[House Report 109-208]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-208

======================================================================



 
       NATIONAL SMALL BUSINESS REGULATORY ASSISTANCE ACT OF 2005

                                _______
                                

 July 28, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Manzullo, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 230]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Small Business, to whom was referred the 
bill (H.R. 230) to amend the Small Business Act to direct the 
Administrator of the Small Business Administration to establish 
a program to provide regulatory compliance assistance to small 
business concerns, and for other purposes, having considered 
the same, report favorably thereon with an amendment and 
recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

   This Act may be cited as the ``National Small Business Regulatory 
Assistance Act of 2005''.

SEC. 2. PURPOSE.

   The purpose of this Act is to establish a program to--
          (1) provide confidential assistance to small business 
        concerns;
          (2) provide small business concerns with the information 
        necessary to improve their rate of compliance with Federal and 
        State regulations;
          (3) create a partnership among Federal agencies to increase 
        outreach efforts to small business concerns with respect to 
        regulatory compliance;
          (4) provide a mechanism for unbiased feedback to Federal 
        agencies on the regulatory environment for small business 
        concerns; and
          (5) utilize the service delivery network of Small Business 
        Development Centers to improve access of small business 
        concerns to programs to assist them with regulatory compliance.

SEC. 3. DEFINITIONS.

   In this Act, the definitions set forth in section 37(a) of the Small 
Business Act (as added by section 4 of this Act) shall apply.

SEC. 4. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM.

   The Small Business Act (15 U.S.C. 637 et seq.) is amended--
          (1) by redesignating section 37 as section 38; and
          (2) by inserting after section 36 the following new section:

``SEC. 37. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM.

  ``(a) Definitions.--In this section, the following definitions apply:
          ``(1) Association.--The term `Association' means the 
        association recognized by the Administrator of the Small 
        Business Administration under section 21(a)(3)(A).
          ``(2) Participating small business development center.--The 
        term `participating Small Business Development Center' means a 
        Small Business Development Center participating in the program.
          ``(3) Program.--The term `program' means the regulatory 
        assistance program established under this section.
          ``(4) Regulatory compliance assistance.--The term `regulatory 
        compliance assistance' means assistance provided by a Small 
        Business Development Center to a small business concern to 
        enable the concern to comply with Federal regulatory 
        requirements.
          ``(5) Small business development center.--The term `Small 
        Business Development Center' means a Small Business Development 
        Center described in section 21.
          ``(6) State.--The term `State' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, and American Samoa.
  ``(b) Authority.--In accordance with this section, the Administrator 
shall establish a program to provide regulatory compliance assistance 
to small business concerns through selected Small Business Development 
Centers, the Association of Small Business Development Centers, and 
Federal compliance partnership programs.
  ``(c) Small Business Development Centers.--
          ``(1) In general.--In carrying out the program, the 
        Administrator shall enter into arrangements with selected Small 
        Business Development Centers under which such Centers shall 
        provide--
                  ``(A) access to information and resources, including 
                current Federal and State nonpunitive compliance and 
                technical assistance programs similar to those 
                established under section 507 of the Clean Air Act (42 
                U.S.C. 7661f);
                  ``(B) training and educational activities;
                  ``(C) confidential, free-of-charge, one-on-one, in-
                depth counseling to the owners and operators of small 
                business concerns regarding compliance with Federal and 
                State regulations, as long as such counseling is not 
                considered to be the practice of law in a State in 
                which a Small Business Development Center is located or 
                in which such counseling is conducted;
                  ``(D) technical assistance;
                  ``(E) referrals to experts and other providers of 
                compliance assistance who meet such standards for 
                educational, technical, and professional competency as 
                are established by the Administrator; and
                  ``(F) access to the Internet and training on Internet 
                use, including the use of the Internet website 
                established by the Administrator under subsection 
                (d)(1)(C).
          ``(2) Reports.--
                  ``(A) In general.--Each selected Small Business 
                Development Center shall transmit to the Administrator 
                a quarterly report that includes--
                          ``(i) a summary of the regulatory compliance 
                        assistance provided by the center under the 
                        program; and
                          ``(ii) any data and information obtained by 
                        the center from a Federal agency regarding 
                        regulatory compliance that the agency intends 
                        to be disseminated to small business concerns.
                  ``(B) Electronic form.--Each report required under 
                subparagraph (A) shall be transmitted in electronic 
                form.
                  ``(C) Interim reports.--A participating Small 
                Business Development Center may transmit to the 
                Administrator such interim reports as the Center 
                considers appropriate.
                  ``(D) Limitation on disclosure requirements.--The 
                Administrator shall not require a Small Business 
                Development Center to disclose the name or address of 
                any small business concern that received or is 
                receiving assistance under the program, except that the 
                Administrator shall require such a disclosure if 
                ordered to do so by a court in any civil or criminal 
                action.
  ``(d) Data Repository and Clearinghouse.--
          ``(1) In general.--In carrying out the program, the 
        Administrator shall--
                  ``(A) act as the repository of and clearinghouse for 
                data and information submitted by Small Business 
                Development Centers;
                  ``(B) submit to the President, the Committee on Small 
                Business and Entrepreneurship of the Senate, and the 
                Committee on Small Business of the House of 
                Representatives an annual report that includes--
                          ``(i) a description of the types of 
                        assistance provided by participating Small 
                        Business Development Centers under the program;
                          ``(ii) data regarding the number of small 
                        business concerns that contacted participating 
                        Small Business Development Centers regarding 
                        assistance under the program;
                          ``(iii) data regarding the number of small 
                        business concerns assisted by participating 
                        Small Business Development Centers under the 
                        program;
                          ``(iv) data and information regarding 
                        outreach activities conducted by participating 
                        Small Business Development Centers under the 
                        program, including any activities conducted in 
                        partnership with Federal agencies;
                          ``(v) data and information regarding each 
                        case known to the Administrator in which one or 
                        more Small Business Development Centers offered 
                        conflicting advice or information regarding 
                        compliance with a Federal or State regulation 
                        to one or more small business concerns;
                          ``(vi) any recommendations for improvements 
                        in the regulation of small business concerns; 
                        and
                          ``(vii) a list of regulations identified by 
                        the Administrator, after consultation with the 
                        Chief Counsel for Advocacy of the 
                        Administration, who shall review such list, and 
                        the Small Business and Agriculture Regulatory 
                        Enforcement Ombudsman, as being most burdensome 
                        to small business concerns, and recommendations 
                        to reduce or eliminate the burdens of such 
                        regulations; and
                  ``(C) establish an Internet website that--
                          ``(i) provides access to Federal, State, 
                        academic, and industry association Internet 
                        websites containing industry-specific 
                        regulatory compliance information that the 
                        Administrator deems potentially useful to small 
                        businesses attempting to comply with Federal 
                        regulations; and
                          ``(ii) arranges such Internet websites in 
                        industry-specific categories.
  ``(e) Review of Burdensome Regulations and Petition for Agency 
Review.--
          ``(1) Transmission of list of regulations to chief counsel 
        for advocacy.--The Administrator shall transmit to the Chief 
        Counsel for Advocacy of the Administration a copy of the list 
        of regulations submitted under subsection (d)(1)(B) as part of 
        the annual report required by that subsection.
          ``(2) Review of list of regulations.--The Chief Counsel for 
        Advocacy shall review the list of regulations transmitted under 
        paragraph (1) and identify any regulation that--
                  ``(A) is eligible for review in accordance with 
                section 610 of title 5, United States Code;
                  ``(B) has a significant impact on a substantial 
                number of small business concerns that is substantially 
                different from the impact indicated in the final 
                regulatory flexibility analysis for that regulation, as 
                published with the final regulation in the Federal 
                Register; or
                  ``(C) has a significant impact on a substantial 
                number of small business concerns and for which no 
                final regulatory flexibility analysis was ever 
                performed.
          ``(3) Notification and agency review.--With respect to any 
        regulation identified under paragraph (2) the Chief Counsel for 
        Advocacy shall--
                  ``(A) notify the appropriate Federal rulemaking 
                agency and the Office of Information and Regulatory 
                Affairs of the Office of Management of the 
                identification of such rule or regulation; and
                  ``(B) request the review of such regulation--
                          ``(i) in accordance with section 610 of title 
                        5, United States Code; or
                          ``(ii) for any impact it has on small 
                        business concerns.
          ``(4) Annual report.--The Chief Counsel for Advocacy shall 
        publish an annual report containing a list of any regulation 
        identified under paragraph (2) and the disposition by the 
        appropriate agency.
  ``(f) Eligibility.--
          ``(1) In general.--A Small Business Development Center shall 
        be eligible to receive assistance under the program only if the 
        center is certified under section 21(k)(2).
          ``(2) Waiver.-- With respect to a Small Business Development 
        Center seeking assistance under the program, the administrator 
        may waive the certification requirement set forth in paragraph 
        (1) if the Administrator determines that the center is making a 
        good faith effort to obtain such certification.
          ``(3) Effective date.--The restriction described in paragraph 
        (1) shall not apply to any Small Business Development Center 
        before October 1, 2005.
  ``(g) Selection of Participating State Programs.--
          ``(1) Establishment of program.--In consultation with the 
        Association and giving substantial weight to the Association's 
        recommendations, the Administrator shall select the Small 
        Business Development Center programs of 2 States from each of 
        the following groups of States to participate in the program:
                  ``(A) Group 1: Maine, Massachusetts, New Hampshire, 
                Connecticut, Vermont, and Rhode Island.
                  ``(B) Group 2: New York, New Jersey, Puerto Rico, and 
                the Virgin Islands.
                  ``(C) Group 3: Pennsylvania, Maryland, West Virginia, 
                Virginia, the District of Columbia, and Delaware.
                  ``(D) Group 4: Georgia, Alabama, North Carolina, 
                South Carolina, Mississippi, Florida, Kentucky, and 
                Tennessee.
                  ``(E) Group 5: Illinois, Ohio, Michigan, Indiana, 
                Wisconsin, and Minnesota.
                  ``(F) Group 6: Texas, New Mexico, Arkansas, Oklahoma, 
                and Louisiana.
                  ``(G) Group 7: Missouri, Iowa, Nebraska, and Kansas.
                  ``(H) Group 8: Colorado, Wyoming, North Dakota, South 
                Dakota, Montana, and Utah.
                  ``(I) Group 9: California, Guam, Hawaii, Nevada, and 
                Arizona.
                  ``(J) Group 10: Washington, Alaska, Idaho, and 
                Oregon.
          ``(2) Deadline for initial selections.--The Administrator 
        shall make selections under paragraph (1) not later than 60 
        days after promulgation of regulations under section 5 of the 
        National Small Business Regulatory Assistance Act of 2005.
          ``(3) Additional selections.--Not earlier than the date 3 
        years after the date of the enactment of this paragraph, the 
        Administrator may select Small Business Development Center 
        programs of States in addition to those selected under 
        paragraph (1). The Administrator shall consider the effect on 
        the programs selected under paragraph (1) before selecting 
        additional programs under this paragraph.
          ``(4) Coordination to avoid duplication with other 
        programs.--In selecting programs under this subsection, the 
        Administrator shall give a preference to Small Business 
        Development Center programs that have a plan for consulting 
        with Federal and State agencies to ensure that any assistance 
        provided under this section is not duplicated by an existing 
        Federal or State program.
  ``(h) Matching not Required.--Subparagraphs (A) and (B) of section 
21(a)(4) shall not apply to assistance made available under the 
program.
  ``(i) Distribution of Grants.--
          ``(1) In general.--Except as provided in paragraph (2), each 
        State program selected to receive a grant under subsection (g) 
        in a fiscal year shall be eligible to receive a grant in an 
        amount not to exceed the product obtained by multiplying--
                  ``(A) the amount made available for grants under this 
                section for the fiscal year; and
                  ``(B) the ratio that the population of the State 
                bears to the population of all the States with programs 
                selected to receive grants under subsection (g) for the 
                fiscal year.
          ``(2) Minimum amount.--The minimum amount that a State 
        program selected to receive a grant under subsection (g) shall 
        be eligible to receive under this section for any fiscal year 
        shall be $200,000. The Administrator shall reduce the amount 
        described in paragraph (1) as appropriate to carry out the 
        purposes of this paragraph and subsection (j)(2).
  ``(j) Evaluation and Report.--Not later than 3 years after the 
establishment of the program, the Comptroller General of the United 
States shall conduct an evaluation of the program and shall transmit to 
the Administrator, the Committee on Small Business and Entrepreneurship 
of the Senate, and the Committee on Small Business of the House of 
Representatives a report containing the results of the evaluation along 
with any recommendations as to whether the program, with or without 
modification, should be extended to include the participation of all 
Small Business Development Centers.
  ``(k) Authorization of Appropriations.--
          ``(1) In general.--There is authorized to be appropriated to 
        carry out this section $5,000,000 for fiscal year 2006 and each 
        subsequent fiscal year.
          ``(2) Limitation on use of other funds.--The Administrator 
        shall carry out the program only with amounts appropriated in 
        advance specifically to carry out this section.''.

