Regulatory Flexibility Act Compliance
The Regulatory Flexibility Act (RFA) of 1980, as amended (5 U.S.C. 601 et seq.), requires Federal agencies to review their regulations to ensure that they do not unduly inhibit the ability of small entities to compete. The following information provides the NRC's policy and procedures for complying with the RFA.
On this page:
- Analysis of NRC Rulemakings -- Impact on Small Entities
- Initial Determination
- Draft Regulatory Analysis
- Impact on Small Entities: Initial Regulatory Flexibility Analysis
- No Impact on Small Entities: Certification
- Need for More Information
- Emergency Situations
- Notification to SBA
- Section 610 Periodic Review
- Semiannual Regulatory Agenda
The RFA compels agencies to analyze the economic impacts of their regulations on small entities and to communicate and explain their findings to the public. Specific RFA requirements applicable to NRC rulemaking include:
Preparation and publication of an analysis of the impact of each rulemaking on small entities and evaluation of alternatives that would accomplish regulatory objectives while also minimizing significant economic impacts on small entities.
The periodic review of existing agency rules which have a significant economic impact on a substantial number of small entities.
Preparation and publication of a semiannual agenda listing rules under development that may have a significant economic impact on a substantial number of small entities.
Analysis of NRC Rulemakings -- Impact on Small Entities
The RFA applies to each rule subject to notice and comment rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553 (b)). Therefore, the requirements of the RFA apply to each proposed rule developed by the NRC, but not to final rules for which a proposed rule was not issued.
The NRC's Management Directive 6.3 "The Rulemaking Process" states that the NRC staff is responsible for coordinating the Office of Management and Budget (OMB) review of major NRC final actions as required by the Congressional Review Act (CRA). These final actions were formerly requested under the Small Business Regulatory Enforcement Fairness Act (SBREFA).
A final action is defined as "major" under CRA if the action will result in or is likely to result in–
- An annual effect on the economy of $100 million or more;
- A major increase in costs or prices for consumers, individual industries, or geographical regions; or
- Significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of the United States-based enterprises, in domestic and export markets.
In accordance with Small Business Administration's (SBA) regulation 13 CFR 121.903(c), the NRC has developed its own size standards for performing a Regulatory Flexibility Analysis pursuant to the RFA, and has verified with the SBA Office of Advocacy that its size standards are appropriate for NRC analyses. The NRC size standards at 10 CFR 2.810 are used to determine whether a licensee qualifies as a small entity in the NRC's regulatory programs. Section 2.810 defines the following types of small entities:
small business: a for-profit concern and is a— (1) Concern that provides a service or a concern not engaged in manufacturing with average gross receipts of $7.0 million or less over its last 3 completed fiscal years; or (2) Manufacturing concern with an average number of 500 or fewer employees based upon employment during each pay period for the preceding 12 calendar months.
small organization: a not-for-profit organization which is independently owned and operated and has annual gross receipts of $7.0 million or less.
small governmental jurisdiction: a small governmental jurisdiction is a government of a city, county, town, township, village, school district, or special district with a population of less than 50,000.
small educational institution: one that is— (1) Supported by a qualifying small governmental jurisdiction; or (2) Not state or publicly supported and has 500 or fewer employees.
Apart from the size standards located in 10 CFR 2.810, the NRC closely follows other SBA provisions. In particular, the NRC defines annual receipts in accordance with the SBA regulations. In addition, an NRC licensee that is a subsidiary of a large entity does not qualify as a small entity for purposes of this determination.
Draft Regulatory Analysis
Because the NRC is committed to regulating in a cost-effective manner, it is the agency's policy to prepare for each rulemaking, and to make publicly available, a regulatory analysis calculating the costs and benefits, including alternative regulatory approaches. The NRC's Regulatory Analysis Guidelines (NUREG/BR-0058, Rev. 4) require that the factors necessary to evaluate the economic impact of the regulatory action under consideration on small entities be addressed in the Regulatory Analysis.
Impact on Small Entities: Initial Regulatory Flexibility Analysis
If the NRC believes that a proposed rule will have a significant economic impact on a substantial number of small entities, the staff prepares an initial regulatory flexibility analysis according to the guidance in NUREG/BR-0053, "United States Nuclear Regulatory Commission Regulations Handbook."
Procedurally, since the factors necessary to evaluate the economic impact of the proposed rule on small entities are addressed in the regulatory analysis that considers the costs and benefits of the proposed rule, the regulatory flexibility analysis is normally included as an appendix to the regulatory analysis. The draft regulatory flexibility analysis, or a summary of the analysis, is published in the Federal Register for public comment as an appendix to the proposed rule. In brief, such analysis provides:
- A description of why the NRC is considering regulatory action, and the legal basis for the proposed rule.
- An estimate, including the justification or assumptions used, of the annual economic impact on small entities that would be caused by the proposed regulation by changes such as hardware modifications, procedural changes for testing or maintenance, or hiring of additional personnel.
- A description and estimate of the number of small entities to which the rule would apply.
- Projected reporting, recordkeeping, or other compliance requirements and the type of professional skills necessary for the preparation of the reports or records.
- Alternatives considered, and justification that the proposed regulation is the least costly alternative that will provide adequate protection to the public and the licensees.
- An indication of all relevant Federal rules that may duplicate, overlap, or conflict with the proposed rule along with an explanation of the necessity for any rule duplication or overlap.
