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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 746 Reported in Senate (RS)]

                                                       Calendar No. 219

106th CONGRESS

  1st Session

                                 S. 746

                          [Report No. 106-110]

_______________________________________________________________________

                                 A BILL

 To provide for analysis of major rules, to promote the public's right 
  to know the costs and benefits of major rules, and to increase the 
               accountability and quality of Government.

_______________________________________________________________________

                             July 20, 1999

                        Reported with amendments

                                                       Calendar No. 219
106th CONGRESS
  1st Session
                                 S. 746

                          [Report No. 106-110]

 To provide for analysis of major rules, to promote the public's right 
  to know the costs and benefits of major rules, and to increase the 
               accountability and quality of Government.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 25, 1999

  Mr. Levin (for himself, Mr. Thompson, Mr. Voinovich, Mr. Robb, Mr. 
   Abraham, Mr. Rockefeller, Mr. Roth, Mr. Daschle, Mr. Stevens, Mr. 
Moynihan, Mr. Cochran, Mr. Breaux, Mr. Frist, Mr. Enzi, Mr. Grams, Mr. 
 Grassley,  Mrs. Lincoln, Mr. Crapo, Mr. McConnell, Mr. Coverdell, and 
  Mr. Hagel) introduced the following bill; which was read twice and 
           referred to the Committee on Governmental Affairs

                             July 20, 1999

               Reported by Mr. Thompson, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL

 
 To provide for analysis of major rules, to promote the public's right 
  to know the costs and benefits of major rules, and to increase the 
               accountability and quality of Government.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Regulatory Improvement Act of 
1999''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Effective regulatory programs provide important 
        benefits to the public, including improving the environment, 
        worker safety, and public health. Regulatory programs also 
        impose significant costs on the public, including individuals, 
        businesses, and State, local, and tribal governments.
            (2) Improving the ability of Federal agencies to use 
        scientific and economic analysis in developing regulations 
        should yield increased benefits and more effective protections 
        while minimizing costs.
            (3) Cost-benefit analysis and risk assessment are useful 
        tools to better inform agencies in developing regulations, 
        although such analyses and assessments do not replace the need 
        for good judgment and consideration of values.
            (4) The evaluation of costs and benefits must involve the 
        consideration of the relevant information, whether expressed in 
        quantitative or qualitative terms, including factors such as 
        social values, distributional effects, and equity.
            (5) Cost-benefit analysis and risk assessment should be 
        presented with a clear statement of the analytical assumptions 
        and uncertainties, including an explanation of what is known 
        and not known and what the implications of alternative 
        assumptions might be.
            (6) The public has a right to know about the costs and 
        benefits of regulations, the risks addressed, the risks 
        reduced, and the quality of scientific and economic analysis 
        used to support decisions. Such knowledge will promote the 
        quality, integrity and responsiveness of agency actions.
            (7) The Administrator of the Office of Information and 
        Regulatory Affairs should oversee regulatory activities to 
        raise the quality and consistency of cost-benefit analysis and 
        risk assessment among all agencies.
            (8) The Federal Government should develop a better 
        understanding of the strengths, weaknesses, and uncertainties 
        of cost-benefit analysis and risk assessment and conduct the 
        research needed to improve these analytical tools.

SEC. 3. REGULATORY ANALYSIS.

    (a) In General.--Chapter 6 of title 5, United States Code, is 
amended by adding at the end the following:

                  ``SUBCHAPTER II--REGULATORY ANALYSIS

``Sec. 621. Definitions
    ``For purposes of this subchapter the definitions under section 551 
shall apply and--
            ``(1) the term `Administrator' means the Administrator of 
        the Office of Information and Regulatory Affairs of the Office 
        of Management and Budget;
            ``(2) the term `benefit' means the reasonably identifiable 
        significant favorable effects, quantifiable and 
        nonquantifiable, including social, health, safety, 
        environmental, economic, and distributional effects, that are 
        expected to result from implementation of, or compliance with, 
        a rule;
            ``(3) the term `cost' means the reasonably identifiable 
        significant adverse effects, quantifiable and nonquantifiable, 
        including social, health, safety, environmental, economic, and 
        distributional effects, that are expected to result from 
        implementation of, or compliance with, a rule;
            ``(4) the term `cost-benefit analysis' means an evaluation 
        of the costs and benefits of a rule, quantified to the extent 
        feasible and appropriate and otherwise qualitatively described, 
        that is prepared in accordance with the requirements of this 
        subchapter at the level of detail appropriate and practicable 
for reasoned decisionmaking on the matter involved, taking into 
consideration uncertainties, the significance and complexity of the 
decision, and the need to adequately inform the public;
            ``(5) the term `Director' means the Director of the Office 
        of Management and Budget, acting through the Administrator of 
        the Office of Information and Regulatory Affairs;
            ``(6) the term `flexible regulatory options' means 
        regulatory options that permit flexibility to regulated persons 
        in achieving the objective of the statute as addressed by the 
        rule making, including regulatory options that use market-based 
        mechanisms, outcome oriented performance-based standards, or 
        other options that promote flexibility;
            ``(7) the term `major rule' means a rule that--
                    ``(A) the agency proposing the rule or the Director 
                reasonably determines is likely to have an annual 
                effect on the economy of $100,000,000 or more in 
                reasonably quantifiable costs; or
                    ``(B) is otherwise designated a major rule by the 
                Director on the ground that the rule is likely to 
                adversely affect, in a material way, the economy, a 
                sector of the economy, including small business, 
                productivity, competition, jobs, the environment, 
                public health or safety, or State, local or tribal 
                governments, or communities;
            ``(8) the term `reasonable alternative' means a reasonable 
        regulatory option that would achieve the objective of the 
        statute as addressed by the rule making and that the agency has 
        authority to adopt under the statute granting rule making 
        authority, including flexible regulatory options;
            ``(9) the term `risk assessment' means the systematic, 
        objective process of organizing hazard and exposure 
        information, based on a careful analysis of the weight of the 
        scientific evidence, to estimate the potential for specific 
        harm to an exposed population, subpopulation, or natural 
        resource including, to the extent feasible, a characterization 
        of the distribution of risk as well as an analysis of 
        uncertainties, variabilities, conflicting information, and 
        inferences and assumptions;
            ``(10) the term `rule' has the same meaning as in section 
        551(4), and shall not include--
                    ``(A) a rule exempt from notice and public comment 
                procedure under section 553;
                    ``(B) a rule that involves the internal revenue 
                laws of the United States, or the assessment or 
                collection of taxes, duties, or other debts, revenue, 
                or receipts;
                    ``(C) a rule of particular applicability that 
                approves or prescribes for the future rates, wages, 
                prices, services, corporate or financial structures, 
                reorganizations, mergers, acquisitions, accounting 
                practices, or disclosures bearing on any of the 
                foregoing;
                    ``(D) a rule relating to monetary policy proposed 
                or promulgated by the Board of Governors of the Federal 
                Reserve System or by the Federal Open Market Committee;
                    ``(E) a rule relating to the operations, safety, or 
                soundness of federally insured depository institutions 
                or any affiliate of such an institution (as defined in 
                section 2(k) of the Bank Holding Company Act of 1956 
                (12 U.S.C. 1841(k)); credit unions; the Federal Home 
                Loan Banks; government-sponsored housing enterprises; a 
                Farm Credit System Institution; foreign banks, and 
                their branches, agencies, commercial lending companies 
                or representative offices that operate in the United 
                States and any affiliate of such foreign banks (as 
                those terms are defined in the International Banking 
                Act of 1978 (12 U.S.C. 3101)); or a rule relating to 
                the payments system or the protection of deposit 
                insurance funds or Farm Credit Insurance Fund;
                    ``(F) a rule relating to the integrity of the 
                securities or commodities futures markets or to the 
