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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 942 Reported in Senate (RS)]

                                                       Calendar No. 342

104th CONGRESS

  2d Session

                                 S. 942

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                             March 6, 1996

                       Reported with an amendment

                                                       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 excessive 
 and arbitrary regulatory enforcement actions against small entities, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Small 
Business Regulatory Fairness Act of 1995''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Purposes.
  <DELETED>TITLE I--REGULATORY SIMPLIFICATION AND VOLUNTARY COMPLIANCE

<DELETED>Sec. 101. Definitions.
<DELETED>Sec. 102. Compliance guides.
<DELETED>Sec. 103. No action letter.
<DELETED>Sec. 104. Voluntary self-audits.
<DELETED>Sec. 105. Defense to enforcement actions.
  <DELETED>TITLE II--SMALL BUSINESS RESPONSIVENESS OF COVERED AGENCIES

<DELETED>Sec. 201. Small business and agriculture ombudsman.
<DELETED>Sec. 202. Small business regulatory fairness boards.
<DELETED>Sec. 203. Services provided by small business development 
                            centers.
   <DELETED>TITLE III--FINANCIAL ACCOUNTABILITY OF COVERED AGENCIES 
                     RELATING TO FEES AND EXPENSES

<DELETED>Sec. 301. Administrative proceedings.
<DELETED>Sec. 302. Judicial proceedings.

<DELETED>SEC. 2. PURPOSES.</DELETED>

<DELETED>    The purposes of this Act are--</DELETED>
        <DELETED>    (1) to change the relationship between regulators 
        and small entities;</DELETED>
        <DELETED>    (2) to ameliorate the concern of small entities 
        regarding the effects of arbitrary Federal regulatory 
        enforcement actions on small entities;</DELETED>
        <DELETED>    (3) to increase the comprehensibility of Federal 
        regulations affecting small entities;</DELETED>
        <DELETED>    (4) to make Federal regulators accountable for 
        their actions; and</DELETED>
        <DELETED>    (5) to provide small entities with a meaningful 
        opportunity for the redress of arbitrary enforcement actions by 
        Federal regulators.</DELETED>

       <DELETED>TITLE I--REGULATORY SIMPLIFICATION AND VOLUNTARY 
                          COMPLIANCE</DELETED>

<DELETED>SEC. 101. DEFINITIONS.</DELETED>

<DELETED>    For purposes of this title, the following definitions 
shall apply:</DELETED>
        <DELETED>    (1) Compliance guide.--The term ``compliance 
        guide'' means a publication made by a covered agency under 
        section 102(a).</DELETED>
        <DELETED>    (2) Covered agency.--The term ``covered agency'' 
        has the same meaning as in section 30(a) of the Small Business 
        Act (as added by section 201 of this Act).</DELETED>
        <DELETED>    (3) No action letter.--The term ``no action 
        letter'' means a written determination from a covered agency 
        stating that, based on a no action request submitted to the 
        agency by a small entity, the agency will not take enforcement 
        action against the small entity under the rules of the covered 
        agency.</DELETED>
        <DELETED>    (4) No action request.--The term ``no action 
        request'' means a written correspondence submitted by a small 
        entity to a covered agency--</DELETED>
                <DELETED>    (A) stating a set of facts; and</DELETED>
                <DELETED>    (B) requesting a determination by the 
                agency of whether the agency would take an enforcement 
                action against the small entity based on such facts and 
                the application of any rule of the agency.</DELETED>
        <DELETED>    (5) Rule.--The term ``rule'' has the same meaning 
        as in section 601(2) of title 5, United States Code.</DELETED>
        <DELETED>    (6) Small entity.--The term ``small entity'' has 
        the same meaning as in section 601(6) of title 5, United States 
        Code.</DELETED>
        <DELETED>    (7) Small business concern.--The term ``small 
        business concern'' has the same meaning as in section 3 of the 
        Small Business Act.</DELETED>
        <DELETED>    (8) Voluntary self-audit.--The term ``voluntary 
        self-audit'' means an audit, assessment, or review of any 
        operation, practice, or condition of a small entity that--
        </DELETED>
                <DELETED>    (A) is initiated by an officer, employee, 
                or agent of the small entity; and</DELETED>
                <DELETED>    (B) is not required by law.</DELETED>

<DELETED>SEC. 102. COMPLIANCE GUIDES.</DELETED>

<DELETED>    (a) Compliance Guide.--</DELETED>
        <DELETED>    (1) Publication.--If a covered agency is required 
        to prepare a regulatory flexibility analysis for a rule or 
        group of related rules under section 603 of title 5, United 
        States Code, the agency shall publish a compliance guide for 
        such rule or group of related rules.</DELETED>
        <DELETED>    (2) Requirements.--Each compliance guide published 
        under paragraph (1) shall--</DELETED>
                <DELETED>    (A) contain a summary description of the 
                rule or group of related rules;</DELETED>
                <DELETED>    (B) contain a citation to the location of 
                the complete rule or group of related rules in the 
                Federal Register;</DELETED>
                <DELETED>    (C) provide notice to small entities of 
                the requirements under the rule or group of related 
                rules and explain the actions that a small entity is 
                required to take to comply with the rule or group of 
                related rules;</DELETED>
                <DELETED>    (D) be written in a manner to be 
                understood by the average owner or manager of a small 
                entity; and</DELETED>
                <DELETED>    (E) be updated as required to reflect 
                changes in the rule.</DELETED>
<DELETED>    (b) Dissemination.--</DELETED>
        <DELETED>    (1) In general.--Each covered agency shall 
        establish a system to ensure that compliance guides required 
        under this section are published, disseminated, and made easily 
        available to small entities.</DELETED>
        <DELETED>    (2) Small business development centers.--In 
        carrying out this subsection, each covered agency shall provide 
        sufficient numbers of compliance guides to small business 
        development centers for distribution to small businesses 
        concerns under section 21(c)(3)(R) of the Small Business Act 
        (as added by section 202 of this Act).</DELETED>
<DELETED>    (c) Limitation on Enforcement.--</DELETED>
        <DELETED>    (1) In general.--No covered agency may bring an 
        enforcement action in any Federal court or in any Federal 
        administrative proceeding against a small entity to enforce a 
        rule for which a compliance guide is not published and 
        disseminated by the covered agency as required under this 
        section.</DELETED>
        <DELETED>    (2) Effective dates.--This subsection shall take 
        effect--</DELETED>
                <DELETED>    (A) 1 year after the date of the enactment 
                of this Act with regard to a final regulation in effect 
                on the date of the enactment of this Act; and</DELETED>
                <DELETED>    (B) on the date of the enactment of this 
                Act with regard to a regulation that takes effect as a 
                final regulation after such date of 
                enactment.</DELETED>

