Report on the Regulatory Flexibility Act 
FY 2008
Annual Report of the Chief Counsel for Advocacy 
on Implementation of the Regulatory Flexibility 
Act  
and Executive Order 13272

January 2009
The full text of this report is available on the Office of Advocacys Internet site at 
http://www.sba.gov/advo/. Reprints in paper or microfiche are available for purchase from the National 
Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161.

To the President and the Congress of the United States

I am pleased to present to the President and the Congress the U.S. Small Business Administration, Office of 
Advocacys fiscal year (FY) 2008 Report on the Regulatory Flexibility Act. The report covers federal 
agencies FY 2008 compliance with the Regulatory Flexibility Act of 1980 (RFA) and Executive Order 
13272, as well as Advocacys Regulatory Review and Reform (r3) initiative. The RFA requires agencies to 
review the prospective impact of proposed regulations on small entitiessmall businesses as well as small 
governmental jurisdictions and small nonprofitsand to consider significant alternatives that minimize 
small entity impacts. Advocacy continues to make steady progress in its efforts to improve agency compli-
ance with the RFA.
    In numerous cases, Advocacy has provided federal agencies with assistance in meeting their regulatory 
goals and reducing the disproportionate burden of those regulations on small entities. Advocacy directs its 
efforts through comments regarding key agency rules, testimony to Congress, RFA compliance training for 
federal agencies, participation in Small Business Regulatory Enforcement Fairness Act (SBREFA) panels, 
advocacy for legislative reform, and vital research on small business issues. Advocacys efforts are en-
hanced by numerous Web-based tools that place information sharing at the forefront: RSS feeds, e-mail 
alerts, an Advocacy blogThe Small Business Watchdog, Regulatory Alerts, and an electronic notification 
system for agencies to use when alterting Advocacy about rules that will have a signficiant economic im-
pact on small entities. 
    Through Advocacys work in bringing small business concerns to the rulemaking table in FY 2008, the 
office was able to save small entities nearly $11 billion in forgone regulatory costs, without undermining 
federal agencies regulatory goals. Successful implementation of the RFA at the federal level has led to 
success at the state level in convincing states to adopt similar legislation to ease the burden of state regula-
tions. In the current economic climate, it is more important than ever to minimize unnecessary regulatory 
burden on the sector of the economy that will likely be the innovators and job creatorssmall businesses.  
     In the next year, Advocacy looks forward to working with the new Administration and hopes to con-
tinue providing support to federal agencies seeking to reduce the impacts of their regulations on small enti-
ties by providing further training and conducting more outreach to the small business communities affected 
by federal regulations.

/s/

Shawne Carter McGibbon 
Acting Chief Counsel for Advocacy

Contents

To the President and the Congress of the United States
1  An Overview of the Regulatory Flexibility Act and Related Policy in Fiscal Year 2008
	Agency Compliance
	The Regulatory Review and Reform (r3) Initiative 
	Roundtables
	Judicial Review
2.Federal RFA and E.O. 13272 Compliance and the Role of the Office of Advocacy
	RFA Training under E.O. 13272
	Overview of RFA Implementation
	Chart 2.1 Advocacy Comments by Key RFA Compliance Issue, FY 2008
	Table 2.1 Regulatory Comment Letters Filed by the Office of Advocacy, FY 2008
	Table 2.2 Regulatory Cost Savings, FY 2008
	Table 2.3 Summary of Cost Savings, FY 2008
3.  Advocacy Review of Agency RFA Compliance in Fiscal Year 2008
	Department of Agriculture
	Department of Commerce
    Department of Defense
	Department of Education
	Department of Energy
	Department of Health and Human Services
	Department of Homeland Security
	Department of Housing and Urban Development
	Department of the Interior
	Department of Justice
	Department of Labor
	Department of State
	Department of Transportation
	Department of the Treasury
	Department of Veterans Affairs
	Consumer Product Safety Commission
	Environmental Protection Agency
	Federal Acquisition Regulation Council
	Federal Communications Commission
	Securities and Exchange Commission
	Small Business Administration

Conclusion

 Small Business Regulatory Flexibility Model Legislation Initiative
Wisconsins Family Child Care Centers Benefit from Regulatory Flexibility
The Role of Advocacys Regional Advocates
	Table 4.1 State Regulatory Flexibility Legislation, 2008 Legislative Activity
	Table 4.2 State Regulatory Flexibility Legislation, Status as of October 2008
	Chart 4.1 Mapping State Regulatory Flexibility Provisions, FY 2008
Appendix A  Supplementary Tables
	Table A.1 Federal Agencies Trained in RFA Compliance, 2003-2008
	Table A.2 Status Report on FY 2008 Top Ten Rules for Review and Reform
	Table A.3 Updates of RFA-related Case Law, 2007-2008
	Table A.4 SBREFA Panels through Fiscal Year 2008
Appendix B  The Regulatory Flexibility Act
Appendix C  Executive Order 13272
Appendix D  Abbreviations

1. An Overview of the Regulatory Flexibility Act and 
Related Policy in Fiscal Year 2008
In 1980 Congress found that regulations issued by the federal agencies imposed disproportionate burdens 
on small entities. With the passage of the Regulatory Flexibility Act(1) that year, Congress required that 
agencies determine the extent of the impact of their regulations on small businesses and consult with small 
businesses during the rulemaking process to determine ways to minimize the disproportionate burdens.(2) 
The RFA has been strengthened over the years by the passage of the Small Business Regulatory Enforce-
ment Fairness Act in 1996,(3) and by the signing of Executive Order 13272 in 2002.(4)
Agency Compliance 
Overall agency compliance with the RFA continues to develop. Agencies continue to be receptive to the 
RFA training the Office of Advocacy provides in accordance with E.O. 13272. (See Table A.1 for a listing 
of agencies trained.) Advocacy has established itself as a partner in the rulemaking process with the various 
agencies, and has been able to open important lines of communication between the rulemaking agencies 
and the small business community.
The Regulatory Review and Reform (r3) Initiative 
It is also important to provide information on the cumulative effect on small businesses of federal rules. 
Advocacy has determined that the cumulative annual cost of federal regulations is more than $1 trillion, 
and that the burden falls disproportionately upon the nations small businesses. According to Office of Ad-
vocacy-sponsored research, the per-employee burden of regulations on the smallest American businesses 
was 45 percent higher than the burden on the largest businesses.(5)
    To address the problem of the cumulative burden of regulations, Congress included in section 610 of 
the RFA a requirement that agencies review the existing rules that have a significant economic impact on 
small entities within 10 years of promulgation.(6) Section 610 has not proven to be as effective as it could 
be.(7) As a result, Advocacy established the Regulatory Review and Reform Initiative, or r3. Through the 
r3 initiative in FY 2008, Advocacy received nominations of 83 regulations small businesses believe are ripe 
for review and reform. From the list of 83, Advocacy developed a top ten list and posted the results on its 
website.(8) The Office of Advocacy hopes that federal agencies will further incorporate small business 
concerns in their rulemaking as a result of the attention brought by the r3 process. A chart of the current 
status of the top ten rules for review and reform appears in Appendix A, Table A.2.
Roundtables
Over the years, Advocacy has seen increased interest in Advocacy-run roundtables, with growing participa-
tion from small business representatives as well as representatives of the federal agencies.
    Some roundtables have been scheduled as regularly recurring events, such as Advocacys monthly 
roundtable on environmental rules and Advocacys occupational safety roundtable, which is generally bi-
monthly. Other roundtables, such as those concerning transportation and homeland security, have been held 
quarterly, while still others have been held on an ad hoc basis. 
    In FY 2008, Advocacys roundtables addressed such issues as veteran-owned small businesses, new 
requirements for commercial driver training, regulations issued under the Family and Medical Leave Act, 
tax issues, and rules proposed by the Department of Housing and Urban Development under the Real Estate 
Settlement Procedures Act, among others.
    Almost all of these roundtables have featured presentations by small business representatives as well as 
key agency personnel; every roundtable has been devoted to discussions of the impact of federal agency 
rules on small businesses. In holding these roundtables, Advocacy fosters the kind of information sharing 
between government and small businesses that the drafters of the RFA and SBREFA envisioned. The 
roundtables give agency personnel an opportunity to hear firsthand from small businesses how a rule is 
affecting or will affect them, and to hear how the rule might be adjusted to reduce the small business bur-
den. 
Judicial Review
The 1996 SBREFA amendments reformed RFA by providing for judicial review of certain agency actions 
under the RFA.(9) The judicial review provisions of SBREFA gave small entities a way to ensure that fed-
eral agencies meaningfully comply with the requirements of the RFA. Since the adoption of SBREFA, nu-
merous cases have clarified the RFA and provided federal agencies with clearer guidance on its require-
ments. A synopsis of FY 2008 federal cases raising RFA issues is included as Table A.3 in Appendix A. 
The most significant case involving the RFA in FY 2008 was a ruling by a federal district court in Califor-
nia to enjoin enforcement of a rule issued by the Department of Homeland Security until the department 
conducted the appropriate analysis under the RFA.(10) The future of the challenged rule has yet to be de-
termined as of this writing; however, the Department of Homeland Security published a supplemental regu-
latory flexibility analysis for the rule in April 2008. Advocacys comments on the supplemental analysis 
can be found at www.sba.gov/advo.(11)
2. Federal RFA and E.O. 13272 Compliance and the Role 
of the Office of Advocacy 

The Office of Advocacy, which oversees agency compliance with the Regulatory Flexibility Act, also was 
tasked with monitoring federal agency compliance with Executive Order 13272. This executive order sets 
forth additional compliance requirements to assist federal agencies in promulgating rules that are clear and 
that minimize undue economic burdens on small entities. 
    Federal agencies must meet three requirements set forth under section 3 of E.O. 13272. First, they must 
publicly document their policies for ensuring that small entities are properly considered during the rule-
making process. Second, agencies must notify Advocacy of prepublication (draft) rules that may impose a 
significant economic impact on small entities, either when the rule is sent to the Office of Management and 
Budgets (OMB) Office of Information and Regulatory Affairs (OIRA) or at a reasonable time prior to its 
publication. To best facilitate prompt agency compliance with the electronic notice requirements of E.O. 
13272, Advocacy created an email address: notify.advocacy@sba.gov. Many regulatory agencies have be-
gun to utilize this tool. Third, E.O. 13272 requires the agencies to consider Advocacys comments and rec-
ommendations on a proposed rule and to respond to Advocacys written comments in the final rule pub-
lished in the Federal Register. 
    In addition to the three directives given to agencies, E.O. 13272 mandated three requirements for the 
Office of Advocacy. First, Advocacy was required to notify agencies of their compliance requirements un-
der the RFA and the executive order. This was accomplished by the publication of A Guide for Government 
Agencies: How to Comply with the Regulatory Flexibility Act. The guide was published in 2003, and Advo-
cacy continues to receive requests for updated versions from numerous regulatory agencies. Second, the 
executive order provided for additional reporting by the Office of Advocacy. Previously, Advocacy had 
reported annually to particular congressional committees and the president on agency compliance with the 
RFA. E.O. 13272 added a requirement that Advocacy also report annually to the OMBs Office of Informa-
tion and Regulatory Affairs about agency compliance with the three executive order requirements. Advo-
cacys FY 2008 report on agency compliance with E.O. 13272 is included here and in chapter 3. Finally, 
E.O. 13272 requires that Advocacy train federal agencies in how to comply with the RFA. 
RFA Training under E.O. 13272
Advocacy has trained numerous economists, attorneys, and regulatory and policy staff at federal agencies 
to consider the impact of their regulations on small entities before, during, and after the drafting of their 
rules. In FY 2008, Advocacy continued with this task by holding training sessions for new employees of 
previously trained agencies, staff requesting additional training sessions, and employees of agencies not yet 
trained. These training sessions demonstrate to agencies that it is possible for them to accomplish their 
regulatory objectives while finding ways to reduce the burden on small businesses. Participants have gained 
tools to assist them in their economic analysis of proposed rules so that they may also identify regulatory 
alternatives that will reduce the potential economic impact of the regulation on small entities. 
    Advocacys success in RFA compliance training throughout the federal agencies over the past five 
years has improved agency analysis of the federal regulatory burden on small businesses and has enhanced 
the factual basis for agency certifications of rules. The program has also led to a greater willingness by the 
agencies to share draft documents with Advocacy. Not all agencies are quick to consider small business 
impacts from the beginning of rule development, but these training sessions have indeed made a difference 
to many agencies in their rule development process, and ultimately the training has made a difference to 
small businesses. 
    In the next phase of RFA training, Advocacy will be able to focus on agencies needing more training 
in the economic analysis of small business impacts, while offering the training to employees who were un-
able to attend previous sessions. This continued focus on the basics of the RFAthe importance of detailed 
economic analysis as an integral part of the public comment period, the foundation of a factual basis as a 
requirement for a threshold analysis of a rules impact, and contemplating a rules impact prior to a first 
draftwill continue to be important issues for Advocacys training team in the next fiscal year.
Overview of RFA Implementation
Advocacy continues to advance agency compliance with the RFA and E.O. 13272 by coordinating with 
agency attorneys and economists throughout the rulemaking process. In FY 2008, Advocacy provided 
comments to multiple agencies, offering counsel on compliance with the RFA, identifying areas of particu-
lar concern to small businesses, and recommending burden-reducing alternatives for agency consideration. 
The following tables illustrate the areas in which Advocacy continues to work with agencies to comply 
with the RFA and summarizes the small business cost savings realized through Advocacys efforts.

Chart 2.1 Advocacy Comments by Key RFA Compliance Issue, 
FY 2008
Chart 3.1 illustrates the most common concerns raised in Advocacys comment letters. 
The chart highlights areas in need of continued improvement based on Advocacys analy-
sis of its FY 2008 comment letters.
Table 2.1 Regulatory Comment Letters Filed by the 
Office of Advocacy, FY 2008

Date 

Agency 

Comment Subject 

10/02/07

SEC

Comments regarding two alternative releases on shareholder proxy access 
(72 Fed. Reg. 43488; 72 Fed. Reg. 43465).

10/12/07

EPA

Letter recommending inclusion of specific small entity representatives in a 
Small Business Advocacy Review (SBAR) Panel for EPAs revised National 
Primary Drinking Water Regulations. 

10/25/07

EPA

Comments regarding EPAs National Emissions Standards for Hazardous Air 
Pollutants (72 Fed. Reg. 52958).

11/02/07

TSA

Comments regarding TSAs proposed Secure Flight Program regulations (72 
Fed. Reg. 48356).

11/07/07

FCC

Comments regarding petitions by Verizon Telephone Companies for forbear-
ance (WC Docket No. 06-172).

11/15/07

OSMRE

Comments regarding the proposed regulation, Excess Spoil, Coal Mine 
Waste, and Buffers for Waters of the United States (72 Fed. Reg. 48889).

11/29/07

DOJ

Letter forwarding Advocacys report titled Evaluation of Barrier Removal 
Costs Associated with the 2004 Americans with Disabilities Act (ADA) Ac-
cessibility Guidelines.

12/12/07

Treasury

Comments regarding a proposed prohibition on funding of unlawful Internet 
gambling (72 Fed. Reg. 56680).

01/15/08

OSHA

Transmittal of the Report of the Small Business Advocacy Review Panel on 
the Occupational Safety and Health Administrations Draft Standard for 
Occupational Exposure to Beryllium.

02/20/08

SBA

Comments on the SBAs women-owned small business federal contracting 
procedures (72 Fed. Reg. 73285).

02/25/08

SEC

Comments regarding the SECs proposal to extend the implementation date 
for Sarbanes-Oxley (73 Fed. Reg. 7449).

02/28/08

FDA

Comments regarding the FDAs guidance on the labeling of dietary supple-
ments (73 Fed. Reg. 196).

03/14/08

NHTSA

Comments regarding NHTSAs proposed tire registration and recordkeeping 
rule (73 Fed. Reg. 4157).

