```

[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 821 Introduced in House (IH)]

104th CONGRESS
  1st Session
                                H. R. 821

       To reform the regulatory process, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            February 3, 1995

 Mr. McIntosh introduced the following bill; which was referred to the 
 Committee on Government Reform and Oversight and, in addition, to the 
Committees on the Judiciary and Rules, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
       To reform the regulatory process, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Middle Class Regulatory Relief Act 
of 1995''.

SEC. 2. ANALYSIS OF AGENCY PROPOSALS.

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

             ``SUBCHAPTER II--ANALYSIS OF AGENCY PROPOSALS

``Sec. 621. Definitions
    ``For purposes of this subchapter and subchapter III of this 
chapter--
            ``(1) the term `agency' has the same meaning as in section 
        551(1) of this title;
            ``(2) the term `person' has the same meaning as in section 
        551(2) of this title;
            ``(3) the term `rule' has the same meaning as in section 
        551(4) of this title;
            ``(4)(A) the term `major rule' means--
                    ``(i) a rule or a group of closely related rules 
                that the agency proposing the rule or the President 
                reasonably determines is likely to have a gross annual 
                effect on the economy of $50,000,000 or more in 
                reasonably quantifiable increased direct and indirect 
                costs, or has a significant impact on a sector of the 
                economy; or
                    ``(ii) a rule or a group of closely related rules 
                that is otherwise designated a major rule by the agency 
                proposing the rule, or by the President on the ground 
                that the rule is likely to result in--
                            ``(I) a substantial increase in costs or 
                        prices for wage earners, consumers, individual 
                        industries, nonprofit organizations, Federal, 
                        State, or local government agencies, or 
                        geographic regions; or
                            ``(II) significant adverse effects on 
                        competition, employment, investment, 
                        productivity, innovation, the environment, 
                        public health or safety, or the ability of 
                        enterprises whose principal places of business 
                        are in the United States to compete in domestic 
                        or export markets;
            ``(B) the term `major rule' does not include--
                    ``(i) a rule that involves the internal revenue 
                laws of the United States; or
                    ``(ii) a rule that authorizes the introduction into 
                commerce, or recognizes the marketable status, of a 
                product;
            ``(5) the term `benefit' means the reasonably identifiable 
        significant benefits, including social and economic benefits, 
        that are expected to result directly or indirectly from 
        implementation of a rule or an alternative to a rule;
            ``(6) the term `cost' means the reasonably identifiable 
        significant costs and adverse effects, including social and 
        economic costs, reduced consumer choice, substitution effects, 
        and impeded technological advancement, that are expected to 
        result directly or indirectly from implementation of, or 
        compliance with, a rule or an alternative to a rule; and
            ``(7) the term `market-based mechanism' means a regulatory 
        program that--
                    ``(A) imposes legal accountability for the 
                achievement of an explicit regulatory objective on each 
                regulated person;
                    ``(B) affords maximum flexibility to each regulated 
                person in complying with mandatory regulatory 
                objectives, which flexibility shall, where feasible and 
                appropriate, include, but not be limited to, the 
                opportunity to transfer to, or receive from, other 
                persons, including for cash or other legal 
                consideration, increments of compliance responsibility 
                established by the program; and
                    ``(C) permits regulated persons to respond 
                automatically to changes in general economic conditions 
                and in economic circumstances directly pertinent to the 
                regulatory program without affecting the achievement of 
                the program's explicit regulatory mandates.
``Sec. 622. Rulemaking cost-benefit analysis
    ``(a)(1) Prior to publishing notice of a proposed rulemaking for 
any rule (or, in the case of a notice of a proposed rulemaking that has 
been published on or before the date of enactment of this subchapter, 
not later than 30 days after such date of enactment), each agency shall 
determine whether the rule is or is not a major rule within the meaning 
of section 621(4)(A)(i) and, if it is not, whether it should be 
designated a major rule under section 621(4)(A)(ii). For the purpose of 
any such determination or designation, a group of closely related rules 
shall be considered as one rule.
    ``(2) Each notice of proposed rulemaking shall include a succinct 
statement and explanation of the agency's determination under paragraph 
(1).
    ``(b)(1) If an agency has determined that a rule is not a major 
rule within the meaning of section 621(4)(A)(i) and has not designated 
the rule a major rule within the meaning of section 621(4)(A)(ii), the 
President may, as appropriate, determine that the rule is a major rule 
or designate the rule a major rule not later than 30 days after the 
publication of the notice of proposed rulemaking for the rule (or, in 
the case of a notice of proposed rulemaking that has been published on 
or before the date of enactment of this subchapter, not later than 60 
days after such date of enactment).
    ``(2) Such determination or designation shall be published in the 
Federal Register, together with a succinct statement of the basis for 
the determination or designation.
    ``(c)(1)(A) When the agency publishes a notice of proposed 
rulemaking for a major rule, the agency shall issue and place in the 
rulemaking record a draft cost-benefit analysis, and shall include a 
summary of such analysis in the notice of proposed rulemaking.
    ``(B)(i) When the President has published a determination or 
designation that a rule is a major rule after the publication of the 
notice of proposed rulemaking for the rule, the agency shall promptly 
issue and place in the rulemaking file a draft cost-benefit analysis 
for the rule and shall publish in the Federal Register a summary of 
such analysis.
    ``(ii) Following the issuance of a draft cost-benefit analysis 
under clause (i), the agency shall give interested persons an 
opportunity to comment pursuant to section 553 of this title in the 
same manner as if the draft cost-benefit analysis had been issued with 
the notice of proposed rulemaking.
