SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Regulatory 
Flexibility Reform Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Clarification and expansion of rules covered by the Regulatory 
                            Flexibility Act.
Sec. 4. Requirements providing for more detailed analyses.
Sec. 5. Periodic review of rules.
Sec. 6. Clerical amendments.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) A vibrant and growing small business sector is critical 
        to creating jobs in a dynamic economy.
            (2) Regulations designed for application to large-scale 
        entities have been applied uniformly to small businesses and 
        other small entities, even though the problems sought to be 
        solved by such regulations are not always caused by these small 
        businesses and other small entities.
            (3) Uniform Federal regulatory and reporting requirements 
        in many instances have imposed on small businesses and other 
        small entities unnecessary and disproportionately burdensome 
        demands, including legal, accounting, and consulting costs.
            (4) Since 1980, Federal agencies have been required to 
        recognize and take account of the differences in the scale and 
        resources of regulated entities, but have failed to do so.
            (5) Alternative regulatory approaches that do not conflict 
        with the stated objectives of the statutes the regulations seek 
        to implement may be available and may minimize the significant 
        economic impact of regulations on small businesses and other 
        small entities.
            (6) Federal agencies have failed to analyze and uncover 
        less-costly alternative regulatory approaches, despite the fact 
        that the chapter 6 of title 5, United States Code (commonly 
        known as the Regulatory Flexibility Act), requires them to do 
        so.
            (7) Federal agencies continue to interpret chapter 6 of 
        title 5, United States Code, in a manner that permits them to 
        avoid their analytical responsibilities.
            (8) The existing oversight of the compliance of Federal 
        agencies with the analytical requirements to assess regulatory 
        impacts on small businesses and other small entities and obtain 
        input from the Chief Counsel for Advocacy has not sufficiently 
        modified the Federal agency regulatory culture.
            (9) Significant changes are needed in the methods by which 
        Federal agencies develop and analyze regulations, receive input 
        from affected entities, and develop regulatory alternatives 
        that will lessen the burden or maximize the benefits of final 
        rules to small businesses and other small entities.
            (10) It is the intention of Congress to amend chapter 6 of 
        title 5, United States Code, to ensure that all impacts, 
        including foreseeable indirect effects, of proposed and final 
        rules are considered by agencies during the rulemaking process 
        and that the agencies assess a full range of alternatives that 
        will limit adverse economic consequences or enhance economic 
        benefits.
            (11) Federal agencies should be capable of assessing the 
        impact of proposed and final rules without delaying the 
        regulatory process or impinging on the ability of Federal 
        agencies to fulfill their statutory mandates.

SEC. 3. CLARIFICATION AND EXPANSION OF RULES COVERED BY THE REGULATORY 
              FLEXIBILITY ACT.

    Section 601 of title 5, United States Code, is amended by adding at 
the end the following:
            ``(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 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).''.

SEC. 4. REQUIREMENTS PROVIDING FOR MORE DETAILED ANALYSES.

