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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4863 Introduced in House (IH)]

105th CONGRESS
  2d Session
                                H. R. 4863

    To ensure the incorporation of risk assessment and cost benefit 
                  analysis in the rulemaking process.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 20, 1998

 Mr. Condit (for himself and Mr. John) introduced the following bill; 
 which was referred to the Committee on the Judiciary, and in addition 
to the Committee on Government Reform and Oversight, 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 ensure the incorporation of risk assessment and cost benefit 
                  analysis in the rulemaking process.

    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 ``Government Regulatory Improvement 
and Performance Act of 1998''.

SEC. 2. STATEMENT OF REGULATORY PHILOSOPHY AND PRINCIPLES.

    (a) The Regulatory Philosophy.--Federal agencies (in this Act 
referred to as ``agencies'') should promulgate only such regulations as 
are required by law, are necessary to interpret the law, or are 
necessary to protect and promote or improve the health and safety of 
the public, the environment, or the well-being of the American people. 
In deciding whether and how to regulate, agencies should assess all 
costs and benefits of available regulatory alternatives, including the 
alternative of not regulating. Costs and benefits shall be understood 
to include both quantifiable measures (to the fullest extent that these 
can be usefully estimated) and qualitative measures of costs and 
benefits that are difficult to quantify, but nevertheless essential to 
consider. Further, in choosing among alternative regulatory approaches, 
agencies should select those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages, distributive impacts, and equity), unless a 
statute requires another regulatory approach.
    (b) The Principles of Regulation.--To ensure that the agencies' 
regulatory programs are consistent with the philosophy set out in 
subsection (a), agencies shall adhere to the following principles in 
promulgating any regulation, to the extent permitted by law and where 
applicable:
            (1) Each agency shall identify the problem that it intends 
        to address by the regulation (including, where applicable, the 
        failures of private markets or public institutions that warrant 
        new agency action), assess the significance of that problem, 
        and if possible conduct a risk analysis regarding the 
        regulation.
            (2) Each agency shall examine whether existing regulations 
        (or other law) have created, or contributed to, the problem 
        that a new regulation is intended to correct and whether those 
        regulations (or other law) should be modified to achieve the 
        intended goal of regulation more effectively.
            (3) Each agency shall identify and assess available 
        alternatives to direct regulation, including providing economic 
        incentives to encourage the desired behavior, such as user fees 
        or marketable permits or providing information upon which 
        choices can be made by the public.
            (4) In setting regulatory priorities, each agency shall 
        consider, to the extent permitted by law, the degree and nature 
        of the risks posed by various substances or activities within 
        its jurisdiction.
            (5) When an agency determines that a regulation is 
        necessary, it shall design its regulations in the most cost-
        effective manner to achieve the regulatory objective. In doing 
        so, each agency shall consider incentives for innovation, 
        consistency, predictability, the costs of enforcement and 
        compliance (to the government, regulated entities, and the 
        public), flexibility, distributive impacts, and equity.
            (6) Each agency shall assess both the costs and the 
        benefits of the intended regulation and, recognizing that some 
        costs and benefits are difficult to quantify, propose or adopt 
        a regulation only upon a reasoned determination that the 
        benefits of the intended regulation justify its costs.
            (7) Each agency shall base its decisions on the best 
        reasonably obtainable scientific, technical, economic, and 
        other information concerning the need for, and consequences of, 
        the intended regulation.
            (8) Each agency shall identify and assess alternative forms 
        of regulation and shall, to the extent feasible, specify 
        performance objectives, rather than specifying the behavior or 
        manner of compliance that regulated entities must adopt.
            (9) Wherever feasible, agencies shall seek views of 
        appropriate State, local, and tribal officials before imposing 
        regulatory requirements that might significantly or uniquely 
        affect those governmental entities. Each agency shall assess 
        the effects of Federal regulations on State, local, and tribal 
        governments, including specifically the availability of 
        resources to carry out those mandates, and seek to minimize 
        those burdens that uniquely or significantly affect such 
        governmental entities, consistent with achieving regulatory 
        objectives. In addition, as appropriate, agencies shall seek to 
        harmonize Federal regulatory actions with related State, local, 
        and tribal regulatory and other governmental functions.
            (10) Each agency shall avoid regulations that are 
        inconsistent, incompatible, or duplicative with its other 
        regulations or those of other Federal agencies.
            (11) Each agency shall tailor its regulations to impose the 
        least burden on society, including individuals, businesses of 
        differing sizes, and other entities (including small 
        communities and governmental entities), consistent with 
        obtaining the regulatory objectives, taking into account, among 
        other things, and to the extent practicable, the costs of 
        cumulative regulations.
            (12) Each agency shall draft its regulations to be simple 
        and easy to understand, with the goal of minimizing the 
        potential for uncertainty and litigation arising from such 
        uncertainty.

