II

104TH CONGRESS

1ST SESSION S. 291

To reform the regulatory process, to make Government more efficient and

effective, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 27 (legislative day, JANUARY 10), 1995

Mr. ROTH introduced the following bill; which was read twice and referred to

the Committee on Governmental Affairs

A BILL

To reform the regulatory process, to make Government more

efficient and effective, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Regulatory Reform Act

5 of 1995’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of Contents.

TITLE I—REGULATORY ANALYSIS AND REVIEW

Sec. 101. Cost/benefit analysis of agency proposals; risk assessment; regulatory

review
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Sec. 102. Use of State or local requirements.

Sec. 103. Presidential authority.

TITLE II—RISK-BASED PRIORITIES

Sec. 201. Short title.

Sec. 202. Purposes.

Sec. 203. Definitions.

Sec. 204. Department and agency program goals.

Sec. 205. Comparative risk analysis.

Sec. 206. Reports and recommendations to Congress and the President.

Sec. 207. Savings provision and judicial review.

TITLE III—REGULATORY ACCOUNTING

Sec. 301. Short title.

Sec. 302. Accounting statement.

Sec. 303. Associated report to Congress.

Sec. 304. Guidance from Office of Management and Budget.

Sec. 305. Recommendations from Congressional Budget Office.

Sec. 306. Definitions.

TITLE IV—MARKET INCENTIVES AND ECONOMICALLY EFFICIENT

REGULATION

Sec. 401. Short title.

Sec. 402. Program design requirements.

Sec. 403. Agency assessment and OMB review.

Sec. 404. Definitions.

1 TITLE I—REGULATORY ANALYSIS AND

2 REVIEW

3 SEC. 101. COST/BENEFIT ANALYSIS OF AGENCY PROPOS4 ALS; RISK ASSESSMENT; REGULATORY RE5 VIEW.

6 (a) IN GENERAL.—Chapter 6 of title 5, United

7 States Code, is amended by adding at the end thereof the

8 following:
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1 ‘‘Subchapter II—Analysis of Agency

2 Proposals

3 ‘‘§ 621. Definitions

4 ‘‘For purposes of this subchapter and subchapter III

5 of this chapter:

6 ‘‘(1) The term ‘agency’ has the same meaning

7 as in section 551(1) of this title.

8 ‘‘(2) The term ‘person’ has the same meaning

9 as in section 551(2) of this title.

10 ‘‘(3) The term ‘rule’ has the same meaning as

11 in section 551(4) of this title, except that such term

12 does not include—

13 ‘‘(A) a rule of particular applicability that

14 approves or prescribes for the future rates,

15 wages, prices, services, or allowances therefor,

16 corporate or financial structures, reorganiza17 tions, mergers or acquisitions, or accounting

18 practices or disclosures bearing on any of the

19 foregoing;

20 ‘‘(B) a rule relating to monetary policy

21 proposed or promulgated by the Board of Gov22 ernors of the Federal Reserve System; or

23 ‘‘(C) a rule issued by the Federal Election

24 Commission or a rule issued by the Federal

25 Communications Commission pursuant to sec-
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1 tions 315 and 312(a)(7) of the Communications

2 Act of 1934.

3 ‘‘(4) The term ‘major rule’ means—

4 ‘‘(A) a rule or a group of closely related

5 rules that the agency, the President, or the offi6 cer selected under section 624 of this title rea7 sonably determines is likely to have an annual

8 effect in the economy of $100,000,000 or more

9 in reasonably quantifiable direct and indirect

10 costs, or has a significant impact on a subsector

11 of the economy; and

12 ‘‘(B) a rule or a group of closely related

13 rules that is otherwise designated a major rule

14 by the agency proposing the rule, or is so des15 ignated by the President, or by the officer se16 lected under section 624 of this title, on the

17 ground that the rule is likely to result in—

18 ‘‘(i) a substantial increase in costs or

19 prices for wage earners, consumers, indi20 vidual industries, nonprofit organizations,

21 Federal, State, or local government agen22 cies, or geographic regions; or

23 ‘‘(ii) significant adverse effects on

24 wages, economic growth, investment, pro25 ductivity, innovation, the environment,
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1 public health or safety, or the ability of en2 terprises whose principal places of business

3 are in the United States to compete in do4 mestic or export markets. For purposes of

5 subparagraph (A) of this paragraph, the

6 term ‘rule’ does not mean—

7 ‘‘(I) a rule that involves the in8 ternal revenue laws of the United

9 States;

10 ‘‘(II) a rule that authorizes the

11 introduction into commerce or recog12 nizes the marketable status of a prod13 uct, pursuant to sections 408, 409(c),

14 and 706 of the Federal Food, Drug,

15 and Cosmetic Act;

16 ‘‘(III) a rule exempt from notice

17 and public procedure pursuant to sec18 tion 553(a) of this title; or

19 ‘‘(IV) a rule relating to the via20 bility, stability, asset powers, or cat21 egories of accounts of, or permissible

22 interest rate ceilings applicable to, de23 pository institutions the deposits or

24 accounts of which are insured by the

25 Federal Deposit Insurance Corpora-
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1 tion, or the Share Insurance Fund of

2 the National Credit Union Adminis3 tration Board.

4 ‘‘(5) The term ‘benefit’ means the reasonably

5 identifiable significant benefits and beneficial effects,

6 including social and economic benefits and effects,

7 that are expected to result directly or indirectly from

8 implementation of a rule or an alternative to a rule.

9 ‘‘(6) The term ‘cost’ means the reasonably iden10 tifiable significant costs and adverse effects, includ11 ing economic and social costs and effects, that are

12 expected to result directly or indirectly from imple13 mentation of a rule or an alternative to a rule.

14 ‘‘§ 622. Regulatory cost/benefit analysis

15 ‘‘(a) Prior to publishing notice of proposed rule16 making for any rule, each agency shall determine whether

17 the rule is or is not a major rule within the meaning of

18 section 621(4)(A) of this title and, if it is not, whether

19 it should be designated a major rule under section

20 621(4)(B) of this title. For the purpose of any such deter21 mination or designation, a group of closely related rules

22 shall be considered as one rule. Every notice of proposed

23 rulemaking shall include a succinct statement and expla24 nation of the agency’s determination of whether or not the

25 rule is a major rule within the meaning of section
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1 621(4)(A) of this title and, if applicable, of its designation

2 as a major rule under section 621(4)(B) of this title.

3 ‘‘(b) The President or the officer selected by the

4 President under section 624 of this title may determine

5 that a rule is a major rule within the meaning of section

6 621(4)(A) of this title or may designate a rule as a major

7 rule under section 621(4)(B) of this title not later than

8 thirty days after the publication of the notice of proposed

9 rulemaking for that rule. Such determination or designa10 tion shall be published in the Federal Register, together

11 with a succinct statement of the basis for the determina12 tion or designation. The President or the officer selected

13 by the President under section 624 of this title may des14 ignate not more than seventy-five rules as major rules

15 under section 621(4)(B) of this title in any fiscal year.

16 ‘‘(c)(1) When the agency publishes a notice of pro17 posed rulemaking for a major rule, the agency shall issue

18 and place in the rulemaking file maintained under section

19 553(f) of this title a preliminary regulatory analysis and

20 shall include in such notice of proposed rulemaking a sum21 mary of the analysis. When the President or the officer

22 selected by the President under section 624 of this title

23 has published a determination or designation that a rule

24 is a major rule after the publication of the notice of pro25 posed rulemaking for that rule, the agency shall promptly
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1 issue and place in the rulemaking file maintained under

2 section 553(f) of this title a preliminary regulatory analy3 sis for the rule and shall publish in the Federal Register

4 a summary of such analysis. Following the issuance of a

5 preliminary regulatory analysis under the preceding sen6 tence, the agency shall give interested persons an oppor7 tunity to comment thereon pursuant to section 553 of this

8 title in the same manner as if the preliminary regulatory

9 analysis had been issued with the notice of proposed rule10 making.

11 ‘‘(2) Each preliminary regulatory analysis shall con12 tain—

13 ‘‘(A) a succinct description of the benefit of the

14 proposed rule, including any beneficial effects that

15 cannot be quantified, and an explanation of how the

16 agency anticipates each benefit will be achieved by

17 the proposed rule, including a description of the per18 sons, classes of persons, or particular levels of Gov19 ernment likely to receive such benefits;

20 ‘‘(B) a succinct description of the costs of the

21 proposed rule, including any costs that cannot be

22 quantified as well as the cost-reduction effects of

23 complying with the requirements of title IV, and an

24 explanation of how the agency anticipates each such

25 cost will result from the proposed rule, including a
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1 description of the persons, classes of persons, or par2 ticular levels of Government likely to incur such

3 costs;

4 ‘‘(C) a succinct description of reasonable alter5 natives for achieving the identified benefits of the

6 proposed rule, including alternatives that—

7 ‘‘(i) require no Government action;

8 ‘‘(ii) will accommodate differences between

9 geographic regions; and

10 ‘‘(iii) employ performance or other

11 marketbased standards which permit the great12 est flexibility in achieving the identified benefits

13 of the proposed rule and which comply with the

14 requirements of title IV;

15 ‘‘(D) in any case in which the proposed rule is

16 based on scientific evaluations or information, a de17 scription of action undertaken by the agency to ver18 ify the quality, reliability, and relevance of such sci19 entific evaluations or scientific information in ac20 cordance with the requirements of title IV; and

21 ‘‘(E) where it is not expressly or by necessary

22 implication inconsistent with the provisions of the

23 enabling statute pursuant to which the agency is

24 proposing the rule, an explanation of how the identi25 fied benefits of the proposed rule are likely to justify
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1 the identified costs of the proposed rule, and an ex2 planation of how the proposed rule is likely to sub3 stantially achieve the rulemaking objectives in a

4 more cost-effective manner than the alternatives to

5 the proposed rule, including alternatives identified in

6 accordance with title IV.

