[Congressional Record Volume 148, Number 66 (Tuesday, May 21, 2002)]
[House]
[Pages H2784-H2787]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            SMALL BUSINESS ADVOCACY IMPROVEMENT ACT OF 2002

  Mr. MANZULLO. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4231) to improve small business advocacy, and for other 
purposes, as amended.
  The Clerk read as follows:

                               H.R. 4231

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Advocacy 
     Improvement Act of 2002''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Excessive regulations continue to burden the Nation's 
     small businesses.
       (2) Federal agencies continue to propose regulations that 
     impose disproportionate burdens on small businesses.
       (3) An independent office of small business advocacy will 
     help to ensure that Federal agencies are responsive to small 
     businesses and that those agencies comply with their 
     statutory obligations with respect to small businesses.
       (4) The independence of an office that acts as an advocate 
     for small businesses is essential to ensure that it can serve 
     as an effective advocate without being restricted by the 
     views or policies of the Small Business Administration or any 
     other Federal executive branch agency.
       (5) To be effective an office that acts as an advocate for 
     small businesses needs sufficient resources to conduct 
     creditable economic studies and research which are necessary 
     for the maintenance of small business databases and for the 
     accurate assessment of the impact of regulations on small 
     businesses, the role of small business in the Nation's 
     economy, and the barriers to the growth of small businesses.
       (6) The research, information, and expertise provided by an 
     independent office of small business advocacy will be a 
     valuable source of information and advice for Congress and 
     Federal agencies with which the office will work on behalf of 
     small businesses.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure that there exists an entity that has the 
     statutory independence and adequate financial resources to 
     effectively advocate for and on behalf of small business;
       (2) to require that such an entity report to the Chairmen 
     and Ranking Members of the Committee on Small Business of the 
     House of Representatives and the Committee on Small Business 
     and Entrepreneurship of the Senate, and to the Administrator 
     of the Small Business Administration in order to keep them 
     fully and currently informed about issues and regulations 
     affecting small business concerns and the necessity for 
     corrective action by the regulatory agency or Congress;
       (3) to provide a separate authorization for appropriations 
     for such an entity; and
       (4) to strengthen the role of the Small Business and 
     Agriculture Regulatory Enforcement Ombudsman by ensuring 
     greater cooperation between the Ombudsman and the Office of 
     Advocacy of the Small Business Administration.

     SEC. 3. APPOINTMENT OF CHIEF COUNSEL OF ADVOCACY.

       (a) In General.--Section 201 of Public Law 94-305 (15 
     U.S.C. 634a) is amended--
       (1) by inserting ``(a)'' before ``There is established'';
       (2) by striking the second sentence; and
       (3) by adding at the end the following:
       ``(b) The management of the Office shall be vested in a 
     Chief Counsel for Advocacy who shall be appointed from 
     civilian life by the President, by and with the advice and 
     consent of the Senate, and who should be appointed without 
     regard to political affiliation and on the basis of fitness 
     to perform the duties of the office.
       ``(c) No individual may be appointed under subsection (b) 
     if such individual has served as an officer or employee of 
     the Small Business Administration during the 5-year period 
     preceding the date of such individual's appointment.
       ``(d) Any Chief Counsel appointed after the date of the 
     enactment of this subsection shall be paid at a rate not to 
     exceed the rate of basic pay for level III of the Executive 
     Schedule.
       ``(e) After the expiration of the term of a President, the 
     Chief Counsel may continue to serve at the pleasure of the 
     President for a period of not to exceed one year until such 
     date as a successor to the Chief Counsel is nominated.''.
       (b) Incumbent Chief Counsel for Advocacy.--The individual 
     serving as the Chief Counsel for Advocacy of the Small 
     Business Administration on the date of the enactment of this 
     Act shall continue to serve in that position after such date 
     in accordance with section 201 of Public Law 94-305 (15 
     U.S.C. 634a), as amended by this section.

     SEC. 4. PRIMARY FUNCTIONS OF OFFICE OF ADVOCACY.

