104TH CONGRESS

2D SESSION S. 942

AN ACT

To promote increased understanding of Federal regulations

and increased voluntary compliance with such regulations

by small entities, to provide for the designation of regional ombudsmen and oversight boards to monitor the

enforcement practices of certain Federal agencies with

respect to small business concerns, to provide relief from

excessive and arbitrary regulatory enforcement actions

against small entities, and for other purposes.

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

3 SECTION. 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Small Business Regu5 latory Enforcement Fairness Act of 1996’’.
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1 SEC. 2. FINDINGS.

2 Congress finds that—

3 (1) a vibrant and growing small business sector

4 is critical to creating jobs in a dynamic economy;

5 (2) small businesses bear a disproportionate

6 share of regulatory costs and burdens;

7 (3) fundamental changes that are needed in the

8 regulatory and enforcement culture of Federal agen9 cies to make agencies more responsive to small busi10 ness can be made without compromising the statu11 tory missions of the agencies;

12 (4) three of the top recommendations of the

13 White House Conference on Small Business involve

14 reforms to the way Government regulations are de15 veloped and enforced, and reductions in Government

16 paperwork requirements;

17 (5) the requirements of the Regulatory Flexibil18 ity Act have too often been ignored by Government

19 agencies, resulting in greater regulatory burdens on

20 small entities than necessitated by statute; and

21 (6) small entities should be given the oppor22 tunity to seek judicial review of agency actions re23 quired by the Regulatory Flexibility Act.

24 SEC. 3. PURPOSES.

25 The purposes of this Act are—
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1 (1) to implement certain recommendations of

2 the 1995 White House Conference on Small Busi3 ness regarding the development and enforcement of

4 Federal regulations;

5 (2) to provide for judicial review of the Regu6 latory Flexibility Act;

7 (3) to encourage the effective participation of

8 small businesses in the Federal regulatory process;

9 (4) to simplify the language of Federal regula10 tions affecting small businesses;

11 (5) to develop more accessible sources of infor12 mation on regulatory and reporting requirements for

13 small businesses;

14 (6) to create a more cooperative regulatory en15 vironment among agencies and small businesses that

16 is less punitive and more solution-oriented; and

17 (7) to make Federal regulators more account18 able for their enforcement actions by providing small

19 entities with a meaningful opportunity for redress of

20 excessive enforcement activities.

21 SEC. 4. EFFECTIVE DATE.

22 This Act shall become effective on the date 90 days

23 after enactment, except that the amendments made by

24 title IV of this Act shall not apply to interpretive rules
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1 for which a notice of proposed rulemaking was published

2 prior to the date of enactment.

3 TITLE I—REGULATORY

4 COMPLIANCE SIMPLIFICATION

5 SEC. 101. DEFINITIONS.

6 For purposes of this Act—

7 (1) the terms ‘‘rule’’ and ‘‘small entity’’ have

8 the same meanings as in section 601 of title 5, Unit9 ed States Code;

10 (2) the term ‘‘agency’’ has the same meaning as

11 in section 551 of title 5, United States Code; and

12 (3) the term ‘‘small entity compliance guide’’

13 means a document designated as such by an agency.

14 SEC. 102. COMPLIANCE GUIDES.

15 (a) COMPLIANCE GUIDE.—For each rule or group of

16 related rules for which an agency is required to prepare

17 a final regulatory flexibility analysis under section 604 of

18 title 5, United States Code, the agency shall publish one

19 or more guides to assist small entities in complying with

20 the rule, and shall designate such publications as ‘‘small

21 entity compliance guides’’. The guides shall explain the ac22 tions a small entity is required to take to comply with a

23 rule or group of rules. The agency shall, in its sole discre24 tion, taking into account the subject matter of the rule

25 and the language of relevant statutes, ensure that the
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1 guide is written using sufficiently plain language likely to

2 be understood by affected small entities. Agencies may

3 prepare separate guides covering groups or classes of simi4 larly affected small entities, and may cooperate with asso5 ciations of small entities to develop and distribute such

6 guides.

7 (b) COMPREHENSIVE SOURCE OF INFORMATION.—

8 Agencies shall cooperate to make available to small enti9 ties through comprehensive sources if information, the

10 small entity compliance guides and all other available in11 formation on statutory and regulatory requirements af12 fecting small entities.

13 (c) LIMITATION ON JUDICIAL REVIEW.—An agency’s

14 small entity compliance guide shall not be subject to judi15 cial review, except that in any civil or administrative ac16 tion against a small entity for a violation occurring after

17 the effective date of this section, the content of the small

18 entity compliance guide may be considered as evidence of

19 the reasonableness or appropriateness of any proposed

20 fines, penalties or damages.

21 SEC. 103. INFORMAL SMALL ENTITY GUIDANCE.

22 (a) GENERAL.—Whenever appropriate in the interest

23 of administering statutes and regulations within the juris24 diction of an agency, it shall be the practice of the agency

25 to answer inquiries by small entities concerning informa-
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1 tion on and advice about compliance with such statutes

2 and regulations, interpreting and applying the law to spe3 cific sets of facts supplied by the small entity. In any civil

4 or administrative action against a small entity, guidance

5 given by an agency applying the law to facts provided by

6 the small entity may be considered as evidence of the rea7 sonableness or appropriateness of any proposed fines, pen8 alties or damages sought against such small entity.

9 (b) PROGRAM.—Each agency regulating the activities

10 of small entities shall establish a program for responding

11 to such inquiries no later than 1 year after enactment of

12 this section, utilizing existing functions and personnel of

13 the agency to the extent practicable.

