II

105TH CONGRESS

2D SESSION S. 1728

To provide for the conduct of a risk assessment for certain Federal agency

rules, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 6, 1998

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

the Committee on Governmental Affairs

A BILL

To provide for the conduct of a risk assessment for certain

Federal agency rules, 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 ‘‘Federal Regulatory

5 Risk Assessment Act of 1997’’.

6 SEC. 2. RISK ASSESSMENTS.

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

8 States Code, is amended by adding at the end the follow9 ing:
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1 ‘‘SUBCHAPTER II—RISK ASSESSMENTS

2 ‘‘§ 621. Definitions

3 ‘‘For purposes of this subchapter the definitions

4 under section 551 shall apply and—

5 ‘‘(1) the term ‘cost’ means the reasonably iden6 tifiable significant adverse effects, including social,

7 health, safety, environmental, economic, and dis8 tributional effects that are expected to result directly

9 or indirectly from implementation of, or compliance

10 with, a rule;

11 ‘‘(2) the term ‘Director’ means the Director of

12 the Office of Management and Budget, acting

13 through the Administrator of the Office of Informa14 tion and Regulatory Affairs;

15 ‘‘(3) the term ‘flexible regulatory options’

16 means regulatory options that permit flexibility to

17 regulated persons in achieving the objective of the

18 statute as addressed by the rule making, including

19 regulatory options that use market-based mecha20 nisms, outcome oriented performance-based stand21 ards, or other options that promote flexibility;

22 ‘‘(4) the term ‘major rule’ means a rule or a

23 group of closely related rules that—

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

25 Director reasonably determines is likely to have
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1 an annual effect on the economy of

2 $100,000,000 or more in reasonably quantifi3 able costs; or

4 ‘‘(B) is otherwise designated a major rule

5 by the Director on the ground that the rule is

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

7 economy, a sector of the economy, including

8 small business, productivity, competition, jobs,

9 the environment, public health or safety, or

10 State, local or tribal governments, or commu11 nities;

12 ‘‘(5) the term ‘reasonable alternative’ means a

13 reasonable regulatory option that would achieve the

14 objective of the statute as addressed by the rule

15 making and that the agency has authority to adopt

16 under the statute granting rule making authority,

17 including flexible regulatory options;

18 ‘‘(6) the term ‘risk assessment’ means the sys19 tematic process of organizing hazard and exposure

20 assessments to estimate the potential for specific

21 harm to exposed individuals, populations, or natural

22 resources;

23 ‘‘(7) the term ‘rule’ has the same meaning as

24 in section 551(4), and shall not include—
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1 ‘‘(A) a rule exempt from notice and public

2 comment procedure under section 553;

3 ‘‘(B) a rule that involves the internal reve4 nue laws of the United States, or the assess5 ment and collection of taxes, duties, or other

6 revenue or receipts;

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

8 approves or prescribes for the future rates,

9 wages, prices, services, corporate or financial

10 structures, reorganizations, mergers, acquisi11 tions, accounting practices, or disclosures bear12 ing on any of the foregoing;

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

14 proposed or promulgated by the Board of Gov15 ernors of the Federal Reserve System or by the

16 Federal Open Market Committee;

17 ‘‘(E) a rule relating to the safety or sound18 ness of federally insured depository institutions

19 or any affiliate of such an institution (as de20 fined in section 2(k) of the Bank Holding Com21 pany Act of 1956 (12 U.S.C. 1841(k)); credit

22 unions; the Federal Home Loan Banks; govern23 ment-sponsored housing enterprises; a Farm

24 Credit System Institution; foreign banks, and

25 their branches, agencies, commercial lending
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1 companies or representative offices that operate

2 in the United States and any affiliate of such

3 foreign banks (as those terms are defined in the

4 International Banking Act of 1978 (12 U.S.C.

5 3101)); or a rule relating to the payments sys6 tem or the protection of deposit insurance funds

7 or Farm Credit Insurance Fund;

8 ‘‘(F) a rule or order relating to the finan9 cial responsibility, recordkeeping, or reporting

10 of brokers and dealers (including Government

11 securities brokers and dealers) or futures com12 mission merchants, the safeguarding of investor

13 securities and funds or commodity future or op14 tions customer securities and funds, the clear15 ance and settlement of securities, futures, or

16 options transactions, or the suspension of trad17 ing under the Securities Exchange Act of 1934

18 (15 U.S.C. 78a et seq.) or emergency action

19 taken under the Commodity Exchange Act (7

20 U.S.C. 1 et seq.), or a rule relating to the pro21 tection of the Securities Investor Protection

22 Corporation, that is promulgated under the Se23 curities Investor Protection Act of 1970 (15

24 U.S.C. 78aaa et seq.), or a rule relating to the

25 custody of Government securities by depository
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1 institutions under section 3121 or 9110 of

2 title 31;

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

4 Commission or a rule issued by the Federal

5 Communications Commission under sections

6 312(a)(7) and 315 of the Communications Act

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

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

9 least annually pursuant to statute; or

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

11 public debt; and

12 ‘‘(8) the term ‘substitution risk’ means an in13 creased risk to health, safety, or the environment

14 reasonably likely to result from a regulatory option.

