II

104TH CONGRESS

1ST SESSION S. 942

To promote increased understanding of Federal regulations and increased

voluntary compliance with such regulations by small entities, to provide

for the designation of regional ombudsmen and oversight boards to monitor the enforcement practices of certain Federal agencies with respect

to small business concerns, to provide relief from excessive and arbitrary

regulatory enforcement actions against small entities, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 16 (legislative day, JUNE 5), 1995

Mr. BOND (for himself, Mr. DOMENICI, Mr. WARNER, Mrs. HUTCHISON, Mr.

BURNS, Mr. FRIST, and Mr. COVERDELL) introduced the following bill;

which was read twice and referred to the Committee on Small Business

A BILL

To promote increased understanding of Federal regulations

and increased voluntary compliance with such regulations

by small entities, to provide for the designation of regional ombudsmen and oversight boards to monitor the

enforcement practices of certain Federal agencies with

respect to small business concerns, to provide relief from

excessive and arbitrary regulatory enforcement actions

against small entities, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Small Business Regulatory Fairness Act of 1995’’.

4 (b) TABLE OF CONTENTS.—The table of contents for

5 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Purposes.

TITLE I—REGULATORY SIMPLIFICATION AND VOLUNTARY

COMPLIANCE

Sec. 101. Definitions.

Sec. 102. Compliance guides.

Sec. 103. No action letter.

Sec. 104. Voluntary self-audits.

Sec. 105. Defense to enforcement actions.

TITLE II—SMALL BUSINESS RESPONSIVENESS OF COVERED

AGENCIES

Sec. 201. Small business and agriculture ombudsman.

Sec. 202. Small business regulatory fairness boards.

Sec. 203. Services provided by small business development centers.

TITLE III—FINANCIAL ACCOUNTABILITY OF COVERED AGENCIES

RELATING TO FEES AND EXPENSES

Sec. 301. Administrative proceedings.

Sec. 302. Judicial proceedings.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are—

8 (1) to change the relationship between regu9 lators and small entities;

10 (2) to ameliorate the concern of small entities

11 regarding the effects of arbitrary Federal regulatory

12 enforcement actions on small entities;

13 (3) to increase the comprehensibility of Federal

14 regulations affecting small entities;
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1 (4) to make Federal regulators accountable for

2 their actions; and

3 (5) to provide small entities with a meaningful

4 opportunity for the redress of arbitrary enforcement

5 actions by Federal regulators.

6 TITLE I—REGULATORY SIM7 PLIFICATION AND VOL8 UNTARY COMPLIANCE

9 SEC. 101. DEFINITIONS.

10 For purposes of this title, the following definitions

11 shall apply:

12 (1) COMPLIANCE GUIDE.—The term ‘‘compli13 ance guide’’ means a publication made by a covered

14 agency under section 102(a).

15 (2) COVERED AGENCY.—The term ‘‘covered

16 agency’’ has the same meaning as in section 30(a)

17 of the Small Business Act (as added by section 201

18 of this Act).

19 (3) NO ACTION LETTER.—The term ‘‘no action

20 letter’’ means a written determination from a cov21 ered agency stating that, based on a no action re22 quest submitted to the agency by a small entity, the

23 agency will not take enforcement action against the

24 small entity under the rules of the covered agency.
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1 (4) NO ACTION REQUEST.—The term ‘‘no ac2 tion request’’ means a written correspondence sub3 mitted by a small entity to a covered agency—

4 (A) stating a set of facts; and

5 (B) requesting a determination by the

6 agency of whether the agency would take an en7 forcement action against the small entity based

8 on such facts and the application of any rule of

9 the agency.

10 (5) RULE.—The term ‘‘rule’’ has the same

11 meaning as in section 601(2) of title 5, United

12 States Code.

13 (6) SMALL ENTITY.—The term ‘‘small entity’’

14 has the same meaning as in section 601(6) of title

15 5, United States Code.

