Calendar No. 342

104TH CONGRESS

2D SESSION S. 942

A BILL

To promote increased understanding of Federal

purposes.actions against small entities, and for otherexcessive and arbitrary regulatory enforcementto small business concerns, to provide relief frompractices of certain Federal agencies with respectoversight boards to monitor the enforcementfor the designation of regional ombudsmen andwith such regulations by small entities, to provideregulations and increased voluntary compliance

MARCH 6, 1996

Reported with an amendment
II

Calendar No. 342

104TH CONGRESS

2D 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, Mr. COVERDELL, Mr. DOLE, Mr. LUGAR, Mr.

GRAMS, Mr. LOTT, and Mr. GRASSLEY) introduced the following bill;

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

MARCH 6, 1996

Reported by Mr. BOND, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

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
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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,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

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

7 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.

8 SEC. 2. PURPOSES.

9 The purposes of this Act are—

10 (1) to change the relationship between regu11 lators and small entities;
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1 (2) to ameliorate the concern of small entities

2 regarding the effects of arbitrary Federal regulatory

3 enforcement actions on small entities;

4 (3) to increase the comprehensibility of Federal

5 regulations affecting small entities;

6 (4) to make Federal regulators accountable for

7 their actions; and

8 (5) to provide small entities with a meaningful

9 opportunity for the redress of arbitrary enforcement

10 actions by Federal regulators.

11 TITLE I—REGULATORY SIM12 PLIFICATION AND VOL13 UNTARY COMPLIANCE

14 SEC. 101. DEFINITIONS.

15 For purposes of this title, the following definitions

16 shall apply:

17 (1) COMPLIANCE GUIDE.—The term ‘‘compli18 ance guide’’ means a publication made by a covered

19 agency under section 102(a).

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

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

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

23 of this Act).

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

25 letter’’ means a written determination from a cov-
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1 ered agency stating that, based on a no action re2 quest submitted to the agency by a small entity, the

3 agency will not take enforcement action against the

4 small entity under the rules of the covered agency.

5 (4) NO ACTION REQUEST.—The term ‘‘no ac6 tion request’’ means a written correspondence sub7 mitted by a small entity to a covered agency—

8 (A) stating a set of facts; and

9 (B) requesting a determination by the

10 agency of whether the agency would take an en11 forcement action against the small entity based

12 on such facts and the application of any rule of

13 the agency.

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

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

16 States Code.

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

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

19 5, United States Code.

20 (7) SMALL BUSINESS CONCERN.—The term

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

22 in section 3 of the Small Business Act.

23 (8) VOLUNTARY SELF-AUDIT.—The term ‘‘vol24 untary self-audit’’ means an audit, assessment, or
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1 review of any operation, practice, or condition of a

2 small entity that—

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

4 agent of the small entity; and

5 (B) is not required by law.

6 SEC. 102. COMPLIANCE GUIDES.

7 (a) COMPLIANCE GUIDE.—

8 (1) PUBLICATION.—If a covered agency is re9 quired to prepare a regulatory flexibility analysis for

10 a rule or group of related rules under section 603

11 of title 5, United States Code, the agency shall pub12 lish a compliance guide for such rule or group of re13 lated rules.

14 (2) REQUIREMENTS.—Each compliance guide

15 published under paragraph (1) shall—

16 (A) contain a summary description of the

17 rule or group of related rules;

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

19 complete rule or group of related rules in the

20 Federal Register;

21 (C) provide notice to small entities of the

22 requirements under the rule or group of related

23 rules and explain the actions that a small entity

24 is required to take to comply with the rule or

25 group of related rules;
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1 (D) be written in a manner to be under2 stood by the average owner or manager of a

3 small entity; and

4 (E) be updated as required to reflect

5 changes in the rule.

6 (b) DISSEMINATION.—

7 (1) IN GENERAL.—Each covered agency shall

8 establish a system to ensure that compliance guides

9 required under this section are published, dissemi10 nated, and made easily available to small entities.

11 (2) SMALL BUSINESS DEVELOPMENT CEN12 TERS.—In carrying out this subsection, each covered

13 agency shall provide sufficient numbers of compli14 ance guides to small business development centers

15 for distribution to small businesses concerns under

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

17 added by section 202 of this Act).

18 (c) LIMITATION ON ENFORCEMENT.—

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

20 bring an enforcement action in any Federal court or

21 in any Federal administrative proceeding against a

22 small entity to enforce a rule for which a compliance

23 guide is not published and disseminated by the cov24 ered agency as required under this section.
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1 (2) EFFECTIVE DATES.—This subsection shall

2 take effect—

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

4 of this Act with regard to a final regulation in

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

6 and

7 (B) on the date of the enactment of this

8 Act with regard to a regulation that takes effect

9 as a final regulation after such date of enact10 ment.

11 SEC. 103. NO ACTION LETTER.

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

13 agencies, except—

14 (1) the Federal Trade Commission;

15 (2) the Equal Employment Opportunity Com16 mission; and

17 (3) the Consumer Product Safety Commission.

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

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

20 receives a no action request, the agency shall—

21 (1) make a determination regarding whether to

22 grant the no action request, deny the no action re23 quest, or seek further information regarding the no

24 action request; and
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1 (2) if the agency makes a determination under

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

3 a no action letter and transmit the letter to the re4 questing small entity.