03/21/08

Treasury

Comments regarding an advance notice of proposed rulemaking (ANPRM) 
providing guidance on refund anticipation loans (RALs) (73 Fed. Reg. 1131).

03/31/08

EPA

Report of the Small Business Advocacy Review Panel, including the execu-
tive summary, on Revisions to the Total Coliform Monitoring and Analytical 
Requirements and Consideration of Distribution System.

04/07/08

DOL

Comments regarding the proposed revisions to regulations implementing the 
Family and Medical Leave Act (73 Fed. Reg. 7875).

04/08/08

FRB

Comments regarding the proposed Truth in Lending regulation (73 Fed. Reg. 
1671).

04/23/08

DOT

Comments regarding a notice of proposed rulemaking (NPRM) on passenger 
vessel transportation for individuals with disabilities (73 Fed. Reg. 14427).

04/24/08

Treasury, IRS

Comments regarding required government withholding of 3 percent on pay-
ments for services and property (IRS Notice 2008-38).

04/25/08

DHS

Comments regarding DHS Supplemental Proposed Rule on Safe-Harbor Pro-
cedures for Employers who Receive a No-match Letter (73 Fed. Reg. 4157).

04/25/08

FCC

Comments commending FCC for considering a proposal to grant regulatory 
relief to small cable providers.

05/13/08

CPSC

Comments about the NPRM regarding setting standards for the flammability 
of residential upholstered furniture (73 Fed. Reg. 11701).

05/19/08

FCC

Comments regarding the High-cost Universal Service Support, Federal-state 
Joint Board on Universal Service (72 Fed. Reg. 73225).

06/11/08

FHA

Comments regarding the Real Estate Settlement Procedures Act: Proposed 
Rule to Simplify and Improve the Process of Obtaining Mortgages and Re-
duce Consumer Settlement Costs (73 Fed. Reg. 14029).

06/25/08

SEC

Comments commending the SEC for approving a one-year extension for 
small businesses from the auditor attestation requirement in the Sarbanes-
Oxley Act.

06/30/08

SEC

Comments regarding the SECs plans to unify Americas current Generally 
Accepted Accounting Principles with the International Financial Reporting 
Standards.

07/14/08

FS

Comments regarding the Forest Services Locatable Minerals Operations 
NPRM (73 Fed. Reg. 16185).

07/23/08

DHS

Comments regarding the Commercial Fishing Industry Vessels ANPRM (73 
Fed. Reg. 16815).

07/25/08

FCC

Comments regarding Qwest Petitions for Forbearance Pursuant to 47 U.S.C 
section 160(c) in the Denver, Minneapolis-St. Paul, Phoenix, and Seattle 
Metropolitan Statistical Areas (WC Docket No. 07-97).

08/06/08

DOJ

Comments regarding the NPRM titled Nondiscrimination on the Basis of 
Disability by Public Accommodations and Commercial Facilities (73 Fed. 
Reg. 34508).

08/07/08

FAR Council

Comments regarding the proposed Employment Eligibility Verification rule, 
FAR Case 2007-013 (72 Fed. Reg. 33374).

08/21/08

FCC

Comments regarding the OrbitCom Petition for Forbearance of sections 
61.26(b) and 61.26(c) of the FCCs rules (WC Docket 08-162).

09/15/08

DHS

Comments to DHSs U.S. Citizenship and Immigration Services regarding 
the NPRM titled Changes to Requirements Affecting H-2B Nonimmigrants 
and Their Employers (73 Fed. Reg. 49109 August 20, 2008).

Table 2.2 Regulatory Cost Savings, FY 2008

Agency 

Subject Description 

Cost Savings/ 
Impact Measures 

FCC

Petitions of the Verizon Telephone Companies for Forbearance 
Pursuant to 47 U.S.C.  160(c) in the Boston, New York, Phila-
delphia, Pittsburgh, Providence, and Virginia Beach Metropoli-
tan Statistical Areas, WC Docket No. 06-172. On December 4, 
2007, the FCC denied the six petitions filed by Verizon to request 
forbearance from unbundled network element (UNE) obligations. 
Because of information received from small business stake-
holders, the Office of Advocacy was able to present data to the 
FCC that did not support a finding that competition in these six 
metropolitan areas was sufficient to justify a grant of forbearance. 
Because of the petitions denial, small competitive local exchange 
carriers (CLECS) can continue to enter and do business in the 
markets. 

The total one-time cost 
savings from this pro-
posal are $393.9 mil-
lion.

EPA

Automotive Spray Painting and Stripping Facilities Rule. EPA 
followed Advocacys recommendation to clarify the applicability 
requirements of the final rule for facilities that use paint spray 
guns. The clarification included limiting the scope of the rule to 
automotive paint shops that spray coatings containing the hazard-
ous air pollutants (HAPs) being regulated. Limiting the scope of 
the rule resulted in a reduction in the number of affected small 
entities from 95,000 facilities to 9,000 facilities. The cost for the 
specified spray booth equipment would have been at least $2,000 
per facility. 

Total one-time cost 
savings are $172 mil-
lion.

EPA

Air Pollution Control Standards for Iron and Steel Foundries 
Rule. On January 2, 2008, EPA published a final rule establishing 
new air pollution control standards for small-scale iron and steel 
foundries under the Clean Air Act. The rule requires foundries 
above a specific melting capacity to install pollution control 
equipment. On the basis of information received from small busi-
ness stakeholders and the Office of Advocacy, EPA raised the 
applicability threshold for these new controls to a higher melting 
capacity. As a result, smaller foundries can continue to operate 
without having to install new controls. Advocacy had already 
claimed savings based on the proposal published in September 
2007. Based on the language of the final rule, EPA exempted 
foundries with an even higher melting capacity. 

EPAs additional ex-
emptions yielded an 
additional $4.94 mil-
lion in one-time sav-
ings and an additional 
$1.003 million in re-
curring operating and 
maintenance costs 
saved.

EPA

SPCCSpill Prevention, Control, and Countermeasure Rule, 
Phase II. On October 15, 2007, the EPA proposed phase II re-
quirements for facilities that store more than 1,320 gallons of oil. 
These facilities are required to have a prevention and response 
plan to minimize and eliminate releases of oil to navigable waters. 
In this case, Advocacy helped persuade EPA to add various 
changes to allow flexibility for smaller facilitiesflexibility for 
integrity testing of tanks, flexibility of security requirements, and 
defining the scope of a regulated facility. 

The savings for these 
three provisions total 
$291 million annual-
ized at the 7 percent 
discount rate.

SEC

Shareholder Proposals. On August 3, 2007, the SEC released two 
alternative proposals on shareholder proxy access, which would 
allow shareholders access to company proxy statements in order 
to nominate their own candidates to their board of directors. The 
SEC received more than 25,000 comment letters supporting the 
long proposal, which would have enabled certain shareholders 
to amend future election procedures, such as allowing proxy ac-
cess. Advocacy filed a public comment letter supporting the 
short proposal, which affirmed the status quo position that 
shareholder proposals on items such as proxy access may be ex-
cluded from a companys proxy materials. Responding to input 
from the small business community, Advocacy commented that it 
did not support the long proposal because it was likely to have a 
disproportionate impact on smaller public companies. Advocacy 
was one of a few groups that actively supported the short pro-
posal. On December 6, 2007, the SEC released the final rule on 
the short proposal, Shareholder Proposals Relating to the Election 
of Directors (SEC File No. S7-17-07). 

The adoption of the 
short proposal will 
result in one-time cost 
savings of 
$414,252,000.

DOD

Contractor Code of Ethics. On February 16, 2007, the FAR 
Council published a proposed regulation titled Contractor Code of 
Business Ethics and Conduct. If implemented, the regulation 
would have required all federal prime contractors and subcontrac-
tors that were awarded a contract of $5 million or more to imple-
ment a formal code of ethics and provide an employee ethics and 
business training program. The proposed regulation also stated 
that for contracts valued at $5 million or less such programs may 
not be necessarily required, but when required, they shall be suit-
able to the size of the company and the extent of the companys 
business within the federal government. Advocacy was ap-
proached by a construction trade group representing a large num-
ber of small business members about the impact of the proposal. 
After consultation with an industry expert on corporate ethics 
programs, Advocacy was informed that the type of ethics program 
being proposed in the FAR regulation would, conservatively, cost 
a company $10,000 to establish, plus another immeasurable 
amount annually to run and maintain the program. On May 21, 
2007, the Office of Advocacy submitted an official comment let-
ter to the FAR Council requesting reconsideration of the impacts 
of the proposed regulation on small businesses. On November 23, 
2007, DOD, GSA, and NASA published the final contractor eth-
ics rule with an exemption for small businesses. 

The exemptions result 
in one-time cost sav-
ings to small busi-
nesses of more than 
$5.3 billion. This total 
does not include the 
number of contracts 
awarded to small 
business subcontrac-
tors.

SEC

Sarbanes-Oxley ActSection 404(b) Extensions. The Sarbanes-
Oxley Act of 2002 requires public companies to submit a section 
404(a) management assessment report and a section 404(b) audi-
tors report on the companys internal controls to the SEC. Since 
the SEC adopted the rule implementing section 404 of the Sar-
banes-Oxley Act in 2003, Advocacy and other small business 
stakeholders have recommended extension because these re-
quirements would impose disproportionate costs on small entities. 
The SEC has delayed the section 404 implementation date for 
smaller public companies with less than $75 million in public 
float a number of times. In December 2006, the SEC released 
management guidance, and the Public Companies Accounting 
Oversight Board released a new auditing standard to address con-
cerns with the act. In 2007, Advocacy submitted numerous com-
ment letters to the SEC recommending that the agency further 
extend the deadline for section 404(b) compliance for smaller 
public companies to examine whether this new auditing standard 
would make the process more efficient. On July 2, 2008, the SEC 
published a final rule granting smaller public companies one more 
year to comply with section 404(b), requiring that they submit this 
report for fiscal years ending on or after December 15, 2009. The 
SEC granted this extension to allow the SEC to complete a study 
of the costs and benefits of section 404, with a particular emphasis 
on small business impacts. 

The one-year exten-
sion will result in one-
time cost savings of 
$1,957,225,008.

FAA

Final Revisions to Cockpit Voice Recorder and Digital Flight 
Data Recorder Regulation. The Federal Aviation Administra-
tions proposed CVR/DFDR rule was published on February 28, 
2005, and the Office of Advocacy filed formal public comments 
on June 25, 2005, after discussing the proposed rule with small 
business representatives at its regular Aviation Safety Roundtable. 
On March 7, 2008, the FAA issued its Final Revisions to Cockpit 
Voice Recorder and Digital Flight Data Recorder Regulations 
(CVR/DFDR rule). The final rule amends cockpit voice recorder 
(CVR) and digital flight data recorder (DFDR) regulations affect-
ing certain air carriers, operators, and aircraft manufacturers. Ad-
vocacys comments noted, among other things, that while FAAs 
proposed rule would apply to all aircraft with 10 or more seats, 
FAAs economic analysis appeared to focus mostly on large 
scheduled airlines (Part 121 carriers) while omitting other seg-
ments of the aviation industry, such as Part 91 (general aviation) 
and Part 135 operators (on-demand air charters, fractional aircraft 
programs, and scheduled regional carriers). In response to Advo-
cacys comments, FAA excluded all Part 91 operators from hav-
ing to retrofit their aircraft.

First-year cost savings 
are $289 million for 
retrofitting some 
15,000 aircraft; an 
additional annual 
$13.65 million is saved 
in operational and 
maintenance costs of 
$910 per aircraft.

EPA

Area Source Standard for Metal Fabrication and Finishing. On 
June 13, 2008, the EPA signed a final Clean Air Act rule for 
smaller facilities that fabricate and/or finish metal products. The 
rule set emission standards in the form of management practices 
and equipment standards for small metalworking operations that 
use dry blasting, machining, dry grinding, and dry polishing, as 
well as spray painting and welding. EPA estimates that 5,800 fa-
cilities will be affected by the new rule, and that 5,300 of those 
facilities are small businesses. The rule imposes new monitoring 
and recordkeeping obligations on these sources, which EPA esti-
mates to cost about $339 per facility per year. This obligation 
represents a significant reduction from the original monitoring 
and reporting requirements the rule would have imposed. Re-
sponding to comments from Advocacy and others, EPA proposed 
less burdensome reporting requirements. 

The new reporting 
requirements will save 
metalworking opera-
tions of all sizes 
$1,015,000 per year on 
a recurring basis.

FAR Council

FAR Case 2006-011, Representations and CertificationsTax 
Delinquencies. On March 30, 2007, the Federal Acquisition 
Council published a proposed rule that if finalized would require 
almost all federal contractors, prime and subcontractors, to certify 
whether or not they have, within a three-year period preceding the 
contract offer, been convicted of or had a civil judgment rendered 
against them for violating any tax law or failing to pay any tax, or 
been notified of any delinquent taxes for which the liability re-
mains unsatisfied. On May 25, 2007, the Office of Advocacy sent 
a comment letter to the FAR Council. On April 22, 2008, the FAR 
Council published the final rule. The rule acknowledged the con-
cerns raised by the Office of Advocacy and established a mini-
mum federal tax delinquency threshold of $3,000. The final rule 
also limited the tax violations to federal criminal tax laws and it 
provided a detailed definition of delinquent federal taxes. 

The FAR Councils 
actions resulted in 
annual cost savings to 
small contractors of at 
least $18.8 million.

FCC

Qwest Petitions for Forbearance Pursuant to 47 U.S.C.  160(c) 
in the Denver, Minneapolis- St. Paul, Phoenix, and Seattle Met-
ropolitan Statistical Areas, WC Docket No. 07-97, FCC Docket 
No. 08-174. On April 27, 2007, Qwest filed a petition for forbear-
ance pursuant to 47 U.S.C.  160 (c) in the Denver, Minneapolis-
St. Paul, Phoenix, and Seattle Metropolitan Statistical Areas 
(MSAs). Competitive local exchange providers explained to Ad-
vocacy that the requisite level of competition had not been met in 
these areas, and provided a recent market-based study examining 
the economic impact of the incumbent being granted forbearance. 
Advocacy asked the FCC to utilize these data when conducting its 
section 10 forbearance analysis to weigh the impact of this grant 
on small providers. On July 25, 2008, the FCC denied Qwests 
forbearance request in response to Advocacys concerns. 

Savings are more than 
$1.14 billion annually 
for small providers in 
the MSAs.

FCC

In the Matter of Carriage of Digital Television Broadcast Sig-
nals: Amendment to Part 76 of the Commissions Rules (CS 
Docket No. 98-120; FCC Docket No. 08-193). On September 24, 
2007, Advocacy met with representatives of the American Cable 
Association (ACA) to discuss the regulatory burden that certain 
aspects of the proposed DTV transition rule would impose on 
their members systems. They explained that the proposed dual 
carriage language would have required that cable systems pro-
vide customers with both broadcast and digital signals, and this 
mandate would have a negative economic impact on small cable 
systems. Advocacy continued to meet with both the ACA mem-
bership and representatives from the FCC to assist them in negoti-
ating a compromise that would reduce this burden on the smallest 
systems while still achieving the commissions goal of ensuring 
that cable viewers are minimally affected by the digital television 
(DTV) transition. On September 4, 2008, the commission released 
its Fourth Report and Order, which carves out exemptions for 
small cable systems with certain characteristics. For these small 
entities, compliance with this rule would have cost approximately 
$50,000 per system. 

The costs to affected 
small entities have 
been reduced to 
$10,000 per system, a 
cost savings of ap-
proximately $160 mil-
lion annually.