16 (7) SMALL BUSINESS CONCERN.—The term

17 ‘‘small business concern’’ has the same meaning as

18 in section 3 of the Small Business Act.

19 (8) VOLUNTARY SELF-AUDIT.—The term ‘‘vol20 untary self-audit’’ means an audit, assessment, or

21 review of any operation, practice, or condition of a

22 small entity that—

23 (A) is initiated by an officer, employee, or

24 agent of the small entity; and

25 (B) is not required by law.
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1 SEC. 102. COMPLIANCE GUIDES.

2 (a) COMPLIANCE GUIDE.—

3 (1) PUBLICATION.—If a covered agency is re4 quired to prepare a regulatory flexibility analysis for

5 a rule or group of related rules under section 603

6 of title 5, United States Code, the agency shall pub7 lish a compliance guide for such rule or group of re8 lated rules.

9 (2) REQUIREMENTS.—Each compliance guide

10 published under paragraph (1) shall—

11 (A) contain a summary description of the

12 rule or group of related rules;

13 (B) contain a citation to the location of the

14 complete rule or group of related rules in the

15 Federal Register;

16 (C) provide notice to small entities of the

17 requirements under the rule or group of related

18 rules and explain the actions that a small entity

19 is required to take to comply with the rule or

20 group of related rules;

21 (D) be written in a manner to be under22 stood by the average owner or manager of a

23 small entity; and

24 (E) be updated as required to reflect

25 changes in the rule.

26 (b) DISSEMINATION.—
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1 (1) IN GENERAL.—Each covered agency shall

2 establish a system to ensure that compliance guides

3 required under this section are published, dissemi4 nated, and made easily available to small entities.

5 (2) SMALL BUSINESS DEVELOPMENT CEN6 TERS.—In carrying out this subsection, each covered

7 agency shall provide sufficient numbers of compli8 ance guides to small business development centers

9 for distribution to small businesses concerns under

10 section 21(c)(3)(R) of the Small Business Act (as

11 added by section 202 of this Act).

12 (c) LIMITATION ON ENFORCEMENT.—

13 (1) IN GENERAL.—No covered agency may

14 bring an enforcement action in any Federal court or

15 in any Federal administrative proceeding against a

16 small entity to enforce a rule for which a compliance

17 guide is not published and disseminated by the cov18 ered agency as required under this section.

19 (2) EFFECTIVE DATES.—This subsection shall

20 take effect—

21 (A) 1 year after the date of the enactment

22 of this Act with regard to a final regulation in

23 effect on the date of the enactment of this Act;

24 and
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1 (B) on the date of the enactment of this

2 Act with regard to a regulation that takes effect

3 as a final regulation after such date of enact4 ment.

5 SEC. 103. NO ACTION LETTER.

6 (a) APPLICATION.—This section applies to all covered

7 agencies, except—

8 (1) the Federal Trade Commission;

9 (2) the Equal Employment Opportunity Com10 mission; and

11 (3) the Consumer Product Safety Commission.

12 (b) ISSUANCE OF NO ACTION LETTER.—Not later

13 than 90 days after the date on which a covered agency

14 receives a no action request, the agency shall—

15 (1) make a determination regarding whether to

16 grant the no action request, deny the no action re17 quest, or seek further information regarding the no

18 action request; and

19 (2) if the agency makes a determination under

20 paragraph (1) to grant the no action request, issue

21 a no action letter and transmit the letter to the re22 questing small entity.

23 (c) RELIANCE ON NO ACTION LETTER OR COMPLI24 ANCE GUIDE.—In any enforcement action brought by a

25 covered agency in any Federal court, or Federal adminis-
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1 trative proceeding against a small entity, the small entity

2 shall have a complete defense to any allegation of non3 compliance or violation of a rule if the small entity affirm4 atively pleads and proves by a preponderance of the evi5 dence that the act or omission constituting the alleged

6 noncompliance or violation was taken in good faith with

7 and in reliance on—

8 (1) a no action letter from that agency; or

9 (2) a compliance guide of the applicable rule

10 published by the agency under section 102(a).