<DELETED>SEC. 103. NO ACTION LETTER.</DELETED>

<DELETED>    (a) Application.--This section applies to all covered 
agencies, except--</DELETED>
        <DELETED>    (1) the Federal Trade Commission;</DELETED>
        <DELETED>    (2) the Equal Employment Opportunity Commission; 
        and</DELETED>
        <DELETED>    (3) the Consumer Product Safety 
        Commission.</DELETED>
<DELETED>    (b) Issuance of No Action Letter.--Not later than 90 days 
after the date on which a covered agency receives a no action request, 
the agency shall--</DELETED>
        <DELETED>    (1) make a determination regarding whether to 
        grant the no action request, deny the no action request, or 
        seek further information regarding the no action request; 
        and</DELETED>
        <DELETED>    (2) if the agency makes a determination under 
        paragraph (1) to grant the no action request, issue a no action 
        letter and transmit the letter to the requesting small 
        entity.</DELETED>
<DELETED>    (c) Reliance on No Action Letter or Compliance Guide.--In 
any enforcement action brought by a covered agency in any Federal 
court, or Federal administrative proceeding against a small entity, the 
small entity shall have a complete defense to any allegation of 
noncompliance or violation of a rule if the small entity affirmatively 
pleads and proves by a preponderance of the evidence that the act or 
omission constituting the alleged noncompliance or violation was taken 
in good faith with and in reliance on--</DELETED>
        <DELETED>    (1) a no action letter from that agency; 
        or</DELETED>
        <DELETED>    (2) a compliance guide of the applicable rule 
        published by the agency under section 102(a).</DELETED>

<DELETED>SEC. 104. VOLUNTARY SELF-AUDITS.</DELETED>

<DELETED>    (a) Inadmissibility of Evidence and Limitation on 
Discovery.--The evidence described in subsection (b)--</DELETED>
        <DELETED>    (1) shall not be admissible, unless agreed to by 
        the small entity, in any enforcement action brought against a 
        small entity by a Federal agency in any Federal--</DELETED>
                <DELETED>    (A) court; or</DELETED>
                <DELETED>    (B) administrative proceeding; 
                and</DELETED>
        <DELETED>    (2) may not be the subject of discovery in any 
        enforcement action brought against a small entity by a Federal 
        agency in any Federal--</DELETED>
                <DELETED>    (A) court; or</DELETED>
                <DELETED>    (B) administrative proceeding.</DELETED>
<DELETED>    (b) Application.--For purposes of subsection (a), the 
evidence described in this subsection is--</DELETED>
        <DELETED>    (1) a voluntary self-audit made in good faith; 
        and</DELETED>
        <DELETED>    (2) any report, finding, opinion, or any other 
        oral or written communication made in good faith relating to 
        such voluntary self-audit.</DELETED>
<DELETED>    (c) Exceptions.--Subsection (a) shall not apply if--
</DELETED>
        <DELETED>    (1) the act or omission that forms the basis of 
        the enforcement action is a violation of criminal law; 
        or</DELETED>
        <DELETED>    (2) the voluntary self-audit or the report, 
        finding, opinion, or other oral or written communication was 
        prepared for the purpose of avoiding disclosure of information 
        required for an investigative, administrative, or judicial 
        proceeding that, at the time of preparation, was imminent or in 
        progress.</DELETED>

<DELETED>SEC. 105. DEFENSE TO ENFORCEMENT ACTIONS.</DELETED>

<DELETED>    (a) In General.--No covered agency may impose a fine or 
penalty on a small entity if the small entity proves by a preponderance 
of the evidence that--</DELETED>
        <DELETED>    (1) the covered agency rule is vague or ambiguous; 
        and</DELETED>
        <DELETED>    (2) the interpretation by the small entity of the 
        rule is reasonable considering the rule and any applicable 
        compliance guide.</DELETED>
<DELETED>    (b) Interpretation of Rule.--In determining whether the 
interpretation of a rule by a small entity is reasonable, no deference 
shall be given to any interpretation of the rule by the agency that is 
not included in a compliance guide.</DELETED>

      <DELETED>TITLE II--SMALL BUSINESS RESPONSIVENESS OF COVERED 
                           AGENCIES</DELETED>

<DELETED>SEC. 201. SMALL BUSINESS AND AGRICULTURE OMBUDSMAN.</DELETED>

<DELETED>    The Small Business Act (15 U.S.C. 631 et seq.) is 
amended--</DELETED>
        <DELETED>    (1) by redesignating section 30 as section 31; 
        and</DELETED>
        <DELETED>    (2) by inserting after section 29 the following 
        new section:</DELETED>

<DELETED>``SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.</DELETED>

<DELETED>    ``(a) Definitions.--For purposes of this section, the 
following definitions shall apply:</DELETED>
        <DELETED>    ``(1) Board.--The term `Board' means a Small 
        Business Regulatory Fairness Board established under subsection 
        (c).</DELETED>
        <DELETED>    ``(2) Covered agency.--The term `covered agency' 
        means any agency that, as of the date of enactment of the Small 
        Business Regulatory Fairness Act of 1995, has promulgated any 
        rule for which a regulatory flexibility analysis was required 
        under section 605 of title 5, United States Code, and any other 
        agency that promulgates any such rule, as of the date of such 
        promulgation.</DELETED>
        <DELETED>    ``(3) Ombudsman.--The term `ombudsman' means a 
        Regional Small Business and Agriculture Ombudsman designated 
        under subsection (b).</DELETED>
        <DELETED>    ``(4) Region.--The term `region' means any area 
        for which the Administrator has established a regional office 
        of the Administration pursuant to section 4(a).</DELETED>
        <DELETED>    ``(5) Rule.--The term `rule' has the same meaning 
        as in section 601(2) of title 5, United States Code.</DELETED>
<DELETED>    ``(b) Ombudsman.--</DELETED>
        <DELETED>    ``(1) In general.--Not later than 180 days after 
        the date of enactment of the Small Business Regulatory Fairness 
        Act of 1995, the Administrator shall designate in each region a 
        senior employee of the Administration to serve as the Regional 
        Small Business and Agriculture Ombudsman in accordance with 
        this subsection.</DELETED>
        <DELETED>    ``(2) Duties.--Each ombudsman designated under 
        paragraph (1) shall--</DELETED>
                <DELETED>    ``(A) on a confidential basis, solicit and 
                receive comments from small business concerns regarding 
                the enforcement activities of covered 
                agencies;</DELETED>
                <DELETED>    ``(B) based on comments received under 
                subparagraph (A), annually assign and publish a small 
                business responsiveness rating to each covered 
                agency;</DELETED>
                <DELETED>    ``(C) publish periodic reports compiling 
                the comments received under subparagraph (A);</DELETED>
                <DELETED>    ``(D) coordinate the activities of the 
                Small Business Regulatory Fairness Board established 
                under subsection (c); and</DELETED>
                <DELETED>    ``(E) establish a toll-free telephone 
                number to receive comments from small business concerns 
                under subparagraph (A).''.</DELETED>

