Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

115th Congress    }                                         {    Report
                                  SENATE                          
1st Session       }                                         {    115-194
_______________________________________________________________________

                                     

                                                       


     SMALL BUSINESS REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2017

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                          WITH MINORITY VIEWS

                              to accompany

                                 S. 584

           TO AMEND CHAPTER 6 OF TITLE 5, UNITED STATES CODE
   (COMMONLY KNOWN AS THE ``REGULATORY FLEXIBILITY ACT''), TO ENSURE 
COMPLETE ANALYSIS OF POTENTIAL IMPACTS ON SMALL ENTITIES OF RULES, AND 
                           FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


               December 14, 2017.--Ordered to be printed
               
          
                           _________ 
                                  
                U.S. GOVERNMENT PUBLISHING OFFICE
 79-010                 WASHINGTON : 2017                      
 
 
 
 
               
               
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
         Catharine A. Bailey, Director of Governmental Affairs
                   Satya P. Thallam, Chief Economist
               Margaret E. Daum, Minority Staff Director
               Stacia M. Cardille, Minority Chief Counsel
       Charles A. Moskowitz, Minority Senior Legislative Counsel
                 Katherine C. Sybenga, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     



                                                       Calendar No. 284
                                                       
115th Congress    }                                          {    Report
                                  SENATE
                                                                 
 1st Session      }                                          {   115-194

======================================================================



 
     SMALL BUSINESS REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2017

                                _______
                                

               December 14, 2017.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany S. 584]

      [Including cost estimate of the Congressional Budget Office]

     The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 584) to amend 
chapter 6 of title 5, United States Code (commonly known as the 
``Regulatory Flexibility Act''), to ensure complete analysis of 
potential impacts on small entities of rules, and for other 
purposes, having considered the same, reports favorably thereon 
with amendments and recommends that the bill, as amended, do 
pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................2
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................6
 IV. Section-by-Section Analysis......................................7
  V. Evaluation of Regulatory Impact.................................10
 VI. Congressional Budget Office Cost Estimate.......................10
VII. Minority Views..................................................14
VIII.Changes in Existing Law Made by the Bill, as Reported...........19


                         I. Purpose and Summary

    S. 584, the Small Business Regulatory Flexibility 
Improvements Act (SBRFIA), follows previous attempts by 
Congress to build into the Federal regulatory policymaking 
process a voice for, and consideration of the potential impacts 
on, small businesses, non-profits, and local governments. It 
also addresses deficiencies in the extant laws by making more 
robust the requirements and review mechanisms applicable to 
agencies when contemplating rules which may have a significant 
effect on small entities.

              II. Background and the Need for Legislation


Small Business Act

    The formal recognition of the unique impact of Federal 
policy on small enterprises goes back to at least 1953 with the 
establishment of the Small Business Administration via 
enactment of the Small Business Act of 1953.\1\ That act 
states, in describing the underlying goal of the legislation:
---------------------------------------------------------------------------
    \1\An Act to Create the Small Business Administration and to 
Preserve Small Business Institutions and Free, Competitive Enterprise, 
Pub. L. No. 83-163, 67 Stat., Title II.
---------------------------------------------------------------------------
          The essence of the American economic system of 
        private enterprise is free competition. Only through 
        full and free competition can free markets, free entry 
        into business, and opportunities for the expression and 
        growth of personal initiative and individual judgment 
        be assured. The preservation and expansion of such 
        competition is basic not only to the economic well-
        being but to the security of this Nation. Such security 
        and well-being cannot be realized unless the actual and 
        potential capacity of small business is encouraged and 
        developed.\2\
---------------------------------------------------------------------------
    \2\Id. at Sec. 202.
---------------------------------------------------------------------------
    The Small Business Act, and its establishment of the Small 
Business Administration (SBA), was a successor to previous 
Federal efforts to aid small enterprises, including the 
Reconstruction Finance Corporation\3\ and the Smaller War 
Plants Corporation.\4\ These initiatives, along with the 
earliest iteration of the SBA, had missions which concerned 
primarily providing financing, facilitating credit, and 
enhancing access to Federal projects and contracts for small 
businesses and federal contractors. These early efforts, 
however, did not explicitly address the issue of regulation's 
disproportionate effect on small businesses.
---------------------------------------------------------------------------
    \3\Records of the Reconstruction Finance Corporation [RFC], Nat. 
Archives, Sec. 234.1, https://www.archives.gov/research/guide-fed-
records/groups/234.html (The Corporation was established in 1932 and 
eliminated via the Small Business Act).
    \4\Active from 1942 through 1945 during World War II, id. at 240.1.
---------------------------------------------------------------------------

Effect of regulation on small businesses

    Regulations can have an overall aggregate effect that 
differs from their particular effects on specific sectors or 
types of entities, and, ``[t]he cost of government regulation 
almost always includes both variable and fixed components, with 
variable costs being a function of the size of the regulated 
transaction.''\5\ In the simplest fixed cost case, where costs 
are invariant to a firm's size or activity-level, such as a 
one-time capital outlay for a smokestack scrubber,\6\ the 
regulation will impose a proportionately higher cost on smaller 
firms, with the proportionate cost of compliance decreasing in 
firm size (or firm output). That is, a fixed cost will require 
a larger share of the small firm's resources (labor or capital) 
to be reallocated toward compliance and away from wages and 
investment--the same cost will have a smaller effect the larger 
the firm and the average cost (per employee or transaction) is 
lower.
---------------------------------------------------------------------------
    \5\C. Steven Bradford, Does Size Matter? An Economic Analysis of 
Small Business Exemptions from Regulation, 8 J. of Small and Emerging 
Bus. L. 6 (2004).
    \6\This is the canonical example, explored more in depth in, see, 
e.g. id. at 7.
---------------------------------------------------------------------------
    Information costs--the costs to review and understand 
regulations--can sometimes exhibit fixed cost 
characteristics.\7\ A firm may need to hire lawyers, compliance 
officers, or human resources managers to ensure compliance with 
the regulatory framework applicable to their industry. While 
these labor costs may be incurred on an hourly or part-time 
basis, absent special considerations in the law, the firm 
(large or small) is still responsible for knowing and complying 
with all relevant portions of the body of regulations.\8\
---------------------------------------------------------------------------
    \7\Id. at 8-9.
    \8\Office of Advocacy, U.S. Small Business Administration, Report 
on The Changing Burden of Regulation, Paperwork, and Tax Compliance on 
Small Business (1995), (``A significant body of knowledge must be 
gained by a firm to determine whether a regulation applies to it, 
whether it is in compliance, or what action must be taken to be in 
compliance. For example, a firm must first learn that a form is 
required by rule, determine if the firm is required to submit that 
form, and then determine how to complete the form correctly. These 
fixed information-gathering costs are the same for all firms, whether 
large or small.'').
---------------------------------------------------------------------------
    One result of this phenomenon, consistent with the policy 
statement contained in the Small Business Act,\9\ is an anti-
competitive effect: ``large fixed costs can lead to market 
structures with fewer, larger firms (increased market 
concentration)'' because ``[w]hen fixed costs increase 
substantially, it requires that a firm have a larger output 
level to maintain profitability.''\10\ Indeed, from one of the 
largest single increases in Federal regulation\11\ came what 
one prominent CEO of a large financial institution identified 
as a ``moat'' defending his company from competition.\12\ 
Another prominent investment bank executive put it in more 
direct terms when he identified the effects of regulatory 
requirements as ``hav[ing] raised the barriers to entry.''\13\ 
The reason for this is because regulatory compliance often 
entails differential impacts and economies of scale.\14\
---------------------------------------------------------------------------
    \9\An Act to Create the Small Business Administration and to 
Preserve Small Business Institutions and Free, Competitive Enterprise, 
Pub. L. No. 83-163, Sec. 202, 67 Stat. 4.
    \10\Steven Hackett, Environmental and Natural Resource Economics: 
Theory, Policy, and the Sustainable Society 154 (2d ed.) (2001).
    \11\Patrick McLaughlin, Oliver Sherouse & Daniel Francis, Dodd-
Frank is One of the Biggest Regulatory Events Ever, QuantGov, https://
quantgov.org/charts/dodd-frank-is-one-of-the-biggest-regulatory-events-
ever.
    \12\Joe Wiesenthal, The 4 Things That Worry Jamie Dimon . . . , 
Bus. Insider, Feb. 4, 2013, http://www.businessinsider.com/the-four-
things-that-worry-jamie-dimon-2013-2.
    \13\Opinion, Regulation is Good for Goldman,Wall St. J., Feb. 11, 
2015, https://www.wsj.com/articles/regulation-is-good-for-goldman-
1423700859, (citing comments made by Mr. Blankfein at an investor 
conference).
    \14\See, e.g., Marshall Lux & Robert Greene, The State and Fate of 
Community Banking 13 (Mossaver-Rahmani Center for Business and 
Government, M-RCBG Associate Working Paper Series, No. 37, 2015) 
(``[T]he discrepancy in performance between large and small community 
banks in part stems from the disproportionate cost of regulation on 
smaller institutions.'').
---------------------------------------------------------------------------
    Variable costs are typically proportional (linear) or 
decreasing (convex) in firm size. Consider a rule which 
requires a construction company to provide a hardhat for each 
jobsite employee--this cost increases at a rate directly 
proportional to the number of employees. But a variable cost 
may also be ``lumpy'' or discontinuous. For example a rule may 
require providing one outdoor toilet per 50 employees--if a 
firm has fewer than 50 employees, it has no way of 
proportionately reducing its cost.\15\ Or consider a license 
for a tax accounting program which may be subject to pricing 
per user but not per usage, resulting in a relatively higher 
cost for less intensive users of the product.
---------------------------------------------------------------------------
    \15\Bradford, supra note 6, at 7-8.
---------------------------------------------------------------------------
    Taken together, the fixed and certain variable components 
of a regulation's costs can result in an economic outcome that 
is suboptimal and to which policymakers should pay particular 
attention. Numerous analysts have attempted to quantify the 
scale of this differential regulatory impact.\16\ One 
difficulty in doing so is fully accounting for the effective 
``shadow price'' on the creation of new firms in the absence of 
a regulation (or relaxing its requirements). In other words, 
calculating the costs to a business to fully comply with a 
regulation may only partially capture the rule's economic 
effect because it does not account for those firms that may 
have formed in the absence of those costs (the aforementioned 
barriers to entry).\17\ And a growing body of literature points 
toward the importance of new firms (moreso than small ones, 
though most are by nature small at inception) for producing 
jobs and economic growth.\18\
---------------------------------------------------------------------------
    \16\See, e.g., Nicole V. Crain & W. Mark Crain, Small Bus. Admin., 
The Impact of Regulatory Costs on Small Firms iv (2010) (``As of 2008, 
small business face an annual regulatory cost of $10,585 per employee, 
which is 36 percent higher than the regulatory cost facing large firms 
(defined as firms with 500 or more employees).''); Ben Gitis & Sam 
Batkins, Regulatory Impact on Small Business Establishments, American 
Action Forum, (2015) (``The results . . . indicate that regulations 
cumulatively have a highly regressive effect on businesses.'').
    \17\Aggregate economic data may obscure underlying forgone economic 
activity, such as a ``missing generation'' of new firms. See, e.g., 
Francois Gourio, Todd Messer & Michael Siemer, What is the economic 
impact of the slowdown in new business formation?, 326 Chi. Fed. Letter 
(2014); Leora Klapper, Luc Laeven & Raghuram Rajan, Entry regulation as 
a barrier to entrepreneurship, 82 J. of Fin. Econ. 2006, (``We find 
that costly regulations hamper the creation of new firms, especially in 
industries that should naturally have high entry. These regulations 
also force new entrants to be larger and cause incumbent firms in 
naturally high-entry industries to grow more slowly.''); Lee 
Branstatter, et. al., Do Entry Regulations Deter Entrepreneurship and 
Job Creation? Evidence from Recent Reforms in Portugal, 124 The Econ. 
J. 805 (2014); Jamal Ibrahim Haidar, The Impact of Business Regulatory 
Reforms on Economic Growth, 26 J. of the Japanese and Int'l Economies 
285 (2012); and James Bailey & Diana Thomas, Regulating Away 
Competition: The Effect of Regulation on Entrepreneurship and 
Employment (2015) (Mercatus Center working paper).
    \18\See generally, Jason Wiens and Chris Jackson, Ewing Marion 
Kauffman Foundation, The Importance of Young Firms for Economic Growth, 
Entrepreneurship Policy Digest (2015); Alexander S. Kritikos, 
Entrepreneurs and their impact on jobs and economic growth, IZA World 
of Labor (2014); John Haltiwanger, Ron S. Jarmin & Javier Miranda, Who 
Creates Jobs? Small versus Large versus Young, 95 The Rev. of Econ. and 
Statistics 347 (2013); Ryan Decker, et. al., The Role of 
Entrepreneurship in US Job Creation and Economic Dynamism, 28 J. of 
Econ. Perspectives 3 (2014); Zoltan Acs and Catherine Armington, 
Employment Growth and Entrepreneurial Activity in Cities, 38 Reg'l 
Studies 911 (2004) (``Findings indicate that higher rates of 
entrepreneurial activity were strongly associated with faster growth of 
local economies.''); Andre van Stel, Empirical Analysis of 
Entrepreneurship and Economic Growth (2006).
---------------------------------------------------------------------------