11 SEC. 104. VOLUNTARY SELF-AUDITS.

12 (a) INADMISSIBILITY OF EVIDENCE AND LIMITATION

13 ON DISCOVERY.—The evidence described in subsection

14 (b)—

15 (1) shall not be admissible, unless agreed to by

16 the small entity, in any enforcement action brought

17 against a small entity by a Federal agency in any

18 Federal—

19 (A) court; or

20 (B) administrative proceeding; and

21 (2) may not be the subject of discovery in any

22 enforcement action brought against a small entity by

23 a Federal agency in any Federal—

24 (A) court; or

25 (B) administrative proceeding.
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1 (b) APPLICATION.—For purposes of subsection (a),

2 the evidence described in this subsection is—

3 (1) a voluntary self-audit made in good faith;

4 and

5 (2) any report, finding, opinion, or any other

6 oral or written communication made in good faith

7 relating to such voluntary self-audit.

8 (c) EXCEPTIONS.—Subsection (a) shall not apply if—

9 (1) the act or omission that forms the basis of

10 the enforcement action is a violation of criminal law;

11 or

12 (2) the voluntary self-audit or the report, find13 ing, opinion, or other oral or written communication

14 was prepared for the purpose of avoiding disclosure

15 of information required for an investigative, adminis16 trative, or judicial proceeding that, at the time of

17 preparation, was imminent or in progress.

18 SEC. 105. DEFENSE TO ENFORCEMENT ACTIONS.

19 (a) IN GENERAL.—No covered agency may impose a

20 fine or penalty on a small entity if the small entity proves

21 by a preponderance of the evidence that—

22 (1) the covered agency rule is vague or ambigu23 ous; and
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1 (2) the interpretation by the small entity of the

2 rule is reasonable considering the rule and any appli3 cable compliance guide.

4 (b) INTERPRETATION OF RULE.—In determining

5 whether the interpretation of a rule by a small entity is

6 reasonable, no deference shall be given to any interpreta7 tion of the rule by the agency that is not included in a

8 compliance guide.

9 TITLE II—SMALL BUSINESS RE10 SPONSIVENESS OF COVERED

11 AGENCIES

12 SEC. 201. SMALL BUSINESS AND AGRICULTURE OMBUDS13 MAN.

14 The Small Business Act (15 U.S.C. 631 et seq.) is

15 amended—

16 (1) by redesignating section 30 as section 31;

17 and

18 (2) by inserting after section 29 the following

19 new section:

20 ‘‘SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

21 ‘‘(a) DEFINITIONS.—For purposes of this section, the

22 following definitions shall apply:

23 ‘‘(1) BOARD.—The term ‘Board’ means a Small

24 Business Regulatory Fairness Board established

25 under subsection (c).
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1 ‘‘(2) COVERED AGENCY.—The term ‘covered

2 agency’ means any agency that, as of the date of en3 actment of the Small Business Regulatory Fairness

4 Act of 1995, has promulgated any rule for which a

5 regulatory flexibility analysis was required under

6 section 605 of title 5, United States Code, and any

7 other agency that promulgates any such rule, as of

8 the date of such promulgation.

9 ‘‘(3) OMBUDSMAN.—The term ‘ombudsman’

10 means a Regional Small Business and Agriculture

11 Ombudsman designated under subsection (b).

12 ‘‘(4) REGION.—The term ‘region’ means any

13 area for which the Administrator has established a

14 regional office of the Administration pursuant to

15 section 4(a).

