[House Report 118-853]
[From the U.S. Government Publishing Office]
118th Congress } { Rept. 118-853
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
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ASSURANCE FOR SMALL BUSINESS ACT OF 2024
_______
December 10, 2024.--Ordered to be printed
_______
Mr. Williams of Texas, from the Committee on Small Business,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 9031]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 9031) to require Federal agency heads to submit a
report on the implementation of the Regulatory Flexibility Act,
and for other purposes, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary........................................2
II. Need for Legislation............................................2
III. Hearings........................................................2
IV. Committee Consideration.........................................2
V. Committee Votes.................................................2
VI. Section-by-Section of H.R. 9031.................................5
VII. Congressional Budget Office Cost Estimate.......................5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure8
IX. Oversight Findings & Recommendations............................8
X. Performance Goals and Objectives................................8
XI. Statement of Duplication of Federal Programs....................8
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits........................................................8
XIII. Federal Mandates Statement......................................8
XIV. Federal Advisory Committee Statement............................8
XV. Applicability to Legislative Branch.............................8
XVI. Statement of Constitutional Authority...........................9
XVII. Minority Views.................................................10
I. PURPOSE AND BILL SUMMARY
On July 15, 2024, Rep. Stauber introduced H.R. 9031. The
purpose of H.R. 9031, the ``Assurance for Small Business Act,''
is to require all rulemaking agencies to issue a report to
Congress on how they define a significant economic impact on a
substantial number of small entities.
II. NEED FOR LEGISLATION
There is not a standard definition of a significant
economic impact on a substantial number of small entities
across the federal government because every agency and the
rules they issue are different. However, individual agencies
use varying definitions when considering a rule's impact to fit
their own narrative. Since every agency uses their own unique
analysis to determine what qualifies as a significant economic
impact, it makes oversight extremely difficult. While we
understand that one single government wide definition may not
be practical in every situation, we must at least understand
the baseline of any given agency for the Committee to evaluate
if they did follow the spirit of the law or are ignoring it.
This bill will require all rulemaking agencies to issue a
report to Congress on how they determine a significant economic
impact on a substantial number of small entities so that it is
easier to hold them to account.
III. HEARINGS
In the 118th Congress, the Committee held one hearing
examining the issues covered in H.R. 9031. On May 22, 2024, the
Committee held a hearing titled ``Burdensome Regulations:
Examining the Biden Administration's Failure to Consider Small
Businesses'' which examined the impacts of the Biden
Administration's burdensome regulatory landscape and explored
ways to support small businesses and overcome agencies'
noncompliance with the RFA.
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on September 10, 2024 and ordered H.R.
9031 reported to the House of Representatives. During the
markup no amendments were offered.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted to favorably report H.R. 9031 to
the House of Representatives at 2:42 PM.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. SECTION-BY-SECTION OF H.R. 9031
Section 1: Short title
The bill may be cited as the ``Assurance for Small Business
Act.''
Section 2: Report on implementation of the Regulatory Flexibility Act
Requires the head of each agency which issues rules to
submit a report describing how they apply the RFA within 90
days of enactment. The report shall include the agencies'
definition of ``significant economic impact'' and ``substantial
number of small entities'', and a comprehensive list of factors
considered when applying these terms.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to clause 3(d)(1) of House rule XIII, the
Committee adopts as its own the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
The Congressional Budget Act of 1974 requires the
Congressional Budget Office, to the extent practicable, to
prepare estimates of the budgetary effects of legislation
ordered reported by Congressional authorizing committees. In
order to provide the Congress with as much information as
possible, the attached table summarizes information about the
estimated direct spending and revenue effects of some of the
legislation that has been ordered reported by the House
Committee on Small Business during the 118th Congress. The
legislation listed in this table generally would have small
effects, if any, on direct spending or revenues, CBO estimates.
Where possible, the table also provides information about the
legislation's estimated effects on spending subject to
appropriation and on intergovernmental and private-sector
mandates as defined in the Unfunded Mandates Reform Act.
