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Enhanced Regulatory Flexibility Assessment Act

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Congressional materials
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Crpt 118Hrpt854
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Crpt 118Hrpt854

Summary

House Report 118-854, Part 1, from the Committee on Small Business of the 118th Congress, submitted by Mr. Williams of Texas and ordered printed December 10, 2024, to accompany H.R. 9032, the Enhanced Regulatory Flexibility Assessment Act. The report recommends that the bill pass without amendment and states that the committee ordered it reported on September 10, 2024 after a markup with no amendments offered. It describes the bill as amending the initial regulatory flexibility analysis requirements to require fuller descriptions of cumulative and disproportionate impacts on small entities, with a section-by-section summary. It notes a May 22, 2024 hearing, states that no CBO cost estimate had been received, and shows changes to § 603 of title 5. It closes with minority views signed by Ranking Member Nydia M. Velázquez.

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“Enhanced Regulatory Flexibility Assessment Act.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crpt-118hrpt854/, SHA-256 496c79784a40bc21c24df4e2ed30421654f4eabaf4c0a48ac5f4f639def9ed15.

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                                                                                118TH CONGRESS                                                                                       REPT. 118–854
                                                                                               " HOUSE OF REPRESENTATIVES                                                        !
                                                                                   2d Session                                                                                           Part 1




                                                                                ENHANCED REGULATORY FLEXIBILITY ASSESSMENT ACT



                                                                                                              DECEMBER 10, 2024.—Ordered to be printed




                                                                                     Mr. WILLIAMS of Texas, from the Committee on Small Business,
                                                                                                       submitted the following


                                                                                                                                R E P O R T
                                                                                                                                   together with

                                                                                                                             MINORITY VIEWS

                                                                                                                            [To accompany H.R. 9032]

                                                                                  The Committee on Small Business, to whom was referred the bill
                                                                                (H.R. 9032) to amend chapter 6 of title 5, United States Code (com-
                                                                                monly known as the ‘‘Regulatory Flexibility Act’’), to ensure com-
                                                                                plete analysis of potential impacts on small entities of rules, and
                                                                                for other purposes, having considered the same, reports favorably
                                                                                thereon without amendment and recommends that the bill do pass.
                                                                                                                                       CONTENTS
                                                                                                                                                                                                           Page
                                                                                     I. Purpose and Bill Summary ........................................................................                    2
                                                                                    II. Need for Legislation ....................................................................................            2
                                                                                   III. Hearings .......................................................................................................     2
                                                                                   IV. Committee Consideration ...........................................................................                   2
                                                                                    V. Committee Votes .........................................................................................             2
                                                                                   VI. Section-by-Section of H.R. 9032 .................................................................                     5
                                                                                  VII. Congressional Budget Office Cost Estimate .............................................                               5
                                                                                 VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures                                                     5
                                                                                   IX. Oversight Findings & Recommendations ..................................................                               5
                                                                                    X. Performance Goals and Objectives ............................................................                         6
                                                                                   XI. Statement of Duplication of Federal Programs ........................................                                 6
                                                                                  XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
                                                                                          Benefits .....................................................................................................     6
                                                                                 XIII. Federal Mandates Statement .....................................................................                      6
                                                                                  XIV. Federal Advisory Committee Statement ...................................................                              6
                                                                                   XV. Applicability to Legislative Branch ...........................................................                       6
                                                                                  XVI. Statement of Constitutional Authority ......................................................                          6
                                                                                 XVII. Changes in Existing Law Made by the Bill, As Reported .......................                                         6




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                                                                                XVIII. Minority Views ............................................................................................          12

