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CSS Opposes Bills to Expand the Regulatory Flexibility Act

September 9, 2024 | Download PDF

Representative Roger Williams
Chairman, House Committee on Small Business
2361 Rayburn House Office Building
Washington, DC 20515

Representative Nydia M. Velázquez
Ranking Member, House Committee on Small Business
2069 Rayburn House Office Building
Washington, DC 20515

Dear Chairman Williams and Ranking Member Velázquez:

The Coalition for Sensible Safeguards (CSS), an alliance of over 200 labor, scientific, research, good government, faith, community, health, environmental, and public interest organizations that represent millions of Americans and advocate for effective regulations to protect the public, strongly urges you to oppose seven bills under consideration by the House Committee on Small Business. We urge opposition to the Regulatory Transparency for Small Businesses Act, H.R. 8033; the Regulatory Agenda Clarity Act, H.R. 9030; the Assurance for Small Business Act of 2024, H.R. 9031; the Enhanced Regulatory Flexibility Assessment Act, H.R. 9032; the Let American Businesses be On Record Act of 2024 (LABOR Act), H.R. 9033; and the Regulatory Review Improvement Act of 2024, H.R. 9085. We also urge opposition to the Prove It Act and have discussed our opposition in a separate letter to this Committee.

All of these bills would expand the reach and scope of the Regulatory Flexibility Act (RFA) and would cause unnecessary and lengthy regulatory delays, encourage court challenges, create uncertainty for and harm small businesses by increasing the influence that large corporations have over the substance of agency rulemakings.

When added to the existing procedural and analytical requirements that agencies must already navigate in order to implement laws, the new requirements these bills would impose risk further impeding agencies’ ability to fulfill their congressionally mandated missions of protecting the public and responding to emerging health and environmental dangers. Given that many of the new analytical requirements in these bills would be difficult or impossible to satisfy in practice, large corporations would have endless opportunities to hold up regulations they oppose by challenging agency compliance. For example, corporate interests would always be able to find some impact that was not adequately quantified or some indirect effect that was not fully considered. This combination of factors leads to a less stable regulatory environment and more regulatory uncertainty for small businesses, thus making it more difficult for them to operate effectively in the marketplace.

As outlined below, these bills dissect the RFA and drastically overhaul specific sections collectively creating burdens and obstacles to compliance with the RFA. These bills make such compliance time-consuming and costly, thereby discouraging agencies from undertaking rulemaking at all. These bills impact almost all key provisions of the RFA while not including provisions that lead to “better” regulations. Rather, these bills will lead to fewer safeguards.

  • Regulatory Transparency for Small Businesses Act, H.R. 8033:
    • Expands certification requirements under section 605 of the Regulatory Flexibility Act.
    • Adds more procedural restraints to vastly more rulemaking processes, which are focused on a rule’s costs with no comparable attention to its benefits.
    • Focuses on cost of rulemaking, cost of implementation, compliance, percentage of revenue of small entities, whether costs of compliance are economically significant, and a determination of small businesses which experience significant economic impact as a result of the rule.
    • Fails to define key terms that will undermine good faith attempts at compliance by agencies.
    • Expands judicial review under the Regulatory Flexibility Act thereby giving courts even more opportunities to strike down regulations that protect the public.
  • Regulatory Agenda Clarity Act, H.R. 9030:
    • Amends section 602 of the Regulatory Flexibility Act and expands the reporting requirements of the “Regulatory Agenda” to include the posting of a plain language summary on the Small Business Administration’s (SBA) Office of Advocacy website.
    • Is both redundant and requires unnecessary work, with no additional value, to be conducted by the SBA Office of Advocacy.
    • Unreasonably requires agencies to identify a regulation’s impact on specific business sectors before agencies have even begun their regulatory analysis.
  • Assurance for Small Business Act of 2024, H.R. 9031:
    • Undermines section 601 of the Regulatory Flexibility Act by creating confusion over the definitions of key statutory terms.
    • Requires submission of a report by the head of each agency to Congress on application of specific definitions within the Regulatory Flexibility Act for each agency rule. This bill is retroactive and likely includes thousands of rules issued since the Regulatory Flexibility Act was originally passed which will create extensive work for agencies with no additional resources provided to cover these extensive compliance costs.
  • Enhanced Regulatory Flexibility Assessment Act, H.R. 9032:
    • Amends the Initial Regulatory Flexibility Analysis requirement under section 603(b), the Final Regulatory Flexibility Analysis under 604(a).
    • Certifications under section 605 require more extensive and repetitive analysis focusing on cost of compliance.
  • Let American Businesses be On Record Act of 2024 (LABOR Act), H.R. 9033:
    • Amends section 609 of the Regulatory Flexibility Act by expanding Small Business Advocacy Review panel requirements – which now only apply to from the Occupational Safety and Health Administration (OSHA), Consumer Financial Protection Bureau (CFPB), and the Environmental Protection Agency (EPA) – to include the rest of the Department of Labor beyond OSHA.
    • Will result in significant delays and opportunities to weaken DOL regulations that protect workers.
  • Regulatory Review Improvement Act of 2024, H.R. 9085:
    • Amends section 610 of the Regulatory Flexibility Act, drastically reducing the amount of time agencies can delay retrospective review of their rules from the current five years to just one.
    • Increases agency cost of such reviews and has a singular focus on cost of compliance rather than determining how to improve regulations to make them more effective at protecting the public.

These bills, in combination, add new and expanded requirements to the Regulatory Flexibility Act that would significantly delay needed regulatory actions without appreciably improving the quality agency decision-making.

Blocking, weakening, or delaying critical standards and safeguards will result in more foodborne illnesses, more air and water pollution, more injuries on the job that would increase costs to businesses and decrease our nation’s productivity, and a greater risk of financial fraud and collapse, both for individuals and the nation as a whole.

Instead of adding more unnecessary requirements that will not make regulations more effective or fair, we urge consideration of reforms to the SBA Office of Advocacy that help to ensure that the office listens to all small businesses and does not singularly focus on those entities that oppose federal regulation. We further urge this committee to conduct robust oversight of the SBA Office of Advocacy to ensure that it uses its authorities under the Regulatory Flexibility Act in a fair, neutral, objective, and balanced manner in addition to examining how increasing corporate concentration by big business hurts small businesses across the country.

Americans deserve untainted food, safe drugs, clean air and water, workplace protections, and a stable economy. Government agencies have advanced these goals for decades. Updating these safeguards to protect the public would become even more difficult if these bills were enacted.

We urge you to oppose the Regulatory Transparency for Small Businesses Act, H.R. 8033; the Regulatory Agenda Clarity Act, H.R. 9030; the Assurance for Small Business Act of 2024, H.R. 9031; the Enhanced Regulatory Flexibility Assessment Act, H.R. 9032; the Let American Businesses be On Record Act of 2024 (LABOR Act), H.R. 9033; and the Regulatory Review Improvement Act of 2024, H.R. 9085.

Thank you for your time and consideration.

Sincerely,

Rachel Weintraub
Executive Director
Coalition for Sensible Safeguards

CC: Members of House Committee on Small Business