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Prove It Act — Rept. 119-108, Part 1 (House of Representatives, 119th Congress, May 21, 2025)

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Summary

House Report 119–108, Part 1, on the Prove It Act, submitted by Mr. Williams of Texas from the Committee on Small Business and ordered to be printed May 21, 2025, to accompany H.R. 1163. The committee reports the bill favorably with an amendment and recommends that it pass. The amendment text requires initial regulatory flexibility analyses to address reasonably foreseeable indirect costs to small entities and adds a new § 605A letting small entities petition the Chief Counsel for Advocacy of the Small Business Administration to review agency certifications. It also requires publication of guidance for certain rules and sets review procedures under section 610, including that a rule not reviewed within the 10-year period ceases to be effective. The report closes with Minority Views signed by Ranking Member Nydia M. Velázquez opposing the bill.

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“Prove It Act — Rept. 119-108, Part 1 (House of Representatives, 119th Congress, May 21, 2025).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crpt-119hrpt108/, SHA-256 5e8d32e461ad30d364a5585da9034d3b54fe042545de1a184b9ffc10b5ef5332.

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                                                                               119TH CONGRESS                                                                                        REPT. 119–108
                                                                                              " HOUSE OF REPRESENTATIVES                                                         !
                                                                                  1st Session                                                                                           Part 1




                                                                                                                                PROVE IT ACT



                                                                                                                   MAY 21, 2025.—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. 1163]

                                                                                 The Committee on Small Business, to whom was referred the bill
                                                                               (H.R. 1163) to amend title 5, United States Code, to require greater
                                                                               transparency for Federal regulatory decisions that impact small
                                                                               businesses, and for other purposes, having considered the same, re-
                                                                               ports favorably thereon with an amendment and recommends that
                                                                               the bill as amended do pass.

                                                                                                                                       CONTENTS
                                                                                                                                                                                                           Page
                                                                                     I. Purpose and Bill Summary ........................................................................                    5
                                                                                    II. Need for Legislation ....................................................................................            5
                                                                                   III. Hearings .......................................................................................................     5
                                                                                   IV. Committee Consideration ...........................................................................                   5
                                                                                    V. Committee Votes .........................................................................................             6
                                                                                   VI. Section-by-Section of H.R. 1163 .................................................................                    12
                                                                                  VII. Congressional Budget Office Cost Estimate .............................................                              13
                                                                                 VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures                                                    13
                                                                                   IX. Oversight Findings & Recommendations ..................................................                              13
                                                                                    X. Performance Goals and Objectives ............................................................                        13
                                                                                   XI. Statement of Duplication of Federal Programs ........................................                                13
                                                                                  XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
                                                                                          Benefits .....................................................................................................    13
                                                                                 XIII. Federal Mandates Statement .....................................................................                     14
                                                                                  XIV. Federal Advisory Committee Statement ...................................................                             14
                                                                                   XV. Applicability to Legislative Branch ...........................................................                      14
                                                                                  XVI. Statement of Constitutional Authority ......................................................                         14




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                                                                                 XVII. Changes in Existing Law Made by the Bill, as Reported ........................                                       14
                                                                                XVIII. Minority Views ............................................................................................          23
                                                                                      59–006




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                                                                                     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’’.
                                                                               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 agen-
                                                                                     cy’’; and
                                                                                        (3) by inserting after section 605 the following:
                                                                               ‘‘§ 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 con-
                                                                                           spicuous 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 commu-
                                                                                           nicate with the petitioner;
                                                                                              ‘‘(B) if the petitioner is an organization, provide additional identifying in-
                                                                                           formation, 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 cer-
                                                                                                 tification that the proposed rule will not, if promulgated, have a signifi-
                                                                                                 cant economic impact on a substantial number of small entities is in-
                                                                                                 correct, 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 confiden-
                                                                                           tial technical, scientific, or other data or information supporting any asser-
                                                                                           tion of the problems or issues with the certification;




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                                                                                              ‘‘(E) present a proposed solution to the problems or issues raised in the
                                                                                           petition, including potential regulatory or compliance alternatives to the
                                                                                           proposed rule;




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                                                                                                  ‘‘(F) provide an analysis, discussion, or argument that explains how the
                                                                                               proposed solution 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 infor-
                                                                                               mation 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 con-
                                                                                               spicuous 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 re-
                                                                                         spect 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 the peti-
                                                                                         tion as to the properness of the certification and whether the proposed rule in
                                                                                         question would, if promulgated, have a significant economic impact on a sub-
                                                                                         stantial 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 peti-
                                                                                         tion 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 sub-
                                                                                         section 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 substan-
                                                                                                     tial 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 Admin-
                                                                                               istrator 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




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                                                                                         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 Reg-




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                                                                                    ister and on the website of the Office of Advocacy of the Small Business Admin-
                                                                                    istration, the results of the review conducted under paragraph (1).
                                                                                       ‘‘(3) REQUIREMENT TO PERFORM ANALYSES.—If, after a full review of a certifi-
                                                                                    cation made with respect to a proposed rule under paragraph (1), the Chief
                                                                                    Counsel determines that the proposed rule will, if promulgated, have a signifi-
                                                                                    cant 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 para-
                                                                                    graph (1)(B) or in any other way fails to assist the Chief Counsel in a full re-
                                                                                    view under paragraph (1) with respect to a proposed rule of the agency, as de-
                                                                                    termined 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 para-
                                                                                          graph (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 signifi-
                                                                               cant 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 deter-
                                                                                      mined 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 en-
                                                                                      sure 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 fac-
                                                                                          tors’’;
                                                                                             (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 dur-
                                                                                    ing 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 de-
                                                                                    termines that the rule should be reinstated—
                                                                                             ‘‘(A) the agency shall have 180 days beginning on the date of that deter-
                                                                                          mination 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 proce-
                                                                                          dures under section 553 of this title.’’.
                                                                                 (b) APPLICATION.—The amendment made by subsection (a)(2) shall apply with re-




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                                                                               spect 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.




