Summary of HR 1163 - Prove It Act of 2025

Overview

The Prove It Act of 2025 (HR 1163) is a legislative proposal aimed at enhancing transparency in federal regulatory decisions that affect small businesses. Introduced on February 10, 2025, the bill is currently under consideration by the Committee on Small Business, which has held mark-up sessions and reported the bill favorably with amendments.

Purpose and Intent

The primary goal of the Prove It Act is to ensure that federal agencies conduct thorough analyses of the potential economic impacts of proposed regulations on small businesses. The bill seeks to provide small entities with greater opportunities to challenge regulatory certifications that they believe may adversely affect them.

Key Provisions

The Prove It Act proposes several significant amendments to Title 5 of the United States Code, specifically focusing on regulatory flexibility analysis:

1. Expanded Cost Analysis:

   • Agencies must consider not only direct costs but also reasonably foreseeable indirect costs that proposed rules may impose on small entities. This includes impacts on businesses that interact with directly regulated entities.

2. Petition for Review:

   • Small entities or organizations representing them can petition the Chief Counsel for Advocacy of the Small Business Administration to review agency certifications that a proposed rule will not significantly impact a substantial number of small businesses.

3. Consultation Process:

   • The Chief Counsel will provide a structured process for entities to request consultations regarding their petitions, ensuring clarity and accessibility.

4. Detailed Petition Requirements:

   • Petitions must include specific information about the petitioner, the issues raised, supporting data, and proposed solutions to the identified problems.

Affected Parties

The bill primarily impacts:
- Small Businesses: Entities that may be directly or indirectly affected by federal regulations.
- Federal Agencies: Agencies responsible for drafting and implementing regulations that impact small businesses.
- Small Business Administration: The agency will play a crucial role in reviewing petitions and facilitating consultations.

Procedural Aspects

• The bill has undergone several legislative actions, including:
  • May 21, 2025: Ordered to be reported in the nature of a substitute by a vote of 14-12.
  • April 30, 2025: Ordered to be reported (amended) by a vote of 15-11.
• The bill has been referred to the Committee on the Judiciary and the Committee on Small Business for further consideration.

Conclusion

The Prove It Act of 2025 aims to empower small businesses by enhancing transparency and providing mechanisms for them to challenge potentially harmful regulations. By requiring federal agencies to conduct more comprehensive analyses and allowing for greater participation from small entities, the bill seeks to create a more equitable regulatory environment.