Calendar No. 219

106TH CONGRESS

1ST SESSION S. 746

[Report No. 106–110]

A BILL

To provide for analysis of major rules, to promote

and quality of Government.of major rules, and to increase the accountabilitythe public’s right to know the costs and benefits

JULY 20, 1999

Reported with amendments
II

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.

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

2 This Act may be cited as the ‘‘Regulatory Improve3 ment Act of 1999’’.

4 SEC. 2. FINDINGS.

5 Congress finds the following:

6 (1) Effective regulatory programs provide im7 portant benefits to the public, including improving

8 the environment, worker safety, and public health.

9 Regulatory programs also impose significant costs

10 on the public, including individuals, businesses, and

11 State, local, and tribal governments.

12 (2) Improving the ability of Federal agencies to

13 use scientific and economic analysis in developing

14 regulations should yield increased benefits and more

15 effective protections while minimizing costs.

16 (3) Cost-benefit analysis and risk assessment

17 are useful tools to better inform agencies in devel18 oping regulations, although such analyses and as19 sessments do not replace the need for good judgment

20 and consideration of values.

21 (4) The evaluation of costs and benefits must

22 involve the consideration of the relevant information,

23 whether expressed in quantitative or qualitative

24 terms, including factors such as social values, dis25 tributional effects, and equity.
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1 (5) Cost-benefit analysis and risk assessment

2 should be presented with a clear statement of the

3 analytical assumptions and uncertainties, including

4 an explanation of what is known and not known and

5 what the implications of alternative assumptions

6 might be.

7 (6) The public has a right to know about the

8 costs and benefits of regulations, the risks ad9 dressed, the risks reduced, and the quality of sci10 entific and economic analysis used to support deci11 sions. Such knowledge will promote the quality, in12 tegrity and responsiveness of agency actions.

13 (7) The Administrator of the Office of Informa14 tion and Regulatory Affairs should oversee regu15 latory activities to raise the quality and consistency

16 of cost-benefit analysis and risk assessment among

17 all agencies.

18 (8) The Federal Government should develop a

19 better understanding of the strengths, weaknesses,

20 and uncertainties of cost-benefit analysis and risk

21 assessment and conduct the research needed to im22 prove these analytical tools.
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1 SEC. 3. REGULATORY ANALYSIS.

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

3 States Code, is amended by adding at the end the fol4 lowing:

5 ‘‘SUBCHAPTER II—REGULATORY ANALYSIS

6 ‘‘§ 621. Definitions

7 ‘‘For purposes of this subchapter the definitions

8 under section 551 shall apply and—

9 ‘‘(1) the term ‘Administrator’ means the Ad10 ministrator of the Office of Information and Regu11 latory Affairs of the Office of Management and

12 Budget;

13 ‘‘(2) the term ‘benefit’ means the reasonably

14 identifiable significant favorable effects, quantifiable

15 and nonquantifiable, including social, health, safety,

16 environmental, economic, and distributional effects,

17 that are expected to result from implementation of,

18 or compliance with, a rule;

19 ‘‘(3) the term ‘cost’ means the reasonably iden20 tifiable significant adverse effects, quantifiable and

21 nonquantifiable, including social, health, safety, envi22 ronmental, economic, and distributional effects, that

23 are expected to result from implementation of, or

24 compliance with, a rule;

25 ‘‘(4) the term ‘cost-benefit analysis’ means an

26 evaluation of the costs and benefits of a rule, quan-
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1 tified to the extent feasible and appropriate and oth2 erwise qualitatively described, that is prepared in ac3 cordance with the requirements of this subchapter at

4 the level of detail appropriate and practicable for

5 reasoned decisionmaking on the matter involved,

6 taking into consideration uncertainties, the signifi7 cance and complexity of the decision, and the need

8 to adequately inform the public;

9 ‘‘(5) the term ‘Director’ means the Director of

10 the Office of Management and Budget, acting

11 through the Administrator of the Office of Informa12 tion and Regulatory Affairs;

13 ‘‘(6) the term ‘flexible regulatory options’

14 means regulatory options that permit flexibility to

15 regulated persons in achieving the objective of the

16 statute as addressed by the rule making, including

17 regulatory options that use market-based mecha18 nisms, outcome oriented performance-based stand19 ards, or other options that promote flexibility;

20 ‘‘(7) the term ‘major rule’ means a rule that—

21 ‘‘(A) the agency proposing the rule or the

22 Director reasonably determines is likely to have

23 an annual effect on the economy of

24 $100,000,000 or more in reasonably quantifi25 able costs; or
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1 ‘‘(B) is otherwise designated a major rule

2 by the Director on the ground that the rule is

3 likely to adversely affect, in a material way, the

4 economy, a sector of the economy, including

5 small business, productivity, competition, jobs,

6 the environment, public health or safety, or

7 State, local or tribal governments, or commu8 nities;

9 ‘‘(8) the term ‘reasonable alternative’ means a

10 reasonable regulatory option that would achieve the

11 objective of the statute as addressed by the rule

12 making and that the agency has authority to adopt

13 under the statute granting rule making authority,

14 including flexible regulatory options;

