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Small business relief bill introduced |
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March 10, 2017 |
Senator James Lankford (R-OK) on Wednesday
introduced the Small Business Regulatory
Flexibility Improvements Act to require federal
agencies to analyze the full impact of a
proposed regulation on small businesses during
the rulemaking process. The bill is co-sponsored
by Senators Chuck Grassley (R-IA), who is
chairman of the Judiciary Committee, and Jim
Risch, who is chairman of the Small Business
Committee.
“Small businesses are responsible for nearly
two-thirds of the job growth in America, so it
is important that Washington fully analyzes
regulatory impacts on small businesses before a
rule is finalized,” said Lankford. “This bill is
desperately needed because federal agencies
frequently use loopholes in the process to avoid
the full economic analysis of a proposed
regulation on small businesses. The Small
Business Regulatory Flexibility Improvements Act
will ensure that the needs and priorities of
small business are fully taken into account
early in the rulemaking process.”
“Washington bureaucrats don’t fully understand
the degree to which new regulations increase
costs and uncertainty in the business world,”
said Risch, noting that federal regulatory
agencies estimate that the cost of complying
with their own regulations is nearly $108
billion annually. “We need stronger controls to
limit what D.C. agencies can do to stifle
growth, and this bill will ensure appropriate
analysis occurs before a new regulation is
implemented.”
“Small businesses feel the brunt of regulations
that aren’t considered carefully enough out of
Washington, DC,” said Grassley. “If we’re
hurting small businesses, we’re hurting job
creation and we’re hurting a large number of
employees in this country. We have to apply
common-sense here. So I’m glad to co-sponsor
this bill, which makes critical improvements to
the rulemaking process. It requires agencies to
take a much closer look at how proposed
regulations might impact small businesses, and
gives small businesses a stronger voice at the
table before rules are finalized. Reducing
unnecessary burdens on our nation’s small
businesses should be one thing that all of us
can agree on.”
According to the National Federation of
Independent Business’ Small Business Problems
and Priorities, “unreasonable government
regulations” ranks as the second largest problem
for small businesses. Due to limited resources,
small business ability to comply with new
federal regulations are much more difficult than
larger companies. According to the American
Action Forum, a 10 percent increase in
cumulative regulatory costs can result in a five
to six percent fall in the number of businesses
with fewer than 20 workers. That translates to a
loss of over 400 small businesses in an
industry. Meanwhile, those same regulations are
associated with a two to three percent increase
in businesses with 500 or more workers.
This bill would force agencies to analyze the
total impact regulations have on all small
businesses, and closes loopholes used by
agencies to avoid compliance with the Regulatory
Flexibility Act (RFA) and the Small Business
Regulatory Enforcement and Fairness Act (SBREFA)
of 1996.
The RFA of 1980 requires federal agencies to
assess the impact of proposed regulations on
"small entities." Under the RFA, agencies,
including independent agencies, must prepare a
regulatory flexibility analysis for rules deemed
to have a “significant economic impact on a
substantial number of small entities.” However,
the RFA failed to define “significant economic
impact" or "substantial number of small
entities," leaving agencies with broad
discretion to decide when regulatory flexibility
analysis requirements are triggered.
The SBREFA of 1996 amended the RFA to create
additional requirements agencies must follow
when promulgating rules that impact small
entities, however deficiencies in both of the
RFA and SBRFA left small businesses burdened by
massive, one-size-fits-all regulatory schemes.
Agencies are frequently able to work around RFA
and SBREFA requirements by: (1) considering only
the direct economic impacts of proposed rules;
(2) not including tribes as a small entity; (3)
exempting IRS regulations; (4) requiring small
business review panels of only three agencies;
and (5) allowing agencies to sign off on rules
as having “no significant economic impact”
without detailed analysis. |
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