SEC. 3. ORGANIZATION.

    (a) The Agencies.--Because Federal agencies are the repositories of 
significant substantive expertise and experience, they are responsible 
for developing regulations and assuring that the regulations are 
consistent with applicable law, the President's priorities, and the 
principles set forth in this Act.
    (b) The Office of Management and Budget.--Coordinated review of 
agency rulemaking is necessary to ensure that regulations are 
consistent with applicable law, the President's priorities, and the 
principles set forth in this Act, and that decisions made by one agency 
do not conflict with the policies or actions taken or planned by 
another agency. The Office of Management and Budget (in this Act 
referred to as ``OMB'') shall carry out that review function. Within 
OMB, the Office of Information and Regulatory Affairs (in this Act 
referred as as ``OIRA'') is the repository of expertise concerning 
regulatory issues, including methodologies and procedures that affect 
more than one agency, this Act, and the President's regulatory 
policies. To the extent permitted by law, OMB shall provide guidance to 
agencies and assist the President, the Administrator of OIRA, and other 
regulatory policy advisers to the President in regulatory planning and 
shall be the entity that reviews individual regulations, as provided by 
this Act.
    (c) The Administrator of OIRA.--The Administrator of OIRA shall 
coordinate the development and presentation of recommendations 
concerning, regulatory policy, planning, and review, as set forth in 
this Act. In fulfilling their responsibilities under this Act, the 
President and the Administrator of OIRA shall be assisted by the 
regulatory policy advisers within the Executive Office of the President 
and by such agency officials and personnel as the President and the 
Administrator of OIRA may, from time to time, consult.

SEC. 4. PLANNING MECHANISM.

