39–006 

113TH CONGRESS REPT. 113–288 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2013 

DECEMBER 11, 2013.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. GOODLATTE, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 2542] 

[Including cost estimate of the Congressional Budget Office] 

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

(H.R. 2542) 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, report favorably thereon with an amendment and recommend that the bill as amended 

do pass. 

CONTENTS 

Page 

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

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

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

Hearings ................................................................................................................... 12 

Committee Consideration ........................................................................................ 12 

Committee Votes ...................................................................................................... 12 

Committee Oversight Findings ............................................................................... 17 

New Budget Authority and Tax Expenditures ...................................................... 17 

Congressional Budget Office Cost Estimate .......................................................... 17 

Duplication of Federal Programs ............................................................................ 20 

Disclosure of Directed Rule Makings ..................................................................... 20 

Performance Goals and Objectives ......................................................................... 20 

Advisory on Earmarks ............................................................................................. 20 

Section-by-Section Analysis .................................................................................... 20 

Changes in Existing Law Made by the Bill, as Reported ..................................... 25 

Dissenting Views ..................................................................................................... 42 


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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 

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

files/rs371tot.pdf (last accessed July 25, 2011). 

The Amendment 

The amendment (stated in terms of the page and line numbers 

of the introduced bill) is as follows: 

Page 27, line 14, strike ‘‘(6)’’ and insert ‘‘(9)’’. 

Purpose and Summary 

The Regulatory Flexibility Improvements Act of 2013, H.R. 2542, 

provides needed reforms to the Regulatory Flexibility Act of 1980 

(RFA) and the Small Business Regulatory Enforcement Fairness 

Act of 1996 (SBREFA). The RFA and SBREFA attempted to require agencies to account better for the impacts of proposed regulations on small businesses and other small entities and to tailor 

final regulations to minimize adverse impacts on these entities, but 

have not commanded full agency compliance.1 The RFIA updates 

the RFA and SBREFA to close loopholes and more effectively reduce the disproportionate burden that over-regulation places on 

small entities, thereby enhancing job creation and hastening economic recovery. 

Background and Need for the Legislation 

I. 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. 

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 to prepare a 

regulatory flexibility analysis when proposed and final rules are 

published in the Federal Register that describes the rule’s impact 


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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. 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). 

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 pursuant to section 605(b) of the Act 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) 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 effectiveness of this 

requirement remains unclear, however, as indicated by inconsistent 

agency practice.12

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, 


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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. 20See P.L. 111–203, § 1100G(a) (July 21, 2010). 

agencies only had to comply when it would benefit their 

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

Advocacy or 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

II. 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 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

With regard to advocacy review panels, 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 impact 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 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 


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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). 

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 

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 


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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). 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). 

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 supports 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 and H.R. 2542. This Committee’s Subcommittee on Commercial and Administrative Law and the Committee on Small Business both held hearings on H.R. 682.28

III. 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 

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 


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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/SB100014240527487042882045753631626648357 

80.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 un- certainty, 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); Terry Miller, The U.S. loses Ground on Economic Freedom, WALL STREET JOURNAL (Jan. 13, 

2011), available at http://online.wsj.com/article/SB10001424052748703779704576074193214999 

486.html?utmlsource 

=Newsletter&utmlmedium=Email&utmlcampaign=Heritage%2BHotsheet (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). 

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 imposed a cumulative burden of $1.75 trillion on our economy—a figure that equaled fourteen 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

Recent regulatory expansions and the future threat of further excessive Federal regulation—such as under the waves of regulation 

occurring 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 businesses—and since start-up firms 

are the source of net job creation in the U.S. economy, it is only 


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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). 37 ‘‘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). 38Letter 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). 39Letter 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). 40 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). 41 Id. 42See 5 U.S.C. § 609. 43See ‘‘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). 

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

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 37 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 impact 

small businesses.38 When former Judiciary Committee Chairman 

Lamar 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.39

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.’’ 40 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 

public if requested.’’ 41 This falls well short of convening the advocacy review panel that OSHA is required by law to hold.42

IV. CUMULATIVE HEARING RECORD ON THE REGULATORY FLEXIBILITY

IMPROVEMENTS ACT

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

and Administrative Law held a legislative hearing on H.R. 527.43

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’s Rights for the Public Welfare Foundation; and, Karen 


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44 Id. at 56. 45 Id. 46 Id. 47 Id. at 65. 48 Id. at 66. 49 Id. at 85. 50 Id. 51 Id. at 77. 52See 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). 53See ‘‘Legislative Hearing on H.R. 2542, the Regulatory Flexibility Improvements Act of 2013’’ 

Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. 

on the Judiciary, 113th Cong., Serial No. 113–ll (June. 26, 2013) (hearing record available 

at http://judiciary.house.gov/hearings/113th/hearl06282013.html). 

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.44

Mr. Gimmell called for ‘‘more detailed statements in the RFA process and requirements to identify redundant, overlapping, or conflicting regulations.’’ 45 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.46

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.’’ 47 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.48

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.’’ 49 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.’’ 50 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.’’ 51

The Committee on Small Business also held a legislative hearing 

on H.R. 527.52 Testimony was received from Bill Squires, Senior 

Vice President and General Counsel for Blackfoot Telecommunications 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. 

The Regulatory Flexibility Improvements Act was reintroduced 

on June 27, 2013, as H.R. 2542, the ‘‘Regulatory Flexibility Improvements Act of 2013.’’ On June 28, 2013, the Subcommittee on 

Regulatory Reform, Commercial and Antitrust Law held a legislative hearing on H.R. 2542.53 Testimony was received from NFIB 

Exec. Dir. Harned; Carl Harris, co-founder of Carl Harris Co., Inc., 

Kansas national area chairman for the National Association of 


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54Statement of Karen Harned at ‘‘Legislative Hearing on H.R. 2542, the Regulatory Flexibility 

Improvements Act of 2013’’ Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th Cong., Serial No. 113-ll at 2 (June. 26, 

2013) (available at http://judiciary.house.gov/hearings/113th/hearl06282013.html). 55 Id. at 2–3. 56 Id. at 3. 57 Id. 58Statement of Carl Harris at ‘‘Legislative Hearing on H.R. 2542, the Regulatory Flexibility 

Improvements Act of 2013’’ Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th Cong., Serial No. 113-ll at 2 (June. 26, 

2011) (available at http://judiciary.house.gov/hearings/113th/hearl06282013.html). 59 Id. 60 Id. 61Statement of Rosario Palmieri at ‘‘Legislative Hearing on H.R. 2542, the Regulatory Flexibility Improvements Act of 2013’’ Before the Subcomm. on Regulatory Reform, Commercial and 

Antitrust Law of the H. Comm. on the Judiciary, 113th Cong., Serial No. 113-ll at 3 (June. 

26, 2011) (available at http://judiciary.house.gov/hearings/113th/hearl06282013.html). 62 Id. at 4. 

Home Builders, and president of the Kansas Building Industry Association; Rosario Palmieri, Vice President, Infrastructure, Legal 

and Regulatory Policy, National Association of Manufacturers; and, 

Amit Narang, Regulatory Policy Advocate, Public Citizen. 

Ms. Harned testified that overzealous regulation remains a constant concern, and that, as of June 20, 2013, 23 percent of small 

businesses cited red tape as their most important concern, second 

only to taxes.54 Ms. Harned emphasized that, according to analysis 

of recent figures released by OIRA, the costs imposed by new regulations under the Obama administration in 2012 alone exceeded 

the costs of new regulations promulgated by both the George W. 

Bush and Clinton administrations.55 Meanwhile, Ms. Harned 

stressed, job creation in the U.S. has remained stagnant, and small 

businesses had reported a drop in willingness to hire since November 2012.56 In Ms. Harned’s view, regulatory reform like the RFIA 

would ‘‘go a long way’’ towards resolving the adverse impacts of 

regulation on small businesses, who are responsible for most job 

creation in the economy.57

Mr. Harris testified that the costs of regulation at all levels account for 25 percent of the cost of new homes, and that it can be 

very difficult for a small business to comply with the myriad of regulations affecting its business.58 Based on his experience with the 

RFA and SBREFA, including as a SBREFA small business review 

panelist, Mr. Harris testified that the concepts of the RFA and 

SBREFA were constructive, but that, under existing law, agencies 

too frequently reduced RFA and SBREFA compliance to a ‘‘check 

the box’’ exercise that produced insufficiently meaningful results.59

Mr. Harris submitted that the RFIA’s reforms to the RFA and 

SBREFA would substantially contribute to the realization of these 

statutes’ promise.60

Mr. Palmieri testified that nearly 95 percent of U.S. manufacturers have fewer than 100 employees, and that ‘‘to compete on a global stage, manufacturing in the United States needs policies that 

enable it to thrive and create jobs.’’ 61 Mr. Palmieri directed the 

Subcommittee’s attention to a 2011 study by the Manufacturers Institute and the Manufacturers Alliance for Productivity and Innovation, which found that U.S. manufacturers ‘‘face a 20 percent 

structural cost burden compared to nine major trading partners because of government imposed policies, including regulations.’’ 62 Mr. 

Palmieri also cited recent evidence that 67 percent of manufacturers cited an unfavorable business climate due to regulations and 


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63 Id. 64 Id. at 5–7. 65 Id. at 6. 66Statement of Amit Narang at ‘‘Legislative Hearing on H.R. 2542, the Regulatory Flexibility 

Improvements Act of 2013’’ Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th Cong., Serial No. 113-l at 9 (June. 26, 2011) 

(available at http://judiciary.house.gov/hearings/113th/hearl06282013.html). 67 Id. at 10. 

taxes as a primary challenge that they faced.63 Mr. Palmieri submitted that, when regulatory agencies did comply with the RFA 

and SBREFA, positive results could occur, but that agencies far too 

often were able to evade meaningful RFA compliance.64 Like Ms. 

Harned and Mr. Harris, he testified that the RFIA would greatly 

help to solve this problem.65

Mr. Narang, by contrast, submitted that, in his view, the RFIA 

would slow down the regulatory process unnecessarily.66 In his 

view, a more productive path forward would be to provide more 

compliance guidance and assistance to small businesses, rather 

than additional analysis of regulations before they are imposed.67

V. INCLUSION OF H.R. 585

In conjunction with the House’s consideration of H.R. 527 during 

the 112th Congress, the House also considered a companion bill, 

H.R. 585, the ‘‘Small Business Size Standard Flexibility Act of 

2011.’’ H.R. 585 amended the Small Business Act by transferring 

certain size standard determination functions from the Administrator of the Small Business Administration (SBA) to the Office of 

the Chief Counsel for Advocacy. 