    ``(2) Each draft cost-benefit analysis shall contain--
            ``(A) an analysis of the benefit of the proposed rule, and 
        an explanation of how the agency anticipates each benefit will 
        be achieved by the proposed rule;
            ``(B) an analysis of the costs of the proposed rule, and an 
        explanation of how the agency anticipates each such cost will 
        result from the proposed rule;
            ``(C) an identification (including an analysis of the costs 
        and benefits) of reasonable alternatives for achieving the 
        identified benefits of the proposed rule, including 
        alternatives that--
                    ``(i) require no Government action;
                    ``(ii) will accommodate differences among 
                geographic regions and among persons with differing 
                levels of resources with which to comply; and
                    ``(iii) employ performance or other market-based 
                standards that permit the greatest flexibility in 
                achieving the identified benefits of the proposed rule 
                and that comply with the requirements of subparagraph 
                (D);
            ``(D) an assessment of the feasibility of establishing a 
        regulatory program that operates through the application of 
        market-based mechanisms;
            ``(E) in any case in which the proposed rule is based on 
        one or more scientific evaluations or information or is subject 
        to the risk assessment requirements of subchapter III, a 
        description of actions undertaken by the agency to verify the 
        quality, reliability, and relevance of such scientific 
        evaluations or scientific information in accordance with the 
        risk assessment requirements of subchapter III;
            ``(F) an assessment of the aggregate effect of the rule on 
        small businesses with fewer than 100 employees, including an 
        assessment of the net employment effect of the rule; and
            ``(G) an analysis of whether the identified benefits of the 
        proposed rule are likely to exceed the identified costs of the 
        proposed rule, and an analysis of whether the proposed rule 
        will provide greater net benefits to society than any of the 
        alternatives to the proposed rule, including alternatives 
        identified in accordance with subparagraph (C).
    ``(d)(1) When the agency publishes a final major rule, the agency 
shall also issue and place in the rulemaking record a final cost-
benefit analysis, and shall include a summary of the analysis in the 
statement of basis and purpose.
    ``(2) Each final cost-benefit analysis shall contain--
            ``(A) a description and comparison of the benefits and 
        costs of the rule and of the reasonable alternatives to the 
        rule described in the rulemaking, including the market-based 
        mechanisms identified pursuant to subsection (c)(2)(D); and
            ``(B) an analysis, based upon the rulemaking record 
        considered as a whole, of--
                    ``(i) whether the benefits of the rule outweigh the 
                costs of the rule; and
                    ``(ii) whether the rule will provide greater net 
                benefits to society than any of the alternatives 
                described in the rulemaking, including the market-based 
                incentives identified pursuant to subsection (c)(2)(D).
    ``(e)(1)(A) The description of the benefits and costs of a proposed 
and a final rule required under this section shall include, to the 
extent feasible, a quantification or numerical estimate of the 
quantifiable benefits and costs. Such quantification or numerical 
estimate shall be made in the most appropriate unit of measurement, 
using comparable assumptions, including time periods, and shall specify 
the ranges of predictions and shall explain the margins of error 
involved in the quantification methods and in the estimates used. An 
agency shall describe the nature and extent of the nonquantifiable 
benefits and costs of a final rule pursuant to this section in as 
precise and succinct a manner as possible.
    ``(B) Where practicable, the description of the benefits and costs 
of a proposed and final rule required under this section shall describe 
such benefits and costs on an industry by industry basis.
    ``(2)(A) In evaluating and comparing costs and benefits and in 
evaluating the risk assessment information developed pursuant to 
subchapter III, the agency shall not rely on cost, benefit, or risk 
assessment information that is not accompanied by data, analysis, or 
other supporting materials that would enable the agency and other 
persons interested in the rulemaking to assess the accuracy, 
reliability, and uncertainty factors applicable to such information.
    ``(B) The agency evaluations of the relationships of the benefits 
of a proposed and final rule to its costs shall be clearly articulated 
in accordance with this section.
``Sec. 623. Decisional criteria
    ``(a) No final rule subject to this subchapter shall be promulgated 
unless the agency finds that--
            ``(1) the potential benefits to society from the rule 
        outweigh the potential costs of the rule to society, as 
        determined by the analysis required by section 622(d)(2)(B); 
        and
            ``(2) the rule will provide greater net benefits to society 
        than any of the reasonable alternatives identified pursuant to 
        section 622(c)(2)(C), including the market-based mechanisms 
        identified pursuant to section 622(c)(2)(D).
    ``(b) The requirements of this section shall supplement the 
decisional criteria for rulemaking otherwise applicable under the 
statute granting the rulemaking authority, except when such statute 
contains explicit textual language prohibiting the consideration of the 
criteria set forth in this section. Where the agency finds that 
consideration of the criteria set forth in this section is prohibited 
by explicit statutory language, the agency shall transmit its finding 
to Congress, along with the final cost-benefit analysis required by 
section 622(d)(2)(B).
``Sec. 624. Judicial review
    ``(a) Compliance or noncompliance by an agency with the provisions 
of this subchapter shall be subject to judicial review in accordance 
with this section.
    ``(b)(1) Each of the following shall be subject to judicial review:
            ``(A) A determination by an agency or by the President that 
        a rule is or is not a major rule within the meaning of section 
        621(4).
            ``(B) A designation by an agency or by the President of a 
        rule as a major rule.
            ``(C) A decision by an agency or by the President not to 
        designate a rule a major rule.
    ``(2) A determination by an agency or by the President that a rule 
is not a major rule within the meaning of section 621(4), or the 
decision by an agency or by the President not to designate a rule a 
major rule, shall be set aside by a reviewing court only upon a showing 
of clear and convincing evidence that the determination or decision not 
to designate is erroneous in light of the information available to the 
agency at the time the determination or decision not to designate was 
made.
    ``(3) An action to review a determination that a rule is not a 
major rule or to review a decision not to designate shall be filed not 
later than 30 days after the date of publication of such determination 
or failure to designate.
    ``(c) If a court of the United States finds that a rule should have 
been reviewed pursuant to this subchapter, such rule shall have no 
force or effect until such time as the requirements of this subchapter 
are met.
    ``(d) Each court with jurisdiction to review final agency action 
under the statute granting the agency authority to conduct the 
rulemaking shall have jurisdiction to review findings by any agency 
under this subchapter and shall set aside agency action that fails to 
satisfy the decisional criteria of section 623. The court shall apply 
the same standards of judicial review that apply to the review of 
agency findings under the statute granting the agency authority to 
conduct the rulemaking.
