Small Business Regulatory Review and Reform Initiative

Questions & Answers
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What is the objective of the r3 program?

The r3 program is intended to help small businesses address the cumulative Federal regulatory burden, which is now estimated to exceed $1.1 trillion. Through the r3 program, we believe federal agencies will do a better job of identifying and revising rules that need to be reformed.

Why did the Office of Advocacy initiate the r3 program?

The r3 program is, in part, a response to a July 2007 report issued by the Government Accountability Office (GAO), Reexamining Regulations: Opportunities Exist to Improve Effectiveness and Transparency of Retrospective Reviews. The report looked at the job agencies do when they evaluate the effectiveness of their existing regulations, including periodic reviews of their current rules required by Section 610 of the Regulatory Flexibility Act (RFA). GAO found that federal agencies often did a poor job of involving the public in the review process and explaining what they look at when they evaluate their rules. As a result, GAO concluded that agencies’ reviews of their current rules, including reviews required under Section 610, are not as effective as they could be.

How does the r3 program work?

The r3 program has three distinct components: (1) providing tools that will improve federal agencies’ compliance with Section 610 of the RFA, leading to a better understanding of the impact of their current regulations on small entities; (2) developing a process for small business stakeholders to identify current rules that are outdated or ineffective and recommend targeted reforms; and (3) posting the recommended reforms on Advocacy’s website and updating the status of reforms twice a year.

What are the tools to improve compliance with Section 610 of the RFA?

Advocacy has published a best practices document to help federal agencies know when and how they should conduct a Section 610 review of an existing rule. This document also discusses approaches to Section 610 that can benefit agencies along with small business stakeholders. In addition, Advocacy is placing greater emphasis on Section 610 through training sessions with agencies and improved tracking of reviews.

What is the process for small business stakeholders to identify rules as candidates for reform?

Stakeholders who are interested in recommending reform of a current rule or regulatory program should provide the Office of Advocacy with a description of the current rule and the reasons why the rule or program should be reformed. Stakeholders also need to describe their recommended reform. After Advocacy receives and reviews a recommendation for reform, Advocacy staff will work with the stakeholder to develop sufficient information to move forward. Advocacy will accept r3 nominations for 2009 from now until December 31, 2008. See Nominating an Existing Agency Rule for Reform.

What is the timetable for the r3 program?

Advocacy has published a best practices document for federal agencies on how to comply with Section 610. Advocacy has also started to cover Section 610 compliance issues in the half-day RFA training sessions Advocacy offers to other federal agencies. In October 2007, Advocacy hosted a public roundtable to call for nominations of rules in need of reform. The top 10 rules for review and reform in 2008 were announced in Advocacy’s Annual Report on the Regulatory Flexibility Act to the President and to Congress, which was released February 2008.

How does the Section 610 review process differ from r3’s public rule reform nomination process?

The Section 610 review process is required by law and must be conducted under circumstances specified by Congress. The public rule reform nomination process is a voluntary process that allows stakeholders to identify existing rules for reform and have agencies act on the reforms.

Is the Section 610 requirement for agencies to “look back” and consider the burden of their existing rules a new requirement?

No. Section 610 has been part of the Regulatory Flexibility Act since 1980. Federal agencies are required to review their existing regulations that have a significant economic impact on a substantial number of small entities at least once every ten years. As of 1996, when the RFA was amended by the Small Business Regulatory Enforcement Fairness Act, an agency’s failure to comply with Section 610 can be reviewed by a court under the judicial review provision of the RFA, Section 611.

Is there a formal process that stakeholders need to use in order to ask an agency to conduct a Section 610 review?

No. Section 610 does not specify a process for interested persons to ask an agency to initiate a Section 610 review. Stakeholders should be able to simply submit a petition to an agency to undertake the review.

Aren’t Section 610 reviews and recommendations for reform under the r3 program really just a way to eliminate or reduce the scope of existing rules?

No. The purpose of the r3 program is to help agencies look at their existing regulations and revise rules that are outdated, ineffective, or otherwise need to be reformed. While a Section 610 review or a recommended rule reform could result in the elimination of a rule, it is just as likely that a rule will ultimately be revised to reflect improved technology or be more carefully designed to achieve the desired regulatory outcome. In particular, Section 610 reviews sometimes lead to rule revisions that strengthen, rather than weaken, a rule (an example is a more stringent 2003 Federal Motor Carrier Safety Administration rule covering the transportation of household goods that was finalized immediately after a Section 610 review).

How does the r3 program’s rule reform nomination process relate to the public reform nomination process undertaken by the Office of Management and Budget in recent years?

The r3 program’s rule reform nomination process continues the momentum built up by OMB’s 2001, 2002, and 2004 public calls for nominations of rules to be reformed. The OMB public calls resulted in hundreds of nominations of rules that stakeholders believed should be reformed. OMB, working with the agencies themselves, identified numerous rules for reform – including several rules designed to make vehicles safer and better able to survive accidents. Many of those reform nominations have been implemented by the agencies. OMB has maintained a listing of the 2004 OMB reform nominations and their status. The r3 rule reform nominations will be similar to the OMB reforms, except that the Office of Advocacy will evaluate potential rule reforms with an emphasis on small business impacts.

Where do I go if I have additional questions about the r3 program?

If you have any questions concerning the r3 program, please send your question to advocacy@sba.gov or contact the r3 Project Leader, Keith Holman at (202) 205-6936 or keith.holman@sba.gov.