Regulatory Flexibility Act

Regulatory Flexibility Act
Short title	Regulatory Flexibility Act
Long title	An Act to amend the Small Business Act to provide for an analysis of the impact of certain rules and regulations on small businesses, and for other purposes
Enacted by	96th United States Congress
Effective	January 1, 1981
Citations	Public Law 96-354

Regulatory Flexibility Act. The Regulatory Flexibility Act is a United States federal law that was enacted to ensure that federal agencies consider the impact of their rules and regulations on small businesses, as defined by the Small Business Administration. This law was passed in response to concerns that federal regulations were having a disproportionate impact on small businesses, which are often less able to absorb the costs of compliance than larger businesses, such as General Motors and Microsoft. The Regulatory Flexibility Act was signed into law by President Jimmy Carter on September 19, 1980, and it has been amended several times since then, including by the Small Business Regulatory Enforcement Fairness Act of 1996, which was signed into law by President Bill Clinton.

Introduction

The Regulatory Flexibility Act was introduced in the United States Senate by Senator Harrison Williams and in the United States House of Representatives by Representative John LaFalce, with the support of organizations such as the National Federation of Independent Business and the United States Chamber of Commerce. The law requires federal agencies, including the Environmental Protection Agency, the Occupational Safety and Health Administration, and the Federal Trade Commission, to consider the potential impact of their rules and regulations on small businesses, as well as on other small entities, such as non-profit organizations and small governmental jurisdictions, like the City of New York and the State of California. The Regulatory Flexibility Act also requires agencies to prepare a regulatory flexibility analysis for rules that are expected to have a significant impact on small businesses, which must be published in the Federal Register and made available for public comment, as required by the Administrative Procedure Act.

Legislative History

The Regulatory Flexibility Act was passed by the 96th United States Congress and signed into law by President Jimmy Carter on September 19, 1980. The law was enacted in response to concerns that federal regulations were having a disproportionate impact on small businesses, which are often less able to absorb the costs of compliance than larger businesses, such as IBM and Procter & Gamble. The Regulatory Flexibility Act was supported by organizations such as the National Small Business Association and the Small Business Legislative Council, which represented the interests of small businesses, including those in the National Restaurant Association and the International Franchise Association. The law has been amended several times since its enactment, including by the Omnibus Budget Reconciliation Act of 1990, which was signed into law by President George H.W. Bush, and the Small Business Jobs Act of 2010, which was signed into law by President Barack Obama.

Provisions and Requirements

The Regulatory Flexibility Act requires federal agencies to consider the potential impact of their rules and regulations on small businesses and other small entities, such as cooperatives and credit unions, like the National Cooperative Bank and the National Credit Union Administration. The law also requires agencies to prepare a regulatory flexibility analysis for rules that are expected to have a significant impact on small businesses, which must be published in the Federal Register and made available for public comment, as required by the Freedom of Information Act and the Paperwork Reduction Act. The regulatory flexibility analysis must include a description of the impact of the rule on small businesses, as well as a description of any alternatives that were considered, such as those proposed by the American Bar Association and the National Association of Manufacturers. The Regulatory Flexibility Act also requires agencies to consider the cumulative impact of their rules and regulations on small businesses, as well as the impact of rules and regulations issued by other agencies, such as the Federal Communications Commission and the Securities and Exchange Commission.

Agency Compliance and Review

Federal agencies are required to comply with the Regulatory Flexibility Act when issuing new rules and regulations, as well as when reviewing existing rules and regulations, as required by the Regulatory Flexibility Act Amendments of 1996, which were signed into law by President Bill Clinton. The law requires agencies to consider the potential impact of their rules and regulations on small businesses and other small entities, and to prepare a regulatory flexibility analysis for rules that are expected to have a significant impact on small businesses, which must be reviewed by the Office of Management and Budget and the Office of Information and Regulatory Affairs. The Regulatory Flexibility Act also requires agencies to report on their compliance with the law, which must be submitted to the Congress of the United States and made available to the public, as required by the Congressional Review Act.

Impact and Criticisms

The Regulatory Flexibility Act has had a significant impact on the way that federal agencies issue rules and regulations, and has helped to reduce the burden of regulations on small businesses, as reported by the Small Business Administration and the National Federation of Independent Business. However, the law has also been criticized for not doing enough to reduce the burden of regulations on small businesses, and for not providing sufficient protections for small businesses, as argued by the United States Chamber of Commerce and the National Association of Manufacturers. Some critics have argued that the law is too narrow in scope, and that it does not apply to all types of regulations, such as those issued by independent agencies, like the Federal Reserve System and the Federal Deposit Insurance Corporation. Others have argued that the law is too vague, and that it does not provide clear guidance on how agencies should comply with its requirements, as noted by the Government Accountability Office and the Congressional Budget Office.

Amendments and Reforms

The Regulatory Flexibility Act has been amended several times since its enactment, including by the Small Business Regulatory Enforcement Fairness Act of 1996, which was signed into law by President Bill Clinton, and the Regulatory Flexibility Improvements Act of 2013, which was introduced in the United States Senate by Senator Susan Collins and in the United States House of Representatives by Representative Steve Chabot. The law has also been the subject of several reform efforts, including the Regulatory Accountability Act of 2017, which was introduced in the United States Senate by Senator Rob Portman and in the United States House of Representatives by Representative Bob Goodlatte, with the support of organizations such as the American Legislative Exchange Council and the Heritage Foundation. These reforms have aimed to strengthen the law and to provide greater protections for small businesses, as well as to improve the transparency and accountability of the regulatory process, as required by the Administrative Procedure Act and the Federal Advisory Committee Act.

Category:United States federal legislation