15 ‘‘(9) the term ‘risk assessment’ means the sys16 tematic, objective process of organizing hazard and

17 exposure information, based on a careful analysis of

18 the weight of the scientific evidence, to estimate the

19 potential for specific harm to an exposed population,

20 subpopulation, or natural resource including, to the

21 extent feasible, a characterization of the distribution

22 of risk as well as an analysis of uncertainties,

23 variabilities, conflicting information, and inferences

24 and assumptions;
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1 ‘‘(10) the term ‘rule’ has the same meaning as

2 in section 551(4), and shall not include—

3 ‘‘(A) a rule exempt from notice and public

4 comment procedure under section 553;

5 ‘‘(B) a rule that involves the internal rev6 enue laws of the United States, or the assess7 ment or collection of taxes, duties, or other

8 debts, revenue, or receipts;

9 ‘‘(C) a rule of particular applicability that

10 approves or prescribes for the future rates,

11 wages, prices, services, corporate or financial

12 structures, reorganizations, mergers, acquisi13 tions, accounting practices, or disclosures bear14 ing on any of the foregoing;

15 ‘‘(D) a rule relating to monetary policy

16 proposed or promulgated by the Board of Gov17 ernors of the Federal Reserve System or by the

18 Federal Open Market Committee;

19 ‘‘(E) a rule relating to the operations, safe20 ty, or soundness of federally insured depository

21 institutions or any affiliate of such an institu22 tion (as defined in section 2(k) of the Bank

23 Holding Company Act of 1956 (12 U.S.C.

24 1841(k)); credit unions; the Federal Home

25 Loan Banks; government-sponsored housing en-
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1 terprises; a Farm Credit System Institution;

2 foreign banks, and their branches, agencies,

3 commercial lending companies or representative

4 offices that operate in the United States and

5 any affiliate of such foreign banks (as those

6 terms are defined in the International Banking

7 Act of 1978 (12 U.S.C. 3101)); or a rule relat8 ing to the payments system or the protection of

9 deposit insurance funds or Farm Credit Insur10 ance Fund;

11 ‘‘(F) a rule relating to the integrity of the

12 securities or commodities futures markets or to

13 the protection of investors in those markets;

14 ‘‘(G) a rule issued by the Federal Election

15 Commission or a rule issued by the Federal

16 Communications Commission under sections

17 312(a)(7) and 315 of the Communications Act

18 of 1934 (47 U.S.C. 312(a)(7) and 315);

19 ‘‘(H) a rule required to be promulgated at

20 least annually pursuant to statute;

21 ‘‘(I) a rule or agency action relating to the

22 public debt or fiscal policy of the United States;

23 or

24 ‘‘(J) a rule or agency action that author25 izes or bars the introduction into or removal
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1 from commerce, or recognizes or cancels rec2 ognition of the marketable status, of a product

3 under the Federal Food, Drug and Cosmetic

4 Act (21 U.S.C. 301 et seq.); and

5 ‘‘(11) the term ‘substitution risk’—

6 ‘‘(A) means a reasonably identifiable sig7 nificant increased risk to health, safety, or the

8 environment expected to result from a regu9 latory option; and

10 ‘‘(B) shall not include risks attributable to

11 the effect of an option on the income of individ12 uals.

13 ‘‘§ 622. Applicability and effect

14 ‘‘(a) Except as provided in section 623(f), this sub15 chapter shall apply to all proposed and final major rules.

16 ‘‘(b) Nothing in this subchapter shall be construed

17 to alter or modify—

18 ‘‘(1) the substantive standards applicable to a

19 rule making under other statutes;

20 ‘‘(2)(A) the range of regulatory options that an

21 agency has the authority to adopt under the statute

22 authorizing the agency to promulgate the rule; or

23 ‘‘(B) the deference otherwise accorded to the

24 agency in construing such statute; or
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1 ‘‘(3) any opportunity for judicial review made

2 applicable under other statutes.

3 ‘‘§ 623. Regulatory analysis

4 ‘‘(a)(1) Before publishing a notice of a proposed rule

5 making for any rule, each agency shall determine whether

6 the rule is or is not a major rule covered by this sub7 chapter.

8 ‘‘(2) The Director may designate any rule to be a

9 major rule under section 621(7)(B), if the Director—

10 ‘‘(A) makes such designation not later than 30

11 days after the close of the comment period for the

12 rule; and

13 ‘‘(B) publishes such designation in the Federal

14 Register, together with a succinct statement of the

15 basis for the designation, within 30 days after such

16 designation.

17 ‘‘(b)(1)(A) When an agency publishes a notice of pro18 posed rule making for a major rule, the agency shall—

19 ‘‘(i) prepare and place in the rule making file

20 an initial regulatory analysis; and

21 ‘‘(ii) include a summary of such analysis con22 sistent with subsection (e) in the notice of proposed

23 rule making.

24 ‘‘(B)(i) When the Director has published a designa25 tion that a rule is a major rule after the publication of
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1 the notice of proposed rule making for the rule, the agency

2 shall—

3 ‘‘(I) promptly prepare and place in the rule

4 making file an initial regulatory analysis for the

5 rule; and

6 ‘‘(II) publish in the Federal Register a sum7 mary of such analysis consistent with subsection (e).

