Order Code RL32801
CRS Report for Congress
Received through the CRS Web
Reexamining Rules:
Section 610 of the Regulatory Flexibility Act
Updated March 11, 2005
Curtis W. Copeland
Specialist in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

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Reexamining Rules:
Section 610 of the Regulatory Flexibility Act
Summary
As part of a broader regulatory reform agenda, some interest groups have
suggested that Congress require agencies to reexamine their existing regulations to
determine whether they are still needed or can be made less burdensome. One model
that has been suggested for such regulatory “lookbacks” is an expansion of a
requirement in Section 610 of the Regulatory Flexibility Act (RFA) of 1980. That
provision requires each agency to develop a plan for the review of its existing rules
that have or will have a “significant economic impact on a substantial number of
small entities.” Agencies are required to review any new rules within 10 years of
their publication as a final rule, and to provide an annual Federal Register notice of
rules they have designated for review within the next 12 months. The Unified
Agenda of Federal Regulatory and Deregulatory Actions is intended to be a
compendium of agency rulemaking actions within the next 12 months. Therefore,
the number of Section 610 notices in the Unified Agenda should provide some
indication of the extent to which agencies are conducting the required “lookbacks”
under the RFA.
Although this statutory “lookback” requirement has been in place since 1981,
it difficult to determine with any degree of certainty whether agencies are consistently
implementing it. However, it appears that agencies are carrying out relatively few
Section 610 reviews. Several agencies have consistently indicated that they plan to
issue dozens of rules each year with a significant impact on small entities, but have
published few if any notices of Section 610 reviews in the Unified Agenda. The RFA
gives agencies a significant amount of discretion to decide which rules are covered
by the review requirement. There also appears to be substantial confusion or
disagreement among the agencies regarding what Section 610 requires, thereby
limiting its effectiveness. For example, some agencies said the statutes underlying
their rules had a significant impact on small entities, not the rules themselves, so they
did not have to review them under Section 610.
The poor implementation history of Section 610 of the RFA offers a number of
valuable lessons for current advocates of even broader “lookback” reviews. For any
such process to work, Congress faces the challenge of clearly specifying what rules
should be reviewed and how the reviews should be conducted. Also, some means of
tracking the reviews, congressional or executive branch oversight, and a meaningful
enforcement mechanism appear important to improving the implementation of the
lookback requirement. Otherwise, agencies are unlikely to conduct many more
reviews than have occurred pursuant to Section 610. Legislation has been introduced
in the 109th Congress (H.R. 682) that addresses some of the issues regarding the
implementation of the RFA and Section 610 reviews.
This report will be updated when additional information about Section 610 or
broader lookback reviews become available.

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Contents
Regulatory Flexibility Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Implementation of the Section 610 Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 4
GAO Reviews of Section 610 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Issues Affecting Section 610 Implementation . . . . . . . . . . . . . . . . . . . . . . . . 6
Agencies’ Section 610 Reviews in 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Implications for Regulatory Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Developments During the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. Agencies Announced Few Section 610 Reviews in 2004 . . . . . . . . . . . . 8

