Congressional Research Service IF12986.2 (Small Business Administration Office of Advocacy)
Summary
This Congressional Research Service report of May 5, 2025 describes the Small Business Administration Office of Advocacy. The Small Business Amendments of 1974 authorized the SBA Administrator to create an Office of Chief Counsel for Advocacy, and Section 10 of that law assigned the Chief Counsel five duties, including receiving complaints about agency policies affecting small businesses. The Chief Counsel is appointed by the President with the advice and consent of the Senate, and the Small Business Jobs Act of 2010 gave Advocacy a separate budget account. The Regulatory Flexibility Act of 1980 charges the Chief Counsel with monitoring agencies’ compliance with its provisions.
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“Congressional Research Service IF12986.2 (Small Business Administration Office of Advocacy).”
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May 5, 2025
Small Business Administration Office of Advocacy
Office of Advocacy Origins the Chief Counsel be appointed by the President, with the
During the early 1970s, small business trade associations advice and consent of the Senate. A report accompanying
indicated at congressional hearings that they were not this legislation stated that “this position be given a great
satisfied with advocacy efforts at the Small Business deal of latitude in its operation and that it not be filled by a
Administration (SBA), especially in achieving regulatory person who will become a ‘yes’ man for the Agency.”
relief for small businesses—even though the Small
Business Act of 1953 (P.L. 83-163, as amended) had At that time, Advocacy’s budget was provided through the
directed the SBA to “aid, counsel, assist, and protect, SBA’s Salaries and Expenses’ Executive Direction account.
insofar as is possible, the interests of small-business Years later, through the Small Business Jobs Act of 2010
concerns.” Congress then passed legislation (P.L. 93-386, (P.L. 111-240), Congress enhanced Advocacy’s
the Small Business Amendments of 1974) that authorized independence by requiring the President to provide a
the SBA Administrator to create an Office of Chief Counsel separate statement on the amount of appropriations
for Advocacy. Section 10 of P.L. 93-386 assigned the Chief requested for Advocacy, to be designated in a separate
Counsel five duties: account in the General Fund of the Treasury.
1. serve as a focal point for the receipt of Advocacy’s Regulatory Oversight Role
complaints, criticisms, and suggestions P.L. 96-354, the Regulatory Flexibility Act of 1980 (RFA,
concerning the policies and activities of as amended) expanded the role of the Office of Advocacy
the Administration and any other federal by charging Advocacy’s Chief Counsel with monitoring
agency that affects small businesses; and reporting agencies’ compliance with RFA provisions.
2. counsel small businesses on how to The RFA requires federal agencies to assess the economic
resolve questions and problems impact of forthcoming regulations on small entities,
concerning the relationship of the small including small businesses, small not-for-profit
business to the federal government; organizations, and small governmental jurisdictions
(generally, the government of a city, county, town, school
3. develop proposals for changes in the district or special district with a population of less than
policies and activities of any agency of
50,000). Agencies must also notify Advocacy prior to
the federal government that will better issuing certain rules, for possible comment by the Chief
fulfill the purposes of the Small Business Counsel. Advocacy’s role in RFA implementation is
Act and communicate such proposals to
codified at 5 U.S.C. §§601-612. More information on the
the appropriate federal agencies; RFA is available in CRS In Focus IF11900, The Regulatory
4. represent the views and interests of small Flexibility Act: An Overview, by Maeve P. Carey.
businesses before other federal agencies
whose policies and activities may affect Advocacy is also responsible for monitoring agency
small businesses; and compliance with Executive Order (E.O.) 13272, Proper
5. enlist the cooperation and assistance of Consideration of Small Entities in Agency Rulemaking
public and private agencies, businesses, (August 13, 2002). E.O. 13272 requires federal agencies to
and other organizations in disseminating make information concerning how they will comply with
information about the programs and the RFA’s statutory mandates publicly available. It also
services provided by the federal requires federal agencies to send to Advocacy copies of any
government, which are of benefit to small draft regulations that may have “a significant economic
businesses, and information on how small impact on a substantial number of small entities.”
businesses can participate in or make use
of such programs and services. Advocacy is responsible for training agencies in how to
The SBA’s Office of Chief Counsel for Advocacy comply with the RFA, and produces a periodic publication,
(“Advocacy”) was created in October 1974 and was fully A Guide for Government Agencies: How to Comply with the
operational by March 1975. Regulatory Flexibility Act. In FY2023, Advocacy held nine
training sessions for 139 federal officials. Advocacy must
An “Independent” Office within SBA report annually on federal agency compliance with the
After lobbying by small business organizations for executive order, which is accomplished primarily through
Advocacy to have greater independence from the SBA’s Advocacy’s annual publication of Report on the Regulatory
Administrator, Congress passed P.L. 94-305 in June 1976. Flexibility Act. The report includes details on agency
Title II of P.L. 94-305 required Advocacy to be established rulemaking as well as Advocacy’s activities.
as a separate, stand-alone office within the SBA and that
https://crsreports.congress.gov
Small Business Administration Office of Advocacy
Amendments to the RFA in 1996 (Title II of P.L. 104-121), declining small business receipts over time and another
the Small Business Regulatory Enforcement Fairness Act brief on small businesses in the childcare industry.