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                                                                               SEC. 5. NO ADDITIONAL FUNDS.
                                                                                 No additional funds are authorized to be appropriated for the purpose of carrying
                                                                               out this Act or the amendments made by this Act.

                                                                                                               I. PURPOSE AND BILL SUMMARY
                                                                                 On February 10, 2025, Rep. Finstad, along with Rep. Hageman,
                                                                               Rep. Moran, Rep. Salazar, Rep. Meuser, Rep. Nunn, Rep. Steil, and
                                                                               Rep. Stauber, introduced H.R. 1163, the Prove It Act of 2025. H.R.
                                                                               1163 strengthens the Regulatory Flexibility Act (RFA) by requiring
                                                                               federal agencies to thoroughly assess the direct and indirect im-
                                                                               pacts of regulations on small businesses and to publicly share up-
                                                                               dates and reviews of final rules. The bill also allows small busi-
                                                                               nesses to challenge agency actions through the SBA’s Office of Ad-
                                                                               vocacy when agencies fail to meet these requirements.
                                                                                                                 II. NEED FOR LEGISLATION
                                                                                  On May 22, 2024, the Committee released a report titled ‘‘Regu-
                                                                               latory Flexibility Act (RFA) Report: Agencies’ Noncompliance with
                                                                               the RFA.’’ The report was a result of a 15-month long investigation
                                                                               in which the Committee found that agencies frequently failed to
                                                                               properly assess the true impact of their rules on small businesses,
                                                                               among other agency efforts to skirt RFA requirements.
                                                                                  This bill codifies efforts ordered under President Trump’s Execu-
                                                                               tive Order 14192 ‘‘Unleashing Prosperity Through Deregulation.’’ 1
                                                                               H.R. 1163 is necessary to address longstanding deficiencies in
                                                                               agency compliance with the RFA. The RFA requires ‘‘federal agen-
                                                                               cies to consider the effects of their regulations on small businesses
                                                                               and other small entities.’’ Unfortunately, agencies are not properly
                                                                               considering the effects of their regulations on small businesses.
                                                                                  Congress has not amended the RFA since 2010, therefore it is es-
                                                                               sential for H.R. 1163 to strengthen procedural safeguards and shift
                                                                               power back to small businesses. The RFA was a pivotal first step
                                                                               in ensuring that small businesses have a way to challenge the over-
                                                                               ly burdensome administrative state, but agencies still underreport,
                                                                               minimize or ignore the effect regulations have on small businesses.
                                                                               The Prove It Act of 2025 will help force the administrative state to
                                                                               comply with the RFA, ensure indirect costs on small businesses are
                                                                               properly accounted for, and gives small businesses a way to chal-
                                                                               lenge non-compliant agencies.
                                                                                                                           III. HEARINGS
                                                                                 On April 1, 2025, the Committee on Small Business held a hear-
                                                                               ing examining matters related to H.R. 1163 entitled ‘‘The Golden
                                                                               Age: Unleashing Main Street Through Deregulation.’’
                                                                                                               IV. COMMITTEE CONSIDERATION
                                                                                  The Committee on Small Business met in open session, with a
                                                                               quorum being present, on April 30, 2025, and ordered H.R. 1163,
                                                                               as amended, to be reported favorably to the House of Representa-
                                                                               tives by a roll call vote of 15 ayes to 11 nos. During the markup




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                                                                               five amendments were offered.
                                                                                     1 Exec. Order No. 14,192, 90 Fed. Reg. 9065 (2025).




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                                                                                                                  V. COMMITTEE VOTES
                                                                                  Clause 3(b) of rule XIII of the Rules of the House of Representa-
                                                                               tives requires the Committee to list the recorded votes on the mo-
                                                                               tion to report legislation and amendments thereto. The Committee
                                                                               voted to favorably report H.R. 1163, as amended, to the House of
                                                                               Representatives at 6:21 PM.
                                                                                  The Committee considered the following amendments to H.R.
                                                                               1163:
                                                                                      • Representative Finstad offered an amendment in the na-
                                                                                    ture of a substitute. This amendment was adopted by voice
                                                                                    vote.
                                                                                      • Representative Goodlander offered an amendment to the
                                                                                    amendment in the nature of a substitute. The vote on the
                                                                                    amendment failed 11 ayes to 15 nos.
                                                                                      • Representative McGarvey offered an amendment to the
                                                                                    amendment in the nature of a substitute. The vote on the
                                                                                    amendment failed 11 ayes to 15 nos.
                                                                                      • Representative Velázquez offered an amendment to the
                                                                                    amendment in the nature of a substitute. The vote on the
                                                                                    amendment failed 11 ayes to 15 nos.
                                                                                      • Representative Olszewski offered an amendment to the
                                                                                    amendment in the nature of a substitute. The vote on the
                                                                                    amendment failed 11 ayes to 15 nos.