                protection of investors in those markets;
                    ``(G) a rule issued by the Federal Election 
                Commission or a rule issued by the Federal 
                Communications Commission under sections 312(a)(7) and 
                315 of the Communications Act of 1934 (47 U.S.C. 
                312(a)(7) and 315);
                    ``(H) a rule required to be promulgated at least 
                annually pursuant to statute;
                    ``(I) a rule or agency action relating to the 
                public debt or fiscal policy of the United States; or
                    ``(J) a rule or agency action that authorizes or 
                bars the introduction into or removal from commerce, or 
                recognizes or cancels recognition of the marketable 
                status, of a product under the Federal Food, Drug and 
                Cosmetic Act (21 U.S.C. 301 et seq.); and
            ``(11) the term `substitution risk'--
                    ``(A) means a reasonably identifiable significant 
                increased risk to health, safety, or the environment 
                expected to result from a regulatory option; and
                    ``(B) shall not include risks attributable to the 
                effect of an option on the income of individuals.
``Sec. 622. Applicability and effect
    ``(a) Except as provided in section 623(f), this subchapter shall 
apply to all proposed and final major rules.
    ``(b) Nothing in this subchapter shall be construed to alter or 
modify--
            ``(1) the substantive standards applicable to a rule making 
        under other statutes;
            ``(2)(A) the range of regulatory options that an agency has 
        the authority to adopt under the statute authorizing the agency 
        to promulgate the rule; or
            ``(B) the deference otherwise accorded to the agency in 
        construing such statute; or
            ``(3) any opportunity for judicial review made applicable 
        under other statutes.
``Sec. 623. Regulatory analysis
    ``(a)(1) Before publishing a notice of a proposed rule making for 
any rule, each agency shall determine whether the rule is or is not a 
major rule covered by this subchapter.
    ``(2) The Director may designate any rule to be a major rule under 
section 621(7)(B), if the Director--
            ``(A) makes such designation not later than 30 days after 
        the close of the comment period for the rule; and
            ``(B) publishes such designation in the Federal Register, 
        together with a succinct statement of the basis for the 
        designation, within 30 days after such designation.
    ``(b)(1)(A) When an agency publishes a notice of proposed rule 
making for a major rule, the agency shall--
            ``(i) prepare and place in the rule making file an initial 
        regulatory analysis; and
            ``(ii) include a summary of such analysis consistent with 
        subsection (e) in the notice of proposed rule making.
    ``(B)(i) When the Director has published a designation that a rule 
is a major rule after the publication of the notice of proposed rule 
making for the rule, the agency shall--
            ``(I) promptly prepare and place in the rule making file an 
        initial regulatory analysis for the rule; and
            ``(II) publish in the Federal Register a summary of such 
        analysis consistent with subsection (e).
    ``(ii) Following the issuance of an initial regulatory analysis 
under clause (i), the agency shall give interested persons an 
opportunity to comment under section 553 in the same manner as if the 
initial regulatory analysis had been issued with the notice of proposed 
rule making.
    ``(2) Each initial regulatory analysis shall contain--
            ``(A) a cost-benefit analysis of the proposed rule that 
        shall contain--
                    ``(i) an analysis of the benefits of the proposed 
                rule, including any benefits that cannot be quantified, 
                and an explanation of how the agency anticipates that 
                such benefits will be achieved by the proposed rule, 
                including a description of the persons or classes of 
                persons likely to receive such benefits;
                    ``(ii) an analysis of the costs of the proposed 
                rule, including any costs that cannot be quantified, 
                and an explanation of how the agency anticipates that 
                such costs will result from the proposed rule, 
                including a description of the persons or classes of 
                persons likely to bear such costs;
                    ``(iii) an evaluation of the relationship of the 
                benefits of the proposed rule to its costs, including 
                the determinations required under subsection (d), 
                taking into account the results of any risk assessment;
                    ``(iv) an evaluation of the benefits and costs of a 
                reasonable number of reasonable alternatives reflecting 
                the range of regulatory options that would achieve the 
                objective of the statute as addressed by the rule 
                making, including, where feasible, alternatives that--
                            ``(I) require no government action or 
                        utilize voluntary programs;
                            ``(II) provide flexibility for small 
                        entities under subchapter I and for State, 
                        local, or tribal government agencies delegated 
                        to administer a Federal program;
                            ``(III) employ flexible regulatory options; 
                        and
                            ``(IV) assure protection of sensitive 
                        subpopulations, or populations exposed to 
