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House Bill Aims to Implement Review of Government Regulations’ Impact on Small Businesses


Rep. Lamar Smith, R-Texas, Rep. Howard Coble, R-N.C., and
Rep. Sam Graves, R-Mo., are proposing H.R. 527, the Regulatory
Flexibility Improvements Act of 2011, which would create economic
protections for small businesses when the U.S. Environmental Protection
Agency and other federal government agencies draft new regulations.

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H.R. 527 aims to require that the EPA and other federal agencies:

• review
their rules’ indirect impacts on small entities;

• reconsider their
existing regulations to minimize their effects;

• require more detailed
explanations from the EPA in cases where officials decline to convene
special panels to limit rules’ small business effects; and

• elevate the
role of the Small Business Administration’s (SBA) advocacy office in
litigation over agency rules.

The bill amends current regulatory review requirements contained in the
Regulatory Flexibility Act (RFA). The House Committee on the Judiciary’s
Courts, Commercial and Administrative Law Subcommittee held a hearing
on the proposal. Coble, subcommittee chairman and bill co-sponsor,
indicated after the hearing that the bill could soon be considered by
the full committee, though he said the decision was up to Smith, who is
committee chairman.


Opponents of the measure state that it will undermine the EPA and other
agencies’ ability to protect public health. Rep. John Conyers Jr.,
D-Mich., the ranking member on the Judiciary Committee, warned at a
recent hearing on the bill that its regulatory review requirements could
overburden agencies and waste money by requiring all agencies to
conduct analyses on the indirect impacts of regulations.

Under the RFA, the EPA and the Occupational Health and Safety
Administration (OSHA) are already required to certify that their
proposed rules will not harm a substantial number of small businesses or
else conduct small-business review panels to consider regulatory
alternatives that pose less of a burden on small entities. However, the
EPA has faced criticism from small-business advocates that in some
cases, it has avoided conducting small-business reviews even in
cases where some of its rules may harm a large number of entities.


Now, the bill seeks to tighten the agency’s current regulatory review
requirements to consider the impacts of its rules on small businesses.
For example, the bill requires the EPA and other agencies to consider
indirect impacts of proposed rules and raises the bar for the EPA to
justify when it chooses not to convene small-business review panels. Tom
Sullivan, former head of SBA’s advocacy office in the Bush
administration and a witness at the judiciary hearing, says the proposal
would also require the EPA to publicize the “ripple effects” of the
proposed rule on small businesses – for instance, requiring the agency to
consider the effects of a rule governing utilities on the cost of
electricity for small businesses.


More information:

The full text of the proposed bill is available from ASA’s legislative website


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