[House Report 116-113]
[From the U.S. Government Publishing Office]


116th Congress    }                                   {         Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                   {        116-113

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

 
   TO AMEND THE SMALL BUSINESS ACT TO REQUIRE THE SMALL BUSINESS AND 
 AGRICULTURE REGULATORY ENFORCEMENT OMBUDSMAN TO CREATE A CENTRALIZED 
         WEBSITE FOR COMPLIANCE GUIDES, AND FOR OTHER PURPOSES

                                _______
                                

 June 13, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Velazquez, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2142]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 2142) to amend the Small Business Act to require the 
Small Business and Agriculture Regulatory Enforcement Ombudsman 
to create a centralized website for compliance guides, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Bill Summary........................................2
  II. Background and Need for Legislation.............................2
 III. Hearings........................................................3
  IV. Committee Consideration.........................................3
   V. Committee Votes.................................................3
  VI. Section-by-Section Analysis for H.R. 2142.......................5
 VII. Congressional Budget Office Cost Estimate.......................5
VIII. Unfunded Mandates...............................................6
  IX. New Budget Authority, Entitlement Authority, and Tax Expenditure6
   X. Oversight Findings..............................................6
  XI. Statement of Constitutional Authority...........................6
 XII. Congressional Accountability Act................................6
XIII. Federal Advisory Committee Act Statement........................6
 XIV. Statement of No Earmarks........................................6
  XV. Statement of Duplication of Federal Programs....................7
 XVI. Disclosure of Directed Rule Makings.............................7
XVII. Performance Goals and Objectives................................7
XVIII.Changes in Existing Law, Made by the Bill, As Reported..........7


                      I. Purpose and Bill Summary

    The purpose of H.R. 2142 is to require the Office of the 
National Ombudsman at the Small Business Administration (SBA) 
to create a centralized website with hyperlinks to small entity 
compliance guides and the contact person at agencies who could 
provide small businesses with assistance. The legislation would 
also require the Office of the National Ombudsman to report on 
federal agencies' compliance with the Section 212 requirements 
of the Small Business Regulatory Enforcement Fairness Act 
(SBREFA) in its annual report to Congress.

                II. Background and Need for Legislation

    H.R. 2142 was introduced by Representative Antonio Delgado 
(D-NY) and Representative John Joyce (R-PA) on April 9, 2018. 
Section 212 of the Small Business Regulatory Enforcement 
Fairness Act (SBREFA) requires federal agencies to publish a 
``small entity compliance guide'' for every rule that requires 
a regulatory flexibility analysis (RFA). The guide must be 
posted the day the final rule is published or shortly 
thereafter, but no later than the day the rule becomes 
effective. Agencies are also required to publish the guides on 
their websites, distribute the guides to small entities 
affected by the rules, and report annually to Congress.

        A. BACKGROUND ON SBA'S OFFICE OF THE NATIONAL OMBUDSMAN

    The SBA's Office of the National Ombudsman was created in 
1996 to help small businesses overcome excessive or unfair 
regulatory enforcement actions by federal agencies, such as 
repetitive audits, investigations, or excessive fines. The 
Ombudsman works directly with federal agencies to ensure that 
actions taken against small businesses are fair and not 
excessive. In Fiscal Year 2017, the Office of the National 
Ombudsman advocated on behalf of 460 small businesses, 
conducted more than 130 outreach events across the country to 
raise the visibility of the Office, and strengthened 
relationships with 28 interagency partners.