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Reexamining Rules:
Section 610 of the Regulatory Flexibility Act
President George W. Bush has indicated that regulatory reform would be one
of his Administration’s priorities during his second term. As part of this effort,
several interest groups have suggested that Congress require agencies to reexamine
their existing regulations to determine whether they are still needed or can be made
less burdensome.1 One model that has been suggested for such regulatory
“lookbacks” is an expansion of a requirement already in place in Section 610 of the
Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601-612).
Section 610 of the RFA is the only crosscutting statutory requirement that
federal agencies reexamine certain rules after they have been issued.2 Specifically,
Subsection 610(a) of the RFA requires each agency to develop a plan for the review
of its existing rules that have or will have a “significant economic impact on a
substantial number of small entities.” The act (Section 601) defines a “small entity”
as including small businesses, small governmental jurisdictions, or other small
organizations. The Section 610 review plans were to require agencies to review all
existing rules within 10 years of the effective date of the statute (Jan. 1, 1981), and
require any new rules to be reviewed within 10 years of their publication as a final
rule. According to the RFA, the purpose of the reviews is to determine whether the
rules should be continued without change, or should be amended or rescinded to
minimize their impact on small entities. Subsection 610(c) of the RFA requires
agencies to provide an annual Federal Register notice of rules they have designated
for review within the next 12 months. In essence, Subsection 610(c) is an advance
notice requirement designed to facilitate public input into reviews of existing rules.
Although this statutory “lookback” requirement has been in place since 1981,
it is still difficult to determine with any degree of certainty whether agencies are
consistently implementing it. However, it appears that agencies are carrying out
relatively few Section 610 reviews. One reason why so few reviews are done is that
the act gives agencies a significant amount of discretion to decide which rules are
1 Paul Singer, “Sunsetting the Beast,” National Journal, vol. 37 (Jan. 28, 2005), pp. 296-
297; and Rebecca Adams, “GOP Adds New Tactics to War on Regulations,” CQ Weekly,
vol. 63 (Jan. 31, 2005), pp. 224-226.
2 Certain statutes (e.g., Section 812 of the 1990 amendments to the Clean Air Act) require
agencies to reexamine the effects of certain provisions. Also, Section 5 of Executive Order
12866 on “Regulatory Planning and Review” (58 Federal Register 51735, Oct. 4, 1993)
requires covered agencies (not including independent regulatory agencies) to “periodically”
review their significant regulations to determine whether they should be revised or
eliminated. However, the results of those reviews have not been very impressive. See U.S.
General Accounting Office, Regulatory Reform: Agencies’ Efforts to Eliminate and Revise
Rules Yield Mixed Results, GAO/GGD-98-3, Oct. 2, 1997.

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covered by the review requirement. There also appears to be substantial confusion
among the agencies regarding what Section 610 requires, thereby limiting its
effectiveness. This report examines those issues and their implications for future
regulatory reforms, but begins with a brief background discussion of the RFA itself.
Regulatory Flexibility Act
Under the RFA, all agencies (cabinet departments, independent agencies, and
independent regulatory agencies) must prepare a regulatory flexibility analysis at the
time proposed and certain final rules are issued. The RFA requires the analysis to
describe, among other things, (1) the reasons why the regulatory action is being
considered; (2) the small entities to which the rule will apply and, where feasible, an
estimate of their number; (3) the projected reporting, record-keeping, and other
compliance requirements of the rule; and (4) any significant alternatives to the rule
that would accomplish the statutory objectives while minimizing the impact on small
entities.
However, these analytical requirements are not triggered if the head of the
issuing agency certifies that the forthcoming rule would not have a “significant
economic impact on a substantial number of small entities.” The RFA does not
define “significant economic impact” or “substantial number of small entities,”
thereby giving federal agencies substantial discretion to determine when the act’s
analytical requirements are initiated.3 Also, the RFA’s analytical requirements do not
apply to final rules for which the agency does not publish a proposed rule.4 Judicial
review of agency compliance with certain provisions of the RFA is available to small
entities, including Section 610. Section 612 of the RFA requires the Small Business
Administration’s (SBA’s) Chief Counsel for Advocacy to monitor and report at least
annually on agencies’ implementation of the act.5
The General Accounting Office (GAO, now the Government Accountability
Office) has examined the implementation of the RFA several times since its
enactment, and a recurring theme in GAO’s reports has been a lack of clarity in the
3 Agencies also have discretion regarding other requirements built on this determination.
For example, Section 212 of the Small Business Regulatory Enforcement Fairness Act
(SBREFA) requires agencies to publish one or more compliance guides for each final rule
or group of related rules that triggers the RFA. If an agency certifies a rule as not having
a significant impact on small entities, no compliance guide need be developed. See U.S.
General Accounting Office, Regulatory Reform: Compliance Guide Requirement Has Had
Little Effect on Agency Practices, GAO-02-172, Dec. 28, 2001.
4 Many agencies are apparently aware of this limitation. The General Accounting Office
(GAO, now the Government Accountability Office) estimated that in more than 500 final
rules published in 1997 the agencies specifically stated that the RFA was not applicable or
that a regulatory flexibility analysis was not required because the action was not preceded
by a proposed rule. See U.S. General Accounting Office, Federal Rulemaking: Agencies
Often Published Final Actions Without Proposed Rules, GAO/GGD-98-126, Aug. 31, 1998,
p. 31.
5 For copies of the Chief Counsel’s reports, see [http://www.sba.gov/ADVO/laws/flex/].