ESTIMATED BUDGETARY EFFECTS AND MANDATES INFORMATION
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Spending
Last Budget Direct Revenues, 2025- subject to Pay-As-You-Go Budgetary
Bill number Title Status action function spending, 2034 appropriation, procedures effects after Mandates Contact
2025-2034 2025-2029 apply? 2034
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H.R. 9030.... Regulatory Agenda Ordered reported... 09/10/24 Multiple Between Between - Not estimated Yes Insignificant Yes Margot Berman
Clarity Act. functions zero and $500,000 and
$500,000 zero
H.R. 9030 would require federal agencies to describe the type of business that would be affected by a proposed rule, explain whether the rule would impose significant economic
effects on a substantial number of small entities, and display that information on their website. CBO estimates that enacting H.R. 9030 could increase direct spending by some
regulatory agencies, a few of which are allowed to charge fees to cover their operating costs. CBO estimates that the net increase in direct spending would be insignificant.
Enacting H.R. 9030 could reduce revenues because costs incurred by the Federal Reserve reduce remittances to the Treasury, which are recorded in the budget as revenues.
However, CBO estimates that any reduction in revenues would be insignificant. CBO has not estimated the bill's effects on spending subject to appropriation. If federal
regulators increase annual fees to offset the costs of implementing the bill, H.R. 9030 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.
H.R. 9031.... Assurance for Small Ordered reported... 09/10/24 Multiple Between Between - Not estimated Yes Insignificant Yes Margot Berman
Business Act of functions zero and $500,000 and
2024. $500,000 zero
H.R. 9031 would require each rulemaking agency to report to the Congress on how the agency determines whether a rule would impose significant economic effects on a substantial
number of small entities. Enacting H.R. 9031 could increase direct spending by some regulatory agencies, a few of which are allowed to charge fees to cover their operating
costs. CBO estimates that the net increase in direct spending would be insignificant. Enacting H.R. 9031 could reduce revenues because costs incurred by the Federal Reserve
reduce remittances to the Treasury, which are recorded in the budget as revenues. However, CBO estimates that any reduction in revenues would be insignificant. CBO has not
estimated the bill's effects on spending subject to appropriation. If federal regulators increase annual fees to offset the costs of implementing the bill, H.R. 9031 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.
H.R. 9033.... LABOR Act of 2024... Ordered reported... 09/10/24 500 0 0 Not estimated No No No Margot Berman
H.R. 9033 would require the Department of Labor to convene a small business advocacy review panel before proposing rules that would have significant economic effects on a
substantial number of small entities. Under current law, only the Occupational Safety and Health Administration within the Department of Labor is required to do so. CBO
estimates that enacting H.R. 9033 would not affect direct spending or revenues. CBO has not estimated the bill's effects on spending subject to appropriation. The bill contains
no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
H.R. 9085.... Regulatory Review Ordered reported... 09/10/24 Multiple Between Between - Not estimated Yes Insignificant Yes Margot Berman
Improvement Act of functions zero and $500,000 and
2024. $500,000 zero
H.R. 9085 would expand the information that agencies must include in a 10-year review of a rule's effect on small entities, including the cost for entities to comply with the
rule once it goes into effect and an analysis of public comments an agency receives about the rule. The bill also would reduce the time from 5 years to 1 year for an agency to
complete a review. CBO estimates that enacting H.R. 9085 could increase direct spending by some agencies, a few of which are allowed to charge fees to cover their operating
costs. CBO estimates that the net increase in direct spending would be insignificant. Enacting H.R. 9085 could reduce revenues because costs incurred by the Federal Reserve
reduce remittances to the Treasury, which are recorded in the budget as revenues. However, CBO estimates that any reduction in revenues would be insignificant. CBO has not
estimated the bill's effects on spending subject to appropriation. If federal regulators increase annual fees to offset the costs of implementing the bill, H.R. 9085 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.
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VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX
EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a)(I) of the
Congressional Budget Act of 1974, the Committee provides the
following opinion and estimate with respect to new budget
authority, entitlement authority, and tax expenditures. The
Committee does not believe that there will be any additional
costs attributable to this legislation. H.R. 9031 does not
direct new spending, but instead reallocates funding
independently authorized and appropriated.