14 SEC. 104. SERVICES OF SMALL BUSINESS DEVELOPMENT

15 CENTERS.

16 Section 21(c)(3) of the Small Business Act (15

17 U.S.C. 648(c)(3)) is amended—

18 (1) in subparagraph (O), by striking ‘‘and’’ at

19 the end;

20 (2) in subparagraph (P), by striking the period

21 at the end and inserting a semicolon; and

22 (3) by inserting after subparagraph (P) the fol23 lowing new subparagraphs:

24 ‘‘(Q) providing assistance to small business

25 concerns regarding regulatory requirements, in-
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1 cluding providing training with respect to cost2 effective regulatory compliance;

3 ‘‘(R) developing informational publications,

4 establishing resource centers of reference mate5 rials, and distributing compliance guides pub6 lished under section 102(a) of the Small Busi7 ness Regulatory Enforcement Fairness Act of

8 1996 to small business concerns; and

9 ‘‘(S) developing programs to provide con10 fidential onsite assessments and recommenda11 tions regarding regulatory compliance to small

12 business concerns and assisting small business

13 concerns in analyzing the business development

14 issues associated with regulatory implementa15 tion and compliance measures.’’.

16 SEC. 105. MANUFACTURING TECHNOLOGY CENTERS AND

17 PROGRAMS ESTABLISHED UNDER SECTION

18 507 OF THE CLEAN AIR ACT AMENDMENTS OF

19 1990.

20 (a) GENERAL.—The Manufacturing Technology Cen21 ters and other similar extension centers administered by

22 the National Institute of Standards and Technology of the

23 Department of Commerce shall, as appropriate, provide

24 the assistance regarding regulatory requirements, develop

25 and distribute information and guides and develop the
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1 programs to provide confidential onsite assessments and

2 recommendations regarding regulatory compliance to the

3 same extent as provided for in section 104 of this Act with

4 respect to Small Business Development Centers.

5 (b) SECTION 507 PROGRAMS.—Nothing in this Act

6 in any way limits the authority and operation of the small

7 business stationary source technical and environmental

8 compliance assistance programs established under section

9 507 of the Clean Air Act Amendments of 1990.

10 SEC. 106. COOPERATION ON GUIDANCE.

11 Agencies may, to the extent resources are available

12 and where appropriate, in cooperation with the States, de13 velop guides that fully integrate requirements of both Fed14 eral and State regulations where regulations within an

15 agency’s area of interest at the Federal and State levels

16 impact small businesses. Where regulations vary among

17 the States, separate guides may be created for separate

18 States in cooperation with State agencies.

19 TITLE II—REGULATORY

20 ENFORCEMENT REFORMS

21 SEC. 201. SMALL BUSINESS AND AGRICULTURE ENFORCE22 MENT OMBUDSMAN.

23 The Small Business Act (15 U.S.C. 631 et seq.) is

24 amended—
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1 (1) by redesignating section 30 as section 31;

2 and

3 (2) by inserting after section 29 the following

4 new section:

5 ‘‘SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

6 ‘‘(a) DEFINITIONS.—For purposes of this section, the

7 term—

8 ‘‘(1) ‘‘Board’’ means a Regional Small Business

9 Regulatory Fairness Board established under sub10 section (c); and

11 ‘‘(2) ‘‘Ombudsman’’ means the Small Business

12 and Agriculture Regulatory Enforcement Ombuds13 man designated under subsection (b).

14 ‘‘(b) SBA ENFORCEMENT OMBUDSMAN.—

15 ‘‘(1) Not later than 180 days after the date of

16 enactment of this section, the Administration shall

17 designate a Small Business and Agriculture Regu18 latory Enforcement Ombudsman utilizing personnel

19 of the Small Business Administration to the extent

20 practicable. Other agencies shall assist the Ombuds21 man and take actions as necessary to ensure compli22 ance with the requirements of this section. Nothing

23 in this section is intended to replace or diminish the

24 activities of any Ombudsman or similar office in any

25 other agency.
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1 ‘‘(2) The Ombudsman shall—

2 ‘‘(A) work with each agency with regu3 latory authority over small businesses to ensure

4 that small business concerns that receive or are

5 subject to an audit, onsite inspection, compli6 ance assistance effort, or other enforcement re7 lated communication or contact by agency per8 sonnel are provided with a means to comment

9 on the enforcement activity conducted by such

10 personnel;

11 ‘‘(B) establish means to receive comments

12 from small business concerns regarding actions

13 by agency employees conducting compliance or

14 enforcement activities with respect to the small

15 business concern, means to refer comments to

16 the Inspector General of the affected agency in

17 the appropriate circumstances, and otherwise

18 seek to maintain the identity of the person and

19 small business concern making such comments

20 on a confidential basis to the same extent as

21 employee identities are protected under section

22 7 of the Inspector General Act of 1978 (5

23 U.S.C. App.);

24 ‘‘(C) based on substantiated comments re25 ceived from small business concerns and the
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1 Boards, annually report to Congress and af2 fected agencies evaluating the enforcement ac3 tivities of agency personnel including a rating of

4 the responsiveness to small business of the var5 ious regional and program offices of each agen6 cy;

7 ‘‘(D) coordinate and report annually on the

8 activities, findings, and recommendations of the

9 Boards to the Administration and to the heads

10 of affected agencies; and

11 ‘‘(E) provide the affected agency with an

12 opportunity to comment on draft reports pre13 pared under paragraph (C) and include a sec14 tion of the final report in which the affected

15 agency may make such comments as are not

16 addressed by the Ombudsman in revisions to

17 the draft.

18 ‘‘(c) REGIONAL SMALL BUSINESS REGULATORY

19 FAIRNESS BOARDS.—

20 ‘‘(1) Not later than 180 days after the date of

21 enactment of this section, the Administration shall

22 establish a Small Business Regulatory Fairness

23 Board in each regional office of the Small Business

24 Administration.
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1 ‘‘(2) Each Board established under paragraph

2 (1) shall—

3 ‘‘(A) meet at least annually to advise the

4 Ombudsman on matters of concern to small

5 businesses relating to the enforcement activities

6 of agencies;

7 ‘‘(B) report to the Ombudsman on sub8 stantiated instances of excessive enforcement

9 actions of agencies against small business con10 cerns including any findings or recommenda11 tions of the Board as to agency enforcement

12 policy or practice; and

13 ‘‘(C) prior to publication, provide comment

14 on the annual report of the Ombudsman pre15 pared under subsection (b).