16 ‘‘(5) RULE.—The term ‘rule’ has the same

17 meaning as in section 601(2) of title 5, United

18 States Code.

19 ‘‘(b) OMBUDSMAN.—

20 ‘‘(1) IN GENERAL.—Not later than 180 days

21 after the date of enactment of the Small Business

22 Regulatory Fairness Act of 1995, the Administrator

23 shall designate in each region a senior employee of

24 the Administration to serve as the Regional Small
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1 Business and Agriculture Ombudsman in accordance

2 with this subsection.

3 ‘‘(2) DUTIES.—Each ombudsman designated

4 under paragraph (1) shall—

5 ‘‘(A) on a confidential basis, solicit and re6 ceive comments from small business concerns

7 regarding the enforcement activities of covered

8 agencies;

9 ‘‘(B) based on comments received under

10 subparagraph (A), annually assign and publish

11 a small business responsiveness rating to each

12 covered agency;

13 ‘‘(C) publish periodic reports compiling the

14 comments received under subparagraph (A);

15 ‘‘(D) coordinate the activities of the Small

16 Business Regulatory Fairness Board estab17 lished under subsection (c); and

18 ‘‘(E) establish a toll-free telephone number

19 to receive comments from small business con20 cerns under subparagraph (A).’’.

21 SEC. 202. SMALL BUSINESS REGULATORY FAIRNESS

22 BOARDS.

23 Section 30 of the Small Business Act (as added by

24 section 201 of this Act) is amended by adding at the end

25 the following new subsection:
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1 ‘‘(c) SMALL BUSINESS REGULATORY FAIRNESS

2 BOARDS.—

3 ‘‘(1) IN GENERAL.—Not later than 180 days

4 after the date of enactment of the Small Business

5 Regulatory Fairness Act of 1995, the Administrator

6 shall establish in each region a Small Business Reg7 ulatory Fairness Board in accordance with this sub8 section.

9 ‘‘(2) DUTIES.—Each Board established under

10 paragraph (1) shall—

11 ‘‘(A) advise the ombudsman on matters of

12 concern to small business concerns relating to

13 the enforcement activities of covered agencies;

14 ‘‘(B) conduct investigations into enforce15 ment activities by covered agencies with respect

16 to small business concerns;

17 ‘‘(C) issue advisory findings and rec18 ommendations regarding the enforcement activi19 ties of covered agencies with respect to small

20 business concerns;

21 ‘‘(D) review and approve, prior to publica22 tion—

23 ‘‘(i) each small business responsive24 ness rating assigned under subsection

25 (b)(2)(B); and
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1 ‘‘(ii) each periodic report prepared

2 under subsection (b)(2)(C); and

3 ‘‘(E) prepare written opinions regarding

4 the reasonableness and understandability of

5 rules issued by covered agencies.

6 ‘‘(3) MEMBERSHIP.—Each Board shall consist

7 of—

8 ‘‘(A) 1 member appointed by the Presi9 dent;

10 ‘‘(B) 1 member appointed by the Speaker

11 of the House of Representatives;

12 ‘‘(C) 1 member appointed by the Minority

13 Leader of the House of Representatives;

14 ‘‘(D) 1 member appointed by the Majority

15 Leader of the Senate; and

16 ‘‘(E) 1 member appointed by the Minority

17 Leader of the Senate.

18 ‘‘(4) PERIOD OF APPOINTMENT; VACANCIES.—

19 ‘‘(A) PERIOD OF APPOINTMENT.—

20 ‘‘(i) PRESIDENTIAL APPOINTEES.—

21 Each member of the Board appointed

22 under subparagraph (A) of paragraph (2)

23 shall be appointed for a term of 3 years,

24 except that the initial member appointed
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1 under such subparagraph shall be ap2 pointed for a term of 1 year.

3 ‘‘(ii) HOUSE OF REPRESENTATIVES

4 APPOINTEES.—Each member of the Board

5 appointed under subparagraph (B) or (C)

6 of paragraph (2) shall be appointed for a

7 term of 3 years, except that the initial

8 members appointed under such subpara9 graphs shall each be appointed for a term

10 of 2 years.