                        multiple and cumulative risks; and
                    ``(v) a description of the scientific or economic 
                evaluations or information upon which the agency 
                substantially relied in the cost-benefit analysis and 
                risk assessment required under this subchapter, and an 
                explanation of how the agency reached the 
                determinations under subsection (d);
            ``(B) if required, the risk assessment in accordance with 
        section 624; and
            ``(C) when scientific information on substitution risks to 
        health, safety, or the environment is reasonably available to 
        the agency, an identification and evaluation of such risks.
    ``(c)(1) When the agency publishes a final major rule, the agency 
shall prepare and place in the rule making file a final regulatory 
analysis.
    ``(2) Each final regulatory analysis shall address each of the 
requirements for the initial regulatory analysis under subsection 
(b)(2), revised to reflect--
            ``(A) any material changes made to the proposed rule by the 
        agency after publication of the notice of proposed rule making;
            ``(B) any material changes made to the cost-benefit 
        analysis or risk assessment; and
            ``(C) agency consideration of significant comments received 
        regarding the proposed rule and the initial regulatory 
        analysis, including regulatory review communications under 
        subchapter IV.
    ``(d)(1)(A) The agency shall include in the statement of basis and 
purpose for a proposed or final major rule a reasonable determination, 
based upon the rule making record considered as a whole--
            ``(i) whether the rule is likely to provide benefits that 
        justify the costs of the rule;
            ``(ii) whether the rule is likely to substantially achieve 
        the rule making objective in a more cost-effective manner, or 
        with greater net benefits, than the other reasonable 
        alternatives considered by the agency; and
            ``(iii) whether the rule adopts a flexible regulatory 
        option.
    ``(B) Consistent with section 621 (2) and (3), net benefits 
analysis shall not be construed to be limited to quantifiable effects.
    ``(2) If the agency head determines that the rule is not likely to 
provide benefits that justify the costs of the rule or is not likely to 
substantially achieve the rule making objective in a more cost-
effective manner, or with greater net benefits, than the other 
reasonable alternatives considered by the agency, the agency head 
shall--
            ``(A) explain the reasons for selecting the rule 
        notwithstanding such determination, including identifying any 
        statutory provision that required the agency to select such 
        rule;
            ``(B) describe any reasonable alternative considered by the 
        agency that would be likely to provide benefits that justify 
        the costs of the rule and be likely to substantially achieve 
        the rule making objective in a more cost-effective manner, or 
        with greater net benefits, than the alternative selected by the 
        agency; and
            ``(C) describe any flexible regulatory option considered by 
        the agency and explain why that option was not adopted by the 
        agency if that option was not adopted.
    ``(e) Each agency shall include an executive summary of the 
regulatory analysis, including any risk assessment, in the regulatory 
analysis and in the statement of basis and purpose for the proposed and 
final major rule. Such executive summary shall include a succinct 
presentation of--
            ``(1) the benefits and costs expected to result from the 
        rule and any determinations required under subsection (d);
            ``(2) if applicable, the risk addressed by the rule and the 
        results of any risk assessment;
            ``(3) the benefits and costs of reasonable alternatives 
        considered by the agency; and
            ``(4) the key assumptions and scientific or economic 
        information upon which the agency relied.
    ``(f)(1) A major rule may be adopted without prior compliance with 
this subchapter if--
            ``(A) the agency for good cause finds that conducting the 
        regulatory analysis under this subchapter before the rule 
        becomes effective is impracticable or contrary to an important 
        public interest; and
            ``(B) the agency publishes the rule in the Federal Register 
        with such finding and a succinct explanation of the reasons for 
        the finding.
    ``(2) If a major rule is adopted under paragraph (1), the agency 
shall comply with this subchapter as promptly as possible unless the 
Director determines that compliance would be clearly unreasonable.
    ``(g) Each agency shall develop an effective process to permit 
elected officers of State, local, and tribal governments (or their 
designated employees with authority to act on their behalf) to provide 
meaningful and timely input in the development of regulatory proposals 
that contain significant Federal intergovernmental mandates. The 
process developed under this subsection shall be consistent with 
section 204 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1534).
``Sec. 624. Principles for risk assessments
    ``(a)(1)(A) Subject to paragraph (2), each agency shall design and 
conduct risk assessments in accordance with this subchapter for--
            ``(i) each proposed and final major rule the primary 
        purpose of which is to address health, safety, or environmental 
        risk; or
            ``(ii) any risk assessment that is not the basis of a rule 
        making that the Director--
                    ``(I) reasonably anticipates is likely to have an 