7 ‘‘(d)(1) When the agency publishes a final major rule,

8 the agency shall also issue and place in the rulemaking

9 file maintained under section 553(f) of this title a final

10 regulatory analysis, and shall include a summary of the

11 analysis in the statement of basis and purpose required

12 by section 553(c)(6) of this title. Notwithstanding the pre13 ceding sentence, in any case in which an agency, under

14 section 553(b)(2) of this title, is not required to comply

15 with subsections (b) through (f) of section 553 of this title

16 prior to the adoption of a final rule, an agency is not re17 quired to comply with the preceding sentence prior to the

18 adoption of the final rule but shall comply with such

19 sentence when complying with section 553(b)(2)(C) of this

20 title.

21 ‘‘(2) Each final regulatory analysis shall contain—

22 ‘‘(A) a description and comparison of the bene23 fits and costs of the rule and of the reasonable alter24 natives to the rule described in the rulemaking, in-
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1 cluding the market-based mechanisms identified pur2 suant to title IV; and

3 ‘‘(B) where it is not expressly or by necessary

4 implication inconsistent with the provisions of the

5 enabling statute pursuant to which the agency is

6 acting, a reasonable determination, based upon the

7 rulemaking file considered as a whole, that the bene8 fits of the rule justify the costs of the rule, and that

9 the rule will substantially achieve the rulemaking ob10 jectives in a more cost-effective manner than the al11 ternatives described in the rulemaking, including the

12 market-based incentives identified pursuant to title

13 IV.

14 ‘‘(e)(1) An agency shall describe the nature and ex15 tent of the nonqualifiable benefits and costs of a proposed

16 and a final rule pursuant to this section in as precise and

17 succinct a manner as possible. The description of the bene18 fits and costs of a proposed and a final rule required under

19 this section shall include a quantification or numerical es20 timate of the quantifiable benefits and costs. Such quan21 tification or numerical estimate shall be made in the most

22 appropriate unit of measurement and shall specify the

23 ranges of predictions and explain the margins of error in24 volved in the quantification methods and in the estimates

25 used.
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1 ‘‘(2) In evaluating and comparing costs and benefits,

2 the agency shall not rely on cost or benefit information

3 submitted by any person that is not accompanied by data,

4 analysis, or other supporting materials that would enable

5 the agency and other persons interested in the rulemaking

6 to assess the accuracy and reliability of such information.

7 The agency evaluations of the relationships of the benefits

8 of a proposed and final rule to its costs required by this

9 section shall be clearly articulated in accordance with the

10 provisions of this section. An agency is not required to

11 make such evaluation primarily on a mathematical or nu12 merical basis.

13 ‘‘(f) The preparation of the preliminary or final regu14 latory analysis required by this section shall only be per15 formed by an officer or employee of the agency. The provi16 sions of the preceding sentence do not preclude a person

17 outside the agency from gathering data or information to

18 be used by the agency in preparing any such regulatory

19 analysis or from providing an explanation sufficient to per20 mit the agency to analyze such data or information. If any

21 such data or information is gathered or explained by a

22 person outside the agency, the agency shall specifically

23 identify in the preliminary or final regulatory analysis the

24 data or information gathered or explained and the person

25 who gathered or explained it, and shall describe the ar-
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1 rangement by which the information was procured by the

2 agency, including the total amount of funds expended for

3 such procurement.

4 ‘‘(g) The requirements of this section do not alter the

5 criteria for rulemaking otherwise applicable under other

6 statutes.

7 ‘‘§ 623. Judicial review

8 ‘‘(a) Compliance or noncompliance by an agency with

9 the provisions of this subchapter shall not be subject to

10 judicial review except according to the provisions of this

11 section.

12 ‘‘(b) Any determination by the President or by the

13 officer selected under section 624 of this title that a rule

14 is a major rule within the meaning of section 621(4)(A)

15 of this title, and any designation by the President or the

16 officer selected under section 624 of this title that a rule

17 is a major rule under section 621(4)(B) of this title, or

18 any failure to make such a designation, shall not be sub19 ject to judicial review in any manner.

20 ‘‘(c) The determination of an agency of whether a

21 rule is or is not a major rule within the meaning of section

22 621(4)(A) of this title shall be set aside by a reviewing

23 court only upon a clear and convincing showing that the

24 determination is erroneous in light of the information

25 available to the agency at the time it made the determina-
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1 tion. Any designation by an agency that a rule is a major

2 rule under section 621(4)(B) of this title, or any failure

3 to make such a designation, shall not be subject to judicial

4 review.

5 ‘‘(d) Any regulatory analysis prepared under section

6 622 of this title shall not be subject to judicial consider7 ation separate or apart from review of the rule to which

8 it relates. When an action for judicial review of a rule is

9 instituted, any regulatory analysis for such rule shall con10 stitute part of the whole rulemaking record of agency ac11 tion for the purpose of judicial review of the rule and shall,

12 to the extent relevant, be considered by a court in deter13 mining the legality of the rule.

14 ‘‘§ 624. Executive oversight

15 ‘‘(a) The President shall have the authority to estab16 lish procedures for agency compliance with this title and

17 titles II, III, and IV of this Act. The President shall have

18 the authority to monitor, review, and ensure agency imple19 mentation of such procedures. The President shall report

20 annually to the Congress on agency compliance or non21 compliance with the requirements of this chapter.

22 ‘‘(b) Any procedures established pursuant to the au23 thority granted under subsection (a) of this section shall

24 be adopted after the public has been afforded an oppor25 tunity to comment thereon, and shall be consistent with
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1 the prompt completion of rulemaking proceedings. If such

2 procedures include review of preliminary or final regu3 latory analyses to ensure that they comply with the proce4 dures established pursuant to subsection (a), the time for

5 any such review of a preliminary regulatory analysis shall

6 not exceed thirty days following the receipt of that analysis

7 by the President or by an officer to whom the authority

8 granted under subsection (a) of this section has been dele9 gated pursuant to subsection (c) of this section, and the

10 time for such review of a final regulatory analysis shall

11 not exceed thirty days following the receipt of that analysis

12 by the President or such officer. The times for each such

13 review may be extended for good cause by the President

14 or such officer for an additional thirty days. Notice of any

15 such extension, together with a succinct statement of the

16 reasons therefor, shall be inserted in the rulemaking file.

17 ‘‘(c) The President may delegate the authority grant18 ed by this Act to the Vice President or to an officer within

19 the Executive Office of the President whose appointment

20 has been subject to the advice and consent of the Senate.

21 Any such notice with respect to a delegation to the Vice

22 President shall contain a statement by the Vice President

23 that the Vice President will make every reasonable effort

24 to respond to congressional inquiries concerning the exer25 cise of the authority delegated under this subsection. No-
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1 tice of any such delegation, or any revocation or modifica2 tion thereof, shall be published in the Federal Register.

3 ‘‘(d) The authority granted under subsection (a) of

4 this section and title II shall not apply to rules issued by

5 the Nuclear Regulatory Commission.

6 ‘‘(e) Any exercise of the authority granted under this

7 section, or any failure to exercise such authority, by the

8 President or by an officer to whom such authority has

9 been delegated under subsection (c) of this section, shall

10 not be subject to judicial review in any manner under this

11 Act.

12 ‘‘Subchapter III—Risk Assessments

13 ‘‘§ 631. Findings, purposes, and definitions

14 ‘‘(a) FINDINGS.—The Congress finds that:

15 ‘‘(1) Environmental, health, and safety regula16 tions have lead to dramatic improvements in the en17 vironment and have significantly reduced risks to

18 human health; however, many regulations have been

19 more costly and less effective than they could have

20 been; too often, regulatory priorities have not been

21 based upon a realistic consideration of risk, risk re22 duction opportunities, and costs.

23 ‘‘(2) The public and private resources available

24 to address health, safety, and environmental risks

25 are not unlimited; those resources should be allo-
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1 cated to address the greatest needs in the most cost2 effective manner and to ensure that the incremental

3 costs of regulatory options are reasonably related to

4 the incremental benefits.

5 ‘‘(3) To provide more cost-effective protection

6 to human health and the environment, regulatory

7 priorities should be based upon realistic consider8 ation of risk; the priority-setting process must in9 clude scientifically sound, objective, and unbiased

10 risk assessments and risk management choices that

11 are grounded in cost/benefit principles.

