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The Regulatory Flexibility Act – Office of Advocacy
Home Resources The Regulatory Flexibility Act
The following text of the Regulatory Flexibility Act of 1980, as amended, is taken
from Title 5 of the United States Code, sections 601–612. The Regulatory
Flexibility Act was originally passed in 1980 (P.L. 96-354). The act was amended by
the Small Business Regulatory Enforcement Fairness Act of 1996 (P.L. 104-121),
the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203),
and the Small Business Jobs Act of 2010 (P.L. 111-240).
Congressional Findings and Declaration of Purpose
(a) The Congress finds and declares that —
(1) when adopting regulations to protect the health, safety and economic welfare
of the Nation, Federal agencies should seek to achieve statutory goals as
effectively and efficiently as possible without imposing unnecessary burdens on
the public;
(2) laws and regulations designed for application to large scale entities have been
applied uniformly to small businesses, small organizations, and small
governmental jurisdictions even though the problems that gave rise to
government action may not have been caused by those smaller entities;
(3) uniform Federal regulatory and reporting requirements have in numerous
instances imposed unnecessary and disproportionately burdensome demands
including legal, accounting and consulting costs upon small businesses, small
organizations, and small governmental jurisdictions with limited resources;
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(4) the failure to recognize differences in the scale and resources of regulated
entities has in numerous instances adversely affected competition in the
marketplace, discouraged innovation and restricted improvements in
productivity;
(5) unnecessary regulations create entry barriers in many industries and
discourage potential entrepreneurs from introducing beneficial products and
processes;
(6) the practice of treating all regulated businesses, organizations, and
governmental jurisdictions as equivalent may lead to inefficient use of regulatory
agency resources, enforcement problems and, in some cases, to actions
inconsistent with the legislative intent of health, safety, environmental and
economic welfare legislation;
(7) alternative regulatory approaches which do not conflict with the stated
objectives of applicable statutes may be available which minimize the significant
economic impact of rules on small businesses, small organizations, and small
governmental jurisdictions;
(8) the process by which Federal regulations are developed and adopted should
be reformed to require agencies to solicit the ideas and comments of small
businesses, small organizations, and small governmental jurisdictions to examine
the impact of proposed and existing rules on such entities, and to review the
continued need for existing rules.
(b) It is the purpose of this Act [enacting this chapter and provisions set out as
notes under this section] to establish as a principle of regulatory issuance that
agencies shall endeavor, consistent with the objectives of the rule and of
applicable statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions subject to
regulation. To achieve this principle, agencies are required to solicit and consider
flexible regulatory proposals and to explain the rationale for their actions to
assure that such proposals are given serious consideration.
Regulatory Flexibility Act
§ 601 Definitions
§ 602 Regulatory agenda
§ 603 Initial regulatory flexibility analysis
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§ 604 Final regulatory flexibility analysis
§ 605 Avoidance of duplicative or unnecessary analyses
§ 606 Effect on other law
§ 607 Preparation of analyses
§ 608 Procedure for waiver or delay of completion
§ 609 Procedures for gathering comments
§ 610 Periodic review of rules
§ 611 Judicial review
§ 612 Reports and intervention rights
§ 601 Definitions
For purposes of this chapter —
(1) the term “agency” means an agency as defined in section 551(1) of this title;
(2) the term “rule” means any rule for which the agency publishes a general notice
of proposed rulemaking pursuant to section 553(b) of this title, or any other law,
including any rule of general applicability governing Federal grants to State and
local governments for which the agency provides an opportunity for notice and
public comment, except that the term “rule” does not include a rule of particular
applicability relating to rates, wages, corporate or financial structures or
reorganizations thereof, prices, facilities, appliances, services, or allowances
therefor or to valuations, costs or accounting, or practices relating to such rates,
wages, structures, prices, appliances, services, or allowances;
(3) the term “small business” has the same meaning as the term “small business
concern” under section 3 of the Small Business Act, unless an agency, after
consultation with the 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
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of such term which are appropriate to the activities of the agency and publishes
such definition(s) in the Federal Register;
(5) the term “small governmental jurisdiction” means governments of cities,
counties, towns, townships, villages, school districts, or special districts, with a
population of less than fifty thousand, unless an agency establishes, after
opportunity for public comment, one or more definitions of such term which are
appropriate to the activities of the agency and which are based on such factors as
location in rural or sparsely populated areas or limited revenues due to the
population of such jurisdiction, and publishes such definition(s) in the Federal
Register;
(6) 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.
(8) Recordkeeping requirement — The term “recordkeeping requirement” means
a requirement imposed by an agency on persons to maintain specified records.
