§603 Initial Regulatory Flexibility Analysis

Summary

Agencies that must publish a general notice of proposed rulemaking under section 553 or another law, or that publish a notice for an interpretative rule about the internal revenue laws, must prepare and publish an initial regulatory flexibility analysis (IRFA) for public comment. The IRFA must explain how the proposed rule will affect small businesses and other small entities. A copy or summary of the IRFA must appear in the Federal Register when the agency publishes the notice. The agency must also send a copy to the Chief Counsel for Advocacy at the Small Business Administration. For interpretative rules about internal revenue laws, this requirement only applies when the rule is published in the Federal Register for codification in the Code of Federal Regulations and only if it requires small entities to collect information. Each IRFA must say why the agency is acting, the rule’s goals and legal basis, how many small entities will be affected (when possible), the expected reporting, recordkeeping, and other compliance duties and the kinds of small entities and skills involved, and any federal rules that duplicate or conflict. The IRFA must also describe important alternatives that meet the statute’s goals but reduce harm to small entities, such as different timetables, simpler requirements, performance standards instead of design rules, or exemptions. For agencies covered by section 609(d)(2), the IRFA must also cover any likely increase in small entities’ cost of credit, alternatives to reduce that cost, and advice from small-entity representatives chosen with the SBA Advocate.