16 ‘‘(3) Each Board shall consist of five members

17 appointed by the Administration, who are owners or

18 operators of small entities, after receiving the rec19 ommendations of the chair and ranking minority

20 member of the Committees on Small Business of the

21 House of Representatives and the Senate.

22 ‘‘(4) Members of the Board shall serve for

23 terms of three years or less.
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1 ‘‘(5) The Administration shall select a chair

2 from among the members of the Board who shall

3 serve for not more than 2 years as chair.

4 ‘‘(6) A majority of the members of the Board

5 shall constitute a quorum for the conduct of busi6 ness, but a lesser number may hold hearings.

7 ‘‘(d) POWERS OF THE BOARDS.—

8 ‘‘(1) The Board may hold such hearings and

9 collect such information as appropriate for carrying

10 out this section.

11 ‘‘(2) The Board may use the United States

12 mails in the same manner and under the same con13 ditions as other departments and agencies of the

14 Federal Government.

15 ‘‘(3) The Board may accept donations of serv16 ices necessary to conduct its business: Provided,

17 That the donations and their sources are disclosed

18 by the Board.

19 ‘‘(4) Members of the Board shall serve without

20 compensation: Provided, That members of the Board

21 shall be allowed travel expenses, including per diem

22 in lieu of subsistence, at rates authorized for em23 ployees of agencies under subchapter I of chapter 57

24 of title 5, United States Code, while away from their
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1 homes or regular places of business in the perform2 ance of services for the Board.’’.

3 SEC. 202. RIGHTS OF SMALL ENTITIES IN ENFORCEMENT

4 ACTIONS.

5 (a) IN GENERAL.—Each agency regulating the activi6 ties of small entities shall establish a policy or program

7 within 1 year of enactment of this section to provide for

8 the reduction, and under appropriate circumstances for

9 the waiver, of civil penalties for violations of a statutory

10 or regulatory requirement by a small entity. Under appro11 priate circumstances, an agency may consider ability to

12 pay in determining penalty assessments on small entities.

13 (b) CONDITIONS AND EXCLUSIONS.—Subject to the

14 requirements or limitations of other statutes, policies or

15 programs established under this section shall contain con16 ditions or exclusions which may include, but shall not be

17 limited to—

18 (1) requiring the small entity to correct the vio19 lation within a reasonable correction period;

20 (2) limiting the applicability to violations dis21 covered by the small entity through participation in

22 a compliance assistance or audit program operated

23 or supported by the agency or a State;

24 (3) excluding small entities that have been sub25 ject to multiple enforcement actions by the agency;
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1 (4) excluding violations involving willful or

2 criminal conduct;

3 (5) excluding violations that pose serious

4 health, safety or environmental threats; and

5 (6) requiring a good faith effort to comply with

6 the law.

7 (c) REPORTING.—Agencies shall report to Congress

8 no later than 2 years from the effective date on the scope

9 of their program or policy, the number of enforcement ac10 tions against small entities that qualified or failed to qual11 ify for the program or policy, and the total amount of pen12 alty reductions and waivers.

13 TITLE III—EQUAL ACCESS TO

14 JUSTICE ACT AMENDMENTS

15 SEC. 301. ADMINISTRATIVE PROCEEDINGS.

16 Section 504 of title 5, United States Code, is amend17 ed—

18 (1) in subsection (b), by striking ‘‘$75’’ in sub19 paragraph (b)(1) and inserting ‘‘$125’’; and

20 (2) in subsection (a) by adding the following

21 new paragraph:

22 ‘‘(4) In an adversary adjudication brought by

23 an agency, an adjudicative officer of the agency shall

24 award attorney’s fees and other expenses to a party

25 or a small entity, as defined in section 601, if the
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1 decision of the adjudicative officer is disproportion2 ately less favorable to the agency than an express

3 demand by the agency, unless the party or small en4 tity has committed a willful violation of law or other5 wise acted in bad faith, or special circumstances

6 make an award of attorney’s fees unjust. For pur7 poses of this paragraph, an ‘express demand’ shall

8 not include a recitation by the agency of the maxi9 mum statutory penalty (A) in the administrative

10 complaint, or (B) elsewhere when accompanied by an

11 express demand for a lesser amount. Fees and ex12 penses awarded under this paragraph may not be

13 paid from the claims and judgments account of the

14 Treasury from funds appropriated pursuant to sec15 tion 1304 of title 31, United States Code.’’.

16 SEC. 302. JUDICIAL PROCEEDINGS.

17 Section 2412 of title 28, United States Code, is

18 amended—

19 (1) in paragraph (d), by striking ‘‘$75’’ in sub20 paragraph (2)(A) and inserting ‘‘$125’’; and

21 (2) in paragraph (d)(1) by adding the following

22 new subparagraph:

23 ‘‘(D) In a civil action brought by the Unit24 ed States, a court shall award attorney’s fees

25 and other expenses to a party or a small entity,
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1 as defined in section 601 of title 5, United

2 States Code, if the judgment finally obtained by

3 the United States is disproportionately less fa4 vorable to the United States than an express

5 demand by the United States, unless the party

6 or small entity has committed a willful violation

7 of law or otherwise acted in bad faith, or special

8 circumstances make an award of attorney’s fees

9 unjust. For purposes of this subparagraph, an

10 ‘express demand’ shall not include a recitation

11 of the maximum statutory penalty (i) in the

12 complaint, or (ii) elsewhere when accompanied

13 by an express demand for a lesser amount. Fees

14 and expenses awarded under this subparagraph

15 may not be paid from the claims and judgments

16 account of the Treasury from funds appro17 priated pursuant to section 1304 of title 31,

18 United States Code.’’.

19 TITLE IV—REGULATORY

20 FLEXIBILITY ACT AMENDMENTS

21 SEC. 401. REGULATORY FLEXIBILITY ANALYSES.

22 (a) INITIAL REGULATORY FLEXIBILITY ANALYSIS.—

23 Section 603(a) of title 5, United States Code, is amend24 ed—
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1 (1) by inserting after ‘‘proposed rule’’, the

2 phrase ‘‘, or publishes a notice of proposed rule3 making for an interpretive rule involving the internal

4 revenue laws of the United States’’; and

5 (2) by inserting at the end of the subsection,

6 the following new sentence: ‘‘In the case of an inter7 pretive rule involving the internal revenue laws of

8 the United States, this chapter applies to interpre9 tive rules published in the Federal Register for codi10 fication in the Code of Federal Regulations, but only

11 to the extent that such interpretive rules impose on

12 small entities a collection of information require13 ments, as defined in the Paperwork Reduction Act

14 of 1995.’’.