5 (c) RELIANCE ON NO ACTION LETTER OR COMPLI6 ANCE GUIDE.—In any enforcement action brought by a

7 covered agency in any Federal court, or Federal adminis8 trative proceeding against a small entity, the small entity

9 shall have a complete defense to any allegation of non10 compliance or violation of a rule if the small entity affirm11 atively pleads and proves by a preponderance of the evi12 dence that the act or omission constituting the alleged

13 noncompliance or violation was taken in good faith with

14 and in reliance on—

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

16 (2) a compliance guide of the applicable rule

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

18 SEC. 104. VOLUNTARY SELF-AUDITS.

19 (a) INADMISSIBILITY OF EVIDENCE AND LIMITATION

20 ON DISCOVERY.—The evidence described in subsection

21 (b)—

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

23 the small entity, in any enforcement action brought

24 against a small entity by a Federal agency in any

25 Federal—
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1 (A) court; or

2 (B) administrative proceeding; and

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

4 enforcement action brought against a small entity by

5 a Federal agency in any Federal—

6 (A) court; or

7 (B) administrative proceeding.

8 (b) APPLICATION.—For purposes of subsection (a),

9 the evidence described in this subsection is—

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

11 and

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

13 oral or written communication made in good faith

14 relating to such voluntary self-audit.

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

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

17 the enforcement action is a violation of criminal law;

18 or

19 (2) the voluntary self-audit or the report, find20 ing, opinion, or other oral or written communication

21 was prepared for the purpose of avoiding disclosure

22 of information required for an investigative, adminis23 trative, or judicial proceeding that, at the time of

24 preparation, was imminent or in progress.
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1 SEC. 105. DEFENSE TO ENFORCEMENT ACTIONS.

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

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

4 by a preponderance of the evidence that—

5 (1) the covered agency rule is vague or ambigu6 ous; and

7 (2) the interpretation by the small entity of the

8 rule is reasonable considering the rule and any appli9 cable compliance guide.

10 (b) INTERPRETATION OF RULE.—In determining

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

12 reasonable, no deference shall be given to any interpreta13 tion of the rule by the agency that is not included in a

14 compliance guide.

15 TITLE II—SMALL BUSINESS RE16 SPONSIVENESS OF COVERED

17 AGENCIES

18 SEC. 201. SMALL BUSINESS AND AGRICULTURE OMBUDS19 MAN.

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

21 amended—

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

23 and

24 (2) by inserting after section 29 the following

25 new section:
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1 ‘‘SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

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

3 following definitions shall apply:

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

5 Business Regulatory Fairness Board established

6 under subsection (c).

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

8 agency’ means any agency that, as of the date of en9 actment of the Small Business Regulatory Fairness

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

11 regulatory flexibility analysis was required under

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

13 other agency that promulgates any such rule, as of

14 the date of such promulgation.

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

16 means a Regional Small Business and Agriculture

17 Ombudsman designated under subsection (b).

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

19 area for which the Administrator has established a

20 regional office of the Administration pursuant to

21 section 4(a).

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

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

24 States Code.

25 ‘‘(b) OMBUDSMAN.—
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1 ‘‘(1) IN GENERAL.—Not later than 180 days

2 after the date of enactment of the Small Business

3 Regulatory Fairness Act of 1995, the Administrator

4 shall designate in each region a senior employee of

5 the Administration to serve as the Regional Small

6 Business and Agriculture Ombudsman in accordance

7 with this subsection.

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

9 under paragraph (1) shall—

10 ‘‘(A) on a confidential basis, solicit and re11 ceive comments from small business concerns

12 regarding the enforcement activities of covered

13 agencies;

14 ‘‘(B) based on comments received under

15 subparagraph (A), annually assign and publish

16 a small business responsiveness rating to each

17 covered agency;

18 ‘‘(C) publish periodic reports compiling the

19 comments received under subparagraph (A);

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

21 Business Regulatory Fairness Board estab22 lished under subsection (c); and

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

24 to receive comments from small business con25 cerns under subparagraph (A).’’.
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1 SEC. 202. SMALL BUSINESS REGULATORY FAIRNESS

2 BOARDS.

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

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

5 the following new subsection:

6 ‘‘(c) SMALL BUSINESS REGULATORY FAIRNESS

7 BOARDS.—

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

9 after the date of enactment of the Small Business

10 Regulatory Fairness Act of 1995, the Administrator

11 shall establish in each region a Small Business Reg12 ulatory Fairness Board in accordance with this sub13 section.

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

15 paragraph (1) shall—

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

17 concern to small business concerns relating to

18 the enforcement activities of covered agencies;

19 ‘‘(B) conduct investigations into enforce20 ment activities by covered agencies with respect

21 to small business concerns;

22 ‘‘(C) issue advisory findings and rec23 ommendations regarding the enforcement activi24 ties of covered agencies with respect to small

25 business concerns;
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1 ‘‘(D) review and approve, prior to publica2 tion—

3 ‘‘(i) each small business responsive4 ness rating assigned under subsection

5 (b)(2)(B); and

6 ‘‘(ii) each periodic report prepared

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

8 ‘‘(E) prepare written opinions regarding

9 the reasonableness and understandability of

10 rules issued by covered agencies.

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

12 of—

13 ‘‘(A) 1 member appointed by the Presi14 dent;

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

16 of the House of Representatives;

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

18 Leader of the House of Representatives;

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

20 Leader of the Senate; and

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

22 Leader of the Senate.

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

24 ‘‘(A) PERIOD OF APPOINTMENT.—
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1 ‘‘(i) PRESIDENTIAL APPOINTEES.—

2 Each member of the Board appointed

3 under subparagraph (A) of paragraph (2)

4 shall be appointed for a term of 3 years,

5 except that the initial member appointed

6 under such subparagraph shall be ap7 pointed for a term of 1 year.

8 ‘‘(ii) HOUSE OF REPRESENTATIVES

9 APPOINTEES.—Each member of the Board

10 appointed under subparagraph (B) or (C)

11 of paragraph (2) shall be appointed for a

12 term of 3 years, except that the initial

13 members appointed under such subpara14 graphs shall each be appointed for a term

15 of 2 years.

16 ‘‘(iii) SENATE APPOINTEES.—Each

17 member of the Board appointed under sub18 paragraph (D) or (E) of paragraph (2)

19 shall be appointed for a term of 3 years.