<DELETED>SEC. 202. SMALL BUSINESS REGULATORY FAIRNESS BOARDS.</DELETED>

<DELETED>    Section 30 of the Small Business Act (as added by section 
201 of this Act) is amended by adding at the end the following new 
subsection:</DELETED>
<DELETED>    ``(c) Small Business Regulatory Fairness Boards.--
</DELETED>
        <DELETED>    ``(1) In general.--Not later than 180 days after 
        the date of enactment of the Small Business Regulatory Fairness 
        Act of 1995, the Administrator shall establish in each region a 
        Small Business Regulatory Fairness Board in accordance with 
        this subsection.</DELETED>
        <DELETED>    ``(2) Duties.--Each Board established under 
        paragraph (1) shall--</DELETED>
                <DELETED>    ``(A) advise the ombudsman on matters of 
                concern to small business concerns relating to the 
                enforcement activities of covered agencies;</DELETED>
                <DELETED>    ``(B) conduct investigations into 
                enforcement activities by covered agencies with respect 
                to small business concerns;</DELETED>
                <DELETED>    ``(C) issue advisory findings and 
                recommendations regarding the enforcement activities of 
                covered agencies with respect to small business 
                concerns;</DELETED>
                <DELETED>    ``(D) review and approve, prior to 
                publication--</DELETED>
                        <DELETED>    ``(i) each small business 
                        responsiveness rating assigned under subsection 
                        (b)(2)(B); and</DELETED>
                        <DELETED>    ``(ii) each periodic report 
                        prepared under subsection (b)(2)(C); 
                        and</DELETED>
                <DELETED>    ``(E) prepare written opinions regarding 
                the reasonableness and understandability of rules 
                issued by covered agencies.</DELETED>
        <DELETED>    ``(3) Membership.--Each Board shall consist of--
        </DELETED>
                <DELETED>    ``(A) 1 member appointed by the 
                President;</DELETED>
                <DELETED>    ``(B) 1 member appointed by the Speaker of 
                the House of Representatives;</DELETED>
                <DELETED>    ``(C) 1 member appointed by the Minority 
                Leader of the House of Representatives;</DELETED>
                <DELETED>    ``(D) 1 member appointed by the Majority 
                Leader of the Senate; and</DELETED>
                <DELETED>    ``(E) 1 member appointed by the Minority 
                Leader of the Senate.</DELETED>
        <DELETED>    ``(4) Period of appointment; vacancies.--
        </DELETED>
                <DELETED>    ``(A) Period of appointment.--</DELETED>
                        <DELETED>    ``(i) Presidential appointees.--
                        Each member of the Board appointed under 
                        subparagraph (A) of paragraph (2) shall be 
                        appointed for a term of 3 years, except that 
                        the initial member appointed under such 
                        subparagraph shall be appointed for a term of 1 
                        year.</DELETED>
                        <DELETED>    ``(ii) House of representatives 
                        appointees.--Each member of the Board appointed 
                        under subparagraph (B) or (C) of paragraph (2) 
                        shall be appointed for a term of 3 years, 
                        except that the initial members appointed under 
                        such subparagraphs shall each be appointed for 
                        a term of 2 years.</DELETED>
                        <DELETED>    ``(iii) Senate appointees.--Each 
                        member of the Board appointed under 
                        subparagraph (D) or (E) of paragraph (2) shall 
                        be appointed for a term of 3 years.</DELETED>
                <DELETED>    ``(B) Vacancies.--Any vacancy on the 
                Board--</DELETED>
                        <DELETED>    ``(i) shall not affect the powers 
                        of the Board; and</DELETED>
                        <DELETED>    ``(ii) shall be filled in the same 
                        manner and under the same terms and conditions 
                        as the original appointment.</DELETED>
        <DELETED>    ``(5) Chairperson.--The Board shall select a 
        Chairperson from among the members of the Board.</DELETED>
        <DELETED>    ``(6) Meetings.--</DELETED>
                <DELETED>    ``(A) In general.--The Board shall meet at 
                the call of the Chairperson.</DELETED>
                <DELETED>    ``(B) Initial meeting.--Not later than 90 
                days after the date on which all members of the Board 
                have been appointed, the Board shall hold its first 
                meeting.</DELETED>
        <DELETED>    ``(7) Quorum.--A majority of the members of the 
        Board shall constitute a quorum for the conduct of business, 
        but a lesser number may hold hearings.</DELETED>
        <DELETED>    ``(8) Powers of the board.--</DELETED>
                <DELETED>    ``(A) Hearings.--The Board or, at its 
                direction, any subcommittee or member of the Board, 
                may, for the purpose of carrying out the provisions of 
                this section--</DELETED>
                        <DELETED>    ``(i) hold such hearings, sit and 
                        act at such times and places, take such 
                        testimony, receive such evidence, administer 
                        such oaths; and</DELETED>
                        <DELETED>    ``(ii) require, by subpoena or 
                        otherwise, the attendance and testimony of such 
                        witnesses and the production of such books, 
                        records, correspondence, memoranda, papers, 
                        documents, tapes, and materials as the Board or 
                        such subcommittee or member considers 
                        advisable.</DELETED>
                <DELETED>    ``(B) Issuance and enforcement of 
                subpoenas.--</DELETED>
                        <DELETED>    ``(i) Issuance.--Each subpoena 
                        issued pursuant to subparagraph (A) shall bear 
                        the signature of the Chairperson and shall be 
                        served by any person or class of persons 
                        designated by the Chairperson for that 
                        purpose.</DELETED>
                        <DELETED>    ``(ii) Enforcement.--</DELETED>
                                <DELETED>    ``(I) In general.--In the 
                                case of contumacy or failure to obey a 
                                subpoena issued under subparagraph (A), 
                                the United States district court for 
                                the judicial district in which the 
                                subpoenaed person resides, is served, 
                                or may be found may issue an order 
                                requiring such person to appear at any 
                                designated place to testify or to 
                                produce documentary or other 
                                evidence.</DELETED>
                                <DELETED>    ``(II) Contempt of 
                                court.--Any failure to obey the order 
                                of the court issued under subclause (I) 
                                may be punished by the court as a 
                                contempt of that court.</DELETED>
                <DELETED>    ``(C) Witness allowances and fees.--
                Section 1821 of title 28, United States Code, shall 
                apply to witnesses requested or subpoenaed to appear at 
                any hearing of the Board. The per diem and mileage 
                allowances for any witness shall be paid from funds 
                available to pay the expenses of the Board.</DELETED>
                <DELETED>    ``(D) Information from federal agencies.--
                Upon the request of the Chairperson, the Board may 
                secure directly from the head any Federal department or 
                agency such information as the Board considers 
                necessary to carry out the provisions of this 
                section.</DELETED>
                <DELETED>    ``(E)  Postal services.--The Board may use 
                the United States mails in the same manner and under 
                the same conditions as other departments and agencies 
                of the Federal Government.</DELETED>
                <DELETED>    ``(F) Donations.--The Board may accept, 
                use, and dispose of donations of services or 
                property.</DELETED>
        <DELETED>    ``(9) Board personnel matters.--</DELETED>
                <DELETED>    ``(A) Compensation.--Members of the Board 
                shall serve without compensation.</DELETED>
                <DELETED>    ``(B) Travel expenses.--Members of the 
                Board shall be allowed travel expenses, including per 
                diem in lieu of subsistence, at rates authorized for 
                employees of agencies under subchapter I of chapter 57 
                of title 5, United States Code, while away from their 
                homes or regular places of business in the performance 
                of services for the Board.''.</DELETED>

