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As the small business committee of the House of Representatives addresses regulatory reform, The National Federation of Independent Business weighs in. It has submitted its top recommendations for legislation that is intended to improve the Regulatory Flexibility Act (RFA).
Andrew Langer, senior manager of regulatory affairs at NFIB, urged lawmakers to remember that it's not one specific rule that causes such a burden, it's the compilation of thousands of detailed regulations that make compliance extremely burdensome for small firms.
"Regulations cannot be made in a vacuum," Langer said. "Agencies have to take into account how each and every little rule adds up to weeks' worth of a small business' time."
Following are some of the specific suggestions NFIB proposed to the legislators. They are aimed at improving the current regulatory state for small business owners.
- More Stringent Review of Rules on the Books: Section 610 of the Regulatory Flexibility Act ought to be expanded to cover the review of all rules impacting small business. Currently, the reviews only cover regulations the agency considered, "economically significant," at the time they were proposed.
- Include Indirect Economic Impacts in Regulatory Review: Congress ought to require agencies to consider how regulations affect small businesses that themselves are not being directly regulated by a rule, but will nevertheless be impacted.
- Strengthen Compliance Guide Mandates: Small businesses continue to be frustrated with the instructions they are supposed to follow in figuring out how to comply with new regulations. Agencies should be mandated that whenever a rule requires a final regulatory flexibility analysis, then they must also publish a compliance guide, in plain language, specifically geared towards small businesses.
- Expand Small Business Protections to the IRS: The RFA's jurisdiction over the IRS must be clarified. IRS rules ought to be subject to Small Business Regulatory Enforcement Fairness Act (SBREFA) panels, similar to those faced by proposed OSHA and EPA regulations, and most importantly, small business protections must expressly cover all new information collection requests (i.e., questions) and not just new forms, as the IRS currently interprets the law.
- Require that Agencies Publish the Name and Number For A Regulation's Principal Author: One of the most problematic situations for a small business owner is knowing who to turn to when a question arises. We believe that the person primarily responsible for a regulation's shepherding through promulgation would have the greatest expertise on a regulation. If a small business owner is going to be required to follow a regulation, then it's only courteous and fair that the person who wrote the regulation be made regularly available for questions about the regulation.
- Financially Penalize Agencies That Ignore Their Regulatory Flexibility Obligations: Many small business owners and their representatives believe that agencies only pay scant attention to their obligations under the law. Part of the reason for this is that there is no penalty when the agencies treat their obligations in a pro forma manner. We recommend that should it be found that an agency affirmatively ignored its obligation, some financial penalty accrue to the agency.
- Expand the Purview of the Regulatory Fairness Boards to Include Review of Agency Compliance with Regulatory Flexibility Laws: Currently, there exists no body which engages in an across the board, comprehensive review of agency compliance. We believe that the Regulatory Fairness Program administered by the National Ombudsman for Small Business at the SBA has been a rousing success. These successes ought to be built upon. Expanding this program's scope to include regulatory flexibility compliance review would be appropriate.
For more detail on these proposals, visit www.NFIB.com. A complete copy of NFIB's congressional testimony is available to download for free.
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