WASHINGTON The U.S. House of Representatives Committee on Small Business has unanimously approved a bill designed to require federal agencies to give greater consideration to small businesses when adopting new rules and regulations.

The Small Business Regulatory Improvement Act (H.R. 4458) is supposed to close loopholes in the implementation of the federal Regulatory Flexibility Act, which has been on the books since 1980.

U.S. Small Business Administration Chief Counsel for Advocacy Thomas M. Sullivan said the proposed law would provide "needed assistance to small entities."

According to Sullivan, the bill would assure fair treatment of small businesses in the regulatory process by requiring federal agencies to give consideration to foreseeable "indirect impacts" of proposed regulations and to periodically review existing regulations.

Plus, it would codify Executive Order 13272, "Proper Consideration of Small Entities in Agency Rulemaking." Sullivan said the executive order requires agencies to notify the Office of Advocacy when a proposed rule is expected to have a significant impact on small business.

"Our biggest concern with the (Regulatory Flexibility Act) is that it does not require agencies to analyze indirect impacts," said Sullivan. "Agencies are required to consider the direct economic impact of a regulatory action on small entities, but that analysis can overlook obvious side effects and fail to provide decision-makers with a full understanding of a rule's likely impact on small entities.

"H.R. 4458 contains the needed improvements to require this analysis," he added.

Sullivans Office of Advocacy is the self-described "small business watchdog" of the federal government, examining the role and status of small business in the economy and representing the views of small business to federal agencies, Congress and the administration. It also is the source for small business statistics, and funds research into small business issues.