estimating the additional cumulative eco4 nomic impact of the proposed rule on small entities 

5 beyond that already imposed on the class of small 

6 entities by the agency or why such an estimate is 

7 not available.’’; and 

8 (2) by adding at the end the following: 

9 ‘‘(d) An agency shall notify the Chief Counsel for Ad10 vocacy of the Small Business Administration of any draft 

11 rules that may have a significant economic impact on a 

12 substantial number of small entities either— 

13 ‘‘(1) when the agency submits a draft rule to 

14 the Office of Information and Regulatory Affairs at 

15 the Office of Management and Budget under Execu16 tive Order 12866, if that order requires such sub17 mission; or 

18 ‘‘(2) if no submission to the Office of Informa19 tion and Regulatory Affairs is so required, at a rea20 sonable time prior to publication of the rule by the 

21 agency.’’. 

22 (b) FINAL REGULATORY FLEXIBILITY ANALYSIS.— 

23 (1) IN GENERAL.—Section 604(a) of title 5, 

24 United States Code, is amended— 
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1 (A) in paragraph (1), by striking ‘‘suc2 cinct’’; 

3 (B) in paragraph (2), by striking ‘‘sum4 mary’’ each place it appears and inserting 

5 ‘‘statement’’; 

6 (C) in paragraph (3), by— 

7 (i) striking ‘‘an explanation’’ and in8 serting ‘‘a detailed explanation’’; and 

9 (ii) inserting ‘‘detailed’’ before ‘‘de10 scription’’; 

11 (D) in paragraph (4), by inserting ‘‘de12 tailed’’ before ‘‘description’’; and 

13 (E) in paragraph (5), by inserting ‘‘de14 tailed’’ before ‘‘description’’. 

15 (2) INCLUSION OF RESPONSE TO COMMENTS ON

16 CERTIFICATION OF PROPOSED RULE.—Section 

17 604(a)(2) of title 5, United States Code, is amended 

18 by inserting ‘‘(or certification of the proposed rule 

19 under section 605(b))’’ after ‘‘initial regulatory flexi20 bility analysis’’. 

21 (3) INCLUSION OF RESPONSE TO COMMENTS

22 FILED BY CHIEF COUNSEL FOR ADVOCACY.—Section 

23 604(a) of title 5, United States Code, is amended by 

24 redesignating paragraphs (3), (4), and (5) as para-
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1 graphs (4), (5), and (6), respectively, and inserting 

2 after paragraph (2) the following: 

3 ‘‘(3) the agency’s response to any comments 

4 filed by the Chief Counsel for Advocacy of the Small 

5 Business Administration in response to the proposed 

6 rule, and a detailed statement of any changes made 

7 to the proposed rule in the final rule as a result of 

8 such comments;’’. 

9 (4) PUBLICATION OF ANALYSIS ON WEB SITE, 

10 ETC.—Section 604(b) of title 5, United States Code, 

11 is amended to read as follows: 

12 ‘‘(b) The agency shall make copies of the final regu13 latory flexibility analysis available to the public, including 

14 placement of the entire analysis on the agency’s Web site, 

15 and shall publish in the Federal Register the final regu16 latory flexibility analysis, or a summary thereof that in17 cludes the telephone number, mailing address, and link to 

18 the Web site where the complete analysis may be ob19 tained.’’. 

20 (c) CROSS-REFERENCES TO OTHER ANALYSES.— 

21 Section 605(a) of title 5, United States Code, is amended 

22 to read as follows: 

23 ‘‘(a) A Federal agency shall be treated as satisfying 

24 any requirement regarding the content of an agenda or 

25 regulatory flexibility analysis under section 602, 603, or 
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1 604, if such agency provides in such agenda or analysis 

2 a cross-reference to the specific portion of another agenda 

3 or analysis that is required by any other law and which 

4 satisfies such requirement.’’. 

