[Federal Register Volume 68, Number 90 (Friday, May 9, 2003)]
[Notices]
[Pages 25166-25186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11311]



[[Page 25165]]

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Part III





Office of Management and Budget





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Draft Report of the Small Business Paperwork Relief Task Force; Notice

  Federal Register / Vol. 68, No. 90 / Friday, May 9, 2003 / Notices  

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OFFICE OF MANAGEMENT AND BUDGET


Draft Report of the Small Business Paperwork Relief Task Force

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice and request for comments.

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SUMMARY: The Small Business Paperwork Relief Task Force requests 
comments on the attached Draft Report. In this Draft Report, the Small 
Business Paperwork Relief Task Force discusses and makes 
recommendations concerning consolidated information collections, an 
organized list of information collections, and interactive electronic 
systems.

DATES: To ensure consideration of comments, comments must be in writing 
and received by OMB no later than June 4, 2003.

ADDRESSES: Comments on this Draft Report should be addressed to Stanton 
D. Anderson, Office of E-Government and Information Technology.
    You are encouraged to submit these comments by facsimile to (202) 
395-0342, or by electronic mail to [email protected].

FOR FURTHER INFORMATION CONTACT: Stanton D. Anderson, Office of 
Information Technology and E-Government, Office of Management and 
Budget, Washington, DC 20503. Telephone: (202) 395-0346.

SUPPLEMENTARY INFORMATION: Congress directed the Director of OMB to 
convene and have a representative chair a Task Force to study the 
feasibility of streamlining requirements with respect to small business 
concerns regarding collection of information and strengthening 
dissemination of information'' (44 U.S.C. 3520, Pub. L. 107-198). More 
specifically, this Small Business Paperwork Relief Task Force is 
charged with examining five ways to reduce the information collection 
burden placed by government on small business concerns. They are:
    1. Examine the feasibility and desirability of requiring the 
consolidation of information collection requirements within and across 
Federal agencies and programs, and identify ways of doing so.
    2. Examine the feasibility and benefits to small businesses of 
having OMB publish a list of data collections organized in a manner by 
which they can more easily identify requirements with which they are 
expected to comply.
    3. Examine the savings and develop recommendations for implementing 
electronic submissions of information to the Federal government with 
immediate feedback to the submitter.
    4. Make recommendations to improve the electronic dissemination of 
information collected under Federal requirements.
    5. Recommend a plan to develop an interactive Government-wide 
Internet program to identify applicable collections and facilitate 
compliance.
    While carrying out its work, the Small Business Paperwork Relief 
Task Force is asked to consider opportunities for the coordination of 
Federal and State reporting requirements, and coordination among 
individuals who have been designated as the small business ``point of 
contact'' in their agencies.
    The Small Business Paperwork Relief Task Force is required to 
submit a report of its findings on the first three issues no later than 
one year after enactment, or June 28, 2003. A second report on the 
final two issues is required no later than two years after enactment, 
or June 28, 2004. Both reports must be submitted to the Director of 
OMB; the Small Business and Agriculture Regulatory Enforcement 
Ombudsman; and the Senate Committees on Governmental Affairs and Small 
Business and Entrepreneurship; and, the House Committees on Government 
Reform and Small Business.
    The Director of OMB appointed Dr. John D. Graham, Administrator of 
the Office of Information and Regulatory Affairs, and Mr. Mark A. 
Forman, Administrator for E-Government and Information Technology, to 
co-chair the Small Business Paperwork Relief Task Force.
    The Act specifies the following agencies to be represented on the 
SBPRA Task Force: Department of Labor (including the Bureau of Labor 
Statistics, and the Occupational Safety and Health Administration); 
Environmental Protection Agency; Department of Transportation; Office 
of Advocacy of the Small Business Administration; Internal Revenue 
Service; Department of Health and Human Services (including the Centers 
for Medicare and Medicaid Services); Department of Agriculture; 
Department of Interior; the General Services Administration; and two 
other participants to be selected by the Director of OMB (who are the 
Department of Commerce and additional representatives from the Small 
Business Administration).
    The Small Business Paperwork Relief Task Force is now seeking input 
from all interested parties concerning the findings and recommendations 
contained in this draft report. All comments will be considered and may 
result in modifications to the final report. A summary of the public 
comments with responses of the Task Force will be attached to the final 
report.

John D. Graham,
Administrator, Office of Information and Regulatory Affairs.

Mark Forman,
Administrator for E-Government and Information Technology.

Draft Report of the Small Business Paperwork Relief Task Force

Introduction: The Problem of Paperwork Burden for Small Businesses

    This is the first report of the Task Force created under the Small 
Business Paperwork Relief Act of 2002 (SBPRA).\1\ It contains findings 
and recommendations intended to reduce the burden imposed on small 
businesses by Government paperwork information collection requirements.
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    \1\ 44 U.S.C. 3520, Public Law 107-198, references at Appendix 
1.
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What Is a ``Small Business'' and Why Does the Law Focus on the Small 
Business Community?
    For the purposes of SBPRA, ``the term `small business concern' has 
the meaning given under section 3 of the Small Business Act (15 U.S.C. 
632).'' This definition includes any firm that is ``independently owned 
and operated'' and is ``not dominant in its field of operation''. The 
Small Business Administration (SBA) has developed size standards to 
carry out the purposes of the Small Business Act and those size 
standards can be found in the Code of Federal Regulations, 13 CFR 
121.201.\2\ If an industry is not specified in the regulation, the 
default is (a) 500 or fewer employees, or (b) $6 million or less in 
receipts.
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    \2\ For more information, visit http://www.sba.gov/size/.
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    While SBPRA applies to all small businesses, the Act further 
specifies that agencies make efforts to ``reduce the information 
collection burden for small business concerns with fewer than 25 
employees.''
    Small businesses have always been the backbone of our economy. They 
represent 99.7% of all employers. Of the Nation's 22.4 million 
businesses, only 17,000 are large (with more than 500 employees). That 
leaves a total of about

[[Page 25167]]

22.4 million small businesses.\3\ Within this community, 90% have fewer 
than 20 employees.\4\ Given the enormous collective impact that the 
smallest businesses have on our Nation's overall economy, it is vital 
that government do all it can to create the climate they need to 
thrive.
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    \3\ SBA Office of Advocacy Web site, Small Business by the 
Numbers, at http://www.sba.gov/advo.
    \4\ W. Mark Crain & Thomas D. Hopkins, ``The Impact of 
Regulatory Costs on Small Firms'', Report to the Small Business 
Administration, RFP No. SBAHQ-00-R-0027 (2001), at 2. The opinions 
and recommendations of the authors of this study do not necessarily 
reflect official policies of the SBA or other agencies of the U.S. 
government. For more information, write to the Office of Advocacy at 
409 Third Street SW., Washington, DC 20416, or visit the office's 
Internet site at http://www.sba.gov/advo.
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What Is the Government's Paperwork Burden and How Heavily Does It 
Impact Small Businesses?
    The term ``paperwork'' refers to the traditional method for 
collecting information, paper forms. However, SBPRA applies to any 
information collection, including those via the Internet, telephone, or 
other medium. SBPRA uses the broad definition for ``collection of 
information'' in section 3502 of the Paperwork Reduction Act of 1995 
(PRA). It means ``obtaining, causing to be obtained, soliciting, or 
requiring the disclosure to third parties or the public, of facts or 
opinions by or for an agency, regardless of form or format, calling for 
either--
    [sbull] Answers to identical questions posed to, or identical 
reporting or recordkeeping requirements imposed on, ten or more 
persons, other than agencies, instrumentalities, or employees of the 
United States; or,
    [sbull] Answers to questions posed to agencies, instrumentalities, 
or employees of the United States which are to be used for general 
statistical purposes.''
    Burden is also defined in the PRA. It goes beyond the effort 
required to complete a form and includes ``time, effort or financial 
resources expended by persons to generate, maintain, or provide 
information to or for a Federal agency, including the resources 
expended for--
    1. Reviewing instructions;
    2. Acquiring, installing, and utilizing technology and systems;
    3. Adjusting the existing ways to comply with any previously 
applicable instructions and requirements;
    4. Searching data sources;
    5. Completing and reviewing the collection of information; and
    6. Transmitting or otherwise disclosing the information.''
    Government agencies must collect information from the public to 
administer important programs and fulfill their intended missions.

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     Purpose of government collection                                     Examples
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To obtain or retain a benefit for the       License and permit applications.
 business.
To demonstrate compliance with regulations  Water discharge monitoring reports.
Recordkeeping requirements................  Inspection records.
For statistical purposes or rule            Industry surveys.
 development.
For use by third parties..................  Nutrition labels.
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    The Office of Management and Budget (OMB) is responsible for 
reviewing and approving information collections. The Federal government 
alone now has over 8,000 separate information collection requests 
authorized by OMB. These OMB approved information collections fall into 
three categories.
    [sbull] 38.4% are mandatory where failure to provide the 
information required can result in civil, even criminal, sanctions;
    [sbull] 39.7% are required to obtain or retain some kind of benefit 
for the respondent; and,
    [sbull]* 21.9% are voluntary where a response is entirely 
discretionary and has no direct effect on any benefit or privilege for 
the respondent.\5\
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    \5\ The Office of Information and Regulatory Affairs Reports 
Management System, February 2003.
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    This report focuses on the first two categories, which generally 
evolve from regulations. It is important to note that agencies 
generally collect, or require those regulated to keep records, as part 
of their regulatory provisions. The information-related provisions are 
designed to help the agency ensure compliance with the rule. For 
example, EPA requires certain businesses to monitor and keep records of 
pollutants to ensure that certain emission thresholds are not exceeded. 
The substance (and primary cost) of such a rule is the action the 
businesses must take to reduce their pollution emissions. The 
recordkeeping is a secondary requirement, although it may be a 
significant one. Consequently, when considering reductions of paperwork 
burden on small businesses, we must also take into account the 
regulatory provisions that the reporting or recordkeeping are meant to 
support. It would be misleading to focus attention only on information 
collection burdens without making clear this connection with the 
related substantive regulatory provisions.
    OMB estimates the cost to provide data required by all approved 
information collection requests in Fiscal Year 2002 was 8 billion hours 
and $140 billion.\6\ OMB's estimates reflect data provided by the 
collecting agencies, and may understate the actual burden imposed on 
the public. Further, information collections are only part of the full 
impact of the Federal regulatory process. According to a 2001 report, 
``The Impact of Regulatory Costs on Small Firms'' by W. Mark Crain and 
Thomas D. Hopkins, the total costs of federal regulations were 
estimated to be $843 billion in 2000, or 8 percent of the U.S. Gross 
Domestic Product.\7\ Of these costs, $497 billion fell on business and 
$346 billion fell on consumers or other governments.\8\
    Government places a heavy and expensive reporting and recordkeeping 
burden on all businesses, which is most keenly felt in the smallest 
firms. Additionally, small businesses bear a disproportionate share of 
the total regulatory burden.\9\ For firms employing fewer than 20 
employees, the annual regulatory burden is $6,975 per employee--nearly 
60 percent more than that for firms with more than 500 employees, at 
$4,463.\10\ Table 1 provides a comparison by sector.
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    \6\ Id. Dollar cost figures do not include the cost represented 
by the hour burden reported.
    \7\ Crain & Hopkins, at 1.
    \8\ Crain & Hopkins, at 25.
    \9\ Crain & Hopkins, at 2.
    \10\ Crain & Hopkins, at 3.