8 ‘‘(ii) Following the issuance of an initial regulatory

9 analysis under clause (i), the agency shall give interested

10 persons an opportunity to comment under section 553 in

11 the same manner as if the initial regulatory analysis had

12 been issued with the notice of proposed rule making.

13 ‘‘(2) Each initial regulatory analysis shall contain—

14 ‘‘(A) a cost-benefit analysis of the proposed rule

15 that shall contain—

16 ‘‘(i) an analysis of the benefits of the pro17 posed rule, including any benefits that cannot

18 be quantified, and an explanation of how the

19 agency anticipates that such benefits will be

20 achieved by the proposed rule, including a de21 scription of the persons or classes of persons

22 likely to receive such benefits;

23 ‘‘(ii) an analysis of the costs of the pro24 posed rule, including any costs that cannot be

25 quantified, and an explanation of how the agen-
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1 cy anticipates that such costs will result from

2 the proposed rule, including a description of the

3 persons or classes of persons likely to bear such

4 costs;

5 ‘‘(iii) an evaluation of the relationship of

6 the benefits of the proposed rule to its costs, in7 cluding the determinations required under sub8 section (d), taking into account the results of

9 any risk assessment;

10 ‘‘(iv) an evaluation of the benefits and

11 costs of a reasonable number of reasonable al12 ternatives reflecting the range of regulatory op13 tions that would achieve the objective of the

14 statute as addressed by the rule making, includ15 ing, where feasible, alternatives that—

16 ‘‘(I) require no government action or

17 utilize voluntary programs;

18 ‘‘(II) provide flexibility for small enti19 ties under subchapter I and for State,

20 local, or tribal government agencies dele21 gated to administer a Federal program;

22 ‘‘(III) employ flexible regulatory op23 tions; and
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1 ‘‘(IV) assure protection of sensitive

2 subpopulations, or populations exposed to

3 multiple and cumulative risks; and

4 ‘‘(v) a description of the scientific or eco5 nomic evaluations or information upon which

6 the agency substantially relied in the cost-ben7 efit analysis and risk assessment required under

8 this subchapter, and an explanation of how the

9 agency reached the determinations under sub10 section (d);

11 ‘‘(B) if required, the risk assessment in accord12 ance with section 624; and

13 ‘‘(C) when scientific information on substitution

14 risks to health, safety, or the environment is reason15 ably available to the agency, an identification and

16 evaluation of such risks.

17 ‘‘(c)(1) When the agency publishes a final major rule,

18 the agency shall prepare and place in the rule making file

19 a final regulatory analysis.

20 ‘‘(2) Each final regulatory analysis shall address each

21 of the requirements for the initial regulatory analysis

22 under subsection (b)(2), revised to reflect—

23 ‘‘(A) any material changes made to the pro24 posed rule by the agency after publication of the no25 tice of proposed rule making;
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1 ‘‘(B) any material changes made to the cost2 benefit analysis or risk assessment; and

3 ‘‘(C) agency consideration of significant com4 ments received regarding the proposed rule and the

5 initial regulatory analysis, including regulatory re6 view communications under subchapter IV.

7 ‘‘(d)(1)(A) The agency shall include in the statement

8 of basis and purpose for a proposed or final major rule

9 a reasonable determination, based upon the rule making

10 record considered as a whole—

11 ‘‘(i) whether the rule is likely to provide bene12 fits that justify the costs of the rule;

13 ‘‘(ii) whether the rule is likely to substantially

14 achieve the rule making objective in a more cost-ef15 fective manner, or with greater net benefits, than

16 the other reasonable alternatives considered by the

17 agency; and

18 ‘‘(iii) whether the rule adopts a flexible regu19 latory option.

20 ‘‘(B) Consistent with section 621 (2) and (3), net

21 benefits analysis shall not be construed to be limited to

22 quantifiable effects.

23 ‘‘(2) If the agency head determines that the rule is

24 not likely to provide benefits that justify the costs of the

25 rule or is not likely to substantially achieve the rule mak-
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1 ing objective in a more cost-effective manner, or with

2 greater net benefits, than the other reasonable alternatives

3 considered by the agency, the agency head shall—

4 ‘‘(A) explain the reasons for selecting the rule

5 notwithstanding such determination, including iden6 tifying any statutory provision that required the

7 agency to select such rule;

8 ‘‘(B) describe any reasonable alternative consid9 ered by the agency that would be likely to provide

10 benefits that justify the costs of the rule and be like11 ly to substantially achieve the rule making objective

12 in a more cost-effective manner, or with greater net

13 benefits, than the alternative selected by the agency;

14 and

15 ‘‘(C) describe any flexible regulatory option con16 sidered by the agency and explain why that option

17 was not adopted by the agency if that option was

18 not adopted.

