[Federal Register Volume 63, Number 98 (Thursday, May 21, 1998)]
[Notices]
[Pages 28214-28215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13636]



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Part IV





Department of Housing and Urban Development





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Notice and Request for Comments on HUD's Implementation of the Small 
Business Regulatory Enforcement Fairness Act of 1996; Notice

  Federal Register / Vol. 63, No. 98 / Thursday, May 21, 1998 / 
Notices  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4347-N-01]


Notice and Request for Comments on HUD's Implementation of the 
Small Business Regulatory Enforcement Fairness Act of 1996

AGENCY: Office of the Secretary, HUD.

ACTION: Notice.

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SUMMARY: This notice solicits comments on HUD's implementation of the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). 
The notice describes HUD's implementation to date of SBREFA and 
additional implementation plans.

DATES: Comment Due Date: July 20, 1998.

ADDRESSES: Interested persons are invited to submit comments regarding 
this document to the Regulations Division, Office of the General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410-0500. Communications should 
refer to the above docket number and title and to the specific sections 
in the regulation. Facsimile (FAX) comments are not acceptable. A copy 
of each communication submitted will be available for public inspection 
and copying during regular business hours at the above address.

FOR FURTHER INFORMATION CONTACT: Casimir Bonkowski, Director, Office of 
Small and Disadvantaged Businesses, Department of Housing and Urban 
Development, Room 3130 451 Seventh Street, S.W., Washington, DC 20410, 
telephone 202-708-1428. Hearing- or speech-impaired persons may use the 
telecommunications system for the hearing-impaired (TTY) by contacting 
the Federal Information Relay Service on 1-800-877-TTY (1-800-877-8339) 
or (202) 708-9300. (Other than the ``800'' TTY number, telephone 
numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. The Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(Pub.L. 104-121, 110 Stat. 847, approved March 29, 1996) (``SBREFA'') 
provides, among other things, for agencies to establish specific 
policies or programs to assist small entities. Small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions.
    Section 213 of SBREFA requires each covered agency to establish a 
program to answer inquiries concerning information and advice about 
compliance with statutes and regulations within the agency's 
jurisdiction. The agency must use information received during these 
inquiries to help small entities interpret and apply the regulations to 
specific facts.
    Section 223 of SBREFA requires each covered agency to establish a 
policy or program to reduce or waive civil penalties when a small 
entity violates a statute or regulation. Under appropriate 
circumstances, an agency may consider ability to pay when it assesses a 
penalty against a small entity. 1
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    \1\  The applicable procurement statutes and regulations do not 
provide for special consideration of or rights for small 
governmental entities. SBREFA did not make statutory changes that 
would result in changes to the Federal Acquisition Regulation to 
address small entities.
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II. Identification of HUD Regulations That May Have a Significant 
Economic Impact on a Substantial Number of Small Entities

    Although HUD is not generally regarded as a ``regulatory agency'', 
HUD has important regulatory responsibilities, including oversight and 
enforcement of the Real Estate Settlement Procedures Act (RESPA) and 
the Interstate Land Sales Full Disclosure Act; oversight over certain 
activities of government-sponsored enterprises (GSEs); oversight and 
enforcement of FHA mortgage insurance programs; and the establishment 
and enforcement of lead-based paint hazard control standards and 
manufactured housing standards.
    HUD has long had in place a systematic process for determining 
whether newly developed rules are likely to have a significant economic 
impact on a substantial number of small entities. The typical HUD rule 
implements statutory directions for the administration of grant 
programs. Rules of this type are intended to reflect Congressional 
mandates that, by their nature, have universal applicability to the 
portion of the public affected by the rule. These rules generally do 
not lend themselves to the provision of special procedures, or 
exemptions from requirements, applicable to small entities. Although 
HUD Rules are generally not the type to lend themselves to special 
procedures or exemptions for small entities, HUD nevertheless has 
developed a process intended to introduce additional scrutiny to 
existing procedures for safeguarding the interests of small entities 
during development and following implementation of regulations.
    To ensure that there is a meaningful assessment of HUD rules to 
determine which rules, if any, will have a significant economic impact 
on substantial number of small businesses, HUD:
    (1) Targets regulations that may impact small businesses at the 
earliest opportunity in the development process; and
    (2) Assigns oversight responsibility to HUD's Office of Small and 
Disadvantaged Business Utilization (OSDBU) to review:
    (i) the HUD program office's assessment of any significant economic 
impact on a substantial number of small entities;
    (ii) the HUD program office's assessment and disposition of all 
alternative rule implementation strategies submitted by small entities, 
and
    (iii) the small entity compliance guides prepared by the program 
offices, where applicable.