SEC. 5. PROMULGATION OF REGULATIONS.

   After providing notice and an opportunity for comment and after 
consulting with the Association (but not later than 180 days after the 
date of the enactment of this Act), the Administrator shall promulgate 
final regulations to carry out this Act, including regulations that 
establish--
          (1) priorities for the types of assistance to be provided 
        under the program;
          (2) standards relating to educational, technical, and support 
        services to be provided by participating Small Business 
        Development Centers;
          (3) standards relating to any national service delivery and 
        support function to be provided by the Association under the 
        program;
          (4) standards relating to any work plan that the 
        Administrator may require a participating Small Business 
        Development Center to develop; and
          (5) standards relating to the educational, technical, and 
        professional competency of any expert or other assistance 
        provider to whom a small business concern may be referred for 
        compliance assistance under the program.

                                Purpose

    The purpose of H.R. 230, the ``National Small Business 
Regulatory Assistance Act of 2005,'' is to utilize existing 
Small Business Administration infrastructure to provide 
regulatory compliance assistance to small businesses. The 
United States Small Business Administration oversees the 
operations of Small Business Development Centers (SBDCs). 
Located in every state, these centers are associated with 
colleges and universities and provide operational assistance to 
small business owners. They are authorized to provide 
regulatory compliance assistance, but they do not have an 
organized program for providing such assistance. H.R. 230 would 
establish a program for selected SBDC state grantees to 
specifically develop regulatory compliance assistance.
    The bill mandates that the Administrator of the United 
States Small Business Administration establish a project in 
which twenty SBDC state programs will be selected to test 
whether the centers within those state programs would be an 
appropriate vehicle for providing regulatory compliance 
assistance to small business owners. It is the expectation of 
the Committee that the program should be expanded to include 
all SBDCs should the program prove successful.
    Finally, the bill, as amended, requires the Administrator 
to establish a web based resource for small business compliance 
assistance, organized by industry, and directs the 
participating SBDCs to assist small businesses in using this 
and other web based compliance assistance resources. Further, 
it builds on the current requirement to identify burdensome 
regulations and creates a mechanism for bringing such 
regulations to the attention of the appropriate agencies for 
review.