EPA

Amendments to Clean Air Act Compliance Assurance Monitor-
ing Rule. On January 22, 2004, the U.S. Environmental Protec-
tion Agency published a final rule that, among other things, noti-
fied the public that EPA intended to expand the scope and strin-
gency of the Compliance Assurance Monitoring (CAM) Rule, 69 
Fed. Reg. 3202 (Jan. 22, 2004). EPA subsequently developed a 
revised monitoring regime that would require additional emissions 
points at facilities with federal Clean Air Act operating permits to 
monitor and report their emissions. After receiving comments 
from Advocacy and other interested parties about EPAs analysis 
of the costs of the proposal versus its likely benefits, EPA sus-
pended work on the proposal indefinitely in March 2008. EPA 
had estimated that the amended rule would have imposed new 
costs of $114 million per year on regulated sources. 

Cost savings from the 
suspended rule are 
$114 million per year.

EPA

Control of Emissions from Nonroad Spark Ignition Engines and 
Equipment. On September 4, 2008, EPA finalized a rule to con-
trol air pollution from gasoline-powered engines and equipment 
below 50 horsepower, 73 Fed. Reg. 59034 (October 8, 2008). As 
part of the final rule, EPA responded to concerns raised by Advo-
cacy and small business stakeholders about a provision that EPA 
had originally proposed requiring small engine makers to certify 
the compliance of incomplete and replacement engines used in 
nonroad equipment. These new certification, tracking, and moni-
toring requirements would have substantially added to the cost 
and difficulty of obtaining replacement and partially built engines. 
In the final rule, EPA provided per-engine family exemption allo-
cations that will significantly lower the burden on small manufac-
turers and small repair facilities.

The cost savings from 
this final rule are $500 
million per year.

Table 2.3 Summary of Cost Savings, FY 2008 
(Dollars)1

Rule/ Intervention

First-year costs 

Annual costs  

Verizon Petition for Forbearance (FCC)2

393,900,000

Automotive Spray Painting and Stripping Facilities (EPA)3

172,000,000

Air Pollution Control Standards for Iron and Steel 
   FoundriesFinal (EPA)4
4,940,000

1,003,000

SPCC Spill Prevention, Controls, and
   Countermeasures Phase II (EPA)5
291,000,000

291,000,000

Shareholder Proposals6

414,252,000

Contractor Code of Ethics (DOD, GSA, NASA)7

5,301,630,000

Sarbanes-Oxley Act, Section 404(b) Extensions (SEC)8

1,957,225,008

Final Revisions to Cockpit Voice Recorder and
   Digital Flight Data Recorder Regulations Rule (FAA)9

289,000,000

13,650,000

Area Source Standards for Metal Fabrication and 
   Finishing (EPA)10
1,015,000

1,015,000

FAR Case 2006-011, Representations and Certifications 
   Tax Delinquencies (FAR Council)11

18,800,910

18,800,910
Qwest Petition for Forbearance (FCC)12

1,140,317,713

1,140,317,713

Carriage of Digital Television Broadcast Signals (FCC)13

160,000,000

160,000,000

Amendments to Clean Air Act Compliance Assurance 
   Monitoring Rule (EPA)14
114,000,000

114,000,000

Control of Emissions from Nonroad Spark Ignition Engines
   and Equipment  (EPA)15

500,000,000

500,000,000

                Total

10,758,080,631

2,239,786,623

1	The U.S. Small Business Administration, Office of Advocacy, generally bases its cost savings estimates on agency esti-
mates. Cost savings for a given rule are captured in the fiscal year in which the agency agrees to changes in the rule as a re-
sult of Advocacys intervention. Where possible, the Office of Advocacy limits the savings to those attributable to small 
businesses. These are best estimates. First-year cost savings consist of either capital or annual costs that would be incurred 
in the rules first year of implementation. Recurring annual cost savings are listed where applicable. 
2	Source: Office of Advocacy estimate based on Federal Communications Commission (FCC) data.
3	Source: Advocacy estimate. 
4	Source: Environmental Protection Agency (EPA).
5	Source: EPA, EPA environmental impact analysis, August 2007 draft, Exhibit 1-2. 
6	Source: Securities and Exchange Commission (SEC). 
7	Source: Department of Defense, General Services Administration, National Aeronautics and Space Administration, and 
Advocacy analysis. GSA data for FY 2007 through the third quarter show 530,163 small business contracts at a value of $5 
million or less. The total cost is estimated at 530,163 (total contracts ?$5,000,000) x $10,000 (program set-up cost).
8	Source: SEC and Financial Executives International.
9	Source: Federal Aviation Administration (FAA).
10	Source: Advocacy estimate based on EPA data.
11	Source: Advocacy estimate based on data in rulemaking.
12	Source: QSI, An Analysis of Qwests Petition for Forbearance.
13	Source: American Cable Association.
14	Source: EPA.
15	Source: EPA.
3. Advocacy Review of Agency RFA Compliance in Fiscal 
Year 2008
The Office of Advocacy has worked consistently with federal agencies to examine the effects of their pro-
posed regulations on small entities since the enactment of the Regulatory Flexibility Act in 1980. Advocacy 
demonstrates its commitment to working with agencies to reduce the burden of federal regulations on small 
entities by providing written interagency communications, public comments, RFA training, and congres-
sional testimony, as well as hosting RFA panels and roundtables. Communication and coordination be-
tween other federal agencies and the Office of Advocacy has increased in the effort to address small busi-
ness concerns in policy deliberations. The following section provides an overview of RFA and E.O. 13272 
compliance by agency in fiscal year 2008.
Department of Agriculture
E.O. 13272 Compliance
The U.S. Department of Agriculture (USDA) has complied with section 3(a) of E.O. 13272 by making its 
policies for considering small business impacts when promulgating regulations publicly available on its 
website. The following agencies within USDA generally comply with section 3(b) of E.O. 13272 by noti-
fying Advocacy of rules that may have a significant economic impact on a substantial number of small 
entities: the Animal and Plant Health Inspection Service (APHIS), the Agricultural Marketing Service 
(AMS), and the Grain Inspection, Packers, and Stockyards Administration (GIPSA). Advocacy has pro-
vided RFA training to all of these agencies. USDA published two final rules that were the subject of Ad-
vocacy comment in FY 2008 and regularly complies with section 3(c) of the E.O. 13272 by responding to 
Advocacys written comments. 
Animal and Plant Health Inspection Service 
Issue: Viral Hemorrhagic Septicemia: Interstate Movement and Import Restrictions on Certain Live 
Fish. In September 2008, the Department of Agricultures Animal and Plant Health Inspection Service 
(APHIS) published an interim final rule in the Federal Register establishing regulations to restrict the inter-
state movement and importation into the United States of live fish that are susceptible to viral hemorrhagic 
septicemia (VHS), a highly contagious disease of certain fish. Advocacy filed comments with APHIS seek-
ing to bring to the agencys attention many concerns about the rule sounded by small aquaculture busi-
nesses. Advocacy commented that small businesses were concerned that the interim final rule would have a 
significant economic effect on the industry and that alternatives were available that would serve to mini-
mize the cost of the regulation to those businesses, while accomplishing the agencys objective. As a result 
of Advocacys comments and those made by industry, APHIS chose to delay implementation of the rule so 
that it could evaluate the comments and make adjustments to the rule as needed.
Agricultural Marketing Service 
Issue: Mandatory Country-of-Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Perish-
able Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts. In August 2008, 
the Department of Agricultures Agricultural Marketing Service (AMS) published an interim final rule in 
the Federal Register implementing mandatory country of origin food labeling. The Food, Conservation, 
and Energy Act of 2008 amended the Agricultural Marketing Act of 1946 to require retailers to notify 
their customers of the country of origin of covered commodities. Covered commodities included muscle 
cuts of beef (including veal), lamb, chicken, goat, and pork; ground beef, ground lamb, ground chicken, 
ground goat, and ground pork; wild and farm-raised fish and shellfish; perishable agricultural commodi-
ties; macadamia nuts, pecans, ginseng, and peanuts. 
    Advocacy has been involved in the country-of-origin labeling rulemaking since 2001. Advocacy pro-
vided AMS with suggestions on how to reduce the rules burden on the regulated small businesses and en-
couraged the agency to entertain additional alternatives. As a result of Advocacys intervention, AMS 
changed the period in which the retail product must be relabeled when it has been in inventory and reduced 
the time that records must be maintained by the retailer.
Department of Commerce
E.O. 13272 Compliance
The Department of Commerce (DOC) continues to comply with the requirements of E.O. 13272. Its RFA 
policies are publicly available in compliance with section 3(a) of E.O. 13272, and DOCs agencies notify 
Advocacy of draft rules as required by section 3(b) of E.O. 13272. For example, the National Marine Fish-
eries Service (NMFS) not only notifies Advocacy of its draft rules, but also routinely submits them to the 
Office of Advocacy for interagency review. Similarly, in the last year, the United States Patent and Trade-
mark Office (PTO) complied with section 3(b) of E.O. 13272 by notifying Advocacy of its draft rules and 
submitting them to Advocacy.. DOC did not publish any final rules in FY 2008 that were the subject of any 
Advocacy comment; therefore, DOCs compliance with section 3(c) of E.O. 12372 cannot be assessed. 
Department of Defense
E.O. 13272 Compliance
The Federal Acquisition Regulation Council (FAR Council) promulgates procurement regulations that are 
governmentwide and affect small businesses. The FAR Council statutorily includes representation from the 
Department of Defense (DOD), the General Services Administration (GSA), and the National Aeronautics 
and Space Administration (NASA). The DOD regulations, called the Defense Federal Acquisition Regula-
tion Supplement (DFARS), are specific to DOD and can only supplement the FAR Council regulations. 
The FAR Council and DOD regulatory processes are interrelated and DODs procedures comply with sec-
tion 3(a) of E.O. 13272. DOD notifies Advocacy of its draft rules in compliance with section 3(b) of E.O. 
13272, and routinely submits prepublication rulemakings for Advocacy consideration. DOD did not publish 
any final rules in FY 2008 that were the subject of any written Advocacy comments; therefore, DOD com-
pliance with section 3(c) cannot be assessed. DODs staff received RFA training in FY 2005. Advocacy 
worked closely with OIRAs Defense regulatory team, providing significant interagency input on several 
regulations in fiscal year 2008.
Federal Acquisition Regulation Council
Issue: Contractor Code of Ethics. On February 16, 2007, the FAR Council published a proposed regula-
tion titled Code of Business Ethics and Conduct. If implemented, the regulation would have required all 
federal prime contractors and subcontractors awarded a contract of $5 million or more to implement a for-
mal code of ethics and provide an employee ethics and business training program. The proposed regulation 
also stated that for contracts valued at $5 million or less such programs may not be necessarily required, 
but when required, they shall be suitable to the size of the company and the extent of the companys busi-
ness within the federal government.
    Advocacy was approached by a construction trade group representing a large number of small business 
members about the impact of the proposal. After consultation with an industry expert on corporate ethics 
programs, Advocacy was informed that the type of ethics program being proposed in the FAR regulation 
would, conservatively, cost a company $10,000 to establish, plus another immeasurable amount annually to 
run and maintain the program. On May 21, 2007, the Office of Advocacy submitted an official comment 
letter to the FAR Council requesting reconsideration of the impacts of the proposed regulations on small 
businesses. On November 23, 2007, DOD, GSA, and NASA published the final contractor ethics rule with 
an exemption for small businesses. The exemptions resulted in one-time cost savings for small businesses 
of $5.3 billion. (The savings total does not include the savings for small businesses participating in pro-
curement as subcontractors to larger businesses.)
    
Issue: FAR Case 2006-011, Representations and CertificationsTax Delinquencies. On March 30, 
2007, the FAR Council published a proposed rule that if finalized would require almost all federal contrac-
tors, prime contractors and subcontractors, to certify whether or not they have, within a three-year period 
preceding the contract offer, been convicted of or had a civil judgment rendered against them for violating 
any tax law or failing to pay any tax, or been notified of any delinquent taxes for which the liability remains 
unsatisfied. 
    On May 25, 2007, The Office of Advocacy sent a comment letter to the FAR Council. On April 22, 
2008, the FAR Council published the final rule. The rule acknowledged the concerns raised by the Office 
of Advocacy and established a minimum federal tax delinquency threshold of $3,000 for compliance. The 
final rule also limited the tax violations to federal criminal tax laws and provided a detailed definition of 
delinquent federal taxes. These actions resulted in an annual cost savings to small contractors of at least 
$18.8 million.
Department of Education
E.O. 13272 Compliance
The Department of Education (Education) has made its policies and procedures publicly available as re-
quired by section 3(a) of E.O. 13272. Education notifies Advocacy through Advocacys email notification 
system of draft rules that may have a significant economic impact on a substantial number of small entities, 
as required by section 3(b) of E.O. 13272. Education has not published any final rules in FY 2008 that were 
the subject of any Advocacy comment; therefore, Educations compliance with section 3(c) cannot be as-
sessed. 
Department of Energy
E.O. 13272 Compliance
The Department of Energy (DOE) has complied with section 3(a) of E.O. 13272 by maintaining its RFA 
policies and procedures on its website. DOE complies with section 3(b) of E.O. 13272 by notifying Advo-
cacy of draft rules that may have a significant economic impact on a substantial number of small entities, 
and also routinely submits draft rules to Advocacy for review prior to their publication in the Federal Reg-
ister. DOE did not publish any final rules in FY 2008 that were the subject of Advocacy comment. There-
fore, DOEs compliance with section 3(c) of E.O. 13272 cannot be assessed.
Department of Health and Human Services
E.O. 13272 Compliance
The Department of Health and Human Services (HHS) has complied with section 3(a) of E.O. 13272 by 
making its policies and procedures publicly available online. Agencies within HHS do not consistently no-
tify Advocacy of draft proposed rules  pursuant to section 3(b) of E.O. 13272. The Food Safety and Inspec-
tion Service (FSIS) and the Centers for Medicare and Medicaid Services (CMS) published final rules that 
were the subject of Advocacy comments, and both agencies complied with section 3(c) of E.O. 13272 by 
publicly responding to Advocacys comments when publishing their final rules in the Federal Register.
Food Safety and Inspection Service
Issue: Availability of Lists of Retail Consignees during Meat or Poultry Recalls. On July 17, 2008, the 
FSIS published a final rule in the Federal Register amending the federal meat and poultry products inspec-
tion regulations to provide that the agency would make available to the public the names and locations of 
the retail consignees of meat and poultry products that had been recalled if the recalled product had been 
distributed at the retail level. Pursuant to the RFA, the agency certified that the rule would not have a sig-
nificant economic impact on a substantial number of small entities.
    Advocacy filed public comments on the proposed rule on May 4, 2006, informing FSIS that its certifi-
cation of no impact had an insufficient factual basis pursuant to the RFA. Advocacy also provided the FSIS 
with information about industry concerns with respect to the rule, including loss of proprietary information 
and unanticipated adverse effects on recall efficiency. As a result of Advocacys comments, FSIS agreed to 
remove the certification of no impact, perform a final regulatory flexibility analysis (FRFA), and restrict 
the rules requirements to Class I recalls only. Because of Advocacys intervention, regulatory costs to the 
industry were reduced. 
Centers for Medicare and Medicaid Services
Issue: HIPAA Administrative Simplification: Modification to Medical Data Code Set Standards to 
Adopt ICD-10-CM and ICD-10-PCS. On August 22, 2008, as part of implementing the Health Insurance 
Portability and Accountability Act (HIPAA), the Centers for Medicare and Medicaid Services published a 
proposed rule in the Federal Register titled HIPAA Administrative Simplification: Modification to Medical 
Data Code Set Standards to Adopt ICD-10-CM and ICD-10-PCS. The rule modified two of the medical 
data code set standards adopted in the Transactions and Code Sets final rule published in 2000. More spe-
cifically, the rule was set to modify the standard code sets for coding diagnoses and inpatient hospital pro-
cedures by concurrently adopting the International Classification of Diseases, Tenth Revision, Clinical 
Modification (ICD-10-CM) and Procedure Coding System (ICD-10-PCS). 
    Although CMS acknowledged that significant costs would be incurred by regulated health care provid-
ers, the agency chose to certify that the rule would not have a significant economic impact on a substantial 
number of small entities. Advocacy suggested that because of CMSs expectation that most health care 
providers in the United States would use the ICD-10 code, CMS should prepare an initial regulatory flexi-
bility analysis (IRFA) that would assess the rules economic impact on covered health care providers. CMS 
agreed to withdraw its certification and perform the IRFA.
    