Regulatory Flexibility Act

    In 1980, Congress formally acknowledged this regulatory 
effect phenomenon and passed the Regulatory Flexibility Act 
(RFA) which placed into statute requirements that Federal 
agencies consider the impacts on small entities of proposed 
Federal regulations.\19\ The RFA formalized a longstanding 
recognition of the potentially differential and 
disproportionate impacts regulations may have on small entities 
vis-a-vis large ones, and further ``establish[ed] as a 
principle of regulatory issuance that agencies shall endeavor . 
. . to fit regulatory and informational requirements to the 
scale of the businesses, organizations, and governmental 
jurisdictions subject to regulation.''\20\
---------------------------------------------------------------------------
    \19\Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164.
    \20\Id., at Sec. 2(b). Here ``organizations'' refers to not-for-
profit enterprises.
---------------------------------------------------------------------------
    Among other things, the RFA outlines particular 
considerations agencies must address as part of what it calls a 
``regulatory flexibility analysis.''\21\ It requires agencies 
to publicly preview likely forthcoming rules that are ``likely 
to have a significant economic impact on a substantial number 
of small entities'' in a semi-annual report,\22\ as well as 
solicit public input as part of the rule's development.\23\ It 
also directs the SBA's Chief Counsel for Advocacy to monitor 
``agency compliance with'' the RFA and report thereon to the 
President and Congress, as well as authorizes the Chief Counsel 
``to appear as amicus curiae in any action brought in a court 
of the United States to review a rule.''\24\
---------------------------------------------------------------------------
    \21\5 U.S.C. Sec. 603.
    \22\Id. at Sec. 602.
    \23\Id. at Sec. 609.
    \24\Id. at Sec. 612.
---------------------------------------------------------------------------

S. 584, the Small Business Regulatory Flexibility Improvements Act

    SBRFIA aims to address perceived deficiencies in the RFA, 
later amended by the Small Business Regulatory Enforcement 
Fairness Act) in 1996.\25\ One issue with the RFA was that 
``agency compliance . . . was at best sporadic'' because 
``[a]gencies faced little threat from non-compliance, since 
judicial review of regulatory flexibility analyses was very 
limited, and an agency's certification decision could not be 
challenged in court.''\26\
---------------------------------------------------------------------------
    \25\Contract with America Advancement Act of 1996, Pub. L. No. 104-
121, 110 Stat. 847, amended by U.S. Troop Readiness, Veterans' Care, 
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, 
Pub. L. No. 110-28, 121 Stat. 112.
    \26\H.R. Rep. 114-12, pt. 1, at 4 (2015). citing Thompson v. Clark, 
741 F.2d 401, 405 (D.C. Cir. 1984); Colo. State Banking Bd. v. 
Resolution Trust Corp., 926 F.2d 931, 948 (10th Cir. 1991); Lehigh 
Valley Farmers v. Block, 640 F. Supp. 1497, 1520 (E.D. Pa. 1986), aff'd 
on other grounds, 829 F.2d 409 (3d Cir. 1987).
---------------------------------------------------------------------------
    While RFA created a basic analytical lens and framework 
through which to consider Federal policy impacts on small 
businesses, the 1996 Act sought to alter the policymaking 
structure whereby small businesses would have a more robust 
voice in the process, for example, through establishment of 
``small business advocacy review panels'' (so-called SBREFA 
panels).\27\ It also included a requirement that agencies, when 
they are required to publish a final regulatory flexibility 
analysis, develop a ``compliance guide'' for each rule (or 
group of related rules) which explain to small entities how to 
comply. It also included judicial review for some agency 
actions under the RFA in order to improve agency compliance. 
Unfortunately, even these later ``changes have had only a 
modest effect on agency compliance with regulatory flexibility 
requirements.''\28\ As a witness at a recent Senate hearing put 
it:
---------------------------------------------------------------------------
    \27\Id. at Sec. 244.
    \28\Id. citing Sarah E. Shive, If You've Always Done It That Way, 
It's Probably Wrong: How the Regulatory Flexibility Act Has Failed To 
Change Agency Behavior, and How Congress Can Fix It, 1 Entrepreneurial 
Bus. L.J. 153, 164 (2006) (``[W]hile one Department of Labor official 
noted that the judicial review permitted by the SBREFA would likely 
result in a `significant impact,' judges have rarely ruled in favor of 
small businesses, granting substantial deference to agencies in all but 
the most egregious of cases.''); Christopher M. Grengs, Making the 
Unseen Seen: Issues and Options in Small Business Regulatory Reform, 85 
Minn. L. Rev. 1957, 1973 (June 2001) (``Some observers expressed high 
optimism about SBREFA's prospects for holding Federal agencies more 
accountable for their treatment of small businesses. Although this 
optimism was perhaps not entirely deserved, SBREFA has spurred moderate 
progress in improving the regulatory treatment of small businesses. In 
particular, since SBREFA's enactment in 1996, judicial review of 
Federal agency action under SBREFA has proved to be a promising 
lynchpin for remedying irrational or glaringly mistaken agency 
action.''); Jeffrey J. Polich, Judicial Review and the Small Business 
Regulatory Enforcement Fairness Act: An Early Examination of When and 
Where Judges Are Using Their Newly Granted Power Over Federal 
Regulatory Agencies, 41 Wm. & Mary L. Rev. 1425, 1426, 1461 (Apr. 2000) 
(``A review of existing case law demonstrates that small entities have 
prevailed using SBREFA in cases in which there was a gross violation of 
Federal rulemaking procedures by an agency, but failed when using 
SBREFA in cases in which the agency made some effort to comply with 
those requirements . . . . The SBREFA amendments succeed in refining 
the requirements of the RFA and, in particular, the judicial review 
provision grants small businesses a weapon to insure that Federal 
agencies comply with the RFA. Judicial deference to agency decisions, 
however, limits the power of judicial review. In the end, true 
regulatory relief depends upon the agencies' own commitment to fairness 
and balance for the small businesses they regulate.'').

          While the Regulatory Flexibility Act requires 
        agencies to consider the effect of their actions on 
        small entities, agencies regularly neglect input from 
        the regulated community and, as a result, produce very 
        poor analysis. Even with these flaws, the rules go into 
        place and businesses are forced to divert precious 
        resources to lengthy and uncertain legal challenges. 
        Unfortunately there is no other way to hold agencies 
        accountable when they ignore the effects of regulation 
        on small businesses, and agencies are not required to 
        confirm their economic analysis with a respected, 
        neutral third party.\29\
---------------------------------------------------------------------------
    \29\Examining How Small Businesses Confront and Shape Regulations: 
Hearing Before the S. Comm. on Small Bus. and Entrepreneurship, 115th 
Cong., 115-21 (2017) (testimony of Randy Noel) (``Under the RFA and 
subsequent amendments of the SBRFA, an agency may certify that a rule 
is not expected to have a significant economic impact on a substantial 
number of small entities. This allows the agency to skip the SBREFA 
requirements. Unfortunately there is no check on whether the agency 
certification of no impact on small businesses is correct. 
Increasingly, agencies have improperly claimed that small businesses 
were not affected by their proposed rule, even when that clearly was 
not the case.'') (emphasis added).

---------------------------------------------------------------------------
    Another Congressional hearing witness put it thusly:

          While the original Congressional intent and 
        subsequent additions/enhancements to the Regulatory 
        Flexibility Act (RFA) are to be lauded, the reality is 
        that far too often agencies either view compliance with 
        the Act as little more than a procedural ``check-the-
        box'' exercise or they artfully avoid compliance by 
        other means.\30\
---------------------------------------------------------------------------
    \30\Hearing on H.R. 2542 Before the Subcomm. on Regulatory Reform, 
Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th 
Cong.113-29 (2013) (statement of Carl Harris).

    SBRFIA seeks to strengthen the framework established in RFA 
and the Small Business Regulatory Enforcement Fairness Act 
while also narrowing avenues for agencies to de facto or even 
explicitly avoid those acts' requirements. It does this in part 
by providing more clarity through expanded definitions where 
previously these were subject to agency's own interpretation, 
providing for expanded judicial review of agency compliance 
with RFA requirements, and expanded authorities for the SBA's 
Office of Advocacy. The overall effect is to drive regulatory 
agencies toward a process and analysis which meaningfully 
accounts for--and to the extent possible accommodates--the 
impact on small entities before finalizing a rule.