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                Table.--The Incidence of Federal Regulations by Firm Size, All Business Sectors *
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                                                                             Cost per employee for firms with:
                                                                          --------------------------------------
                     Type of regulation                        All firms       <20         20-499       500 +
                                                                            employees    employees    employees
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All Federal Regulations.....................................       $4,722       $6,975       $4,319       $4,463
Environmental...............................................        1,213        3,328        1,173          717
Economic....................................................        2,065        1,616        1,648        2,485
Workplace...................................................          779          829          873          698
Tax Compliance..............................................          665        1,202          625         562
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* Note to Table 1: These aggregate cost data use employment shares to weight the respective busihess sectors.
  The estimates are for 2000 and are denominated in 2000 dollars.
Source: The Impact of Regulatory Costs on Small Firms, an Advocacy-funded study by W. Mark Crain and Thomas D.
  Hopkins.

    In a December, 2001, small business poll conducted by the National 
Federation of Independent Business (NFIB), respondents shared their 
perspectives on the impacts of the regulatory workload on their firms. 
When asked ``is government regulation a very serious, somewhat serious, 
not too serious, or not at all serious problem for your business,'' 
nearly half, or 43.6 percent, answered ``very serious'' or ``somewhat 
serious.''\11\ When asked ``which level of government creates the most 
serious regulatory problems for you,'' 49 percent chose the Federal 
government, 35 percent State government and 13 percent local 
government.\12\
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    \11\ Coping with Regulation, NFIB National Small Business Poll, 
Volume 1, Issue 5 (2001), ISSN-1534-8326, at 9. The poll is 
available for viewing at http://www.nfib.com.
    \12\ Id.
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    When asked ``What is the single greatest problem created for your 
business by government regulation,'' the largest percentage of small 
businesses in three size groups singled out extra paperwork, with the 
number of votes increasing as the number of employees decreased.\13\ 
The second most frequently selected problems, sharing an equal number 
of votes, were: (1) difficulty understanding what (a business must do) 
to comply, and (2) dollars spent to comply.\14\ This poll supports the 
conclusion that SBPRA focuses on issues of importance to small business 
concerns.
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    \13\ Id.
    \14\ Id. It is not clear whether the difficulty in understanding 
how to comply referred to compliance reporting, compliance with the 
substantive regulatory standards, or both.
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    Several factors contribute to the difficulty small businesses 
experience when trying to find out what they must do to comply with 
regulations and related information collections:
    Volume--It is well known that the Code of Federal Regulations (CFR) 
continues to expand despite efforts to curtail further growth. The CFR 
grew from 71,000 pages in 1975 to 135,000 pages in 1998. Annually, 
there are more than 4,000 regulatory changes introduced by the Federal 
government alone. Businesses must find ways to navigate the maze of 
requirements to identify the rules and information collections that 
apply to them.
    Multi-Jurisdictional System--Businesses are regulated by numerous 
agencies at Federal, State and local levels, all imposing separate 
requirements on individual businesses--adding to the confusion and time 
needed to become compliant. For example, for the trucking industry, 
there are over 40 information collection requirements from 11 federal 
entities and at least 5 standardized transactions imposed by every 
state.
    Complexity--Many of the laws and regulations are extremely complex 
and difficult to understand, causing businesses to spend additional 
money hiring service providers such as attorneys, accountants, and 
permit agents. Paying taxes, acquiring licenses and permits, and 
managing employees are reportedly the three most burdensome areas of 
laws and regulations affecting businesses, particularly for the most 
regulated industries (e.g., transportation, food, chemicals, auto, and 
health care).
    Inaccessibility--Currently, businesses must search through multiple 
sources of information, such as the Federal Register, Federal/State/
local agency and trade Web sites, and trade publications to try to 
locate all the rules and regulations that affect them. They may also 
learn of requirements through the media, at professional conferences 
and from other business persons. Not all sources are accessible 24/7, 
and many remain informational only, without the kind of compliance 
assistance many small businesses need.
Two Perspectives on the Regulatory Information
    Regulatory agencies and small businesses have different 
perspectives on information collections associated with regulations. 
Understandably the regulator views the information burden from the 
perspective of its role in meeting the goals of each specific 
regulation, e.g., cleaner air, safer automobiles or workplaces, sounder 
financial practices. This burden is seen as part of the costs of 
regulatory compliance and is borne by small business and others who 
must comply. The analytical framework for reviewing the burden revolves 
around the regulation--can it be harmonized with other agency 
regulations, or do the societal benefits justify the societal costs, 
including the costs of paperwork and compliance efforts? The following 
chart depicts the regulator-centered point of views. In this case, 
reduction in burden focuses on individual regulations a, b, c, 1, 2, 
and 3.

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[GRAPHIC] [TIFF OMITTED] TN09MY03.000

    An alternative way of analyzing the regulatory burden is from the 
perspective of the information supplier, i.e., the regulated 
businesses. A customer-driven government would analyze the regulatory 
burden from the point of view of specific businesses or, more 
practically, from the point of view of clusters of ``regulated'' 
communities, and find ways to streamline and harmonize regulatory 
information collected from these clusters. The graphic below shows the 
environment from the information provider point of view. In this case, 
burden reduction focuses on clusters of regulatory requirements from 
all Federal, State, and local governments that affect a particular 
regulatory community.
[GRAPHIC] [TIFF OMITTED] TN09MY03.001

Background: Efforts To Address the Problem

What Prior Efforts Have Been Made To Address the Information Collection 
Burden?
Federal Reports Act of 1942
    The Federal Reports Act of 1942 15-18 gave OMB's 
predecessor agency, the Bureau of the Budget, the authority to approve 
federal information collections. OMB's Division of Statistical 
Standards was given responsibility for approving Federal forms. After 
World War II, the Division concentrated mostly on increasing the use of 
statistical sampling and other techniques to reduce the costs of 
Federal information collections.
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    \15-18\Pub. Law 77-831.
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Paperwork Reduction Act of 1980
    Congress first passed the Paperwork Reduction Act (PRA) in 
1980.\19\ The PRA eliminated the exemptions granted under the FRA to 
the Internal Revenue Service, bank regulatory agencies, and independent 
regulatory commissions. It also made clear that OMB would approve all 
Federal information collections, including recordkeeping and reporting 
requirements contained in regulations.
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    \19\ Pub. L. 96-511.
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    The PRA also added a ``bottom up'' component to paperwork review; 
each agency is required to perform an internal review of each 
information collection request before submitting it to OMB for 
approval. The PRA also requires public notice and the opportunity for 
public comment on proposed information collections.
Regulatory Flexibility Act of 1980
    The Regulatory Flexibility Act of 1980 \20\ recognized that small 
entities may be less able to manage the burdens imposed by Federal 
regulation, or even unable to achieve compliance, than

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large entities. The RFA requires agencies to specifically examine the 
effects on small businesses of rules under consideration, to involve 
small businesses in the rulemaking process, and to consider 
alternatives that will reduce the costs imposed or increase the 
benefits to small businesses.
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    \20\ Pub. L. 96-354.
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Paperwork Reduction Act of 1995
    In 1995, Congress amended the PRA to emphasize, clarify, and 
reaffirm several purposes of the original PRA, specifically that--
    [sbull] The PRA applies to all Federal government-sponsored 
collections of information, including those that do not require 
submission of information directly to a Federal agency (e.g., third-
party reporting requirement, Federal-sponsored academic research);
    [sbull] That the fundamental purpose of the PRA is to minimize the 
burden imposed by Federal paperwork on the public; and
    [sbull] That each Federal agency is responsible for minimizing its 
paperwork burden and fostering paperwork reduction.
    In addition, the 1995 PRA set a government-wide goal of a 5% annual 
reduction in paperwork burden and assigned responsibility for agency 
review of information collections to the agency Chief Information 
Officer.
Small Business Regulatory Enforcement Fairness Act of 1996
    In 1996, Congress amended the RFA and strengthened its protection 
for small entities. The Small Business Regulatory Enforcement Fairness 
Act of 1996 \21\ (SBREFA) subjected agency RFA determinations to 
judicial review, subjected agency actions with large impacts on the 
economy as a whole or a specific sector of the economy to congressional 
review, and required agencies to provide additional compliance 
assistance to small entities. In addition, SBREFA required the 
Occupational Safety and Health Administration (OSHA) and the 
Environmental Protection Agency (EPA) to convene a panel of agency 
employees, SBA's Office of Advocacy, and OMB to solicit advice from 
small businesses before the agency issues a proposed rule that may have 
a significant economic impact on a substantial number of small 
entities.
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    \21\ Pub. L. 104-121.
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The Government Paperwork Elimination Act of 1998
    The Government Paperwork Elimination Act of 1998 \22\ requires 
Federal agencies, by October 21, 2003, to allow individuals or entities 
that deal with the agencies the option to submit information or 
transact with the agency electronically, when practicable, and to 
maintain records electronically, when practicable.
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    \22\ Pub. L. 105-277, Title XVII, 112 Stat. 2681-749.
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How Does the Small Business Paperwork Relief Act Add to These Prior 
Efforts?
    SBPRA was enacted in June of 2002 in a further effort to help 
reduce the burden of paperwork on small businesses. It requires the 
Federal government to (1) publish an annual list of the compliance 
assistance resources available to small businesses, (2) establish a 
single point of contact within agencies to interact with small 
businesses, and (3) establish an interagency Task Force to study and 
recommend additional means of reducing the burden. This report 
addresses activities of the Small Business Paperwork Relief Task Force.
The Small Business Paperwork Relief Task Force
What Specific Functions Are Assigned to the Task Force?
    SBPRA requires the Director of OMB to convene and chair a Task 
Force ``to study the feasibility of streamlining requirements with 
respect to small business concerns regarding collection of information 
and strengthening dissemination of information.'' More specifically, 
the Small Business Paperwork Relief Task Force is charged with 
examining five ways to reduce the information collection burden placed 
by government on small business concerns. They are:
    1. Examine the feasibility and desirability of requiring the 
consolidation of information collection requirements within and across 
Federal agencies and programs, and identify ways of doing so.
    2. Examine the feasibility and benefits to small businesses of 
having OMB publish a list of data collections organized in a manner by 
which they can more easily identify requirements with which they are 
expected to comply.
    3. Examine the savings and develop recommendations for implementing 
electronic submissions of information to the Federal government with 
immediate feedback to the submitter.
    4. Make recommendations to improve the electronic dissemination of 
information collected under Federal requirements.
    5. Recommend a plan to develop an interactive Government-wide 
Internet program to identify applicable collections and facilitate 
compliance.
    While carrying out its work, the Small Business Paperwork Relief 
Task Force is asked to consider opportunities for the coordination of 
Federal and State reporting requirements, and coordination among 
individuals who have been designated as the small business ``point of 
contact'' in their agencies.
    The Task Force is required to submit a report of its findings on 
the first three questions no later than one year after enactment, or 
June 28, 2003. A second report on the final two questions is required 
no later than two years after enactment, or June 28, 2004. Both reports 
must be submitted to--
    [sbull] The Director of OMB;
    [sbull] The Small Business and Agriculture Regulatory Enforcement 
Ombudsman designated under section 30(b) of the Small Business Act (15 
U.S.C. 657(b)); and,
    [sbull] The chairpersons and ranking minority members of:
    --The Senate Committees on Governmental Affairs and Small Business 
and Entrepreneurship; and,
    --The House Committees on Government Reform and Small Business.
Which Agencies Are Represented and Who Are the Small Business Paperwork 
Relief Task Force Members?
    Mitchell D. Daniels, the Director of OMB, appointed Dr. John D. 
Graham, Administrator of the Office of Information and Regulatory 
Affairs, and Mark A. Forman, Associate Director for Information 
Technology and E-Government, to co-chair the Small Business Paperwork 
Relief Task Force. Dr. Graham is responsible for administering the 
Paperwork Reduction Act and for overseeing the Federal regulatory 
process. Mr. Forman is responsible for overseeing the government-wide, 
cross-agency E-Government initiative, including a Government-to-
Business Portfolio of projects. Thus, both organizations are equally 
vested in the Task Force agenda.
    The Act specifies the following agencies to be represented on the 
Task Force:
    [sbull] Department of Labor (including the Bureau of Labor 
Statistics, and the Occupational Safety and Health Administration);
    [sbull] Environmental Protection Agency;
    [sbull] Department of Transportation;
    [sbull] Office of Advocacy of the Small Business Administration;
    [sbull] Internal Revenue Service;
    [sbull] Department of Health and Human Services (including the 
Centers for Medicare and Medicaid Services);

