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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3010 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 3010

 To reform the process by which Federal agencies analyze and formulate 
                new regulations and guidance documents.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 22, 2011

     Mr. Smith of Texas (for himself, Mr. Coble, and Mr. Peterson) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL

 
 To reform the process by which Federal agencies analyze and formulate 
                new regulations and guidance documents.

    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 ``Regulatory Accountability Act of 
2011''.

SEC. 2. DEFINITIONS.

    Section 551 of title 5, United States Code, is amended--
            (1) in paragraph (13), by striking ``and'' at the end;
            (2) in paragraph (14), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
            ``(15) `major rule' means any rule that the Administrator 
        of the Office of Information and Regulatory Affairs determines 
        is likely to impose--
                    ``(A) an annual cost on the economy of $100,000,000 
                or more, adjusted annually for inflation;
                    ``(B) a major increase in costs or prices for 
                consumers, individual industries, Federal, State, 
                local, or tribal government agencies, or geographic 
                regions;
                    ``(C) significant adverse effects on competition, 
                employment, investment, productivity, innovation, or on 
                the ability of United States-based enterprises to 
                compete with foreign-based enterprises in domestic and 
                export markets; or
                    ``(D) significant costs on multiple sectors of the 
                economy;
            ``(16) `high-impact rule' means any rule that the 
        Administrator of the Office of Information and Regulatory 
        Affairs determines is likely to impose an annual cost on the 
        economy of $1,000,000,000 or more, adjusted annually for 
        inflation;
            ``(17) `guidance' means an agency statement of general 
        applicability and future effect, other than a regulatory 
        action, that sets forth a policy on a statutory, regulatory or 
        technical issue or an interpretation of a statutory or 
        regulatory issue;
            ``(18) `major guidance' means guidance that the 
        Administrator of the Office of Information and Regulatory 
        Affairs finds is likely to lead to--
                    ``(A) an annual cost on the economy of $100,000,000 
                or more, adjusted annually for inflation;
                    ``(B) a major increase in costs or prices for 
                consumers, individual industries, Federal, State, local 
                or tribal government agencies, or geographic regions;
                    ``(C) significant adverse effects on competition, 
                employment, investment, productivity, innovation, or on 
                the ability of United States-based enterprises to 
                compete with foreign-based enterprises in domestic and 
                export markets; or
                    ``(D) significant costs for multiple sectors of the 
                economy;
            ``(19) the `Information Quality Act' means section 515 of 
        Public Law 106-554, the Treasury and General Government 
        Appropriations Act for Fiscal Year 2001, and guidelines issued 
        by the Administrator of the Office of Information and 
        Regulatory Affairs or other agencies pursuant to the Act; and
            ``(20) the `Office of Information and Regulatory Affairs' 
        means the office established under section 3503 of chapter 35 
        of title 44 and any successor to that office.''.

SEC. 3. RULEMAKING.