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                                                                                                      VI. SECTION-BY-SECTION OF H.R. 1163
                                                                               Section 1—Short title
                                                                                 This act may be cited as the ‘‘Prove It Act of 2025.’’
                                                                               Section 2—Initial Regulatory Flexibility Analysis
                                                                                  This section requires agencies to consider ‘‘indirect costs’’ when
                                                                               conducting an RFA certification. This includes costs to small enti-
                                                                               ties which purchase from or sell to directly impacted entities, are
                                                                               regulated by other government entities because of the rule, or are
                                                                               subject to other regulations because of the rule.
                                                                                  Any small entity or group representing small entities can peti-
                                                                               tion the SBA Office of Advocacy (Advocacy) to review an agency’s
                                                                               certification.
                                                                                       • Advocacy will conduct an initial review. If the rule does
                                                                                    not have a significant economic impact on a substantial num-
                                                                                    ber of small entities, the review stops there. If it does, Advo-
                                                                                    cacy has 10 days to notify the petitioner and agency that Advo-
                                                                                    cacy will do a full review.
                                                                                       • The full review must consider whether the agency: (1) cor-
                                                                                    rectly considered which small entities would be impacted; and
                                                                                    (2) accurately and wholly considered the relevant economic
                                                                                    data and impact.
                                                                                       • Advocacy must host a meeting between itself, the peti-
                                                                                    tioner, representatives of the agency, and the Administrator of
                                                                                    the Office of Information and Regulatory Affairs (OIRA)
                                                                                            » This meeting allows each side to defend its position
                                                                                         and Advocacy to ask questions.
                                                                                       • Final review must be published by Advocacy within 30
                                                                                    days.
                                                                                       • If determined to have a substantial economic impact on a
                                                                                    significant number of small entities, the agency that promul-
                                                                                    gated the proposed rule must perform an Initial Regulatory
                                                                                    Flexibility Analysis (IRFA) and Final Regulatory Flexibility
                                                                                    Analysis (FRFA) for the rule.
                                                                                       • If the agency fails to comply with any of the above, the
                                                                                    rule does not apply to small entities.
                                                                               Section 3—Publication of guidance
                                                                                  For any rule determined to have a significant economic impact
                                                                               on a substantial number of small entities, the promulgating agency
                                                                               must publish the guidance and all relevant documents on Regula-
                                                                               tions.gov. The agency must also allow for comments on the pub-
                                                                               lished documents.
                                                                               Section 4—Review procedures for section 610 periodic review of
                                                                                    rules
                                                                                  When periodically reviewing rules, agencies must consider the in-
                                                                               direct costs considered in the IRFA and any others arising in the
                                                                               10-year period since the last review or since the publication of the




DMWilson on DSK7X7S144PROD with REPORTS
                                                                               rule. If an agency fails to do the review, Advocacy will alert the
                                                                               agency that the rule is no longer valid, and the agency must pub-
                                                                               lish said information in the Federal Register.




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                                                                                           VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
                                                                                 Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
                                                                               resentatives, the Committee adopts as its own the cost estimate
                                                                               prepared by the Director of the Congressional Budget Office pursu-
                                                                               ant to section 402 of the Congressional Budget Act of 1974. The
                                                                               Committee has requested but not received from the Director of the
                                                                               Congressional Budget Office a cost estimate for the Committee’s
                                                                               provisions.
                                                                                        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 Budg-
                                                                               et Act of 1974, the Committee provides the following opinion and
                                                                               estimate with respect to new budget authority, entitlement author-
                                                                               ity, and tax expenditures. While the Committee has not received an
                                                                               estimate of new budget authority contained in the cost estimate
                                                                               prepared by the Director of the Congressional Budget Office pursu-
                                                                               ant to Sec. 402 of the Congressional Budget Act of 1974, the Com-
                                                                               mittee does not believe that there will be any additional costs at-
                                                                               tributable to this legislation. H.R. 1163 does not direct new spend-
                                                                               ing, 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 over-
                                                                               sight findings and recommendations of the Committee on Small
                                                                               Business with respect to the subject matter contained in H.R. 1163
                                                                               are incorporated into the descriptive portions of this report.
                                                                                                    X. PERFORMANCE GOALS AND OBJECTIVES
                                                                                 With respect to the requirements of clause 3(c)(4) of rule XIII of
                                                                               the Rules of the House of Representatives, there are no specific
                                                                               performance goals and objectives of H.R. 1163 applicable.
                                                                                         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. 1163 is known to be dupli-
                                                                               cative 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 As-
                                                                               sistance.
                                                                                         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 con-




DMWilson on DSK7X7S144PROD with REPORTS
                                                                               tain 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.




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                                                                                                                                14

                                                                                                      XIII. FEDERAL MANDATES STATEMENT
                                                                                 The Committee adopts as its own the estimate of Federal man-
                                                                               dates 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 Con-
                                                                               gressional 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, § 8,
                                                                               cl.1 of the Constitution of the United States.
                                                                                XVII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
                                                                                 In compliance with clause 3(e) of rule XIII of the Rules of the
                                                                               House of Representatives, changes in existing law made by the bill,
                                                                               as reported, are shown as follows (existing law proposed to be omit-
                                                                               ted is enclosed in black brackets, new matter is printed in italics,
                                                                               and existing law in which no change is proposed is shown in
                                                                               roman):
                                                                                      CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
                                                                                 In compliance with clause 3(e) of rule XIII of the Rules of the
                                                                               House of Representatives, changes in existing law made by the bill,
                                                                               as reported, are shown as follows (existing law proposed to be omit-
                                                                               ted is enclosed in black brackets, new matter is printed in italics,
                                                                               and existing law in which no change is proposed is shown in
                                                                               roman):

                                                                                                       TITLE 5, UNITED STATES CODE
                                                                                           *            *           *               *               *         *            *

                                                                                           PART I—THE AGENCIES GENERALLY
                                                                                           *            *           *               *               *         *            *
                                                                                          CHAPTER 6—THE ANALYSIS OF REGULATORY
                                                                                                       FUNCTIONS

                                                                               Sec.
                                                                                       *          *        *          *          *          *          *
                                                                               605A. Review procedures relating to initial regulatory flexibility analysis certifi-




DMWilson on DSK7X7S144PROD with REPORTS
                                                                                          cations.