12 ‘‘(4) Risk assessment has proved to be a useful

13 decisionmaking tool; however, improvements are

14 needed in both the quality of assessments and the

15 characterization and communication of findings; sci16 entific and other data must be better collected, orga17 nized, and evaluated; most importantly, the critical

18 information resulting from a risk assessment must

19 be effectively communicated in an objective and un20 biased manner to decision makers, and from decision

21 makers to the public.

22 ‘‘(5) The public stakeholders must be fully in23 volved in the decisionmaking process for regulating

24 risks. The public has the right to know about the

25 risks addressed by regulation, the amount of risk re-
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1 duced, the quality of the science used to support de2 cisions, and the cost of implementing and complying

3 with regulations. This knowledge will allow for pub4 lic scrutiny and will promote the quality, integrity,

5 and responsiveness of agency decisions.

6 ‘‘(b) PURPOSES.—The purposes of this subchapter

7 are—

8 ‘‘(1) to present the public and executive branch

9 with the most scientifically objective and unbiased

10 information concerning the nature and magnitude of

11 health, safety, and environmental risks to promote

12 sound regulatory decisions and public education;

13 ‘‘(2) to provide for full consideration and dis14 cussion of relevant data and potential methodologies;

15 ‘‘(3) to require explanation of significant

16 choices in the risk assessment process that will allow

17 for better public understanding; and

18 ‘‘(4) to improve consistency within the executive

19 branch in preparing risk assessments and risk char20 acterizations.

21 ‘‘(c) DEFINITIONS.—For purposes of this subchapter:

22 ‘‘(1) BEST ESTIMATE.—The term ‘best esti23 mate’ means an estimate that, to the extent feasible

24 and scientifically appropriate, is based on one of the

25 following:
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1 ‘‘(A) Central estimates of risk using the

2 most plausible assumptions.

3 ‘‘(B) An approach that combines multiple

4 estimates based on different scenarios and

5 weighs the probability of each scenario.

6 ‘‘(C) Any other methodology designed to

7 provide the most unbiased representation of the

8 most plausible level of risk, given the current

9 scientific information available to the Federal

10 agency concerned.

11 ‘‘(2) COVERED AGENCY.—The term ‘covered

12 agency’ means each of the following:

13 ‘‘(A) The Environmental Protection Agen14 cy.

15 ‘‘(B) The Department of Labor.

16 ‘‘(C) The Food and Drug Administration.

17 ‘‘(D) The Consumer Product Safety Com18 mission.

19 ‘‘(E) The Department of Transportation.

20 ‘‘(F) The Department of Energy.

21 ‘‘(G) The Department of Agriculture.

22 ‘‘(H) The Department of the Interior.

23 ‘‘(I) The Nuclear Regulatory Commission.
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1 ‘‘(3) EMERGENCY.—The term ‘emergency’

2 means an imminent and substantial endangerment

3 to public health, safety, or the environment.

4 ‘‘(4) HAZARD IDENTIFICATION.—The term

5 ‘hazard identification’ means identification of a sub6 stance, activity, or condition as potentially posing a

7 risk to human health or safety or the environment

8 based on empirical data, measurements, or testing

9 showing that it has caused significant adverse effects

10 at some levels of dose or exposure not necessarily

11 relevant to level of dose or exposure that are nor12 mally expected to occur.

13 ‘‘(5) RISK ASSESSMENT.—The term ‘risk as14 sessment’ means—

15 ‘‘(A) the process of identifying hazards and

16 quantifying or describing the degree of toxicity,

17 exposure, or other risk they pose for exposed

18 individuals, populations, or resources; and

19 ‘‘(B) the document containing the expla20 nation of how the assessment process has been

21 applied to an individual substance, activity, or

22 condition.

23 ‘‘(6) RISK CHARACTERIZATION.—The term ‘risk

24 characterization’ means—
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1 ‘‘(A) the element of a risk assessment that

2 involves presentation of the degree of risk in

3 any regulatory proposal or decision, report to

4 Congress, or other document that is made avail5 able to the public; and

6 ‘‘(B) includes discussions of uncertainties,

7 conflicting data, estimates, extrapolations, in8 ferences, and opinions.

9 ‘‘(7) SUBSTITUTION RISK.—The term ‘substi10 tution risk’ means a potential increased risk to

11 human health, safety, or the environment from a

12 regulatory option designed to decrease other risks.

13 ‘‘§ 632. Applicability

14 ‘‘(a) IN GENERAL.—Except as otherwise provided in

15 subsection (b), this title shall apply to all risk assessments

16 and risk characterizations prepared by, or on behalf of,

17 or prepared by others and adopted by any covered agency

18 in connection with health, safety, and environmental risks.

19 ‘‘(b) EXCEPTIONS.—

20 ‘‘(1) IN GENERAL.—This title shall not apply to

21 risk assessments or risk characterizations performed

22 with respect to—

23 ‘‘(A) a situation that the head of the agen24 cy considers to be an emergency; or
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1 ‘‘(B) a screening analysis, including a

2 screening analysis for the purposes of product

3 registration, product reregistrations, or

4 premanufacturing notices.

5 ‘‘(2) TREATMENT OF ANALYSIS AS SCREENING

6 ANALYSIS.—An analysis shall not be treated as a

7 screening analysis for the purposes of paragraph

8 (1)(B) if the result of the analysis is used—

9 ‘‘(A) as the basis for imposing a restriction

10 on a substance or activity; or

11 ‘‘(B) to characterize a positive finding of

12 risks from a substance, product, or activity in

13 any agency document or other communication

14 made available to the general public, the media,

15 or Congress.

16 ‘‘(3) LABELS.—This title shall not apply to any

17 food, drug, or other product label or to any risk

18 characterization appearing on any such label.

19 ‘‘§ 633. Savings provisions

20 ‘‘Nothing in this title shall be construed to—

21 ‘‘(1) modify any statutory standard or require22 ment designed to protect human health, safety, or

23 the environment;

24 ‘‘(2) preclude the consideration of any data or

25 the calculation of any estimate to more fully describe
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1 risk or provide examples of scientific uncertainty or

2 variability; or

3 ‘‘(3) require the disclosure of any trade secrets

4 or other confidential information.

5 ‘‘§ 634. Requirement to prepare risk assessments

6 ‘‘Except as provided in subsection 632(b), the Presi7 dent shall require that the head of each covered agency

8 prepare for each major rule relating to human health,

9 safety, or the environment that is proposed by the agency

10 after the date of enactment of this title—

11 ‘‘(1) a risk assessment in accordance with this

12 title; and

13 ‘‘(2) for each such proposed or final rule, an as14 sessment of incremental risk reduction or other ben15 efits associated with each significant regulatory al16 ternative considered by the agency in connection

17 with the rule or proposed rule.

18 ‘‘§ 635. Principles for risk assessment

19 ‘‘(a) IN GENERAL.—The head of each covered agency

20 shall ensure that risk assessments and all of their compo21 nents—

22 ‘‘(1) distinguish scientific findings and best es23 timates of risk from other considerations;

24 ‘‘(2) are, to the maximum extent practicable,

25 unbiased and inclusive of all reliable information and
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1 employ default assumptions only if situation-specific

2 information is not reasonably available;

3 ‘‘(3) rely on scientific findings of risk;

4 ‘‘(4) result in the most plausible and realistic

5 estimates feasible for the population, or, if only

6 bounds can be estimated reliably, describe the range

7 encompassed; and

8 ‘‘(5) are tailored so that the degree of specific9 ity and rigor employed is commensurate with the

10 consequences of the decision to be made.

11 ‘‘(b) HAZARD IDENTIFICATION AND RISK CHARAC12 TERIZATION.—A risk assessment shall clearly separate

13 hazard identification from risk characterization and make

14 clear the relationship between the level of risk and the

15 level of exposure to a hazard.

16 ‘‘§ 636. Principles for risk characterization and risk

17 communication

18 ‘‘In characterizing risk in any risk assessment docu19 ment, regulatory proposal or decision each covered agency

20 shall include in the risk characterization each of the fol21 lowing:

22 ‘‘(1) ESTIMATES OF RISK.—

23 ‘‘(A) SUBJECT.—A description of the pop24 ulations or natural resources that are the sub25 ject of the risk characterization.
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1 ‘‘(B) ASSUMPTIONS, INFERENCES, AND

2 MODELS.—When a risk assessment involves a

3 choice of any significant assumption, inference,

4 or model, the covered agency or instrumentality

5 preparing the risk assessment shall—

6 ‘‘(i) present a representative list and

7 explanation of plausible and alternative as8 sumptions, inferences, or models;

9 ‘‘(ii) explain the basis for any choices;

10 ‘‘(iii) identify any subjective policy de11 cisions or value judgments; and

12 ‘‘(iv) indicate the extent to which any

13 significant model has been validated by, or

14 conflicts with, empirical data.

15 ‘‘(C) UNCERTAINTY.—The major uncer16 tainties in the risk assessment.

17 ‘‘(D) EXPOSURE SCENARIOS.—Information

18 about exposure scenarios used, including the

19 likelihood of those scenarios.

20 ‘‘(E) RISK RANGE.—To the extent feasible,

21 a range of risk estimates, including central esti22 mates, for each exposure scenario.

23 ‘‘(F) SCIENTIFIC FINDINGS AND POLICY

24 DECISIONS.—To the extent feasible, each risk
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1 characterization should distinguish between sci2 entific findings and policy decisions.