    (a) Agencies' Policy Meeting.--Early in each year's planning cycle, 
the Administrator of OIRA shall convene a meeting of the Advisers and 
the heads of agencies to seek a common understanding of priorities and 
to coordinate regulatory efforts to be accomplished in the upcoming 
year.
    (b) Unified Regulatory Agenda.-- Each agency shall prepare an 
agenda of all regulations under development or review, at a time and in 
a manner specified by the Administrator of OIRA. The description of 
each regulatory action shall contain, at a minimum, a regulation 
identifier number, a brief summary of the action, the legal authority 
for the action, any legal deadline for the action, and the name and 
telephone number of a knowledgeable agency official. Agencies may 
incorporate the information required under section 602 of title 5, 
United States Code, into these agendas.
    (c) The Regulatory Plan.--
            (1) As part of the Unified Regulatory Agenda, beginning in 
        1994, each agency shall prepare a Regulatory Plan (in this Act 
        referred to as a ``Plan'') of the most important significant 
        regulatory actions that the agency reasonably expects to issue 
        in proposed or final form in that fiscal year or thereafter. 
        The Plan shall be approved personally by the agency head and 
        shall contain at a minimum--
                    (A) a statement of the agency's regulatory 
                objectives and priorities and how they relate to the 
                philosophy and principles set forth in sections 2(a) 
                and 2(b), respectively;
                    (B) a summary of each planned significant 
                regulatory action including, to the extent possible, 
                alternatives to be considered and preliminary estimates 
                of the anticipated costs and benefits;
                    (C) a summary of the legal basis for each such 
                action, including whether any aspect of the action is 
                required by statute or court order;
                    (D) a statement of the need for each such action 
                and, if applicable, how the action will reduce risks to 
                public health, safety, or the environment, as well as 
                how the magnitude of the risk addressed by the action 
                relates to other risks within the jurisdiction of the 
                agency;
                    (E) the agency's schedule for action, including a 
                statement of any applicable statutory or judicial 
                deadlines; and
                    (F) the name, address, and telephone number of a 
                person the public may contact for additional 
                information about the planned regulatory action.
            (3) The Plans developed by the issuing agency shall be 
        published annually in the October publication of the Unified 
        Regulatory Agenda. This publication shall be made available to 
        the Congress; State, local, and tribal governments; and the 
        public. Any views on any aspect of any agency Plan, including 
        whether any planned regulatory action might conflict with any 
        other planned or existing regulation, impose any unintended 
        consequences on the public, or confer any unclaimed benefits on 
        the public, should be directed to the issuing agency, with a 
        copy to OIRA.
    (d) Regulatory Working Group.--Within 30 days after the date of the 
enactment of this Act, the Administrator of OIRA shall convene a 
Regulatory Working Group (``Working Group''), which shall consist of 
representatives of the heads of each agency that the Administrator 
determines to have significant domestic regulatory responsibility and 
the Advisers. The Administrator of OIRA shall chair the Working Group 
and shall periodically advise the President and the Congress on the 
activities of the Working Group. The Working Group shall serve as a 
forum to assist agencies in identifying and analyzing important 
regulatory issues (including, among others (1) the development of 
innovative regulatory techniques, (2) the methods, efficacy, and 
utility of comparative risk assessment in regulatory decision-making, 
and (3) the development of short forms and other streamlined regulatory 
approaches for small businesses and other entities). The Working Group 
shall meet at least quarterly and may meet as a whole or in subgroups 
of agencies with an interest in particular issues or subject areas. To 
inform its discussions, the Working Group may commission analytical 
studies and reports by OIRA, the Administrative Conference of the 
United States, or any other agency.
    (e) Conferences.--The Administrator of OIRA and the heads of 
agencies shall meet quarterly with representatives of State, local, and 
tribal governments to identify both existing and proposed regulations 
that may uniquely or significantly affect those governmental entities. 
The Administrator of OIRA shall also convene, periodically conferences 
with representatives of businesses, nongovernmental organizations, and 
the public to discuss regulatory issues of common concern.
    (f) Definition.--For purposes of this section, the term ``agency'' 
includes independent regulatory agencies, as defined in section 
3502(10) of title 44 United States Code.

SEC. 5. EXISTING REGULATIONS.

