Sen. Joni Ernst, R-Iowa, speaks Wednesday, March 15, 2023, on Capitol Hill in Washington. (AP Photo/Mariam Zuhaib) Mariam Zuhaib/AP
Joni Ernst to introduce bill to force federal agency transparency on small business regulations
Rachel Schilke May 03, 10:00 AM May 03, 10:22 AM Video Embed
EXCLUSIVE — Sen. Joni Ernst (R-IA) plans to introduce a bill on Wednesday aimed at helping small businesses hold federal agencies accountable when it comes to newly instated regulations on direct and indirect costs.
Ernst will unveil the Prove It Act of 2023 at noon, which will aim to force federal agencies under the Biden administration to prove that any new regulation is fully compliant with existing laws. It also creates an avenue for small businesses to raise concerns when regulators do not consider the direct and indirect costs placed upon their businesses before imposing a rule.
SMALL BUSINESSES ARE LESS OPTIMISTIC ABOUT FUTURE, SURVEY FINDS
“For too long, federal bureaucrats have ignored the concerns of our job creators and the negative impact their many rules have on hardworking small and family-owned businesses,” Ernst said in a statement first shared with the Washington Examiner. “One-size-fits-all regulations don’t suit Iowa’s entrepreneurs, and that’s why I’m fighting to ensure our small businesses are heard and considered in future regulatory mandates from Washington.”
Under the Prove It Act, small businesses that fear regulators are taking advantage of them and placing a statute that goes against already-existing laws can ask their chief advocate in the government to force the agencies to prove their regulations are legal.
In April, the American Action Forum found that federal agencies published $43.4 billion in total costs and added 1.8 million hours of annual paperwork burden hours on small businesses. Forty-eight total regulations were installed, the most notable coming from the Environmental Protection Agency for its regulation on greenhouse gas emissions standards for heavy-duty vehicles.
Ernst’s bill comes after a report from the National Federation of Independent Business Small Business Legal Center discovered that several government agencies, including the Department of Energy, Department of Labor, and Environmental Protection Agency, failed to comply with the statutes under the Regulatory Flexibility Act.
The act, signed into law by former President Jimmy Carter in 1980, addresses the “disproportionate impact of federal regulations on small businesses” by requiring federal agencies to consider the impacts of their proposals on the small business community.
“Now, over 40 years later, the Act is hardly taken seriously. Currently, the RFA’s requirements may politely be deemed a mere formality; more accurately, a paper tiger,” the report stated.
The NFIB cited 28 instances of federal agencies being noncompliant with RFA statutes from May 2021 to December 2022. Of the 28, the EPA was responsible for nine, per the NFIB report. Several of the violations pertain to niche regulations, such as reporting and recordkeeping requirements for certain substances or designating certain substances as harmful.
Other agencies that were cited for noncompliance the most, along with EPA, included the Department of Labor and the Securities and Exchange Commission.
“Sen. Ernst’s Prove It Act of 2023 will ensure that small businesses have a voice in rules and regulations coming out of Washington,” said Tom Sullivan, vice president for small business policy at the U.S. Chamber of Commerce. “Listening to small businesses’ concerns about the impact of federal regulations needs to be a top priority when Congress considers SBA Reauthorization.”
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Ernst’s introduction of the bill comes during National Small Business Week. In Iowa, 99.3% of businesses are considered small businesses, with nearly half of Iowans employed by a small business, according to the Small Business Administration.
Iowa City, home to the University of Iowa, was named the Small Business Association’s Iowa Small Business Community of the Year.
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