Bill to Enhance Small Business Voice in Rulemaking

July 1, 2015

stk318013rknOn June 9, Chairman of the Senate Committee on Small Business and Entrepreneurship David Vitter (R-La.) and Sens. Jim Risch (R-Idaho), Marco Rubio (R-Fla.), Cory Gardner (R-Colo.), Joni Ernst (R-Iowa), and Mike Enzi (R-Wyo.) introduced the Small Business Regulatory Flexibility Improvements Act of 2015 (S. 426) legislation which would strengthen existing law in order to provide small businesses with a voice and protections in the federal rulemaking process

The bill strengthens and modernizes the Regulatory Flexibility Act of 1980 (RFA), which requires agencies to assess both the direct and indirect impact of rules and regulations on small business and consider possible alternatives. In the 35 years since the RFA was enacted, agencies have exploited loopholes to get around the good-government intentions of the original legislation while undermining small business input in the process.

S. 426 closes those loopholes by requiring agencies to provide more detailed analysis of proposed regulations, as well as include assessments of the cumulative impacts new regulations will have on small businesses. The measure provides greater opportunity for small businesses early input on new rules through Small Business Advocacy Review panels before rules are proposed. It also ensures that agencies regularly review existing regulations that have a significant economic impact on small businesses, while also further reducing small business impacts where feasible. Finally, the bill provides relief from the massive amount of regulations imposed on small businesses by suspending fines for first-time paperwork violations without removing obligations.

Similar legislation, H.R. 527, the Regulatory Flexibility Improvements Act of 2015, introduced by House Small Business Committee Chairman Steve Chabot (R-Ohio) passed the House on Feb. 5, and is substantively identical to multiple pieces of legislation that previously passed the House in the 112th and 113th Congresses.

NSBA has consistently ranked regulatory reform as a top priority for Congress to address, as small businesses disproportionately face higher annual regulatory costs of $10,585 per employee per year, which is 36 percent above the regulatory cost facing large firms. NSBA has long supported legislation such as S. 426; it provides vital protections for our nation’s small businesses during the regulatory process by requiring federal agencies to better understand and quantify how proposed rules impact small firms.

Please click here to read NSBA’s letter of support for S. 426.