15 (b) FINAL REGULATORY FLEXIBILITY ANALYSIS.—

16 Section 604 of title 5, United States Code, is amended—

17 (1) in subsection (a) to read as follows:

18 ‘‘(a) When an agency promulgates a final rule under

19 section 553 of this title, after being required by that sec20 tion or any other law to publish a general notice of pro21 posed rulemaking, or is otherwise required to publish an

22 initial regulatory flexibility analysis, the agency shall pre23 pare a final regulatory flexibility analysis. Each final regu24 latory flexibility analysis shall contain—
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1 ‘‘(1) a succinct statement of the need for, and

2 objectives of, the rule;

3 ‘‘(2) a summary of the significant issues raised

4 by the public comments in response to the initial

5 regulatory flexibility analysis, a summary of the as6 sessment of the agency of such issues, and a state7 ment of any changes made in the proposed rule as

8 a result of such comments;

9 ‘‘(3) a description of and an estimate of the

10 number of small entities to which the rule will apply

11 or an explanation of why no such estimate is avail12 able;

13 ‘‘(4) a description of the projected reporting,

14 record keeping and other compliance requirements of

15 the rule, including an estimate of the classes of

16 small entities which will be subject to the require17 ment and the type of professional skills necessary

18 for preparation of the report or record; and

19 ‘‘(5) a description of the steps the agency has

20 taken to minimize the significant economic impact

21 on small entities consistent with the stated objectives

22 of applicable statutes, including a statement of the

23 factual, policy, and legal reasons for selecting the al24 ternative adopted in the final rule and why each one

25 of the other significant alternatives to the rule con-
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1 sidered by the agency which affect the impact on

2 small business was rejected.’’; and

3 (2) in subsection (b), by striking ‘‘at the time’’

4 and all that follows and inserting ‘‘such analysis or

5 a summary thereof.’’.

6 SEC. 402. JUDICIAL REVIEW.

7 Section 611 of title 5, United States Code, is amend8 ed to read as follows:

9 ‘‘§ 611. Judicial review

10 ‘‘(a)(1) For any rule subject to this chapter, a small

11 entity that is adversely affected or aggrieved by final agen12 cy action is entitled to judicial review of agency compliance

13 with the requirements of this chapter, except the require14 ments of sections 602, 603, 609 and 612.

15 ‘‘(2) Each court having jurisdiction to review such

16 rule for compliance with section 553 of this title or under

17 any other provision of law shall have jurisdiction to review

18 any claims of noncompliance with this chapter, except the

19 requirements of sections 602, 603, 609 and 612.

20 ‘‘(3)(A) A small entity may seek such review during

21 the period beginning on the date of final agency action

22 and ending one year later, except that where a provision

23 of law requires that an action challenging a final agency

24 action be commenced before the expiration of one year,
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1 such lesser period shall apply to a petition for judicial re2 view under this section.

3 ‘‘(B) In the case where an agency delays the issuance

4 of a final regulatory flexibility analysis pursuant to section

5 608(b) of this chapter, a petition for judicial review under

6 this section shall be filed not later than—

7 ‘‘(i) one year after the date the analysis is made

8 available to the public, or

9 ‘‘(ii) where a provision of law requires that an

10 action challenging a final agency regulation be com11 menced before the expiration of the one year period,

12 the number of days specified in such provision of law

13 that is after the date the analysis is made available

14 to the public.

15 ‘‘(4) If the court determines, on the basis of the rule16 making record, that the final agency action under this

17 chapter was arbitrary, capricious, an abuse of discretion

18 or otherwise not in accordance with the law, the court

19 shall order the agency to take corrective action consistent

20 with this chapter, which may include—

21 ‘‘(A) remanding the rule to the agency, and

22 ‘‘(B) deferring the enforcement of the rule against

23 small entities, unless the court finds good cause for con24 tinuing the enforcement of the rule pending the completion

25 of the corrective action.
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1 ‘‘(5) Nothing in this subsection shall be construed to

2 limit the authority of any court to stay the effective date

3 of any rule or provision thereof under any other provision

4 of law or to grant any other relief in addition to the re5 quirements of this section.

6 ‘‘(b) In an action for the judicial review of a rule,

7 the regulatory flexibility analysis for such rule, including

8 an analysis prepared or corrected pursuant to paragraph

9 (a)(4), shall constitute part of the entire record of agency

10 action in connection with such review.

11 ‘‘(c) Except as otherwise required by this chapter, the

12 court shall apply the same standards of judicial review

13 that govern the review of agency findings under the stat14 ute granting the agency authority to conduct a rule15 making.

16 ‘‘(d) Compliance or noncompliance by an agency with

17 the provisions of this chapter shall be subject to judicial

18 review only in accordance with this section.

19 ‘‘(e) Nothing in this section bars judicial review of

20 any other impact statement or similar analysis required

21 by any other law if judicial review of such statement or

22 analysis is otherwise permitted by law.’’.

23 SEC. 403. TECHNICAL AND CONFORMING AMENDMENTS.

24 (a) Section 605(b) of title 5, United States Code, is

25 amended to read as follows:
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1 ‘‘(b) Sections 603 and 604 of this title shall not apply

2 to any proposed or final rule if the head of the agency

3 certifies that the rule will not, if promulgated, have a sig4 nificant economic impact on a substantial number of small

5 entities. If the head of the agency makes a certification

6 under the preceding sentence, the agency shall publish

7 such certification in the Federal Register, at the time of

8 publication of general notice of proposed rulemaking for

9 the rule or at the time of publication of the final rule,

10 along with a statement providing the factual and legal rea11 sons for such certification. The agency shall provide such

12 certification and statement to the Chief Counsel for Advo13 cacy of the Small Business Administration.’’.

