28214 Federal Register / Vol. 63, No. 98 /Thursday, May 21, 1998 / Notices

1 The applicable procurement statutes and

regulations do not provide for special consideration

of or rights for small governmental entities.

SBREFA did not make statutory changes that would

result in changes to the Federal Acquisition

Regulation to address small entities.

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

[Docket No. FR–4347–N–01]

Notice and Request for Comments on

HUD’s Implementation of the Small

Business Regulatory Enforcement

Fairness Act of 1996

AGENCY: Office of the Secretary, HUD.

ACTION: Notice.

SUMMARY: This notice solicits comments

on HUD’s implementation of the Small

Business Regulatory Enforcement

Fairness Act of 1996 (SBREFA). The

notice describes HUD’s implementation

to date of SBREFA and additional

implementation plans.

DATES: COMMENT DUE DATE: July 20,

1998.

ADDRESSES: Interested persons are

invited to submit comments regarding

this document to the Regulations

Division, Office of the General Counsel,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410–

0500. Communications should refer to

the above docket number and title and

to the specific sections in the regulation.

Facsimile (FAX) comments are not

acceptable. A copy of each

communication submitted will be

available for public inspection and

copying during regular business hours

at the above address.

FOR FURTHER INFORMATION CONTACT:

Casimir Bonkowski, Director, Office of

Small and Disadvantaged Businesses,

Department of Housing and Urban

Development, Room 3130 451 Seventh

Street, S.W., Washington, DC 20410,

telephone 202–708–1428. Hearing- or

speech-impaired persons may use the

telecommunications system for the

hearing-impaired (TTY) by contacting

the Federal Information Relay Service

on 1–800–877-TTY (1–800–877–8339)

or (202) 708–9300. (Other than the

‘‘800’’ TTY number, telephone numbers

are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. The Small Business Regulatory

Enforcement Fairness Act

The Small Business Regulatory

Enforcement Fairness Act of 1996

(Pub.L. 104–121, 110 Stat. 847,

approved March 29, 1996) (‘‘SBREFA’’)

provides, among other things, for

agencies to establish specific policies or

programs to assist small entities. Small

entities include small businesses,

nonprofit organizations, and small

governmental jurisdictions.

Section 213 of SBREFA requires each

covered agency to establish a program to

answer inquiries concerning

information and advice about

compliance with statutes and

regulations within the agency’s

jurisdiction. The agency must use

information received during these

inquiries to help small entities interpret

and apply the regulations to specific

facts.

Section 223 of SBREFA requires each

covered agency to establish a policy or

program to reduce or waive civil

penalties when a small entity violates a

statute or regulation. Under appropriate

circumstances, an agency may consider

ability to pay when it assesses a penalty

against a small entity. 1

II. Identification of HUD Regulations

That May Have a Significant Economic

Impact on a Substantial Number of

Small Entities

Although HUD is not generally

regarded as a ‘‘regulatory agency’’, HUD

has important regulatory

responsibilities, including oversight and

enforcement of the Real Estate

Settlement Procedures Act (RESPA) and

the Interstate Land Sales Full Disclosure

Act; oversight over certain activities of

government-sponsored enterprises

(GSEs); oversight and enforcement of

FHA mortgage insurance programs; and

the establishment and enforcement of

lead-based paint hazard control

standards and manufactured housing

standards.

HUD has long had in place a

systematic process for determining

whether newly developed rules are

likely to have a significant economic

impact on a substantial number of small

entities. The typical HUD rule

implements statutory directions for the

administration of grant programs. Rules

of this type are intended to reflect

Congressional mandates that, by their

nature, have universal applicability to

the portion of the public affected by the

rule. These rules generally do not lend

themselves to the provision of special

procedures, or exemptions from

requirements, applicable to small

entities. Although HUD Rules are

generally not the type to lend

themselves to special procedures or

exemptions for small entities, HUD

nevertheless has developed a process

intended to introduce additional

scrutiny to existing procedures for

safeguarding the interests of small

entities during development and

following implementation of

regulations.

To ensure that there is a meaningful

assessment of HUD rules to determine

which rules, if any, will have a

significant economic impact on

substantial number of small businesses,

HUD:

(1) Targets regulations that may

impact small businesses at the earliest

opportunity in the development

process; and

(2) Assigns oversight responsibility to

HUD’s Office of Small and

Disadvantaged Business Utilization

(OSDBU) to review:

(i) the HUD program office’s

assessment of any significant economic

impact on a substantial number of small

entities;

(ii) the HUD program office’s

assessment and disposition of all

alternative rule implementation

strategies submitted by small entities,

and

(iii) the small entity compliance

guides prepared by the program offices,

where applicable.