[[Page 25171]]

    [sbull] Department of Agriculture;
    [sbull] Department of Interior;
    [sbull] General Services Administration;
    [sbull] Two other participants to be selected by the Director of 
OMB (the Department of Commerce and additional representation from the 
Small Business Administration were chosen).
    The Small Business Paperwork Relief Task Force members are listed 
by name at Appendix 2. A list of other participating staff is included 
at Appendix 3.
What Are the Goals, Objectives, and Operating Principles?
    Goal: Identify effective, realistic ways to reduce the burden on 
small businesses by making it easier to find, understand, and comply 
with government information collection requirements.
    Objective 1: Recommend actions that can make it easier for small 
businesses to find out what information collections apply to them from 
individual Federal agencies, across all Federal agencies, and from 
State and Local governments, where practicable.
    Objective 2: Recommend actions that can reduce the difficulty, 
frequency, redundancy and expense of compliance for small businesses.
    Objective 3: Recommend actions that will help small businesses 
understand why information is being collected and how it benefits them.
Operating Principles
    [sbull] Recommendations should be consistent with principles of the 
President's Management Agenda:
    [sbull] Citizen-centered, not bureaucracy-centered.
    [sbull] Benefits to small businesses must take precedence over 
benefits to government.
    [sbull] Results-oriented. Success should be measured by benefits 
that are demonstrable.
    [sbull] Market-based, actively promoting innovation.
    [sbull] Recommendations must be technically feasible.
    [sbull] Recommendations should be supportable within existing 
government agencies and management structures.
    [sbull] Recommendations must be achievable given existing Agency 
resources, or sufficient case must be made to support additional costs.
    [sbull] Recommendations should address both short term and long 
term remedies.
    [sbull] Recommendations should leverage and build on efforts 
underway that address the Task Force's goals.
    [sbull] Recommendations should be consistent with lessons learned 
and based on best practices from past efforts.
    In developing its recommendations, the Small Business Paperwork 
Relief Task Force made the assumption that Federal agencies are in 
compliance with existing legislative requirements that address 
paperwork burden, including: the Paperwork Reduction Act of 1980 and 
1995, the Regulatory Flexibility Act of 1995, and the Small Business 
Regulatory Flexibility Act of 1996. The Task Force recommendations are 
intended to build upon, rather than duplicate, the efforts required by 
these statutes. In addition, the Task Force assumed that Federal 
agencies collect the minimum information necessary to fulfill statutory 
or programmatic responsibilities, consistent with the Paperwork 
Reduction Act. The recommendations concentrate on ways to minimize the 
burden associated with existing requirements, rather than eliminate 
requirements.
What Methods Did the Task Force Use To Derive Its Recommendations?
    The Small Business Paperwork Relief Task Force began its work with 
a meeting of the full membership to develop a common understanding of 
the law, project goals, scope, roles and responsibilities, resource 
requirements, strategy, timeline and deliverables. A professionally 
facilitated brainstorming session followed, during which members began 
looking at the three major tasks for the 2003 report.
    After the initial meeting the Task Force divided into three 
subcommittees to examine the three questions in greater detail. 
Additional staff experts from the agencies joined the effort. The 
subcommittees used methods such as:
    [sbull] Assigning specific questions to experts for research;
    [sbull] In-person and virtual brainstorming with a wider group of 
experts;
    [sbull] Inventorying and investigating activities and projects 
already underway;
    [sbull] Studying best practices and lessons learned from prior/
current activities; and
    [sbull] Studying the results of public outreach conducted by the 
Small Business Administration's (SBA) Office of Advocacy and other 
reference material intended to provide input from the business 
community and other stakeholders.
    The subcommittee members and staff experts worked together to 
develop findings and recommendations. The initial drafts were reviewed, 
modified, and finally adopted by the subcommittees, then presented to 
the full Task Force for consideration. Again the material was reviewed, 
modified and adopted for publication in the Federal Register.
    At the request of the Small Business Paperwork Relief Task Force, 
SBA's Office of Advocacy held a public meeting on March 4, 2003, to 
solicit the views of interested persons regarding SBPRA. The Chief 
Counsel for Advocacy convened the meeting both in his Advocacy role, 
and as a Task Force member. Following the meeting, written input was 
accepted, including the results of two surveys conducted about SBPRA by 
the U.S. Chamber of Commerce and the National Federation of Independent 
Business. The Office of Advocacy published the written proceedings of 
its outreach activities which is included at Appendix 4.
    The Small Business Paperwork Relief Task Force is now seeking input 
from all interested parties concerning the findings and recommendations 
contained in this draft report. All comments will be considered and may 
result in modifications to the final report. A summary of the public 
comments with responses of the Task Force will be attached to the final 
report.

Findings and Recommendations

Task 1: Consolidated Information Collections (See, 44 U.S.C. 
3520(c)(1))
Problem Statement
    As noted earlier in this report, reporting and recordkeeping 
requirements place a heavy and expensive burden on businesses, 
particularly small businesses. Compliance with these requirements is 
made more difficult by the number and complexity of regulations which 
impose direct burdens of compliance. Businesses are often subject to 
regulations enforced by multiple Federal agencies. The need to report 
information to several different government entities also increases 
compliance costs, particularly when reporting or recordkeeping 
requirements are not coordinated across Agencies. Subcommittee 1 has 
considered ways to reduce the paperwork burden on small businesses by 
identifying and consolidating similar collections of information across 
Federal agencies. This section reports our findings and recommendations 
for accomplishing these goals.
Assumptions
    In developing our recommendations, the subcommittee made the 
following assumptions:
    [sbull] There are several barriers to burden reduction that must be 
recognized.

[[Page 25172]]

    --Information Needs. Federal agencies have specific statutory and 
programmatic responsibilities, and require information in order to 
fulfill those responsibilities. Paperwork can only be reduced in ways 
that will not negatively impact the effectiveness of the laws and 
regulations to which the Agency is accountable.
    --Expanded Responsibilities. The need for information increases as 
new federal programs are created, existing programs are expanded and 
additional health, safety or environmental protection laws are enacted.
Issues
    The Task Force was asked to specifically consider the feasibility 
of: (1) Synchronized reporting times and frequencies, (2) consolidated 
reporting requirements within and across agencies, and (3) small 
business compliance assistance, and submission of information, through 
a single point of contact within an agency. Subcommittee 1 conducted a 
brief review, which uncovered a number of federal government 
initiatives to reduce or streamline reporting requirements for 
businesses. Several of these initiatives are described in Appendix 5. 
Our review indicates that while each of these options outlined in the 
law may be desirable and feasible under the appropriate circumstances, 
there are several barriers that need to be addressed.

Synchronized Reporting

    Synchronized reporting seems to have the least potential for burden 
reduction. Not all information that businesses are required to report 
is submitted to the Federal government on a regular basis. Some 
reporting occurs only at the time of an event, such as admission of a 
patient to a nursing home, or a chemical spill. Timely submission of 
this information is critical to fulfill agency responsibilities.
    Even for information that is submitted to the government on a 
regular basis--monthly, quarterly or annually--a synchronized reporting 
time may not be desirable. In the public meeting held by SBA on March 
4, 2003, small businesses expressed concern about synchronized 
reporting times. A requirement to provide all information required by 
the federal government on a single date has the potential of creating a 
greater workload burden for business than when the reporting is spaced 
throughout the year. Clearly, some small businesses prefer spreading 
reporting throughout the year.
    Further, for many reporting requirements, the reporting frequency 
is mandated in statute or regulation. Synchronizing reporting frequency 
would require legislative or regulatory action. To the extent that 
similar information is required within or across Agencies, such action 
should be taken, provided changing the reporting frequency would not 
negatively impact the effectiveness of the underlying law or 
regulation.

Consolidated Information Collections

    The Task Force believes that there is opportunity for improved 
consolidation of similar information collections and reporting 
requirements across the Federal Government. We have outlined several 
recommendations for accomplishing this task. However, we recognize 
that, given the diversity of federal government activities, no one 
method or template for reporting would fit all information collections. 
Seemingly duplicative information collections may not be appropriate 
for consolidation due to the nature or utility of the data collected. 
For example, definitions across similar data collections may not be 
harmonized due to differences across industries or underlying statutes. 
Consolidation of such reporting requirements may lead to confusion, 
rather than simplification. There are also barriers to consolidation in 
many cases, stemming from confidentiality of data and privacy rights. 
For example, statistical agencies collecting data under a 
confidentiality pledge cannot share information with enforcement 
agencies such as OSHA and the IRS.

Single Small-Business Point of Contact

    Establishing a single point of contact for small businesses appears 
to be both feasible and desirable. The Small Business Paperwork Relief 
Act requires all Federal Agencies to establish a single point of 
contact for small businesses. Small business participants in the SBA 
public meeting were very supportive of this measure. The Point of 
Contact should be able to provide information about regulatory 
reporting requirements enforced by the Agency, and technical assistance 
in fulfilling those requirements.
    It should be noted that the strategies discussed above are not 
mutually exclusive. For example, if several forms are consolidated into 
a single format, then synchronized reporting for information 
submissions having the same frequency with respect to timing would 
logically follow. Greatest efficiencies from consolidated reporting are 
to be found where the same information is being collected more than 
once. Agencies should focus resources to identify and merge these 
collections when feasible. Small businesses should also participate in 
this process, by utilizing existing and planned communication 
mechanisms to inform Agencies and OMB of duplicative collections.
Recommendations
    The subcommittee has developed several recommendations to achieve 
the SBPRA goals. The recommendations discussed below are consistent 
with the Operating Principles outlined above. They have been limited to 
options considered technically feasible, supportable within existing 
government management structures, and doable given existing Agency 
resources. We also considered the previous legislative efforts to 
address paperwork burden, discussed above, when developing the 
recommendations. While the recommendations listed below do not 
duplicate these prior efforts, neither do they alleviate the need to 
continue them. We've determined that more can and should be done within 
the existing framework created by these Acts to reduce paperwork burden 
on small businesses. For example, the Paperwork Reduction Act requires 
agencies to ensure that data collections minimize burden and maximize 
practical utility. Greater emphasis should be placed on these criteria 
for collections from small businesses. The following are some examples 
of opportunities for improvement.
Practical Utility
    [sbull] Agencies should periodically review laws and regulations to 
assure the continued usefulness of reporting and recordkeeping 
requirements.
    [sbull] Eliminate those requirements found to no longer have 
practical utility. For example, OSHA does not require certain small 
businesses in service producing industries with a low frequency of 
injury and illness to keep worker injury and illness logs.
Minimize Burden
    [sbull] Review reporting forms and instructions for simplicity and 
ease of understanding.
    [sbull] Conduct periodic reviews of existing collections to explore 
less burdensome ways to obtain data.
    [sbull] Harmonize definitions across similar data elements and use 
existing classification systems when feasible.
    Based on our analysis of the problem and issues discussed above, we 
present the following recommendations to reduce paperwork burden on 
small businesses through simplification and consolidation of reporting 
requirements.