Issue: Health Insurance Reform; Modifications to the HIPAA Electronic Transaction Standards. On 
August 22, 2008, CMS published a proposed rule in the Federal Register titled Health Insurance Reform; 
Modifications to the HIPAA Electronic Transaction Standards. The rule proposed to adopt updated ver-
sions of the standards for electronic transactions originally adopted in the regulations titled Health Insur-
ance Reform: Standards for Electronic Transactions, published in 2000. More specifically, the rule would 
enhance the electronic filing of certain health and billing information by transitioning from Version 4010 to 
Version 5010. 
    Although CMS acknowledged that regulated health care providers would incur large costs, the agency 
chose to certify that the rule would not have a significant economic impact on a substantial number of small 
entities. Advocacy suggested that because of CMSs expectation that most health care providers in the 
United States would use Version 5010, the agency should prepare an IRFA that would assess the rules eco-
nomic impact. CMS agreed to withdraw its certification and perform the IRFA.
Department of Homeland Security
E.O. 13272 Compliance
The Department of Homeland Security (DHS) has made some progress in complying with E.O. 13272. 
DHS has posted its RFA policy on its website, as required by section 3(a) of E.O. 13272. The Transporta-
tion Security Administration (TSA) was trained in RFA compliance in FY 2005, and the U.S. Coast Guard 
(USCG) was trained in FY 2005 and FY 2008. However, Advocacy has been unable to schedule RFA train-
ing with other DHS components despite repeated requests. DHS did not notify Advocacy of all of its draft 
rules that may have had a significant economic impact on a substantial number of small entities  in FY 
2008, as required by section 3(b) of E.O. 13272. DHS did not publish any final rules in FY 2008 that were 
the subject of Advocacy comments; therefore, compliance with section 3(c) of E.O. 13272 cannot be as-
sessed. Advocacy submitted comments to DHS on its Supplemental Safe Harbor Procedures for Employers 
Who Receive a No-match Letter Rule; however, that rule was not finalized in FY 2008.
Department of Housing and Urban Development
E.O. 13272 Compliance
The Department of Housing and Urban Development (HUD) has made its policies and procedures available 
to the public in compliance with section 3(a) of E.O. 13272. HUD consistently notifies Advocacy of rules 
that may have a significant economic impact on a substantial number of small entities as required by sec-
tion 3(b) of E.O. 13272. HUD received RFA training in FY 2005. HUD did not publish any final rules in 
FY 2008 that were the subject of any Advocacy public comments; therefore, the agencys compliance with 
section 3(c) of E.O. 13272 cannot be assessed. 

Issue: Real Estate Settlement Procedures Act of 1974 (RESPA). In 2002, HUD issued a proposed rule to 
revise the regulations implementing RESPA. The purpose of the proposal was to simplify and improve the 
process of obtaining home mortgages and to reduce settlement costs to consumers. Small businesses 
throughout the real estate and settlement services industry strongly opposed the rule. Advocacy filed com-
ments on behalf of small businesses in October 2002. Advocacys comments suggested that HUD prepare a 
revised IRFA to provide information to the public about the industries affected by the proposal and alterna-
tives to minimize the impact on small entities. Advocacy also emphasized its desire to continue working 
with HUD to ensure that improvements to the mortgage financing and settlement process are sensitive to 
the impact on small business. 
    In March 2004, HUD withdrew the draft final RESPA rule from OMB review. Subsequently, Advo-
cacy worked with HUD to perform outreach to the small business community, to discuss the impact of 
RESPA reform on small entities, and to develop less burdensome alternatives. In addition to attending 
roundtables that HUD held in Washington, DC. Advocacy and HUD cosponsored three roundtables around 
the country. Members of every aspect of the real estate community were invited to participate in the round-
tables held in Chicago, Fort Worth, and Los Angeles. 
    On March 14, 2008, HUD published a new proposed rule on RESPA. The purpose of the proposed rule 
is to simplify and improve the disclosure requirements for mortgage settlement costs under RESPA and to 
protect consumers from unnecessarily high settlement costs. The revisions aimed to protect consumers by 
taking steps to: 1) improve the good faith estimate (GFE) form to make it easier to shop for settlement ser-
vice providers; 2) ensure that page one of the GFE provides a clear summary of the loan terms and total 
settlement charges; 3) provide accurate estimates of costs of settlement services; 4) improve disclosure of 
yield spread premiums; 5) facilitate comparison of the GFE and the HUD-1/HUD-1A settlement state-
ments; 6) ensure that at settlement borrowers are aware of final loan terms and settlement costs by allowing 
them to read and receive a copy of the closing script; 7) clarify HUD-1 instructions; 8) clarify HUDs 
current regulations concerning discounts; and 9) expressly state under what circumstances RESPA permits 
certain pricing mechanisms that benefit consumers, such as average cost pricing and discounts, including 
volume-based discounts. 
    After holding a roundtable attended by several members of the industry (including representative 
realtors, settlement service providers, mortgage brokers, and mortgage bankers), Advocacy submitted 
comments on the proposal. Advocacy was concerned that HUD may have underestimated the proposals 
costs, thereby creating a potential uneven playing field for some small entities. Advocacy suggested that 
HUD create a GFE that mirrors the HUD-1 to prevent consumer confusion and clarify the language on 
tolerances. Advocacy also suggested that HUD eliminate the closing script from the proposal and recon-
sider volume discounts and the yield spread premium disclosure. Advocacy further requested a delayed 
implementation period for small entities, if HUD decides to go forward with the proposal. HUD did not 
publish a final rule in FY 2008.
Department of the Interior
E.O. 13272 Compliance 
The Department of the Interior (DOI) has a departmental manual publicly available online listing the re-
quirements and guidance to promote RFA compliance, in accordance with section 3(a) of E.O. 13272. 
    As required by section 3(b) of E.O. 13272, the National Park Service (NPS) notifies Advocacy of rules 
that it has determined could have a significant economic impact on a substantial number of small entities. 
NPS did not submit any final rules in FY 2008 that were the subject of any of Advocacys comments; 
therefore, NPSs compliance with section 3(c) of E.O. 13272 cannot be assessed. 
    The U.S. Fish and Wildlife Service (FWS) does not notify Advocacy of any draft rules that may have 
a significant economic impact on a substantial number of small entities, as required by section 3(b) of 
E.O. 13272. FWS fails to prepare an IRFA or a certification that its rules may have a significant economic 
impact on a substantial number of small entities when the rule is proposed. FWS also does not provide an 
economic analysis at the proposed rule stage. Advocacy believes that these delays in completing the nec-
essary RFA analysis hinder the ability of affected small entities to provide meaningful comment on a pro-
posals impact. FWS submitted no final rules in FY 2008 that were the subject of Advocacy comments. 
Advocacy is working with the FWS to improve its E.O. 13272 and RFA compliance.
Department of Justice
E.O. 13272 Compliance
The Department of Justice (DOJ) has made its policies and procedures publicly available as required by 
section 3(a) of E.O. 13272. DOJ notifies Advocacy through Advocacys email notification system of draft 
rules that may have a significant economic impact on a substantial number of small entities, as required by 
section 3(b) of E.O. 13272. DOJ did not publish any final rules in FY 2008 that were the subject of any 
Advocacy comment; therefore, DOJs compliance with section 3(c) of E.O. 13272 cannot be assessed. DOJ 
received RFA training in FY 2008.

Issue: Americans with Disabilities Act Regulations on Public Accommodations. In June 2008, DOJ 
published a notice of proposed rulemaking outlining revisions to the Departments 1991 regulations im-
plementing Title III of the Americans with Disabilities Act (ADA). Title III sets standards for making 
buildings accessible for people with disabilities and requires existing facilities to remove barriers that con-
flict with these standards when such modifications are readily achievable. The NPRM proposed to adopt 
the 2004 ADA accessibility guidelines (ADAAG) recommended by the Architectural and Transportation 
Barriers Compliance Board (the Access Board). DOJ has not yet finalized this rule, but Advocacy has been 
actively involved in this rulemaking.
    When DOJ released the advance notice of proposed rulemaking for this rule, Advocacy submitted a 
public comment letter stating that applying the 2004 ADAAG retroactively would unfairly punish small 
businesses that were trying to comply with the 1991 regulations. In November 2007, the Office of Advo-
cacy submitted a report to the U.S. Department of Justice titled Evaluation of Barrier Removal Costs Asso-
ciated with the 2004 Americans with Disabilities Act Accessibility Guidelines. This report found that both 
small and large firms face substantial costs from the adoption of the barrier removal requirements in the 
2004 ADAAG. These higher costs are associated with typical small firm buildings rather than large firm 
buildings, whether measured per square foot or per employee. 
    DOJs NPRM proposed two safe harbors to address these concerns. Under the general safe harbor, 
existing facilities compliance with the current 1991 ADA standards may be sufficient to meet the new re-
quirements. The small business safe harbor would give credit to small businesses that spend 1 percent of 
revenue on ADA modifications. In April 2008, Advocacy held a small business roundtable on the rule at-
tended by small business stakeholders and the Department of Justice, and wrote a comment letter based on 
this input. Advocacy recommended that the DOJ clarify safe harbor provisions and publish a small business 
compliance guide in conjunction with the final rule. Advocacy also recommended that DOJ include further 
cost estimates in its IRFA. 
Department of Labor
E.O. 13272 Compliance
The Department of Labor (DOL) has made its policies and procedures publicly available as required by 
section 3(a) of E.O. 13272. The Mine Safety and Health Administration (MSHA), Occupational Safety 
and Health Administration (OSHA), Employment and Training Administration (ETA), Employment Stan-
dards Administration (ESA), and Employee Benefits Security Administration (EBSA) were trained in 
RFA compliance in FY 2004. Agencies within DOL notify Advocacy in a timely manner, through Advo-
cacys email notification system (OSHA) or by mail (MSHA), of draft rules that may have a significant 
economic impact on a substantial number of small entities, as required by section 3(b) of E.O. 13272. 
DOL agencies did not finalize any rules in FY 2008 upon which Advocacy filed comments; therefore, 
compliance with section 3(c) of E.O. 13272 cannot be assessed. Advocacy submitted comments to OSHA 
on its proposed confined spaces in construction rule; however, that rule was not finalized in FY 2008. In 
addition, Advocacy participated in a small business advocacy review panel on OSHAs draft standard for 
occupational exposure to beryllium; however, that rule was not proposed in FY 2008.
Department of State
E.O. 13272 Compliance
The Department of State (State) has made some progress in complying with E.O. 13272. While State has 
not posted its RFA policy on its website as required by section 3(a) of E.O. 13272, it was trained in RFA 
compliance in FY 2006. State did not notify Advocacy of  any draft rules in FY 2008 as required by section 
3(b) of E.O. 13272; however, it published one final rule in FY 2008 that concerned comments filed by Ad-
vocacy. After addressing Advocacys comments in the final rule, in compliance with section 3(c) of E.O. 
13272, the department re-imposed the small business impacts in a subsequent rule and policy change.

Issue: Final Exchange Visitor Program; Trainees and Interns Rule. The Department of State issued a 
final rule on June 19, 2007, for designating U.S. government, academic, and private sector entities to con-
duct educational and cultural exchange programs pursuant to the Mutual Educational and Cultural Ex-
change Act of 1961, as amended (the Fulbright-Hays Act). The final rule imposed a variety of new re-
quirements on designated program sponsors operating under the J-1 visa program before they could accept 
a participant into their exchange program. During the proposed rule period, several small aviation flight 
schools contacted Advocacy and said that several of the provisions related to aviation flight training 
schools would be economically detrimental to them. 
    Advocacy filed comments on the proposed rule and, based on Advocacys comments, the State De-
partment exempted aviation flight schools from the final rule. However, on December 20, 2007, the State 
Department issued a new rule that said it may, in its sole discretion, revoke the J-1 designation of a class of 
designated programs if State determines that they no longer further the security or diplomatic interests of 
the United States. Following that action, the State Department issued a statement of policy on July 11, 
2008, announcing that aviation flight schools will no longer be eligible to participate in the J-1 visa pro-
gram, thereby eliminating the exemption it had earlier provided. State did not prepare a regulatory flexibil-
ity analysis for its final rule or provide a factual basis for its certification that the rule would not have a 
significant economic impact on a substantial number of small entities.
    Advocacy hosted a roundtable for affected aviation flight schools participating in the J-1 visa program 
to discuss this issue and attended follow-up meetings at the State Department and the Office of Manage-
ment and Budget. The Department of Homeland Security has stated publicly that it is committed to taking 
over the J-1 visa program for aviation flight schools in some manner prior to the State Departments termi-
nation date. No further action with respect to this rule took place in FY 2008.
Department of Transportation
E.O. 13272 Compliance
The Department of Transportation (DOT) has made its policies and procedures publicly available as re-
quired by section 3(a) of E.O. 13272. The Federal Aviation Administration (FAA) was trained in RFA 
compliance in FY 2003 and FY 2008. The Federal Motor Carrier Administration (FMCSA) and the Federal 
Railroad Administration (FRA) were trained in RFA compliance in FY 2004 and FY 2008. The National 
Highway Traffic Safety Administration (NHTSA) and the Federal Highway Administration (FHWA) were 
trained in RFA compliance in FY 2005. Agencies within the Department of Transportation notify Advo-
cacy in a timely manner, through Advocacys email notification system, of draft rules that may have a sig-
nificant economic impact on a substantial number of small entities, as required by Section 3(b) of E.O. 
13272.
    DOT agencies finalized one rule (FAAs Digital Flight Recorder rule) in FY 2008. However, while 
FAA did respond to certain concerns raised by Advocacy in a general manner, it did not respond directly to 
Advocacys comments as required by section 3(c) or indicate a particular response to Advocacys com-
ments in any way.
    
Issue: Final Revisions to Cockpit Voice Recorder and Digital Flight Recorder Regulations. DOTs 
Federal Aviation Administration (FAA) issued its final Revisions to Cockpit Voice Recorder and Digital 
Flight Recorder Regulations rule on March 7, 2008. The final rule amends cockpit voice recorder (CVR) 
and digital flight data recorder (DFDR) regulations for certain air carriers, operators, and aircraft manufac-
turers. Specifically, the final rule increases the duration of certain CVR recordings, increases the data re-
cording rate for certain DFDR parameters, requires physical separation of the DFDR and CVR, increases 
the requirements for the reliability of the power supplies to both the CVR and DFDR, and requires that 
certain datalink communications received on an aircraft be recorded if datalink communication equipment 
is installed. The rule as originally proposed would have applied to numerous small businesses required to 
retrofit their aircraft. 
    FAAs proposed rule was discussed during one of Advocacys aviation safety roundtables, which in-
cluded presentations by small business representatives who would have been affected by the rule. Advo-
cacy filed formal comments with FAA expressing concern that the agencys regulatory impact analysis did 
not capture many small businesses likely to be affected by the proposed rule, failed to use the correct SBA 
size standard, and did not consider less burdensome alternatives for small businesses.
    While the FAA generally responded to several of the issues raised by Advocacy, it did not provide a 
specific response to Advocacys comments as required by section 3(c) of E.O. 13272. FAA did, however, 
modify the rule by exempting general aviation operators from the requirement to retrofit their airplanes, 
which saved the operators several hundred million dollars.
Department of the Treasury
E.O. 13272 Compliance
The Department of the Treasury (Treasury) has made its policies and procedures available to the public 
in compliance with section 3(a) of E.O. 13272. Three agencies within Treasury create regulations of 
most concern to small businesses: the Internal Revenue Service (IRS), the Office of the Comptroller of 
Currency (OCC), and the Office of Thrift Supervision (OTS). Treasury and the Internal Revenue Service 
have not notified Advocacy of any draft proposed rules under section 3(b) of E.O. 13272. Both OCC and 
OTS notify Advocacy in accordance with the requirements of section 3(b) of E.O. 13272.
    In FY 2008, Advocacy held two RFA training sessions for IRS staff. Treasury and the IRS did not pub-
lish any final rules in FY 2008 that were the subject of Advocacy comments; therefore the compliance of 
Treasury and the IRS with section 3(c) of E.O. 13272 cannot be assessed. Advocacy did not file any com-
ments with OCC or OTS in FY 2008.
    
Issue: Three Percent Withholding Requirement for Government on Payments for Services and Prop-
erty. On March 11, 2008, Treasury and the IRS published Notice 2008-38, which invited public comments 
regarding guidance to be provided to government entities required to withhold 3 percent on payments made 
by the government entities or their paying agents for services and property.
    On April 24, 2008, Advocacy submitted a public comment to Treasury and the IRS in which Advocacy 
suggested that Treasury and the IRS consider the following recommendations to reduce the overall burden 
of the 3 percent withholding requirement on small businesses: (1) small businesses could be permitted to 
offset payroll tax submissions by the 3 percent amount withheld and could be reimbursed quarterly for any 
amounts withheld in excess of their payroll tax liabilities; (2) subcontractors could be excluded from the 
definition of contract amount; and (3) federal construction contracts already subject to the Miller Act 
could be exempt from the requirements of the 3 percent withholding requirement. To the extent that Treas-
ury and the IRS use the language of Notice 2008-38 as the basis for a future notice of proposed rulemaking, 
Advocacy  reminded the agencies of their obligation to comply with the RFA. The guidance was still under 
consideration as of the end of FY 2008.
    
Issue: Guidance Regarding Marketing of Refund Anticipation Loans (RALs) and Certain Other 
Products in Connection With the Preparation of a Tax Return. On January 7, 2008, Treasury and the 
IRS published an advance notice of proposed rulemaking that detailed rules that Treasury and the IRS are 
considering for a proposed regulation that would separate the act of return preparation from the act of mar-
keting or purchasing certain financial products. The proposal would prohibit the use of information ob-
tained by a tax return preparer during the tax-preparation process, for the purpose of marketing a RAL or 
similar product or service. 
    The ANPRM, if finalized, would affect small businesses that market RALs and other similar products. 
On March 21, 2008, Advocacy submitted a public comment to Treasury and the IRS in which Advocacy 
noted that it stands ready to assist the agencies to comply with the RFA in the development of the proposed 
rules related to RALs. The ANPRM was still under consideration as of the end of FY 2008.
    
Issue: Escrow Accounts, Trusts, and Other Funds Used During Deferred Exchanges of Like-Kind 
Property. On February 7, 2006, Treasury and the IRS published a proposed rule that would affect qualified 
intermediaries that facilitate exchanges of like-kind property. On May 8, 2006, Advocacy submitted a pub-
lic comment to Treasury and the IRS in which Advocacy advised that the full extent of the economic im-
pact on small businesses could not be precisely determined from the IRFA included in the proposed rule. 
Advocacy also recommended that Treasury and the IRS consider a de minimus exemption for smaller fa-
cilitator loans.
    Advocacys ongoing support encouraged Treasury and the IRS to publish a revised IRFA with a period 
for comment in the Federal Register on March 20, 2007. On May 10, 2007, Advocacy submitted a public 
comment to Treasury and the IRS commending them for the revised IRFA. The additional analysis in the 
revised IRFA afforded affected taxpayers a clearer understanding of the impact of the proposed regulations.
    On August 25, 2008, Treasury and the IRS published a final rule in the Federal Register that adopted 
Advocacys recommendations. The final rule provides an exemption for facilitator loans of less than $2 
million. Advocacy commends Treasury and the IRS for their willingness to work collaboratively with the 
affected small businesses to reduce the burden of this rule.
     
Issue: Unlawful Internet Gambling. On October 4, 2007, the Board of Governors of the Federal Reserve 
System (FRB) and the Department of the Treasury published a proposed rule titled Prohibition on Funding 
of Unlawful Internet Gambling to implement applicable provisions of the Unlawful Internet Gambling En-
forcement Act of 2006. The proposed rule required participants in designated payment systems to establish 
policies and procedures reasonably designed to identify and block or otherwise prevent or prohibit transac-
tions in connection with unlawful Internet gambling. The proposed rule did not specify which gambling 
activities or transactions were legal or illegal because the act itself defers to underlying state and federal 
gambling laws in that regard; determinations under those laws may depend on the facts of specific activities 
or transactions. 
    Advocacy commented that the agencies may not have fully considered the economic impact on small 
businesses as required by the RFA. Although the IRFA submitted by the agencies identified types of small 
businesses affected by the proposal, it failed to provide information about the nature of the impact; to ana-
lyze viable alternatives; or to identify duplicative, overlapping, or conflicting federal rules as required by 
the RFA. Instead of identifying duplicative rules, the agencies sought public comment on whether there are 
statutes or regulations that would duplicate, overlap, or conflict with the proposed law. Advocacy com-
mented that the RFA places the duty to identify existing regulations on agencies, not small entities. Advo-
cacy encouraged the agencies to prepare and publish for public comment a revised IRFA to determine the 
full economic impact on small entities and consider significant alternatives to meet its objective while 
minimizing the impact on small entities. The agencies did not publish a final rule in FY 2008.
    
Issue: Truth in Lending. On January 9, 2008, the Board of Governors of the Federal Reserve System pub-
lished a proposed rule in the Federal Register titled Regulation Z: Truth in Lending. The proposed rule 
implements the Truth in Lending Act and the Home Ownership and Equity Protection Act. The goals of the 
proposal were to protect consumers in the mortgage market from unfair, abusive, or deceptive lending and 
servicing practices while preserving responsible lending and sustainable homeownership; to ensure that 
advertisements for mortgage loans provide accurate and balanced information and do not contain mislead-
ing or deceptive representations; and to provide consumers transaction-specific disclosures early enough to 
use while shopping for a mortgage. After meeting with members of the mortgage brokerage industry, Ad-
vocacy commented that the agency may not have fully considered the economic impact on small businesses 
as required by the RFA. Advocacy was also concerned about potential conflicts with HUDs proposed rule 
on RESPA reform. 
    The FRB published the final rule in July 2008. The board made changes to the rule that minimized the 
impact on small entities; for example, providing a different standard for defining higher-priced mortgage 
loans to more accurately correspond to mortgage market conditions and excluding from the definition some 
prime loans that might have been classified as higher-priced under the proposed rule. These changes de-
creased the economic impact of the final rule on small entities by limiting their compliance costs for prime 
loans the FRB did not intend to cover under the higher-priced mortgage loan rules. The board also provided 
a longer implementation period for complying with the rule and later effective dates for the escrow re-
quirement than for the other parts of the final rule to give small entities time to come into compliance with 
the final rules requirements. Finally, the board withdrew proposals 1) to prohibit creditors from paying a 
mortgage broker more than the consumer had agreed in advance the broker would receive, and 2) to require 
a servicer to provide to a consumer upon request a schedule of all specific fees and charges that may be 
imposed in connection with the servicing of the consumers account. 
Department of Veterans Affairs
E.O. 13272 Compliance
The Department of Veterans Affairs (VA) has made its RFA policies publicly available on its website, as 
required by section 3(a) of E.O. 13272, while maintaining that most of its regulations do not affect small 
entities. The VA notifies Advocacy of any proposed rules that may have a significant economic impact on a 
substantial number of small entities in accordance with section 3(b) of E.O. 13272. The VA did not publish 
any final rules in FY 2008 that were the subject of Advocacys comments; therefore, the departments com-
pliance with section 3(c) of E.O. 13272 cannot be assessed.
Consumer Product Safety Commission
E.O. 13272 Compliance
The Consumer Product Safety Commission (CPSC) has made its RFA policies and procedures publicly 
available on its website as required by section 3(a) of E.O. 13272. The CPSC does not regularly give Ad-
vocacy draft proposed rules before publication as required by section 3(b) of E.O. 13272. The CPSC did 
not publish any final rules in FY 2008 that were the subject of Advocacys comments; therefore, compli-
ance with section 3(c) of E.O. 13272 cannot be assessed.
Environmental Protection Agency
E.O. 13272 Compliance
The Environmental Protection Agency (EPA) has made its RFA policies and procedures publicly available 
through its website in accordance with section 3(a) of E.O. 13272. EPA has also consistently notified Ad-
vocacy of  draft proposed rules that are expected to have a significant economic impact on a substantial 
number of small entities before publishing them in the Federal Register, as required by section 3 (b) of 
E.O. 13272.  EPA also consistently provides prepublication draft rules for Advocacy review. EPA contin-
ues to respond to Advocacys comments in accordance with section 3(c) of E.O. 13272.

Issue: Control of Emissions from Nonroad Spark Ignition Engines and Equipment. On September 4, 
2008, EPA finalized a rule to control air pollution from gasoline-powered engines and equipment below 50 
horsepower. (See 73 Fed. Reg. 59034, October 8, 2008). As part of the final rule, EPA responded to con-
cerns raised by Advocacy and small business stakeholders about a provision that EPA had originally pro-
posed, requiring small engine makers to certify the compliance of incomplete and replacement engines used 
in nonroad equipment. These new certification, tracking, and monitoring requirements would have added 
substantially to the cost and difficulty of obtaining replacement and partially built engines. In the final rule, 
EPA provided per-engine family exemption allocations that will lower significantly the burden on small 
manufacturers and small repair facilities. .

Issue: Amendments to Clean Air Act Compliance Assurance Monitoring Rule. In January 2004, EPA 
published a final rule that, among other things, notified the public that the agency intended to expand the 
scope and stringency of the Compliance Assurance Monitoring (CAM) Rule. 69 Fed. Reg. 3,202 (Jan. 22, 
2004). EPA subsequently developed a revised monitoring regime that would require additional emissions 
points at facilities with federal Clean Air Act operating permits to monitor and report their emissions. After 
receiving comments from Advocacy and other interested parties about EPAs analysis of the costs of the 
proposal versus its likely benefits, EPA suspended work on the proposal indefinitely in March 2008. EPA 
had estimated that the amended rule would have imposed new costs of $114 million per year on regulated 
sources. 
    
Issue: Area Source Standard for Metal Fabrication and Finishing. On June 13, 2008, EPA signed a 
final Clean Air Act rule for smaller facilities that fabricate and/or finish metal products. The rule set emis-
sion standards in the form of management practices and equipment standards for small metalworking op-
erations that use dry blasting, machining, dry grinding, and dry polishing, as well as spray painting and 
welding. EPA estimates that 5,800 facilities will be affected by the new rule, and that 5,300 of those facili-
ties are small businesses. The rule imposes new monitoring and recordkeeping obligations on these sources, 
which EPA estimates will cost about $339 per facility per year. This obligation represents a significant re-
duction from the original monitoring and reporting requirements the rule would have imposed. Responding 
to comments from Advocacy and others, EPA proposed less burdensome reporting requirements that Ad-
vocacy estimates will save metalworking operations of all sizes $1.015 million per year on a recurring ba-
sis..

Issue: Automotive Spray Painting and Stripping Facilities Rule. On January 9, 2008, EPA published a 
final Clean Air Act rule for small facilities that engage in paint stripping, surface coating of motor vehi-
cles (e.g., auto body shops), and other surface coating operations. The final rule establishes new emission 
standards for these facilities. Advocacy submitted a public comment letter on October 25, 2007, raising 
concerns about the expansive scope of EPAs proposed rule. EPA followed Advocacys recommendation 
to clarify the applicability requirements of the final rule for facilities that use paint spray guns. The clari-
fication included limiting the scope of the rule to automotive paint shops that spray coatings containing 
the hazardous air pollutants (HAPs) being regulated. Limiting the scope of the rule resulted in a reduction 
in the number of affected small entities from 95,000 facilities to 9,000 facilities. The cost for the specified 
spray booth equipment would have been at least $2,000 per facility. 

Issue: Air Pollution Control Standards for Iron and Steel Foundries Rule. On January 2, 2008, EPA 
published a final rule establishing new air pollution control standards for small-scale iron and steel foun-
dries under the Clean Air Act. The rule requires foundries above a specific melting capacity to install pollu-
tion control equipment. On the basis of information received from small business stakeholders and the Of-
fice of Advocacy, EPA raised the applicability threshold for these new controls to a higher melting capac-
ity. As a result, smaller foundries can continue to operate without having to install new controls. Advocacy 
had already claimed savings based on the proposal published in September 2007. Based on the language of 
the final rule, EPA exempted foundries with an even higher melting capacity, yielding an additional $4.94 
million in one-time savings and an additional $1.003 million in recurring operating and maintenance costs 
saved.

Issue: Multi-Sector General Permit. On September 29, 2008, EPA promulgated the Multi-sector General 
Permit (MSGP), which affects thousands of industrial facilities that discharge stormwater and are regulated by 
the EPA. All facilities must prepare and implement a stormwater pollution prevention plan (SWPPP). These 
plans are designed to minimize the discharge of pollutants in stormwater, and include good housekeeping and 
containment measures. There are requirements for annual inspection and quarterly visual monitoring of each 
stormwater outfall during the entire five-year term. In addition, there are analytical (chemical) monitoring 
requirements, generally on a quarterly basis for one or two years. 
    Advocacy submitted comments in November 2006 to address the impact on the 3,656 federally regu-
lated facilities. More important, the MSGP may serve as a model for the nearly 50 state programs that issue 
their own permits for approximately 100,000 industrial facilities. Advocacy expressed concern about the 
high cost and questionable utility of the stormwater analytical monitoring requirements. The permit affects 
facilities in 29 industrial sectors, including mining, logging, manufacturing, transportation, and landfills, 
which Advocacy estimates are 60 percent small businesses. In particular, Advocacy criticized the inclusion 
of the sampling of total suspended solids (TSS) for 12 new industrial sectors dominated by small businesses. 
Advocacys comments established that there was little correlation between higher TSS measurements and 
chemical contamination of stormwater, and therefore these costly new requirements yielded little benefit. As 
a result of Advocacys comments and others, EPA deleted the requirements for the 12 new sectors, resulting 
in millions of dollars in savings annually.(12)
    
Issue: Spill Prevention, Control, and Countermeasure (SPCC). On December 26, 2006, EPA published a 
final rule governing the Spill Prevention Control and Countermeasure rule for facilities that manage or use oil 
(SPCC I). The SPCC rule requires affected facilities to take steps to prevent or minimize releases of oil to 
navigable waters. In December 2006, EPA adopted streamlined requirements for small facilities that handle 
less than a certain threshold quantity of oil, and for those facilities with oil-filled equipment. In response to 
the outcry from regulated facilities regarding the 2002 SPCC rule, EPA, in collaboration with the Office of 
Advocacy, initiated rulemaking to revise the SPCC requirements. Advocacy issued a first set of recom-
mendations in June 2004 to address smaller oil facilities. The 2006 rule is largely an outgrowth of Advo-
cacys 2004 plan. 
    In October 2007, EPA proposed additional flexibility for small facilities. With respect to the oil-filled 
equipment requirements, facilities are permitted to use an oil spill contingency plan, in lieu of the more 
expensive requirement for secondary containment around the equipment. EPA also added some simplified 
requirements for the smaller facilities going beyond SPCC I, including a visual inspection option for small-
volume tanks. The agency also tailored the requirements for hundreds of thousands of oil production facili-
ties, which are mostly owned by small businesses. Overall, these revisions will reduce the regulatory and 
paperwork burdens on small facilities, while increasing overall compliance with the SPCC program and 
focusing facilities on measures that will prevent oil spills from reaching waterways. EPA estimates the sav-
ings for these revisions at $188 million per year, most of which should accrue to small businesses. EPA 
was scheduled to promulgate these revisions shortly after the end of FY 2008 (SPCC II).
Federal Acquisition Regulation Council
E.O. 13272 Compliance
The policies and procedures required by section 3(a) that were provided by DOD apply also to the Federal 
Acquisition Regulation Council (FAR Council). The FAR Council has complied with section 3(b) by mak-
ing its deliberations and predecisional deliberative rulemaking processes open to the Office of Advocacy. 
Advocacy commented on several of the preproposed FAR rules that may have a significant economic im-
pact on a substantial number of small entities in FY 2008. (See Department of Defense for more detail.) 
Advocacy coordinated closely with OIRA and the FAR Council to improve the regulatory analysis process 
and hosted several RFA training sessions to increase the FAR Councils understanding of RFA require-
ments. The FAR Council published two final rules in FY 2008 that were the subject of Advocacy com-
ments and was in compliance with section 3(c) of E.O. 13272.
Federal Communications Commission
E.O. 13272 Compliance
Historically, the Federal Communications Commissions (FCC) compliance with E.O. 13272 remains prob-
lematic. In past years the FCC has attempted to use its status as an independent agency to bypass compli-
ance with E.O. 13272. In FY 2005, the FCC sent Advocacy a letter suggesting that as an independent 
agency it is not required to comply with E.O. 13272, but that it is committed to upholding the spirit of the 
law by examining its rules for small entity impacts. Most recently, the FCC defended criticism of its RFA 
compliance in its brief before the United States Court of Appeals for the District of Columbia Circuit in 
National Telecommunications Cooperative Association v. Federal Communications Commission and the 
United States of America (No. 08-1071). 
    At issue in the case, the FCCs local number portability order required small wireline carriers to trans-
port or port telephone numbers to mobile service providers located outside the areas served by small 
wireline carriers. This matter was previously before the D.C. Circuit in 2005, when the court remanded the 
case and instructed the FCC to conduct a FRFA as required by the RFA, 5 U.S.C. Section 604. While the 
commission did publish a FRFA, the petitioners appealed, urging the court to find that the FCCs final de-
cision was inconsistent with the intent of Congress as expressed in the RFA. Petitioners argued that the 
FRFA did not consider significant issues and alternatives as expressed through public comments. Oral ar-
guments were scheduled to take place at the end of January 2009.
    The FCC has not made its policies and procedures to promote RFA compliance publicly available as 
required by section 3(a) of E.O. 13272. In part, the Commission complies with section 3(b) by notifying 
Advocacy of proposed rules that may have a significant economic impact on a substantial number of small 
entities. The FCC sends its notices by mail following the adoption and release of the rule and prior to the 
rules publication in the Federal Register as required by section 3(b). 
    In FY 2008, the Commission increased its focus on small business issues, but still published deficient 
IRFAs. The FCCs IRFAs are inadequate because they consistently lack a proper economic analysis of how 
the rule will affect small entities. The FCC often does not provide meaningful alternatives as required by 
the RFA, but has improved its use of alternatives offered by small businesses in their comments. 
    Advocacy continues to offer the FCC assistance in complying with the RFA; FCC staff received RFA 
training in 2005. The Office of Advocacy often reaches out to engage the FCC early in the rulemaking 
process and to provide their bureaus with additional RFA training.

Issue: Carriage of Digital Television Broadcast Signals. The FCC released its Fourth Report and Order 
regarding the dual carriage of digital television broadcast signals. The final rule requires cable operating 
systems to provide customers with both broadcast and digital signals. However, the technical requirements 
of this rule would have imposed an economic burden on some of the smallest cable systems. Advocacy 
communicated the concerns of these small entities to the FCC, and encouraged the commission to shape the 
rule in a way that would fulfill the policy goals while reducing the disproportionate regulatory burden on 
small systems. Advocacy recommended that the FCC carve out an exemption for some small entities. In its 
order, the FCC included an exemption for small carriers that exhibited certain characteristics. For these 
small entities, compliance with the rule would have cost approximately $50,000 per system. The exemption 
has reduced these costs, saving small systems approximately $160 million annually. 

Issue: Forbearance. Issues related to the FCCs forbearance procedures were prevalent in FY 2008. Sec-
tion 10 of the Communications Act of 1934, as amended, sets forth the analysis that the FCC must conduct 
when determining whether it should grant specific companies relief from certain regulations. Typically, a 
finding of adequate competition will assist in supporting a grant of forbearance. However, in recent years, 
small carriers have grown concerned that the FCCs section 10 forbearance analyses did not incorporate the 
best available data, and that the process itself lacked an adequate level of transparency. To best address 
these concerns, Advocacy requested that the FCC open a rulemaking to examine ways in which the agency 
could strengthen the forbearance process. In addition, Advocacy filed letters urging the commission to con-
sider newly released data in considering specific forbearance petitions from Verizon and Qwest in various 
metropolitan statistical areas (MSAs). The FCC considered these data and denied petitions for forbearance 
from both Verizon and Qwest in various MSAs. This decision saved small competitive local exchange car-
riers (CLECs) approximately $393.9 million in total one-time cost savings for the Verizon forbearance peti-
tion and $1.14 billion annually for the Qwest petition. 
Securities and Exchange Commission
E.O. 13272 Compliance
The Securities and Exchange Commission (SEC) has not made public its written policies and procedures 
for the consideration of small entities in its rulemaking as required by section 3(a) of E.O. 13272. The SEC 
consistently notifies Advocacy through Advocacys email notification system of draft rules that may have a 
significant economic impact on a substantial number of small entities, as required by section 3(b) of E.O. 
13272. The SEC published four final rules in FY 2007 that were subject to Advocacy comment, and com-
plied with section 3(c) of E.O. 13272, as all of these final rules addressed Advocacy comments. 

Issue: The Sarbanes-Oxley Act Section 404 Requirements. In 2003, the SEC adopted rules implement-
ing section 404 of the Sarbanes-Oxley Act, which required public companies to submit a management re-
port and an external auditor report on their internal controls, or company safeguards against fraudulent and 
mistaken transactions and annual financial reports. Based on concerns raised by Advocacy and other small 
business stakeholders, the SEC reexamined the costs inherent in complying with section 404 and delayed 
the implementation date for small businesses with a public float of less than $75 million. However, acceler-
ated filers, or larger companies with a public float of more than $75 million, had to comply with section 
404 and reported problems because of the lack of management guidance. These larger companies also 
faced difficulties with the rules onerous one-size-fits-all auditing standard that resulted in excess costs and 
redundancies. 
    In 2006, the SECs Advisory Committee on Smaller Public Companies recommended that the SEC de-
fer the implementation of the new section 404 internal control reporting requirements until an adequate 
framework is in place to account for the differences in size between smaller and larger companies. On De-
cember 15, 2006, the SEC published a final rule granting smaller public companies a five-month extension 
for the management assessment report and a 17-month extension for the auditors report. 
    On February 1, 2008, the SEC proposed an additional one-year extension of section 404(b) of the Sar-
banes-Oxley Act of 2002 for smaller public companies, and on February 25, 2008, Advocacy submitted a 
comment letter in support of the SECs proposed extension. On June 20, 2008, the SEC announced its ap-
proval of a one-year extension of section 404(b) of the Sarbanes-Oxley Act of 2002 for smaller public 
companies. The extension of the auditor attestation requirement will allow the SEC to complete a cost-
benefit study of section 404 for small companies. On October 3, 2008, Advocacy submitted a public com-
ment commending the SEC commissioners for their ongoing dedication to easing the difficult process of 
implementing section 404 for smaller companies.
    
Issue: Unification of Accounting Standards. On June 30, 2008, Advocacy submitted a public comment 
letter to the SEC concerning the commissions publicly announced plan to align Americas current Gener-
ally Accepted Accounting Principles (GAAP) with the International Financial Reporting Standards (IFRS). 
Small businesses had contacted Advocacy and expressed concern that they would no longer be permitted to 
utilize the last-in, first-out (LIFO) inventory accounting method, and that eliminating their ability to use 
LIFO would result in a tax increase that could ultimately force many small businesses to close.
    In its comment letter, Advocacy noted that prohibiting businesses from using LIFO would raise busi-
ness taxes in two ways. First, a business would see higher future taxes because it would be unable to use 
LIFO to protect itself from rising inventory costs. Second, a business would be required to pay taxes on its 
existing LIFO reserves. On August 27, 2008, the SEC issued a press release announcing that it will be 
seeking public comment on a release (published in the Federal Register) that will include both (1) a pro-
posed roadmap for the potential mandatory adoption of IFRS by issuers in the United States and (2) a pro-
posed rule that would allow the optional use of IFRS by certain qualifying domestic issuers. The SEC had 
not issued its proposed roadmap in the Federal Register as of the end of FY 2008.
    
Issue: Smaller Public Company Regulatory Reforms. In FY 2008, the SEC published two final rules 
subject to Advocacy comment that allowed more small public companies to take advantage of beneficial 
regulatory programs: 
    Forms S-3 and F-3. In December 2007, the SEC published a final rule that will increase the eligibility 
requirements for Forms S-3 and F-3 for public companies with a public float below $75 million. These 
short forms, which were previously limited to use by companies with more than $75 million in public 
float, allow companies to incorporate past and future filings by reference and to utilize shelf registrations. 
Shelf registrations allow companies to register securities prior to any specific offering, and to release de-
layed or continuous offerings without waiting for additional SEC action. According to the SEC, almost 
5,000 small public companies that filed annual reports in 2006 had a public float below $75 million. Advo-
cacy submitted a public comment letter supporting this proposal while noting that several small business 
representatives were concerned that the proposal limits small entities with a public float below $75 million 
from selling more than 20 percent of their public float in offerings over a period of 12 calendar months. 
These entities were concerned that this restriction would limit the ability of smaller entities to raise capital 
in the public markets. Advocacy recommended that the SEC consider raising this limit for smaller public 
companies using the short forms. In its final rule, the SEC followed this recommendation and limited small 
entities with a public float below $75 million from selling more than 33 percent of their public float in of-
ferings over a period of 12 calendar months.
    Regulation S-B. On December 19, 2007, the SEC published a final rule that expands the eligibility of 
the SECs scaled disclosure and reporting requirements under Regulation S-B to smaller public companies 
with a public float of less than $75 million. Previously, only small business issuers with a public float and 
revenues of less than $25 million were eligible to use forms under Regulation S-B. According to the SEC, 
more than 3,000 companies had a public float under $25 million, compared with almost 5,000 small public 
companies with a public float below $75 million in 2006. Advocacy submitted a public comment letter 
supporting the SECs proposal to update the definition of smaller public company to companies with less 
than $75 million in public float for future regulations. Following Advocacys recommendations, the SEC 
also updated the small business size standard with the Small Business Administration to correspond with 
this regulatory change. 
    Based on conversations with small business representatives, Advocacy also recommended that the 
SEC reconsider the proposals elimination of the Regulation S-B forms. This proposal will require these 
smaller public companies to utilize a modified version of the regular registration forms. Advocacy recom-
mended that the SEC provide a two-year phase-in period to allow users the choice of the Regulation S-B 
forms or the modified regular registration forms. In its final rule, the SEC adopted a one-year phase-in pe-
riod to utilize the modified regular registration forms. 

Issue: Shareholder Proxy Access Rules. In December 2007, the SEC published a final rule, Shareholder 
Proposals Relating to the Election of Directors (the short proposal), which affirmed the agencys status quo 
position that shareholder proposals on items such as proxy access may be excluded from a companys 
proxy materials. Proxy materials are documents used to inform shareholders and solicit votes for corporate 
decisions, such as the election of directors and other corporate actions. Advocacy submitted a comment 
letter supporting the short proposal, which was one of two alternatives released by the SEC on shareholder 
proxy access. The SEC did not finalize the rule, Shareholder Proposals (the long proposal), which would 
have enabled certain shareholders to amend future election procedures, such as allowing proxy access. Cur-
rently, if a shareholder seeks to nominate nominees for the companys board of directors, the party must 
pay the costs of soliciting their own proxy statements. Advocacy commented that it did not support the long 
proposal because allowing shareholders access to the proxy document would shift these costs to companies, 
which would have to pay for and publish the shareholders nomination materials. Based on SEC data, the 
adoption of the short proposal will result in cost savings of $414,252,000.
Small Business Administration
E.O. 13272 Compliance
The U.S. Small Business Administration (SBA) has made significant efforts to stay in compliance with 
E.O. 13272. SBA has published its RFA procedures in compliance with section 3(a) of E.O. 13272. SBA 
notifies Advocacy of draft rules in compliance with section 3(b) of E.O. 13272, and consistently provides 
Advocacy with  rules for review.  As a result of RFA training and continued RFA discussions on draft 
rules, SBA personnel have utilized Advocacy input earlier rather than later in the regulatory development 
process. SBA published one final rule in FY 2008 that was the subject of an Advocacy comment letter; 
SBA gave Advocacys comments appropriate consideration, in compliance with section 3(c) of E.O. 
13272..

Issue: Women-Owned Small Business Federal Contracting Assistance Procedures. On June 15, 2006, 
SBA published proposed regulations to implement section 811 of the Small Business Reauthorization Act 
of 2000. In July 2006, Advocacy submitted comments on the proposed rule. In the July 2006 letter, Advo-
cacy recommended several changes, including removal of the formal certification process and revising and 
incorporating new underrepresentation data on women-owned small businesses (WOSBs) in the IRFA. 
    On December 27, 2007, SBA determined that the June 15 proposed rule needed significant changes 
warranting public comment. The December 27, 2007, proposed rule incorporated Advocacys July 2006 
recommendation that the program should not have a formal certification process but that eligible firms 
should be allowed to self-certify. The December 27 proposed regulation, however, included a new require-
ment for each agency to determine whether it had discriminated against women-owned small businesses 
before it could create a program to set aside contracts for WOSBs. This major addition to the proposed rule 
might have required WOSBs to petition agencies to make a discrimination finding. The addition did not 
discuss the cost to WOSBs if they had to formally petition an agency to make such a finding. 
    On February 20, 2008, the Office of Advocacy filed a comment letter recommending that the final rule 
provide cost data on the effort required by WOSBs expected to play a role in compelling agencies to de-
termine evidence of discrimination. SBA issued the final regulation on September 30, 2008, and assured 
Advocacy that women-owned small businesses will not be required or expected to participate in individual 
agency discrimination fact-finding processes. SBA concluded that this process will not generate compli-
ance costs for WOSBs.
Conclusion
In FY 2008, Advocacy observed continued improvement by federal agencies with respect to their RFA and 
E.O 13272 compliance. Advocacy continues to face the challenge of working with stakeholders and federal 
agencies to ensure that federal regulations do not place small businesses at a competitive disadvantage be-
cause of disproportionate regulatory burdens. The significant small business cost savings realized through 
increased interagency dialogue and outreach to small business stakeholders is evidence of Advocacys suc-
cess in fostering agency RFA compliance. 
    In the future, Advocacy will continue to work cooperatively with federal agencies so that they can both 
meet their regulatory goals and fulfill their obligations under the RFA. To accomplish this, Advocacy will 
focus its efforts on training new agency staff to establish continuity with respect to agency compliance with 
the RFA and E.O. 13272. Advocacy will continue providing input to federal agencies about the impacts of 
proposed regulations on small entities early in the rulemaking process.
    
4. Small Business Regulatory Flexibility Model Legislation 
Initiative
In December 2002, Advocacy presented model regulatory flexibility legislation for the states based on the 
federal Regulatory Flexibility Act.(13) The intent of the model legislation is to foster a climate for entre-
preneurial success in the states. 
    The American Legislative Exchange Council (ALEC) adopted the legislation as a model bill, and nu-
merous state legislators, stakeholders, and small business advocacy organizations have pursued its passage 
in various states, including the National Federation of Independent Business (NFIB), state chambers of 
commerce, the U.S. Chamber of Commerce, the Small Business & Entrepreneurship Council (SBEC), and 
the National Association for the Self-employed (NASE).
    According to Advocacys state model legislation, successful state-level regulatory flexibility laws ad-
dress the following areas: (1) a small business definition that is consistent with state practices and permit-
ting authorities; (2) a requirement that state agencies perform an economic impact analysis on the effect of 
a rule on small business before they regulate; (3) a requirement that state agencies consider less burden-
some alternatives for small businesses that still meet the agencys regulatory goals; (4) a provision that 
forces state governments to review all of their regulations periodically; and (5) judicial review to give the 
law teeth.
    Since 2002, 44 states have enacted the model bill, at least in part, through legislation or an executive 
order. Of the 44, 17 statesplus one territoryhave active regulatory flexibility statutes in place. In 2008, 
10 states introduced regulatory flexibility legislation: Arizona (HB 2235), Florida (HB 7109), Hawaii (HB 
2781, HB 2686, HB 2736), Illinois (HB 302), Iowa (SF 2227), Kansas (HB 2827), Louisiana (HB 368), 
Massachusetts (SB 2413), New Jersey (A832), and Utah (HB 53). Florida, Hawaii, Kansas, Louisiana, and 
Utah signed bills into law.(14) The following is a real-world example that demonstrates the value to small 
businesses of regulatory flexibility at the state level. 
Wisconsins Family Child Care Centers Benefit from Regulatory 
Flexibility
The Wisconsin Department of Health and Family Services (DHFS) is required to establish minimum re-
quirements and standards for the operation of day care centers in the state. In November 2007, the depart-
ment proposed a series of rules to update the current standards. One chapter affected was HFS 45, dealing 
with family child care centers. 
    The initial proposed modification to the standards required family child care centers that use on-
premises play space to have a permanent boundary to protect children under care from nearby hazards. The 
initial analysis suggested fences be used as the boundary and estimated that 80 percent of currently licensed 
family child care providers already had the appropriate enclosure, and another 1 to 2 percent of facilities 
had permission to use off-premises play space that did not require enclosure. That, however, still left 500 to 
600 facilities affected. 
    The department estimated that the cost to purchase and install the fences would start at $300 and noted 
that using other materials could increase the costs. No other specific estimates were listed. The analysis 
also touched on the possibility of centers qualifying for an exception to the rule (decided on a case-by-case 
basis) based on other protections that could be put in place to adequately protect children; however, few 
details were given. 
    Under Wisconsin law, agencies are required to review the economic impact of their proposed rules on 
small businesses and consider alternatives that would be less burdensome. In addition, the Wisconsin Small 
Business Regulatory Review Board (SBRRB) was created in 2004 to serve as a voice for small businesses. 
Rules are brought to the SBRRB for review in several ways. Agencies may ask the board directly for com-
ments about an economic analysis, or representatives of affected industries may request that the board re-
view a rule when they feel that the analysis is lacking or inadequate. In this case, representatives of the day 
care center industry requested the boards involvement on rule HFS 45 because they felt that the economic 
analysis was deficient. 
    After review, the SBRRB submitted comments about HFS 45 to the department. One section of the 
analysis believed by the board to be inadequate was an estimate of the economic impact with respect to the 
permanent barrier requirement. The board recommended that DHFS reevaluate the data sources used in the 
analysis. The board acknowledged that the analysis may have met minimum requirements but that by ne-
glecting to include a broad range of fencing options and costs, it misrepresented the likely economic impact 
of the proposed rule on small businesses. The SBRRB requested that the department include any non-
fencing options that would still be acceptable and include more information about the differences in fencing 
options and costs. 
    In its final analysis, the department took the boards suggestions into consideration and included sev-
eral fencing options (with costs listed), making it clear that a fence was not required if other alternatives 
were used (such as plants and landscaping). As a result, small businesses were provided a more thorough 
analysis of possible costs, and were offered alternatives to permanent fencing that might be more afford-
able. 
    This example demonstrates the importance of analyzing the economic impact of a rule on smaller enti-
ties and of considering less burdensome alternatives. In this example, when the burden on small firms was 
reduced, they were better able to survive in a competitive marketplace and benefit the states economy, 
while at the same time meeting the agencys objective of creating appropriate requirements and standards 
for day care centers.(15)
The Role of Advocacys Regional Advocates
The Office of Advocacy is strengthened by regional advocates located in the Small Business Administra-
tions 10 regions across the country. These accomplished individuals are the chief counsel for advocacys 
direct link to small business owners, state and local government bodies, and organizations that support the 
interests of small entities. The regional advocates help identify regulatory concerns of small businesses by 
monitoring the impact of federal and state policies at the grassroots level. Their work goes far to develop 
programs and policies that encourage fair regulatory treatment of small businesses and to help ensure their 
future growth and prosperity. Each promotes, counsels, and champions the causes of small business to 
stakeholders, legislative bodies, universities, and small business owners. 
    The regional advocates promote the three main components of Advocacys state model regulatory 
flexibility act: introduction and passage of Advocacys state model regulatory flexibility act, small business 
activism, and executive leadership.
Introduction and Passage of the Legislation
Regional advocates are responsible for facilitating the introduction and implementation of the model RFA 
in each state in their region. To accomplish this goal, the regional advocates must determine the states 
small business climate and work with state and local government officials, small businesses, and other 
stakeholders to encourage the introduction, passage and implementation of the legislation. 
    To be successful, regional advocates must find key champions in the state legislature who will support 
the model RFA, introduce the bill, and expend legislative resources to see the bill through the legislative 
process. Regional advocates must also be continually involved with the sponsor(s) of the legislation, small 
businesses and other support groups throughout the process. Such involvement may include providing edu-
cational information, testifying at a committee hearing, or answering questions about the model RFA. 
Small Business Activism and Executive Leadership
Following the enactment of legislation, regional advocates are also responsible for facilitating the imple-
mentation of the law by encouraging small business activism and executive leadership. Not only are gover-
nors instrumental in getting the model legislation passed; their leadership in carrying out existing regula-
tory flexibility law is critical. Offices of the secretaries of state and other executive departments are also 
critically important resources. 
    Small business activism is essential. Stakeholders (small business owners, trade associations, and other 
membership groups) will benefit from a states regulatory flexibility law if they are educated and encouraged 
to become actively engaged in the system. 
    Small business outreach is also important to determine whether an existing regulatory flexibility law is 
or is not working effectively. Through relationships with small business owners, agencies and other stake-
holder groups, regional advocates collect concrete examples where, for example, an alternative regulatory 
approach was utilized by an agency to minimize the economic impact of the rule on small businesses. Also 
important are examples of best practices in each statethe regulatory alert systems, e-mail notification 
systems, and other programs that inform small businesses of agency regulatory activities and facilitate the 
efficient functioning of the program. Regional advocates also provide examples that show how a states law 
or system can be improved to create a friendlier small business regulatory environment. 
    With the involvement of the small business community and state and local policymakers, and with the 
support of Advocacys regional team, the model regulatory flexibility initiative continues to achieve a bet-
ter regulatory and economic environment for small businesses across the nation. 
Table 4.1 State Regulatory Flexibility Legislation, 
2008 Legislative Activity

Five states enacted regulatory flexibility legislation in 2008
Florida (HB 7109)

Kansas (HB 2827)

Utah (HB 53)

Hawaii (HB 2781)

Louisiana (HB 368)

Ten states introduced regulatory flexibility legislation in 2008

Arizona (HB 2235)

Iowa (SF 2227)

Massachusetts (SB 2413)*

Florida (HB 7109)

Kansas (HB 2827)

New Jersey (A 832)

Hawaii (HB 2781, HB 2686, HB 2736)

Louisiana (HB 368)

Utah (HB 53)

Illinois (HB 302)*

* This bill, introduced in the 2007 legislative session, continued to be active in 2008.

  
Table 4.2 State Regulatory Flexibility Legislation, 
Status as of October 2008

Seventeen states and one territory have active regulatory flexibility statutes
Arizona

Maine

Oklahoma

Tennessee

Colorado

Missouri

Oregon

Virginia

Connecticut

Nevada

Puerto Rico

Wisconsin

Hawaii

New York

Rhode Island

Indiana

North Dakota

South Carolina

Twenty-seven states have a partial or partially used regulatory flexibility statute  
or executive order

Alaska

Iowa

Minnesota

South Dakota

Arkansas

Kansas

Mississippi

Texas

California

Kentucky

New Hampshire

Utah

Delaware

Louisiana

New Jersey

Vermont

Florida

Maryland

New Mexico

Washington

Georgia (EO)

Massachusetts (EO)

Ohio

West Virginia (EO)

Illinois

Michigan

Pennsylvania

Six states, two territories, and the District of Columbia have no regulatory  
flexibility statutes

Alabama

Idaho

Nebraska

Virgin Islands

District of Columbia

Montana

North Carolina

Wyoming

Guam

  
Chart 4.1 Mapping State Regulatory Flexibility 
Provisions, FY 2008 
Appendix A Supplementary Tables
Table A.1 Federal Agencies Trained in RFA 
Compliance, 2003-2008
As required by E.O. 13272, the Office of Advocacy has offered training to the following federal depart-
ments and agencies in how to comply with the Regulatory Flexibility Act.

Department of Agriculture
	Animal and Plant Health Inspection Service
	Agricultural Marketing Service
	Grain Inspection, Packers, and Stockyards Administration
	Forest Service
	Rural Utilities Service
Department of Commerce
	National Oceanic and Atmospheric Administration 
	National Telecommunications and Information Administration
	Office of Manufacturing Services
	Patent and Trademark Office
Department of Education
Department of Energy
Department of Health and Human Services
	Center for Medicare and Medicaid Services
	Food and Drug Administration
Department of Homeland Security
	Bureau of Citizenship and Immigration Services
	Bureau of Customs and Border Protection
	Federal Emergency Management Agency 
Transportation Security Administration
	United States Coast Guard
Department of Housing and Urban Development 
	Office of Community Planning and Development
	Office of Fair Housing and Equal Opportunity
	Office of Manufactured Housing
	Office of Public and Indian Housing
Department of the Interior
	Bureau of Indian Affairs
	Bureau of Land Management
	Fish and Wildlife Service
	Minerals Management Service
	National Park Service
	Office of Surface Mining Reclamation and Enforcement
Department of Justice
	Bureau of Alcohol, Tobacco and Firearms
	Drug Enforcement Administration
	Federal Bureau of Prisons
Department of Labor
	Employee Benefits Security Administration
	Employment and Training Administration
	Employment Standards Administration
	Mine Safety and Health Administration
	Occupational Safety and Health Administration
Department of Transportation
	Federal Aviation Administration
	Federal Highway Administration
	Federal Motor Carrier Safety Administration
	Federal Railroad Administration
	Federal Transit Administration
	Maritime Administration
	National Highway Traffic Safety Administration
	Research and Special Programs Administration
	Surface Transportation Board
Department of the Treasury
	Alcohol and Tobacco Tax and Trade Bureau
	Financial Crimes Enforcement Network
	Financial Management Service
	Internal Revenue Service
	Office of the Comptroller of the Currency
Department of Veterans Affairs
Independent Federal Agencies
	Access Board
	Consumer Product Safety Commission
	Commodity Futures Trading Commission
	Environmental Protection Agency 
	Farm Credit Administration
	Federal Communications Commission
	Federal Deposit Insurance Corporation
	Federal Election Commission
	Federal Housing Finance Board
	Federal Reserve System
	Federal Trade Commission
	General Services Administration / FAR Council
	National Credit Union Administration
	Nuclear Regulatory Commission
	Pension Benefit Guaranty Corporation
	Securities and Exchange Commission
	Small Business Administration
	Trade and Development Agency

Table A.2 Status Report on FY 2008 Top Ten Rules 
for Review and Reform

Table A.3 Updates of RFA-related Case Law, 2007-
2008  
Case

Description and Status

Valentine Props.  
Assoc. v. U.S. Dept 
of Housing & Urban 
Dev., 
2007 WL 3146698 
(S.D.N.Y. Oct. 12, 
2007) (Not reported  
in the F. Supp.).

The plaintiff owned two apartment complexes with section 8 subsidy contracts with 
the U.S. Department of Housing and Urban Development originating in 1978. 
When the contracts were signed, each unit was required to meet decent, safe and 
sanitary conditions; however, these conditions were not defined in the United 
States Housing Act of 1937. HUD performed annual inspections to ensure that 
these undefined requirements were met. In 1998, HUD updated the act to include a 
specific definition of these conditions, and formed the Real Estate Assessment Cen-
ter (REAC) to carry out these inspections. In 2003, the plaintiffs properties failed 
inspection, and HUD attempted to terminate the contracts. The plaintiff sought a 
declaratory judgment that the use of REAC for pre-existing contracts and termina-
tion of these contracts violated the terms of the contracts and the Fifth Amendment. 
The plaintiff asserted that the REAC regulations contradicted the requirements con-
tained in E.O. 12866 and the RFA. The defendant filed 12(b)(1), (6) motions, 
which the court granted.  However, the court found that HUDs effort to terminate 
the contracts after adoption of the new definition of the disputed terms violated the 
terms within the contracts. The court did not address the RFA.  

Am. Fedn of Labor 
v. Chertoff, 
552 F. Supp. 2d 999 
(N.D. Cal. 2007).

The Department of Homeland Security (DHS) promulgated a final rule titled Safe-
Harbor Procedures for Employers Who Receive a No-match Letter. See 72 
Fed.Reg. 45611 (Aug. 15, 2007).  Under the rule, an employer received a no-
match letter if an employees name and social security number did not match. The 
plaintiff union and business group sought a preliminary injunction to bar enforce-
ment of the rule under several theories, asserting that it was arbitrary and capricious 
in violation of the APA, and that promulgation of the rule violated the RFA for 
failure to conduct a final regulatory flexibility analysis. This analysis requires, in 
pertinent part: a summary of the significant issues raised by the public comments in 
response to the initial regulatory flexibility analysis, a summary of the assessment 
of the agency of such issues, [and] the steps the agency has taken to minimize the 
significant economic impact on small entities, 5 U.S.C.  604(a). In promulgating 
the rule, DHS claimed an exception permitted in the RFA that allows for an agency 
to certify that the rule will not have a significant economic impact on a substantial 
number of small entities, 5 U.S.C.  605(b). At first, DHS asserted that the rule 
merely provided clarification of terms. However, in briefing, DHS claimed that the 
FRFA was unnecessary because the RFA does not apply to interpretive rules. The 
court was unable to consider the second explanation, focusing instead on DHSs 
first argument, which was that there would not be a significant economic impact on 
small 

entities. The court was persuaded by the plaintiffs declarations that the rule would 
have a significant impact, noting the potential significance of the costs of hiring 
human resources staff to track and solve mismatches within the timeframe allotted 
in the rule, the costs of hiring legal services help, and the costs of training current 
staff. The court found discrepancies in DHSs arguments, and granted the plain-
tiffs motion for preliminary injunction. 

Tafas v. Dudas, 
530 F. Supp. 2d 786 
(E.D. Va. 2008). 

The plaintiff, an inventor, brought an action against the Patent and Trademark Of-
fice (PTO) under the Administrative Procedure Act (APA), challenging newly 
adopted rules that limited the number of continuing applications, requests for con-
tinued examination (RCE), and claims that the applicant could make. The plaintiff 
made a claim for discovery on the ground that the PTO made an erroneous and bad-
faith judgment under the RFA that the new rules would not have a significant eco-
nomic impact on a substantial number of small entities. The court reiterated U.S. 
Cellular Corp. v. FCC and Ranchers Cattlemen Action Legal Fund United Stock-
growers of Am. v. USDA and stated that the RFA imposes no substantive require-
ments on an agency; rather, its requirements are purely procedural in nature. It fur-
ther quoted U.S. Cellular Corp. v. FCC and stated that an agency need only put 
forth a reasonable, good-faith effort to fulfill the procedural requirements. The 
court held that notice in the Federal Register, as well as 1,100 pages dedicated to 
the RFA in the administrative record, were sufficient for the court to determine 
whether the PTO made a reasonable, good-faith effort to comply with the RFAs 
procedural requirements. 

Tafas v. Dudas, 
541 F. Supp. 2d 805 
(E.D. Va. 2008). 

The plaintiffs, a pharmaceutical company and an inventor, brought an action 
against the Patent and Trademark Office (PTO) challenging newly adopted rules 
that limited the number of continuing applications, requests for continued examina-
tion, and claims that the applicant could make. The plaintiffs argued that the new 
rules violated the Constitution, the Patent Act, the APA, and the RFA, and sought 
an injunction against the implementation of the rules. The court ruled that 35 
U.S.C.A.  2(b)(2) does not give the PTO the ability to make substantive rules, 
even though the PTO is required to have notice and comment. Instead, the PTOs 
ability is limited to procedural rules. Though the PTO argued its rule is procedural, 
it is not, as it affects individual rights and obligations (541 F. Supp. 2d at 814, 
quoting Chrysler Corp. v. Brown, 441 U.S. 281, 302). For example, the new rules 
shift the examination burden from the PTO to the applicants and limit the number 
of patent applications. Accordingly, the plaintiffs motion for summary judgment 
was granted. The court did not address the merits of the RFA claim.
 
Natl Mining Assn v. 
Mine Safety and 
Health Admin., 
512 F.3d 696 (D.C. 
Cir. 2008).

The Mine Safety and Health Administration (MSHA) proposed a rule amending the 
Federal Mine Health and Safety Act of 1977. The association challenged the pro-
posed rule, arguing, among other things, that MSHA failed to comply with the RFA 
by not analyzing the economic impact of the hardened room option. When MSHA 
published the temporary standard, it certified that the primary method of compli-
anceplacing a separate set of rescue devices in each emergency escapeway
would not have a significant economic impact on small businesses. The plaintiffs 
did not challenge the sufficiency of the certification. The court found that since the 
primary method of compliance did not create a significant economic burden on 
small businesses, there was no reason for MSHA to undertake an economic analy-
sis of the alternative. The court further stated that if the hardened room option was 
considerably more expensive, small businesses could simply refuse to choose it.

Am. Forest Res. 
Council v. Hall, 
533 F. Supp. 2d 84 
(D.D.C. 2008).

The plaintiff, a forest products trade association, brought an action alleging that the 
United States Fish and Wildlife Services (FWS) decision, after conducting a five-
year status review, to maintain threatened species listing for a species of seabird 
violated the Endangered Species Act (ESA), the Administrative Procedure Act 
(APA), the Regulatory Flexibility Act (RFA), the Unfunded Mandates Reform Act, 
and the National Environmental Policy Act (NEPA). The parties filed cross-
motions for summary judgment. Because NEPA did not create a cause of action, 
the defendants action must be a final agency action for which there is no other 
adequate remedy in court (533 F.Supp. 2d at 90). The Supreme Court developed a 
two-part test to determine finality: First, the action must mark the consummation 
of the agencys decisionmaking process...it must not be of a merely tentative or 
interlocutory nature.second, the action must be one by which rights or obliga-
tions have been determined, or from which legal consequences will flow. (Ben-
nett v. Spear, 520 U.S. 154, 177, 1997.) The court found that the five-year status 
review qualified as a consummation of the decisionmaking process, as the defen-
dant determined that the species would remain protected. The likelihood of revision 
of the rule sometime in the future was considered irrelevant. However, the court 
ruled that legal consequences did not flow from the five-year review, as the defen-
dant is not required to change the species status based on it. Accordingly, the court 
granted the defendants motion, holding that decisions to maintain threatened spe-
cies listings are not subject to judicial review. The court did not address the RFA 
issue.

Atlantic Urological  
Assoc. v. Leavitt, 
549 F.Supp.2d 20 
(D.D.C. 2008).

To counteract the practice of physician groups using offsite laboratories for lab 
work, and then claiming that doctors in both locations shared a practice for pur-
poses of billing, HHS created the Anti-Markup Rule. This rule permitted billing 
Medicare only for lab work performed in a centralized building. The plaintiff 
urology physicians group challenged the rule. It asserted arbitrary and capricious 
violation of the APA, as well as violation of the RFA, stating that the defendant 
failed to prepare a final regulatory flexibility analysis. The court granted the defen-
dants motion to dismiss for lack of standing and jurisdiction, and did not address 
the alleged APA and RFA violations.

 Table A.4 SBREFA Panels through Fiscal Year 2008
Rule Subject 

Date 
Convened

Report 
Completed

NPRM1

Final Rule 
Published

Environmental Protection Agency

Nonroad Diesel Engines

03/25/97

05/23/97

09/24/97

10/23/98

Industrial Laundries Effluent Guideline

06/06/97

08/08/97

12/12/97

Withdrawn2

Stormwater Phase 2

06/19/97

08/07/97

01/09/98

12/08/99

Transportation Equipment Cleaning  
   Effluent Guideline

07/16/97

09/23/97

06/25/98

08/14/00

Centralized Waste Treatment Effluent
   Guideline
11/06/97

01/23/98

01/13//99
09/10/03
12/22/00

Underground Injection Control Class V
   Wells
02/17/98

04/17/98

07/29/98

12/07/99

Ground Water

04/10/98

06/09/98

05/10/00

11/08/06

Federal Implementation Plan (FIP) for 
   Regional Nitrogen Oxides Reductions
06/23/98

08/21/98

10/21/98

04/28/06

Section 126 Petitions

06/23/98

08/21/98

09/30/98

05/25/99

Radon in Drinking Water

07/09/98

09/18/98

11/02/99

Long Term 1 Enhanced Surface Water
   Treatment
08/21/98

10/19/98

04/10/00

01/14/02

Filter Backwash Recycling

08/21/98

10/19/98

04/10/00

06/08/01

Light Duty Vehicles/Light Duty Trucks
   Emissions and Sulfur in Gasoline

08/27/98

10/26/98

05/13/99

02/10/00
Arsenic in Drinking Water

03/30/99

06/04/99

06/22/00

01/22/01

Recreational Marine Engines

06/07/99

08/25/99

10/05/01
08/14/02
11/08/02

Diesel Fuel Sulfur Control Requirements

11/12/99

03/24/00

06/02/00

01/18/01

Lead Renovation and Remodeling Rule

11/23/99

03/03/00

01/10/06

Metals Products and Machinery Effluent
   Guideline
12/09/99

03/03/00

01/03/01

05/13/03

Concentrated Animal Feedlots Effluent 
   Guideline
12/16/99

04/07/00

01/12/01

02/12/03

Reinforced Plastics Composites

04/06/00

06/02/00

08/02/01

04/21/03

Long Term 2 Enhanced Surface Water 
   Treatment
04/25/00

06/23/00

08/11/03

01/05/06

Emissions from Nonroad and Recreational
    Engines and Highway Motorcycles
05/03/01

07/17/01

10/05/01
08/14/02
11/08/02

Construction and Development Effluent 
   Guideline
07/16/01

10/12/01

06/24/02

Withdrawn

Aquatic Animal Production Industry

01/22/02

06/19/02

09/12/02

08/23/04

Lime IndustryAir Pollution

01/22/02

03/25/02

12/20/02

01/05/04

Nonroad Diesel EmissionsTier 4 Rules

10/24/02

12/23/02

05/23/03

06/29/04

Cooling Water Intake Structures
   Phase III Facilities
02/27/04

04/27/04

11/24/04

06/15/06

Section 126 Petition (2005 Clean Air 
   Implementation RuleCAIR)
04/27/05

06/27/05

08/24/05

04/28/06

Federal Implementation Plan for 
   Regional Nitrogen Oxides (CAIR)
04/27/05

06/27/05

08/24/05

04/28/06

Mobile Source Air ToxicsControl of 
   Hazardous Air Pollutant from Mobile 
   Sources
09/07/05

11/08/05

03/29/06

02/26/07

Nonroad Spark-ignition Engines/ 
   Equipment
08/17/06

10/17/06

05/18/07

10/08/08

Total Coliform Monitoring Rule (TCR)

01/31/08

03/31/08

Construction and Development Effluent 
   Guideline
09/10/08

4

11/28/08

4

Occupational Safety and Health Administration

Tuberculosis

09/10/96

11/12/96

10/17/97

Withdrawn5

Safety and Health Program Rule

10/20/98

12/19/98

In process

Ergonomics Program Standard

03/02/99

04/30/99

11/23/99

 11/14/006

Electric Power Generation, Transmission, 
   and Distribution
04/01/03

06/30/03

06/15/05

Confined Spaces in Construction

09/26/03

11/24/03 

11/28/07

Occupational Exposure to Respirable 
   Crystalline Silica Dust
10/20/03

12/19/03

Cranes and Derricks in Construction

08/18/06

10/17/06

10/09/08

Occupational Exposure to Beryllium

09/17/07

01/15/08

1	Notice of proposed rulemaking (NPRM).
2	Proposed rule was withdrawn August 18, 1999. EPA does not plan to issue a final rule.
3	Proposed rule was withdrawn on April 26, 2004. EPA does not plan to issue a final rule.
4	This is a second panel on the topic; see the panel convened 07/16/01.EPA certified the rule; the panel did not issue a report.
5	Proposed rule was withdrawn on December 31, 2003. OSHA does not plan to issue a final rule. 
6	President George W. Bush signed Senate J. Res. 6 on March 20, 2001, which eliminated this final rule under the Congres-
sional Review Act.

Appendix B 
The Regulatory Flexibility Act

this section bars judicial review of any other impact statement or similar analysis required by any other law 

Appendix C 
Executive Order 13272
Appendix D 
Abbreviations 

ACA		American Cable Association
Access Board	Architectural and Transportation Barriers Compliance Board
ADA		Americans with Disabilities Act
ADAAG	Americans with Disabilities Act accessibility guidelines
ALEC		American Legislative Exchange Council
AMS		Agricultural Marketing Service
ANPRM		advance notice of proposed rulemaking
APA		Administrative Procedure Act
APHIS		Animal and Plant Health Inspection Service
CAM		compliance assurance monitoring
CFR		Code of Federal Regulations
CLECS		competitive local exchange carriers
CMS		Centers for Medicare and Medicaid Services
CPNI		customer proprietary network information 
CPSC		Consumer Product Safety Commission
CVR		cockpit voice recorder
DFARS		Defense Federal Acquisition Supplement
DFDR		digital flight data recorder
DHFS		Department of Health and Family Services (Wisconsin)
DHS		Department of Homeland Security
DOC		Department of Commerce
DOD		Department of Defense
DOE		Department of Energy
DOI		Department of the Interior
DOJ		Department of Justice
DOL		Department of Labor
DOT		Department of Transportation
DTV		digital television
EBSA		Employee Benefits Security Administration
Education	Department of Education
E.O.		Executive Order
EPA		Environmental Protection Agency
EPCRA		Emergency Planning and Community Right to Know Act
ESA		Employment Standards Administration
ESA		Endangered Species Act
ESD		examination support document
ETA		Employment and Training Administration
FAA		Federal Aviation Administration
FAR		Federal Acquisition Regulation
FCC		Federal Communications Commission 
FDA		Food and Drug Administration
Fed. Reg.	Federal Register
FEI		Financial Executives International
FHWA		Federal Highway Administration
FIP		federal implementation plan
FMCSA		Federal Motor Carrier Safety Administration
FRA		Federal Railroad Administration
FRB		Federal Reserve Board
FRFA		final regulatory flexibility analysis
FS		Forest Service
FWS		Fish and Wildlife Service
FY		fiscal year
GAAP		Generally Accepted Accounting Principles
GAO		Government Accountability Office
GFE		good faith estimate
GIPSA		Grain Inspection, Packers, and Stockyards Administration
GSA		General Services Administration
HAPs		hazardous air pollutants
HHS		Department of Health and Human Services
HIPAA		Health Insurance Portability and Accessibility Act
HUD		Department of Housing and Urban Development
IFRS		International Financial Reporting Standards
IRFA		initial regulatory flexibility analysis
IRS		Internal Revenue Service
LIFO		last-in first-out
MSA		metropolitan statistical area
MSGP		Multi-sector General Permit
MSHA		Mine Safety and Health Administration
NASA		National Aeronautics and Space Administration
NASE 		National Association for the Self-employed
NEPA		National Environmental Policy Act
NFIB 		National Federation of Independent Business 
NHTSA		National Highway Traffic Safety Administration
NPRM		notice of proposed rulemaking
NPS		National Park Service	
OCC		Office of the Comptroller of the Currency
OIRA		Office of Information and Regulatory Affairs
OMB		Office of Management and Budget
OSHA		Occupational Safety and Health Administration
OSMRE		Office of Surface Mining Reclamation and Enforcement
OTS		Office of Thrift Supervision
P.L.		Public Law
PTO		Patent and Trademark Office
r3		Regulatory Review and Reform Initiative
RALs		refund anticipation loans
RCE		requests for continued examination
REAC		Real Estate Assessment Center
RESPA		Real Estate Settlement Procedures Act
RFA		Regulatory Flexibility Act
SBA		Small Business Administration
SBAR		Small Business Advocacy Review Panel
SBEC 		Small Business & Entrepreneurship Council 
SBREFA	Small Business Regulatory Enforcement Fairness Act 
SBRRB		Small Business Regulatory Review Board (Wisconsin)
SEC		Securities and Exchange Commission
SPCC		Spill Prevention Control and Countermeasures
SPPP		stormwater pollution prevention plan
State		Department of State
Treasury		Department of the Treasury
TSA		Transportation Security Administration
TSS		total suspended solids
UNE		unbundled network element
U.S.C.		United States Code
USCG		U.S. Coast Guard
USDA		United States Department of Agriculture
VA		Department of Veterans Affairs
VHS		vital hemorrhagic systicemia
WOSB		woman-owned small business

ENDNOTES

1.  Regulatory Flexibility Act of 1980, Pub. L. No. 96-354, 94 Stat. 1164 (1980) (codified as amended at 5 
U.S.C.  601 et seq.).
2.  5 U.S.C.  601, note.
3.  Small Business Regulatory Enforcement Fairness Act, Pub. L. 104-121, Title II, 110 Stat. 857 (1996) 
(codified in various sections of 5 U.S.C.  601 et seq.).
4.  Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking, 67 Fed. Reg. 
53461 (Aug. 16, 2002).
5.  Crain, W. Mark. The Impact of Regulatory Costs on Small Firms. Office of Advocacy, U.S. Small Busi-
ness Administration (September 2005), available at http://www.sba.gov/advo/research/rs264tot.pdf.
6.  5 U.S.C.  610.
7.  See Government Accountability Office, Reexamining Regulations: Opportunities Exist to Improve Ef-
fectiveness and Transparency of Retrospective Reviews (GAO-07-791), 35, 43-44 (July 2007).
8.  For more information about r3, see http://www.sba.gov/advo/r3/.
9.  5 U.S.C. Sec. 611.
10. AFL-CIO, et al., v. Michael Chertoff, et al., 552 F. Supp 2d 999; October 10, 2007.
11. Comments from the Office of Advocacy, Re: Supplemental Proposed Rule on Safe-Harbor Procedures 
for Employers Who Receive a No-Match Letter; Clarification; Initial Regulatory Flexibility Analysis, 
April 25, 2008.
12. A precise amount of savings could not be calculated; therefore, this rule does not appear in the cost 
savings tables (Tables 2.2 and 2.3).
13. The text of Advocacys model legislation, updated versions of the state regulatory flexibility legislative 
activity map, and the regional advocates contact information can be found on the Office of Advocacy 
website at www.sba.gov/advo/laws/law_modeleg.html. 
14. Illinois HB 302 and Massachusetts SB 2413 were both introduced in the 2007 legislative session and 
continued to be active in 2008.
15. Effective July 1, 2008, agency authority to administer the licensing of child care centers was transferred 
from the Department of Health and Family Services (DHFS) to the Department of Children and Families 
(DCF).