                                                                                      59–006




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                                                                                                             I. PURPOSE AND BILL SUMMARY
                                                                                  On July 15, 2024, Rep. Maloy introduced H.R. 9032. The purpose
                                                                                of H.R. 9032, the ‘‘Enhanced Regulatory Flexibility Assessment
                                                                                Act,’’ is to amend Initial Regulatory Flexibility Analysis require-
                                                                                ments to include stronger language and descriptions of the cumu-
                                                                                lative impact of the rule and any disproportionate impacts on small
                                                                                entities.
                                                                                                               II. NEED FOR LEGISLATION
                                                                                   Section 603 of the Regulatory Flexibility Act (RFA) requires
                                                                                agencies to conduct what is known as an initial regulatory flexi-
                                                                                bility analysis (IRFA) as a step in the RFA certification process.
                                                                                The IRFA has to include information such as a summary of what
                                                                                the rule is trying to accomplish, and a summary of what type of
                                                                                entities will be impacted by a proposed rule. This bill amends the
                                                                                IRFA requirements to include stronger language and descriptions
                                                                                of the cumulative impact of the rule and any disproportionate im-
                                                                                pacts on small entities.
                                                                                   As written, the IRFA and RFA include flexible language such as
                                                                                ‘‘where feasible’’ and ‘‘to the extent practicable’’ which give agencies
                                                                                clearance to not do a full analysis of how impactful a rule will be.
                                                                                This legislation will strengthen that language so that agencies and
                                                                                Main Street alike can better understand how these rules impact
                                                                                America’s businesses.
                                                                                   Throughout the Committee’s investigation, we uncovered that
                                                                                many agencies would ignore some of the requirements in the IRFA
                                                                                in order to get the rule implemented faster. If agencies are going
                                                                                to force small businesses to comply with burdensome regulations,
                                                                                they should have a full and accurate analysis on what the impacts
                                                                                will be rather than not conducting an analysis because of this loop-
                                                                                hole built into the law.
                                                                                                                         III. HEARINGS
                                                                                  In the 118th Congress, the Committee held one hearing exam-
                                                                                ining the issues covered in H.R. 9032. On May 22, 2024, the Com-
                                                                                mittee held a hearing titled ‘‘Burdensome Regulations: Examining
                                                                                the Biden Administration’s Failure to Consider Small Businesses’’
                                                                                which examined the impacts of the Biden Administration’s burden-
                                                                                some regulatory landscape and explored ways to support small
                                                                                businesses and overcome agencies’ noncompliance with the RFA.
                                                                                                             IV. COMMITTEE CONSIDERATION
                                                                                  The Committee on Small Business met in open session, with a
                                                                                quorum being present, on September 10, 2024 and ordered H.R.
                                                                                9032 reported to the House of Representatives. During the markup
                                                                                no amendments were offered.
                                                                                                                   V. COMMITTEE VOTES
                                                                                   Clause 3(b) of rule XIII of the Rules of the House of Representa-
                                                                                tives requires the Committee to list the recorded votes on the mo-




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                                                                                tion to report legislation and amendments thereto. The Committee
                                                                                voted to favorably report H.R. 9032 to the House of Representatives
                                                                                at 2:27 PM.




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                                                                                                      VI. SECTION-BY-SECTION OF H.R. 9032
                                                                                Section 1: Short title
                                                                                  This bill may be cited as the ‘‘Enhanced Regulatory Flexibility
                                                                                Assessment Act.’’
                                                                                Section 2: Requirements providing for more detailed analyses
                                                                                  Expands requirements for the IRFA and final regulatory flexi-
                                                                                bility analysis (FRFA) to contain additional information about the
                                                                                proposed rule including why the agency is considering the action,
                                                                                the objectives and legal basis for the rule, an estimate of the num-
                                                                                ber of small entities to which the rule will apply, and information
                                                                                such as whether access to credit would be impacted or whether
                                                                                some businesses will be more impacted than others.
                                                                                  Additionally, agencies are required to acknowledge and respond
                                                                                to comments or concerns of the proposed rule in the case of certifi-
                                                                                cation, rather than just the FRFA.
                                                                                  Strikes the single ‘‘factual basis requirement’’ in a certification to
                                                                                instead require ‘‘detailed statement providing the factual and legal
                                                                                basis for such certification. The detailed statement shall include an
                                                                                economic assessment or a sufficiently detailed summary to support
                                                                                the certification by the agency.
                                                                                  Requires a quantifiable description of the rule’s impact or a de-
                                                                                scriptive statement on why the quantification isn’t possible.
                                                                                           VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
                                                                                  Pursuant to clause 3(d)(1) of House rule XIII, the Committee
                                                                                adopts as its own the cost estimate prepared by the Director of the
                                                                                Congressional Budget Office pursuant to section 402 of the Con-
                                                                                gressional Budget Act of 1974. The Committee has requested but
                                                                                not received from the Director of the Congressional Budget Office
                                                                                a cost estimate for the Committee’s provisions. Once available, the
                                                                                cost estimate will be published in the Congressional Record.
                                                                                VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX
                                                                                                      EXPENDITURES
                                                                                   Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
                                                                                of Representatives and section 308(a)(I) of the Congressional Budg-
                                                                                et Act of 1974, the Committee provides the following opinion and
                                                                                estimate with respect to new budget authority, entitlement author-
                                                                                ity, and tax expenditures. While the Committee has not received an
                                                                                estimate of new budget authority contained in the cost estimate
                                                                                prepared by the Director of the Congressional Budget Office pursu-
                                                                                ant to Sec. 402 of the Congressional Budget Act of 1974, the Com-
                                                                                mittee does not believe that there will be any additional costs at-
                                                                                tributable to this legislation. H.R. 9032 does not direct new spend-
                                                                                ing, but instead reallocates funding independently authorized and
                                                                                appropriated.
                                                                                                  IX. OVERSIGHT FINDINGS & RECOMMENDATIONS