[[Page 25173]]

These recommendations should not be viewed as discrete actions; the 
recommended steps flow toward a final goal.
    1. Agencies Should Develop a SBPRA Plan. The plan would outline 
specific steps the Agency would take to reduce paperwork burden on 
small businesses, set goals and establish timelines for achieving those 
goals. The Task Force envisions that the initial plan would include 
steps to develop a complete inventory of Agency recordkeeping and 
reporting requirements, followed by a detailed mapping of those 
requirements to the Agency's business lines/programs or underlying 
regulations. Based on this analysis, Agencies would identify and 
prioritize opportunities for burden reduction. Additionally, as part of 
their SBPRA plans, agencies should identify a person or group of 
persons to serve as the single point of contact for the agency's 
paperwork requirements. The Task Force envisions that over time the 
single point of contact would become familiar with the paperwork 
requirements imposed by the agency, be able to identify duplicative or 
obsolete requirements, and provide some level of compliance assistance 
to the public.
    2. Require Agencies To Submit Annual SBPRA Reports To OMB. Agencies 
would be required to provide their SBPRA plans, or updated plans, 
status of implementation, and whether goals have been met. This 
information would be included in the annual OMB Information Collection 
Budget.
    3. Improve Outreach To Small Businesses. Design a simple process 
for small businesses to comment on pending or active information 
collections. Although mechanisms exist for the public to comment on new 
and existing information collections, many small businesses have 
criticized the existing comment process as overly complex and 
burdensome. A system should be designed to give the public the ability 
to see, via the Internet, any active or pending information.
    Agencies should also take steps to improve outreach to small 
businesses, including the conduct of public meetings and announcements 
of public comment periods in industry publications, on all highly 
burdensome (defined as over 1,000,000 burden hours) information 
collections expected to affect small businesses. Additional outreach 
efforts would significantly improve an Agency's efforts to identify 
opportunities for burden reduction.
    4. Create Partnerships between Agencies with similar or overlapping 
regulatory authority. Identify other agencies, including state and 
local government agencies, with similar reporting requirements and 
partner with them to develop consolidated reporting systems. 
Duplication should be eliminated and data sharing maximized when 
feasible.
    5. Develop OMB Guidelines to Achieve Burden Reduction through E-
Government. We recommend that the Office of Management and Budget 
require each agency to incorporate burden reduction as a goal of its E-
Government initiative, and issue guidelines to aid Agencies in doing 
so. All Executive Branch Departments have existing E-Gov working groups 
which could take the lead in this effort. We envision E-Government as 
more than allowing electronic submission of existing forms. The E-Gov 
initiative should be a tool to achieve further burden reduction through 
process re-engineering when feasible. In this way the E-Gov working 
groups would compliment, rather than duplicate, other burden reduction 
efforts within the Agency.
    6. Continue the Business Compliance One Stop initiative. The 
Business Compliance One Stop (BCOS) is one of the Administration's 25 
E-Government initiatives, located at http://www.BusinessLaw.gov. It is 
designed to ultimately provide small businesses a single point of entry 
for regulatory compliance information. The Task Force believes BCOS 
shows promise as a means for achieving the purpose of SBPRA. Since its 
inception in the Spring of 2002, the BCOS has streamlined a number of 
paperwork reporting requirements and transactions from a business-
centric perspective. However, it is a long-term solution since the 
project is expected to take years to complete. More information on BCOS 
is provided in Appendix 6.
Task 2: Organized List of Information Collections (See, 44 
U.S.C. 3520(c)(2))
Problem Statement
    Small businesses can be unaware of all of the federal regulatory 
requirements that apply to them and the reports that they must file and 
records that they must keep in order to demonstrate compliance. Small 
businesses may not know where to find such information or how to comply 
or where to go for compliance assistance. As a result, the agency's 
intent for federal information collection requirements may not be 
achieved as small businesses are not aware of the information they are 
required to provide. Ideally, small businesses would have access to a 
system that enables them to quickly and easily generate a list of all 
requirements that apply to their operation. Providing this information 
to small businesses would reduce the burden associated with reporting 
and recordkeeping requirements.
Assumptions
    To be most useful, a tool for meeting small businesses' need for 
information about reporting and recordkeeping requirements would 
provide a list that is:
    [sbull] Tailored to specific industry sectors, (e.g., dry cleaning, 
printing),
    [sbull] Comprehensive,
    [sbull] User-friendly, and
    [sbull] Up-to-date.
Issues
    Creating a tool for identifying applicable requirements for small 
businesses will require resolving a number of technical, management, 
and resource issues.

Technical Issues

    [sbull] Overcoming the lack of a complete inventory of federal 
information collections. One prerequisite for developing a list of 
applicable reporting and recordkeeping requirements is a complete 
inventory of all federal information collections. OMB maintains a 
database called the Reports Management System that stores only 
generally descriptive information about the clearance packages it 
reviews. There are three issues that limit its usefulness for small 
business:
    1. The Reports Management System does not include the reporting and 
recordkeeping requirements that small businesses are looking for. The 
database was built as an internally management tool for use by OMB to 
document the information collection review process under the Paperwork 
Reduction Act. It contains information provided by agencies on form OMB 
83-I (see http://www.whitehouse.gov/omb/inforeg/infocoll.html). Because 
the system is a management tool for OMB, it is not accessible by other 
agencies, the public, or small businesses. The system only contains a 
brief overall title of the information collections or groups of 
information collections for which OMB grants approval. The system does 
not contain that actual requirements imposed on small businesses. Small 
businesses would have to go to the agency or the Code of Federal 
Regulation (CFR) to learn the details of what is required.
    2. Data quality and accuracy are inconsistent. Accuracy of the data 
submitted by agencies on OMB form 83-I varies.

[[Page 25174]]

    3. Information collections in the database cannot be sorted by size 
or sector. There is no consistent element related to size that would 
indicate applicability to a small business. Nor are there elements, 
such as NAICS codes, that would indicate applicability to specific 
small business sectors. At one time many years ago the Standard 
Industrial Classifications codes (SIC, a precursor to NAICS) that 
applied to a clearance package were collected. This information was 
discontinued because 70 percent or more of the clearance packages were 
submitted as applying to ``10 or more SIC codes'' rather than listing a 
few specific codes. While the form and database do include key words 
that can help identify applicability, there are no standards to guide 
their selection.
    [sbull] Overcoming the lack of a consistent methodology for 
identifying a requirement's applicability. A second prerequisite for 
developing a list of reporting and recordkeeping requirements is the 
ability to identify which requirements apply to which businesses. 
However, there is no federal guidance that addresses how agencies 
should specify reporting and recordkeeping requirements applicable to a 
particular business size or sector. Each agency, and in some cases each 
program within an agency, makes its own decision about whether to 
include this information. For example, at EPA, some programs identify 
the NAICS codes in their regulatory development and tracking systems, 
while others use an industry sector descriptor or nothing at all.
    [sbull] Members of the Business Compliance One Stop (BCOS) project 
team have been developing plans for a system capable of identifying 
regulatory reporting and recordkeeping requirements applicable to 
specific business sizes and sectors. They have discovered the following 
issues which need to be addressed:
    1. Multiple NAICS Codes Apply to Individual Businesses: Many 
businesses' activities are characterized by multiple NAICS codes. A 
list of reporting and recordkeeping requirements listed by NAICS codes 
alone would require many businesses to review multiple requirements 
listed under several NAICS codes. Such listings would likely include 
duplicative requirements.
    2. Broadly Applicable Regulations: OMB has estimated that 
approximately 70 percent of information collections apply to many, or 
even all, NAICS codes. For example, all businesses are subject to IRS 
tax reporting.
    3. Regulation Applicability Based on Other Factors: In some cases, 
regulatory applicability is dependent on factors other than business 
size or sector. For example, IRS bases its requirements on the points 
in a business life-cycle and other unique criteria.
    A complete listing of all reporting and recordkeeping requirements 
for small businesses can not be based on NAICS codes alone. It will 
need to take into account not only business type, but also size and 
other factors that can affect applicability.
    [sbull] Resolving complexities affecting ease of use. Because of 
the issues described above, having a government-generated list of 
reporting and recordkeeping requirements by NAICS code alone would not 
meet small business information needs. Such a list would include every 
requirement that potentially could apply to a particular NAICS code. 
The list of potentially applicable requirements for a particular NAICS 
code would not be significantly shorter than the list of all existing 
information collection requirements. Moreover, if a small business were 
listed under more than one NAICS code, the research to determine 
applicability would be even greater.
    [sbull] One alternative would be to sort the requirements into 
multiple categories that could include an industry sector 
identification and other distinguishing criteria, such as the kinds of 
businesses subject to environmental or worker safety reporting and 
recordkeeping requirements. A list organized in this manner would 
require the user to search under multiple categories and to cross-
reference the requirements that appear under each one. It would be time 
consuming, but would lead to a more accurate result than a listing by 
NAICS code alone. Even with this more tailored approach, the result 
would be affected by how knowledgeable the user is about his or her 
operation. The user would have to know which headings to search. This 
process would likely be tedious and time consuming. Moreover, even 
sophisticated users might overlook or miss applicable categories, 
leading to an incomplete result.
    Neither approach--a listing by NAICS code or a listing using 
multiple categories--would fully meet small business needs. They would 
still be extremely time-consuming and could complete incomplete results 
or identify collections that might only apply if other factors were 
also involved.
    [sbull] Building an automated, interactive system that enables 
small businesses to self-identify requirements that apply. Recognizing 
the power of automated search engines, the BCOS team is designing an 
Internet portal with a sophisticated multi-criteria search capability. 
This system enables the user to research requirements using multiple 
screening tools. The user answers questions that relate to business 
type, size and other factors that enable the search engine to narrow 
the results. Depending on the answers, the user may be asked for more 
details to narrow the search. For example, if the user indicates an 
interest in environmental regulations, he or she may be asked about the 
hazardous materials used at their operation. While this automated, 
query-based system is much more reliable and user-friendly than the 
government-generated lists described in the preceding bullet, it is 
still under development. The development process is proceeding 
sequentially. SBA estimates that having a complete system for serving 
all sectors is a number of years away.
    [sbull] Ensuring access to the list. Providing a list over the 
Internet would provide the most accessible and cost-effective means of 
meeting small business information needs. But many small businesses do 
not have Internet access. SBA estimates that over 10% of small 
businesses will not use computers in the next five years. Of those that 
do, owners and employees may not have the time to access and download 
the information while juggling other on-the-job demands. Providing a 
list of applicable requirements in a quick, easy to download and 
printer-friendly format would allow downloading at work or in other 
places, such as homes or libraries, where Internet access is available. 
Further, having an order-form of relevant publications that could be 
downloaded may be helpful for small business owners who do not have 
time to download and print documents regardless of where they 
physically conduct their Internet searches.

Management

    [sbull] Coordinating with multiple federal agencies. Thirty-six 
agencies impose reporting and recordkeeping requirements, and all of 
them have unique organizational structures, processes, and systems for 
managing these responsibilities. Reaching agreement on a single system 
for identifying requirements will require extensive coordination among 
these agencies.
    [sbull] Designating responsibility. Given the number of agencies 
involved, a single federal entity would need to be charged with 
overseeing the development and long-term maintenance of a system that 
could identify requirements applicable to small businesses.