5 (d) CERTIFICATIONS.—The second sentence of sec6 tion 605(b) of title 5, United States Code, is amended— 

7 (1) by inserting ‘‘detailed’’ before ‘‘statement’’; 

8 and 

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

10 (e) QUANTIFICATION REQUIREMENTS.—Section 607 

11 of title 5, United States Code, is amended to read as fol12 lows: 

13 ‘‘§ 607. Quantification requirements 

14 ‘‘In complying with sections 603 and 604, an agency 

15 shall provide— 

16 ‘‘(1) a quantifiable or numerical description of 

17 the effects of the proposed or final rule and alter18 natives to the proposed or final rule; or 

19 ‘‘(2) a more general descriptive statement and 

20 a detailed statement explaining why quantification is 

21 not practicable or reliable.’’. 

22 SEC. 5. PERIODIC REVIEW OF RULES. 

23 Section 610 of title 5, United States Code, is amend24 ed to read as follows: 
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1 ‘‘§ 610. Periodic review of rules 

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

3 the Regulatory Flexibility Reform Act of 2005, each agen4 cy shall publish in the Federal Register and place on its 

5 Web site a plan for the periodic review of rules issued by 

6 the agency that the head of the agency determines has 

7 a significant economic impact on a substantial number of 

8 small entities. Such determination shall be made without 

9 regard to whether the agency performed an analysis under 

10 section 604. The purpose of the review shall be to deter11 mine whether such rules should be continued without 

12 change, or should be amended or rescinded, consistent 

13 with the stated objectives of applicable statutes, to mini14 mize any significant adverse economic impacts on a sub15 stantial number of small entities. Such plan may be 

16 amended by the agency at any time by publishing the revi17 sion in the Federal Register and subsequently placing the 

18 amended plan on the agency’s Web site. 

19 ‘‘(b) The plan shall provide for the review of all such 

20 agency rules existing on the date of the enactment of the 

21 Regulatory Flexibility Reform Act of 2005 within 10 years 

22 after the date of publication of the plan in the Federal 

23 Register and every 10 years thereafter and for review of 

24 rules adopted after the date of enactment of the Regu25 latory Flexibility Reform Act of 2005 within 10 years after 

26 the publication of the final rule in the Federal Register 
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1 and every 10 years thereafter. If the head of the agency 

2 determines that completion of the review of existing rules 

3 is not feasible by the established date, the head of the 

4 agency shall so certify in a statement published in the 

5 Federal Register and may extend the review for not longer 

6 than 2 years after publication of notice of extension in 

7 the Federal Register. Such certification and notice shall 

8 be sent to the Chief Counsel for Advocacy and Congress. 

9 ‘‘(c) Each agency shall annually submit a report re10 garding the results of its review pursuant to such plan 

11 to Congress and, in the case of agencies other than inde12 pendent regulatory agencies (as defined in section 3502(5) 

13 of title 44, United States Code), to the Administrator of 

14 the Office of Information and Regulatory Affairs of the 

15 Office of Management and Budget. Such report shall in16 clude the identification of any rule with respect to which 

17 the head of the agency made a determination of infeasi18 bility under paragraph (5) or (6) of subsection (d) and 

19 a detailed explanation of the reasons for such determina20 tion. 

21 ‘‘(d) In reviewing rules under such plan, the agency 

22 shall consider— 

23 ‘‘(1) the continued need for the rule; 

24 ‘‘(2) the nature of complaints received by the 

25 agency from small entities concerning the rule; 
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1 ‘‘(3) comments by the Regulatory Enforcement 

2 Ombudsman and the Chief Counsel for Advocacy; 

3 ‘‘(4) the complexity of the rule; 

4 ‘‘(5) the extent to which the rule overlaps, du5 plicates, or conflicts with other Federal rules and, 

6 unless the head of the agency determines it to be in7 feasible, State and local rules; 

8 ‘‘(6) the contribution of the rule to the cumu9 lative economic impact of all Federal rules on the 

10 class of small entities affected by the rule, unless the 

11 head of the agency determines that such calculations 

12 cannot be made and reports that determination in 

13 the annual report required under subsection (c); 