                                                                                           *            *           *               *               *         *            *




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                                                                                                                                15

                                                                               § 603. Initial regulatory flexibility analysis
                                                                                  (a) Whenever an agency is required by section 553 of this title,
                                                                               or any other law, to publish general notice of proposed rulemaking
                                                                               for any proposed rule, or publishes a notice of proposed rulemaking
                                                                               for an interpretative rule involving the internal revenue laws of the
                                                                               United States, the agency shall prepare and make available for
                                                                               public comment an initial regulatory flexibility analysis. Such anal-
                                                                               ysis shall describe the impact of the proposed rule on small enti-
                                                                               ties. The initial regulatory flexibility analysis or a summary shall
                                                                               be published in the Federal Register at the time of the publication
                                                                               of general notice of proposed rulemaking for the rule. The agency
                                                                               shall transmit a copy of the initial regulatory flexibility analysis to
                                                                               the Chief Counsel for Advocacy of the Small Business Administra-
                                                                               tion. In the case of an interpretative rule involving the internal
                                                                               revenue laws of the United States, this chapter applies to interpre-
                                                                               tative rules published in the Federal Register for codification in the
                                                                               Code of Federal Regulations, but only to the extent that such inter-
                                                                               pretative rules impose on small entities a collection of information
                                                                               requirement.
                                                                                  (b) Each initial regulatory flexibility analysis required under this
                                                                               section shall contain—
                                                                                       (1) a description of the reasons why action by the agency is
                                                                                     being considered;
                                                                                       (2) a succinct statement of the objectives of, and legal basis
                                                                                     for, the proposed rule;
                                                                                       (3) a description of and, where feasible, an estimate of the
                                                                                     number of small entities to which the proposed rule will apply;
                                                                                       (4) a description of the projected reporting, recordkeeping
                                                                                     and other compliance requirements of the proposed rule, in-
                                                                                     cluding an estimate of the classes of small entities which will
                                                                                     be subject to the requirement and the type of professional
                                                                                     skills necessary for preparation of the report or record;
                                                                                       (5) an identification, to the extent practicable, of all relevant
                                                                                     Federal rules which may duplicate, overlap or conflict with the
                                                                                     proposed ruleø.¿; and
                                                                                       (6) where feasible, any reasonably foreseeable potential indi-
                                                                                     rect costs the proposed rule may impose on small entities, in-
                                                                                     cluding small entities that—
                                                                                            (A) purchase products or services from, sell products or
                                                                                          services to, or otherwise conduct business with entities di-
                                                                                          rectly 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.
                                                                                  (c) Each initial regulatory flexibility analysis shall also contain
                                                                               a description of any significant alternatives to the proposed rule
                                                                               which accomplish the stated objectives of applicable statutes and
                                                                               which minimize any significant economic impact of the proposed




DMWilson on DSK7X7S144PROD with REPORTS
                                                                               rule on small entities. Consistent with the stated objectives of ap-
                                                                               plicable statutes, the analysis shall discuss significant alternatives
                                                                               such as—




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                                                                                       (1) the establishment of differing compliance or reporting re-
                                                                                    quirements or timetables that take into account the resources
                                                                                    available to small entities;
                                                                                       (2) the clarification, consolidation, or simplification of compli-
                                                                                    ance and reporting requirements under the rule for such small
                                                                                    entities;
                                                                                       (3) the use of performance rather than design standards; and
                                                                                       (4) an exemption from coverage of the rule, or any part
                                                                                    thereof, for such small entities.
                                                                                 (d)(1) For a covered agency, as defined in section 609(d)(2), each
                                                                               initial regulatory flexibility analysis shall include a description of—
                                                                                       (A) any projected increase in the cost of credit for small enti-
                                                                                    ties;
                                                                                       (B) any significant alternatives to the proposed rule which
                                                                                    accomplish the stated objectives of applicable statutes and
                                                                                    which minimize any increase in the cost of credit for small en-
                                                                                    tities; and
                                                                                       (C) advice and recommendations of representatives of small
                                                                                    entities relating to issues described in subparagraphs (A) and
                                                                                    (B) and subsection (b).
                                                                                 (2) A covered agency, as defined in section 609(d)(2), shall, for
                                                                               purposes of complying with paragraph (1)(C)—
                                                                                       (A) identify representatives of small entities in consultation
                                                                                    with the Chief Counsel for Advocacy of the Small Business Ad-
                                                                                    ministration; and
                                                                                       (B) collect advice and recommendations from the representa-
                                                                                    tives identified under subparagraph (A) relating to issues de-
                                                                                    scribed in subparagraphs (A) and (B) of paragraph (1) and sub-
                                                                                    section (b).
                                                                                           *            *           *               *               *         *            *
                                                                               § 605. Avoidance of duplicative or unnecessary analyses
                                                                                  (a) Any Federal agency may perform the analyses required by
                                                                               sections 602, 603, and 604 of this title in conjunction with or as a
                                                                               part of any other agenda or analysis required by any other law if
                                                                               such other analysis satisfies the provisions of such sections.
                                                                                  (b) Sections 603 and 604 of this title shall not apply to any pro-
                                                                               posed or final rule if the head of the agency certifies that the rule
                                                                               will not, if promulgated, have a significant economic impact on a
                                                                               substantial number of small entities. If the head of the agency
                                                                               makes a certification under the preceding sentence, the agency
                                                                               shall publish such certification in the Federal Register at the time
                                                                               of publication of general notice of proposed rulemaking for the rule
                                                                               or at the time of publication of the final rule, along with a state-
                                                                               ment providing the factual basis for such certification. øThe agen-
                                                                               cy¿ Not later than 10 days after completing the certification de-
                                                                               scribed in this subsection, the agency shall provide such certifi-
                                                                               cation and statement to the Chief Counsel for Advocacy of the
                                                                               Small Business Administration.
                                                                                  (c) In order to avoid duplicative action, an agency may consider




DMWilson on DSK7X7S144PROD with REPORTS
                                                                               a series of closely related rules as one rule for the purposes of sec-
                                                                               tions 602, 603, 604 and 610 of this title.