            B. THE NEED FOR THE CHANGES OUTLINED IN THE BILL

    Section 212 of the Small Business Regulatory Enforcement 
Fairness Act (SBREFA) requires federal agencies to publish a 
``small entity compliance guide'' for every rule that requires 
a regulatory flexibility analysis (RFA). The guide must be 
posted the day the final rule is published or shortly 
thereafter, but no later than the day the rule becomes 
effective. Agencies are also required to publish the guides on 
their websites, distribute the guides to small entities 
affected by the rules, and report annually to Congress.
    Small businesses rarely have the resources to navigate 
multiple agency websites to understand their responsibilities 
under new laws. H.R. 2142, would make it easier for small 
businesses by requiring the Office of the National Ombudsman at 
the Small Business Administration (SBA) to create a centralized 
website, which would provide a ``one stop shop'' for small 
entities compliance guides. Specifically, the legislation would 
require the Office of the National Ombudsman at the Small 
Business Administration (SBA) to create a centralized website 
with hyperlinks to small entity compliance guides and the 
contact person at agencies who could provide small businesses 
with assistance. The legislation would also require the 
Ombudsman to report on federal agencies' compliance with the 
section 212 requirements in its annual report to Congress.
    In addition, the bill would provide transparency and ensure 
federal agencies are complying with the SBREFA requirements. 
Federal agencies' compliance with the requirements has been 
varied. For example, the Federal Trade Commission (FTC) has a 
longstanding small business education program and regularly 
submits reports to the Small Business Committee each year. In 
the 2018 annual report, the FTC reported that the Commission 
did not issue any rules that were subject to Section 212 of 
SBREFA for the reporting period. However, it made compliance 
materials available for several rulemakings even though they 
were not required to do so by the Act. Conversely, the Surface 
Transportation Board reported in its 2018 annual report that 
the Board failed to issue a timely compliance guide for a 
particular rule, but promptly remedied the omission once it was 
realized. The legislation would require the Office of the 
National Ombudsman to report on federal agencies' compliance 
with the SBREFA requirements in its annual report to Congress.

                             III. Hearings

    While multiple hearings have been held by the Committee 
over the past several years exploring regulatory compliance 
burdens specific to the small business community, no specific 
hearings in the 116th Congress have been held to explore 
reforms to SBA's Office of the National Ombudsman.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on May 1, 2019 and ordered H.R. 2142 
favorably reported to the House. During the markup, no 
amendments were offered.

                           V. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto. The Committee voted by voice vote to favorably report 
H.R. 2142 to the House at 11:58 A.M.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  VI. Section-by-Section of H.R. 2142


Section 1: Centralized compliance guides

    This section amends section 30 of the Small Business Act by 
adding a new subsection requiring the Office of the National 
Ombudsman at the Small Business Administration (SBA) to create 
a centralized website that would: 1) provide hyperlinks to 
small entity compliance guides described under Section 212 of 
the Small Business Regulatory Enforcement Fairness Act of 1996; 
and 2) provide the contact information for the person at the 
agency who could provide small entities with assistance with 
respect to the rules that are the subject of such guide.
    This section would also require the Ombudsman to report on 
federal agencies' compliance with the Section 212 requirements 
of the Small Business Regulatory Enforcement Fairness Act of 
1996 in its annual report to Congress.

             VII. Congressional Budget Office Cost Estimate

    The Congressional Budget Office pursuant to 402 of the 
Congressional Budget Act of 1974, submitted a cost estimate for 
H.R. 2142 that stated enacting the legislation would not 
increase net direct spending or on budget deficits in any of 
the four consecutive 10-year periods beginning in 2030.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 4, 2019.
Hon. Nydia M. Velazquez,
Chairwoman, Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2142, a bill to 
amend the Small Business Act to require the Small Business and 
Agriculture Regulatory Enforcement Ombudsman to create a 
centralized website for compliance guides, and for other 
purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Hughes.
            Sincerely,
                                            Phillip Swagel,
                                                          Director.
    Enclosure.

    H.R. 2142 would require the Small Business Administration's 
(SBA's) Office of the National Ombudsman to maintain a public 
website with links to small-entity compliance guides issued by 
federal agencies and those agencies' contact information. 
Federal agencies create small-entity compliance guides to 
assist small businesses in complying with federal rules and 
regulations. Under the bill, the National Ombudsman would 
assess the extent to which federal agencies are publishing 
those guides.
    CBO estimates that implementing H.R. 2142 would have an 
insignificant cost. The Small Business Paperwork Relief Act of 
2002 already requires the Office of Management and Budget, in 
consultation with the SBA, to post small-entity compliance 
guides online each year. The agency's compliance contacts are 
posted as well. Any additional spending would be subject to the 
availability of appropriated funds.
    The CBO staff contact for this estimate is David Hughes. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                        VIII. Unfunded Mandates

    H.R. 2142 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act, Public 
Law No. 104-4, and would impose no costs on state, local, or 
tribal governments.