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                                                                                  In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
                                                                                of rule X of the Rules of the House of Representatives, the over-
                                                                                sight findings and recommendations of the Committee on Small




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                                                                                Business with respect to the subject matter contained in the H.R.
                                                                                9032 are incorporated into the descriptive portions of this report.
                                                                                                     X. PERFORMANCE GOALS AND OBJECTIVES
                                                                                  With respect to the requirements of clause 3(c)(1) of rule XIII of
                                                                                the Rules of the House of Representatives, the performance goals
                                                                                and objectives of H.R. 9032 are to require stronger descriptions of
                                                                                the cumulative impact a rule may have on Americans and any dis-
                                                                                proportionate impacts on small entities.
                                                                                         XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
                                                                                  Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
                                                                                of Representatives, no provision of H.R. 9032 is known to be dupli-
                                                                                cative of another Federal program, including any program that was
                                                                                included in a report to Congress pursuant to section 21 of Public
                                                                                Law 111–139 or the most recent Catalog of Federal Domestic As-
                                                                                sistance.
                                                                                     XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND
                                                                                                     LIMITED TARIFF BENEFITS
                                                                                  With respect to clause 9 of rule XXI of the Rules of the House
                                                                                of Representatives, the Committee finds that the bill does not con-
                                                                                tain any congressional earmarks, limited tax benefits, or limited
                                                                                tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
                                                                                the Rules of the House of Representatives.
                                                                                                        XIII. FEDERAL MANDATES STATEMENT
                                                                                  The Committee adopts as its own the estimate of Federal man-
                                                                                dates prepared by the Director of the Congressional Budget Office
                                                                                pursuant to section 423 of the Unfunded Mandates Reform Act.
                                                                                                  XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
                                                                                  No advisory committees within the meaning of section 5(b) of the
                                                                                Federal Advisory Committee Act were created by this legislation.
                                                                                                    XV. APPLICABILITY TO LEGISLATIVE BRANCH
                                                                                  The Committee finds that the legislation does not relate to the
                                                                                terms and conditions of employment or access to public services or
                                                                                accommodations within the meaning of section 102(b)(3) of the Con-
                                                                                gressional Accountability Act.
                                                                                              XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
                                                                                   Pursuant to clause 7 of rule XII of the Rules of the House, the
                                                                                Committee finds that the authority for this legislation in Art. I, § 8,
                                                                                cl.1 of the Constitution of the United States.
                                                                                 XVII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
                                                                                  In compliance with clause 3(e) of rule XIII of the Rules of the




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                                                                                House of Representatives, changes in existing law made by the bill,
                                                                                as reported, are shown as follows (existing law proposed to be omit-
                                                                                ted is enclosed in black brackets, new matter is printed in italics,




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                                                                                and existing law in which no change is proposed is shown in
                                                                                roman):
                                                                                      CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
                                                                                  In compliance with clause 3(e) of rule XIII of the Rules of the
                                                                                House of Representatives, changes in existing law made by the bill,
                                                                                as reported, are shown as follows (existing law proposed to be omit-
                                                                                ted is enclosed in black brackets, new matter is printed in italics,
                                                                                and existing law in which no change is proposed is shown in
                                                                                roman):

