The Committee has a well-established record of working to reduce the burden that Federal regulations bear on small businesses. Over the past twenty years, the number and complexity of Federal regulations have multiplied at an alarming rate. These regulations impose a much more significant impact on small businesses than larger businesses. A report prepared for the SBA’s Office of Advocacy found that in 2004, the per-employee cost of federal regulations for firms with fewer than 20 employees was $7,647. That was approximately 45 percent more than the $5,282 per-employee cost faced by businesses with 500 or more workers.
In the Senate, Ranking Member Snowe has been a longtime leader in bringing regulatory reform to small businesses. She has introduced a series of legislation that would bring specific, targeted relief to small businesses and would clarify requirements that exist under Federal law that require agencies to produce useful small business compliance guides that explain, in a readable format, the compliance requirements of complex rules. Senator Snowe has also introduced legislation that would amend and perfect the Regulatory Flexibility Act (RFA), the seminal small business regulatory statute. It would require agencies to formally address the comments of the SBA Office of Advocacy during the rulemaking process, and it would require that agencies conduct periodic reviews of existing Federal rules to ensure that they do not bear a significant impact on a substantial number of small businesses. Ranking Member Snowe is also a longstanding champion for the independence of the Office of Advocacy, which in FY 2008 saved small businesses approximately $11 billion in forgone regulatory compliance costs.
Job Impact Analysis Act of 2010 (S. 3024)
On February 23, 2010, Senators Snowe and Mark Pryor (D-Ark.) introduced legislation aimed at forcing Congress to fully consider the implications that significant legislation would have on job creation. The Job Impact Analysis Act of 2010 would direct the Congressional Budget Office (CBO) to estimate in a “job impact statement” the potential job creation or job loss attributable to each bill or joint resolution reported by a Congressional committee that exceeds $5 billion in costs.
The bill also includes several targeted regulatory reforms that would ensure Federal agencies fully consider small business implications during the rulemaking process, such as strengthening the effectiveness of the Regulatory Flexibility Act, which requires agencies to consider the impact of their regulatory proposals on small businesses and analyze effective alternatives that minimize the negative impact on these firms.
Furthermore, the bipartisan measure would require Federal agencies take into account comments provided by the SBA’s Office of Advocacy, a key office that is intended to be the independent voice for small business within the Federal government. The bill would guarantee the statutory and budgetary independence of the office, whose research demonstrates that the annual cost of federal regulations totals $1.1 trillion, with small firms bearing a disproportionate burden – paying approximately 45 percent more per employee in annual regulatory compliance costs than larger firms.
The reforms contained in the bill are based on the Regulatory Flexibility Reform Act from the 109th Congress and the Independent Office of Advocacy and Small Business Regulatory Reform Act of 2008 from the 110th Congress.