``Sec. 625. Petition for cost-benefit analysis
    ``(a)(1) Any person subject to a major rule may petition the 
relevant agency or the President to perform a cost-benefit analysis 
under this subchapter for the major rule, including a major rule in 
effect on the date of enactment of this subchapter for which a cost-
benefit analysis pursuant to such subchapter has not been performed, 
regardless of whether a cost-benefit analysis was previously performed 
to meet requirements imposed before the date of enactment of this 
subchapter.
    ``(2) The petition shall identify with reasonable specificity the 
major rule to be reviewed.
    ``(3) The agency or the President shall grant the petition if the 
petition shows that there is a reasonable likelihood that the costs of 
the major rule outweigh the benefits, or that reasonable questions 
exist as to whether the rule provides greater net benefits to society 
than any reasonable alternative to the rule that may be more clearly 
resolved through examination pursuant to this subchapter and subchapter 
III.
    ``(4) A decision to grant or deny a petition under this subsection 
shall be made not later than 180 days after submittal. A decision to 
deny a petition shall be subject to judicial review immediately upon 
denial as final agency action under the statute granting the agency 
authority to conduct the rulemaking.
    ``(b) For each major rule for which a petition has been granted 
under subsection (a), the agency shall conduct a cost-benefit analysis 
in accordance with this subchapter, and shall determine whether the 
rule satisfies the decisional criteria set forth in section 623. If the 
rule does not satisfy the decisional criteria, then the agency shall 
take immediate action to either revoke or amend the rule to conform the 
rule to the requirements of this subchapter and the decisional criteria 
under section 623.
    ``(c) For purposes of this section, the term `major rule' means any 
major rule or portion thereof.
    ``(d)(1) Any person may petition the relevant agency to withdraw, 
as contrary to this subchapter, any agency guidance or general 
statement of policy that would be a major rule if the guidance or 
general statement of policy had been adopted as a rule.
    ``(2) The petition shall identify with reasonable specificity why 
the guidance or general statement of policy would be major if adopted 
as a rule.
    ``(3) The agency shall grant the petition if the petition shows 
that there is a reasonable likelihood that the guidance or general 
statement of policy would be major if adopted as a rule.
    ``(4) A decision to grant or deny a petition under this subsection 
shall be made not later than 180 days after the petition is submitted. 
If the agency fails to act by such date, the petition shall be deemed 
to have been granted. A decision to deny a petition shall be subject to 
judicial review immediately upon denial as final agency action under 
the statute under which the agency has issued the guidance or general 
statement of policy.
    ``(e) For each petition granted under subsection (d), the agency 
shall be prohibited from enforcing against any person the regulatory 
standards or criteria contained in such guidance or policy unless 
included in a rule proposed and promulgated in accordance with this 
subchapter.
``Sec. 626. Effective date of final regulations
    ``(a)(1) Beginning on the date of enactment of this section, all 
deadlines in statutes that require agencies to propose or promulgate 
any rule subject to this subchapter are suspended until such time as 
the requirements of this subchapter are satisfied.
    ``(2) Beginning on the date of enactment of this section, the 
jurisdiction of any court of the United States to enforce any deadline 
that would require an agency to propose or promulgate a rule subject to 
subchapter II of chapter 5 of title 5, United States Code (as added by 
this section), is suspended until such time as the requirements of this 
subchapter are satisfied.
    ``(3) In any case in which the failure to promulgate a rule by a 
deadline would create an obligation to regulate through individual 
adjudications, the obligation to conduct individual adjudications shall 
be suspended to allow the requirements of this subchapter to be 
satisfied.
    ``(b)(1) Before a major rule takes effect as a final rule, the 
agency promulgating such rule shall submit to the Congress a copy of 
such rule and a report containing a concise general statement relating 
to the rule, including a complete copy of the cost-benefit analysis, 
and the proposed effective date of the rule.
    ``(2) A major rule relating to a report submitted under paragraph 
(1) shall take effect as a final rule, the latest of--
            ``(A) the later of the date occurring 45 days after the 
        date on which--
                    ``(i) the Congress receives the report submitted 
                under paragraph (1); or
                    ``(ii) the rule is published in the Federal 
                Register;
            ``(B) if the Congress passes a joint resolution of 
        disapproval described under subsection (h) relating to the 
rule, and the President signs a veto of such resolution, the earlier 
date--
                    ``(i) on which either House of Congress votes and 
                fails to override the veto of the President; or
                    ``(ii) occurring 30 session days after the date on 
                which the Congress received the veto and objections of 
                the President; or
            ``(C) the date the rule would have otherwise taken effect, 
        if not for this section (unless a joint resolution of 
        disapproval under subsection (h) is enacted).
    ``(c) A rule shall not take effect as a final rule if the Congress 
passes a joint resolution of disapproval described under subsection 
(h).
    ``(d)(1) Notwithstanding any other provision of this section 
(except subject to paragraph (3)), a rule that would not take effect by 
reason of this section may take effect if the President makes a 
determination under paragraph (2) and submits written notice of such 
determination to the Congress.
    ``(2) Paragraph (1) applies to a determination made by the 
President by Executive order that the rule should take effect because 
such rule is--
            ``(A) necessary because of an imminent threat to health or 
        safety or other emergency;
            ``(B) necessary for the enforcement of criminal laws; or
            ``(C) necessary for national security.
    ``(3) An exercise by the President of the authority under this 
subsection shall have no effect on the procedures under subsection (h) 
or the effect of a joint resolution of disapproval under this section.
    ``(4) This subsection and an Executive order issued by the 
President under this subsection shall not be subject to judicial review 
by a court of the United States.
    ``(e)(1) Subsection (h) shall apply to any rule that is published 
in the Federal Register (as a rule that shall take effect as a final 
rule) during the period beginning on the date occurring 60 days before 
the date the Congress adjourns sine die through the date on which the 
succeeding Congress first convenes.
    ``(2) For purposes of subsection (h), a rule described under 
paragraph (1) shall be treated as though such rule were published in 
the Federal Register (as a rule that shall take effect as a final rule) 
on the date the succeeding Congress first convenes.
    ``(3) During the period between the date the Congress adjourns sine 
die through the date on which the succeeding Congress first convenes, a 
rule described under paragraph (1) shall take effect as a final rule as 
otherwise provided by law.