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

21 Board—

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

23 Board; and
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1 ‘‘(ii) shall be filled in the same man2 ner and under the same terms and condi3 tions as the original appointment.

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

5 Chairperson from among the members of the Board.

6 ‘‘(6) MEETINGS.—

7 ‘‘(A) IN GENERAL.—The Board shall meet

8 at the call of the Chairperson.

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

10 90 days after the date on which all members of

11 the Board have been appointed, the Board shall

12 hold its first meeting.

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

14 the Board shall constitute a quorum for the conduct

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

16 ‘‘(8) POWERS OF THE BOARD.—

17 ‘‘(A) HEARINGS.—The Board or, at its di18 rection, any subcommittee or member of the

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

20 provisions of this section—

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

22 such times and places, take such testi23 mony, receive such evidence, administer

24 such oaths; and
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1 ‘‘(ii) require, by subpoena or other2 wise, the attendance and testimony of such

3 witnesses and the production of such

4 books, records, correspondence, memo5 randa, papers, documents, tapes, and ma6 terials as the Board or such subcommittee

7 or member considers advisable.

8 ‘‘(B) ISSUANCE AND ENFORCEMENT OF

9 SUBPOENAS.—

10 ‘‘(i) ISSUANCE.—Each subpoena is11 sued pursuant to subparagraph (A) shall

12 bear the signature of the Chairperson and

13 shall be served by any person or class of

14 persons designated by the Chairperson for

15 that purpose.

16 ‘‘(ii) ENFORCEMENT.—

17 ‘‘(I) IN GENERAL.—In the case

18 of contumacy or failure to obey a sub19 poena issued under subparagraph (A),

20 the United States district court for

21 the judicial district in which the sub22 poenaed person resides, is served, or

23 may be found may issue an order re24 quiring such person to appear at any

25 designated place to testify or to
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1 produce documentary or other evi2 dence.

3 ‘‘(II) CONTEMPT OF COURT.—

4 Any failure to obey the order of the

5 court issued under subclause (I) may

6 be punished by the court as a con7 tempt of that court.

8 ‘‘(C) WITNESS ALLOWANCES AND FEES.—

9 Section 1821 of title 28, United States Code,

10 shall apply to witnesses requested or subpoe11 naed to appear at any hearing of the Board.

12 The per diem and mileage allowances for any

13 witness shall be paid from funds available to

14 pay the expenses of the Board.

15 ‘‘(D) INFORMATION FROM FEDERAL AGEN16 CIES.—Upon the request of the Chairperson,

17 the Board may secure directly from the head

18 any Federal department or agency such infor19 mation as the Board considers necessary to

20 carry out the provisions of this section.

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

22 use the United States mails in the same man23 ner and under the same conditions as other de24 partments and agencies of the Federal Govern25 ment.
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1 ‘‘(F) DONATIONS.—The Board may ac2 cept, use, and dispose of donations of services

3 or property.

4 ‘‘(9) BOARD PERSONNEL MATTERS.—

5 ‘‘(A) COMPENSATION.—Members of the

6 Board shall serve without compensation.

7 ‘‘(B) TRAVEL EXPENSES.—Members of the

8 Board shall be allowed travel expenses, includ9 ing per diem in lieu of subsistence, at rates au10 thorized for employees of agencies under sub11 chapter I of chapter 57 of title 5, United States

12 Code, while away from their homes or regular

13 places of business in the performance of serv14 ices for the Board.’’.

15 SEC. 203. SERVICES PROVIDED BY SMALL BUSINESS DE16 VELOPMENT CENTERS.

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

18 U.S.C. 648(c)(3)) is amended—

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

20 the end;

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

22 at the end and inserting a semicolon; and

23 (3) by inserting immediately after subpara24 graph (P) the following new subparagraphs:
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1 ‘‘(Q) providing assistance to small business

2 concerns regarding regulatory requirements, in3 cluding providing training with respect to cost4 effective regulatory compliance;

5 ‘‘(R) developing informational publications,

6 establishing resource centers of reference mate7 rials, and distributing compliance guides pub8 lished under section 102(a) of the Small Busi9 ness Regulatory Fairness Act of 1995 to small

10 business concerns; and

11 ‘‘(S) developing a program to provide con12 fidential onsite assessments and recommenda13 tions regarding regulatory compliance to small

14 business concerns and assisting small business

15 concerns in analyzing the business development

16 issues associated with regulatory implementa17 tion and compliance measures.’’.

18 TITLE III—FINANCIAL ACCOUNT19 ABILITY OF COVERED AGEN20 CIES RELATING TO FEES AND

21 EXPENSES

22 SEC. 301. ADMINISTRATIVE PROCEEDINGS.

23 Section 504 of title 5, United States Code, is amend24 ed—

25 (1) in subsection (b)(1)(B)—
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1 (A) by striking ‘‘, or (ii)’’ and inserting ‘‘,

2 (ii)’’; and

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

4 the subparagraph and inserting the following:

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

6 in subsection (g)(1)(D);’’ and

7 (2) by adding at the end the following new sub8 section:

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

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

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

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

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

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

15 shall not apply; and

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

17 at a rate of pay in excess of $150 per hour un18 less the adjudicative party determines that re19 gional costs or other special factors justify a

20 higher fee;

21 ‘‘(C) ‘prevailing small entity’—

22 ‘‘(i) means a small entity that raised a suc23 cessful defense to an agency enforcement action

24 by a covered agency in an adversary adjudica25 tion; and
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1 ‘‘(ii) includes a small entity that is a party

2 in an adversary adjudication in which the adju3 dicative officer orders a corrective action or

4 penalty against the small entity that is less bur5 densome than the corrective action or penalty

6 initially sought or demanded by the covered

7 agency; and

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

9 section 601(6).