       Section 202 of Public Law 94-305 (15 U.S.C. 634b) is 
     amended--
       (1) in paragraph (6) by striking ``to minority 
     enterprises'' and inserting ``to small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals, to small business concerns owned 
     and controlled by women, and to small business concerns owned 
     and controlled by veterans'';
       (2) in paragraph (7) by striking ``minority enterprises'' 
     and inserting ``small business concerns owned and controlled 
     by socially and economically disadvantaged individuals, small 
     business concerns owned and controlled by women, and small 
     business concerns owned and controlled by veterans'';
       (3) in paragraph (8) by striking ``minority and other small 
     business enterprises'' and inserting ``small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals, small business concerns owned and 
     controlled by women, small business concerns owned and 
     controlled by veterans, and other small businesses'';
       (4) in paragraph (9) by striking ``complete'' and inserting 
     ``compete'';
       (5) by striking paragraph (11);
       (6) by redesignating paragraph (12) as paragraph (11);
       (7) in paragraph (11) (as so redesignated)--
       (A) by striking ``serviced-disabled'' and inserting 
     ``service-disabled''; and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (8) by adding at the end the following:
       ``(12) make such recommendations and submit such reports as 
     the Chief Counsel determines appropriate to the President, to 
     the Chairmen and Ranking Members of the Committee on Small 
     Business of the House of Representatives and the Committee on 
     Small Business and Entrepreneurship of the Senate, and to the 
     Administrator of the Small Business Administration, with 
     respect to issues and regulations affecting small businesses 
     and the necessity for corrective action by any Federal agency 
     or by Congress.''.

     SEC. 5. ADDITIONAL FUNCTIONS.

       (a) In General.--Section 203 of Public Law 94-305 (15 
     U.S.C. 634c) is amended--
       (1) by inserting ``(a)'' before ``The Office of Advocacy 
     shall also perform''; and
       (2) in subsection (a) (as so designated)--

[[Page H2785]]

       (A) in paragraph (4) by striking ``and'' at the end;
       (B) in paragraph (5) by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(6) maintain economic databases and make the information 
     contained therein available to the Administrator of the Small 
     Business Administration and to Congress;
       ``(7) carry out the responsibilities of the Chief Counsel 
     under chapter 6 of title 5, United States Code; and
       ``(8) enter into a memorandum of understanding with the 
     Small Business and Agriculture Regulatory Enforcement 
     Ombudsman regarding methods and procedures for cooperation 
     between the Ombudsman and the Office of Advocacy and transmit 
     a copy of such memorandum to the Committee on Small Business 
     of the House of Representatives and the Committee on Small 
     Business and Entrepreneurship of the Senate.''.
       (b) Appropriation Request.--Section 203 of Public Law 94-
     305 (15 U.S.C. 634c) is further amended by adding at the end 
     the following:
       ``(b)(1) For each fiscal year, the Chief Counsel shall 
     transmit the Office of Advocacy's appropriation estimate and 
     request to the Office of Management and Budget, the Committee 
     on Small Business of the House of Representatives, the 
     Committee on Small Business and Entrepreneurship of the 
     Senate, and the Committees on Appropriations of the House of 
     Representatives and the Senate.
       ``(2) Each budget of the United States Government submitted 
     by the President shall include a separate statement of the 
     amount of appropriations requested for the Office of 
     Advocacy.''.

     SEC. 6. DEPUTY CHIEF COUNSELS AND REGIONAL ADVOCATES.

       Section 204 of Public Law 94-305 (15 U.S.C. 634d) is 
     amended--
       (1) by inserting ``(a)'' before ``In carrying out''; and
       (2) by adding at the end the following:
       ``(b)(1) The Chief Counsel may appoint 2 individuals to 
     serve as Deputy Chief Counsels.
       ``(2) Notwithstanding any other provision of this section, 
     the pay rate for each Deputy Chief Counsel may not exceed the 
     rate of basic pay for level III of the Senior Executive 
     Service.
       ``(3) Individuals appointed to positions under this 
     subsection shall not be counted toward the limitation 
     contained in subsection (a)(1) regarding the number of 
     individuals who may be compensated at a rate in excess of the 
     lowest rate for GS-15 of the General Schedule.
       ``(c) The Chief Counsel may appoint regional advocates 
     within each Standard Federal Region as appropriate. Such 
     regional advocates shall--
       ``(1) assist in examining the role of small business in the 
     economy of the United States by identifying academic and 
     other research institutions that focus on small business 
     concerns and linking these research resources to research 
     activities conducted by the Office of Advocacy;
       ``(2) assist in representing the views and interests of 
     small business concerns before Federal agencies whose 
     policies and activities may affect small business;
       ``(3) in coordination with the Small Business and 
     Agriculture Regulatory Enforcement Ombudsman, assist the 
     functioning of regional small business fairness boards;
       ``(4) assist in enlisting the cooperation and assistance of 
     public and private agencies, businesses, and other 
     organizations in disseminating information about the programs 
     and services provided by the Federal Government that are of 
     benefit to small business concerns and the means by which 
     small business concerns can participate in or make use of 
     such programs and services; and
       ``(5) carry out such duties pursuant to the mission of the 
     Office of Advocacy as the Chief Counsel may assign.''.