The reasons for this amendment are straightforward. Currently, 

the SBA Administrator, pursuant to Sec. 3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2), has the authority to determine what 

constitutes a small business for the purposes of the Small Business 

Act or any other Federal statute. If an agency proposes to draft a 

regulation that adopts a size standard different from one already 

adopted by the Administrator in regulations that implement the 

Small Business Act, the agency must obtain the Administrator’s 

approval. To consider approval, however, the Administrator requires a full understanding of the regulatory regime that SBA’s sister agency proposes to implement, encompassing knowledge outside 

of the SBA’s ordinary expertise. The SBA’s Office of the Chief 

Counsel for Advocacy, however—an independent office within the 

SBA—has such expertise, because it represents the interests of 

small businesses in other agencies’ rulemaking proceedings as part 

of its responsibility to monitor agency compliance with the RFA. It 

is therefore logical to transfer the limited function of determining 

size standards of small businesses for purposes other than the 

Small Business Act and Small Business Investment Act of 1958 to 

the Office of the Chief Counsel for Advocacy. 

The Judiciary Committee and the Small Business Committee 

share jurisdiction over the RFIA, meaning that both committees 

may hold hearings on and markup the legislation. For efficiency in 

the committees’ and the House’s consideration of related issues, 

H.R. 2542 incorporates into the Regulatory Flexibility Improvements Act the terms of the Small Business Size Standard Flexibility Act, as passed by the House during the 112th Congress. 


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Hearings 

The Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law held 1 day of hearings on H.R. 2542, on 

June 28, 2013. Testimony was received from Karen R. Harned, Executive Director, National Federation of Independent Business; 

Carl Harris, co-founder, Carl Harris Co., Inc., Kansas national area 

chairman for the National Association of Home Builders, and president of the Kansas Building Industry Association; Rosario 

Palmieri, Vice President, Infrastructure, Legal and Regulatory Policy, National Association of Manufacturers; and, Amit Narang, Regulatory Policy Advocate, Public Citizen, with additional material 

submitted by the Associated Builders and Contractors, Inc. 

Committee Consideration 

On July 10, 2013, the Subcommittee on Regulatory Reform, Commercial and Antitrust Law met in open session and ordered the bill 

H.R. 2542 favorably reported, without amendment, by voice vote, 

a quorum being present. On July 31, 2013, the Committee met in 

open session and ordered the bill H.R. 2542 favorably reported 

without amendment, by a rollcall vote of 15 to 9, 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. 

2542. 

1. The amendment offered by Mr. Conyers strikes section 5 of 

H.R. 2542, which provides compliance-related rulemaking authority 

to the Small Business Administration’s Chief Counsel for Advocacy 

and repeals waiver provisions of the RFA. The amendment was defeated by a rollcall vote of 11–17. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................


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ROLLCALL NO. 1—Continued 

Ayes Nays Present 

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) .......................................................................................

Mr. Smith (MO) .......................................................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................ X 

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) ..........................................................................................

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) .........................................................................................

Total ......................................................................................... 11 17 

2. The amendment offered by Mr. Nadler adds requirements 

that agencies identify direct and indirect benefits of covered regulations. The amendment was defeated by a rollcall vote of 12–17. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ...........................................................................................

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) .......................................................................................... X 

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................


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ROLLCALL NO. 2—Continued 

Ayes Nays Present 

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) ......................................................................................... X 

Mr. DeSantis (FL) .......................................................................................

Mr. Smith (MO) .......................................................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................ X 

Ms. Lofgren (CA) ........................................................................................ X 

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) .......................................................................................... X 

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................ X 

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) .......................................................................................... X 

Mr. Jeffries (NY) .........................................................................................

Total ......................................................................................... 12 17 

3. The amendment offered by Mr. Johnson exempts regulations 

to implement the Patient Protection and Affordable Care Act from 

the requirements of H.R. 2542. The amendment was defeated by a 

rollcall vote of 5–11. 

ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) .......................................................................

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ...........................................................................................

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) ..........................................................................................

Mr. King (IA) ..............................................................................................

Mr. Franks (AZ) .......................................................................................... X 

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) ....................................................................................... X 

Mr. Marino (PA) .........................................................................................

Mr. Gowdy (SC) .......................................................................................... X 


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ROLLCALL NO. 3—Continued 

Ayes Nays Present 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) .......................................................................................

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) .........................................................................................

Mr. DeSantis (FL) ....................................................................................... X 

Mr. Smith (MO) ..........................................................................................

Mr. Conyers, Jr. (MI), Ranking Member ....................................................

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) .................................................................................

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) .............................................................................................

Mr. Deutch (FL) ..........................................................................................

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) ..........................................................................................

Mr. Jeffries (NY) .........................................................................................

Total ......................................................................................... 5 11 

4. The amendment offered by Ms. Jackson Lee exempts Food 

and Drug Administration regulations from the requirements of 

H.R. 2542. The amendment was defeated by a rollcall vote of 8–14. 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) ..........................................................................................

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) ..........................................................................................

Mr. Gohmert (TX) .......................................................................................

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) .......................................................................................

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 


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ROLLCALL NO. 4—Continued 

Ayes Nays Present 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) ....................................................................................... X 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) .........................................................................................

Mr. DeSantis (FL) ....................................................................................... X 

Mr. Smith (MO) .......................................................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) .......................................................................................

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) ..........................................................................................

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) ..........................................................................................

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 8 14 

5. The bill was reported by a rollcall vote of 15–9. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................................................... X 

Mr. Sensenbrenner, Jr. (WI) ....................................................................... X 

Mr. Coble (NC) ........................................................................................... X 

Mr. Smith (TX) ........................................................................................... X 

Mr. Chabot (OH) ........................................................................................ X 

Mr. Bachus (AL) ......................................................................................... X 

Mr. Issa (CA) .............................................................................................

Mr. Forbes (VA) ..........................................................................................

Mr. King (IA) .............................................................................................. X 

Mr. Franks (AZ) ..........................................................................................

Mr. Gohmert (TX) ....................................................................................... X 

Mr. Jordan (OH) .........................................................................................

Mr. Poe (TX) ...............................................................................................

Mr. Chaffetz (UT) .......................................................................................

Mr. Marino (PA) ......................................................................................... X 

Mr. Gowdy (SC) .......................................................................................... X 

Mr. Amodei (NV) ........................................................................................

Mr. Labrador (ID) ....................................................................................... X 


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ROLLCALL NO. 5—Continued 

Ayes Nays Present 

Ms. Farenthold (TX) ................................................................................... X 

Mr. Holding (NC) ........................................................................................ X 

Mr. Collins (GA) .........................................................................................

Mr. DeSantis (FL) ....................................................................................... X 

Mr. Smith (MO) .......................................................................................... X 

Mr. Conyers, Jr. (MI), Ranking Member .................................................... X 

Mr. Nadler (NY) .......................................................................................... X 

Mr. Scott (VA) ............................................................................................ X 

Mr. Watt (NC) ............................................................................................

Ms. Lofgren (CA) ........................................................................................

Ms. Jackson Lee (TX) ................................................................................. X 

Mr. Cohen (TN) ..........................................................................................

Mr. Johnson (GA) ....................................................................................... X 

Mr. Pierluisi (PR) ....................................................................................... X 

Ms. Chu (CA) ............................................................................................. X 

Mr. Deutch (FL) ..........................................................................................

Mr. Gutierrez (IL) .......................................................................................

Ms. Bass (CA) ............................................................................................

Mr. Richmond (LA) .....................................................................................

Ms. DelBene (WA) ...................................................................................... X 

Mr. Garcia (FL) ..........................................................................................

Mr. Jeffries (NY) ......................................................................................... X 

Total ......................................................................................... 15 9 

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 

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. 2542, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 


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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 5, 2013. 

Hon. BOB GOODLATTE, 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. 2542, the ‘‘Regulatory 

Flexibility Improvements Act of 2013.’’ 

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. 2542—Regulatory Flexibility Improvements Act of 2013. 

As ordered reported by the House Committee on the Judiciary 

on September 5, 2013. 

SUMMARY

H.R. 2542 would amend the Regulatory Flexibility Act (RFA) by 

expanding the number of rules covered by the RFA and requiring 

agencies to perform additional analysis of regulations that affect 

small businesses. The legislation also would provide new authorities to the Small Business Administration’s (SBA’s) Office of Advocacy to intervene and provide support for agency rulemaking. 

CBO estimates that implementing H.R. 2542 would cost $45 million over the 2014–2018 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. 2542 would not affect revenues. 

H.R. 2542 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

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. 2542 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. 


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By Fiscal Year, in Millions of Dollars 

2014 2015 2016 2017 2018 2014– 

2018 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level 5 9 12 12 12 50 

Estimated Outlays 4 7 10 12 12 45 

BASIS OF ESTIMATE

For this estimate, CBO assumes that the legislation will be enacted near the start of fiscal year 2014, that the necessary amounts 

will be appropriated each year, and that spending will follow historical patterns for similar activities. 

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

However, according to the Congressional Research Service, Federal 

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

Protection Agency (EPA). Most major rules (those with an estimated economic impact on the economy of more than $100 million 

per year) are issued by the Departments of Health and Human 

Services and Agriculture, and EPA. 

H.R. 2542 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 include an examination of 

indirect economic effects on small businesses and a more detailed 

analysis of the possible economic consequences of the rule for small 

businesses. The legislation defines indirect economic effects as any 

impact that is reasonably foreseeable. The legislation also would 

require agencies to prepare reports on the cumulative economic impact on small businesses of new and existing regulations. 

Implementing H.R. 2542 would increase the amount of regulatory analysis that agencies would need to prepare and it would 

expand the role of the SBA’s Office of Advocacy, and the Office of 

Management and Budget’s 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 agencies indicates that the new requirements would increase the cost to issue 

a few hundred of the thousands of Federal regulations issued annually. Based on that information, CBO estimates that administrative 

costs in some regulatory agencies, the SBA’s Office of Advocacy, 

and OIRA would increase by a total of about $12 million annually, 

subject to the availability of appropriated funds. We expect that it 

would take about three years to reach that level of effort. 


