Regulatory Watch

Background

Government regulations and red tape can be a tremendous barrier to small business growth. Small businesses' regulatory compliance costs are 36 percent higher than large businesses so it is no surprise that regulations consistently rank as a top concern for small business owners. Roughly 3,300 regulations are in the pipeline this year and many of them will affect small businesses. 

Below are regulatory proposals that have been published in the Federal Register and are open for public comment. An agency publishes an initial regulatory flexibility analysis (IRFA) with a proposed rule if it expects that the rule will have a significant economic impact on substantial number of small businesses. The IRFA provides information about the potential effects of the proposed rule on small businesses.  

Agencies' initial analyses of small business impacts are not always correct or complete, so the Committee on Small Business encourages small businesses to file comments through the government's online portal, Regulations.gov, and tell federal agencies how the regulatory proposal will affect them. If you had trouble with an agency or regulation, please feel free to share your story with the Committee.

Regulations to Watch:

Department of Labor (DOL), Wage and Hour Division

Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019

The DOL, Wage and Hour Division has issued a notice to announce the applicable minimum wage rate of $10.60 per hour for workers performing work on or in connection with federal contracts beginning January 1, 2019.  Currently, the federal contractor minimum wage is $10.35 per hour.  For tipped employees, the new minimum hourly wage will be $7.40 per hour beginning on January 1, 2019, an increase from $7.25 per hour. Executive Order 13658 establishes a minimum wage for contractors and requires the Secretary of Labor to make annual adjustments. (PUBLISHED 9-4-2018)

IRFA – No

View Notice here

Small Business Administration (SBA)

Express Loan Programs; Affiliation Standards

The SBA has issued a proposed rule to amend various regulations governing its business loan programs. The agency has issued 9 proposed amendments, including amending the regulation identifying when the size status of an Applicant for financial assistance is determined with respect to applications under the SBA Express and Export Express Loan Programs, requiring owners of the small business Applicant to inject excess liquid assets into the business to reduce the amount of SBA-guaranteed funds, and other changes. The agency expects the proposed rule will impact  4,500 7(a) Lenders, all of the approximately 214 CDCs, all of the approximately 146 Microloan Intermediaries, all of the approximately 33 Intermediary Lending Program Intermediaries, and all of the approximately 32 Sureties that participate in the Surety Bond Guarantee Program. (PUBLISHED 9-28-2018)

IRFA – Yes

COMMENTS DUE 12-18-2018

Definition of “Employer” Under Section 3(5) of ERISA-Association Retirement Plans and Other Multiple-Employer Plans

The DOL EBSA has issued a proposed rule that would clarify the circumstances where an employer group or association may sponsor a workplace retirement plan. These multiple employer plans (MEPs) would enable groups of private-sector employers to participate in a collective retirement plan. Small businesses would be able to join MEPs as long as they are eligible to do so and the MEP sponsor meets the requirements of the proposed rule. The agency expects that businesses with less than 50 employees are the most likely to participate in MEPs. (PUBLISHED 10-23-2018)

IFRA – Yes

COMMENTS DUE 12-24-2018

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce

Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Industry-Funded Monitoring

The NMFS has issued a proposed rule that would implement a process to standardize future industry-funded monitoring programs in New England Council fishery management plans and the Atlantic herring fishery. The agency expects the proposed Atlantic herring measures to have economic impacts on fishery-related businesses and human communities due to the costs associated with the industry-funded monitoring measures for the herring fishery, and it estimates that there are 62 small entities that could be directly regulated. The NMFS estimates that the reporting requirements' total annual costs will be $3,121 per provider. Additionally, annual costs for carrying an at-sea monitor for Category A and B vessels is estimated to cost, on average, $13,490 per vessel, and industry-funded observer coverage for midwater trawl vessels fishing in Groundfish Closed Areas is estimated to cost, on average, $17,178 per vessel. (PUBLISHED 11-07-2018)

IRFA – Yes

COMMENTS DUE 12-24-2018

Federal Communications Commission (FCC)

Modernization of Media Regulation Initiative: Revisions to Cable Television Rate Regulations

The FCC is seeking comment on whether to replace and simplify the Commission's cable rate-regulation framework. It also seeks comment on decisions to deregulate rates charged for equipment used to receive service tiers that have been deregulated, deregulate some small systems owned by small cable companies and clarify that the rate regulations do not apply to services provided to commercial entities. Lastly, the Commission seeks comment on its decision to eliminate outdated forms and make changes to how regulated rates are calculated. The Commission believes that all of the proposed changes are either neutral or reduce existing compliance requirements for small entities. (PUBLISHED 11-27-2018)

IRFA – Yes

COMMENTS DUE 12/27/2018

Securities and Exchange Commission (SEC)