            IX. New Budget Authority, Entitlement Authority,
                          and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House, the Committee provides the following opinion and 
estimate with respect to new budget authority, entitlement 
authority, and tax expenditures. While the Committee has not 
received an estimate of new budget authority contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to Sec. 402 of the Congressional Budget 
Act of 1974, the Committee does not believe that there will be 
any additional costs attributable to this legislation. H.R. 
2142 does not direct new spending, but instead reallocates 
funding independently authorized and appropriated.

                         X. Oversight Findings

    In accordance with clause 2(b)(1) of rule X of the Rules of 
the House, the oversight findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 2142 are incorporated into the descriptive 
portions of this report.

               XI. Statement of Constitutional Authority

    Pursuant to clause 7 of rule XII of the Rules of the House 
of Representatives, the Committee finds the authority for this 
legislation in Art. I, Sec. 8, cl. 1 of the Constitution of the 
United States.

                 XII. Congressional Accountability Act

    H.R. 2142 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of Sec. 102(b)(3) of Public Law No. 104-1.

             XIII. Federal Advisory Committee Act Statement

    H.R. 2142 does not establish or authorize the establishment 
of any new advisory committees as that term is defined in the 
Federal Advisory Committee Act, 5 U.S.C. App.2.

                     XIV. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 2142 does not 
contain any congressional earmarks, limited tax benefits, or 
limited tariff benefits as defined in subsections (d), (e), or 
(f) of clause 9 of rule XXI of the Rules of the House.

            XV. Statement of Duplication of Federal Programs

    Pursuant to clause 3 of rule XIII of the Rules of the 
House, no provision of H.R. 2142 establishes or reauthorizes a 
program of the federal government known to be duplicative of 
another federal program, a program that was included in any 
report from the United States Government Accountability Office 
pursuant to Sec. 21 of Pub. L. No. 111-139, or a program 
related to a program identified in the most recent catalog of 
federal domestic assistance.

                XVI. Disclosure of Directed Rulemakings

    Pursuant to clause 3 of rule XIII of the Rules of the 
House, H.R. 2142 does not direct any rulemaking.

                 XVII. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
    H.R. 2142 includes a couples of provisions designed to make 
it easier for small businesses to understand their 
responsibilities under the laws.

      XVIII. Changes in Existing Law Made by the Bill, as Reported

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

         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 (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                           SMALL BUSINESS ACT




           *       *       *       *       *       *       *
SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