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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. 2542 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. 2542 contains no intergovernmental or private-sector mandates as defined in UMRA and would not affect the budgets of 

state, local, or tribal governments. 

ESTIMATE PREPARED BY: 

Federal Spending: Matthew Pickford and Susan Willie 

Impact on State, Local, and Tribal Governments: Melissa Merrell 

Impact on the Private Sector: Paige Piper/Bach 

ESTIMATE APPROVED BY: 

Theresa A. Gullo 

Deputy Assistant Director for Budget Analysis 

Duplication of Federal Programs 

No provision of H.R. 2542 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 2542 specifically directs the 

Chief Counsel for Advocacy of the Small Business Administration 

to conduct one rule making proceeding within the meaning of 5 

U.S.C. 551. 

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. 2542 is intended 

to promote job creation, economic growth by better protecting small 

entities from unnecessary Federal regulatory burdens. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 2542 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 

The following discussion describes the bill as reported by the 

Committee. 


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Sec. 1. Short title; table of contents. 

Section 1 provides that the Act may be cited as the ‘‘Regulatory 

Flexibility Improvements Act of 2013.’’ 

Sec. 2. Clarification and Expansion of Rules Covered by the Regulatory Flexibility Act. 

Subsection 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. 

Subsection 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. 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, 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 

‘‘economic impact’’ covers both direct and indirect effects that are 

reasonably foreseeable. 

Subsection 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. 

Subsection 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. 

Subsection 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 is the GAO’s view, although the Forest 

Service and the BLM disagree. Since these agencies already collect 

economic data for NEPA reports, this clarification will not be burdensome. 

Subsection 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 


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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. 

Subsection 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. 

Sec. 3. Expansion of Report of Regulatory Agenda. 

Section 3 expands the terms of 5 U.S.C. sec. 602, which requires 

agencies to publish regulatory agendas every April and October, including regulations that may have significant impacts on substantial numbers of small entities. Section 3 requires the agendas to describe the North American Industrial Classification System sectors 

primarily affected by the rules. It also requires agencies and the 

SBA to publish plain language summaries of the information in the 

agendas on their websites. 

Sec. 4. 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’’ 

regarding the environmental impact of a proposed rule. Courts 

have interpreted the NEPA to require agencies to take a ‘‘hard 

look’’ at environmental impacts. 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 4 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 4(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 


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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 intent. Subsection 4(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 4(a)(7) requires agencies to describe 

any disproportionate economic impact on a specific class of small 

entities. 

Regarding the final regulatory flexibility analysis (‘‘FRFA’’), Subsection 4(b)(1) amends Section 604 to require the ‘‘description’’ and 

‘‘explanation’’ required by Section 604(b)(4), (5) and (6) to be ‘‘detailed.’’ This 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. Subsection 4(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. Subsection 4(b)(3) updates the RFA technologically by requiring agencies to post FRFAs online. 

Subsection 4(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 4(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 substantial number of small entities,’’ Section 4(d) requires the agency 

to give a ‘‘detailed statement’’ and to identify the supporting ‘‘factual and legal’’ basis for the certification. 

Finally, Subsection 4(e) makes quantifiable data (of the caliber 

required under the Information Quality Act) 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. 

Sec. 5. Repeal of Waiver Authority and Additional Powers of Chief 

Counsel. 

Section 5 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. The Chief Counsel’s regulations will be promulgated according to notice-and-comment rulemaking and conVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6601 E:\HR\OC\HR288P1.XXX HR288P1

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sequently will receive Chevron deference. Agencies can issue supplementary compliance protocols, but no agency can overturn the 

Chief Counsel’s compliance rules. 

Section 5 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 5 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 5 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. 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. 

Sec. 6. Procedures for Gathering Comments. 

Section 6 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 6 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 6 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 6 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 6 empowers the Chief Counsel 

for Advocacy to waive the panel process when it is ‘‘impractical, unnecessary, or contrary to the public interest.’’ 

Sec. 7. Periodic Review of Rules. 

Section 7 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 7 requires agencies to develop 

new periodic review plans within 180 days and to publish these 

plans online. Section 7 clarifies that the agency must review all 


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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. 

Sec. 8. Judicial Review of Compliance with the RFA. 

Under Section 8, 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 8(a) and 

(b) ensure that small entities will have prompt access to judicial review without procedural delays from agency-imposed exhaustion 

requirements. Section 8(c) makes appropriate conforming and technical corrections to Section 611. Lastly, Section 8(d) clarifies the 

Chief Counsel for Advocacy’s authority to file an amicus brief regarding agency compliance with the RFA. 

Sec. 9. Jurisdiction of Court of Appeals for Challenges to Rules Implementing RFA. 

Section 9(a) grants jurisdiction to the U.S. Court of Appeals to 

review challenges by small entities to rules promulgated by the 

Chief Counsel for Advocacy to implement the RFA. Section 9(b) 

makes technical conforming amendments. Section 9(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. 

Sec. 10. Establishment and Approval of Small Business Concern 

Size Standards by Chief Counsel for Advocacy. 

Section 10 transfers from the SBA Administrator to the Chief 

Counsel for Advocacy the function of determining size standards of 

small businesses for purposes other than the Small Business Act 

and Small Business Investment Act of 1958. 

Sec. 11. Clerical Amendments. 

Section 11 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): 


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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 titleø;¿. 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 opportunity 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 Registerø;¿. 


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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. 

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 sectionø; 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— 


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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— 

(i) any plan developed by the Secretary of Agriculture under section 6 of the Forest and Rangeland 

Renewable Resources Planning Act of 1974 (16 U.S.C. 

1604); and 

(ii) any plan developed by the Secretary of the Interior under section 202 of the Federal Land Policy and 

Management Act of 1976 (43 U.S.C. 1712). 

(B) REVISION.—The term ‘‘revision’’ means any change 

to a land management plan which— 

(i) in the case of a plan described in subparagraph 

(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 


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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)). 

§ 602. Regulatory agenda 

(a) During the months of October and April of each year, each 

agency shall publish in the Federal Register a regulatory flexibility 

agenda which shall contain— 

(1) * * * 

(2) a summary of the nature of any such rule under consideration for each subject area listed in the agenda pursuant to 

paragraph (1), the objectives and legal basis for the issuance 

of the rule, and an approximate schedule for completing action 

on any rule for which the agency has issued a general notice 

of proposed rulemakingø, and¿; 

(3) a brief description of the sector of the North American 

Industrial Classification System that is primarily affected by 

any rule which the agency expects to propose or promulgate 

which is likely to have a significant economic impact on a substantial number of small entities; and 

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

(1). 

* * * * * * * 

ø(c) Each agency shall endeavor to provide notice of each regulatory flexibility agenda to small entities or their representatives 

through direct notification or publication of the agenda in publications likely to be obtained by such small entities and shall invite 

comments upon each subject area on the agenda.¿ 

(c) Each agency shall prominently display a plain language 

summary of the information contained in the regulatory flexibility 

agenda published under subsection (a) on its website within 3 days 

of its publication in the Federal Register. The Office of Advocacy of 

the Small Business Administration shall compile and prominently 

display a plain language summary of the regulatory agendas referenced in subsection (a) for each agency on its website within 3 

days of their publication in the Federal Register. 

* * * * * * * 

§ 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 


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small entities. The initial regulatory flexibility analysis or a summary shall be published in the Federal Register at the time of the 

publication of general notice of proposed rulemaking for the rule. 

The agency shall transmit a copy of the initial regulatory flexibility 

analysis to the Chief Counsel for Advocacy of the Small Business 

Administration. In the case of an interpretative rule involving the 

internal revenue laws of the United States, this chapter applies to 

interpretative rules published in the Federal Register for codification in the Code of Federal Regulations, but only to the extent that 

such interpretative rules impose on small entities a collection of information requirementø.¿ or a recordkeeping requirement, and 

without regard to whether such requirement is imposed by statute 

or regulation. 

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 proVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6601 E:\HR\OC\HR288P1.XXX HR288P1

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posed 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) * * * 

* * * * * * * 

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, includVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6601 E:\HR\OC\HR288P1.XXX HR288P1

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ing 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 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. 

§ 605. øAvoidance of duplicative or unnecessary analyses¿ 

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. 

* * * * * * * 


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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. 

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 2013, 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 suppleVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00033 Fmt 6659 Sfmt 6603 E:\HR\OC\HR288P1.XXX HR288P1

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mental 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. 

§ 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), 


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but the agency believes may have a greater than de minimis impact on a substantial number of small entities. 

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

means— 

ø(1) the Environmental Protection Agency; 

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

ø(3) the Occupational Safety and Health Administration of 

the Department of Labor. 

ø(e) The Chief Counsel for Advocacy, in consultation with the 

individuals identified in subsection (b)(2), and with the Administrator of the Office of Information and Regulatory Affairs within 

the Office of Management and Budget, may waive the requirements of subsections (b)(3), (b)(4), and (b)(5) by including in the 

rulemaking record a written finding, with reasons therefor, that 

those requirements would not advance the effective participation of 

small entities in the rulemaking process. For purposes of this subsection, the factors to be considered in making such a finding are 

as follows: 

ø(1) In developing a proposed rule, the extent to which the 

covered agency consulted with individuals representative of affected small entities with respect to the potential impacts of 

the rule and took such concerns into consideration. 

ø(2) Special circumstances requiring prompt issuance of 

the rule. 

ø(3) Whether the requirements of subsection (b) would provide the individuals identified in subsection (b)(2) with a competitive advantage relative to other small entities.¿ 

(b)(1) Prior to publication of any proposed rule described in 

subsection (e), an agency making 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 


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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, including an assessment 

of the proposed rule’s impact on the cost that small entities pay for 

energy, and a discussion of any alternatives that will minimize adverse significant economic impacts or maximize beneficial significant economic impacts on small entities. 

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

the publication of the proposed rule, the agency shall explain what 

actions, if any, the agency took in response to such report. 