    (a) Objectives.--The objectives of this section are to reduce the 
regulatory burden on the American people, their families, their 
communities, their State, local, and tribal governments, and their 
industries, to determine whether regulations promulgated by the 
executive branch of the Federal Government have become unjustified or 
unnecessary as a result of changed circumstances, to confirm that 
regulations are both compatible with each other and not duplicative or 
inappropriately burdensome in the aggregate, to ensure that all 
regulations are consistent with the President's priorities and the 
principles set forth in this Act, within applicable law, and to 
otherwise improve the effectiveness of existing regulations.
    (b) Program for Review.--Within 90 days after the date of the 
enactment of this Act, each agency shall submit to OIRA a program, 
consistent with its resources and regulatory priorities, under which 
the agency will periodically review its existing significant 
regulations to determine whether any such regulations should be 
modified or eliminated so as to make the agency's regulatory program 
more effective in achieving the regulatory objectives, less burdensome, 
or in greater alignment with the President's priorities and the 
principles set forth in this Act. Any significant regulations selected 
for review shall be included in the agency's annual Plan. The agency 
shall also identify any legislative mandates that require the agency to 
promulgate or continue to impose regulations that the agency believes 
are unnecessary or outdated by reason of changed circumstances.
    (c) Function of Administrator of OIRA.--The Administrator of OIRA 
shall work with the Regulatory Working Group and other interested 
entities to pursue the objectives of this section. State, local, and 
tribal governments are specifically encouraged to assist in the 
identification of regulations that impose significant or unique burdens 
on those governmental entities, and that result in the compliance costs 
that are not funded by the Federal Government, appear to have outlived 
their justification, or are otherwise inconsistent with the public 
interest.
    (d) Other Regulations for Review.--The Administrator of OIRA, in 
consultation with the Advisers, may identify for review by the 
appropriate agency or agencies other existing regulations of an agency 
or groups of regulations of more than one agency that affect a 
particular group, industry, or sector of the economy, or may identify 
legislative mandates that may be appropriate for reconsideration by the 
Congress.

SEC. 6. CENTRALIZED REVIEW OF REGULATIONS.

