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Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) was passed in 1980 with the intention of balancing the social goals of federal regulations with the needs and capabilities of small entities.  According to RFA, any federal agency having the right of rulemaking has to analyze and assess the impact of the new rule on the finances of small entities.  If the rulemaking agency certifies that its proposed rule will not affect the economy of small entities, it may refrain from preparing regulatory flexibility analysis and assessment.  However, the agency should provide the factual basis of such certification.  An initial flexibility analysis must be prepared by the agency and be made available for public opinion before publishing general notice for making a new rule prescribed by law.  The impact of the proposed rule on small entities should be included in the initial flexibility analysis and published in the Federal Register during the publication of the general notice of rulemaking.

Eventually, a final regulatory flexibility analysis should be prepared by the rulemaking agency at the time of promulgating the final rule.  The final regulatory flexibility analysis should contain a succinct statement of the need for, and objectives of, the rule.  It should also include the steps taken by the agency to minimize the economic impact on small entities consistent with the objectives of applicable statutes.  Copies of the final regulatory flexibility analysis should be made available to the public.  The final analysis or its summary must also be published in the Federal Register.

It is not the duty of the rulemaking agencies to conduct a small entity impact analysis of effects on entities that are not regulated by the RFA.

Inside Regulatory Flexibility Act