An act to amend title 5, United States Code, to improve Federal rulemaking by creating procedures to analyze the availability of more flexible regulatory approaches for small entities, and for other purposes.
PL 96-354 (S.299), enacted 09/19/1980

94 STAT. 1164 
PUBLIC LAW 96-354—SEPT. 19, 1980 
Public Law 96-354 
96th Congress 
An Act 
Sept. 19, 1980 
IJIQ amend title 5, United States Code, to improve Federal rulemaking by creating 
[S. 299] 
procedures to analyze the availability of more flexible regulatory approaches for 
small entities, and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
Regulatory 
United States of 
America in Congress assembled, That this Act may be 
5 use 601 note 
^^*®^ ^ *^® "Regulatory Flexibility Act". 
FINDINGS AND PURPOSES 
5 use 601 note. 
SEC. 2. (a) The Congress finds and declares that— 
(1) when adopting regulations to protect the health, safety and 
economic welfare of the Nation, Federal agencies should seek to 
achieve statutory goals as effectively and efficiently as possible 
without imposing unnecessary burdens on the public; 
(2) laws and regulations designed for application to large scale 
entities have been applied uniformly to small businesses, small 
organizations, and small governmental jurisdictions even though 
the problems that gave rise to government action may not have 
been caused by those smaller entities; 
(3) uniform Federal regulatory and reporting requirements 
have in numerous instances imposed unnecessary and dispropor-
tionately burdensome demands including legal, accounting and 
consulting costs upon small businesses, small organizations, and 
small governmental jurisdictions with limited resources; 
(4) the failure to recognize differences in the scale and 
resources of regulated entities has in numerous instances 
adversely affected competition in the marketplace, discouraged 
innovation and restricted improvements in productivity; 
(5) unnecessary regulations create entry barriers in many 
industries and discourage potential entrepreneurs from intro-
ducing beneficial products and processes; 
(6) the practice of treating all regulated businesses, organiza-
tions, and governmental jurisdictions as equivalent may lead to 
inefficient use of regulatory agency resources, enforcement prob-
lems, and, in some cases, to actions inconsistent with the legis-
lative intent of health, safety, environmental and economic 
welfare legislation; 
(7) alternative regulatory approaches which do not conflict 
with the stated objectives of applicable statutes may be available 
which minimize the significant economic impact of rules on 
small businesses, small organizations, and small governmental 
jurisdictions; 
(8) the process by which Federal regulations are developed and 
adopted should be reformed to require agencies to solicit the 
ideeis and comments of small businesses, small organizations, 
and small governmental jurisdictions to examine the impact of 
proposed and existing rules on such entities, and to review the 
continued need for existing rules. 
PUBLIC LAW 96-354—SEPT. 19, 1980 
94 STAT. 1165 
(b) It is the purpose of this Act to establish as a principle of 
regulatory issuance that agencies shall endeavor, consistent with the 
objectives of the rule and of applicable statutes, to fit regulatory and 
informational requirements to the scale of the businesses, organiza-
tions, and governmental jurisdictions subject to regulation. To 
achieve this principle, agencies are required to solicit and consider 
flexible regulatory proposals and to explain the rationale for their 
actions to assure that such proposals are given serious consideration. 
ANALYSIS OF REGULATORY FUNCTIONS 
SEC. 3. (a) Title 5, United States Code, is amended by adding 
immediately after chapter 5 the following new chapter: 
"CHAPTER 
6—THE 
ANALYSIS 
OF 
REGULATORY 
FUNCTIONS 
"Sec. 601. Definitions. 
"Sec. 602. Regulatory agenda. 
"Sec. 603. Initial regulatory flexibility analysis. 
"Sec. 604. Final regulatory flexibility analysis. 
"Sec. 605. Avoidance of duplicative or unnecessary analyses. 
"Sec. 606. Effect on other law. 
"Sec. 607. Preparation of analyses. 
"Sec. 608. Procedure for waiver or delay of completion. 
"Sec. 609. Procedures for gathering comments. 
"Sec. 610. Periodic review of rules. 
"Sec. 611. Judicial review. 
"Sec. 612. Reports and intervention rights. 
"§ 60L Definitions 
5 use 60i. 
"For purposes of this chapter— 
"(1) the term 'agency' means an agency as defined in section 
551(1) of this title; 
5 USC 551. 
"(2) the term 'rule' means any rule for which the agency 
publishes a general notice of proposed rulemaking pursuant to 
section 553(b) of this title, or any other law, including any rule of ^ ^SC 553. 
general applicability governing Federal grants to State and local 
governments for which the agency provides an opportunity for 
notice and public comment, except that the term rule' does not 
include a rule of particular applicability relating to rates, wages, 
corporate or financial structures or reorganizations thereof, 
prices, facilities, appliances, services, or allowances therefor or to 
valuations, costs or accounting, or practices relating to such 
rates, wages, structures, prices, appliances, services, or 
allowances; 
"(3) the term 'small business' has the same meaning as the 
term 'small business concern' under section 3 of the Small 
Business Act, unless an agency, after consultation with the 15 use 632. 
Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register; 
' (4) the term 'small organization' means any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field, unless an agency establishes, after opportu-
nity for public comment, one or more definitions of such term 
which are appropriate to the activities of the agency and pub-
lishes such definition(s) in the Federal Register; 
94 STAT. 1166 
PUBLIC LAW 96-354—SEPT. 19, 1980 
5 use 602. 
Publication in 
Federal 
Register. 
Transmittal to 
SBA. 
Notice. 
5 u s e 603. 
Public comment. 
5 use 553. 
Publication in 
Federal 
Register. 
Transmittal to 
SBA. 
"(5) the term 'small governmental jurisdiction' means govern-
ments of cities, counties, towns, townships, villages, school dis-
tricts, or special districts, with a population of less than fifty 
thousand, unless an agency establishes, after opportunity for 
public comment, one or more definitions of such term which are 
appropriate to the activities of the agency and which are based 
on such factors as location in rural or sparsely populated areas or 
limited revenues due to the population of such jurisdiction, and 
publishes such definition(s) in the Federal Register; and 
"(6) the term 'small entity' shall have the same meaning as the 
terms 'small business', 'small organization' and 'small govern-
mental jurisdiction' defined in paragraphs (3), (4) and (5) of this 
section. 
"§602. Regulatory agenda 
"(a) During the months of October and April of each year, each 
agency shall publish in the Federal Register a regulatory flexibility 
agenda which shall contain— 
"(1) a brief description of the subject area of any rule which the 
agency expects to propose or promulgate which is likely to have a 
significant economic impact on a substantial number of small 
entities; 
"(2) a summary of the nature of any such rule under considera-
tion for each subject area listed in the agenda pursuant to 
paragraph (1), the objectives and legal basis for the issuance of 
the rule, and an approximate schedule for completing action on 
any rule for which the agency has issued a gener^ notice of 
proposed rulemaking, and 
"(3) the name and telephone number of an agency official 
knowledgeable concerning the items listed in paragraph (1). 
"(b) Each regulatory flexibility agenda shall be transmitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment, if any. 
"(c) Each agency shall endeavor to provide notice of each regula-
tory flexibility agenda to small entities or their representatives 
through direct notification or publication of the agenda in publica-
tions likely to be obtained by such small entities and shall invite 
comments upon each subject area on the agenda. 
"(d) Nothing in this section precludes an agency from considering 
or acting on any matter not included in a regulatory flexibility 
agenda, or requires an agency to consider or act on any matter listed 
in such agenda. 
"§ 603. Initial regulatory flexibility analysis 
"(a) Whenever an agency is required by section 553 of this title, or 
any other law, to publish general notice of proposed rulemaking for 
any proposed rule, the agency shall prepare and make available for 
public comment an initial regulatory flexibility analysis. Such analy-
sis shall describe the impact of the proposed rule on small entities. 
The initial regulatory flexibility analysis or a summary shall be 
published in the Federal Register at the time of the publication of 
general notice of proposed rulemaking for the rule. The agency shall 
transmit a copy of the initial regulatory flexibility analysis to the 
Chief Counsel for Advocacy of the Small Business Administration. 
"(b) Each initial regulatory flexibility analysis required imder this 
section shall contain— 
"(1) a description of the reasons why action by the agency is 
being considered; 
PUBLIC LAW 96-354—SEPT. 19, 1980 
94 STAT. 1167 
"(2) a succinct statement of the objectives of, and legal basis 
for, the proposed rule; 
"(3) a description of and, where feasible, an estimate of the 
number of small entities to which the proposed rule will apply; 
"(4) a description of the projected reporting, recordkeeping and 
other compliance requirements of the proposed rule, including 
an estimate of the classes of small entities which will be subject 
to the requirement and the type of professional skills necessary 
for preparation of the report or record; 
"(5) an identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap or conflict with the 
proposed rule. 
"(c) Each initial regulatory flexibility analysis shall also contain a 
description of any significant alternatives to the proposed rule which 
accomplish the stated objectives of applicable statutes and which 
minimize any significant economic impact of the proposed rule on 
small entities. Consistent with the stated objectives of applicable 
statutes, the analysis shall discuss significant alternatives such as— 
"(1) the establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities; 
"(2) the clarification, consolidation, or simplification of compli-
ance and reporting requirements under the rule for such small 
entities; 
"(3) the use of performance rather than design standards; and 
"(4) an exemption from coverage of the rule, or any part 
thereof, for such small entities. 