(SBREFA), required the Environmental Protection Agency
(EPA) and the Occupational Safety and Health International Trade Negotiations
Administration (OSHA) to ensure that small entities have Section 502 of the Trade Facilitation and Trade
an opportunity to participate in rulemaking through Enforcement Act of 2015 (P.L. 114-125) directs Advocacy
“SBREFA panels.” The Dodd-Frank Wall Street Reform to lead small business outreach through an Interagency
and Consumer Protection Act (P.L. 111-203) required this Working Group, to solicit input from small businesses
for Consumer Financial Protection Bureau (CFPB) during international trade negotiations. The act provides
rulemaking as well. that the working group shall be convened when the
President notifies Congress of the intention to enter into
An SBREFA panel provides a mechanism for small entities certain trade negotiations with another country, including
to provide input into EPA, OSHA, or CFPB rules by renegotiations of agreements. Also, that the working group
soliciting information from small entity representatives and shall include representatives of the following.
other sources about the potential impacts of a new rule. The
panel is to consider regulatory alternatives that minimize • The Office of the United States Trade Representative
burdens on small entities, and prepares a report with
recommendations. The panel must consist of full-time • The Department of Commerce
federal employees from the rulemaking agency, the Office
of Management and Budget, and SBA’s Chief Counsel for • The Department of Agriculture
Advocacy. Advocacy has several responsibilities related to
these panels, including the identification of individuals who • Any other agency that the Chief Counsel for Advocacy,
should serve and as a participant on the panel. In FY2023, in consultation with the United States Trade
10 SBREFA panels were convened. Representative, determines to be relevant with respect to
the subject of the covered trade agreement.
Apart from compliance training and SBREFA panels,
Advocacy seeks to influence agency regulatory processes Upon convening the working group, the Chief Counsel
by convening “roundtables” with small business shall identify a “diverse group of small businesses,
representatives on regulatory issues, as well as through representatives of small businesses, or a combination
letters to agencies that “alert them to their rules’ small thereof,” to share the perspective of small firms in
business impacts and to propose alternative approaches to manufacturing, services, and agriculture industries with the
achieving regulatory goals.” During FY2023 (the most working group, about the potential economic effects of the
recent year for which data is available), Advocacy provided trade agreement. Within 180 days, the Chief Counsel shall
46 letters to 27 agencies and hosted 28 roundtables. then submit a report on the economic impacts of the trade
agreement on small businesses to congressional
As a result of its regulatory oversight activities, Advocacy committees, including the Small Business and Ways and
estimated that it enabled $91.3 million in “regulatory cost Means committees.
savings” in FY2023, from actions related to regulations
from four agencies (the EPA, the Securities and Exchange One example of an agreement negotiation that spurred
Commission, the CFPB, and the Food and Drug working group activities includes the renegotiation of the
Administration). The annual Report on the Regulatory North American Free Trade Agreement (NAFTA). On May
Flexibility Act notes that Advocacy bases cost savings 18, 2017, the Trump Administration notified Congress of its
estimates on an analysis performed by the agency issuing intent to renegotiate NAFTA and Advocacy convened an
each rule. Interagency Working Group on June 14, 2017, to identify
small business stakeholders and seek their views of the
Advocacy’s Research and Other NAFTA renegotiation’s small business impacts, releasing
Activities its report in December 2018.
Economic Research Advocacy’s Scope and Capacity
Advocacy’s Office of Economic Research conducts and Advocacy’s resources determine its ability to engage in
publishes various products and analyses. Part of this activities not directly related to its RFA role. Although
office’s work also includes outreach to academic, media, Advocacy provides some research and other functions, it
and policy audiences. According to the Office of Advocacy primarily works “to reduce the burdens that Federal
FY 2025 Congressional Budget Justification and FY 2023 regulations and other policies impose on small entities,” as
Annual Performance Report, Advocacy’s economists seen from the “accomplishments” described in the Office of
“serve as a key resource for congressional staff, SBA Advocacy FY 2025 Congressional Budget Justification and
offices and resource partners, other federal agencies, the FY 2023 Annual Performance Report. Advocacy’s
media, and trade associations.” In FY2023, Advocacy appropriations in recent fiscal years have been between $9
published 20 new research and data products, and made 14 and $10 million, and the office has employed about 50 staff
outreach presentations. Publications included several “fact members.
sheets” and a series of Small Business Profiles for Major
Metropolitan Areas. Recent economic studies have R. Corinne Blackford, Analyst in Small Business and
included an “issue brief” discussing the long-term trend of Economic Development Policy
https://crsreports.congress.gov
Small Business Administration Office of Advocacy
IF12986
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