14 (b) Section 612 of title 5, United States Code, is

15 amended—

16 (1) in subsection (a), by striking ‘‘the commit17 tees on the Judiciary of the Senate and the House

18 of Representatives, the Select Committee on Small

19 Business of the Senate, and the Committee on Small

20 Business of the House of Representatives’’ and in21 serting ‘‘the Committees on the Judiciary and Small

22 Business of the Senate and House of Representa23 tives’’.

24 (2) in subsection (b), by striking ‘‘his views

25 with respect to the’’ and inserting in lieu thereof,
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1 ‘‘his or her views with respect to compliance with

2 this chapter, the adequacy of the rulemaking record

3 with respect to small entities and the’’.

4 SEC. 404. SMALL BUSINESS ADVOCACY REVIEW PANELS.

5 (a) SMALL BUSINESS OUTREACH AND INTERAGENCY

6 COORDINATION.—Section 609 of title 5, United States

7 Code, is amended—

8 (1) before ‘‘techniques,’’ by inserting ‘‘the rea9 sonable use of’’;

10 (2) in paragraph (4), after ‘‘entities’’, by insert11 ing ‘‘including soliciting and receiving comments

12 over computer networks’’;

13 (3) by designating the current text as sub14 section (a); and

15 (4) by adding the following new subsection:

16 ‘‘(b) Prior to publication of an initial regulatory flexi17 bility analysis which a covered agency is required to con18 duct by this chapter—

19 ‘‘(1) a covered agency shall notify the Chief

20 Counsel for Advocacy of the Small Business Admin21 istration and provide the Chief Counsel with infor22 mation on the potential impacts of the proposed rule

23 on small entities and the type of small entities that

24 might be affected;
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1 ‘‘(2) not later than 15 days after the date of re2 ceipt of the materials described in paragraph (1),

3 the Chief Counsel shall identify individuals rep4 resentative of affected small entities for the purpose

5 of obtaining advice and recommendations from those

6 individuals about the potential impacts of the pro7 posed rule;

8 ‘‘(3) the agency shall convene a review panel for

9 such rule consisting wholly of full-time Federal em10 ployees of the office within the agency responsible

11 for carrying out the proposed rule, the Office of In12 formation and Regulatory Affairs within the Office

13 of Management and Budget, and the Chief Counsel;

14 ‘‘(4) the panel shall review any material the

15 agency has prepared in connection with this chapter,

16 including any draft proposed rule, collect advice and

17 recommendations of the small entity representatives

18 identified by the agency after consultation with the

19 Chief Counsel, on issues related to subsections

20 603(b), paragraphs (3), (4) and (5) and 603(c);

21 ‘‘(5) not later than 60 days after the date a

22 covered agency convenes a review panel pursuant to

23 paragraph (3), the review panel shall report on the

24 comments of the small entity representatives and its

25 findings as to issues related to subsections 603(b),
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1 paragraphs (3), (4) and (5) and 603(c): Provided,

2 That such report shall be made public as part of the

3 rulemaking record; and

4 ‘‘(6) where appropriate, the agency shall modify

5 the proposed rule, the initial regulatory flexibility

6 analysis or the decision on whether an initial regu7 latory flexibility analysis is required.

8 ‘‘(c) Prior to publication of a final regulatory flexibil9 ity analysis that a covered agency is required by this chap10 ter to conduct—

11 ‘‘(1) an agency shall reconvene the review panel

12 established under paragraph (b)(3), or if no initial

13 regulatory flexibility analysis was published, under14 take the actions described in paragraphs (b) (1)

15 through (3);

16 ‘‘(2) the panel shall review any material the

17 agency has prepared in connection with this chapter,

18 including any draft rule, collect the advice and rec19 ommendations of the small entity representatives

20 identified by the agency after consultation with the

21 Chief Counsel, on issues related to subsection

22 604(a), paragraphs (3), (4) and (5);

23 ‘‘(3) not later than 15 days after the date a

24 covered agency convenes a review panel pursuant to

25 paragraph (1), the review panel shall report on the
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1 comments of the small entity representatives and its

2 findings as to issues related to subsection 604(a),

3 paragraphs (3), (4) and (5): Provided, That such re4 port shall be made public as part of the rulemaking

5 record; and

6 ‘‘(4) where appropriate, the agency shall modify

7 the final rule, the final regulatory flexibility analysis

8 or the decision on whether a final regulatory flexibil9 ity analysis is required.

10 ‘‘(d) An agency may in its discretion apply sub11 sections (b) and (c) to rules that the agency intends to

12 certify under subsection 605(b), but the agency believes

13 may have a greater than de minimis impact on a substan14 tial number of small entities.

15 ‘‘(e) For purposes of this section, the term ‘covered

16 agency’ means the Environmental Protection Agency and

17 the Occupational Health and Safety Administration of the

18 Department of Labor.

19 ‘‘(f) The Chief Counsel for Advocacy, in consultation

20 with the individuals identified in paragraph (b)(2) and

21 with the Administrator of the Office of Information and

22 Regulatory Affairs within the Office of Management and

23 Budget, may waive the requirements of paragraphs (b)(3),

24 (b)(4), and (b)(5), and subsection (c) by including in the

25 rulemaking record a written finding, with reasons there-
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1 for, that those requirements would not advance the effec2 tive participation of small entities in the rulemaking proc3 ess. For purposes of this subsection, the factors to be con4 sidered in making such a finding are as follows—

5 ‘‘(1) in developing a proposed rule, the extent

6 to which the covered agency consulted with individ7 uals representative of affected small entities with re8 spect to the potential impacts of the rule and took

9 such concerns into consideration; or in developing a

10 final rule, the extent to which the covered agency

11 took into consideration the comments filed by the in12 dividuals identified in paragraph (b)(2);

13 ‘‘(2) special circumstances requiring prompt is14 suance of the rule; and

15 ‘‘(3) whether the requirements of subsection (b)

16 or (c) would provide the individuals identified in

17 subsection (b)(2) with a competitive advantage rel18 ative to other small entities.’’.