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act and a resulting variability in the act’s implementation. For example, in 1991
GAO reported that each of the four federal agencies that it reviewed had a different
interpretation of key RFA provisions.6 In 1994 GAO again reported that agencies’
compliance with the RFA varied widely from one agency to another and that agencies
were interpreting the statute differently.7 In a 2000 report on the implementation of
the RFA at the Environmental Protection Agency (EPA), GAO concluded that the
agency had broad discretion to determine what the statute required — even when
EPA concluded that a rule costing more than 5,000 small businesses more than
$5,000 each did not have a “significant economic impact on a substantial number of
small entities.”8 GAO reported that in the two and one-half years after the enactment
of the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996
(which was intended to strengthen the implementation of the RFA), EPA certified
that 96% of its proposed rules would not have a significant impact on small entities
— nearly 20 percentage points higher than in the two and one-half years before
SBREFA was enacted. Two of EPA’s program offices (pesticides and solid waste)
said all 46 of their proposed rules published during this period would not have a
significant impact on small entities.
In all of these reports, GAO suggested that Congress consider clarifying the
act’s requirements and/or giving SBA or some other entity the responsibility to
develop criteria for whether and how agencies should conduct RFA analyses. In
2001, GAO testified that the promise of the RFA may never be realized until
Congress or some other entity defines what a “significant economic impact” and a
“substantial number of small entities” mean in a rulemaking setting.9 In 2002, GAO
testified that the implementation of the RFA was still problematic, and raised even
more questions about how the statute should be interpreted.10 For example, in
determining whether a rule has a significant impact on small entities, should agencies
take into account the cumulative impact of similar rules in the same area? Should
agencies consider the RFA triggered when a rule has a significant positive impact on
small entities? GAO went on to say the following:
These questions are not simply matters of administrative conjecture within the
agencies. They lie at the heart of the RFA and SBREFA, and the answers to the
questions can have a substantive effect on the amount of regulatory relief
provided through those statutes. Because Congress did not answer these
questions when the statutes were enacted, agencies have had to develop their
own answers — and those answers differ. If Congress does not like the answers
that the agencies have developed, it needs to either amend the underlying statutes
6 U.S. General Accounting Office, Regulatory Flexibility Act: Inherent Weaknesses May
Limit Its Usefulness for Small Governments, GAO/HRD-91-16, Jan. 11, 1991.
7 U.S. General Accounting Office, Regulatory Flexibility Act: Status of Agencies’
Compliance, GAO/GGD-94-105, Apr. 27, 1994.
8 U.S. General Accounting Office, Regulatory Flexibility Act: Implementation in EPA
Program Offices and Proposed Lead Rule, GAO/GGD-00-193, Sept. 20, 2000.
9 U.S. General Accounting Office, Regulatory Flexibility Act: Key Terms Still Need to Be
Clarified, GAO-01-669T, Apr. 24, 2001.
10 U.S. General Accounting Office, Regulatory Flexibility Act: Clarification of Key Terms
Still Needed, GAO-02-491T, Mar. 6, 2002.

