Overview
Title
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, the "Prove It Act of 2024," wants to make sure small businesses know how new rules might affect them by having government groups explain their plans better and let small businesses say if they think they're being hurt.
Summary AI
H.R. 7198, known as the "Prove It Act of 2024," aims to increase transparency in federal regulatory decisions affecting small businesses. The bill requires agencies to analyze potential indirect costs of proposed rules on small businesses and allows small entities to challenge agency certifications that claim proposed rules won't significantly impact them. If a petition is filed, the Small Business Administration's Chief Counsel for Advocacy must review the certifications and may require further analysis if a proposed rule does indeed affect many small businesses. Moreover, the bill mandates agencies to publish guidance documents on rules impacting small businesses and allows for public feedback on these documents.
Published
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AnalysisAI
The bill titled "To amend title 5, United States Code, to require greater transparency for Federal regulatory decisions that impact small businesses, and for other purposes,” also known as the "Prove It Act of 2024," aims to enhance transparency and provide a more robust framework for small businesses to challenge federal regulatory decisions that might adversely affect them. The act introduces new procedures to ensure rules that significantly impact small businesses undergo thorough scrutiny.
General Summary of the Bill
The "Prove It Act of 2024" proposes amendments to provide small businesses with enhanced mechanisms for addressing concerns over government regulations. This involves permitting businesses to petition if they suspect that a proposed rule could significantly affect them financially, despite agency assurances. It further mandates the publication of guidance regarding regulations and requires periodic reviews of existing rules.
Summary of Significant Issues
Several issues arise from this bill. One primary concern is the complexity it introduces into the regulatory process, potentially overwhelming small businesses that lack legal or technical expertise. The penalties for agencies that do not cooperate during reviews could lead to legal ambiguities, creating uncertainty in enforcement and policy implementation. The bill also lacks clear definitions for essential terms like "significant economic impact," leading to potential discrepancies in application across agencies.
Additionally, while the proposed processes for transparency and review sound rigorous, they could inadvertently delay regulatory decisions critical to public welfare. Furthermore, the requirement for small businesses to provide detailed information and solutions in their petitions might act as a deterrent for less resourced entities.
Public Impact
Broadly, the bill could improve transparency and government accountability, potentially empowering small businesses by giving them a louder voice in regulatory affairs. However, the intricate processes involved might result in bureaucratic roadblocks that could stall necessary regulations, affecting sectors that depend on timely regulatory action.
Impact on Specific Stakeholders
Small Businesses: They stand to benefit from increased transparency and the ability to contest rules adversely impacting them. However, the complexity and resource demands of the petition process could discourage smaller operations with limited means. This risk might inadvertently sideline the very voices the bill intends to amplify.
Federal Agencies: The introduction of stricter review protocols could increase their workload, necessitating more precise economic analyses and greater engagement with stakeholder feedback. There are concerns about how effectively agencies can implement these requirements without additional resources, and the implied penalties might strain agency capabilities.
Regulatory Process: The bill might bring about more comprehensive evaluations of economic impacts, potentially improving rule quality. Yet, the added layers of review and potential penalties could slow down the promulgation of well-needed regulations, affecting timely responses to evolving economic and social challenges.
In summary, while the "Prove It Act of 2024" aims to fortify small businesses against potentially harmful regulations by increasing transparency and accountability, its intricate procedural requirements and ambiguous terms may pose challenges, leading to potential delays and unequal participation across differently resourced businesses. The overall success of this bill in achieving its intended outcomes will depend significantly on how its provisions are implemented and enforced.
Issues
The penalty clause in section 605A(d)(4), which states that a final rule will not apply to small entities if an agency fails to cooperate with the Chief Counsel during a full review, could disrupt policy implementation and affect regulatory certainty, potentially harming small businesses' legal and financial stability.
Section 2 of the bill introduces a complex process for small entities to petition for a review of regulatory decisions. The requirement for detailed petition contents and the intricate steps involved may discourage small businesses from participating due to a lack of resources or legal expertise.
The bill does not provide clear definitions or criteria for 'significant economic impact' or 'substantial number of small entities' in sections 605A and 3, which could lead to different interpretations and inconsistent application by agencies, affecting small business compliance across various industries.
Section 3 lacks a specified timeline for when agencies must publish guidance documents on regulations.gov, potentially causing delays and reducing transparency in regulatory processes affecting small businesses.
The absence of detailed guidelines for determining whether issues raised by small entities in petitions genuinely warrant a full review (Section 605A) risks inconsistent decision-making, potentially benefiting more resourceful entities over smaller competitors.
In section 4, the bill does not specify consequences or penalties for agencies that fail to review rules within the mandated 10-year period, which could result in regulatory gaps and reduce accountability for maintaining up-to-date, effective regulations.
The language and complexity of the procedures described in sections 2 and 3 may be overly technical for individuals without a legal or regulatory background, potentially hindering understanding and compliance by small businesses.
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 this Act states its official short title, which is the “Prove It Act of 2024.”
2. Initial regulatory flexibility analysis Read Opens in new tab
Summary AI
The text outlines new procedures for small businesses to challenge proposed government rules that may significantly impact them financially. It allows small businesses to petition for a review by the Small Business Administration, sets detailed requirements for filing and consulting on these petitions, and describes the review process, including the possibility of a full review and potential penalties for agencies that do not participate.
605A. Review procedures relating to initial regulatory flexibility analysis certifications Read Opens in new tab
Summary AI
In this section, small businesses or organizations can petition for a review if they believe a proposed rule will significantly impact them, despite an agency's claim otherwise. The Chief Counsel of the Small Business Administration will review the petition and decide if further examination is needed, potentially leading to a full review and additional analyses if the rule indeed affects many small businesses.
3. Publication of guidance Read Opens in new tab
Summary AI
The section requires that for any rule significantly impacting many small businesses, the agency must publish guidance documents online and allow for public comments to ensure these businesses can understand and provide feedback on these rules.
4. Review procedures for section 610 periodic review of rules Read Opens in new tab
Summary AI
Section 4 of the bill updates the procedures for periodic reviews of regulations under section 610 of title 5, United States Code, by emphasizing the consideration of indirect costs and outlining consequences if a review is not completed within ten years. If a rule is not reviewed in time, it will cease to be effective, and the agency must notify the public and consider comments on whether the rule should be reinstated, allowing 180 days for a review if reinstatement is deemed necessary.