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Small Business Panel Approves Bill Aimed at Reducing Regulatory Burdens

Washington, September 19, 2013




By Cheryl Bolen, Bloomberg Government

The House Small Business Committee approved by voice vote Sept. 18 an amended version of the Regulatory Flexibility Improvements Act (H.R. 2542) that would require agencies to consider less burdensome alternatives to expensive regulations.

The bill also would require agencies to consider both the direct and indirect effects of regulations on small businesses.

At a June 28 hearing on the bill, Amit Narang, regulatory policy advocate at Public Citizen's Congress Watch, said the vague indirect effects test in the bill was cause for significant concern. The bill also does not define an indirect effect, he said.

A total of 19 amendments were offered by Republicans and Democrats during markup of the bill. Of those, seven were adopted by voice vote, and 12 were defeated.

Rep. Sam Graves (R-Mo.), the chairman of the committee, said the small business community has been hampered by an ever-increasing regulatory burden.

The bill, which is similar to the version that passed at the end of 2011 in the House, would require all federal agencies to analyze the impact of proposed regulations on small businesses. Agencies would have to consider less burdensome alternatives if the rules had an economic impact of $100 million or more annually.

Although the Regulatory Flexibility Act has been on the books for more than 30 years, agencies still fail to fully comply with the law, Graves said.

Democratic Opposition

Rep. Nydia Velazquez (D-N.Y.), the ranking member of the committee, said all members of the committee recognize the importance of an effective regulatory process.

Since the legislation first passed at the end of 2011, there have been several critical changes not reflected in the bill, Velazquez said. For example, the bill doesn't take into account recent implementation of the president's 2011 executive order on regulations.

“There are serious concerns that this bill will at best duplicate those efforts,” she said. “At worst it could complicate or slow implementation of the order.”

Equally important, the bill has not been adjusted to reflect the realities of sequestration, Velazquez said. Adding bureaucrats to conduct more analysis will cost money the government doesn't have, she said.

In this fiscally constrained era, hard choices must be made about how to preserve existing programs and get the best value for taxpayers, Velazquez said, questioning the bill's price tag of $100 million over five years.

There are also concerns about whether the bill will have its intended effect, Velazquez said. Extending the enhanced review process from three agencies to the entire federal government raises concerns, she said.

Congress specifically chose the Environmental Protection Agency, the Occupational Safety and Health Administration and the Consumer Financial Protection Bureau to be covered by enhanced review, because of how directly their rules impact small businesses, Velazquez said.

“However, extending this process to other agencies will not mean less regulation. It will mean more complicated regulations,” she said.