HR 421119th CongressIntroduced

Small Business Regulatory Flexibility Improvements Act

Introduced: Jan 15, 2025

Economy & Taxes

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Small Business Regulatory Flexibility Improvements Act would substantially expand and strengthen the Regulatory Flexibility Act (RFA). It broadens which federal rules are covered, requires much more thorough analysis of how rules affect small entities (including indirect and beneficial effects), and increases transparency and public involvement in the rulemaking process. It also gives the Small Business Administration’s Chief Counsel for Advocacy greater authority to shape agency compliance, intervene in agency actions, and participate in adjudications. The bill introduces periodic reviews of rules with significant small-entity impact, expands judicial review, and makes related reforms to small-business size standards and paperwork violation penalties for small entities. In short, it aims to ensure rules are more carefully evaluated for their effects on small businesses, nonprofits, tribal organizations, and other small entities, before and after they are issued.

Key Points

1Broadens coverage and scope of the RFA
2- Expands what counts as a “rule” (including indirect effects, tribal organizations, land management plans, certain IRS interpretive rules, and more).
3- Includes rules with beneficial impacts and rules with indirect effects, not just direct regulation.
4More detailed, quantified analyses and disclosures
5- Initial analyses require detailed purposes, objectives, affected small entities, compliance costs, duplicative rules, cumulative impacts, disproportionate effects, and impacts on access to credit.
6- Final analyses require detailed descriptions of impacts and responses to comments, with mandatory publication on agency websites.
7Stronger role and powers for the Chief Counsel for Advocacy
8- The Chief Counsel can issue and update compliance rules within 270 days and require agencies to consult before issuing related rules.
9- The Chief Counsel can intervene in agency adjudications (with limitations) and file comments on agency notices.
10- Agencies must provide the Chief Counsel with proposed rule materials early in the process for review.
11Expanded procedures for comment gathering and outreach
12- Agencies must notify the Chief Counsel before proposing rules and share materials and potential impacts.
13- A review panel (including agency staff and, for most agencies, OMB) analyzes the materials and issues a report on economic impacts to small entities.
14Greater transparency and public accessibility
15- Agencies must post plain-language summaries of their regulatory agendas on their websites; the SBA’s Office of Advocacy will also post agency summaries.
16- Agencies must publish or provide access to redacted final analyses and summaries to the public.
17Periodic rule reviews and ongoing oversight
18- Each agency must publish a plan within 180 days to periodically review rules that significantly impact small entities, with a goal to amend or rescind rules to minimize adverse impacts or maximize beneficial impacts.
19- Annual reports on rule reviews, including why certain rules were kept, amended, or rescinded, and which rules are to be reviewed.
20Expanded judicial and appellate jurisdiction
21- Final rules implementing the RFA become subject to heightened appellate review.
22- The Office of Advocacy can be named a party in judicial challenges to size standards approved under the bill.
23Size standards and compliance relief for small businesses
24- The Chief Counsel would gain authority to establish detailed small-business size standards for purposes of various statutes.
25- A new waiver framework would allow first-time small-business violators of information-collection rules to avoid fines in many cases, with limited exceptions; a 24-hour cure option is allowed in certain circumstances.
26Administrative and clerical adjustments
27- Several clarifications and reorganizations of the RFA’s definitions and table of sections to reflect the expanded framework.
28- Agency guides for small entities (clarifying, plain-language resources) would be encouraged and coordinated with small-entity associations.
29Accountability and oversight
30- A Comptroller General study within 90 days of enactment to assess the capacity and resources of the Chief Counsel to carry out the Act.
31- The bill adds mechanisms to ensure agencies engage with small entities and report results to Congress and SBA (and in some cases OMB).

Impact Areas

Primary group/area affected- Small entities: small businesses, small nonprofit enterprises, and tribal organizations (including small labor organizations under certain provisions).Secondary group/area affected- Federal regulatory agencies (the processes of rulemaking), the Small Business Administration (Office of Advocacy), the Office of Management and Budget (OMB), and the judiciary (courts of appeals and related review processes).Additional impacts- Potentially higher upfront and ongoing regulatory-analysis costs for agencies due to more extensive data collection, analysis, and public reporting.- Increased transparency and public engagement in how rules affect small entities.- Possible slower or more cautious rulemaking as agencies work through deeper analyses and required outreach.- A stronger framework for addressing disproportionate or cumulative impacts on small entities, with explicit consideration of credit access and energy costs.- Enhanced remedies for small entities in paperwork-related matters, including first-time violation waivers and expedited cure options in limited cases.Small entity: generally a small business or other small organization as defined by the SBA; the bill allows refinements to the definition with SBA input.Rule: broad definition aligned with current law, plus added categories and indirect effects.Chief Counsel for Advocacy: SBA official who leads on representing small-entity interests in federal rulemaking; the bill expands their authority and role.

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