19 (b) SMALL BUSINESS ADVOCACY CHAIRPERSONS.—

20 Not later than 30 days after the date of enactment of this

21 Act, the head of each agency that has conducted a final

22 regulatory flexibility analysis shall designate a small busi23 ness advocacy chairperson using existing personnel to the

24 extent possible, to be responsible for implementing this
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1 section and to act as permanent chair of the agency’s re2 view panels established pursuant to this section.

3 TITLE V—CONGRESSIONAL

4 REVIEW

5 SEC. 501. SHORT TITLE.

6 This title may be cited as the ‘‘Congressional Review

7 Act of 1996’’.

8 SEC. 502. FINDING.

9 The Congress finds that effective steps for improving

10 the efficiency and proper management of Government op11 erations will be promoted if a moratorium on the effective12 ness of certain significant final rules is imposed in order

13 to provide Congress an opportunity for review.

14 SEC. 503. MORATORIUM ON REGULATIONS; CONGRES15 SIONAL REVIEW.

16 (a) REPORTING AND REVIEW OF REGULATIONS.—

17 (1) REPORTING TO CONGRESS AND THE COMP18 TROLLER GENERAL.—

19 (A) Before a rule can take effect as a final

20 rule, the Federal agency promulgating such rule

21 shall submit to each House of the Congress and

22 to the Comptroller General a report contain23 ing—

24 (i) a copy of the rule;
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1 (ii) a concise general statement relat2 ing to the rule; and

3 (iii) the proposed effective date of the

4 rule.

5 (B) The Federal agency promulgating the

6 rule shall make available to each House of Con7 gress and the Comptroller General, upon re8 quest—

9 (i) a complete copy of the cost-benefit

10 analysis of the rule, if any;

11 (ii) the agency’s actions relevant to

12 section 603, section 604, section 605, sec13 tion 607, and section 609 of Public Law

14 96–354;

15 (iii) the agency’s actions relevant to

16 title II, section 202, section 203, section

17 204, and section 205 of Public Law 104–

18 4; and

19 (iv) any other relevant information or

20 requirements under any other Act and any

21 relevant Executive Orders, such as Execu22 tive Order 12866.

23 (C) Upon receipt, each House shall provide

24 copies to the Chairman and Ranking Member of

25 each committee with jurisdiction.
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1 (2) REPORTING BY THE COMPTROLLER GEN2 ERAL.—

3 (A) The Comptroller General shall provide

4 a report on each significant rule to the commit5 tees of jurisdiction to each House of the Con6 gress by the end of 12 calendar days after the

7 submission or publication date as provided in

8 section 504(b)(2). The report of the Comptrol9 ler General shall include an assessment of the

10 agency’s compliance with procedural steps re11 quired by subparagraph (B) (i) through (iv).

12 (B) Federal agencies shall cooperate with

13 the Comptroller General by providing informa14 tion relevant to the Comptroller General’s re15 port under paragraph (2)(A) of this section.

16 (3) EFFECTIVE DATE OF SIGNIFICANT

17 RULES.—A significant rule relating to a report sub18 mitted under paragraph (1) shall take effect as a

19 final rule, the latest of—

20 (A) the later of the date occurring 45 days

21 after the date on which—

22 (i) the Congress receives the report

23 submitted under paragraph (1); or

24 (ii) the rule is published in the Fed25 eral Register;
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1 (B) if the Congress passes a joint resolu2 tion of disapproval described under section 504

3 relating to the rule, and the President signs a

4 veto of such resolution, the earlier date—

5 (i) on which either House of Congress

6 votes and fails to override the veto of the

7 President; or

8 (ii) occurring 30 session days after

9 the date on which the Congress received

10 the veto and objections of the President; or

11 (C) the date the rule would have otherwise

12 taken effect, if not for this section (unless a

13 joint resolution of disapproval under section

14 504 is enacted).

15 (4) EFFECTIVE DATE FOR OTHER RULES.—Ex16 cept for a significant rule, a rule shall take effect as

17 otherwise provided by law after submission to Con18 gress under paragraph (1).

19 (5) FAILURE OF JOINT RESOLUTION OF DIS20 APPROVAL.—Notwithstanding the provisions of para21 graph (3), the effective date of a rule shall not be

22 delayed by operation of this title beyond the date on

23 which either House of Congress votes to reject a

24 joint resolution of disapproval under section 504.
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1 (b) TERMINATION OF DISAPPROVED RULEMAKING.—

2 A rule shall not take effect (or continue) as a final rule,

3 if the Congress passes a joint resolution of disapproval de4 scribed under section 504.

5 (c) PRESIDENTIAL WAIVER AUTHORITY.—

6 (1) PRESIDENTIAL DETERMINATIONS.—Not7 withstanding any other provision of this section (ex8 cept subject to paragraph (3)), a rule that would not

9 take effect by reason of this title may take effect, if

10 the President makes a determination under para11 graph (2) and submits written notice of such deter12 mination to the Congress.

13 (2) GROUNDS FOR DETERMINATIONS.—Para14 graph (1) applies to a determination made by the

15 President by Executive order that the rule should

16 take effect because such rule is—

17 (A) necessary because of an imminent

18 threat to health or safety or other emergency;

19 (B) necessary for the enforcement of crimi20 nal laws; or

21 (C) necessary for national security.

22 (3) WAIVER NOT TO AFFECT CONGRESSIONAL

23 DISAPPROVALS.—An exercise by the President of the

24 authority under this subsection shall have no effect
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1 on the procedures under section 504 or the effect of

2 a joint resolution of disapproval under this section.

3 (d) TREATMENT OF RULES ISSUED AT END OF CON4 GRESS.—

5 (1) ADDITIONAL OPPORTUNITY FOR REVIEW.—

6 In addition to the opportunity for review otherwise

7 provided under this title, in the case of any rule that

8 is published in the Federal Register (as a rule that

9 shall take effect as a final rule) during the period

10 beginning on the date occurring 60 days before the

11 date the Congress adjourns sine die through the

12 date on which the succeeding Congress first con13 venes, section 504 shall apply to such rule in the

14 succeeding Congress.

