Letter to CPSC Chair on Regulatory Flexibility Act Compliance — House Committee on Small Business

Summary

A letter dated February 22, 2023 from members of the House Committee on Small Business, led by Chairman Roger Williams, Vice Chairman Blaine Luetkemeyer and Subcommittee Chairman Beth Van Duyne, to Alexander Hoehn-Saric, Chair of the U.S. Consumer Product Safety Commission. The letter states that the Committee is investigating the CPSC's implementation of the Regulatory Flexibility Act, SBREFA and Executive Order 13272, citing 2022 letters from the SBA Office of Advocacy on the agency's regulatory flexibility analyses. It requests a staff level briefing no later than March 3, 2023. It also lists ten requests for documents and information due by March 10, 2023, including small entity compliance guides and records on significant-impact determinations since 2020. The four-page letter is signed by nine members and copied to the Ranking Member.

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Full text

                                             February 22, 2023

The Honorable Alexander Hoehn-Saric
Chair
U.S. Consumer Product Safety Commission
4330 East-West Highway
Bethesda, MD 20814

Dear Chair Hoehn-Saric:

       The Committee on Small Business is investigating the Consumer Product Safety
Commission’s (CPSC) implementation of the Regulatory Flexibility Act (RFA), the Small
Business Regulatory Enforcement Fairness Act (SBREFA), and Executive Order 13272
(EO13272).1 In the last year alone, the Small Business Administration (SBA) Office of
Advocacy (Advocacy) wrote to you twice in 2022 noting your agency failed to conduct proper
economic impact analysis on proposed rules. We write today to request documents and
information related to our investigation as well as a staff level briefing.

         As you know, 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 Advocacy noted in their letters to you on March 23 and April 18, 2022, CPSC’s
Initial Regulatory Flexibility Analysis (IRFA) was insufficient for the rules related to safety
standards for operating cords on window covering and clothing storage units.3

        Agencies across the federal government are provided discretion when determining a
regulation’s impact on the small businesses. Agencies are required to produce an 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.”4 If not, the agency simply

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
  Letter from Major L. Clark, III, Deputy Chief Counsel, and Prianka P. Sharma, Asst. Chief Counsel, Office of
Advocacy, U.S. Small Bus. Admin., to Alexander Hoehn-Saric, Chair, U.S. Consumer Product Safety Commission
(Mar. 23, 2022); Letter from Major L. Clark, III, Deputy Chief Counsel, and Prianka P. Sharma, Asst. Chief
Counsel, Office of Advocacy, U.S. Small Bus. Admin., to Alexander Hoehn-Saric, Chair, U.S. Consumer Product
Safety Commission (Apr. 18, 2022).
4
  5 U.S.C. § 603(a).
The Honorable Alexander Hoehn-Saric
February 22, 2023
Page 2 of 4

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.”5 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.6

        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.7 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.”8

       Small businesses across America deserve to know how the CPSC is working to consider
small businesses in their rulemaking process. We therefore request a staff level briefing on the
CPSC’s compliance with the RFA, SBREFA, and EO13272, as soon as possible but no later than
March 3, 2023. In addition, we request the following documents and information, as soon as
possible but no later than March 10, 2023:

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

    2. Identify any CPSC 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.



5
  5 U.S.C. § 603(b).
6
  Id.
7
  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).
8
  5 U.S.C. § 604(a)(4).
The Honorable Alexander Hoehn-Saric
February 22, 2023
Page 3 of 4

   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.

   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
The Honorable Alexander Hoehn-Saric
February 22, 2023
Page 4 of 4




_________________________                     _________________________
Dan Meuser                                    Jake Ellzey
Member of Congress                            Member of Congress
Committee on Small Business                   Committee on Small Business



_________________________                     _________________________
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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