19 ‘‘(e) Each agency shall include an executive summary

20 of the regulatory analysis, including any risk assessment,

21 in the regulatory analysis and in the statement of basis

22 and purpose for the proposed and final major rule. Such

23 executive summary shall include a succinct presentation

24 of—
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1 ‘‘(1) the benefits and costs expected to result

2 from the rule and any determinations required under

3 subsection (d);

4 ‘‘(2) if applicable, the risk addressed by the rule

5 and the results of any risk assessment;

6 ‘‘(3) the benefits and costs of reasonable alter7 natives considered by the agency; and

8 ‘‘(4) the key assumptions and scientific or eco9 nomic information upon which the agency relied.

10 ‘‘(f)(1) A major rule may be adopted without prior

11 compliance with this subchapter if—

12 ‘‘(A) the agency for good cause finds that con13 ducting the regulatory analysis under this sub14 chapter before the rule becomes effective is impracti15 cable or contrary to an important public interest;

16 and

17 ‘‘(B) the agency publishes the rule in the Fed18 eral Register with such finding and a succinct expla19 nation of the reasons for the finding.

20 ‘‘(2) If a major rule is adopted under paragraph (1),

21 the agency shall comply with this subchapter as promptly

22 as possible unless the Director determines that compliance

23 would be clearly unreasonable.

24 ‘‘(g) Each agency shall develop an effective process

25 to permit elected officers of State, local, and tribal govern-
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1 ments (or their designated employees with authority to act

2 on their behalf) to provide meaningful and timely input

3 in the development of regulatory proposals that contain

4 significant Federal intergovernmental mandates. The

5 process developed under this subsection shall be consistent

6 with section 204 of the Unfunded Mandates Reform Act

7 of 1995 (2 U.S.C. 1534).

8 ‘‘§ 624. Principles for risk assessments

9 ‘‘(a)(1)(A) Subject to paragraph (2), each agency

10 shall design and conduct risk assessments in accordance

11 with this subchapter for—

12 ‘‘(i) each proposed and final major rule the pri13 mary purpose of which is to address health, safety,

14 or environmental risk; or

15 ‘‘(ii) any risk assessment that is not the basis

16 of a rule making that the Director—

17 ‘‘(I) reasonably anticipates is likely to have

18 an annual effect on the economy of

19 $100,000,000 or more in reasonably quantifi20 able costs; and

21 ‘‘(II) determines shall be subject to the re22 quirements of this section.

23 ‘‘(B)(i) Risk assessments conducted under this sub24 chapter shall be conducted in a manner that promotes ra25 tional and informed risk management decisions and in-
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1 formed public input into and understanding of the process

2 of making agency decisions.

3 ‘‘(ii) The scope and level of analysis of such a risk

4 assessment shall be commensurate with the significance

5 and complexity of the decision and the need to adequately

6 inform the public, consistent with any need for expedition,

7 and designed for the nature of the risk being assessed.

8 ‘‘(2) If a risk assessment under this subchapter is

9 otherwise required by this section, but the agency deter10 mines that—

11 ‘‘(A) a final rule subject to this subchapter is

12 substantially similar to the proposed rule with re13 spect to the risk being addressed;

14 ‘‘(B) a risk assessment for the proposed rule

15 has been carried out in a manner consistent with

16 this subchapter; and

17 ‘‘(C) a new risk assessment for the final rule is

18 not required in order to respond to comments re19 ceived during the period for comment on the pro20 posed rule,

21 the agency may publish such determination along with the

22 final rule in lieu of preparing a new risk assessment for

23 the final rule.

24 ‘‘(b) Each agency shall consider in each risk assess25 ment all relevant, reliable, and reasonably available sci-
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1 entific information and shall describe the basis for select2 ing such scientific information.

3 ‘‘(c)(1) When a risk assessment involves a choice of

4 assumptions, the agency shall, with respect to significant

5 assumptions—

6 ‘‘(A) identify the assumption and its scientific

7 and policy basis, including the extent to which the

8 assumption has been validated by, or conflicts with,

9 empirical data;

10 ‘‘(B) explain the basis for any choices among

11 assumptions and, where applicable, the basis for

12 combining multiple assumptions; and

13 ‘‘(C) describe reasonable alternative assump14 tions that—

15 ‘‘(i) would have had a significant effect on

16 the results of the risk assessment; and

17 ‘‘(ii) were considered but not selected by

18 the agency for use in the risk assessment.

19 ‘‘(2) Significant assumptions used in a risk assess20 ment shall incorporate all reasonably available, relevant,

21 and reliable scientific information.

22 ‘‘(d) The agency shall inform the public when the

23 agency is conducting a risk assessment subject to this sec24 tion and, to the extent practicable, shall solicit relevant
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1 and reliable data from the public. The agency shall con2 sider such data in conducting the risk assessment.

3 ‘‘(e) Each risk assessment under this subchapter

4 shall include, as appropriate, each of the following:

5 ‘‘(1) A description of the hazard of concern.

6 ‘‘(2) A description of the populations or natural

7 resources that are the subject of the risk assess8 ment.

9 ‘‘(3) An explanation of the exposure scenarios

10 used in the risk assessment, including an estimate of

11 the corresponding population or natural resource at

12 risk and the likelihood of such exposure scenarios.