[[Page 25175]]

    [sbull] Incorporating identification elements into existing 
requirements. Once a methodology for identifying which requirements 
apply to a small business is developed, all federal information 
collections will have to be updated to reflect it. Incorporating 
industry sector identification or other identification elements into 
requirements all at once would overwhelm most regulatory agencies. 
However, under federal law, agencies must update their information 
collection requests--that are associated with those requirements--every 
three years. There are currently over 8,000 approved information 
collections. OMB form 83-I could be modified to require the new 
identification element. The information could be updated in the Reports 
Management System database on a continual basis as the agencies' 
information collection requests are submitted. OMB's review help to 
ensure that all requests include identification elements and agency CIO 
review could help to ensure the accuracy of the information. In this 
way, the element (or elements) needed to specify applicability could be 
added to all information collections and housed in a searchable 
database within three years.

    Note: While this effort could be completed in three years, it 
could still represent a significant workload for agencies that have 
to evaluate the applicability of their requirements.

Resources

    [sbull] Cost of system development. To build a functioning profiler 
or ``intelligent agent'' that asks the user a number of questions and 
based on the answers takes one to the appropriate information 
collection requirement or compliance assistance tool will cost a 
minimum of $200,000 for developing better accessibility to 
environmental, employment, taxation, and trucking regulations and 
compliance assistance information.
    [sbull] Cost of system operation and maintenance. A system that 
enables users to identify applicable reporting and recordkeeping 
requirements must be operated and maintained continuously. The BCOS 
project should provide a basis for estimating the cost of operating and 
maintaining a more comprehensive system.
    [sbull] Staffing needs. Building, operating, and maintaining a 
system that could provide a list of requirements will require staff 
from multiple agencies with reporting and recordkeeping 
responsibilities.
Options Considered
    The Task Force identified and evaluated several federal resources 
that potentially could be used to generate a list of applicable 
requirements.

Existing Information Sources Related to Federal Paperwork and 
Regulatory Requirements

    [sbull] The Paperwork Requirements Web site: http://www.whitehouse.gov/omb/inforeg/infocoll.html.
    Managed by OMB; provides an inventory of current approved 
information collections; listed by agency; not searchable by business 
size or sector.
    RISC/OIRA Consolidated Information System (ROCIS):
    OIRA, working with GSA's Regulatory Information Service Center 
(RISC), is developing ROCIS. ROCIS will provide for electronic 
submission, review, and approval of information collections. It will 
also give the public the ability to see, via the Internet, what 
information collections agencies have submitted to OMB for review, and 
give the public the ability to comment electronically to OIRA about 
these information collections. The public will also be able to see 
precisely what is currently approved under the PRA.
    ROCIS also collects basic information about the information 
collections. While the system will not be sophisticated enough to be 
able to determine the precise information collections with which a 
specific business must comply, there will be information about the 
regulatory provisions with which an information collection is 
associated.
    OIRA intends for ROCIS to be in place before the end of 2003. 
However, because approvals under the PRA can be good for up to three 
years, ROCIS will not form a complete database of information 
collections approved under the PRA until 2006.
    [sbull] The Businesslaw.gov Web site: http://www.businesslaw.gov.
    Managed by SBA; provides access to a variety of tools and resources 
related to federal, state, and local requirements. At the federal 
level, it includes information about the federal regulatory process and 
access to the U.S. Code, Code of Federal Regulations, and Federal 
Register; offers plain English compliance assistance guides that can be 
used to help determine requirements.
    [sbull] The Business Compliance One-Stop (BCOS): http://
www.businesslaw.gov.
    Managed by SBA and under development. Will allow small business 
sectors to identify what regulations apply to their operation, learn 
about how to comply, and find useful compliance assistance resources. 
Initial focus is on providing compliance assistance resources and 
information. In the long-term, will enable users to identify the 
requirements that apply to their particular operation and complete 
transactions online. Businesslaw.gov, described in the preceding 
bullet, is one of the early accomplishments under this initiative, and 
will be the portal for offering these capabilities.
    [sbull] The ``Regulation.gov'' Web site: http://www.regulation.gov.
    Another E-Government initiative; Sponsored by OMB and maintained by 
GPO; allows searches of regulations by key words; allows businesses to 
provide comments on Federal regulations in development; and provides 
links to EPA, E-Gov, the Federal Register and FirstGov, which links to 
Businesslaw.gov.
    Options (based on the evaluations above):
    1. OMB should publish a list of requirements applicable to small 
business. OMB's Reports Management System database contains information 
about approved information clearance packages. The Web site does not 
list actual regulatory requirements, nor does it list specific 
reporting or recordkeeping requirements. The ROCIS tool now under 
development will enable OMB, other federal agencies, and the public to 
perform searches on this database. However, there are limitations to 
this database. Most agencies do not categorize their information 
collections by business size or type. If OMB required agencies to 
develop such information and added it to the database, one could search 
for the identifying information (at least as to the clearance packages 
that OMB had reviewed). Using the Code of Federal Regulations reference 
included in the database, users could then look up the underlying 
regulatory requirement. However, many reporting and recordkeeping 
requirements are not published in the Code of Federal Regulations. And, 
ROCIS could not include the interactive functions contemplated under 
BCOS--it would only be possible to include and search on simple 
categorization schemes such as industry sector. Additionally, although 
it would be certified by agency CIOs, information included in ROCIS 
would still be subject to the same issues of inaccuracy or 
incompleteness as the information currently reported on the 83-I form.
    2. Support the BCOS project team's efforts to develop an automated, 
interactive system that enables small businesses to self identify 
applicable requirements. This system would

[[Page 25176]]

include a powerful search engine--that uses multiple search elements--
for identifying requirements for specific small businesses. By 
searching across all Federal information collections at the time of 
query, it would provide a complete and up-to-date list.
Recommendations
    1. Designate a federal agency to be in charge of system 
development. The Office of Information Technology and E-Government at 
OMB has a governance structure for E-Government projects under its 
sponsorship, and has designated SBA to manage BCOS.
    2. Complete the BCOS methodology for identifying regulatory 
applicability. If the federal budget allows, expedite development. 
Consider consulting with private, nonprofit, and/or academic experts 
with specialized expertise in delivering tailored information to 
clients. Also evaluate regulatory development and tracking systems 
managed by individual agencies to determine whether there are good 
models and/or system features already in use that should be 
incorporated.
    3. Develop a system that incorporates the BCOS methodology for 
identifying regulatory applicability and generates a list of applicable 
requirements. Design the system with the small business owner in mind, 
and integrate into the Businesslaw.gov Web site.
    4. Issue federal guidance for adding identification elements to all 
information collection requests. Once categorization methods are 
developed under recommendation 2, OMB should consider requiring 
agencies to report them on the 83-I form and allowing the public to 
search ROCIS based on the categorization. Because it may be impossible 
to include some elements of the BCOS categorization in ROCIS, OMB 
should review each element of the BCOS categorization to ensure that 
OMB only requires agencies to submit information that will be useful in 
the simple-search format that ROCIS provides.
    5. Complete ROCIS and link to it in Businesslaw.gov. Until the 
system described in recommendation III becomes available, promote ROCIS 
as a useful tool for researching reporting and recordkeeping 
requirements. Provide a link on businesslaw.gov pointing to the ROCIS 
system as one way to begin identifying applicable information 
collection requirements.
Final Note
    Identifying requirements for small businesses is only the first 
step in assuring compliance. Ultimately, any system that is built to 
identify requirements should also include access to information about 
how to comply and where to go for compliance assistance. While this 
recommendation is beyond the scope of this report, it does raise 
additional technical, management, and resource issues that should be 
considered in devising a long-term solution to small businesses 
information and compliance assistance needs (See below, and Appendix 
7--Compliance Assistance Best Practices).

Expanding the Small Business Reporting and Recordkeeping Requirements 
System to Include Compliance Information--Additional Issues

Technical
    Additional content to identify and incorporate. Providing 
compliance information would require researching and providing access 
to compliance assistance resources. This could be limited to federal 
resources, or broadened to include resources from States, local 
governments, or other compliance assistance providers.
    [sbull] Handling different formats. Compliance resources may take a 
variety of forms, such as telephone numbers, compliance checklists, and 
online expert systems. The system would have to be designed to handle 
both simple and sophisticated products.
Management
    [sbull] Additional coordination required. Providing compliance 
information would require working not only with staff that handle 
information collection requirements, but also with staff that have 
regulatory compliance responsibilities.
Resources
    [sbull] Additional cost. Expanding this service to include 
information about compliance resources would significantly increase the 
cost (in dollars and FTEs). It would mean additional research to 
incorporate compliance information and identify relevant compliance 
assistance resources.
Legal
    [sbull] Excessive detail. It is unlikely that compliance aids will 
be able to provide all compliance information for every business. There 
will likely remain the need for expert assistance to help businesses 
with compliance details in light of the differences among them.
Task 3: Interactive Electronic Systems (See, 44 U.S.C. 
3520(c)(3))
Problem

Overview

    The cost of finding, understanding and complying with legal and 
regulatory requirements poses a significant burden on businesses and is 
a formidable obstacle to success. One costly aspect of compliance with 
regulatory standards is the related paperwork.
    Of the $843 billion dollars spent on Federal regulatory compliance 
in 2000, $497 billion fell on businesses. This comes to 63 percent of 
the total regulatory burden.
    The Small Business Administration's (SBA's) Office of Advocacy 
estimates \23\ the following paperwork regulatory information burden to 
businesses, categorized by number of employees:
---------------------------------------------------------------------------

    \23\ These figures are derived from impact of Regulatory Costs 
on Small Firms, an Advocacy-funded study by W. Mark Crain and Thomas 
D. Hopkins.
---------------------------------------------------------------------------

    [sbull] Firms with fewer than 20 employees--$2,000 per employee per 
year.
    [sbull] Firms with 20-499 employees--cost $1,931 per employee per 
year.
    [sbull] Firms with 500 or more--cost $1,086 per employee.
    SBA research confirms that these regulatory costs continue to 
increase and to disadvantage small businesses.

Assumptions

    [sbull] The Federal Government is firmly committed to reducing the 
regulatory information burden and will strongly encourage Federal 
regulatory agencies to make this happen.
    [sbull] All regulatory agencies have a goal of reducing the 
regulatory information burden through amending regulations, changing 
information requirements, and streamlining collection processes, 
consistent with their mission.
    [sbull] Important issues of transaction security, privacy, 
electronic signatures, standards, and architectures will be properly 
addressed by e-government initiatives and need not be discussed here.
    [sbull] As time and resources allow, small businesses should help 
to find ways to significantly reduce the regulatory information burden.
    [sbull] The Internet is a primary regulatory communication channel 
as use of the Net by small businesses with employees grew to 67 percent 
in 2001 and will be nearly 80 percent by 2003, but the Federal 
Government cannot use it as the sole means of regulatory communication 
or the sole means of providing compliance assistance.

[[Page 25177]]

Solution

Objectives

    To reduce the regulatory burden on small businesses and increase 
compliance, the Federal Government is focusing on three questions:
    [sbull] How can we reduce the burden of information collection 
requirements as part of regulatory compliance at all levels of 
government?
    [sbull] How can we use the Internet to streamline the collection 
and dissemination of data from regulated small businesses?
    [sbull] How can we provide user-friendly and cost effective 
compliance assistance?
    Governments at all levels must reduce duplication and overlap in 
its data collection, coordinate data definitions and reporting periods 
and, of course, determine if data is needed in the first place. 
Further, it is not enough to improve the information demand chain. It 
is also necessary to look at the information supply chain, which 
includes assisting small businesses in identifying reporting and 
recordkeeping requirements, providing compliance assistance tools, and 
user friendly submission systems.

