Proper Consideration of Small Entities in Agency 
                Rulemaking

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, it is hereby ordered as follows:

                Section 1. General Requirements. Each agency shall 
                establish procedures and policies to promote compliance 
                with the Regulatory Flexibility Act, as amended (5 
                U.S.C. 601 et seq.) (the ``Act''). Agencies shall 
                thoroughly review draft rules to assess and take 
                appropriate account of the potential impact on small 
                businesses, small governmental jurisdictions, and small 
                organizations, as provided by the Act. The Chief 
                Counsel for Advocacy of the Small Business 
                Administration (Advocacy) shall remain available to 
                advise agencies in performing that review consistent 
                with the provisions of the Act.

                Sec. 2. Responsibilities of Advocacy. Consistent with 
                the requirements of the Act, other applicable law, and 
                Executive Order 12866 of September 30, 1993, as 
                amended, Advocacy:

                    (a) shall notify agency heads from time to time of 
                the requirements of the Act, including by issuing 
                notifications with respect to the basic requirements of 
                the Act within 90 days of the date of this order;
                    (b) shall provide training to agencies on 
                compliance with the Act; and
                    (c) may provide comment on draft rules to the 
                agency that has proposed or intends to propose the 
                rules and to the Office of Information and Regulatory 
                Affairs of the Office of Management and Budget (OIRA).

                Sec. 3. Responsibilities of Federal Agencies. 
                Consistent with the requirements of the Act and 
                applicable law, agencies shall:

                    (a) Within 180 days of the date of this order, 
                issue written procedures and policies, consistent with 
                the Act, to ensure that the potential impacts of 
                agencies' draft rules on small businesses, small 
                governmental jurisdictions, and small organizations are 
                properly considered during the rulemaking process. 
                Agency heads shall submit, no later than 90 days from 
                the date of this order, their written procedures and 
                policies to Advocacy for comment. Prior to issuing 
                final procedures and policies, agencies shall consider 
                any such comments received within 60 days from the date 
                of the submission of the agencies' procedures and 
                policies to Advocacy. Except to the extent otherwise 
                specifically provided by statute or Executive Order, 
                agencies shall make the final procedures and policies 
                available to the public through the Internet or other 
                easily accessible means;
                    (b) Notify Advocacy of any draft rules that may 
                have a significant economic impact on a substantial 
                number of small entities under the Act. Such 
                notifications shall be made (i) when the agency submits 
                a draft rule to OIRA under Executive Order 12866 if 
                that order requires such submission, or (ii) if no 
                submission to OIRA is so required, at a reasonable time 
                prior to publication of the rule by the agency; and
                    (c) Give every appropriate consideration to any 
                comments provided by Advocacy regarding a draft rule. 
                Consistent with applicable law and appropriate 
                protection of executive deliberations and legal 
                privileges, an agency shall include, in any explanation 
                or discussion accompanying publication in the Federal 
                Register of a final rule, the agency's response to any 
                written comments submitted by Advocacy on the proposed 
                rule that preceded the final rule; provided, however, that such inclusion is 
                not required if the head of the agency certifies that 
                the public interest is not served thereby.

                Agencies and Advocacy may, to the extent permitted by 
                law, engage in an exchange of data and research, as 
                appropriate, to foster the purposes of the Act.

                Sec. 4. Definitions. Terms defined in section 601 of 
                title 5, United States Code, including the term 
                ``agency,'' shall have the same meaning in this order.

                Sec. 5. Preservation of Authority. Nothing in this 
                order shall be construed to impair or affect the 
                authority of the Administrator of the Small Business 
                Administration to supervise the Small Business 
                Administration as provided in the first sentence of 
                section 2(b)(1) of Public Law 85-09536 (15 U.S.C. 
                633(b)(1)).

                Sec. 6. Reporting. For the purpose of promoting 
                compliance with this order, Advocacy shall submit a 
                report not less than annually to the Director of the 
                Office of Management and Budget on the extent of 
                compliance with this order by agencies.

                Sec. 7. Confidentiality. Consistent with existing law, 
                Advocacy may publicly disclose information that it 
                receives from the agencies in the course of carrying 
                out this order only to the extent that such information 
                already has been lawfully and publicly disclosed by 
                OIRA or the relevant rulemaking agency.

                Sec. 8. Judicial Review. This order is intended only to 
                improve the internal management of the Federal 
                Government. This order is not intended to, and does 
                not, create any right or benefit, substantive or 
                procedural, enforceable at law or equity, against the 
                United States, its departments, agencies, or other 
                entities, its officers or employees, or any other 
                person.

 (Presidential Sig.)B

                THE WHITE HOUSE,

                     August 13, 2002.