    ``(f) Any rule that takes effect and later is made of no force or 
effect by the enactment of a joint resolution under subsection (h) 
shall be treated as though such rule had never taken effect.
    ``(g) If the Congress does not enact a joint resolution of 
disapproval under subsection (h), no court or agency may infer any 
intent of the Congress from any action or inaction of the Congress with 
regard to such rule, related statute, or joint resolution of 
disapproval.
    ``(h)(1) For purposes of this subsection, the term `joint 
resolution' means only a joint resolution introduced after the date on 
which the report referred to in subsection (b) is received by Congress 
the matter after the resolving clause of which is as follows: `That 
Congress disapproves the rule submitted by the ________ relating to 
________, and such rule shall have no force or effect. (The blank 
spaces being appropriately filled in.)'.
    ``(2)(A) A resolution described in paragraph (1) shall be referred 
to the committees in each House of Congress with jurisdiction. Such a 
resolution shall not be reported before the eighth day after its 
submission or publication date.
    ``(B) For purposes of this subsection the term `submission or 
publication date' means the later of the date on which--
            ``(i) the Congress receives the report submitted under 
        subsection (b)(1); or
            ``(ii) the rule is published in the Federal Register.
    ``(3) If the committee to which a resolution described in paragraph 
(1) is referred has not reported such resolution (or an identical 
resolution) at the end of 20 calendar days after its submission or 
publication date, such committee may be discharged by the Majority 
Leader of the Senate or the Majority Leader of the House of 
Representatives, as the case may be, from further consideration of such 
resolution and such resolution shall be placed on the appropriate 
calendar of the House involved.
    ``(4)(A) When the committee to which a resolution is referred has 
reported, or when a committee is discharged (under paragraph (3)) from 
further consideration of, a resolution described in paragraph (1), it 
shall at any time thereafter be in order (even though a previous motion 
to the same effect has been disagreed to) for any Member of the 
respective House to move to proceed to the consideration of the 
resolution, and all points of order against the resolution (and against 
consideration of the resolution) shall be waived. The motion shall be 
highly privileged in the House of Representatives and shall be 
privileged in the Senate and shall not be debatable. The motion shall 
not subject to amendment, or to a motion to postpone, or to a motion to 
proceed to the consideration of other business. A motion to reconsider 
the vote by which the motion is agreed to or disagreed to shall not be 
in order. If a motion to proceed to the consideration of the resolution 
is agreed to, the resolution shall remain the unfinished business of 
the respective House until disposed of.
    ``(B) Debate on the resolution, and on all debatable motions and 
appeals in connection therewith, shall be limited to not more than 10 
hours, which shall be divided equally between those favoring and those 
opposing the resolution. A motion further to limit debate shall be in 
order and shall not be debatable. An amendment to, or a motion to 
postpone, or a motion to proceed to the consideration of other 
business, or a motion to recommit the resolution shall not be in order. 
A motion to reconsider the vote by which the resolution is agreed to or 
disagreed to shall not be in order.
    ``(C) Immediately following the conclusion of the debate on a 
resolution described in paragraph (1), and a single quorum call at the 
conclusion of the debate if requested in accordance with the rules of 
the appropriate House, the vote on final passage of the resolution 
shall occur.
    ``(D) Appeals from the decisions of the Chair relating to the 
application of the rules of the Senate or the House of Representatives, 
as the case may be, to the procedure relating to a resolution described 
in paragraph (1) shall be decided without debate.
    ``(5) If, before the passage by one House of a resolution of that 
House described in paragraph (1), that House receives from the other 
House a resolution described in paragraph (1), then the following 
procedures shall apply:
            ``(A) The resolution of the other House shall not be 
        referred to a committee.
            ``(B) With respect to a resolution described in paragraph 
        (1) of the House receiving the resolution--
                    ``(i) the procedure in that House shall be the same 
                as if no resolution had been received from the other 
                House; but
                    ``(ii) the vote on final passage shall be on the 
                resolution of the other House.
    ``(6) This subsection is enacted by Congress--
            ``(A) as an exercise of the rulemaking power of the Senate 
        and House of Representatives, respectively, and as such it is 
        deemed to be a part of the rules of each House, respectively, 
        but applicable only with respect to the procedure to be 
        followed in that House in the case of a resolution described in 
        paragraph (1), and it supersedes other rules only to the extent 
        that it is inconsistent with such rules; and
            ``(B) with full recognition of the constitutional right of 
        either House to change the rules (so far as relating to the 
        procedure of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.
``Sec. 627. Unauthorized rulemakings
    ``(a) Notwithstanding any other provision of law, beginning on July 
1, 1995, any rule that expands Federal power or jurisdiction beyond the 
level of regulatory action needed to satisfy statutory requirements 
shall be prohibited.
    ``(b) Nothing in this section shall be construed to prevent any 
agency from promulgating a rule that repeals, narrows, or streamlines a 
rule, regulation, or administrative process, or from issuing or 
promulgating a rule providing for tax relief or clarification or 
reducing regulatory burdens.
``Sec. 628. Standard for review of agency interpretations of an 
              enabling statute
    ``(a) In reviewing a final agency action under section 706 of this 
title, or under a statute that provides for review of a final agency 
action, the reviewing court shall affirm the agency's interpretation of 
the statute granting authority to promulgate the rule if, applying 
traditional principles of statutory construction, the reviewing court 
finds that the interpretation is clearly the interpretation of the 
statute intended by Congress.
    ``(b) If the reviewing court, applying traditional principles of 
statutory construction, finds that an interpretation other than the 
interpretation applied by the agency is clearly the interpretation of 
the statute intended by Congress, the reviewing court shall find that 
the agency's interpretation is erroneous and contrary to law.
    ``(c)(1) If the reviewing court, applying established principles of 
statutory construction, finds that the statute gives the agency 
discretion to choose from among a range of permissible statutory 
constructions, the reviewing court shall affirm the agency's 
interpretation where the record on review establishes that--
            ``(A) the agency has correctly identified the range of 
        permissible statutory constructions;
            ``(B) the interpretation chosen is one that is within that 
        range; and
            ``(C) the agency has engaged in reasoned decisionmaking in 
        determining that the interpretation, rather than other 
        permissible constructions of the statute, is the one that 
        maximizes net benefits to society.