When the final rule is published in the Federal Register, it contains a final regulatory flexibility analysis. This includes a summary of the issues raised by public comments in response to the initial regulatory flexibility analysis, the NRC's assessment of these issues, and any changes made in the proposed rule as a result of the comments.
No Impact on Small Entities: Certification
If the NRC determines that a proposed rule is not likely to have significant economic impact on a substantial number of small entities, the Commission provides certification to this effect in accordance with section 605(b) of the RFA. In these circumstances, the NRC does not prepare an initial regulatory flexibility analysis. The draft regulatory analysis which contains sufficient information to support the certification is added as an enclosure to the Commission paper or the memorandum requesting issuance of the certification by the Executive Director for Operations (EDO). The Commission's certification statement contains sufficient information to support the conclusion of no significant impact, and provides information on the number and type of small entities involved and the potential effect the rule will have upon them.
The Commission's certification statement is published in the Federal Register in the preamble for the proposed rule along with a request for public comment on the Commission's decision to dispense with a regulatory flexibility analysis.
This certification statement is not repeated in the final rule unless, based on comments received or other information, there is a reason to change this conclusion, in which case a final regulatory flexibility analysis is prepared. The NRC staff addresses all public comments regarding the Commission's certification in the statement of considerations for the final rule. In the event of adverse comments, the statement of considerations will contain clear justification for the Commission's decision to reaffirm its initial certification or the Commission directs the staff to conduct a regulatory flexibility analysis, which is published along with the final rule.
Need for More Information
In some instances, the NRC staff may find, after preparing an initial regulatory flexibility analysis or conducting a preliminary examination of the anticipated impacts of the proposed rule on small entities, that the NRC needs more information on how or whether the proposed rule will actually affect small entities or on how a rule may be modified to alleviate significant economic impact upon them. In such cases, the NRC may include in the preamble of the proposed rule a request for public comment on the potential impact of the proposed rule on small entities. Typically, small entities are invited to discuss:
(a) The size of their business and how the proposed regulations would result in a significant economic burden upon them as compared to larger organizations in the same business community;
(b) How the proposed regulations could be modified to take into account their differing needs or capabilities;
(c) The benefits that would accrue, or the detriments that would be avoided, if the proposed regulations were modified as suggested by the commenter;
(d) How the proposed regulations, as modified, would more closely equalize the impact of NRC regulations or create more equal access to the benefits of Federal programs as opposed to providing special advantages to any individuals or groups; and
(e) How the proposed regulations, as modified, would still adequately protect the public health and safety.
Comments received on regulatory flexibility issues are addressed in the statement of considerations for the final rule.
The RFA permits the NRC to delay the completion of a regulatory flexibility analysis for a rule issued in response to an emergency, when compliance with the RFA would be impracticable. The NRC publishes in the Federal Register, concurrent with the final rule, a written finding detailing need for and cause of the delay of the analysis. The NRC then shall prepare its flexibility analysis within 180 days of completion of the final rule or the rule will lapse and have no effect. The NRC's policy (NUREG/BR-0053) is to limit its interpretation of "emergency situations" as to those that could have an immediate and significant impact on public health and safety.
Notification to SBA
In addition to requesting public comment for proposed rules and their accompanying draft regulatory flexibility analyses, the NRC informs the Small Business Administration (SBA) via e-mail of each proposed and final rule that includes a regulatory flexibility certification statement or for which a regulatory flexibility analysis has been performed. This notification occurs at the time the NRC transmits the rulemaking for publication in the Federal Register. Any SBA comments on a draft rule that may have a significant economic impact on a substantial number of small entities are addressed in the statements of consideration when the NRC publishes its final rule in the Federal Register, unless the Commission certifies that addressing SBA's comments does not serve the public interest.
Section 610 Periodic Reviews
Section 610 of the Regulatory Flexibility Act (RFA) requires agencies to conduct a review within 10 years of the promulgation of those regulations that have or will have a significant economic impact on a substantial number of small entities. The NRC undertakes these reviews to decide whether the rules should continue without change, be amended, or be rescinded.
The NRC notifies the public of the initiation and completion of these Section 610 periodic reviews through the rulemaking entry in the semiannual Unified Agenda. Those entries will be added as a periodic review initiation entry in the "Pre-rule" section of the Unified Agenda and will be subject to public comment. The results of the periodic review will be published in the "Completed Actions" section of the Unified Agenda. At this time, the NRC does not have any rules that have a significant economic impact on a substantial number of small entities; therefore, the NRC has not included any RFA Section 610 periodic reviews in the latest edition of the Unified Agenda.
See a complete listing of NRC rulemakings that impact small entities.
Semiannual Regulatory Agenda
The RFA requires the NRC to publish a regulatory agenda twice a year in the Federal Register listing all rules under development that are expected to have a significant economic impact on a substantial number of small entities. The agenda is required to state the objectives and legal basis of each such rule, discuss its expected impact on small entities, and provide a schedule for completion of each action.
The NRC complies with this regulatory flexibility agenda requirement by submitting data for inclusion in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda), published in the spring and fall of each year by the Office of Management and Budget (OMB). Since all NRC rulemakings approved for development by the Commission, the EDO, or the Chief Financial Officer are assigned a Regulation Identifier Number (RIN), readers can easily cross-reference Unified Agenda entries to Federal Register notices and track a rulemaking from its planning to promulgation.
Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission (NUREG/BR-0058)(ADAMS Accession No. ML003738939)
Management Directive 6.3, "The Rulemaking process" (ADAMS Accession No. ML13205A400).
United States Nuclear Regulatory Commission Regulations Handbook (NUREG/BR-0053).