                annual effect on the economy of $100,000,000 or more in 
                reasonably quantifiable costs; and
                    ``(II) determines shall be subject to the 
                requirements of this section.
    ``(B)(i) Risk assessments conducted under this subchapter shall be 
conducted in a manner that promotes rational and informed risk 
management decisions and informed public input into and understanding 
of the process of making agency decisions.
    ``(ii) The scope and level of analysis of such a risk assessment 
shall be commensurate with the significance and complexity of the 
decision and the need to adequately inform the public, consistent with 
any need for expedition, and designed for the nature of the risk being 
assessed.
    ``(2) If a risk assessment under this subchapter is otherwise 
required by this section, but the agency determines that--
            ``(A) a final rule subject to this subchapter is 
        substantially similar to the proposed rule with respect to the 
        risk being addressed;
            ``(B) a risk assessment for the proposed rule has been 
        carried out in a manner consistent with this subchapter; and
            ``(C) a new risk assessment for the final rule is not 
        required in order to respond to comments received during the 
        period for comment on the proposed rule,
the agency may publish such determination along with the final rule in 
lieu of preparing a new risk assessment for the final rule.
    ``(b) Each agency shall consider in each risk assessment all 
relevant, reliable, and reasonably available scientific information and 
shall describe the basis for selecting such scientific information.
    ``(c)(1) When a risk assessment involves a choice of assumptions, 
the agency shall, with respect to significant assumptions--
            ``(A) identify the assumption and its scientific and policy 
        basis, including the extent to which the assumption has been 
        validated by, or conflicts with, empirical data;
            ``(B) explain the basis for any choices among assumptions 
        and, where applicable, the basis for combining multiple 
        assumptions; and
            ``(C) describe reasonable alternative assumptions that--
                    ``(i) would have had a significant effect on the 
                results of the risk assessment; and
                    ``(ii) were considered but not selected by the 
                agency for use in the risk assessment.
    ``(2) Significant assumptions used in a risk assessment shall 
incorporate all reasonably available, relevant, and reliable scientific 
information.
    ``(d) The agency shall inform the public when the agency is 
conducting a risk assessment subject to this section and, to the extent 
practicable, shall solicit relevant and reliable data from the public. 
The agency shall consider such data in conducting the risk assessment.
    ``(e) Each risk assessment under this subchapter shall include, as 
appropriate, each of the following:
            ``(1) A description of the hazard of concern.
            ``(2) A description of the populations or natural resources 
        that are the subject of the risk assessment.
            ``(3) An explanation of the exposure scenarios used in the 
        risk assessment, including an estimate of the corresponding 
        population or natural resource at risk and the likelihood of 
        such exposure scenarios.
            ``(4) A description of the nature and severity of the harm 
        that could reasonably occur as a result of exposure to the 
        hazard.
            ``(5) A description of the major uncertainties in each 
        component of the risk assessment and their influence on the 
        results of the assessment.
    ``(f) To the extent scientifically appropriate, each agency shall--
            ``(1) express the estimate of risk as 1 or more reasonable 
        ranges and, if feasible, probability distributions that reflect 
        variabilities, uncertainties, and lack of data in the analysis;
            ``(2) provide the ranges and distributions of risks, 
        including central and high end estimates of the risks, and 
        their corresponding exposure scenarios for the potentially 
        exposed population and, as appropriate, for more highly exposed 
        or sensitive subpopulations; and
            ``(3) describe the qualitative factors influencing the 
        ranges, distributions, and likelihood of possible risks.
    ``(g) When scientific information that permits relevant comparisons 
of risk is reasonably available, each agency shall use the information 
to place the nature and magnitude of a risk to health, safety, or the 
environment being analyzed in relationship to other reasonably 
comparable risks familiar to and routinely encountered by the general 
public. Such comparisons should consider relevant distinctions among 
risks, such as the voluntary or involuntary nature of risks, well 
understood or newly discovered risks, and reversible or irreversible 
risks.
``Sec. 625. Peer review
    ``(a) Each agency shall provide for an independent peer review in 
accordance with this section of--
            ``(1) a cost-benefit analysis of a major rule that the 
        agency or Director reasonably anticipates is likely to have an 
        annual effect on the economy of $500,000,000 in reasonably 
        quantifiable costs; and
            ``(2) a risk assessment required by this subchapter.
    ``(b)(1) Peer review required under subsection (a) shall--
            ``(A) be conducted through panels, expert bodies, or other 
        formal or informal devices that are broadly representative and 
        involve participants--
                    ``(i) with expertise relevant to the sciences, or 
                analyses involved in the regulatory decisions; and
                    ``(ii) who are independent of the agency;