    ``(2) If an agency's interpretation of a statute cannot be affirmed 
under paragraph (1), the reviewing court shall find that the agency's 
interpretation is arbitrary and capricious.

                   ``SUBCHAPTER III--RISK ASSESSMENTS

``Sec. 631. Definitions
    ``For purposes of this subchapter:
            ``(1) The term `best estimate' means an estimate that, to 
        the extent feasible and scientifically appropriate, is based on 
        one or more of the following:
                    ``(A) Central estimates of risk using the most 
                plausible assumptions.
                    ``(B) An approach that combines multiple estimates 
                based on different scenarios and weighs the probability 
                of each scenario.
                    ``(C) Any other methodology designed to provide the 
                most unbiased representation of the most plausible 
                level of risk, given the current scientific information 
                available to the agency concerned.
            ``(2) The term `emergency' means a clearly imminent and 
        substantial endangerment to public health, safety, or natural 
        resources.
            ``(3) The term `hazard identification' means identification 
        of a substance, activity, or condition as potentially posing a 
        risk to human health or safety or natural resources based on 
        empirical data, measurements, testing, or scientifically 
        acceptable methods showing that it has caused significant 
        adverse effects at some levels of dose or exposure not 
        necessarily relevant to level of dose or exposure that are 
        normally expected to occur.
            ``(4) The term `negative data' means data indicating that 
        under certain conditions a given substance or activity did not 
        induce an adverse effect.
            ``(5) The term `plausible' means realistic and 
        scientifically probable.
            ``(6) The term `risk assessment' means--
                    ``(A) the process of identifying hazards, and 
                quantifying (to the extent practicable) or describing 
                the degree of toxicity, exposure, or other risk the 
                hazards pose for exposed individuals, populations, or 
                resources; and
                    ``(B) the document containing the explanation of 
                how the assessment process has been applied to an 
                individual substance, activity, or condition.
            ``(7) The term `risk characterization'--
                    ``(A) means the element of a risk assessment that 
                involves presentation of the degree of risk to 
                individuals and populations expected to be protected, 
                as presented in any regulatory proposal or decision, 
                report to Congress, or other document that is made 
                available to the public; and
                    ``(B) includes discussions of uncertainties, 
                conflicting data, estimates, extrapolations, 
                inferences, and opinions.
            ``(8) The term `substitution risk' means a potential 
        increased risk to human health, safety, or the environment from 
        a regulatory option designed to decrease other risks.
``Sec. 632. Applicability
    ``(a) Except as provided in subsection (b), this subchapter shall 
apply to all risk assessments and risk characterizations prepared by, 
or on behalf of, or prepared by others and adopted by, any agency in 
connection with health, safety, and risk to natural resources.
    ``(b)(1) This subchapter shall not apply to risk assessments or 
risk characterizations performed with respect to--
            ``(A) a situation that the head of the agency considers to 
        be an emergency;
            ``(B) a rule that authorizes the introduction into 
        commerce, or recognizes the marketable status of a product; or
            ``(C) a screening analysis.
    ``(2)(A) An analysis shall not be treated as screening analysis for 
the purposes of paragraph (1)(B) if the result of the analysis is 
used--
            ``(i) as the basis for imposing a restriction on a 
        substance or activity; or
            ``(ii) to characterize a positive finding of risks from a 
        substance or activity in any agency document or other 
        communication made available to the public, the media, or 
        Congress.
    ``(B) Among the analyses that may be treated as a screening 
analyses for the purposes of paragraph (1)(B) are product 
registrations, reregistrations, tolerance settings, and reviews of 
premanufacture notices and existing chemicals under the Federal 
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 et seq.) and 
the Toxic Substances Control Act (15 U.S.C. 2601 et seq.).
    ``(3) This subchapter shall not apply to any food, drug, or other 
product label or to any risk characterization appearing on any such 
label.
``Sec. 633. Rule of construction
    ``Nothing in this subchapter shall be construed to--
            ``(1) preclude the consideration of any data or the 
        calculation of any estimate to more fully describe risk or 
        provide examples of scientific uncertainty or variability; or
            ``(2) require the disclosure of any trade secret or other 
        confidential information.
``Sec. 634. Requirement to prepare risk assessments
    ``(a) Except as provided in section 632, the head of each agency 
shall prepare for each major rule relating to human health, safety, or 
natural resources that is proposed by the agency after the date of 
enactment of this subchapter, is pending on the date of enactment of 
this subchapter, or is subject to a granted petition for review 
pursuant to section 625 or 637--
            ``(1) a risk assessment in accordance with this subchapter;
            ``(2) for each such proposed or final rule, an assessment, 
        quantified to the extent feasible, of incremental risk 
        reduction or other benefits associated with each significant 
        regulatory alternative to the rule or proposed rule; and
            ``(3) for each such proposed or final rule, quantified to 
        the extent feasible, a comparison of any human health, safety, 
        or natural resource risks addressed by the regulatory 
        alternatives to other relevant risks chosen by the head of the 
        agency, including at least 3 other risks regulated by the 
        agency and to at least 3 other risks with which the public is 
        familiar.
    ``(b) A risk assessment prepared pursuant to this subchapter shall 
be a component of and used to develop the cost-benefit analysis 
required by subchapter II, and shall be made part of the administrative 
record for judicial review of any final agency action.
``Sec. 635. Principles for risk assessment
    ``(a)(1) The head of each agency shall apply the principles set 
forth in subsection (b) when preparing any risk assessment, whether or 
not required by section 634, to ensure that the risk assessment and all 
of its components--
            ``(A) distinguish scientific findings and best estimates of 
        risk from other considerations;
            ``(B) are, to the maximum extent practicable scientifically 
        objective, unbiased and inclusive of all relevant data; and
            ``(C) rely, to the extent available and practicable, on 
        scientific findings.
    ``(2) Discussions or explanations required under this section need 
not be repeated in each risk assessment document as long as there is a 
reference to the relevant discussion or explanation in another agency 
document.