13 ‘‘(4) A description of the nature and severity of

14 the harm that could reasonably occur as a result of

15 exposure to the hazard.

16 ‘‘(5) A description of the major uncertainties in

17 each component of the risk assessment and their in18 fluence on the results of the assessment.

19 ‘‘(f) To the extent scientifically appropriate, each

20 agency shall—

21 ‘‘(1) express the estimate of risk as 1 or more

22 reasonable ranges and, if feasible, probability dis23 tributions that reflect variabilities, uncertainties, and

24 lack of data in the analysis;
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1 ‘‘(2) provide the ranges and distributions of

2 risks, including central and high end estimates of

3 the risks, and their corresponding exposure scenarios

4 for the potentially exposed population and, as appro5 priate, for more highly exposed or sensitive sub6 populations; and

7 ‘‘(3) describe the qualitative factors influencing

8 the ranges, distributions, and likelihood of possible

9 risks.

10 ‘‘(g) When scientific information that permits rel11 evant comparisons of risk is reasonably available, each

12 agency shall use the information to place the nature and

13 magnitude of a risk to health, safety, or the environment

14 being analyzed in relationship to other reasonably com15 parable risks familiar to and routinely encountered by the

16 general public. Such comparisons should consider relevant

17 distinctions among risks, such as the voluntary or involun18 tary nature of risks, well understood or newly discovered

19 risks, and reversible or irreversible risks.

20 ‘‘§ 625. Peer review

21 ‘‘(a) Each agency shall provide for an independent

22 peer review in accordance with this section of—

23 ‘‘(1) a cost-benefit analysis of a major rule that

24 the agency or Director reasonably anticipates is like-
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1 ly to have an annual effect on the economy of

2 $500,000,000 in reasonably quantifiable costs; and

3 ‘‘(2) a risk assessment required by this sub4 chapter.

5 ‘‘(b)(1) Peer review required under subsection (a)

6 shall—

7 ‘‘(A) be conducted through panels, expert bod8 ies, or other formal or informal devices that are

9 broadly representative and involve participants—

10 ‘‘(i) with expertise relevant to the sciences,

11 or analyses involved in the regulatory decisions;

12 and

13 ‘‘(ii) who are independent of the agency;

14 ‘‘(B) be governed by agency standards and

15 practices governing conflicts of interest of non16 governmental agency advisors;

17 ‘‘(C) provide for the timely completion of the

18 peer review including meeting agency deadlines;

19 ‘‘(D) contain a balanced presentation of all con20 siderations, including minority reports and an agen21 cy response to all significant peer review comments;

22 and

23 ‘‘(E) provide adequate protections for confiden24 tial business information and trade secrets, including
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1 requiring panel members or participants to enter

2 into confidentiality agreements.

3 ‘‘(2) Each agency shall provide a written response to

4 all significant peer review comments. All peer review com5 ments and any responses shall be made—

6 ‘‘(A) available to the public; and

7 ‘‘(B) part of the rule making record for pur8 poses of judicial review of any final agency action.

9 ‘‘(3) If the head of an agency, with the concurrence

10 of the Director, publishes a determination in the rule mak11 ing file that a cost-benefit analysis or risk assessment, or

12 any component thereof, has been previously subjected to

13 adequate peer review, no further peer review shall be re14 quired under this section for such analysis, assessment,

15 or component.

16 ‘‘(c) For each peer review conducted by an agency

17 under this section, the agency head shall include in the

18 rule making record a statement by a Federal officer or

19 employee who is not an employee of the agency rule mak20 ing office or program—

21 ‘‘(1) whether the peer review participants re22 flect the independence and expertise required under

23 subsection (b)(1)(A); and
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1 ‘‘(2) whether the agency has adequately re2 sponded to the peer review comments as required

3 under subsection (b)(2).

4 ‘‘(d) The formality of the peer review conducted

5 under this section shall be commensurate with the signifi6 cance and complexity of the subject matter.

7 ‘‘(e) The peer review required by this section shall

8 not be subject to the Federal Advisory Committee Act (5

9 U.S.C. App.).

10 ‘‘(f) A member of an agency advisory board (or com11 parable organization) established by statute shall be con12 sidered independent of the agency for purposes of sub13 section (b)(1)(A)(ii).

14 ‘‘(g) The status of a person as a contractor or grantee

15 of the agency conducting the peer review shall not, in and

16 of itself, exclude such person from serving as a peer re17 viewer for such agency because of the requirement of sub18 section (b)(1)(A)(ii).

19 ‘‘(h) Nothing in this section shall require more than

20 one peer review of a cost-benefit analysis or a risk assess21 ment during a rule making. A peer review required by this

22 section shall occur to the extent feasible before the notice

23 of proposed rule making.
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1 ‘‘§ 626. Deadlines for rule making

2 ‘‘(a) All statutory deadlines that require an agency

3 to propose or promulgate any major rule during the 2-

4 year period beginning on the effective date of this section

5 shall be suspended until the earlier of—

6 ‘‘(1) the date on which the requirements of this

7 subchapter are satisfied; or

8 ‘‘(2) the date occurring 180 days after the date

9 of the applicable deadline.