    (a) Section 553(a) of title 5, United States Code, is amended by 
striking ``(a) This section applies'' and inserting ``(a) 
Applicability.--This section applies''.
    (b) Section 553 of title 5, United States Code, is amended by 
striking subsections (b) through (e) and inserting the following:
    ``(b) Rule Making Considerations.--In a rule making, an agency 
shall make all preliminary and final determinations based on evidence 
and consider, in addition to other applicable considerations, the 
following:
            ``(1) The legal authority under which a rule may be 
        proposed, including whether a rule making is required by 
        statute, and if so, whether by a specific date, or whether the 
        agency has discretion to commence a rule making.
            ``(2) Other statutory considerations applicable to whether 
        the agency can or should propose a rule or undertake other 
        agency action.
            ``(3) The specific nature and significance of the problem 
        the agency may address with a rule (including the degree and 
        nature of risks the problem poses and the priority of 
        addressing those risks compared to other matters or activities 
        within the agency's jurisdiction), whether the problem warrants 
        new agency action, and the countervailing risks that may be 
        posed by alternatives for new agency action.
            ``(4) Whether existing rules have created or contributed to 
        the problem the agency may address with a rule and whether 
        those rules could be amended or rescinded to address the 
        problem in whole or part.
            ``(5) Any reasonable alternatives for a new rule or other 
        response identified by the agency or interested persons, 
        including not only responses that mandate particular conduct or 
        manners of compliance, but also--
                    ``(A) the alternative of no Federal response;
                    ``(B) amending or rescinding existing rules;
                    ``(C) potential regional, State, local, or tribal 
                regulatory action or other responses that could be 
                taken in lieu of agency action; and
                    ``(D) potential responses that--
                            ``(i) specify performance objectives rather 
                        than conduct or manners of compliance;
                            ``(ii) establish economic incentives to 
                        encourage desired behavior;
                            ``(iii) provide information upon which 
                        choices can be made by the public; or
                            ``(iv) incorporate other innovative 
                        alternatives rather than agency actions that 
                        specify conduct or manners of compliance.
            ``(6) Notwithstanding any other provision of law--
                    ``(A) the potential costs and benefits associated 
                with potential alternative rules and other responses 
                considered under section 553(b)(5), including direct, 
                indirect, and cumulative costs and benefits and 
                estimated impacts on jobs, economic growth, innovation, 
                and economic competitiveness;
                    ``(B) means to increase the cost-effectiveness of 
                any Federal response; and
                    ``(C) incentives for innovation, consistency, 
                predictability, lower costs of enforcement and 
                compliance (to government entities, regulated entities, 
                and the public), and flexibility.
    ``(c) Advance Notice of Proposed Rule Making for Major Rules and 
High-Impact Rules.--
            ``(1) In the case of a rule making for a major rule or 
        high-impact rule, not later than 90 days before a notice of 
        proposed rule making is published in the Federal Register, an 
        agency shall publish advance notice of proposed rule making in 
        the Federal Register. In publishing such advance notice, the 
        agency shall--
                    ``(A) include a written statement identifying, at a 
                minimum--
                            ``(i) the nature and significance of the 
                        problem the agency may address with a rule, 
                        including data and other evidence and 
                        information on which the agency expects to rely 
                        for the proposed rule;
                            ``(ii) the legal authority under which a 
                        rule may be proposed, including whether a rule 
                        making is required by statute, and if so, 
                        whether by a specific date, or whether the 
                        agency has discretion to commence a rule 
                        making; and
                            ``(iii) preliminary information available 
                        to the agency concerning the other 
                        considerations specified in subsection (b);
                    ``(B) solicit written data, views or argument from 
                interested persons concerning the information and 
                issues addressed in the advance notice; and
                    ``(C) provide for a period of not fewer than 60 
                days for interested persons to submit such written 
                data, views, or argument to the agency.
    ``(d) Notices of Proposed Rule Making; Determinations of Other 
Agency Course.--Following completion of procedures under subsection 
(c), if applicable, and consultation with the Administrator of the 
Office of Information and Regulatory Affairs, the agency shall publish 
either a notice of proposed rule making or a determination of other 
agency course, in accordance with the following:
            ``(1) A notice of proposed rule making shall include--
                    ``(A) a statement of the time, place, and nature of 
                public rule making proceedings;
                    ``(B) reference to the legal authority under which 
                the rule is proposed;
                    ``(C) the terms of the proposed rule;
                    ``(D) a description of information known to the 
                agency on the subject and issues of the proposed rule, 
                including but not limited to--
                            ``(i) a summary of information known to the 
                        agency concerning the considerations specified 
                        in subsection (b);
                            ``(ii) a summary of additional information 
                        the agency provided to and obtained from 
                        interested persons under subsection (c); and
                            ``(iii) information specifically 
                        identifying all data, studies, models, and 
                        other evidence or information considered or 
                        used by the agency in connection with its 