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

Office of Management and Budget, the head of the agency (or the 

delegatee of the head of the agency), or an independent regulatory 

agency determines that the proposed rule is likely to result in— (1) an annual effect on the economy of $100,000,000 or 

more; 

(2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local governments, tribal 

organizations, or geographic regions; 

(3) significant adverse effects on competition, employment, 

investment, productivity, innovation, or on the ability of United 

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

(4) a significant economic impact on a substantial number 

of small entities. 

(f) Upon application by the agency, the Chief Counsel for Advocacy of the Small Business Administration may waive the requirements of subsections (b) through (e) if the Chief Counsel 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 


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the rules upon a substantial number of such small entities. The 

plan shall provide for the review of all such agency rules existing 

on the effective date of this chapter within ten years of that date 

and for the review of such rules adopted after the effective date of 

this chapter within ten years of the publication of such rules as the 

final rule. If the head of the agency determines that completion of 

the review of existing rules is not feasible by the established date, 

he shall so certify in a statement published in the Federal Register 

and may extend the completion date by one year at a time for a 

total of not more than five years. 

ø(b) In reviewing rules to minimize any significant economic 

impact of the rule on a substantial number of small entities in a 

manner consistent with the stated objectives of applicable statutes, 

the agency shall consider the following factors— 

ø(1) the continued need for the rule; 

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

ø(3) the complexity of the rule; 

ø(4) the extent to which the rule overlaps, duplicates or 

conflicts with other Federal rules, and, to the extent feasible, 

with State and local governmental rules; and 

ø(5) the length of time since the rule has been evaluated 

or the degree to which technology, economic conditions, or 

other factors have changed in the area affected by the rule. 

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 2013, 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 2013 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 2013 within 10 years after the publication of the 


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final rule in the Federal Register. If the head of the agency determines that completion of the review of existing rules is not feasible 

by the established date, the head of the agency shall so certify in 

a statement published in the Federal Register and may extend the 

review for not longer than 2 years after publication of notice of extension in the Federal Register. Such certification and notice shall 

be sent to the Chief Counsel for Advocacy of the Small Business Administration and the Congress. 

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

will conduct outreach to and meaningfully include small businesses 

for the purposes of carrying out this section. The agency shall include in this section a plan for how the agency will contact small 

businesses and gather their input on existing agency rules. 

(d) Each agency shall annually submit a report regarding the 

results of its review pursuant to such plan to the Congress, the Chief 

Counsel for Advocacy of the Small Business Administration, and, in 

the case of agencies other than independent regulatory agencies (as 

defined in section 3502(5) of title 44) to the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget. Such report shall include the identification of 

any rule with respect to which the head of the agency made a determination described in paragraph (5) or (6) of subsection (e) and a 

detailed explanation of the reasons for such determination. 

(e) In reviewing a rule pursuant to subsections (a) through (d), 

the agency shall amend or rescind the rule to minimize any adverse 

significant economic impact on a substantial number of small entities or disproportionate economic impact on a specific class of small 

entities, or maximize any beneficial significant economic impact of 

the rule on a substantial number of small entities to the greatest extent possible, consistent with the stated objectives of applicable statutes. In amending or rescinding the rule, the agency shall consider 

the following factors: 

(1) The continued need for the rule. 

(2) The nature of complaints received by the agency from 

small entities concerning the rule. 

(3) Comments by the Regulatory Enforcement Ombudsman 

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

(4) The complexity of the rule. 

(5) The extent to which the rule overlaps, duplicates, or conflicts with other Federal rules and, unless the head of the agency determines it to be infeasible, State, territorial, and local 

rules. 

(6) The contribution of the rule to the cumulative economic 

impact of all Federal rules on the class of small entities affected 

by the rule, unless the head of the agency determines that such 

calculations cannot be made and reports that determination in 

the annual report required under subsection (d). 

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

the degree to which technology, economic conditions, or other 

factors have changed in the area affected by the rule. 

(f) The agency shall publish in the Federal Register and on 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 imVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00038 Fmt 6659 Sfmt 6603 E:\HR\OC\HR288P1.XXX HR288P1

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pact 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 requirements of sections 601, 604, 605(b), ø608(b),¿ and 610 in accordance with chapter 7. Agency compliance with sections 607 and 

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

(2) Each court having jurisdiction to review such rule for compliance with section 553, or under any other provision of law, (or 

which would have such jurisdiction if publication of the final rule 

constituted final agency action) shall have jurisdiction to review 

any claims of noncompliance with sections 601, 604, 605(b), 

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

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 


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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 

* * * * * * * 

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. 

* * * * * * * 

SMALL BUSINESS ACT 

* * * * * * * 

SEC. 3. DEFINITIONS. 

(a) SMALL BUSINESS CONCERNS.— 


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(1) * * * 

(2) ESTABLISHMENT OF SIZE STANDARDS.— ø(A) IN GENERAL.—In addition to the criteria specified 

in paragraph (1), the Administrator may specify detailed 

definitions or standards by which a business concern may 

be determined to be a small business concern for the purposes of this Act or any other Act.¿ 

(A) IN GENERAL.—In addition to the criteria specified 

in paragraph (1)— 

(i) the Administrator may specify detailed definitions or standards by which a business concern may be 

determined to be a small business concern for purposes 

of this Act or the Small Business Investment Act of 

1958; and 

(ii) the Chief Counsel for Advocacy may specify 

such definitions or standards for purposes of any other 

Act. 

* * * * * * * 

(C) REQUIREMENTS.—Unless specifically authorized by 

statute, no Federal department or agency may prescribe a 

size standard for categorizing a business concern as a 

small business concern, unless such proposed size standard— 

(i) * * * 

* * * * * * * 

ø(iii) is approved by the Administrator.¿ 

(iii) except in the case of a size standard prescribed 

by the Administrator, is approved by the Chief Counsel 

for Advocacy. 

(3) VARIATION BY INDUSTRY AND CONSIDERATION OF OTHER

FACTORS.—When establishing or approving any size standard 

pursuant to paragraph (2), the Administrator or Chief Counsel 

for Advocacy, as appropriate shall ensure that the size standard varies from industry to industry to the extent necessary to 

reflect the differing characteristics of the various industries 

and consider other factors deemed to be relevant by the Administrator or Chief Counsel for Advocacy. 

* * * * * * * 

(9) JUDICIAL REVIEW OF STANDARDS APPROVED BY CHIEF

COUNSEL.—In the case of an action for judicial review of a rule 

which includes a definition or standard approved by the Chief 

Counsel for Advocacy under this subsection, the party seeking 

such review shall be entitled to join the Chief Counsel as a 

party in such action. 

* * * * * * * 

SECTION 212 OF THE SMALL BUSINESS REGULATORY 

ENFORCEMENT FAIRNESS ACT OF 1996 

SEC. 212. COMPLIANCE GUIDES. 

(a) COMPLIANCE GUIDE.— 


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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 

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, 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. 

(1) * * * 

* * * * * * * 

ø(5) AGENCY PREPARATION OF GUIDES.—The agency shall, 

in its sole discretion, taking into account the subject matter of 

the rule and the language of relevant statutes, ensure that the 

guide is written using sufficiently plain language likely to be 

understood by affected small entities. Agencies may prepare 

separate guides covering groups or classes of similarly affected 

small entities and may cooperate with associations of small entities to develop and distribute such guides. An agency may 

prepare guides and apply this section with respect to a rule or 

a group of related rules.¿ 

(5) AGENCY PREPARATION OF GUIDES.—The agency shall, in 

its sole discretion, taking into account the subject matter of the 

rule and the language of relevant statutes, ensure that the guide 

is written using sufficiently plain language likely to be understood by affected small entities. Agencies may prepare separate 

guides covering groups or classes of similarly affected small entities and may cooperate with associations of small entities to 

distribute such guides. In developing guides, agencies shall solicit input from affected small entities or associations of affected 

small entities. An agency may prepare guides and apply this 

section with respect to a rule or a group of related rules. 

* * * * * * * 

Dissenting Views 

INTRODUCTION

H.R. 2542, the ‘‘Regulatory Flexibility Improvements Act of 

2013,’’ (RFIA) amends the Regulatory Flexibility Act 1 (RFA) in 

ways that will significantly hinder the promulgation of critical public health and safety rules by Federal administrative agencies. 

While H.R. 2542’s proponents claim that these changes to the RFA 

will ease the alleged 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. 

H.R. 2542 does nothing to help small businesses and other small 

entities reduce compliance costs or to ensure agency compliance 

with the RFA. Instead, the bill imposes numerous and unnecessary 

burdens on agencies while ignoring the fact that small businesses, 


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2For example, workplace 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/. There were 4,383 fatal occupational 

injuries last year, according to the Bureau of Labor Statistics. Press Release, U.S. Dep’t of Labor 

Bureau of Labor Statistics, National Census of Fatal Occupational Census of Fatal Occupational 

Injuries in 2012 (Preliminary Results), Aug. 13, 2013, available at http://www.bls.gov/ 

news.release/pdf/cfoi.pdf. Additionally, an analysis by the National Institute for Occupational 

Safety and Health, the American Cancer Society, and Emory University’s School of Public 

Health estimates that after factoring in disease and injury data ‘‘there are a total of 55,200 US 

deaths annually resulting from occupational disease or injury (range 32,200–78,200).’’Kyle 

Steenland et al., Dying for Work: The Magnitude of US Mortality from Selected Cases of Death 

Associated with Occupation, 43 Am. J. Industrial Medicine 461 (2003). 3The other organizations include: Alliance for Justice, American Association of University Professors, American Federation of Teachers, Americans for Financial Reform, American Rivers, 

American Values Campaign, American Sustainable Business Council, BlueGreen Alliance, Campaign for Contract Agriculture Reform, Center for Effective Government, Center for Food Safety, 

Center for Foodborne Illness Research and Prevention, Center for Independent Living, Center 

for Science in the Public Interest, Citizens for Sludge-Free Land, Clean Air Watch, Clean Water 

Network, Consortium for Citizens with Disabilities, Countercorp, Cumberland Countians for 

Peace and Justice, Demos, Economic Policy Institute, Edmonds Institute, Environment America, 

Farmworker Justice, Free Press, Friends of the Earth, Green for All, Health Care for America 

Now, In the Public Interest, International Brotherhood of Teamsters, International Center for 

Technology Assessment, International Union of United Automobile, Aerospace, & Agricultural 

Implement Workers of America (UAW), Los Angeles Alliance for a New Economy, Main Street 

Alliance, National Association of Consumer Advocates, National Center for Healthy Housing, 

National Consumers League, National Council for Occupational Safety and Health, National 

Employment Law Project, National Lawyers Guild Louisville Chapter, National Women’s Health 

Network, National Women’s Law Center, Natural Resources Defense Council, Network for Environmental & Economic Responsibility of the United Church of Christ, New Jersey Work Environment Council, New York Committee for Occupational Safety and Health, Oregon Peaceworks, 

People for the American Way, Protect All Children’s Environment, Reproductive Health Technologies Project, Safe Tables Our Priority (S.T.O.P.), Service Employees International Union, 

Southern Illinois Committee for Occupational Safety and Health, The Arc of the United States, 

The Partnership for Working Families, Trust for America’s Health, U.S. Camber Watch, U.S. 