            ``(B) be governed by agency standards and practices 
        governing conflicts of interest of nongovernmental agency 
        advisors;
            ``(C) provide for the timely completion of the peer review 
        including meeting agency deadlines;
            ``(D) contain a balanced presentation of all 
        considerations, including minority reports and an agency 
        response to all significant peer review comments; and
            ``(E) provide adequate protections for confidential 
        business information and trade secrets, including requiring 
        panel members or participants to enter into confidentiality 
        agreements.
    ``(2) Each agency shall provide a written response to all 
significant peer review comments. All peer review comments and any 
responses shall be made--
            ``(A) available to the public; and
            ``(B) part of the rule making record for purposes of 
        judicial review of any final agency action.
    ``(3) If the head of an agency, with the concurrence of the 
Director, publishes a determination in the rule making file that a 
cost-benefit analysis or risk assessment, or any component thereof, has 
been previously subjected to adequate peer review, no further peer 
review shall be required under this section for such analysis, 
assessment, or component.
    ``(c) For each peer review conducted by an agency under this 
section, the agency head shall include in the rule making record a 
statement by a Federal officer or employee who is not an employee of 
the agency rule making office or program--
            ``(1) whether the peer review participants reflect the 
        independence and expertise required under subsection (b)(1)(A); 
        and
            ``(2) whether the agency has adequately responded to the 
        peer review comments as required under subsection (b)(2).
    ``(d) The formality of the peer review conducted under this section 
shall be commensurate with the significance and complexity of the 
subject matter.
    ``(e) The peer review required by this section shall not be subject 
to the Federal Advisory Committee Act (5 U.S.C. App.).
    ``(f) A member of an agency advisory board (or comparable 
organization) established by statute shall be considered independent of 
the agency for purposes of subsection (b)(1)(A)(ii).
    ``(g) The status of a person as a contractor or grantee of the 
agency conducting the peer review shall not, in and of itself, exclude 
such person from serving as a peer reviewer for such agency because of 
the requirement of subsection (b)(1)(A)(ii).
    ``(h) Nothing in this section shall require more than one peer 
review of a cost-benefit analysis or a risk assessment during a rule 
making. A peer review required by this section shall occur to the 
extent feasible before the notice of proposed rule making.
``Sec. 626. Deadlines for rule making
    ``(a) All statutory deadlines that require an agency to propose or 
promulgate any major rule during the 2-year period beginning on the 
effective date of this section shall be suspended until the earlier 
of--
            ``(1) the date on which the requirements of this subchapter 
        are satisfied; or
            ``(2) the date occurring 180 days after the date of the 
        applicable deadline.
    ``(b) In any proceeding involving a deadline imposed by a court of 
the United States that requires an agency to propose or promulgate any 
major rule during the 2-year period beginning on the effective date of 
this section, the United States shall request, and the court may grant, 
an extension of such deadline until the earlier of--
            ``(1) the date on which the requirements of this subchapter 
        are satisfied; or
            ``(2) the date occurring 180 days after the date of the 
        applicable deadline.
    ``(c) In any case in which the failure to promulgate a major rule 
by a deadline occurring during the 2-year period beginning on the 
effective date of this section would create an obligation to regulate 
through individual adjudications, the deadline shall be suspended until 
the earlier of--
            ``(1) the date on which the requirements of this subchapter 
        are satisfied; or
            ``(2) the date occurring 180 days after the date of the 
        applicable deadline.
``Sec. 627. Judicial review
    ``(a) Compliance by an agency with the provisions of this 
subchapter shall be subject to judicial review only--
            ``(1) in connection with review of final agency action;
            ``(2) in accordance with this section; and
            ``(3) in accordance with the limitations on timing, venue, 
        and scope of review imposed by the statute authorizing judicial 
        review.
    ``(b) Any determination of an agency whether a rule is a major rule 
under section 621(7)(A) shall be set aside by a reviewing court only 
upon a showing that the determination is arbitrary or capricious.
    ``(c) Any designation by the Director that a rule is a major rule 
under section 621(7), or any failure to make such designation, shall 
not be subject to judicial review.
    ``(d) The cost-benefit analysis, cost-benefit determination under 
section 623(d), and any risk assessment required under this subchapter 
shall not be subject to judicial review separate from review of the 
final rule to which such analysis or assessment applies. The cost-
benefit analysis, cost-benefit determination under section 623(d), and 
any risk assessment shall be part of the rule making record and shall 
be considered by a court to the extent relevant, only in determining 
under the statute granting the rule making authority whether the final 
rule is arbitrary, capricious, an abuse of discretion, or is 
unsupported by substantial evidence where that standard is otherwise 
provided by law.
    ``(e) If an agency fails to perform the cost-benefit analysis, 