                        determination to propose the rule;
                    ``(E)(i) a reasoned preliminary determination of 
                need for the rule based on the information described 
                under subparagraph (D); and
                    ``(ii) an additional statement of whether a rule is 
                required by statute;
                    ``(F) a reasoned preliminary determination that the 
                benefits of the proposed rule meet the relevant 
                statutory objectives and justify the costs of the 
                proposed rule (including all costs to be considered 
                under subsection (b)(6)), based on the information 
                described under subparagraph (D);
                    ``(G) a discussion of--
                            ``(i) the alternatives to the proposed 
                        rule, and other alternative responses, 
                        considered by the agency under subsection (b);
                            ``(ii) the costs and benefits of those 
                        alternatives (including all costs to be 
                        considered under subsection (b)(6));
                            ``(iii) whether those alternatives meet 
                        relevant statutory objectives; and
                            ``(iv) why the agency did not propose any 
                        of those alternatives; and
                    ``(H)(i) a statement of whether existing rules have 
                created or contributed to the problem the agency seeks 
                to address with the proposed rule; and
                    ``(ii) if so, whether or not the agency proposes to 
                amend or rescind any such rules, and why.
                All information considered by the agency, and steps to 
                obtain information by the agency, in connection with 
                its determination to propose the rule, including all 
                information described by the agency under subparagraph 
                (D) and, at the discretion of the President or the 
                Administrator of the Office of Information and 
                Regulatory Affairs, information provided by that Office 
                in consultations with the agency, shall be placed in 
                the docket for the proposed rule and made accessible to 
                the public for the public's use when the notice of 
                proposed rule making is published.
            ``(2)(A) A notice of determination of other agency course 
        shall include a description of the alternative response the 
        agency determined to adopt.
            ``(B) If in its determination of other agency course the 
        agency makes a determination to amend or rescind an existing 
        rule, the agency need not undertake additional proceedings 
        under subsection (c) before it publishes a notice of proposed 
        rule making to amend or rescind the existing rule.
        All information considered by the agency, and steps to obtain 
        information by the agency, in connection with its determination 
        of other agency course, including but not limited to all 
        information that would be required to be described by the 
        agency under paragraph (1)(D) if the agency had determined to 
        publish a notice of proposed rule making and, at the discretion 
        of the President or the Administrator of the Office of 
        Information and Regulatory Affairs, information provided by 
        that Office in consultations with the agency, shall be placed 
        in the docket for the determination and made accessible to the 
        public for the public's use when the notice of determination is 
        published.
            ``(3) After notice of proposed rule making required by this 
        section, the agency shall provide interested persons an 
        opportunity to participate in the rule making through 
        submission of written data, views, or arguments with or without 
        opportunity for oral presentation, except that--
                    ``(A) if a hearing is required under paragraph 
                (4)(B) or subsection (e), opportunity for oral 
                presentation shall be provided pursuant to that 
                requirement; or
                    ``(B) when other than under subsection (e) of this 
                section rules are required by statute or at the 
                discretion of the agency to be made on the record after 
                opportunity for an agency hearing, sections 556 and 557 
                shall apply, and paragraph (4), requirements of 
                subsection (e) to receive comment outside of the 
                procedures of sections 556 and 557, and the petition 
                procedures of subsection (e)(6) shall not apply.
        The agency shall provide not fewer than 90 days for interested 
        persons to submit written data, views, or argument (or 120 days 
        in the case of a proposed major or high-impact rule).
            ``(4)(A) Within 30 days of publication of notice of 
        proposed rulemaking, a member of the public may petition for a 
        hearing in accordance with section 556 to determine whether any 
        evidence or other information upon which the agency bases the 
        proposed rule fails to comply with of the Information Quality 
        Act.
            ``(B)(i) The agency may, upon review of the petition, 
        determine without further process to exclude from the rule 
        making the evidence or other information that is the subject of 
        the petition and, if appropriate, withdraw the proposed rule. 
        The agency shall promptly publish any such determination.
            ``(ii) If the agency does not resolve the petition under 
        the procedures of clause (i), it shall grant any such petition 
        that presents a prima facie case that evidence or other 
        information upon which the agency bases the proposed rule fails 
        to comply with the Information Quality Act, hold the requested 
        hearing not later than 30 days after receipt of the petition, 
        provide a reasonable opportunity for cross-examination at the 
        hearing, and decide the issues presented by the petition not 
        later than 60 days after receipt of the petition. The agency 
        may deny any petition that it determines does not present such 
        a prima facie case.
            ``(C) There shall be no judicial review of the agency's 
        disposition of issues considered and decided or determined 
        under subparagraph (B)(ii) until judicial review of the 
        agency's final action. There shall be no judicial review of an 
        agency's determination to withdraw a proposed rule under 
        subparagraph (B)(i).
            ``(D) Failure to petition for a hearing under this 
        paragraph shall not preclude judicial review of any claim based 
        on the Information Quality Act under chapter 7 of this title.