10 ‘‘(b) In any proceeding involving a deadline imposed

11 by a court of the United States that requires an agency

12 to propose or promulgate any major rule during the 2-

13 year period beginning on the effective date of this section,

14 the United States shall request, and the court may grant,

15 an extension of such deadline until the earlier of—

16 ‘‘(1) the date on which the requirements of this

17 subchapter are satisfied; or

18 ‘‘(2) the date occurring 180 days after the date

19 of the applicable deadline.

20 ‘‘(c) In any case in which the failure to promulgate

21 a major rule by a deadline occurring during the 2-year

22 period beginning on the effective date of this section would

23 create an obligation to regulate through individual adju24 dications, the deadline shall be suspended until the earlier

25 of—
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1 ‘‘(1) the date on which the requirements of this

2 subchapter are satisfied; or

3 ‘‘(2) the date occurring 180 days after the date

4 of the applicable deadline.

5 ‘‘§ 627. Judicial review

6 ‘‘(a) Compliance by an agency with the provisions of

7 this subchapter shall be subject to judicial review only—

8 ‘‘(1) in connection with review of final agency

9 action;

10 ‘‘(2) in accordance with this section; and

11 ‘‘(3) in accordance with the limitations on tim12 ing, venue, and scope of review imposed by the stat13 ute authorizing judicial review.

14 ‘‘(b) Any determination of an agency whether a rule

15 is a major rule under section 621(7)(A) shall be set aside

16 by a reviewing court only upon a showing that the deter17 mination is arbitrary or capricious.

18 ‘‘(c) Any designation by the Director that a rule is

19 a major rule under section 621(7), or any failure to make

20 such designation, shall not be subject to judicial review.

21 ‘‘(d) The cost-benefit analysis, cost-benefit deter22 mination under section 623(d), and any risk assessment

23 required under this subchapter shall not be subject to judi24 cial review separate from review of the final rule to which

25 such analysis or assessment applies. The cost-benefit anal-
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1 ysis, cost-benefit determination under section 623(d), and

2 any risk assessment shall be part of the rule making

3 record and shall be considered by a court to the extent

4 relevant, only in determining under the statute granting

5 the rule making authority whether the final rule is arbi6 trary, capricious, an abuse of discretion, or is unsupported

7 by substantial evidence where that standard is otherwise

8 provided by law.

9 ‘‘(e) If an agency fails to perform the cost-benefit

10 analysis, cost-benefit determination, or risk assessment, or

11 to provide for peer review, a court may, giving due regard

12 to prejudicial error, remand or invalidate the rule. The

13 adequacy of compliance with the specific requirements of

14 this subchapter shall not otherwise be grounds for re15 manding or invalidating a rule under this subchapter. If

16 the court allows the rule to take effect, the court shall

17 order the agency to promptly perform such analysis, deter18 mination, or assessment or provide for such peer review.

19 ‘‘§ 628. Guidelines, interagency coordination, and re20 search

21 ‘‘(a)(1) Not later than 270 days after the date of en22 actment of this section, the Director, in consultation with

23 the Council of Economic Advisors, the Director of the Of24 fice of Science and Technology Policy, and relevant agency

25 heads, shall issue guidelines for cost-benefit analyses, risk
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1 assessments, and peer reviews as required by this sub2 chapter. The Director shall oversee and periodically revise

3 such guidelines as appropriate.

4 ‘‘(2) As soon as practicable and not later than 18

5 months after issuance of the guidelines required under

6 paragraph (1), each agency subject to section 624 shall

7 adopt detailed guidelines for risk assessments as required

8 by this subchapter. Such guidelines shall be consistent

9 with the guidelines issued under paragraph (1). Each

10 agency shall periodically revise such agency guidelines as

11 appropriate.

12 ‘‘(3) The guidelines under this subsection shall be de13 veloped following notice and public comment. The develop14 ment and issuance of the guidelines shall not be subject

15 to judicial review, except in accordance with section

16 706(1).

17 ‘‘(b) To promote the use of cost-benefit analysis and

18 risk assessment in a consistent manner and to identify

19 agency research and training needs, the Director, in con20 sultation with the Council of Economic Advisors and the

21 Director of the Office of Science and Technology Policy,

22 shall—

23 ‘‘(1) oversee periodic evaluations of Federal

24 agency cost-benefit analysis and risk assessment;
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1 ‘‘(2) provide advice and recommendations to the

2 President and Congress to improve agency use of

3 cost-benefit analysis and risk assessment;

4 ‘‘(3) utilize appropriate interagency mechanisms

5 to improve the consistency and quality of cost-ben6 efit analysis and risk assessment among Federal

7 agencies; and

8 ‘‘(4) utilize appropriate mechanisms between

9 Federal and State agencies to improve cooperation

10 in the development and application of cost-benefit

11 analysis and risk assessment.

12 ‘‘(c)(1) The Director, in consultation with the head

13 of each agency, the Council of Economic Advisors, and the

14 Director of the Office of Science and Technology Policy,

15 shall periodically evaluate and develop a strategy to meet

16 agency needs for research and training in cost-benefit

17 analysis and risk assessment, including research on model18 ling, the development of generic data, use of assumptions

19 and the identification and quantification of uncertainty

20 and variability.