Continued 

like their larger counterparts, can substantially impact the health 

and safety of their workers as well as that of the general public.2

Small businesses, like all businesses, provide services and goods 

that also affect our lives and can carry the same risk of harm as 

the services and goods that large businesses provide. 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. 

Accordingly, we must oppose attempts like H.R. 2542 that create 

an unacceptable barrier to agency rulemaking. Specifically we are 

opposed to this legislation because it: (1) is based on the false 

premise that regulatory costs stifle economic growth and job creation; (2) will threaten public health and safety by severely undermining Federal agency rulemaking; (3) imposes additional duties 

on agencies while failing to provide for any additional resources to 

meet these burdens; and (4) allows more opportunities for industry 

to delay or defeat proposed rulemakings. 

Consumer groups and organizations concerned with protecting 

public health and safety have raised many of these same concerns. 

The Coalition for Sensible Safeguards, a broad coalition of 72 environmental, labor, and consumer organizations, including the AFL– 

CIO, the American Federation of State, County and Municipal Employees, the American Lung Association, Consumer Federation of 

America, Consumers Union, the League of Conservation Voters, 

Public Citizen, and the Union of Concerned Scientists, strongly opposed substantially similar legislation to H.R. 2542 in the 112th 

Congress.3


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PIRG, Union Plus, United Food and Commercial Workers Union, United Steelworkers, 

Waterkeeper Alliance, Worksafe. See Letter from 72 organizations to Representative John Conyers, Jr. (D–MI), Ranking Member, Committee on the Judiciary (Nov. 29, 2011) (on file with 

the United States House of Representatives, Comm. on the Judiciary, Democrats). 4 Executive Office of the President, Office of Management and Budget, Statement of Administration Policy for H.R. 527—Regulatory Flexibility Improvements Act of 2011 (Nov. 29, 2011) 

(emphasis in original), available at http://www.whitehouse.gov/sites/default/files/omb/legislative/ 

sap/112/saphr527rl20111129.pdf. 5 5 U.S.C. § 601(6) (2013). 

6See 5 U.S.C. §§ 603, 604 (2013). 7 5 U.S.C. § 605(b) (2013). 

8 5 U.S.C. § 602 (2013). 

9 5 U.S.C. § 610 (2013). 

10 5 U.S.C. § 609 (2013). 11Pub. L. No. 104–121, § 242, 110 Stat. 847, 857 (1996). 

Moreover, the Obama administration issued a veto threat against 

the earlier iteration of the RFIA in the 112th Congress, explaining 

that the RFIA ‘‘would impede the ability of agencies to provide the 

public with basic protections, and create needless confusion and 

delay that would prove disruptive for businesses, as well as for 

state, tribal and local governments.’’ 4

We wholeheartedly agree with the Administration’s assessment 

of the RFIA and for the reasons discussed below, we respectfully 

dissent and urge our colleagues to reject this seriously flawed legislation. 

BACKGROUND AND DESCRIPTION

I. BACKGROUND

Enacted in 1980, the RFA requires Federal agencies to assess the 

impact of proposed regulations on ‘‘small entities,’’ which the Act 

defines as either a small business, small organization, or small governmental jurisdiction.5 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.6 This analysis is not required, however, if the agency certifies that the rule will not have 

a ‘‘significant economic impact on a substantial number of small 

entities.’’ 7 Whether a proposed rule will have such an impact is, 

therefore, the threshold inquiry under the RFA. 

In addition, the RFA requires each agency to publish twice a 

year in the Federal Register a regulatory flexibility agenda identifying regulations that have a significant economic impact on a substantial number of small entities which the agency expects to propose. 8 Further, the RFA requires agencies to conduct periodic reviews of rules having a significant economic impact on a substantial number of small entities 9 and to ensure that small entities 

have an opportunity to participate in the rulemaking process.10

Congress amended the RFA in 1996 with the enactment of the 

Small Business Regulatory Enforcement Fairness Act (SBREFA)11

to permit judicial review of an agency’s regulatory flexibility analysis for a final rule and of an agency’s certification that a rule 


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12 5 U.S.C. § 609(b) (2013). The review panel requirement was extended to the Consumer Financial Protection Bureau in 2010. See 5 U.S.C. § 609(d) (2013). 

would not have a significant economic impact on a substantial 

number of small entities. SBREFA also requires that 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 the Small 

Business Administration, and the Office of Information and Regulatory Affairs (OIRA).12

II. DESCRIPTION

H.R. 2542’s supporters contend that agencies have failed to comply with the RFA. In response to this purported concern, H.R. 2542 

amends the RFA to expand the scope of its provisions and impose 

new procedural and analytical requirements on agencies whenever 

a rule is subject to the RFA. 

First, H.R. 2542 expands the type of rules covered by the RFA 

to include those that have a reasonably foreseeable indirect effect 

on small entities, which is a highly speculative requirement. It also 

includes documents like land management plans and certain guidance documents under the definition of ‘‘rule,’’ further expanding 

the RFA’s scope. Second, the bill would require agencies to provide 

more detail and analysis in their initial and final regulatory analyses of proposed and final rules. Third, H.R. 2542 repeals the emergency authority that the RFA gives to agencies to waive or delay 

an initial regulatory flexibility analysis or to delay a final regulatory flexibility analysis. This provision will prevent agencies from 

quickly responding to a public health or safety emergency. Fourth, 

H.R. 2542 grants additional power to the Small Business Administration’s (SBA’s) Chief Counsel for Advocacy to promulgate rules 

governing agencies’ RFA compliance, to intervene in agency adjudications, and to file comments on proposed rules. Fifth, the bill 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—not just rules issued by the 

EPA, OSHA, and the Consumer Financial Protection Bureau 

(CFPB), as is under current law—and would also apply to rules 

that would be considered ‘‘major rules’’ regardless of whether such 

rules would otherwise be subject to the RFA. 

Sixth, H.R. 2542 amends the RFA’s requirement that agencies 

periodically review rules to require that agencies review all rules 

that exist on H.R. 2542’s enactment date. The bill would also mandate that agencies amend or rescind those rules, regardless of the 

review’s findings. In addition, H.R. 2542 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. 2542 grants exclusive jurisdiction to the 

Federal courts of appeal 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 under this legislation. 

A detailed section-by-section analysis of H.R. 2542 appears later 

in our dissenting views. 


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13 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/rs371 

tot.pdf. 14 H.R. 527, the ‘‘Regulatory Flexibility Improvements Act of 2011’’—Unleashing Small Businesses to Create Jobs: Hearing Before the Subcomm. on Courts, Commercial and Administrative 

L. of the H. Comm. on the Judiciary, 112th Cong. (2011) [hereinafter ‘‘H.R. 527 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). 15Sid 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), available at http://www.progressivereform.org/articles/SBAlRegulatorylCostsl Analysisl1103.pdf. 16 Id. 17 Id. 18 Curtis W. Copeland, Analysis of an Estimate of the Total Costs of Federal Regulations, Congressional Research Service Report for Congress, R41763 (Apr. 6, 2011). 19 Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to the author of the CRS report). 20 Id. 

CONCERNS WITH H.R. 2542

I. H.R. 2542 IS BASED UPON THE FALSE PREMISE THAT REGULATIONS

STIFLE JOB CREATION

H.R. 2542 is based on the false premise that regulations impose 

overwhelmingly burdensome costs on small businesses that ultimately hampers economic growth and job creation. In particular, 

H.R. 2542’s supporters rely almost exclusively on an SBA study 

conducted by economists Nicole and Mark Crain (Crain study)13

which 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.14

The Crain study, however, has been thoroughly debunked 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.15 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.16 Moreover, the Crain 

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.17

The Congressional Research Service (CRS)—which is independent and nonpartisan—also conducted an extensive examination of the Crain study and criticized much of its methodology.18

CRS noted that the authors of the Crain study themselves admitted 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?)’’ 19 Accordingly, CRS concluded that ‘‘a valid, reasoned 

policy decision can only be made after considering information on 

both costs and benefits’’ of regulation.20

The Crain study’s failure to account for the net benefits of regulation in general was particularly shortsighted given the fact that 


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21Occupational 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/cottondustl final2000.pdf. 22 Id. 23 Id. at 38–39. 24The REINS Act—Promoting Jobs and Expanding Freedom by Reducing Needless Regulations Hearing Before the Subcomm. on Courts, Commercial and Administrative L. 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). 25 Id. 26Office of Management and Budget, Draft 2013 Report to Congress on the Benefits and Costs 

of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act, available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/2013lcb/draftl2013lcostl benefitlreport.pdf. 27 Id. 

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.21 Much of that growth and prosperity was 

the result of business innovations relating to compliance with the 

rule.22 Indeed, the costs of the rule ended up being much smaller 

than predicted because of these innovations.23

Sally Katzen, a former OIRA Administrator during the Clinton 

administration, noted in testimony before the Judiciary Committee’s Subcommittee on Courts, Commercial and Administrative 

Law, that the OMB regularly finds that the aggregate benefits of 

Federal regulations outweigh their costs.24 Katzen noted that: 

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 

issuance of regulations more difficult or time consuming is 

certainly in question.25

OMB’s draft 2013 Report to Congress further bolsters the conclusion that the benefits of regulations far outweigh their costs. It 

found that the ‘‘estimated annual benefits of major Federal regulations reviewed by OMB from October 1, 2002, to September 30, 

2012, for which agencies estimated and monetized both benefits 

and costs, are in the aggregate between $193 billion and $800 billion, while the estimated annual costs are in the aggregate between 

$57 billion and $84 billion.’’ 26 The draft 2013 report further noted 

that some benefits and costs cannot be quantified or monetized.27

Representative Jerrold Nadler (D–NY) offered an amendment at 

the Committee’s markup of H.R. 2542 that would have required 

agencies to assess the indirect benefits of a rule as part of the required regulatory flexibility analysis under H.R. 2542. The MajorVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\HR288P1.XXX HR288P1

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28Pub. L. No. 104–121, § 242, 110 Stat. 847, 857 (1996). 29 5 U.S.C. § 609(b) (2013). The review panel requirement was extended to the CFPB in 2010. 