§ 602. Regulatory agenda
(a) During the months of October and April of each year, each agency shall publish
in the Federal Register a regulatory flexibility agenda which shall contain —
(1) a brief description of the subject area of any rule which the agency expects to
propose or promulgate which is likely to have a significant economic impact on a
substantial number of small entities;
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(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) the name and telephone number of an agency official knowledgeable
concerning the items listed in paragraph (1).
(b) Each regulatory flexibility agenda shall be transmitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment, if any.
(c) Each agency shall endeavor to provide notice of each 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.
(d) Nothing in this section precludes an agency from considering or acting on any
matter not included in a regulatory flexibility agenda or requires an agency to
consider or act on any matter listed in such agenda.
§ 603. Initial regulatory flexibility analysis
(a) Whenever an agency is required by section 553 of this title, or any other law, to
publish general notice of proposed rulemaking for any proposed rule 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.
(b) Each initial regulatory flexibility analysis required under this section shall
contain —
(1) a description of the reasons why action by the agency is being considered;
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(2) a succinct statement of the objectives of, and legal basis for, the proposed rule;
(3) a description of and, where feasible, an estimate of the number of small
entities to which the proposed rule will apply;
(4) a description of the projected reporting, recordkeeping and other compliance
requirements of the proposed rule, including an estimate of the classes of small
entities which will be subject to the requirement and the type of professional
skills necessary for preparation of the report or record;
(5) an identification, to the extent practicable, of all relevant Federal rules which
may duplicate, overlap or conflict with the proposed rule.
(c) Each initial regulatory flexibility analysis shall also contain a description of any
significant alternatives to the proposed rule which accomplish the stated
objectives of applicable statutes and which minimize any significant economic
impact of the proposed rule on small entities. Consistent with the stated
objectives of applicable statutes, the analysis shall discuss significant alternatives
such as —
(1) the establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small entities;
(2) the clarification, consolidation, or simplification of compliance and reporting
requirements under the rule for such small entities;
(3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for such small
entities.
(d) (1) For a covered agency, as defined in section 609(d)(2), each initial regulatory
flexibility analysis shall include a description of—
(A) any projected increase in the cost of credit for small entities;
(B) 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 and recommendations of representatives of small entities relating to
issues described in subparagraphs (A) and (B) and subsection (b).
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(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).
§ 604. Final regulatory flexibility analysis
(a) When an agency promulgates a final rule under section 553 of this title, after
being required by that section or any other law to publish a general notice of
proposed rulemaking or promulgates a final interpretative rule involving the
internal revenue laws of the United States as described in section 603(a), the
agency shall prepare a final regulatory flexibility analysis. Each final regulatory
flexibility analysis shall contain —
(1) a statement of the need for, and objectives of, the rule;
(2) a statement of the significant issues raised by the public comments in
response to the initial regulatory flexibility analysis, a statement of the
assessment of the agency of such issues, and a statement of any changes made in
the proposed rule as a result of such comments;
(3) the response of the agency to any comments filed by the Chief Counsel for
Advocacy of the Small Business Administration in response to the proposed rule,
and a detailed statement of any change made to the proposed rule in the final
rule as a result of the comments;
(4) a description of and an estimate of the number of small entities to which the
rule will apply or an explanation of why no such estimate is available;
(5) a 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 description of the steps the agency has taken to minimize the significant
economic impact on small entities consistent with the stated objectives of
applicable statutes, including a statement of the factual, policy, and legal reasons
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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;
(6)1 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.
(b) The agency shall make copies of the final regulatory flexibility analysis
available to members of the public and shall publish in the Federal Register such
analysis or a summary thereof.
(1) So in original. Two paragraphs (6) were enacted.
§ 605. Avoidance of duplicative or unnecessary analyses
(a) Any Federal agency may perform the analyses required by sections 602, 603,
and 604 of this title in conjunction with or as a part of any other agenda or
analysis required by any other law if such other analysis satisfies the provisions of
such sections.
(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. The agency shall provide such certification and statement to the
Chief Counsel for Advocacy of the Small Business Administration.
(c) In order to avoid duplicative action, an agency may consider a series of closely
related rules as one rule for the purposes of sections 602, 603, 604 and 610 of this
title.
§ 606. Effect on other law
The requirements of sections 603 and 604 of this title do not alter in any manner
standards otherwise applicable by law to agency action.
§ 607. Preparation of analyses
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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.
§ 608. Procedure for waiver or delay of completion
(a) An agency head may waive or delay the completion of some or all of the
requirements of section 603 of this title by publishing in the Federal Register, not
later than the date of publication of the final rule, a written finding, with reasons
therefor, that the final rule is being promulgated in response to an emergency that
makes 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.
