The Honorable Denis Richard McDonough, Department of Veterans Affairs — Committee on Small Business (2023)

Summary

Denis Richard McDonough, Secretary of the U.S. Department of Veterans Affairs, is the recipient of this February 22, 2023 letter from the Committee on Small Business. It concerns the Department's implementation of the Regulatory Flexibility Act, the Small Business Regulatory Enforcement Fairness Act, and Executive Order 13272, and says Republicans on the Committee wrote last Congress and the Secretary failed to respond. The Committee requests documents and information by March 10, 2023, including all documents and communications on the standards used to determine the factual basis for certifying that a proposed rule would not have a significant impact.

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                                             February 22, 2023

The Honorable Denis Richard McDonough
Secretary
U.S. Department of Veterans Affairs
810 Vermont Ave. N.W.
Washington, D.C. 20420

Dear Secretary McDonough:

       The Committee on Small Business is investigating the Department of Veterans Affairs
implementation of the Regulatory Flexibility Act (RFA), the Small Business Regulatory
Enforcement Fairness Act (SBREFA), and Executive Order 13272 (EO13272).1 Republicans on
this Committee wrote to you last Congress and you failed to respond. We write today to request
additional documents and information.

        As mentioned in our last letter, the RFA, SBREFA, and EO13272 were designed to
provide small businesses notice of proposed agency rules that affected their business and provide
them the opportunity to participate in the process.2 Despite this stated goal, it seems that some
agencies are failing to properly implement these measures to the detriment of small businesses
across the country.

        As you are well aware, agencies across the federal government are provided discretion
when determining a regulation’s impact on the small businesses. Agencies are required to
produce an Initial Regulatory Flexibility Analysis (IRFA) in proposed rules only after the agency
determines the proposed rule is expected to have a “significant impact” on a “substantial number
of small entities.”3 If not, the agency simply certifies the rule will not have a significant
economic impact on a substantial number of small entities and provides a “factual basis for such
certification.”4 That certification is published in the Federal Register and reported to the Chief
Counsel for Advocacy at SBA at the time the proposed or final rule is published for public
comment.5



1
  5 U.S.C.§§ 601-12; Pub. L. No. 104-121 (Mar. 29, 1996); Proper Consideration of Small Entities in Agency
Rulemaking, 67 Fed. Reg. 53,461 (Aug. 16, 2002).
2
  5 U.S.C.§§ 601-12.
3
  5 U.S.C. § 603(a).
4
  5 U.S.C. § 603(b).
5
  Id.
The Honorable Denis Richard McDonough
February 22, 2023
Page 2 of 4

        If the agency determines that the proposed rule will have a significant impact on a
substantial number of small entities, section 212 of SBREFA requires agencies to publish one or
more small entity compliance guides for each rule, or group of rules.6 Additionally, in the final
rule, the agency needs to publish a Final Regulatory Flexibility Analysis (FRFA) that includes
but is not limited to “a description of and an estimate of the number of small entities to which the
rule will apply or an explanation of why no such estimate is available.”7

        Small businesses across America deserve to know how the Department of Veterans
Affairs is working to consider small businesses in their rulemaking process. We therefore request
the following documents and information, as soon as possible but no later than March 10, 2023:

    1. Identify any central Department of Veterans Affairs position or office, if one exists,
       responsible for ensuring that Department of Veterans Affairs complies with the RFA,
       SBREFA, and EO13272.

    2. Identify any Department of Veterans Affairs positions or offices responsible for reducing
       the regulatory burden on small businesses.

    3. Provide all small entity compliance guides produced or in use at the agency within the
       last calendar year.

    4. Provide the agency’s definition of “significant impact” and “substantial number of small
       entities” from 2010 until present, including any and all changes over that time and the
       justifications for those changes.

    5. Provide the name, docket number, and citation of all rules, proposed and final, that that
       the agency certified as having no significant impact on a substantial number of small
       entities from 2020 to present.

    6. All documents and communications relating to the agency’s determination of whether
       there was a “significant impact” on a “substantial number of small entities” for all
       proposed and final rules from 2020 until present.

    7. All documents and communications detailing any and all factors the agency considers
       when determining whether the proposed rule will have a “significant impact” on a
       “substantial number of small entities” and the weight of each factor given in the
       determination.

    8. All documents and communications relating to consideration of alternate rule proposals
       when the agency has determined a proposed or final rule has a substantial impact on a
       substantial number of small entities from 2020 until present.

6
  Small Business Regulatory Enforcement Fairness Act, Pub. L. 104-121, § 212 (as amended by the Small Business
and Work Opportunity Act of 2007, Pub. L. 110-28 § 8302).
7
  5 U.S.C. § 604(a)(4).
The Honorable Denis Richard McDonough
February 22, 2023
Page 3 of 4


   9. All documents and communications relating to instances where input from mandated
      SBREFA panels compelled the agency to amend a proposed rule, with supporting
      documents, from 2020 to present.

   10. All documents and communications relating to the standards the agency uses to
       determine its “factual basis” to support a determination that a proposed rule would not
       have a significant impact on a substantial number of small businesses.

        To schedule the delivery of responsive documents or ask any related follow-up questions,
please contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee
on Small Business has broad authority to investigate “problems of all types of small business”
under House Rule X. Thank you in advance for your cooperation with this inquiry.


                                            Sincerely,




_________________________                           _________________________
Roger Williams                                      Blaine Luetkemeyer
Chairman                                            Vice Chairman
Committee on Small Business                         Committee on Small Business



_________________________                           _________________________
Beth Van Duyne                                      Pete Stauber
Chairman                                            Member of Congress
Subcommittee on Oversight,                          Committee on Small Business
Investigations, and Regulations



_________________________                           _________________________
Dan Meuser                                          Jake Ellzey
Member of Congress                                  Member of Congress
Committee on Small Business                         Committee on Small Business
The Honorable Denis Richard McDonough
February 22, 2023
Page 4 of 4




_________________________                     _________________________
Marc Molinaro                                 Aaron Bean
Member of Congress                            Member of Congress
Committee on Small Business                   Committee on Small Business



_________________________
Nick LaLota
Member of Congress
Committee on Small Business



cc:   The Honorable Nydia M. Velasquez, Ranking Member
      Committee on Small Business

      The Honorable Dean Phillips, Vice Ranking Member
      Committee on Small Business


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