<DELETED>SEC. 203. SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT 
              CENTERS.</DELETED>

<DELETED>    Section 21(c)(3) of the Small Business Act (15 U.S.C. 
648(c)(3)) is amended--</DELETED>
        <DELETED>    (1) in subparagraph (O), by striking ``and'' at 
        the end;</DELETED>
        <DELETED>    (2) in subparagraph (P), by striking the period at 
        the end and inserting a semicolon; and</DELETED>
        <DELETED>    (3) by inserting immediately after subparagraph 
        (P) the following new subparagraphs:</DELETED>
                <DELETED>    ``(Q) providing assistance to small 
                business concerns regarding regulatory requirements, 
                including providing training with respect to cost-
                effective regulatory compliance;</DELETED>
                <DELETED>    ``(R) developing informational 
                publications, establishing resource centers of 
                reference materials, and distributing compliance guides 
                published under section 102(a) of the Small Business 
                Regulatory Fairness Act of 1995 to small business 
                concerns; and</DELETED>
                <DELETED>    ``(S) developing a program to provide 
                confidential onsite assessments and recommendations 
                regarding regulatory compliance to small business 
                concerns and assisting small business concerns in 
                analyzing the business development issues associated 
                with regulatory implementation and compliance 
                measures.''.</DELETED>

   <DELETED>TITLE III--FINANCIAL ACCOUNTABILITY OF COVERED AGENCIES 
                RELATING TO FEES AND EXPENSES</DELETED>

<DELETED>SEC. 301. ADMINISTRATIVE PROCEEDINGS.</DELETED>

<DELETED>    Section 504 of title 5, United States Code, is amended--
</DELETED>
        <DELETED>    (1) in subsection (b)(1)(B)--</DELETED>
                <DELETED>    (A) by striking ``, or (ii)'' and 
                inserting ``, (ii)''; and</DELETED>
                <DELETED>    (B) by striking the semicolon at the end 
                of the subparagraph and inserting the following: ``, or 
                (iii) a small entity as such term is defined in 
                subsection (g)(1)(D);'' and</DELETED>
        <DELETED>    (2) by adding at the end the following new 
        subsection:</DELETED>
<DELETED>    ``(g)(1) For purposes of this subsection, the term--
</DELETED>
        <DELETED>    ``(A) `covered agency' has the same meaning as in 
        section 30(a) of the Small Business Act;</DELETED>
        <DELETED>    ``(B) `fees and other expenses' has the same 
        meaning as in subsection (b)(1)(A), except that--</DELETED>
                <DELETED>    ``(i) clause (ii) of such subparagraph (A) 
                shall not apply; and</DELETED>
                <DELETED>    ``(ii) attorney's fees shall not be 
                awarded at a rate of pay in excess of $150 per hour 
                unless the adjudicative party determines that regional 
                costs or other special factors justify a higher 
                fee;</DELETED>
        <DELETED>    ``(C) `prevailing small entity'--</DELETED>
                <DELETED>    ``(i) means a small entity that raised a 
                successful defense to an agency enforcement action by a 
                covered agency in an adversary adjudication; 
                and</DELETED>
                <DELETED>    ``(ii) includes a small entity that is a 
                party in an adversary adjudication in which the 
                adjudicative officer orders a corrective action or 
                penalty against the small entity that is less 
                burdensome than the corrective action or 
penalty initially sought or demanded by the covered agency; 
and</DELETED>
        <DELETED>    ``(D) `small entity' has the same meaning as in 
        section 601(6).</DELETED>
<DELETED>    ``(2) For the purpose of making a finding of whether an 
award under subsection (a)(1) is unjust, in any case in which fees and 
other expenses would be awarded to a prevailing small entity as a 
prevailing party--</DELETED>
        <DELETED>    ``(A) the adjudicative officer of the agency shall 
        not consider whether the position of the agency was 
        substantially justified; and</DELETED>
        <DELETED>    ``(B) special circumstances shall be limited to 
        circumstances in which--</DELETED>
                <DELETED>    ``(i) the matters in the adversary 
                adjudication are matters for which there is little or 
                no legal precedent; or</DELETED>
                <DELETED>    ``(ii) findings of fact or conclusions of 
                law are based on inconsistent interpretations of 
                applicable law by different courts.</DELETED>
<DELETED>    ``(3) If a prevailing small entity is awarded fees and 
other expenses as a prevailing party under subsection (a)(1), such fees 
and other expenses shall include all fees and expenses incurred by the 
small entity in appearing in any proceeding the purpose of which is to 
determine the amount of fees and other expenses.</DELETED>
<DELETED>    ``(4) Fees and other expenses awarded to a prevailing 
small entity as a prevailing party under this section shall be paid by 
the covered agency from funds made available to the agency by 
appropriation or from fees or other amounts charged to the public if 
authorized by law. A covered agency may not increase any such fee or 
amount charged for the purpose of paying fees and other expenses 
awarded to a prevailing small entity as a prevailing party under this 
section.''.</DELETED>

