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Executive Order 13272

Original Text

Effective Dates
8/13/2002 - Present

Reform Goals
Promote agency compliance with the Regulatory Flexibility Act, and spur agencies to review draft rules to assess their potential impact on small businesses. 

Requirements (What of whom?)
EO 13272 required both executive and independent federal agencies to establish written policies on how they measure their regulatory impacts on small entities. A “significant impact on a substantial number of small businesses” was a term of art that had remained undefined up until that point.

The Chief Counsel for Advocacy of the Small Business Administration (Advocacy) may comment on draft rules an agency has proposed to OIRA and must submit an annual report on the state of compliance with the executive order to OIRA. Agencies must reflect the act in their internal policies and notify Advocacy of any rules which have a significant economic impact on a substantial number of small entities, and publish discussions with Advocacy on forthcoming rules in the Federal Register. The Office of Advocacy was also ordered to train agencies on how to comply with the Regulatory Flexibility Act.

Oversight for rule compliance
The Small Business Administration possessed full oversight over compliance with the reform.

Reform “Teeth”
Although this executive order reaffirmed the SBA’s status as a regulatory watchdog, it did not constitute a clear order to the agencies and provided no benchmarks for what constituted an adequate analysis of “significant impact on a substantial number of small businesses.” 

Outcomes
EO 13272 had some success - by 2016 every Cabinet-level department except the Department of State had submitted written plans to the Office of Advocacy. [1] The SBA was also able to secure some plans and reports from some, but not all of the independent regulatory agencies. The order improved the quality and frequency of communication between the SBA and the agencies, and inspired many agencies to create small-business divisions to help small businesses navigate regulation. [2] 

Commentary
Since the RFA itself has not achieved the goal of reducing the federal regulatory burden on small businesses, EO 13272’s success in improving compliance with the RFA is of little inherent value.

References

  1. See Pages 16. Office of Advocacy of the U.S. Small Business Administration. "Report on the Regulatory Flexibility Act, FY 2016." January 2017.  Link , PDF
  2. Holman, Keith W. “The Regulatory Flexibility Act at 25: Is the Law Achieving its Goal?” Fordham Urban Law Journal. Vol 33.4, 2005. Link , PDF

Additional Reading

  • Shive, Sarah. “If You’ve Always Done It That Way, It’s Probably Wrong: How the Regulatory Flexibility Act Has Failed to Change Agency Behavior, and How Congress Can Fix It.” Entrepreneurial Business Law Journal, Vol. 1, 2006. Link
  • Institute for Policy Integrity. "Strengthening Regulatory Review, Recommendations for the Trump Administration from Former OIRA Leaders." New York University School of Law. 2016. Link