    ``(b) The principles to be applied when preparing risk assessments 
are as follows:
            ``(1)(A) When assessing human health risks, a risk 
        assessment shall be based on the most reliable laboratory, 
        epidemiological, and exposure assessment data that finds, or 
        fails to find, a correlation between a health risk and a 
        potential toxin or activity. Other relevant data may be 
        summarized.
            ``(B) When conflicts among such data appear to exist, or 
        when animal data are used as a basis to assess human health, 
        the assessment shall include discussion of possible 
        reconciliation of conflicting information, and, as appropriate, 
        differences in study designs, comparative physiology, routes of 
        exposure, bioavailability, pharmacokinetics, and any other 
        relevant factor, including the availability of raw data for 
        review. Greatest emphasis shall be placed on data that 
        indicates a biological basis of the resulting harm in humans. 
Animal data shall be reviewed with regard to relevancy to humans.
            ``(2) When a risk assessment involves selection of any 
        significant assumption, inference, or model, the agency shall--
                    ``(A) describe the plausible and alternative 
                assumptions, inferences, or models;
                    ``(B) explain the basis for any choices among such 
                assumptions, inferences, or models;
                    ``(C) identify any policy or value judgments 
                involved in choosing from among such alternative 
                assumptions, inferences, or models;
                    ``(D) fully describe any model used in the risk 
                assessment and make explicit the assumptions 
                incorporated in the model; and
                    ``(E) indicate the extent to which any significant 
                model has been validated by, or conflicts with, 
                empirical data.
            ``(3) A risk assessment shall be prepared at the level of 
        detail appropriate and practicable for reasoned decisionmaking 
        on the matter involved, taking into consideration the 
        significance and complexity of the decision and any need for 
        expedition.
``Sec. 636. Principles for risk characterization and communication
    ``In characterizing risk in any risk assessment document, 
regulatory proposal or decision, report to Congress, or other document 
that is made available to the public, each agency characterizing the 
risk shall comply with each of the following:
            ``(1)(A) The head of the agency shall describe the 
        populations or natural resources that are the subject of the 
        risk characterization.
            ``(B) If a numerical estimate of risk is provided, the head 
        of the agency, to the extent feasible and scientifically 
        appropriate--
                    ``(i) shall provide--
                            ``(I) the best estimate or estimates for 
                        the specific populations or natural resources 
                        which are the subject of the characterization 
                        (based on the information available to the 
                        department, agency, or instrumentality) or, in 
                        lieu of a single best estimate, an array of 
                        multiple estimates (showing the distribution of 
                        estimates and the best estimate) based on 
                        assumptions, inferences, or models which are 
                        equally plausible, given current scientific 
                        understanding;
                            ``(II) a statement of the reasonable range 
                        of scientific uncertainties; and
                            ``(III) to the extent practicable and 
                        appropriate, descriptions of the distribution 
                        and probability of risk estimates to reflect 
                        differences in exposure variability in 
                        populations and uncertainties;
                    ``(ii) in addition to a best estimate or estimates, 
                may present plausible upper-bound or conservative 
                estimates, but only in conjunction with equally 
                plausible lower-bound estimates; and
                    ``(iii) shall ensure that, where a safety factor, 
                as distinguished from inherent quantitative or 
                qualitative uncertainties, is used, such factor shall 
                be similar in degree to safety factors used to ensure 
                safety in human activities.
            ``(2) The head of the agency shall explain the exposure 
        scenarios used in any risk assessment, and, to the extent 
        feasible, provide a statement of the size of the corresponding 
        population or natural resource at risk and the likelihood of 
        such exposure scenarios.
            ``(3)(A) To the extent feasible, the head of the agency 
        shall provide a statement that places the nature and magnitude 
        of individual and population risks to human health in context.
            ``(B) A statement under subparagraph (A) shall--
                    ``(i) include appropriate comparisons with 
                estimates of risks that are familiar to and routinely 
                encountered by the general public as well as other 
                risks; and
                    ``(ii) identify relevant distinctions among 
                categories of risk and limitations to comparisons.
            ``(4) When an agency provides a risk assessment or risk 
        characterization for a proposed or final regulatory action, 
        such assessment or characterization shall include a statement 
        of any significant substitution risks to human health 
        identified by the agency or contained in information provided 
        to the agency by a commenter.
            ``(5) If--
                    ``(A) an agency provides a public comment period 
                with respect to a risk assessment or regulation;
                    ``(B) a commenter provides a risk assessment, and a 
                summary of results of such risk assessment; and
                    ``(C) such risk assessment is reasonably consistent 
                with the principles and the guidance provided under 
                this subtitle,
        the agency shall present such summary in connection with the 
        presentation of the agency's risk assessment or the regulation.
``Sec. 637. Regulations; plan for assessing new information
    ``(a)(1) Not later than 1 year after the date of enactment of this 
subchapter, the President shall issue a final regulation that has been 
subject to notice and comment under section 553 of title 5, United 
States Code, for agencies to implement the risk assessment and 
characterization principles set forth in sections 635 and 636 and shall 
provide a format for summarizing risk assessment results.
    ``(2) The regulation under paragraph (1) shall be sufficiently 
specific to ensure that risk assessments are conducted consistently by 
the various agencies.
    ``(b)(1) Review of the risk assessment for any major rule shall be 
conducted by the head of the agency on the written petition of a person 
showing a reasonable likelihood that--
            ``(A) the risk assessment is inconsistent with the 
        principles set forth in sections 635 and 636;
            ``(B) the risk assessment produces substantially different 
        results;
            ``(C) the risk assessment is inconsistent with a rule 
        issued under subsection (a); or
            ``(D) the risk assessment does not take into account 
        material significant new scientific data or scientific 
        understanding.
    ``(2) Not later than 90 days after receiving a petition under 
paragraph (1), the head of the agency shall respond to the petition by 
agreeing or declining to review the risk assessment referred to in the 
petition, and shall state the basis for the decision.
    ``(3) If the head of the agency agrees to review the petition, the 
agency shall complete its review within 180 days, unless the Director 
of the Office of Management and Budget agrees in writing with an agency 
determination that an extension is necessary in view of limitations on 
agency resources.
    ``(4) Denial of a petition by the agency head shall be subject to 
judicial review in accordance with chapter 7 of title 5, United States 
Code.
