[Congressional Record Volume 170, Number 180 (Thursday, December 5, 2024)]
[House]
[Pages H6379-H6392]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVE IT ACT OF 2024
Ms. HAGEMAN. Mr. Speaker, pursuant to House Resolution 1602, I call
up the bill (H.R. 7198) to amend title 5, United States Code, to
require greater transparency for Federal regulatory decisions that
impact small businesses, and for other purposes, and ask for its
immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Norman). Pursuant to House Resolution
1602, the amendment in the nature of a substitute recommended by the
Committee on the Judiciary, printed in the bill is adopted and the
bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 7198
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prove It Act of 2024''.
SEC. 2. INITIAL REGULATORY FLEXIBILITY ANALYSIS.
(a) In General.--Chapter 6 of title 5, United States Code,
is amended--
(1) in section 603(b)--
(A) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(B) by adding at the end the following:
``(6) where feasible, any reasonably foreseeable potential
indirect costs the proposed rule may impose on small
entities, including small entities that--
``(A) purchase products or services from, sell products or
services to, or otherwise conduct business with entities
directly regulated by the rule;
``(B) are directly regulated by other governmental entities
as a result of the rule; or
``(C) are not directly regulated by the agency as a result
of the rule but are otherwise subject to other agency rules
as a result of the rule.'';
(2) in section 605(b), by striking ``The agency'' and
inserting ``Not later than 10 days after completing the
certification described in this subsection, the agency''; and
(3) by inserting after section 605 the following:
``Sec. 605A. Review procedures relating to initial regulatory
flexibility analysis certifications
``(a) Filing a Petition to Review Agency Certification of a
Proposed Rule.--
``(1) In general.--Any small entity, group of small
entities, or organization representing the interests of small
entities may petition the Chief Counsel for Advocacy of the
Small Business Administration (in this section referred to as
the `Chief Counsel') to review a certification published
under section 605(b) that a proposed rule will not, if
promulgated, have a significant economic impact on a
substantial number of small entities.
``(2) Form.--The Chief Counsel shall--
``(A) determine the method, timing, and form of
disseminating a petition described in paragraph (1); and
``(B) display the information described in subparagraph (A)
on the website of the Office of Advocacy of the Small
Business Administration in a conspicuous manner.
``(3) Contents.--Each petition described in paragraph (1)
with respect to a certification published under section
605(b) for a proposed rule shall clearly and concisely--
``(A) specify the name of the petitioner and a telephone
number, a mailing address, and an email address that the
Chief Counsel may use to communicate with the petitioner;
``(B) if the petitioner is an organization, provide
additional identifying information, as applicable, including
the organizational or corporate status of the petitioner, the
State of incorporation of the petitioner, the registered
agent of the petitioner, the interest of the petitioner in
representing small entities affected by the proposed rule and
the certification at issue, and the name and authority of the
individual who signed the petition on behalf of the
organizational or corporate petitioner;
``(C) present the specific problems or issues that the
petitioner believes should be addressed or considered through
a review of the certification, such as--
``(i) any specific circumstances in which the determination
of the certification that the proposed rule will not, if
promulgated, have a significant economic impact on a
substantial number of small entities is incorrect,
incomplete, or inadequate; or
``(ii) why the proposed rule would, if promulgated, have a
significant economic impact on a substantial number of small
entities;
``(D) cite, enclose, or reference any relevant and non-
protected or confidential technical, scientific, or other
data or information supporting any assertion of the problems
or issues with the certification;
``(E) present a proposed solution to the problems or issues
raised in the petition, including potential regulatory or
compliance alternatives to the proposed rule;
``(F) provide an analysis, discussion, or argument that
explains how the proposed solution
[[Page H6380]]
described in subparagraph (E) solves the problems or issues
raised in the petition; and
``(G) cite, enclose, or reference any other publicly
available data or information supporting the proposed
solution described in subparagraph (E).
``(b) Consultation.--
``(1) In general.--Any entity or organization desiring to
file a petition under subsection (a) may request a
consultation with the Chief Counsel before or after filing
the petition.
``(2) Form.--The Chief Counsel shall--
``(A) determine the method, timing, and form of requesting
a consultation with the Chief Counsel under paragraph (1);
and
``(B) display the information described in subparagraph (A)
on the website of the Office of Advocacy of the Small
Business Administration in a conspicuous manner.
``(3) Limitations on assistance.--In any consultation
regarding a petition under paragraph (1), the Chief Counsel--
``(A) may only--
``(i) describe the process for filing, docketing, tracking,
closing, amending, withdrawing, and resolving the petition;
and
``(ii) assist the petitioner to clarify the petition so
that the Chief Counsel is able to understand the issues of
concern to the petitioner; and
``(B) may not advise a petitioner on whether the petition
should be amended or withdrawn.
``(c) Prima Facie Review.--
``(1) In general.--Upon receipt of a petition filed under
this section with respect to the certification of a proposed
rule, the Chief Counsel shall make an initial prima facie
determination on the merit of the issues raised in petition
as to the properness of the certification and whether the
proposed rule in question would, if promulgated, have a
significant economic impact on a substantial number of small
entities.
``(2) No further review.--If, following the prima facie
review of a petition under paragraph (1), the Chief Counsel
determines that the issues raised in the petition do not
merit further review by the Chief Counsel, the Chief Counsel
shall, not later than 10 days after receipt of the petition,
inform the petitioner of that determination and the matter
shall be closed.
``(3) Further review.--If, following the prima facie review
of a petition under paragraph (1), the Chief Counsel
determines that the issues raised in the petition do merit
further review by the Chief Counsel, the Chief Counsel shall,
not later than 10 days after receipt of the petition, inform
the petitioner and the agency that promulgated the proposed
rule that the Chief Counsel shall conduct a full review of
the certification and proposed rule to which the petition
relates under subsection (d).
``(d) Full Review.--
``(1) Considerations; meeting.--In conducting a full review
under this subsection with respect to the certification made
under section 605(b), the Chief Counsel shall--
``(A) consider--
``(i) whether the agency that promulgated the proposed rule
correctly determined which small entities will be affected by
the proposed rule;
``(ii) whether the agency considered adequate economic data
to assess whether the proposed rule will have a significant
impact on a substantial number of small entities; and
``(iii) the economic implications of the proposed rule; and
``(B) convene a virtual or in-person meeting between the
Chief Counsel, the petitioner, representatives of the agency
that promulgated the proposed rule who are determined
appropriate by the Chief Counsel, and the Administrator of
the Office of Information and Regulatory affairs to--
``(i) provide positions and support for those positions
regarding the certification of the proposed rule; and
``(ii) allow the Chief Counsel to ask questions as the
Chief Counsel determines necessary to make a final
determination as to the validity of the certification.
``(2) Publication.--Not later than 30 days after the date
on which the Chief Counsel begins a full review of a
certification made with respect to a proposed rule under
paragraph (1), the Chief Counsel shall submit to the
petitioner and the agency that promulgated the proposed rule,
and publish in the Federal Register and on the website of the
Office of Advocacy of the Small Business Administration, the
results of the review conducted under paragraph (1).
``(3) Requirement to perform analyses.--If, after a full
review of a certification made with respect to a proposed
rule under paragraph (1), the Chief Counsel determines that
the proposed rule will, if promulgated, have a significant
economic impact on a substantial number of small entities,
the agency that promulgated the proposed rule shall perform
an initial regulatory flexibility analysis and a final
regulatory flexibility analysis for the proposed rule under
sections 603 and 604, respectively.
``(4) Penalty.--If an agency fails to attend the required
meeting under paragraph (1)(B) or in any other way fails to
assist the Chief Counsel in a full review under paragraph (1)
with respect to a proposed rule of the agency, as determined
by the Chief Counsel, the final rule shall not apply to small
entities.
``(5) Judicial review.--For purposes of judicial review
under chapter 7 of this title, a certification made by an
agency under section 605(b) for which a petition is filed
under subsection (a) shall be considered final agency action
as of the date on which the Chief Counsel--
``(A) makes a determination under subsection (c)(2) that
the issues raised in the petition do not merit further
review; or
``(B) publishes the results of a full review of the
certification under paragraph (1).''.
(b) Technical and Conforming Amendment.--The table of
sections for chapter 6 of title 5, United States Code, is
amended by inserting after the item relating to section 605
the following:
``605A. Review procedures relating to initial regulatory flexibility
analysis certifications.''.
SEC. 3. PUBLICATION OF GUIDANCE.
Section 609 of title 5, United States Code, is amended by
adding at the end the following:
``(f) With respect to any rule that an agency determines is
likely to have a significant economic impact on a substantial
number of small entities, the head of the agency shall, on
regulations.gov or any similar internet website--
``(1) publish all guidance documents and other relevant
documents, as determined by the agency, including any updated
guidance documents that set forth interpretations of the
rule; and
``(2) allow for comments on the documents described in
paragraph (1) to ensure that small entities may access and
provide feedback on those documents.''.
SEC. 4. REVIEW PROCEDURES FOR SECTION 610 PERIODIC REVIEW OF
RULES.
(a) In General.--Section 610 of title 5, United States
Code, is amended--
(1) in subsection (b)--
(A) in the matter preceding paragraph (1), by striking
``the following factors'';
(B) in paragraph (4), by striking ``and'' at the end;
(C) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(D) by adding at the end the following:
``(6) any indirect costs described in the initial
regulatory flexibility analysis under section 603(b)(6), and
any other indirect costs that may have arisen during the 10-
year period described in subsection (a).''; and
(2) by adding at the end the following:
``(d) If an agency fails to conduct a review of a rule as
required under this section within the 10-year period
described in subsection (a)--
``(1) the Chief Counsel for Advocacy of the Small Business
Administration shall notify the agency that the rule has
ceased to be effective;
``(2) the agency shall publish in the Federal Register a
notification that the rule has ceased to be effective, and
solicit comments for why the rule should be reinstated; and
``(3) if, based on the comments received under paragraph
(2), the agency determines that the rule should be
reinstated--
``(A) the agency shall have 180 days beginning on the date
of that determination to complete the review of the rule
under this section; and
``(B) upon completion of the review under subparagraph (A),
the rule shall be reinstated, notwithstanding the notice and
comment rulemaking procedures under section 553 of this
title.''.
(b) Application.--The amendment made by subsection (a)(2)
shall apply with respect to any final rule issued by an
agency--
(1) during the 5-year period preceding the date of
enactment of this Act; or
(2) on or after the date of enactment of this Act.
The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour equally divided and controlled by the Chair and ranking minority
member of the Committee on the Judiciary or their respective designees.
After 1 hour of debate on the bill, as amended, it shall be in order
to consider the further amendment printed in part B of House Report
118-791, if offered by the Member designated in the report, which shall
be considered read, shall be separately debatable for the time
specified in the report equally divided and controlled by the proponent
and an opponent, and shall not be subject to a demand for a division of
the question.
The gentlewoman from Wyoming (Ms. Hageman) and the gentleman from New
York (Mr. Nadler) each will control 30 minutes.
The Chair recognizes the gentlewoman from Wyoming.
General Leave
Ms. HAGEMAN. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and to insert extraneous material on H.R. 7198.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Wyoming?
There was no objection.
Ms. HAGEMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 7198, the Prove It Act of
2024.
This is an important bipartisan piece of legislation that will help
small businesses around the country comply with the overwhelming weight
of Federal regulation.
It is no secret that small businesses around the United States face
an uphill battle when complying with Federal regulations. Many
regulations cause significant economic impacts on these small
businesses.
{time} 1230
When small businesses are forced to shoulder the burden of these
regulations, it results in higher prices at the cash register. It also
can keep some small businesses out of the market altogether. Rather
than facing a mountain of regulation and compliance
[[Page H6381]]
costs, some would-be small business owners may never achieve their
dream of opening a small business.
Under the Regulatory Flexibility Act, the agencies that make these
damaging regulations are supposed to take small businesses into account
when writing the rules. All too often, however, the agencies are out of
compliance with the RFA's mandates.