     SEC. 7. OVERHEAD AND ADMINISTRATIVE SUPPORT.

       Section 205 of Public Law 94-305 (15 U.S.C. 634e) is 
     amended by inserting before ``Each department'' the 
     following:
       ``(a) The Administrator of the Small Business 
     Administration shall provide the Office of Advocacy with 
     appropriate and adequate office space at central and field 
     office locations of the Administration, together with such 
     equipment, office supplies, communications facilities, and 
     personnel and maintenance services as may be necessary for 
     the operation of such offices.
       ``(b)''.

     SEC. 8. REPORTS.

       Section 206 of Public Law 94-305 (15 U.S.C. 634f) is 
     amended by striking ``The Chief Counsel may'' and all that 
     follows through ``on his activities.'' and inserting the 
     following:
       ``(a) Not less than annually, the Chief Counsel shall 
     submit to the President, the Committee on Small Business of 
     the House of Representatives, the Committee on Small Business 
     and Entrepreneurship of the Senate, the Committee on 
     Government Affairs of the Senate, the Committee on Government 
     Reform of the House of Representatives, and the Committees on 
     the Judiciary of the Senate and the House of Representatives, 
     and the Administrator of the Small Business Administration a 
     report on agency compliance with chapter 6 of title 5, United 
     States Code.
       ``(b) In addition to the reports required by this title, 
     the Chief Counsel may prepare and publish such other reports 
     as the Chief Counsel determines appropriate.
       ``(c)''.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       Section 207 of Public Law 94-305 (15 U.S.C. 634g) is 
     amended by striking ``not to exceed $1,000,000'' and 
     inserting ``$10,000,000 for fiscal year 2003, $12,000,000 for 
     fiscal year 2004, and $14,000,000 for fiscal year 2005''.

     SEC. 10. CONFORMING AMENDMENTS.

       (a) Executive Pay Schedule.--Title 5, United States Code, 
     is amended--
       (1) in section 5314 by adding at the end the following:
       ``Chief Counsel for Advocacy, Small Business 
     Administration.''; and
       (2) in section 5315 by striking the following:
       ``Chief Counsel for Advocacy, Small Business 
     Administration.''.
       (b) Rural Tourism Training Program.--Section 311 of the 
     Small Business Administration Reauthorization and Amendments 
     Act of 1990 (15 U.S.C. 653 note; 104 Stat. 2832) is amended 
     by striking ``Chief Counsel for Advocacy'' and inserting 
     ``Administrator''.
       (c) Small Business and Agriculture Regulatory Enforcement 
     Ombudsman.--Section 30(b)(2) of the Small Business Act (15 
     U.S.C. 657(b)(2)) is amended--
       (1) in subparagraph (D), by striking ``and'' at the end;
       (2) in subparagraph (E), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(F) enter into a memorandum of understanding with the 
     Office of Advocacy regarding methods and procedures for 
     cooperation between the Ombudsman and the Office of 
     Advocacy.''.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Illinois (Mr. Manzullo) and the gentlewoman from New York (Ms. 
Velazquez) each will control 20 minutes.
  The Chair recognizes the gentleman from Illinois (Mr. Manzullo).