    (a) Initial Regulatory Flexibility Analysis.--Section 603 of title 
5, United States Code, is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Each initial regulatory flexibility analysis required under 
this section shall contain a detailed statement--
            ``(1) describing the reasons why action by the agency is 
        being considered;
            ``(2) describing the objectives of, and legal basis for, 
        the proposed rule;
            ``(3) estimating the number and type of small entities to 
        which the proposed rule will apply;
            ``(4) describing the projected reporting, recordkeeping, 
        and other compliance requirements of the proposed rule, 
        including an estimate of the classes of small entities which 
        will be subject to the requirement and the type of professional 
        skills necessary for preparation of the report and record;
            ``(5) describing all relevant Federal rules which may 
        duplicate, overlap, or conflict with the proposed rule, or the 
        reasons why such a description could not be provided; and
            ``(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.''; and
            (2) by adding at the end the following:
    ``(d) An agency shall notify the Chief Counsel for Advocacy of the 
Small Business Administration of any draft rules that may have a 
significant economic impact on a substantial number of small entities 
either--
            ``(1) when the agency submits a draft rule to the Office of 
        Information and Regulatory Affairs at the Office of Management 
        and Budget under Executive Order 12866, if that order requires 
        such submission; or
            ``(2) if no submission to the Office of Information and 
        Regulatory Affairs is so required, at a reasonable time prior 
        to publication of the rule by the agency.''.
    (b) Final Regulatory Flexibility Analysis.--
            (1) In general.--Section 604(a) of title 5, United States 
        Code, is amended--
                    (A) in paragraph (1), by striking ``succinct'';
                    (B) in paragraph (2), by striking ``summary'' each 
                place it appears and inserting ``statement'';
                    (C) in paragraph (3), by--
                            (i) striking ``an explanation'' and 
                        inserting ``a detailed explanation''; and
                            (ii) inserting ``detailed'' before 
                        ``description'';
                    (D) in paragraph (4), by inserting ``detailed'' 
                before ``description''; and
                    (E) in paragraph (5), by inserting ``detailed'' 
                before ``description''.
            (2) Inclusion of response to comments on certification of 
        proposed rule.--Section 604(a)(2) of title 5, United States 
        Code, is amended by inserting ``(or certification of the 
        proposed rule under section 605(b))'' after ``initial 
        regulatory flexibility analysis''.
            (3) Inclusion of response to comments filed by chief 
        counsel for advocacy.--Section 604(a) of title 5, United States 
        Code, is amended by redesignating paragraphs (3), (4), and (5) 
        as paragraphs (4), (5), and (6), respectively, and inserting 
        after paragraph (2) the following:
            ``(3) the agency's response 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 changes made to the proposed rule in the final rule as a 
        result of such comments;''.
            (4) Publication of analysis on web site, etc.--Section 
        604(b) of title 5, United States Code, is amended to read as 
        follows:
    ``(b) The agency shall make copies of the final regulatory 
flexibility analysis available to the public, including placement of 
the entire analysis on the agency's Web site, and shall publish in the 
Federal Register the final regulatory flexibility analysis, or a 
summary thereof that includes the telephone number, mailing address, 
and link to the Web site where the complete analysis may be 
obtained.''.
    (c) Cross-References to Other Analyses.--Section 605(a) of title 5, 
United States Code, is amended to read as follows:
    ``(a) A Federal agency shall be treated as satisfying any 
requirement regarding the content of an agenda or regulatory 
flexibility analysis under section 602, 603, or 604, if such agency 
provides in such agenda or analysis a cross-reference to the specific 
portion of another agenda or analysis that is required by any other law 
and which satisfies such requirement.''.
    (d) Certifications.--The second sentence of section 605(b) of title 
5, United States Code, is amended--
            (1) by inserting ``detailed'' before ``statement''; and
            (2) by inserting ``and legal'' after ``factual''.
    (e) Quantification Requirements.--Section 607 of title 5, United 
States Code, is amended to read as follows:
``Sec. 607. Quantification requirements
    ``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. 5. PERIODIC REVIEW OF RULES.

    Section 610 of title 5, United States Code, is amended to read as 
follows:
``Sec. 610. Periodic review of rules
    ``(a) Not later than 180 days after the enactment of the Regulatory 
Flexibility Reform Act of 2005, each agency shall publish in the 
Federal Register and place on its Web site a plan for the periodic 
review of rules issued by the agency that the head of the agency 
determines has 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 stated objectives of applicable statutes, to minimize any 
significant adverse 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 agency's Web site.
    ``(b) The plan shall provide for the review of all such agency 
rules existing on the date of the enactment of the Regulatory 
Flexibility Reform Act of 2005 within 10 years after the date of 
publication of the plan in the Federal Register and every 10 years 
thereafter and for review of rules adopted after the date of enactment 
of the Regulatory Flexibility Reform Act of 2005 within 10 years after 
the publication of the final rule in the Federal Register and every 10 
years thereafter. 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 and Congress.
    ``(c) Each agency shall annually submit a report regarding the 
results of its review pursuant to such plan to Congress and, in the 
case of agencies other than independent regulatory agencies (as defined 
in section 3502(5) of title 44, United States Code), 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 of infeasibility under paragraph (5) or (6) of 
subsection (d) and a detailed explanation of the reasons for such 
determination.
    ``(d) In reviewing rules under such plan, the agency shall 
consider--
            ``(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;
            ``(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 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 
        determines that such calculations cannot be made and reports 
        that determination in the annual report required under 
        subsection (c);
            ``(7) 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; 
        and
            ``(8) the current impact of the rule, including--
                    ``(A) the number of small entities to which the 
                rule will apply; and
                    ``(B) the projected reporting, recordkeeping and 
                other compliance requirements of the proposed rule, 
                including--
                            ``(i) an estimate of the classes of small 
                        entities that will be subject to the 
                        requirement; and
                            ``(ii) the type of professional skills 
                        necessary for preparation of the report or 
                        record.
    ``(e) The agency shall publish in the Federal Register and on its 
Web site a list of rules to be reviewed pursuant to such plan. 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, and 
the Regulatory Enforcement Ombudsman concerning the enforcement of the 
rule.''.