<DELETED>SEC. 302. JUDICIAL PROCEEDINGS.</DELETED>

<DELETED>    Section 2412 of title 28, United States Code, is amended--
</DELETED>
        <DELETED>    (1) in subsection (d)(2)(B)--</DELETED>
                <DELETED>    (A) by striking ``, or (ii)'' and 
                inserting ``, (ii)''; and</DELETED>
                <DELETED>    (B) by striking the semicolon at the end 
                of the subparagraph and inserting the following: ``, or 
                (iii) a small entity as defined under subsection 
                (g)(1)(D);'' and</DELETED>
        <DELETED>    (2) by adding at the end the following new 
        subsection:</DELETED>
<DELETED>    ``(g)(1) For purposes of this subsection, the term--
</DELETED>
        <DELETED>    ``(A) `covered agency' has the same meaning as in 
        section 30(a) of the Small Business Act;</DELETED>
        <DELETED>    ``(B) `fees and other expenses' has the same 
        meaning as in subsection (d)(2)(A), except that--</DELETED>
                <DELETED>    ``(i) clause (ii) of such subparagraph (A) 
                shall not apply; and</DELETED>
                <DELETED>    ``(ii) attorney's fees shall not be 
                awarded at a rate of pay in excess of $150 per hour 
                unless the court determines that regional costs or 
                other special factors justify a higher fee;</DELETED>
        <DELETED>    ``(C) `prevailing small entity'--</DELETED>
                <DELETED>    ``(i) means a small entity that raised a 
                successful defense to an agency enforcement action by a 
                covered agency in a civil action; and</DELETED>
                <DELETED>    ``(ii) includes a small entity that is a 
                party in a civil action in which the court orders a 
                corrective action or penalty against the small entity 
                that is less burdensome than the corrective action or 
                penalty initially sought or demanded by the covered 
                agency; and</DELETED>
        <DELETED>    ``(D) `small entity' has the same meaning as the 
        term `small entity' in section 601(6) of title 5.</DELETED>
<DELETED>    ``(2) For the purpose of making a finding of whether an 
award under subsection (d)(1)(A) is unjust, in any case in which fees 
and other expenses would be awarded to a prevailing small entity as a 
prevailing party--</DELETED>
        <DELETED>    ``(A) the court shall not consider whether the 
        position of the United States was substantially justified; 
        and</DELETED>
        <DELETED>    ``(B) special circumstances shall be limited to 
        circumstances in which--</DELETED>
                <DELETED>    ``(i) the matters in the civil action are 
                matters for which there is little or no legal 
                precedent; or</DELETED>
                <DELETED>    ``(ii) findings of fact or conclusions of 
                law are based on inconsistent interpretations of 
                applicable law by different courts.</DELETED>
<DELETED>    ``(3) If a prevailing small entity is awarded fees and 
other expenses as a prevailing party under subsection (d)(1)(A), such 
fees and expenses shall include all fees and expenses incurred by the 
small entity in appearing in any proceeding the purpose of which is to 
determine the amount of fees and other expenses.</DELETED>
<DELETED>    ``(4) Fees and other expenses awarded to a prevailing 
small entity as a prevailing party under this section shall be paid by 
the covered agency from funds made available to the agency by 
appropriation or from fees or other amounts charged to the public if 
authorized by law. A covered agency may not increase any such fee or 
amount charged for the purpose of paying fees and other expenses 
awarded to a prevailing small entity as a prevailing party under this 
section.''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Regulatory 
Enforcement Fairness Act of 1996''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) a vibrant and growing small business sector is critical 
        to creating jobs in a dynamic economy;
            (2) small businesses bear a disproportionate share of 
        regulatory costs and burdens;
            (3) fundamental changes that are needed in the regulatory 
        and enforcement culture of federal agencies to make agencies 
        more responsive to small business can be made without 
        compromising the statutory missions of the agencies;
            (4) three of the top recommendations of the White House 
        Conference on Small Business involve reforms to the way 
        government regulations are developed and enforced, and 
        reductions in government paperwork requirements;
            (5) the requirements of the Regulatory Flexibility Act have 
        too often been ignored by government agencies, resulting in 
        greater regulatory burdens on small entities than necessitated 
        by statute; and
            (6) small entities should be given the opportunity to seek 
        judicial review of agency actions required by the Regulatory 
        Flexibility Act.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to implement certain recommendations of the 1995 White 
        House Conference on Small Business regarding the development 
        and enforcement of Federal regulations;
            (2) to provide for judicial review of the Regulatory 
        Flexibility Act;
            (3) to encourage the effective participation of small 
        businesses in the Federal regulatory process;
            (4) to simplify the language of Federal regulations 
        affecting small businesses;
            (5) to develop more accessible sources of information on 
        regulatory and reporting requirements for small businesses;
            (6) to create a more cooperative regulatory environment 
        among agencies and small businesses that is less punitive and 
        more solution-oriented; and
            (7) to make Federal regulators more accountable for their 
        enforcement actions by providing small entities with a 
        meaningful opportunity for redress of excessive enforcement 
        activities.

SEC. 4. EFFECTIVE DATE.

    This Act shall become effective on the date 90 days after 
enactment.

             TITLE I--REGULATORY COMPLIANCE SIMPLIFICATION

SEC. 101. DEFINITIONS.

    For purposes of this Act--
            (1) the terms ``rule'' and ``small entity'' have the same 
        meanings as in section 601 of title 5, United States Code;
            (2) the term ``agency'' has the same meaning as in section 
        551 of title 5, United States Code; and
            (3) the term ``small entity compliance guide'' means a 
        document designated as such by an agency.

SEC. 102. COMPLIANCE GUIDES.

    (a) Compliance Guide.--For each rule or group of related rules for 
which an agency is required to prepare a final regulatory flexibility 
analysis under section 604 of title 5, United States Code, the agency 
shall publish one or more guides to assist small entities in complying 
with the rule, and shall designate such publications as ``small entity 
compliance guides''. The guides shall explain the actions a small 
entity is required to take to comply with a rule or group of rules. The 
agency shall, in its sole discretion, ensure that the guide is written 
using sufficiently plain language to be understood by affected small 
entities. Agencies may prepare separate guides covering groups or 
classes of similarly affected small entities, and may cooperate with 
associations of small entities to develop and distribute such guides.
    (b) Single Source of Information.--Agencies shall cooperate to make 
available to small entities through a single source of information, the 
small entity compliance guides and all other available information on 
statutory and regulatory requirements affecting small entities.
    (c) Limitation on Judicial Review.--Except as provided by this 
subsection, an agency's designation of a small entity compliance guide 
shall not be subject to judicial review. In any civil or administrative 
action against a small entity for a violation occurring after the 
effective date of this section, the content of the small business guide 
may be considered as evidence of the reasonableness or appropriateness 
of any proposed fines, penalties or damages.