15 ‘‘§ 622. Applicability

16 ‘‘Except as provided in section 623(d), this sub17 chapter shall apply to all proposed and final major rules

18 the primary purpose of which is to address health, safety,

19 or environmental risk.

20 ‘‘§ 623. Risk assessments

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

22 making for any rule, each agency shall determine whether

23 the rule is or is not a major rule covered by this sub24 chapter.
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1 ‘‘(2) The Director may designate any rule to be a

2 major rule under section 621(4)(B), if the Director—

3 ‘‘(A) makes such designation no later than 30

4 days after the close of the comment period for the

5 rule; and

6 ‘‘(B) publishes such determination in the Fed7 eral Register together with a succinct statement of

8 the basis for the determination within 30 days after

9 such determination.

10 ‘‘(b)(1) When an agency publishes a notice of pro11 posed rule making for a major rule to which section 624(a)

12 applies, the agency shall prepare and place in the rule

13 making file an initial risk assessment, and shall include

14 a summary of such assessment in the notice of proposed

15 rule making.

16 ‘‘(2)(A) When the Director has published a deter17 mination that a rule is a major rule to which section

18 624(a) applies, after the publication of the notice of pro19 posed rule making for the rule, the agency shall promptly

20 prepare and place in the rule making file an initial risk

21 assessment for the rule and shall publish in the Federal

22 Register a summary of such assessment.

23 ‘‘(B) Following the issuance of an initial risk assess24 ment under subparagraph (A), the agency shall give inter25 ested persons an opportunity to comment under section
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1 553 in the same manner as if the initial risk assessment

2 had been issued with the notice of proposed rule making.

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

4 to which section 624(a) applies, the agency shall also pre5 pare and place in the rule making file a final risk assess6 ment, and shall prepare a summary of the assessment.

7 ‘‘(2) Each final risk assessment shall address each

8 of the requirements for the initial risk assessment under

9 subsection (b), revised to reflect—

10 ‘‘(A) any material changes made to the pro11 posed rule by the agency after publication of the no12 tice of proposed rule making;

13 ‘‘(B) any material changes made to the risk as14 sessment; and

15 ‘‘(C) agency consideration of significant com16 ments received regarding the proposed rule and the

17 risk assessment.

18 ‘‘(d)(1) A major rule may be adopted without prior

19 compliance with this subchapter if—

20 ‘‘(A) the agency for good cause finds that con21 ducting the risk assessment under this subchapter is

22 contrary to the public interest due to an emergency,

23 or an imminent threat to health or safety that is

24 likely to result in significant harm to the public or

25 the environment; and
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1 ‘‘(B) the agency publishes in the Federal Reg2 ister, together with such finding, a succinct state3 ment of the basis for the finding.

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

5 the agency shall comply with this subchapter as promptly

6 as possible unless compliance would be unreasonable be7 cause the rule is, or soon will be, no longer in effect.

8 ‘‘§ 624. Principles for risk assessments

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

10 design and conduct risk assessments in accordance with

11 this subchapter for each proposed and final major rule ,

12 or that results in a significant substitution risk, in a man13 ner that promotes rational and informed risk management

14 decisions and informed public input into and understand15 ing of the process of making agency decisions.

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

17 otherwise required by this section, but the agency deter18 mines that—

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

20 substantially similar to the proposed rule with re21 spect to the risk being addressed;

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

23 has been carried out in a manner consistent with

24 this subchapter; and
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1 ‘‘(C) a new risk assessment for the final rule is

2 not required in order to respond to comments re3 ceived during the period for comment on the pro4 posed rule,

5 the agency may publish such determination along with the

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

7 the final rule.

8 ‘‘(b) Each agency shall consider in each risk assess9 ment reliable and reasonably available scientific informa10 tion and shall describe the basis for selecting such sci11 entific information.

12 ‘‘(c)(1) Each agency may use reasonable assumptions

13 to the extent that relevant and reliable scientific informa14 tion, including site-specific or substance-specific informa15 tion, is not reasonably available.

16 ‘‘(2) When a risk assessment involves a choice of as17 sumptions, the agency shall—

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

19 or policy basis, including the extent to which the as20 sumption has been validated by, or conflicts with,

21 empirical data;

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

23 assumptions and, where applicable, the basis for

24 combining multiple assumptions; and
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1 ‘‘(C) describe reasonable alternative assump2 tions that were considered but not selected by the

3 agency for use in the risk assessment, how such al4 ternative assumptions would have changed the con5 clusions of the risk assessment, and the rationale for

6 not using such alternatives.

7 ‘‘(d) Each agency shall provide appropriate oppor8 tunity for public comment and participation during the de9 velopment of a risk assessment.

10 ‘‘(e) Each risk assessment supporting a major rule

11 under this subchapter shall include, as appropriate, each

12 of the following:

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

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

15 resources that are the subject of the risk assess16 ment.

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

18 used in the risk assessment, including an estimate of

19 the corresponding population at risk and the likeli20 hood of such exposure scenarios.

