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House Bill 7198
118th Congress(2023-2024)
Prove It Act of 2024
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Passed House on Dec 5, 2024
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H. R. 7198 (Reported-in-House)

Union Calendar No. 631

118th CONGRESS
2d Session
H. R. 7198

[Report No. 118–761, Part I]


To amend title 5, United States Code, to require greater transparency for Federal regulatory decisions that impact small businesses, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

February 1, 2024

Mr. Finstad (for himself, Ms. Caraveo, and Mr. Moran) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

November 22, 2024

Additional sponsors: Mr. Gallagher, Ms. Hageman, Ms. Salazar, Mr. Valadao, Mrs. Miller of West Virginia, Mr. Stauber, Mr. Bacon, Mrs. Fischbach, Mr. Flood, Mr. Steil, Mr. Carey, Mr. Mooney, Mr. D'Esposito, Mr. Bean of Florida, and Mr. Lamborn

November 22, 2024

Reported from the Committee on the Judiciary with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

November 22, 2024

Committee on Small Business discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed

[For text of introduced bill, see copy of bill as introduced on February 1, 2024]

A BILL

To amend title 5, United States Code, to require greater transparency for Federal regulatory decisions that impact small businesses, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Prove It Act of 2024”.

SEC. 2. Initial regulatory flexibility analysis.

(a) In general.—Chapter 6 of title 5, United States Code, is amended—

(1) in section 603(b)—

(A) in paragraph (5), by striking the period at the end and inserting “; and”; and

(B) by adding at the end the following:

“(6) where feasible, any reasonably foreseeable potential indirect costs the proposed rule may impose on small entities, including small entities that—

“(A) purchase products or services from, sell products or services to, or otherwise conduct business with entities directly regulated by the rule;

“(B) are directly regulated by other governmental entities as a result of the rule; or

“(C) are not directly regulated by the agency as a result of the rule but are otherwise subject to other agency rules as a result of the rule.”;

(2) in section 605(b), by striking “The agency” and inserting “Not later than 10 days after completing the certification described in this subsection, the agency”; and

(3) by inserting after section 605 the following:

Ҥ 605A. Review procedures relating to initial regulatory flexibility analysis certifications

“(a) Filing a petition to review agency certification of a proposed rule.—

“(1) IN GENERAL.—Any small entity, group of small entities, or organization representing the interests of small entities may petition the Chief Counsel for Advocacy of the Small Business Administration (in this section referred to as the ‘Chief Counsel’) to review a certification published under section 605(b) that a proposed rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.

“(2) FORM.—The Chief Counsel shall—

“(A) determine the method, timing, and form of disseminating a petition described in paragraph (1); and

“(B) display the information described in subparagraph (A) on the website of the Office of Advocacy of the Small Business Administration in a conspicuous manner.

“(3) CONTENTS.—Each petition described in paragraph (1) with respect to a certification published under section 605(b) for a proposed rule shall clearly and concisely—

“(A) specify the name of the petitioner and a telephone number, a mailing address, and an email address that the Chief Counsel may use to communicate with the petitioner;

“(B) if the petitioner is an organization, provide additional identifying information, as applicable, including the organizational or corporate status of the petitioner, the State of incorporation of the petitioner, the registered agent of the petitioner, the interest of the petitioner in representing small entities affected by the proposed rule and the certification at issue, and the name and authority of the individual who signed the petition on behalf of the organizational or corporate petitioner;

“(C) present the specific problems or issues that the petitioner believes should be addressed or considered through a review of the certification, such as—

“(i) any specific circumstances in which the determination of the certification that the proposed rule will not, if promulgated, have a significant economic impact on a substantial number of small entities is incorrect, incomplete, or inadequate; or

“(ii) why the proposed rule would, if promulgated, have a significant economic impact on a substantial number of small entities;

“(D) cite, enclose, or reference any relevant and non-protected or confidential technical, scientific, or other data or information supporting any assertion of the problems or issues with the certification;

“(E) present a proposed solution to the problems or issues raised in the petition, including potential regulatory or compliance alternatives to the proposed rule;

“(F) provide an analysis, discussion, or argument that explains how the proposed solution described in subparagraph (E) solves the problems or issues raised in the petition; and

“(G) cite, enclose, or reference any other publicly available data or information supporting the proposed solution described in subparagraph (E).

“(b) Consultation.—

“(1) IN GENERAL.—Any entity or organization desiring to file a petition under subsection (a) may request a consultation with the Chief Counsel before or after filing the petition.

“(2) FORM.—The Chief Counsel shall—

“(A) determine the method, timing, and form of requesting a consultation with the Chief Counsel under paragraph (1); and

“(B) display the information described in subparagraph (A) on the website of the Office of Advocacy of the Small Business Administration in a conspicuous manner.

“(3) LIMITATIONS ON ASSISTANCE.—In any consultation regarding a petition under paragraph (1), the Chief Counsel—

“(A) may only—

“(i) describe the process for filing, docketing, tracking, closing, amending, withdrawing, and resolving the petition; and

“(ii) assist the petitioner to clarify the petition so that the Chief Counsel is able to understand the issues of concern to the petitioner; and

“(B) may not advise a petitioner on whether the petition should be amended or withdrawn.

“(c) Prima facie review.—

“(1) IN GENERAL.—Upon receipt of a petition filed under this section with respect to the certification of a proposed rule, the Chief Counsel shall make an initial prima facie determination on the merit of the issues raised in petition as to the properness of the certification and whether the proposed rule in question would, if promulgated, have a significant economic impact on a substantial number of small entities.