List of Rules To Be Reviewed Pursuant to the Regulatory Flexibility Act

The SEC is publishing a list of rules to be reviewed pursuant to Section 610 of the Regulatory Flexibility Act. The list is published to provide the public with notice that these rules are scheduled for review by the agency and to invite public comment on whether the rules should be continued without change, or should be amended or rescinded to minimize any significant economic impact of the rules upon a substantial number of such small entities. (PUBLISHED 11-27-2018)

IRFA – No

COMMENTS DUE 12/27/2018

Internal Revenue Service (IRS), Department of the Treasury; Employee Benefits Security Administration (EBSA), Department of Labor; Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services

Health Reimbursement Arrangements (HRAs) and Other Account-Based Group Health Plans

The IRS, EBSA, and CMS have issued a proposed rule that would allow integrating HRAs with individual health insurance coverage, if certain conditions are met. CMS is also proposing to provide a special enrollment period in the individual market for individuals who gain access to an HRA. Specifically, this proposed rule would remove the current prohibition against integrating an HRA with individual health insurance coverage and expand the definition of limited excepted benefits. The agencies expect smaller businesses would be more likely to utilize Group Health Plans because of their ability to spread risk pools of higher and lower risk individuals. (PUBLISHED 10-29-2018)

IFRA – No

COMMENTS DUE 12-28-2018

Small Business Administration (SBA)

Small Business HUBZone Program; Government Contracting Programs

The SBA has issued a proposed rule that would amend its regulations for the Historically Underutilized Business Zone (HUBZone) Program. Specifically, the proposed rule would revise key definitions to remove ambiguities, reorganize the eligibility requirements to make them clearer, clarify the certification process, and other revisions. The SBA estimates that there are 5,000 small businesses that participate in the program. (PUBLISHED 10-31-2018)

IFRA – Yes

COMMENTS DUE 12-31-2018

Environmental Protection Agency (EPA)

Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces

The EPA is proposing to amend the 2015 New Source Performance Standards (NSPS) for new residential hydronic heaters and new forced-air furnaces by adding a two-year “sell-through” period for all affected new hydronic heaters and forced-air furnaces that are manufactured or imported before the May 2020 compliance date to be sold at retail through May 2022. This will allow retailers additional time, after the May 2020 effective date of the “Step 2” standards, for the sale of “Step 1” compliant hydronic heaters and forced-air furnaces remaining in inventory. The agency is also taking comment on whether a sell-through period for all affected new residential wood heaters is appropriate following the May 2020 compliance date and, if so, how long a sell-through period is needed and why. In addition, this action is taking comment on whether the current minimum pellet fuel requirements should be retained and, if so, whether they should be revised. The EPA has certified that this proposed rule will not impose any new requirements on any small businesses. (PUBLISHED 11-30-2018)

IRFA – No

COMMENTS DUE 1/14/2019

Registration Modernization

The United States Copyright Office is building a new registration system that will incorporate a new technological infrastructure. This modernization is in an effort to improve the Office's processing times that meets the changing needs of individual creators, industry, copyright practitioners, and the general public. Other proposed changes include a more powerful dashboard, and an improved messaging system to confirm that a submission has been received and provide details on what to expect next. The Office is also seeking comments on whether there should be a mandate to use electronic applications and eliminate paper copyright applications. (PUBLISHED 10-17-2018)

IRFA – No

COMMENTS DUE 1-15-2019

Office of United States Trade Representative (USTR)

Negotiating Objectives for a U.S.-United Kingdom Trade Agreement

The USTR is seeking public comments on a proposed U.S.-U.K. Trade Agreement, including U.S. interests and priorities, in order to develop U.S. negotiating positions. The Administration's aim in negotiations with the U.K. is to address both tariff and non-tariff barriers and to achieve free, fair, and reciprocal trade. The USTR requests that small businesses, generally defined by the Small Business Administration as firms with fewer than 500 employees, or organizations representing small business members, submit comments so that it may be aware of issues of particular interest to small businesses. The USTR is also accepting notifications of intent to testify at a public hearing on January 29, 2019. (PUBLISHED 11-16-2018)

IRFA – No

COMMENTS DUE 1/15/2019

Federal Deposit Insurance Corporation (FDIC)

Request for Information on Small-Dollar Lending

The FDIC is seeking comments on small-dollar lending, including steps that can be taken to encourage FDIC-supervised financial institutions to offer small-dollar credit products that are responsive to customers' needs and that are underwritten and structured prudently and responsibly. The agency is seeking information on consumer demand, the benefits and risks of small-dollar credit products, the challenges that may disincentivize banks from offering small-dollar credit products, product features of these types of loans, innovations to enhance banks 'abilities to offer small-dollar loans, and alternatives that banks should consider. (PUBLISHED 11/20/2018)

IRFA – No

COMMENTS DUE 1/22/2019

Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT)