                                                                                                       TITLE 5, UNITED STATES CODE

                                                                                            *           *            *              *           *         *            *

                                                                                            PART I—THE AGENCIES GENERALLY
                                                                                            *           *            *              *           *         *            *
                                                                                          CHAPTER 6—THE ANALYSIS OF REGULATORY
                                                                                                       FUNCTIONS
                                                                                            *           *            *              *           *         *            *
                                                                                § 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, or publishes a notice of proposed rulemaking
                                                                                for an interpretative rule involving the internal revenue laws of the
                                                                                United States, the agency shall prepare and make available for
                                                                                public comment an initial regulatory flexibility analysis. Such anal-
                                                                                ysis shall describe the impact of the proposed rule on small enti-
                                                                                ties. 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 Administra-
                                                                                tion. In the case of an interpretative rule involving the internal
                                                                                revenue laws of the United States, this chapter applies to interpre-
                                                                                tative rules published in the Federal Register for codification in the
                                                                                Code of Federal Regulations, but only to the extent that such inter-
                                                                                pretative rules impose on small entities a collection of information
                                                                                requirement.
                                                                                   ø(b) Each initial regulatory flexibility analysis required under
                                                                                this section shall contain—
                                                                                       ø(1) a description of the reasons why action by the agency is
                                                                                     being considered;
                                                                                       ø(2) a succinct statement of the objectives of, and legal basis
                                                                                     for, the proposed rule;
                                                                                       ø(3) a description of and, where feasible, an estimate of the
                                                                                     number of small entities to which the proposed rule will apply;




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                                                                                       ø(4) a description of the projected reporting, recordkeeping
                                                                                     and other compliance requirements of the proposed rule, in-
                                                                                     cluding an estimate of the classes of small entities which will




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                                                                                     be subject to the requirement and the type of professional
                                                                                     skills necessary for preparation of the report or record;
                                                                                        ø(5) an identification, to the extent practicable, of all rel-
                                                                                     evant Federal rules which may duplicate, overlap or conflict
                                                                                     with the proposed rule.¿
                                                                                  (b) Each initial regulatory flexibility analysis required under this
                                                                                section shall contain a detailed statement—
                                                                                        (1) describing the reasons why action by the agency is being
                                                                                     considered;
                                                                                        (2) describing the objectives of, and legal basis for, the pro-
                                                                                     posed rule;
                                                                                        (3) estimating the number and type of small entities to which
                                                                                     the proposed rule will apply;
                                                                                        (4) describing 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 and record;
                                                                                        (5) describing all relevant Federal rules which may duplicate,
                                                                                     overlap, or conflict with the proposed rule, or the reasons why
                                                                                     such a description could not be provided;
                                                                                        (6) estimating the additional cumulative economic impact of
                                                                                     the proposed rule on small entities beyond that already imposed
                                                                                     on the class of small entities by the agency or why such an esti-
                                                                                     mate is not available;
                                                                                        (7) describing any disproportionate economic impact on small
                                                                                     entities or a specific class of small entities; and
                                                                                        (8) describing any impairment of the ability of small entities
                                                                                     to have access to credit.
                                                                                  (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 ap-
                                                                                plicable statutes, the analysis shall discuss significant alternatives
                                                                                such as—
                                                                                        (1) the establishment of differing compliance or reporting re-
                                                                                     quirements 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.
                                                                                  (d)(1) For a covered agency, as defined in section 609(d)(2), each
                                                                                initial regulatory flexibility analysis shall include a description of—
                                                                                        (A) any projected increase in the cost of credit for small enti-
                                                                                     ties;
                                                                                        (B) any significant alternatives to the proposed rule which




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                                                                                     accomplish the stated objectives of applicable statutes and
                                                                                     which minimize any increase in the cost of credit for small en-
                                                                                     tities; and