21 ‘‘(2)(A) Not later than 180 days after the date of

22 enactment of this section, the Director, in consultation

23 with the Director of the Office of Science and Technology

24 Policy, shall enter a contract with an accredited scientific

25 institution to conduct research to—
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1 ‘‘(i) develop a common basis to assist risk com2 munication related to both carcinogens and non3 carcinogens; and

4 ‘‘(ii) develop methods to appropriately incor5 porate risk assessments into related cost-benefit

6 analyses.

7 ‘‘(B) Not later than 2 years after the date of enact8 ment of this section, the results of the research conducted

9 under this paragraph shall be submitted to the Director

10 and Congress.

11 ‘‘§ 629. Risk based priorities study

12 ‘‘(a) Not later than 1 year after the date of enact13 ment of this section, the Director, in consultation with the

14 Director of the Office of Science and Technology Policy,

15 shall enter into a contract with an accredited scientific in16 stitution to conduct a study that provides—

17 ‘‘(1) a systematic comparison of the extent and

18 severity of significant risks to human health, safety,

19 or the environment (hereafter referred to as a com20 parative risk analysis);

21 ‘‘(2) a study of methodologies for using com22 parative risk analysis to compare dissimilar risks to

23 human health, safety, or the environment, including

24 development of a common basis to assist compara-
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1 tive risk analysis related to both carcinogens and

2 noncarcinogens; and

3 ‘‘(3) recommendations on the use of compara4 tive risk analysis in setting priorities for the reduc5 tion of risks to human health, safety, or the environ6 ment.

7 ‘‘(b) The Director shall ensure that the study re8 quired under subsection (a) is—

9 ‘‘(1) conducted through an open process pro10 viding peer review consistent with section 625 and

11 opportunities for public comment and participation;

12 and

13 ‘‘(2) not later than 3 years after the date of en14 actment of this section, completed and submitted to

15 Congress and the President.

16 ‘‘(c) Not later than 4 years after the date of enact17 ment of this section, each relevant agency shall, as appro18 priate, use the results of the study required under sub19 section (a) to inform the agency in the preparation of the

20 agency’s annual budget and strategic plan and perform21 ance plan under section 306 of this title and sections

22 1115, 1116, 1117, 1118, and 1119 of title 31.

23 ‘‘(d) Not later than 5 years after the date of enact24 ment of this section, and periodically thereafter, the Presi25 dent shall submit a report to Congress recommending leg-
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1 islative changes to assist in setting priorities to more effec2 tively and efficiently reduce risks to human health, safety,

3 or the environment.

4 ‘‘SUBCHAPTER III—EXECUTIVE OVERSIGHT

5 ‘‘§ 631. Definitions

6 ‘‘For purposes of this subchapter—

7 ‘‘(1) the definitions under sections 551 and 621

8 shall apply; and

9 ‘‘(2) the term ‘regulatory action’ means any one

10 of the following:

11 ‘‘(A) Advance notice of proposed rule mak12 ing.

13 ‘‘(B) Notice of proposed rule making.

14 ‘‘(C) Final rule making, including interim

15 final rule making.

16 ‘‘§ 632. Presidential regulatory review

17 ‘‘(a) This subchapter shall apply to all proposed and

18 final major rules and to any other rules designated by the

19 President for review.

20 ‘‘(b) The President shall establish a process for the

21 review and coordination of Federal agency regulatory ac22 tions. Such process shall be the responsibility of the Direc23 tor.

24 ‘‘(c) For the purpose of carrying out subsection

25 (c)(b), the Director shall—
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1 ‘‘(1) develop and oversee uniform regulatory

2 policies and procedures, including those by which

3 each agency shall comply with the requirements of

4 this chapter;

5 ‘‘(2) develop policies and procedures for the re6 view of regulatory actions by the Director; and

7 ‘‘(3) develop and oversee an annual govern8 mentwide regulatory planning process that shall in9 clude review of planned significant regulatory ac10 tions and publication of—

11 ‘‘(A) a summary of and schedule for pro12 mulgation of planned agency major rules;

13 ‘‘(B) agency specific schedules for review

14 of existing rules, including under section 610;

15 ‘‘(C) a summary of regulatory review ac16 tions undertaken in the prior year;

17 ‘‘(D) a list of major rules promulgated in

18 the prior year for which an agency could not

19 make the determinations that the benefits of a

20 rule justify the costs under section 623(d);

21 ‘‘(E) identification of significant agency

22 noncompliance with this chapter in the prior

23 year; and

24 ‘‘(F) recommendations for improving com25 pliance with this chapter and increasing the ef-
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1 ficiency and effectiveness of the regulatory

2 process.

3 ‘‘(d)(1) The review established under subsection (b)

4 shall be conducted as expeditiously as practicable and shall

5 be limited to not more than 90 days.

6 ‘‘(2) A review may be extended longer than the 90-

7 day period referred to under paragraph (1) by the Direc8 tor or at the request of the rule making agency to the

9 Director. Notice of such extension shall be published

10 promptly in the Federal Register.

