[Congressional Record Volume 153, Number 5 (Wednesday, January 10, 2007)]
[Senate]
[Pages S385-S386]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mr. Kerry, Mr. Enzi, and Ms. 
        Landrieu):
  S. 246. A bill to enhance compliance assistance for small business; 
to the Committee on Small Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, I have long worked to reduce the burden 
that Federal regulations bear on small businesses. Over the past twenty 
years, the number and complexity of Federal regulations have multiplied 
at an alarming rate. These regulations impose a much more significant 
impact on small businesses than larger businesses. A recent report 
prepared for the Small Business Administration's Office of Advocacy 
found that in 2004, the per-employee cost of Federal regulations for 
firms with fewer than 20 employees was $7,647. That was 44.8 percent 
more than the $5,282 per-employee cost faced by businesses with 500 or 
more workers.
  That is why today, I rise with Senators Kerry, Enzi, and Landrieu to 
introduce the Small Business Compliance Assistance Enhancement Act of 
2007. Our bill would clarify requirements that exist under Federal law 
to ensure that agencies produce useful small business compliance guides 
that explain, in a readable format, the compliance requirements of 
complex rules. This ``small,'' targeted reform, which would not create 
any new rules or requirements, would have a major benefit for small 
businesses across the country.
  In 1996, 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 satisfy regulatory obligations. Unfortunately, 
over the years, agencies have done a poor job of meeting this 
requirement. The Government Accountability Office (GAO) has found that 
agencies have ignored this requirement or failed miserably in their 
attempts to satisfy it. The GAO has also found that the language of 
SBREFA is unclear in some places about what is actually required. 
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 Small Business Compliance Assistance Enhancement Act of 2007 
would close those loopholes and requires agencies to produce quality 
compliance assistance materials for small businesses. Our bill is drawn 
directly from the GAO's recommendations and is intended only to clarify 
an already existing requirement. Similarly, the compliance guides that 
the agencies will produce are merely suggestions about how to satisfy a 
regulation's requirements without imposing further requirements or 
additional enforcement measures. 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. Furthermore, our bill was 
included as part of the Small Business Reauthorization and Improvements 
Act that was unanimously reported out of the Senate Small Business 
Committee in the 109th Congress.
  All too often, small businesses do not maintain the staff, or possess 
the financial resources to comply with complex Federal regulations. 
This puts them at a disadvantage compared to larger businesses, and 
reduces the effectiveness of the agency's regulations. 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 originally included in SBREFA, and 
this rationale is just as valid today as it was in 1996.
  Specifically, our bill would clarify that a small business compliance 
guide

[[Page S386]]

is required 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.
  Second, our bill would also clarify how a guide shall be designated. 
Under current law, agencies must ``designate'' the publications 
prepared under the section as small business compliance guides. 
However, the form in which those designations should occur is unclear. 
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 on line searches--a technology that was not 
widely used when SBREFA was passed. Thus, agencies would be directed to 
publish guides entitled ``Small Entity Compliance Guide.''
  Third, our bill would clarify how a guide shall be published. SBREFA 
currently requires that agencies ``shall publish'' the guides, but it 
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. Under our bill, agencies would be 
directed, at a minimum, to make their compliance guides easily 
accessible and available through their websites. 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.
  Fourth, our bill also clarifies when a guide shall be published. 
Section 212 of SBREFA currently does not indicate when compliance 
guides should be published. This means that even if an agency was 
required to produce a compliance guide, the agency may claim that they 
have not violated that requirement since there is no deadline 
established for when they had to produce that guide. Under our bill, 
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.
  Finally, our bill would clarify the phrase ``compliance 
requirements.'' 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 
the requirements. This should include a description of the procedures a 
small business might employ. If, as is the case with many OSHA and EPA 
regulations, testing is required, the agency should explain how that 
testing should be conducted. Our 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.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 246

       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 2007''.

     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 generated 60 to 80 percent of net new 
     jobs annually over the last decade.
       (3) Very small firms with fewer than 20 employees spend 
     nearly 50 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 2004, firms employing fewer than 20 employees 
     face an annual regulatory burden of $7,647 per employee, 
     compared to a burden of $5,282 per employee for a firm with 
     over 500 employees.
       (4) Section 212 of the Small Business Regulatory 
     Enforcement Fairness Act of 1996 (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 of 
     1996 (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 of 1996 (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 of 
     1996 (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 of 1996 (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 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 or group of related rules 
     for which an agency is required to prepare a final regulatory 
     flexibility analysis 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 
     the requirements of a rule, 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 may 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.
       ``(6) Reporting.--Not later than 1 year after the date of 
     enactment of the Small Business Compliance Assistance 
     Enhancement Act of 2007, and annually thereafter, the head of 
     each agency shall submit a report to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives describing 
     the status of the agency's compliance with paragraphs (1) 
     through (5).''.
       (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''.
                                 ______