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

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

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

13 prevailing small entity as a prevailing party—

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

15 not consider whether the position of the agency was

16 substantially justified; and

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

18 circumstances in which—

19 ‘‘(i) the matters in the adversary adjudica20 tion are matters for which there is little or no

21 legal precedent; or

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

23 are based on inconsistent interpretations of ap24 plicable law by different courts.
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1 ‘‘(3) If a prevailing small entity is awarded fees and

2 other expenses as a prevailing party under subsection

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

4 and expenses incurred by the small entity in appearing

5 in any proceeding the purpose of which is to determine

6 the amount of fees and other expenses.

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

8 small entity as a prevailing party under this section shall

9 be paid by the covered agency from funds made available

10 to the agency by appropriation or from fees or other

11 amounts charged to the public if authorized by law. A cov12 ered agency may not increase any such fee or amount

13 charged for the purpose of paying fees and other expenses

14 awarded to a prevailing small entity as a prevailing party

15 under this section.’’.

16 SEC. 302. JUDICIAL PROCEEDINGS.

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

18 amended—

19 (1) in subsection (d)(2)(B)—

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

21 ‘‘, (ii)’’; and

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

23 the subparagraph and inserting the following:

24 ‘‘, or (iii) a small entity as defined under sub25 section (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 (d)(2)(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 court determines that regional costs or

13 other special factors justify a higher fee;

14 ‘‘(C) ‘prevailing small entity’—

15 ‘‘(i) means a small entity that raised a suc16 cessful defense to an agency enforcement action

17 by a covered agency in a civil action; and

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

19 in a civil action in which the court orders a cor20 rective action or penalty against the small en21 tity that is less burdensome than the corrective

22 action or penalty initially sought or demanded

23 by the covered agency; and

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

25 the term ‘small entity’ in section 601(6) of title 5.
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1 ‘‘(2) For the purpose of making a finding of whether

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

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

4 prevailing small entity as a prevailing party—

5 ‘‘(A) the court shall not consider whether the

6 position of the United States was substantially justi7 fied; and

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

9 circumstances in which—

10 ‘‘(i) the matters in the civil action are mat11 ters for which there is little or no legal prece12 dent; or

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

14 are based on inconsistent interpretations of ap15 plicable law by different courts.

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

17 other expenses as a prevailing party under subsection

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

19 expenses incurred by the small entity in appearing in any

20 proceeding the purpose of which is to determine the

21 amount of fees and other expenses.

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

23 small entity as a prevailing party under this section shall

24 be paid by the covered agency from funds made available

25 to the agency by appropriation or from fees or other
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1 amounts charged to the public if authorized by law. A cov2 ered agency may not increase any such fee or amount

3 charged for the purpose of paying fees and other expenses

4 awarded to a prevailing small entity as a prevailing party

5 under this section.’’.

6 SECTION 1. SHORT TITLE.

7 This Act may be cited as the ‘‘Small Business Regu8 latory Enforcement Fairness Act of 1996’’.

9 SEC. 2. FINDINGS.

10 Congress finds that—

11 (1) a vibrant and growing small business sector

12 is critical to creating jobs in a dynamic economy;

13 (2) small businesses bear a disproportionate

14 share of regulatory costs and burdens;

15 (3) fundamental changes that are needed in the

16 regulatory and enforcement culture of federal agencies

17 to make agencies more responsive to small business

18 can be made without compromising the statutory mis19 sions of the agencies;

20 (4) three of the top recommendations of the

21 White House Conference on Small Business involve

22 reforms to the way government regulations are devel23 oped and enforced, and reductions in government pa24 perwork requirements;
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1 (5) the requirements of the Regulatory Flexibility

2 Act have too often been ignored by government agen3 cies, resulting in greater regulatory burdens on small

4 entities than necessitated by statute; and

5 (6) small entities should be given the opportunity

6 to seek judicial review of agency actions required by

7 the Regulatory Flexibility Act.

8 SEC. 3. PURPOSES.

9 The purposes of this Act are—

10 (1) to implement certain recommendations of the

11 1995 White House Conference on Small Business re12 garding the development and enforcement of Federal

13 regulations;

14 (2) to provide for judicial review of the Regu15 latory Flexibility Act;

16 (3) to encourage the effective participation of

17 small businesses in the Federal regulatory process;

18 (4) to simplify the language of Federal regula19 tions affecting small businesses;

20 (5) to develop more accessible sources of informa21 tion on regulatory and reporting requirements for

22 small businesses;

23 (6) to create a more cooperative regulatory envi24 ronment among agencies and small businesses that is

25 less punitive and more solution-oriented; and
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1 (7) to make Federal regulators more accountable

2 for their enforcement actions by providing small enti3 ties with a meaningful opportunity for redress of ex4 cessive enforcement activities.

5 SEC. 4. EFFECTIVE DATE.

6 This Act shall become effective on the date 90 days

7 after enactment.

8 TITLE I—REGULATORY

9 COMPLIANCE SIMPLIFICATION

10 SEC. 101. DEFINITIONS.

11 For purposes of this Act—

12 (1) the terms ‘‘rule’’ and ‘‘small entity’’ have the

13 same meanings as in section 601 of title 5, United

14 States Code;

15 (2) the term ‘‘agency’’ has the same meaning as

16 in section 551 of title 5, United States Code; and

17 (3) the term ‘‘small entity compliance guide’’

18 means a document designated as such by an agency.

19 SEC. 102. COMPLIANCE GUIDES.

20 (a) COMPLIANCE GUIDE.—For each rule or group of

21 related rules for which an agency is required to prepare

22 a final regulatory flexibility analysis under section 604 of

23 title 5, United States Code, the agency shall publish one

24 or more guides to assist small entities in complying with

25 the rule, and shall designate such publications as ‘‘small
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1 entity compliance guides’’. The guides shall explain the ac2 tions a small entity is required to take to comply with a

3 rule or group of rules. The agency shall, in its sole discre4 tion, ensure that the guide is written using sufficiently

5 plain language to be understood by affected small entities.

