What This Bill Does
This bill changes how federal agencies analyze new rules to understand impacts on small businesses. It requires agencies to look at both direct and indirect economic effects on small entities, consider beneficial impacts as well as harmful ones, and review existing rules to see if they hurt small businesses. The bill also gives the Small Business Administration's Chief Counsel for Advocacy more power to review and comment on major rules that could affect small companies.
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Who It Affects
- Small businesses and nonprofit organizations
- Small governmental jurisdictions (small towns and counties)
- Tribal organizations
- Federal agencies that create rules
- The Chief Counsel for Advocacy of the Small Business Administration
- The Office of Information and Regulatory Affairs
- Congress
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Key Provisions
- Agencies must analyze both direct and indirect economic impacts (including compliance costs and lost revenue) when rules might affect small entities, even if the rule doesn't directly regulate them (Sec. 2(b))
- Before publishing major rules that could affect small entities, agencies must notify the Chief Counsel for Advocacy and provide draft rules and impact information, and the Chief Counsel must convene a panel to review the proposal (Sec. 6)
- Agencies must create a plan to review existing rules that significantly affect small entities, completing reviews of current rules within 10 years and new rules within 10 years of publication (Sec. 7)
- Agencies must publish plain language summaries of their regulatory agendas on their websites within 3 days of Federal Register publication (Sec. 3)
- Small businesses cannot be fined for their first violation of information collection requirements by an agency, with limited exceptions (Sec. 14)
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What Changes
If this becomes law, federal agencies will spend more time analyzing how rules affect small companies before creating them. They will need to consider both negative and positive impacts on small entities. Agencies will hold special panel reviews for major rules that could affect small business. Existing regulations affecting small businesses will be reviewed and potentially changed if they cause harm. Agencies must post summaries of their rule plans online in plain language. Small businesses will get protection from fines for their first paperwork violation. The Chief Counsel for Advocacy gains new powers to intervene in agency decisions and review compliance with small business protection rules.
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Important Definitions
**Economic Impact:** Direct effects on small entities from a rule, plus any indirect effects (including compliance costs and revenue impacts) that are reasonably foreseeable, whether or not small entities are directly regulated by the rule (Sec. 2(b))
**Small Business:** A business that meets size standards set by the Small Business Administration, based on either industry classification or net worth and employee count (Sec. 2(g))
**Small Organization:** A nonprofit organization that does not exceed the Small Business Administration's size standards for its industry, or that has a net worth not exceeding $7,000,000 and no more than 500 employees (Sec. 2(g))
**Land Management Plan:** Plans developed by the Secretary of Agriculture under forest laws or by the Secretary of the Interior under public lands laws (Sec. 2(e))
**First-Time Violation:** A violation by a small business of an information collection requirement where the business has not violated a similar requirement from the same agency in the previous 5 years (Sec. 14)
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Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION
H. R. 358
To amend chapter 6 of title 5, United States Code (commonly known as
the ‘‘Regulatory Flexibility Act’’), to ensure complete analysis of potential
impacts on small entities of rules, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 13, 2023
Mr. CLINE (for himself and Mrs. MILLER of Illinois) introduced the following
bill; which was referred to the Committee on the Judiciary, and in addi-
tion to the Committees on Small Business, and Oversight and Account-
ability, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To amend chapter 6 of title 5, United States Code (com-
monly known as the ‘‘Regulatory Flexibility Act’’), to
ensure complete analysis of potential impacts on small
entities of rules, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Small Business Regu-
4
latory Flexibility Improvements Act’’.
5
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•HR 358 IH
SEC. 2. CLARIFICATION AND EXPANSION OF RULES COV-
1
ERED BY THE REGULATORY FLEXIBILITY
2
ACT.
3
(a) IN GENERAL.—Section 601(2) of title 5, United
4
States Code, is amended to read as follows:
5
‘‘(2) RULE.—The term ‘rule’—
6
‘‘(A) has the meaning given the term in
7
section 551(4); and
8
‘‘(B) does not include—
9
‘‘(i) a rule pertaining to the protection
10
of the rights of and benefits for veterans
11
or part 232 of title 32, Code of Federal
12
Regulations (as in effect on July 1, 2014),
13
or any successor provisions thereto; or
14
‘‘(ii) a rule of particular (and not gen-
15
eral) applicability relating to rates, wages,
16
corporate or financial structures or reorga-
17
nizations thereof, prices, facilities, appli-
18
ances, services, or allowances therefor or to
19
valuations, costs or accounting, or prac-
20
tices relating to such rates, wages, struc-
21
tures, prices, appliances, services, or allow-
22
ances.’’.