                          Need for Legislation

    During the past twenty-five years, the Federal Register--
the compendium of federal regulatory initiatives and changes--
almost doubled in size from 42,000 pages to a record 83,289 
pages in 2000. Since President Bush took office in 2001, the 
growth in regulation has slowed but the regulatory burden 
continues to be a problem. This crush of federal dictates is 
particularly troubling to small businesses that find it 
increasingly difficult to meet these burgeoning regulatory 
requirements while at the same time trying to successfully 
operate their businesses in an expanding competitive global 
environment. Often, small business owners do not learn about 
their failure to comply with a regulation or that a new 
regulatory requirement has been imposed until an inspector or 
auditor walks through the door.
    The result is neither beneficial to the small business 
owner nor the federal government. Federal regulations exist to 
achieve some statutory objective; noncompliance hinders the 
reaching of these statutory goals. Small business owners 
certainly would be more interested in complying with federal 
regulations than paying penalties and fines. However, the 
amount of information, including regulations and concomitant 
guidance, simply overwhelms small business owners.
    In 1996, Congress took action in an effort to alleviate 
this problem. The Small Business Regulatory Enforcement 
Fairness Act provided that federal agencies are required to 
produce plain-English compliance guides for any regulation that 
would have a significant economic impact on a substantial 
number of small businesses. The General Accounting Office (now 
the General Accountability Office) found that agencies did not 
do a particularly good job in drafting compliance guides. 
United States General Accounting Office, Compliance Guide 
Requirement Has Had Little Effect on Agency Practices 1 
(December 2001). Even if agencies do produce excellent 
compliance guides, they are of little utility if small business 
owners do not know about the regulatory changes. Some mechanism 
must exist to make small businesses more aware of their 
regulatory obligations.
    Even more important than making small businesses aware of 
the regulations is providing them with assistance needed to 
understand and comply with the regulations. A regulation may 
only take up fifteen pages of text, but the explanation for 
what those pages mean may require sifting through a hundred or 
more pages of dense, triple-columned, single-spaced pages in 
the Federal Register. See, e.g., Defining and Delimiting the 
Exemption for Executive, Administrative, Professional, Outside 
Sales and Computer Employees, 69 Fed. Reg. 22,122 (April 23, 
2004) (regulations are 14 pages but explanatory text is 138 
pages). Most small business owners do not have the time to go 
through this dense prolixity. And even if they did, they would 
not understand it unless they were knowledgeable in the field. 
The Committee believes that greater assistance must be provided 
to small business owners in helping them comply with complex 
regulatory issuances. Otherwise, a divide could develop between 
those businesses, usually large, with the resources to comply 
and those, usually small, without such resources. The small 
businesses will be at risk for penalties, fines, and audits 
while large businesses will not. Success or failure should be 
determined in the marketplace; not whether the business has the 
internal resources needed to comply with federal regulatory 
edicts. A regulatory compliance assistance program operated 
through the SBDCs could provide substantial assistance in 
ensuring such a divide does not occur.
    The Small Business Administration oversees a number of 
mechanisms for delivering advice to small business owners. One 
of the most effective is the Small Business Development Center 
program. Operated in conjunction with colleges and 
universities, the SBDCs assist small businesses in solving 
problems concerning the operations, manufacturing, engineering, 
technology, exchange and development, personnel administration, 
marketing, sales, merchandising, finance, accounting, and 
business strategy development. The SBDCs utilize the resources 
and the expertise of colleges and universities. In addition, 
the SBDCs, like the Agricultural Extension Service, also 
provide a focal point for information retrieval, coordination 
of federal and state government services, and referral to 
experts. Historically, the SBDCs have focused on financial, 
management, and marketing activities of small businesses 
despite the requirement that they also provide regulatory 
compliance assistance. See Sec. 21(c)(3)(H) of the Small 
Business Act (codified at 15 U.S.C. Sec. 648(c)(3)(H)).
    The Committee believes that SBDCs can provide an effective 
mechanism for dispensing regulatory compliance information and 
advice. However, regulatory compliance,unlike many of the other 
activities undertaken by the SBDCs, has significant legal consequences 
and requires resource utilization quite different from that usually 
offered at SBDCs. Therefore, the Committee believes that a program to 
examine how the regulatory compliance assistance will operate in 
selected SBDCs is a preferred strategy to simply providing an 
authorization of additional funding so that the SBDCs can provide 
regulatory compliance assistance. By initially limiting the number of 
centers, the Small Business Administration can pick the centers that 
will provide the best regulatory compliance assistance and then 
transfer the best practices on regulatory assistance to other centers.

                            Committee Action

    The Committee on Small Business held a field hearing to 
consider predecessor versions of H.R. 230. The hearing was held 
on September 2, 1999 at the Columbia Greene Community College 
in Hudson, NY. During that hearing, small businesses testified 
concerning the complexity of federal regulations, their desire 
for better understanding of federal regulatory requirements, 
and the need for easy access to compliance assistance. The 
Committee's Subcommittee on Workforce, Empowerment, and 
Government Programs held a hearing on another predecessor to 
H.R. 230 on July 19, 2001. At the hearing, witnesses, the 
sponsor of the bill, Mr. Sweeney (R-NY), noted that he 
continues to hear from small business constituents that they 
still are being overwhelmed with regulation and need compliance 
assistance. The Association of Small Business Development 
Centers (Association) also voiced support for the bill. 
Finally, the American Industrial Hygiene Association also 
endorsed the bill but suggested that amendments should be made 
to ensure that regulatory compliance assistance is provided by 
properly credentialed individuals. A hearing on H.R. 230 was 
held on July 13, 2005 before the full Committee. Mr. Rich 
Gangi, president of American Trim, noted that offering greater 
regulatory compliance assistance will benefit small business 
owners who do not have expertise to understand complex federal 
regulatory schemes.

                       Consideration of H.R. 230

    At 9:36 a.m. on July 14, 2005, the Committee on Small 
Business met to consider and report H.R. 230. Following brief 
opening statement by the Chairman, he declared the bill open 
for amendment.
    Mr. Manzullo introduced an amendment in the nature of a 
substitute. Ms. Velazquez (D-NY), the Ranking Democratic 
Member, introduced an amendment to amend Mr. Manzullo's 
amendment in the nature of a substitute. The Ranking Member's 
amendment was accepted by unanimous voice vote, a quorum being 
present. Chairman Manzullo then moved the bill be reported, and 
at 9:45 a.m. by unanimous voice vote, a quorum being present, 
the Committee passed H.R. 230, as amended and ordered it 
reported.

                      Section-by-Section Analysis


Section 1. Short title

    Designates the bill as the ``National Small Business 
Regulatory Assistance Act of 2005.''

Section 2. Purpose

    This section expresses the purpose of the legislation--to 
establish a dedicated set of resources within certain SBDCs to 
provide and coordinate regulatory compliance assistance to 
small businesses.

Section 3. Definitions

    The definitions of the Small Business Act shall apply to 
this program unless a different definition is utilized in the 
new Sec. 36 created by this Act. In those cases in which the 
definition is different, the definitions in new Sec. 36 shall 
apply to the program created by this Act.

Section 4. Small business regulatory assistance program

    This section establishes the program by creating a new 
Section 36 of the Small Business Act. Since H.R. 230 amends the 
Small Business Act, the Chairman's mark eliminates definitions 
of terms already in the Act. Thus, the terms Administrator, 
Association, Small Business Development Center, and State were 
deleted as being redundant.
    Section 36(a)(1) defines the term ``Selected Small Business 
Development Center'' as a SBDC selected to participate in the 
program established under this section. The Chairman's 
substituted the term ``selected'' for the term 
``participating'' because the former more accurately reflects 
the nature of the involvement of the SBDC.
    Section 36(a)(2) defines the term ``Program'' to mean the 
program established under this section for the provision of 
compliance assistance by the Small Business Administration 
through the utilization of resources of SBDCs.
    Section 36(a)(3) defines the term ``Regulatory Compliance 
Assistance'' as assistance provided by a participating SBDC to 
a small business concerning compliance with federal 
regulations.
    Section 36(b) authorizes the Administrator of the Small 
Business Administration to establish a program for selected 
SBDCs to provide small businesses with regulatory compliance 
assistance.
    Section 36(c)(1) authorizes the Administrator to enter into 
arrangements with the SBDCs selected under this section for the 
provision of regulatory compliance assistance.
    The selected SBDCs are required to provide access to 
information and resources on regulatory compliance, including 
contact information for federal and state compliance and 
technical assistance similar to those established under section 
507 of the Clean Air Act Amendments of 1990. Numerous other 
federal and state agencies have non-punitive compliance 
assistance programs (such as the federal Occupational Safety 
and Health Administration), and the Committee expects that the 
SBDCs selected under this section will maintain all necessary 
contact information with those federal and state agencies. 
Furthermore, the Committee expects that the quality of 
coordination of these assistance resources will be a 
significant factor in selecting the SBDCs for the program.
    Section 36(c)(1) also requires that the selected SBDCs 
establish various training and educational activities. The 
Committee expects that selected centers will utilize their 
contacts with federal and state agencies to obtain compliance 
pamphlets, videos, books, and any compliance guides issued 
pursuant to the Small Business Regulatory Enforcement Fairness 
Act. In addition, the Committee expects that participating 
centers will hold lectures and seminars on regulatory 
compliance including updates on compliance based on regulatory 
changes. The Committee expects that the Administrator will 
consider the quality of proposed educational programs in 
determining which centers are selected to participate in the 
program.
    Section 36(c)(1)(C) also mandates that the selected SBDCs 
provide confidential counseling on a one-on-one basis at no 
charge to small businesses seeking regulatory compliance 
assistance. The Committee recognizes that compliance with 
regulations inculcates legal rights and responsibilities of 
small business owners. Therefore, section 36(c) prohibits any 
regulatory compliance counseling that would be considered the 
practice of law in the jurisdiction in which the SBDC is 
located or in which such counseling is conducted. Furthermore, 
the Committee supports efforts in which the development centers 
establish contacts with lawyers in the community willing to 
provide seminars and other consultative service on regulatory 
compliance matters, either for a fee or on a pro bono basis.
    Section 36(c)(1) also requires the provision of technical 
assistance. Such counseling may include the arrangement of 
meetings with technical experts known to the participating 
SBDCs as long as such counseling again is done on a one-on-one 
basis at no charge to the small business.
    Section 36(c)(1)(E) makes explicit the Committee's concern 
that small businesses are directed to those individuals who 
have appropriate credentials and certifications to provide 
regulatory compliance assistance. While the Committee fully 
understands that many very successful businesses, including 
Microsoft, Apple, and Dell Computer, started in garages and 
those businessmen are quite capable of providing advice on 
starting, financing, and marketing a business, they are not 
necessarily qualified to provide guidance on compliance with 
OSHA, EPA, or IRS regulations. In fact, due to the potential 
legal consequences resulting from a small business owner 
following incorrect guidance, the Committee determined that it 
is necessary to make explicit the requirement that the 
participating centers only refer businesses to individuals with 
appropriate expertise in the regulatory compliance matter for 
which advice is sought.
    Section 36(c)(1)(F) directs the SBDCs to provide access to 
and training on the Internet including the use of the Internet 
Web site where SBA has collected and organized regulatory 
compliance information as described in subsection 36(d)(1)(C).
    Section 36(c)(2) requires each center selected to 
participate to file a quarterly report with the Administrator. 
The report shall provide a summary of the compliance assistance 
provided under the program. The report also must contain any 
data and information obtained by the participating SBDC from a 
federal agency concerning compliance that the federal agency 
intends to be disseminated to small business concerns. The 
Committee believes that this latter requirement will enable the 
Administrator or the Chief Counsel for Advocacy to raise issues 
of agency inconsistencies, to the extent that they exist, to 
the appropriate decisionmakers.
    Section 36(c)(2) requires that reports be filed with the 
Administrator in an electronic format. The Committee expects 
the Administrator to promulgate regulations that will provide 
for a consistent format of the report. The Committee believes 
that such consistency is necessary for the accurate compilation 
of data and proper assessment of the effectiveness of the 
program.
    Section 36(c)(2) also permits, but does not require, SBDCs 
to make interim reports if such reports are necessary or 
useful. For example, a SBDC participating in the program may 
receive inconsistent compliance information from a federal 
agency. By alerting the Administrator prior to the issuance of 
the quarterly report, the federal agency may be able to issue a 
clarification that may eliminate confusion, save compliance 
costs, and improve small business compliance.
    The Chairman's mark eliminates the privacy requirements set 
forth in Sec. 36(c)(2)(D). The privacy provisions in H.R. 230 
were included in Division K of H.R. 4818, the Consolidated 
Appropriations Act for 2005, which was signed into law by 
President Bush on December 8, 2004 as Pub. L. No. 108-447.
    Section 36(d) requires the Administrator to act as a 
repository of data and information submitted by SBDCs selected 
to participate in the program. Given the oversight role and 
importance of the Associate Administrator for Small Business 
Development Centers, section 36(d) requires that the functions 
of maintaining the database be housed with the Associate 
Administrator. The Committee believes that a central repository 
is necessary in order to determine whether federal agencies are 
providing consistent compliance information on a national 
basis. However, the Committee expects that the information 
received under this subsection be made available to other 
offices within the Small Business Administration, particularly 
the Chief Counsel for Advocacy and the Small Business and 
AgricultureRegulatory Ombudsman so those offices can more 
effectively carry out their mission of representing the interests of 
small businesses before federal agencies.
    Section 36(d) also requires that the Administrator submit 
an annual report to the President and the Committees on Small 
Business of the Senate and the House of Representatives. The 
report will contain: (a) data on the types of information 
provided by the participating SBDCs; (b) the number of small 
businesses that contacted the participating SBDCs; (c) the 
number of small businesses assisted by participating SBDCs; (d) 
information on the outreach activities of the participating 
SBDCs; (e) information regarding each case known to the 
Administrator in which participating SBDCs provided conflicting 
advice regarding compliance with federal regulation to one or 
more small businesses; (f) and any recommendations for 
improving the regulatory environment of small businesses, 
including the most burdensome regulations on small businesses. 
The Committee believes that this information is necessary to 
evaluate the utility of the program. More importantly, the 
report will reveal whether similarly situated small businesses 
are receiving consistent regulatory compliance assistance. In 
preparing the report, the Committee recognizes that the 
Administrator should consult with the Chief Counsel for 
Advocacy and the Small Business and Agriculture Regulatory 
Ombudsman. The Committee supports such consultative efforts but 
notes that the Administrator may not delegate the 
responsibility of preparing the report required by this 
subsection to any office within the Small Business 
Administration except the Associate Administrator for Small 
Business Development Centers.
    Section 36(d)(1)(C) sets out that the website the 
Administrator shall set up should provide access to federal, 
state, academic and industry association Internet websites 
containing industry specific regulation compliance information 
and give him broad authority to determine which sites should be 
included. Such a site should be arranged in an industry 
specific organization so that small businesses can quickly 
locate the sites that apply to their industry.
    Subsection 36(e) requires the Administrator to give the 
Chief Counsel for Advocacy the list as reported according to 
section 36(d) for the Chief Counsel to review. The Chief 
Counsel shall determine if any of the regulations are eligible 
for review under section 610 of the Regulatory Flexibility Act 
which would generally be a matter of seeing if the regulation 
was issued more than 10 years before the date of the review and 
if a final regulatory flexibility analysis was performed. The 
Chief Counsel also can determine if the regulation has a 
significant impact on a substantial number of small businesses 
and if that impact is substantially different than was 
estimated in the final regulatory flexibility analysis. 
Finally, the Chief Counsel can determine if the regulation has 
a significant impact on a substantial number of small business 
concerns but no final regulatory flexibility analysis was ever 
performed. If any of those three situations exist, the Chief 
Counsel must contact the appropriate federal rulemaking agency 
and the Office of Information and Regulatory Authority and 
request a review of such regulation in accordance with Sec. 610 
of the Regulatory Flexibility Act if applicable or for any 
impact the regulation has on small business. The Chief Counsel 
shall add to his Annual Report on Regulatory Flexibility Act if 
applicable or for any impact the regulation has on small 
business. The Chief Counsel shall add to his Annual Report on 
the Regulatory Flexibility Act the status of any listed 
regulations. The Committee believes that, in this way, the 
Chief Counsel and the agencies will receive solid, practical 
data of the regulation's impact on which to base consideration 
of better regulatory alternatives. As good as agency and the 
Chief Counsel's estimates are, they should not replace actual 
burden information reported from the field when it is 
available. That was the original intention of Sec. 610.
    Section 36(f) limits participation in the program only to 
those SBDCs certified under Sec. 21(k)(2) of the Small Business 
Act. The Committee is limiting participation in the program to 
those small business centers of the highest quality. Some SBDCs 
have not completed their certification programs. Nevertheless, 
some of these centers may be developing or already have 
exceptional regulatory compliance assistance programs. The 
Committee does not believe that such centers should be 
prohibited from participating in the program. Therefore, 
Sec. 36(f)(2) authorizes the Administrator to waive the 
requirement for certification if the center is making a good 
faith effort to obtain such certification.
    Section 36(g) requires the Administrator to select two 
participating state programs from each of the Small Business 
Administration's ten federal regions as those regions exist on 
the date of enactment of this Act. The Administrator shall 
consult with the Association and give the Association's 
recommendations substantial weight. The Administrator is 
required to complete the selection of the participating centers 
within 60 days after the regulations to implement the program 
have been promulgated.
    Section 36(h) ensures that no matching funds currently 
allocated to the operation of the SBDCs will be utilized to 
fund this new regulatory assistance program. In order to ensure 
proper funding, the Committee is authorizing a separate funding 
authorization for the program.
    Section 36(i) establishes the procedures for distributing 
grants among the selected state programs. The formula is based 
on the principle that a state which has a smaller population 
also will have, in absolute terms, fewer small businesses than 
a larger state. The formula therefore allocates funds according 
to the relative size of each state. The Committee believes that 
the minimum funds needed to initiate a state program will be 
$200,000. Because the Committee has authorized $5,000,000, it 
is making extra resources available to the larger states which 
will require more resources to initiate the project.
    Section 36(j) requires the Comptroller General of the 
United States to provide a report evaluating the effectiveness 
of the program three years after establishment. The report also 
should contain any suggested modifications to the program. 
Finally, the Comptroller General should provide its opinion 
concerning whether the program should be continued and expanded 
to include more SBDCs. The report shall be transmitted to the 
Committees on Small Business of the Senate and House of 
Representatives. The Committee expects that the program will be 
sufficiently successful to expand the program to other SBDCs.
    Section 36(k) limits the operation of the program only to 
the funds appropriated in advance for the program. Section 
36(j) provides an authorization of appropriations of $5,000,000 
for fiscal year 2006 and each year thereafter. Section 36(j) 
also prohibits the Administrator from using other funds, 
including other funds made available for the operation of 
SBDCs, to operate this program. The Committee authorized the 
additional appropriations because it determined that funding of 
the regulatory compliance program should not detract from the 
available funding for the delivery of other SBDC programs.

