[Congressional Record Volume 154, Number 65 (Wednesday, April 23, 2008)]
[Senate]
[Pages S3307-S3309]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself and Mr. Pryor):
  S. 2902. A bill to ensure the independent operation of the Office of 
Advocacy of the Small Business Administration, ensure complete analysis 
of potential impacts on small entities of rules, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
  Ms. SNOWE. Mr. President, I rise today with my colleague Senator 
Pryor, during National Small Business Week, to introduce the 
Independent Office of Advocacy and Small Business Regulatory Reform Act 
of 2008. This bipartisan measure would ensure the independence of the 
Small Business Administration, SBA, Office of Advocacy, and provide 
targeted small business regulatory reforms that would strengthen the 
Office of Advocacy's voice in protecting our small businesses. Our bill 
is supported by the SBA Office of Advocacy and National Ombudsman, as 
well as the National Federation of Independent Business and the U.S. 
Chamber of Commerce.
  As Ranking Member of the Senate Committee on Small Business and 
Entrepreneurship, I recognize that the SBA Office of Advocacy is, 
regrettably, one of our Government's best kept secrets, and in many 
cases, the best hope for small businesses faced with overly burdensome 
Federal regulations.
  Established in 1976, the Office of Advocacy, headed by the Chief 
Counsel for Advocacy, is a unique office within the Federal Government. 
First, the Office of Advocacy is the ``Regulatory Watchdog'' for small 
businesses. In this capacity, it represents small businesses before the 
Federal Government in regulatory matters--taking advantage of its 
statutorily granted independence to argue against Federal regulatory 
actions that impose too great a burden on small businesses for too 
little benefit--and to encourage Federal agencies to consider less 
costly regulatory alternatives. Second, it conducts valuable research 
to further our understanding of the importance of small businesses to 
our economy and the forces that have an effect on them.
  The SBA Office of Advocacy is part of the SBA, and the Chief Counsel 
for Advocacy is nominated by the President and confirmed by the Senate. 
At the same time, the office is also intended to be the ``independent'' 
voice for small business within the Federal Government. It is charged 
with the duty of representing the views and interests of small 
businesses before other Federal agencies, and developing proposals for 
changing government policies to help small businesses. These roles can 
sometimes come into conflict.
  The Independent Office of Advocacy and Small Business Regulatory 
Reform Act of 2008 resolves such conflicts in favor of the small 
businesses that rely on the Chief Counsel and the Office of Advocacy to 
be a fully independent advocate within the executive branch. The bill 
would help to reinforce a clear mandate that the Office of Advocacy 
must fight on behalf of small businesses, regardless of the position 
taken

[[Page S3308]]

on critical issues by the administration.
  Funding for the Office of Advocacy currently comes from the 
``Salaries and Expense Account'' of the SBA's budget. Staffing is 
allocated by the SBA administrator to the Office of Advocacy from the 
overall staff allocation for the Agency. In 1990, there were 70 full-
time employees working on behalf of small businesses in the Office of 
Advocacy. The current allocation of staff is 48. The independence and 
effectiveness of the office is potentially diminished when the Office 
of Advocacy staff is reduced, at the discretion of the administrator.
  To address this problem, the Independent Office of Advocacy and Small 
Business Regulatory Reform Act of 2008 builds a firewall to minimize 
political intrusion into the management of day-to-day operations of the 
Office of Advocacy similar to the one that protects Inspectors General 
in other agencies. The bill would require the Federal budget to include 
a separate account for the Office of Advocacy drawn directly from 
General Fund of the Treasury. No longer would its funds come from the 
general operating account of the SBA. This will free the Chief Counsel 
for Advocacy from having to seek approval from the SBA administrator to 
hire staff for the Office of Advocacy.
  The bill would leave unchanged current law that allows the Chief 
Counsel to hire individuals critical to the mission of the Office of 
Advocacy without going through the normal competitive procedures 
directed by Federal law and the Office of Personnel Management, OPM. 
This long-standing special hiring authority, which is limited only to 
employees within the Office of Advocacy, is beneficial because it 
allows the Chief Counsel to hire quickly those persons who can best 
assist the Office in responding to changing issues and problems 
confronting small businesses.
  In addition to protecting the Office of Advocacy's independence, this 
bill also provides targeted small business regulatory reform. As the 
Ranking Member of the Small Business Committee, I have long fought to 
ensure that small businesses across the country are treated fairly by 
the Federal Government. Unfortunately, in far too many cases, Federal 
agencies promulgate rules and regulations without adequately addressing 
the economic impacts on small businesses.
  The disproportionate burden that Federal regulations often place on 
our small businesses cannot be overemphasized. Research published by 
the Office of Advocacy indicates that small businesses spend an 
astounding 8 billion hours each year complying with government rules 
and regulations. More specifically, the smallest firms with fewer than 
20 employees, spend approximately 45 percent more per employee than 
larger firms to comply with Federal regulations.
  The Regulatory Flexibility Act (RFA) recognizes this situation, as it 
requires Federal Government agencies to propose rules that keep the 
regulatory burden at a minimum on small businesses. Enacted in 1980, 
the RFA requires Federal agencies to analyze the economic impact of 
proposed regulations when there is likely to be a significant economic 
impact on a substantial number of small entities. In 1996, I was 
pleased to support, along with all of my colleagues, the Small Business 
Regulatory Enforcement Fairness Act, (SBREFA), which amended the RFA. 
The intent of SBREFA was to further curb the impact of burdensome or 
duplicative regulations on small businesses, by clarifying key RFA 
requirements.
  The Independent Office of Advocacy and Small Business Regulatory 
Reform Act of 2008 would further improve the Regulatory Flexibility Act 
by requiring Federal agencies to consider and specifically respond to 
comments provided by Office of Advocacy. This critical change would 
ensure that agencies give the proper deference to the Office of 
Advocacy, and to the comments and concerns of small businesses. This is 
a straightforward and simple reform that could have major benefits.
  Finally, our proposal would also clarify that Federal agencies are 
required to provide pertinent information to the SBA Ombudsman upon 
request.
  This noncontroversial, bipartisan legislation is absolutely 
necessary. I urge my colleagues to support this bill so we can ensure 
the complete independence of the Office of Advocacy in all matters, and 
provide our Nation's small businesses and their employees with much 
needed targeted regulatory relief.
  Mr. President, 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. 2902