23
(b) INCLUSION
OF RULES WITH INDIRECT EF-
24
FECTS.—Section 601 of title 5, United States Code, is
25
amended by adding at the end the following:
26
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•HR 358 IH
‘‘(9) ECONOMIC IMPACT.—The term ‘economic
1
impact’ means, with respect to a proposed or final
2
rule—
3
‘‘(A) any direct economic effect on small
4
entities of such rule; and
5
‘‘(B) any indirect economic effect (includ-
6
ing compliance costs and effects on revenue) on
7
small entities which is reasonably foreseeable
8
and results from such rule (without regard to
9
whether small entities will be directly regulated
10
by the rule).’’.
11
(c) INCLUSION OF RULES WITH BENEFICIAL EF-
12
FECTS.—
13
(1) INITIAL REGULATORY FLEXIBILITY ANAL-
14
YSIS.—Section 603(c) of title 5, United States Code,
15
is amended by striking the first sentence and insert-
16
ing ‘‘Each initial regulatory flexibility analysis shall
17
also contain a detailed description of alternatives to
18
the proposed rule which minimize any adverse sig-
19
nificant economic impact or maximize any beneficial
20
significant economic impact on small entities.’’.
21
(2) FINAL
REGULATORY
FLEXIBILITY
ANAL-
22
YSIS.—Section 604(a) of title 5, United States Code,
23
is amended—
24
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•HR 358 IH
(A) by redesignating the second paragraph
1
designated as paragraph (6) (relating to cov-
2
ered agencies) as paragraph (7); and
3
(B) in paragraph (6), by striking ‘‘mini-
4
mize the significant economic impact’’ and in-
5
serting ‘‘minimize the adverse significant eco-
6
nomic impact or maximize the beneficial signifi-
7
cant economic impact’’.
8
(d) INCLUSION OF RULES AFFECTING TRIBAL ORGA-
9
NIZATIONS.—Section 601(5) of title 5, United States
10
Code, is amended by inserting ‘‘and tribal organizations
11
(as defined in section 4(l) of the Indian Self-Determina-
12
tion and Education Assistance Act (25 U.S.C. 5304(l))),’’
13
after ‘‘special districts,’’.
14
(e) INCLUSION OF LAND MANAGEMENT PLANS AND
15
FORMAL RULE MAKING.—
16
(1) INITIAL REGULATORY FLEXIBILITY ANAL-
17
YSIS.—Section 603(a) of title 5, United States Code,
18
is amended in the first sentence—
19
(A) by striking ‘‘or’’ after ‘‘proposed
20
rule,’’; and
21
(B) by inserting ‘‘or publishes a revision or
22
amendment to a land management plan,’’ after
23
‘‘United States,’’.
24
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•HR 358 IH
(2) FINAL
REGULATORY
FLEXIBILITY
ANAL-
1
YSIS.—Section 604(a) of title 5, United States Code,
2
is amended in the first sentence—
3
(A) by striking ‘‘or’’ after ‘‘proposed rule-
4
making,’’; and
5
(B) by inserting ‘‘or adopts a revision or
6
amendment to a land management plan,’’ after
7
‘‘section 603(a),’’.
8
(3) LAND MANAGEMENT PLAN DEFINED.—Sec-
9
tion 601 of title 5, United States Code, as amended
10
by subsection (b), is amended by adding at the end
11
the following:
12
‘‘(10) LAND MANAGEMENT PLAN.—
13
‘‘(A) IN GENERAL.—The term ‘land man-
14
agement plan’ means—
15
‘‘(i) any plan developed by the Sec-
16
retary of Agriculture under section 6 of
17
the Forest and Rangeland Renewable Re-
18
sources Planning Act of 1974 (16 U.S.C.
19
1604); and
20
‘‘(ii) any plan developed by the Sec-
21
retary of the Interior under section 202 of
22
the Federal Land Policy and Management
23
Act of 1976 (43 U.S.C. 1712).