15 (2) TREATMENT UNDER SECTION 504.—

16 (A) In applying section 504 for purposes of

17 such additional review, a rule described under

18 paragraph (1) shall be treated as though—

19 (i) such rule were published in the

20 Federal Register (as a rule that shall take

21 effect as a final rule) on the 15th session

22 day after the succeeding Congress first

23 convenes; and
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1 (ii) a report on such rule were submit2 ted to Congress under subsection (a)(1) on

3 such date.

4 (B) Nothing in this paragraph shall be

5 construed to affect the requirement under sub6 section (a)(1) that a report must be submitted

7 to Congress before a final rule can take effect.

8 (3) ACTUAL EFFECTIVE DATE NOT AF9 FECTED.—A rule described under paragraph (1)

10 shall take effect as a final rule as otherwise provided

11 by law (including other subsections of this section).

12 (e) TREATMENT OF RULES ISSUED BEFORE THIS

13 TITLE.—

14 (1) OPPORTUNITY FOR CONGRESSIONAL RE15 VIEW.—The provisions of section 504 shall apply to

16 any significant rule that is published in the Federal

17 Register (as a rule that shall take effect as a final

18 rule) during the period beginning on March 1, 1996,

19 through the date on which this title takes effect.

20 (2) TREATMENT UNDER SECTION 504.—In ap21 plying section 504 for purposes of Congressional re22 view, a rule described under paragraph (1) shall be

23 treated as though—

24 (A) such rule were published in the Fed25 eral Register (as a rule that shall take effect as
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1 a final rule) on the date of the enactment of

2 this Act; and

3 (B) a report on such rule were submitted

4 to Congress under subsection (a)(1) on such

5 date.

6 (3) ACTUAL EFFECTIVE DATE NOT AF7 FECTED.—The effectiveness of a rule described

8 under paragraph (1) shall be as otherwise provided

9 by law, unless the rule is made of no force or effect

10 under section 504.

11 (f) NULLIFICATION OF RULES DISAPPROVED BY

12 CONGRESS.—Any rule that takes effect and later is made

13 of no force or effect by the enactment of a joint resolution

14 under section 504 shall be treated as though such rule

15 had never taken effect.

16 (g) NO INFERENCE TO BE DRAWN WHERE RULES

17 NOT DISAPPROVED.—If the Congress does not enact a

18 joint resolution of disapproval under section 504, no court

19 or agency may infer any intent of the Congress from any

20 action or inaction of the Congress with regard to such

21 rule, related statute, or joint resolution of disapproval.

22 SEC. 504. CONGRESSIONAL DISAPPROVAL PROCEDURE.

23 (a) JOINT RESOLUTION DEFINED.—For purposes of

24 this section, the term ‘‘joint resolution’’ means only a joint

25 resolution introduced during the period beginning on the
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1 date on which the report referred to in section 503(a) is

2 received by Congress and ending 45 days thereafter, the

3 matter after the resolving clause of which is as follows:

4 ‘‘That Congress disapproves the rule submitted by the

5 ll relating to ll, and such rule shall have no force

6 or effect.’’. (The blank spaces being appropriately filled

7 in.)

8 (b) REFERRAL.—

9 (1) IN GENERAL.—A resolution described in

10 paragraph (1) shall be referred to the committees in

11 each House of Congress with jurisdiction. Such a

12 resolution may not be reported before the eighth day

13 after its submission or publication date.

14 (2) SUBMISSION DATE.—For purposes of this

15 subsection the term ‘‘submission or publication

16 date’’ means the later of the date on which—

17 (A) the Congress receives the report sub18 mitted under section 503(a)(1); or

19 (B) the rule is published in the Federal

20 Register.

21 (c) DISCHARGE.—If the committee to which is re22 ferred a resolution described in subsection (a) has not re23 ported such resolution (or an identical resolution) at the

24 end of 20 calendar days after the submission or publica25 tion date defined under subsection (b)(2), such committee
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1 may be discharged from further consideration of such res2 olution in the Senate upon a petition supported in writing

3 by 30 Members of the Senate and in the House upon a

4 petition supported in writing by one-fourth of the Mem5 bers duly sworn and chosen or by motion of the Speaker

6 supported by the Minority Leader, and such resolution

7 shall be placed on the appropriate calendar of the House

8 involved.

9 (d) FLOOR CONSIDERATION.—

10 (1) IN GENERAL.—When the committee to

11 which a resolution is referred has reported, or when

12 a committee is discharged (under subsection (c))

13 from further consideration of, a resolution described

14 in subsection (a), it is at any time thereafter in

15 order (even though a previous motion to the same

16 effect has been disagreed to) for a motion to proceed

17 to the consideration of the resolution, and all points

18 of order against the resolution (and against consid19 eration of resolution) are waived. The motion is not

20 subject to amendment, or to a motion to postpone,

21 or to a motion to proceed to the consideration of

22 other business. A motion to reconsider the vote by

23 which the motion is agreed to or disagreed to shall

24 not be in order. If a motion to proceed to the consid25 eration of the resolution is agreed to, the resolution
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1 shall remain the unfinished business of the respec2 tive House until disposed of.

3 (2) DEBATE.—Debate on the resolution, and on

4 all debatable motions and appeals in connection

5 therewith, shall be limited to not more than 10

6 hours, which shall be divided equally between those

7 favoring and those opposing the resolution. A motion

8 further to limit debate is in order and not debatable.

9 An amendment to, or a motion to postpone, or a mo10 tion to proceed to the consideration of other busi11 ness, or a motion to recommit the resolution is not

12 in order.

13 (3) FINAL PASSAGE.—Immediately following

14 the conclusion of the debate on a resolution de15 scribed in subsection (a), and a single quorum call

16 at the conclusion of the debate if requested in ac17 cordance with the rules of the appropriate House,

18 the vote on final passage of the resolution shall

19 occur.