3 ‘‘(2) SUBSTITUTION RISKS.—When a covered

4 agency provides a risk assessment or risk character5 ization for a proposed or final regulatory action,

6 such assessment or characterization shall include a

7 statement of any significant substitution risks, when

8 information on such risks has been provided to the

9 agency.

10 ‘‘(3) SUMMARIES OF OTHER RISK ESTI11 MATES.—If—

12 ‘‘(A) a covered agency provides a public

13 comment period with respect to a risk assess14 ment or regulation;

15 ‘‘(B) a commenter provides a risk assess16 ment, and a summary of results of such risk as17 sessment; and

18 ‘‘(C) such risk assessment is consistent

19 with the principles and the guidance provided

20 under this subtitle,

21 the covered agency shall present such summary in

22 connection with its presentation of the risk assess23 ment or regulation.
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1 ‘‘§ 637. Guidelines, plan for assessing new informa2 tion, and report

3 ‘‘(a) GUIDELINES.—

4 ‘‘(1) IN GENERAL.—Within fifteen months after

5 the date of enactment of this title, each covered

6 agency shall issue, after notice and public comment,

7 guidelines to implement the risk assessment and risk

8 characterization principles set forth in sections 635

9 and 636 and shall provide a format for summarizing

10 risk assessment results.

11 ‘‘(2) MATTERS TO BE ADDRESSED.—The guide12 lines under paragraph (1) shall—

13 ‘‘(A) include guidance on utilization of spe14 cific technical methodologies and standards for

15 acceptable quality of specific kinds of data; and

16 ‘‘(B) address important decisional factors

17 for the risk assessment or risk characterization

18 at issue, such as criteria for scaling animal

19 studies to assess risk to human health; use of

20 different types of dose-response models; thresh21 olds; definitions, use, and interpretations of the

22 maximum tolerated dose; weighing of evidence

23 with respect to extrapolating human health

24 risks from sensitive species; evaluation of be25 nign tumors; and evaluation of differences in

26 human health endpoints, where relevant.
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1 ‘‘(b) PLAN.—

2 ‘‘(1) IN GENERAL.—Within eighteen months

3 after the date of enactment of this title, the head of

4 each covered agency shall publish a plan to review

5 and revise any risk assessment published prior to

6 the expiration of such eighteen-month period if the

7 covered agency determines that significant new in8 formation or methodologies are available that could

9 significantly alter the results of the prior risk assess10 ment.

11 ‘‘(2) CONTENTS.—A plan under paragraph (1)

12 shall—

13 ‘‘(A) provide procedures for receiving and

14 considering new information and risk assess15 ments from the public; and

16 ‘‘(B) set priorities for review and revision

17 of risk assessments based on such factors as

18 the agency head considers appropriate.

19 ‘‘(c) REPORT.—Within three years after the enact20 ment of this title, each covered agency shall provide a re21 port to the Congress evaluating the categories of policy

22 and value judgments identified under subparagraph

23 (B)(iii) of section 636(1).

24 ‘‘(d) PUBLIC COMMENT AND CONSULTATION.—The

25 guidelines, plan and report under this section shall be de-
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1 veloped after notice and opportunity for public comment,

2 and after consultation with representatives of appropriate

3 State agencies and local governments, and such other de4 partments and agencies, organizations, or persons as may

5 be advisable.

6 ‘‘(e) REVIEW.—The President shall review the guide7 lines published under this section at least every four years.

8 ‘‘(f) LIMITATION ON JUDICIAL REVIEW.—The devel9 opment, issuance, and publication of risk assessment and

10 risk characterization guidelines under this section shall

11 not be subject to judicial review.

12 ‘‘§ 638. Risk management criteria

13 ‘‘For each major rule subject to this title, the head

14 of the agency or the President shall make a determination

15 that—

16 ‘‘(1) the risk assessment under section 634(1)

17 and the analysis under section 634(2) are based on

18 a scientific evaluation of the risk addressed by the

19 major rule and are supported by the best available

20 scientific data; and

21 ‘‘(2) there is no regulatory alternative that is

22 allowed by the statute under which the regulation is

23 promulgated that would achieve an equivalent reduc24 tion in risk in a more cost-effective and flexible man25 ner.
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1 ‘‘§ 639. Interagency coordination

2 ‘‘To promote the conduct, application, and practice

3 of risk assessment in a consistent manner and to identify

4 risk assessment data and research needs common to more

5 than one Federal agency, the Director of the Office of

6 Science and Technology Policy shall—

7 ‘‘(1) periodically survey the manner in which

8 each Federal agency involved in risk assessment is

9 conducting such risk assessment to determine the

10 scope and adequacy of risk assessment practices in

11 use by the Federal Government;

12 ‘‘(2) provide advice and recommendations to the

13 President and Congress based on the surveys con14 ducted and determinations made under paragraph

15 (1);

16 ‘‘(3) establish appropriate interagency mecha17 nisms to promote coordination among Federal agen18 cies conducting risk assessment with respect to the

19 conduct, application, and practice of risk assessment

20 and to promote the use of state-of-the-art risk as21 sessment practices throughout the Federal Govern22 ment;

23 ‘‘(4) establish appropriate mechanisms between

24 Federal and State agencies to communicate state-of25 the-art risk assessment practices; and
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1 ‘‘(5) periodically convene meetings with State

2 government representatives and Federal and other

3 leaders to assess the effectiveness of Federal-State

4 cooperation in the development and application of

5 risk assessment.

6 ‘‘Subchapter IV—Regulatory Priorities and

7 Review

8 ‘‘§ 641. Review of agency rules

9 ‘‘(a)(1)(A) Not later than nine months after the ef10 fective date of this section, each agency shall prepare and

11 publish in the Federal Register a proposed schedule for

12 the review, in accordance with this section, of—

13 ‘‘(i) each rule of the agency which is in effect

14 on such effective date and which, if adopted on such

15 effective date, would be a major rule under section

16 621(4)(A) of this title, and

17 ‘‘(ii) each rule of the agency in effect on such

18 effective date (in addition to the rules described in

19 clause (i)) which the agency has selected for review.

20 ‘‘(B) Each proposed schedule required by subpara21 graph (A) shall include—

22 ‘‘(i) a brief explanation of the reasons the agen23 cy considers each rule on the schedule to be such a

24 major rule under section 621(a)(4)(A) of this title or
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1 of the reasons why the agency selected the rule for

2 review;

3 ‘‘(ii) a date set by the agency, in accordance

4 with the provisions of subsection (b)(1) of this sec5 tion, for the completion of the review of each such

6 rule; and

7 ‘‘(iii) a statement that the agency requests com8 ments from the public on the proposed schedule.

9 ‘‘(C) The agency shall set a date to initiate review

10 of each rule on the schedule in a manner which will ensure

11 the simultaneous review of related items and which will

12 achieve a reasonable distribution of reviews over the period

13 of time covered by the schedule.

14 ‘‘(2) At least ninety days before publishing in the

15 Federal Register the proposed schedule required under

16 paragraph (1), each agency shall make the proposed

17 schedule available to the President, or to the Vice Presi18 dent or other officer to whom oversight authority has been

19 delegated under section 624(b) of this title. The President

20 or that officer may select for review in accordance with

21 this section any additional rule that the President or such

22 officer determines to be a major rule under section

23 621(4)(A) of this title.

24 ‘‘(3) Not later than one year after the effective date

25 of this section, each agency shall publish in the Federal
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1 Register a final schedule for the review of the rules re2 ferred to in paragraphs (1) and (2) of this subsection.

3 Each agency shall publish with the final schedule the re4 sponse of the agency to comments received concerning the

5 proposed schedule.

6 ‘‘(b)(1) Except where explicitly provided otherwise by

7 statute, the agency shall, pursuant to subsections (c)

8 through (e) of this section, review—

9 ‘‘(A) each rule on the schedule promulgated

10 pursuant to subsection (a) of this section;

11 ‘‘(B) each major rule under section 621(4) of

12 this title promulgated, amended, or otherwise re13 newed by an agency after the date of the enactment

14 of this section; and

15 ‘‘(C) each rule promulgated after the date of

16 enactment of this section which the President or the

17 officer designated by the President pursuant to sub18 section (a)(2) of this section determines to be a

19 major rule under section 621(4) of this title.

20 Except where an extension has been granted pursuant to

21 subsection (f) of this section, the review of a rule required

22 by this section shall be completed within ten years after

23 the effective date of this section or within ten years after

24 the date on which the rule is promulgated, amended, or

25 renewed, whichever is later.
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1 ‘‘(2) A rule required to be reviewed under the preced2 ing subsection on grounds that it is major need not be

3 reviewed if the agency determines that such rule, if adopt4 ed at the time of the planned review, would not be major

5 under the definition previously applied to it. When the

6 agency makes such a determination, it shall publish a no7 tice and explanation of the determination in the Federal

8 Register.

9 ‘‘(c) An agency shall publish in the Federal Register

10 a notice of its proposed action under this section with re11 spect to a rule being reviewed. The notice shall include—

12 ‘‘(1) an identification of the specific statutory

13 authority under which the rule was promulgated and

14 a statement specifying the agency’s determination of

15 whether the rule continues to fulfill the intent of

16 Congress in enacting that authority;

17 ‘‘(2) an assessment of the benefits and costs of

18 the rule during the period in which it has been in

19 effect;

20 ‘‘(3) an explanation of the proposed agency ac21 tion with respect to the rule; and

22 ‘‘(4) a statement that the agency seeks propos23 als from the public for modifications or alternatives

24 to the rule which may accomplish the objectives of

25 the rule in a more effective or less burdensome man-
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1 ner, including alternatives developed in accordance

2 with the provisions of title IV of this bill.