                        III. Legislative History

    Senator James Lankford (R-OK) introduced S. 584 on March 8, 
2017, with Senators James E. Risch (R-ID) and Chuck Grassley 
(R-IA). Senators Orrin G. Hatch (R-UT), John Hoeven (R-ND), and 
Pat Roberts (R-KS) later joined as cosponsors. The bill was 
referred to the Committee on Homeland Security and Governmental 
Affairs. The Committee considered S. 584 at a May 17, 2017 
business meeting.
    The Committee ordered S. 584 reported favorably on May 17, 
2017, by a roll call vote of 8 yeas to 6 nays. Senators voting 
in the affirmative were Johnson, McCain, Portman, Paul, 
Lankford, Enzi, Hoeven, and Daines. Senators voting in the 
negative were McCaskill, Tester, Heitkamp, Peters, Hassan, and 
Harris. For the record only, Senator Carper voted nay by proxy. 
Consistent with Committee Rule 11, the Committee reports the 
bill with a technical amendment by mutual agreement of the 
Chairman and Ranking Member.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Short title

    This section provides the bill's short title, the ``Small 
Business Regulatory Flexibility Improvements Act.''

Section 2. Clarification and expansion of rules covered by the 
        Regulatory Flexibility Act

    This section clarifies and expands the rules covered by the 
Regulatory Flexibility Act by amending Section 601 of title 5 
of the United States Code. This section defines ``economic 
impact'' as any direct or indirect economic effect on small 
entities; defines ``land management plan'' to mean any plan 
developed by the Secretary of Agriculture under the Forest and 
Rangeland Renewable Resources Planning Act of 1974 or Section 
202 of the Federal Land Policy and Management Act of 1976; 
defines ``revision'' and ``amendment;'' defines ``small 
organization'' pursuant to a size standard established by the 
Administrator of the Small Business Administration for entities 
described by the North American Industrial Classification 
System or, if this is not available, as any entity whose net 
worth does not exceed $7,000,000 and 500 employees.

Section 3. Expansion of report of regulatory agenda

    This section requires that the SBA describe which sector of 
the North American Industrial Classification System is 
primarily affected by any rule proposed by the agency that is 
likely to have a significant economic impact on small entities. 
Furthermore, within three days after an agency publishes a 
regulatory flexibility agenda, it must publicize a plain 
language summary of the agenda on its website. The SBA must 
also publish on its website a plain language summary of each 
regulatory flexibility agenda within three days of their 
publication in the Federal Register.

Section 4. Requirements providing for more detailed analyses

    This section lays out the requirements for what must be 
included in a regulatory flexibility analysis. These analyses 
must include (1) a description of the reasons the action is 
being considered, (2) a description of the proposed rule's 
objectives and legal basis, (3) an estimate of the number and 
type of small entities the rule will apply to, (4) a 
description of the compliance requirements of the proposed 
rule, (5) a description of all potentially duplicate, 
overlapping, or conflicting federal rules, (6) an estimate of 
the added economic burden of the rule on small entities, (7) a 
description of any disproportionate impact on small entities or 
a specific class thereof, and (8) a description of any 
hindrance on small entity's ability to have access to credit. 
An agency may satisfy these requirements by cross-referencing 
to a specific portion of another agenda required by law which 
meets these stipulations. The agency shall also publish the 
final regulatory flexibility analysis available on its website 
and in the Federal Register. The agency shall further provide a 
quantifiable description of the impacts of the proposed rule or 
a statement as to why the effects are not quantifiable. This 
section also includes changes to the syntax of 5 U.S.C. 604(a) 
and 605(b).

Section 5. Repeal of waiver and delay authority; additional powers of 
        the Chief Counsel for Advocacy

    This section mandates that Chief Counsel for Advocacy of 
the SBA, after taking public comment, issue rules within 270 
days of enactment of this bill to govern agency compliance with 
the Regulatory Flexibility Act, and these rules cannot be 
altered without the Chief Counsel's consultation. It further 
empowers the Chief Counsel to intervene in any agency 
adjudication and to file comments in response to any agency 
notice requesting a statement.

Section 6. Procedures for gathering comments

    This section requires that an agency, prior to making a 
rule, must provide the Chief Counsel for Advocacy of the SBA 
with (1) all materials prepared and utilized by the agency in 
making the proposed rule, (2) information on the potential 
economic effects of the proposed rule. Within 15 days of 
receiving these materials, the Chief Counsel must (1) identify 
the small entities from whom to solicit input about the 
potential economic impact of the proposed rule and (2) convene 
a review panel to review these materials consisting of an 
employee from the SBA Office of Advocacy, an employee from the 
agency making the rule and, in the case of an agency other than 
an independent regulatory agency, an employee from the Office 
of Information and Regulatory Affairs of OMB. Within 60 days of 
this committee being convened, the Chief Counsel shall submit a 
report to the agency including an assessment of the economic 
impact of the proposed rule and this report shall become part 
of the rule making record. This section applies to a proposed 
rule if (1) its annual effect on the economy is $100,000,000 or 
more, (2) it creates a major increase in costs or prices for 
consumers, industry, or the government (3) it results in 
significant adverse effects on competition, employment, 
investment, productivity, innovation, or the ability for 
American enterprises to compete in domestic markets, or (4) it 
results in a significant economic impact on a substantial 
number of small entities. The Chief Counsel can waive these 
reporting requirements if he or she determines that compliance 
is impracticable, unnecessary, or contrary to the public 
interest. A small entity may request that the agency provide it 
with all of the documentation discussed in this subsection 
which will be delivered to the entity within ten days.

Section 7. Periodic review of rules

    This section requires that, within 180 days, each agency 
must publish in the Federal Register and place on its website a 
plan for the periodic review of rules issued by the agency 
which the agency head determines have a significant economic 
impact to a substantial number of small entities. The purpose 
of the review is to determine whether rules should be 
continued, amended, or rescinded. The plan shall provide for 
the review of all such agency rules currently existing within 
ten years of the publication of the plan. If the agency head 
deems this unfeasible, he or she will certify this in a 
statement published in the Federal Register and may extend the 
review for no longer than two years. The plan shall include 
details on how the agency will include small businesses in the 
process. Agencies shall amend or rescind rules to minimize any 
adverse significant economic impact on a substantial number of 
small entities. Each agency must submit an annual report with 
the results of this review process and each year, each agency 
must publish on its website a list of the rules to be reviewed.

Section 8. Judicial review of compliance with the requirements of the 
        Regulatory Flexibility Act available after publication of the 
        final rule

    This section contains syntax changes for 5 U.S.C. 
Sec. 611(a) and 5 U.S.C. Sec. 612(b).

Section 9. Jurisdiction of court of appeals over rules implementing the 
        Regulatory Flexibility Act

    This section contains syntax changes for 28 U.S.C. 
Sec. 2342, 28 U.S.C. Sec. 2341(3), and 5 U.S.C. Sec. 612(b).

Section 10. Establishment and approval of small business concern size 
        standards by Chief Counsel for Advocacy

    This section establishes that the SBA Administrator may 
specify standards by which a business concern can be determined 
to be a small business concern for the purposes of this 
legislation. This section further specifies that in the case of 
an action for judicial review of a rule which includes 
definitions or standards approved by the Chief Counsel, the 
party seeking such a review shall be entitled to join as a 
party in the action.

Section 11. Clerical Amendments

    This section contains clerical edits to 5 U.S.C. Sec. 601, 
5 U.S.C. Sec. 605, 5 U.S.C. Sec. 607, 5 U.S.C. Sec. 608, 5 
U.S.C. Sec. 603(d), and 5 U.S.C. Sec. 604(a).

Section 12. Agency preparation of guides

    This section requires SBA to use sufficiently plain 
language in guides for affected small entities. The SBA shall 
solicit input from these entities when developing guides.

Section 13. Comptroller General report

    This section requires the Comptroller General of the United 
States to publish a study within 90 days examining whether the 
Chief Counsel of the SBA has the resources to carry out that 
office's duties under this act.

Section 14. Waiver of fines for first-time paperwork violations by 
        small businesses

    This section edits the procedure for fining a small 
business for a first-time paperwork violation. A violation is a 
first-time violation if the small business has not previously 
violated any similar requirement by the same agency within five 
years. The head of the agency will not impose a fine on a small 
business for a first-time violation. This policy may be 
excepted if the agency head determines that (1) the violation 
can cause serious harm to the public interest, (2) failing to 
impose a fine would impede with the detection of criminal 
activity, (3) the violation is tax-related, (4) the violation 
was not corrected on or before the 6-month anniversary of being 
notified of their noncompliance, or (5) the violation presents 
a danger to public health or safety. In the case of a danger to 
public health and safety, the agency head may choose not to 
impose a fine if the concern is corrected within 24 hours. To 
determine whether to waive a fine in these cases, the agency 
head shall consider all of the facts including (1) the nature 
and seriousness of the violation, (2) whether the small 
business has made a good faith effort to comply, and (3) 
whether the small business has obtained a significant economic 
benefit from the violation. Should the agency head not decide 
to allow the small business 24 hours to correct the violation 
and avoid a fine, the agency head shall notify congress 
regarding this determination within 60 days of the imposition 
of the fine.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would impose no costs on 
state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 18, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 584, the Small 
Business Regulatory Flexibility Improvements Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

S. 584--Small Business Regulatory Flexibility Improvements Act

    Summary: S. 584 would amend the Regulatory Flexibility Act 
(RFA) to expand the number of rules covered by that act and to 
require agencies to perform additional analysis of regulations 
that affect small businesses. The legislation also would 
provide new authorities to the Small Business Administration's 
(SBA's) Office of Advocacy to intervene and provide support for 
agency rulemaking. Finally, S. 584 would require the Government 
Accountability Office (GAO) to report on the implementation of 
the bill.
    CBO estimates that implementing S. 584 would cost $65 
million over the 2017-2022 period, assuming appropriation of 
the necessary funds. Enacting the bill could affect direct 
spending by agencies not funded through annual appropriations 
and would waive certain fines, which are recorded as revenues; 
therefore, pay-as-you-go procedures apply. CBO estimates, 
however, that any changes in direct spending and revenues would 
not be significant.
    CBO estimates that enacting S. 584 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    S. 584 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments.
    If any federal agencies increase mandatory fees to offset 
the costs of implementing the additional analysis required by 
the bill, S. 584 would increase the cost of an existing mandate 
on private entities to pay those fees. CBO expects that if fees 
are increased as a result of the bill, the additional cost of 
the mandate would fall well below the annual threshold 
established in UMRA for private-sector mandates ($156 million 
in 2017, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 584 is shown in the following table. The 
costs of this legislation fall within budget functions 370 
(commerce and housing credit), 800 (general government), and 
all budget functions that include funding for agencies that 
issue regulations affecting small businesses.