Strategies

    We can reduce the regulatory burden by:
    [sbull] Reducing the number of required data elements (by 
elimination or by standardizing similar elements in an e-forms format).
    [sbull] Reducing the number of updating cycles (for example, from 
monthly to quarterly, if possible).
    [sbull] Reducing the number of separate submission with similar 
data to different recipients (for example by having a single collection 
point for one or more agencies).
    [sbull] Reducing the amount of historical data a respondent must 
keep.
    [sbull] Reducing manual efforts through the use of software.
    [sbull] Introducing intermediaries (professional groups, 
associations, or government agencies) as collection and dissemination 
points.

The Business Compliance One Stop Portal

    The major vehicle for implementing a regulatory burden reduction 
solution is the Business Compliance One Stop. Its goal is to reduce the 
regulatory information burden on business owners by making it easy to 
find, understand, and comply with governmental laws and regulations. 
The BCOS solution is to build upon the businesslaw.gov platform to 
provide interactive electronic legal and regulatory information and 
compliance assistance.
    The portal offers the following functionalities to the business 
community:
    (1) Find: efficient access to laws and regulations at all levels of 
government (helps you find what applies to you as a business owner, 
where you live);
    (2) Understand: compliance assistance digital guides or expert 
tools that will help businesses determine if they are in compliance and 
how to comply;
    (3) Comply: online transactions, such as allowing businesses to 
register their business, apply for licenses and permits, and file 
information electronically.
    A number of Federal agencies (i.e., DOT, DOI, DOE, EPA, IRS, DOL, 
OSHA, INS, and GSA) and seven states (i.e., Illinois, Georgia, 
Washington, Missouri, Iowa, New Jersey and Texas) are working together 
with SBA as the managing partner to build this interactive electronic 
system. The initiative has also enlisted the partnership of several 
associations to represent the business customer.
    During its first year, the BCOS focused on compliance assistance in 
the areas of environment, workplace health and safety, taxes and 
employment. For its second and third years, while continuing to focus 
on creating compliance assistance tools, BCOS will increase the 
emphasis on reducing the burden that emanates from the 7.7 billion 
hours created by government paperwork.
    Evaluations of modern forms management systems which include 
interactive, electronic forms as well as streamlining collection 
processes and harmonizing data requirements across agencies have the 
potential to reduce by 50 percent agency costs and the small business 
burden using the following three e-forms strategies:
    1. Reduce the information required through analyzing if information 
is needed, if definitions in different forms and forms in different 
agencies can be harmonized to reduce overlap;
    2. Increase the effectiveness of data collection processes by 
collecting once and sharing data among programs and agencies;
    3. Reduce the work of submitting data by using interactive, 
electronic, forms that aid the user.
    The BCOS initiative will initially concentrate on highly regulated 
industries such as trucking, health care, food, and mining.

BCOS Results

    BCOS has demonstrated that using interactive electronic systems 
(Internet) is a cost effective way of reducing regulatory burden. 
Currently there are over 270,000 accesses per week to our BCOS 
platform, Businesslaw.gov, which features a number of our results, to 
include:
    Created a Single point of contact for legal and regulatory 
assistance--the BusinessLaw portal: BCOS uses BusinessLaw.gov as its 
platform for electronic interaction with users. This portal provides 
nearly 20,000 links to federal and state legal and regulatory 
information on 39 different topics, where to go to complete 
transactions such as licenses and permits, and a host of information on 
rulemaking, compliance assistance, and regulatory fairness. The portal 
also offers useful information on where to get help, how to contact 
Congress and associations, and principal considerations in choosing 
legal help. The site is adding new navigation aids, additional digital 
guides or expert tools, and user-friendly transactions.
    Developing Compliance Assistance Guides: Several guides have been 
built, including:
    [sbull] Alien Employee Visa Classification eTool
    [sbull] Employment Eligibility Verification (I-9) eTool
    [sbull] OSHA emergency building evacuation procedures eTool
    [sbull] Choosing a Legal Structure eTool
    [sbull] Auto Dismantler & Recycler Environmental Audit Advisor
    [sbull] Motor Vehicle (Class V) Waste Disposal Wells Advisor
    Integrated State Registration and Federal Employer Identification 
Number (EIN) Application: This web services application demonstrates 
that significant savings can ensue when state and Federal processes are 
integrated and offered as a single web services. State business 
registration requires many of the same data elements as the Federal 
Employer Identification Number (FEIN) submission. This tool permits the 
user to apply on-line for a state registration and then elect to apply 
for a FEIN, which is pre-populated with data from the state 
application. For additional information, the application asks for 
additional data in an interview format. IRS estimates that more than 
2.4 million businesses acquire EINs annually.
    Coal Mining Report Harmonization: This BCOS project is an excellent 
example of an e-forms solution. Agencies worked together to reduce the 
information burden on nearly 1,000 coal miners who submit reports to 
DOI, DOE, EPA, DOL, IRS, and State EPAs. Eighty percent of the data in 
these reports are identical and require about 50,000 hours annually. A 
tool developed by DOI

[[Page 25178]]

provides a one-stop submission of data that is then distributed to 
participating agencies. Data metrics using different definitions is 
automatically changed to the metric required by each agency and results 
in an estimated 25,000 hours saved. As the project has been 
progressing, agencies have begun to look at streamlining definitions, 
reporting periods and the need for the information in the first place.
    Developing the Profiler: This tool allows the user to provide 
information based on a profile of factors such as location, size, 
industry and type of business entity and business life cycle as well as 
desired assistance. Based on specific answers, the tool then refers the 
user to compliance assistance resources from five major Federal 
Regulatory Agencies.
    Trucking One-Stop Portal: Trucking is an important industry, 
contributing one out of every 12 jobs. We have completed the project 
plan for building an integrated state and federal one stop for 
trucking, offering an example of how using harmonized data capture, 
electronic forms and transactions, and offering web services for both 
Federal and state requirements can work for a specific industry.
    The BCOS offers businesses a significant reduction in the 
Regulatory Information Burden. Estimates of annual savings show savings 
have already been realized. Examples include:
    [sbull] The BusinessLaw.gov portal reduces the time for users to 
find, understand and comply with regulations. Estimated annual savings: 
$56 million.
    [sbull] The Profiler provides estimated savings of $62 million.
    [sbull] Each compliance guide provides an estimated savings of $10 
million to businesses and $400,000 in agency administrative costs.
    [sbull] The harmonized coal mine reporting system will reduce the 
regulatory information burden in half or about $1 million.
    [sbull] The Integrated State registration and Federal Employer 
Identification Number Application has estimated savings of $96 million.
    [sbull] The Bureau of Citizenship and Immigration Services 
interactive I-9 electronic tool offers an estimated savings of $12 
million.
    [sbull] The planned Trucking one stop industrial portal will have 
estimated savings of $400 million.
    More information on BCOS is provided in Appendix 6.
Recommendations
    The team presents the following primary recommendations:
    1. Consistent with the President's budget, fund the BCOS as a 
platform for the Federal government's cross-agency paperwork reduction 
initiative, focusing on creation of e-forms solutions, additional 
interactive expert tools, intelligent agent profilers, innovative 
navigation aids and search engines, and online transactions specific to 
various industries.
    2. Work with industry to develop standards for information 
collection and dissemination.
    3. Work with industry trade associations to determine fruitful 
areas for streamlining and harmonization of data requirements and look 
for ways that associations can become viable trusted collection and 
dissemination points. This includes determining specific forms or 
industries where the return on investment for using interactive 
electronic transmission of information is high (e.g., the IRS 2290 for 
truckers).
    4. Implement demonstration projects for these identified high 
burden areas where Internet technology is used, expert tools are 
integrated with electronic forms, and business models are developed 
including the concept of intermediaries or collection/dissemination 
points (e.g., extend the coal miner application to all miners; 
implement portals that reduce the information burden for different 
industries).
    5. Partner with the private sector to develop online tools that 
will do the following:
    [sbull] Help specific industries simplify their recordkeeping and 
extract data to satisfy the demand for regulatory information.
    [sbull] Enable electronic transmission of compliance information.
    The team has suggested a number of additional activities that, 
taken together, will help reduce the regulatory burden. They include:
    Approach Change Incrementally. Select each year a limited group of 
stakeholders to provide input on reducing information collection 
burdens. For example, one could approach reducing the information 
burden industry-by-industry with clearly established goals set for 
improvement. Start with the five major industry clusters the first 
year, and then address the next five industries the following year. 
This process could involve setting up panels with members from the 
affected industries to assist in identifying information requirements, 
as well as members from State governments, other affected stakeholders, 
the general public, and Federal agencies.
    Industrial Classification. BCOS needs to promulgate, in 
coordination with the regulatory agencies and private sector, an 
industrial classification nomenclature that will accurately describe 
the target regulated industries in ways that reflects the structure of 
regulatory programs and without the detailed complexity of NAICS.
    Using BCOS to Identify Duplication. The PRA requires agencies to 
self-certify that existing and proposed information gathering systems 
do not duplicate or overlap those of other systems in the same agency/
department. Agencies should participate in the BCOS initiative to 
provide a common front end for regulatory requirements industry-by-
industry.
    Study Organizational Data Collection Approaches. The ideal 
organizational system for collecting and disseminating regulatory 
information among federal, state and local levels is not yet clear. 
Steps should be taken under the aegis of BCOS to partner with state and 
local government as well as the private sector to explore innovative 
approaches to information collection and dissemination industry by 
industry. New technology holds promise for facilitating collection and 
transfer of information. Best practices should be studied in industry 
as well as Federal, state, and local levels and demonstration projects 
should be carried out and evaluated.
    Raise Awareness among Government Employees. All changes in culture 
and attitude and all transformations of process require training. One 
cannot simply assume that government agencies will suddenly discover 
how to do things differently. Sharing best practices and developing 
good practices would be part of a training effort. Part of this 
training would include the ways in which small businesses are different 
from larger businesses and how this affects regulatory compliance.
    Develop a Cross-Agency Initiative. Pattern this initiative after 
the successful E-government initiatives where the significant 
information gathering agencies would work together to reduce the 
information required, streamline the collection and dissemination of 
information, and share best practices.
    Provide List Of Laws, Regulations And Compliance Assistance Tools 
on BusinessLaw.gov. Require Agencies to post and maintain list by 
industry of applicable regulations and laws as well as compliance 
assistance tools and publications on BusinessLaw.gov.
    Publish standards for Electronic Data Streams. Harmonize data 
elements, business rules and XML standards. In

[[Page 25179]]

this manner third parties such as software companies and intermediates 
could where practicable assist small businesses in providing the 
information in much the same manner that Intuit assists small 
businesses file their taxes.
    Encourage Agencies to Utilize ``Smart'' Electronic Forms. These 
forms would include components that provide immediate feedback to 
assure that data being submitted meets requirements of format and are 
within the range of acceptable options for each data field. This would 
be similar to the aforementioned tax preparation software. On these 
programs, if you enter an illegal value in a blank, you are given an 
immediate error message. Or, if the program finds that you need to fill 
out a Schedule C, it automatically pops you over to that schedule, you 
fill it out, and it pops you back to the your form 1040, and translates 
the data from the Schedule C onto the form 1040. These programs also 
have handy pop-up windows that explain terms and definitions, and 
provide cross-references to the regulations. This should be a model of 
the user friendliness and efficiency that we should strive to implement 
in government forms. Agencies should accept electronic submission of 
forms to avoid errors when paper forms are manually transcribed
    To this end, we would recommend an evaluation of the following 
requirements.
    (1) When an agency submits a form to OMB for approval and 
assignment of an ``OMB control number,'' OMB should review the 
collection for compliance with GPEA. The agencies should provide web 
services transactions, not just e-copies of paper forms.
    (2) Any computation should be built into the form. Data that 
appears in more than one field should be copied automatically.
    (3) The submitting agency should include form field validation 
parameters at the time that the electronic form is submitted to ensure 
valid data entry.
    (4) All electronic forms should contain instructions in the form of 
pop-up windows to explain to the user why the form field is invalid as 
well as definitions of terms, statutes, reference data, and, where 
applicable, worksheets for computing entries.
    Implementing these improved, ``smarter'' forms will, of course, 
cost the government time and money. Agencies will have to spend time 
designing the electronic forms, and determining the validation 
parameters. OMB will have to spend additional time in reviewing the 
forms and verifying the completeness of the validation and pop-up help 
screens. However, the return on investment will be significant for both 
governments and businesses.