3 ‘‘(d) If an agency proposes to repeal or amend a rule

4 under review pursuant to this section, the agency shall,

5 after issuing the notice required by subsection (c) of this

6 section, comply with the provisions of this chapter and

7 chapter 5 of this title or other applicable law. The require8 ments of such provisions and related requirements of law

9 shall apply to the same extent and in the same manner

10 as in the case of a proposed agency action to repeal or

11 amend a rule which is not taken pursuant to the review

12 required by this section.

13 ‘‘(e) If an agency proposed to renew without amend14 ment a rule under review pursuant to this section, the

15 agency shall—

16 ‘‘(1) give interested persons not less than sixty

17 days after the publication of the notice required by

18 subsection (c) of this section to comment on the pro19 posed renewal; and

20 ‘‘(2) publish in the Federal Register notice of

21 the renewal of such rule and an explanation of the

22 continued need for the rule, and, if the renewed rule

23 is a major rule under section 621(4) of this title, in24 clude with such notice an explanation of the reason25 able determination of the agency that the rule com-
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1 plies with the provisions of section 622(d)(2)(B) of

2 this title.

3 ‘‘(f)(1) Any agency, which for good cause finds com4 pliance with this section with respect to a particular rule

5 to be impracticable during the period provided in sub6 section (b) of this section, may request the President, or

7 the officer designated by the President pursuant to sub8 section (a)(2) of this section, to establish a period longer

9 than ten years for the completion of the review of such

10 rule. The President or that officer may extend the period

11 for review of a rule to a total period of not more than

12 fifteen years. Such extension shall be published in the

13 Federal Register with an explanation of the reasons there14 for.

15 ‘‘(2) An agency may, with the concurrence of the

16 President or the officer designated by the President pursu17 ant to subsection (a)(2) of this section, or shall, at the

18 direction of the President or that officer, alter the timing

19 of review of rules under any schedule required by this sec20 tion for the review of rules if an explanation of such alter21 ation is published in the Federal Register at the time such

22 alteration is made.

23 ‘‘(g) In any case in which an agency has not com24 pleted the review of a rule within the period prescribed

25 by subsection (b) or (f) of this section, the agency shall
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1 immediately publish in the Federal Register a notice pro2 posing to amend, repeal, or renew the rule under sub3 section (c) of this section, and shall complete proceedings

4 pursuant to subsection (d) or (e) of this section within

5 one hundred and eighty days of the date on which the re6 view was required to be completed under subsection (b)

7 or (f) of this section.

8 ‘‘(h)(1) Agency compliance or noncompliance with the

9 provisions of subsection (a) of this section shall not be

10 subject to judicial review in any manner.

11 ‘‘(2) Agency compliance or noncompliance with the

12 provisions of subsections (b), (c), (e), (f) and (g) of this

13 section shall be subject to judicial review only pursuant

14 to section 706(a)(1) of this title.

15 ‘‘(i) Nothing in this section shall relieve any agency

16 from its obligation to respond to a petition to issue,

17 amend, or repeal a rule, for an interpretation regarding

18 the meaning of a rule, or for a variance or exemption from

19 the terms of a rule, submitted pursuant to section 553(e)

20 of this title.

21 § 642. Regulatory agenda and calendar

22 ‘‘(a) Each agency shall publish in the Federal Reg23 ister in April and October of each year an agenda of the

24 rules that the agency expects to propose, promulgate,

25 renew, or repeal in the succeeding twelve months. For
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1 each such rule, the agenda shall contain, at a minimum,

2 and in addition to any other information required by

3 law—

4 ‘‘(1) a general description of the rule, including

5 a citation to the authority under which the action

6 with respect to the rule is to be taken, or a specific

7 explanation of the congressional intent to which the

8 objectives of rule respond;

9 ‘‘(2) a statement of whether or not the rule is

10 or is expected to be a major rule;

11 ‘‘(3) an approximate schedule of the significant

12 dates on which the agency will take action relating

13 to the rule, including the dates for any notice of pro14 posed rulemaking, hearing, and final action on the

15 rule;

16 ‘‘(4) the name, address, and telephone number

17 of an agency official responsible for answering ques18 tions from the public concerning the rule;

19 ‘‘(5) a statement specifying whether each rule

20 listed on the previous agenda has been published as

21 a proposed rule, has been published as a final rule,

22 has become effective, has been repealed, or is pend23 ing in some other status; and
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1 ‘‘(6) a cumulative summary of the status of the

2 rules listed on the previous agenda in accordance

3 with clause (5) of this subsection.

4 ‘‘(b) The President or an officer in the Executive Of5 fice of the President whose appointment has been subject

6 to the advice and consent of the Senate shall publish in

7 the Federal Register in May and November of each year

8 a Calendar of Federal Regulations listing each of the

9 major rules identified in the regulatory agendas published

10 by agencies in the preceding month. Each rule listed in

11 the calendar shall be accompanied by a summary of the

12 information relating to the rule that appeared in the most

13 recent regulatory agenda in which the rule was identified.

14 ‘‘(c) An agency may propose or promulgate a major

15 rule that was not listed in the regulatory agenda required

16 by subsection (a) of this section only if the agency pub17 lishes with the rule an explanation of the omission of the

18 rule from such agenda and otherwise complies with this

19 section with respect to that rule.

20 ‘‘(d) Any compliance or noncompliance by the agency

21 with the provisions of this section shall not be subject to

22 judicial review.

23 ‘‘§ 643. Establishment of deadlines

24 ‘‘(a)(1) Whenever any agency publishes a notice of

25 proposed rulemaking pursuant to section 553 of this title,
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1 the agency shall include in such notice an announcement

2 of the date by which it intends to complete final agency

3 action on the rule.

4 ‘‘(2) If any agency announcement under this section

5 indicates that the proceeding relating to such rule will re6 quire more than one year to complete, the agency shall

7 also indicate in the announcement the date by which the

8 agency intends to complete each major portion of that pro9 ceeding. In carrying out the requirements of this sub10 section, the agency shall select dates for completing agen11 cy action which will assure the most expeditious consider12 ation of the rule which is possible, consistent with the in13 terests of fairness and other agency priorities.

14 ‘‘(3) The requirements of this subsection shall not

15 apply to any rule on which the agency intends to complete

16 action within one hundred and twenty days after providing

17 notice of the proposed action.

18 ‘‘(b) If an agency fails to complete action in a pro19 ceeding, or a major portion of the proceeding, by the date

20 announced pursuant to subsection (a) of this section, or,

21 in the case of a proceeding described in paragraph (3) of

22 such subsection, if an agency fails to complete action with23 in one hundred and twenty days after providing notice of

24 such proposed action, and the expected delay in complet25 ing action will exceed thirty days, the agency shall prompt-
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1 ly announce the new date by which the agency intends to

2 complete action in such proceeding and new dates by

3 which the agency intends to complete action on each major

4 portion of the proceeding.

5 ‘‘(c) Compliance or noncompliance by an agency with

6 the provisions of this section shall not be subject to judi7 cial review except in accordance with subsection (d).

8 ‘‘(d) In determining whether to compel agency action

9 unreasonably delayed pursuant to section 706(a)(1) of this

10 title, the reviewing court shall consider, in addition to any

11 other relevant factors, the extent to which the agency has

12 failed to comply with this section.’’.

13 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

14 Part I of title 5, United States Code, is amended by strik15 ing out the chapter heading and table of sections for chap16 ter 6 and inserting in lieu thereof the following:

‘‘CHAPTER 6—THE ANALYSIS OF REGULATORY FUNCTIONS

‘‘SUBCHAPTER I—REGULATORY ANALYSIS

‘‘Sec.

‘‘601. Definitions.

‘‘602. Regulatory agenda.

‘‘603. Initial regulatory flexibility analysis.

‘‘604. Final regulatory flexibility analysis.

‘‘605. Avoidance of duplicative or unnecessary analyses.

‘‘606. Effect on other law.

‘‘607. Preparation of analyses.

‘‘608. Procedure for waiver or delay of completion.

‘‘609. Procedures for gathering comments.

‘‘610. Periodic review of rules.

‘‘611. Judicial review.

‘‘612. Reports and intervention rights.

‘‘SUBCHAPTER II—ANALYSIS OF AGENCY PROPOSALS

‘‘621. Definitions.
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‘‘622. Regulatory cost/benefit analysis.

‘‘623. Judicial review.

‘‘624. Executive oversight.

‘‘SUBCHAPTER III—RISK ASSESSMENTS

‘‘631. Findings, purposes, and definitions.

‘‘632. Applicability.

‘‘633. Savings provisions.

‘‘634. Requirement to prepare risk assessments.