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                                                                                                                                17

                                                                               § 605A. Review procedures relating to initial regulatory flexi-
                                                                                            bility 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 pe-
                                                                                    tition the Chief Counsel for Advocacy of the Small Business Ad-
                                                                                    ministration (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 eco-
                                                                                    nomic impact on a substantial number of small entities.
                                                                                       (2) FORM.—The Chief Counsel shall—
                                                                                            (A) determine the method, timing, and form of dissemi-
                                                                                         nating 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 addi-
                                                                                         tional 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 rep-
                                                                                         resenting 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 organi-
                                                                                         zational or corporate petitioner;
                                                                                            (C) present the specific problems or issues that the peti-
                                                                                         tioner believes should be addressed or considered through
                                                                                         a review of the certification, such as—
                                                                                                 (i) any specific circumstances in which the deter-
                                                                                               mination of the certification that the proposed rule will
                                                                                               not, if promulgated, have a significant economic im-
                                                                                               pact on a substantial number of small entities is incor-
                                                                                               rect, 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-pro-
                                                                                         tected 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 ex-




DMWilson on DSK7X7S144PROD with REPORTS
                                                                                         plains how the proposed solution described in subpara-
                                                                                         graph (E) solves the problems or issues raised in the peti-
                                                                                         tion; and




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                                                                                               (G) cite, enclose, or reference any other publicly available
                                                                                             data or information supporting the proposed solution de-
                                                                                             scribed 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 regard-
                                                                                        ing 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 pe-
                                                                                                  tition; 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 the petition as to the
                                                                                        properness of the certification and whether the proposed rule in
                                                                                        question would, if promulgated, have a significant economic im-
                                                                                        pact 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 Coun-
                                                                                        sel 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—




DMWilson on DSK7X7S144PROD with REPORTS
                                                                                                     (i) whether the agency that promulgated the proposed
                                                                                                  rule correctly determined which small entities will be
                                                                                                  affected by the proposed rule;




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                                                                                                  (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 ap-
                                                                                           propriate 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 de-
                                                                                                termination 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 Reg-
                                                                                      ister 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 re-
                                                                                      view of a certification made with respect to a proposed rule
                                                                                      under paragraph (1), the Chief Counsel determines that the pro-
                                                                                      posed rule will, if promulgated, have a significant economic im-
                                                                                      pact on a substantial number of small entities, the agency that
                                                                                      promulgated the proposed rule shall perform an initial regu-
                                                                                      latory flexibility analysis and a final regulatory flexibility anal-
                                                                                      ysis for the proposed rule under sections 603 and 604, respec-
                                                                                      tively.
                                                                                         (4) PENALTY.—If an agency fails to attend the required meet-
                                                                                      ing under paragraph (1)(B) or in any other way fails to assist
                                                                                      the Chief Counsel in a full review under paragraph (1) with re-
                                                                                      spect 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 certifi-
                                                                                           cation under paragraph (1).
                                                                                           *            *           *               *               *         *            *
                                                                               § 609. Procedures for gathering comments
                                                                                  (a) When any rule is promulgated which will have a significant




DMWilson on DSK7X7S144PROD with REPORTS
                                                                               economic impact on a substantial number of small entities, the
                                                                               head of the agency promulgating the rule or the official of the agen-
                                                                               cy with statutory responsibility for the promulgation of the rule




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                                                                               shall assure that small entities have been given an opportunity to
                                                                               participate in the rulemaking for the rule through the reasonable
                                                                               use of techniques such as—
                                                                                      (1) the inclusion in an advanced notice of proposed rule-
                                                                                    making, if issued, of a statement that the proposed rule may
                                                                                    have a significant economic effect on a substantial number of
                                                                                    small entities;
                                                                                      (2) the publication of general notice of proposed rulemaking
                                                                                    in publications likely to be obtained by small entities;
                                                                                      (3) the direct notification of interested small entities;
                                                                                      (4) the conduct of open conferences or public hearings con-
                                                                                    cerning the rule for small entities including soliciting and re-
                                                                                    ceiving comments over computer networks; and
                                                                                      (5) the adoption or modification of agency procedural rules to
                                                                                    reduce the cost or complexity of participation in the rule-
                                                                                    making by small entities.
                                                                                 (b) Prior to publication of an initial regulatory flexibility analysis
                                                                               which a covered agency is required to conduct by this chapter—
                                                                                      (1) a covered agency shall notify the Chief Counsel for Advo-
                                                                                    cacy of the Small Business Administration and provide the
                                                                                    Chief Counsel with information on the potential impacts of the
                                                                                    proposed rule on small entities and the type of small entities
                                                                                    that might be affected;
                                                                                      (2) not later than 15 days after the date of receipt of the ma-
                                                                                    terials described in paragraph (1), the Chief Counsel shall
                                                                                    identify individuals representative of affected small entities for
                                                                                    the purpose of obtaining advice and recommendations from
                                                                                    those individuals about the potential impacts of the proposed
                                                                                    rule;
                                                                                      (3) the agency shall convene a review panel for such rule
                                                                                    consisting wholly of full time Federal employees of the office
                                                                                    within the agency responsible for carrying out the proposed
                                                                                    rule, the Office of Information and Regulatory Affairs within
                                                                                    the Office of Management and Budget, and the Chief Counsel;
                                                                                      (4) the panel shall review any material the agency has pre-
                                                                                    pared in connection with this chapter, including any draft pro-
                                                                                    posed rule, collect advice and recommendations of each indi-
                                                                                    vidual small entity representative identified by the agency
                                                                                    after consultation with the Chief Counsel, on issues related to
                                                                                    subsections 603(b), paragraphs (3), (4) and (5) and 603(c);
                                                                                      (5) not later than 60 days after the date a covered agency
                                                                                    convenes a review panel pursuant to paragraph (3), the review
                                                                                    panel shall report on the comments of the small entity rep-
                                                                                    resentatives and its findings as to issues related to subsections
                                                                                    603(b), paragraphs (3), (4) and (5) and 603(c), provided that
                                                                                    such report shall be made public as part of the rulemaking
                                                                                    record; and
                                                                                      (6) where appropriate, the agency shall modify the proposed
                                                                                    rule, the initial regulatory flexibility analysis or the decision on
                                                                                    whether an initial regulatory flexibility analysis is required.
                                                                                 (c) An agency may in its discretion apply subsection (b) to rules




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                                                                               that the agency intends to certify under subsection 605(b), but the
                                                                               agency believes may have a greater than de minimis impact on a
                                                                               substantial number of small entities.