Section 5. Promulgation of regulations

    Section 5 authorizes the Administrator to promulgate 
regulations to implement this program no later than 180 days 
after the enactment of the Act. Such regulations only shall be 
promulgated after the public has been given an opportunity for 
notice and comment. The Committee believes that the 
Administrator can and should accomplish the issuance of 
regulations within the deadline set by statute. The Committee 
considers this Act to be some other law for purposes of 
Sec. 603 of Title 5 of the United States Code.
    The regulations shall include the priorities for the type 
of assistance to be provided, standards relating to the 
educational, technical, and support services to be provided by 
the Association to the participating centers, and standards for 
work plans that the participating centers will provide to the 
Administrator. The Committee believes that given the potential 
interest in the program by SBDCs, it is appropriate for the 
Administrator to have a set of standards by which it can 
determine which state programs shall be chosen. More 
importantly, the standards will provide an appropriate baseline 
for the Comptroller General's evaluation of the project.
    Section 5 also requires the Administrator to develop 
appropriate standards for ensuring the technical qualifications 
of experts to whom small businesses will be referred. The 
Committee does not intend that someone must have a college or 
advance degree to qualify. For example, a contractor licensed 
in a state with 20 years experience (who is a high-school 
graduate) may be as well-equipped to provide advice on 
compliance with OSHA construction standards as a professor of 
civil engineering. On the other hand, that same contractor 
might not be an appropriate individual to provide tax 
compliance advice. The Committee does not expect that this 
aspect of the Administrator's regulations shall be all 
encompassing, i.e., delineate every profession and the 
appropriate qualifications. However, the Committee does expect 
that the Administrator will recognize, as qualified, those 
individuals certified by nationally-recognized accrediting 
bodies (whose members must demonstrate substantial educational 
and practical experience), meet educational and work standards 
established by a federal agency, or are licensed to practice a 
particular profession or job pursuant to state law. The 
Committee expects that the regulations will provide the centers 
selected with enough information that they can determine 
whether the person providing the advice is competent in the 
field of regulation.
    The Chairman's mark does not contain Sec. 6 of H.R. 230 
because, as already noted, the privacy provisions were enacted 
into law as part of Pub. L. No. 108-447.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 20, 2005.
Hon. Donald Manzullo,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 230, the National 
Small Business Regulatory Assistance Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Melissa E. 
Zimmerman.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 230--National Small Business Regulatory Assistance Act of 2005

    Summary: H.R. 230 would authorize the appropriation of $25 
million for fiscal years 2006 through 2010 to assist small 
businesses in complying with federal and state regulations. 
Under the bill, the Small Business Administration would make 
grants to eligible Small Business Development Centers (SBDCs) 
to advise small businesses on regulatory compliance, gather 
information on the activities of participating SBDCs, and 
recommend changes in regulations affecting small businesses. 
Assuming appropriation of the authorized amounts, CBO estimates 
that implementing H.R. 230 would cost about $15 million over 
the 2006-2010 period, with additional outlays of about $10 
million after 2010. Enacting the bill would not affect direct 
spending or revenues.
    H.R. 230 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would benefit state, local, and tribal governments 
receiving grants under the bill, and any costs incurred by 
grant recipients would result from complying with grant 
conditions.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 230 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit). For this estimate, CBO assumes 
that the bill will be enacted by the end of 2005, that the 
authorized amounts will be appropriated for each fiscal year, 
and that outlays will follow historical trends. CBO estimates 
that implementing the bill would cost $15 million over the 
2006-2010 period for grants to assist small business in 
complying wth federal and state regulations. Remaining 
amounts--about $10 million--would be spent after 2010.