SEC. 6. CLERICAL AMENDMENTS.

    (a) In General.--Section 601 of title 5, United States Code, is 
amended--
            (1) in paragraph (1)--
                    (A) by striking the semicolon at the end and 
                inserting a period; and
                    (B) by striking ``(1) the term'' and inserting the 
                following:
            ``(1) Agency.--The term'';
            (2) in paragraph (2)--
                    (A) by striking the semicolon at the end and 
                inserting a period; and
                    (B) by striking ``(2) the term'' and inserting the 
                following:
            ``(2) Rule.--The term'';
            (3) in paragraph (3)--
                    (A) by striking the semicolon at the end and 
                inserting a period; and
                    (B) by striking ``(3) the term'' and inserting the 
                following:
            ``(3) Small business.--The term'';
            (4) in paragraph (4)--
                    (A) by striking the semicolon at the end and 
                inserting a period; and
                    (B) by striking ``(4) the term'' and inserting the 
                following:
            ``(4) Small organizations.--The term'';
            (5) in paragraph (5)--
                    (A) by striking the semicolon at the end and 
                inserting a period; and
                    (B) by striking ``(5) the term'' and inserting the 
                following:
            ``(5) Small governmental jurisdiction.--The term'';
            (6) in paragraph (6)--
                    (A) by striking ``; and'' and inserting a period; 
                and
                    (B) by striking ``(6) the term'' and inserting the 
                following:
            ``(6) Small entity.--The term'';
            (7) in paragraph (7), by striking ``(7) the term'' and 
        inserting the following:
            ``(7) Collection of information.--The term''; and
            (8) in the matter preceding paragraph (1), by striking 
        ``chapter--'' and inserting ``chapter, the following 
        definitions apply:''.
    (b) Heading.--The heading of section 605 of title 5, United States 
Code, is amended to read as follows:
``Sec. 605. Incorporations by reference and certifications''.
    (c) Table of Sections.--The table of sections for chapter 6 of 
title 5, United States Code, is amended--
            (1) by striking the item relating to section 605 and 
        inserting the following:

``605. Incorporations by reference and certifications.'';
        and
            (2) by striking the item relating to section 607 and 
        inserting the following:

``607. Quantification requirements.''.
Regulatory Flexibility Reform Act of 2005 - Revises the Regulatory Flexibility Act. Defines the "economic impact" of a rule to include any economic effects on small entities.

Requires initial regulatory flexibility analyses of a proposed rule to contain a detailed statement 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 explaining why such an estimate is not available. Requires an agency to notify the Chief Counsel for Advocacy of the Small Business Administration of any draft rules that may have a significant economic impact on a substantial number of small entities either: (1) when the agency submits a draft rule to the Office of Information and Regulatory Affairs at the Office of Management and Budget under Executive Order 12866, if that order requires such submission; or (2) if no submission to the Office of Information and Regulatory Affairs is so required, at a reasonable time before publication of the rule by the agency.

Requires that final regulatory flexibility analyses include the agency's response to any comments filed on a rule by the Chief Counsel and a detailed statement of any changes made as a result. Requires publication of analyses on agency websites.

Revises provisions requiring the publication by each agency of a plan for the periodic review of its rules that have a significant impact on a substantial number of small entities to determine whether such rules should be continued, changed, or rescinded.
A bill 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.