‘‘635. Principles for risk assessment.

‘‘636. Principles for risk characterization and risk communication.

‘‘637. Guidelines, plan for assessing new information, and report.

‘‘638. Risk management criteria.

‘‘639. Interagency coordination.

‘‘SUBCHAPTER IV—REGULATORY PRIORITIES AND REVIEW

‘‘641. Review of agency rules.

‘‘642. Regulatory agenda and calendar.

‘‘643. Establishment of deadlines.’’.

1 SEC. 102. USE OF STATE OR LOCAL REQUIREMENTS.

2 (a) IN GENERAL.—Subchapter II of chapter 5 of title

3 5, United States Code, is amended by adding at the end

4 thereof the following new section:

5 ‘‘§ 560. Use of duplicative State or local requirements

6 ‘‘(a) Except as otherwise provided by law, the head

7 of each Federal agency is authorized, in the administra8 tion of a Federal statute with respect to any State or local9 ity, to adopt as a Federal rule a regulation of that State

10 or local government or use as a Federal recordkeeping or

11 reporting requirement or implementation procedure a rec12 ordkeeping or reporting requirement or implementation

13 procedure of that State or locality if the head of the agen14 cy determines—

15 ‘‘(1) that such State or local government regu16 lation, implementation procedure, recordkeeping re-
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1 quirement, or reporting requirement duplicates a

2 Federal regulation, procedure, recordkeeping re3 quirement, or reporting requirement; and

4 ‘‘(2) that such State or local government regu5 lation, implementation procedure, recordkeeping re6 quirement, or reporting requirement is substantively

7 equivalent to or more stringent than the Federal

8 regulation, procedure, recordkeeping requirement, or

9 reporting requirement.

10 ‘‘(b) When the head of an agency determines to use

11 a State or local recordkeeping or reporting requirement

12 or implementation procedure, as a Federal recordkeeping

13 or reporting requirement, or implementation procedure in

14 that State or locality, the head of the agency shall prepare

15 at a minimum, a written statement of the reasons for any

16 determination made under subsection (a), and shall make

17 such statement available to the public.

18 ‘‘(c) This section does not limit the authority or re19 sponsibility of the head of any agency to enforce Federal

20 law.’’.

21 (b) RULEMAKING.—Section 551 of title 5, United

22 States Code, is amended by inserting the following be23 tween ‘‘rule’’ and the semicolon: ‘‘, or the adoption of a

24 rule pursuant to section 561 of this title’’.
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1 (c) TABLE OF SECTIONS.—The table of sections for

2 chapter 5 of such title is amended by inserting after the

3 item relating to section 559 the following new item:

‘‘560. Use of duplicative State or local requirements.’’.

4 SEC. 103. PRESIDENTIAL AUTHORITY.

5 Nothing in this Act (i) limits the exercise by the

6 President of the authority and responsibility that he other7 wise possesses under the Constitution and other laws of

8 the United States with respect to regulatory policies, pro9 cedures, and programs of departments, agencies, and of10 fices, or (ii) alters in any manner rulemaking authority

11 vested by law in an agency to initiate or complete a rule12 making proceeding, or to issue, modify, or rescind a rule.

13 TITLE II—RISK-BASED PRIORITIES

14 SEC. 201. SHORT TITLE.

15 This title may be cited as the ‘‘Risk Reduction Prior16 ities Act of 1995’’.

17 SEC. 202. PURPOSES.

18 It is the purposes of this title to—

19 (1) encourage Federal agencies engaged in reg20 ulating risks to human health, safety, and the envi21 ronment to achieve the greatest risk reduction at the

22 least cost practical;

23 (2) promote the coordination of policies and

24 programs to reduce risks to human health, safety,

25 and the environment; and
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1 (3) promote open communication among Fed2 eral agencies, the public, the President, and Con3 gress regarding environmental, health, and safety

4 risks, and the prevention and management of those

5 risks.

6 SEC. 203. DEFINITIONS.

7 For the purposes of this title:

8 (1) COMPARATIVE RISK ANALYSIS.—The term

9 ‘‘comparative risk analysis’’ means a process to sys10 tematically estimate, compare, and rank the size and

11 severity of risks to provide a common basis for eval12 uating strategies for reducing or preventing those

13 risks.

14 (2) COVERED AGENCY.—The term ‘‘covered

15 agency’’ means each of the following:

16 (A) The Environmental Protection Agency.

17 (B) The Department of Labor.

18 (C) The Food and Drug Administration.

19 (D) The Consumer Product Safety Com20 mission.

21 (E) The Department of Transportation.

22 (F) The Department of Energy.

23 (G) The Department of Agriculture.

24 (H) The Department of the Interior.

25 (I) The Nuclear Regulatory Commission.
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1 (3) DIRECTOR.—The term ‘‘Director’’ means

2 the Director of the Office of Management and Budg3 et.

4 (4) EFFECT.—The term ‘‘effect’’ means a dele5 terious change in the condition—

6 (A) of a human or other living thing (in7 cluding death, cancer, or other chronic illness,

8 decreased reproductive capacity, or disfigure9 ment); or

10 (B) of an inanimate thing important to

11 human welfare (including destruction, degenera12 tion, the loss of intended function, and in13 creased costs for maintenance).

14 (5) IRREVERSIBILITY.—The term ‘‘irre15 versibility’’ means the extent to which a return to

16 conditions prior to the occurrence of an effect are ei17 ther very slow or will never occur.

18 (6) LIKELIHOOD.—The term ‘‘likelihood’’

19 means the estimated probability that an effect will

20 occur.

21 (7) MAGNITUDE.—The term ‘‘magnitude’’

22 means the number of individuals or the quantity of

23 ecological resources or other resources that contrib24 ute to human welfare that are affected by exposure

25 to a stressor.
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1 (8) SERIOUSNESS.—The term ‘‘seriousness’’

2 means the intensity of effect, the likelihood, the

3 irreversibility, and the magnitude.

4 SEC. 204. DEPARTMENT AND AGENCY PROGRAM GOALS.

5 (a) SETTING PRIORITIES.—In exercising authority

6 under applicable laws protecting human health, safety, or

7 the environment, the head of each covered agency should

8 strive to set priorities and to use the resources available

9 under those laws to address those risks to human health,

10 safety, and the environment that—

11 (1) the covered agency determines to be the

12 most serious; and

13 (2) can be addressed in a cost-effective manner,

14 with the goal of achieving the greatest overall net re15 duction in risks with the public and private sector

16 resources expended.

17 (b) DETERMINING THE MOST SERIOUS RISKS.—In

18 identifying the greatest risks under subsection (a) of this

19 section, each covered agency shall consider, at a mini20 mum—

21 (1) the likelihood, irreversibility, and severity of

22 the effect; and

23 (2) the number and groups of individuals poten24 tially affected, and shall explicitly take into account
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1 the results of the comparative risk analysis con2 ducted under section 205 of this Act.

3 (c) OMB REVIEW.—The covered agency’s determina4 tions of the sources of the most serious risks for purposes

5 of setting priorities shall be reviewed and approved by the

6 Director of the Office of Management and Budget prior

7 to submission of the covered agency’s annual budget re8 quests to Congress.

9 (d) INCORPORATING RISK-BASED PRIORITIES INTO

10 BUDGET AND PLANNING.—The head of each covered

11 agency shall incorporate the priorities identified in sub12 section (a) of this section into the agency budget, strategic

13 planning, regulatory agenda, enforcement, and research

14 activities by—

15 (1) in the covered agency’s annual budget re16 quest to Congress—

17 (A) identifying which risks that the cov18 ered agency head has determined are the most

19 serious and can be addressed in a cost-effective

20 manner under subsection (a) and the basis for

21 that determination;

22 (B) explicitly identifying how the covered

23 agency’s requested funds will be used to reduce

24 those risks, including the amount of funds re25 quested to address each of those risks; and
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1 (C) identifying any statutory, regulatory,

2 or administrative obstacles to allocating agency

3 resources in accordance with the mandates of

4 subsection (a);

5 (2) explicitly considering the requirements of

6 subsection (a) and the results of the comparative

7 risk analysis prepared under section 205 of this title

8 when preparing the covered agency’s regulatory

9 agenda or other covered agency strategic plan and

10 explaining how the agenda or plan reflects those re11 quirements and the comparative risk analysis when

12 publishing any such agenda or strategic plan;

13 (3) developing an annual enforcement strategic

14 plan that targets the priority risks identified under

15 subsection (a); and

16 (4) expressly considering the priority risks de17 termined under subsection (a) in selecting research

18 activities.

19 (e) EFFECTIVE DATE.—This section shall take effect

20 twelve months from the date of enactment of this title.

21 SEC. 205. COMPARATIVE RISK ANALYSIS.

22 (a) REQUIREMENT.—Within six months of the enact23 ment of this title, the Director of the Office of Manage24 ment and Budget shall enter into appropriate arrange25 ments with an accredited scientific body—
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1 (1) to conduct a study of the methodologies for

2 using comparative risk to rank dissimilar human

3 health, safety, and environmental risks; and

4 (2) to conduct a comparative risk analysis. The

5 comparative risk analysis shall compare and rank, to

6 the extent feasible, human health, safety, and envi7 ronmental risks potentially regulated across the

8 spectrum of programs administered by all covered

9 agencies.