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and provide what it believes are the correct answers or give some other entity the
authority to issue guidance on these issues.11
However, other observers have indicated that the definitions of these terms
should remain flexible because of significant differences in each agency’s operating
environment. For example, the SBA Office of Advocacy said that “[n]o definition
could, or arguably should, be devised to apply to all rules given the dynamics of the
economy and changes that are constantly occurring in the structure of small-entity
sectors.”12
In August 2002, President George W. Bush issued Executive Order 13272,
which was intended to promote compliance with the RFA.13 The executive order
required agencies to issue written procedures and policies to ensure that the potential
impacts of their draft rules on small entities are properly considered, and required
them to notify the Office of Advocacy of any draft rules with a significant economic
impact on a substantial number of small entities. Although the order required the
Office of Advocacy to provide training on compliance with the RFA and to provide
comments on draft rules, it did not define what should be considered a “significant”
economic impact or a “substantial” number of small entities.
Implementation of the Section 610 Requirements
SBA’s annual reports on the implementation of the RFA have only occasionally
mentioned Section 610 of the statute. However, in April and May 1992, SBA’s
Chief Counsel for Advocacy sent letters to the heads of at least 83 executive
departments and agencies requesting that they provide information on their
implementation of Section 610. Of the 55 agencies that responded, 13 said they had
published the required plan for the review of their rules. The remaining 42
respondents indicated that they had not done so, most often saying that none of their
rules had a significant economic impact on a substantial number of small entities.
In 1994, the Chief Counsel told GAO that SBA did not follow up with these agencies
because SBA had no authority to compel agencies to plan for or conduct a review of
their rules.14
In February 1998, the House Committee on Small Business held a hearing on
the implementation of Section 610 of the RFA.15 In general, the witnesses indicated
that few Section 610 reviews had been done, and the reasons for this lack of action
11 Ibid, pp. 2-3.
12 U.S. Small Business Administration, Office of Advocacy, The Regulatory Flexibility Act:
An Implementation Guide for Federal Agencies (Washington, D.C.: 1998), p. 16.
13 U.S. President (Bush), “Proper Consideration of Small Entities in Agency Rulemaking,”
Executive Order 13272, 67 Federal Register 53461, Aug. 13, 2002.
14 GAO/GGD-94-105, pp. 12-16.
15 U.S. Congress, House Committee on Small Business, Federal Agency Compliance With
Section 610 of the Regulatory Flexibility Act, 105th Congress, 2nd sess., Feb. 12, 1998
(Washington: GPO, 1998).

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varied. For example, one witness said certain agencies had effectively written
themselves out of portions of the RFA by indicating that their “interpretative rules”
are not covered by the act, or by defining a “small business” in such a way that the
act was not triggered.
GAO Reviews of Section 610
Section 602 of the RFA requires each agency to publish in the Federal Register
a “regulatory flexibility agenda” describing each rule the agency intends to
promulgate that is likely to have a significant economic impact on a substantial
number of small entities. As noted previously, Subsection 610(c) of the RFA
requires agencies to publish a notice in the Federal Register of rules that they plan
to review within the next 12 months. A number of agencies have used the Unified
Agenda of Federal Regulatory and Deregulatory Actions to publish these notices,
although the statute does not refer to or require its use.16 The Unified Agenda is
published twice each year in the Federal Register by the Regulatory Information
Service Center, and provides uniform reporting of data on regulatory activities under
development throughout the federal government. In essence, the Agenda is intended
to be a compendium of agency rulemaking actions within the next 12 months.
Therefore, the number of Section 610 notices in the Unified Agenda should provide
some indication of the extent to which agencies are conducting the required
“lookbacks” under the RFA.
GAO has used the Unified Agenda to examine the implementation of Section
610 of the RFA several times within the past 10 years, and each time concluded that
its implementation appeared flawed. For example, in April 1997 and February 1998,
GAO reported that relatively few agencies had entries in the November 1996 and
October 1997 editions of the Unified Agenda that they characterized as Section 610
reviews.17 Also, where present, the agencies’ entries frequently did not meet the
specific requirements of Subsection 610(c).
In April 1999, GAO examined the April 1998 and November 1998 editions of
the Unified Agenda, and again reported that few regulatory agencies indicated that
they were conducting Section 610 reviews — even among agencies that indicated
they issued a large number of rules with a significant economic impact on a
substantial number of small entities.18 For example, of the 61 federal departments
and agencies with entries in the November 1998 Unified Agenda, only eight agencies
16 Notably, Section 4 of Executive Order 12866 requires all agencies to prepare an “agenda”
of all regulations under development or review. Also, Section 5 of the executive order
requires covered agencies to include any significant rules selected for review in the
agencies’ regulatory plans, which are required to be published in the Unified Agenda.
17 U.S. General Accounting Office, Regulatory Flexibility Act: Agencies’ Use of the
November 1996 Unified Agenda Did Not Satisfy Notification Requirements,
GAO/GGD/OGC-97-77R, Apr. 22, 1997; and Regulatory Flexibility Act: Agencies’ Use of
the October 1997 Unified Agenda Often Did Not Satisfy Notification Requirements,
GAO/GGD-98-61R, Feb. 12, 1998.
18 U.S. General Accounting Office, Regulatory Flexibility Act: Agencies’ Interpretations of
Review Requirements Vary, GAO/GGD-99-55, April 2, 1999.