cost-benefit determination, or risk assessment, or to provide for peer 
review, a court may, giving due regard to prejudicial error, remand or 
invalidate the rule. The adequacy of compliance with the specific 
requirements of this subchapter shall not otherwise be grounds for 
remanding or invalidating a rule under this subchapter. If the court 
allows the rule to take effect, the court shall order the agency to 
promptly perform such analysis, determination, or assessment or provide 
for such peer review.
``Sec. 628. Guidelines, interagency coordination, and research
    ``(a)(1) Not later than 270 days after the date of enactment of 
this section, the Director, in consultation with the Council of 
Economic Advisors, the Director of the Office of Science and Technology 
Policy, and relevant agency heads, shall issue guidelines for cost-
benefit analyses, risk assessments, and peer reviews as required by 
this subchapter. The Director shall oversee and periodically revise 
such guidelines as appropriate.
    ``(2) As soon as practicable and not later than 18 months after 
issuance of the guidelines required under paragraph (1), each agency 
subject to section 624 shall adopt detailed guidelines for risk 
assessments as required by this subchapter. Such guidelines shall be 
consistent with the guidelines issued under paragraph (1). Each agency 
shall periodically revise such agency guidelines as appropriate.
    ``(3) The guidelines under this subsection shall be developed 
following notice and public comment. The development and issuance of 
the guidelines shall not be subject to judicial review, except in 
accordance with section 706(1).
    ``(b) To promote the use of cost-benefit analysis and risk 
assessment in a consistent manner and to identify agency research and 
training needs, the Director, in consultation with the Council of 
Economic Advisors and the Director of the Office of Science and 
Technology Policy, shall--
            ``(1) oversee periodic evaluations of Federal agency cost-
        benefit analysis and risk assessment;
            ``(2) provide advice and recommendations to the President 
        and Congress to improve agency use of cost-benefit analysis and 
        risk assessment;
            ``(3) utilize appropriate interagency mechanisms to improve 
        the consistency and quality of cost-benefit analysis and risk 
        assessment among Federal agencies; and
            ``(4) utilize appropriate mechanisms between Federal and 
        State agencies to improve cooperation in the development and 
        application of cost-benefit analysis and risk assessment.
    ``(c)(1) The Director, in consultation with the head of each 
agency, the Council of Economic Advisors, and the Director of the 
Office of Science and Technology Policy, shall periodically evaluate 
and develop a strategy to meet agency needs for research and training 
in cost-benefit analysis and risk assessment, including research on 
modelling, the development of generic data, use of assumptions and the 
identification and quantification of uncertainty and variability.
    ``(2)(A) Not later than 180 days after the date of enactment of 
this section, the Director, in consultation with the Director of the 
Office of Science and Technology Policy, shall enter a contract with an 
accredited scientific institution to conduct research to--
            ``(i) develop a common basis to assist risk communication 
        related to both carcinogens and noncarcinogens; and
            ``(ii) develop methods to appropriately incorporate risk 
        assessments into related cost-benefit analyses.
    ``(B) Not later than 2 years after the date of enactment of this 
section, the results of the research conducted under this paragraph 
shall be submitted to the Director and Congress.
``Sec. 629. Risk based priorities study
    ``(a) Not later than 1 year after the date of enactment of this 
section, the Director, in consultation with the Director of the Office 
of Science and Technology Policy, shall enter into a contract with an 
accredited scientific institution to conduct a study that provides--
            ``(1) a systematic comparison of the extent and severity of 
        significant risks to human health, safety, or the environment 
        (hereafter referred to as a comparative risk analysis);
            ``(2) a study of methodologies for using comparative risk 
        analysis to compare dissimilar risks to human health, safety, 
        or the environment, including development of a common basis to 
        assist comparative risk analysis related to both carcinogens 
        and noncarcinogens; and
            ``(3) recommendations on the use of comparative risk 
        analysis in setting priorities for the reduction of risks to 
        human health, safety, or the environment.
    ``(b) The Director shall ensure that the study required under 
subsection (a) is--
            ``(1) conducted through an open process providing peer 
        review consistent with section 625 and opportunities for public 
        comment and participation; and
            ``(2) not later than 3 years after the date of enactment of 
        this section, completed and submitted to Congress and the 
        President.
    ``(c) Not later than 4 years after the date of enactment of this 
section, each relevant agency shall, as appropriate, use the results of 
the study required under subsection (a) to inform the agency in the 
preparation of the agency's annual budget and strategic plan and 
performance plan under section 306 of this title and sections 1115, 
1116, 1117, 1118, and 1119 of title 31.
    ``(d) Not later than 5 years after the date of enactment of this 
section, and periodically thereafter, the President shall submit a 
report to Congress recommending legislative changes to assist in 
setting priorities to more effectively and efficiently reduce risks to 
human health, safety, or the environment.

