WASHINGTON, D.C. – U.S. Senator Joni Ernst’s (R-IA) Prove It Act of 2016 today passed out of the Senate Small Business & Entrepreneurship Committee and now heads to the full Senate for consideration.

The Prove It Act increases transparency within the federal rulemaking process, especially when there is a disagreement between agencies over the economic impact of a rule on small businesses. In particular, this proposal designates a third party to review the facts and issue a publicly available objective assessment. If it is determined that the proposed rule would have a significant impact on a substantial number of small entities, the bill requires the federal agency to go back and complete additional regulatory analyses. 

“Today’s committee passage of the Prove It Act is an important step to help our small businesses who are stymied under the weight of burdensome federal rules and regulations,” said Senator Ernst. “By encouraging federal agencies to carefully consider the impact a rule may have on small businesses, it brings us a step closer to preventing harmful rules like the expanded definition of WOTUS, while also incentivizing better rulemaking to free up our job creators. I encourage my Senate colleges to support this commonsense proposal that streamlines our regulatory system and helps our small businesses focus on growing their business and creating jobs, rather than worrying about costly regulations.”

Background:

  • In the case of the expanded Waters of the U.S. (WOTUS) rule, the Prove It Act could have worked to incentivize the Environmental Protection Agency (EPA) and Small Business Administration’s Office of Advocacy to resolve their differences on whether the rule would have a direct and significant economic impact on small businesses.  In 2014, the Office of Advocacy submitted a regulatory comment letter that requested EPA to withdraw the WOTUS rule and conduct additional analysis in light of these concerns.
  • The Prove It Act:
  • Gives small businesses a stronger voice and requires agencies to prove their regulatory analysis if the SBA Office of Advocacy Chief Counsel disagrees with the agency’s decision to certify that the rule would not have a significant economic impact.
  • Calls for the request for review to be published in the Federal Register and on the SBA Office of Advocacy’s website to ensure transparency.
  • Requires the federal agency that issued the proposed rule to also publish a response to the SBA Office of Advocacy’s request for an OIRA review and disclose it in the Federal Register and on its website.
  • Mandates that OIRA submit the results of the review to the SBA Chief Counsel and publish those results in the Federal Register and on OIRA’s website.
  • Ensures that if OIRA determines that the proposed rule will in fact have a significant economic impact, the agency would be required to perform an Initial Regulatory Flexibility Analysis (IRFA) and subsequently a Final Regulatory Flexibility Analysis (FRFA).

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