Critical Success Factors

    The Task Force envisions several critical success factors in 
achieving the desired paperwork burden reduction and user-friendly 
compliance assistance:
    [sbull] Effective collaboration among and between the regulators;
    [sbull] Commitment of the regulated community and their 
associations;
    [sbull] Commitment to developing a critical mass of users, 
infrastructure and tools to ensure rapid implementation of E-forms;
    [sbull] Public-private partnerships and use of ``best practices'' 
to deliver the tools;
    [sbull] Use of proven, affordable technologies to deliver 
compliance assistance to small businesses in a one-stop, single format 
manner;
    [sbull] Agreement on appropriate business models to illustrate who 
funds, develops, owns and maintains the web services;
    [sbull] Agreement on financing strategy that highlights shared 
services and clarifies who manages the relationship with the user, 
controls the data, and owns the transaction.

Appendix 1--44 U.S.C. 3520, Public Law 107-198

    [See http://www.acess.gpo.gov]

                         Appendix 2.--Small Business Paperwork Relief Task Force Members
----------------------------------------------------------------------------------------------------------------
               Agency                           Member                                 Title
----------------------------------------------------------------------------------------------------------------
Office of Management and Budget....  Mark A. Forman.............  Associate Director for Information Technology
                                                                   and E-Government.
Office of Management and Budget....  John Graham................  Administrator, Office of Information and
                                                                   Regulatory Affairs.
Department of Labor................  Dana Barbieri..............  Associate Assistant Secretary for Policy.
Department of Labor................  Lois Orr...................  Deputy Commissioner, Bureau of Labor
                                                                   Statistics.
Department of Labor................  Cheryl Kerr................  Special Assistant to the Commissioner, Bureau
                                                                   of Labor Statistics.
Department of Labor................  Jeff Koch..................  Special Assistant to the Assistant Secretary
                                                                   for Administration and Management.
Department of Labor................  Steven Witt................  Director, Standards and Guidance, Occupational
                                                                   Safety and Health Administration.
Small Business Administration......  James M. Van Wert..........  Expert Advisor to the Chief Operating Officer.
Small Business Administration......  David Javdan...............  General Counsel.
Small Business Administration,       Thomas M. Sullivan.........  Chief Counsel for Advocacy.
 Office of Advocacy.
Department of Transportation.......  Eugene Taylor..............  Acting Chief Information Officer.
Department of Treasury.............  Neil Eisner................  Assistant General Counsel for Regulations and
                                                                   Enforcement.
Internal Revenue Service...........  Michael R. Chesman.........  Director, Tax Payer Burden Reduction.
Internal Revenue Service...........  Sherrill A. Fields.........  Deputy Director, Tax Payer Education and
                                                                   Communications.
Department of Health and Human       Daniel Troy................  Associate General Counsel.
 Services.
Department of Health and Human       Ruben King Shaw............  Deputy Administrator and Chief Operating
 Services.                                                         Officer, Centers for Medicare and Medicaid
                                                                   Services.
U.S. Department of Agriculture.....  James E. House.............  Director, Small and Disadvantaged Business
                                                                   Utilization.
Department of Interior.............  Robert Faithful............  Director, Small and Disadvantaged Business
                                                                   Utilization.
General Services Administration....  Mary Mitchell..............  Acting Deputy Associate Administrator,
                                                                   Electronic Government and Technology.
Environmental Protection Agency....  Stephanie Daigle...........  Acting Deputy Associate Administrator, Policy,
                                                                   Economics and Innovation.
Environmental Protection Agency....  Karen Brown................  Small Business Ombudsman.
Department of Commerce.............  Janet Schwalb..............  Special Assistant to the Chief Financial
                                                                   Officer.
Department of Commerce.............  Karen Hogan................  Deputy Chief Information Officer.
----------------------------------------------------------------------------------------------------------------


[[Page 25180]]


                                         Appendix 3.--Contributing Staff
----------------------------------------------------------------------------------------------------------------
               Agency                           Member                                 Title
----------------------------------------------------------------------------------------------------------------
Office of Management and Budget....  Donald Arbuckle............  Deputy Administrator, Office of Information
                                                                   and Regulatory Affairs (OIRA).
Office of Management and Budget....  Jefferson Hill.............  Senior Advisor, OIRA.
Office of Management and Budget....  Stanton Anderson...........  G2B Portfolio Manager.
Office of Management and Budget....  Jo Armstrong...............  SBPRA Project Manager.
Office of Management and Budget....  Bryon Allen................  EPA Desk Officer, OIRA.
Office of Management and Budget....  David Rostker..............  SBA Desk Officer, OIRA.
Office of Management and Budget....  Cristal Thomas.............  DOL Desk Officer, OIRA.
Environmental Protection Agency....  Joan Crawford..............  Special Assistant, Office of Policy, Economics
                                                                   and Innovation.
Environmental Protection Agency....  Sandy Germann..............  ..............................................
Environmental Protection Agency....  Doreen Sterling............  Associate Director, Collection Strategies
                                                                   Division, Office of Information Collection,
                                                                   Office of Environmental Information.
Environmental Protection Agency....  Jim Edward.................  Director, Compliance Assistance and Sector
                                                                   Programs Division.
Environmental Protection Agency....  Tracy Back.................  ..............................................
Internal Revenue Service...........  Margie Kinney..............  Program Analyst, Office of Tax Payer Burden
                                                                   Reduction.
Internal Revenue Service...........  Ron Kovatch................  Senior Advisor, Office of Tax Payer Burden
                                                                   Reduction.
General Services Administration....  Frank McDonough............  Director, Office of Intergovernmental
                                                                   Solutions.
Department of Health and Human       David Elizalde.............  Centers for Medicare and Medicaid Services.
 Services.
Department of Labor................  Jennifer Silk..............  Deputy Director, Standards and Guidance,
                                                                   Occupational Safety and Health
                                                                   Administration.
Department of Labor................  Todd Owens.................  OSHA Clearance Officer.
Department of Labor................  David Gray.................  Deputy Assistant Secretary of Labor.
Small Business Administration......  Shawne McGibbon............  Deputy Chief Counsel for Advocacy.
Small Business Administration......  Suey Howe..................  Director, Interagency Affairs, Office of
                                                                   Advocacy.
Small Business Administration......  Keith Holman...............  Assistant Chief Counsel, Office of Advocacy.
Small Business Administration......  Ernst Nilsson..............
----------------------------------------------------------------------------------------------------------------

Appendix 4--Results of SBA Office of Advocacy's Outreach Activities

SBA Office of Advocacy Observations Regarding Implementation of the 
Small Business Paperwork Relief Act of 2002, Based on Comments 
Submitted to the Office of Advocacy by Small Business Representatives

    1. Single Point of Contact. Small business representatives 
stated that a single point of contact for paperwork/information 
collection requirements within each agency would be extremely 
beneficial. They recommend that the single point of contact be the 
Chief Information Officer (CIO) or an analogous official within each 
agency who is responsible for compliance with the Paperwork 
Reduction Act (or that person's representative). Small business 
representatives believe that the single point of contact needs to 
have sufficient authority and the resources to be able to truly 
function as a single point of contact. Finally, they suggest that 
the single point of contact within each agency be clearly identified 
to the public and to agency personnel. From the Office of Advocacy's 
experience in communicating with small businesses, the designation 
of an effective single point of contact within each agency will be 
critical in achieving the burden relief objectives of the Act.
    2. Overlapping/Duplicative Reporting. Small business 
representatives cited the need to repeatedly submit the same 
information to a single agency as a major paperwork burden. They 
suggest that agencies periodically review and eliminate duplicative 
reporting requirements. The single point of contact for paperwork 
within each agency would be uniquely situated to identify such 
overlapping, duplicative reporting requirements and recommend their 
elimination.
    3. Compliance Assistance. Small business representatives stated 
that agencies should provide more effective paperwork compliance 
assistance to small businesses. Concise, plain-language compliance 
guides would be helpful. Currently, small business representatives 
complain about compliance guidance that is complex, outdated, 
misleading, or voluminous, leaving the small business more confused 
that when the guidance was first consulted. Small businesses have 
told the Office of Advocacy that compliance hotlines are also very 
useful. Certainly, compliance assistance hotlines such as the 
Internal Revenue Service's Tele-Tax assistance network have proven 
to be very helpful to regulated entities.
    4. Paperwork Utility Review. Small business representatives 
believe that it would be beneficial for agencies to periodically 
review their information requirements and assess whether the 
required information is still necessary or even useful.
    5. Catalogue of Required Paperwork Requirements. Small business 
representatives stated that a catalogue of reporting requirements 
would be useful and would enhance their ability to identify and 
comply with paperwork and information collection requirements. They 
believe that such a catalogue can and should be categorized by NAICS 
code. Ultimately, small businesses would like to be able to enter 
their industry code and see all of the paperwork requirements that 
apply to them.
    6. Use of Enforcement Discretion. Small business representatives 
suggested that agencies waive penalties for first-time paperwork 
violations, especially where a small business has sought out and 
followed advice from a hotline or other agency contact. One 
suggestion is for agencies to develop a mechanism to track calls to 
hotlines or other compliance assistance requests (e.g., a 
confirmation number is provided to the small business at the 
conclusion of the contact), so that the small business can 
demonstrate that the contact was made. Agencies can use their 
existing enforcement discretion on a case-by-case basis to respond 
to these situations.
    7. Paperwork Retention Requirements. Small business 
representatives noted their concern with record retention 
requirements that may add significantly to the overall paperwork 
burden. They believe that paperwork retention requirements should be 
periodically evaluated and unnecessarily long retention periods 
should be shortened where appropriate.
    8. Electronic Paperwork Reporting. Small business 
representatives pointed out that many small businesses still rely on 
paper, and are unlikely to become computerized in the near future. 
Agencies should not assume that Web-based paperwork filing is a 
solution to the paperwork burden.