14 ‘‘(7) the length of time since the rule has been 

15 evaluated or the degree to which technology, eco16 nomic conditions, or other factors have changed in 

17 the area affected by the rule; and 

18 ‘‘(8) the current impact of the rule, including— 

19 ‘‘(A) the number of small entities to which 

20 the rule will apply; and 

21 ‘‘(B) the projected reporting, record22 keeping and other compliance requirements of 

23 the proposed rule, including— 
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1 ‘‘(i) an estimate of the classes of small 

2 entities that will be subject to the require3 ment; and 

4 ‘‘(ii) the type of professional skills 

5 necessary for preparation of the report or 

6 record. 

7 ‘‘(e) The agency shall publish in the Federal Register 

8 and on its Web site a list of rules to be reviewed pursuant 

9 to such plan. Such publication shall include a brief de10 scription of the rule, the reason why the agency deter11 mined that it has a significant economic impact on a sub12 stantial number of small entities (without regard to wheth13 er it had prepared a final regulatory flexibility analysis 

14 for the rule), and request comments from the public, the 

15 Chief Counsel for Advocacy, and the Regulatory Enforce16 ment Ombudsman concerning the enforcement of the 

17 rule.’’. 

18 SEC. 6. CLERICAL AMENDMENTS. 

19 (a) IN GENERAL.—Section 601 of title 5, United 

20 States Code, is amended— 

21 (1) in paragraph (1)— 

22 (A) by striking the semicolon at the end 

23 and inserting a period; and 

24 (B) by striking ‘‘(1) the term’’ and insert25 ing the following: 
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1 ‘‘(1) AGENCY.—The term’’; 

2 (2) in paragraph (2)— 

3 (A) by striking the semicolon at the end 

4 and inserting a period; and 

5 (B) by striking ‘‘(2) the term’’ and insert6 ing the following: 

7 ‘‘(2) RULE.—The term’’; 

8 (3) in paragraph (3)— 

9 (A) by striking the semicolon at the end 

10 and inserting a period; and 

11 (B) by striking ‘‘(3) the term’’ and insert12 ing the following: 

13 ‘‘(3) SMALL BUSINESS.—The term’’; 

14 (4) in paragraph (4)— 

15 (A) by striking the semicolon at the end 

16 and inserting a period; and 

17 (B) by striking ‘‘(4) the term’’ and insert18 ing the following: 

19 ‘‘(4) SMALL ORGANIZATIONS.—The term’’; 

20 (5) in paragraph (5)— 

21 (A) by striking the semicolon at the end 

22 and inserting a period; and 

23 (B) by striking ‘‘(5) the term’’ and insert24 ing the following: 
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1 ‘‘(5) SMALL GOVERNMENTAL JURISDICTION.— 

2 The term’’; 

3 (6) in paragraph (6)— 

4 (A) by striking ‘‘; and’’ and inserting a pe5 riod; and 

6 (B) by striking ‘‘(6) the term’’ and insert7 ing the following: 

8 ‘‘(6) SMALL ENTITY.—The term’’; 

9 (7) in paragraph (7), by striking ‘‘(7) the term’’ 

10 and inserting the following: 

11 ‘‘(7) COLLECTION OF INFORMATION.—The 

12 term’’; and 

13 (8) in the matter preceding paragraph (1), by 

14 striking ‘‘chapter—’’ and inserting ‘‘chapter, the fol15 lowing definitions apply:’’. 

16 (b) HEADING.—The heading of section 605 of title 

17 5, United States Code, is amended to read as follows: 

18 ‘‘§ 605. Incorporations by reference and certifi19 cations’’. 

20 (c) TABLE OF SECTIONS.—The table of sections for 

21 chapter 6 of title 5, United States Code, is amended— 

22 (1) by striking the item relating to section 605 

23 and inserting the following: 

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

24 and 
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1 (2) by striking the item relating to section 607 

2 and inserting the following: 

‘‘607. Quantification requirements.’’. 

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