10 The Director shall consult with the Office of Science and

11 Technology Policy regarding the scope of the study and

12 the conduct of the comparative risk analysis.

13 (b) CRITERIA.—In arranging for the comparative risk

14 analysis referred to in subsection (a), the Director shall

15 ensure that—

16 (1) the scope and specificity of the analysis are

17 sufficient to provide the President and agency heads

18 guidance in allocating resources across agencies and

19 among programs in agencies to achieve the greatest

20 degree of risk prevention and reduction for the pub21 lic and private resources expended;

22 (2) the analysis is conducted through an open

23 process, which may include using panels of appro24 priate independent experts and public stakeholders;
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1 (3) The methodologies and principal scientific

2 determinations made in the analysis are subjected to

3 independent and external peer review and that the

4 conclusions of the peer review are made publicly

5 available as part of the final report required by sub6 section (c);

7 (4) there is an opportunity for public comment

8 on the results prior to making them final; and

9 (5) the results are presented in a manner that

10 distinguishes between the scientific conclusions and

11 any policy or value judgments embodied in the com12 parisons.

13 (c) REPORT.—The comparative risk analysis required

14 by subsection (a) shall be completed and a report submit15 ted to Congress and the President no later than three

16 years following the enactment of this Act. The compara17 tive risk analysis shall be reviewed and revised at least

18 every five years thereafter for a minimum of fifteen years

19 following the release of the first analysis. The Director

20 shall arrange for such review and revision with an accred21 ited scientific body in the same manner as provided in sub22 sections (a) and (b) above.

23 (d) STUDY.—The study of methodologies provided in

24 subsection (a) shall be conducted as part of the first com25 parative risk analysis. The goal of the study shall be to
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1 develop and rigorously test methods of comparative risk

2 analysis. The study shall have sufficient scope and breadth

3 to test approaches for improving comparative risk analysis

4 and its use in setting priorities for human health, safety,

5 and environmental risk prevention and reduction. As part

6 of its analysis, the study shall review and evaluate the ex7 perience of the States that have conducted comparative

8 risk analyses.

9 (e) REPORT.—Within one hundred and eighty days

10 after the completion of the study, the Director shall issue

11 a report of the study to the Congress, along with results

12 of a scientific peer review of the study.

13 (f) TECHNICAL GUIDANCE.—Not later than one hun14 dred and eighty days after the enactment of this Act, the

15 Director, in collaboration with other heads of covered

16 agencies shall enter into a contract with the National Re17 search Council to provide technical guidance to agencies

18 on approaches to using comparative risk analysis in set19 ting human health, safety, and environmental priorities to

20 assist agencies in complying with section 204 of this title.

21 SEC. 206. REPORTS AND RECOMMENDATIONS TO CON22 GRESS AND THE PRESIDENT.

23 (a) IN GENERAL.—In addition to the statement sub24 mitted to Congress with each covered agency’s annual

25 budget request required under section 204(d)(1) of this
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1 title, each covered agency shall submit a report to Con2 gress and the President twenty-four months following the

3 enactment of this legislation, and every twenty-four

4 months thereafter—

5 (1) detailing how the agency has complied with

6 section 204;

7 (2) describing the reasons for any departure

8 from the requirement to establish priorities to

9 achieve the greatest overall net reduction in risk;

10 and

11 (3) estimating the total public and private costs

12 of regulatory and voluntary risk reduction activities

13 under programs administered by the agency that

14 year, a comparison of that estimate with the pre15 vious year, and a projection for the following year.

16 (b) RECOMMENDATION.—In March of each year, the

17 head of each covered agency shall submit to Congress spe18 cific recommendations for—

19 (1) modifying, repealing, or enacting laws to re20 form, eliminate, or enhance programs or mandates

21 relating to human health, safety, and the environ22 ment; and

23 (2) modifying or eliminating statutorily or judi24 cially mandated deadlines,
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1 that would assist the covered agency to set priorities in

2 its activities to address the risks to human health, safety,

3 and the environment that are the most serious and can

4 be addressed in a cost-effective manner consistent with the

5 requirements of section 204(a).

6 SEC. 207. SAVINGS PROVISION AND JUDICIAL REVIEW.

7 (1) IN GENERAL.—Nothing in this title shall be con8 strued to modify any statutory standard or requirement

9 designed to protect human health, safety, or the environ10 ment.

11 (2) JUDICIAL REVIEW.—Compliance or noncompli12 ance by an agency with the provisions of this title shall

13 not be subject to judicial review.

14 (3) AGENCY ANALYSIS.—Any analysis prepared

15 under this title shall not be subject to judicial consider16 ation separate or apart from the requirement, rule, pro17 gram, or law to which it relates. When an action for judi18 cial review of a covered agency action is instituted, any

19 analysis for, or relating to, the action shall constitute part

20 of the whole record of agency action for the purpose of

21 judicial review of the action and shall, to the extent rel22 evant, be considered by a court in determining the legality

23 of the covered agency action.
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1 TITLE III—REGULATORY ACCOUNTING

2 SEC. 301. SHORT TITLE

3 This title may be cited as the ‘‘Regulatory Accounting

4 Act of 1995’’.

5 SEC. 302. ACCOUNTING STATEMENT

6 (a) IN GENERAL.—

7 (1) RESPONSIBILITY FOR IMPLEMENTATION.—

8 The President shall be responsible for implementing

9 and administering the requirements of this title.

10 (2) ACCOUNTING STATEMENT.—Every two

11 years, not later than June of the second year, the

12 President shall prepare and submit to Congress an

13 accounting statement that estimates the costs of

14 Federal regulatory programs and corresponding ben15 efits in accordance with this section.

16 (b) YEARS COVERED BY ACCOUNTING STATE17 MENT.—Each accounting statement shall cover, at a mini18 mum, the five fiscal years beginning on October 1 of the

19 year in which the report is submitted and may cover any

20 fiscal year preceding such fiscal years for purpose of revis21 ing previous estimates.

22 (c) TIMING AND PROCEDURES.—

23 (1) NOTICE AND COMMENT.—The President

24 shall provide notice and opportunity for comment for

25 each accounting statement. The President may dele-
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1 gate to an agency the requirement to provide notice

2 and opportunity to comment for the portion of the

3 accounting statement relating to that agency.

4 (2) DEADLINES FOR FIRST STATEMENT.—The

5 President shall propose the first accounting state6 ment under this section not later than two years

7 after the date of the enactment of this Act and shall

8 issue the first accounting statement in final form

9 not later than three years after the date of the en10 actment of this Act. Such statement shall cover, at

11 a minimum, each of the eight fiscal years beginning

12 after the date of the enactment of this Act.

13 (d) CONTENT OF ACCOUNTING STATEMENT.—

14 (1) IN GENERAL.—Each accounting statement

15 shall contain estimates of costs and benefits with re16 spect to each fiscal year covered by the statement in

17 accordance with this subsection. For each such fiscal

18 year for which estimates were made in a previous ac19 counting statement, the statement shall revise those

20 estimates and state the reasons for the revisions.

21 (2) STATEMENT OF COSTS.—

22 (A) IN GENERAL.—An accounting state23 ment shall estimate the costs of Federal regu24 latory programs by setting forth, for each year

25 covered by the statement—
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1 (i) the annual expenditure of national

2 economic resources for the regulatory pro3 gram; and

4 (ii) such other quantitative and quali5 tative measures of costs as the President

6 considers appropriate.

7 (B) NATIONAL ECONOMIC RESOURCES.—

8 For purposes of the estimate of costs in the ac9 counting statement, national economic re10 sources shall include, and shall be listed under,

11 at least the following categories:

12 (i) Private sector costs.

13 (ii) Federal sector administrative

14 costs.

15 (iii) Federal sector compliance costs.

16 (iv) State and local government ad17 ministrative costs.

18 (v) State and local government com19 pliance costs.

20 (3) STATEMENT OF CORRESPONDING BENE21 FITS.—An accounting statement shall estimate the

22 benefits of Federal regulatory programs by setting

23 forth, for each year covered by the statement, such

24 quantitative and qualitative measures of benefits as

25 the President considers appropriate. Any estimates
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1 of benefits concerning reduction in human health,

2 safety, or environmental risks shall present the most

3 plausible level of risk practical, along with a state4 ment of the reasonable degree of scientific certainty.

5 SEC. 303. ASSOCIATED REPORT TO CONGRESS.

6 (a) IN GENERAL.—At the same time as the President

7 submits an accounting statement under section 302, the

8 President, acting through the Director of the Office of

9 Management and Budget, shall submit to Congress a re10 port associated with the accounting statement (hereinafter

11 referred to as an ‘‘associated report’’). The associated re12 port shall contain, in accordance with this section—

13 (1) analyses of impacts; and

14 (2) recommendations for reform.

15 (b) ANALYSES OF IMPACTS.—The President shall in16 clude in the associated report the following:

17 (1) Analyses prepared by the President of the

18 cumulative impact of Federal regulatory programs

19 covered in the accounting statement on the follow20 ing:

21 (A) The ability of State and local govern22 ments to provide essential services, including

23 police, fire protection, and education.

24 (B) Small business.