III. Guidance to Small Entities

To help small entities understand

their obligations under the regulations

administered by HUD, HUD provides

both general guidance and

individualized advice. OSDBU

maintains the requirements of the

SBREFA and Regulatory Flexibility Act

on the HUD web site with instructions

to small entities on the OSDBU role as

small business Ombudsman, as well as

copies of compliance guides, names of

HUD staff with familiarity in HUD

programs that may impact small

businesses, to answer questions, and a

users forum where representatives of

small entities can ask questions on a

specific rule as a means of providing a

fast means of clarifying issues.

Additionally, small entities can

download regulations, forms, and

documentation from the HUD web

pages. If a small entity does not have

access to a computer, HUD will mail

this information on request.

To ensure that we evaluate and

update our small entity assistance

program periodically, HUD works with

the Small Business Administration to

identify small business concerns in the

housing industry.

IV. Rights of Small Entities in

Enforcement Actions

Section 223 of SBREFA requires

agencies that regulate the activities of

small entities to establish a policy or

program to reduce or, under appropriate

circumstances, waive civil penalties

when a small entity violates a statute or
Federal Register / Vol. 63, No. 98 /Thursday, May 21, 1998 / Notices 28215

regulation. (For purposes of brevity, this

policy or program is referred to as the

‘‘small entity compliance policy.’’)

Section 223 also requires an agency’s

small entity compliance policy to

contain conditions or exclusions

(subject to any restrictions or limitations

that may be imposed on the agency by

other statutes), which conditions or

exclusions may include, but are not

limited to the following:

(1) Requiring small entities to correct

the violation within a reasonable

correction period;

(2) Limiting applicability of the small

entity compliance policy to violations

discovered when small entities

participate in a compliance assistance or

audit program operated by the agency;

(3) Excluding from applicability of the

small entity compliance policy those

small entities that have been subject to

multiple enforcement actions by the

agency;

(4) Excluding from applicability of the

small entity compliance policy

violations involving willful or criminal

conduct or that pose serious health,

safety, or environmental threats, safety,

or requiring a good-faith effort to

comply with the law.

Federal statutes and regulations

authorize HUD to impose civil penalties

in conjunction with regulatory and

enforcement issues. Under these

authorities, HUD has authority to issue

civil money penalties for violations of

requirements governing its grant,

mortgage insurance, and the regulatory

programs, identified earlier in this

notice.

In establishing its policy for

implementation of SBREFA, following

enactment of SBREFA, HUD reported to

President Clinton and the Congress that,

under appropriate circumstances, HUD

may consider ability to pay in

determining penalty assessments on

small entities. HUD notes that the

ability to pay is a legislative directive

for many programs under the

Department of Housing and Urban

Development Reform Act of 1989 (Pub.

L. 101–235, approved December 15,

1989). HUD’s policy to date has been to

assist regulated entities in achieving

compliance with requirements in order

to avoid any penalty process.

Where penalties are determined

appropriate, HUD’s policy is to

consider: (1) the nature of the violation

(the violation must not be one that is

repeated or multiple, willful, criminal

or poses health or safety risks), (2)

whether the entity has shown a good

faith effort to comply with the

regulations; and (3) the resources of the

regulated entity. Depending upon the

circumstances surrounding the

violation, it is not HUD’s intent to put

any individual or entity out of business

by the penalties or settlement amounts

paid to the Federal Government.

V. Small Entities’ Comments on

Agencies Enforcement Activities

Section 222 of SBREFA requires the

Small Business and Agriculture

Regulatory Enforcement Ombudsman to

‘‘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

other enforcement related

communication or contact by agency

personnel are provided with a means to

comment on the enforcement activity

conducted by this personnel.

To implement this statutory

provision, the Small Business

Administration has requested that

agencies include the following language

on agency publications and notices

which are provided to small businesses

concerns at the time the enforcement

action is undertaken. The language is as

follows:

Your Comments Are Important

The Small Business and Agriculture

Regulatory Enforcement Ombudsman and 10

Regional Fairness Boards were established to

receive comments from small businesses

about federal agency enforcement actions.

The Ombudsman will annually evaluate the

enforcement activities and rate each agency’s

responsiveness to small business. If you wish

to comment on the enforcement actions of

[insert agency name], call [provide telephone

number].

HUD intends to work with the Small

Business Administration to provide

small entities with information on the

Fairness Boards and National

Ombudsman program, at the time

enforcement actions are taken, to ensure

that small entities have the full means

to comment on the enforcement activity

conducted by HUD. HUD intends to

include this language in HUD general

circulation issuances and publications

regarding enforcement actions. HUD

welcomes comments on the manner in

which it has implemented SBREFA to

date, and the additional action intended

to be taken as described in this notice.

Dated: May 14, 1998.

Andrew Cuomo,

Secretary.

[FR Doc. 98–13636 Filed 5–20–98; 8:45 am]

BILLING CODE 4210–32–P