                             General Leave

  Mr. MANZULLO. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous material on this legislation.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Illinois?
  There was no objection.
  Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, 2 weeks ago we celebrated National Small Business Week 
and the entrepreneurial spirit that makes this Nation great. Small 
business drives our Nation's economy and the heart of our communities. 
Small businesses account for 99.7 percent of the Nation's employers. 
Small businesses employ 53 percent of the private workforce and are 
responsible for over 50 percent of the private gross domestic product. 
During this time of economic uncertainty, it is important to remember 
that small businesses have pulled this Nation out of every downturn. 
Small businesses create about three-fourths of the new jobs in this 
country.

                              {time}  1915

  That is why it is critically important that we in Congress do all we 
can to foster the entrepreneurial spirit in America.
  After all the festivities are over, it is especially important that 
we carry on the legacy of National Small Business Week throughout the 
year by strengthening and making the Office of Advocacy at the Small 
Business Administration more independent. Advocacy is a very small, but 
unique and dynamic, government office. Mr. Speaker, I encourage my 
colleagues that if you do not know too much about this office, it is 
time you became more familiar with its mission and its hard-working 
personnel.
  Advocacy is staffed with public servants who truly have a heart for 
small business. It is a great resource, particularly for caseworkers 
that may not know to whom to turn in order to resolve a complex small 
business problem. It is one of the few offices in the executive branch 
that can take positions contrary to the administration on behalf of 
small business. Advocacy serves as an internal government watchdog in 
our regulatory process to make sure that the interests of small 
businesses are not ignored as agencies develop, propose and finalize 
their regulations.
  Advocacy has concluded that Federal regulations cost small businesses 
about 60 percent more per employee than it costs large businesses. 
Compliance with regulations averages about $7,000 per employee. That is 
a huge burden. The Regulatory Flexibility Act was passed in 1980 to 
require agencies to factor into their analysis the impact of

[[Page H2786]]