    ``(e) Hearings for High-Impact Rules.--Following notice of a 
proposed rule making, receipt of comments on the proposed rule, and any 
hearing held under subsection (d)(4), and before adoption of any high-
impact rule, the agency shall hold a hearing in accordance with 
sections 556 and 557, unless such hearing is waived by all participants 
in the rulemaking other than the agency. The agency shall provide a 
reasonable opportunity for cross-examination at such hearing. The 
hearing shall be limited to the following issues of fact, except that 
participants at the hearing other than the agency may waive 
determination of any such issue:
            ``(1) Whether the agency's asserted factual predicate for 
        the rule is supported by the evidence.
            ``(2) Whether there is an alternative to the proposed rule 
        that would achieve the relevant statutory objectives at a lower 
        cost (including all costs to be considered under subsection 
        (b)(6)) than the proposed rule.
            ``(3) If there is more than one alternative to the proposed 
        rule that would achieve the relevant statutory objectives at a 
        lower cost than the proposed rule, which alternative would 
        achieve the relevant statutory objectives at the lowest cost.
            ``(4) Whether, if the agency proposes to adopt a rule that 
        is more costly than the least costly alternative that would 
        achieve the relevant statutory objectives (including all costs 
        to be considered under subsection (b)(6)), the additional 
        benefits of the more costly rule exceed the additional costs of 
        the more costly rule.
            ``(5) Whether the evidence and other information upon which 
        the agency bases the proposed rule meets the requirements of 
        the Information Quality Act.
            ``(6) Upon petition by an interested person who has 
        participated in the rulemaking, other issues relevant to the 
        rule making, unless the agency determines that consideration of 
        the issues at the hearing would not advance consideration of 
        the rule or would, in light of the nature of the need for 
        agency action, unreasonably delay completion of the rule 
        making. An agency shall grant or deny a petition under this 
        paragraph within 30 days of its receipt of the petition.
No later than 45 days before any hearing held under this subsection or 
sections 556 and 557, the agency shall publish in the Federal Register 
a notice specifying the proposed rule to be considered at such hearing, 
the issues to be considered at the hearing, and the time and place for 
such hearing, except that such notice may be issued not later than 15 
days before a hearing held under subsection (d)(4)(B).
    ``(f) Final Rules.--(1) The agency shall adopt a rule only 
following consultation with the Administrator of the Office of 
Information and Regulatory Affairs to facilitate compliance with 
applicable rule making requirements.
    ``(2) The agency shall adopt a rule only on the basis of the best 
reasonably obtainable scientific, technical, economic, and other 
evidence and information concerning the need for, consequences of, and 
alternatives to the rule.
    ``(3)(A) Except as provided in subparagraph (B), the agency shall 
adopt the least costly rule considered during the rule making 
(including all costs to be considered under subsection (b)(6)) that 
meets relevant statutory objectives.
    ``(B) The agency may adopt a rule that is more costly than the 
least costly alternative that would achieve the relevant statutory 
objectives only if the additional benefits of the more costly rule 
justify its additional costs and only if the agency explains its reason 
for doing so based on interests of public health, safety or welfare 
that are clearly within the scope of the statutory provision 
authorizing the rule.
    ``(4) When it adopts a final rule, the agency shall publish a 
notice of final rule making. The notice shall include--
            ``(A) a concise, general statement of the rule's basis and 
        purpose;
            ``(B) the agency's reasoned final determination of need for 
        a rule to address the problem the agency seeks to address with 
        the rule, including a statement of whether a rule is required 
        by statute;
            ``(C) the agency's reasoned final determination that the 
        benefits of the rule meet the relevant statutory objectives and 
        justify the rule's costs (including all costs to be considered 
        under subsection (b)(6));
            ``(D) the agency's reasoned final determination not to 
        adopt any of the alternatives to the proposed rule considered 
        by the agency during the rule making, including--
                    ``(i) the agency's reasoned final determination 
                that no alternative considered achieved the relevant 
                statutory objectives with lower costs (including all 
                costs to be considered under subsection (b)(6)) than 
                the rule; or
                    ``(ii) the agency's reasoned determination that its 
                adoption of a more costly rule complies with subsection 
                (f)(3)(B);
            ``(E) the agency's reasoned final determination--
                    ``(i) that existing rules have not created or 
                contributed to the problem the agency seeks to address 
                with the rule; or
                    ``(ii) that existing rules have created or 
                contributed to the problem the agency seeks to address 
                with the rule, and, if so--
                            ``(I) why amendment or rescission of such 
                        existing rules is not alone sufficient to 
                        respond to the problem; and
                            ``(II) whether and how the agency intends 
                        to amend or rescind the existing rule separate 
                        from adoption of the rule;
            ``(F) the agency's reasoned final determination that the 
        evidence and other information upon which the agency bases the 
        rule complies with the Information Quality Act; and
            ``(G)(i) for any major rule or high-impact rule, the 
        agency's plan for review of the rule no less than every ten 
        years to determine whether, based upon evidence, there remains 
        a need for the rule, whether the rule is in fact achieving 
        statutory objectives, whether the rule's benefits continue to 
        justify its costs, and whether the rule can be modified or 
        rescinded to reduce costs while continuing to achieve statutory 
        objectives;
            ``(ii) review of a rule under a plan required by clause (i) 
        of this subparagraph shall take into account the factors and 
        criteria set forth in subsections (b) through (f) of section 
        553 of this title.
        All information considered by the agency in connection with its 
        adoption of the rule, and, at the discretion of the President 
        or the Administrator of the Office of Information and 
        Regulatory Affairs, information provided by that Office in 
        consultations with the agency, shall be placed in the docket 
        for the rule and made accessible to the public for the public's 
        use no later than when the rule is adopted.
    ``(g) Exceptions From Notice and Hearing Requirements.--(1) Except 
when notice or hearing is required by statute, subsections (c) through 
(e) of this section do not apply to interpretive rules, general 
statements of policy, or rules of agency organization, procedure, or 
practice.
    ``(2)(A) When the agency for good cause, based upon evidence, finds 
(and incorporates the finding and a brief statement of reasons therefor 
in the rules issued) that compliance with subsection (c), (d), or (e) 
or requirements to render final determinations under subsection (f) of 
this section before the issuance of an interim rule is impracticable or 
contrary to the public interest, including interests of national 
security, such subsections or requirements to render final 
determinations shall not apply to the agency's adoption of an interim 
rule.
    ``(B) If, following compliance with subparagraph (A) of this 
paragraph, the agency adopts an interim rule, it shall commence 
proceedings that comply fully with subsections (c) through (f) of this 
section immediately upon publication of the interim rule. No less than 
270 days from publication of the interim rule (or 18 months in the case 
of a major rule or high-impact rule), the agency shall complete rule 
making under subsections (c) through (f) of this subsection and take 
final action to adopt a final rule or rescind the interim rule. If the 
agency fails to take timely final action, the interim rule will cease 
to have the effect of law.
    ``(C) Other than in cases involving interests of national security, 
upon the agency's publication of an interim rule without compliance 
with subsections (c), (d), or (e) or requirements to render final 
determinations under subsection (f) of this section, an interested 
party may seek immediate judicial review under chapter 7 of this title 
of the agency's determination to adopt such interim rule. The record on 
such review shall include all documents and information considered by 
the agency and any additional information presented by a party that the 
court determines necessary to consider to assure justice.
    ``(h) Additional Requirements for Hearings.--When a hearing is 
required under subsection (e) or is otherwise required by statute or at 
the agency's discretion before adoption of a rule, the agency shall 
comply with the requirements of sections 556 and 557 in addition to the 
requirements of subsection (f) in adopting the rule and in providing 
notice of the rule's adoption.
    ``(i) Date of Publication of Rule.--The required publication or 
service of a substantive final or interim rule shall be made not less 
than 30 days before the effective date of the rule, except--
            ``(1) a substantive rule which grants or recognizes an 
        exemption or relieves a restriction;
            ``(2) interpretive rules and statements of policy; or
            ``(3) as otherwise provided by the agency for good cause 
        found and published with the rule.
    ``(j) Right To Petition.--Each agency shall give an interested 
person the right to petition for the issuance, amendment, or repeal of 
a rule.
    ``(k) Rule Making Guidelines.--(1)(A) The Administrator of the 
Office of Information and Regulatory Affairs shall have authority to 
establish guidelines for the assessment, including quantitative and 
qualitative assessment, of the costs and benefits of potential, 
proposed, and final rules and other economic issues or issues related 
to risk that are relevant to rule making under this section and other 
sections of this title. The rigor of cost-benefit analysis required by 
such guidelines shall be commensurate, in the Administrator's 
determination, with the economic impact of the rule.
    ``(B) To ensure that agencies use the best available techniques to 
quantify and evaluate anticipated present and future benefits, costs, 
other economic issues, and risks as accurately as possible, the 
Administrator of the Office of Information and Regulatory Affairs shall 
regularly update guidelines established under paragraph (1)(A) of this 
subsection.
    ``(2) The Administrator of the Office of Information and Regulatory 
Affairs shall also have authority to issue guidelines to promote 
coordination, simplification and harmonization of agency rules during 
the rule making process and otherwise. Such guidelines shall assure 
that each agency avoids regulations that are inconsistent or 
incompatible with, or duplicative of, its other regulations and those 
of other Federal agencies and drafts its regulations to be simple and 
easy to understand, with the goal of minimizing the potential for 
uncertainty and litigation arising from such uncertainty.
    ``(3) To ensure consistency in Federal rule making, the 
Administrator of the Office of Information and Regulatory Affairs 
shall--
            ``(A) issue guidelines and otherwise take action to ensure 
        that rule makings conducted in whole or in part under 
        procedures specified in provisions of law other than those of 
        subchapter II of this title conform to the fullest extent 
        allowed by law with the procedures set forth in section 553 of 
        this title; and
            ``(B) issue guidelines for the conduct of hearings under 
        subsections 553(d)(4) and 553(e) of this section, including to 
        assure a reasonable opportunity for cross-examination. Each 
        agency shall adopt regulations for the conduct of hearings 
        consistent with the guidelines issued under this subparagraph.
    ``(4) The Administrator of the Office of Information and Regulatory 
Affairs shall issue guidelines pursuant to the Information Quality Act 
to apply in rule making proceedings under sections 553, 556 and 557 of 
this title. In all cases, such guidelines, and the Administrator's 
specific determinations regarding agency compliance with such 
guidelines, shall be entitled to judicial deference.
    ``(l) Inclusion in the Record of Certain Documents and 
Information.--The agency shall include in the record for a rule making 
all documents and information considered by the agency during the 
proceeding, including, at the discretion of the President or the 
Administrator of the Office of Information and Regulatory Affairs, 
documents and information communicated by that Office during 
consultation with the Agency.
    ``(m) Monetary Policy Exemption.--Nothing in subsection (b)(6), 
subparagraphs (F) and (G) of subsection (d)(1), subsection (e), 
subsection (f)(3), and subparagraphs (C) and (D) of subsection (f)(5) 
shall apply to rule makings that concern monetary policy proposed or 
implemented by the Board of Governors of the Federal Reserve System or 
the Federal Open Market Committee.''.

SEC. 4. AGENCY GUIDANCE; PROCEDURES TO ISSUE MAJOR GUIDANCE; 
              PRESIDENTIAL AUTHORITY TO ISSUE GUIDELINES FOR ISSUANCE 
              OF GUIDANCE.

    (a) In General.--Chapter 5 of title 5, United States Code, is 
amended by inserting after section 553 the following new section:
``Sec. 553a. Agency guidance; procedures to issue major guidance; 
              authority to issue guidelines for issuance of guidance
    ``(a) Before issuing any major guidance, an agency shall--
            ``(1) make and document a reasoned determination that--
                    ``(A) assures that such guidance is understandable 
                and complies with relevant statutory objectives and 
                regulatory provisions;
                    ``(B) identifies the costs and benefits (including 
                all costs to be considered during the rule making under 
                section 553(b) of this title) of conduct conforming to 
                such guidance and assures that such benefits justify 
                such costs; and
                    ``(C) describes alternatives to such guidance and 
                their costs and benefits (including all costs to be 
                considered during rule making under section 553(b) of 
                this title) and explains why the agency rejected those 
                alternatives; and
            ``(2) confer with the Administrator of the Office of 
        Information and Regulatory Affairs on the issuance of such 
        guidance to assure that the guidance is reasonable, 
        understandable, consistent with relevant statutory and 
        regulatory provisions and requirements or practices of other 
        agencies, does not produce costs that are unjustified by the 
        guidance's benefits, and is otherwise appropriate.
    ``(b) Agency guidance--
            ``(1) is not legally binding and may not be relied upon by 
        an agency as legal grounds for agency action;
            ``(2) shall state in a plain, prominent and permanent 
        manner that it is not legally binding; and
            ``(3) shall, at the time it is issued or upon request, be 
        made available by the issuing agency to interested persons and 
        the public.
    ``(c) The Administrator of the Office of Information and Regulatory 
Affairs shall have authority to issue guidelines for use by the 
agencies in the issuance of major guidance and other guidance. Such 
guidelines shall assure that each agency avoids issuing guidance 
documents that are inconsistent or incompatible with, or duplicative 
of, with its other regulations and those of other Federal agencies and 
drafts its guidance documents to be simple and easy to understand, with 
the goal of minimizing the potential for uncertainty and litigation 
arising from such uncertainty.''.
    (b) Clerical Amendment.--The table of sections for chapter 5 of 
title 5, United States Code, is amended by inserting after the item 
relating to section 553 the following new item:

``553a. Agency guidance; procedures to issue major guidance; 
                            presidential authority to issue guidelines 
                            for issuance of guidance.''.

SEC. 5. HEARINGS; PRESIDING EMPLOYEES; POWERS AND DUTIES; BURDEN OF 
              PROOF; EVIDENCE; RECORD AS BASIS OF DECISION.

    Section 556 of title 5, United States Code, is amended by striking 
subsection (e) and inserting the following:
    ``(e)(1) The transcript of testimony and exhibits, together with 
all papers and requests filed in the proceeding, constitutes the 
exclusive record for decision in accordance with section 557 and, on 
payment of lawfully prescribed costs, shall be made available to the 
parties. When an agency decision rests on official notice of a material 
fact not appearing in the evidence in the record, a party is entitled, 
on timely request, to an opportunity to show the contrary.
    ``(2) Notwithstanding paragraph (1) of this subsection, in a 
proceeding held under this section pursuant to section 553(d)(4) or 
553(e), the record for decision shall include any information that is 
part of the record of proceedings under section 553.
    ``(f) When an agency conducts rule making under this section and 
section 557 directly after concluding proceedings upon an advance 
notice of proposed rulemaking under section 553(c), the matters to be 
considered and determinations to be made shall include, among other 
relevant matters and determinations, the matters and determinations 
described in subsections (b) and (f) of section 553.
    ``(g) Upon receipt of a petition for a hearing under this section, 
the agency shall grant the petition in the case of any major rule, 
unless the agency reasonably determines that a hearing would not 
advance consideration of the rule or would, in light of the need for 
agency action, unreasonably delay completion of the rule making. The 
agency shall publish its decision to grant or deny the petition when it 
renders the decision, including an explanation of the grounds for 
decision. The information contained in the petition shall in all cases 
be included in the administrative record. This subsection shall not 
apply to rule makings that concern monetary policy proposed or 
implemented by the Board of Governors of the Federal Reserve System or 
the Federal Open Market Committee.''.