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                                                                                       (C) advice and recommendations of representatives of small
                                                                                    entities relating to issues described in subparagraphs (A) and
                                                                                    (B) and subsection (b).
                                                                                  (2) A covered agency, as defined in section 609(d)(2), shall, for
                                                                                purposes of complying with paragraph (1)(C)—
                                                                                       (A) identify representatives of small entities in consultation
                                                                                    with the Chief Counsel for Advocacy of the Small Business Ad-
                                                                                    ministration; and
                                                                                       (B) collect advice and recommendations from the representa-
                                                                                    tives identified under subparagraph (A) relating to issues de-
                                                                                    scribed in subparagraphs (A) and (B) of paragraph (1) and sub-
                                                                                    section (b).
                                                                                § 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, or promulgates
                                                                                a final interpretative rule involving the internal revenue laws of
                                                                                the United States as described in section 603(a), the agency shall
                                                                                prepare a final regulatory flexibility analysis. Each final regulatory
                                                                                flexibility analysis shall contain—
                                                                                        (1) a statement of the need for, and objectives of, the rule;
                                                                                        (2) a statement of the significant issues raised by the public
                                                                                     comments in response to the initial regulatory flexibility anal-
                                                                                     ysis (or certification of the proposed rule under section 605(b)),
                                                                                     a statement 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;
                                                                                        (3) the response of the agency to any comments filed by the
                                                                                     Chief Counsel for Advocacy of the Small Business Administra-
                                                                                     tion in response to the proposed rule, and a detailed statement
                                                                                     of any change made to the proposed rule in the final rule as
                                                                                     a result of the comments;
                                                                                        (4) a detailed description of and an estimate of the number
                                                                                     of small entities to which the rule will apply or øan expla-
                                                                                     nation¿ a detailed explanation of why no such estimate is
                                                                                     available;
                                                                                        (5) a detailed description of the projected reporting, record-
                                                                                     keeping and other compliance requirements of the rule, includ-
                                                                                     ing 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;
                                                                                        (6) a detailed description of the steps the agency has taken
                                                                                     to minimize the significant economic impact on small entities
                                                                                     consistent with the stated objectives of applicable statutes, in-
                                                                                     cluding a statement of the factual, policy, and legal reasons for
                                                                                     selecting the alternative adopted in the final rule and why
                                                                                     each one of the other significant alternatives to the rule consid-
                                                                                     ered by the agency which affect the impact on small entities
                                                                                     was rejected; øand¿
                                                                                        (6) for a covered agency, as defined in section 609(d)(2), a
                                                                                     description of the steps the agency has taken to minimize any




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                                                                                     additional cost of credit for small entities.
                                                                                        (8) a detailed description of any disproportionate economic
                                                                                     impact on small entities or a specific class of small entities.




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                                                                                   ø(b) The agency shall make copies of the final regulatory flexi-
                                                                                bility analysis available to members of the public and shall publish
                                                                                in the Federal Register such analysis or a summary thereof.¿
                                                                                   (b) The agency shall make copies of the final regulatory flexibility
                                                                                analysis available to the public, including placement of the entire
                                                                                analysis on the website of the agency, and shall publish in the Fed-
                                                                                eral Register the final regulatory flexibility analysis, or a summary
                                                                                thereof which includes the telephone number, mailing address, and
                                                                                link to the website where the complete analysis may be obtained.
                                                                                § 605. Avoidance of duplicative or unnecessary analyses
                                                                                   ø(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.¿
                                                                                   (a) A Federal agency shall be treated as satisfying any require-
                                                                                ment regarding the content of a regulatory flexibility agenda or reg-
                                                                                ulatory flexibility analysis under section 602, 603, or 604 if the Fed-
                                                                                eral agency provides in the agenda or analysis a cross-reference to
                                                                                the specific portion of another agenda or analysis which is required
                                                                                by any other law and which satisfies the requirement.
                                                                                   (b) Sections 603 and 604 of this title shall not apply to any pro-
                                                                                posed 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 østate-
                                                                                ment providing the factual basis for such certification.¿ detailed
                                                                                statement providing the factual and legal basis for such certifi-
                                                                                cation. The detailed statement shall include an economic assessment
                                                                                or a summary thereof that is sufficiently detailed to support the cer-
                                                                                tification of the agency. The agency shall provide such certification
                                                                                and statement to the Chief Counsel for Advocacy of the Small Busi-
                                                                                ness 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 sec-
                                                                                tions 602, 603, 604 and 610 of this title.
                                                                                            *           *            *              *           *         *            *
                                                                                ø§ 607. Preparation of analyses
                                                                                   øIn complying with the provisions of sections 603 and 604 of this
                                                                                title, an agency may provide either a quantifiable or numerical de-
                                                                                scription of the effects of a proposed rule or alternatives to the pro-
                                                                                posed rule, or more general descriptive statements if quantification
                                                                                is not practicable or reliable.¿
                                                                                § 607. Quantification requirements
                                                                                   In complying with sections 603 and 604, an agency shall pro-
                                                                                vide—