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indicated that they were reviewing rules under Section 610, and most of them were
reviewing only one or two rules each. Several of the agencies with no Section 610
review entries had indicated in 20 successive editions of the Agenda that many of
their regulatory actions would have a significant economic impact on small entities
— thereby strongly indicating that they would need to review many of their rules
under Section 610.
Issues Affecting Section 610 Implementation
However, in that 1999 report, GAO said it could not definitively determine
whether more rules should have been reviewed under Section 610, or which rules,
because no authoritative database existed delineating (1) the final rules that agencies
determined would have a significant impact on small entities or (2) the rules for
which Section 610 reviews had already been conducted. Also, GAO determined
there were significant differences of opinion among federal agencies regarding the
act’s requirements, or misunderstandings of those requirements. For example:
! Subsection 610(c) requires agencies to publish notices in the Federal
Register of rules that “have” a significant economic impact on a
substantial number of small entities. Some agencies (e.g., EPA)
indicated that this language required a review of any rule that had
such an impact at the time the final rule was promulgated (i.e., any
rule for which they had prepared a final regulatory flexibility
analysis). In contrast, other agencies (e.g., the Department of
Transportation) said that the impact of rules can change dramatically
over a 10-year period, and said they interpreted the statute’s use of
the present tense “have” to mean they must review rules that have
such an impact at the time the agency conducts the review. Under
this reading of the statute, agencies cannot rely on their previous
determinations and must reexamine all of their rules within 10 years
of their issuance to determine their current economic effect on small
entities.19
! Other agencies (e.g., the Department of Health and Human Services)
said they believed they had met the public notice requirements of
Subsection 610(c) by simply listing rules in the Unified Agenda that
they believed would have a significant impact on small entities.
(Department officials said they subsequently understood that
interpretation was wrong.)
! Still other agencies (e.g., the Small Business Administration) said
they had not done any Section 610 reviews at the time of GAO’s
study because they had reviewed and revised all of their rules in the
mid-1990s as part of the Clinton Administration’s regulatory reform
initiative. Therefore, they argued, the agencies had no rules more
than 10 years old that had not been reviewed. (Notably, GAO
19 Because DOT interprets the RFA in this manner, for the past several years it has been
systematically reviewing all of its rules to determine their current impact on small entities.

