Small Business Regulatory Flexibility Improvements Act

The bill would make wide-ranging amendments to the Regulatory Flexibility Act, requiring federal agencies to analyze both direct and indirect economic effects of proposed rules on small businesses — including effects on entities not directly regulated. It would expand the Act's coverage to land management plan revisions (covering Forest Service and Bureau of Land Management plans), tribal organizations, and rules involving tax recordkeeping requirements. Agencies would no longer be allowed to waive required economic analyses. Instead, the SBA's Chief Counsel for Advocacy would issue binding compliance rules and convene pre-publication review panels for major rules. More detailed analyses would be required, including descriptions of disproportionate impacts and effects on access to credit.

The bill would strengthen judicial review by making it available upon publication of a final rule rather than only after final agency action, and would give the Court of Appeals original jurisdiction over Chief Counsel compliance rules. It would waive first-time civil fines for small businesses committing paperwork violations, with exceptions for public health risks, criminal activity, and uncorrected violations. It would also direct the GAO to assess whether the Chief Counsel has sufficient resources for the expanded role.

Small businesses, small nonprofits, small governmental jurisdictions, and tribal organizations subject to federal rulemaking across all sectors. Federal agencies conducting rulemaking, particularly the Forest Service and Bureau of Land Management for land management plans. The SBA's Office of Advocacy gains significant new enforcement duties, and OIRA at OMB is drawn into the pre-publication review panel process.

If enacted, agencies would face stronger, legally enforceable obligations to minimize regulatory burdens on small businesses, and small entities would gain new tools to challenge non-compliant rules in court sooner. The elimination of the waiver authority removes a significant loophole agencies have used to avoid analyses. The first-time paperwork fine waiver would directly reduce financial penalties on small firms caught in inadvertent compliance errors.

The Chief Counsel for Advocacy would issue binding compliance rules governing all agencies within 270 days of enactment. Before publishing a major rule, agencies would notify the Chief Counsel, triggering a 15-day window to convene a review panel (comprising SBA, the agency, and OIRA) and a 60-day window to produce a report that becomes part of the rulemaking record. Each agency would publish a periodic review plan for existing rules within 180 days of enactment and submit annual reports to Congress, the Chief Counsel, and OIRA. Small entities could request copies of review reports. A GAO study on Chief Counsel capacity would be due within 90 days of enactment.