Small Business Reg Reform Bill IntroducedMarch 23, 2016
On March 16, Sen. Rand Paul (R-Ky.) introduced the Protect Small Business Jobs Act of 2016 (S. 2696), legislation designed to protect small businesses from regulatory sanctions and by extension the jobs those small businesses create. This type of protection is increasingly necessary for small businesses as they struggle to keep up with the flow of regulations that have been finalized over the past several years.
S. 2696 addresses the situation in which a small business is deemed by a regulatory agency to be a first-time violator of an existing rule or regulation. In that situation, the legislation requires the agency to promptly notify the small business that it is in violation of the regulation. However, following that notification, small businesses are given a six month period to remedy the violation. Upon showing good faith and reasonable efforts, that period can be extended by three months. After that period, only if the small business is still in violation of the rule or regulation would the agency take action against the small business. This process would only apply to violations which did not place anyone in imminent danger and to first-time violations of a given rule or regulation by the small business.
The legislation currently does not have any cosponsors and was referred to the Senate Committee on Homeland Security and Government Affairs. However, given the compressed nature of the Senate calendar this year, it remains uncertain if or when the committee will be able take up the legislation.
Small businesses face very different regulatory compliance challenges than larger companies. Most small businesses do not have dedicated regulatory compliance staff, so time spent on complex regulatory compliance takes away from time focusing on the core functions of the business. Allowing small businesses to remedy first time violations, prior to official sanctions is a commonsense approach that will help protect small businesses that put forward good faith efforts to comply with an increasingly complex regulatory environment.