----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars--
                                          ----------------------------------------------------------------------
                                             2017      2018      2019      2020      2021      2022    2017-2022
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level............         0        10        15        15        15        15         70
Estimated Outlays........................         0         7        13        15        15        15         65
----------------------------------------------------------------------------------------------------------------

    Basis of Estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the beginning of fiscal year 
2017, that the necessary amounts will be appropriated each 
year, and that spending will follow historical patterns for 
similar activities.
    CBO is unaware of any comprehensive information on the 
current level of spending for regulatory activities 
governmentwide. However, according to the Congressional 
Research Service, federal agencies issue 3,000 to 4,000 final 
rules each year. The Departments of Transportation, Homeland 
Security, and Commerce, and the Environmental Protection Agency 
(EPA) issue the most rules. Most major rules (those with an 
estimated economic impact on the economy of more than $100 
million per year) are issued by the Departments of Health and 
Human Services and Agriculture and the EPA.
    S. 584 would broaden the definition of a ``rule'' for 
rulemaking purposes to include agency guidance and policy 
statements. The bill also would expand the scope of the 
regulatory analysis for proposed and final rules to include an 
examination of indirect economic effects on small businesses 
and a more detailed analysis of the possible economic 
consequences of the rule for small businesses. The legislation 
defines indirect economic effects as any effect that is 
reasonably foreseeable and would require agencies to prepare 
reports on the cumulative economic impact on small businesses 
of new and existing regulations.
    Implementing S. 584 would increase the amount of regulatory 
analysis that agencies would need to prepare, and it would 
expand the role of the SBA's Office of Advocacy and the Office 
of Information and Regulatory Affairs (OIRA) within the Office 
of Management and Budget in the rulemaking process. Finally, 
the legislation would require more federal agencies to use 
panels of experts to evaluate regulations and to prepare 
reports on the economic impact of proposed regulations on small 
business.
    Information from OIRA, the SBA, and some federal agencies 
indicates that the new requirements would increase the cost to 
issue a few hundred of the thousands of federal regulations 
issued annually. Based on an analysis of that information, CBO 
estimates that administrative costs of some regulatory 
agencies, the SBA and OIRA would eventually increase by a total 
of about $15 million annually. That amount would cover 
approximately 60 new employees at the SBA and OIRA as well as 
additional administrative expenses for several other agencies. 
We expect that it would take about two years to reach that 
level of effort. The GAO report on the effect of the 
legislation on the Office of Advocacy would cost less than 
$500,000 to complete. Additional spending would be subject to 
the availability of appropriated funds.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. Pay-as-you-go procedures apply because enacting S. 
584 could affect direct spending by agencies not funded through 
annual appropriations and would decrease revenues by waiving 
certain fines. CBO estimates, however, that any net increase in 
direct spending by those agencies and the loss of revenues from 
the waving of fines would not be significant.
    Increase in long-term net direct spending and deficits: CBO 
estimates S. 584 would not increase net direct spending or on-
budget deficits by more than $5 billion in any of the four 
consecutive 10-year periods beginning in 2028.
    Intergovernmental and private sector impact: S. 584 
contains no intergovernmental mandates as defined in UMRA and 
would not affect the budgets of state, local, or tribal 
governments.
    If any federal agencies increase mandatory fees to offset 
the costs of implementing the additional analysis required by 
the bill, S. 584 would increase the cost of an existing mandate 
on private entities to pay those fees. CBO expects that if such 
mandatory fees are increased as a result of the bill, the 
additional cost of the mandate in any one year would fall well 
below the annual threshold established in UMRA for private-
sector mandates ($156 million in 2017, adjusted annually for 
inflation).
    Estimate prepared by: Federal Spending: Matthew Pickford 
and Stephen Rabent; Impact on state, local, and tribal 
governments: Zach Byrum; Impact on the private sector: Paige 
Piper/Bach.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                          VII. Minority Views

                              ----------                              


MINORITY VIEWS OF SENATORS CLAIRE McCASKILL, THOMAS R. CARPER, AND GARY 
                               C. PETERS

    Small businesses are the backbone of American communities. 
They are the local car dealership, laundromat, and favorite 
family restaurant. Small businesses are critical to creating 
jobs and driving economic growth. That is why, when Congress 
considers legislation it should always be our goal to consider 
the impact on small businesses, and ensure a level playing 
field so small businesses have the opportunity to thrive. 
Unfortunately, the Small Business Regulatory Flexibility 
Improvements Act of 2017 (SBRFIA) does not meet that standard. 
This bill will introduce more uncertainty into the regulatory 
process and make it more difficult to create that level playing 
field.
    Contrary to the rhetoric often heard, most small businesses 
are not opposed to all forms of regulation. According to 
polling conducted by Small Business Majority, nearly eight in 
ten small employers agree regulations are important. These 
business owners believe that regulations protect small 
businesses from unfair competition and level the playing field 
with big businesses so they can compete. The same poll found 
that 86% of small employers feel that certain government 
regulations play an important role and are necessary for a 
modern economy.\1\ These polls are significant since the Small 
Business Office of Advocacy finds that over 99% of all 
businesses qualify as small businesses (using the basic 
Advocacy definition of a small business being any business 
entity with less than 500 employees).\2\
---------------------------------------------------------------------------
    \1\Improving Small Business Input on Federal Regulations: Ideas for 
Congress and a New Administration: Hearing Before the Subcommittee on 
Regulatory Affairs and Federal Management, 115th Cong, Jan. 19, 2017 
(testimony of LaJuanna Russell).
    \2\``Frequently Asked Questions About Small Business,'' Small 
Business Office of Advocacy, https://www.sba.gov/sites/default/files/
advocacy/SB-FAQ-2017-WEB.pdf
---------------------------------------------------------------------------
    The focus of SBRFIA is to make changes and expand upon the 
rulemaking and analytical requirements developed under the 
Regulatory Flexibility Act (RFA) and the Small Business 
Regulatory Enforcement Fairness Act (SBREFA). The majority's 
committee report states that SBRFIA seeks to strengthen the RFA 
framework while narrowing the ability of agencies to 
inappropriately avoid these requirements. Further, the report 
argues that SBRFIA drives regulatory agencies toward a process 
where agencies meaningfully account for and, to the extent 
possible, accommodate small entities when analyzing the impacts 
of rules.\3\
---------------------------------------------------------------------------
    \3\Supra, pt. 2
---------------------------------------------------------------------------
    Unfortunately, in an attempt to accomplish those laudable 
goals, SBRFIA injects vagueness and overly broad requirements 
into a well-understood statute. The net result is uncertainty 
for small businesses, and eventually harm to those small 
businesses as the regulatory process becomes unable to 
effectively meet their needs.
    Agencies should always comply with the RFA when developing 
rules, and agencies that incorrectly waive RFA requirements if 
a rule does have a significant impact on a significant number 
of small entities should be held accountable for their actions. 
In fact, there are already substantial incentives for agencies 
to properly certify rules. Entities that believe an agency has 
improperly certified a rule, waiving RFA requirements, can 
challenge the certification in federal court.\4\ This provides 
the necessary check on agency actions and helps ensure RFA 
compliance.
---------------------------------------------------------------------------
    \4\5 U.S.C. 605(b).
---------------------------------------------------------------------------
The importance of benefits in the rulemaking process
    In order to actually improve outcomes for small businesses, 
reforms to the rulemaking process must take into account the 
benefits of regulations in addition to the costs. While it is 
easy to focus on the costs of regulations, the benefits are 
just as important, since the benefits are the foundational 
rationale behind requiring a group to incur any regulatory 
costs at all. Accounting for the benefits of a regulation has 
been enshrined in the regulatory process since President Reagan 
issued Executive Order 12291 in 1981\5\ and the importance of 
benefits in regulatory process was further solidified when 
Executive Order 12866 was issued in 1993,\6\ that executive 
order that has been reaffirmed and kept in effect by both 
Democratic and Republican presidents. To focus on costs without 
giving equal consideration to the benefits provided, as this 
legislation does, is shortsighted and harmful to small 
businesses.
---------------------------------------------------------------------------
    \5\Exec. Order No. 12291. 46 C.F.R. 13193 (Feb. 17, 1981).
    \6\Exec. Order No. 12866, 58 C.F.R. 51735 (Sept. 20, 1993).
---------------------------------------------------------------------------
    Furthermore, the benefits should not be thought of as a 
redistribution of power, but as a reduction of societal costs--
such as ensuring that a parent has a safe workplace or is 
protected from exposure to hazardous chemicals. A serious 
workplace injury to a parent who is unable to care for a young 
child creates immeasurable harm to the family, but it also 
means potentially significant societal burdens as well--
children may end up in foster care, or families may lose their 
only income and be forced to rely on welfare benefits. These 
types of regulatory benefits demonstrate the effectiveness of 
regulations that mitigate the unavoidable risks our society 
encounters every day. Throughout SBRFIA, there is an emphasis 
on costs over benefits, which will hurt small businesses and 
the entire regulatory process.
    Any reform of the rulemaking process must also consider the 
time it takes to promulgate a regulation. The rulemaking 
process is now more time consuming than ever before, and 
Administrative Law experts have been sounding the alarm for 
years--with estimated promulgation times for significant 
regulations taking up to eight years, in a best case 
scenario.\7\
---------------------------------------------------------------------------
    \7\See e.g. Shapiro, S., The Regulatory Accountability Act of 2011: 
Way Too Much of a Good Thing, Administrative & Regulatory Law News, 
37(3), 10-11 (2012).
---------------------------------------------------------------------------
    Of the alterations SBRFIA makes to the federal regulatory 
process, there are a number of concerns that deserve closer 
examination, including the expansion of the definition of what 
constitutes a rule, the true impact of analyzing indirect 
effects, providing excessive authority to the Small Business 
Office of Advocacy, the impact on public health and safety of 
waiving certain paperwork requirements, and unnecessary 
analytical requirements that will not improve regulations. 
These five subjects do not represent the sum total of the 
concerns with SBRFIA but do represent some of the most critical 
problems that need to be addressed.
S. 584 Creates an overly-broad definition of covered rules
    Under the SBRFIA definition of ``rules,'' direct final and 
interim final rules would be subject to the expanded RFA 
requirements, a significant change from current law. Most often 
these types of rulemaking processes are utilized in emergency 
situations, to protect public health and safety, and during 
routine and noncontroversial rulemakings. They are important 
tools that aid agencies in many situations and help protect the 
public, and they are used in situations in which compliance 
with the RFA would do nothing more than waste scarce 
resources.\8\ SBRFIA also repeals the ability of agencies to 
waive applicable RFA requirements when responding to an 
emergency or when it would otherwise be impracticable.\9\
---------------------------------------------------------------------------
    \8\Section-by-Section Analysis, S. 584, the Small Business 
Regulatory Flexibility Improvement Act of 2017, Center for Progressive 
Reform (hereinafter ``CPR Analysis'').
    \9\S. 584, Sec. 2.
---------------------------------------------------------------------------
    Additionally, SBRFIA would require many agency guidance 
documents to go through the expanded RFA analytical 
requirements--including, for the first time, documents that do 
not have the force and effect of law since they are not 
regulations.\10\ Agencies use guidance documents to clarify the 
meaning of regulations, and businesses rely on these documents, 
and the fast issuance of these documents, to ensure compliance 
with complex regulations. Guidance can be used by both the 
regulators and regulated to ensure that all parties understand 
the requirements and responsibilities spelled out in regulatory 
text. SBRFIA's departure from current practice would inevitably 
cause significant delays in the issuance of guidance, leading 
to less certainty for businesses.
---------------------------------------------------------------------------
    \10\CPR Analysis.
---------------------------------------------------------------------------
    In addition, agency guidance documents are already 
regularly examined by the courts, and when these texts are 
found to create additional burdens beyond those examined in the 
underlying regulation, the action is struck down.\11\ As such, 
codifying the additional RFA requirements in this bill would 
add uncertainty without adding additional oversight.
---------------------------------------------------------------------------
    \11\Agric. Retailers Ass'n v. U.S. Dep't of Labor & OSHA, 837 F.3d 
60, 2016; Perez v. Mortg. Bankers Ass'n, 135 S. Ct. 1199 (2015).
---------------------------------------------------------------------------
    Taken together, these changes to current law regarding 
direct and interim final rules and guidance documents will 
significantly hamper an agency's ability to respond to 
emergency situations and put a strain on agency resources. By 
requiring that agencies complete a lengthy RFA analysis, even 
when using these commonsense, well-understood and accepted 
rulemaking procedures, agencies will likely abandon these 
practices and, at best, needlessly subject the American people 
to lengthened rulemaking and public risks.
S. 584 requires unbalanced analysis of indirect economic effects
    SBRFIA's requirement to expand regulatory analysis to 
include the indirect effects of regulation on small entities 
represents a significant increase in the number of regulations 
subject to the analytical requirements under the RFA, and could 
potentially result in every regulation being subject to the 
RFA. The bill does not clearly define ``indirect effects,'' 
saying only that the indirect effect should be ``reasonably 
foreseeable and results from such rule (without regard to 
whether small entities will be directly regulated by the 
rule).''\12\ Under such a wide definition, even rules with only 
very minor indirect impacts on small entities would have to 
complete the same analytical analysis as rules with significant 
impact on small entities. Since it was first enacted, and 
through several legislative updates, the RFA was specifically 
designed and targeted at the rules which had the most 
significant direct impact on small entities.\13\ By changing 
this standard, the original purpose of the RFA is lost.
---------------------------------------------------------------------------
    \12\S. 584, Sec. 2.
    \13\S. Rpt. 96-878 to accompany S. 299, which was signed into law 
as P.L. 96-354 (1980).
---------------------------------------------------------------------------
    Requiring so many additional rules to undergo such scrutiny 
also threatens the quality of all regulatory actions. A 
situation may very easily arise where agencies simply do not 
receive the resources necessary to perform the required 
analysis with the attention to detail required under this bill. 
Even with additional appropriations to the agencies, such 
detailed requirements will continue to elongate an already 
backlogged process. This will undoubtedly create additional 
delays which will further risk the public health and safety, as 
well as a level playing field for small businesses, within our 
Nation.
    It is also notable that the bill actually refers to 
``indirect economic effect'' rather than ``indirect effects.'' 
This is nothing more than an attack on the fair consideration 
of both the costs and benefits of a proposed rule. Benefits, by 
their nature, are not as easily quantifiable as costs to the 
regulated entities, and many benefits are not 100 percent 
economic in nature. Under this bill's requirement, it is not 
difficult to see how agencies will be bound to consider 
regulatory costs at a higher rate than the benefits to society. 
As we already discussed, consideration of benefits in 
regulatory analysis is critical to understanding the true 
impact of a rule, and just looking at economic impacts presents 
an incomplete analysis.

