Graves Highlights Two New Proposed Regulations in “Small Biz Reg Watch”
Chairman Encourages Small Businesses to Comment on Proposed Rules
Small Business Committee Chairman Sam Graves (R-MO) today highlighted two new proposed rules from the Obama administration on the Committee’s digital resource, Small Biz Reg Watch: the Securities and Exchange Commission’s (SEC) regulation of how companies may publicly market private securities offerings, and the Food and Drug Administration’s (FDA) foreign supplier verification programs for importers of food for humans and animals.
Small Biz Reg Watch was launched in January of this year to help small businesses participate in the development of federal regulations. This online resource on the Committee’s website will regularly highlight proposed regulations that could impact small companies and instruct business owners on how they can make comments to the federal agency developing the proposed regulation.
“Not all regulations are bad, but they are piling up at a rate that can really strain the resources of small businesses,” said Chairman Graves. “The SEC rule seeks to implement the JOBS Act, which would allow startups and other small firms to raise capital by marketing their equity offerings, while the FDA rule may have a significant impact on small food importers. The purpose of Reg Watch is to help small firms participate in the rule-making process before new regulations are imposed that could affect their operations and their bottom line. Unfortunately, agencies don’t always understand the real world consequences of their proposals. Regulators, many of whom have never run a business themselves, benefit from the insights of those who are actually working in the industry, so I encourage small businesses that will be affected by these proposals to make their voices heard.”
SEC Proposed Rule Amending Requirements for the Marketing of Private Securities Offerings: In conjunction with issuing a final rule lifting the general solicitation ban, which implements Title II of the JOBS Act, the SEC has published proposed amendments to its regulations on how startups and other small firms publicly advertise their investment proposals to accredited investors. These proposals would impose new reporting, compliance, disclosure and standard legend and disclosure requirements on businesses seeking to issue and market securities to raise capital under Rule 506. In 2012, at least 3,958 small issuers relied on the Rule 506 exemption that the rule modifies. This comment period ends September 23rd.
FDA Proposed Rule Establishing Foreign Supplier Verification Programs for Importers of Food for Humans and Animals: The FDA has proposed a rule that requires all food importers (food manufacturers, wholesale merchants, food and beverage stores and others) to perform certain risk-based activities to verify that imported food meets the same level of public health protection as food produced domestically. An importer will be required to develop a Foreign Supplier Verification Program (FSVP) for each food it imports. Each FSVP will require the importer to analyze and control hazards associated with each food they import along with other compliance, verification and recordkeeping requirements. Under the options being considered, the average annual cost of the proposed rule on importers, depending on the size of the importer, is estimated to be between $210 to over $17,000. This comment period ends November 26th.
Over the last four years, major rules alone have added nearly $70 billion in new regulatory costs. In Fiscal Year 2012, more than 3,800 final rules were issued. Ten years ago, there were 6 major rules in Fiscal Year 2003, for annual costs that were already about $2 billion. In Fiscal Year 2012, 14 new major rules imposed an additional $14.8 to $19.5 billion in annual costs, according to the Office of Management and Budget, making 2012 the costliest year on record for federal regulation.
Through the "Small Biz Reg Watch" initiative, the Committee regularly highlights new agency proposed rules that may have a significant effect on small businesses. The Committee also communicates with small businesses via email and social media when new comment periods begin for select proposed rules that have a significant impact on a wide array of small businesses. The website URL is: www.smallbusiness.house.gov/RegWatch###