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

22 the harm that could reasonably occur as a result of

23 exposure to the hazard.
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1 ‘‘(5) A description of the major uncertainties in

2 each component of the risk assessment and their in3 fluence on the results of the assessment.

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

5 agency shall—

6 ‘‘(1) express the overall estimate of risk as a

7 reasonable range or probability distribution that re8 flects variabilities, uncertainties, and lack of data in

9 the analysis;

10 ‘‘(2) provide the range and distribution of risks

11 and the corresponding exposure scenarios, identify12 ing the range and distribution and likelihood of risk

13 to the general population and, as appropriate, to

14 more highly exposed or sensitive subpopulations, in15 cluding the most plausible estimates of the risks;

16 and

17 ‘‘(3) where quantitative estimates are not avail18 able, describe the qualitative factors influencing the

19 range, distribution, and likelihood of possible risks.

20 ‘‘(g) When scientific information that permits rel21 evant comparisons of risk is reasonably available, each

22 agency shall use the information to place the nature and

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

24 being analyzed in relationship to other reasonably com25 parable risks familiar to and routinely encountered by the
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1 general public. Such comparisons should consider relevant

2 distinctions among risks, such as the voluntary or involun3 tary nature of risks.

4 ‘‘(h) When scientifically appropriate information on

5 significant substitution risks to health, safety, or the envi6 ronment is reasonably available to the agency, the agency

7 shall describe such risks in the risk assessment.

8 ‘‘§ 625. Deadlines for rule making

9 ‘‘(a) All deadlines in statutes or imposed by a court

10 of the United States, that require an agency to propose

11 or promulgate any major rule to which section 624(a) ap12 plies, during the 2-year period beginning on the effective

13 date of this section shall be suspended until the earlier

14 of—

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

16 subchapter are satisfied; or

17 ‘‘(2) the date occurring 6 months after the date

18 of the applicable deadline.

19 ‘‘(b) In any case in which the failure to promulgate

20 a major rule to which section 624(a) applies by a deadline

21 occurring during the 2-year period beginning on the effec22 tive date of this section would create an obligation to regu23 late through individual adjudications, the deadline shall be

24 suspended until the earlier 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 6 months after the date

4 of the applicable deadline.

5 ‘‘§ 626. Judicial review

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

7 the provisions of this subchapter shall only be subject to

8 judicial review in accordance with this section.

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

10 is or is not a major rule under section 621(4)(A) shall

11 be set aside by a reviewing court only upon a clear and

12 convincing showing that the determination is erroneous in

13 light of the information available to the agency at the time

14 the agency made the determination.

15 ‘‘(c) Any determination by the Director that a rule

16 is a major rule under section 621(4), or any failure to

17 make such determination, shall not be subject to judicial

18 review in any manner.

19 ‘‘(d) Any risk assessment required under this sub20 chapter shall not be subject to judicial review separate

21 from review of the final rule to which the assessment ap22 plies. Any risk assessment shall be part of the whole rule

23 making record for purposes of judicial review of the rule

24 and shall be considered by a court in determining whether

25 the final rule is arbitrary or capricious unless the agency
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1 can demonstrate that the assessment would not be mate2 rial to the outcome of the rule.

3 ‘‘(e) If an agency fails to perform the risk assess4 ment, a court shall remand or invalidate the rule.’’.

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

6 shall limit the exercise by the President of the authority

7 and responsibility that the President otherwise possesses

8 under the Constitution and other laws of the United

9 States with respect to regulatory policies, procedures, and

10 programs of departments, agencies, and offices.

11 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

12 (1) Part I of title 5, United States Code, is

13 amended by striking the chapter heading and table

14 of sections for chapter 6 and inserting the following:

15 ‘‘CHAPTER 6—THE ANALYSIS OF

16 REGULATORY FUNCTIONS

‘‘SUBCHAPTER I—ANALYSIS OF REGULATORY FLEXIBILITY

‘‘Sec.

‘‘601. Definitions.

‘‘602. Regulatory agenda.

‘‘603. Initial regulatory flexibility analysis.

‘‘604. Final regulatory flexibility analysis.

‘‘605. Avoidance of duplicative or unnecessary analyses.

‘‘606. Effect on other law.

‘‘607. Preparation of analysis.

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

‘‘609. Procedures for gathering comments.

‘‘610. Periodic review of rules.

‘‘611. Judicial review.

‘‘612. Reports and intervention rights.

‘‘SUBCHAPTER II—RISK ASSESSMENTS

‘‘621. Definitions.

‘‘622. Applicability.

‘‘623. Risk assessments.
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‘‘624. Principles for risk assessments.

‘‘625. Deadlines for rule making.

‘‘626. Judicial review.’’.

1 (2) Chapter 6 of title 5, United States Code, is

2 amended by inserting immediately before section

3 601, the following subchapter heading:

4 ‘‘SUBCHAPTER I—ANALYSIS OF REGULATORY

5 FLEXIBILITY’’.

6 SEC. 3. EFFECTIVE DATE.

7 Except as otherwise provided in this Act, this Act

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

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

10 a notice of proposed rulemaking is published on or before

11 August 1, 1997.

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