S. 584 provides excessive authority to the Office of Advocacy

    SBRFIA gives wide-ranging authority to the Small Business 
Office of Advocacy (Advocacy) to develop regulations regarding 
agency implementation of the RFA, as amended by SBRFIA. This 
would give Advocacy significant authority over rulemaking of 
every federal agency, since potentially every rule would be 
impacted by the RFA. It is not clear that Advocacy wishes to 
have such authority, nor is it clear that giving it such 
authority would improve regulatory outcomes for small 
businesses. Recent actions taken by Advocacy have created doubt 
in the decision-making ability and objectivity of the Office. 
Advocacy recently chose to award an important research contract 
to individuals who developed a previous report for Advocacy 
that was debunked and eventually disclaimed by Advocacy because 
it significantly overstated the costs of regulations.\14\ That 
Advocacy would choose to pursue another critical regulatory 
analysis research effort with the same individuals who 
previously produced a widely debunked report\15\ gives rise to 
concerns about Advocacy's judgement and ability to oversee 
regulatory activity across the federal government.
---------------------------------------------------------------------------
    \14\``Backlash to SBA Regulatory Research Contract Is Growing'', 
Bloomberg BNA, By Cheryl Bolen, Nov. 2, 2017; and ``Controversial 
Research Contract Faces Possible Bid Protest,'' Bloomberg BNA, By 
Cheryl Bolen, Nov. 9, 2017.
    \15\https://www.sba.gov/advocacy/impact-regulatory-costs-small-
firms.
---------------------------------------------------------------------------

S. 584 weakens enforcement of public health and safety requirements

    SBRFIA also weakens public health and safety requirements 
by amending the Paperwork Reduction Act (PRA) and creating a 
requirement that agencies waive fines for a significant number 
of paperwork violations. The definition of paperwork violations 
under the PRA is broad and captures a significant number of 
recordkeeping and reporting requirements, as well as 
disclosures to third parties.\16\ For example, consider all of 
the safety requirements of the asbestos standard in 
construction and the provisions requiring the environmental 
monitoring of exposures, the medical examinations of workers, 
the communication of employers, and the training of workers. 
Those requirements would be deemed paperwork under SBRFIA and 
could therefore be waived, as could similar requirements.\17\ 
Agencies have considerable flexibility to waive paperwork 
requirements for small businesses. For example, as part of the 
Small Business Paperwork Relief Act of 2002, agencies can 
aggressively seek out ways to reduce burdens for the smallest 
businesses, those with fewer than 25 employees.\18\ However, 
SBRFIA eliminates much of that flexibility and undermines 
agencies' efforts to protect public health and safety.
---------------------------------------------------------------------------
    \16\CPR Analysis.
    \17\Asbestos in Construction Standard (29 CFR 1926.1101) (1218-
0134), U.S. Department of Labor, Occupational Safety and Health 
Administration, August 2016.
    \18\5 U.S.C. 3506.
---------------------------------------------------------------------------
    These paperwork violations also cannot be accurately 
defined as ``first-time'' violations since the legislative 
language actually states that a business is eligible for a 
waiver if they have not committed a similar violation in the 
past five years.\19\ Even if a violation occurred more than 
five years ago, a responsible business should take steps to 
comply with the requirements, and waiving these requirements 
removes an important incentive for businesses to do so.
---------------------------------------------------------------------------
    \19\S. 584, Sec. 14.
---------------------------------------------------------------------------

S. 584 creates unnecessary analytical requirements

    Throughout, SBRFIA features an expansion of analytical 
requirements under the RFA. For example, it adds the term 
``detailed'' to several requirements\20\ but invites 
uncertainty by offering no explanation what constitutes a 
detailed analysis. While such a change may seem 
inconsequential, inside the courtroom legislative word choice 
matters and can have lasting impacts.\21\ SBRFIA requires 
consideration of the ``cumulative economic impact,'' and 
``disproportionate economic impacts'' such overly broad terms 
could very easily lead to additional rulemaking delays and 
highly speculative analysis. Taken as a whole, these 
requirements lead to what some have referred to as ``paralysis 
by analysis,'' causing harm to businesses and families alike.
---------------------------------------------------------------------------
    \20\Id.
    \21\Senate Committee on Homeland Security and Governmental Affairs, 
Subcommittee on Regulatory Affairs and Federal Management, The Unfunded 
Mandates Reform Act: Opportunities for Improvement to Support State and 
Local Governments. 114th Cong. (Feb. 24, 2016) (S. Hrg. 114-266).
---------------------------------------------------------------------------

Conclusion

    Finally, we note that SBRFIA misses sufficient 
consideration of key concepts that should be in any legislative 
update of the RFA. First, the bill makes no provision regarding 
how to provide agencies additional resources or capabilities to 
produce the additional analysis called for in the bill. 
Further, the bill does not provide enough focus or direction to 
agencies regarding additional compliance assistance for small 
entities. As noted earlier, small entities see the value in 
regulations that level the playing field.\22\
---------------------------------------------------------------------------
    \22\Senate Committee on Homeland Security and Governmental Affairs, 
Subcommittee on Regulatory Affairs and Federal Management, Improving 
Small Business Input on Federal Regulations: Ideas for Congress and a 
New Administration, Testimony of LaJuanna Russell, 115th Cong (Jan. 19, 
2017).
---------------------------------------------------------------------------
    It should be our goal to have an effective, and transparent 
regulatory process, and to ensure that process results in 
common-sense regulations, which are promulgated in a timely 
fashion, protect public health and safety, and maximize 
benefits. We remain open to considering legislation that will 
actually improve regulatory outcomes for small businesses, and 
we look forward to such efforts in the future. However, we do 
not believe this bill would improve the regulatory process, and 
the superfluous analytical requirements would slow down an 
already slow process without improving outcomes. For these 
reasons we oppose S. 584 and urge our colleagues to join us in 
opposition.

      VIII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 584 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):
UNITED STATES CODE

           *       *       *       *       *       *       *


TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

           *       *       *       *       *       *       *


PART I--THE AGENCIES GENERALLY

           *       *       *       *       *       *       *


            CHAPTER 6--THE ANALYSIS OF REGULATORY FUNCTIONS

Sec.
601. Definitions.
602. Regulatory agenda.
603. Initial regulatory flexibility analysis.
604. Final regulatory flexibility analysis.
605. [Avoidance of duplicative or unnecessary analyses.] Incorporations 
          by reference and certifications.
606. Effect on other law.
607. [Preparation of analyses.] Quantification requirements.
608. [Procedure for waiver or delay of completion.] Additional powers of 
          Chief Counsel for Advocacy.
609. Procedures for gathering comments.
610. Periodic review of rules.
611. Judicial review.
612. Reports and intervention rights.

SEC. 601. DEFINITIONS.