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                                                                                  (d) For purposes of this section, the term ‘‘covered agency’’
                                                                               means—
                                                                                        (1) the Environmental Protection Agency;
                                                                                        (2) the Consumer Financial Protection Bureau of the Federal
                                                                                     Reserve System; and
                                                                                        (3) the Occupational Safety and Health Administration of the
                                                                                     Department of Labor.
                                                                                  (e) The Chief Counsel for Advocacy, in consultation with the indi-
                                                                               viduals identified in subsection (b)(2), and with the Administrator
                                                                               of the Office of Information and Regulatory Affairs within the Of-
                                                                               fice of Management and Budget, may waive the requirements of
                                                                               subsections (b)(3), (b)(4), and (b)(5) by including in the rulemaking
                                                                               record a written finding, with reasons therefor, that those require-
                                                                               ments would not advance the effective participation of small enti-
                                                                               ties in the rulemaking process. For purposes of this subsection, the
                                                                               factors to be considered in making such a finding are as follows:
                                                                                        (1) In developing a proposed rule, the extent to which the
                                                                                     covered agency consulted with individuals representative of af-
                                                                                     fected small entities with respect to the potential impacts of
                                                                                     the rule and took such concerns into consideration.
                                                                                        (2) Special circumstances requiring prompt issuance of the
                                                                                     rule.
                                                                                        (3) Whether the requirements of subsection (b) would provide
                                                                                     the individuals identified in subsection (b)(2) with a competi-
                                                                                     tive advantage relative to other small entities.
                                                                                  (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 docu-
                                                                                     ments, 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 para-
                                                                                     graph (1) to ensure that small entities may access and provide
                                                                                     feedback on those documents.
                                                                               § 610. Periodic review of rules
                                                                                  (a) Within one hundred and eighty days after the effective date
                                                                               of this chapter, each agency shall publish in the Federal Register
                                                                               a plan for the periodic review of the rules issued by the agency
                                                                               which have or will have a significant economic impact upon a sub-
                                                                               stantial number of small entities. Such plan may be amended by
                                                                               the agency at any time by publishing the revision in the Federal
                                                                               Register. The purpose of the review shall be to determine whether
                                                                               such rules should be continued without change, or should be
                                                                               amended or rescinded, consistent with the stated objectives of ap-
                                                                               plicable statutes, to minimize any significant economic impact of
                                                                               the rules upon a substantial number of such small entities. The
                                                                               plan shall provide for the review of all such agency rules existing
                                                                               on the effective date of this chapter within ten years of that date
                                                                               and for the review of such rules adopted after the effective date of




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                                                                               this chapter within ten years of the publication of such rules as the
                                                                               final rule. If the head of the agency determines that completion of
                                                                               the review of existing rules is not feasible by the established date,




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                                                                               he shall so certify in a statement published in the Federal Register
                                                                               and may extend the completion date by one year at a time for a
                                                                               total of not more than five years.
                                                                                 (b) In reviewing rules to minimize any significant economic im-
                                                                               pact of the rule on a substantial number of small entities in a man-
                                                                               ner consistent with the stated objectives of applicable statutes, the
                                                                               agency shall consider øthe following factors¿—
                                                                                       (1) the continued need for the rule;
                                                                                       (2) the nature of complaints or comments received con-
                                                                                    cerning the rule from the public;
                                                                                       (3) the complexity of the rule;
                                                                                       (4) the extent to which the rule overlaps, duplicates or con-
                                                                                    flicts with other Federal rules, and, to the extent feasible, with
                                                                                    State and local governmental rules; øand¿
                                                                                       (5) the length of time since the rule has been evaluated or
                                                                                    the degree to which technology, economic conditions, or other
                                                                                    factors have changed in the area affected by the ruleø.¿; and
                                                                                       (6) any indirect costs described in the initial regulatory flexi-
                                                                                    bility analysis under section 603(b)(6), and any other indirect
                                                                                    costs that may have arisen during the 10-year period described
                                                                                    in subsection (a).
                                                                                 (c) Each year, each agency shall publish in the Federal Register
                                                                               a list of the rules which have a significant economic impact on a
                                                                               substantial number of small entities, which are to be reviewed pur-
                                                                               suant to this section during the succeeding twelve months. The list
                                                                               shall include a brief description of each rule and the need for and
                                                                               legal basis of such rule and shall invite public comment upon the
                                                                               rule.
                                                                                 (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 Ad-
                                                                                    ministration shall notify the agency that the rule has ceased to
                                                                                    be effective;
                                                                                       (2) the agency shall publish in the Federal Register a notifica-
                                                                                    tion that the rule has ceased to be effective, and solicit com-
                                                                                    ments 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.
                                                                                           *            *           *               *               *         *            *