    ``(5) A risk assessment completed pursuant to a petition may be the 
basis for initiating a regulatory review pursuant to section 625.
    ``(c) The regulations under this section shall be developed after 
notice and opportunity for public comment, and after consultation with 
representatives of appropriate State agencies and local governments, 
and such other departments and agencies, offices, organizations, or 
persons as may be advisable.
    ``(d) At least every 4 years, the President shall review, and when 
appropriate, revise the regulations published under this section.
``Sec. 638. Decisional criteria
    ``For each major rule subject to this subchapter, the head of the 
agency, subject to review by the President, shall make a determination 
that--
            ``(1) the risk assessment under section 634 is based on a 
        scientific and unbiased evaluation, reflecting realistic 
        exposure scenarios, of the risk addressed by the major rule and 
        is supported by the best available scientific data, as 
        determined by a peer review panel in accordance with section 
        640; and
            ``(2) there is no alternative that is allowed by the 
        statute under which the major rule is promulgated that would 
        provide greater net benefits or that would achieve an 
        equivalent reduction in risk in a more cost-effective and 
        flexible manner.
``Sec. 639. Regulatory priorities
    ``(a) In exercising authority under any laws protecting human 
health and safety or the environment, the head of an agency shall 
prioritize the use of the resources available under such laws to 
address the risks to human health, safety, and natural resources that--
            ``(1) the agency determines are the most serious; and
            ``(2) can be addressed in a cost-effective manner, with the 
        goal of achieving the greatest overall net reduction in risks 
        with the public and private sector resources to be expended.
    ``(b) In identifying the sources of the most serious risks under 
subsection (a), the head of the agency shall consider, at a minimum--
            ``(1) the plausible likelihood and severity of the effect; 
        and
            ``(2) the plausible number and groups of individuals 
        potentially affected.
    ``(c) The head of the agency shall incorporate the priorities 
identified in subsection (a) into the budget, strategic planning, and 
research activities of the agency by, in the agency's annual budget 
request to Congress--
            ``(1) identifying which risks the agency has determined are 
        the most serious and can be addressed in a cost-effective 
        manner under subsection (a), and the basis for that 
        determination;
            ``(2) explicitly identifying how the agency's requested 
        funds will be used to address those risks;
            ``(3) identifying any statutory, regulatory, or 
        administrative obstacles to allocating agency resources in 
        accordance with the priorities established under subsection 
        (a); and
            ``(4) explicitly considering the requirements of subsection 
        (a) when preparing the agency's regulatory agenda or other 
        strategic plan, and providing an explanation of how the agenda 
        or plan reflects those requirements and the comparative risk 
        analysis when publishing any such agenda or strategic plan.
    ``(d) In March of each year, the head of each agency shall submit 
to Congress specific recommendations for repealing or modifying laws 
that would better enable the agency to prioritize its activities to 
address the risks to human health, safety, and the environment that are 
the most serious and can be addressed in a cost-effective manner 
consistent with the requirements of subsection (a).
``Sec. 640. Establishment of program
    ``(a) The President shall develop a systematic program for the peer 
review of work products covered by subsection (c), which program shall 
be used uniformly across the agencies.
    ``(b) The program under subsection (a)--
            ``(1) shall provide for the creation of peer review panels 
        consisting of independent and external experts who are broadly 
        representative and balanced to the extent feasible;
            ``(2) shall not exclude peer reviewers merely because they 
        represent entities that may have a potential interest in the 
        outcome, if that interest is fully disclosed;
            ``(3) shall exclude, to the maximum extent practicable, any 
        peer reviewer who has been involved in any previous analysis of 
        the tests and evidence presented for certification by the peer 
        review panel; and
            ``(4) shall provide for a timely completed peer review, 
        meeting agency deadlines, which contains a balanced 
        presentation of all considerations, including minority reports 
        and an agency response to all significant peer review comments.
    ``(c) The peer review and the agency's responses shall be made 
available to the public and shall be made part of the administrative 
record for purposes of judicial review of any final agency action.
    ``(d) The proceedings of peer review panels under this section 
shall be subject to the applicable provisions of the Federal Advisory 
Committee Act (5 U.S.C. App.).

                  ``SUBCHAPTER IV--EXECUTIVE OVERSIGHT

``Sec. 651. Procedures
    ``The President shall--
            ``(1) establish procedures for agency compliance with 
        subchapters II and III; and
            ``(2) monitor, review, and ensure agency implementation of 
        such procedures.
``Sec. 652. Promulgation and adoption
    ``(a) Procedures established pursuant to section 651 shall only be 
implemented after opportunity for public comment. Any such procedures 
shall be consistent with the prompt completion of rulemaking 
proceedings.
    ``(b)(1) If procedures established pursuant to section 651 include 
review of preliminary or final regulatory analyses to ensure that they 
comply with subchapters II and III, the time for any such review of a 
preliminary regulatory analysis shall not exceed 30 days following the 
receipt of the analysis by the President or by an officer to whom the 
authority granted under section 651 has been delegated pursuant to 
section 653.
    ``(2) The time for review of a final regulatory analysis shall not 
exceed 30 days following the receipt of the analysis by the President 
or such officer.
    ``(3)(A) The times for each such review may be extended for good 
cause by the President or such officer for an additional 30 days.
    ``(B) Notice of any such extension, together with a succinct 
statement of the reasons therefor, shall be inserted in the rulemaking 
file.
``Sec. 653. Delegation of authority
    ``(a) The President may delegate the authority granted by this 
subchapter to the Vice President or to an officer within the Executive 
Office of the President whose appointment has been subject to the 
advice and consent of the Senate.
    ``(b)(1) Notice of any delegation, or any revocation or 
modification thereof, shall be published in the Federal Register.
    ``(2) Any notice with respect to a delegation to the Vice President 
shall contain a statement by the Vice President that the Vice President 
will make every reasonable effort to respond to congressional inquiries 
concerning the exercise of the authority delegated under this section.
``Sec. 654. Applicability
    ``The authority granted under this subchapter shall not apply to 
rules issued by the Nuclear Regulatory Commission.