See 5 U.S.C. § 609(d) (2013). 

ity, however, opposed this amendment and it was defeated by a 12 

to 17 vote along party lines. 

II. H.R. 2542 THREATENS PUBLIC HEALTH AND SAFETY BY

UNDERMINING FEDERAL AGENCY RULEMAKING

H.R. 2542 will undermine the ability of agencies to protect public 

health and safety by imposing new and unnecessary requirements 

on the rulemaking process and will force these agencies to shift resources to this more complex, costly, and time-consuming rulemaking process. The bill will prevent agencies from effectively promulgating regulations designed to protect Americans’ health and 

safety. 

A. H.R. 2542’s Elimination of Agencies’ Waiver and Delay Authority Undermines the Agencies’ Ability To Respond To Emergencies 

Section 5 of H.R. 2542 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. 2542 undermines 

an agency’s ability to respond to emergency situations. 

The 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 absolutely 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. 

At the Committee markup, Ranking Member John Conyers, Jr. 

offered an amendment that would have preserved the waiver or 

delay authority agencies have under current law to quickly respond 

to emergencies, without being hampered or second-guessed by others. The amendment was defeated by an 11 to 17 party-line vote. 

B. H.R. 2542’s Expanded Use of Advocacy Review Panels Creates a 

Serious Impediment To Agency Rulemaking 

As discussed earlier, SBREFA 28 amended the RFA to require 

that rules proposed by the EPA and OSHA be subject to an advocacy review panel consisting of a representative of the agency promulgating the rule, the Chief Counsel for Advocacy of SBA, and 

OIRA.29 The Dodd-Frank Act later added the CFPB to this list of 

agencies subject to advocacy review panels. Section 6 of H.R. 2542 

significantly expands the reach of this requirement to make it 

apply to rules proposed by all agencies. In addition, section 6 would 

make the review panel requirement apply to all major rules regardless of whether they have a significant economic impact on a substantial number of small entities, that is, regardless of whether the 

RFA would apply. Under section 6, the review panel would review 

a proposed rule, solicit and obtain input from business interests, 

and then issue a report assessing the economic impact of the proposed rule on small entities, including the energy cost impact, as 

well as a discussion of regulatory alternatives. This report is then 


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30Small Business Administration, Office of Advocacy, About Us, available at http:// 

www.sba.gov/category/advocacy-navigation-structure/about-us. 31The Center for Progressive Reform prepared a report earlier this year detailing the Office 

of Advocacy’s role in politicizing debates about regulation and ‘‘funneling special interest pressure into agency rulemakings, even though such interests have already had ample opportunity 

to comment on proposed regulations.’’ Sidney Shapiro & James Goodwin, Distorting the Interests 

of Small Business: How the Small Business Administration Office of Advocacy’s Politicization of 

Small Business Concerns Undermines Public Health and Safety, Center for Progressive Reform 

White Paper #1302 (Jan. 2013), available at http://www.progressivereform.org/articles/SBAl 

OfficeloflAdvocacyl1302.pdf. Additionally, the Center for Effective Government issued a report detailing how the Office of Advocacy interfered with regulators’ scientific assessments in 

order to promote the interests of large chemical companies having nothing to do with small business. Randy Rabinowitz, Katie Greenhaw, & Katie Weatherford, Small Business, Public Health, 

and Scientific Integrity: Whose Interests Does the Office of Advocacy at the Small Business Administration Serve?, Center for Effective Government (Jan. 2013), available at http:// 

www.foreffectivegov.org/files/regs/office-of-advocacy-report.pdf. 32 H.R. 2542, the ‘‘Regulatory Flexibility Improvements Act of 2013’’: Hearing Before the 

Subcomm. on Regulatory Reform, Commercial and Antitrust L. of the H. Comm. on the Judiciary, 113th Cong. (2013) (statement of Amit Narang, Regulatory Policy Advocate, Public Citizen). 33 Id. 

to be made part of the rulemaking record, and the agency must explain what, if anything, it did in response to the report. 

By requiring the cumbersome review panel process to apply to all 

agency rules having a significant economic impact on a substantial 

number of small entities, as well as by requiring this process to 

apply to all major rules—regardless of whether they have such an 

impact—this provision will slow down the rulemaking process and 

substantially empower business interests to throw sand into the 

gears of rulemaking. The use of advocacy review panels is already 

cumbersome. SBA’s Office of Advocacy, which was established with 

the express purpose of acting as an independent advocate for business interests within the Federal Government,30 is already able to 

delay the issuance of final EPA, OSHA, and CFPB rules and to 

shape them in industry-friendly ways.31 Expanding the use of these 

panels to include all agencies and all rules that do not necessarily 

have a significant economic impact on a substantial number of 

small entities would guarantee that most rulemakings would be delayed and reflect a less consumer-oriented perspective. Moreover, 

this expansion of the review panel process takes it well beyond the 

scope of the RFA. 

Amit Narang, Regulatory Policy Advocate for Public Citizen, testified before the Subcommittee on Regulatory Reform, Commercial 

and Antitrust Law (Subcommittee) that the ‘‘dramatic expansion’’ 

of review panels under the RFIA ‘‘will result in these panels giving 

feedback on rules that have no application and place no requirements on small businesses. Once again, the RFIA stretches the 

boundaries of what is considered a regulation that impacts small 

businesses to such a degree that the distinction between what does 

and what does not impact small businesses is rendered meaningless.’’ 32 Mr. Narang further noted that a Government Accountability Office report detailing the ‘‘glacially slow pace of rulemaking 

at OSHA identified the SBREFA panel process as one of the factors 

delaying OSHA, finding that it takes about 8 months of work for 

OSHA to prepare for the panel’’ 33 Greatly expanding use of these 

panels can only cause similar rulemaking delays at other agencies. 

III. H.R. 2542 FORCES AGENCIES TO ENGAGE IN WASTEFUL, SPECULATIVE ANALYSES

Section 2 of H.R. 2542 defines, among other things, ‘‘economic 

impact’’ to include any reasonably foreseeable ‘‘indirect economic efVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00049 Fmt 6659 Sfmt 6601 E:\HR\OC\HR288P1.XXX HR288P1

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34 Id. 35 H.R. 2542, 113th Cong., § 4(b)(1)(B) (2013). 36 H.R. 2542, 113th Cong., § 4(b)(1)(A) (2013). 37 H.R. 2542, 113th Cong., § 4(a) (2013). 38 H.R. 2542, 113th Cong., § 4(d) (2013). 39 H.R. 2542, 113th Cong., § 4(e) (2013). 

fect’’ 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. In effect, H.R. 2542 could kill a 

rulemaking as a result of ‘‘paralysis by analysis.’’ 

The bill’s onerous requirements will prevent agencies from engaging in effective rulemaking. As Mr. Narang testified before the 

Subcommittee, the: 

RFIA does little to clarify what constitutes, and more importantly, what does not constitute an indirect economic effect, giving agencies only the vague and perfunctory guidance that it be ‘‘reasonably foreseeable.’’ This ill-defined 

and indeterminate new mandate will exert strong pressure 

on agencies to engage in a guessing game of sorts as they 

attempt to identify all possible indirect effects of a rule, an 

enterprise akin to ordering a meteorologist to discern the 

effects on Washington, D.C. weather of a butterfly flapping 

its wings in Japan.34

A. H.R. 2542 Imposes Additional Duties on Agencies, But Fails To 

Provide Any Additional Funding for Agencies to Comply with 

Burdensome New Requirements 

In addition to requiring agency assessments of a rule’s indirect 

effects and expanding the use of advocacy review panels, H.R. 2542 

substantially increases other agency responsibilities with respect to 

rulemaking. For example, section 4 of the bill requires agencies, 

with respect to regulatory analyses, to: 

• specifically detail the required descriptions;35

• provide a detailed explanation of 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;36

• describe any disproportionate economic impact on small entities or a specific class of small entities;37

• 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;38 and 

• provide in every instance (rather than simply making discretionary, as under current law) a quantifiable or numerical 

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.39

These heightened responsibilities and other duties imposed by 

H.R. 2542 will force agencies to expend already-strained resources 


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40 Congressional Budget Office, Cost Estimate for H.R. 2542, the Regulatory Flexibility Improvements Act of 2013 (Sept. 5, 2013), available at http://cbo.gov/sites/default/files/cbofiles/ 

attachments/hr2542.pdf. 41 Id. 42 H.R. 2542, 113th Cong, § 7 (2013) (emphasis added). 

and incur considerable costs to implement the bill. Not surprisingly, the Congressional Budget Office (CBO) estimates that H.R. 

2542 would cost American taxpayers $45 million between 2014 and 

2018.40 Meanwhile, the CBO identified no cost savings stemming 

from H.R. 2542.41

B. H.R. 2542 Would Overwhelm Agencies by Requiring Them To 

Conduct Exhaustive Reviews of All Existing Rules 

Section 7 of H.R. 2542 threatens to undermine agencies’ ability 

to fulfill their regulatory responsibilities by requiring that all agencies review all rules—not just those subject to the RFA—existing 

on the bill’s enactment date issued within 10 years of the publication of a required plan by each agency for retrospective review. 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, and workplace safety. Agencies will be forced to redirect their scarce resources to meet this 

burdensome requirement. 

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 that could be subjected to H.R. 2542’s look-back requirement. At a time when agencies are already under strain with 

limited resources, they can ill-afford this substantial increase in 

their workload. Meanwhile, Congress continues to slash funding for 

critical child welfare, indigent assistance, and law enforcement programs. 