       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 ``Independent Office of 
     Advocacy and Small Business Regulatory Reform Act of 2008''.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to ensure that the Office of Advocacy of the Small 
     Business Administration (referred to in this section as the 
     ``Office'') has adequate financial resources to advocate for 
     and on behalf of small business concerns;
       (2) to provide a separate authorization of appropriations 
     for the Office; and
       (3) to enhance the role of the Office pursuant to chapter 6 
     of title 5, United States Code.

     SEC. 3. OFFICE OF ADVOCACY.

       (a) In General.--Section 203 of Public Law 94-305 (15 
     U.S.C. 634c) is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(6) carry out the responsibilities of the Office of 
     Advocacy under chapter 6 of title 5, United States Code.''.
       (b) Budgetary Line Item and Authorization of 
     Appropriations.--Title II of Public Law 94-305 (15 U.S.C. 
     634a et seq.) is amended by striking section 207 and 
     inserting the following:

     ``SEC. 207. BUDGETARY LINE ITEM AND AUTHORIZATION OF 
                   APPROPRIATIONS.

       ``(a) Appropriation Requests.--Each budget of the United 
     States Government submitted by the President under section 
     1105 of title 31, United States Code, shall include a 
     separate statement of the amount of appropriations requested 
     for the Office of Advocacy of the Small Business 
     Administration, which shall be designated in a separate 
     account in the General Fund of the Treasury.
       ``(b) Administrative Operations.--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, together with such 
     equipment, operating budget, and communications facilities 
     and services as may be necessary, and shall provide necessary 
     maintenance services for such offices and the equipment and 
     facilities located in such offices.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this title. Any amount appropriated under this 
     subsection shall remain available, without fiscal year 
     limitation, until expended.''.

     SEC. 4. REGULATORY FLEXIBILITY REFORM FOR SMALL BUSINESSES.

       (a) Requirements Providing for More Detailed Analyses.--
       (1) Initial regulatory flexibility analysis.--Section 603 
     of title 5, United States Code, is amended by adding at the 
     end the following:
       ``(d) An agency shall notify the Chief Counsel for Advocacy 
     of the Small Business Administration of any draft rules that 
     may have a significant economic impact on a substantial 
     number of small entities either--
       ``(1) when the agency submits a draft rule to the Office of 
     Information and Regulatory Affairs at the Office of 
     Management and Budget under Executive Order 12866, if that 
     order requires such submission; or
       ``(2) if no submission to the Office of Information and 
     Regulatory Affairs is so required, at a reasonable time prior 
     to publication of the rule by the agency.''.
       (2) Final regulatory flexibility analysis.--
       (A) Inclusion of response to comments on certification of 
     proposed rule.--Section 604(a)(2) of title 5, United States 
     Code, is amended by inserting ``(or certification of the 
     proposed rule under section 605(b))'' after ``initial 
     regulatory flexibility analysis''.
       (B) Inclusion of response to comments filed by chief 
     counsel for advocacy.--Section 604(a) of title 5, United 
     States Code, is amended--
       (i) by redesignating paragraphs (3), (4), and (5) as 
     paragraphs (4), (5), and (6), respectively; and
       (ii) by inserting after paragraph (2) the following:
       ``(3) the response of the agency to any comments filed by 
     the Chief Counsel for Advocacy of the Small Business 
     Administration in response to the proposed rule, and a 
     detailed statement of any changes made to the proposed rule 
     in the final rule as a result of such comments;''.
       (C) Publication of analyses on website.--
       (i) Initial regulatory flexibility analysis.--Section 603 
     of title 5, United States Code, as amended by this Act, is 
     amended by adding at the end the following:
       ``(e) An agency shall publish any initial regulatory 
     flexibility analysis required under this section on the 
     website of the agency.''.