11 ‘‘(iii) SENATE APPOINTEES.—Each

12 member of the Board appointed under sub13 paragraph (D) or (E) of paragraph (2)

14 shall be appointed for a term of 3 years.

15 ‘‘(B) VACANCIES.—Any vacancy on the

16 Board—

17 ‘‘(i) shall not affect the powers of the

18 Board; and

19 ‘‘(ii) shall be filled in the same man20 ner and under the same terms and condi21 tions as the original appointment.

22 ‘‘(5) CHAIRPERSON.—The Board shall select a

23 Chairperson from among the members of the Board.

24 ‘‘(6) MEETINGS.—
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1 ‘‘(A) IN GENERAL.—The Board shall meet

2 at the call of the Chairperson.

3 ‘‘(B) INITIAL MEETING.—Not later than

4 90 days after the date on which all members of

5 the Board have been appointed, the Board shall

6 hold its first meeting.

7 ‘‘(7) QUORUM.—A majority of the members of

8 the Board shall constitute a quorum for the conduct

9 of business, but a lesser number may hold hearings.

10 ‘‘(8) POWERS OF THE BOARD.—

11 ‘‘(A) HEARINGS.—The Board or, at its di12 rection, any subcommittee or member of the

13 Board, may, for the purpose of carrying out the

14 provisions of this section—

15 ‘‘(i) hold such hearings, sit and act at

16 such times and places, take such testi17 mony, receive such evidence, administer

18 such oaths; and

19 ‘‘(ii) require, by subpoena or other20 wise, the attendance and testimony of such

21 witnesses and the production of such

22 books, records, correspondence, memo23 randa, papers, documents, tapes, and ma24 terials as the Board or such subcommittee

25 or member considers advisable.
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1 ‘‘(B) ISSUANCE AND ENFORCEMENT OF

2 SUBPOENAS.—

3 ‘‘(i) ISSUANCE.—Each subpoena is4 sued pursuant to subparagraph (A) shall

5 bear the signature of the Chairperson and

6 shall be served by any person or class of

7 persons designated by the Chairperson for

8 that purpose.

9 ‘‘(ii) ENFORCEMENT.—

10 ‘‘(I) IN GENERAL.—In the case

11 of contumacy or failure to obey a sub12 poena issued under subparagraph (A),

13 the United States district court for

14 the judicial district in which the sub15 poenaed person resides, is served, or

16 may be found may issue an order re17 quiring such person to appear at any

18 designated place to testify or to

19 produce documentary or other evi20 dence.

21 ‘‘(II) CONTEMPT OF COURT.—

22 Any failure to obey the order of the

23 court issued under subclause (I) may

24 be punished by the court as a con25 tempt of that court.
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1 ‘‘(C) WITNESS ALLOWANCES AND FEES.—

2 Section 1821 of title 28, United States Code,

3 shall apply to witnesses requested or subpoe4 naed to appear at any hearing of the Board.

5 The per diem and mileage allowances for any

6 witness shall be paid from funds available to

7 pay the expenses of the Board.

8 ‘‘(D) INFORMATION FROM FEDERAL AGEN9 CIES.—Upon the request of the Chairperson,

10 the Board may secure directly from the head

11 any Federal department or agency such infor12 mation as the Board considers necessary to

13 carry out the provisions of this section.

14 ‘‘(E) POSTAL SERVICES.—The Board may

15 use the United States mails in the same man16 ner and under the same conditions as other de17 partments and agencies of the Federal Govern18 ment.

19 ‘‘(F) DONATIONS.—The Board may ac20 cept, use, and dispose of donations of services

21 or property.

22 ‘‘(9) BOARD PERSONNEL MATTERS.—

23 ‘‘(A) COMPENSATION.—Members of the

24 Board shall serve without compensation.
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1 ‘‘(B) TRAVEL EXPENSES.—Members of the

2 Board shall be allowed travel expenses, includ3 ing per diem in lieu of subsistence, at rates au4 thorized for employees of agencies under sub5 chapter I of chapter 57 of title 5, United States

6 Code, while away from their homes or regular

7 places of business in the performance of serv8 ices for the Board.’’.