``Sec. 655. Judicial review
    ``The exercise of the authority granted under this subchapter by 
the President or by an officer to whom such authority has been 
delegated under section 653 shall not be subject to judicial review in 
any manner under this chapter.''.
    (b) Judicial Review of Regulatory Flexibility Analysis.--
            (1) Amendment.--Section 611 of title 5, United States Code, 
        is amended to read as follows:
``Sec. 611. Judicial review
    ``(a)(1) Except as provided in paragraph (2), not later than 1 year 
after the effective date of a final rule with respect to which an 
agency--
            ``(A) certified, pursuant to section 605(b), that such rule 
        would not have a significant economic impact on a substantial 
        number of small entities; or
            ``(B) prepared final regulatory flexibility analysis 
        pursuant to section 604,
an affected small entity may petition for the judicial review of such 
certification or analysis in accordance with this subsection. A court 
having jurisdiction to review such rule for compliance with section 553 
of this title or under any other provision of law shall have 
jurisdiction to review such certification or analysis.
    ``(2)(A) Except as provided in subparagraph (B), in the case of a 
provision of law that requires that an action challenging a final 
agency regulation be commenced before the expiration of the 1-year 
period provided in paragraph (1), such lesser period shall apply to a 
petition for the judicial review under this subsection.
    ``(B) In a case in which an agency delays the issuance of a final 
regulatory flexibility analysis pursuant to section 608(b), a petition 
for judicial review under this subsection shall be filed not later 
than--
            ``(i) 1 year; or
            ``(ii) in a case in which a provision of law requires that 
        an action challenging a final agency regulation be commenced 
        before the expiration of the 1-year period provided in 
        paragraph (1), the number of days specified in such provision 
        of law,
after the date the analysis is made available to the public.
    ``(3) For purposes of this subsection, the term `affected small 
entity' means a small entity that is or will be adversely affected by 
the final rule.
    ``(4) Nothing in this subsection shall be construed to affect the 
authority of any court to stay the effective date of any rule or 
provision thereof under any other provision of law.
    ``(5)(A) In a case in which an agency certifies that such rule 
would not have a significant economic impact on a substantial number of 
small entities, the court may order the agency to prepare a final 
regulatory flexibility analysis pursuant to section 604 if the court 
determines, on the basis of the rulemaking record, that the 
certification was arbitrary, capricious, an abuse of discretion, or 
otherwise not in accordance with law.
    ``(B) In a case in which the agency prepared a final regulatory 
flexibility analysis, the court may order the agency to take corrective 
action consistent with section 604 if the court determines, on the 
basis of the rulemaking record, that the final regulatory flexibility 
analysis was prepared by the agency without complying with section 604.
    ``(6) If, by the end of the 90-day period beginning on the date of 
the order of the court pursuant to paragraph (5) (or such longer period 
as the court may provide), the agency fails, as appropriate--
            ``(A) to prepare the analysis required by section 604; or
            ``(B) to take corrective action consistent with section 604 
        of this title,
the court may stay the rule or grant such other relief as it deems 
appropriate.
    ``(7) In making any determination or granting any relief authorized 
by this subsection, the court shall take due account of the rule of 
prejudicial error.
    ``(b) In an action for the judicial review of a rule, any 
regulatory flexibility analysis for such rule (including an analysis 
prepared or corrected pursuant to subsection (a)(5)) shall constitute 
part of the whole record of agency action in connection with such 
review.
    ``(c) Nothing in this section bars judicial review of any other 
impact statement or similar analysis required by any other law if 
judicial review of such statement or analysis is otherwise provided by 
law.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of enactment of this Act, except 
        that the judicial review authorized by section 611(a) of title 
        5, United States Code (as added by subsection (a)), shall apply 
        only to final agency rules issued after the date of enactment 
        of this Act.
    (c) Presidential Authority.--Nothing in this Act shall limit the 
exercise by the President of the authority and responsibility that the 
President otherwise possesses under the Constitution and other laws of 
the United States with respect to regulatory policies, procedures, and 
programs of departments, agencies, and offices.
    (d) Technical and Conforming Amendments.--(1) Part I of title 5, 
United States Code, is amended by striking out the chapter heading and 
table of sections for chapter 6 and inserting in lieu thereof the 
following:

           ``CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS

                  ``SUBCHAPTER I--REGULATORY ANALYSIS

``Sec.
``601.  Definitions.
``602.  Regulatory agenda.
``603.  Initial regulatory flexibility analysis.
``604.  Final regulatory flexibility analysis.
``605.  Avoidance of duplicative or unnecessary analyses.
``606.  Effect on other law.
``607.  Preparation of analyses.
``608.  Procedure for waiver or delay of completion.
``609.  Procedures for gathering comments.
``610.  Periodic review of rules.
``611.  Judicial review.
``612.  Reports and intervention rights.
             ``SUBCHAPTER II--ANALYSIS OF AGENCY PROPOSALS

``621.  Definitions.
``622.  Rulemaking cost-benefit analysis.
``623.  Decisional criteria.
``624.  Judicial review.
``625.  Petition for cost-benefit analysis.
``626.  Effective date of final regulations.
``627.  Unauthorized rulemakings.
``628.  Standard for review of agency interpretations of an enabling 
                            statute.
                   ``SUBCHAPTER III--RISK ASSESSMENTS

``631.  Definitions.
``632.  Applicability.
``633.  Rule of construction.
``634.  Requirement to prepare risk assessments.
``635.  Principles for risk assessment.
``636.  Principles for risk characterization and communication.
``637.  Regulations; plan for assessing new information.
``638.  Decisional criteria.
``639.  Regulatory priorities.
``640.  Establishment of program.
                  ``SUBCHAPTER IV--EXECUTIVE OVERSIGHT

``651.  Procedures.
``652.  Promulgation and adoption.
``653.  Delegation of authority.
``654.  Applicability.
``655.  Judicial review.''.
    (2) Chapter 6 of title 5, United States Code, is amended by 
inserting immediately before section 601, the following subchapter 
heading:

                 ``SUBCHAPTER I--REGULATORY ANALYSIS''.

                                 <all>
HR 821 IH----2
HR 821 IH----3
HR 821 IH----4
```