[Congressional Record Volume 150, Number 116 (Thursday, September 23, 2004)]
[Senate]
[Pages S9613-S9614]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 2834. A bill to enhance compliance assistance for small business; 
to the Committee on Small Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, in 1996, over eight years ago, the Senate 
passed without opposition the Small Business Regulatory Enforcement 
Fairness Act (SBREFA) to make the Regulatory Flexibility Act more 
effective in curtailing the impact of regulations on small businesses. 
One of the most important provisions of SBREFA is a requirement that 
agencies produce compliance assistance materials to help small 
businesses meet the requirements of their regulations. Unfortunately, 
over the years, agencies have done a poor job of meeting this 
requirement. Consequently, small businesses have been forced to figure 
out on their own how to comply with these regulations. This makes 
compliance that much more difficult to achieve, and therefore reduces 
the effectiveness of the regulation.
  The GAO found that agencies have ignored this requirement or failed 
miserably in their attempts to satisfy it. GAO also found that the 
language of SBREFA is unclear in some places about what is actually 
required. That is why today I am introducing the Small Business 
Compliance Assistance Enhancement Act of 2004 to close those loopholes 
and make it clear that we were serious when we first told agencies we 
want them to produce quality compliance assistance materials to help 
small businesses understand how to deal with regulations.
  My bill is drawn directly from the GAO recommendations and is 
intended only to clarify an already existing requirement--not to add 
anything new. Similarly, the compliance guides that the agencies will 
produce will be suggestion about how to meet a regulations 
requirements, not further requirements, or subject to enforcement. Nor 
does this bill, in any way, interfere or undercut an agency's ability 
to enforce its regulations to the full extent they currently enjoy. Bad 
actors must be brought to justice, but if the only trigger for 
compliance is the threat of enforcement, then agencies will never 
achieve the impact their regulations must have to be effective.
  The key to helping small businesses comply is to provide assistance--
show them what is necessary and how they will be able to tell when they 
have met their obligations. Too often, small businesses do not maintain 
the staff, or have the resources to figure out the answers to these 
questions. This puts them at a disadvantage compared to larger 
businesses, and reduces the effectiveness of the agency's regulations. 
SBA's Office of Advocacy has determined that compliance with 
regulations cost small businesses with less than 20 employees almost 
$7,000 per employee, compared to almost $4,500 for companies with more 
than 500 employees. If an agency cannot describe how to comply with its 
regulation, how can we expect a small business to figure it out? This 
was the reason the requirement to provide compliance assistance was 
included in SBREFA originally, and this reason is just as valid today 
as it was in 1996.
  Specifically, my bill would do the following: Clarify when a guide is 
required: To clarify when an agency must prepare a compliance guide 
section 212 of SBREFA would be amended to require a guide whenever the 
agency does not certify the rule under section 605(b) of title 5, 
United States Code (i.e. whenever an agency determines that a rule will 
have ``a significant economic impact on a substantial number of small 
entities''). This would avoid confusion about whether the agency should 
produce a compliance guide when the agency produces a Final Regulatory 
Flexibility Analysis voluntarily (i.e. even though the agency certified 
that the regulation would not have ``a significant economic impact on a 
substantial number of small entities'').
  Clarify how a guide shall be designated: Section 212 currently says 
that agencies must ``designate'' the publications prepared under the 
section as small entity compliance guides. However, the form in which 
those designations should occur is not clear. This term would be 
changed to ``entitle.'' Consistent use of the phrase ``Small Entity 
Compliance Guide'' in the title could make it easier for small entities 
to locate the guides that the agencies develop. This would also aid in 
using online searches--a technology that was not widely used when 
SBREFA was passed. Thus, agencies

[[Page S9614]]

would be directed to publish guides entitled ``Small Entity Compliance 
Guide.''
  Clarify how a guide shall be published: Section 212 currently says 
agencies ``shall publish'' the guides, but does not indicate where or 
how they should be published. At least one agency has published the 
guides as part of the preamble to the subject rule, thereby requiring 
affected small entities to read the Federal Register to obtain the 
guides. Agencies would be directed, at a minimum, to make their 
compliance guides available through their websites in an easily 
accessed way. In addition, agencies would be directed to forward their 
compliance guides to known industry contacts such as small businesses 
or associations with small business members that will be affected by 
the regulation.
  Clarify when a guide shall be published: Section 212 does not 
indicate when the compliance guides should be published. This means 
that even if an agency was required to produce a compliance guide, they 
can claim that they have not violated that requirement since there is 
no deadline established for when they had to produce that guide. 
Agencies would be instructed to publish the compliance guides 
coincident with, or as soon as possible after, the final rule is 
published, provided that the guides must be published no later than the 
effective date of the rule's compliance requirements.
  Clarify the term ``compliance requirements'': The term ``compliance 
requirements'' also needs to be clarified. At a minimum, this term 
means what a small business has to do to satisfy the regulation, and 
when they will know they have met these requirements. This should 
include a description of the procedures a small business might use to 
meet the requirements. If, as is the case with many OSHA and EPA 
regulations, testing is required, the agency should explain how that 
testing would be conducted. The bill makes clear that the procedural 
description should be merely suggestive--an agency would not be able to 
enforce this procedure if a small business was able to satisfy the 
requirements through a different approach.
  It is time we got serious about making sure small businesses have the 
assistance they need to deal with the maze of federal regulations we 
expect them to handle on a daily basis. The Small Business Compliance 
Assistance Enhancement Act will make a significant contribution to that 
effort.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2834

