Title 5 — Government Organization and Employees — § 604. Final regulatory flexibility analysis
Summary
These pages (223 and 224) of Title 5 of the printed U.S. Code carry § 604, added by Pub. L. 96–354 in 1980, which requires an agency that issues a final rule after a general notice of proposed rulemaking to prepare a final regulatory flexibility analysis. The analysis must state the need for and objectives of the rule, respond to public comments and to comments from the Chief Counsel for Advocacy of the Small Business Administration, estimate the number of small entities the rule will apply to, describe compliance requirements, and explain the steps taken to minimize the significant economic impact on small entities and why other alternatives were rejected. The agency must publish the analysis or a summary of it in the Federal Register. A 2010 amendment added a duty for covered agencies to describe steps to minimize any additional cost of credit for small entities.
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Page 223 TITLE 5—GOVERNMENT ORGANIZATION AND EMPLOYEES § 604
(2) the clarification, consolidation, or sim- 245 of Pub. L. 104–121, set out as a note under section 601
plification of compliance and reporting re- of this title.
quirements under the rule for such small enti- EFFECTIVE DATE
ties; Section effective Jan. 1, 1981, except that the require-
(3) the use of performance rather than design ments of this section applicable only to rules for which
standards; and a notice of proposed rulemaking was issued on or after
(4) an exemption from coverage of the rule, Jan. 1, 1981, see section 4 of Pub. L. 96–354, set out as
or any part thereof, for such small entities. a note under section 601 of this title.
(d)(1) For a covered agency, as defined in sec- § 604. Final regulatory flexibility analysis
tion 609(d)(2), each initial regulatory flexibility
analysis shall include a description of— (a) When an agency promulgates a final rule
(A) any projected increase in the cost of under section 553 of this title, after being re-
credit for small entities; quired by that section or any other law to pub-
(B) any significant alternatives to the pro- lish a general notice of proposed rulemaking, or
posed rule which accomplish the stated objec- promulgates a final interpretative rule involv-
tives of applicable statutes and which mini- ing the internal revenue laws of the United
mize any increase in the cost of credit for States as described in section 603(a), the agency
small entities; and shall prepare a final regulatory flexibility anal-
(C) advice and recommendations of rep- ysis. Each final regulatory flexibility analysis
resentatives of small entities relating to shall contain—
(1) a statement of the need for, and objec-
issues described in subparagraphs (A) and (B)
tives of, the rule;
and subsection (b).
(2) a statement of the significant issues
(2) A covered agency, as defined in section raised by the public comments in response to
609(d)(2), shall, for purposes of complying with the initial regulatory flexibility analysis, a
paragraph (1)(C)— statement of the assessment of the agency of
(A) identify representatives of small entities such issues, and a statement of any changes
in consultation with the Chief Counsel for Ad- made in the proposed rule as a result of such
vocacy of the Small Business Administration; comments;
and (3) the response of the agency to any com-
(B) collect advice and recommendations ments filed by the Chief Counsel for Advocacy
from the representatives identified under sub- of the Small Business Administration in re-
paragraph (A) relating to issues described in sponse to the proposed rule, and a detailed
subparagraphs (A) and (B) of paragraph (1) and statement of any change made to the proposed
subsection (b). rule in the final rule as a result of the com-
ments;
(Added Pub. L. 96–354, § 3(a), Sept. 19, 1980, 94
(4) a description of and an estimate of the
Stat. 1166; amended Pub. L. 104–121, title II,
number of small entities to which the rule will
§ 241(a)(1), Mar. 29, 1996, 110 Stat. 864; Pub. L.
apply or an explanation of why no such esti-
111–203, title X, § 1100G(b), July 21, 2010, 124 Stat.
mate is available;
2112.) (5) a description of the projected reporting,
recordkeeping and other compliance require-
Editorial Notes
ments of the rule, including an estimate of the
AMENDMENTS classes of small entities which will be subject
2010—Subsec. (d). Pub. L. 111–203 added subsec. (d).
