Reg Reform Bill Introduced

January 11, 2017

On Jan. 3, 2017, the first day of the new Congress, House Small Business Committee Chairman Steve Chabot (R-Ohio) introduced the Small Business Regulatory Flexibility Improvements Act (H.R. 33). Supported by NSBA and approved by the House in the previous session of Congress, the legislation will strengthen the voice of small businesses in the federal rulemaking process and makes agencies fully quantify the impact of major rules.

H.R. 33 would update and improve the Regulatory Flexibility Act of 1980 (RFA), a 1980 law that requires federal agencies to assess the economic impact of regulations on small business, before imposing overly burdensome mandates. However, each agency interprets important terms in the existing statute in widely divergent ways and is able to avoid the RFA’s requirements as Congress intended. This bill would streamline and make uniform those determinations of when the RFA would apply to a rule.

The measure seeks to close loopholes harming small firms by requiring agencies to conduct more extensive analysis of proposed rules, providing greater opportunity for small business input, and ensuring agencies regularly review regulations already enacted for their economic impact on the small business community. In addition, it would require each department to convene a small-business review panel to discuss any major new regulations before the rules can be implemented. The bill would also expand the scope of the required economic impact analysis to consider indirect effects, which would minimize any significant adverse impact.

While the House passed similar versions of this bill several times in past sessions of Congress, it never garnered enough support in the Senate which was then controlled by Democrats, and also faced a presidential veto. Given the new leadership in Washington, D.C., the bill faces a much clearer path to enactment.

NSBA supports this legislation as it would help reduce red-tape by providing much needed reform, transparency and priority setting in the regulatory process for the nation’s job creators, small businesses. We thank Chairman Chabot for his leadership on this issue and applaud the cosponsors for their support of this critical legislation.