One report actually found that, in 75 percent of the rulemakings, the
agencies either ignored costs on small businesses, or underestimated
the regulations costs. H.R. 7198, the Prove It Act of 2024, would
strengthen the RFA's already-existing provisions and make it so that
agencies have a much harder time skirting their statutory obligations
to our country's small businesses.
The Prove It Act of 2024 allows small businesses to petition the
Small Business Administration to investigate a rulemaking process when
a small business owner believes the agency inadequately performed its
regulatory analysis as required by the RFA. It also authorizes the
SBA's chief advocacy counsel to independently investigate a rulemaking
agency's compliance with the RFA. Finally, it creates a penalty for
rulemaking agencies that failed to comply with the RFA's requirements.
My colleagues on the other side of the aisle may claim that this bill
is only an attempt to slow down the agency rulemaking, making it more
difficult for the Federal Government to oversee the economy. This is
incorrect.
There are no provisions in this bill that are designed to slow down
rulemaking. In fact, the only thing that may slow down an agency's
rulemaking endeavor is having to fully comply with the law as it is
already written. The RFA was passed in 1980. Yet, there are still
agencies which do not take the specific needs of small businesses into
account when crafting regulations.
If Federal regulators followed the law as Congress intended, the
legislation before us would not be necessary. Unfortunately, Federal
regulators have been delinquent in their obligations to American small
business owners.
H.R. 7198, the Prove It Act of 2024, is a bipartisan effort to force
regulators to comply with existing statutes and consider small business
owners when crafting legislation.
Mr. Speaker, I urge my colleagues to support this legislation, and I
reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 7198, the Prove It Act, represents the latest
effort by Republicans to dismantle the regulatory process, giving well-
resourced special interests a powerful new cudgel to wield against
regulations, while causing harm to the very small entities the bill
purports to help.
This legislation would vest enormous and unreviewable authority over
agency rules to the chief counsel of the Office of Advocacy within the
Small Business Administration, a chronically underfunded office that
has not even had a Senate-confirmed leader since 2017.
It authorizes the chief counsel, unilaterally and without review, to
exempt large parts of the business community from proposed rules if he
or she determines that an agency did not properly consider how a
proposed rule would affect small entities.
Not only would this broad and vaguely defined authority apply to
proposed regulations, but the bill would also charge the chief counsel
with tracking agencies' completion of mandatory reviews of existing
rules every 10 years. If they find that an agency failed to conduct the
required review of the rule, they can simply suspend operation of the
rule.
I note that, while this legislation would impose significant new
burdens on the SBA, it would provide no additional funding to carry out
these duties, putting a further strain on the agency's ability to
assist small businesses.
Our public agencies are responsible for writing rules that protect
our community from harm. They make sure that the toys our children play
with are safe. They make sure that the vehicles we drive and the
buildings we live in are up to code. They make sure that the
legislation we pass in Congress for tackling issues like climate change
and public health are implemented as we intend.
The Prove It Act would grind all of this to a halt. Rules that would
ban toxic chemicals or take contaminated food out of the market would
hang in limbo while petitions mount before this single official to
complete his or her reviews, if he or she can ever complete them at
all.
This bill is not about lessening the burden on small businesses. By
law, agencies already must take small businesses into account. These
small entities already have power through the Office of Advocacy to
champion their concerns, so the bill is entirely unnecessary if that
was truly the purpose of the bill.
In reality, this bill is about giving big businesses the ability to
shut down the regulatory process. Any group that merely purports to
represent small businesses, no matter how large or well-resourced they
may be, could petition this one official to block a pending rule they
do not like. There would be no limit to how many times they do this.
This is a recipe for chaos and dysfunction. That, of course, is the
point.
Republicans do not want to empower the agencies that ensure the drugs
we take are safe, that ensure child car seats protect the most
vulnerable among us, and that enforce our competition laws to ensure
that small businesses have a chance to thrive. They want to throw sand
in the gears of these agencies to ensure that they never issue the
regulations we depend on to keep us safe.
This bill would do little to help small businesses, but it could
prove to be a windfall for powerful companies and special interests. It
is no surprise, therefore, that this legislation is right out of the
Project 2025 playbook, which calls for ``supercharging'' the Office of
Advocacy at the SBA so the entity can ``dismantle extreme regulatory
policies and advance limited-government reforms.''
Republicans are so determined to carry out this dismantling of the
regulatory process that they are even willing to violate their own
House rules against legislation that will increase mandatory spending,
ignoring a CBO estimate that the bill would add millions of dollars to
the deficit.
We all want to ensure that small businesses can thrive, but this bill
would not help them. Instead, it would create uncertainty and chaos
while giving big businesses a new tool to dismantle the regulatory
process that protects public health and safety and that protects
consumers from rising costs.
Mr. Speaker, I urge all Members to oppose this legislation, and I
reserve the balance of my time.
Ms. HAGEMAN. Mr. Speaker, I include in the Record the CBO score for
this bill.
H.R. 7198, PROVE IT ACT OF 2024 AS REPORTED BY THE HOUSE COMMITTEE ON
THE JUDICIARY ON NOVEMBER 22, 2024
------------------------------------------------------------------------
By fiscal year, millions of
dollars--
-----------------------------------
2025 2025-2029 2025-2034
------------------------------------------------------------------------
Direct Spending (Outlays)........... 1 5 10
Revenues............................ * * -7
Increase or Decrease (-) in the 1 5 17
Deficit............................
Spending Subject to Appropriation 6 40 not
(Outlays).......................... estimated
------------------------------------------------------------------------
* = between -$500,000 and zero.
Increases net direct spending in any of the four
consecutive 10-year periods beginning in 2035? < $2.5
billion.
Increases on-budget deficits in any of the four consecutive
10-year periods beginning in 2035? < $5 billion.
Statutory pay-as-you-go procedures apply? Yes.
Mandate Effects:
Contains intergovernmental mandate? No.
Contains private-sector mandate? Yes, under threshold.
The bill would:
Allow small businesses, nonprofit organizations, and small
local governments to request that the Small Business
Administration (SBA) review a certification that a proposed
rule would not have a significant economic effect on a
substantial number of such small entities
Require the SBA to declare a rule no longer in effect if
the issuing agency fails to review that rule periodically
Impose mandates on private-sector entities
Estimated budgetary effects would mainly stem from:
Requiring some federal agencies to devote staff to meet new
analysis and reporting requirements
Increasing costs for agencies that are funded through
annual appropriations to carry out the bill's provisions
Increasing direct spending and decreasing revenues for
several fee-funded, independent
[[Page H6382]]
agencies and the Federal Reserve System to carry out
provisions of the bill
Bill summary: H.R. 7198 would allow small businesses,
nonprofit organizations, and small local governments to
request that the Small Business Administration (SBA) review
federal agencies' certifications that proposed rules would
not significantly affect a substantial number of small
entities. The bill would require the SBA to establish a
process for reviewing those requests and determining whether
certifications merit further review. (Federal agencies
currently evaluate proposed rules' economic effects on small
entities and either certify that a rule would not
significantly affect them or they prepare a detailed
regulatory flexibility analysis for the rule. A regulatory
flexibility analysis is an assessment of a proposed
regulation on small entities.)
If further review is required, the SBA would consult the
rulemaking agency, representatives of the small entities, and
the Office of Management and Budget to determine whether, in
place of a certification, the rulemaking agency must prepare
a regulatory flexibility analysis. If the agency does not
complete that process, the final rule would not apply to
small entities.
Additionally, under the bill, if an agency fails to update
its analysis of a rule's effect on small entities within 10
years of the rule taking effect, as they are required to do
under current law, the rule would no longer be in effect.
That provision would apply to rules for which agencies should
have provided updated analysis within the 5-year period prior
to the bill's enactment. Under the bill, a rulemaking agency
could seek to reinstate a rule by carrying out a new
rulemaking process.
Estimated Federal cost: The costs of the legislation,
detailed in Table 1, fall within multiple budget functions.
Basis of estimate: For this estimate, CBO assumes that H.R.
7198 will be enacted near the end of calendar year 2024, that
the estimated amounts will be appropriated in each year, and
that outlays will follow historical spending patterns.
If an agency fails to comply with the bill's requirements,
the SBA would determine that the existing or proposed rule is
no longer in effect or would not apply to small entities.
Because CBO expects that federal agencies would generally
comply with the bill's requirements, we estimate that any
budgetary effects stemming from that change would be
insignificant.
In addition, CBO estimates that implementing the bill would
increase administrative costs for most agencies because they
would need additional staff to carry out the bill's
provisions.
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 7198
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------------
2025- 2025-
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2029 2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDING
Estimated Budget Authority.................. 1 1 1 1 1 1 1 1 1 1 5 10
Estimated Outlays........................... 1 1 1 1 1 1 1 1 1 1 5 10
DECREASES IN REVENUES
Estimated Revenues.......................... * * * * * -3 -1 -1 -1 -1 * -7
NET INCREASE IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Effect on the Deficit....................... 1 1 1 1 1 4 2 2 2 2 5 17
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization..................... 8 8 8 9 9 n.e. n.e. n.e. n.e. n.e. 42 n.e.
Estimated Outlays........................... 6 8 8 9 9 n.e. n.e. n.e. n.e. n.e. 40 n.e.
--------------------------------------------------------------------------------------------------------------------------------------------------------
n.e. = not estimated.
* = between -$500,000 and zero.
Direct spending: The administrative costs of the Consumer
Financial Protection Bureau, Federal Deposit Insurance
Corporation, National Credit Union Administration (NCUA), and
Office of the Comptroller of the Currency (OCC), are
classified in the budget as direct spending. Two of those
agencies, the NCUA and the OCC, collect fees from financial
institutions to offset their costs; those fees are treated as
reductions in direct spending.
Using information about the rulemaking activities of those
agencies, CBO estimates that the increased administrative
workload under H.R. 7198 would increase net direct spending
for those independent agencies by $10 million over the 2025-
2034 period.
Revenues: H.R. 7198 also would affect revenues by
increasing operating costs for the Federal Reserve System,
which remits its net earnings to the Treasury; those
remittances are classified as revenues in the federal budget.
Based on the costs of similar activities, CBO estimates that
the increased costs under the bill would reduce revenues by
$7 million over the 2025-2034 period.
Spending subject to appropriation: CBO estimates that
implementing H.R. 7198 also would increase spending for
agencies that are funded by annual appropriations. CBO
estimates that agencies that produce large numbers of rules
affecting small entities would need more staff to meet the
bill's requirements.
CBO expects that the agencies most affected by the bill
include the Departments of Agriculture, Education, Health and
Human Services, Homeland Security, Labor, and Transportation,
and the Environmental Protection Agency and Securities and
Exchange Commission (SEC). Using information about similar
activities, CBO estimates that the administrative costs for
federal agencies to implement H.R. 7198 would total $35
million over the 2025-2029 period; any related spending would
be subject to the availability of appropriated funds.
Under current law, the SEC is authorized to collect fees
sufficient to offset its annual appropriations. Therefore,
CBO estimates that the net budgetary effect of that
commission's activities to implement H.R. 7198 would be less
than $500,000 over the 2025-2029 period, assuming
appropriation actions consistent with the commission's
authorities.
Finally, the requirement for the SBA to establish and carry
out a process for small entities to request certification
review would pose additional costs to that agency. Using
information from the SBA, CBO estimates that those
administrative costs would total $5 million over the 2025-
2029 period; any related spending would be subject to the
availability of appropriated funds.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in Table
1.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting H.R. 7198 would not increase net
direct spending by more than $2.5 billion in any of the four
consecutive 10-year periods beginning in 2035.
CBO estimates that enacting H.R. 7198 would not increase
on-budget deficits by more than $5 billion in any of the four
consecutive 10-year periods beginning in 2035.
Mandates: If federal financial regulators increase annual
fees to offset the costs of implementing the bill, H.R. 7198
would increase the costs of an existing private-sector
mandate on entities required to pay those fees. CBO estimates
that the incremental cost of the mandate would be small and
would fall well below the annual threshold established in the
Unfunded Mandates Reform Act (UMRA) for private-sector
mandates ($200 million in 2024, adjusted annually for
inflation).
The bill contains no intergovernmental mandates as defined
in UMRA.
