Senator Ayotte Votes to Protect Small Businesses from Burdensome Regulations

Press Release

FREEDOM Act would require federal agencies to examine impact of regulations on small businesses, job creation

U.S. Senator Kelly Ayotte (R-NH), a member of the Senate Small Business Committee, today voted in support of an amendment to the Economic Development Revitalization Act that would establish strong protections for small businesses from potentially onerous federal regulations. The amendment, which required 60 votes for passage, failed by a vote of 53-46.

The Freedom from Restrictive Excessive Executive Demands and Outcomes Mandates (FREEDOM) Act, which was introduced by Senators Olympia Snowe (R-ME) and Tom Coburn (R-OK), would modernize the Regulatory Flexibility Act (RFA) by requiring federal government regulators to conduct comprehensive reviews of the potential impacts that proposed regulations have on small businesses and job creation.

"At a time when New Hampshire's small business owners are already struggling in this difficult economy, they should not have the added burden of onerous and costly federal regulations that further stifle investment, innovation, and job growth," said Senator Ayotte. "This legislation is a commonsense step toward ensuring that regulators better understand the impact on small businesses before imposing new rules and regulations."

Highlights of the FREEDOM Act include:

* Incorporating "Indirect" Economic Impact in RFA Small Entity Analyses. The amendment revises the RFA to draw in rules with foreseeable indirect economic effects. Regulations that only address the concerns of large businesses can trickle down, unintentionally hurting small business.

* Expanding judicial review requirements. This amendment will enhance the RFA to allow small entities to seek review at the proposed rule stage. Currently, small entities can only seek review on the date of the final regulatory action.

* Ensuring that agencies periodically review existing rules that impact small business. If a federal agency fails to conduct a periodic review of their rules, as required under section 610 of the RFA, then that agency will have one percent of its budget for salaries rescinded, unless Congress takes action.

* Requiring Small Business Review Panels for Nine Additional Agencies. This section expands the small business panel process requirement (i.e., "SBREFA" panels) to apply to nine additional federal agencies (based on the economic impact of the agency rules on small entities) over the course of three years. These panels currently only apply to the EPA, OSHA, and the new Consumer Financial Protection Bureau (CFPB).

* Including a Fully Offset Funding Provision. The new expenditures would be offset by repealing the SBA's Drug-Free Workplace program and two special purpose SBA grant programs, all of which the Administration has proposed eliminating in its FY 2012 budget request.

* Expanding the Regulatory Flexibility Act (RFA) to Agency Guidance Documents. The amendment extends the RFA to agency guidance documents, so that federal agencies must conduct small business economic analyses before publishing guidance documents. Many agencies, including OSHA, have repeatedly subverted the rulemaking process, by relying on guidance documents so that they don't have to adhere to their RFA obligations - this provision should help to end that practice.

The amendment has wide support from national business groups, including the National Federation of Independent Business and the U.S. Chamber of Commerce.

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