SEC. 6. ACTIONS REVIEWABLE.

    Section 704 of title 5, United States Code, is amended--
            (1) by striking ``Agency action made'' and inserting ``(a) 
        Agency action made''; and
            (2) by adding at the end the following:
    ``(b) Other than in cases involving interests of national security, 
notwithstanding subsection (a) of this section, upon the agency's 
publication of an interim rule without compliance with section 553 (c), 
(d), or (e) or requirements to render final determinations under 
subsection (f) of section 553, an interested party may seek immediate 
judicial review under this chapter of the agency's determination to 
adopt such rule on an interim basis. Review shall be limited to whether 
the agency abused its discretion to adopt the interim rule without 
compliance with section 553 (c), (d), or (e) or without rendering final 
determinations under subsection (f) of section 553.''.

SEC. 7. SCOPE OF REVIEW.

    Section 706 of title 5, United States Code is amended--
            (1) by striking ``To the extent necessary'' and inserting 
        ``(a) To the extent necessary'';
            (2) in paragraph (2)(A) of subsection (a) (as redesignated 
        by paragraph (1) of this section), by inserting after ``in 
        accordance with law'' the following: ``(including the 
        Information Quality Act)''; and
            (3) by adding at the end the following:
    ``(b) The court shall not defer to the agency's--
            ``(1) interpretation of an agency rule if the agency did 
        not comply with the procedures of section 553 or sections 556-
        557 of chapter 5 of this title to issue the interpretation;
            ``(2) determination of the costs and benefits or other 
        economic or risk assessment of the action, if the agency failed 
        to conform to guidelines on such determinations and assessments 
        established by the Administrator of the Office of Information 
        and Regulatory Affairs under section 553(k); or
            ``(3) determinations under interlocutory review pursuant to 
        sections 553(g)(2)(C) and 704(b).
    ``(c) The court shall review agency denials of petitions under 
section 553(e)(6) or any other petition for a hearing under sections 
556 and 557 for abuse of agency discretion.''.

SEC. 8. ADDED DEFINITION.

    Section 701(b) of title 5, United States Code, is amended--
            (1) in paragraph (1), by striking ``and'';
            (2) in paragraph (2), by striking the period at the end, 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) `substantial evidence' means such relevant evidence 
        as a reasonable mind might accept as adequate to support a 
        conclusion in light of the record considered as a whole, taking 
        into account whatever in the record fairly detracts from the 
        weight of the evidence relied upon by the agency to support its 
        decision.''.

SEC. 9. EFFECTIVE DATE.

    The amendments made by this Act to--
            (1) sections 553, 556, and 704 of title 5, United States 
        Code;
            (2) subsection (b) of section 701 of such title;
            (3) paragraphs (2) and (3) of section 706(b) of such title; 
        and
            (4) subsection (c) of section 706 of such title;
shall not apply to any rule makings pending or completed on the date of 
enactment of this Act.
                                 <all>
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