6 Agencies may prepare separate guides covering groups or

7 classes of similarly affected small entities, and may cooper8 ate with associations of small entities to develop and dis9 tribute such guides.

10 (b) SINGLE SOURCE OF INFORMATION.—Agencies shall

11 cooperate to make available to small entities through a sin12 gle source of information, the small entity compliance

13 guides and all other available information on statutory and

14 regulatory requirements affecting small entities.

15 (c) LIMITATION ON JUDICIAL REVIEW.—Except as

16 provided by this subsection, an agency’s designation of a

17 small entity compliance guide shall not be subject to judi18 cial review. In any civil or administrative action against

19 a small entity for a violation occurring after the effective

20 date of this section, the content of the small business guide

21 may be considered as evidence of the reasonableness or ap22 propriateness of any proposed fines, penalties or damages.

23 SEC. 103. INFORMAL SMALL ENTITY GUIDANCE.

24 (a) IN GENERAL.—Whenever appropriate in the inter25 est of administering statutes and regulations within the ju-
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1 risdiction of an agency, it shall be the practice of the agency

2 to answer inquiries by small entities concerning informa3 tion on and advice about compliance with such statutes and

4 regulations, interpreting and applying the law to specific

5 sets of facts supplied by the small entity. In any civil or

6 administrative action against a small entity, guidance pro7 vided by an agency to a small entity may be considered

8 as evidence of the reasonableness or appropriateness of any

9 proposed fines, penalties or damages imposed on such small

10 entity.

11 (b) PROGRAM.—Each agency shall establish a program

12 for issuing guidance in response to such inquiries no later

13 than 1 year after enactment of this section, utilizing exist14 ing functions and personnel of the agency to the extent prac15 ticable.

16 SEC. 104. SERVICES OF SMALL BUSINESS DEVELOPMENT

17 CENTERS.

18 Section 21(c)(3) of the Small Business Act (15 U.S.C.

19 648(c)(3)) is amended—

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

21 the end;

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

23 at the end and inserting a semicolon; and

24 (3) by inserting after subparagraph (P) the fol25 lowing new subparagraphs:
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1 ‘‘(Q) providing assistance to small business con2 cerns regarding regulatory requirements, including

3 providing training with respect to cost-effective regu4 latory compliance;

5 ‘‘(R) developing informational publications, es6 tablishing resource centers of reference materials, and

7 distributing compliance guides published under sec8 tion 102(a) of the Small Business Regulatory En9 forcement Fairness Act of 1996 to small business con10 cerns; and

11 ‘‘(S) developing programs to provide confidential

12 onsite assessments and recommendations regarding

13 regulatory compliance to small business concerns and

14 assisting small business concerns in analyzing the

15 business development issues associated with regulatory

16 implementation and compliance measures.’’.

17 SEC. 105. MANUFACTURING TECHNOLOGY CENTERS.

18 The Manufacturing Technology Centers and other

19 similar extension centers administered by the National In20 stitute of Standards and Technology of the Department of

21 Commerce shall, as appropriate, provide the assistance re22 garding regulatory requirements, develop and distribute in23 formation and guides and develop the programs to provide

24 confidential onsite assessments and recommendations re-
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1 garding regulatory compliance described in Section 104 of

2 this Act.

3 TITLE II—REGULATORY

4 ENFORCEMENT REFORMS

5 SEC. 201. SMALL BUSINESS AND AGRICULTURE ENFORCE6 MENT OMBUDSMAN.

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

8 amended—

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

10 and

11 (2) by inserting after section 29 the following

12 new section:

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

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

15 term—

16 ‘‘(1) ‘Board’ means a Regional Small Business

17 Regulatory Fairness Board established under sub18 section (c); and

19 ‘‘(2) ‘Ombudsman’ means the Small Business

20 and Agriculture Regulatory Enforcement Ombudsman

21 designated under subsection (b).

22 ‘‘(b) SBA ENFORCEMENT OMBUDSMAN.—

23 ‘‘(1) Not later than 180 days after the date of en24 actment of this section, the Administration shall des25 ignate a Small Business and Agriculture Regulatory
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1 Enforcement Ombudsman utilizing existing personnel

2 to the extent practicable. Other agencies shall assist

3 the Ombudsman and take actions as necessary to en4 sure compliance with the requirements of this section.

5 Nothing in this section is intended to replace or di6 minish the activities of any Ombudsman or similar

7 office in any other agency.

8 ‘‘(2) The Ombudsman shall—

9 ‘‘(A) work with each agency with regulatory

10 authority over small businesses to ensure that

11 small business concerns that receive or are sub12 ject to an audit, on-site inspection, compliance

13 assistance effort, or other enforcement related

14 communication or contact by agency personnel

15 are provided with a confidential means to com16 ment on and rate the performance of such per17 sonnel;

18 ‘‘(B) establish means to solicit and receive

19 comments from small business concerns regard20 ing actions by agency employees conducting com21 pliance or enforcement related activities with re22 spect to the small business concern, and main23 tain the identity of the person and small busi24 ness concern making such comments on a con25 fidential basis; and
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1 ‘‘(C) based on comments received from small

2 business concerns and the Boards, annually re3 port to Congress and affected agencies concerning

4 the enforcement activities of agency personnel in5 cluding a rating of the responsiveness to small

6 business of the various regional and program of7 fices and personnel of each agency; and

8 ‘‘(D) coordinate and report annually on the

9 activities, findings and recommendations of the

10 Boards to the Administration and to the heads

11 of affected agencies.

