HR-1163-119
Placed on the Union Calendar, Calendar No. 552.
Sponsored by Brad Finstad (R-MN)
What it does
The Prove It Act would amend the Regulatory Flexibility Act (title 5, U.S. Code) in four ways. First, it would require federal agencies to analyze indirect costs — not just direct costs — that proposed rules may impose on small businesses, including costs felt by businesses that trade with directly regulated entities. Second, it would create a formal petition process allowing small businesses or their representatives to challenge an agency's certification that a proposed rule will not significantly affect small entities, with the SBA's Chief Counsel for Advocacy empowered to conduct reviews and, if warranted, force a full economic analysis. Third, it would require agencies to publicly post guidance documents related to rules affecting small businesses and allow public comment on those documents. Fourth, it would automatically suspend any existing rule that an agency fails to review within the required 10-year period, requiring a public comment process before reinstatement.
Who benefits
Small businesses across all sectors that are subject to federal regulation, particularly those affected indirectly by rules targeting larger entities. Trade associations and advocacy groups representing small businesses, who gain a formal petition channel. Small businesses in supply chains of directly regulated industries. The SBA's Office of Advocacy, which gains expanded review authority. Regulated industries broadly, as the automatic suspension provision could neutralize rules that agencies have not reviewed on schedule. Legal and consulting firms that assist businesses in regulatory proceedings.
Who is hurt
Federal agencies that would face increased procedural burdens, mandatory meetings, and potential rule suspensions for missed review deadlines — all without additional appropriated funding. Workers and communities that benefit from existing regulations that could be automatically suspended if agencies miss review deadlines. Agencies operating under resource constraints may find compliance difficult, potentially creating regulatory gaps. Larger businesses that compete with small businesses could face a less level playing field if small businesses gain exemptions from rules. Public interest groups focused on health, safety, labor, or environmental protections, whose preferred rules could be delayed or suspended through the petition process.
Supporters argue
Supporters argue that federal agencies routinely certify that proposed rules have no significant impact on small businesses without conducting rigorous economic analysis, effectively shielding those certifications from meaningful challenge. They contend that the existing Regulatory Flexibility Act has weak enforcement mechanisms, and that small businesses — which employ roughly 46% of the U.S. private-sector workforce according to SBA data — bear disproportionate compliance costs relative to large corporations. By requiring agencies to account for indirect costs and creating a formal, time-bound review process, the bill would ensure that agencies must substantiate their impact assessments before rules take effect.
Opponents argue
Opponents argue that the bill's automatic suspension provision for rules that miss the 10-year review deadline could neutralize health, safety, labor, and environmental protections that remain fully valid and effective, creating regulatory gaps that harm workers and the public. They contend that mandating expanded analyses, petition reviews, and mandatory meetings without authorizing additional funding would strain agency resources, potentially slowing the rulemaking process for all regulations — not just those affecting small businesses. The petition mechanism, they argue, could be used strategically by well-resourced industry groups to delay or block rules that serve broader public interests.
Constitutional context
The bill operates within Congress's authority to structure administrative procedures under the Necessary and Proper Clause (Art. I, §8, cl. 18) and the Vesting Clause (Art. I, §1). Post-Loper Bright v. Raimondo (2024), agency certifications that a rule does not significantly affect small businesses would face independent judicial scrutiny rather than deference, making the bill's judicial review provision — which designates certifications as final agency action — particularly significant in the current doctrinal environment.
Checks and balances
The executive branch (federal agencies) loses some unilateral authority over impact certifications, while the SBA's Chief Counsel for Advocacy — an independent voice within the executive branch — gains formal review and enforcement power; courts gain a clearer trigger for judicial review of agency certifications as final agency action.
Historical precedent
The Regulatory Flexibility Act of 1980 and its 1996 amendment (the Small Business Regulatory Enforcement Fairness Act) established the original framework this bill modifies, and courts have previously reviewed agency compliance with RFA certification requirements, though enforcement has historically been limited.