Previous CBO estimate: On December x, 2024, CBO transmitted
a cost estimate for H.R. 7198, the Prove It Act of 2024, as
ordered reported by the House Committee on Small Business on
September 10, 2024. The two pieces of legislation are
similar, and CBO's estimates of their budgetary effects are
the same.
Estimate prepared by: Federal Costs: Julia Aman (for the
Federal Deposit Insurance Corporation, the National Credit
Union Administration, and the Office of the Comptroller of
the Currency), David Hughes (for the Consumer Financial
Protection Bureau), Aurora Swanson (for the Small Business
Administration and for federal agencies funded by annual
appropriations); Revenues: Nathaniel Frentz; Mandates: Rachel
Austin.
Estimate reviewed by: Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Kathleen
FitzGerald, Chief, Public and Private Mandates Unit;
Christina Hawley Anthony, Deputy Director of Budget Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
Ms. HAGEMAN. Mr. Speaker, I yield 4 minutes to the gentleman from
Minnesota (Mr. Finstad).
Mr. FINSTAD. Mr. Speaker, I thank the gentlewoman for yielding.
Mr. Speaker, I rise today in support of my bipartisan legislation,
the Prove
[[Page H6383]]
It Act, which gives small businesses a seat at the table during the
regulatory process and shields them from the most heavyhanded, one-
size-fits-all regulations.
Government red tape has made it harder and more costly for Americans
to start a business. For many, this hinders their opportunity to
achieve the American Dream. For too long, D.C. bureaucrats have abused
their power, trampling over the small businesses, which are the
backbone of our communities.
Simply put, the Prove It Act gives teeth to the already-existing law,
the Regulatory Flexibility Act, which is often ignored by Federal
agencies in pursuit of their own political agenda.
Under RFA, agencies are required to complete an initial and final
analysis of their regulations and certify that they will not have a
significant impact on a substantial number of small entities.
Unfortunately, in many cases, agencies have failed to meet the
standards set out by the RFA and, in turn, have left our small business
owners with the short end of the stick.
Throughout the last 4 years, the Biden-Harris administration has
improperly certified dozens of regulations as not having a significant
impact on a substantial number of small businesses.
Moreover, according to the American Action Forum, since 2009, Federal
regulations have cost American taxpayers and businessowners $2.3
trillion to comply with them and have added 985 million hours of
paperwork for our small businesses to shoulder. The Biden
administration alone has accounted for $1.8 trillion of these costs and
over 340 million paperwork hours.
With these compliance costs and paperwork hours skyrocketing, the
Prove It Act is more important now than ever. Specifically, the Prove
It Act will require Federal agencies to analyze both the direct and
indirect costs their regulations would have on our small entities,
create a way for small businesses to petition their chief advocate in
government to review agencies' work and to make them prove that they
are fully compliant with already-existing laws. If agencies fail to
comply with the review process, small businesses would be exempt from
the regulations in question.
Moreover, the bill ensures that small businesses can easily access
preexisting guidance documents via regulations.gov. If agencies failed
to perform an already-required 10-year retrospective review, the
regulations would be nullified, giving teeth to this requirement that
currently is in statute.
Mr. Speaker, I include in the Record letters of support from the
National Federation of Independent Business; Job Creators Network;
National Stone, Sand & Gravel Association; National Association of
Insurance and Financial Advisors; a coalition letter on Regulatory
Flexibility Act reform signed by over 45 national associations; and a
May 21, 2024, letter from numerous Chambers of Commerce.
NFIB,
Washington, DC, February 1, 2024.
Hon. Brad Finstad,
U.S. House of Representatives,
Washington, DC.
Dear Representative Finstad: On behalf of NFIB, the
nation's leading small business advocacy organization, I
write in support of the Prove It Act. This legislation would
strengthen the requirements for agencies to analyze the
impact of regulations on small businesses and increase small
business engagement in the regulatory process.
NFIB members annually rate ``unreasonable government
regulation'' as one of the top concerns facing small
businesses. Unfortunately, the red tape and compliance
burdens of small businesses continue to grow exponentially.
According to a recent analysis, the total cost of federal
regulations in 2022 was $3.079 trillion. The study found that
the average U.S. company pays roughly $13,000 per employee to
comply with federal regulations.
The pace of regulation has significantly increased over the
last three years. As of January 26, 2024, President Biden had
imposed more than $454 billion of final rule costs and 279
million paperwork hours. These regulatory costs are massive.
However, they pale in comparison to the proposed $616 billion
of regulatory costs and 191 million paperwork hours that are
under development by the administration.
Small businesses often do not have compliance officers or
lawyers to help navigate these massive new regulatory
burdens. And existing laws like the Regulatory Flexibility
Act (RFA) were enacted to minimize the disproportionate
impact that federal regulations have on small businesses.
However, as NFIB's 2023 found, agencies use loopholes in the
RFA to underreport, minimize, or ignore the impact of
regulations on small businesses.
This circumvention of the RFA is unacceptable and small
businesses ultimately pay the regulatory price in forgone
growth and opportunity. That is why legislation like the
Prove It Act is so important. The Prove It Act seeks to
address the loopholes in the RFA by increasing small business
input in the regulatory process and strengthening the
requirements for agencies to examine the impacts of
regulations on small businesses.
NFIB supports the Prove It Act and urges Congress to
promptly enact this legislation. Small businesses appreciate
your continued leadership to reduce onerous regulatory
burdens and red tape.
Sincerely,
Josh McLeod,
Director, Federal Government Relations NFIB.
____
JCN,
Addison, TX, March 20, 2024.
Hon. Jim Jordan,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Hon. Jerrold Nadler,
Ranking Member, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Chairman Jordan, Ranking Member Nadler, and Members of
the Committee: In advance of the Judiciary Committee's markup
tomorrow, the Job Creators Network expresses its strong
support for the ``Prove it Act of 2024.'' JCN urges the
Committee to pass this bipartisan legislation that would
ensure federal agencies conduct meaningful reviews of the
burden proposed rules would have on small business and hold
them accountable if they do not.
JCN is a nonpartisan organization founded by entrepreneurs
who believe that many government policies are getting in the
way of the economic freedom that helped make this country
prosperous.
JCN provides business leaders and entrepreneurs with the
tools to become the voice of free enterprise in the media, in
Congress, in state capitals, in their communities, and their
workplaces--allowing them to hold politicians accountable to
job creators and their employees.
The ``Prove it Act of 2024'' would help shield small
businesses from executive overreach and provide Main Street
with important tools to help contend with government
overregulation.
According to the U.S. Small Business Administration's
Office of Advocacy small businesses employ almost half--46.4
percent--of America's employees. Truly America's job
creators, small businesses accounted for 62.7 percent of net
new jobs from 1995 to 2021.
Despite their significant contributions to our nation's
economy, small business owners get the short end of the stick
when it comes to regulation--one size does not fit all.
It is well-documented that small business owners are
disproportionately negatively impacted by regulation as
compared to big businesses.
When it comes to regulation, it is important to remember
that seventy-nine percent of small businesses have fewer than
ten employees. Firms with fewer than ten employees do not
employ attorneys, accountants, or human resource
professionals. If they are lucky, they have someone to manage
sales. As a practical matter that means that it is the small
business owner who is tasked with those duties, many of which
involve regulatory compliance.
Moreover, it is well-documented that small business owners
spend more on regulation than larger businesses. Businesses
with fewer than fifty employees pay $14,700 per employee, as
compared to $13,890 per employee for medium-sized businesses,
and $12,200 per employee for large businesses.
Despite these realities, increasingly we see federal
regulators view their legal obligation to assess small
business impact of new regulations as nothing more than a
``check the box'' exercise. According to an investigation
conducted by the House Committee on Small Business, many
government agencies in Washington are ``failing to properly
implement'' statutes intended to shield small businesses from
overburdensome regulations.
For example, the Army Corps of Engineers has twice
certified as not significantly impacting small businesses its
proposal to redefine ``waters of the United States'' in a way
that would require millions of landowners to get a federal
permit before doing things as simple as moving mulch.
Similarly, the Department of Labor had the audacity to
certify its recent regulation that effectively converts most
independent contractors into employees as a mandate with
little impact on small business. These are just two of many
examples where federal bureaucrats are not following the
letter and spirit of the Regulatory Flexibility Act when it
comes to protecting small businesses from one-size-fits-all
regulation.
The ``Prove it Act of 2024'' fulfills a key pillar of the
Job Creators Network's American Small Business Prosperity
Plan--an eight-point policy blueprint--by reducing the
regulatory burden on small businesses.
The ``Prove it Act of 2024'' would bolster existing law
that federal agencies have been side-stepping at the expense
of small businesses. It would hold agencies accountable by
providing a meaningful opportunity for small businesses to
challenge an agency certification that a proposed regulation
would not impact a substantial number of small entities. And
small businesses would be exempt
[[Page H6384]]
from any rule in which an agency fails to follow the law.
Small business regulatory protections are in dire need of
restoration. Passage of the ``Prove it Act of 2024'' would be
a step in the right direction. We commend the Committee for
marking up this important legislation and urge its passage.
It is time for our elected leaders in Washington to
prioritize Main Street.
Alfredo Ortiz,
CEO, Job Creators Network.
____
NSSGA,
Alexandria, VA, February 29, 2024.
Hon. Brian Finstad,
U.S. Congressman,
Washington, DC.
Hon. Yadira Caraveo,
U.S. Congresswoman,
Washington, DC.
Hon. Nathaniel Moran,
U.S. Congressman,
Washington, DC.
Dear Congressman Finstad, Congresswoman Caraveo, and
Congressman Moran: I am writing on behalf of the over 400
members of the National Stone, Sand & Gravel Association
(NSSGA), to express our strong support for the bipartisan
Prove It Act that you recently introduced. The aggregates
industry, like many others, has faced considerable challenges
due to the increasing complexity and scope of federal
regulations. These regulations often impose substantial
direct and indirect costs on small businesses, which unlike
larger entities, lack the resources to navigate these
regulatory burdens effectively.
NSSGA represents the aggregates industry, including
thousands of quarries, sand and gravel operations, and other
related businesses nationwide. NSSGA members conduct over
9,000 operations and employ over 100,000 citizens to create
2.5 billion tons of aggregates each year. These raw materials
are essential to rebuild and repair our country's aging
infrastructure and assist our nation's goals in lowering the
overall energy cost for families.
The Prove It Act represents a significant step forward in
ensuring that small businesses, including those within the
aggregates sector, are not unduly burdened by regulations
that can stifle innovation, reduce job creation, and hamper
economic growth. By requiring federal agencies to analyze the
impact of their regulations on small entities and limit these
impacts, the legislation aligns with our longstanding
commitment to sensible, balanced regulatory frameworks that
protect the environment and public safety without imposing
unnecessary costs on businesses.
Moreover, the Act's provisions for creating mechanisms for
small businesses to raise concerns and request reviews are
especially important. These measures provide a vital avenue
for our members to ensure that regulations are fair,
transparent, and consider the unique challenges faced by
small businesses. Ensuring easy access to guidance documents
and direct communication channels with regulators will also
greatly benefit small businesses by reducing compliance
uncertainty and fostering a more cooperative regulatory
environment.
We thank you for your leadership and commitment to
protecting small businesses from overbearing regulations. The
Prove It Act will help ensure that federal agencies fully
consider the impact of their actions on small entities,
promoting a healthier business environment and supporting the
vital contributions of small businesses to our national
economy.
We look forward to the passage of this important
legislation and stand ready to support its implementation to
ensure that it delivers meaningful benefits to the aggregates
industry and all small businesses across the country.
Sincerely,
Michele Stanley,
Executive Vice President and
Chief Advocacy Officer.
____
NAIFA,
Arlington, VA, February 5, 2024.
Hon. Brad Finstad,
House of Representatives,
Washington, DC.
Dear Representative Finstad: On behalf of the National
Association of Insurance and Financial Advisors (``NAIFA''),
I write in support of the Prove It Act. This legislation
would strengthen the requirements for agencies to analyze the
impact of regulations on insurance producers, registered
representatives of broker-dealers, and financial advisors.