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2006    2007    2008    2009    2010
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level.............       5       5       5       5       5
Estimated Outlays...............       *       2       4       4      5
------------------------------------------------------------------------
Note.--* = less than $500,000.

    Intergovernmental and private-sector impact: H.R. 230 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would benefit state, local, and 
tribal governments receiving grants under the bill, and any 
costs incurred by grant recipients would result from complying 
with grant conditions.
    Estimate prepared by: Federal Costs: Melissa E. Zimmerman. 
Impact on State, Local, and Tribal Governments: Sarah Puro. 
Impact on the Private Sector: Craig Cammarata.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Committee Estimate of Costs

    Pursuant to the Congressional Budget Act of 1974, the 
Committee estimates that the amendments to the Small Business 
Act contained in H.R. 230 will not significantly increase 
discretionary spending over the next five fiscal years. The 
Committee also estimates that H.R. 230 will not affect direct 
spending. These estimates concur with Congressional Budget 
Office (CBO) estimates.
    Furthermore, pursuant to clause 3(d)(2)(A) of rule XIII of 
the Rules of the House of Representatives, the Committee 
estimates that implementation of H.R. 230 will not 
significantly increase other administrative costs.

                           Oversight Findings

    In accordance with clause 4(c)(2) of rule X of the Rules of 
the House of Representatives, the Committee states that no 
oversight findings or recommendations have been made by the 
Committee on Government Reform with respect to the subject 
matter contained in H.R. 230.
    In accordance with clause (2)(b)(1) of rule X of the Rules 
of the House of Representatives, the oversight findings and 
recommendations of the Committee on Small Business with respect 
to the subject matter contained in H.R. 230 are incorporated 
into the descriptive portions of this report.

                 Statement of Constitutional Authority

    Pursuant to clause 3(d)(1) of rule XII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, Section 8, clause 18, of the 
Constitution of the United States.

                    Compliance With Public Law 104-4

    H.R. 230 contains no unfunded mandates.

                    Congressional Accountability Act

    H.R. 230 does not relate to the terms and conditions of 
employment or access to public services or accommodations with 
the meaning of section 102(b)(3) of P.L. 104-1.

                  Federal Advisory Committee Statement

    This legislation does not establish or authorize the 
establishment of any new advisory committees.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

THE SMALL BUSINESS ACT

           *       *       *       *       *       *       *



SEC. 37. SMALL BUSINESS REGULATORY ASSISTANCE PROGRAM.