           *       *       *       *       *       *       *


          [(1) the term](1) Agency.--The term ``agency'' means 
        an agency as defined in section 551(1) of this 
        title[;].
          (2) Rule._The term ``rule''--
                  (A) has the meaning given the term in section 
                551(4); and
                  (B) does not include--
                          (i) a rule pertaining to the 
                        protection of the rights of and 
                        benefits for veterans or part 232 of 
                        title 32, Code of Federal Regulations 
                        (as in effect on July 1, 2014), or any 
                        successor provisions thereto; or
                          (ii) a rule of particular (and not 
                        general) applicability relating to 
                        rates, wages, corporate or financial 
                        structures or reorganizations thereof, 
                        prices, facilities, appliances, 
                        services, 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 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 opportunity for public 
        comment, 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;] 
        Small Organization._
                  (A) In general.--The term ``small 
                organization'' means any nonprofit enterprise 
                which, as of the issuance of a notice of 
                proposed rule making--
                          (i) in the case of an enterprise 
                        which is described by a classification 
                        code of the North American Industrial 
                        Classification System, does not exceed 
                        the size standard established by the 
                        Administrator of the Small Business 
                        Administration pursuant to section 3 of 
                        the Small Business Act (15 U.S.C. 632) 
                        for small business concerns described 
                        by such classification code; and
                          (ii) in the case of any other 
                        enterprise, has a net worth that does 
                        not exceed $7,000,000 and has not more 
                        than 500 employees.
                  (B) Local labor organizations.--In the case 
                of any local labor organization, subparagraph 
                (A) shall be applied without regard to any 
                national or international organization of which 
                such local labor organization is a part.
                  (C) Agency definitions.--Subparagraphs (A) 
                and (B) shall not apply to the extent that an 
                agency, after consultation with the Office of 
                Advocacy of the Small Business Administration 
                and after opportunity for public comment, 
                establishes one or more definitions for such 
                term which are appropriate to the activities of 
                the agency and publishes such definitions in 
                the Federal Register.
          [(5) the term] (5) Small governmental jurisdiction.--
        The term ``small governmental jurisdiction'' means 
        governments of cities, counties, towns, townships, 
        villages, school districts, or special districts, and 
        tribal organizations (as defined in section 4(l) of the 
        Indian Self-Determination and Education Assistance Act 
        (25 U.S.C. 5304(l))), 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[;].
          [(6) the term] (6) Small entity.--The term ``small 
        entity'' shall have the same meaning as the terms 
        ``small business'', ``small organization'', and ``small 
        governmental jurisdiction'' defined in paragraphs (3), 
        (4) and (5) of this section[; and].
          (7) [the term ``collection of information''--
                  [(A) means the obtaining, causing to be 
                obtained, soliciting, or requiring the 
                disclosure to third parties or the public, of 
                facts or opinions by or for an agency, 
                regardless of form or format, calling for 
                either--
                          [(i) answers to identical questions 
                        posed to, or identical reporting or 
                        recordkeeping requirements imposed on, 
                        10 or more persons, other than 
                        agencies, instrumentalities, or 
                        employees of the United States; or
                          [(ii) answers to questions posed to 
                        agencies, instrumentalities, or 
                        employees of the United States which 
                        are to be used for general statistical 
                        purposes; and
                  (B) shall not include a collection of 
                information described under section 3518(c)(1) 
                of title 44, United States Code.] Collection of 
                information.--The term ``collection of 
                information'' has the meaning given the term in 
                section 3502 of title 44.
          (8) Recordkeeping requirement.--The term 
        ``recordkeeping requirement'' [means a requirement 
        imposed by an agency on persons to maintain specified 
        records.] has the meaning given the term in section 
        3502 of title 44.
          (9) Economic impact.--The term ``economic impact'' 
        means, with respect to a proposed or final rule--
                  (A) any direct economic effect on small 
                entities of such rule; and
                  (B) any indirect economic effect (including 
                compliance costs and effects on revenue) on 
                small entities which is reasonably foreseeable 
                and results from such rule (without regard to 
                whether small entities will be directly 
                regulated by the rule).
          (10) Land management plan.--
                  (A) In general.--The term ``land management 
                plan'' means--
                          (i) any plan developed by the 
                        Secretary of Agriculture under section 
                        6 of the Forest and Rangeland Renewable 
                        Resources Planning Act of 1974 (16 
                        U.S.C. 1604); and
                          (ii) any plan developed by the 
                        Secretary of the Interior under section 
                        202 of the Federal Land Policy and 
                        Management Act of 1976 (43 U.S.C. 
                        1712).
                  (B) Revision.--The term ``revision'' means 
                any change to a land management plan which--
                          (i) in the case of a plan described 
                        in subparagraph (A0(i), is made under 
                        section 6(f)(5) of the Forest and 
                        Rangeland Renewable Resources Planning 
                        Act of 1974 (16 U.S.C. 1604(f)(5)); or
                          (ii) in the case of a plan described 
                        in subparagraph (A)(ii), is made under 
                        section 1610. Of title 43, Code of 
                        Federal Regulations (or any successor 
                        regulation).
                  (C) Amendment.--The term ``amendment'' means 
                any change to a land management plan which--
                          (i) in the case of a plan described 
                        in subparagraph (A)(i), is made under 
                        section 6(f)(4) of the Forest and 
                        Rangeland Renewable Resources Planning 
                        Act of 1974 (16 U.S.C. 1604(f)(4)) and 
                        with respect to which the Secretary of 
                        Agriculture prepares a statement 
                        described in section 102(2)(C) of the 
                        National Environmental Policy Act of 
                        1969 (42 U.S.C. 4332(2)(C)); or
                          (ii) in the case of a plan described 
                        in subparagraph (A)(ii), is made under 
                        section 1610.5-5 of title 43, Code of 
                        Federal Regulations (or any successor 
                        regulation), and with respect to which 
                        the Secretary of the Interior prepares 
                        a statement described in section 
                        102(2)(C) of the National Environmental 
                        Policy Act of 1969 (42 U.S.C. 
                        4332(2)(C)).

           *       *       *       *       *       *       *


Small Business Regulatory Fairness Act of 1996

           *       *       *       *       *       *       *


SEC. 212. COMPLIANCE GUIDES.

    (a) * * *
          (1) * * *

           *       *       *       *       *       *       *

          (5) [Agency preparation of guides.--]Agency 
        preparation of guides.--The agency shall, in its sole 
        discretion, taking into account the subject matter of 
        the rule and the language of relevant statutes, ensure 
        that the guide is written using sufficiently plain 
        language likely to be understood by affected small 
        entities. Agencies may prepare separate guides covering 
        groups or classes of similarly affected small entities 
        and may cooperate with associations of small entities 
        to [develop and] distribute such guides. In developing 
        guides, agencies shall solicit input from affected 
        small entities or associations of affected small 
        entities. An agency may prepare guides and apply this 
        section with respect to a rule or a group of related 
        rules.

           *       *       *       *       *       *       *


SEC. 602. REGULATORY AGENDA.

    (a) * * *
          (1) * * *
          (2) a summary of the nature of any such rule under 
        consideration 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 general notice of 
        proposed rulemaking[, and];
          (3) a brief description of the sector of the North 
        American Industrial Classification System that is 
        primarily affected by 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; and
          [(3)] (4) the name and telephone number of an agency 
        official knowledgeable concerning the items listed in 
        paragraph (1).
    (b) * * *
    [(c) Each agency shall endeavor to provide notice of each 
regulatory flexibility agenda to small entities or their 
representatives through direct notification or publication of 
the agenda in publications likely to be obtained by such small 
entities and shall invite comments upon each subject area on 
the agenda.]
  (c)(1) Not later than 3 days after the date on which an 
agency publishes a regulatory flexibility agenda in the Federal 
Register under subsection (a), the agency shall prominently 
display on the website of the agency a plain language summary 
of the information contained in the regulatory flexibility 
agenda.
  (2) The Office of Advocacy of the Small Business 
Administration shall compile, by agency, and prominently 
display on the website of the Small Business Administration a 
plain language summary of each regulatory flexibility agenda 
published under subsection (a) not later than 3 days after the 
date of publication in the Federal Register.

SEC. 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 analysis 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. In the case of an interpretative rule 
involving the internal revenue laws of the United States, this 
chapter applies to interpretative rules published in the 
Federal Register for codification in the Code of Federal 
Regulations, but only to the extent that such interpretative 
rules impose on small entities a collection of information 
requirement[.] or a recordkeeping requirement, and without 
regard to whether such requirement is imposed by statute or 
regulation.
    (b) Each initial regulatory flexibility analysis required 
under this section shall contain[--] a detailed statement--
          (1) [a description of the reasons why action by the 
        agency is being considered;] describing the reasons why 
        action by the agency is being considered;
          (2) [a succinct statement of the objectives of, and 
        legal basis for, the proposed rule;] describing 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;] estimating the number and 
        type 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;] 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 requirements and the type of 
        professional skills necessary for preparation of the 
        report and record;
          (5) [an identification, to the extent practicable, of 
        all relevant Federal rules which may duplicate, overlap 
        or conflict with the proposed rule.] 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 estimate 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.] Each initial 
regulatory flexibility analysis shall also contain a detailed 
description of alternatives to the proposed rule which minimize 
any adverse significant economic impact or maximize any 
beneficial significant economic impact on small entities. 
Consistent with the stated objectives of applicable statutes, 
the analysis shall discuss significant alternatives such as--
    (d)[(1) For a covered agency, as defined in section 
609(d)(2), each initial regulatory flexibility analysis] Each 
initial regulatory flexibility analysis by an agency shall 
include a description of--
          [(A) any](1) any projected increase in the cost of 
        credit for small entities;
          [(B) any](2) any significant alternatives to the 
        proposed rule which accomplish the stated objectives of 
        applicable statutes and which minimize any increase in 
        the cost of credit for small entities; and
          [(C) advice] (3) 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 
                Administration; and
                  [(B) collect advice and recommendations from 
                the representatives identified under 
                subparagraph (A) relating to issues described 
                in subparagraphs (A) and (B) of paragraph (1) 
                and subsection (b).]

SEC. 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), or adopts a revision or amendment to a land 
management plan, the agency shall prepare a final regulatory 
flexibility analysis. Each final regulatory flexibility 
analysis shall contain--
          (1) * * *
          (2) a statement of the significant issues raised by 
        the public comments in response to the initial 
        regulatory flexibility analysis (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) * * *
          (4) a detailed description of and an estimate of the 
        number of small entities to which the rule will apply 
        or [an explanation] a detailed explanation of why no 
        such estimate is available;
          (5) a detailed description of the projected 
        reporting, recordkeeping and other compliance 
        requirements of the 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;
          (6) a detailed description of the steps the agency 
        has taken to [minimize the significant economic impact] 
        minimize the adverse significant economic impact or 
        maximize the beneficial significant impact on small 
        entities consistent with the stated objectives of 
        applicable statutes, including 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 
        considered by the agency which affect the impact on 
        small entities was rejected; [and]
          [(6)](7) [for a covered agency, as defined in section 
        609(d)(2),] a description of the steps the agency has 
        taken to minimize any additional cost of credit for 
        small entities[.]; and
          (8) a detailed description of any disproportionate 
        economic impact on small entities or a specific class 
        of small entities.
    (b) The agency shall make copies of the final regulatory 
flexibility analysis available to [members of] the public, 
including placement of the entire analysis on the website of 
the agency, and shall publish in the Federal Register the final 
regulatory flexibility [such] analysis, or a summary thereof 
which included the telephone number, mailing address, and link 
to the website where the complete analysis may be obtained.

SEC. 605. [AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES] 
                    INCORPORATIONS BY REFERENCE AND CERTIFICATIONS.

    (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 Federal agency shall be treated as satisfying 
any requirement regarding the content of a regulatory 
flexibility agenda or regulatory flexibility analysis under 
section 602, 603, or 604 if the Federal 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 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 [statement 
providing the factual basis for such certification.] detailed 
statement providing the factual and legal basis for such 
certification. The detailed statement shall include an economic 
assessment or a summary thereof that is sufficiently detailed 
to support the certification of the agency. The agency shall 
provide such certification and statement to the Chief Counsel 
for Advocacy of the Small Business Administration.

SEC. 606. * * *

SEC. 607. [PREPARATION OF ANALYSES] QUANTIFICATION REQUIREMENTS.

    [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 quantification is not practicable or reliable.] 
In complying with sections 603 and 604, an agency shall 
provide--
          (1) a quantifiable or numerical description of the 
        effects of the proposed or final rule and alternatives 
        to the proposed or final rule; or
          (2) a more general descriptive statement and a 
        detailed statement explaining why quantification is not 
        practicable or reliable.