20 (4) APPEALS.—Appeals from the decisions of

21 the Chair relating to the application of the rules of

22 the Senate or the House of Representatives, as the

23 case may be, to the procedure relating to a resolu24 tion described in subsection (a) shall be decided

25 without debate.
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1 (e) TREATMENT IF OTHER HOUSE HAS ACTED.—If,

2 before the passage by one House of a resolution of that

3 House described in subsection (a), that House receives

4 from the other House a resolution described in subsection

5 (a), then the following procedures shall apply:

6 (1) NONREFERRAL.—The resolution of the

7 other House shall not be referred to a committee.

8 (2) FINAL PASSAGE.—With respect to a resolu9 tion described in subsection (a) of the House receiv10 ing the resolution—

11 (A) the procedure in that House shall be

12 the same as if no resolution had been received

13 from the other House; but

14 (B) the vote on final passage shall be on

15 the resolution of the other House.

16 (f) CONSTITUTIONAL AUTHORITY.—This section is

17 enacted by Congress—

18 (1) as an exercise of the rulemaking power of

19 the Senate and House of Representatives, respec20 tively, and as such it is deemed a part of the rules

21 of each House, respectively, but applicable only with

22 respect to the procedure to be followed in that

23 House in the case of a resolution described in sub24 section (a), and it supersedes other rules only to the

25 extent that it is inconsistent with such rules; and
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1 (2) with full recognition of the constitutional

2 right of either House to change the rules (so far as

3 relating to the procedure of that House) at any time,

4 in the same manner, and to the same extent as in

5 the case of any other rule of that House.

6 SEC. 505. SPECIAL RULE ON STATUTORY, REGULATORY

7 AND JUDICIAL DEADLINES.

8 (a) IN GENERAL.—In the case of any deadline for,

9 relating to, or involving any rule which does not take effect

10 (or the effectiveness of which is terminated) because of

11 the enactment of a joint resolution under section 504, that

12 deadline is extended until the date 12 months after the

13 date of the joint resolution. Nothing in this subsection

14 shall be construed to affect a deadline merely by reason

15 of the postponement of a rule’s effective date under sec16 tion 503(a).

17 (b) DEADLINE DEFINED.—The term ‘‘deadline’’

18 means any date certain for fulfilling any obligation or ex19 ercising any authority established by or under any Federal

20 statute or regulation, or by or under any court order im21 plementing any Federal statute or regulation.

22 SEC. 506. DEFINITIONS.

23 For purposes of this title—

24 (1) FEDERAL AGENCY.—The term ‘‘Federal

25 agency’’ means any ‘‘agency’’ as that term is defined
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1 in section 551(1) of title 5, United States Code (re2 lating to administrative procedure).

3 (2) SIGNIFICANT RULE.—The term ‘‘significant

4 rule’’—

5 (A) means any final rule that the Adminis6 trator of the Office of Information and Regu7 latory Affairs within the Office of Management

8 and Budget finds—

9 (i) has an annual effect on the econ10 omy of $100,000,000 or more or adversely

11 affects in a material way the economy, a

12 sector of the economy, productivity, com13 petition, jobs, the environment, public

14 health or safety, or State, local, or tribal

15 governments or communities;

16 (ii) creates a serious inconsistency or

17 otherwise interferes with an action taken

18 or planned by another agency;

19 (iii) materially alters the budgetary

20 impact of entitlement, grants, user fees, or

21 loan programs or the rights and obliga22 tions of recipients thereof; or

23 (iv) raises novel legal or policy issues

24 arising out of legal mandates, the Presi-
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1 dent’s priorities, or the principles set forth

2 in Executive Order 12866; and

3 (B) shall not include any rule promulgated

4 under the Telecommunications Act of 1996 and

5 the amendments made by such Act.

6 (3) FINAL RULE.—The term ‘‘final rule’’ means

7 any final rule or interim final rule. As used in this

8 paragraph, ‘‘rule’’ has the meaning given such term

9 by section 551 of title 5, United States Code, except

10 that such term does not include any rule of particu11 lar applicability including a rule that approves or

12 prescribes for the future rates, wages, prices, serv13 ices, or allowances therefor, corporate or financial

14 structures, reorganizations, mergers, or acquisitions

15 thereof, or accounting practices or disclosures bear16 ing on any of the foregoing or any rule of agency or17 ganization, personnel, procedure, practice or any

18 routine matter.

19 SEC. 507. JUDICIAL REVIEW.

20 No determination, finding, action, or omission under

21 this title shall be subject to judicial review.

22 SEC. 508. APPLICABILITY; SEVERABILITY.

23 (a) APPLICABILITY.—This title shall apply notwith24 standing any other provision of law.
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1 (b) SEVERABILITY.—If any provision of this title, or

2 the application of any provision of this title to any person

3 or circumstance, is held invalid, the application of such

4 provision to other persons or circumstances, and the re5 mainder of this title, shall not be affected thereby.

6 SEC. 509. EXEMPTION FOR MONETARY POLICY.

7 Nothing in this title shall apply to rules that concern

8 monetary policy proposed or implemented by the Board

9 of Governors of the Federal Reserve System or the Fed10 eral Open Market Committee.

11 SEC. 510. EXEMPTION FOR HUNTING AND FISHING.

12 Nothing in this title shall apply to rules that estab13 lish, modify, open, close, or conduct a regulatory program

14 for a commercial, recreational, or subsistence activity re15 lating to hunting, fishing, or camping.

16 SEC. 511. EFFECTIVE DATE.

17 This title shall take effect on the date of the enact18 ment of this Act and shall apply to any rule that takes

19 effect as a final rule on or after such effective date.

Passed the Senate March 19, 1996.

Attest:

Secretary.
104TH CONGRESS

2D SESSION S. 942

AN ACT

To promote increased understanding of Federal

poses.actions against small entities, and for other purexcessive and arbitrary regulatory enforcementto small business concerns, to provide relief frompractices of certain Federal agencies with respectoversight boards to monitor the enforcementfor the designation of regional ombudsmen andwith such regulations by small entities, to provideregulations and increased voluntary compliance
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