The Regulatory Flexibility Act ("Reg Flex") (1980) (5 U.S.C. §§ 601-612), requires regulatory agencies to consider the effects of any proposed rule on "small entities" (i.e., small businesses, small governmental units, and small not-for-profit organizations). For any rule that an agency determines will affect a significant number of small entities, a Regulatory Flexibility Analysis (RFA) must be prepared at both the proposed rule and final rule stages. This analysis must include: (1) an estimate of the number and type of small entities to be affected; (2) a detailed description of the recordkeeping and compliance requirements for the rule; and (3) a discussion of the alternatives that the agency has considered that would reduce the burden that the rule would impose on small entities. In April and October of each year all regulatory agencies are required to publish in the Federal Register a "regulatory flexibility agenda" listing all rules that the agency is likely to issue in proposed or final form that are expected to have significant impact on small entities. Each year the agency must publish a list of those rules it intends to review within the next 12 months. (See Regulatory Agendas.)

The Regulatory Flexibility Act was amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA, Public Law 104-121, Title II). SBREFA added a provision allowing court challenges to an agency's non-compliance with Reg Flex. SBREFA also requires that agencies develop guidelines and provide other assistance to, and modify enforcement policy for, small businesses. It also created a system of Congressional review of agency rules. (See Congressional Review of Rules)