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examined SBA’s announcements of these reviews and concluded
that they did not meet the requirements of the RFA.)
At a meeting at GAO in February 2000, regulatory agencies raised a number of other
issues regarding the interpretation of the RFA’s Section 610 “lookback” requirement
that have affected its implementation. For example:
! Some agencies indicated that they had established a “high threshold”
for what constituted a “significant economic impact on a substantial
number of small entities.” By designating few of their rules as
having that level of impact, the number of rules from those agencies
that were subject to reexamination was small.
! Some agencies said their rules often only implemented the
requirements in the underlying statutes. Therefore, they considered
the underlying statutes to have a significant impact on small entities,
not their regulations, so they believed that few of their rules were
subject to Section 610.
! Similarly, some agencies said that while the actions of states and
other parties implementing certain federal rules (e.g., health
standards) would likely have a significant impact on small entities,
the federal rules themselves would not have that impact.
! Other agencies indicated that it was unclear whether amending all or
part of a rule within the 10-year period provided in Section 610
would “restart the clock.” If so, they said agencies could prevent any
“lookbacks” simply by making changes to their rules at least once
every 10 years.
! Still other agencies questioned what was considered a “rule” under
Section 610. For example, if a Federal Register provision amended
an existing part in the Code of Federal Regulations (CFR), they said
it was unclear whether the agency should review the CFR part as a
whole within 10 years or only the portion that was amended by the
Federal Register provision.
Agencies’ Section 610 Reviews in 2004
GAO has not examined the implementation of Section 610 of the RFA during
the past five years. Therefore, it is unclear whether agencies have improved their
implementation of Section 610 or whether the same basic pattern is evident. Using
the same methodology that GAO employed, this section of this report examines
agencies’ implementation of the review requirement during calendar year 2004.
The Unified Agendas published in June 2004 and December 2004 each
contained more than 4,000 entries (e.g., notices of forthcoming proposed rules and
final rules) from more than 60 regulatory agencies. In each volume, the agencies
indicated that about 400 of the regulatory actions identified in those entries could
have a significant economic impact on a substantial number of small entities. As

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Table 1 indicates, the agencies with the largest number of such entries were the
Federal Communications Commission (FCC); the Securities and Exchange
Commission (SEC); the Small Business Administration (SBA); and the Departments
of Commerce (DOC), Health and Human Services (HHS), Agriculture (USDA),
Transportation (DOT), and Labor (DOL). Those eight departments and agencies
accounted for about 90% of the regulatory actions in the Agendas that the agencies
expected to trigger the RFA. The same departments and agencies also indicated they
issued many RFA-related rules when GAO did its study examining the Unified
Agendas from 1988 through 1998.20 Therefore, it would be reasonable to expect that,
since they indicated that they intended to issue a large number of rules each year with
a significant effect on small entities, those same agencies would need to reexamine
a large number of rules each year under Section 610.
Table 1. Agencies Announced Few Section 610 Reviews in 2004
June 2004 Unified Agenda
December 2004 Unified Agenda
Department/
Agency
Entries with
Section 610
Entries with
Section 610
impact on
notices
impact on small
notices
small entities
entities
USDA
33
7
38
4
DOC
97
0
61
0
HHS
65
1
68
1
DOL
12
4
8
5
DOT
16
1
17
3
SBA
14
0
10
0
FCC
110
2
111
2
SEC
24
0
18
0
All other
45
20
41
16
agencies
Total
416
35
408
31
Source: Unified Agenda of Federal Regulatory and Deregulatory Actions, 69 Federal Register
38677-38688 and 74291-74301. The number of entries with impact on small entities does not include
Section 610 reviews. The number of Section 610 reviews does not include entries noting the
completion of reviews or rulemaking associated with those reviews.
20 GAO/GGD-99-55, pp. 13-14. GAO reported that several other agencies also indicated
that they issued a significant number of rules with a significant impact on small entities,
including EPA and the Departments of the Interior and the Treasury.

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However, as Table 1 also illustrates, the June 2004 edition of the Unified
Agenda contained only 35 notices of upcoming Section 610 reviews, and the
December edition contained only 31.21 Some of the agencies that indicated they
planned to issue the most rules affecting small entities had either no Section 610
notices (DOC, SBA, and SEC) or had only one or two such notices (HHS and FCC).
GAO reported the same pattern for the same five agencies in its 1999 report.22
Therefore, if the Unified Agenda really is the compendium of forthcoming regulatory
activity that it purports to be, it appears that agencies are still not conducting many
reviews under Section 610 of the RFA.
In fact, the number of Section 610 reviews that federal agencies conduct each
year is actually much less than the above table suggests. All but four (two from DOL
and two from DOT) of the 31 Section 610 notices listed in the December 2004
edition of the Unified Agenda were previously listed among the 35 notices in the June
edition. Likewise, all but nine of the 35 notices in the June 2004 edition had been
listed in the December 2003 edition of the Agenda. The same type of overlap exists
with regard to the number of rules expected to have a significant impact on small
entities. For example, of the 38 USDA entries in the December 2004 edition of the
Unified Agenda with an impact on small entities, all but six were in the June 2004
edition of the Agenda. Overall, though, if the Unified Agenda is a valid general
indication of agencies’ activities in this area, it appears that agencies are reviewing
less than 10% of their rules with an impact on small entities.
Implications for Regulatory Reform