Founded in 1890 as The National Association of Life
Underwriters, NAIFA is the oldest, largest, and most
prestigious association representing the interests of
financial professionals from every Congressional district in
the United States. Our mission--empowering financial
professionals and consumers with world-class advocacy and
education--is the reason NAIFA has consistently and
resoundingly stood up for agents and called upon members to
grow their knowledge while following the highest ethical
standards in the industry.
NAIFA members are Main Street financial professionals.
NAIFA members--comprised primarily of insurance agents, many
of whom are also registered Broker-Dealer representatives--
serve primarily middle-market clients, including individuals
and small businesses. Nine out of ten NAIFA members report
serving middle-income individuals and families and 67 percent
work with small businesses. A typical client's annual
household income falls below $150,000 for 69 percent of NAIFA
members. In some cases, our members are the only financial
advisor across multiple counties.
NAIFA members are also small business owners. Many of our
members work in small firms--sometimes firms of one--with
little administrative or back-office support. Often, their
business practices are dictated by the broker-dealer with
whom they work, including the format and provision of client
forms and disclosures. They are also subject to transaction-
level oversight and review by the broker-dealer.
The Prove It Act would require federal agencies to consider
reasonably foreseeable indirect future costs of their
proposed federal regulations as part of their Initial
Regulatory Flexibility Analysis, where feasible. The proposed
legislation also creates a process whereby small businesses
and organizations representing small business can ask the
Small Business Administration's Office of Advocacy to
formally review a federal agency's certification that a
proposed regulatory rule will not have a significant economic
impact on a substantial number of small entities under the
Regulatory Flexibility Act (RFA). This ensures small
businesses will be able to raise concerns that a rule was
improperly certified and have a third-party review and
determine whether certification was proper.
The Prove It Act would also require that, for any guidance
document or other relevant documents clarifying or
interpreting any rule found by agencies to likely have a
significant economic impact on a substantial number of small
entities, agencies shall publish said documents, as
determined by the agency, to Regulations.gov or similar
website and allow for comments to ensure small businesses can
both easily access the resources and provide feedback or
request additional clarity where needed.
The regulatory burden on insurance producers, registered
representatives of broker-dealers, and financial advisors is
often put in place without proper discussion or concern for
the negative impact on the ability to conduct business or
properly serve clients and consumers. Additionally, federal
regulators often work to circumnavigate the RFA, which leads
to a loss of growth and opportunity for these small
businesses that represent Main Street America and make up an
integral part of the community in which they work. That is
why legislation like the Prove It Act is so important. The
Prove It Act seeks to address the loopholes in the RFA by
increasing small business input in the regulatory process and
strengthening the requirements for agencies to examine the
impacts of regulations on small businesses.
NAIFA offers its full support to the Prove It Act and urges
Congress to promptly enact this legislation. Insurance
Producers, the registered representatives of broker-dealers,
and financial advisors appreciate your continued leadership
to reduce unnecessary regulatory burdens and to allow these
vital insurance professionals to continue to serve the best
interest of their clients.
Sincerely,
Michael W. Hedge, Jr.
Senior Director, Government Relations, National Association
of Insurance and Financial Advisors.
September 5, 2024.
Hon. Roger Williams,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
Hon. Nydia Velazquez,
Ranking Member, Committee on Small Business,
House of Representatives, Washington, DC.
Dear Chairman Williams and Ranking Member Velazquez: On
behalf of millions of small businesses across the country, we
write to thank you for prioritizing legislation to provide
regulatory relief and reduce red tape for small businesses.
We urge the Committee to advance legislation to strengthen
the Regulatory Flexibility Act (RFA) and ensure the intent of
the law is fulfilled.
Small businesses are concerned with the unprecedented pace
of regulations coming from Washington. Over the last three
and a half years, more than $1.6 trillion in new regulatory
costs and almost 300 million new paperwork hours have been
imposed on the private sector. These new burdens fall
disproportionately on small businesses that do not have
lawyers and compliance officers to navigate complex
regulatory issues.
In 1980, President Carter and Congress recognized the
disproportionate impact of federal regulations on small
businesses and unanimously approved the Regulatory
Flexibility Act (RFA). The RFA sought to minimize the burdens
on small businesses. However, in the 40-plus years since the
RFA became law, agencies have found ways to disregard or
avoid many of the requirements. In 2023, NFIB analyzed the
Small Business Administration (SBA) Office of Advocacy's
comment letters to federal agencies from January 2021 to
January 2023 and found significant noncompliance with the
RFA. Advocacy highlighted 28 instances where agencies failed
to adequately examine the economic costs of regulations.
Advocacy noted that agencies often improperly certify that
rules will not have a significant economic impact on a
substantial number of small entities. By doing so, agencies
disregard the intent of the RFA, leaving small businesses
subject to the one-size-fits-all regulatory environment the
RFA sought to remedy.
[[Page H6385]]
The House Committee on Small Business recently issued a
staff report examining agency compliance with the RFA. The
Committee found that most agencies are failing to properly
comply with the RFAs requirements and live up to the spirit
of the law. These findings mirror the conclusions of NFIB's
2023 White Paper and highlight the need to close loopholes to
ensure the intent of the RFA is fulfilled.
In response to these findings, the Committee has
prioritized several legislative proposals to strengthen the
RFA. One proposal, the bipartisan Prove It Act, would
increase small business input in the regulatory process and
ensure agencies are fully accounting for the impact of
regulations on small businesses. Other proposals would
increase the transparency and accountability of the
regulatory process for small businesses.
On behalf of millions of small businesses, thank you for
your attention to the disproportionate impact of regulations
on small entities. We appreciate the Committee's focus on
ensuring the intent of the RFA is fulfilled through
legislation like H.R. 7198, the Prove It Act. We urge
Congress to take swift action to reduce red tape for small
businesses.
Sincerely,
Alliance for Chemical Distribution, American Bakers
Association, American Bankers Association, American Chemistry
Council, American Craft Spirits Association, American
Exploration & Mining Association, American Hotel & Lodging
Association, American Farm Bureau Federation, American Road &
Transportation Builders Association, American Short Line and
Regional Railroad Association, American Waterways Operators,
Associated Builders and Contractors, Associated Equipment
Distributors, Associated General Contractors of America, Can
Manufacturers Institute, Energy Workforce & Technology
Council, Independent Community Bankers of America,
International Franchise Association, International Wood
Products Association, Job Creators Network, National Asphalt
Pavement Association.
National Association of Convenience Stores, National
Association of Insurance and Financial Advisors, National
Association of Manufacturers, National Association of
Realtors, National Association of Wholesaler-Distributors,
National Cattlemen's Beef Association, National Federation of
Independent Business, National Fisheries Institute, National
Funeral Directors Association, National Grocers Association,
National Lumber & Building Material Dealers Association,
National Mining Association, National Pork Producers Council,
National Propane Gas Association, National Retail Federation,
National Roofing Contractors Association, National Rural
Electric Cooperative Association, National Small Business
Association, National Stone Sand & Gravel Association, North
American Association of Food Equipment Manufacturers, Owner-
Operator Independent Drivers Association, Plumbing-Heating-
Cooling Contractors--National Association, Precision Machined
Products Association, PRINTING United Alliance, The Meat
Institute, The Toy Association, Treated Wood Council, U.S.
Chamber of Commerce, USA Rice.
____
May 21, 2024.
To the Members of the United States House of
Representatives: The undersigned chambers of commerce
strongly support H.R. 7198, the Prove It Act of 2024, and
urge the House to consider this important legislation.
This bipartisan bill was introduced by Representatives Brad
Finstad, Nathaniel Moran, and Yadira Caraveo and is co-
sponsored by Representatives Mike Gallagher, Harriett
Hageman, Maria Salazar, David Valadao, and Carol Miller. H.R.
7198 was reported by the Judiciary Committee in March and
would be a major step forward for small businesses that are
harmed by excessive federal regulations.
American small business owners are job creators and
innovators. While their contributions to their communities
and to the American economy are enormous, they bear an
unreasonably heavy burden when it comes to regulatory costs.
The annual cost of complying with federal regulations has
risen by $465 billion since 2012 and now totals over $3
trillion (12 percent of U.S. GDP). The per employee cost of
$12,800 for small businesses is 20 percent greater than the
cost per employee at their larger competitors.
The Regulatory Flexibility Act--passed 44-years ago--was
intended to correct the lopsided burden on small business and
require that regulators tailor rules to meet government
objectives while minimizing the burden on small businesses.
Unfortunately, federal agencies too often exploit loopholes
in the law to hide costs imposed on Main Street businesses
and to ignore their feedback.
The Prove it Act of 2024 would close those loopholes and
bring more transparency to the true costs of red tape on
America's innovators, job creators, and community builders.
The bill would also prevent agencies from ignoring small
business input in their rush to finalize new federal
regulations.
We urge expeditious House consideration of H.R. 7198, the
Prove it Act.
Sincerely,
Alabama:
Chandler Chamber of Commerce, Coastal Alabama Business
Chamber, Enterprise Chamber of Commerce, Mobile Chamber,
Prattville Area Chamber of Commerce, SouthWest Mobile County
Chamber of Commerce.
Alaska:
Alaska Chamber, Greater Fairbanks Chamber of Commerce, The
Greater Juneau Chamber of Commerce.
Arizona:
Arizona Chamber of Commerce and Industry, Buckeye Valley
Chamber of Commerce, Carefree Cave Creek Chamber of Commerce,
Greater Flagstaff Chamber of Commerce, Greater Phoenix
Chamber, Mesa Chamber of Commerce, Nogales Santa Cruz County
Chamber of Commerce, Northwest Valley Chamber of Commerce,
Peoria Chamber of Commerce, Prescott Valley Chamber of
Commerce, Queen Creek Chamber of Commerce, Scottsdale Area
Chamber of Commerce, Southwest Valley Chamber, Springerville-
Eagar Regional Chamber of Commerce, Tucson Metro Chamber,
West Valley Chamber of Commerce Alliance, Wickenburg Chamber
of Commerce, Yuma County Chamber of Commerce.
Arkansas:
AR State Chamber/AIA, Holiday Island Chamber of Commerce,
Little Rock Regional Chamber, Rogers-Lowell Chamber of
Commerce.
California
Anaheim Chamber of Commerce, Brea Chamber of Commerce,
California Chamber of Commerce, Carlsbad Chamber of Commerce,
Chatsworth Porter Ranch Chamber of Commerce, Chino Valley
Chamber of Commerce, Colusa County Chamber of Commerce,
Greater Bakersfield Chamber, Greater Coachella Valley Chamber
of Commerce, Greater Conejo Valley Chamber of Commerce,
Greater Grass Valley Chamber of Commerce, Greater Irvine
Chamber of Commerce, La Mesa Chamber of Commerce, Laguna
Hills Chamber of Commerce, Lodi District Chamber of Commerce,
Murrieta/Wildomar Chamber of Commerce, Newport Beach Chamber
of Commerce, North San Diego Business Chamber, Oceanside
Chamber of Commerce, Palm Desert Area Chamber of Commerce,
Palos Verdes Peninsula Chamber of Commerce, Rancho Cordova
Area Chamber of Commerce, San Diego Regional Chamber of
Commerce, San Juan Capistrano Chamber of Commerce, Santa
Barbara South Coast Chamber of Commerce, Santee Chamber of
Commerce, South Bay Association of Chambers of Commerce,
Tracy Chamber of Commerce, West Ventura County Business
Alliance, Yorba Linda Chamber of Commerce.
Colorado:
Vail Valley Partnership.
Florida:
Coral Gables Chamber of Commerce, Daytona Regional Chamber
of Commerce, Lakeland Chamber of Commerce, St. Johns County
Chamber of Commerce, Visitor Information Center, The Greater
Boca Raton Chamber of Commerce, Venice Area Chamber of
Commerce.
Georgia:
Barrow County Chamber of Commerce, Inc., Cobb County
Chamber of Commerce, Fayette County Chamber of Commerce,
Habersham County Chamber of Commerce, Jackson County Area
Chamber of Commerce, Murray County Chamber of Commerce,
Newton Chamber of Commerce.
Hawaii:
Chamber of Commerce Hawaii, Kapolei Chamber of Commerce,
Kauai Filipino Chamber of Commerce.
Idaho:
Twin Falls Area Chamber of Commerce.
Illinois:
Chamber630, Edwardsville/Glen Carbon Chamber of Commerce,
GLMV Chamber of Commerce, Illinois Chamber of Commerce, Oak
Lawn Chamber of Commerce, Quad Cities Chamber of Commerce,
RiverBend Growth Association, Sauk Valley Area Chamber of
Commerce, The Greater Springfield Chamber of Commerce,
Western DuPage Chamber of Commerce.
Indiana:
Greater Lawrence Chamber of Commerce, Indiana Chamber of
Commerce, South Bend Regional Chamber of Commerce, Wayne
County Area Chamber of Commerce.
Iowa:
Cedar Rapids Metro Economic Alliance, Dubuque Area Chamber
of Commerce, Iowa Association of Business and Industry.
Kansas:
Goddard Chamber of Commerce, Greater Topeka Chamber,
Parsons Chamber of Commerce.
Kentucky:
Greater Louisville, Inc., Paducah Area Chamber of Commerce.
Louisiana:
Central Louisiana Regional Chamber of Commerce, Greenwood
Chamber of Commerce, St. Tammany Chamber of Commerce, West
Baton Rouge Chamber of Commerce.
Maine:
Boothbay Harbor Region Chamber of Commerce.
Maryland:
Maryland Chamber of Commerce, Salisbury Area Chamber of
Commerce, Talbot County Chamber of Commerce, Washington
County Chamber of Commerce.
Massachusetts:
Blackstone Valley Chamber of Commerce, Metro South Chamber
of Commerce, Peabody Area Chamber of Commerce, United
Regional Chamber of Commerce.
Michigan:
Barry County Chamber and Economic Development Alliance,
Cadillac Area Chamber of Commerce, Detroit Regional Chamber,
Grand Rapids Chamber, Hartland Area Chamber of Commerce,
Lansing Regional
[[Page H6386]]
Chamber of Commerce, Michigan Chamber of Commerce, Michigan
West Coast Chamber of Commerce, North Oakland Regional
Chambers Association, Southwest Michigan Regional Chamber of
Commerce, Three Rivers Area Chamber of Commerce.
Minnesota:
Albert Lea-Freeborn County Chamber of Commerce, Austin Area
Chamber of Commerce, Brainerd Lakes Chamber of Commerce,
Cannon Falls Area Chamber of Commerce, Eden Prairie Chamber
of Commerce, FORWARD Worthington, Glenwood Lakes Area Chamber
of Commerce, Greater Mankato Growth, Greater Stillwater
Chamber of Commerce, 1-94 West Chamber of Commerce, Lonsdale
Area Chamber of Commerce. Marshall Area Chamber of Commerce,
Minnesota Chamber of Commerce, Princeton Area Chamber of
Commerce & Tourism, Rochester Area Chamber of Commerce,
Shakopee Area Chamber of Commerce, SouthWest Metro Chamber
of Commerce, St. Cloud Area Chamber of Commerce, Tracy
Area Chamber, Willmar Lakes Area Chamber of Commerce,
Windom Area Chamber of Commerce, Winona Area Chamber of
Commerce.
Mississippi:
Hancock County Chamber of Commerce.
Montana:
Billings Chamber of Commerce, Glasgow Area Chamber of
Commerce & Agriculture, Inc., Missoula Area Chamber of
Commerce, Montana Chamber of Commerce.
Nebraska:
Grand Island Area Chamber of Commerce, Kearney Area Chamber
of Commerce Nebraska Chamber of Commerce, North Platte Area
Chamber & Development Corporation, Washington County Chamber
of Commerce.
Nevada:
Carson City Chamber of Commerce, Henderson Chamber of
Commerce, Reno + Sparks Chamber of Commerce Vegas Chamber,
White Pine Chamber of Commerce.
New Hampshire:
Business & Industry Association New Hampshire.
New Jersey:
New Jersey State Chamber of Commerce, The African American
Chamber of Commerce of New Jersey.
New York:
Capital Region Chamber of Commerce, North Country Chamber
of Commerce, Sullivan County Chamber of Commerce, The
Business Council of NYS, Inc.
North Carolina:
Alamance Chamber of Commerce, Charlotte Regional Business
Alliance, Greater Mount Airy Chamber of Commerce, Mint Hill
Chamber of Commerce, Moore County Chamber of commerce NC
Chamber, The Caldwell Chamber.
North Dakota:
Greater North Dakota Chamber, The Chamber Grand Forks-East
Grand Forks, Williston Area Chamber of Commerce.
Ohio:
Chillicothe Ross Chamber of Commerce, Huber Heights Chamber
of Commerce, Ohio Chamber of Commerce, Toledo Regional
Chamber of Commerce, Troy Area Chamber of Commerce,
Zanesville-Muskingum County Chamber of Commerce.
Oklahoma:
State Chamber of Oklahoma, Tulsa Regional Chamber of
Commerce.
Oregon:
Albany Area Chamber of Commerce, Bend Chamber of Commerce,
Canby Area Chamber of Commerce, Gresham Area Chamber of
Commerce, Lake County Chamber of Commerce, Oregon Business &
Industry, Oregon State Chamber of Commerce, Roseburg Area
Chamber of Commerce, Salem Area Chamber of Commerce, The
Dalles Area Chamber of Commerce, Washington County Chamber of
Commerce.
Pennsylvania:
Alle Kiski Strong Chamber, Blair County Chamber of
Commerce, Chamber of Business and Industry of Centre County,
Columbia Montour Chamber of Commerce, Greater Latrobe-Laurel
Valley Regional Chamber of Commerce, Hanover Area Chamber of
Commerce, Harrisburg Regional Chamber & CREDC, Huntingdon
County Chamber of Commerce, Indian Valley Chamber of
Commerce, Lancaster Chamber of Commerce and Industry,
Pennsylvania Chamber of Business and Industry, Schuylkill
Chamber of Commerce, Somerset County Chamber of Commerce,
Southern Chester County Chamber of Commerce, TriCounty Area
Chamber of Commerce, Venango Area Chamber of Commerce,
Williamsport/Lycoming Chamber of Commerce, York County
Economic Alliance.
Rhode Island:
Greater Newport Chamber of Commerce.
South Carolina:
Anderson Area Chamber of Commerce, Berkeley Chamber of
Commerce, Charleston Metro Chamber of Commerce, Greater
Hartsville Chamber of Commerce, Hilton Head Island-Bluffton
Chamber of Commerce, South Carolina Chamber of Commerce
South Dakota:
South Dakota Chamber of Commerce and Industry.
Tennessee:
Lawrence County Chamber of Commerce, Tennessee Chamber of
Commerce and Industry.
Texas:
Cedar Park Chamber of Commerce, Cuero Chamber of Commerce,
Agriculture & Visitors Center, Denison Area Chamber of
Commerce, Gainesville Area Chamber of Commerce, Greater Waco
Chamber, Kaufman Chamber of Commerce, Kilgore Area Chamber of
Commerce, Longview TX Chamber of Commerce, Metrocrest Chamber
of Commerce, Nacogdoches County Chamber of Commerce, North
Texas Commission, Rowlett Chamber of Commerce, Texas
Association of Business, United Corpus Christi Chamber of
Commerce.
Utah:
Cedar City Chamber of Commerce, ChamberWest Chamber of
Commerce, Davis Chamber of Commerce, Salt Lake Chamber, South
Valley Chamber of Commerce, Utah Pacific IsLander Chamber.
Virginia:
Central Fairfax Chamber of Commerce, Hampton Roads Chamber,
Loudoun County Chamber of Commerce, Virginia Chamber of
Commerce.
Washington:
Burlington Chamber of Commerce, Covington Chamber of
Commerce, Economic Alliance Snohomish County, Greater Lake
Stevens Chamber of Commerce, Mercer Island Chamber of
Commerce, Thurston County Chamber of Commerce.
Wisconsin:
Beaver Dam Area Chamber of Commerce, Heart of Wisconsin
Chamber of Commerce, Rice Lake Area Chamber of Commerce,
Wisconsin Manufacturers & Commerce.
Wyoming:
Campbell County Chamber of Commerce, Greater Cheyenne
Chamber of Commerce, Jackson Hole Chamber of Commerce, Lander
Chamber of Commerce, Rock Springs Chamber of Commerce,
Wyoming State Chamber of Commerce.
Mr. FINSTAD. Mr. Speaker, the Prove It Act gives the hardworking
American small businesses a voice in the regulatory process. It is time
that we strengthen and empower our small business community rather than
force them to comply with unnecessary and burdensome regulations.
Mr. Speaker, I thank Representative Caraveo and Representative Moran
for partnering with me on this important legislation, and I urge all of
my colleagues to vote in support of the Prove It Act.
Mr. NADLER. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Texas (Mrs. Lee Carter), the newest Member of the Judiciary Committee,
proudly carrying on her mother's legacy.
Mrs. LEE CARTER. Mr. Speaker, I thank the gentleman for yielding me
time.
Mr. Speaker, I rise in opposition to H.R. 7198, the Prove It Act of
2024, a bill that would vest the chief counsel of the Office of
Advocacy within the Small Business Administration, which has been
chronically underfunded--and I wish we were spending time on that
instead of this bill--with enormous and unreviewable authority over
agency rules.
More specifically, H.R. 7198 authorizes the chief counsel,
unilaterally and without review, to exempt large parts of the business
community from proposed rules if he or she determines that an agency
did not properly consider how a proposed rule could affect small
entities.
In doing so, this bill would empower large companies and undermine
the regulatory process that keeps Americans safe by imposing a series
of requirements on regulatory agencies.
As we all know, regulatory agencies play a critical role in our
safety and well-being by writing rules designed to protect our food
supply, environment, physical infrastructure, and more. These
regulations safeguard the freedoms that all Americans enjoy.
While efforts to ease burdens on small businesses can be useful, they
should not prevent regulators from doing their jobs in the public
interests.
The Prove It Act, under the guise of helping all small businesses,
would actually allow an unelected administrator within the SBA to
circumvent congressional and agency intent with little oversight. It is
simply unacceptable that we would task a single official in the SBA
with unilateral and unreviewable authority to suspend new and existing
protections and safeguards for large swaths of the economy, not to
mention that it would also require agencies to jump through new,
vaguely defined and nontransparent bureaucratic hoops, which would
cause delays and uncertainty, all the while doing nothing to actually
help small businesses.
In fact, the Coalition for Sensible Safeguards, consisting of over
200 labor, consumer, and environmental organizations, oppose this bill,
including the AFL-CIO, Economic Policy Institute, and National Women's
Law Center.
It is important to convey to the American people that this bill is
also simply unnecessary. By law, agencies already take small businesses
into account, and these small entities already
[[Page H6387]]
have power through the Office of Advocacy to champion their concerns.
Rules and protections are critical to ensuring the safety and
soundness of virtually every facet of our lives, including clean air,
clean water, safe toys that my children might use, safe cars while I
drive my children to school, and safe workplaces for all of us.
Mr. Speaker, we should reject any efforts that would prevent agencies
from issuing these lifesaving regulations. Therefore, I urge my
colleagues to vote against H.R. 7198, the Prove It Act.
Ms. HAGEMAN. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Moran).
Mr. MORAN. Mr. Speaker, I rise today to support H.R. 7198, the Prove
It Act, a bipartisan piece of legislation to protect small businesses
from the burdens of Federal regulations.
I was proud to join Congressman Finstad and Congresswoman Caraveo in
introducing this bill and to vote for it in the House Judiciary
Committee.
This legislation puts teeth into the Regulatory Flexibility Act,
which has been discussed today. In 1980, it required Federal agencies
to take into consideration the direct and indirect impacts of their
regulations on small and family businesses, but it is not being
enforced today.
{time} 1245
Effectively, there is no recourse to those businesses under the
Regulatory Flexibility Act, which is why, in more than 75 percent of
the cases, these new regulations actually completely ignore that
Regulatory Flexibility Act or put a de minimis amount attached to the
impact on small businesses.