9 SEC. 203. SERVICES PROVIDED BY SMALL BUSINESS DE10 VELOPMENT CENTERS.

11 Section 21(c)(3) of the Small Business Act (15

12 U.S.C. 648(c)(3)) is amended—

13 (1) in subparagraph (O), by striking ‘‘and’’ at

14 the end;

15 (2) in subparagraph (P), by striking the period

16 at the end and inserting a semicolon; and

17 (3) by inserting immediately after subpara18 graph (P) the following new subparagraphs:

19 ‘‘(Q) providing assistance to small business

20 concerns regarding regulatory requirements, in21 cluding providing training with respect to cost22 effective regulatory compliance;

23 ‘‘(R) developing informational publications,

24 establishing resource centers of reference mate25 rials, and distributing compliance guides pub-
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1 lished under section 102(a) of the Small Busi2 ness Regulatory Fairness Act of 1995 to small

3 business concerns; and

4 ‘‘(S) developing a program to provide con5 fidential onsite assessments and recommenda6 tions regarding regulatory compliance to small

7 business concerns and assisting small business

8 concerns in analyzing the business development

9 issues associated with regulatory implementa10 tion and compliance measures.’’.

11 TITLE III—FINANCIAL ACCOUNT12 ABILITY OF COVERED AGEN13 CIES RELATING TO FEES AND

14 EXPENSES

15 SEC. 301. ADMINISTRATIVE PROCEEDINGS.

16 Section 504 of title 5, United States Code, is amend17 ed—

18 (1) in subsection (b)(1)(B)—

19 (A) by striking ‘‘, or (ii)’’ and inserting ‘‘,

20 (ii)’’; and

21 (B) by striking the semicolon at the end of

22 the subparagraph and inserting the following:

23 ‘‘, or (iii) a small entity as such term is defined

24 in subsection (g)(1)(D);’’ and
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1 (2) by adding at the end the following new sub2 section:

3 ‘‘(g)(1) For purposes of this subsection, the term—

4 ‘‘(A) ‘covered agency’ has the same meaning as

5 in section 30(a) of the Small Business Act;

6 ‘‘(B) ‘fees and other expenses’ has the same

7 meaning as in subsection (b)(1)(A), except that—

8 ‘‘(i) clause (ii) of such subparagraph (A)

9 shall not apply; and

10 ‘‘(ii) attorney’s fees shall not be awarded

11 at a rate of pay in excess of $150 per hour un12 less the adjudicative party determines that re13 gional costs or other special factors justify a

14 higher fee;

15 ‘‘(C) ‘prevailing small entity’—

16 ‘‘(i) means a small entity that raised a suc17 cessful defense to an agency enforcement action

18 by a covered agency in an adversary adjudica19 tion; and

20 ‘‘(ii) includes a small entity that is a party

21 in an adversary adjudication in which the adju22 dicative officer orders a corrective action or

23 penalty against the small entity that is less bur24 densome than the corrective action or penalty
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1 initially sought or demanded by the covered

2 agency; and

3 ‘‘(D) ‘small entity’ has the same meaning as in

4 section 601(6).

5 ‘‘(2) For the purpose of making a finding of whether

6 an award under subsection (a)(1) is unjust, in any case

7 in which fees and other expenses would be awarded to a

8 prevailing small entity as a prevailing party—

9 ‘‘(A) the adjudicative officer of the agency shall

10 not consider whether the position of the agency was

11 substantially justified; and

12 ‘‘(B) special circumstances shall be limited to

13 circumstances in which—

14 ‘‘(i) the matters in the adversary adjudica15 tion are matters for which there is little or no

16 legal precedent; or

17 ‘‘(ii) findings of fact or conclusions of law

18 are based on inconsistent interpretations of ap19 plicable law by different courts.