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                                                                                       (1) a quantifiable or numerical description of the effects of—
                                                                                            (A) the proposed or final rule; and
                                                                                            (B) alternatives to the proposed or final rule; or




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                                                                                                                                11

                                                                                         (2) a more general descriptive statement and a detailed state-
                                                                                       ment explaining why quantification is not practicable or reli-
                                                                                       able.
                                                                                            *           *            *              *           *         *            *




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                                                                                                               XVIII. MINORITY VIEWS
                                                                                   Under the Regulatory Flexibility Act (RFA), if an agency deter-
                                                                                mines that a proposed rule would have a significant economic im-
                                                                                pact on a substantial number of small entities, (SEISNSE), then it
                                                                                must, to the extent practicable, determine the economic impact the
                                                                                rule would have on small businesses and consider alternatives to
                                                                                accomplish the objectives without unduly burdening the small enti-
                                                                                ties. The economic analysis consists of an initial regulatory flexi-
                                                                                bility (IRFA) and a final regulatory flexibility analysis (FRFA),
                                                                                which are published at the proposed and final rule stages, respec-
                                                                                tively.
                                                                                   The ‘‘Enhanced Regulatory Flexibility Assessment Act’’ would re-
                                                                                quire agencies to include more analytical and procedural require-
                                                                                ments in the IRFA and FRFA. First, the addition of an estimate
                                                                                of the cumulative impact to the IRFA would require agencies to
                                                                                look not just at the rule but look at it in the context of all rules,
                                                                                as well as the past, present and future costs. This requirement is
                                                                                time-consuming for agencies to do and would slow the rule-making
                                                                                process down considerably. Under current law, agencies have not
                                                                                been required to complete this analysis, so the information is not
                                                                                presently available. An estimate of the cumulative impact would
                                                                                also require an economic assessment justifying certification for
                                                                                IRFAs. Congress has never explicitly required cost-benefit analyses
                                                                                for every proposed rule. Moreover, agencies have limited resources
                                                                                to conduct this type of analysis.
                                                                                   Second, these new additional analytical and procedural require-
                                                                                ments included in the FRFA would be subject to judicial review,
                                                                                meaning they could be used as a basis for those who don’t like the
                                                                                rule to attempt to overturn it. Additionally, it is unclear why the
                                                                                bill asks for a ‘‘legal basis’’ in addition to a factual basis. The legal
                                                                                basis is already established in section 605 (permitting such certifi-
                                                                                cations).
                                                                                   Third, the bill requires the agency to provide a quantitative or
                                                                                numerical description of the effects of the proposed rule in the
                                                                                IRFA and FRFA. This tightens up the current 607 requirement and
                                                                                reduces the amount of flexibility agencies have in providing a gen-
                                                                                eral description statement if the quantification is not practicable or
                                                                                reliable. This new provision would require agencies to provide a
                                                                                justification for the rule, and the justification for the FRFA would
                                                                                be judicially reviewable.
                                                                                   Agencies must consider the impact of rulemaking on small enti-
                                                                                ties, and the Office Advocacy monitors their compliance with the
                                                                                RFA. These additional requirements are unnecessary, burdensome
                                                                                to agencies, delay the implementation of rules that benefit small
                                                                                businesses and Americans, add limited value to small businesses,
                                                                                and require more agency resources, without improving the rule-




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                                                                                making process.
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                                                                                                                                13

                                                                                  It is important to note, that agencies are carrying out the laws
                                                                                that Congress passed, and agencies have to operate within the
                                                                                guidelines to improve public participation, respond to comments,
                                                                                ensure benefits justify the costs, and follow the procedural require-
                                                                                ments of the APA and RFA.
                                                                                  We have learned from Committee hearings that smart, well-
                                                                                crafted regulations can spur innovation and the development of
                                                                                new technologies that provide new opportunities for entrepreneurs.
                                                                                  This bill gets stuck on the message that regulations hinder the
                                                                                growth of small businesses, rather than look to the future and un-
                                                                                derstand that regulations can drive innovation, grow the economy,
                                                                                and protect the environment, labor, and consumer safety.
                                                                                                                         NYDIA M. VELÁZQUEZ,
                                                                                                                                 Ranking Member.

                                                                                                                                    Æ




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