§ 609. Procedures for gathering comments
(a) When any rule is promulgated which will have a significant economic impact
on a substantial number of small entities, the head of the agency promulgating
the rule or the official of the agency with statutory responsibility for the
promulgation of the rule shall assure that small entities have been given an
opportunity to participate in the rulemaking for the rule through the reasonable
use of techniques such as—
(1) the inclusion in an advance notice of proposed rulemaking, if issued, of a
statement that the proposed rule may have a significant economic effect on a
substantial number of small entities;
(2) the publication of general notice of proposed rulemaking in publications likely
to be obtained by small entities;
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(3) the direct notification of interested small entities;
(4) the conduct of open conferences or public hearings concerning the rule for
small entities including soliciting and receiving comments over computer
networks; and
(5) the adoption or modification of agency procedural rules to reduce the cost or
complexity of participation in the rulemaking by small entities.
(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.
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(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.
§ 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
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shall provide for the review of all such agency rules existing on the effective date
of this chapter within ten years of that date and for the review of such rules
adopted after the effective date of this chapter within ten years of the publication
of such rules as the final rule. If the head of the agency determines that
completion of the review of existing rules is not feasible by the established date,
he shall so certify in a statement published in the Federal Register and may extend
the completion date by one year at a time for a total of not more than five years.
(b) In reviewing rules to minimize any significant economic impact of the rule on a
substantial number of small entities in a manner consistent with the stated
objectives of applicable statutes, the agency shall consider the following factors—
(1) the continued need for the rule;
(2) the nature of complaints or comments received concerning the rule from the
public;
(3) the complexity of the rule;
(4) the extent to which the rule overlaps, duplicates or conflicts with other Federal
rules, and, to the extent feasible, with State and local governmental rules; and
(5) the length of time since the rule has been evaluated or the degree to which
technology, economic conditions, or other factors have changed in the area
affected by the rule.
(c) Each year, each agency shall publish in the Federal Register a list of the rules
which have a significant economic impact on a substantial number of small
entities, which are to be reviewed pursuant to this section during the succeeding
twelve months. The list shall include a brief description of each rule and the need
for and legal basis of such rule and shall invite public comment upon the rule.
§ 611. Judicial review
(a) (1) For any rule subject to this chapter, a small entity that is adversely affected
or aggrieved by final agency action 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, shall have jurisdiction to review any
claims of noncompliance with sections 601, 604, 605(b), 608(b), and 610 in
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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 may seek such review during the period beginning on the
date of final agency action and ending one year later, except that 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—
(i) one year after the date the analysis is made available to the public, or
(ii) where a provision of law requires that an action challenging a final agency
regulation be commenced before the expiration of the 1-year period, the number
of days specified in such provision of law that is after the date the analysis is made
available to the public.
(4) In granting any relief in an action under this section, the court shall order the
agency to take corrective action consistent with this chapter and chapter 7,
including, but not limited to —
(A) remanding the rule to the agency, and
(B) deferring the enforcement of the rule against small entities unless the court
finds that continued enforcement of the rule is in the public interest.
(5) Nothing in this subsection shall be construed to limit the authority of any court
to stay the effective date of any rule or provision thereof under any other
provision of law or to grant any other relief in addition to the requirements of this
section.
(b) In an action for the judicial review of a rule, the regulatory flexibility analysis
for such rule, including an analysis prepared or corrected pursuant to paragraph
(a)(4), shall constitute part of the entire record of agency action in connection
with such review.
(c) Compliance or noncompliance by an agency with the provisions of this chapter
shall be subject to judicial review only in accordance with this section.
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(d) Nothing in this section bars judicial review of any other impact statement or
similar analysis required by any other law if judicial review of such statement or
analysis is otherwise permitted by law.
§ 612. Reports and intervention rights
(a) The Chief Counsel for Advocacy of the Small Business Administration shall
monitor agency compliance with this chapter and shall report at least annually
thereon to the President and to the Committees on the Judiciary and Small
Business of the Senate and House of Representatives.
(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. In any such action, the Chief Counsel is authorized
to present his or her views with respect to compliance with this chapter, the
adequacy of the rulemaking record with respect to small entities and the effect of
the rule on small entities.
(c) A court of the United States shall grant the application of the Chief Counsel for
Advocacy of the Small Business Administration to appear in any such action for
the purposes described in subsection (b).
The Office of Advocacy supports businesses with less than 500 employees, non-profit organizations,
and independent contractors. On behalf of small entities in our country, our mission is to help small
businesses as regulations are developed.
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File Type | application/pdf |
File Title | The Regulatory Flexibility Act – Office of Advocacy |
File Modified | 2024-09-04 |
File Created | 2024-09-04 |