IX. OVERSIGHT FINDINGS & RECOMMENDATIONS
In accordance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the oversight findings and recommendations of the Committee on
Small Business with respect to the subject matter contained in
the H.R. 9031 are incorporated into the descriptive portions of
this report.
X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
performance goals and objectives of H.R. 9031 are to require
rulemaking agencies to issue a report to Congress on how they
define a significant economic impact on a substantial number of
small entities.
XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, no provision of H.R. 9031 is known to
be duplicative of another Federal program, including any
program that was included in a report to Congress pursuant to
section 21 of Public Law 111-139 or the most recent Catalog of
Federal Domestic Assistance.
XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED
TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee finds that the bill
does not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits as defined in clause 9(e),
9(f), or 9(g) of rule XXI of the Rules of the House of
Representatives.
XIII. FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
XV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
Pursuant to clause 7 of Rule XII of the Rules of the House,
the Committee finds that the authority for this legislation in
Art. I, Sec. 8, cl. 1 of the Constitution of the United States.
XVII. MINORITY VIEWS
The Regulatory Flexibility Act (RFA) requires federal
agencies to consider the effects of their regulations on small
businesses and other small entities. If a regulation is
determined to have a ``significant economic impact on a
substantial number of small entities'' (SEISNSE), the RFA
requires agencies to conduct more detailed regulatory analysis
and consider alternatives.\1\
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\1\Cong. Research Serv., The Regulatory Flexibility Act: An
Overview, 2 (Aug. 16, 2021).
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The RFA does not define the terms, ``significant economic
impact'' and ``substantial number of small entities.'' With
regard to the term ``significant economic impact,'' the Office
of Advocacy (Advocacy) relies on the legislative history of the
RFA and has said that these terms should not be measured in
absolute terms. Significant impact should be viewed as relative
to the size of the business, the size of the competitors'
business, and the impact the regulation has on larger
businesses, and Advocacy believes that agencies are in the best
position to gauge the impact of the regulation on small
entities.\2\ In terms of ``substantial number of small
entities'', Advocacy has also relied on the legislative
history, and its guidance encourages agencies to examine the
number of affected firms in a particular economic industry. For
example, five firms in an industry of more than 1,000 regulated
entities would not be the same as five firms in an industry
with 20 regulated entities. Advocacy has issued specific
guidance on these particular terms and trains agencies on how
to comply with the Regulatory Flexibility Act.\3\
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\2\Off. of Advocacy, A Guide for Government Agencies: How to Comply
with the Regulatory Flexibility Act, U.S. Small Bus. Admin. (Aug.
2017), https://advocacy.sba.gov/wp-content/uploads/2019/06/How-to-
Comply-with-the-RFA.pdf.
\3\Id.
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This bill would require federal agencies to submit a report
to Congress on the application of the RFA on the rulemaking of
their respective agencies within 90 days of enactment. With
that said, the bill requires each agency head to review every
rule that was issued by the agency since 1980, when the RFA was
first enacted. The analysis of the rules includes the
definitions used by the agency to determine ``significant
economic impact'' and ``substantial number of small entities'',
as well as a comprehensive list of factors for the regulatory
flexibility analysis, which includes the threshold analysis,
initial regulatory flexibility analysis, and the final
regulatory flexibility analysis. The requirement for additional
analysis is exceptionally broad, and it is unclear how the
report would be helpful to Congress. Moreover, it is highly
unlikely the reports could be completed within 90 days.
Advocacy has indicated that the report will not provide any
consistent response.
Agencies have written procedures and have developed
criteria, and these procedures are posted on their websites.
Executive Order 13272 requires Advocacy to provide compliance
training to federal regulatory officials, and in FY 2023,
Advocacy offered nine training sessions for 139 federal
officials.\4\ More training of rule-writing staff at agencies
would help to further improve the RFA process.
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\4\Off. of Advocacy, Report on the Regulatory Flexibility Act, FY
2023 (Jun. 2024).
Nydia M. Velazquez,
Ranking Member.
[all]