11 ‘‘§ 633. Public disclosure of information

12 ‘‘(a) The Director, in carrying out section 632, shall

13 establish procedures to provide public and agency access

14 to information concerning review of regulatory actions

15 under this subchapter, including—

16 ‘‘(1) disclosure to the public on an ongoing

17 basis of information regarding the status of regu18 latory actions undergoing review;

19 ‘‘(2) disclosure to the public, not later than the

20 date of publication of a regulatory action, of—

21 ‘‘(A) all written correspondence relating to

22 the substance of a regulatory action, including

23 drafts of all proposals and associated analyses,

24 between the Administrator or employees of the

25 Administrator and the regulatory agency;
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1 ‘‘(B) all written correspondence relating to

2 the substance of a regulatory action between

3 the Administrator or employees of the Adminis4 trator and any person not employed by the ex5 ecutive branch of the Federal Government; and

6 ‘‘(C) a list identifying the dates, names of

7 individuals involved, and subject matter dis8 cussed in significant meetings and telephone

9 conversations relating to the substance of a reg10 ulatory action between the Administrator or

11 employees of the Administrator and any person

12 not employed by the executive branch of the

13 Federal Government; and

14 ‘‘(3) disclosure to the regulatory agency, on a

15 timely basis, of—

16 ‘‘(A) all written correspondence relating to

17 the substance of a regulatory action between

18 the Administrator or employees of the Adminis19 trator and any person not employed by the ex20 ecutive branch of the Federal Government; and

21 ‘‘(B) a list identifying the dates, names of

22 individuals involved, and subject matter dis23 cussed in significant meetings and telephone

24 conversations relating to the substance of a reg25 ulatory action between the Administrator or
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1 employees of the Administrator and any person

2 not employed by the executive branch of the

3 Federal Government.

4 ‘‘(b) Before the publication of any proposed or final

5 rule, the agency shall include in the rule making record—

6 ‘‘(1) a document identifying in a complete,

7 clear, and simple manner, the substantive changes

8 between the draft submitted to the Administrator for

9 review and the rule subsequently published;

10 ‘‘(2) a document identifying and describing

11 those substantive changes in the rule that were

12 made as a result of the regulatory review and a

13 statement if the Administrator suggested or rec14 ommended no changes; and

15 ‘‘(3) all written correspondence relating to the

16 substance of a regulatory action between the Admin17 istrator and the agency during the review of the

18 rule, including drafts of all proposals and associated

19 analyses.

20 ‘‘(c) In any meeting relating to the substance of a

21 regulatory action under review between the Administrator

22 or employees of the Administrator and any person not em23 ployed by the executive branch of the Federal Government,

24 a representative of the agency submitting the regulatory

25 action shall be invited.
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1 ‘‘§ 634. Judicial review

2 ‘‘The exercise of the authority granted under this

3 subchapter by the President, the Director, or the Adminis4 trator shall not be subject to judicial review in any man5 ner.’’.

6 (b) PRESIDENTIAL AUTHORITY.—Nothing in this Act

7 shall limit the exercise by the President of the authority

8 and responsibility that the President otherwise possesses

9 under the Constitution and other laws of the United

10 States with respect to regulatory policies, procedures, and

11 programs of departments, agencies, and offices.

12 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

13 (1) TABLE OF SECTIONS.—Part I of title 5,

14 United States Code, is amended by striking the

15 chapter heading and table of sections for chapter 6

16 and inserting the following:

17 ‘‘CHAPTER 6—THE ANALYSIS OF

18 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.
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‘‘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.’’.

1 (2) SUBCHAPTER HEADING.—Chapter 6 of title

2 5, United States Code, is amended by inserting im3 mediately before section 601, the following sub4 chapter heading:

5 ‘‘SUBCHAPTER I—ANALYSIS OF REGULATORY

6 FLEXIBILITY’’.

7 SEC. 4. COMPLIANCE WITH THE UNFUNDED MANDATES RE8 FORM ACT OF 1995.

9 Compliance with the requirements of subchapter II

10 of chapter 6 of title 5, United States Code (as added by

11 section 3 of this Act), shall constitute compliance with the

12 requirements pertaining to the costs and benefits of a Fed13 eral mandate to the private sector in sections 202,

14 205(a)(2), and 208 of the Unfunded Mandates Reform

15 Act of 1995 (2 U.S.C. 1532, 1535(a)(2), and 1538).
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1 SEC. 5. REPORT TO CONGRESS.

2 Not later than February 5, 2002, the President, acting

3 through the Director of the Office of Management and Budg4 et, shall prepare and submit to Congress an accounting

5 statement and report containing an estimate of the total

6 annual incremental benefits and costs of complying with

7 the provisions of subchapter II of chapter 6 of title 5, United

8 States Code (as added by this Act) for each agency.

9 SEC. 5. 6. EFFECTIVE DATE.

10 Except as otherwise provided in this Act, this Act

11 shall take effect 180 days after the date of enactment of

12 this Act, but shall not apply to any agency rule for which

13 a notice of proposed rule making is published on or before

14 60 days before the date of enactment of this Act.