Overview
Title
An Act To amend title 5, United States Code, to require greater transparency for Federal regulatory decisions that impact small businesses, and for other purposes.
ELI5 AI
H.R. 7198, called the "Prove It Act of 2024," wants to make sure when the government makes rules, they think about how those rules affect small businesses and give them a chance to ask for help if the rules are too tough.
Summary AI
H.R. 7198, known as the "Prove It Act of 2024," aims to improve transparency in federal regulatory decisions that affect small businesses. The bill requires federal agencies to consider the potential indirect costs their regulations might impose on small businesses. It allows small businesses to petition the Small Business Administration to review agency certifications that claim a rule will not have a significant economic impact on them. The bill also mandates that agencies publish guidance on their regulations and ensure that rules are reviewed every ten years to assess their impact on small businesses.
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AnalysisAI
Summary of the Bill
The "Prove It Act of 2024" seeks to enhance transparency in federal regulatory decisions that affect small businesses by amending existing U.S. Code provisions. The bill focuses on introducing mechanisms to ensure an open and rigorous review process for regulatory rules that might significantly impact small businesses economically. It allows small businesses to petition for reviews, mandates publication of related guidance, and imposes structured review procedures on agencies for their rules every 10 years. The goal is to ensure that the potential impacts of regulations on small businesses are adequately considered and analyzed.
Significant Issues
A central issue with the bill is the complexity and lack of clarity regarding the criteria for determining when a petition for reviewing a rule merits further investigation. This could lead to arbitrary decision-making, impairing the reliability of the process. Furthermore, the term "significant economic impact on a substantial number of small entities" is not strictly defined, leaving room for varied interpretations and application across different scenarios.
Another potential complication arises from the penalty clause that states a rule will not apply to small entities if agencies fail to meet review obligations. This could lead to enforcement challenges and unintended exploitation of regulatory compliance gaps. Additionally, the intricate formalities involved in filing petitions and subsequent reviews might deter small entities from engaging with the process due to complexity or lack of resources.
Broad Public Impact
The bill's intent is to create a more transparent regulatory environment, which can empower small businesses by considering their economic welfare more prominently in rule-making processes. While this could potentially result in reduced regulatory burdens for small businesses, it might impede the timeliness and efficiency of rule promulgations that aim to address broader public concerns.
From a broader perspective, enhancing regulatory transparency could foster public confidence in how regulations are developed and implemented. However, if regulatory processes become overly cumbersome or stalled, the broader public might experience delays in the benefits that come from new regulations, such as improved safety standards or environmental protections.
Impact on Specific Stakeholders
For small businesses, the bill offers a potential avenue to exert more influence over federal regulations that might otherwise pose economic challenges to their operations. This empowerment could translate into more favorable regulatory outcomes, reducing compliance costs and protecting their competitive viability.
On the flip side, regulatory agencies might face increased operational demands, as the proposed changes imply additional responsibilities to conduct thorough reviews, publish documents promptly, and incorporate public feedback. This added layer could exhaust resources and create delays in the implementation of necessary regulations, which might not align with the public's broader interests in efficient governance.
Large businesses and industries could also be affected, albeit indirectly. As regulatory procedures are scrutinized more intensely for their impact on smaller entities, large companies might see changes in how regulations apply to their supply chains or market dynamics as rules are adjusted to mitigate small business impacts.
In conclusion, while the "Prove It Act of 2024" intends to bolster the transparency and fairness of the regulatory process for small businesses, its success largely hinges on effectively addressing the identified issues, ensuring clarity and practicality in its provisions, and balancing the need for thoughtful regulation with efficient execution.
Issues
The criteria for determining whether a petition merits further review under section 605A(c) are not clearly defined, leading to potential arbitrary or inconsistent decision-making, which could undermine the process' fairness and perceived legitimacy.
The term 'significant economic impact on a substantial number of small entities' is frequently referenced but lacks explicit quantitative criteria, which could lead to varying interpretations and uneven application of the provisions across different cases (Sections 2, 605A, and 3).
The penalty clause in section 605A(d)(4) that the final rule shall not apply to small entities if an agency fails to meet review obligations could be impractical and unenforceable, potentially creating a loophole or avenue for exploitation.
The process for filing a petition and the subsequent review procedures described in section 605A involve complex formalities that could be cumbersome for small entities and discourage participation, limiting the effectiveness of the bill in protecting small business interests.
There are no specific time frames mentioned for consulting with the Chief Counsel in section 605A(b), which could lead to inefficiencies or unnecessary delays in addressing concerns raised by small entities.
The requirement for an agency to perform additional analyses if the Chief Counsel's full review indicates a significant economic impact (section 605A(d)(3)) may impose significant regulatory burdens and costs, potentially outweighing the intended benefits.
Section 4 lacks clear criteria for determining if a rule should be reinstated based on public comments, which could result in inconsistent or opaque decision-making processes, raising questions about procedural fairness.
The amendment made to section 610 does not specify consequences for an agency if they fail to complete a review of a rule within the designated 180-day period after determining reinstatement, reducing accountability for agency compliance.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill gives it the official short title “Prove It Act of 2024.”
2. Initial regulatory flexibility analysis Read Opens in new tab
Summary AI
The section amends the United States Code to improve the process for reviewing regulatory rules that affect small businesses. It allows small entities to petition for a review if they believe a proposed rule will have a significant economic impact, requires the review process to be more transparent, and ensures that rules are analyzed for their effects on small businesses before they are finalized.
605A. Review procedures relating to initial regulatory flexibility analysis certifications Read Opens in new tab
Summary AI
The text explains a process where small businesses can challenge a government agency’s claim that a proposed rule won’t significantly affect them economically. It outlines how these businesses can submit a petition to the Chief Counsel for Advocacy, who will then review the issues, possibly conduct a full review, and may require the agency to reconsider its decision if the rule does have a significant impact on small businesses.
3. Publication of guidance Read Opens in new tab
Summary AI
Section 3 of the bill updates the U.S. Code to require that if a government agency believes a new rule will have a big economic effect on many small businesses, they must post all relevant guidance documents on the internet, and allow people to comment on them to give these businesses a chance to share their thoughts and concerns.
4. Review procedures for section 610 periodic review of rules Read Opens in new tab
Summary AI
The proposed changes to Section 610 of title 5 in the United States Code require agencies to review rules every 10 years, considering indirect costs among other factors. If an agency fails to conduct this review, the rule becomes ineffective until the agency publishes a notice and gathers public comments, potentially reinstating the rule within 180 days if deemed necessary.