12 ‘‘(c) REGIONAL SMALL BUSINESS REGULATORY FAIR13 NESS BOARDS.—

14 ‘‘(1) Not later than 180 days after the date of en15 actment of this section, the Administration shall es16 tablish a Small Business Regulatory Fairness Board

17 in each regional office of the Small Business Adminis18 tration.

19 ‘‘(2) Each Board established under paragraph

20 (1) shall—

21 ‘‘(A) meet at least annually to advise the

22 Ombudsman on matters of concern to small busi23 nesses relating to the enforcement activities of

24 agencies;
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1 ‘‘(B) report to the Ombudsman on instances

2 of excessive enforcement actions of agencies

3 against small business concerns including any

4 findings or recommendations of the Board as to

5 agency enforcement policy or practice; and

6 ‘‘(C) prior to publication, provide comment

7 on the annual report of the Ombudsman pre8 pared under subsection (b).

9 ‘‘(3) Each Board shall consist of five members

10 appointed by the Administration, after receiving the

11 recommendations of the chair and ranking minority

12 member of the Small Business Committees of the

13 House and Senate.

14 ‘‘(4) Members of the Board shall serve for terms

15 of three years or less.

16 ‘‘(5) The Administration shall select a chair

17 from among the members of the Board who shall serve

18 for not more than 2 years as chair.

19 ‘‘(6) A majority of the members of the Board

20 shall constitute a quorum for the conduct of business,

21 but a lesser number may hold hearings.

22 ‘‘(d) POWERS OF THE BOARDS.—

23 ‘‘(1) The Board may hold such hearings and col24 lect such information as appropriate for carrying out

25 this section.
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1 ‘‘(2) The Board may use the United States mails

2 in the same manner and under the same conditions

3 as other departments and agencies of the Federal Gov4 ernment.

5 ‘‘(3) The Board may accept donations of services

6 necessary to conduct its business.

7 ‘‘(4) Members of the Board shall serve without

8 compensation, provided that, members of the Board

9 shall be allowed travel expenses, including per diem

10 in lieu of subsistence, at rates authorized for employ11 ees of agencies under subchapter I of chapter 57 of

12 title 5, United States Code, while away from their

13 homes or regular places of business in the perform14 ance of services for the Board.’’.

15 SEC. 202. RIGHTS OF SMALL ENTITIES IN ENFORCEMENT

16 ACTIONS.

17 (a) IN GENERAL.—Each agency regulating the activi18 ties of small entities shall establish a policy or program

19 to provide for the reduction, and under appropriate cir20 cumstances for the waiver, of civil penalties for violations

21 of a statutory or regulatory requirement by a small entity.

22 (b) CONDITIONS AND EXCEPTIONS.—Policies or pro23 grams established under this section may contain condi24 tions or exceptions such as—
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1 (1) requiring the small entity to correct the vio2 lation within a reasonable correction period;

3 (2) limiting the applicability to violations dis4 covered by the small entity through participation in

5 a compliance assistance or audit program operated or

6 supported by the agency or a State, or through a com7 pliance audit resulting in disclosure of the violation;

8 (3) exempting small entities that have been sub9 ject to multiple enforcement actions by the agency;

10 (4) exempting violations involving willful or

11 criminal conduct; and

12 (5) exempting violations that pose serious health,

13 safety or environmental threats or risk of serious in14 jury.

15 TITLE III—EQUAL ACCESS TO

16 JUSTICE ACT AMENDMENTS

17 SEC. 301. ADMINISTRATIVE PROCEEDINGS.

18 Section 504(b)(1) of title 5, United States Code, is

19 amended—

20 (1) by striking ‘‘$75’’ in subparagraph (A) and

21 inserting ‘‘$125’’;

22 (2) by striking ‘‘, or (ii)’’ in subparagraph (B)

23 and inserting ‘‘, (ii)’’;
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1 (3) at the end of subparagraph (B), by striking

2 ‘‘;’’ and inserting the following: ‘‘, or (iii) a small en3 tity as defined in section 601;’’;

4 (4) by striking ‘‘; and’’ in subparagraph (D) and

5 inserting ‘‘;’’; and

6 (5) by adding at the end the following new sub7 paragraphs:

8 ‘‘(F) ‘prevailing party’ includes a small entity

9 with respect to claims in an adversary adjudication

10 brought by an agency (1) that the small entity has

11 raised a successful defense to, or (2) with respect to

12 which the decision of the adjudicative officer is sub13 stantially less than that sought by the agency in the

14 adversary adjudication, provided that such small en15 tity has not committed a willful violation of the law

16 or otherwise acted in bad faith, and

17 ‘‘(G) in an adversary adjudication brought by

18 an agency against a small entity, in the determina19 tion whether the position of the agency, including any

20 citation, assessment, fine, penalty or demand for set21 tlement sought by the agency, is ‘substantially justi22 fied’ only if the agency demonstrates that such posi23 tion does not substantially exceed the decision of the

24 adjudicative officer in the adversary adjudication,
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1 and the position of the agency is consistent with agen2 cy policy.’’.

3 SEC. 302. JUDICIAL PROCEEDINGS.

4 Section 2412 of title 28, United States Code, is amend5 ed in paragraph (d)(2)—

6 (1) by striking ‘‘$75’’ in subparagraph (A) and

7 inserting ‘‘$125’’;

8 (2) by striking ‘‘, or (ii)’’ in subparagraph (B)

9 and inserting ‘‘, (ii)’’;

10 (3) by striking ‘‘; and’’ subparagraph (G) and

11 inserting ‘‘;’’

12 (4) in subparagraph (H)—

13 (i) after ‘‘prevailing party’’,’’ by inserting ‘‘in14 cludes a small entity with respect to a claim in

15 a civil action brought by the United States (1)

16 that the small entity has raised a successful de17 fense to, or (2) with respect to which the final

18 judgement in the action is substantially less than

19 that sought by the United States, provided that

20 such small entity has not committed a willful

21 violation of the law or otherwise acted in bad

22 faith, and’’; and

23 (ii) at the end of the subparagraph, by

24 striking the period and inserting ‘‘; and’’; and
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1 (5) by adding at the end the following new sub2 paragraph:

3 ‘‘(I) In a civil action brought by the United

4 States against a small entity, a position of the United

5 States, including any citation, assessment, fine, pen6 alty or demand for settlement sought by an agency,

7 is ‘‘substantially justified’’ only if the United States

8 demonstrates that such position does not substantially

9 exceed the value of the final judgement in the action,

10 and the position of the United States is consistent

11 with agency policy.’’.