  (a) Definitions.--In this section, the following definitions 
apply:
          (1) Association.--The term ``Association'' means the 
        association recognized by the Administrator of the 
        Small Business Administration under section 
        21(a)(3)(A).
          (2) Participating small business development 
        center.--The term ``participating Small Business 
        Development Center'' means a Small Business Development 
        Center participating in the program.
          (3) Program.--The term ``program'' means the 
        regulatory assistance program established under this 
        section.
          (4) Regulatory compliance assistance.--The term 
        ``regulatory compliance assistance'' means assistance 
        provided by a Small Business Development Center to a 
        small business concern to enable the concern to comply 
        with Federal regulatory requirements.
          (5) Small business development center.--The term 
        ``Small Business Development Center'' means a Small 
        Business Development Center described in section 21.
          (6) State.--The term ``State'' means each of the 
        several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        and American Samoa.
  (b) Authority.--In accordance with this section, the 
Administrator shall establish a program to provide regulatory 
compliance assistance to small business concerns through 
selected Small Business Development Centers, the Association of 
Small Business Development Centers, and Federal compliance 
partnership programs.
  (c) Small Business Development Centers.--
          (1) In general.--In carrying out the program, the 
        Administrator shall enter into arrangements with 
        selected Small Business Development Centers under which 
        such Centers shall provide--
                  (A) access to information and resources, 
                including current Federal and State nonpunitive 
                compliance and technical assistance programs 
                similar to those established under section 507 
                of the Clean Air Act (42 U.S.C. 7661f);
                  (B) training and educational activities;
                  (C) confidential, free-of-charge, one-on-one, 
                in-depth counseling to the owners and operators 
                of small business concerns regarding compliance 
                with Federal and State regulations, as long as 
                such counseling is not considered to be the 
                practice of law in a State in which a Small 
                Business Development Center is located or in 
                which such counseling is conducted;
                  (D) technical assistance;
                  (E) referrals to experts and other providers 
                of compliance assistance who meet such 
                standards for educational, technical, and 
                professional competency as are established by 
                the Administrator; and
                  (F) access to the Internet and training on 
                Internet use, including the use of the Internet 
                website established by the Administrator under 
                subsection (d)(1)(C).
          (2) Reports.--
                  (A) In general.--Each selected Small Business 
                Development Center shall transmit to the 
                Administrator a quarterly report that 
                includes--
                          (i) a summary of the regulatory 
                        compliance assistance provided by the 
                        center under the program; and
                          (ii) any data and information 
                        obtained by the center from a Federal 
                        agency regarding regulatory compliance 
                        that the agency intends to be 
                        disseminated to small business 
                        concerns.
                  (B) Electronic form.--Each report required 
                under subparagraph (A) shall be transmitted in 
                electronic form.
                  (C) Interim reports.--A participating Small 
                Business Development Center may transmit to the 
                Administrator such interim reports as the 
                Center considers appropriate.
                  (D) Limitation on disclosure requirements.--
                The Administrator shall not require a Small 
                Business Development Center to disclose the 
                name or address of any small business concern 
                that received or is receiving assistance under 
                the program, except that the Administrator 
                shall require such a disclosure if ordered to 
                do so by a court in any civil or criminal 
                action.
  (d) Data Repository and Clearinghouse.--
          (1) In general.--In carrying out the program, the 
        Administrator shall--
                  (A) act as the repository of and 
                clearinghouse for data and information 
                submitted by Small Business Development 
                Centers;
                  (B) submit to the President, the Committee on 
                Small Business and Entrepreneurship of the 
                Senate, and the Committee on Small Business of 
                the House of Representatives an annual report 
                that includes--
                          (i) a description of the types of 
                        assistance provided by participating 
                        Small Business Development Centers 
                        under the program;
                          (ii) data regarding the number of 
                        small business concerns that contacted 
                        participating Small Business 
                        Development Centers regarding 
                        assistance under the program;
                          (iii) data regarding the number of 
                        small business concerns assisted by 
                        participating Small Business 
                        Development Centers under the program;
                          (iv) data and information regarding 
                        outreach activities conducted by 
                        participating Small Business 
                        Development Centers under the program, 
                        including any activities conducted in 
                        partnership with Federal agencies;
                          (v) data and information regarding 
                        each case known to the Administrator in 
                        which one or more Small Business 
                        Development Centers offered conflicting 
                        advice or information regarding 
                        compliance with a Federal or State 
                        regulation to one or more small 
                        business concerns;
                          (vi) any recommendations for 
                        improvements in the regulation of small 
                        business concerns; and
                          (vii) a list of regulations 
                        identified by the Administrator, after 
                        consultation with the Chief Counsel for 
                        Advocacy of the Administration, who 
                        shall review such list, and the Small 
                        Business and Agriculture Regulatory 
                        Enforcement Ombudsman, as being most 
                        burdensome to small business concerns, 
                        and recommendations to reduce or 
                        eliminate the burdens of such 
                        regulations; and
                  (C) establish an Internet website that--
                          (i) provides access to Federal, 
                        State, academic, and industry 
                        association Internet websites 
                        containing industry-specific regulatory 
                        compliance information that the 
                        Administrator deems potentially useful 
                        to small businesses attempting to 
                        comply with Federal regulations; and
                          (ii) arranges such Internet websites 
                        in industry-specific categories.
  (e) Review of Burdensome Regulations and Petition for Agency 
Review.--
          (1) Transmission of list of regulations to chief 
        counsel for advocacy.--The Administrator shall transmit 
        to the Chief Counsel for Advocacy of the Administration 
        a copy of the list of regulations submitted under 
        subsection (d)(1)(B) as part of the annual report 
        required by that subsection.
          (2) Review of list of regulations.--The Chief Counsel 
        for Advocacy shall review the list of regulations 
        transmitted under paragraph (1) and identify any 
        regulation that--
                  (A) is eligible for review in accordance with 
                section 610 of title 5, United States Code;
                  (B) has a significant impact on a substantial 
                number of small business concerns that is 
                substantially different from the impact 
                indicated in the final regulatory flexibility 
                analysis for that regulation, as published with 
                the final regulation in the Federal Register; 
                or
                  (C) has a significant impact on a substantial 
                number of small business concerns and for which 
                no final regulatory flexibility analysis was 
                ever performed.
          (3) Notification and agency review.--With respect to 
        any regulation identified under paragraph (2) the Chief 
        Counsel for Advocacy shall--
                  (A) notify the appropriate Federal rulemaking 
                agency and the Office of Information and 
                Regulatory Affairs of the Office of Management 
                of the identification of such rule or 
                regulation; and
                  (B) request the review of such regulation--
                          (i) in accordance with section 610 of 
                        title 5, United States Code; or
                          (ii) for any impact it has on small 
                        business concerns.
          (4) Annual report.--The Chief Counsel for Advocacy 
        shall publish an annual report containing a list of any 
        regulation identified under paragraph (2) and the 
        disposition by the appropriate agency.
  (f) Eligibility.--
          (1) In general.--A Small Business Development Center 
        shall be eligible to receive assistance under the 
        program only if the center is certified under section 
        21(k)(2).
          (2) Waiver.-- With respect to a Small Business 
        Development Center seeking assistance under the 
        program, the administrator may waive the certification 
        requirement set forth in paragraph (1) if the 
        Administrator determines that the center is making a 
        good faith effort to obtain such certification.
          (3) Effective date.--The restriction described in 
        paragraph (1) shall not apply to any Small Business 
        Development Center before October 1, 2005.
  (g) Selection of Participating State Programs.--
          (1) Establishment of program.--In consultation with 
        the Association and giving substantial weight to the 
        Association's recommendations, the Administrator shall 
        select the Small Business Development Center programs 
        of 2 States from each of the following groups of States 
        to participate in the program:
                  (A) Group 1: Maine, Massachusetts, New 
                Hampshire, Connecticut, Vermont, and Rhode 
                Island.
                  (B) Group 2: New York, New Jersey, Puerto 
                Rico, and the Virgin Islands.
                  (C) Group 3: Pennsylvania, Maryland, West 
                Virginia, Virginia, the District of Columbia, 
                and Delaware.
                  (D) Group 4: Georgia, Alabama, North 
                Carolina, South Carolina, Mississippi, Florida, 
                Kentucky, and Tennessee.
                  (E) Group 5: Illinois, Ohio, Michigan, 
                Indiana, Wisconsin, and Minnesota.
                  (F) Group 6: Texas, New Mexico, Arkansas, 
                Oklahoma, and Louisiana.
                  (G) Group 7: Missouri, Iowa, Nebraska, and 
                Kansas.
                  (H) Group 8: Colorado, Wyoming, North Dakota, 
                South Dakota, Montana, and Utah.
                  (I) Group 9: California, Guam, Hawaii, 
                Nevada, and Arizona.
                  (J) Group 10: Washington, Alaska, Idaho, and 
                Oregon.
          (2) Deadline for initial selections.--The 
        Administrator shall make selections under paragraph (1) 
        not later than 60 days after promulgation of 
        regulations under section 5 of the National Small 
        Business Regulatory Assistance Act of 2005.
          (3) Additional selections.--Not earlier than the date 
        3 years after the date of the enactment of this 
        paragraph, the Administrator may select Small Business 
        Development Center programs of States in addition to 
        those selected under paragraph (1). The Administrator 
        shall consider the effect on the programs selected 
        under paragraph (1) before selecting additional 
        programs under this paragraph.
          (4) Coordination to avoid duplication with other 
        programs.--In selecting programs under this subsection, 
        the Administrator shall give a preference to Small 
        Business Development Center programs that have a plan 
        for consulting with Federal and State agencies to 
        ensure that any assistance provided under this section 
        is not duplicated by an existing Federal or State 
        program.
  (h) Matching not Required.--Subparagraphs (A) and (B) of 
section 21(a)(4) shall not apply to assistance made available 
under the program.
  (i) Distribution of Grants.--
          (1) In general.--Except as provided in paragraph (2), 
        each State program selected to receive a grant under 
        subsection (g) in a fiscal year shall be eligible to 
        receive a grant in an amount not to exceed the product 
        obtained by multiplying--
                  (A) the amount made available for grants 
                under this section for the fiscal year; and
                  (B) the ratio that the population of the 
                State bears to the population of all the States 
                with programs selected to receive grants under 
                subsection (g) for the fiscal year.
          (2) Minimum amount.--The minimum amount that a State 
        program selected to receive a grant under subsection 
        (g) shall be eligible to receive under this section for 
        any fiscal year shall be $200,000. The Administrator 
        shall reduce the amount described in paragraph (1) as 
        appropriate to carry out the purposes of this paragraph 
        and subsection (j)(2).
  (j) Evaluation and Report.--Not later than 3 years after the 
establishment of the program, the Comptroller General of the 
United States shall conduct an evaluation of the program and 
shall transmit to the Administrator, the Committee on Small 
Business and Entrepreneurship of the Senate, and the Committee 
on Small Business of the House of Representatives a report 
containing the results of the evaluation along with any 
recommendations as to whether the program, with or without 
modification, should be extended to include the participation 
of all Small Business Development Centers.
  (k) Authorization of Appropriations.--
          (1) In general.--There is authorized to be 
        appropriated to carry out this section $5,000,000 for 
        fiscal year 2006 and each subsequent fiscal year.
          (2) Limitation on use of other funds.--The 
        Administrator shall carry out the program only with 
        amounts appropriated in advance specifically to carry 
        out this section.
  Sec. [37] 38. All laws and parts of laws inconsistent with 
this Act are hereby repealed to the extent of such 
inconsistency.