III. Guidance to Small Entities

    To help small entities understand their obligations under the 
regulations administered by HUD, HUD provides both general guidance and 
individualized advice. OSDBU maintains the requirements of the SBREFA 
and Regulatory Flexibility Act on the HUD web site with instructions to 
small entities on the OSDBU role as small business Ombudsman, as well 
as copies of compliance guides, names of HUD staff with familiarity in 
HUD programs that may impact small businesses, to answer questions, and 
a users forum where representatives of small entities can ask questions 
on a specific rule as a means of providing a fast means of clarifying 
issues. Additionally, small entities can download regulations, forms, 
and documentation from the HUD web pages. If a small entity does not 
have access to a computer, HUD will mail this information on request.
    To ensure that we evaluate and update our small entity assistance 
program periodically, HUD works with the Small Business Administration 
to identify small business concerns in the housing industry.

IV. Rights of Small Entities in Enforcement Actions

    Section 223 of SBREFA requires agencies that regulate the 
activities of small entities to establish a policy or program to reduce 
or, under appropriate circumstances, waive civil penalties when a small 
entity violates a statute or

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regulation. (For purposes of brevity, this policy or program is 
referred to as the ``small entity compliance policy.'')
    Section 223 also requires an agency's small entity compliance 
policy to contain conditions or exclusions (subject to any restrictions 
or limitations that may be imposed on the agency by other statutes), 
which conditions or exclusions may include, but are not limited to the 
following:
    (1) Requiring small entities to correct the violation within a 
reasonable correction period;
    (2) Limiting applicability of the small entity compliance policy to 
violations discovered when small entities participate in a compliance 
assistance or audit program operated by the agency;
    (3) Excluding from applicability of the small entity compliance 
policy those small entities that have been subject to multiple 
enforcement actions by the agency;
    (4) Excluding from applicability of the small entity compliance 
policy violations involving willful or criminal conduct or that pose 
serious health, safety, or environmental threats, safety, or requiring 
a good-faith effort to comply with the law.
    Federal statutes and regulations authorize HUD to impose civil 
penalties in conjunction with regulatory and enforcement issues. Under 
these authorities, HUD has authority to issue civil money penalties for 
violations of requirements governing its grant, mortgage insurance, and 
the regulatory programs, identified earlier in this notice.
    In establishing its policy for implementation of SBREFA, following 
enactment of SBREFA, HUD reported to President Clinton and the Congress 
that, under appropriate circumstances, HUD may consider ability to pay 
in determining penalty assessments on small entities. HUD notes that 
the ability to pay is a legislative directive for many programs under 
the Department of Housing and Urban Development Reform Act of 1989 
(Pub. L. 101-235, approved December 15, 1989). HUD's policy to date has 
been to assist regulated entities in achieving compliance with 
requirements in order to avoid any penalty process.
    Where penalties are determined appropriate, HUD's policy is to 
consider: (1) the nature of the violation (the violation must not be 
one that is repeated or multiple, willful, criminal or poses health or 
safety risks), (2) whether the entity has shown a good faith effort to 
comply with the regulations; and (3) the resources of the regulated 
entity. Depending upon the circumstances surrounding the violation, it 
is not HUD's intent to put any individual or entity out of business by 
the penalties or settlement amounts paid to the Federal Government.

V. Small Entities' Comments on Agencies Enforcement Activities

    Section 222 of SBREFA requires the Small Business and Agriculture 
Regulatory Enforcement Ombudsman to ``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 other enforcement related 
communication or contact by agency personnel are provided with a means 
to comment on the enforcement activity conducted by this personnel.
    To implement this statutory provision, the Small Business 
Administration has requested that agencies include the following 
language on agency publications and notices which are provided to small 
businesses concerns at the time the enforcement action is undertaken. 
The language is as follows:

Your Comments Are Important

    The Small Business and Agriculture Regulatory Enforcement 
Ombudsman and 10 Regional Fairness Boards were established to 
receive comments from small businesses about federal agency 
enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to 
small business. If you wish to comment on the enforcement actions of 
[insert agency name], call [provide telephone number].

    HUD intends to work with the Small Business Administration to 
provide small entities with information on the Fairness Boards and 
National Ombudsman program, at the time enforcement actions are taken, 
to ensure that small entities have the full means to comment on the 
enforcement activity conducted by HUD. HUD intends to include this 
language in HUD general circulation issuances and publications 
regarding enforcement actions. HUD welcomes comments on the manner in 
which it has implemented SBREFA to date, and the additional action 
intended to be taken as described in this notice.

    Dated: May 14, 1998.
Andrew Cuomo,
Secretary.
[FR Doc. 98-13636 Filed 5-20-98; 8:45 am]
BILLING CODE 4210-32-P