    (a) Application.--The requirements set forth in this section shall 
apply to all regulatory actions (including both new and existing 
regulations) by agencies other than those agencies specifically 
exempted by the Administrator of OIRA.
    (b) Agency Responsibilities.--
            (1) Each agency shall (consistent with its own rules, 
        regulations, or procedures) provide the public with meaningful 
        participation in the regulatory process. In particular, before 
        issuing a notice of proposed rulemaking, each agency should, 
        where appropriate, seek the involvement of those who are 
        intended to benefit from and those expected to be burdened by 
        any regulation (including, specifically, State, local, and 
        tribal officials). In addition, each agency should afford the 
        public a meaningful opportunity to comment on any proposed 
        regulation, which in most cases should include a comment period 
        of not less than 60 days. Each agency also is directed to 
        explore and, where appropriate, use consensual mechanisms for 
        developing regulations, including negotiated rulemaking.
            (2) Within 60 days of the date of the enactment of this 
        Act, each agency head shall designate a Regulatory Policy 
        Officer who shall report to the agency head. The Regulatory 
        Policy Officer shall be involved at each stage of the 
        regulatory process to foster the development of effective, 
        innovative, and least burdensome regulations and to further the 
        principles set forth in this Act.
            (3) In addition to adhering to its own rules and procedures 
        and to the requirements of chapters 5, 6, and 7 of title 5, 
        United States Code, the Paperwork Reduction Act of 1980, and 
        other applicable law, each agency shall develop its regulatory 
        actions in a timely fashion and adhere to the following 
        procedures with respect to a regulatory action:
                    (A) Each agency shall provide OIRA, at such times 
                and in the manner specified by the Administrator of 
OIRA, with a list of its planned regulatory actions, indicating those 
which the agency believes are significant regulatory actions within the 
meaning of this Act. Absent a material change in the development of the 
planned regulatory action, those not designated as significant will not 
be subject to review under this section unless, within 10 working days 
of receipt of the list, the Administrator of OIRA notifies the agency 
that OIRA has determined that a planned regulation is a significant 
regulatory action within the meaning of this Act. The Administrator of 
OIRA may waive review of any planned regulatory action designated by 
the agency as significant, in which case the agency need not further 
comply with subparagraph (B) or (C).
                    (B) For each matter identified as, or determined by 
                the Administrator of OIRA to be, a significant 
                regulatory action, the issuing agency shall provide to 
                OIRA--
                            (i) the text of the draft regulatory 
                        action, together with a reasonably detailed 
                        description of the need for the regulatory 
                        action and an explanation of how the regulatory 
                        action will meet that need; and
                            (ii) an assessment of the potential costs 
                        and benefits of the regulatory action, 
                        including an explanation of the manner in which 
                        the regulatory action is consistent with a 
                        statutory mandate and, to the extent permitted 
                        by law, promotes the philosophy and principles 
                        set forth in sections 2(a) and 2(b), 
                        respectively, and avoids undue interference 
                        with State, local, and tribal governments in 
                        the exercise of their governmental functions.
                    (C) For those actions identified as, or determined 
                by the Administrator of OIRA to be, a significant 
                regulatory action, the agency shall conduct an analysis 
                that includes the following:
                            (i) An assessment, including the underlying 
                        analysis, of benefits anticipated from the 
                        regulatory action (including the promotion of 
                        the efficient functioning of the economy and 
                        private markets, the enhancement of health and 
                        safety, the protection of the natural 
                        environment, and the elimination or reduction 
                        of discrimination or bias) together with, to 
                        the extent feasible, a quantification of those 
                        benefits.
                            (ii) An assessment, including the 
                        underlying analysis, of costs anticipated from 
                        the regulatory action (including the direct 
                        cost to the Federal Government and State and 
                        local governments in administering the 
                        regulation and to businesses and others in 
                        complying with the regulation, and any adverse 
                        effects on the efficient functioning of the 
                        economy, private markets (including 
                        productivity, employment, and competitiveness), 
                        health, safety, and the natural environment), 
                        together with, to the extent feasible, a 
                        quantification of those costs.
                            (iii) An assessment, including the 
                        underlying analysis, comparing costs and 
                        benefits of potentially effective and 
                        reasonably feasible alternatives to the planned 
                        regulation and to the extent feasible a 
                        quantitative comparison of costs and benefits 
                        (including improving the current regulation and 
                        reasonably viable nonregulatory actions), and 
                        an explanation why the planned regulatory 
                        action is preferable to the identified 
                        potential alternatives.
                    (D) In emergency situations or when an agency is 
                obligated by law to act more quickly than normal review 
                procedures allow, the agency shall notify OIRA as soon 
                as possible and, to the extent practicable, comply with 
                subparagraphs (B) and (C). For those regulatory actions 
                that are governed by a statutory or court-imposed 
                deadline, the agency shall, to the extent practicable, 