12 TITLE IV—REGULATORY

13 FLEXIBILITY ACT AMENDMENTS

14 SEC. 401. REGULATORY FLEXIBILITY ANALYSES.

15 (a) INITIAL REGULATORY FLEXIBILITY ANALYSIS.—

16 Section 603(a) of title 5, United States Code, is amended—

17 (1) by inserting after ‘‘proposed rule’’, the phrase

18 ‘‘, or publishes a notice of interpretive rule making of

19 general applicability for any proposed interpretive

20 rule’’; and

21 (2) by inserting at the end of the subsection, the

22 following new sentence: ‘‘In the case of interpretive

23 rule making involving the internal revenue laws of

24 the United States, this section applies only to regula25 tions as that term is used in section 7805 of the Inter-
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1 nal Revenue Code of 1986 that impose a record keep2 ing, reporting or paperwork requirement on small en3 tities.’’.

4 (b) FINAL REGULATORY FLEXIBILITY ANALYSIS.—Sec5 tion 604 of title 5, United States Code, is amended—

6 (1) in subsection (a) to read as follows:

7 ‘‘(a) When an agency promulgates a final rule under

8 section 553 of this title, after being required by that section

9 or any other law to publish a general notice of proposed

10 rulemaking, or otherwise publishing an initial regulatory

11 flexibility analysis, the agency shall prepare a final regu12 latory flexibility analysis. Each final regulatory flexibility

13 analysis shall contain—

14 ‘‘(1) a succinct statement of the need for, and ob15 jectives of, the rule;

16 ‘‘(2) a summary of the issues raised by the pub17 lic comments in response to the initial regulatory

18 flexibility analysis, a summary of the assessment of

19 the agency of such issues, and a statement of any

20 changes made in the proposed rule as a result of such

21 comments;

22 ‘‘(3) a description of, and an estimate of the

23 number of, small entities to which the rule will apply

24 or an explanation of why no such estimate is avail25 able;
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1 ‘‘(4) a description of the projected reporting,

2 record keeping and other compliance requirements of

3 the rule, including an estimate of the classes of small

4 entities which will be subject to the requirement and

5 the type of professional skills necessary for prepara6 tion of the report or record; and

7 ‘‘(5) a description of the steps the agency has

8 taken to minimize the significant economic impact on

9 small entities consistent with the stated objectives of

10 applicable statutes, including a statement of the fac11 tual policy, and legal reasons for selecting the alter12 native adopted in the final rule and why each one of

13 the other significant alternatives to the rule consid14 ered by the agency was rejected.’’; and

15 (2) in subsection (b), by striking ‘‘at the time’’

16 and all that follows and inserting ‘‘such analysis or

17 a summary thereof.’’.

18 SEC. 402. JUDICIAL REVIEW.

19 Section 611 of title 5, United States Code, is amended

20 to read as follows:

21 ‘‘§ 611. Judicial review

22 ‘‘(a)(1) For any rule subject to this chapter, a small

23 entity that is adversely affected or aggrieved by agency ac24 tion is entitled to judicial review of agency compliance with
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1 the requirements of this chapter, except the requirements of

2 sections 602, 603, 609 and 612.

3 ‘‘(2) Each court having jurisdiction to review such rule

4 for compliance with section 553 of this title or under any

5 other provision of law shall have jurisdiction to review any

6 claims of noncompliance with this chapter, except the re7 quirements of sections 602, 603, 609 and 612.

8 ‘‘(3)(A) A small entity may seek such review during

9 the period beginning on the date of final agency action and

10 ending one year later, except that where a provision of law

11 requires that an action challenging a final agency action

12 be commenced before the expiration of such one year period,

13 such lesser period shall apply to a petition for judicial re14 view under this section.

15 ‘‘(B) In the case where an agency delays the issuance

16 of a final regulatory flexibility analysis pursuant to section

17 608(b) of this chapter, a petition for judicial review under

18 this section shall be filed not later than—

19 ‘‘(i) one year after the date the analysis is made

20 available to the public, or

21 ‘‘(ii) where a provision of law requires that an

22 action challenging a final agency regulation be com23 menced before the expiration of the one year period,

24 the number of days specified in such provision of law
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1 that is after the date the analysis is made available

2 to the public.

3 ‘‘(4) If the court determines, on the basis of the rule4 making record, that the agency action under this chapter

5 was arbitrary, capricious, an abuse of discretion or other6 wise not in accordance with the law, the court shall order

7 the agency to take corrective action consistent with this

8 chapter, which may include—

9 ‘‘(A) remanding the rule to the agency, or

10 ‘‘(B) deferring the enforcement of the rule

11 against small entities, unless the court finds good

12 cause for continuing the enforcement of the rule pend13 ing the completion of the corrective action.

14 ‘‘(5) Nothing in this subsection shall be construed to

15 limit the authority of any court to stay the effective date

16 of any rule or provision thereof under any other provision

17 of law or to grant any other relief in addition to the re18 quirements of this section.

19 ‘‘(b) In an action for the judicial review of a rule, the

20 regulatory flexibility analysis for such rule, including an

21 analysis prepared or corrected pursuant to paragraph

22 (a)(4), shall constitute part of the entire record of agency

23 action in connection with such review.