to the requirement and the type of profes-
1996—Subsec. (a). Pub. L. 104–121, § 241(a)(1)(B), in- sional skills necessary for preparation of the
serted at end ‘‘In the case of an interpretative rule in- report or record;
volving the internal revenue laws of the United States, (6) 1 a description of the steps the agency has
this chapter applies to interpretative rules published in taken to minimize the significant economic
the Federal Register for codification in the Code of impact on small entities consistent with the
Federal Regulations, but only to the extent that such stated objectives of applicable statutes, in-
interpretative rules impose on small entities a collec- cluding a statement of the factual, policy, and
tion of information requirement.’’
legal reasons for selecting the alternative
Pub. L. 104–121, § 241(a)(1)(A), which directed the in-
sertion of ‘‘, or publishes a notice of proposed rule- adopted in the final rule and why each one of
making for an interpretative rule involving the inter- the other significant alternatives to the rule
nal revenue laws of the United States’’ after ‘‘proposed considered by the agency which affect the im-
rule’’ was executed by making the insertion where pact on small entities was rejected; and
those words appeared in first sentence to reflect the (6) 1 for a covered agency, as defined in sec-
probable intent of Congress. tion 609(d)(2), a description of the steps the
agency has taken to minimize any additional
Statutory Notes and Related Subsidiaries cost of credit for small entities.
EFFECTIVE DATE OF 2010 AMENDMENT (b) The agency shall make copies of the final
Amendment by Pub. L. 111–203 effective on the des- regulatory flexibility analysis available to
ignated transfer date, see section 1100H of Pub. L. members of the public and shall publish in the
111–203, set out as a note under section 552a of this title. Federal Register such analysis or a summary
thereof.
EFFECTIVE DATE OF 1996 AMENDMENT
(Added Pub. L. 96–354, § 3(a), Sept. 19, 1980, 94
Amendment by Pub. L. 104–121 effective on expiration
of 90 days after Mar. 29, 1996, but inapplicable to inter-
Stat. 1167; amended Pub. L. 104–121, title II,
pretative rules for which a notice of proposed rule-
making was published prior to Mar. 29, 1996, see section 1 So in original. Two pars. (6) have been enacted.
§ 605 TITLE 5—GOVERNMENT ORGANIZATION AND EMPLOYEES Page 224
§ 241(b), Mar. 29, 1996, 110 Stat. 864; Pub. L. pretative rules for which a notice of proposed rule-
111–203, title X, § 1100G(c), July 21, 2010, 124 Stat. making was published prior to Mar. 29, 1996, see section
2113; Pub. L. 111–240, title I, § 1601, Sept. 27, 2010, 245 of Pub. L. 104–121, set out as a note under section 601
of this title.
124 Stat. 2551.)
EFFECTIVE DATE
Editorial Notes Section effective Jan. 1, 1981, except that the require-
ments of this section applicable only to rules for which
AMENDMENTS
a notice of proposed rulemaking was issued on or after
2010—Subsec. (a)(1). Pub. L. 111–240, § 1601(1), struck Jan. 1, 1981, see section 4 of Pub. L. 96–354, set out as
out ‘‘succinct’’ before ‘‘statement’’. a note under section 601 of this title.
Subsec. (a)(2). Pub. L. 111–240, § 1601(2), substituted
‘‘statement’’ for ‘‘summary’’ before ‘‘of the significant § 605. Avoidance of duplicative or unnecessary
issues’’ and ‘‘of the assessment’’. analyses
Subsec. (a)(3), (4). Pub. L. 111–240, § 1601(3), (4), added
(a) Any Federal agency may perform the anal-
par. (3) and redesignated former par. (3) as (4). Former
par. (4) redesignated (5). yses required by sections 602, 603, and 604 of this
Subsec. (a)(5). Pub. L. 111–240, § 1601(3), redesignated title in conjunction with or as a part of any
par. (4) as (5). Former par. (5), relating to description of other agenda or analysis required by any other
steps taken to minimize the significant economic im- law if such other analysis satisfies the provi-
pact on small entities, redesignated (6). sions of such sections.
Pub. L. 111–203, § 1100G(c)(1), which directed amend- (b) Sections 603 and 604 of this title shall not
ment of par. (4) by striking ‘‘and’’ at the end, was exe- apply to any proposed or final rule if the head of
cuted to par. (5) to reflect the probable intent of Con- the agency certifies that the rule will not, if
gress and the intervening redesignation of par. (4) as (5) promulgated, have a significant economic im-
by Pub. L. 111–240, § 1601(3). See above.
pact on a substantial number of small entities.