In addition, section 2 of H.R. 2542 expands the scope of rules 

subject to the RFA by including land management plans as well as 

rules pertaining to Tribal Organizations and certain Internal Revenue Service interpretive rules. These types of guidance documents 

traditionally are not ‘‘rules’’ subject to the RFA. Expanding the 

scope of items subject to review will require additional resources 

that would otherwise be used by the agency to carry out its duties 

as delegated by Congress. 

Further, section 7 imposes the absurd and wasteful requirement 

that agencies amend or rescind all existing rules. Specifically, section 7 of H.R. 2542 states that in ‘‘reviewing a rule, the agency 

shall amend or rescind the rule to minimize any adverse significant 

economic impact on a substantial nuber of small entities or disproportionate economic impact on a specific class of small entities. . . .’’ 42 In other words, regardless of the findings of any review of existing regulations, agencies must amend or rescind all existing rules, even when the review finds there is no need to amend 

or rescind a particular rule. Why require agencies to engage in a 

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43The Regulatory Flexibility Improvements Act of 2011—Unleashing Small Businesses to Create Jobs: Hearing Before the Subcomm. on Commercial and Administrative L. of the H. Comm. 

on the Judiciary, 112th Cong. (2011) (statement of J. Robert Shull). 44 H.R. 2542, the ‘‘Regulatory Flexibility Improvements Act of 2013’’: Hearing Before the 

Subcomm. on Regulatory Reform, Commercial and Antitrust L. of the H. Comm. on the Judiciary, 113th Cong. (2013) (statement of Amit Narang, Regulatory Policy Advocate, Public Citizen). 45The Regulatory Flexibility Improvements Act of 2011—Unleashing Small Businesses to Create Jobs: Hearing Before the Subcomm. on Commercial and Administrative L. of the H. Comm. 

on the Judiciary, 112th Cong. (2011) (statement of J. Robert Shull). 

scinded if amending or rescinding the rule is required regardless 

of what the review would find? Taken literally, this provision would 

force agencies to: (1) review the hundreds of thousands of pages of 

rules and guidance documents existing on H.R. 2542’s enactment 

date, and (2) amend or rescind every rule in existence on that date 

regardless of the review’s findings. As J. Robert Shull noted in testimony before the Subcommittee last Congress, the mandatory 

‘‘amend or rescind’’ provision requires that ‘‘the agency . . . embark upon new rulemakings for all of those [existing] regulations.’’ 43 While we find much of the bill’s provisions to be wasteful, 

surely, the sponsors of H.R. 2542 hopefully could not have intended 

to include this absurd and monumental waste of taxpayer resources. 

IV. 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 8 of H.R. 2542 creates the opportunity for well-funded 

anti-regulatory business interests to engage in frivolous litigation. 

It does this by expanding the scope of judicial review to include 

court challenges to agency actions to issuance of a final rule, including agency compliance with H.R. 2542’s numerous, vague, speculative, and cumbersome analytical and other requirements. Current law limits such judicial review to final agency actions. 

As Mr. Narang noted at the Subcommittee’s hearing on H.R. 

2542, the bill’s expansion of judicial review to include challenges to 

the adequacy of regulatory flexibility analyses would open the door 

to endless litigation, stating, in the context of discussing the bill’s 

requirement that agencies assess a rule’s indirect effects, that: 

the RFIA ensures that if agencies guess wrong on indirect 

effects, regulated entities will have the ability to draft the 

agency into court and overturn a rule because the agency 

wasn’t able to satisfy this new and highly speculative mandate of determining all indirect effects. Thus, the RFIA 

opens the floodgates of litigation and transforms a statute 

that is supposed to target rules that apply to small businesses into one that forces agencies, by default, to assume 

that their rules will in some indirect and attenuated fashion apply to small businesses.44

Similarly, Mr. Shull testified that the RFIA would ‘‘dramatically’’ 

expand the RFA’s judicial review provisions ‘‘to allow corporate special interests to challenge the adequacy of analysis over a wide 

range of agency activities, not limited to the ‘final agency actions’ 

that normally are the decision point that must be reached before 

an agency can be dragged into court.’’ 45


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46Section 3502(3) defines ‘‘collection of information’’ as follows: 

Continued 

To address the threat to public health and safety posed by the 

various provisions of H.R. 2542 outlined above, Representative 

Hank Johnson (D–GA) offered at markup an amendment that 

would have exempted rules implementing the Patient Protection 

and Affordable Care Act from H.R. 2542. The Majority opposed this 

amendment and it was defeated by a 5 to 11 party-line vote. Similarly, Representative Sheila Jackson Lee (D–TX) offered an amendment that would have exempted rules issued by the Food and Drug 

Administration from H.R. 2542. The Majority opposed this amendment and it was defeated by an 8 to 14 party-line vote. 

SECTION–BY–SECTION EXPLANATION

A section-by-section explanation of the bill’s substantive provisions follows. Section 2(a) amends 5 U.S.C. § 601(2) to provide that 

the term ‘‘rule’’ does not include a rule of particular applicability 

related to rates, wages, corporate or financial structures (or reorganizations thereof), prices, facilities, appliances, services, or allowances. 

Section 2(b) amends 5 U.S.C. § 601 to define ‘‘economic impact’’as 

any direct economic effect on small entities by a proposed or final 

rule and any indirect economic effect on small entities that is reasonably foreseeable and results from such rule, without regard to 

whether small entities will be directly regulated by the rule. 

Section 2(c) amends 5 U.S.C. §§ 603(c) and 604(a)(7) to require 

each initial and final regulatory flexibility analysis to contain a detailed description of alternatives to the rule that minimize any significant adverse economic impact or maximize any significant beneficial economic impact on small entities. 

Section 2(d) amends 5 U.S.C. § 601(5) (which defines small governmental jurisdiction) to expand its applicability to tribal organizations. 

Section 2(e) amends 5 U.S.C. §§ 603(a) and 604(a) to make the 

requirement to prepare an initial and final regulatory impact analysis applicable to instances where an agency publishes a revision 

or amendment to a land management plan or issues a proposed 

rule made on the record after opportunity for an agency hearing. 

In addition, section 2(e) amends 5 U.S.C. § 601 to define land management plan, revision of a land management plan, and amendment of a land management plan. 

Section 2(f)(1) amends 5 U.S.C. § 603(a) with respect to its requirement for an initial regulatory flexibility analysis for Internal 

Revenue Service interpretative rules published in the Federal Register for codification in the Code of Federal Regulations the bill provides, to the extent that such interpretative rules require small entities to collect information. Section 603(a) applies to recordkeeping 

requirements imposed by such rules on small entities, without regard to whether such requirements are imposed by statute or regulation. 

Section 2(f)(2) amends 5 U.S.C. § 601(7), which defines the term 

‘‘collection of information’’ to provide that the term has the same 

meaning as set forth in 44 U.S.C. § 3502(3).46


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(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— 

(I) answers to identical questions posed to, or identical reporting or recordkeeping requirements imposed on, ten or more persons, other than agencies, instrumentalities, or 

employees of the United States; or 

(ii) answers to questions posed to agencies, instrumentalities, or employees of the 

United States which are to be used for general statistical purposes; and 

(B) shall not include a collection of information described under section 3518(c)(1). 

44 U.S.C. § 3502(3) (2013). 47Section 3502(13) defines ‘‘recordkeeping requirement’’ as follows: 

[A] requirement imposed by or for an agency on persons to maintain specified records, including 

a requirement to— 

(A) retain such records; 

(B) notify third parties, the Federal Government, or the public of the existence of such 

records; 

(C) disclose such records to third parties, the Federal Government, or the public; or 

(D) report to third parties, the Federal Government, or the public regarding such 

records[.] 

Section 2(f)(3) amends 5 U.S.C. § 601(8), which defines the term 

‘‘recordkeeping requirement’’ ‘‘as a requirement imposed by an 

agency on persons to maintain specified records.’’ Section 2(f)(3) 

amends the definition to provide that the term has the same meaning as set forth in 44 U.S.C. § 3502(13).47

Section 2(g) amends 5 U.S.C. § 601(4), which defines the term 

‘‘small organization’’ as ‘‘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[.]’’ Section 2(g) provides that this term includes any 

not-for-profit enterprise that ‘‘as of the issuance of the notice of 

proposed rulemaking’’ does not exceed the specified size standard 

for small business concerns established by the SBA Administrator 

applicable to a classification code of the North American Industrial 

Classification System, providing such enterprise has a net worth of 

less than $7 million and has fewer than 500 employees. For a local 

labor organization, the definition applies regardless of whether the 

organization is a part of a national or international organization. 

These definitions do not apply to the extent that an agency, after 

consulting the Office of Advocacy of the Small Business Administration and public comments, establishes its own definition of 

‘‘small organization’’ and publishes such definition in the Federal 

register. 

Section 3 amends 5 U.S.C. § 602 by adding a requirement for a 

brief description of the sector that is primarily affected by a rule 

in its regulatory flexibility agenda and a requirement that the 

agenda contain a plain-language summary to be published on the 

agency’s website within 3 days of its publication in the Federal 

Register. 

Section 4(a) amends 5 U.S.C. § 603(b) to require an initial regulatory flexibility analysis to contain a detailed statement: (1) describing the reasons why the 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 businesses 

to which the rule will apply; (4) describing the rule’s projected reporting, recordkeeping, and other compliance requirements; (5) describing all relevant Federal rules that may duplicate, overlap, or 


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conflict with the rule or the reasons why such description was not 

provided; (6) estimating the rule’s additional cumulative economic 

impact on small entities beyond that already imposed on the class 

of small entities (or an explanation of why such an estimate is not 

available); and (7) describing any disproportionate economic impact 

on small entities or a specific class of small entities. 

Section 4(b)(1) amends 5 U.S.C. § 604(a), which sets forth the requirements of a final regulatory flexibility analysis, by requiring 

more detailed descriptions and explanations specyfying that an 

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

Section 4(b)(2) amends 5 U.S.C. § 604(a)(2) to provide that it applies to instances where the agency certifies a proposed rule. Section 4(b)(3) amends 5 U.S.C. § 604(b), which requires an agency to 

make copies of the final regulatory flexibility analysis available to 

the public and to publish it (or a summary thereof) in the Federal 

Register. Section 4(b)(3) expands this requirement to include posting the entire analysis on the agency’s website. In addition, the 

final analysis must also include the telephone number, mailing address, and link to the website where the complete analysis may be 

found. 