SEC. 608. [PROCEDURE FOR WAIVER OR DELAY OF COMPLETION] ADDITIONAL 
                    POWERS OF CHIEF COUNSEL FOR ADVOCACY.

    [(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 compliance 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.]
    (a)(1) Not later than 270 days after the date of enactment 
of the Small Business Regulatory Flexibility Improvements Act, 
the Chief Counsel for Advocacy of the Small Business 
Administration shall, after opportunity for notice and comment 
under section 553, issue rules governing agency compliance with 
this chapter. The Chief Counsel may modify or amend such rules 
after notice and comment under section 553. This chapter (other 
than this subsection) shall not apply with respect to the 
issuance, modification, and amendment of rules under this 
paragraph.
    (2) An agency shall not issue rules which supplement the 
rules issued under subsection (a) unless such agency has first 
consulted with the Chief Counsel for Advocacy to ensure that 
the supplemental rules comply with this chapter and the rules 
issued under paragraph (1).
    (b) Notwithstanding any other law, the Chief Counsel for 
Advocacy of the Small Business Administration may intervene in 
any agency adjudication (unless such agency is authorized to 
impose a fine or penalty under such adjudication) and may 
inform the agency of the impact that any decision on the record 
may have on small entities. The Chief Counsel shall not 
initiate an appeal with respect to any adjudication in which 
the Chief Counsel intervenes under this subsection.
    (c) The Chief Counsel for Advocacy may file comments in 
response to any agency notice requesting comment, regardless of 
whether the agency is required to file a general notice of 
proposed rule making under section 553.

SEC. 609. PROCEDURES FOR GATHERING COMMENTS.

    (a) * * *
    [(b) Prior to publication of an initial regulatory 
flexibility analysis which a covered agency is required to 
conduct by this chapter--
          [(1) a covered agency shall notify the Chief Counsel 
        for Advocacy of the Small Business Administration and 
        provide the Chief Counsel with information on the 
        potential impacts of the proposed rule on small 
        entities and the type of small entities that might be 
        affected;
          [(2) not later than 15 days after the date of receipt 
        of the materials described in paragraph (1), the Chief 
        Counsel shall identify individuals representative of 
        affected small entities for the purpose of obtaining 
        advice and recommendations from those individuals about 
        the potential impacts of the proposed rule;
          [(3) the agency shall convene a review panel for such 
        rule consisting wholly of full time Federal employees 
        of the office within the agency responsible for 
        carrying out the proposed rule, the Office of 
        Information and Regulatory Affairs within the Office of 
        Management and Budget, and the Chief Counsel;
          [(4) the panel shall review any material the agency 
        has prepared in connection with this chapter, including 
        any draft proposed rule, collect advice and 
        recommendations of each individual small entity 
        representative identified by the agency after 
        consultation with the Chief Counsel, on issues related 
        to subsections 603(b), paragraphs (3), (4) and (5) and 
        603(c);
          [(5) not later than 60 days after the date a covered 
        agency convenes a review panel pursuant to paragraph 
        (3), the review panel shall report on the comments of 
        the small entity representatives and its findings as to 
        issues related to subsections 603(b), paragraphs (3), 
        (4) and (5) and 603(c), provided that such report shall 
        be made public as part of the rulemaking record; and
          [(6) where appropriate, the agency shall modify the 
        proposed rule, the initial regulatory flexibility 
        analysis or the decision on whether an initial 
        regulatory flexibility analysis is required.
    [(c) An agency may in its discretion apply subsection (b) 
to rules that the agency intends to certify under subsection 
605(b), but the agency believes may have a greater than de 
minimis impact on a substantial number of small entities.
    [(d) For purposes of this section, the term ``covered 
agency'' means--
          [(1) the Environmental Protection Agency;
          [(2) the Consumer Financial Protection Bureau of the 
        Federal Reserve System; and
          [(3) the Occupational Safety and Health 
        Administration of the Department of Labor.
    [(e) The Chief Counsel for Advocacy, in consultation with 
the individuals identified in subsection (b)(2), and with the 
Administrator of the Office of Information and Regulatory 
Affairs within the Office of Management and Budget, may waive 
the requirements of subsections (b)(3), (b)(4), and (b)(5) by 
including in the rulemaking record a written finding, with 
reasons therefor, that those requirements would not advance the 
effective participation of small entities in the rulemaking 
process. For purposes of this subsection, the factors to be 
considered in making such a finding are as follows:
          [(1) In developing a proposed rule, the extent to 
        which the covered agency consulted with individuals 
        representative of affected small entities with respect 
        to the potential impacts of the rule and took such 
        concerns into consideration.
          [(2) Special circumstances requiring prompt issuance 
        of the rule.
          [(3) Whether the requirements of subsection (b) would 
        provide the individuals identified in subsection (b)(2) 
        with a competitive advantage relative to other small 
        entities.]
    (b)(1) Prior to publication of any proposed rule described 
in subsection (e), an agency making the rule shall notify the 
Chief Counsel for Advocacy of the Small Business Administration 
and provide the Chief Counsel with--
          (A) all materials prepared or utilized by the agency 
        in making the proposed rule, including the draft of the 
        proposed rule; and
          (B) information on the potential adverse and 
        beneficial economic impacts of the proposed rule on 
        small entities and the type of small entities that 
        might be affected.
    (2) An agency shall not be required under paragraph (1) to 
provide the exact language of any draft if the rule--
          (A) relates to the internal revenue laws of the 
        United States; or
          (B) is proposed by an independent regulatory agency.
    (c) Not later than 15 days after the receipt of the 
materials and information under subsection (b), the Chief 
Counsel for Advocacy of the Small Business Administration 
shall--
          (1) identify small entities or representatives of 
        small entities or a combination of both for the purpose 
        of obtaining advice, input, and recommendations from 
        the persons about the potential economic impacts of the 
        proposed rule and the compliance of the agency with 
        section 603; and
          (2) convene a review panel consisting of an employee 
        from the Office of Advocacy of the Small Business 
        Administration, an employee from the agency making the 
        rule, and, in the case of an agency other than an 
        independent regulatory agency, an employee from the 
        Office of Information and Regulatory Affairs of the 
        Office of Management and Budget to review the materials 
        and information provided to the Chief Counsel under 
        subsection (b).
    (d)(1) Not later than 60 days after the review panel 
described in subsection (c)(2) is convened, the Chief Counsel 
for Advocacy of the Small Business Administration shall, after 
consultation with the members of the panel, submit a report to 
the agency and, in the vase of an agency other than an 
independent regulatory agency, the Office of Information and 
Regulatory Affairs of the Office of Management and Budget.
    (2) Each report described in paragraph (1) shall include an 
assessment of the economic impact of the proposed rule on small 
entities, including--
          (A) an assessment of the impact of the proposed rule 
        on the cost that small entities pay for energy;
          (B) an assessment of the impact of the proposed rule 
        on startup costs for small entities; and
          (C) a discussion of any alternatives that will 
        minimize adverse significant economic impacts or 
        maximize beneficial significant economic impacts on 
        small entities.
    (3) Each report described in paragraph (1) shall become 
part of the rule making record. In the publication of the 
proposed rule, the agency shall explain what actions, if any, 
the agency took in response to the report.
    (e) A proposed rule is described by this subsection if the 
Administrator of the Office of Information and Regulatory 
Affairs of the Office of Management and Budget, the head of the 
agency (or the delegate of the head of the agency), or an 
independent regulatory agency determines that the proposed rule 
is likely to result in--
          (1) an annual effect on the economy of $100,000,000 
        or more;
          (2) a major increase in costs or prices for 
        consumers, individual industries, Federal, State, or 
        local governments, tribal organizations, or geographic 
        regions;
          (3) significant adverse effects on competition, 
        employment, investment, productivity, innovation, or 
        the ability of United States-based enterprises to 
        compete with foreign-based enterprises in domestic and 
        export markets; or
          (4) a significant economic impact on a substantial 
        number of small entities.
    (f) Upon application by the agency, the Chief Counsel for 
Advocacy of the Small Business Administration may waive the 
requirements of subsections (b) through (e) if the Chief 
Counsel determines that compliance with the requirements of 
such subsections are impracticable, unnecessary, or contrary to 
the public interest.
    (g) A small entity or a representative of a small entity 
may submit a request that the agency provide a copy of the 
report prepared under subsection (d) and all materials and 
information provided to the Chief Counsel for Advocacy of the 
Small Business Administration under subsection (b). The agency 
receiving such request shall provide the report, materials, and 
information to the requesting small entity or representative of 
a small entity not later than 10 business days after receiving 
such request, except that the agency shall not disclose any 
information that is prohibited from disclosure to the public 
pursuant to section 552(b) of this title.
    (h) In this section, the term ``independent regulatory 
agency'' has the meaning given the term in section 3502 of 
title 44.

SEC. 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 minimize 
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.]
    (a) Not later than 180 days after the date of enactment of 
the Small Business Regulatory Flexibility Improvements Act, 
each agency shall publish in the Federal Register and place on 
website of the agency a plan for periodic review of rules 
issued by the agency which the head of the agency determined 
have a significant economic impact on a substantial number of 
small entities. Such determination shall be made without regard 
to whether the agency performed an analysis under section 604. 
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 states objectives of 
applicable statutes, to minimize any adverse significant 
economic impacts or maximize any beneficial significant 
economic impacts on 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 and 
subsequently placing the amended plan on the website of the 
agency.
    (b) The plan shall provide for the review of all such 
agency rules existing on the date of enactment of the Small 
Business Regulatory Flexibility Improvements Act within 10 
years after the publication of the final rule in the Federal 
Register. If the head of the agency determines that completion 
of the review of existing rules is not feasible by the 
established date, the head of the agency shall so certify in a 
statement published in the Federal Register and may extend the 
review for not longer than 2 years after publication of notice 
of extension in the Federal Register. Such certification and 
notice shall be sent to the Chief Counsel for Advocacy of the 
Small Business Administration and Congress.
    (c) The plan shall include a section that details how an 
agency will conduct outreach to and meaningfully include small 
businesses (including small business concerns owned and 
controlled by women, small business concerns owned and 
controlled by veterans, and small business concerns owned and 
controlled by socially and economically disadvantaged 
individuals (as such terms are defined in section 3 and section 
8(d)(3)(C))) for the purposes of carrying out this section. The 
agency shall include in this section a plan for how the agency 
will contact small businesses and gather their input on 
existing agency rules.
    (d) Each agency shall annually submit a report regarding 
the results of its review pursuant to such plan to Congress, 
the Chief Counsel for Advocacy of the Small Business 
Administration, and, in the case of agencies other than 
independent regulatory agencies (as defined in section 3502 of 
title 44), to the Administrator of the Office of Information 
and Regulatory Affairs of the Office of Management and Budget. 
Such report shall include the identification of any rule with 
respect to which the head of the agency made a determination 
described in paragraph (5) or (6) of subsection (e) and a 
detailed explanation of the reasons for such determination.
    (e) In reviewing a rule pursuant to subsections (a) through 
(d), the agency shall amend or rescind the rule to minimize any 
adverse significant economic impact on a substantial number on 
a specific class of small entities, or maximize any beneficial 
significant economic impact of the rule on a substantial number 
of small entities to the greatest extent possible, consistent 
with the stated objectives of applicable statutes. In amending 
or rescinding the rule, the agency shall consider the following 
factors:
          (1) The continued need for the rule.
          (2) The nature of complaints received by the agency 
        from small entities concerning the rule.
          (3) Comments by the Regulatory Enforcement Ombudsman 
        and the Chief Counsel for Advocacy of the Small 
        Business Administration.
          (4) The complexity of the rule.
          (5) The extent to which the rule overlaps, 
        duplicates, or conflicts with other Federal rules and, 
        unless the head of the agency determines it to be 
        infeasible, State, territorial, and local rules.
          (6) The contribution of the rule to the cumulative 
        economic impact of all Federal rules on the class of 
        small entities affected by the rule, unless the head of 
        the agency determined that such calculations cannot be 
        made and reports that determination in the annual 
        report required under subsection (d).
          (7) The length of time since the rule has been 
        evaluated or the degree to which technology, economic 
        conditions, or other factors have changes in the area 
        affected by the rule.
    (f) Each year, each agency shall publish in the Federal 
Register and on its website a list of rules to be reviewed 
pursuant to such plan. The agency shall include in the 
publication a solicitation of public comments on any further 
inclusions or exclusions of rules from the list and shall 
respond to such comments. Such publication shall include a 
brief description of the rule, the reason why the agency 
determined that it has a significant economic impact on a 
substantial number of small entities (without regard to whether 
it had prepared a final regulatory flexibility analysis for the 
rule), and request comments from the public, the Chief Counsel 
for Advocacy of the Small Business Administration, and the 
Regulatory Enforcement Ombudsman concerning the enforcement of 
the rule.