"§ 604. Final regulatory flexibility analysis 
"(a) When an agency promulgates a final rule under section 553 of 
this title, after being required by that section or any other law to 
publish a general notice of proposed rulemaking, the agency shall 
prepare a final regulatory flexibility analysis. Each final regulatory 
flexibility analysis shall contain— 
"(1) a succinct statement of the need for, and the objectives of, 
the rule; 
"(2) a summary of the issues raised by the public comments in 
response to the initial regulatory flexibility analysis, a summary 
of the assessment of the agency of such issues, and a statement of 
any changes made in the proposed rule as a result of such 
comments; and 
"(3) a description of each of the significant alternatives to the 
rule consistent with the stated objectives of applicable statutes 
and designed to minimize any significant economic impact of the 
rule on small entities which was considered by the agency, and a 
statement of the reasons why each one of such alternatives was 
rejected. 
"(b) The agency shall make copies of the final regulatory flexibility 
analysis available to members of the public and shall publish in the 
Federal Register at the time of publication of the final rule under 
section 553 of this title a statement describing how the public may 
obtain such copies. 
"§ 605. Avoidance of duplicative or unnecessary analyses 
"(a) Any Federal agency may perform the analyses required by 
sections 602, 603, and 604 of this title in conjunction with or as a part 
of any other agenda or analysis required by any other law if such 
other analysis satisfies the provisions of such sections. 
5 use 604. 
5 use 553. 
Public 
availability; 
publication in 
Federal 
Register. 
5 use 553. 
5 use 605. 
79-194 
O—81—pt. 1 
77 : QL3 
94 STAT. 1168 
PUBLIC LAW 96-354—SEPT. 19, 1980 
Certification, 
publication in 
Federal Register 
and transmittal 
to SBA. 
5 u s e 606. 
5 u s e 607. 
5 u s e 608. 
Publication in 
Federal 
Register. 
Publication in 
Federal 
Register. 
5 u s e 609. 
"(b) Sections 603 and 604 of this title shall not apply to any 
proposed or final rule if the head of the agency certifies that the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities. If the head of the agency makes 
a certification under the preceding sentence, the agency shall publish 
such certification in the Federal Register, at the time of publication 
of general notice of proposed rulemaking for the rule or at the time of 
publication of the final rule, along with a succinct statement explain-
ing the reasons for such certification, and provide such certification 
and statement to the Chief Counsel for Advocacy of the Small 
Business Administration. 
"(c) In order to avoid duplicative action, an agency may consider a 
series of closely related rules as one rule for the purposes of sections 
602,603,604 and 610 of this title. 
"§606. Effect on other law 
"The requirements of sections 603 and 604 of this title do not alter 
in any manner standards otherwise applicable by law to agency 
action. 
"§ 607. Preparation of analyses 
"In complying with the provisions of sections 603 and 604 of this 
title, an agency may provide either a quantifiable or numerical 
description of the effects of a proposed rule or alternatives to the 
proposed rule, or more general descriptive statements if quantifica-
tion is not practicable or reliable. 
"§ 608. Procedure for waiver or delay of completion 
"(a) An agency head may waive or delay the completion of some or 
all of the requirements of section 603 of this title by publishing in the 
Federal Register, not later than the date of publication of the final 
rule, a written finding, with reasons therefor, that the final rule is 
being promulgated in response to an emergency that makes compli-
ance or timely compliance with the provisions of section 603 of this 
title impracticable. 
"(b) Except as provided in section 605(b), an agency head may not 
waive the requirements of section 604 of this title. An agency head 
may delay the completion of the requirements of section 604 of this 
title for a period of not more than one hundred and eighty days after 
the date of publication in the Federal Register of a final rule by 
publishing in the Federal Register, not later than such date of 
publication, a written finding, with reasons therefor, that the final 
rule is being promulgated in response to an emergency that makes 
timely compliance with the provisions of section 604 of this title 
impracticable. If the agency has not prepared a final regulatory 
analysis pursuant to section 604 of this title within one hundred and 
eighty days from the date of publication of the final rule, such rule 
shall lapse and have no effect. Such rule shall not be repromulgated 
until a final regulatory flexibility analysis has been completed by the 
agency. 
"§ 609. Procedures for gathering comments 
"When any rule is promulgated which will have a significant 
economic impact on a substantial number of small entities, the head 
of the agency promulgating the rule or the official of the agency with 
statutory responsibility for the promulgation of the rule shall assure 
that small entities have been given an opportunity to participate in 
the rulemaking for the rule through techniques such as— 
PUBLIC LAW 96-354—SEPT. 19, 1980 
94 STAT. 1169 
"(1) the inclusion in an advanced notice of proposed rulemak-
ing, if issued, of a statement that the proposed rule may have a 
significant economic effect on a substantial number of small 
entities; 
"(2) the publication of general notice of proposed rulemaking 
in publications likely to be obtained by small entities; 
(3) the direct notmcation of interested small entities; 
"(4) the conduct of open conferences or public hearings con-
cerning the rule for small entities; and 
"(5) the adoption or modification of agency procedural rules to 
reduce the cost or complexity of participation in the rulemaking 
by small entities. 