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                                                                                                               XVIII. MINORITY VIEWS
                                                                                 Congress passed the Regulatory Flexibility Act (RFA) in 1980 out
                                                                               of concern that uniform regulations disproportionately burden
                                                                               small firms.1 The Office of Advocacy (Advocacy) is responsible for
                                                                               monitoring agencies’ compliance with the RFA and educates rule-
                                                                               writing staff on the effect their rules would have on small busi-
                                                                               nesses. Advocacy seeks to find targeted solutions that are less bur-
                                                                               densome, and in Fiscal Year 2023 (FY 2023), their efforts resulted
                                                                               in more than $90 million in estimated regulatory costs savings for
                                                                               small businesses.2
                                                                                 Concerns have been raised by the Coalition for Sensible Safe-
                                                                               guards and other organizations that the RFA has become a tool for
                                                                               large businesses to obstruct the regulatory process. To that end,
                                                                               the ‘‘Prove It Act of 2025’’ would give the biggest companies a pow-
                                                                               erful new tool to use against regulations that protect our health,
                                                                               environment, and safety, and cause further harm to the very small
                                                                               entities it purports to help.
                                                                               Cumbersome New Process Giving Powerful Trade Groups Too Much
                                                                                    Influence
                                                                                  First and foremost, the bill creates an unworkable quasi-judicial
                                                                               process within Advocacy for reviewing agencies’ certification that a
                                                                               regulation would not have a ‘‘significant economic effect on a sig-
                                                                               nificant number of small entities (SEISNSE).’’ Unlike the original
                                                                               RFA, which only allows small entities to seek judicial review, the
                                                                               ‘‘Prove It Act of 2025’’ ‘‘would allow an ‘‘organization representing
                                                                               the interests of small entities’’ to file a petition for review with the
                                                                               Chief Counsel of Advocacy. This new process would let powerful
                                                                               trade associations like the U.S. Chamber of Commerce petition the
                                                                               SBA to review a certification as long as the organization can claim
                                                                               to represent some small entities affected by the underlying rule.
                                                                               Moreover, the bill would allow these organizations to challenge the
                                                                               agencies’ certifications without identifying which small businesses
                                                                               they represent or how those small businesses would be harmed by
                                                                               the rules they are challenging.
                                                                                  Once a petition is filed, the Chief Counsel would have 10 days
                                                                               to determine if the petition warrants a full review. If the Chief
                                                                               Counsel determines that a full review is required, the Chief Coun-
                                                                               sel has 30 more days to conduct the review and publish the results.
                                                                               This new process would result in additional meetings with the rep-
                                                                               resentatives of small entities, agencies, Office of Information and
                                                                               Regulatory Affairs (OIRA), and Advocacy. Multiple and duplicative
                                                                                  1 Stuart Shapiro & Deanna Moran, The Checkered History of Regulatory Reform, 19 N.Y.U.
                                                                               J. LEGIS. & PUB. POL’Y 141, 153–54 (2016) (describing hearings leading up to passage of the
                                                                               RFA).
                                                                                  2 OFF. OF ADVOC., U.S. SMALL BUS. ADMIN., REPORT ON THE REGULATORY FLEXIBILITY ACT:
                                                                               FISCAL YEAR 2023 (2024), https://advocacy.sba.gov/wp-content/uploads/2024/06/RFA-FY23_




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                                                                               final.pdf.
                                                                                                                                (23)




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                                                                                                                                24

                                                                               petitions could be received on the same rule, resulting in numerous
                                                                               reviews and meetings.
                                                                               Indirect Economic Effect Cost Estimates
                                                                                  The bill would also require agencies to include indirect economic
                                                                               effects of rules in their regulatory flexibility analyses, which can be
                                                                               burdensome, impracticable, and counterproductive. Under current
                                                                               law, the RFA requires agencies to take into consideration the direct
                                                                               impact on small entities and try to minimize the direct impact
                                                                               while achieving the same goal. Indirect costs are significantly more
                                                                               difficult to estimate, and agencies do not always have that informa-
                                                                               tion available to them, nor do they have control over minimizing
                                                                               them.
                                                                               Unreviewable Discretion Granted to the Chief Counsel
                                                                                  In addition to creating a new process, the bill gives the Chief
                                                                               Counsel unreviewable discretion to sanction the agency promul-
                                                                               gating the rule by making the final rule inapplicable to small enti-
                                                                               ties upon the finding that the agency failed to assist the Chief
                                                                               Counsel. With 99 percent of businesses being designated as small,
                                                                               the bill would allow Advocacy to essentially gut a regulation.
                                                                                  The Chief Counsel must also track agency completion of manda-
                                                                               tory reviews of existing rules every 10 years. It requires agencies
                                                                               to also conduct retrospective reviews based on the indirect costs
                                                                               identified in the initial analysis. This provision doesn’t make sense
                                                                               because agencies may have changed the rules significantly between
                                                                               proposed and final rule stages, meaning the indirect costs identi-
                                                                               fied in the proposed stage may not be applicable to the final rule,
                                                                               let alone 10 years after the final rule has taken effect. To that end,
                                                                               the provision is unworkable.
                                                                                  If the Chief Counsel finds that an agency failed to conduct a re-
                                                                               quired review of a rule, the Chief Counsel could suspend operation
                                                                               of the rule, meaning it wouldn’t apply to anyone or any business.
                                                                               This provision creates another layer of regulatory review, which
                                                                               would essentially allow Advocacy to freeze a regulation until an
                                                                               agency review is conducted and then possibly reinstate the rule—
                                                                               causing undue uncertainty to small businesses.
                                                                                  In the 118th Congress, Advocacy shared with Democratic Com-
                                                                               mittee staff that small businesses need certainty in the rule-mak-
                                                                               ing process and requiring small businesses to come into compliance
                                                                               with a rule or regulation only to remove it from the books would
                                                                               be onerous in and of itself. Advocacy further stated, ‘‘rules are inte-
                                                                               grated into one another, and they have a much broader impact in
                                                                               terms of who it affects, further contributing to the uncertainty in
                                                                               the rulemaking process, particularly for small businesses that pro-
                                                                               cure with the federal government.’’
                                                                               CBO Score
                                                                                 Congressional Budget Office (CBO) estimates the bill would in-
                                                                               crease administrative costs for most agencies, including Advocacy.
                                                                               Accordingly, CBO reported that H.R. 7198, identical legislation in-
                                                                               troduced in the previous Congress, would increase direct spending




DMWilson on DSK7X7S144PROD with REPORTS
                                                                               for independent agencies by $10 million, reduce revenues by $7
                                                                               million over the 2025–2034 period, and increase spending by $35