24
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•HR 358 IH
‘‘(B)
REVISION.—The
term
‘revision’
1
means any change to a land management plan
2
which—
3
‘‘(i) in the case of a plan described in
4
subparagraph (A)(i), is made under section
5
6(f)(5) of the Forest and Rangeland Re-
6
newable Resources Planning Act of 1974
7
(16 U.S.C. 1604(f)(5)); or
8
‘‘(ii) in the case of a plan described in
9
subparagraph (A)(ii), is made under sec-
10
tion 1610.5–6 of title 43, Code of Federal
11
Regulations (or any successor regulation).
12
‘‘(C) AMENDMENT.—The term ‘amend-
13
ment’ means any change to a land management
14
plan which—
15
‘‘(i) in the case of a plan described in
16
subparagraph (A)(i), is made under section
17
6(f)(4) of the Forest and Rangeland Re-
18
newable Resources Planning Act of 1974
19
(16 U.S.C. 1604(f)(4)) and with respect to
20
which the Secretary of Agriculture pre-
21
pares a statement described in section
22
102(2)(C) of the National Environmental
23
Policy
Act
of
1969
(42
U.S.C.
24
4332(2)(C)); or
25
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•HR 358 IH
‘‘(ii) in the case of a plan described in
1
subparagraph (A)(ii), is made under sec-
2
tion 1610.5–5 of title 43, Code of Federal
3
Regulations (or any successor regulation),
4
and with respect to which the Secretary of
5
the Interior prepares a statement described
6
in section 102(2)(C) of the National Envi-
7
ronmental Policy Act of 1969 (42 U.S.C.
8
4332(2)(C)).’’.
9
(f) INCLUSION OF CERTAIN INTERPRETIVE RULES
10
INVOLVING THE INTERNAL REVENUE LAWS.—
11
(1) IN GENERAL.—Section 603(a) of title 5,
12
United States Code, is amended by striking the pe-
13
riod at the end and inserting ‘‘or a recordkeeping re-
14
quirement, and without regard to whether such rec-
15
ordkeeping requirement is imposed by statute or reg-
16
ulation.’’.
17
(2) COLLECTION
OF
INFORMATION.—Section
18
601(7) of title 5, United States Code, is amended to
19
read as follows:
20
‘‘(7) COLLECTION OF INFORMATION.—The term
21
‘collection of information’ has the meaning given the
22
term in section 3502 of title 44.’’.
23
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•HR 358 IH
(3) RECORDKEEPING
REQUIREMENT.—Section
1
601(8) of title 5, United States Code, is amended to
2
read as follows:
3
‘‘(8)
RECORDKEEPING
REQUIREMENT.—The
4
term ‘recordkeeping requirement’ has the meaning
5
given the term in section 3502 of title 44.’’.
6
(g) DEFINITION OF SMALL ORGANIZATION.—Section
7
601(4) of title 5, United States Code, is amended to read
8
as follows:
9
‘‘(4) SMALL ORGANIZATION.—
10
‘‘(A) IN GENERAL.—The term ‘small orga-
11
nization’ means any nonprofit enterprise which,
12
as of the issuance of a notice of proposed rule-
13
making—
14
‘‘(i) in the case of an enterprise which
15
is described by a classification code of the
16
North American Industrial Classification
17
System, does not exceed the size standard
18
established by the Administrator of the
19
Small Business Administration pursuant to
20
section 3 of the Small Business Act (15
21
U.S.C. 632) for small business concerns
22
described by such classification code; and
23
‘‘(ii) in the case of any other enter-
24
prise, has a net worth that does not exceed
25
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•HR 358 IH
$7,000,000 and has not more than 500
1
employees.
2
‘‘(B) LOCAL LABOR ORGANIZATIONS.—In
3
the case of any local labor organization, sub-
4
paragraph (A) shall be applied without regard
5
to any national or international organization of
6
which such local labor organization is a part.
7
‘‘(C)
AGENCY
DEFINITIONS.—Subpara-
8
graphs (A) and (B) shall not apply to the ex-
9
tent that an agency, after consultation with the
10
Office of Advocacy of the Small Business Ad-
11
ministration and after opportunity for public
12
comment, establishes one or more definitions
13
for such term which are appropriate to the ac-
14
tivities of the agency and publishes such defini-
15
tions in the Federal Register.’’.