                 ``SUBCHAPTER III--EXECUTIVE OVERSIGHT

``Sec. 631. Definitions
    ``For purposes of this subchapter--
            ``(1) the definitions under sections 551 and 621 shall 
        apply; and
            ``(2) the term `regulatory action' means any one of the 
        following:
                    ``(A) Advance notice of proposed rule making.
                    ``(B) Notice of proposed rule making.
                    ``(C) Final rule making, including interim final 
                rule making.
``Sec. 632. Presidential regulatory review
    ``(a) This subchapter shall apply to all proposed and final major 
rules and to any other rules designated by the President for review.
    ``(b) The President shall establish a process for the review and 
coordination of Federal agency regulatory actions. Such process shall 
be the responsibility of the Director.
    ``(c) For the purpose of carrying out subsection 
<DELETED>(c)</DELETED>(b), the Director shall--
            ``(1) develop and oversee uniform regulatory policies and 
        procedures, including those by which each agency shall comply 
        with the requirements of this chapter;
            ``(2) develop policies and procedures for the review of 
        regulatory actions by the Director; and
            ``(3) develop and oversee an annual governmentwide 
        regulatory planning process that shall include review of 
        planned significant regulatory actions and publication of--
                    ``(A) a summary of and schedule for promulgation of 
                planned agency major rules;
                    ``(B) agency specific schedules for review of 
                existing rules, including under section 610;
                    ``(C) a summary of regulatory review actions 
                undertaken in the prior year;
                    ``(D) a list of major rules promulgated in the 
                prior year for which an agency could not make the 
                determinations that the benefits of a rule justify the 
                costs under section 623(d);
                    ``(E) identification of significant agency 
                noncompliance with this chapter in the prior year; and
                    ``(F) recommendations for improving compliance with 
                this chapter and increasing the efficiency and 
                effectiveness of the regulatory process.
    ``(d)(1) The review established under subsection (b) shall be 
conducted as expeditiously as practicable and shall be limited to not 
more than 90 days.
    ``(2) A review may be extended longer than the 90-day period 
referred to under paragraph (1) by the Director or at the request of 
the rule making agency to the Director. Notice of such extension shall 
be published promptly in the Federal Register.
``Sec. 633. Public disclosure of information
    ``(a) The Director, in carrying out section 632, shall establish 
procedures to provide public and agency access to information 
concerning review of regulatory actions under this subchapter, 
including--
            ``(1) disclosure to the public on an ongoing basis of 
        information regarding the status of regulatory actions 
        undergoing review;
            ``(2) disclosure to the public, not later than the date of 
        publication of a regulatory action, of--
                    ``(A) all written correspondence relating to the 
                substance of a regulatory action, including drafts of 
                all proposals and associated analyses, between the 
                Administrator or employees of the Administrator and the 
                regulatory agency;
                    ``(B) all written correspondence relating to the 
                substance of a regulatory action between the 
                Administrator or employees of the Administrator and any 
                person not employed by the executive branch of the 
                Federal Government; and
                    ``(C) a list identifying the dates, names of 
                individuals involved, and subject matter discussed in 
                significant meetings and telephone conversations 
                relating to the substance of a regulatory action 
                between the Administrator or employees of the 
                Administrator and any person not employed by the 
                executive branch of the Federal Government; and
            ``(3) disclosure to the regulatory agency, on a timely 
        basis, of--
                    ``(A) all written correspondence relating to the 
                substance of a regulatory action between the 
                Administrator or employees of the Administrator and any 
                person not employed by the executive branch of the 
                Federal Government; and
                    ``(B) a list identifying the dates, names of 
                individuals involved, and subject matter discussed in 
                significant meetings and telephone conversations 
                relating to the substance of a regulatory action 
                between the Administrator or employees of the 
                Administrator and any person not employed by the 
                executive branch of the Federal Government.
    ``(b) Before the publication of any proposed or final rule, the 
agency shall include in the rule making record--
            ``(1) a document identifying in a complete, clear, and 
        simple manner, the substantive changes between the draft 
        submitted to the Administrator for review and the rule 
        subsequently published;
            ``(2) a document identifying and describing those 
        substantive changes in the rule that were made as a result of 
        the regulatory review and a statement if the Administrator 
        suggested or recommended no changes; and
            ``(3) all written correspondence relating to the substance 
        of a regulatory action between the Administrator and the agency 
        during the review of the rule, including drafts of all 
        proposals and associated analyses.
    ``(c) In any meeting relating to the substance of a regulatory 
action under review between the Administrator or employees of the 
Administrator and any person not employed by the executive branch of 
the Federal Government, a representative of the agency submitting the 
regulatory action shall be invited.
``Sec. 634. Judicial review
    ``The exercise of the authority granted under this subchapter by 
the President, the Director, or the Administrator shall not be subject 
to judicial review in any manner.''.
    (b) Presidential Authority.--Nothing in this Act shall limit the 
exercise by the President of the authority and responsibility that the 
President otherwise possesses under the Constitution and other laws of 
the United States with respect to regulatory policies, procedures, and 
programs of departments, agencies, and offices.
    (c) Technical and Conforming Amendments.--
            (1) Table of sections.--Part I of title 5, United States 
        Code, is amended by striking the chapter heading and table of 
        sections for chapter 6 and inserting the following:

           ``CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS

           ``SUBCHAPTER I--ANALYSIS OF REGULATORY FLEXIBILITY

``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 analysis.
``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--REGULATORY ANALYSIS

``621. Definitions.
``622. Applicability and effect.
``623. Regulatory analysis.
``624. Principles for risk assessments.
``625. Peer review.
``626. Deadlines for rule making.
``627. Judicial review.
``628. Guidelines, interagency coordination, and research.
``629. Risk based priorities study.
                 ``SUBCHAPTER III--EXECUTIVE OVERSIGHT

``631. Definitions.
``632. Presidential regulatory review.
``633. Public disclosure of information.
``634. Judicial review.''.
            (2) Subchapter heading.--Chapter 6 of title 5, United 
        States Code, is amended by inserting immediately before section 
        601, the following subchapter heading:

         ``SUBCHAPTER I--ANALYSIS OF REGULATORY FLEXIBILITY''.

SEC. 4. COMPLIANCE WITH THE UNFUNDED MANDATES REFORM ACT OF 1995.

    Compliance with the requirements of subchapter II of chapter 6 of 
title 5, United States Code (as added by section 3 of this Act), shall 
constitute compliance with the requirements pertaining to the costs and 
benefits of a Federal mandate to the private sector in sections 202, 
205(a)(2), and 208 of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1532, 1535(a)(2), and 1538).

SEC. 5. REPORT TO CONGRESS.

    Not later than February 5, 2002, the President, acting through the 
Director of the Office of Management and Budget, shall prepare and 
submit to Congress an accounting statement and report containing an 
estimate of the total annual incremental benefits and costs of 
complying with the provisions of subchapter II of chapter 6 of title 5, 
United States Code (as added by this Act) for each agency.

SEC. <DELETED>5.</DELETED> 6. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act shall take 
effect 180 days after the date of enactment of this Act, but shall not 
apply to any agency rule for which a notice of proposed rule making is 
published on or before 60 days before the date of enactment of this 
Act.
```