24 ‘‘(c) Except as otherwise required by this chapter, the

25 court shall apply the same standards of judicial review that
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1 govern the review of agency findings under the statute

2 granting the agency authority to conduct a rule making.

3 ‘‘(d) Compliance or noncompliance by an agency with

4 the provisions of this chapter shall be subject to judicial re5 view only in accordance with this section.

6 ‘‘(e) Nothing in this section bars judicial review of any

7 other impact statement or similar analysis required by any

8 other law if judicial review of such statement or analysis

9 is otherwise permitted by law.’’.

10 SEC. 403. TECHNICAL AND CONFORMING AMENDMENTS.

11 (a) Section 605(b) of title 5, United States Code, is

12 amended to read as follows:

13 ‘‘(b) Sections 603 and 604 of this title shall not apply

14 to any proposed or final rule if the head of the agency cer15 tifies that the rule will not, if promulgated, have a signifi16 cant economic impact on a substantial number of small en17 tities. If the head of the agency makes a certification under

18 the preceding sentence, the agency shall publish such certifi19 cation in the Federal Register, at the time of publication

20 of general notice of proposed rule making for the rule or

21 at the time of publication of the final rule, along with a

22 statement providing the factual and legal reasons for such

23 certification. The agency shall provide such certification

24 and statement to the Chief Counsel for Advocacy of the

25 Small Business Administration.’’.
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1 (b) Section 612 of title 5, United States Code, is

2 amended—

3 (1) in subsection (a), by striking ‘‘the committees

4 on the Judiciary of the Senate and the House of Rep5 resentatives, the Select Committee on Small Business

6 of the Senate, and the Committee on Small Business

7 of the House of Representatives’’ and inserting ‘‘the

8 Committees on the Judiciary and Small Business of

9 the Senate and House of Representatives’’.

10 (2) in subsection (b), by striking ‘‘his views with

11 respect to the’’ and inserting in lieu thereof, ‘‘his or

12 her views with respect to compliance with this chap13 ter, the adequacy of the rulemaking record and the’’.

14 SEC. 404. SMALL BUSINESS ADVOCACY REVIEW PANELS.

15 (a) SMALL BUSINESS OUTREACH AND INTERAGENCY

16 COORDINATION.—Section 609 of title 5, United States Code,

17 is amended—

18 (1) before ‘‘techniques,’’ by inserting ‘‘the reason19 able use of ’’;

20 (2) in paragraph (4), after ‘‘entities’’, by insert21 ing ‘‘including soliciting and receiving comments over

22 computer networks’’;

23 (3) by designating the current text as subsection

24 (a); and

25 (4) by adding the following new subsection:
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1 ‘‘(b) Prior to publication of an initial regulatory flexi2 bility analysis—

3 ‘‘(1) an agency shall notify the Chief Counsel for

4 Advocacy of the Small Business Administration and

5 provide the Chief Counsel with information on the po6 tential impacts of the proposed rule on small entities

7 and the type of small entities that might be affected;

8 ‘‘(2) the Chief Counsel shall identify individuals

9 representative of affected small entities for the pur10 pose of obtaining advice and recommendations from

11 those individuals about the potential impacts of the

12 proposed rule;

13 ‘‘(3) the agency shall convene a review panel for

14 such rule consisting wholly of full time federal em15 ployees of the office within the agency responsible for

16 carrying out the proposed rule, the Office of Informa17 tion and Regulatory Affairs within the Office of Man18 agement and Budget, and the Chief Counsel;

19 ‘‘(4) the panel shall review any material the

20 agency has prepared in connection with this chapter,

21 collect advice and recommendations of the small en22 tity representatives identified by the agency after con23 sultation with the Chief Counsel, on issues related to

24 subsection 603(b), paragraphs (3), (4) and (5);
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1 ‘‘(5) the review panel shall report on the com2 ments of the small entity representatives and its find3 ings as to issues related to subsection 603(b), para4 graphs (3), (4) and (5), provided that such report

5 shall be made public as part of the rulemaking record;

6 and

7 ‘‘(6) where appropriate, the agency shall modify

8 the proposed rule or the decision on whether an ini9 tial regulatory flexibility analysis is required.

10 ‘‘(c) Prior to publication of a final regulatory flexibil11 ity analysis—

12 ‘‘(1) an agency shall reconvene the review panel

13 established under paragraph (b)(3), or if no initial

14 regulatory flexibility analysis was published, under15 take the actions described in paragraphs (b)(1)

16 through (3);

17 ‘‘(2) the panel shall review any material the

18 agency has prepared in connection with this chapter,

19 collect the advice and recommendations of the small

20 entity representatives identified by the agency after

21 consultation with the Chief Counsel, on issues related

22 to subsection 604(a), paragraphs (3), (4) and (5);

23 ‘‘(3) the review panel shall report on the com24 ments of the small entity representatives and its find25 ings as to issues related to subsection 604(a), para-
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1 graphs (3), (4) and (5), provided that such report

2 shall be made public as part of the rulemaking record;

3 and

4 ‘‘(4) where appropriate, the agency shall modify

5 the final rule or the decision on whether a final regu6 latory flexibility analysis is required.

7 ‘‘(d) An agency may in its discretion apply subsections

8 (b) and (c) to rules that the agency intends to certify under

9 subsection 605(b), but the agency believes may have a great10 er than de minimis impact on a substantial number of

11 small entities.’’.

12 (b) SMALL BUSINESS ADVOCACY CHAIRPERSONS.—

13 Not later than 30 days after the date of enactment of this

14 Act, the head of each agency that has conducted a final reg15 ulatory flexibility analysis shall designate a small business

16 advocacy chairperson using existing personnel to the extent

17 possible, to be responsible for implementing this section and

18 to act as permanent chair of the agency’s review panels es19 tablished pursuant to this section.

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