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Regulatory Flexibility Act
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The Regulatory Flexibility Act (RFA) is a federal law passed in 1980 requiring federal agencies to consider the effects of regulation on small entities such as small businesses, nonprofit organizations, and local governments. The RFA directed agencies to consider regulatory alternatives for small entities and to consider their input and needs during the rulemaking process. The RFA applies to almost all agencies of the federal government; agencies involved in military and foreign affairs activities are exempted. The act also imposes additional requirements on the Environmental Protection Agency, the Consumer Financial Protection Bureau, and the Occupational Safety and Health Administration.[1][2][3][4]
Background
The Regulatory Flexibility Act was passed into law in 1980, during the administration of President Jimmy Carter (D), and took effect on January 1, 1981.[1] According to Inc. magazine, "by the early 1990s there was a growing clamor in the small business community and Congress for an amended RFA." In 1993, President Bill Clinton's Executive Order 12866 directed agencies to adhere to the RFA and its principles.[2]
The RFA has been amended several times by subsequent legislation, including the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and the 2010 Small Business Jobs Act.[1] The SBREFA guaranteed judicial review for small entities that believe an agency violated the RFA. The law also added additional periodic review requirements to the RFA.[2]
Provisions
The preamble to the RFA, titled "Congressional Findings and Declaration of Purpose," included the following statements from Congress:[1]
| “ | (1) when adopting regulations to protect the health, safety and economic welfare of the Nation, Federal agencies should seek to achieve statutory goals as effectively and efficiently as possible without imposing unnecessary burdens on the public;
(2) laws and regulations designed for application to large scale entities have been applied uniformly to small businesses, small organizations, and small governmental jurisdictions even though the problems that gave rise to government action may not have been caused by those smaller entities; (3) uniform Federal regulatory and reporting requirements have in numerous instances imposed unnecessary and disproportionately burdensome demands including legal, accounting and consulting costs upon small businesses, small organizations, and small governmental jurisdictions with limited resources; ...[1][5] |
” |
Definition of small entities
The RFA defines three kinds of small entities:[1][2]
- Small businesses
- Defined by the Small Business Act and regulations from the U.S. Small Business Administration
- Small organizations
- Independently owned and operated nonprofit organizations not dominant in their field
- Small governmental jurisdictions
- Cities, counties, towns, townships, villages, school districts, and other governmental jurisdictions with less than 50,000 people
Regulatory flexibility agendas
Under the RFA, federal agencies must publish regulatory flexibility agendas in the Federal Register twice per year.[1] Agencies submit these regulatory flexibility agendas for inclusion in each Unified Agenda of Federal Regulatory and Deregulatory Actions, a semiannual publication of recently completed, ongoing, and anticipated federal regulatory actions, issued every spring and fall by the Regulatory Information Service Center (RISC) and the Office of Information and Regulatory Affairs (OIRA). According to RegInfo.gov, the official website of the Unified Agenda, these reports identify agency regulations "that may have a significant economic impact on a substantial number of small entities."[6][7]
Periodic review of existing rules
- See also: Retrospective regulatory review
The RFA, as amended by the SBREFA, includes a requirement for federal agencies to "publish in the Federal Register a plan for the periodic review of the rules issued by the agency which have or will have a significant economic impact upon a substantial number of small entities."[1]
Additional requirements for covered agencies
The RFA and SBREFA impose additional reporting and review requirements on what they refer to as a covered agency, a term which includes the following:[1]
- Environmental Protection Agency
- Occupational Safety and Health Administration (Department of Labor)
- Consumer Financial Protection Bureau* (Federal Reserve)
According to a summary of the requirements for covered agencies from the Environmental Protection Agency:[3]
| “ | The purpose of the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA), is to fit regulatory requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to the regulation. The RFA requires that agencies determine, to the extent feasible, the rule's economic impact on small entities, explore regulatory options for reducing any significant economic impact on a substantial number of such entities, and explain their ultimate choice of regulatory approach. The Agency refers to the RFA as amended by SBREFA simply as the RFA.
|
” |
| —Environmental Protection Agency[3] | ||
*Note: The Consumer Financial Protection Bureau was created by and added to the definition of covered agency for the purposes of the RFA and SBREFA by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.[8][9]
See also
- Rulemaking
- Retrospective regulatory review
- Regulatory impact analysis
- Unified Agenda of Federal Regulatory and Deregulatory Actions
- Amending laws and executive orders:
- Covered agencies:
External links
- Text of the Regulatory Flexibility Act, as amended (U.S. Small Business Administration)
- United States Small Business Administration
- Search Google News for this topic
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Small Business Administration, "The Regulatory Flexibility Act," accessed September 11, 2017
- ↑ 2.0 2.1 2.2 2.3 Inc., "Regulatory Flexibility Act," accessed September 11, 2017
- ↑ 3.0 3.1 3.2 Environmental Protection Agency, "Summary of the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act," last updated October 17, 2016
- ↑ U.S. Equal Employment Opportunity Commission, "Regulatory Flexibility Act Procedures," accessed September 12, 2017
- ↑ 5.0 5.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ RegInfo.gov, "About the Unified Agenda," accessed August 22, 2017
- ↑ The Regulatory Group, "Regulatory Glossary," accessed August 22, 2017
- ↑ Legal Information Institute, "5 U.S. Code § 609 - Procedures for gathering comments," accessed February 21, 2018
- ↑ U.S. Government Publishing Office, "Public Law 111-203 - Dodd-Frank Wall Street Reform and Consumer Protection Act," accessed February 21, 2018
