Ernst works to strengthen small business advocacy in federal rulemaking process

U.S. Sen. Joni Ernst (R-IA) has introduced legislation that would give the Small Business Administration’s (SBA) watchdog entity more power when federal regulations are proposed that could have a significant economic impact on many small businesses.

The Prove It Act of 2017, which Ernst introduced with bipartisan support from U.S. Sen. Heidi Heitkamp (D-ND) on Thursday, aims to add transparency to the federal rulemaking process while giving small business advocates a greater voice.

“Small businesses make up 97 percent of all of Iowa’s employers, meaning their success is our state’s success,” said Ernst, a member of the Senate Small Business and Entrepreneurship Committee.

Currently, federal agencies are required to certify whether a proposed rule would have a significant impact on a substantial number of small businesses under the Regulatory Flexibility Act (RFA). If so, agencies must pursue additional analysis. However, agencies have discretion to certify that a rule would not have a substantial impact, bypassing further scrutiny.

Under the Prove it Act, the SBA’s Office of Advocacy, considered an independent voice for small businesses within the federal government, would be able to request that agencies prove regulatory analyses and determinations under the RFA. Requests for reviews would be published in the Federal Register and online to promote transparency.

“The bipartisan Prove It Act serves as a check on the federal agency certification and analysis process, allowing the small business community the opportunity to question a rule, and, if a discrepancy is found, allowing for it to be re-evaluated before it’s finalized,” Ernst said.

The lawmakers listed several federal rules where provisions in the Prove It Act would have allowed for a review of the rule prior to it being put into action. Those include the Environmental Protection Agency’s proposed Waters of the United States rule and the Department of Energy’s energy conservation standards for manufactured housing.

Heitkamp added that the needs of small businesses must be considered when regulations are created to prevent “red tape and burdensome rules” that unfairly impact them.

“That’s why Sen. Ernst and I are introducing this bipartisan legislation to give small businesses a bigger seat at the table and a stronger voice if a proposed regulation could hurt their ability to grow,” she said.