Small Biz Regulatory Reform Bill Passes House

February 11, 2015

stk318013rknOn Feb. 5, the Small Business Regulatory Flexibility Improvements Act (H.R. 527), passed the House by a margin of 260 – 163. The measure was introduced by House Small Business Committee Chairman Steve Chabot (R-Ohio) just two weeks ago and is an important piece of legislation that strengthens the voice of small businesses in the federal rulemaking process and makes agencies fully quantify the impact of major rules.

H.R. 527 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.

The House passed similar versions of this bill in the prior two sessions of Congress, however in both instances the measures did not pass the Democrat-controlled Senate at the time. The White House has already issued a veto threat against the bill stating that it would impose unnecessary new procedures on agencies and invite frivolous litigation. The bill now moves to the Senate, however, the Small Business Regulatory Flexibility Act does not yet have a Senate companion. Although Sens. Roy Blunt (R-Mo.) and Pat Roberts (R-Kan.) have pushed for regulatory reform in the past, it is unclear if either is planning to introduce the legislation in the Senate.

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. Having long advocated for a more fair and equal rule making process, NSBA is encouraging its members to contact their Senators today and urge them to support similar legislation that further improves the regulatory process for small-businesses.

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