Hazardous Materials: Harmonization With International Standards

The PHMSA is proposing to amend the Hazardous Materials Regulations (HMR) to maintain alignment with international regulations and standards by incorporating various amendments, including changes to proper shipping names, hazard classes, packing groups, special provisions, packaging authorizations, air transport quantity limitations, and vessel stowage requirements. These revisions are part of the agency's ongoing biennial process to harmonize the HMR with international regulations and standards. The PHMSA states that the proposed rule will apply to offerors and carriers of hazardous materials, some of whom are small entities, such as chemical manufacturers, users and suppliers, packaging manufacturers, distributors, and training companies. The agency expects that small businesses competing in foreign markets will be relieved from the burden of complying with a dual system of regulations. (PUBLISHED 11-27-2018)

IRFA – No

COMMENTS DUE 1/28/2019

Defense Acquisition Regulations System, Department of Defense (DoD)

Defense Federal Acquisition Regulation Supplement: Restrictions on Use of Lowest Priced Technically Acceptable Source Selection Process (DFARS Case 2018-D010)

The DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement to implement sections of the National Defense Authorization Acts for Fiscal Years 2017 and 2018 that establish limitations and prohibitions on the use of the lowest price technically acceptable (LPTA) source selection process. The agency has stated that the proposed rule may impact some small businesses, as offerors may need to change the way their quotations or offers are structured to conform to proposal instructions and corresponding evaluation criteria when responding to solicitations that use the tradeoff source selection process for supplies or services where the LPTA source selection process is now prohibited or must now be avoided.  The DoD expects this incremental impact to be minimal. (PUBLISHED 12-4-2018)

IRFA – Yes

COMMENTS DUE 2/4/2019

Defense Acquisition Regulations System, Department of Defense (DoD)

Defense Federal Acquisition Regulation Supplement: Small Business Set-Asides for Architect-Engineer and Construction Design Contracts (DFARS Case 2018-D057)

The DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement to implement section 2804 of the National Defense Authorization Act for Fiscal Year 2019, which concerns small business set-asides of acquisitions for architect-engineer services, including construction design, in connection with military construction projects or military family housing projects. Section 2804 requires these acquisitions to be set aside for small business if valued at less than $1,000,000. Section 2804 also removes the prohibition on setting aside these acquisitions; as a result, these acquisitions may now be set aside for small business, if valued at $1,000,000 or more. The DoD estimates that approximately 300 small entities could benefit from this proposed rule. (PUBLISHED 12-4-2018)

IRFA – Yes

COMMENTS DUE 2/4/2019

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

Federal Acquisition Regulation: Revision of Limitations on Subcontracting

The DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement the final rule published by the Small Business Administration (SBA) implementing section 1651 of the National Defense Authorization Act for Fiscal Year 2013, which revised and standardized the limitations on subcontracting, including the nonmanufacturer rule, that apply to small business concerns under FAR part 19 procurements. The purpose of this rule is to implement statutory authorities and SBA regulations that are designed to make it easier and less burdensome for small business prime contractors to comply with requirements related to how much work they may subcontract under Federal contracts and task and delivery orders. The agencies expect the proposed changes to these requirements to both ease compliance costs and provide more authorized ways to subcontract. (PUBLISHED 12-4-2018)

IRFA – Yes

COMMENTS DUE 2/4/2019

U.S. Small Business Administration (SBA)

National Defense Authorization Acts of 2016 and 2017, Recovery Improvements for Small Entities After Disaster Act of 2015, and Other Small Business Government Contracting

The SBA is proposing to amend its regulations to implement several provisions of the National Defense Authorization Acts of 2016 and 2017 and the Recovery Improvements for Small Entities After Disaster Act of 2015, and other clarifying amendments. The proposed rule would clarify that contracting officers have the authority to request information in connection with a contractor's compliance with applicable limitations on subcontracting clauses; provide exclusions for purposes of compliance with the limitations on subcontracting for certain contracts performed outside of the United States, environmental remediation contracts, and information technology service acquisitions that require substantial cloud computing; require a prime contractor with a commercial subcontracting plan to include indirect costs in its subcontracting goals; establish that failure to provide timely subcontracting reports may constitute a material breach of the contract; clarify the requirements for size and status recertification; and limit the scope of Procurement Center Representative reviews of Department of Defense acquisitions performed outside of the United States and its territories. The proposed rule would also authorize agencies to receive double credit for small business goaling achievements as announced in SBA's scorecard for local area small business set asides in connection with a disaster. Finally, SBA is proposing to remove the kit assembler exception to the non-manufacturer rule. (PUBLISHED 12-4-2018)

IRFA – Yes

COMMENTS DUE 2/4/2019

Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC)