16
SEC. 3. EXPANSION OF REPORT OF REGULATORY AGENDA.
17
Section 602 of title 5, United States Code, is amend-
18
ed—
19
(1) in subsection (a)—
20
(A) in paragraph (2), by striking ‘‘, and’’
21
at the end and inserting a semicolon;
22
(B) by redesignating paragraph (3) as
23
paragraph (4); and
24
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•HR 358 IH
(C) by inserting after paragraph (2) the
1
following:
2
‘‘(3) a brief description of the sector of the
3
North American Industrial Classification System
4
that is primarily affected by any rule which the
5
agency expects to propose or promulgate which is
6
likely to have a significant economic impact on a
7
substantial number of small entities; and’’; and
8
(2) in subsection (c), to read as follows:
9
‘‘(c)(1) Not later than 3 days after the date on which
10
an agency publishes a regulatory flexibility agenda in the
11
Federal Register under subsection (a), the agency shall
12
prominently display on the website of the agency a plain
13
language summary of the information contained in the
14
regulatory flexibility agenda.
15
‘‘(2) The Office of Advocacy of the Small Business
16
Administration shall compile, by agency, and prominently
17
display on the website of the Small Business Administra-
18
tion a plain language summary of each regulatory flexi-
19
bility agenda published under subsection (a) not later than
20
3 days after the date of publication in the Federal Reg-
21
ister.’’.
22
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•HR 358 IH
SEC. 4. REQUIREMENTS PROVIDING FOR MORE DETAILED
1
ANALYSES.
2
(a) INITIAL REGULATORY FLEXIBILITY ANALYSIS.—
3
Section 603(b) of title 5, United States Code, is amended
4
to read as follows:
5
‘‘(b) Each initial regulatory flexibility analysis re-
6
quired under this section shall contain a detailed state-
7
ment—
8
‘‘(1) describing the reasons why action by the
9
agency is being considered;
10
‘‘(2) describing the objectives of, and legal basis
11
for, the proposed rule;
12
‘‘(3) estimating the number and type of small
13
entities to which the proposed rule will apply;
14
‘‘(4) describing the projected reporting, record-
15
keeping, and other compliance requirements of the
16
proposed rule, including an estimate of the classes of
17
small entities which will be subject to the require-
18
ment and the type of professional skills necessary
19
for preparation of the report and record;
20
‘‘(5) describing all relevant Federal rules which
21
may duplicate, overlap, or conflict with the proposed
22
rule, or the reasons why such a description could not
23
be provided;
24
‘‘(6) estimating the additional cumulative eco-
25
nomic impact of the proposed rule on small entities
26
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•HR 358 IH
beyond that already imposed on the class of small
1
entities by the agency or why such an estimate is
2
not available;
3
‘‘(7) describing any disproportionate economic
4
impact on small entities or a specific class of small
5
entities; and
6
‘‘(8) describing any impairment of the ability of
7
small entities to have access to credit.’’.
8
(b) FINAL REGULATORY FLEXIBILITY ANALYSIS.—
9
(1) IN GENERAL.—Section 604(a) of title 5,
10
United States Code, is amended—
11
(A) in paragraph (4)—
12
(i) by inserting ‘‘detailed’’ before ‘‘de-
13
scription’’; and
14
(ii) by striking ‘‘an explanation’’ and
15
inserting ‘‘a detailed explanation’’;
16
(B) in paragraph (5), by inserting ‘‘de-
17
tailed’’ before ‘‘description’’;
18
(C) in paragraph (6)—
19
(i) by inserting ‘‘detailed’’ before ‘‘de-
20
scription’’; and
21
(ii) by striking ‘‘and’’ at the end;
22
(D) in paragraph (7), as so redesignated,
23
by striking the period at the end and inserting
24
‘‘; and’’; and
25
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•HR 358 IH
(E) by adding at the end the following:
1
‘‘(8) a detailed description of any dispropor-
2
tionate economic impact on small entities or a spe-
3
cific class of small entities.’’.
4
(2) INCLUSION OF RESPONSE TO COMMENTS ON
5
CERTIFICATION
OF
PROPOSED
RULE.—Section
[Text truncated for display. Full text available on Congress.gov.]