Since January 2003, personnel from SBA's Office of Advocacy has testified at least eight times to state legislatures urging passage of the model bill or other legislation that would give small business a seat at the regulatory table (without providing any similar opportunity for citizen or public interest involvement). It has also ensured wide circulation of the model bill by releasing it through the American Legislative Exchange Council, a network for conservative state legislators.

It is not clear what legal authority allows the federal SBA to lobby state legislatures.

The SBA crafted its model state bill on the federal Regulatory Flexibility Act and Small Business Regulatory Enforcement Fairness Act, which force federal agencies to analyze proposed rules for their costs to small businesses, consider alternatives that would cost less for small businesses, and explain their reasons for rejecting such alternatives.

States adopting such legislation will now be forced to address the same issues that small business considerations raise in the federal rulemaking process. The very definition of what constitutes a small business, for example, can be so easily manipulated that it could stretch far beyond the sentimental image of the mom-and-pop storefront to include all but the tiniest fraction of total industry. Moreover, the public welfare problems tackled by regulations do not necessarily accommodate the special needs of small businesses. Asthmatics troubled by air pollution will find it difficult to breathe polluted air whether a small or large business is responsible for the emission, just as an employee crippled by unsafe working conditions is crippled all the same whether the business itself is large or small.