SEC. 611. JUDICIAL REVIEW.

    (a)(1) For any rule subject to this chapter, a small entity 
that is adversely affected or aggrieved by [final agency 
action] such rule is entitled to judicial review of agency 
compliance with the requirements of sections 601, 604, 605(b), 
[608(b),] and 610 in accordance with chapter 7. Agency 
compliance with sections 607 and 609(a) shall be judicially 
reviewable in connection with judicial review of section 604.
    (2) Each court having jurisdiction to review such rule for 
compliance with section 553, or under any other provision of 
law, (or which would have such jurisdiction if publication of 
the final rule constituted final agency action) shall have 
jurisdiction to review any claims of noncompliance with 
sections 601, 604, 605(b), [608(b),] and 610 in accordance with 
chapter 7. Agency compliance with sections 607 and 609(a) shall 
be judicially reviewable in connection with judicial review of 
section 604.
    [(3)(A) A small entity] (3) A small entity may seek such 
review during the period beginning on the date of [final agency 
action] publication of the final rule and ending one year 
later, except that, in the case of a rule for which the date of 
final agency action is the same date as the publication of the 
final rule, where a provision of law requires that an action 
challenging a final agency action be commenced before the 
expiration of one year, such lesser period shall apply to an 
action for judicial review under this section.
    [(B) In the case where an agency delays the issuance of a 
final regulatory flexibility analysis pursuant to section 
608(b) of this chapter, an action for judicial review under 
this section shall be filed not later than--]

SEC. 612. REPORTS AND INTERVENTION RIGHTS.

    (a) * * *
    (b) The Chief Counsel for Advocacy of the Small Business 
Administration is authorized to appear as amicus curiae in any 
action brought in a court of the United States to review a rule 
or agency compliance with section 601, 603, 604, 605(b), 609, 
or 610. In any such action, the Chief Counsel is authorized to 
present his or her views with respect to compliance with this 
chapter, chapter 5, and chapter 7, the adequacy of the 
rulemaking record with respect to small entities and the effect 
of the rule on small entities.
    (c) * * *

           *       *       *       *       *       *       *


TITLE 15--COMMERCE AND TRADE

           *       *       *       *       *       *       *


PART VI--PARTICULAR PROCEEDINGS

           *       *       *       *       *       *       *


CHAPTER 14A--AID TO SMALL BUSINESS

           *       *       *       *       *       *       *



SEC. 632. DEFINITIONS.

    (a) * * *
          (1) * * *
          (2) * * *
                  (A) [In general.--In addition to the criteria 
                specified in paragraph (1), the Administrator 
                may specify detailed definitions or standards 
                by which a business concern may be determined 
                to be a small business concern for the purposes 
                of this chapter or any other Act.] In 
                general.--
                          (i) the Administrator may specify 
                        detailed definitions or standards by 
                        which a business concern may be 
                        determined to be a small business 
                        concern for purposes of this Act or the 
                        Small Business Investment Act of 1958 
                        (15 U.S.C. 661 et seq.); and
                          (ii) the Chief Counsel for Advocacy 
                        may specify such definitions or 
                        standards for purposes of any other 
                        Act.
                  (B) * * *
                  (C) * * *
                          (i) * * *
                          (ii) * * *
                          (iii) [is approved by the 
                        Administrator.] except in the case of a 
                        size standard prescribed by the 
                        Administrator, is approved by the Chief 
                        Counsel for Advocacy.
          (3) Variation by industry and consideration of other 
        factors
    When establishing or approving any size standard pursuant 
to paragraph (2), the Administrator or Chief Counsel for 
Advocacy, as appropriate, shall ensure that the size standard 
varies from industry to industry to the extent necessary to 
reflect the differing characteristics of the various industries 
and consider other factors deemed to be relevant by the 
Administrator or Chief Counsel for Advocacy.

           *       *       *       *       *       *       *

          (9) * * *
          (10) Judicial review of standards approved by chief 
        counsel.--In the case of an action for judicial review 
        of a rule which includes a definition or standard 
        approved by the Chief Counsel for Advocacy under this 
        subsection, the party seeking such review shall be 
        entitled to join the Chief Counsel as a party in such 
        action.

           *       *       *       *       *       *       *


TITLE 28--JUDICIARY AND JUDICIAL PROCEDURE

           *       *       *       *       *       *       *


PART VI--PARTICULAR PROCEEDINGS

           *       *       *       *       *       *       *


CHAPTER 158--ORDERS OF FEDERAL AGENCIES; REVIEW

           *       *       *       *       *       *       *



SEC. 2341. JURISDICTION OF COURT OF APPEALS.

    As used in this chapter--
          (1) * * *
          (2) * * *
          (3) * * *
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) the Secretary, when the order is under 
                section 812 of the Fair Housing Act; [and]
                  (E) the Board, when the order was entered by 
                the Surface Transportation Board[.]; and
                  (F) the Office of Advocacy of the Small 
                Business Administration, when the final rule is 
                under section 608(a) of title 5.

SEC. 2342. JURISDICTION OF COURT OF APPEALS.

    The court of appeals (other than the United States Court of 
Appeals for the Federal Circuit) has exclusive jurisdiction to 
enjoin, set aside, suspend (in whole or in part), or to 
determine the validity of--
          (1) * * *

           *       *       *       *       *       *       *

          (6) all final orders under section 812 of the Fair 
        Housing Act; [and]
          (7) all final agency actions described in section 
        20114(c) of title 49[.]; and
          (8) all final rules under section 608(a) of title 5.
    Jurisdiction is invoked by filing a petition as provided by 
section 2344 of this title.

           *       *       *       *       *       *       *


TITLE 44--PUBLIC PRINTING AND DOCUMENTS

           *       *       *       *       *       *       *


CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY

           *       *       *       *       *       *       *



Subchapter I--Federal Information Policy

           *       *       *       *       *       *       *



SEC. 3506. FEDERAL AGENCY RESPONSIBILITIES.

    (a) * * *

           *       *       *       *       *       *       *

    (i) * * *
    (j) Small Businesses.--
          (1) Definitions.--In this subsection:
                  (A) First-time violation.--The term ``first-
                time violation'' means a violation by a small 
                business concern of a requirement regarding 
                collection of information by an agency, where 
                the small business concern has not previously 
                violated any similar requirement regarding 
                collection of information by that same agency 
                during the 5-year period preceding the 
                violation.
                  (B) Small business concern.--The term ``small 
                business concern'' has the meaning given the 
                term in section 3 of the Small Business Act (15 
                U.S.C. 632).
          (2) First-time violation.--
                  (A) In general.--Except as provided in 
                paragraph (3), in the case of a first-time 
                violation by a small business concern of a 
                requirement regarding collection of information 
                by an agency, the head of the agency shall not 
                impose a civil fine on the small business 
                concern.
                  (B) Determination.--For purposes of 
                determining whether to impose a civil fine on a 
                small business concern under subparagraph (A), 
                the head of an agency shall not take into 
                account any violation by the small business 
                concern of a requirement regarding collection 
                of information by another agency.
                  (C) Exception.--An agency may impose a civil 
                fine on a small business concern for a first-
                time violation if the head of the agency 
                determines that--
                          (i) the violation has the potential 
                        to cause serious harm to the public 
                        interest;
                          (ii) failure to impose a civil fine 
                        would impede or interfere with the 
                        detection of criminal activity;
                          (iii) the violation is a violation of 
                        an internal revenue law or a law 
                        concerning assessment or collection of 
                        any tax, debt, revenue, or receipt.
                          (iv) the violation was not corrected 
                        on or before the date that is 6 months 
                        after the date on which the small 
                        business concern received notification 
                        of the violation in writing from the 
                        agency; or
                          (v) except as provided in paragraph 
                        (3), the violation presents a danger to 
                        the public health or safety.
          (3) Danger to public health or safety.--
                  (A) In general.--In any case in which the 
                head of an agency determines under paragraph 
                (2)(C)(v) that a violation presents a danger to 
                the public health or safety, the head of the 
                agency may determine not to impose a civil fine 
                on the small business concern if the violation 
                is corrected not later than 24 hours after 
                receipt by the owner of the small business 
                concern of notification of the violation in 
                writing.
                  (B) Considerations.--In determining whether 
                to allow a small business concern 24 hours to 
                correct a violation under subparagraph (A), the 
                head of an agency shall take into account all 
                of the facts and circumstances regarding the 
                violation, including--
                          (i) the nature and seriousness of the 
                        violation, including whether the 
                        violation is technical or inadvertent 
                        or involves willful or criminal 
                        conduct;
                          (ii) whether the small business 
                        concern had made a good faith effort to 
                        comply with applicable laws and to 
                        remedy the violation within the 
                        shortest practicable period of time; 
                        and
                          (iii) whether the small business 
                        concern has obtained a significant 
                        economic benefit from the violation.
                  (C) Notice to congress.--In any case in which 
                the head of an agency imposes a civil fine on a 
                small business concern for a violation that 
                presents a danger to the public health or 
                safety and does not allow the small business 
                concern 24 hours to correct the violation under 
                subparagraph (A), the head of the agency shall 
                notify Congress regarding the determination not 
                later than 60 days after the date on which the 
                civil fine is imposed by the agency.