HR 1163119th CongressIntroduced

Prove It Act of 2025

Introduced: Feb 10, 2025

Economy & Taxes

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Prove It Act of 2025 would significantly expand the transparency and oversight of federal rulemaking that affects small businesses. It broadens the initial regulatory flexibility analysis to require disclosure of potential indirect costs to small entities and creates a new process for small entities to challenge a agency’s certification that a proposed rule will not have a significant economic impact on a substantial number of small entities. The bill establishes a formal review pathway (605A) through the Small Business Administration’s Office of Advocacy, including petitions, consultations, and a full review process that can lead to required additional regulatory analyses (Sections 603 and 604) if a rule is found to have a significant impact. It also adds requirements for publishing guidance related to major rules and expands the 10-year periodic review of rules to account for indirect costs. Agencies face penalties if they fail to participate in required review processes, and rules that are not reviewed can cease to be effective until reinstated. The measure includes no new funding for these changes.

Key Points

1Expanded initial regulatory flexibility analysis: Agencies must disclose and consider reasonably foreseeable indirect costs to small entities that interact with regulated entities, or are indirectly affected through other rules (603(b)(6)).
2New petition and review mechanism (605A): Small entities can petition the SBA Chief Counsel for Advocacy to review a certification that a proposed rule will not have a significant economic impact on a substantial number of small entities. The petition process includes clear requirements for content, dissemination, and potential consultations.
3Full review and potential follow-on analyses: If a petition merits review, the Chief Counsel conducts a full review with a required meeting including the petitioner, agency representatives, and the OIRA Administrator. If the Chief Counsel finds the certification flawed, the agency must perform initial (603) and final (604) regulatory flexibility analyses for the rule.
4Guidance transparency: For rules likely to have a significant impact, agencies must publish all guidance and related documents (including interpretations) on regulations.gov or similar sites and allow public comments on those documents.
5Expanded 610 periodic review and enforcement: The 10-year rule-review window now covers indirect costs identified in the initial analysis and other indirect costs that may arise over the decade. If an agency fails to conduct a required 610 review, the Chief Counsel can declare the rule ceased to be effective, initiate a Federal Register notice inviting comments on reinstatement, and allow reinstatement within 180 days under a streamlined process (subject to APA 553 rules and reinstatement).
6Effective scope and funding: The bill applies to final rules issued in the five years prior to enactment or after enactment. It explicitly provides that no additional funds are appropriated to carry out these provisions.

Impact Areas

Primary group/area affected- Small businesses and small business groups (e.g., associations representing small entities)- Small entities that interact with regulated firms or are indirectly affected by other rules- The SBA Office of Advocacy and federal agencies that issue or implement regulationsSecondary group/area affected- Federal regulatory agencies and the Office of Information and Regulatory Affairs (OIRA)- Rulemaking dockets and guidance developers within agencies- Public commenters and small business stakeholders who participate in petitions or provide feedback on guidanceAdditional impacts- Increased transparency and public participation in evaluating small-entity impacts- Potentially greater administrative burden and longer timeframes for rulemaking due to petitions, consultations, and mandatory analyses- A deterrent effect on issuing rules with uncertain small-entity impact if challenges are likely- No new funding means agencies would need to absorb any added workload within existing budgetsInitial regulatory flexibility analysis (IRFA): An assessment of how a proposed rule would impact small entities, including costs and burdens.Significant economic impact on a substantial number of small entities: A threshold the agency must evaluate to determine if further analysis (603/604) is required.605(b): The existing certification that a proposed rule will not have a significant impact on a substantial number of small entities; the bill adds a mechanism (605A) to review that certification.609: Provisions related to publication of rule-related materials; the bill adds a new subsection about publishing guidance for significant rules.610: Periodic review of rules to ensure continued effectiveness; the bill expands what must be considered and adds a remediation pathway if reviews are not completed.

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