"§ 610. Periodic review of rules 
"(a) Within one hundred and eighty days after the effective date of 
this chapter, each agency shall publish in the Federal Register a plan 
for the periodic review of the rules issued by the agency which have 
or will have a significant economic impact upon a substantial number 
of small entities. Such plan may be amended by the agency at any 
time by publishing the revision in the Federal Register. The purpose 
of the review shall be to determine whether such rules should be 
continued without change, or should be amended or rescinded, 
consistent with the stated objectives of applicable statutes, to mini-
mize any significant economic impact of the rules upon a substantial 
number of such small entities. The plan shall provide for the review 
of all such agency rules existing on the effective date of this chapter 
within ten years of that date and for the review of such rules adopted 
after the effective date of this chapter within ten years of the 
publication of such rules as the final rule. If the head of the agency 
determines that completion of the review of existing rules is not 
feasible by the established date, he shall so certify in a statement 
published in the Federal Register and may extend the completion 
date by one year at a time for a total of not more than five years. 
"(b) In reviewing rules to minimize any significant economic 
impact of the rule on a substantial number of small entities in a 
manner consistent with the stated objectives of applicable statutes, 
the agency shall consider the following factors— 
"(1) the continued need for the rule; 
"(2) the nature of complaints or comments received concerning 
the rule from the public; 
"(3) the complexity of the rule; 
"(4) the extent to which the rule overlaps, duplicates or 
conflicts with other Federal rules, and, to the extent feasible, 
with State and local governmental rules; and 
"(5) the length of time since the rule has been evaluated or the 
degree to which technology, economic conditions, or other factors 
have changed in the area affected by the rule. 
"(c) Each year, each agency shall publish in the Federal Register a 
list of the rules which have a significant economic impact on a 
substantial number of small entities, which are to be reviewed 
pursuant to this section during the succeeding twelve months. The 
list shall include a brief description of each rule and the need for and 
legal basis of such rule and shall invite public comment upon the 
rule. 
"§611. Judicial review 
"(a) Except as otherwise provided in subsection (b), any determina-
tion by an agency concerning the applicability of any of tiie provi-
5 u s e 610. 
Plan, publication 
in Federal 
Register. 
Consideration 
factors. 
Publication in 
Federal 
Register. 
5 u s e 611. 
94 STAT. 1170 
PUBLIC LAW 96-354—SEPT. 19, 1980 
Submittal to 
President and 
congressional 
committees. 
5 u s e 612. 
5 u s e 601 note. 
sions of this chapter to any action of the agency shall not be subject to 
judicial review. 
"(b) Any regulatory flexibility analysis prepared under sections 603 
and 604 of this title and the compliance or noncompliance of the 
agency with the provisions of this chapter shall not be subject to 
judicial review. When an action for judicial review of a rule is 
instituted, any regulatory flexibility analysis for such rule shall 
constitute part of the whole record of agency action in connection 
with the 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. 
"§ 612. Reports and intervention rights 
"(a) The Chief Counsel for Advocacy of the Small Business Admin-
istration shall monitor agency compliance with this chapter and shall 
report at least annually thereon to the President and to the Commit-
tees on the Judiciary of the Senate and House of Representatives, the 
Select Committee on Small Business of the Senate, and the Commit-
tee on Small Business of the House of Representatives. 
"(b) The Chief Counsel for Advocacy of the Small Business Admin-
istration is authorized to appear £is amicus curiae in any action 
brought in a court of the United States to review a rule. In any such 
action, the Chief Counsel is authorized to present his views with 
respect to the effect of the rule on small entities. 
(c) A court of the United States shall grant the application of the 
Chief Counsel for Advocacy of the Small Business Administration to 
appear in any such action for the purposes described in subsection 
(b).". 
EFFECTIVE DATE 
SEC. 4. The provisions of this Act shall take effect January 1,1981, 
except that the requirements of sections 603 and 604 of title 5, United 
States Code (as added by section 3 of this Act) shall apply only to rules 
for which a notice of proposed rulemaking is issued on or after 
January 1,1981. 
Approved September 19, 1980. 
LEGISLATIVE HISTORY: 
SENATE REPORT No. 96-878 (eomm. on the Judiciary). 
eONGRESSIONAL REeORD, Vol. 126 (1980): 
Aug. 6, considered and passed Senate. 
Sept. 8, 9, considered and passed House. 
WEEKLY eOMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 16, No. 38: 
Sept. 19, Presidential statement.