Section 4(c) amends 5 U.S.C. § 605(a), which provides that an 

agency must be treated as having satisfied any requirement regarding an agenda or regulatory flexibility analysis, to require a 

cross-reference to the specific portion of the other agenda or analysis that satisfies this requirement. 

Section 4(d) amends 5 U.S.C. § 605(b), which permits an agency, 

in lieu of complying with sections 603 and 604, to certify that the 

rule will not have a significant economic impact on a substantial 

number of small entities. As amended, section 605(b) requires such 

certification to be accompanied by a detailed statement providing 

the factual and legal basis for it. 

Section 4(e) amends 5 U.S.C. § 607, which allows an agency to 

provide either a quantifiable or numerical description of the effects 

of a proposed rule or alternatives to a proposed rule, or more general descriptive statements if quantification is not practicable or reliable. This amendment makes section 607 mandatory and specifies 

that in instances where an agency provides a general descriptive 

statement, the agency must also provide a detailed statement explaining why quantification is not practicable or reliable. 

Section 5(a) replaces current 5 U.S.C. § 608, which allows an 

agency to waive or delay the completion of some or all of the requirements of section 603 (pertaining to initial regulatory flexibility 

analyses) and to delay the requirements of section 604 (pertaining 

to final regulatory flexibility analyses), with a new provision allowing for additional powers of the Chief Counsel for Advocacy of the 

Small Business Administration. 

New Section 608(a)(1) requires the Chief Counsel for Advocacy to 

issue rules governing compliance with chapter 6, after opportunity 

for notice and comment, within 270 days after enactment of the 

RFIA. New section 608(a)(2) provides that an agency may not issue 

rules that supplement those promulgated by the Chief Counsel unless such agency has first consulted with the Chief Counsel to ensure that the supplemental rules comply with chapter 6 and the 

Counsel’s rules. 


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New section 608(b) provides that the Chief Counsel, notwithstanding any other law, may intervene in any adjudication before 

any Federal agency (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 provision prohibits the Chief Counsel from initiating 

an appeal with respect to any adjudication in which the Chief 

Counsel intervenes pursuant to new section 613(b). 

New section 608(c) authorizes the Chief Counsel to 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 5 U.S.C. § 553. 

Section 6 replaces 5 U.S.C. § 609(b), which sets out procedures 

that an agency must follow prior to the publication of an initial 

regulatory flexibility analysis. As amended, section 609(b) requires 

the agency to provide to the Chief Counsel for Advocacy with the 

following: (1) all materials prepared by the agency in promulgating 

the proposed rule, including any drafts of such rule (with certain 

exceptions); and (2) information on the rule’s potential adverse and 

beneficial impacts on small entities that might be affected. 

New section 609(c) requires that within 15 days of receipt of such 

information, the Chief Counsel must identify small entities or representatives thereof (or a combination of both) for the purpose of 

obtaining advice, input and recommendations about the rule’s potential economic impact and compliance with sections 603 or 605(b) 

of title 5. The Chief Counsel must also convene a review panel 

staffed by an Office of Advocacy employee and an employee for the 

agency promulgating the rule. If the agency is not an independent 

regulatory agency, the panel must also include an employee from 

OIRA. 

New section 609(d) requires that within 60 days after the panel 

is convened, the Chief Counsel must, after consultation with the 

panel, submit a report to the agency (or to OIRA if the agency is 

an independent regulatory agency). The report must include an assessment of the proposed rule’s impact on small entities as well as 

a discussion of any alternatives that will minimize adverse economic impacts on small entities. 

In addition, section 6 mandates that the report become part of 

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

agency must explain what actions, if any, the agency took in response to such report. 

Section 6 further provides that new section 609(e) applies to a 

proposed rule if the OIRA Administrator or an agency head (or delegate) determines that the rule is likely to result in any of the following: (1) an annual effect on the economy of $100 million 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. 

Finally, section 6(f) permits the Chief Counsel for Advocacy to 

waive the requirements of subsections (b) through (e) of section 609 


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if the Counsel determines that compliance with these requirements 

are impracticable, unnecessary, or contrary to the public interest. 

Section 7 amends 5 U.S.C. § 610, pertaining to the periodic review of rules. In addition to publishing a plan for the periodic review of rules issued by an agency in the Federal Register, the plan 

must also appear on the agency’s website. Section 7 requires the 

agency’s head, rather than the agency, to make the determination 

of whether the rule has a significant economic impact on a substantial number of small entities. Such determination must be made 

without regard to whether the agency performed an analysis under 

section 604. Section 7 revises the objectives of the determination to 

require consideration of whether the rule maximizes any significant beneficial impacts on a substantial number of small entities. 

If an agency head determines that the periodic review cannot be 

performed within the stated time frames, then section 7 permits 

the agency head to so certify and extend the review period for 2 

years after publication of the notice of extension in the Federal 

Register. In addition, such notice and certification must be provided to the Chief Counsel and Congress. Section 7 also directs the 

agency to amend or rescind a rule to minimize adverse significant 

economic impact on a substantial number of small entities or a disproportionate economic impact on a specific class of small entities, 

or to maximize beneficial significant economic impact on a substantial number of small entities. 

As amended, section 610 requires an agency to annually submit 

a report regarding the results of its review to Congress and to 

OIRA, if the agency is an independent regulatory agency. Section 

7 requires the agency to include comments by the Regulatory Enforcement Ombudsman and the Chief Counsel for Advocacy. In addition, the agency must consider the rule’s contribution to the cumulative economic impact of all Federal rules on the class of small 

entities affected by the rule, unless the agency head determines 

that such calculations cannot be made and reports that determination in the annual report required under section 610(c). 

In addition to publication in the Federal Register, section 7 requires each agency to publish a list of rules to be reviewed on its 

website and to include an explanation of why the agency determined such rules have a significant economic impact on a substantial number of small entities. In addition, this publication must request comments from the public, Chief Counsel for Advocacy, and 

the Regulatory Enforcement Ombudsman concerning enforcement 

of such rules. 

Section 8(a) amends 5 U.S.C. § 611(a)(1) to provide that a small 

entity that is adversely affected or aggrieved by any rule under 

chapter 6 is entitled to judicial review of agency compliance. Section 611(a)(1) currently applies only to ‘‘final agency action.’’ Section 8(b) amends 5 U.S.C. § 611(a)(2) to provide that a court may 

review a rule if publication of the final rule constituted final agency 

action. 

Section 8(c) amends 5 U.S.C. § 611(a)(3) to provide that the time 

within which judicial review may be sought begins from publication 

of a final rule. It also specifies that the exception applies in the 

case of a rule for which the date of final agency action is the same 

date as the publication date of the final rule. 


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Section 8(d) amends 5 U.S.C.§ 612(b), which authorizes the Chief 

Counsel for Advocacy to appear as amicus curiae in any action 

brought in a court of the United States to review a rule. As amended, the provision permits the Chief Counsel to also appear as amicus curiae in any action to review agency compliance with sections 

601, 604, 605(b), 609, or 610. 

Section 9(a) amends 28 U.S.C. § 2342 to give the United States 

Court of Appeals (other than the United States Court of Appeals 

for the Federal Circuit) exclusive jurisdiction to enjoin, set aside, 

suspend, or to determine the validity of all final rules under 5 

U.S.C. § 608(a) (as amended by this Act). 

Section 9(b) amends 28 U.S.C. § 2341(3), which defines the term, 

‘‘agency’’. As amended, the definition includes the Office of Advocacy of the Small Business Administration, when a final rule is 

promulgated under section 608(a) of title 5 of the United States 

Code (as amended by this Act). 

Section 9(c) amends 5 U.S.C. § 612(b), which sets out certain 

intervention rights of the Chief Counsel for Advocacy pertaining to 

matters under chapter 6. As amended, section 612(b) extends this 

provision to apply to compliance under chapters 5 and 7, in addition to chapter 6. 

Section 10 of the bill amends the Small Business Act to give the 

SBA’s Chief Counsel for Advocacy the authority to establish small 

business size standards. This text is identical to the text of H.R. 

585, the Small Business Size Standard Flexibility Act of 2011, from 

the 112th Congress, which was referred to the Committee on Small 

Business and over which this Committee did not have jurisdiction. 

Section 11 makes a number of clerical amendments. 

Section 12 amends SBREFA to require that agency guides be 

written in plain language. 

CONCLUSION

H.R. 2542 is the latest iteration of the Majority’s ongoing attack 

on Federal regulation. Since the beginning of the 112th Congress, 

the Committee’s Subcommittee on Regulatory Reform, Commercial 

and Antitrust Law has held 22 hearings and considered at least six 

bills designed to hobble Federal agency rulemaking and to increase 

the influence of business interests over the rulemaking process. 

The Majority’s use of pro-small business rhetoric cannot obscure 

the fact that H.R. 2542, like previous anti-regulatory proposals, 

will erect significant barriers to rulemaking that will hinder the 

promulgation of critical public health and safety protections. 

We share the Majority’s belief that small business plays an important role in our economy, but H.R. 2542 does nothing to alleviate the purported burden on small entities of complying with Federal regulations. In fact, it includes no provision that offers assistance to small entities, whether through subsidies, governmentguaranteed 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. 2542 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 ruleVerDate Mar 15 2010 02:08 Dec 12, 2013 Jkt 039006 PO 00000 Frm 00058 Fmt 6659 Sfmt 6601 E:\HR\OC\HR288P1.XXX HR288P1

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making, without having to rely on Washington-based intermediaries. 

There are other meaningful ways to assist small businesses and 

small entities to navigate the regulatory landscape that would not 

threaten agencies’ ability to protect public health and safety. We 

urge our colleagues to shift their attention to these alternatives 

and to oppose this ill-conceived legislation. 

JOHN CONYERS, JR. 

JERROLD NADLER. 

ROBERT C. ‘‘BOBBY’’ SCOTT. 

MELVIN L. WATT. 

ZOE LOFGREN. 

SHEILA JACKSON LEE. 

STEVE COHEN. 

HENRY C. ‘‘HANK’’ JOHNSON, JR. 

KAREN BASS. 

Æ 


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