SEC. 103. INFORMAL SMALL ENTITY GUIDANCE.

    (a) In General.--Whenever appropriate in the interest of 
administering statutes and regulations within the jurisdiction of an 
agency, it shall be the practice of the agency to answer inquiries by 
small entities concerning information on and advice about compliance 
with such statutes and regulations, interpreting and applying the law 
to specific sets of facts supplied by the small entity. In any civil or 
administrative action against a small entity, guidance provided by an 
agency to a small entity may be considered as evidence of the 
reasonableness or appropriateness of any proposed fines, penalties or 
damages imposed on such small entity.
    (b) Program.--Each agency shall establish a program for issuing 
guidance in response to such inquiries no later than 1 year after 
enactment of this section, utilizing existing functions and personnel 
of the agency to the extent practicable.

SEC. 104. SERVICES OF SMALL BUSINESS DEVELOPMENT CENTERS.

    Section 21(c)(3) of the Small Business Act (15 U.S.C. 648(c)(3)) is 
amended--
            (1) in subparagraph (O), by striking ``and'' at the end;
            (2) in subparagraph (P), by striking the period at the end 
        and inserting a semicolon; and
            (3) by inserting after subparagraph (P) the following new 
        subparagraphs:
            ``(Q) providing assistance to small business concerns 
        regarding regulatory requirements, including providing training 
        with respect to cost-effective regulatory compliance;
            ``(R) developing informational publications, establishing 
        resource centers of reference materials, and distributing 
        compliance guides published under section 102(a) of the Small 
        Business Regulatory Enforcement Fairness Act of 1996 to small 
        business concerns; and
            ``(S) developing programs to provide confidential onsite 
        assessments and recommendations regarding regulatory compliance 
        to small business concerns and assisting small business 
        concerns in analyzing the business development issues 
        associated with regulatory implementation and compliance 
        measures.''.

SEC. 105. MANUFACTURING TECHNOLOGY CENTERS.

    The Manufacturing Technology Centers and other similar extension 
centers administered by the National Institute of Standards and 
Technology of the Department of Commerce shall, as appropriate, provide 
the assistance regarding regulatory requirements, develop and 
distribute information and guides and develop the programs to provide 
confidential onsite assessments and recommendations regarding 
regulatory compliance described in Section 104 of this Act.

                TITLE II--REGULATORY ENFORCEMENT REFORMS

SEC. 201. SMALL BUSINESS AND AGRICULTURE ENFORCEMENT OMBUDSMAN.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended--
            (1) by redesignating section 30 as section 31; and
            (2) by inserting after section 29 the following new 
        section:

``SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

    ``(a) Definitions.--For purposes of this section, the term--
            ``(1) `Board' means a Regional Small Business Regulatory 
        Fairness Board established under subsection (c); and
            ``(2) `Ombudsman' means the Small Business and Agriculture 
        Regulatory Enforcement Ombudsman designated under subsection 
        (b).
    ``(b) SBA Enforcement Ombudsman.--
            ``(1) Not later than 180 days after the date of enactment 
        of this section, the Administration shall designate a Small 
        Business and Agriculture Regulatory Enforcement Ombudsman 
        utilizing existing personnel to the extent practicable. Other 
        agencies shall assist the Ombudsman and take actions as 
        necessary to ensure compliance with the requirements of this 
        section. Nothing in this section is intended to replace or 
        diminish the activities of any Ombudsman or similar office in 
        any other agency.
            ``(2) The Ombudsman shall--
                    ``(A) work with each agency with regulatory 
                authority over small businesses to ensure that small 
                business concerns that receive or are subject to an 
                audit, on-site inspection, compliance assistance 
                effort, or other enforcement related communication or 
                contact by agency personnel are provided with a 
                confidential means to comment on and rate the 
                performance of such personnel;
                    ``(B) establish means to solicit and receive 
                comments from small business concerns regarding actions 
                by agency employees conducting compliance or 
                enforcement related activities with respect to the 
                small business concern, and maintain the identity of 
                the person and small business concern making such 
                comments on a confidential basis; and
                    ``(C) based on comments received from small 
                business concerns and the Boards, annually report to 
                Congress and affected agencies concerning the 
                enforcement activities of agency personnel including 
a rating of the responsiveness to small business of the various 
regional and program offices and personnel of each agency; and
                    ``(D) coordinate and report annually on the 
                activities, findings and recommendations of the Boards 
                to the Administration and to the heads of affected 
                agencies.
    ``(c) Regional Small Business Regulatory Fairness Boards.--
            ``(1) Not later than 180 days after the date of enactment 
        of this section, the Administration shall establish a Small 
        Business Regulatory Fairness Board in each regional office of 
        the Small Business Administration.
            ``(2) Each Board established under paragraph (1) shall--
                    ``(A) meet at least annually to advise the 
                Ombudsman on matters of concern to small businesses 
                relating to the enforcement activities of agencies;
                    ``(B) report to the Ombudsman on instances of 
                excessive enforcement actions of agencies against small 
                business concerns including any findings or 
                recommendations of the Board as to agency enforcement 
                policy or practice; and
                    ``(C) prior to publication, provide comment on the 
                annual report of the Ombudsman prepared under 
                subsection (b).
            ``(3) Each Board shall consist of five members appointed by 
        the Administration, after receiving the recommendations of the 
        chair and ranking minority member of the Small Business 
        Committees of the House and Senate.
            ``(4) Members of the Board shall serve for terms of three 
        years or less.
            ``(5) The Administration shall select a chair from among 
        the members of the Board who shall serve for not more than 2 
        years as chair.
            ``(6) A majority of the members of the Board shall 
        constitute a quorum for the conduct of business, but a lesser 
        number may hold hearings.
    ``(d) Powers of the Boards.--
            ``(1) The Board may hold such hearings and collect such 
        information as appropriate for carrying out this section.
            ``(2) The Board may use the United States mails in the same 
        manner and under the same conditions as other departments and 
        agencies of the Federal Government.
            ``(3) The Board may accept donations of services necessary 
        to conduct its business.
            ``(4) Members of the Board shall serve without 
        compensation, provided that, members of the Board shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Board.''.

SEC. 202. RIGHTS OF SMALL ENTITIES IN ENFORCEMENT ACTIONS.