  (a) Definitions.--For purposes of this section, the term--
          (1) ``Board'' means a Regional Small Business 
        Regulatory Fairness Board established under subsection 
        (c); and
          (2) ``Ombudsman'' means the Small Business and 
        Agriculture Regulatory Enforcement Ombudsman designated 
        under subsection (b).
  (b) SBA Enforcement Ombudsman.--
          (1) Not later than 180 days after the date of 
        enactment of this section, the Administrator shall 
        designate a Small Business and Agriculture Regulatory 
        Enforcement Ombudsman, who shall report directly to the 
        Administrator, utilizing personnel of the Small 
        Business Administration to the extent practicable. 
        Other agencies shall assist the Ombudsman and take 
        actions as necessary to ensure compliance with the 
        requirements of this section. Nothing in this section 
        is intended to replace or diminish the activities of 
        any Ombudsman or similar office in any other agency.
          (2) The Ombudsman shall--
                  (A) work with each agency with regulatory 
                authority over small businesses to ensure that 
                small business concerns that receive or are 
                subject to an audit, on-site inspection, 
                compliance assistance effort, or other 
                enforcement related communication or contact by 
                agency personnel are provided with a means to 
                comment on the enforcement activity conducted 
                by such personnel;
                  (B) establish means to receive comments from 
                small business concerns regarding actions by 
                agency employees conducting compliance or 
                enforcement activities with respect to the 
                small business concern, means to refer comments 
                to the Inspector General of the affected agency 
                in the appropriate circumstances, and otherwise 
                seek to maintain the identity of the person and 
                small business concern making such comments on 
                a confidential basis to the same extent as 
                employee identities are protected under section 
                7 of the Inspector General Act of 1978 (5 
                U.S.C. App.);
                  (C) based on substantiated comments received 
                from small business concerns and the Boards, 
                annually report to Congress and affected 
                agencies evaluating the enforcement activities 
                of agency personnel including a rating of the 
                responsiveness to small business of the various 
                regional and program offices of each agency;
                  (D) coordinate and report annually on the 
                activities, findings and recommendations of the 
                Boards to the Administrator and to the heads of 
                affected agencies; and
                  (E) provide the affected agency with an 
                opportunity to comment on draft reports 
                prepared under subparagraph (C), and include a 
                section of the final report in which the 
                affected agency may make such comments as are 
                not addressed by the Ombudsman in revisions to 
                the draft.
  (c) Regional Small Business Regulatory Fairness Boards.--
          (1) Not later than 180 days after the date of 
        enactment of this section, the Administrator shall 
        establish a Small Business Regulatory Fairness Board in 
        each regional office of the Small Business 
        Administration.
          (2) Each Board established under paragraph (1) 
        shall--
                  (A) meet at least annually to advise the 
                Ombudsman on matters of concern to small 
                businesses relating to the enforcement 
                activities of agencies;
                  (B) report to the Ombudsman on substantiated 
                instances of excessive enforcement actions of 
                agencies against small business concerns 
                including any findings or recommendations of 
                the Board as to agency enforcement policy or 
                practice; and
                  (C) prior to publication, provide comment on 
                the annual report of the Ombudsman prepared 
                under subsection (b).
          (3) Each Board shall consist of five members, who are 
        owners, operators, or officers of small business 
        concerns, appointed by the Administrator, after 
        receiving the recommendations of the chair and ranking 
        minority member of the Committees on Small Business of 
        the House of Representatives and the Senate. Not more 
        than three of the Board members shall be of the same 
        political party. No member shall be an officer or 
        employee of the Federal Government, in either the 
        executive branch or the Congress.
          (4) Members of the Board shall serve at the pleasure 
        of the Administrator for terms of three years or less.
          (5) The Administrator shall select a chair from among 
        the members of the Board who shall serve at the 
        pleasure of the Administrator for not more than 1 year 
        as chair.
          (6) A majority of the members of the Board shall 
        constitute a quorum for the conduct of business, but a 
        lesser number may hold hearings.
  (d) Powers of the Boards.--
          (1) The Board may hold such hearings and collect such 
        information as appropriate for carrying out this 
        section.
          (2) The Board may use the United States mails in the 
        same manner and under the same conditions as other 
        departments and agencies of the Federal Government.
          (3) The Board may accept donations of services 
        necessary to conduct its business, provided that the 
        donations and their sources are disclosed by the Board.
          (4) Members of the Board shall serve without 
        compensation, provided that, members of the Board shall 
        be allowed travel expenses, including per diem in lieu 
        of subsistence, at rates authorized for employees of 
        agencies under subchapter I of chapter 57 of title 5, 
        United States Code, while away from their homes or 
        regular places of business in the performance of 
        services for the Board.
  (e) Centralized Website.--Not later than 6 months after the 
date of the enactment of this subsection, the Ombudsman shall 
maintain a publicly available website that includes--
          (1) hyperlinks to small entity compliance guides 
        described under section 212(a)(1) of the Small Business 
        Regulatory Enforcement Fairness Act of 1996; and
          (2) with respect to each such small entity compliance 
        guide, the contact information for an individual who 
        can offer assistance to small entities with respect to 
        the rules that are the subject of such guide.
  (f) Report on Agency Compliance.--The Ombudsman shall include 
in the annual report required under subsection (b)(2)(C) an 
assessment of agency compliance with the requirements of 
section 212 of the Small Business Regulatory Enforcement 
Fairness Act of 1996 for the year covered by such annual 
report.

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