Subsec. (a)(6). Pub. L. 111–240, § 1601(3), redesignated
par. (5), relating to description of steps taken to mini- If the head of the agency makes a certification
mize the significant economic impact on small entities, under the preceding sentence, the agency shall
as (6). publish such certification in the Federal Reg-
Pub. L. 111–203, § 1100G(c)(3), added par. (6) relating to ister at the time of publication of general notice
description of steps taken to minimize any additional of proposed rulemaking for the rule or at the
cost of credit for small entities. time of publication of the final rule, along with
Pub. L. 111–203, § 1100G(c)(2), which directed amend- a statement providing the factual basis for such
ment of par. (5) by substituting ‘‘; and’’ for period at certification. The agency shall provide such cer-
end, was executed to par. (6), relating to description of
tification and statement to the Chief Counsel
steps taken to minimize the significant economic im-
pact on small entities, to reflect the probable intent of for Advocacy of the Small Business Administra-
Congress and the intervening redesignation of par. (5) tion.
as (6) by Pub. L. 111–240, § 1601(3). See above. (c) In order to avoid duplicative action, an
1996—Subsec. (a). Pub. L. 104–121, § 241(b)(1), amended agency may consider a series of closely related
subsec. (a) generally. Prior to amendment, subsec. (a) rules as one rule for the purposes of sections 602,
read as follows: ‘‘When an agency promulgates a final 603, 604 and 610 of this title.
rule under section 553 of this title, after being required
by that section or any other law to publish a general (Added Pub. L. 96–354, § 3(a), Sept. 19, 1980, 94
notice of proposed rulemaking, the agency shall pre- Stat. 1167; amended Pub. L. 104–121, title II,
pare a final regulatory flexibility analysis. Each final § 243(a), Mar. 29, 1996, 110 Stat. 866.)
regulatory flexibility analysis shall contain—
‘‘(1) a succinct statement of the need for, and the Editorial Notes
objectives of, the rule; AMENDMENTS
‘‘(2) a summary of the issues raised by the public
comments in response to the initial regulatory flexi- 1996—Subsec. (b). Pub. L. 104–121 amended subsec. (b)
bility analysis, a summary of the assessment of the generally. Prior to amendment, subsec. (b) read as fol-
agency of such issues, and a statement of any lows: ‘‘Sections 603 and 604 of this title shall not apply
changes made in the proposed rule as a result of such to any proposed or final rule if the head of the agency
comments; and certifies that the rule will not, if promulgated, have a
‘‘(3) a description of each of the significant alter- significant economic impact on a substantial number
natives to the rule consistent with the stated objec- of small entities. If the head of the agency makes a cer-
tives of applicable statutes and designed to minimize tification under the preceding sentence, the agency
any significant economic impact of the rule on small shall publish such certification in the Federal Register,
entities which was considered by the agency, and a at the time of publication of general notice of proposed
statement of the reasons why each one of such alter- rulemaking for the rule or at the time of publication of
natives was rejected.’’ the final rule, along with a succinct statement explain-
Subsec. (b). Pub. L. 104–121, § 241(b)(2), substituted ing the reasons for such certification, and provide such
‘‘such analysis or a summary thereof.’’ for ‘‘at the time certification and statement to the Chief Counsel for
of publication of the final rule under section 553 of this Advocacy of the Small Business Administration.’’
title a statement describing how the public may obtain
such copies.’’ Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1996 AMENDMENT
Statutory Notes and Related Subsidiaries
Amendment by Pub. L. 104–121 effective on expiration
EFFECTIVE DATE OF 2010 AMENDMENT of 90 days after Mar. 29, 1996, but inapplicable to inter-
pretative rules for which a notice of proposed rule-
Amendment by Pub. L. 111–203 effective on the des- making was published prior to Mar. 29, 1996, see section
ignated transfer date, see section 1100H of Pub. L. 245 of Pub. L. 104–121, set out as a note under section 601
111–203, set out as a note under section 552a of this title. of this title.
EFFECTIVE DATE OF 1996 AMENDMENT EFFECTIVE DATE
Amendment by Pub. L. 104–121 effective on expiration Section effective Jan. 1, 1981, see section 4 of Pub. L.
of 90 days after Mar. 29, 1996, but inapplicable to inter- 96–354, set out as a note under section 601 of this title.
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