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Legislative and Regulatory Process Overview

Download a printable version of this process overview (PDF: 466 KB)

Legislation: How a Bill Becomes a Law

The process of a bill becoming law is complicated and can take time. Approximately 25,000 bills are introduced in each term of Congress, but only about 10 percent become law. A bill may begin in either the House or the Senate, but both must pass the bill before it can be referred to the President for action. Here are the steps to create a law:

Here are the steps to create a law:

  1. Bill introduced by member of Congress
  2. Bill is referred to a committee
  3. Committee reviews Bill, holds hearings
  4. Committee votes to send Bill to House (or Senate)
  5. Bill is debated on the House (or Senate) floor
  6. Bill passes House (or Senate), Bill is referred to the other Chamber (the above steps repeat in the other chamber)
  7. If other Chamber significantly alters the Bill, a conference committee is formed to reconcile differences
  8. Both Houses approve the Bill and send to President
  9. President signs the bill

Regulation: Once a Bill Becomes a Law

Once a pension bill becomes law, often the Department of the Treasury and the Internal Revenue Service (IRS) or the Department of Labor (DOL) draft rules (called regulations) on how to apply the law. Often times, the law dictates a timetable for the IRS or DOL to issue their rules. It's important to note that the IRS or DOL may propose a regulation they believe is necessary at any time and regulations may also be amended from time to time. Here are the steps to finalize a regulation:

Here are the steps to finalize a regulation:

  1. Law exists
  2. Determination is made that a regulation is needed
  3. IRS or DOL prepares a PROPOSED regulation
  4. Referred to the Office of Management and Budget (OMB) for review and approval
  5. Publication of the PROPOSED regulation
  6. 60-day comment period opens for the public to submit comments
  7. IRS or DOL reviews comments submitted and prepares the FINAL or INTERIM FINAL regulation
  8. Referred to the OMB for review and approval
  9. Publication of the FINAL or INTERIM FINAL regulation


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While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

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