The failure of Section 610 of the RFA to get many agencies to review the impact
of their existing rules on small entities offers a number of valuable lessons for current
advocates of even broader “lookback” requirements. In general, the drafters of any
regulatory review legislation should be sure that the requirements for review are clear
in terms of which rules need to be reviewed, and how the reviews are to be
conducted. Giving agencies the discretion to decide which rules meet certain broad
criteria for review appears (in many cases) to be an invitation for the agencies to
declare that few if any of their rules meet that threshold.
Clearly, many of the problems associated with the implementation of Section
610 are traceable to problems associated with the RFA as a whole. Agencies have
substantial discretion to certify rules as not having a significant economic impact on
a substantial number of small entities. Agencies that so certify all or most of their
rules (e.g., EPA) would never even appear in a listing like Table 1 of agencies that
issue a large number of rules that require reexamination under Section 610. It is
ironic that SBREFA, a statute intended to strengthen the RFA, may have had the
21 These editions of the Unified Agenda also contained several other entries indicating that
Section 610 reviews had been completed, or that rulemaking had resulted from a review —
but those entries are not the same as public notices of upcoming reviews.
22 GAO/GGD-99-55, pp. 13-14. GAO also reported that the Departments of the Interior and
the Treasury also had no Section 610 review entries despite having dozens of entries with
a significant economic impact on a substantial number of small entities.

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unintended effect of making fewer rules subject to the RFA’s analytical requirements,
including Section 610.
One way to address this problem in the context of any new statutory “lookback”
requirement could be to eliminate agency discretion entirely and require the agencies
to review all of their existing rules, or all rules they had issued within a set period of
time prior to the enactment of any review requirement (e.g., within the past 10 years).
However, these sorts of all-encompassing reviews would likely be very difficult and
time-consuming for the agencies to conduct. Also, most of the thousands of final
rules that agencies issue each year are routine or administrative (e.g., bridge opening
schedules or air worthiness directives), and are not likely to be the type of rules
considered burdensome or in need of reform by the public. One way to make such
a comprehensive review requirement more manageable could be to require agencies
to review all final rules that both the Office of Management and Budget (OMB) and
the agencies considered “significant” under Executive Order 12866 (about 300 final
rules each year) or “major” under SBREFA (about 70 final rules each year).23
However, even this approach would include some rules that are somewhat ministerial
in nature (e.g., major rules establishing migratory bird hunting seasons or Medicare
reimbursement rates). OMB or some other entity outside of the regulatory agencies
could be authorized to waive the review requirement for such rules.
Another approach could be to solicit suggestions from the public regarding the
rules they believe should be reviewed. However, some would argue that this
approach is already underway. The “Regulatory Right to Know Act” (Section 624
of the Treasury and General Government Appropriations Act of 2001) required that
OMB report on “recommendations for reform.” In response to that requirement,
OMB has been asking the public to nominate rules that they believe are in need of
review. Initially, OMB asked the public to suggest rules that could be “rescinded or
changed” to increase net benefits to the public. In response, OMB received 71
suggestions from the public. Subsequently, though, OMB broadened the request to
include revisions that would increase net benefits by either eliminating or modifying
existing rules, or by extending or expanding existing regulatory programs. In
response to that request, OMB received 316 suggestions from the public, and referred
those suggestions to the agencies for their consideration.24 OMB is continuing to
obtain suggestions from the public regarding rules in need of review.
23 Executive Order 12866 defines a “significant regulatory action” as any rule that may (1)
have an annual effect on the economy of $100 million or more or adversely affect in a
material way the economy, a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or state, local, or tribal governments or communities;
(2) create a serious inconsistency or otherwise interfere with an action taken or planned by
another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees,
or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal
or policy issues arising out of legal mandates, the President’s priorities, or the principles set
forth in the order. However, E.O. 12866 does not include rules issued by independent
regulatory agencies. SBREFA includes all agencies, and defines a “major” rule essentially
as in the first criterion in the order (e.g., $100 million impact on the economy).
24 OMB reported on the status of these recommendations in a December 2004 report to
Congress on the costs and benefits of regulations. To view a copy of that report, see
[http://www.whitehouse.gov/omb/inforeg/2004_cb_final.pdf].