Real Estate Appraisals

The OCC, Board, and FDIC (collectively, the agencies) are inviting comment on a proposed rule to amend the agencies' regulations requiring appraisals for certain real estate-related transactions. The proposed rule would increase the threshold level at or below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000. Consistent with the requirement for other transactions that fall below applicable thresholds, regulated institutions would be required to obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices. The proposed rule would make conforming changes to add transactions secured by residential property in rural areas that have been exempted from the agencies' appraisal requirement pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act to the list of exempt transactions. The proposed rule would require evaluations for these exempt transactions. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the proposed rule would amend the agencies' appraisal regulations to require regulated institutions to subject appraisals for federally related transactions to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice. (PUBLISHED 12-7-2018)

IRFA – Yes

COMMENTS DUE 2/5/2019

Internal Revenue Service (IRS), Treasury

Guidance Related to the Foreign Tax Credit, Including Guidance Implementing Changes Made by the Tax Cuts and Jobs Act

The IRS is proposing regulations that provide guidance relating to the determination of the foreign tax credit under the Internal Revenue Code. The guidance relates to changes made to the applicable law by the Tax Cuts and Jobs Act (the “Act”), which was enacted on December 22, 2017. Guidance on other foreign tax credit issues, including in relation to pre-Act statutory amendments, is also included in this document. The proposed regulations provide guidance needed to comply with statutory changes and affect individuals and corporations claiming foreign tax credits. The IRS believes that the proposed regulations help reduce small businesses' compliance costs by providing clarity, certainty, and flexibility to the taxpayer regarding how to take into account the changes made by the Act in claiming foreign tax credits. (PUBLISHED 12-7-2018)

IRFA – No

COMMENTS DUE 2/5/2019

Regulation of Business Data Services for Rate-of-Return Local Exchange Carriers; Business Data Services in an Internet Protocol Environment; Special Access for Price Cap Local Exchange Carriers

The FCC is seeking comment on proposals to eliminate ex ante pricing regulations for price cap incumbent local exchange carriers' (LECs') provision of time division multiplexing (TDM) and other transport business data services. The Commission also seeks comment on the conditions under which ex ante pricing regulations should be eliminated for lower capacity TDM transport business data services offerings by rate-of-return carriers opting in to the Commission's new light-touch regulatory framework. These proposals part of the Commission's ongoing efforts to modernize regulations for the dynamic and evolving business data services market.  The Commission believes that these proposals will impact recordkeeping and reporting requirements for price cap carriers and rate-of-return carriers. (PUBLISHED 11-29-2018)

IRFA – Yes

COMMENTS DUE 2/12/2019

Environmental Protection Agency (EPA)

Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces

The EPA is requesting comment on several aspects of the 2015 Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces (2015 NSPS) in order to inform future rulemaking to improve these standards and related test methods. This action does not propose any changes to the 2015 NSPS, but does take comment on a number of aspects of the rule, including the compliance date for the Step 2 emission limits, Step 2 emission limits for forced-air furnaces, hydronic heaters and wood heaters, Step 2 emission limits based on weighted averages versus individual burn rates, transitioning to cord wood certification test methods, compliance audit testing, third-party review, electronic reporting tool, and warranty requirements. (PUBLISHED 11-30-2018)

IRFA – No

COMMENTS DUE 2/13/2019

Federal Communications Commission (FCC)

Unlicensed Use of the 6 GHz Band

The FCC is proposing to expand unlicensed use of the 5.925-7.125 GHz band (6 GHz band) while protecting the incumbent licensed services that operate in this spectrum. In the 5.925-6.425 GHz and 6.525-6.875 GHz sub-bands the proposed rules will allow unlicensed access points to operate only on frequencies determined by an automated frequency control (AFC) system. In the remainder of the 6 GHz band, the 6.425-6.525 GHz and 6.875-7.125 GHz sub-bands, no AFC system will be required, and the unlicensed access points will be permitted to operate at lower transmitted power. The proposed rules will also permit unlicensed client devices to operate under the control of an access point throughout the 6 GHz band. The Commission believes that this proposed rule would provide an advantage to small businesses because they would benefit from being able to access the 6 GHz band without complication or cost of needing to obtain a license. (PUBLISHED 12-17-2018)

IRFA – No

COMMENTS DUE 2/15/2019

Estate and Gift Taxes; Difference in the Basic Exclusion Amount

The IRS is proposing regulations that will affect donors of gifts made after 2017 and the estates of decedents dying after 2017. The proposed regulations address recent legislative changes to the basic exclusion amount used in computing Federal gift and estate taxes under the Tax Cuts and Jobs Act. The IRS has stated that these proposed regulations only apply to individuals and estates of deceased individuals, not small entities, but is accepting comment on the impact of the proposed regulations on small entities. (PUBLISHED 11-23-2018)

IRFA – No

COMMENTS DUE 2/21/2019