Ernst Introduces Prove It Act

WASHINGTON, D.C. – U.S. Senator Joni Ernst (R-IA) introduced the Prove It Act of 2016, legislation that increases transparency within the federal rulemaking process, especially when there is a disagreement between agencies over the economic impact of a rule on small businesses.

In particular, this proposal designates a third party to review the facts and issue a publicly available objective assessment. If it is determined that the proposed rule would have a significant impact on a substantial number of small entities, the bill requires the federal agency to go back and complete additional regulatory analyses. 

In the case of the expanded Waters of the U.S. (WOTUS) rule, the Prove It Act could have worked to incentivize the Environmental Protection Agency (EPA) and Small Business Administration’s Office of Advocacy to resolve their differences on whether the rule would have a direct and significant economic impact on small businesses.  In 2014, the Office of Advocacy submitted a regulatory comment letter that requested EPA to withdraw the WOTUS rule and conduct additional analysis in light of these concerns.

“The Prove It Act is a step in the right direction to mitigate rules like the overreaching and burdensome expansion of WOTUS that threatens the livelihoods of many small businesses,” said Senator Ernst. “By requiring an objective, third party assessment of differing regulatory analyses, this proposal works to counter agencies like the EPA from having an unchecked ability to implement harmful rules and regulations without taking into account the concerns of our small businesses. This legislation incentivizes better rulemaking by encouraging federal agencies to have thoughtful conversations about differing impact studies a rule may have on small businesses, as well as bring the conversation into the public domain in a way that doesn’t currently exist.

“It’s time to make our government work more efficiently and streamline our regulatory system so our small businesses can innovate and create jobs without the weight of unnecessary, costly regulations that stymie growth.”

The Prove It Act is also supported by the National Federation of Independent Business, U.S. Chamber of Commerce, and Women Impacting Public Policy.

About The Prove It Act:

• Gives small businesses a stronger voice and requires agencies to prove their regulatory analysis if the SBA Office of Advocacy Chief Counsel disagrees with the agency’s decision to certify that the rule would not have a significant economic impact.

• Calls for the request for review to be published in the Federal Register and on the SBA Office of Advocacy’s website to ensure transparency.

• Requires the federal agency that issued the proposed rule to also publish a response to the SBA Office of Advocacy’s request for an OIRA review and disclose it in the Federal Register and on its website.

• Mandates that OIRA submit the results of the review to the SBA Chief Counsel and publish those results in the Federal Register and on OIRA’s website.

• If OIRA determines that the proposed rule will in fact have a significant economic impact, the agency would be required to perform an Initial Regulatory Flexibility Analysis (IRFA) and subsequently a Final Regulatory Flexibility Analysis (FRFA).

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