25 (C) Productivity.
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1 (D) Wages.

2 (E) Economic growth.

3 (F) Technological innovation.

4 (G) Consumer prices for goods and serv5 ices.

6 (H) Such other factors considered appro7 priate by the President.

8 (2) A summary of any independent analyses of

9 impacts prepared by persons commenting during the

10 comment period on the accounting statement.

11 (c) RECOMMENDATIONS FOR REFORM.—The Presi12 dent shall include in the associated report the following:

13 (1) A summary of recommendations of the

14 President for reform or elimination of any Federal

15 regulatory program or program element that does

16 not represent sound use of national economic re17 sources or otherwise is inefficient.

18 (2) A summary of any recommendations for

19 such reform or elimination of Federal regulatory

20 programs or program elements prepared by persons

21 commenting during the comment period on the ac22 counting statement.
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1 SEC. 304. GUIDANCE FROM OFFICE OF MANAGEMENT AND

2 BUDGET.

3 The Director of the Office of Management and Budg4 et shall, in consultation with the Council of Economic Ad5 visers, provide guidance to agencies—

6 (1) to standardize measures of costs and bene7 fits in accounting statements prepared pursuant to

8 titles I and III, including—

9 (A) detailed guidance on estimating the

10 costs and benefits of major rules;

11 (B) general guidance on estimating the

12 costs and benefits of all other rules that do not

13 meet the thresholds for major rules; and

14 (2) to standardize the format of the accounting

15 statements.

16 SEC. 305. RECOMMENDATIONS FROM CONGRESSIONAL

17 BUDGET OFFICE.

18 After each accounting statement and associated re19 port submitted to Congress, the Director of the Congres20 sional Budget Office shall make recommendations to the

21 President—

22 (1) for improving accounting statements pre23 pared pursuant to this title, including recommenda24 tions on level of detail and accuracy; and
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1 (2) for improving associated reports prepared

2 pursuant to this title, including recommendations on

3 the quality of analysis.

4 SEC. 306. DEFINITIONS.

5 For purposes of this title, the following definitions

6 apply:

7 (1) The term ‘‘Federal regulatory program’’

8 means a program carried out pursuant to a related

9 group of Federal statutes and regulations, as deter10 mined by the President.

11 (2) The term ‘‘regulation’’ means an agency

12 statement of general applicability and future effect

13 designed to implement, interpret, or prescribe law or

14 policy or describing the procedures or practice re15 quirements of an agency. The term does not in16 clude—

17 (A) administrative actions governed by sec18 tions 556 and 557 of title 5, United States

19 Code;

20 (B) regulations issued with respect to a

21 military or foreign affairs function of the Unit22 ed States; or

23 (C) regulations related to agency organiza24 tion, management, or personnel.
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1 (3) The term ‘‘agency’’ means any executive de2 partment, military department, Government corpora3 tion, Government controlled corporation, or other es4 tablishment in the executive branch of the Govern5 ment (including the Executive Office of the Presi6 dent), or any independent regulatory agency, but

7 does not include—

8 (A) the General Accounting Office;

9 (B) the Federal Election Commission;

10 (C) the governments of the District of Co11 lumbia and of the territories and possessions of

12 the United States, and their various subdivi13 sions; or

14 (D) Government-owned contractor-oper15 ated facilities, including laboratories engaged in

16 national defense research and production activi17 ties.

18 TITLE IV—MARKET INCENTIVES AND

19 ECONOMICALLY EFFICIENT REGULATION

20 SEC. 401. SHORT TITLE.

21 This title maybe cited as the ‘‘Market Incentives Act

22 of 1995’’.

23 SEC. 402. PROGRAM DESIGN REQUIREMENTS.

24 (a) IN GENERAL.—To the maximum extent prac25 ticable, agencies shall ensure that major rules, especially,
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1 but not limited to, those that limit the emission of environ2 mental pollutants or otherwise govern the use of natural

3 resources, operate through the application of market4 based mechanisms.

5 (b) FLEXIBLE ALTERNATIVES.—Where it is not

6 practicable to rely on market-based mechanisms in design7 ing regulatory programs, rules, or requirements, agencies

8 shall ensure that major rules, to the maximum extent

9 practicable, are comparable to market-based mechanisms

10 with respect to (i) assuring the achievement of the regu11 latory objective, and (ii) affording flexibility to regulated

12 persons.

13 (c) APPLICABILITY.—Section 402 shall apply, to the

14 extent feasible, to rules in effect on the date of enactment

15 of this Act and rules that take effect after the date of

16 enactment of this Act.

17 SEC. 403. AGENCY ASSESSMENT AND OMB REVIEW.

18 (a) IN GENERAL.—Each agency shall include an as19 sessment of market-based mechanisms in each proposed

20 major rule. Each assessment shall demonstrate the extent

21 to which the major rule complies with the requirements

22 of section 402, or why section 402 is not applicable or

23 appropriate.

24 (b) OMB REVIEW.—The Office of Management and

25 Budget shall review, as part of its regulatory review and
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1 oversight function, the agency assessments and statements

2 prepared in section 403(a). OMB shall determine whether

3 such assessments are detailed, thorough, and otherwise in

4 compliance with section 402.

5 (c) EFFECTIVE DATE.—Section 403 shall take effect

6 three months after the date of enactment of this Act.

7 SEC. 404. DEFINITIONS.

8 For the purposes of this title:

9 (1) The term ‘‘agency’’ means any executive de10 partment, military department, Government corpora11 tion, Government controlled corporation, or other es12 tablishment in the executive branch of the Govern13 ment (including the Executive Office of the Presi14 dent), or any independent regulatory agency, but

15 does not include—

16 (A) the General Accounting Office;

17 (B) the Federal Election Commission;

18 (C) the governments of the District of Co19 lumbia and of the territories and possessions of

20 the United States, and their various subdivi21 sions; or

22 (D) Government-owned contractor-oper23 ated facilities, including laboratories engaged in

24 national defense research and production activi25 ties.
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1 (2) The term ‘‘major rule’’ means—

2 (A) a rule or a group of closely related

3 rules that the agency or the President reason4 ably determines is likely to have an annual ef5 fect on the economy of $100,000,000 or more

6 in reasonably quantifiable direct and indirect

7 costs, or has a significant impact on a subsector

8 of the economy; and

9 (B) a rule or a group of closely related

10 rules that is otherwise designated a major rule

11 by the agency proposing the rule, or is so des12 ignated by the President, on the ground that

13 the rule is likely to result in—

14 (i) a substantial increase in costs or

15 prices for wage earners, consumers, indi16 vidual industries, nonprofit organizations,

17 Federal, State, or local government agen18 cies, or geographic regions; or

19 (ii) significant adverse effects on

20 wages, economic growth, investment, pro21 ductivity, innovation, the environment,

22 public health or safety, or the ability of en23 terprises whose principal places of business

24 are in the United States to compete in do25 mestic or export markets. For purposes of
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1 subparagraph (A) of this paragraph, the

2 term ‘‘rule’’ does not mean—

3 (I) a rule that involves the internal revenue

4 laws of the United States;

5 (II) a rule that authorizes the introduction into

6 commerce or recognizes the marketable status of a

7 product, pursuant to sections 408, 409(c), and 706

8 of the Federal Food, Drug, and Cosmetic Act;

9 (III) a rule exempt from notice and public pro10 cedure pursuant to section 553(a) of title 5, United

11 States Code; or

12 (IV) a rule relating to the viability, stability,

13 asset powers, or categories of accounts of, or permis14 sible interest rate ceilings applicable to, depository

15 institutions the deposits or accounts of which are in16 sured by the Federal Deposit Insurance Corporation,

17 or the Share Insurance Fund of the National Credit

18 Union Administration Board.

19 (3) The term ‘‘market-based mechanism’’

20 means a regulatory requirement that:

21 (A) imposes legal accountability for the

22 achievement of an explicit regulatory objective

23 on each regulated person;

24 (B) affords maximum flexibility to each

25 regulated person in complying with mandatory
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1 regulatory objectives, which flexibility shall in2 clude, but not be limited to, the opportunity to

3 transfer to, or receive from, other persons, in4 cluding for cash or other legal consideration, in5 crements of compliance responsibility estab6 lished by the program; and

7 (C) permits regulated persons to respond

8 automatically to changes in general economic

9 conditions and in economic circumstances di10 rectly pertinent to the regulatory program with11 out affecting the achievement of the program’s

12 explicit regulatory mandates.

13 (4) The term ‘‘rule’’ has the same meaning as

14 in section 551(4) of title 5, United States Code, ex15 cept that such term does not include—

16 (A) a rule of particular applicability that

17 approves or prescribes for the future rates,

18 wages, prices, services, or allowances therefor,

19 corporate or financial structures, reorganiza20 tions, mergers or acquisitions, or accounting

21 practices or disclosures bearing on any of the

22 foregoing.

23 (B) a rule relating to monetary policy pro24 posed or promulgated by the Board of Gov25 ernors of the Federal Reserve System; or
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1 (C) a rule issued by the Federal Election

2 Commission or a rule issued by the Federal

3 Communications Commission pursuant to sec4 tions 315 and 312(a)(7) of the Communications

5 Act of 1934.

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