We need teeth to that 1980 Regulatory Flexibility Act, and the Prove
It Act will do just that. It will change what has not been done in the
past, and it will restore power to small businesses today to push back
against new regulations.
Today, small businesses pay seven times more per employee than
medium-sized businesses to stay compliant with Federal regulations.
They don't have the resources to keep pace with the ever-growing
burdens imposed by the heavy hand of the government.
I am amazed that I am hearing from the opposition words like
``delay,'' ``burden,'' and ``uncertainty'' as it relates to the Federal
Government. I am more concerned with the delays, burden, uncertainty,
and inadequate resources that exist for small businesses to respond to
these new regulations.
Federal agencies seem to ignore the reality and harm that these
regulations cause, which only further discourages American innovation
and small business growth.
The Prove It Act empowers small businesses to petition the Small
Business Administration to review proposed Federal regulations and
gives them the tools to challenge unnecessary regulation imposed upon
them, which they do not have today. It brings more accountability and
transparency to the work of government agencies and reaffirms our
commitment to stand with small business.
If we are going to stand on the side of government or small business,
I choose to stand on the side of small business. Small businesses are,
in fact, the backbone of our economy, and their innovation keeps the
spirit of the American Dream alive.
Mr. Speaker, I urge my colleagues to vote ``yes'' on this legislation
to support the crucial role small businesses play as drivers of
economic growth and job creation. I urge my colleagues to support H.R.
7198, the Prove It Act.
Mr. NADLER. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Colorado (Ms. Caraveo).
Ms. CARAVEO. Mr. Speaker, I thank Ranking Member Nadler for yielding.
Mr. Speaker, I rise today in support of H.R. 7198, the Prove It Act.
I also thank my colleagues, Congressman Finstad and Congressman Moran,
for working with me to run this bipartisan legislation.
Colorado has more than 600,000 small businesses owned by men and
women who work hard day in and day out to provide for their families
and serve our communities. Small business owners already face
innumerable hurdles in pursuit of the American Dream, and burdensome
regulations only add to their challenges.
The repercussions of overregulation are long lasting, impacting our
economy and communities from the moment they are implemented,
particularly in the Front Range and northern Colorado.
Unfortunately, the requirement for analyzing both the direct and
indirect costs imposed on small businesses has often not been satisfied
by various Federal agencies. That is where our bill comes in.
This bill would allow small business owners to be heard when they
feel the Federal Government is imposing expensive roadblocks on them.
It will shield small businesses from undue regulatory burdens and
improve communication between small entities and Federal agencies.
Throughout my time in Congress, I have made it a point to engage with
local small businesses directly through a series of roundtables
throughout the Front Range and northern Colorado. These discussions
highlighted the most pressing issues facing these small businesses,
particularly the disproportionate impact excessive regulations have on
their operations.
With the already razor-thin margins under which these small
businesses operate, they need more of our help to thrive. As their
Representative, I believe it is my duty to give a voice in Congress to
our small businesses and ensure that they have a seat at the table in
the regulatory process. Their views and priorities must be taken into
consideration if we hope to foster a dynamic and robust economy.
Passing the Prove It Act means we can continue to support the small
businesses that are driving our economy.
Mr. Speaker, again, I thank Representatives Finstad and Moran for
their work on this bipartisan legislation and for their diligent
efforts to support our small businesses, and I urge my colleagues to
support this effort.
Ms. HAGEMAN. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Williams).
Mr. WILLIAMS of Texas. Mr. Speaker, I rise today in support of H.R.
7198, the Prove It Act of 2024, introduced by Representative Finstad.
In full disclosure, I am a small business owner.
The Prove It Act is an important piece of legislation that will give
small business owners the ability to petition the government when an
agency fails to actively account for regulations impacting their
operations.
Over the past 4 years, the Biden administration has created an
unbelievable amount of $1.7 trillion in new regulations. The Committee
on Small Business, which I chair, conducted a thorough investigation
into how it was possible to achieve this unfortunate milestone. We
discovered that many agencies are treating the Regulatory Flexibility
Act, a law that is supposed to protect small businesses from the most
costly regulations, like a check-the-box exercise. They do not uphold
the spirit of the law, which is an important check on the
administrative state.
The Prove It Act would close many of the loopholes being utilized by
Federal agencies and give small businesses the ability for their choice
and their voice to be heard when the system fails them.
Main Street America has been dealing with many different economic
headwinds. Inflation and labor shortages alone have made it a challenge
for small business to survive. Out-of-control regulations are just one
more obstacle that businessowners must work to overcome.
My committee held over 13 hearings where we brought in real small
business owners to discuss the impact regulations had on their
operations. Every one of our witnesses said that taking time to
understand and comply with the new mandates prevents them from focusing
on their core operations: giving service and selling product.
These small businesses are the economic engines of the country, and
we must do all we can to support their continued success. The Prove It
Act takes important steps in ensuring that agencies comply with the
intent of the RFA and fully consider small businesses in the rulemaking
process.
Mr. Speaker, I strongly urge my colleagues to support H.R. 7198.
Mr. NADLER. Mr. Speaker, over 200 labor, consumer protection, and
environmental organizations oppose H.R. 7198, the Prove It Act.
Mr. Speaker, I include in the Record letters of opposition from the
Coalition
[[Page H6388]]
for Sensible Safeguards, Earthjustice, and Public Citizen.
Coalition for
Sensible Safeguards,
December 4, 2024.
Representative Mike Johnson,
Speaker, House of Representatives,
Washington, DC.
Representative Hakeem Jeffries,
Democratic Leader, House of Representatives,
Washington, DC.
Dear Speaker Johnson and Democratic Leader Jeffries: The
Coalition for Sensible Safeguards (CSS), an alliance of over
200 labor, scientific, research, good government, faith,
community, health, environmental, and public interest groups,
is writing regarding the House of Representatives'
consideration of the Prove It Act of 2024, H.R. 7198 which
CSS strongly opposes.
The Prove It Act would expand the authority of the Small
Business Administration's Office of Advocacy while failing to
address fundamental flaws of the Regulatory Flexibility Act.
This bill would slow down the regulatory process and empower
an office that has been neither appropriately focused on
small business concerns nor adequately transparent in how it
conducts its actions.
The ostensible purpose of the Regulatory Flexibility Act is
to ensure that small businesses continue to play a role in
the U.S. economy. In practice, though, the implementation of
the Regulatory Flexibility Act has failed to achieve this
basic purpose, as it has instead been wielded as a blunt
weapon to weaken regulatory requirements for firms of all
sizes, often at the behest of large corporations and the
trade associations they dominate.
The result is that protections of public health, safety,
and the environment have been sacrificed without
substantially improving the competitive position of small
businesses in their respective industrial sectors relative to
that of larger firms. These flaws are most apparent in the
Regulatory Flexibility Act's burdensome analytical
requirements, which are designed to weaken regulatory
safeguards rather than promote small business
competitiveness. H.R. 7198 does not fix this basic problem,
however. Instead, it would expand those analytical
requirements and make them more onerous.
The Prove It Act would enhance the authority of the Small
Business Administration's Office of Advocacy in harmful ways.
H.R. 7198, in Section 2(a)(3), would allow for endless
petitions from ``Any small entity, group of small entities,
or organization representing the interests of small
entities'' that challenge a rulemaking agency's certification
that its rule would not have a significant economic impact on
a substantial number of small entities. In many cases, these
petitions would trigger burdensome hearings conducted by the
Chief Counsel for the Office of Advocacy, after which the
Chief Counsel could then force the rulemaking agency to
retract the certification and instead perform the full suite
of burdensome analyses mandated by the Regulatory Flexibility
Act. The bill also provides for expanded judicial review
opportunities against agency certifications, which would
further tie up rulemakings in wasteful and time-consuming
litigation.
We urge members of the House of Representatives to consider
reforms that would instead place greater constraints on the
Office of Advocacy to ensure that it is actually helping,
rather than harming, small businesses. A scathing 2014 report
by the Government Accountability Office (GAO) found
significant deficiencies in the Small Business
Administration's Office of Advocacy's compliance with its own
internal procedures when it intervenes in regulatory actions
or engages in commissioning research on regulatory costs to
small businesses. Of greatest relevance, GAO found that: (1)
the Office had no policies dictating when individual staff
should intervene in individual rulemakings, making it
susceptible to improper industry influence; and (2) the
Office repeatedly cited small business input in its
regulatory comments but could provide no evidence or
documentation supporting this input.
Evidence has also demonstrated the extent to which the
Office of Advocacy has been captured by regulated industry.
The Office has often worked with large trade associations to
weaken rules in ways that benefit large businesses, at the
expense of small ones. These interventions have the effect of
harming small businesses, contrary to the Office's statutory
mission. Nevertheless, this bill would give the Small
Business Administration's Office of Advocacy even greater
authority to intervene in and block agency rules.
Additionally, the Prove It Act would further delay needed
regulatory actions--causing real harm to public health and
safety and the environment--without improving the quality of
agency decision-making. Numerous studies have demonstrated
how existing regulatory analyses, and procedural requirements
contribute to extensive delays of agency rulemaking. These
studies confirm that existing Regulatory Flexibility Act
requirements are among the biggest contributors to these
delays. By creating new analytical and procedural
requirements, this bill would only worsen those delays. These
additional delays are unjustifiable because they do not
result in better regulatory decisions.
Finally, the bill would empower the federal judiciary to
block regulations by making agency compliance with its new
analytical and procedural requirements judicially reviewable.
This would provide judges with an additional new tool for
blocking needed public protections.
Providing the Small Business Administration's Office of
Advocacy with more authority to block, delay, or weaken new
regulatory safeguards, without enacting the significant
reforms recommended by GAO and others, will leave the public
even more at risk to health, safety, and economic security
threats. The numerous petitions, time-consuming hearings, and
expanded judicial review that this legislation would allow
will thwart needed protections while failing to help small
businesses with better designed regulations.
CSS urges the House of Representatives to oppose the Prove
It Act and encourages the Committee to evaluate proposals
that offer real and meaningful reforms to strengthen the
regulatory process, such as H.R. 1507, the Stop Corporate
Capture Act.
We hope to work with the House of Representatives to ensure
that our regulatory process is working effectively and
efficiently to protect the American public.
We strongly urge opposition to the Prove It Act of 2024,
H.R. 7198.
Sincerely,
Rachel Weintraub,
Executive Director, Coalition
for Sensible Safeguards.
____
Earthjustice,
Washington, DC, November 26, 2024.
Hon. Mike Johnson,
Speaker, House of Representatives,
Washington, DC.
Hon. Hakeem Jeffries,
Democratic Leader, House of Representatives,
Washington, DC.
Dear Speaker Johnson and Leader Jeffries: On behalf of
Earthjustice, I strongly urge you to oppose H.R. 7198, the
Prove It Act, which would further a dangerous deregulatory
agenda to restrict federal agencies from protecting our
environment, health, safety, workforce, and civil rights.
The Prove It Act is an unnecessary deregulatory legislative
proposal that seeks to address a problem already addressed by
existing Federal law. Proponents of the bill believe small
businesses are not allowed enough opportunities to engage
directly with agencies to impact the policies, ultimately
limiting and hindering their ability to conduct business,
create jobs, and compete with larger corporations. The
narrative that the rulemaking process leaves small businesses
little to no opportunity to address potential economic
impacts and engage directly is inaccurate and perpetuates
dangerous deregulatory propaganda.
Despite being debilitating underfunding, Agencies are
charged with complying with overarching federal requirements
that consider impacts on all industries, including small
businesses. Agencies, when proposing new rules, are legally
bound by the constraints of the authorizing statute passed by
Congress, the Administrative Procedure Act, providing
appropriate notice and comment opportunities to the public,
listening to the public and regulated entities (including
small businesses), and carefully reviewing all submitted
comments. Small businesses are provided multiple avenues to
engage in the rulemaking process and compliance resources
through state and federal government offices, including the
US Small Business Administration. Businesses can use the
Office of Advocacy and the Office of the National Ombudsman
within the U.S. Small Business Administration (SBA) to
address compliance concerns, make regulatory reform
recommendations, and handle enforcement issues.