[[Page S3309]]

       (ii) Final regulatory flexibility analysis.--Section 604(b) 
     of title 5, United States Code, is amended to read as 
     follows:
       ``(b) The agency shall make copies of the final regulatory 
     flexibility analysis available to the public, including 
     placement of the entire analysis on the website, and shall 
     publish in the Federal Register the final regulatory 
     flexibility analysis, or a summary thereof that includes the 
     telephone number, mailing address, and link to the website 
     where the complete analysis may be obtained.''.
       (3) Cross-references to other analyses.--Section 605(a) of 
     title 5, United States Code, is amended to read as follows:
       ``(a) A Federal agency shall be treated as satisfying any 
     requirement regarding the content of an agenda or regulatory 
     flexibility analysis under section 602, 603, or 604, if such 
     agency provides in such agenda or analysis a cross-reference 
     to the specific portion of another agenda or analysis that is 
     required by any other law and which satisfies such 
     requirement.''.
       (4) Certifications.--The second sentence of section 605(b) 
     of title 5, United States Code, is amended by inserting 
     ``detailed'' before ``statement''.
       (5) Quantification requirements.--Section 607 of title 5, 
     United States Code, is amended to read as follows:

     ``Sec. 607. Quantification requirements

       ``In complying with sections 603 and 604, an agency shall 
     provide--
       ``(1) a quantifiable or numerical description of the 
     effects of the proposed or final rule and alternatives to the 
     proposed or final rule; or
       ``(2) a more general descriptive statement and a detailed 
     statement explaining why quantification is not practicable or 
     reliable.''.
       (b) Technical and Conforming Amendments.--
       (1) Heading.--The heading of section 605 of title 5, United 
     States Code, is amended to read as follows:

     ``Sec. 605. Incorporations by reference and certifications''.

       (2) Table of sections.--The table of sections for chapter 6 
     of title 5, United States Code, is amended--
       (A) by striking the item relating to section 605 and 
     inserting the following:

``605. Incorporations by reference and certifications.''; and

       (B) by striking the item relating to section 607 and 
     inserting the following:

``607. Quantification requirements.''.

     SEC. 5. OVERSIGHT OF REGULATORY ENFORCEMENT.

       Section 30 of the Small Business Act (15 U.S.C. 657) is 
     amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) by inserting ``(A)'' before ``Not later than'';
       (ii) by striking ``Nothing in this section is intended to 
     replace'' and inserting the following:
       ``(B) Nothing in this section--
       ``(i) is intended to replace'';
       (iii) by striking the period at the end and inserting ``; 
     or''; and
       (iv) by adding at the end the following:
       ``(ii) may be construed to exempt an agency from providing 
     relevant information to the Ombudsman upon request.'';
       (B) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) by inserting ``(i)'' before ``work with each agency'';
       (II) by inserting ``fine, forfeiture,'' before ``or other 
     enforcement related''; and
       (III) by adding at the end the following: ``or

       ``(ii) refer any substantiated comment to the affected 
     agency for response to the Ombudsman;''; and
       (ii) by amending subparagraph (C) to read as follows:
       ``(C) based on cases that are substantiated by the 
     Ombudsman, annually submit to Congress and affected agencies 
     a report evaluating the enforcement activities of agency 
     personnel, including--
       ``(i) ratings of the responsiveness to small business 
     concerns; and
       ``(ii) a description of the policies, actions, and 
     activities impacting small business concerns described in 
     subparagraph (A), for each Federal agency and regional or 
     program office of each Federal agency, as determined 
     appropriate by the Ombudsman.'';
       (2) in subsection (d)(1), by inserting ``, in coordination 
     with the Ombudsman,'' after ``hold such hearings''; and
       (3) by adding at the end the following:
       ``(e) The Board shall coordinate with the Ombudsman 
     regarding any official correspondence to be sent by the 
     Board.''.

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