    (a) In General.--Each agency regulating the activities of small 
entities shall establish a policy or program to provide for the 
reduction, and under appropriate circumstances for the waiver, of civil 
penalties for violations of a statutory or regulatory requirement by a 
small entity.
    (b) Conditions and Exceptions.--Policies or programs established 
under this section may contain conditions or exceptions such as--
            (1) requiring the small entity to correct the violation 
        within a reasonable correction period;
            (2) limiting the applicability to violations discovered by 
        the small entity through participation in a compliance 
        assistance or audit program operated or supported by the agency 
        or a State, or through a compliance audit resulting in 
        disclosure of the violation;
            (3) exempting small entities that have been subject to 
        multiple enforcement actions by the agency;
            (4) exempting violations involving willful or criminal 
        conduct; and
            (5) exempting violations that pose serious health, safety 
        or environmental threats or risk of serious injury.

           TITLE III--EQUAL ACCESS TO JUSTICE ACT AMENDMENTS

SEC. 301. ADMINISTRATIVE PROCEEDINGS.

    Section 504(b)(1) of title 5, United States Code, is amended--
            (1) by striking ``$75'' in subparagraph (A) and inserting 
        ``$125'';
            (2) by striking ``, or (ii)'' in subparagraph (B) and 
        inserting ``, (ii)'';
            (3) at the end of subparagraph (B), by striking ``;'' and 
        inserting the following: ``, or (iii) a small entity as defined 
        in section 601;'';
            (4) by striking ``; and'' in subparagraph (D) and inserting 
        ``;''; and
            (5) by adding at the end the following new subparagraphs:
            ``(F) `prevailing party' includes a small entity with 
        respect to claims in an adversary adjudication brought by an 
        agency (1) that the small entity has raised a successful 
        defense to, or (2) with respect to which the decision of the 
        adjudicative officer is substantially less than that sought by 
        the agency in the adversary adjudication, provided that such 
        small entity has not committed a willful violation of the law 
        or otherwise acted in bad faith, and
            ``(G) in an adversary adjudication brought by an agency 
        against a small entity, in the determination whether the 
        position of the agency, including any citation, assessment, 
        fine, penalty or demand for settlement sought by the agency, is 
        `substantially justified' only if the agency demonstrates that 
        such position does not substantially exceed the decision of the 
        adjudicative officer in the adversary adjudication, and the 
        position of the agency is consistent with agency policy.''.

SEC. 302. JUDICIAL PROCEEDINGS.

    Section 2412 of title 28, United States Code, is amended in 
paragraph (d)(2)--
            (1) by striking ``$75'' in subparagraph (A) and inserting 
        ``$125'';
            (2) by striking ``, or (ii)'' in subparagraph (B) and 
        inserting ``, (ii)'';
            (3) by striking ``; and'' subparagraph (G) and inserting 
        ``;''
            (4) in subparagraph (H)--
                (i) after ``prevailing party'','' by inserting 
                ``includes a small entity with respect to a claim in a 
                civil action brought by the United States (1) that the 
                small entity has raised a successful defense to, or (2) 
                with respect to which the final judgement in the action 
                is substantially less than that sought by the United 
                States, provided that such small entity has not 
                committed a willful violation of the law or otherwise 
                acted in bad faith, and''; and
                    (ii) at the end of the subparagraph, by striking 
                the period and inserting ``; and''; and
            (5) by adding at the end the following new subparagraph:
            ``(I) In a civil action brought by the United States 
        against a small entity, a position of the United States, 
        including any citation, assessment, fine, penalty or demand for 
        settlement sought by an agency, is ``substantially justified'' 
        only if the United States demonstrates that such position does 
        not substantially exceed the value of the final judgement in 
        the action, and the position of the United States is consistent 
        with agency policy.''.

            TITLE IV--REGULATORY FLEXIBILITY ACT AMENDMENTS

SEC. 401. REGULATORY FLEXIBILITY ANALYSES.

    (a) Initial Regulatory Flexibility Analysis.--Section 603(a) of 
title 5, United States Code, is amended--
            (1) by inserting after ``proposed rule'', the phrase ``, or 
        publishes a notice of interpretive rule making of general 
        applicability for any proposed interpretive rule''; and
            (2) by inserting at the end of the subsection, the 
        following new sentence: ``In the case of interpretive rule 
        making involving the internal revenue laws of the United 
        States, this section applies only to regulations as that term 
        is used in section 7805 of the Internal Revenue Code of 1986 
        that impose a record keeping, reporting or paperwork 
        requirement on small entities.''.
    (b) Final Regulatory Flexibility Analysis.--Section 604 of title 5, 
United States Code, is amended--
            (1) in subsection (a) to read as follows:
    ``(a) When an agency promulgates a final rule under section 553 of 
this title, after being required by that section or any other law to 
publish a general notice of proposed rulemaking, or otherwise 
publishing an initial regulatory flexibility analysis, the agency shall 
prepare a final regulatory flexibility analysis. Each final regulatory 
flexibility analysis shall contain--
            ``(1) a succinct statement of the need for, and objectives 
        of, the rule;
            ``(2) a summary of the issues raised by the public comments 
        in response to the initial regulatory flexibility analysis, a 
        summary of the assessment of the agency of such issues, and a 
        statement of any changes made in the proposed rule as a result 
        of such comments;
            ``(3) a description of, and an estimate of the number of, 
        small entities to which the rule will apply or an explanation 
        of why no such estimate is available;
            ``(4) a description of the projected reporting, record 
        keeping and other compliance requirements of the rule, 
        including an estimate of the classes of small entities which 
        will be subject to the requirement and the type of professional 
        skills necessary for preparation of the report or record; and
            ``(5) a description of the steps the agency has taken to 
        minimize the significant economic impact on small entities 
        consistent with the stated objectives of applicable statutes, 
        including a statement of the factual policy, and legal reasons 
        for selecting the alternative adopted in the final rule and why 
        each one of the other significant alternatives to the rule 
        considered by the agency was rejected.''; and
            (2) in subsection (b), by striking ``at the time'' and all 
        that follows and inserting ``such analysis or a summary 
        thereof.''.

SEC. 402. JUDICIAL REVIEW.