H.R. 7198 is a tool to help polluting corporations limit
their compliance responsibilities and unfairly shift the cost
of business to the public. Like other past attempts, this
bill seeks to expand the scope of authority of the Regulatory
Flexibility Act, which would increase unnecessary and lengthy
regulatory delays and encourage costly litigation. The
Regulatory Flexibility Act (RFA) already requires agencies to
consider alternatives to proposed regulations to limit
economic burdens to small entities while still achieving the
desired regulatory goals. Agencies must conduct initial
regulatory flexibility analysis, assessing potential impacts
on small entities and consider the feedback provided by small
entities during the rulemaking process. This bill would cost
additional resources and time by allowing small entities to
require duplicative regulatory analysis to rules they would
rather not comply with.
Most concerning are the provisions of H.R. 7198, which
allow any small entity or organization representing a small
entity to petition the Chief Counsel of Advocacy for the
Small Business Administration to direct any agency to adopt a
new determination of the economic impact on small businesses.
If the agency does not do so or ``in any other way fails to
assist the Chief Counsel,'' the rule will be ineffective and
invalidated for all small entities.
Regulations are vital to the public and small businesses,
yielding many benefits that outweigh the costs. H.R. 7198 act
seeks to delay these public protections at the detriment of
the environment and the public, yielding health and
environmental benefits for all who live here. While
regulations are associated with compliance costs and
administrative burdens, they can also provide significant
benefits to small businesses, including but not limited to
bolstering consumer confidence in their products and
services,
[[Page H6389]]
leveraging the playing field by setting standards all must
meet, including larger competitors and preventing monopolies
or unsafe work environments, access to certain kinds of
federal contacts, and limiting legal liabilities related to
workplace safety or product safety issues.
For all the reasons stated above, H.R. 7198 should be
opposed.
Thank you for your consideration.
Brielle L. Green,
Senior Legislative Counsel,
Earthjustice.
____
Public Citizen
Washington, DC; December 4, 2024.
Hon. Mike Johnson,
Speaker, House of Representatives,
Washington, DC.
Hon. Hakeem Jeffries,
Democratic Leader, House of Representatives,
Washington, DC.
Dear Speaker Johnson and Democratic Leader Jeffries: On
Thursday, December 5, the House of Representatives will be
considering the Prove it Act of 2024, H.R. 7198. While Public
Citizen opposes H.R. 7198, this letter does not focus on
Public Citizen's concerns regarding that bill which are
outlined in a separate letter submitted to the members of the
House from the Coalition for Sensible Safeguards which Public
Citizen co-chairs. Instead, this letter is intended to
provide information that we believe will help assess the
current Administration's compliance with the Regulatory
Flexibility Act (RFA) as compared to prior Administrations.
As the government data we cite below shows, the current
Administration has complied with the RFA to a far greater
degree than the previous Administration. Thus, any claims
that the current Administration is not complying with the RFA
are not supported, and in fact contradicted, by the
government data we are sharing with members of the House.
One of the most telling indications whether an
Administration is in compliance with the RFA comes from the
number of so-called ``SBREFA'' panels that an Administration
has conducted as compared to previous Administrations. Under
the Small Business Regulatory Enforcement Fairness Act
(SBREFA), three agencies, the Environmental Protection Agency
(EPA), the Occupational Safety and Health Administration
(OSHA), and the Consumer Financial Protection Bureau (CFPB)
are required to conduct small business review panels prior to
proposing regulations that will have a ``significant impact
on a substantial number of small entities.'' The Small
Business Administration's Office of Advocacy (SBA Advocacy)
plays a central role in identifying small businesses to serve
on the panel and collect their feedback. SBREFA amended the
RFA to require these panels in order to provide small
businesses an opportunity to express concerns to these three
agencies when one of their regulations significantly impacts
small businesses. To be clear, these three agencies have put
in place regulations that have been among the most beneficial
in protecting the public.
Our analysis of the number of SBREFA panels that occurred
from the Obama Administration through the current
Administration reveals a clear pattern of robust compliance
with the RFA under the Obama and Biden Administrations with
the opposite being the case under the Trump Administration.
According to data from SBA Advocacy's website, there were a
total of 31 SBREFA panels completed under the Obama
Administration. By contrast, there were a total of only 3
SBREFA panels completed under the entire Trump
Administration. Under the current Administration, there have
already been 22 SBREFA panels completed. Thus, the three
agencies subject to SBREFA completed a total of 53 panels
during the Obama and Biden Administrations, but only 3 panels
during the Trump Administration.
Such a significant disparity in the number of SBREFA panels
under the current and previous two Administrations should be
concerning to the Committee as it gives the strong appearance
that the SBREFA panel process is hardly neutral but rather is
one-sided in practice by only seeking feedback from small
businesses when the three agencies subject to SBREFA
promulgate new regulatory protections but not when those
regulatory protections are rolled back. The Committee should
ensure that when small businesses face a less stable
regulatory environment and more regulatory uncertainty due to
regulatory rollbacks, the SBREFA panel process is reflecting
those concerns as intended.
Additionally, Public Citizen urges Congress to conduct
robust oversight of SBA Advocacy due to longstanding concerns
that Advocacy has ignored certain small business viewpoints,
namely those that support federal regulations, while favoring
other small business viewpoints, namely those that oppose
federal regulations, in an unbalanced and asymmetric fashion.
While claiming to be ``independent,'' there is considerable
evidence that Advocacy is in reality acting in a partisan and
ideological manner by consistently scrutinizing and
expressing concerns about new federal regulations that
protect the public while doing the opposite when those
regulations are rolled back. Certainly, the data regarding
the number of SBREFA panels across recent Administrations
strongly supports the need for oversight from the Committee.
We hope members of the House of Representatives will find
this information helpful as it assesses claims regarding the
current Administration's compliance with the RFA and
considers H.R. 7198 predicated on the false belief that the
current Administration is failing to comply with the RFA.
Public Citizen stands ready to assist Congress in any
potential oversight of agency compliance with the RFA and
whether SBA Advocacy is properly carrying out its
responsibilities under the RFA in a neutral and unbiased
fashion.
Sincerely,
Lisa Gilbert,
Co-President, Public Citizen.
Mr. NADLER. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Ohio (Mr. Landsman).
Mr. LANDSMAN. Mr. Speaker, I rise today to oppose the bill, not
because I don't want to see a whole host of reforms as it relates to
helping our small businesses but because it does not exclude the big
corporations from exploiting this bill to seize more and more of our
power and wealth. I think people are very frustrated with just how much
wealth and power has been consolidated among a sliver of Americans and
a few big corporations.
For that reason, at the appropriate time, I will offer a motion to
recommit this bill back to committee. If the House rules permitted, I
would have offered this motion as an amendment to focus the same kind
of thinking on our veterans.
As part of the VA Committee and working with our veterans and our VA
back home, I have become increasingly frustrated with the layers of
bureaucracy that slow down care for our veterans or prevent care for
our veterans. My amendment would provide an exemption to this bill for
rules that are determined to have substantial beneficial effects on
veterans and veteran programs.
Mr. Speaker, I ask unanimous consent to insert the text of this
amendment into the Record immediately prior to the vote on the motion
to recommit.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. LANDSMAN. Mr. Speaker, I hope my colleagues will join me in
voting for the motion to recommit.
Ms. HAGEMAN. Mr. Speaker, I yield 2 minutes to the gentleman from
Minnesota (Mr. Stauber).
Mr. STAUBER. Mr. Speaker, I rise to speak in favor of H.R. 7198. I
will start by thanking my good friend and colleague from Minnesota,
Representative Brad Finstad, for his leadership with this legislation.
Small businesses are the lifeblood of our economy. They are the
innovators, job creators, and backbone of our communities.
In my home State of Minnesota, small businesses account for over 99
percent of all businesses and employ more than half of all of our
workforce. When small businesses succeed, America succeeds.
Unfortunately, we have seen time and time again how the Biden-Harris
administration has failed to prioritize these small businesses.
Instead, it has burdened them with an avalanche of costly and
unnecessary regulations, leaving businessowners to navigate a maze of
red tape with little regard for their challenges.
These regulations have a real and negative impact on entrepreneurs,
making it harder for them to succeed and grow. It is clear: Small
businesses need a stronger voice in the regulatory process.
We have the tools to stop overregulation, but those tools need to be
accessible, especially for the smallest of businesses. We must provide
clear and accessible pathways for small businesses to hold Federal
agencies accountable for the regulations they impose.
That is why I am proud to cosponsor my fellow Minnesotan's bill. This
bill gives small businesses the ability to challenge agency regulations
and forces agencies to be transparent about how their regulations will
affect small business owners.
By holding agencies accountable and requiring transparency, we ensure
that small businesses aren't left behind when new regulations are
created. This is a critical step in ensuring that any regulation
created in Washington is shaped with a clear understanding of the real-
world impact. By supporting this legislation, we can help small
businesses thrive and continue to drive our economic growth.
[[Page H6390]]
Mr. Speaker, I urge my colleagues to vote ``yes'' on H.R. 7198. Let's
ensure small businesses are heard and their concerns are addressed.
Mr. NADLER. Mr. Speaker, I yield 5 minutes to the gentlewoman from
New York (Ms. Velazquez), the distinguished ranking member of the
Committee on Small Business.
Ms. VELAZQUEZ. Mr. Speaker, I rise in opposition to H.R. 7198, the
Prove It Act.
Part of the role of the Small Business Committee is to recognize the
impact regulations have on small businesses and work to find ways to
balance the shared goal of minimizing the burdens and achieving the
intended effects of regulations.
Throughout our committee hearings, we have heard that agencies have
been better about considering the impact of their rules on small
entities since the passage of the Regulatory Flexibility Act.
Another tool at our disposal is the ability of advocacy to convene
SBREFA panels to give small businesses an opportunity to provide input
at the beginning of the rulemaking process and when it is most
important.
The Office of Advocacy has been working diligently to educate and
train rule-writing staff about their responsibilities, and we have seen
the fruits of their labor. The analysis agencies are conducting has
improved significantly.
Yet, this bill ignores the current process. Instead of strengthening
it to serve the interests of small employers, the bill we are
considering today would bring our rulemaking process to a grinding
halt.
It will also give big corporations a powerful new tool to delay and
weaken rules, causing uncertainty and harm to small employers.
By creating an unworkable quasi-judicial process within the SBA's
Office of Advocacy for reviewing agency certifications, it allows any
group that claims to represent small businesses to petition Advocacy to
block rules that it doesn't like.
The Prove It Act also requires agencies to conduct retrospective
reviews based on the indirect costs identified in the initial analysis,
without recognizing that agencies may have modified the rule during the
rulemaking process.
Most concerning is the broad and unchecked authority of the chief
counsel to announce that a rule is no longer effective if an agency
fails to conduct a retrospective review. This means a small employer
that came into compliance with an existing rule could see it eliminated
and then possibly reinstated sometime in the future. This is
counterproductive to what my colleagues state they are trying to
achieve.
{time} 1300
Finally, today's bill implements another lengthy process without
providing additional assistance to an under-resourced Office of
Advocacy. If enacted, Advocacy will need to double its staff and, no
surprise, this bill provides no additional resources.
CBO estimates that agencies and Advocacy will need an additional $40
million over the next 5 years to implement this act, and that doesn't
include the $17 million added to the Federal deficit.
Small employers need certainty, and this bill fails to provide it. It
would only serve to cause undue chaos and confusion while achieving
very little to help and support our Nation's small employers. That is
why I urge my colleagues to vote ``no.''
Ms. HAGEMAN. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Ellzey).
Mr. ELLZEY. Mr. Speaker, small businesses have been hit hard in the
last 4 years by rising costs, supply chain problems, and heavy
regulations. These businesses, which make up a large part of America's
economy, often bear the brunt of new Federal rules and regulations
implemented by the Biden administration.
The Prove It Act, H.R. 7198, is designed to help small businesses
push back when Federal agencies don't follow the rules laid out in the
Regulatory Flexibility Act, or the RFA.