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Whichever approach is taken, federal agencies’ experience with Section 610 of
the RFA suggests that Congress be as clear as possible regarding its expectations for
these reviews. For example, Congress faces the challenge of clearly indicating:
! what should be considered a “rule” to be reviewed (e.g., an entire
CFR part or only certain provisions that are changed through a
Federal Register notice);
! whether any “burden” that is associated with a rule’s underlying
statute (or subsequent implementation by state governments or other
parties) should be considered part of the rule; and
! whether any revisions to a rule would “restart the clock” for any
requirement that rules be revised within a particular period of time.
Also, in order to permit the public to be involved in these reviews and to permit
tracking of which rules are still in need of review, agencies could be required to post
their upcoming and completed reviews in the Unified Agenda or on the agency’s
website. As a result, Congress and the public would know which rules were required
to be reviewed, which ones had been reviewed, and which ones were still in need of
review.
Finally, Congress could consider including some type of enforcement
mechanism to any generalized lookback requirement, either through the budget (e.g.,
withholding some portion of the appropriations of agencies that have not carried out
the required reviews), by including judicial review provisions that do more than just
require agencies to do the reviews that they neglected to do in the first place, or
through some other approach. Regular scrutiny of agencies’ implementation of any
lookback requirement by Congress, OMB, or some other entity could also raise the
requirement’s profile. Without some type of enforcement of the review requirement,
agencies are unlikely to conduct many more reviews than have occurred pursuant to
Section 610.
Developments During the 109th Congress
In the 109th Congress, legislation has been introduced to amend the RFA “to
ensure complete analysis of potential impacts on small entities of rules.” The bill —
H.R. 682, the “Regulatory Flexibility Improvements Act” — would (among other
things) (1) define “economic impact” to include “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)”; (2) require
regulatory flexibility analysis of rules with either a significant negative or positive
impact on small entities; and (3) include certain “interpretive” rules from the Internal
Revenue Service under the act’s requirements. These changes, if enacted, would
address several of the issues that have affected RFA compliance for decades.
Perhaps most notably for purposes of this report, the bill would also amend
Section 610 of the RFA to require each agency to develop a new plan for the review
of its rules that have a significant economic impact on a substantial number of small
entities, regardless of whether the agency certified the rule at the time of issuance.

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Under the proposed legislation, all existing rules must be reviewed within 10 years
of the date the legislation is enacted, and all new final rules must generally be
reviewed within 10 years of their publication in the Federal Register. Agencies
would also be required to publish in the Federal Register and on their websites a list
of rules to be reviewed pursuant to the plan, and would be required to report annually
to the Congress regarding the results of its reviews. These changes, if enacted, could
help clarify which rules need to be review and could improve Congress’s ability to
oversee the implementation of the review requirement.
In its listing of legislative priorities for the 109th Congress, SBA’s Office of
Advocacy also called for the modification of Section 610 of the RFA. Specifically,
the office called for Section 610 to be “broadened so that agencies review all rules
periodically and not just those viewed as significant when initially promulgated.”
The office said that doing so would “encourage agencies to update their rules every
ten years to ensure that regulatory protections reflect current conditions.” SBA also
called for the RFA to be amended to require agencies to consider the “indirect
impacts” of their rules, and to codify Executive Order 13272.25
25 Thomas M. Sullivan, “Advocacy’s Legislative Agenda: Strengthen the Regulatory
Flexibility Act,” The Small Business Advocate, vol. 24 (March 2005), p. 3, available at
[http://www.sba.gov/advo/mar05newsletter.pdf].

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