WASHINGTON – This week, NACS submitted a statement to the Senate Committee on Small Business & Entrepreneurship about how small businesses like independent retailers confront and shape regulations. The main concern for NACS is that although Congress enacted  the Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement Act of 1996 (SBREFA) to protect small businesses from burdensome regulations, the laws often fail to do so in practice.

The NACS statement shared that “many times, small businesses do not have in-house counsel or regulatory compliance personnel. Thus, the regulatory burdens that may impose a cost – albeit a “manageable” one – on larger businesses, are magnified for smaller entities.” For this reason, it is problematic that “RFA and SBREFA have become mere procedural requirements without any substantive meaning.” 

According to NACS, the convenience store industry – where single-store operators often double as cashiers at their stores and work behind the counters – is particularly burdened by government regulations. Legislation like the Prove It Act of 2016 and S. 584: the Small Business Regulatory Flexibility Improvement Act would help to ensure “that RFA and SBREFA serve as proper checks on agency actions and effectively work to protect small businesses from regulatory burdens as Congress intended,” NACS said in a statement.

As evidence of how small businesses can be negatively impacted by regulations, NACS highlighted the Food and Drug Administration’s (FDA) menu labeling rules. Despite finding that the rule would have a “significant economic impact,” FDA did not come up with meaningful alternative compliance options for small businesses—as it is required to do by RFA and SBREFA.

To address concerns about overly burdensome regulations for small businesses, NACS  “encouraged the Committee to move [legislation] through the legislative process” to strengthen RFA and SBREFA. “If RFA and SBREFA are to be truly effective, agencies must be required to conduct meaningful analyses based upon legitimate and complete data sets and to consider and implement where possible less burdensome requirements” NACS commented.

The witnesses at the hearing represented the National Association of Home Builders and the South Carolina Small Business Chamber of Commerce.