This bill gives small businesses the power to challenge proposed
regulations if an agency hasn't fully or accurately considered how
those rules would affect them. It also requires agencies to consider
indirect costs when conducting a regulatory flexibility analysis,
publish any follow-up guidance to the rule online, and periodically
review the rule to ensure it still makes sense. If the agency does not
adhere to these requirements, small entities are exempt from complying
with the rule. It is about time.
While agencies are already required by the RFA to do this type of
analysis, they are not required to make it public. The Prove It Act
changes that, adding transparency and accountability to the process. If
they are doing this analysis correctly, then there should be very
little additional burden and no concern in making it public.
This legislation gives small businesses a greater say in the
regulatory process and will help ensure that agencies do their due
diligence when considering how harmful their regulations are to Main
Street.
Mr. NADLER. Mr. Speaker, I yield myself the balance of my time to
close.
Mr. Speaker, the Prove It Act is just the latest in a long line of
Republican bills meant to undermine or block agency rulemaking. If this
legislation is enacted, every single rule--past, present, and future--
would be funneled for review through a single official in a chronically
underfunded office within the Small Business Administration. This one
person would be granted unreviewable and unilateral power to block or
suspend lifesaving regulations that ensure that we have clean air to
breathe, clean water to drink, and safe food to eat.
I urge Members to oppose this dangerous legislation, and I yield back
the balance of my time.
Ms. HAGEMAN. Mr. Speaker, I yield myself the balance of my time to
close.
There are several points that I think need to be made in relation to
this bill, but also to the obvious misunderstanding not only of what
the bill does but of the rulemaking process and procedure that occurs
under the Administrative Procedure Act in this country right now.
First of all, it applies to small businesses, not large businesses.
By definition, it applies to small businesses. The allegation that this
is going to somehow help these huge corporations is absolutely
incorrect.
In addition to which, the Prove It Act does not authorize the SBA to
review the substantive policy of any particular regulation. Again, any
allegation that this would allow the SBA to address the substantive
aspect of a regulation is again incorrect. If the agency has complied
with the RFA, then the regulation will apply to small businesses as
normal.
Here is something that I think is important. We often talk in the
abstract about regulations and the regulatory impacts and regulatory
agencies and unelected bureaucrats. Let's just talk about a real-life
situation for once. Let's talk about what really happens when a
regulation is adopted by an agency and the impact that it has on our
small businesses.
Let's use the USDA EID rule as an example. On November 5, the U.S.
Department of Agriculture issued a rule mandating electronic
identification ear tags on cattle and bison. It will place a
substantial burden on small ranchers when it goes into effect.
The USDA, however, in assessing this rule, only completed a brief,
two-page initial regulatory flexibility analysis, finding that using
the Small Business Administration's guidelines that the majority of
cattle operations in the United States are considered small. In other
words, the majority of our ranching operations are considered small
businesses.
In 2013, when the USDA first considered imposing a rule like this,
they estimated that the cost would be between $1.2 and $1.9 billion
imposed against our small ranchers, yet in this latest analysis, they
did a two-page RFA analysis. I can't imagine that anyone on the other
side of the aisle would actually believe that that is adequate
considering the circumstances and the fact that so many of our ranchers
will be financially broken by such a rule.
After acknowledging that the proposed rule would have a substantial
impact on small businesses, the agency then conducted an insufficient
analysis based upon outdated and incorrect information. This entire
analysis relies on a cost estimate created by APHIS.
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This estimate undervalues the cost to ranchers, and it has not even
publicly disclosed how it calculated those costs.
This example of avoiding the RFA requirements resulted in the USDA
ignoring the true cost of the rule and how the burden is shouldered by
our small businesses.
The USDA and the ear-tag manufacturers are also wholly unprepared to
alleviate the harm caused by the rule. In fact, many States have run
out of the ear tags before even being able to provide them to the
ranchers.
Under the Prove It Act, the USDA would be required to account for the
additional, reasonably foreseeable indirect costs that are borne by
ranchers because of this rule, costs that the USDA is currently
ignoring.
The Prove It Act would give a voice to the ranchers and the
organizations that represent them to point out the obvious flaws in
APHIS's proposals, flaws which were ignored during the finalization of
the rule.
I think it is also incredibly important to understand that we are
passing this bill today to help small businesses understand the true
cost of compliance with regulations and to force regulators to be
transparent when crafting their regulations.
If this bill becomes law, regulators will have to come to terms with
the enormous weight that they place on small businesses in the form of
regulations. In fact, under the Biden-Harris administration, the
regulatory burden in this country is approximately $2.1 trillion a
year. It is almost $16,000 per household.
I cannot understand, for the life of me, why anyone on the other side
of the aisle would not want the agencies to have to disclose the real
cost of these regulations. Maybe it is because they don't want the
American public to understand the costs imposed by unelected
bureaucrats. In an ideal world, regulators would think twice before
imposing massive costs on our small businesses that are the lifeblood
of so many of our communities.
I also want to point out that the claim that this would slow down
rulemaking is absolutely absurd. The Prove It Act is designed to ensure
that agencies are complying with existing law, the Regulatory
Flexibility Act, when they are crafting their regulations. Agencies
must already comply with the RFA's requirements. They are just not
doing it, and this is a law that would force them to meet that
requirement.
The RFA has been the law since 1980. Why are we allowing these
agencies to get away with ignoring the law as written by Congress?
No agency can credibly claim that compliance with the RFA, which
Congress enacted, improperly slows down the rulemaking process.
I also want to point out the comment that this would result in a
bottleneck created by these large corporations filing petition after
petition after petition. Again, that argument is absurd. The claim that
small businesses, large businesses, or trade associations would abuse
the Prove It Act's petition mechanism is just simply misguided.
The Prove It Act gives a method for the chief counsel for advocacy at
the Small Business Administration to dismiss any petition that lacks
merit. Following an initial review, the chief counsel can close the
petition without any further action if the case does not warrant it.
To be clear, big businesses are not allowed to petition the SBA under
the Prove It Act. I would like to repeat that. Big businesses are not
covered by this act.
Finally, the CBO score. The CBO score for this bill is clearly wrong.
The generic language that the CBO cites does not remotely support its
finding that this bill will increase the deficit. CBO claims that
direct spending would increase by $10 million, and Congress would need
to appropriate an extra $35 million to Federal agencies for them to do
much of the same work that they were supposed to be doing for the last
40 years.
Every Federal agency that engages in rulemaking should already have
the staff and resources on board to comply with the law. The Prove It
Act simply requires the already existing staff perform some additional
analyses to report on the reasonably foreseeable indirect costs of
their regulations. This should be relatively straightforward for the
personnel already tasked with the RFA analysis.
Finally, any agency that is burdened by the Prove It Act's
requirements probably did not comply with the RFA in the first place.
One of the things that I find so interesting in these debates about
our efforts to force transparency and good government provisions on our
agencies is often this discussion that it is going to destroy the air
and water, we are going to have sick kids, the toys are going to be
destroyed, and everything is going to be dangerous. That is absolutely
absurd, and it is a red herring.
There is nothing wrong with requiring our agencies to be transparent
and up-front about the costs that they are imposing on our businesses
when they adopt regulations. I am actually surprised that anyone would
oppose the Prove It Act in light of what it is intended to do.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate on the bill has expired.
Amendment No. 1 Offered by Ms. Velazquez
The SPEAKER pro tempore. It is now in order to consider amendment No.
1 printed in House Report 118-791.
Ms. VELAZQUEZ. Mr. Speaker, I have an amendment at the desk.
The SPEAKER pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prove It Act of 2024''.
SEC. 2. TRAINING ON COMPLIANCE WITH REQUIREMENTS OF THE
REGULATORY FLEXIBILITY ACT.
Section 612 of title 5, United States Code, is amended--
(1) in the section heading, by striking ``and intervention
rights'' and inserting ``, intervention rights, and
training''; and
(2) by adding at the end the following new subsection:
``(d) Not less frequently than once every 4 years, the
Chief Counsel for Advocacy of the Small Business
Administration shall provide training on compliance with the
requirements of this chapter for any agency employee who
writes, reviews, approves, or analyzes regulations or
guidance documents.''.
The SPEAKER pro tempore. Pursuant to House Resolution 1602, the
gentlewoman from New York (Ms. Velazquez) and a Member opposed each
will control 5 minutes.
The Chair recognizes the gentlewoman from New York.
Ms. VELAZQUEZ. Mr. Speaker, let me begin by reiterating that as the
ranking member of the Small Business Committee, I recognize the impact
of regulations, and I have worked to find ways to balance the shared
goal of minimizing the burdens while achieving the intended effects of
regulations.
The Prove It Act doesn't strike that appropriate balance. It allows
big corporations to block, delay, and weaken rules. Yes, the Chamber of
Commerce or NFIB could file a petition and doesn't have to identify the
business that they are representing, causing uncertainty and harm to
small employers. It also gives unchecked authority to the SBA's chief
counsel and tasks an understaffed and under-resourced Office of
Advocacy with a cumbersome and lengthy review process.
That is why I am offering a commonsense solution. My amendment will
require the Office of Advocacy to train agencies on how to comply with
their Regulatory Flexibility Act.
Key personnel at every rule-writing agency would be required to
undergo RFA training once every 4 years. We have heard from Advocacy
that when agencies have a better understanding of the RFA, it leads to
more meaningful consideration of small businesses throughout the
rulemaking process. Advocacy has been working diligently to train
staff, and we have seen the fruits of their labor year after year.
Their training programs have made a significant difference in the
rule-writing process, and requiring ongoing training will only lead to
more success. Agencies have shared draft documents with Advocacy early
in the rulemaking process, and Advocacy has worked to help agencies
obtain reliable small business data. Their training program has led to
much better analysis, and in many instances enhanced the factual basis
for agency certifications or led to modifications to reduce the impact
to small firms.
Mr. Speaker, we need to foster a constructive working relationship
between
[[Page H6392]]
Advocacy and Federal agencies rather than create an adversarial one.
This amendment will ensure that Advocacy reaches all agencies on RFA
compliance on a regular basis.
Mr. Speaker, I urge Members to support my amendment, and I reserve
the balance of my time.
{time} 1315
Ms. HAGEMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to the amendment.
This amendment simply strikes the entire bill and replaces it with a
training mandate. Claiming that training is all that is necessary to
help agencies comply with their obligations under the RFA completely
ignores the problems that the Prove It Act is going to solve.
The Small Business Administration already offers training sessions
for regulators and has done so for over 20 years. According to the SBA,
they held nine training sessions and trained 139 Federal officials in
2023 alone.
Further, the SBA has already trained personnel at nearly every
Federal agency and department since 2003. Despite this training,
however, in 2023, SBA sent 46 letters to agencies across government
outlining the deficiencies in their RFA analysis. In 30 cases, the SBA
found that agencies conducted inadequate analysis of small business
impacts.
What this means is that during the rulemaking process for 30 rules,
agencies did not comply with already existing law despite the SBA
training they likely received.
Mr. Speaker, I urge my colleagues to vote against this amendment, and
I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield back the balance of my time.
Ms. HAGEMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, there are a few more points I would like to make.
Despite SBA's best efforts to help agencies comply with their
obligations under the RFA, those efforts are being ignored. Agencies
have had 40 years to develop the experience and expertise necessary to
comply with the Regulatory Flexibility Act and still regularly come up
short.
The claim that training is the answer is simply an attempt to
distract from the importance of the Prove It Act. If we adopt this
amendment and training is mandated instead of adopting the Prove It
Act's provisions, nothing will change. Small businesses around the
country will still be harmed by regulatory agencies blatantly ignoring
their obligations under the RFA and discounting the costs of
regulations.
The only legitimate solution is to adopt the Prove It Act, which
strengthens the RFA and creates mechanisms to force regulatory agencies
to comply with the law.
Mr. Speaker, I urge my colleagues to oppose this amendment, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mr. Rulli). Pursuant to the rule, the
previous question is ordered on the bill and on the amendment offered
by the gentlewoman from New York (Ms. Velazquez).
The question is on the amendment offered by the gentlewoman from New
York (Ms. Velazquez).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Ms. VELAZQUEZ. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings will be postponed.
____________________