proposed regulations on small businesses prior to their implementation, 
and, if necessary, modify the proposal to soften the impact on small 
businesses.
  Last March the President gave a historic address before our Nation's 
women entrepreneurs. The President said, ``Every agency is required to 
analyze the impact of new regulations on small businesses before 
issuing them. That is an important law. The problem is it is oftentimes 
being ignored. The law is on the books; the regulators don't care that 
the law is on the books. From this day forward, they will care that the 
law is on the books.''
  The main mission of the Office of Advocacy is to carry out the 
President's vision by making sure that all regulators finally take 
seriously the obligations contained in the Regulatory Flexibility Act 
to respect the interests of small business. Part of the President's 
small business agenda is to enhance the Office of Advocacy.
  The bill before us today strengthens and improves the office to 
ensure that there is an entity within the executive branch that has the 
statutory independence and adequate financial resources to be an 
effective fighter for small business. Many small business groups, 
including the National Federation of Independent Business, the Small 
Business Legislative Council, the U.S. Chamber of Commerce, National 
Small Business United and the National Association for the Self-
Employed have endorsed this bill.
  The Small Business Advocacy Improvement Act raises the rank of the 
Chief Counsel for Advocacy one level in the executive service schedule 
to be on par with many of his colleagues in other agencies. The 
legislation would permit the appointment of two deputy chief counsel, 
one responsible for regulations, the other for economic research and 
studies. The bill also defines for the first time the duties of 
regional advocates, one at each of the 10 Federal regions. The SBA is 
also required to provide adequate office space, equipment, and 
personnel to the Office of Advocacy.
  In addition, this legislation encourages more cooperation and 
coordination through a memorandum of understanding between the SBA's 
Office of Ombudsman, which oversees how Federal agencies implement 
regulations after they are adopted, and the Office of Advocacy, which 
aims to make proposed regulations more friendly to small businesses 
prior to their final adoption.
  Most importantly, this bill protects the budget of the Office of 
Advocacy by allowing Congress to see the chief counsel's initial budget 
request to the Office of Management and Budget. Unfortunately, Advocacy 
has been threatened in the past with budget cuts unless the chief 
counsel changed his policy with respect to small business to be more in 
line with the administration. This provision is crucial to maintaining 
the independence of the Office of Advocacy, because, without it, other 
executive branch agencies could threaten its budget to influence a 
particular course of action. This bill would shed light on that 
practice in order to put enough pressure to end it.
  Finally, the legislation authorizes modest increases in the budget of 
the Office of Advocacy over the next 3 years in order to increase its 
role and visibility within the executive branch to advocate for and on 
behalf of small businesses.
  Mr. Speaker, I want to thank the ranking minority member, the 
gentlewoman from New York (Ms. Velazquez), for working with me over the 
past 14 months on this issue. I urge my colleagues to support the Small 
Business Advocacy Improvement Act.
  Mr. Speaker, passage of this bill is particularly appropriate today, 
shortly after National Small Business Week, because H.R. 4231 will 
produce untold benefits for our small business constituents for years 
to come.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, even though small businesses serve as the engine of the 
economy, the critical role they play is often overlooked during the 
development and implementation of Federal policies. This oversight 
often results in a myriad of problems and regulations that have little 
benefit, or, in some cases, negative impact on this Nation's small 
businesses.
  To make sure small business has a voice in the Federal Government, 
Congress created the Small Business Administration Office of Advocacy 
25 years ago to defend, strengthen and represent small businesses in 
the legislative and executive rule-making process. To accomplish this, 
Advocacy, and in particular the chief counsel, has the unique power to 
take positions that are contrary to the administration. This ability to 
``call them as he sees them'' allows Advocacy to put aside much of the 
partisan tone that all too often creeps into policy, and has just one 
standard: is it good for this Nation's small businesses?
  Under this charge, the Office of Advocacy works to reduce legal and 
regulatory mandates that disproportionately burden small businesses. By 
bringing together Federal agencies, small businesses and interest 
groups, Advocacy then attempts to reach a mutually beneficial 
consensus. The result is an improved regulation that reduces regulatory 
and paperwork burdens so that small businesses can get back to the work 
they do best.
  In addition, Advocacy highlights policies that support the 
development and growth of small businesses and produces studies and 
research aiding legislators and rule-makers in the decisions that 
affect small businesses.
  As the complexity of Federal regulations has increased, so has the 
need to ensure that Advocacy's independent voice is in no way muffled. 
To do its job and do it well, Advocacy must point out problems and 
shortcomings of administration policy, not a particularly popular job 
to have, but a critical one. This often pits them against agencies and 
many times opposes the Office of Management and Budget, the very agency 
that sets Advocacy's funding levels each year.
  Criticizing the very entity that holds its fate could compromise 
Advocacy's ability to be truly independent. Given the recent 
mishandling by OMB of such matters as the SBA loan program subsidy 
rates and size standards for disaster assistance, shielding Advocacy 
from OMB's heavy hand is more important than ever.
  To that end, the Committee on Small Business provided the Office of 
Advocacy the ability to submit its own budget to Congress in our 
original bill. Unfortunately, this critical guarantee of Advocacy's 
independence has been removed from the final version under 
consideration today. I find this curious. The Office of Advocacy 
already submits testimony, correspondence and reports to Congress 
without any vetting by the administration. It only makes sense that 
this independence should be extended to the budget it submits to 
Congress. The power of a subordinate agency to submit a budget item is 
not without precedent. Currently, FDIC and the International Trade 
Commission, among others, submit their budget without change.
  Testimony by experts before our hearings, committee reports and 
surveys of small business interest groups have all influenced the 
bipartisan proposal to secure Advocacy's independence. In fact, all the 
business groups supported the bill as it was reported by the committee, 
not as it was amended. We know that OMB's current budgetary power over 
the Office of Advocacy can hurt, co-opt or weaken the office, which 
will be less likely to raise issues with OMB that directly harm small 
businesses.
  We should have retained the original language of this bill. I am 
afraid today's proposal is not a step forward, but a step back, in the 
drive to protect small businesses from disproportionate government 
regulations and compliance burdens. The Office of Advocacy has been 
successful because we have given it the flexibility to work with 
agencies to find creative solutions to the problems facing this 
country's small businesses.
  Small businesses are powerful creators of growth and jobs, something 
to keep in mind as our unemployment rate peaks at 6 percent. The Office 
of Advocacy is a strong voice for small business, and we can make it 
stronger so that small businesses can get back to work. We should be 
strengthening it, not weakening it, as this legislation does today.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.

[[Page H2787]]

  Mr. MANZULLO. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Simpson). The question is on the motion 
offered by the gentleman from Illinois (Mr. Manzullo) that the House 
suspend the rules and pass the bill, H.R. 4231, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________