“(2) NO FURTHER REVIEW.—If, following the prima facie review of a petition under paragraph (1), the Chief Counsel determines that the issues raised in the petition do not merit further review by the Chief Counsel, the Chief Counsel shall, not later than 10 days after receipt of the petition, inform the petitioner of that determination and the matter shall be closed.

“(3) FURTHER REVIEW.—If, following the prima facie review of a petition under paragraph (1), the Chief Counsel determines that the issues raised in the petition do merit further review by the Chief Counsel, the Chief Counsel shall, not later than 10 days after receipt of the petition, inform the petitioner and the agency that promulgated the proposed rule that the Chief Counsel shall conduct a full review of the certification and proposed rule to which the petition relates under subsection (d).

“(d) Full review.—

“(1) CONSIDERATIONS; MEETING.—In conducting a full review under this subsection with respect to the certification made under section 605(b), the Chief Counsel shall—

“(A) consider—

“(i) whether the agency that promulgated the proposed rule correctly determined which small entities will be affected by the proposed rule;

“(ii) whether the agency considered adequate economic data to assess whether the proposed rule will have a significant impact on a substantial number of small entities; and

“(iii) the economic implications of the proposed rule; and

“(B) convene a virtual or in-person meeting between the Chief Counsel, the petitioner, representatives of the agency that promulgated the proposed rule who are determined appropriate by the Chief Counsel, and the Administrator of the Office of Information and Regulatory affairs to—

“(i) provide positions and support for those positions regarding the certification of the proposed rule; and

“(ii) allow the Chief Counsel to ask questions as the Chief Counsel determines necessary to make a final determination as to the validity of the certification.

“(2) PUBLICATION.—Not later than 30 days after the date on which the Chief Counsel begins a full review of a certification made with respect to a proposed rule under paragraph (1), the Chief Counsel shall submit to the petitioner and the agency that promulgated the proposed rule, and publish in the Federal Register and on the website of the Office of Advocacy of the Small Business Administration, the results of the review conducted under paragraph (1).

“(3) REQUIREMENT TO PERFORM ANALYSES.—If, after a full review of a certification made with respect to a proposed rule under paragraph (1), the Chief Counsel determines that the proposed rule will, if promulgated, have a significant economic impact on a substantial number of small entities, the agency that promulgated the proposed rule shall perform an initial regulatory flexibility analysis and a final regulatory flexibility analysis for the proposed rule under sections 603 and 604, respectively.

“(4) PENALTY.—If an agency fails to attend the required meeting under paragraph (1)(B) or in any other way fails to assist the Chief Counsel in a full review under paragraph (1) with respect to a proposed rule of the agency, as determined by the Chief Counsel, the final rule shall not apply to small entities.

“(5) JUDICIAL REVIEW.—For purposes of judicial review under chapter 7 of this title, a certification made by an agency under section 605(b) for which a petition is filed under subsection (a) shall be considered final agency action as of the date on which the Chief Counsel—

“(A) makes a determination under subsection (c)(2) that the issues raised in the petition do not merit further review; or

“(B) publishes the results of a full review of the certification under paragraph (1).”.

(b) Technical and conforming amendment.—The table of sections for chapter 6 of title 5, United States Code, is amended by inserting after the item relating to section 605 the following:


“605A. Review procedures relating to initial regulatory flexibility analysis certifications.”.

SEC. 3. Publication of guidance.

Section 609 of title 5, United States Code, is amended by adding at the end the following:

“(f) With respect to any rule that an agency determines is likely to have a significant economic impact on a substantial number of small entities, the head of the agency shall, on regulations.gov or any similar internet website—

“(1) publish all guidance documents and other relevant documents, as determined by the agency, including any updated guidance documents that set forth interpretations of the rule; and

“(2) allow for comments on the documents described in paragraph (1) to ensure that small entities may access and provide feedback on those documents.”.

SEC. 4. Review procedures for section 610 periodic review of rules.

(a) In general.—Section 610 of title 5, United States Code, is amended—

(1) in subsection (b)—

(A) in the matter preceding paragraph (1), by striking “the following factors”;

(B) in paragraph (4), by striking “and” at the end;

(C) in paragraph (5), by striking the period at the end and inserting “; and”; and

(D) by adding at the end the following:

“(6) any indirect costs described in the initial regulatory flexibility analysis under section 603(b)(6), and any other indirect costs that may have arisen during the 10-year period described in subsection (a).”; and

(2) by adding at the end the following:

“(d) If an agency fails to conduct a review of a rule as required under this section within the 10-year period described in subsection (a)—

“(1) the Chief Counsel for Advocacy of the Small Business Administration shall notify the agency that the rule has ceased to be effective;

“(2) the agency shall publish in the Federal Register a notification that the rule has ceased to be effective, and solicit comments for why the rule should be reinstated; and

“(3) if, based on the comments received under paragraph (2), the agency determines that the rule should be reinstated—

“(A) the agency shall have 180 days beginning on the date of that determination to complete the review of the rule under this section; and

“(B) upon completion of the review under subparagraph (A), the rule shall be reinstated, notwithstanding the notice and comment rulemaking procedures under section 553 of this title.”.

(b) Application.—The amendment made by subsection (a)(2) shall apply with respect to any final rule issued by an agency—

(1) during the 5-year period preceding the date of enactment of this Act; or

(2) on or after the date of enactment of this Act.

Union Calendar No. 631

118th CONGRESS
     2d Session
H. R. 7198
[Report No. 118–761, Part I]
A BILL
To amend title 5, United States Code, to require greater transparency for Federal regulatory decisions that impact small businesses, and for other purposes.
November 22, 2024
Reported from the Committee on the Judiciary with an amendment
November 22, 2024
Committee on Small Business discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed