How a small business owner can fight a federal rule before it is final

Most Americans believe that when a federal agency decides to write a rule, the decision is made, the ink is dry, and the only thing left is to grumble. It is the most widespread piece of political fatalism I know, and it is mostly wrong. Before a rule is final, a proposal sits in public view for weeks, and the law says the agency has to read what you send and answer the serious points. After the rule is final, your options shrink to lawsuits, lobbying and luck. Before, all you need is a computer and an afternoon.

This is a playbook, so the steps stay plain and numbered. I will keep the sermon to a minimum. The case is simple: the window to be heard is while the rule is still a proposal, and the people who use that window are almost never the owners of small shops. They are trade associations with staff, big companies with lawyers, and advocacy groups. If you run a roofing company, a bakery or a trucking outfit, your voice is rare in the docket, and for that reason it can be unusually effective. Agencies know what the large players will say. They do not always know what a rule does to a business with twelve employees.

The legal footing, in one page

You should know why this works, so that you do not feel as if you are begging.

• The Administrative Procedure Act of 1946. This statute governs how federal agencies make rules. For most rules it requires the agency to publish a notice of proposed rulemaking in the Federal Register, give interested persons an opportunity to submit comments, and consider the relevant matter presented. When the agency publishes the final rule it must include a statement of the basis and purpose. That is the structure of notice and comment, and it is found in section 553 of Title 5 of the United States Code.
• The courts. In Motor Vehicle Manufacturers Association v. State Farm (1983), the Supreme Court held that an agency rule is "arbitrary and capricious" if the agency fails to consider an important aspect of the problem. That case is the reason a well-supported comment matters. If you raise a significant issue with evidence and the agency ignores it, a court can set the rule aside on that ground.
• The Regulatory Flexibility Act of 1980. It requires agencies to analyze how proposed rules affect small entities, unless the agency head certifies that the rule will not have a significant economic impact on a substantial number of small entities. The Small Business Regulatory Enforcement Fairness Act of 1996 strengthened it, among other things by adding judicial review of an agency's compliance and by requiring special review panels for certain agencies' rules.
• The Paperwork Reduction Act of 1980. It makes agencies estimate and justify the time they ask the public to spend on forms and reports, and it created the Office of Information and Regulatory Affairs within the White House Office of Management and Budget. This is where the burden-hour numbers come from, and those numbers are often where you can find a mistake.
• The Congressional Review Act of 1996. This is the backstop, and I will cover it at the end.

Step 1: Find the proposal before it is final

You cannot comment on what you do not know about. These are the places to look.

1. The Federal Register. It is published each business day and is searchable at federalregister.gov. You can sign up for email alerts by agency or topic, such as the Department of Labor, the Occupational Safety and Health Administration, or the Environmental Protection Agency. Search for words that describe your business.
2. Regulations.gov. This is the federal government's portal for rulemaking dockets. Every proposed rule gets a docket with an identification number, the proposal, supporting documents, and the comments already filed.
3. The Unified Agenda. Twice a year the government publishes a list of the rules each agency expects to propose, and you can read it at reginfo.gov. It is an early warning system. A rule that is on the agenda this spring may be proposed by fall.
4. Your trade association. If you belong to one, it is probably already tracking the proposals that touch your industry. Ask them what is open for comment.
5. The SBA Office of Advocacy. It publishes information on proposals that affect small businesses and invites small business input.

Step 2: Read the proposal the way a lawyer would

Do not start with the 400-page rule text. Start with the preamble, the front section that explains the rule. Look for these items, in order:

1. The summary and the dates. The notice states when comments are due. Comment periods commonly run 30 to 60 days, so mark the deadline today.
2. The docket number. You will need it to file.
3. The agency's own cost estimate. Find the sections on regulatory impact, costs, benefits, the Regulatory Flexibility Act analysis and the Paperwork Reduction Act burden hours.
4. The questions the agency is asking. Proposals often have a section requesting comment on specific points. Those are invitations. Answer them.
5. Your exposure. Ask what in this rule changes what you must do, buy, report or pay.

Step 3: Check the agency's math against your own

This is the step that sets a useful comment apart from a rant. Agencies estimate costs for a typical firm. You know your actual firm.

Here is a hypothetical example. Suppose an agency proposes that small contractors file a new quarterly report, and its paperwork analysis estimates two hours per report. You check with your bookkeeper, who finds the report requires pulling data from three systems and takes six hours. Your loaded cost for that time is $45 an hour.

• The agency's figure: 2 hours times 4 reports a year times $45 equals $360 per firm per year.
• Your figure: 6 hours times 4 reports times $45 equals $1,080 per firm per year.

If the rule covers 10,000 small firms, the agency's figure comes to $3,600,000 and yours to $10,800,000, a gap of $7,200,000. That is the whole case in one table, and it is exactly the sort of evidence the agency has to confront. A comment that says "this is too burdensome" gets a form response. A comment that says "your estimate of two hours is wrong; here is how long it takes, and here is the arithmetic" is a different document.

Step 4: Write the comment

Keep it short, specific and civil. A good comment runs one to five pages. Structure it like this.

1. Who you are. Your business, what it does, how many people it employs, and where. One short paragraph. This establishes standing in the practical sense: you are the kind of person the rule touches.
2. Your position in one sentence. For example: "I urge the agency to withdraw the proposed quarterly reporting requirement, or in the alternative to exempt firms with fewer than 50 employees."
3. Specific citations. Refer to the section, the page of the notice and the docket number. Agencies sort comments by the provisions they address.
4. Real cost data. Use your own numbers: hours, dollars, headcount, prices. Show your arithmetic. Say what you would have to cut, raise or stop doing.
5. Alternatives. This part is the most commonly skipped, and it carries the most weight. If you only say no, you are easy to dismiss. If you say "the same goal can be reached by this cheaper route," the agency must address the alternative. Offer an exemption threshold, a longer phase-in, simplified reporting for small firms, a safe harbor, or a pilot program.
6. Your questions. Ask the agency to explain anything you could not follow, and ask it to consider the Regulatory Flexibility Act analysis if it seems missing or thin.
7. A polite close. Thank them. Anger gets screened out, and courtesy gets read.

Two cautions. Do not put private details, such as your home address or Social Security number, in the text. Comments are generally published in the docket and are public. And do not exaggerate. A single false statement in a comment can discredit the rest, and a careful agency lawyer will find it.

Step 5: File it and keep the receipt

Open the docket on Regulations.gov, choose the comment option, enter your text or attach a file, and submit. Save the tracking number and the confirmation. If a deadline is close and you need more time, you can write to the agency and ask for an extension of the comment period. Agencies sometimes grant it, especially when a rule is large. You can file your request even before your comment is ready.

Do not worry that your comment is only one among thousands. Agencies have said repeatedly that rulemaking is not a vote. Ten thousand identical form letters tend to be treated as one comment, while a single detailed comment with data can change a paragraph of the final rule. Substance beats volume.

Step 6: Multiply your voice

A comment alone is good. A comment with allies is better.

1. Ask your trade association to cite your example in its own comment, with your permission. Associations are happy to have real members' numbers.
2. Contact the SBA Office of Advocacy. The Office of Advocacy was created by Congress in 1976 to represent small business within the government. It can file its own comments on proposed rules, it reviews agencies' Regulatory Flexibility Act compliance, and it has the ability to weigh in with agencies and the White House when a rule threatens to hit small firms hard. Send it your story and your numbers.
3. Write to your members of Congress. Their staff handle constituent casework with agencies, and a letter that cites the docket number and the damage to local jobs gets attention. Contacting Congress, who reads your message and what moves a member explains what reaches a member and what ends up in the pile.
4. Ask to be heard. Some agencies hold public hearings or listening sessions. how to testify at a hearing in three minutes and be remembered covers how to use three minutes well.
5. Ask the White House reviewers. Under Executive Order 12866, the Office of Information and Regulatory Affairs reviews significant rules and, in practice, often meets with outside parties. The meetings are logged on reginfo.gov.

Step 7: After the final rule

When the agency publishes the final rule, read the preamble again. It must respond to the significant comments. If you raised a serious point and the response is thin or missing, that is information.

• Your remaining options inside the process include filing a petition asking the agency to reconsider or amend the rule. Agencies are not required to grant it, but they must take it seriously.
• A court challenge is possible, usually by a trade association or a public-interest law firm and often in the federal courts of appeals. That requires lawyers, and your comment, in the record, may be the evidence they rely on. If you didn't raise an issue during the comment period, a court may refuse to consider it later, which is one more reason to file.
• A major rule generally cannot take effect until 60 days after it is published and submitted to Congress, which leaves a short window for the next tool.

The last backstop: the Congressional Review Act

The Congressional Review Act of 1996 requires agencies to submit every final rule to Congress and to the Government Accountability Office. Congress then has a limited period to pass a joint resolution of disapproval. In the Senate, a special expedited process prevents a filibuster. If both chambers pass the resolution and the President signs it, the rule is dead, and the agency cannot reissue a rule that is substantially the same without new authorization from Congress.

Three notes on realism. First, the President must sign the resolution or Congress must override a veto, so it works best when Congress and the White House are on the same side. Second, the law was used successfully only once in its first twenty years, in 2001 against an ergonomics rule from the Department of Labor, and it was used a number of times in 2017. Third, its power is partly deterrence: an agency that knows Congress can reverse a rule thinks twice. If you want to use it, your path runs through your members of Congress and through the committees that oversee the agency.

For the broader argument about why costs should be counted before rules are written, see Regulation protects us, so why count the cost? Because someone pays it. For the paperwork you will face once you hire, see the new employer's checklist for the first year of payroll and taxes. And for an example of what happens when a state-level rule gates entry to a trade, the license you need to braid hair and the jobs it quietly kills shows how ordinary citizens have won in court.

The bottom line

• The time to fight a federal rule is while it is a proposal. Find it in the Federal Register, on Regulations.gov or in the Unified Agenda, and write down the comment deadline.
• File a comment with your own numbers, your arithmetic and an alternative. Agencies must consider significant comments, and courts have set rules aside when they did not.
• Bring allies: your trade association, the SBA Office of Advocacy and your members of Congress.
• Save the tracking number, and read the agency's answer in the final rule. If it ignored you, a petition, a lawsuit or the Congressional Review Act may still be available.
• Don't wait for a better moment. The owners who show up in the docket are few, and that is what makes you worth listening to.