S. 495: Prove It Act of 2025

The Prove It Act of 2025 is a bill aimed at increasing transparency and accountability in federal regulatory processes, particularly concerning their effects on small businesses. Below is a summary of its main provisions:

Amendments to Regulatory Analysis Requirements

The bill proposes changes to the regulatory flexibility analysis required by federal agencies when developing new rules that could impact small entities, such as small businesses. This includes:

• Indirect Costs Evaluation: Agencies must evaluate and report on potential indirect costs that might affect small entities due to the proposed rule. This includes costs incurred by small businesses that buy from or sell to regulated entities or those affected indirectly by the rule.
• Certificate Review Process: Small entities can petition the Chief Counsel for Advocacy of the Small Business Administration about a rule’s certification, particularly if they believe the rule will significantly impact them economically.

Petition Process

The bill establishes a formal process for small businesses or their representatives to petition for a review of an agency's certification that a proposed rule will not significantly impact them. This includes:

• Petitioners must provide specific information about their identity and concerns.
• Once a petition is submitted, it will undergo an initial examination to determine if there are merit-based grounds for further review.

Full Review Procedures

If a petition is deemed to have merit, a full review will occur, which addresses:

• The accuracy of the agency's assessment of affected small entities.
• The adequacy of the economic data considered.
• The overall economic implications of the proposed rule.

After conducting a full review, findings must be published within 30 days, detailing whether the proposed rule will affect small businesses and outlining the steps needed if a significant impact is identified.

Requirement for Ongoing Rule Review

The bill also emphasizes the need for periodic reviews of existing regulations after ten years to reassess their impact on small entities. If an agency fails to comply with this requirement, the rule will cease to be effective unless a justification is provided and a reinstatement process is followed.

Guidance Publication and Feedback

Agencies must publish all relevant guidance documents for rules anticipated to have significant economic impact on small entities and allow for public comments to ensure that these businesses can provide feedback and share their concerns.

No Additional Funding

The Prove It Act of 2025 specifies that no additional funds will be appropriated for executing its provisions or the changes it mandates.

Relevant Companies

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