Advocacy’s RFA Training Program Teaches Federal Agencies How To Consider Small Business Impact

“Significant” and “substantial.” These two concepts are at the heart of the Office of Advocacy’s training on the Regulatory Flexibility Act (RFA). The RFA requires federal rulemaking agencies to consider small business impacts when they write new rules. But doing so is a many-step process requiring legal and economic expertise. To be sure agencies are properly equipped to implement the RFA, Executive Order 13272 directed the Office of Advocacy to offer training to rulemaking agencies.

Most recently, Assistant Chief Counsel Bruce Lundegren conducted RFA training for Congressional staff and federal agency personnel as part of Regulation University, a program of George Mason University’s Mercatus Center. “The goal of training,” Lundegren explained, “is to ensure that federal rule writers understand the RFA and tailor their rules so as not to unnecessarily burden small entities.” But how do you do this in practice? By applying this key concept: If a rule is expected to impose a significant economic impact on a substantial number of small entities, an agency must consider alternatives, or flexibilities.

How does this work in practice? For example, in 2011, after hearing from small business, the Department of Education made changes to its gainful employment regulations, providing flexibility to educational programs with under $7 million in revenues. The changes saved small programs approximately $218 million.

The RFA was enacted in 1980 to ensure a more level playing field for small business. Congress particularly wanted to avoid “one-size-fits-all” regulations whose costs fell disproportionately on small entities. The RFA requires agencies to assess the impact of their regulations on small entities and to consider less burdensome alternatives; it applies to executive branch and independent agencies alike. The Office of Advocacy, created by Congress in 1976, is responsible for overseeing agency compliance with the RFA.

Each year, the Office of Advocacy trains some ­­­400 federal agency personnel to better understand the impact of regulations on small entities. Since 2003, Advocacy has trained thousands of people across the federal government and beyond.

Advocacy offers RFA training to federal agencies and interested stakeholders alike. To learn more or to schedule training, contact Assistant Chief Counsel Bruce Lundegren at (202) 205-6144 or bruce.lundegren@sba.gov.  He would be happy to assist you.