20 ‘‘(3) If a prevailing small entity is awarded fees and

21 other expenses as a prevailing party under subsection

22 (a)(1), such fees and other expenses shall include all fees

23 and expenses incurred by the small entity in appearing

24 in any proceeding the purpose of which is to determine

25 the amount of fees and other expenses.
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1 ‘‘(4) Fees and other expenses awarded to a prevailing

2 small entity as a prevailing party under this section shall

3 be paid by the covered agency from funds made available

4 to the agency by appropriation or from fees or other

5 amounts charged to the public if authorized by law. A cov6 ered agency may not increase any such fee or amount

7 charged for the purpose of paying fees and other expenses

8 awarded to a prevailing small entity as a prevailing party

9 under this section.’’.

10 SEC. 302. JUDICIAL PROCEEDINGS.

11 Section 2412 of title 28, United States Code, is

12 amended—

13 (1) in subsection (d)(2)(B)—

14 (A) by striking ‘‘, or (ii)’’ and inserting

15 ‘‘, (ii)’’; and

16 (B) by striking the semicolon at the end of

17 the subparagraph and inserting the following:

18 ‘‘, or (iii) a small entity as defined under sub19 section (g)(1)(D);’’ and

20 (2) by adding at the end the following new sub21 section:

22 ‘‘(g)(1) For purposes of this subsection, the term—

23 ‘‘(A) ‘covered agency’ has the same meaning as

24 in section 30(a) of the Small Business Act;
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1 ‘‘(B) ‘fees and other expenses’ has the same

2 meaning as in subsection (d)(2)(A), except that—

3 ‘‘(i) clause (ii) of such subparagraph (A)

4 shall not apply; and

5 ‘‘(ii) attorney’s fees shall not be awarded

6 at a rate of pay in excess of $150 per hour un7 less the court determines that regional costs or

8 other special factors justify a higher fee;

9 ‘‘(C) ‘prevailing small entity’—

10 ‘‘(i) means a small entity that raised a suc11 cessful defense to an agency enforcement action

12 by a covered agency in a civil action; and

13 ‘‘(ii) includes a small entity that is a party

14 in a civil action in which the court orders a cor15 rective action or penalty against the small en16 tity that is less burdensome than the corrective

17 action or penalty initially sought or demanded

18 by the covered agency; and

19 ‘‘(D) ‘small entity’ has the same meaning as

20 the term ‘small entity’ in section 601(6) of title 5.

21 ‘‘(2) For the purpose of making a finding of whether

22 an award under subsection (d)(1)(A) is unjust, in any case

23 in which fees and other expenses would be awarded to a

24 prevailing small entity as a prevailing party—
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1 ‘‘(A) the court shall not consider whether the

2 position of the United States was substantially justi3 fied; and

4 ‘‘(B) special circumstances shall be limited to

5 circumstances in which—

6 ‘‘(i) the matters in the civil action are mat7 ters for which there is little or no legal prece8 dent; or

9 ‘‘(ii) findings of fact or conclusions of law

10 are based on inconsistent interpretations of ap11 plicable law by different courts.

12 ‘‘(3) If a prevailing small entity is awarded fees and

13 other expenses as a prevailing party under subsection

14 (d)(1)(A), such fees and expenses shall include all fees and

15 expenses incurred by the small entity in appearing in any

16 proceeding the purpose of which is to determine the

17 amount of fees and other expenses.

18 ‘‘(4) Fees and other expenses awarded to a prevailing

19 small entity as a prevailing party under this section shall

20 be paid by the covered agency from funds made available

21 to the agency by appropriation or from fees or other

22 amounts charged to the public if authorized by law. A cov23 ered agency may not increase any such fee or amount

24 charged for the purpose of paying fees and other expenses
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1 awarded to a prevailing small entity as a prevailing party

2 under this section.’’.

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