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                                                                                                                                25

                                                                               million over the 2025–2029 period, subject to the availability of ap-
                                                                               propriated funds.3 In sum, the enactment of this bill would result
                                                                               in significant costs to the taxpayer, and it would likely not result
                                                                               in any meaningful reduction of the burdensome requirements to
                                                                               small businesses.
                                                                                  Moreover, by opening the door for well-resourced trade associa-
                                                                               tions to challenge virtually any rule, the bill could end up requiring
                                                                               the Chief Counsel to review agencies’ RFA compliance for many of
                                                                               the thousands of rules issued each year, to say nothing of agencies’
                                                                               periodic reviews of existing rules. That would do little to help small
                                                                               businesses but would help powerful companies with money to hire
                                                                               well-connected lobbyists.
                                                                                  The Government Accountability Office (GAO) reported that the
                                                                               four agencies they reviewed to assess compliance with the RFA
                                                                               generally met statutory requirements, but almost half hadn’t re-
                                                                               ceived training since 2003. GAO made six recommendations, in-
                                                                               cluding one requiring the Office of Advocacy to develop and imple-
                                                                               ment procedures to provide training on RFA compliance, including
                                                                               identifying the agencies most in need of training.4
                                                                                  Committee Democrats offered four commonsense amendments to
                                                                               improve the bill, but Republicans rejected them all.
                                                                                  Ms. Goodlander offered an amendment to require organizations
                                                                               to list the name, address, telephone number, and email of the small
                                                                               businesses they are filing a petition on behalf of with Advocacy.
                                                                               The commonsense amendment would close a loophole in the bill
                                                                               that allows powerful trade associations to exploit the process by fil-
                                                                               ing a petition without naming the small business they are rep-
                                                                               resenting. Committee Democrats supported this good government
                                                                               amendment that would bring transparency and accountability to
                                                                               the process. The Majority rejected this amendment on the grounds
                                                                               that listing the name, address, phone number, and email of the
                                                                               small business the National Federation of Business (NFIB) and
                                                                               Chamber of Commerce file a petition on behalf of would be an un-
                                                                               necessary administrative burden.
                                                                                  Mr. McGarvey offered an amendment that would carve out an
                                                                               exemption for any rules that the agency finds would have a sub-
                                                                               stantial beneficial impact on veterans. He stated, the Prove-It Act
                                                                               is the ‘‘same unworkable policy that would empower the country’s
                                                                               biggest corporations to paralyze all federal rulemaking under the
                                                                               guise of protecting small businesses.’’ He offered the amendment to
                                                                               protect veterans from the damage of the Prove-It Act, given all Re-
                                                                               publican cuts they are facing to programs like, Medicaid, health
                                                                               care, and SNAP. The Republicans argued that the amendment
                                                                               would create and exemption that would undermine transparency
                                                                               and accountability and defeated it.
                                                                                  Ranking Member Velázquez offered an amendment requiring Ad-
                                                                               vocacy to train rule-writing staff at agencies on how to comply with
                                                                               the Regulatory Flexibility Act, at least once every four years, and
                                                                               require agencies to submit a report on the retrospective review of
                                                                                 3 CONG. BUDGET OFF., H.R. 7198, Prove It Act of 2024, Cost Estimate (Dec. 2, 2024), https://
                                                                               www.cbo.gov/publication/61042.
                                                                                 4 U.S. GOV’T ACCOUNTABILITY OFF., REGULATORY FLEXIBILITY ACT: IMPROVED POLICIES FOR




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                                                                               ANALYSIS AND TRAINING COULD ENHANCE COMPLIANCE (Apr. 10, 2025), https://www.gao.gov/
                                                                               products/gao-25-106950.




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                                                                                                                                26

                                                                               rules. The Prove-It Act disregards the meaningful progress that
                                                                               agencies have been making to examine the impact a new rule
                                                                               would have on small businesses. Rather than create an adversarial
                                                                               process between Advocacy and the agencies under the Prove-It Act,
                                                                               the amendment would foster a more constructive working relation-
                                                                               ship that would lead to more success. The Republicans rejected this
                                                                               amendment on the grounds that it would create ‘‘an uncertain and
                                                                               burdensome environment.’’ It is ironic because the the Prove-It Act
                                                                               would require small businesses to come into compliance with a rule
                                                                               only to take it off the books ten years later, if a retrospective re-
                                                                               view was not conducted in a timely manner and then put it back
                                                                               on the books if the retrospective review was conducted. Small busi-
                                                                               nesses need clear, consistent rules of the road, not chaos. Without
                                                                               a solid argument against the amendment, the Republicans relied
                                                                               on the argument that it will result in more ‘‘bureaucratic red tape.’’
                                                                               It is important to note, that the Prove-It Act would establish a
                                                                               whole new bureaucratic process filled with new analytical and pro-
                                                                               cedural requirements, making the rulemaking process significantly
                                                                               more complex.
                                                                                  Mr. Olszewski offered an amendment to carve out an exemption
                                                                               for any rules that the agency finds would have a substantial bene-
                                                                               ficial impact on workforce development programs and rural small
                                                                               business owners. He pointed out the problems with the Prove-It
                                                                               Act and stated his amendment would strengthen our workforce and
                                                                               uplift small rural businesses. The Republicans rejected this amend-
                                                                               ment based on the flawed assumption that it would result in fraud.
                                                                               I countered that the fraud Mr. Finstad was referring to started
                                                                               under the first Trump Administration.
                                                                                  In conclusion, Committee Democrats could not support the Prove-
                                                                               It Act, which creates an unworkable bureaucratic process, and al-
                                                                               lows powerful companies to exploit rulemakings that benefit small
                                                                               businesses, and protect the health and safety of all Americans.
                                                                                                                       NYDIA M. VELÁZQUEZ,
                                                                                                                                Ranking Member.

                                                                                                                                Æ




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