    Section 611 of title 5, United States Code, is amended to read as 
follows:
``Sec. 611. Judicial review
    ``(a)(1) For any rule subject to this chapter, a small entity that 
is adversely affected or aggrieved by agency action is entitled to 
judicial review of agency compliance with the requirements of this 
chapter, except the requirements of sections 602, 603, 609 and 612.
    ``(2) Each court having jurisdiction to review such rule for 
compliance with section 553 of this title or under any other provision 
of law shall have jurisdiction to review any claims of noncompliance 
with this chapter, except the requirements of sections 602, 603, 609 
and 612.
    ``(3)(A) A small entity may seek such review during the period 
beginning on the date of final agency action and ending one year later, 
except that where a provision of law requires that an action 
challenging a final agency action be commenced before the expiration of 
such one year period, such lesser period shall apply to a petition for 
judicial review under this section.
    ``(B) In the case where an agency delays the issuance of a final 
regulatory flexibility analysis pursuant to section 608(b) of this 
chapter, a petition for judicial review under this section shall be 
filed not later than--
            ``(i) one year after the date the analysis is made 
        available to the public, or
            ``(ii) where a provision of law requires that an action 
        challenging a final agency regulation be commenced before the 
        expiration of the one year period, the number of days specified 
        in such provision of law that is after the date the analysis is 
        made available to the public.
    ``(4) If the court determines, on the basis of the rulemaking 
record, that the agency action under this chapter was arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
the law, the court shall order the agency to take corrective action 
consistent with this chapter, which may include--
            ``(A) remanding the rule to the agency, or
            ``(B) deferring the enforcement of the rule against small 
        entities, unless the court finds good cause for continuing the 
        enforcement of the rule pending the completion of the 
        corrective action.
    ``(5) Nothing in this subsection shall be construed to limit the 
authority of any court to stay the effective date of any rule or 
provision thereof under any other provision of law or to grant any 
other relief in addition to the requirements of this section.
    ``(b) In an action for the judicial review of a rule, the 
regulatory flexibility analysis for such rule, including an analysis 
prepared or corrected pursuant to paragraph (a)(4), shall constitute 
part of the entire record of agency action in connection with such 
review.
    ``(c) Except as otherwise required by this chapter, the court shall 
apply the same standards of judicial review that govern the review of 
agency findings under the statute granting the agency authority to 
conduct a rule making.
    ``(d) Compliance or noncompliance by an agency with the provisions 
of this chapter shall be subject to judicial review only in accordance 
with this section.
    ``(e) Nothing in this section bars judicial review of any other 
impact statement or similar analysis required by any other law if 
judicial review of such statement or analysis is otherwise permitted by 
law.''.

SEC. 403. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Section 605(b) of title 5, United States Code, is amended to 
read as follows:
    ``(b) Sections 603 and 604 of this title shall not apply to any 
proposed or final rule if the head of the agency certifies that the 
rule will not, if promulgated, have a significant economic impact on a 
substantial number of small entities. If the head of the agency makes a 
certification under the preceding sentence, the agency shall publish 
such certification in the Federal Register, at the time of publication 
of general notice of proposed rule making for the rule or at the time 
of publication of the final rule, along with a statement providing the 
factual and legal reasons for such certification. The agency shall 
provide such certification and statement to the Chief Counsel for 
Advocacy of the Small Business Administration.''.
    (b) Section 612 of title 5, United States Code, is amended--
            (1) in subsection (a), by striking ``the committees on the 
        Judiciary of the Senate and the House of Representatives, the 
        Select Committee on Small Business of the Senate, and the 
        Committee on Small Business of the House of Representatives'' 
        and inserting ``the Committees on the Judiciary and Small 
        Business of the Senate and House of Representatives''.
            (2) in subsection (b), by striking ``his views with respect 
        to the'' and inserting in lieu thereof, ``his or her views with 
        respect to compliance with this chapter, the adequacy of the 
        rulemaking record and the''.

SEC. 404. SMALL BUSINESS ADVOCACY REVIEW PANELS.

    (a) Small Business Outreach and Interagency Coordination.--Section 
609 of title 5, United States Code, is amended--
            (1) before ``techniques,'' by inserting ``the reasonable 
        use of'';
            (2) in paragraph (4), after ``entities'', by inserting 
        ``including soliciting and receiving comments over computer 
        networks'';
            (3) by designating the current text as subsection (a); and
            (4) by adding the following new subsection:
    ``(b) Prior to publication of an initial regulatory flexibility 
analysis--
            ``(1) an agency shall notify the Chief Counsel for Advocacy 
        of the Small Business Administration and provide the Chief 
        Counsel with information on the potential impacts of the 
        proposed rule on small entities and the type of small entities 
        that might be affected;
            ``(2) the Chief Counsel shall identify individuals 
        representative of affected small entities for the purpose of 
        obtaining advice and recommendations from those individuals 
        about the potential impacts of the proposed rule;
            ``(3) the agency shall convene a review panel for such rule 
        consisting wholly of full time federal employees of the office 
        within the agency responsible for carrying out the proposed 
        rule, the Office of Information and Regulatory Affairs within 
        the Office of Management and Budget, and the Chief Counsel;
            ``(4) the panel shall review any material the agency has 
        prepared in connection with this chapter, collect advice and 
        recommendations of the small entity representatives identified 
        by the agency after consultation with the Chief Counsel, on 
        issues related to subsection 603(b), paragraphs (3), (4) and 
        (5);
            ``(5) the review panel shall report on the comments of the 
        small entity representatives and its findings as to issues 
        related to subsection 603(b), paragraphs (3), (4) and (5), 
        provided that such report shall be made public as part of the 
        rulemaking record; and
            ``(6) where appropriate, the agency shall modify the 
        proposed rule or the decision on whether an initial regulatory 
        flexibility analysis is required.
    ``(c) Prior to publication of a final regulatory flexibility 
analysis--
            ``(1) an agency shall reconvene the review panel 
        established under paragraph (b)(3), or if no initial regulatory 
        flexibility analysis was published, undertake the actions 
        described in paragraphs (b)(1) through (3);
            ``(2) the panel shall review any material the agency has 
        prepared in connection with this chapter, collect the advice 
        and recommendations of the small entity representatives 
        identified by the agency after consultation with the Chief 
        Counsel, on issues related to subsection 604(a), paragraphs 
        (3), (4) and (5);
            ``(3) the review panel shall report on the comments of the 
        small entity representatives and its findings as to issues 
        related to subsection 604(a), paragraphs (3), (4) and (5), 
        provided that such report shall be made public as part of the 
        rulemaking record; and
            ``(4) where appropriate, the agency shall modify the final 
        rule or the decision on whether a final regulatory flexibility 
        analysis is required.
    ``(d) An agency may in its discretion apply subsections (b) and (c) 
to rules that the agency intends to certify under subsection 605(b), 
but the agency believes may have a greater than de minimis impact on a 
substantial number of small entities.''.
    (b) Small Business Advocacy Chairpersons.--Not later than 30 days 
after the date of enactment of this Act, the head of each agency that 
has conducted a final regulatory flexibility analysis shall designate a 
small business advocacy chairperson using existing personnel to the 
extent possible, to be responsible for implementing this section and to 
act as permanent chair of the agency's review panels established 
pursuant to this section.
S 942 RS----2
S 942 RS----3
S 942 RS----4
```