                schedule rulemaking proceedings so as to permit 
                sufficient time for OIRA to conduct its review, as set 
                forth in subsection (c)(2) through (4).
                    (E) After the regulatory action has been published 
                in the Federal Register or otherwise issued to the 
                public, the agency shall--
                            (i) make available to the public the 
                        information set forth in subparagraphs (B) and 
                        (C);
                            (ii) identify for the public, in a 
                        complete, clear, and simple manner, the 
                        substantive changes between the draft submitted 
                        to OIRA for review and the action subsequently 
                        announced; and
                            (iii) identify for the public those changes 
                        in the regulatory action that were made at the 
                        suggestion or recommendation of OIRA.
                    (F) All information provided to the public by the 
                agency shall be in plain, understandable language.
    (c) OIRA Responsibilities.--The Administrator of OIRA shall provide 
meaningful guidance and oversight so that each agency's regulatory 
actions are consistent with applicable law and the philosophy and 
principles set forth in sections 2(a) and 2(b) and do not conflict with 
the policies or actions of another agency. OIRA shall, to the extent 
permitted by law, adhere to the following guidelines:
            (1) OIRA may review only actions identified by the agency 
        or by OIRA as significant regulatory actions under subsection 
        (b)(3)(A).
            (2) OIRA shall waive review or notify the agency in writing 
        of the results of its review within the following time periods:
                    (A) For any notices of inquiry, advance notices of 
                proposed rulemaking, or other preliminary regulatory 
                actions prior to a notice of proposed rulemaking, 
                within 10 calendar days after the date of submission of 
                the draft action to OIRA.
                    (B) For all other regulatory actions, within 90 
                calendar days after the date of submission of the 
                information set forth in subparagraphs (B) and (C) of 
                this section, except that if OIRA has previously 
                reviewed this information and, since that review, there 
                has been no material change in the facts and 
                circumstances upon which the regulatory action is 
                based, OIRA shall complete its review within 45 days 
                after the date of submission of such information.
                    (C) The review process may be extended (i) once by 
                no more than 30 calendar days upon the written approval 
                of the Director, and (ii) at the request of the agency 
                head.
            (3) For each regulatory action that the Administrator of 
        OIRA returns to an agency for further consideration of some or 
        all of its provisions, the Administrator of OIRA shall provide 
        the issuing agency a written explanation for such return, 
        setting forth the pertinent provision of this Act on which OIRA 
        is relying. If the agency head disagrees with some or all of 
        the bases for the return, the agency head shall so inform the 
        Administrator of OIRA in writing.
            (4) Except as otherwise provided by law or required by a 
        court, in order to ensure greater openness, accessibility, and 
        accountability in the regulatory review process, OIRA shall be 
        governed by the following disclosure requirements:
                    (A) All substantive communications between OIRA 
                personnel and persons not employed by the executive 
                branch of the Federal Government regarding a regulatory 
                action under review shall be documented and governed by 
                the following requirements:
                            (i) A representative from the issuing 
                        agency shall be invited to any meeting between 
                        OIRA personnel and such persons.
                            (ii) OIRA shall forward to the issuing 
                        agency, within 10 working days of receipt of 
                        the communications, all written communications, 
                        regardless of format, between OIRA personnel 
                        and any person who is not employed by the 
                        executive branch of the Federal Government, and 
                        the dates and names of individuals involved in 
                        all substantive oral communications (including 
                        meetings to which an agency representative was 
                        invited, but did not attend, and telephone 
                        conversations between OIRA personnel and any 
                        such persons).
                            (iii) OIRA shall publicly disclose relevant 
                        information about such communications, as set 
                        forth in subparagraph (B).
                    (B) OIRA shall maintain a publicly available log 
                that shall contain, at a minimum, the following 
                information pertinent to regulatory actions under 
                review:
                            (i) The status of all regulatory actions, 
                        including if (and if so, when and by whom) Vice 
                        Presidential and Presidential consideration was 
                        requested.
                            (ii) A notation of all written 
                        communications forwarded to an issuing agency 
                        under subparagraph (A)(ii).
                            (iii) The dates and names of individuals 
                        involved in all substantive oral 
                        communications, including meetings and 
                        telephone conversations, between OIRA personnel 
                        and any person not employed by the executive 
                        branch of the Federal Government, and the 
                        subject matter discussed during such 
                        communications.
                    (C) After the regulatory action has been published 
                in the Federal Register or otherwise issued to the 
                public, or after the agency has announced its decision 
                not to publish or issue the regulatory action, OIRA 
                shall make available to the public all documents 
                exchanged between OIRA and the agency during the review 
                by OIRA under this section.
            (5) All information provided to the public by OIRA shall be 
        in plain, understandable language.

