The bill aims to improve transparency and strengthen the voices of Iowa’s small businesses in the federal rulemaking process
Jun 16 2021
WASHINGTON—As the Biden Administration seeks to roll back the previous administration’s Navigable Waters Protection rule that provided more certainty for Iowa’s farmers and small business owners, U.S. Senator Joni Ernst (R-Iowa), a member of the Senate Small Business Committee, is introducing legislation that aims to improve transparency and strengthen the voices of Iowa’s small businesses in the federal rulemaking process.
Specifically, the Prove It Act gives the Small Business Administration’s (SBA) Office of Advocacy—the small business watchdog for rules and regulations—the ability to question an agency’s analysis if it claims a rule or regulation won’t impact small businesses.
“Too often, Washington bureaucrats put forward rules and regulations without considering their impact on small businesses, which are the backbone of our economy. A perfect example is the Obama-Biden WOTUS rule, which would have given the federal government authority to regulate water on 97 percent of land in Iowa and burden our farmers, landowners, and businesses. This bill will give Iowa’s small business community the opportunity to send federal agencies back to the drawing board to ‘prove’ that what they’re proposing won’t hurt small businesses,” said Senator Ernst.
SBA’s Office of Advocacy found that the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers improperly certified the Obama-Biden era WOTUS rule, and, despite EPA claiming otherwise, the rule would have indeed had a costly and direct impact on small businesses. Provisions in the Prove It Act would have allowed for a review or reconsideration of the certification that the rule wouldn’t have a significant impact on small businesses.
Under the Regulatory Flexibility Act, federal agencies are required to certify whether a rule has a significant economic impact on a substantial number of small businesses. If the rule does, agencies are then required to perform a substantive regulatory analysis. Agencies also have the discretion to certify that the rule would not impact small businesses significantly and can then bypass further analysis requirements.
The Prove It Act gives the Office of Advocacy an opportunity to submit a request to an agency to take a second look and reconsider its certification. If after 30 days of review the agency determines that its certification was incorrect, then the agency would be required to do further analyses on the rule. The request for review must be published in the Federal Register and on the Office of Advocacy’s website to ensure transparency.