39–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 109–208 

NATIONAL SMALL BUSINESS REGULATORY ASSISTANCE 

ACT OF 2005 

JULY 28, 2005.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. MANZULLO, from the Committee on Small Business, 

submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany H.R. 230] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Small Business, to whom was referred the bill 

(H.R. 230) to amend the Small Business Act to direct the Administrator of the Small Business Administration to establish a program 

to provide regulatory compliance assistance to small business concerns, and for other purposes, having considered the same, report 

favorably thereon with an amendment and recommend that the bill 

as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘National Small Business Regulatory Assistance Act 

of 2005’’. 

SEC. 2. PURPOSE. 

The purpose of this Act is to establish a program to— 

(1) provide confidential assistance to small business concerns; 

(2) provide small business concerns with the information necessary to improve 

their rate of compliance with Federal and State regulations; 

(3) create a partnership among Federal agencies to increase outreach efforts 

to small business concerns with respect to regulatory compliance; 

(4) provide a mechanism for unbiased feedback to Federal agencies on the 

regulatory environment for small business concerns; and 

(5) utilize the service delivery network of Small Business Development Centers to improve access of small business concerns to programs to assist them 

with regulatory compliance. 

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SEC. 3. DEFINITIONS. 

In this Act, the definitions set forth in section 37(a) of the Small Business Act 

(as added by section 4 of this Act) shall apply. 

SEC. 4. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM. 

The Small Business Act (15 U.S.C. 637 et seq.) is amended— 

(1) by redesignating section 37 as section 38; and 

(2) by inserting after section 36 the following new section: 

‘‘SEC. 37. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM. 

‘‘(a) DEFINITIONS.—In this section, the following definitions apply: 

‘‘(1) ASSOCIATION.—The term ‘Association’ means the association recognized 

by the Administrator of the Small Business Administration under section 

21(a)(3)(A). 

‘‘(2) PARTICIPATING SMALL BUSINESS DEVELOPMENT CENTER.—The term ‘participating Small Business Development Center’ means a Small Business Development Center participating in the program. 

‘‘(3) PROGRAM.—The term ‘program’ means the regulatory assistance program 

established under this section. 

‘‘(4) REGULATORY COMPLIANCE ASSISTANCE.—The term ‘regulatory compliance 

assistance’ means assistance provided by a Small Business Development Center 

to a small business concern to enable the concern to comply with Federal regulatory requirements. 

‘‘(5) SMALL BUSINESS DEVELOPMENT CENTER.—The term ‘Small Business Development Center’ means a Small Business Development Center described in 

section 21. 

‘‘(6) STATE.—The term ‘State’ means each of the several States, the District 

of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 

American Samoa. 

‘‘(b) AUTHORITY.—In accordance with this section, the Administrator shall establish a program to provide regulatory compliance assistance to small business concerns through selected Small Business Development Centers, the Association of 

Small Business Development Centers, and Federal compliance partnership programs. 

‘‘(c) SMALL BUSINESS DEVELOPMENT CENTERS.— ‘‘(1) IN GENERAL.—In carrying out the program, the Administrator shall enter 

into arrangements with selected Small Business Development Centers under 

which such Centers shall provide— 

‘‘(A) access to information and resources, including current Federal and 

State nonpunitive compliance and technical assistance programs similar to 

those established under section 507 of the Clean Air Act (42 U.S.C. 7661f); 

‘‘(B) training and educational activities; 

‘‘(C) confidential, free-of-charge, one-on-one, in-depth counseling to the 

owners and operators of small business concerns regarding compliance with 

Federal and State regulations, as long as such counseling is not considered 

to be the practice of law in a State in which a Small Business Development 

Center is located or in which such counseling is conducted; 

‘‘(D) technical assistance; 

‘‘(E) referrals to experts and other providers of compliance assistance who 

meet such standards for educational, technical, and professional competency as are established by the Administrator; and 

‘‘(F) access to the Internet and training on Internet use, including the use 

of the Internet website established by the Administrator under subsection 

(d)(1)(C). 

‘‘(2) REPORTS.— 

‘‘(A) IN GENERAL.—Each selected Small Business Development Center 

shall transmit to the Administrator a quarterly report that includes— 

‘‘(i) a summary of the regulatory compliance assistance provided by 

the center under the program; and 

‘‘(ii) any data and information obtained by the center from a Federal 

agency regarding regulatory compliance that the agency intends to be 

disseminated to small business concerns. 

‘‘(B) ELECTRONIC FORM.—Each report required under subparagraph (A) 

shall be transmitted in electronic form. 

‘‘(C) INTERIM REPORTS.—A participating Small Business Development 

Center may transmit to the Administrator such interim reports as the Center considers appropriate. 

‘‘(D) LIMITATION ON DISCLOSURE REQUIREMENTS.—The Administrator 

shall not require a Small Business Development Center to disclose the 

name or address of any small business concern that received or is receiving 

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assistance under the program, except that the Administrator shall require 

such a disclosure if ordered to do so by a court in any civil or criminal action. 

‘‘(d) DATA REPOSITORY AND CLEARINGHOUSE.— ‘‘(1) IN GENERAL.—In carrying out the program, the Administrator shall— 

‘‘(A) act as the repository of and clearinghouse for data and information 

submitted by Small Business Development Centers; 

‘‘(B) submit to the President, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business of the 

House of Representatives an annual report that includes— 

‘‘(i) a description of the types of assistance provided by participating 

Small Business Development Centers under the program; 

‘‘(ii) data regarding the number of small business concerns that contacted participating Small Business Development Centers regarding assistance under the program; 

‘‘(iii) data regarding the number of small business concerns assisted 

by participating Small Business Development Centers under the program; 

‘‘(iv) data and information regarding outreach activities conducted by 

participating Small Business Development Centers under the program, 

including any activities conducted in partnership with Federal agencies; 

‘‘(v) data and information regarding each case known to the Administrator in which one or more Small Business Development Centers offered conflicting advice or information regarding compliance with a 

Federal or State regulation to one or more small business concerns; 

‘‘(vi) any recommendations for improvements in the regulation of 

small business concerns; and 

‘‘(vii) a list of regulations identified by the Administrator, after consultation with the Chief Counsel for Advocacy of the Administration, 

who shall review such list, and the Small Business and Agriculture 

Regulatory Enforcement Ombudsman, as being most burdensome to 

small business concerns, and recommendations to reduce or eliminate 

the burdens of such regulations; and 

‘‘(C) establish an Internet website that— 

‘‘(i) provides access to Federal, State, academic, and industry association Internet websites containing industry-specific regulatory compliance information that the Administrator deems potentially useful to 

small businesses attempting to comply with Federal regulations; and 

‘‘(ii) arranges such Internet websites in industry-specific categories. 

‘‘(e) REVIEW OF BURDENSOME REGULATIONS AND PETITION FOR AGENCY REVIEW.— 

‘‘(1) TRANSMISSION OF LIST OF REGULATIONS TO CHIEF COUNSEL FOR ADVOCACY.—The Administrator shall transmit to the Chief Counsel for Advocacy of 

the Administration a copy of the list of regulations submitted under subsection 

(d)(1)(B) as part of the annual report required by that subsection. 

‘‘(2) REVIEW OF LIST OF REGULATIONS.—The Chief Counsel for Advocacy shall 

review the list of regulations transmitted under paragraph (1) and identify any 

regulation that— 

‘‘(A) is eligible for review in accordance with section 610 of title 5, United 

States Code; 

‘‘(B) has a significant impact on a substantial number of small business 

concerns that is substantially different from the impact indicated in the 

final regulatory flexibility analysis for that regulation, as published with 

the final regulation in the Federal Register; or 

‘‘(C) has a significant impact on a substantial number of small business 

concerns and for which no final regulatory flexibility analysis was ever performed. 

‘‘(3) NOTIFICATION AND AGENCY REVIEW.—With respect to any regulation identified under paragraph (2) the Chief Counsel for Advocacy shall— 

‘‘(A) notify the appropriate Federal rulemaking agency and the Office of 

Information and Regulatory Affairs of the Office of Management of the 

identification of such rule or regulation; and 

‘‘(B) request the review of such regulation— 

‘‘(i) in accordance with section 610 of title 5, United States Code; or 

‘‘(ii) for any impact it has on small business concerns. 

‘‘(4) ANNUAL REPORT.—The Chief Counsel for Advocacy shall publish an annual report containing a list of any regulation identified under paragraph (2) 

and the disposition by the appropriate agency. 

‘‘(f) ELIGIBILITY.— 

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‘‘(1) IN GENERAL.—A Small Business Development Center shall be eligible to 

receive assistance under the program only if the center is certified under section 

21(k)(2). 

‘‘(2) WAIVER.— With respect to a Small Business Development Center seeking 

assistance under the program, the administrator may waive the certification requirement set forth in paragraph (1) if the Administrator determines that the 

center is making a good faith effort to obtain such certification. 

‘‘(3) EFFECTIVE DATE.—The restriction described in paragraph (1) shall not 

apply to any Small Business Development Center before October 1, 2005. 

‘‘(g) SELECTION OF PARTICIPATING STATE PROGRAMS.— ‘‘(1) ESTABLISHMENT OF PROGRAM.—In consultation with the Association and 

giving substantial weight to the Association’s recommendations, the Administrator shall select the Small Business Development Center programs of 2 States 

from each of the following groups of States to participate in the program: 

‘‘(A) Group 1: Maine, Massachusetts, New Hampshire, Connecticut, 

Vermont, and Rhode Island. 

‘‘(B) Group 2: New York, New Jersey, Puerto Rico, and the Virgin Islands. 

‘‘(C) Group 3: Pennsylvania, Maryland, West Virginia, Virginia, the District of Columbia, and Delaware. 

‘‘(D) Group 4: Georgia, Alabama, North Carolina, South Carolina, Mississippi, Florida, Kentucky, and Tennessee. 

‘‘(E) Group 5: Illinois, Ohio, Michigan, Indiana, Wisconsin, and Minnesota. 

‘‘(F) Group 6: Texas, New Mexico, Arkansas, Oklahoma, and Louisiana. 

‘‘(G) Group 7: Missouri, Iowa, Nebraska, and Kansas. 

‘‘(H) Group 8: Colorado, Wyoming, North Dakota, South Dakota, Montana, and Utah. 

‘‘(I) Group 9: California, Guam, Hawaii, Nevada, and Arizona. 

‘‘(J) Group 10: Washington, Alaska, Idaho, and Oregon. 

‘‘(2) DEADLINE FOR INITIAL SELECTIONS.—The Administrator shall make selections under paragraph (1) not later than 60 days after promulgation of regulations under section 5 of the National Small Business Regulatory Assistance Act 

of 2005. 

‘‘(3) ADDITIONAL SELECTIONS.—Not earlier than the date 3 years after the date 

of the enactment of this paragraph, the Administrator may select Small Business Development Center programs of States in addition to those selected under 

paragraph (1). The Administrator shall consider the effect on the programs selected under paragraph (1) before selecting additional programs under this 

paragraph. 

‘‘(4) COORDINATION TO AVOID DUPLICATION WITH OTHER PROGRAMS.—In selecting programs under this subsection, the Administrator shall give a preference 

to Small Business Development Center programs that have a plan for consulting with Federal and State agencies to ensure that any assistance provided 

under this section is not duplicated by an existing Federal or State program. 

‘‘(h) MATCHING NOT REQUIRED.—Subparagraphs (A) and (B) of section 21(a)(4) 

shall not apply to assistance made available under the program. 

‘‘(i) DISTRIBUTION OF GRANTS.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), each State program 

selected to receive a grant under subsection (g) in a fiscal year shall be eligible 

to receive a grant in an amount not to exceed the product obtained by multiplying— 

‘‘(A) the amount made available for grants under this section for the fiscal 

year; and 

‘‘(B) the ratio that the population of the State bears to the population of 

all the States with programs selected to receive grants under subsection (g) 

for the fiscal year. 

‘‘(2) MINIMUM AMOUNT.—The minimum amount that a State program selected 

to receive a grant under subsection (g) shall be eligible to receive under this 

section for any fiscal year shall be $200,000. The Administrator shall reduce the 

amount described in paragraph (1) as appropriate to carry out the purposes of 

this paragraph and subsection (j)(2). 

‘‘(j) EVALUATION AND REPORT.—Not later than 3 years after the establishment of 

the program, the Comptroller General of the United States shall conduct an evaluation of the program and shall transmit to the Administrator, the Committee on 

Small Business and Entrepreneurship of the Senate, and the Committee on Small 

Business of the House of Representatives a report containing the results of the evaluation along with any recommendations as to whether the program, with or without 

modification, should be extended to include the participation of all Small Business 

Development Centers. 

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‘‘(k) AUTHORIZATION OF APPROPRIATIONS.— ‘‘(1) IN GENERAL.—There is authorized to be appropriated to carry out this section $5,000,000 for fiscal year 2006 and each subsequent fiscal year. 

‘‘(2) LIMITATION ON USE OF OTHER FUNDS.—The Administrator shall carry out 

the program only with amounts appropriated in advance specifically to carry 

out this section.’’. 

SEC. 5. PROMULGATION OF REGULATIONS. 

After providing notice and an opportunity for comment and after consulting with 

the Association (but not later than 180 days after the date of the enactment of this 

Act), the Administrator shall promulgate final regulations to carry out this Act, including regulations that establish— 

(1) priorities for the types of assistance to be provided under the program; 

(2) standards relating to educational, technical, and support services to be 

provided by participating Small Business Development Centers; 

(3) standards relating to any national service delivery and support function 

to be provided by the Association under the program; 

(4) standards relating to any work plan that the Administrator may require 

a participating Small Business Development Center to develop; and 

(5) standards relating to the educational, technical, and professional competency of any expert or other assistance provider to whom a small business 

concern may be referred for compliance assistance under the program. 

PURPOSE

The purpose of H.R. 230, the ‘‘National Small Business Regulatory Assistance Act of 2005,’’ is to utilize existing Small Business 

Administration infrastructure to provide regulatory compliance assistance to small businesses. The United States Small Business Administration oversees the operations of Small Business Development Centers (SBDCs). Located in every state, these centers are 

associated with colleges and universities and provide operational 

assistance to small business owners. They are authorized to provide regulatory compliance assistance, but they do not have an organized program for providing such assistance. H.R. 230 would establish a program for selected SBDC state grantees to specifically 

develop regulatory compliance assistance. 

The bill mandates that the Administrator of the United States 

Small Business Administration establish a project in which twenty 

SBDC state programs will be selected to test whether the centers 

within those state programs would be an appropriate vehicle for 

providing regulatory compliance assistance to small business owners. It is the expectation of the Committee that the program should 

be expanded to include all SBDCs should the program prove successful. 

Finally, the bill, as amended, requires the Administrator to establish a web based resource for small business compliance assistance, organized by industry, and directs the participating SBDCs 

to assist small businesses in using this and other web based compliance assistance resources. Further, it builds on the current requirement to identify burdensome regulations and creates a mechanism for bringing such regulations to the attention of the appropriate agencies for review. 

NEED FOR LEGISLATION

During the past twenty-five years, the Federal Register—the 

compendium of federal regulatory initiatives and changes—almost 

doubled in size from 42,000 pages to a record 83,289 pages in 2000. 

Since President Bush took office in 2001, the growth in regulation 

has slowed but the regulatory burden continues to be a problem. 

6 

This crush of federal dictates is particularly troubling to small 

businesses that find it increasingly difficult to meet these burgeoning regulatory requirements while at the same time trying to 

successfully operate their businesses in an expanding competitive 

global environment. Often, small business owners do not learn 

about their failure to comply with a regulation or that a new regulatory requirement has been imposed until an inspector or auditor 

walks through the door. 

The result is neither beneficial to the small business owner nor 

the federal government. Federal regulations exist to achieve some 

statutory objective; noncompliance hinders the reaching of these 

statutory goals. Small business owners certainly would be more interested in complying with federal regulations than paying penalties and fines. However, the amount of information, including 

regulations and concomitant guidance, simply overwhelms small 

business owners. 

In 1996, Congress took action in an effort to alleviate this problem. The Small Business Regulatory Enforcement Fairness Act provided that federal agencies are required to produce plain-English 

compliance guides for any regulation that would have a significant 

economic impact on a substantial number of small businesses. The 

General Accounting Office (now the General Accountability Office) 

found that agencies did not do a particularly good job in drafting 

compliance guides. United States General Accounting Office, Compliance Guide Requirement Has Had Little Effect on Agency Practices 1 (December 2001). Even if agencies do produce excellent compliance guides, they are of little utility if small business owners do 

not know about the regulatory changes. Some mechanism must 

exist to make small businesses more aware of their regulatory obligations. 

Even more important than making small businesses aware of the 

regulations is providing them with assistance needed to understand 

and comply with the regulations. A regulation may only take up fifteen pages of text, but the explanation for what those pages mean 

may require sifting through a hundred or more pages of dense, triple-columned, single-spaced pages in the Federal Register. See, 

e.g., Defining and Delimiting the Exemption for Executive, Administrative, Professional, Outside Sales and Computer Employees, 69 

Fed. Reg. 22,122 (April 23, 2004) (regulations are 14 pages but explanatory text is 138 pages). Most small business owners do not 

have the time to go through this dense prolixity. And even if they 

did, they would not understand it unless they were knowledgeable 

in the field. The Committee believes that greater assistance must 

be provided to small business owners in helping them comply with 

complex regulatory issuances. Otherwise, a divide could develop between those businesses, usually large, with the resources to comply 

and those, usually small, without such resources. The small businesses will be at risk for penalties, fines, and audits while large 

businesses will not. Success or failure should be determined in the 

marketplace; not whether the business has the internal resources 

needed to comply with federal regulatory edicts. A regulatory compliance assistance program operated through the SBDCs could provide substantial assistance in ensuring such a divide does not 

occur. 

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The Small Business Administration oversees a number of mechanisms for delivering advice to small business owners. One of the 

most effective is the Small Business Development Center program. 

Operated in conjunction with colleges and universities, the SBDCs 

assist small businesses in solving problems concerning the operations, manufacturing, engineering, technology, exchange and development, personnel administration, marketing, sales, merchandising, finance, accounting, and business strategy development. 

The SBDCs utilize the resources and the expertise of colleges and 

universities. In addition, the SBDCs, like the Agricultural Extension Service, also provide a focal point for information retrieval, coordination of federal and state government services, and referral to 

experts. Historically, the SBDCs have focused on financial, management, and marketing activities of small businesses despite the 

requirement that they also provide regulatory compliance assistance. See § 21(c)(3)(H) of the Small Business Act (codified at 15 

U.S.C. § 648(c)(3)(H)). 

The Committee believes that SBDCs can provide an effective 

mechanism for dispensing regulatory compliance information and 

advice. However, regulatory compliance, unlike many of the other 

activities undertaken by the SBDCs, has significant legal consequences and requires resource utilization quite different from 

that usually offered at SBDCs. Therefore, the Committee believes 

that a program to examine how the regulatory compliance assistance will operate in selected SBDCs is a preferred strategy to simply providing an authorization of additional funding so that the 

SBDCs can provide regulatory compliance assistance. By initially 

limiting the number of centers, the Small Business Administration 

can pick the centers that will provide the best regulatory compliance assistance and then transfer the best practices on regulatory 

assistance to other centers. 

COMMITTEE ACTION

The Committee on Small Business held a field hearing to consider predecessor versions of H.R. 230. The hearing was held on 

September 2, 1999 at the Columbia Greene Community College in 

Hudson, NY. During that hearing, small businesses testified concerning the complexity of federal regulations, their desire for better 

understanding of federal regulatory requirements, and the need for 

easy access to compliance assistance. The Committee’s Subcommittee on Workforce, Empowerment, and Government Programs held a hearing on another predecessor to H.R. 230 on July 

19, 2001. At the hearing, witnesses, the sponsor of the bill, Mr. 

Sweeney (R–NY), noted that he continues to hear from small business constituents that they still are being overwhelmed with regulation and need compliance assistance. The Association of Small 

Business Development Centers (Association) also voiced support for 

the bill. Finally, the American Industrial Hygiene Association also 

endorsed the bill but suggested that amendments should be made 

to ensure that regulatory compliance assistance is provided by 

properly credentialed individuals. A hearing on H.R. 230 was held 

on July 13, 2005 before the full Committee. Mr. Rich Gangi, president of American Trim, noted that offering greater regulatory compliance assistance will benefit small business owners who do not 

have expertise to understand complex federal regulatory schemes. 

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CONSIDERATION OF H.R. 230 

At 9:36 a.m. on July 14, 2005, the Committee on Small Business 

met to consider and report H.R. 230. Following brief opening statement by the Chairman, he declared the bill open for amendment. 

Mr. Manzullo introduced an amendment in the nature of a substitute. Ms. Vela ́zquez (D–NY), the Ranking Democratic Member, 

introduced an amendment to amend Mr. Manzullo’s amendment in 

the nature of a substitute. The Ranking Member’s amendment was 

accepted by unanimous voice vote, a quorum being present. Chairman Manzullo then moved the bill be reported, and at 9:45 a.m. 

by unanimous voice vote, a quorum being present, the Committee 

passed H.R. 230, as amended and ordered it reported. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

Designates the bill as the ‘‘National Small Business Regulatory 

Assistance Act of 2005.’’ 

Section 2. Purpose 

This section expresses the purpose of the legislation—to establish 

a dedicated set of resources within certain SBDCs to provide and 

coordinate regulatory compliance assistance to small businesses. 

Section 3. Definitions 

The definitions of the Small Business Act shall apply to this program unless a different definition is utilized in the new § 36 created by this Act. In those cases in which the definition is different, 

the definitions in new § 36 shall apply to the program created by 

this Act. 

Section 4. Small business regulatory assistance program 

This section establishes the program by creating a new Section 

36 of the Small Business Act. Since H.R. 230 amends the Small 

Business Act, the Chairman’s mark eliminates definitions of terms 

already in the Act. Thus, the terms Administrator, Association, 

Small Business Development Center, and State were deleted as 

being redundant. 

Section 36(a)(1) defines the term ‘‘Selected Small Business Development Center’’ as a SBDC selected to participate in the program 

established under this section. The Chairman’s substituted the 

term ‘‘selected’’ for the term ‘‘participating’’ because the former 

more accurately reflects the nature of the involvement of the 

SBDC. 

Section 36(a)(2) defines the term ‘‘Program’’ to mean the program 

established under this section for the provision of compliance assistance by the Small Business Administration through the utilization of resources of SBDCs. 

Section 36(a)(3) defines the term ‘‘Regulatory Compliance Assistance’’ as assistance provided by a participating SBDC to a small 

business concerning compliance with federal regulations. 

Section 36(b) authorizes the Administrator of the Small Business 

Administration to establish a program for selected SBDCs to provide small businesses with regulatory compliance assistance. 

9 

Section 36(c)(1) authorizes the Administrator to enter into arrangements with the SBDCs selected under this section for the provision of regulatory compliance assistance. 

The selected SBDCs are required to provide access to information 

and resources on regulatory compliance, including contact information for federal and state compliance and technical assistance similar to those established under section 507 of the Clean Air Act 

Amendments of 1990. Numerous other federal and state agencies 

have non-punitive compliance assistance programs (such as the federal Occupational Safety and Health Administration), and the 

Committee expects that the SBDCs selected under this section will 

maintain all necessary contact information with those federal and 

state agencies. Furthermore, the Committee expects that the quality of coordination of these assistance resources will be a significant 

factor in selecting the SBDCs for the program. 

Section 36(c)(1) also requires that the selected SBDCs establish 

various training and educational activities. The Committee expects 

that selected centers will utilize their contacts with federal and 

state agencies to obtain compliance pamphlets, videos, books, and 

any compliance guides issued pursuant to the Small Business Regulatory Enforcement Fairness Act. In addition, the Committee expects that participating centers will hold lectures and seminars on 

regulatory compliance including updates on compliance based on 

regulatory changes. The Committee expects that the Administrator 

will consider the quality of proposed educational programs in determining which centers are selected to participate in the program. 

Section 36(c)(1)(C) also mandates that the selected SBDCs provide confidential counseling on a one-on-one basis at no charge to 

small businesses seeking regulatory compliance assistance. The 

Committee recognizes that compliance with regulations inculcates 

legal rights and responsibilities of small business owners. Therefore, section 36(c) prohibits any regulatory compliance counseling 

that would be considered the practice of law in the jurisdiction in 

which the SBDC is located or in which such counseling is conducted. Furthermore, the Committee supports efforts in which the 

development centers establish contacts with lawyers in the community willing to provide seminars and other consultative service on 

regulatory compliance matters, either for a fee or on a pro bono 

basis. 

Section 36(c)(1) also requires the provision of technical assistance. Such counseling may include the arrangement of meetings 

with technical experts known to the participating SBDCs as long 

as such counseling again is done on a one-on-one basis at no charge 

to the small business. 

Section 36(c)(1)(E) makes explicit the Committee’s concern that 

small businesses are directed to those individuals who have appropriate credentials and certifications to provide regulatory compliance assistance. While the Committee fully understands that many 

very successful businesses, including Microsoft, Apple, and Dell 

Computer, started in garages and those businessmen are quite capable of providing advice on starting, financing, and marketing a 

business, they are not necessarily qualified to provide guidance on 

compliance with OSHA, EPA, or IRS regulations. In fact, due to 

the potential legal consequences resulting from a small business 

owner following incorrect guidance, the Committee determined that 

10 

it is necessary to make explicit the requirement that the participating centers only refer businesses to individuals with appropriate 

expertise in the regulatory compliance matter for which advice is 

sought. 

Section 36(c)(1)(F) directs the SBDCs to provide access to and 

training on the Internet including the use of the Internet Web site 

where SBA has collected and organized regulatory compliance information as described in subsection 36(d)(1)(C). 

Section 36(c)(2) requires each center selected to participate to file 

a quarterly report with the Administrator. The report shall provide 

a summary of the compliance assistance provided under the program. The report also must contain any data and information obtained by the participating SBDC from a federal agency concerning 

compliance that the federal agency intends to be disseminated to 

small business concerns. The Committee believes that this latter 

requirement will enable the Administrator or the Chief Counsel for 

Advocacy to raise issues of agency inconsistencies, to the extent 

that they exist, to the appropriate decisionmakers. 

Section 36(c)(2) requires that reports be filed with the Administrator in an electronic format. The Committee expects the Administrator to promulgate regulations that will provide for a consistent 

format of the report. The Committee believes that such consistency 

is necessary for the accurate compilation of data and proper assessment of the effectiveness of the program. 

Section 36(c)(2) also permits, but does not require, SBDCs to 

make interim reports if such reports are necessary or useful. For 

example, a SBDC participating in the program may receive inconsistent compliance information from a federal agency. By alerting 

the Administrator prior to the issuance of the quarterly report, the 

federal agency may be able to issue a clarification that may eliminate confusion, save compliance costs, and improve small business 

compliance. 

The Chairman’s mark eliminates the privacy requirements set 

forth in § 36(c)(2)(D). The privacy provisions in H.R. 230 were included in Division K of H.R. 4818, the Consolidated Appropriations 

Act for 2005, which was signed into law by President Bush on December 8, 2004 as Pub. L. No. 108–447. 

Section 36(d) requires the Administrator to act as a repository of 

data and information submitted by SBDCs selected to participate 

in the program. Given the oversight role and importance of the Associate Administrator for Small Business Development Centers, 

section 36(d) requires that the functions of maintaining the database be housed with the Associate Administrator. The Committee 

believes that a central repository is necessary in order to determine 

whether federal agencies are providing consistent compliance information on a national basis. However, the Committee expects that 

the information received under this subsection be made available 

to other offices within the Small Business Administration, particularly the Chief Counsel for Advocacy and the Small Business and 

Agriculture Regulatory Ombudsman so those offices can more effectively carry out their mission of representing the interests of small 

businesses before federal agencies. 

Section 36(d) also requires that the Administrator submit an annual report to the President and the Committees on Small Business of the Senate and the House of Representatives. The report 

11 

will contain: (a) data on the types of information provided by the 

participating SBDCs; (b) the number of small businesses that contacted the participating SBDCs; (c) the number of small businesses 

assisted by participating SBDCs; (d) information on the outreach 

activities of the participating SBDCs; (e) information regarding 

each case known to the Administrator in which participating 

SBDCs provided conflicting advice regarding compliance with federal regulation to one or more small businesses; (f) and any recommendations for improving the regulatory environment of small 

businesses, including the most burdensome regulations on small 

businesses. The Committee believes that this information is necessary to evaluate the utility of the program. More importantly, the 

report will reveal whether similarly situated small businesses are 

receiving consistent regulatory compliance assistance. In preparing 

the report, the Committee recognizes that the Administrator should 

consult with the Chief Counsel for Advocacy and the Small Business and Agriculture Regulatory Ombudsman. The Committee supports such consultative efforts but notes that the Administrator 

may not delegate the responsibility of preparing the report required 

by this subsection to any office within the Small Business Administration except the Associate Administrator for Small Business Development Centers. 

Section 36(d)(1)(C) sets out that the website the Administrator 

shall set up should provide access to federal, state, academic and 

industry association Internet websites containing industry specific 

regulation compliance information and give him broad authority to 

determine which sites should be included. Such a site should be arranged in an industry specific organization so that small businesses can quickly locate the sites that apply to their industry. 

Subsection 36(e) requires the Administrator to give the Chief 

Counsel for Advocacy the list as reported according to section 36(d) 

for the Chief Counsel to review. The Chief Counsel shall determine 

if any of the regulations are eligible for review under section 610 

of the Regulatory Flexibility Act which would generally be a matter 

of seeing if the regulation was issued more than 10 years before 

the date of the review and if a final regulatory flexibility analysis 

was performed. The Chief Counsel also can determine if the regulation has a significant impact on a substantial number of small 

businesses and if that impact is substantially different than was 

estimated in the final regulatory flexibility analysis. Finally, the 

Chief Counsel can determine if the regulation has a significant impact on a substantial number of small business concerns but no 

final regulatory flexibility analysis was ever performed. If any of 

those three situations exist, the Chief Counsel must contact the appropriate federal rulemaking agency and the Office of Information 

and Regulatory Authority and request a review of such regulation 

in accordance with § 610 of the Regulatory Flexibility Act if applicable or for any impact the regulation has on small business. The 

Chief Counsel shall add to his Annual Report on Regulatory Flexibility Act if applicable or for any impact the regulation has on 

small business. The Chief Counsel shall add to his Annual Report 

on the Regulatory Flexibility Act the status of any listed regulations. The Committee believes that, in this way, the Chief Counsel 

and the agencies will receive solid, practical data of the regulation’s 

impact on which to base consideration of better regulatory alterVerDate Aug 04 2004 13:40 Aug 08, 2005 Jkt 039010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\PICKUP\HR208.XXX HR208
12 

natives. As good as agency and the Chief Counsel’s estimates are, 

they should not replace actual burden information reported from 

the field when it is available. That was the original intention of 

§ 610. 

Section 36(f) limits participation in the program only to those 

SBDCs certified under § 21(k)(2) of the Small Business Act. The 

Committee is limiting participation in the program to those small 

business centers of the highest quality. Some SBDCs have not completed their certification programs. Nevertheless, some of these 

centers may be developing or already have exceptional regulatory 

compliance assistance programs. The Committee does not believe 

that such centers should be prohibited from participating in the 

program. Therefore, § 36(f)(2) authorizes the Administrator to 

waive the requirement for certification if the center is making a 

good faith effort to obtain such certification. 

Section 36(g) requires the Administrator to select two participating state programs from each of the Small Business Administration’s ten federal regions as those regions exist on the date of enactment of this Act. The Administrator shall consult with the Association and give the Association’s recommendations substantial 

weight. The Administrator is required to complete the selection of 

the participating centers within 60 days after the regulations to 

implement the program have been promulgated. 

Section 36(h) ensures that no matching funds currently allocated 

to the operation of the SBDCs will be utilized to fund this new regulatory assistance program. In order to ensure proper funding, the 

Committee is authorizing a separate funding authorization for the 

program. 

Section 36(i) establishes the procedures for distributing grants 

among the selected state programs. The formula is based on the 

principle that a state which has a smaller population also will 

have, in absolute terms, fewer small businesses than a larger state. 

The formula therefore allocates funds according to the relative size 

of each state. The Committee believes that the minimum funds 

needed to initiate a state program will be $200,000. Because the 

Committee has authorized $5,000,000, it is making extra resources 

available to the larger states which will require more resources to 

initiate the project. 

Section 36(j) requires the Comptroller General of the United 

States to provide a report evaluating the effectiveness of the program three years after establishment. The report also should contain any suggested modifications to the program. Finally, the 

Comptroller General should provide its opinion concerning whether 

the program should be continued and expanded to include more 

SBDCs. The report shall be transmitted to the Committees on 

Small Business of the Senate and House of Representatives. The 

Committee expects that the program will be sufficiently successful 

to expand the program to other SBDCs. 

Section 36(k) limits the operation of the program only to the 

funds appropriated in advance for the program. Section 36(j) provides an authorization of appropriations of $5,000,000 for fiscal 

year 2006 and each year thereafter. Section 36(j) also prohibits the 

Administrator from using other funds, including other funds made 

available for the operation of SBDCs, to operate this program. The 

Committee authorized the additional appropriations because it deVerDate Aug 04 2004 13:40 Aug 08, 2005 Jkt 039010 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\PICKUP\HR208.XXX HR208
13 

termined that funding of the regulatory compliance program should 

not detract from the available funding for the delivery of other 

SBDC programs. 

Section 5. Promulgation of regulations 

Section 5 authorizes the Administrator to promulgate regulations 

to implement this program no later than 180 days after the enactment of the Act. Such regulations only shall be promulgated after 

the public has been given an opportunity for notice and comment. 

The Committee believes that the Administrator can and should accomplish the issuance of regulations within the deadline set by 

statute. The Committee considers this Act to be some other law for 

purposes of § 603 of Title 5 of the United States Code. 

The regulations shall include the priorities for the type of assistance to be provided, standards relating to the educational, technical, and support services to be provided by the Association to the 

participating centers, and standards for work plans that the participating centers will provide to the Administrator. The Committee 

believes that given the potential interest in the program by SBDCs, 

it is appropriate for the Administrator to have a set of standards 

by which it can determine which state programs shall be chosen. 

More importantly, the standards will provide an appropriate baseline for the Comptroller General’s evaluation of the project. 

Section 5 also requires the Administrator to develop appropriate 

standards for ensuring the technical qualifications of experts to 

whom small businesses will be referred. The Committee does not 

intend that someone must have a college or advance degree to qualify. For example, a contractor licensed in a state with 20 years experience (who is a high-school graduate) may be as well-equipped 

to provide advice on compliance with OSHA construction standards 

as a professor of civil engineering. On the other hand, that same 

contractor might not be an appropriate individual to provide tax 

compliance advice. The Committee does not expect that this aspect 

of the Administrator’s regulations shall be all encompassing, i.e., 

delineate every profession and the appropriate qualifications. However, the Committee does expect that the Administrator will recognize, as qualified, those individuals certified by nationally-recognized accrediting bodies (whose members must demonstrate substantial educational and practical experience), meet educational 

and work standards established by a federal agency, or are licensed 

to practice a particular profession or job pursuant to state law. The 

Committee expects that the regulations will provide the centers selected with enough information that they can determine whether 

the person providing the advice is competent in the field of regulation. 

The Chairman’s mark does not contain § 6 of H.R. 230 because, 

as already noted, the privacy provisions were enacted into law as 

part of Pub. L. No. 108–447. 

14 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 20, 2005. 

Hon. DONALD MANZULLO, 

Chairman, Committee on Small Business, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 230, the National Small 

Business Regulatory Assistance Act of 2005. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Melissa E. Zimmerman. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, 

Director. 

Enclosure. 

H.R. 230—National Small Business Regulatory Assistance Act of 

2005 

Summary: H.R. 230 would authorize the appropriation of $25 

million for fiscal years 2006 through 2010 to assist small businesses in complying with federal and state regulations. Under the 

bill, the Small Business Administration would make grants to eligible Small Business Development Centers (SBDCs) to advise small 

businesses on regulatory compliance, gather information on the activities of participating SBDCs, and recommend changes in regulations affecting small businesses. Assuming appropriation of the authorized amounts, CBO estimates that implementing H.R. 230 

would cost about $15 million over the 2006–2010 period, with additional outlays of about $10 million after 2010. Enacting the bill 

would not affect direct spending or revenues. 

H.R. 230 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

The bill would benefit state, local, and tribal governments receiving 

grants under the bill, and any costs incurred by grant recipients 

would result from complying with grant conditions. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 230 is shown in the following table. The costs 

of this legislation fall within budget function 370 (commerce and 

housing credit). For this estimate, CBO assumes that the bill will 

be enacted by the end of 2005, that the authorized amounts will 

be appropriated for each fiscal year, and that outlays will follow 

historical trends. CBO estimates that implementing the bill would 

cost $15 million over the 2006–2010 period for grants to assist 

small business in complying wth federal and state regulations. Remaining amounts—about $10 million—would be spent after 2010. 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Authorization Level .................................................................................................. 5 5 5 5 5 

Estimated Outlays ................................................................................................... * 2 4 4 5 

Note.—* = less than $500,000. 

Intergovernmental and private-sector impact: H.R. 230 contains 

no intergovernmental or private-sector mandates as defined in 

15 

UMRA. The bill would benefit state, local, and tribal governments 

receiving grants under the bill, and any costs incurred by grant recipients would result from complying with grant conditions. 

Estimate prepared by: Federal Costs: Melissa E. Zimmerman. 

Impact on State, Local, and Tribal Governments: Sarah Puro. Impact on the Private Sector: Craig Cammarata. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

COMMITTEE ESTIMATE OF COSTS

Pursuant to the Congressional Budget Act of 1974, the Committee estimates that the amendments to the Small Business Act 

contained in H.R. 230 will not significantly increase discretionary 

spending over the next five fiscal years. The Committee also estimates that H.R. 230 will not affect direct spending. These estimates concur with Congressional Budget Office (CBO) estimates. 

Furthermore, pursuant to clause 3(d)(2)(A) of rule XIII of the 

Rules of the House of Representatives, the Committee estimates 

that implementation of H.R. 230 will not significantly increase 

other administrative costs. 

OVERSIGHT FINDINGS

In accordance with clause 4(c)(2) of rule X of the Rules of the 

House of Representatives, the Committee states that no oversight 

findings or recommendations have been made by the Committee on 

Government Reform with respect to the subject matter contained 

in H.R. 230. 

In accordance with clause (2)(b)(1) of rule X of the Rules of the 

House of Representatives, the oversight findings and recommendations of the Committee on Small Business with respect to the subject matter contained in H.R. 230 are incorporated into the descriptive portions of this report. 

STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to clause 3(d)(1) of rule XII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in Article I, Section 8, clause 18, of the Constitution of the 

United States. 

COMPLIANCE WITH PUBLIC LAW 104–4 

H.R. 230 contains no unfunded mandates. 

CONGRESSIONAL ACCOUNTABILITY ACT

H.R. 230 does not relate to the terms and conditions of employment or access to public services or accommodations with the 

meaning of section 102(b)(3) of P.L. 104–1. 

FEDERAL ADVISORY COMMITTEE STATEMENT

This legislation does not establish or authorize the establishment 

of any new advisory committees. 

16 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

THE SMALL BUSINESS ACT 

* * * * * * * 

SEC. 37. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM. 

(a) DEFINITIONS.—In this section, the following definitions apply: 

(1) ASSOCIATION.—The term ‘‘Association’’ means the association recognized by the Administrator of the Small Business Administration under section 21(a)(3)(A). 

(2) PARTICIPATING SMALL BUSINESS DEVELOPMENT CENTER.— The term ‘‘participating Small Business Development Center’’ 

means a Small Business Development Center participating in 

the program. 

(3) PROGRAM.—The term ‘‘program’’ means the regulatory assistance program established under this section. 

(4) REGULATORY COMPLIANCE ASSISTANCE.—The term ‘‘regulatory compliance assistance’’ means assistance provided by a 

Small Business Development Center to a small business concern 

to enable the concern to comply with Federal regulatory requirements. 

(5) SMALL BUSINESS DEVELOPMENT CENTER.—The term 

‘‘Small Business Development Center’’ means a Small Business 

Development Center described in section 21. 

(6) STATE.—The term ‘‘State’’ means each of the several 

States, the District of Columbia, the Commonwealth of Puerto 

Rico, the Virgin Islands, Guam, and American Samoa. 

(b) AUTHORITY.—In accordance with this section, the Administrator shall establish a program to provide regulatory compliance 

assistance to small business concerns through selected Small Business Development Centers, the Association of Small Business Development Centers, and Federal compliance partnership programs. 

(c) SMALL BUSINESS DEVELOPMENT CENTERS.— 

(1) IN GENERAL.—In carrying out the program, the Administrator shall enter into arrangements with selected Small Business Development Centers under which such Centers shall provide— 

(A) access to information and resources, including current Federal and State nonpunitive compliance and technical assistance programs similar to those established 

under section 507 of the Clean Air Act (42 U.S.C. 7661f); 

(B) training and educational activities; 

(C) confidential, free-of-charge, one-on-one, in-depth 

counseling to the owners and operators of small business 

concerns regarding compliance with Federal and State regulations, as long as such counseling is not considered to be 

the practice of law in a State in which a Small Business 

Development Center is located or in which such counseling 

is conducted; 

17 

(D) technical assistance; 

(E) referrals to experts and other providers of compliance 

assistance who meet such standards for educational, technical, and professional competency as are established by 

the Administrator; and 

(F) access to the Internet and training on Internet use, including the use of the Internet website established by the 

Administrator under subsection (d)(1)(C). 

(2) REPORTS.— 

(A) IN GENERAL.—Each selected Small Business Development Center shall transmit to the Administrator a quarterly report that includes— 

(i) a summary of the regulatory compliance assistance provided by the center under the program; and 

(ii) any data and information obtained by the center 

from a Federal agency regarding regulatory compliance 

that the agency intends to be disseminated to small 

business concerns. 

(B) ELECTRONIC FORM.—Each report required under subparagraph (A) shall be transmitted in electronic form. 

(C) INTERIM REPORTS.—A participating Small Business 

Development Center may transmit to the Administrator 

such interim reports as the Center considers appropriate. 

(D) LIMITATION ON DISCLOSURE REQUIREMENTS.—The 

Administrator shall not require a Small Business Development Center to disclose the name or address of any small 

business concern that received or is receiving assistance 

under the program, except that the Administrator shall require such a disclosure if ordered to do so by a court in any 

civil or criminal action. 

(d) DATA REPOSITORY AND CLEARINGHOUSE.— 

(1) IN GENERAL.—In carrying out the program, the Administrator shall— 

(A) act as the repository of and clearinghouse for data 

and information submitted by Small Business Development 

Centers; 

(B) submit to the President, the Committee on Small 

Business and Entrepreneurship of the Senate, and the 

Committee on Small Business of the House of Representatives an annual report that includes— 

(i) a description of the types of assistance provided by 

participating Small Business Development Centers 

under the program; 

(ii) data regarding the number of small business concerns that contacted participating Small Business Development Centers regarding assistance under the program; 

(iii) data regarding the number of small business 

concerns assisted by participating Small Business Development Centers under the program; 

(iv) data and information regarding outreach activities conducted by participating Small Business Development Centers under the program, including any activities conducted in partnership with Federal agencies; 

18 

(v) data and information regarding each case known 

to the Administrator in which one or more Small Business Development Centers offered conflicting advice or 

information regarding compliance with a Federal or 

State regulation to one or more small business concerns; 

(vi) any recommendations for improvements in the 

regulation of small business concerns; and 

(vii) a list of regulations identified by the Administrator, after consultation with the Chief Counsel for 

Advocacy of the Administration, who shall review such 

list, and the Small Business and Agriculture Regulatory Enforcement Ombudsman, as being most burdensome to small business concerns, and recommendations to reduce or eliminate the burdens of such regulations; and 

(C) establish an Internet website that— 

(i) provides access to Federal, State, academic, and 

industry association Internet websites containing industry-specific regulatory compliance information that 

the Administrator deems potentially useful to small 

businesses attempting to comply with Federal regulations; and 

(ii) arranges such Internet websites in industry-specific categories. 

(e) REVIEW OF BURDENSOME REGULATIONS AND PETITION FOR

AGENCY REVIEW.— (1) TRANSMISSION OF LIST OF REGULATIONS TO CHIEF COUNSEL FOR ADVOCACY.—The Administrator shall transmit to the 

Chief Counsel for Advocacy of the Administration a copy of the 

list of regulations submitted under subsection (d)(1)(B) as part 

of the annual report required by that subsection. 

(2) REVIEW OF LIST OF REGULATIONS.—The Chief Counsel for 

Advocacy shall review the list of regulations transmitted under 

paragraph (1) and identify any regulation that— 

(A) is eligible for review in accordance with section 610 

of title 5, United States Code; 

(B) has a significant impact on a substantial number of 

small business concerns that is substantially different from 

the impact indicated in the final regulatory flexibility analysis for that regulation, as published with the final regulation in the Federal Register; or 

(C) has a significant impact on a substantial number of 

small business concerns and for which no final regulatory 

flexibility analysis was ever performed. 

(3) NOTIFICATION AND AGENCY REVIEW.—With respect to any 

regulation identified under paragraph (2) the Chief Counsel for 

Advocacy shall— 

(A) notify the appropriate Federal rulemaking agency 

and the Office of Information and Regulatory Affairs of the 

Office of Management of the identification of such rule or 

regulation; and 

(B) request the review of such regulation— 

(i) in accordance with section 610 of title 5, United 

States Code; or 

19 

(ii) for any impact it has on small business concerns. 

(4) ANNUAL REPORT.—The Chief Counsel for Advocacy shall 

publish an annual report containing a list of any regulation 

identified under paragraph (2) and the disposition by the appropriate agency. 

(f) ELIGIBILITY.— (1) IN GENERAL.—A Small Business Development Center shall 

be eligible to receive assistance under the program only if the 

center is certified under section 21(k)(2). 

(2) WAIVER.— With respect to a Small Business Development 

Center seeking assistance under the program, the administrator 

may waive the certification requirement set forth in paragraph 

(1) if the Administrator determines that the center is making a 

good faith effort to obtain such certification. 

(3) EFFECTIVE DATE.—The restriction described in paragraph 

(1) shall not apply to any Small Business Development Center 

before October 1, 2005. 

(g) SELECTION OF PARTICIPATING STATE PROGRAMS.— (1) ESTABLISHMENT OF PROGRAM.—In consultation with the 

Association and giving substantial weight to the Association’s 

recommendations, the Administrator shall select the Small 

Business Development Center programs of 2 States from each of 

the following groups of States to participate in the program: 

(A) Group 1: Maine, Massachusetts, New Hampshire, 

Connecticut, Vermont, and Rhode Island. 

(B) Group 2: New York, New Jersey, Puerto Rico, and the 

Virgin Islands. 

(C) Group 3: Pennsylvania, Maryland, West Virginia, 

Virginia, the District of Columbia, and Delaware. 

(D) Group 4: Georgia, Alabama, North Carolina, South 

Carolina, Mississippi, Florida, Kentucky, and Tennessee. 

(E) Group 5: Illinois, Ohio, Michigan, Indiana, Wisconsin, and Minnesota. 

(F) Group 6: Texas, New Mexico, Arkansas, Oklahoma, 

and Louisiana. 

(G) Group 7: Missouri, Iowa, Nebraska, and Kansas. 

(H) Group 8: Colorado, Wyoming, North Dakota, South 

Dakota, Montana, and Utah. 

(I) Group 9: California, Guam, Hawaii, Nevada, and Arizona. 

(J) Group 10: Washington, Alaska, Idaho, and Oregon. 

(2) DEADLINE FOR INITIAL SELECTIONS.—The Administrator 

shall make selections under paragraph (1) not later than 60 

days after promulgation of regulations under section 5 of the 

National Small Business Regulatory Assistance Act of 2005. 

(3) ADDITIONAL SELECTIONS.—Not earlier than the date 3 

years after the date of the enactment of this paragraph, the Administrator may select Small Business Development Center programs of States in addition to those selected under paragraph 

(1). The Administrator shall consider the effect on the programs 

selected under paragraph (1) before selecting additional programs under this paragraph. 

(4) COORDINATION TO AVOID DUPLICATION WITH OTHER PROGRAMS.—In selecting programs under this subsection, the Administrator shall give a preference to Small Business DevelopVerDate Aug 04 2004 13:40 Aug 08, 2005 Jkt 039010 PO 00000 Frm 00019 Fmt 6659 Sfmt 6603 E:\PICKUP\HR208.XXX HR208
20 

ment Center programs that have a plan for consulting with 

Federal and State agencies to ensure that any assistance provided under this section is not duplicated by an existing Federal or State program. 

(h) MATCHING NOT REQUIRED.—Subparagraphs (A) and (B) of 

section 21(a)(4) shall not apply to assistance made available under 

the program. 

(i) DISTRIBUTION OF GRANTS.— (1) IN GENERAL.—Except as provided in paragraph (2), each 

State program selected to receive a grant under subsection (g) 

in a fiscal year shall be eligible to receive a grant in an amount 

not to exceed the product obtained by multiplying— 

(A) the amount made available for grants under this section for the fiscal year; and 

(B) the ratio that the population of the State bears to the 

population of all the States with programs selected to receive grants under subsection (g) for the fiscal year. 

(2) MINIMUM AMOUNT.—The minimum amount that a State 

program selected to receive a grant under subsection (g) shall 

be eligible to receive under this section for any fiscal year shall 

be $200,000. The Administrator shall reduce the amount described in paragraph (1) as appropriate to carry out the purposes of this paragraph and subsection (j)(2). 

(j) EVALUATION AND REPORT.—Not later than 3 years after the establishment of the program, the Comptroller General of the United 

States shall conduct an evaluation of the program and shall transmit to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business 

of the House of Representatives a report containing the results of the 

evaluation along with any recommendations as to whether the program, with or without modification, should be extended to include 

the participation of all Small Business Development Centers. 

(k) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—There is authorized to be appropriated to 

carry out this section $5,000,000 for fiscal year 2006 and each 

subsequent fiscal year. 

(2) LIMITATION ON USE OF OTHER FUNDS.—The Administrator 

shall carry out the program only with amounts appropriated in 

advance specifically to carry out this section. 

SEC. ø37¿ 38. All laws and parts of laws inconsistent with this 

Act are hereby repealed to the extent of such inconsistency. 

(21) 

ADDITIONAL VIEWS 

Democrats agree strongly that some targeted, uniform delivery 

system must exist to make small businesses more aware of their 

regulatory obligations. If greater assistance is not targeted to small 

businesses, a divide could develop between large businesses that 

have the resources to comply with regulatory requirements and 

small businesses that do not. As a result, we strongly support a 

regulatory compliance assistance program operated through SBA’s 

Small Business Development Center Program and believe that its 

overall success will ensure the success of the pilot program established under H.R. 230. 

Small businesses have oftentimes been overwhelmed by the 

growing and constantly changing Federal, State and local regulatory requirements. Indeed every small business or association 

that has testified before the Committee in the 109th Congress has 

listed the growing regulatory burden as one of their top priorities 

for federal action. They fear that, with the onslaught of federal regulations, they will inadvertently fail to comply with some obscure 

rule, their business will be shut down by the government, and they 

will be driven into bankruptcy because they cannot afford the cost 

of compliance. On the other hand, small businesses also fear that 

going to the very agencies that create and enforce the regulations 

is tantamount to turning themselves in, and will ultimately result 

in penalties being levied on their businesses. In fact, many believe 

that the government is more interested in recovering penalties 

than in promoting compliance with the law. 

Although Federal and State regulations and regulatory programs 

usually provide substantial benefits, they can be confusing, burdensome and incur significant costs that disproportionately fall on 

small businesses. Studies presented to the Committee by the SBA 

indicate small businesses bear a disproportionately high burden 

from federal regulations than their larger competitors. Small businesses are not only in need of quality regulatory compliance assistance programs, but also programs that are uniformly developed nationwide and targeted to small businesses. 

An important aspect raised during the Committee’s most recent 

hearing is the technical expertise one must have to understand 

each individual regulatory requirement. Providing that knowledge 

to small businesses is as important, if not more important, as providing advanced notice of any regulatory requirement with which 

they must comply. Therefore, we believe that the purpose of this 

new pilot program is to establish an initial contact that results in 

a referral to the appropriate program or experts. It is our belief 

that the new pilot program is required to utilize existing Federal 

or State compliance assistance programs and avoid competing with 

them. Some of these existing compliance assistance programs, such 

as those created under Section 507 of the Clean Air Act AmendVerDate Aug 04 2004 13:40 Aug 08, 2005 Jkt 039010 PO 00000 Frm 00021 Fmt 6604 Sfmt 6604 E:\PICKUP\HR208.XXX HR208
22 

ments (e.g., EPA’s State Small Business Assistance Program), have 

established a level of expertise in compliance assistance and provide invaluable technical assistance targeted to small businesses. 

In addition, SBDCs must be careful in the type of counseling they 

provide and the liability that can result from such counseling. 

We concur with the report language that directs the Administrator to select two State SBDC programs from each of the ten SBA 

regions across the nation. The State SBDC program, not an individual center or sub-center, will receive the grant money to implement the assistance statewide. 

As introduced, H.R. 230 would have not provided a framework 

for small businesses to utilize the complete resource of SBDCs in 

meeting their regulatory. In order to improve the legislation, Ms. 

Vela ́zquez of New York offered an amendment on behalf of her 

Democratic colleagues to do so. 

The en bloc amendment proposed by the Democrats and adopted 

by the Committee requires the SBA to support Small Business Development Center’s (SBDC) regulatory compliance assistance efforts by establishing an Internet based list of Web sites organized 

by industry that can help small businesses get information about 

regulatory compliance. It is intended that the site should include 

links to federal, state, academic and association Web sites. SBDC 

personnel should also be prepared to show entrepreneurs how to 

use the list and other Internet tools to find compliance assistance. 

In this way, entrepreneurs learn how to access sites that might be 

useful to them when questions arise in the future. 

The entrepreneur can be taught how to find all the necessary information for the appropriate industry in one spot. If the business 

owner does not own a computer, then at least he will understand 

how to use one that might be available at the local school or library. A second essential element to finding useful Web sites is organizing them by industry. That way the business owner can review the sites that apply more easily. 

It is not the Committee’s intent to have this be an endorsement 

of any kind and the Administrator is given broad discretion to set 

rules by which public and private Web sites are listed. The key 

here is organization, access and instruction. SBA is already a major 

Internet hub that has significant public and private links. Working 

with SBDCs, SBA should concentrate on collecting and organizing 

useful sites that can be accessed by an industry specific reference 

so SBDCs and small businesses can use the list as a resource finding useful regulatory compliance assistance. 

The amendment establishes a repository and clearinghouse for 

the information obtained by the SBDCs, primarily to provide unbiased feedback to agencies and to detect inconsistencies in information regarding compliance with a regulation. This will also work to 

identify government-wide trends in regulatory rulemaking and enforcement. This will facilitate the ability of the agencies and Congress to improve compliance assistance available on a government 

wide level to ultimately improve compliance. 

In addition, the en bloc amendment requires the reporting of 

complicated and burdensome federal regulations to the Administrator. After review, the Administrator, in consultation with the 

National Ombudsman and the Chief Counsel for Advocacy, will inVerDate Aug 04 2004 13:40 Aug 08, 2005 Jkt 039010 PO 00000 Frm 00022 Fmt 6604 Sfmt 6604 E:\PICKUP\HR208.XXX HR208
23 

clude in his report a list of burdensome regulations as well as recommendations for ways to reduce the burden. 

Once the list required by H.R. 230 is compiled, the Chief Counsel 

for Advocacy shall analyze the regulations on the list and identify 

regulations that are eligible for consideration under § 610 of the 

Regulatory Flexibility Act. He shall also identify cases where a regulation is not eligible for consideration under § 610 but where the 

actual significant impact on a substantial number of small businesses is different than the supposed impact at the time of promulgating the rule. Finally, the Chief Counsel for Advocacy shall also 

identify cases where there was no study of the impact at the time 

of promulgation of the rule but where there is clearly a significant 

impact on a substantial number of small businesses imposed by the 

regulation. 

The Democrats included this change because simply identifying 

the burdensome regulations without requiring action would not 

solve the core problem. Agencies need to regularly review and improve their regulatory system based on the best available information. Once the Chief Counsel for Advocacy has identified the rules, 

he is required to transmit them to the Office of Information and 

Regulatory Affairs and the appropriate regulatory agency with a 

request that the agency proceed to review the rule for its impact 

on small business. If appropriate, it should be done as indicated in 

§ 610 of the Regulatory Flexibility Act but the Committee assumes 

that if § 610 is not appropriate that the Chief Counsel will make 

the request of the agency in the form and manner as provided by 

§ 553(e) of the Administrative Procedure Act (5 USC § 553(e)— 

which establishes the right to petition an agency for the issuance, 

amendment or repeal of a rule.) The Chief Counsel for Advocacy is 

required to report on the agency’s progress with regard to such reviews in his Annual Report to the President and Congress. 

As amended, this pilot program offers small businesses a voluntary, confidential, and nonpunitive means in which to obtain assistance in complying with the numerous regulations that could determine the success or failure of their businesses. By utilizing 

SBDCs as a delivery network, small businesses will be able to obtain counseling, training, and education, in an environment that is 

not perceived as intimidating or threatening. For the first time 

agencies will have systemized feedback on the actual impact of 

their regulations on small businesses. They can use this information to alter and improve their regulatory requirements. 

NYDIA M. VELA ́ ZQUEZ. 

Æ