SEC. 7. RESOLUTION OF CONFLICTS.

    To the extent permitted by law, disagreements or conflicts between 
or among agency heads or between OMB and any agency that cannot be 
resolved by the Administrator of OIRA shall be resolved by the 
President or a designee of the President.

SEC. 8. PUBLICATION.

    Except to the extent required by law, an agency shall not publish 
in the Federal Register or otherwise issue to the public any regulatory 
action that is subject to review under section 6 until--
            (1) the Administrator of OIRA notifies the agency that OIRA 
        has waived its review of the action or has completed its review 
        without any requests for further consideration, or
            (2) the applicable time period in section 6(b)(2) expires 
        without OIRA having notified the agency that it is returning 
        the regulatory action for further consideration under section 
        6(b)(3),
whichever occurs first. If the terms of the preceding sentence have not 
been satisfied and an agency wants to publish or otherwise issue a 
regulatory action, the head of that agency may request Presidential 
consideration through the Administrator of OIRA, as provided under 
section 8. Upon receipt of this request, the Administrator of OIRA 
shall notify the Advisers. The guidelines and time period set forth in 
section 8 shall apply to the publication of regulatory actions for 
which Presidential consideration has been sought.

SEC. 9. AGENCY AUTHORITY.

    Nothing in this Act shall be construed as displacing the agencies' 
authority or responsibilities, as authorized by law.

SEC. 10. JUDICIAL REVIEW.

    Nothing in this Act shall affect any otherwise available judicial 
review of agency action. This Act is intended only to improve the 
internal management of the Federal Government and does not create any 
right or benefit, substantive or procedural, enforceable at law or 
equity by a party against the United States, its agencies or 
instrumentalities, its officers or employees, or any other person.

SEC. 11. DEFINITIONS.

    For purposes of this Act:
            (1) The term ``Advisers'' refers to such regulatory policy 
        advisers to the President as the President and the 
        Administrator of OIRA may from time to time consult, including, 
        among others--
                    (A) the Director of OMB;
                    (B) the Chair (or another member) of the Council of 
                Economic Advisers;
                    (C) the Assistant to the President for Economic 
                Policy;
                    (D) the Assistant to the President for Domestic 
                Policy;
                    (E) the Assistant to the President for National 
                Security Affairs;
                    (F) the Assistant to the President for Science and 
                Technology;
                    (G) the Assistant to the President for 
                Intergovernmental Affairs;
                    (H) the Assistant to the President and Staff 
                Secretary;
                    (I) the Assistant to the President and Chief of 
                Staff to the Administrator of OIRA;
                    (J) the Assistant to the President and Counsel to 
                the President; and
                    (K) the Deputy Assistant to the President and 
                Director of the White House Office on Environmental 
                Policy.
            (2) Except as provided in section 4(f), the term ``agency'' 
        means any authority of the United States that is an ``agency'' 
        under section 3502(1) of title 44, United States Code, other 
        than those considered to be independent regulatory agencies, as 
        defined in section 3502(10) of title 44, United States Code.
            (3) The term ``Director'' means the Director of OMB.
            (4) The term ``regulation'' or ``rule'' means an agency 
        statement of general applicability and future effect, which the 
        agency intends to have the force and effect of law, that is 
        designed to implement, interpret, or prescribe law or policy or 
        to describe the procedure or practice requirements of an 
        agency. It does not, however, include--
                    (A) regulations or rules issued in accordance with 
                the formal rulemaking provisions of sections 556 and 
                557 of title 5, United States Code;
                    (B) regulations or rules that pertain to a military 
                or foreign affairs function of the United States, other 
                than procurement regulations and regulations involving 
                the import or export of non-defense articles and 
                services;
                    (C) regulations or rules that are limited to agency 
                organization, management, or personnel matters; or
                    (D) any other category of regulations exempted by 
                the Administrator of OIRA.
            (5) The term ``regulatory action'' means any substantive 
        action by an agency (normally published in the Federal 
        Register) that promulgates or is expected to lead to the 
        promulgation of a final rule or regulation, including notices 
        of inquiry, advance notices of proposed rulemaking, and notices 
        of proposed rulemaking.
            (6) The term ``significant regulatory action'' means any 
        regulatory action that is likely to result in a rule that may--
                    (A) have an annual effect on the economy of $100 
                million or more or adversely affect in a material way 
                the economy, a sector of the economy, productivity, 
                competition, jobs, the environment, public health or 
                safety, or State, local, or tribal governments or 
                communities;
                    (B) create a serious inconsistency or otherwise 
                interfere with an action taken or planned by another 
                agency;
                    (C) materially alter the budgetary impact of 
                entitlements, grants, user fees, or loan programs or 
                the rights and obligations of recipients thereof; or
                    (D) raise novel legal or policy issues arising out 
                of legal mandates, the President's priorities, or the 
                principles set forth in this Act.
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