                            ADDITIONAL VIEWS

    Democrats agree strongly that some targeted, uniform 
delivery system must exist to make small businesses more aware 
of their regulatory obligations. If greater assistance is not 
targeted to small businesses, a divide could develop between 
large businesses that have the resources to comply with 
regulatory requirements and small businesses that do not. As a 
result, we strongly support a regulatory compliance assistance 
program operated through SBA's Small Business Development 
Center Program and believe that its overall success will ensure 
the success of the pilot program established under H.R. 230.
    Small businesses have oftentimes been overwhelmed by the 
growing and constantly changing Federal, State and local 
regulatory requirements. Indeed every small business or 
association that has testified before the Committee in the 
109th Congress has listed the growing regulatory burden as one 
of their top priorities for federal action. They fear that, 
with the onslaught of federal regulations, they will 
inadvertently fail to comply with some obscure rule, their 
business will be shut down by the government, and they will be 
driven into bankruptcy because they cannot afford the cost of 
compliance. On the other hand, small businesses also fear that 
going to the very agencies that create and enforce the 
regulations is tantamount to turning themselves in, and will 
ultimately result in penalties being levied on their 
businesses. In fact, many believe that the government is more 
interested in recovering penalties than in promoting compliance 
with the law.
    Although Federal and State regulations and regulatory 
programs usually provide substantial benefits, they can be 
confusing, burdensome and incur significant costs that 
disproportionately fall on small businesses. Studies presented 
to the Committee by the SBA indicate small businesses bear a 
disproportionately high burden from federal regulations than 
their larger competitors. Small businesses are not only in need 
of quality regulatory compliance assistance programs, but also 
programs that are uniformly developed nationwide and targeted 
to small businesses.
    An important aspect raised during the Committee's most 
recent hearing is the technical expertise one must have to 
understand each individual regulatory requirement. Providing 
that knowledge to small businesses is as important, if not more 
important, as providing advanced notice of any regulatory 
requirement with which they must comply. Therefore, we believe 
that the purpose of this new pilot program is to establish an 
initial contact that results in a referral to the appropriate 
program or experts. It is our belief that the new pilot program 
is required to utilize existing Federal or State compliance 
assistance programs and avoid competing with them. Some of 
these existing compliance assistance programs, such as those 
created under Section 507 of the Clean Air Act Amendments 
(e.g., EPA's State Small Business Assistance Program), have 
established a level of expertise in compliance assistance and 
provide invaluable technical assistance targeted to small 
businesses. In addition, SBDCs must be careful in the type of 
counseling they provide and the liability that can result from 
such counseling.
    We concur with the report language that directs the 
Administrator to select two State SBDC programs from each of 
the ten SBA regions across the nation. The State SBDC program, 
not an individual center or sub-center, will receive the grant 
money to implement the assistance statewide.
    As introduced, H.R. 230 would have not provided a framework 
for small businesses to utilize the complete resource of SBDCs 
in meeting their regulatory. In order to improve the 
legislation, Ms. Velazquez of New York offered an amendment on 
behalf of her Democratic colleagues to do so.
    The en bloc amendment proposed by the Democrats and adopted 
by the Committee requires the SBA to support Small Business 
Development Center's (SBDC) regulatory compliance assistance 
efforts by establishing an Internet based list of Web sites 
organized by industry that can help small businesses get 
information about regulatory compliance. It is intended that 
the site should include links to federal, state, academic and 
association Web sites. SBDC personnel should also be prepared 
to show entrepreneurs how to use the list and other Internet 
tools to find compliance assistance. In this way, entrepreneurs 
learn how to access sites that might be useful to them when 
questions arise in the future.
    The entrepreneur can be taught how to find all the 
necessary information for the appropriate industry in one spot. 
If the business owner does not own a computer, then at least he 
will understand how to use one that might be available at the 
local school or library. A second essential element to finding 
useful Web sites is organizing them by industry. That way the 
business owner can review the sites that apply more easily.
    It is not the Committee's intent to have this be an 
endorsement of any kind and the Administrator is given broad 
discretion to set rules by which public and private Web sites 
are listed. The key here is organization, access and 
instruction. SBA is already a major Internet hub that has 
significant public and private links. Working with SBDCs, SBA 
should concentrate on collecting and organizing useful sites 
that can be accessed by an industry specific reference so SBDCs 
and small businesses can use the list as a resource finding 
useful regulatory compliance assistance.
    The amendment establishes a repository and clearinghouse 
for the information obtained by the SBDCs, primarily to provide 
unbiased feedback to agencies and to detect inconsistencies in 
information regarding compliance with a regulation. This will 
also work to identify government-wide trends in regulatory 
rulemaking and enforcement. This will facilitate the ability of 
the agencies and Congress to improve compliance assistance 
available on a government wide level to ultimately improve 
compliance.
    In addition, the en bloc amendment requires the reporting 
of complicated and burdensome federal regulations to the 
Administrator. After review, the Administrator, in consultation 
with the National Ombudsman and the Chief Counsel for Advocacy, 
will include in his report a list of burdensome regulations as 
well as recommendations for ways to reduce the burden.
    Once the list required by H.R. 230 is compiled, the Chief 
Counsel for Advocacy shall analyze the regulations on the list 
and identify regulations that are eligible for consideration 
under Sec. 610 of the Regulatory Flexibility Act. He shall also 
identify cases where a regulation is not eligible for 
consideration under Sec. 610 but where the actual significant 
impact on a substantial number of small businesses is different 
than the supposed impact at the time of promulgating the rule. 
Finally, the Chief Counsel for Advocacy shall also identify 
cases where there was no study of the impact at the time of 
promulgation of the rule but where there is clearly a 
significant impact on a substantial number of small businesses 
imposed by the regulation.
    The Democrats included this change because simply 
identifying the burdensome regulations without requiring action 
would not solve the core problem. Agencies need to regularly 
review and improve their regulatory system based on the best 
available information. Once the Chief Counsel for Advocacy has 
identified the rules, he is required to transmit them to the 
Office of Information and Regulatory Affairs and the 
appropriate regulatory agency with a request that the agency 
proceed to review the rule for its impact on small business. If 
appropriate, it should be done as indicated in Sec. 610 of the 
Regulatory Flexibility Act but the Committee assumes that if 
Sec. 610 is not appropriate that the Chief Counsel will make 
the request of the agency in the form and manner as provided by 
Sec. 553(e) of the Administrative Procedure Act (5 USC 
Sec. 553(e)--which establishes the right to petition an agency 
for the issuance, amendment or repeal of a rule.) The Chief 
Counsel for Advocacy is required to report on the agency's 
progress with regard to such reviews in his Annual Report to 
the President and Congress.
    As amended, this pilot program offers small businesses a 
voluntary, confidential, and nonpunitive means in which to 
obtain assistance in complying with the numerous regulations 
that could determine the success or failure of their 
businesses. By utilizing SBDCs as a delivery network, small 
businesses will be able to obtain counseling, training, and 
education, in an environment that is not perceived as 
intimidating or threatening. For the first time agencies will 
have systemized feedback on the actual impact of their 
regulations on small businesses. They can use this information 
to alter and improve their regulatory requirements.

                                                Nydia M. Velazquez.

                                  
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