       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 Compliance 
     Assistance Enhancement Act of 2004''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Small businesses represent 99.7 percent of all 
     employers, employ half of all private sector employees, and 
     pay 44.3 percent of total United States private payroll.
       (2) Small businesses generate 60 to 80 percent of net new 
     jobs annually over the last decade.
       (3) Very small firms with fewer than 20 employees spend 60 
     percent more per employee than larger firms to comply with 
     Federal regulations. Small firms spend twice as much on tax 
     compliance as their larger counterparts. Based on an analysis 
     in 2001, firms employing fewer than 20 employees face an 
     annual regulatory burden of nearly $7,000 per employee, 
     compared to a burden of almost $4,500 per employee for a firm 
     with over 500 employees.
       (4) Section 212 of the Small Business Regulatory 
     Enforcement Fairness Act (5 U.S.C. 601 note) requires 
     agencies to produce small entity compliance guides for each 
     rule or group of rules for which an agency is required to 
     prepare a final regulatory flexibility analysis under section 
     604 of title 5, United States Code.
       (5) The Government Accountability Office has found that 
     agencies have rarely attempted to comply with section 212 of 
     the Small Business Regulatory Enforcement Fairness Act (5 
     U.S.C. 601 note). When agencies did try to comply with that 
     requirement, they generally did not produce adequate 
     compliance assistance materials.
       (6) The Government Accountability Office also found that 
     section 212 of the Small Business Regulatory Enforcement 
     Fairness Act (5 U.S.C. 601 note) and other sections of that 
     Act need clarification to be effective.
       (b) Purposes.--The purposes of this Act are the following:
       (1) To clarify the requirement contained in section 212 of 
     the Small Business Regulatory Enforcement Fairness Act (5 
     U.S.C. 601 note) for agencies to produce small entity 
     compliance guides.
       (2) To clarify other terms relating to the requirement in 
     section 212 of the Small Business Regulatory Enforcement 
     Fairness Act (5 U.S.C. 601 note).
       (3) To ensure that agencies produce adequate and useful 
     compliance assistance materials to help small businesses meet 
     the obligations imposed by regulations affecting such small 
     businesses, and thereby to increase compliance with these 
     regulations.

     SEC. 3. ENHANCED COMPLIANCE ASSISTANCE FOR SMALL BUSINESSES.

       (a) In General.--Section 212 of the Small Business 
     Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601 
     note) is amended by striking subsection (a) and inserting the 
     following:
       ``(a) Compliance Guide.--
       ``(1) In general.--For each rule for which an agency head 
     does not make a certification under section 605(b) of title 
     5, United States Code, the agency shall publish 1 or more 
     guides to assist small entities in complying with the rule, 
     and shall entitle such publications `small entity compliance 
     guides'.
       ``(2) Publication of guides.--The publication of each guide 
     under this subsection shall include--
       ``(A) the posting of the guide in an easily identified 
     location on the website of the agency; and
       ``(B) distribution of the guide to known industry contacts, 
     such as small entities, associations, or industry leaders 
     affected by the rule.
       ``(3) Publication date.--An agency shall publish each guide 
     (including the posting and distribution of the guide as 
     described under paragraph (2))--
       ``(A) on the same date as the date of publication of the 
     final rule (or as soon as possible after that date); and
       ``(B) not later than the date on which the requirements of 
     that rule become effective.
       ``(4) Compliance actions.--
       ``(A) In general.--Each guide shall explain the actions a 
     small entity is required to take to comply with a rule.
       ``(B) Explanation.--The explanation under subparagraph 
     (A)--
       ``(i) shall include a description of actions needed to meet 
     requirements to enable a small entity to know when such 
     requirements are met; and
       ``(ii) if determined appropriate by the agency, may include 
     a description of possible procedures, such as conducting 
     tests, that assist a small entity in meeting such 
     requirements.
       ``(C) Procedures.--Procedures described under subparagraph 
     (B)(ii)--
       ``(i) shall be suggestions to assist small entities; and
       ``(ii) shall not be additional requirements relating to the 
     rule.
       ``(5) Agency preparation of guides.--The agency shall, in 
     its sole discretion, taking into account the subject matter 
     of the rule and the language of relevant statutes, ensure 
     that the guide is written using sufficiently plain language 
     likely 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. An agency may prepare guides and apply this section 
     with respect to a rule or a group of related rules.''.
       (b) Technical and Conforming Amendment.--Section 211(3) of 
     the Small Business Regulatory Enforcement Fairness Act of 
     1996 (5 U.S.C. 601 note) is amended by inserting ``and 
     entitled'' after ``designated''.
                                 ______