Summary of Public Comments on Implementing the Small Business Paperwork 
Relief Act of 2002, Excerpted From the Transcript of a Public Meeting 
Held March 4, 2003, and Written Comments Submitted to the Office of 
Advocacy

1. Paperwork Retention Requirements

    [sbull] ``Part of the problem with understanding paperwork on 
small business is * * * the amount of time that [small businesses] 
have to spend in collecting the data that back those forms for that 
data, and certainly retaining that data in a manner in which they're 
able to replicate it for organizations

[[Page 25181]]

like the IRS.'' Giovanni Coratolo, U.S. Chamber of Commerce, p. 18
    [sbull] ``[W]e may want to add to the discussion * * * 
recordkeeping in terms of how long folks have to keep these records. 
I mean I know it varies whether it's 30 years, by agency, but shoot, 
I would love to know the compliance rate on that in terms of folks. 
I think that's something that also needs to be looked at.'' Susan 
Eckerly, National Federation of Independent Business, p. 32
    [sbull] ``[O]ne of the things that we frequently hear about, 
particularly in the tax area, the burden of having to keep those 
records. And you've got to remember, as I pointed out earlier, not 
everybody has an empty CD-ROM of all this, which is probably one 
good way to store it. A lot of people just have huge-you know, think 
of a tool and die shop, just huge file folders in a dusty corner of 
a room with all this stuff in it, or think of a gas station, if they 
even have it anymore.'' Susan Eckerly, NFIB, p. 83.
    [sbull] ``The House Small Business chairman in 1995 amended the 
'95 Paperwork Reduction Act to require that the clearance process 
and the single agency officials put on every single recordkeeping 
requirement that exists in the system a record retention 
requirement. That is a matter of law. It reads in 3506(f) now, for 
each recordkeeping requirement, the length of time a person's 
required to retain their records specified * * * we would save 
hundreds of millions of dollars if we could just move to that point. 
** * * I think if you go into the existing inventory today, which 
exists--you can look at it--and count the number of times we have 
recordkeeping requirements established in law that do not express 
what the record retention requirement is, you would be in the 
thousands of specific examples, thousands. * * * They're there now 
and thousands of examples amounting to hundreds of millions of 
dollars in burden.'' Bob Coakley, p. 86-9.

2. Duplicative Paperwork Requirements

    [sbull] ``With the IRS, one area that I thought was very good 
that had some momentum behind it was the STAWRS [Simplified Tax and 
Wage Reporting System] program, where the IRS eliminated the 
duplication of submissions to the IRS and the states and from what I 
understand, that program's completely--not only has it not gone 
forward, it is completely erased.'' Giovanni Coratolo, U.S. Chamber 
of Commerce, p. 19.
    [sbull] ``I do a lot of OSHA issues and I know OSHA last year 
had put forward a proposal as part of the Paperwork Reduction Act to 
get rid of a lot of duplicative and excessively redundant stuff. I 
think that's a good start they've done, which they need to be 
commended for doing that.'' Chris Tampio, National Association of 
Manufacturers, p. 21-2.
    [sbull] ``I hear a lot about duplicative reporting about EPA. 
There are four different media offices. They all ask the same 
questions in different ways and people end up reporting the same 
data with a slightly different twist and I don't know if this report 
can address that because many, many of those requirements are 
statutory. * * *'' Fern Abrams, IPC, p. 26.
    [sbull] ``I know with the IRS, they just deleted the 
requirements of filling out Schedule L and M and when they examined 
it they found it was not used. Here were millions of hours of 
paperwork that was being required, plus the data collection by small 
businesses, and they weren't being used.'' Giovanni Coratolo, U.S. 
Chamber of Commerce, p. 34.
    [sbull] ``Another thing with regard to the single electronic 
reporting system or sort of addressing the duplication, we tried to 
ask our members what agencies are the worst with regard to 
duplicative paperwork. The anecdotal information we received, they 
tend to say that duplications within the agencies * * * if there are 
two representatives from the Department of Labor, ask them have you 
ever taken the Wage and Hour paperwork requirements, reporting 
requirements, matched them up with OSHA? Those are some instances 
that we hear about. And is there any way you can try and merge that? 
That would be a suggestion with respect to that.'' Susan Eckerly, 
NFIB, p. 82-3.
    [sbull] ``I'd ask if it's within the purview of this Task Force 
to look at where state regulations can be synched-up more with 
federal regulations because there's a lot of duplications there, as 
well.'' Fern Abrams, IPC, p. 85.
    [sbull] Examples of Duplicative Reporting in the environmental 
arena:
    --Hazardous waste shipments on both RCRA biennial and annual 
SARA TRI.
    --Annual air emission fees (for those states or air districts 
that require them) and SARA TRI reports--pound for pound TRI 
chemicals virtually identical.
    --WW discharges for certain pollutants that are SARA TRI 
reportable. Although most WW reports are concentration based, some 
are mass based and getting annual totals is a matter of adding.
    --Tier II reports and California HMBP were duplicative until 
Reg. 9 issued July 27, 2001 letter confirming that California 
facilities submitting HMBP annual reports did not have to file Tier 
II reports.
    --Some states duplicate federal TRI reporting with same 
chemicals. (Massachusetts and Form S)
    --Some states require duplication of hazardous waste quantities 
for waste min/P2 reports (New York's HWRP and California's SB 14)
    --All compiled by Fern Abrams, IPC.

3. Single Point of Contact

    [sbull] ``I think small business people, they want to comply 
with regulations and paperwork and stuff but the biggest problem 
they have is compliance assistance. In all the agencies, in IRS, in 
OSHA, at the Department of Labor, in Wage and Hour and everywhere, I 
think having more people there to help with compliance assistance is 
a key that these people want.'' Chris Tampio, National Association 
of Manufacturers, p. 20-1.
    [sbull] ``[o]ur members really do need help with some of this 
paperwork. A lot times it's very--I mean you get down to 
environmental reporting on very technical issues and they're very 
specific and what they really need is simplification. They don't 
need more long written guides or helpful compliance guides where 
instead of now having 20 pages of forms with 200 pages of 
directions, we now have 300 pages of guidance on top of that, which 
is often more regulatory interpretation instead of really being 
helpful.'' Fern Abrams, IPC, p. 27.
    [sbull] ``If we create a series of single agency contacts 
outside the rubric of these chief information officers and their 
statutory authority and responsibilities, how can we expect them to 
work? It's either got to be them, a point Susan [Eckerly] alluded 
to, or it's got to be somebody reporting to them. Then the CIO's 
have to understand that [information resources management] includes 
public burden and small business. And if they think about it and if 
they follow what the president * * * wants done, small business 
would be pretty high on that list and we will begin to see an 
ability to attach these problems.'' Bob Coakley, p. 50.
    [sbull] ``[i]f each [agency] had the list, not only their chief 
information officer but all the ombudsmen they have or all the 
points of contact, that potentially small business would go to, that 
might be a useful exercise, to just get all those, everybody's list 
together in terms of when you try to figure out who should be the 
single point of contact.'' Susan Eckerly, NFIB, p. 73.
    [sbull] ``Not only is there a complex web of who is a small 
business ombudsmen, and I'm using that as just a general term, but 
there's no mechanisms for accountability in a lot of agencies * * *. 
So there's been a long-term problem. Department of Labor I'll use. 
They have--and I don't even know if this position's filled now 
because I just ignore it--their small business outreach person or 
ombudsmen for the entire department and it's always just this office 
that they'd say hi, we'll send you a brochure. So it never was very 
useful. And what's important on that point, not only is the person 
accountable but the agency's accountable * * * '' Anita Drummond, 
ABC, p. 73-4.
    [sbull] ``Imagine being somebody out in Loma Linda, California 
or whatever, calling Washington, D.C. information and asking for the 
Department of Labor. They say I'm a small business and I'm trying to 
comply with the wage and hour laws; who can I talk to? Well, if the 
personnel operator, the operator who answers that line, I think 
that's the key thing right there. Those front-line telephone 
operators need to be able to direct that person, * * * no matter who 
[is the single point of contact], whether we have them set up as a 
full department, an ombudsman, or one-stop call * * *'' Larry 
Fineran, National Association of Manufacturers, p. 91.
    [sbull] ``We should examine the possibility of recommending to 
the agencies the responsibilities this [single point of contact] 
should be assigned * * * should the appointed small business 
official report annually to the Office of [Advocacy]?'' Jim Tozzi, 
Center for Regulatory Effectiveness.
    [sbull] ``It's important to establish what the relationship will 
be between the point of contact identified by the legislation and 
(1) the chief information officer who is charged with administering 
the Paperwork Reduction Act; (2) the small business ombudsperson who 
is appointed by several agencies; and (3) the office of small 
business that various Cabinet departments have set up. If this 
provision is to be implemented effectively, it is important that not 
another overlapping

[[Page 25182]]

office be created to meet this requirement in the 2002 law.'' Susan 
Eckerly, NFIB.

4. Catalogue of Required Reporting

    [sbull] ``One thing that we * * * consistently argued for is the 
catalogue of reporting requirements * * * I think that it doesn't 
make sense to me that you can't go one place, maybe not every single 
paperwork requirement, but most of them, divided by SIC code. It 
just doesn't make sense to me that you can't have that.'' Susan 
Eckerly, NFIB, p. 81-2.
    [sbull] ``But in addition to that idea of a catalogue, a nifty 
electronic edition that be (sic) an export system along the lines of 
Tax Cut, where you put in your SIC code and start answering very 
basic questions that would then take you to the regulations that 
would apply to you.'' Fern Abrams, IPC, p. 84-5.
    [sbull] ``The catalogue of reporting requirements. That system 
of information, that database already exists. It shouldn't be hard * 
* * it should not be a task.'' Bob Coakley, p. 86.
    [sbull] ``The Task Force should clearly identify and recommend 
that any catalog of regulatory paperwork collection requirements be 
broken down according to these different manufacturing processes. 
Creating a catalog in such a manner would greatly enhance the 
ability of small business owners to comply with underlying laws and 
regulations on paperwork and information collections.'' Danielle 
Waterfield, Screenprinting and Graphic Imaging Association 
International.
    [sbull] ``The federal government should have in one place a 
definitive list of the paperwork requirements imposed on small 
business. * * * Given the paperwork and regulatory demands placed on 
small business, the federal government should be able to fulfill its 
end of the bargain and publish a list categorized by the NAICS code. 
It would be wonderful if businesses could access this via CD-ROM, 
through their trade association, or off the internet, among other 
places.'' Susan Eckerly, NFIB.

5. Agency Accountability/Review of Agency Compliance With Paperwork 
Laws

    [sbull] ``[w]e really have to look at what the agencies are 
spending and dedicating their efforts to * * * I know we have a 
section 610 under SBREFA that asks agencies to review rules. Why 
shouldn't there be a 610 for paperwork, where they actually have to 
review the paperwork requirement every so often within the agency? 
And this should be under the guise of OMB to enforce this.'' 
Giovanni Coratolo, U.S. Chamber of Commerce, p. 18-9.
    [sbull] ``I recommend that this Task Force have some sort of 
recommendation of a 610-like provision where agencies could have a 
certain period of time where they would have to review their forms * 
* * so when I refer to 610 I'm not referring to 610 out of SBREFA 
but something similar that would be recommended by this Task Force 
to the agencies that every so often they would have to review these 
forms and have certain assets dedicated to examine whether this 
information is useful or not or is being used.'' Giovanni Coratolo, 
U.S. Chamber of Commerce, p. 33-4.
    [sbull] ``The mantra of the small business community is we don't 
need new laws, we don't even need new administrative initiatives; 
what we need is an executive branch to follow up on the laws that 
exist so that we give integrity to the regulatory process and we can 
participate meaningfully * * * we need to get rid of the benign 
neglect and that'll take political leadership * * * we need the 
president to ask the agencies to make it a priority to follow the 
procedural requirements of law that we already have won and put in 
place and that ought to be done.'' Bob Coakley, p. 45-6.
    [sbull] ``My brother works for the Federal Trade Commission and 
he was reviewing a regulation one time with one of his colleagues 
and his colleague--this was before SBREFA was passed, by the way--he 
said, well what about this Reg Flex review? He said, `Don't worry 
about that. It's not enforceable anyway, so we don't have to do 
that.' I think unfortunately that's the attitude of a lot of federal 
officials, not all of them certainly, but many of them * * * I would 
suggest that you look at ways to implement the paperwork 
requirements that go beyond simply having them review them. Maybe 
some type of judicial review or maybe you need to create some kind 
of incentive from the agency's perspective.'' Brad Frisby, National 
Mining Association, p. 55-7.

6. Penalty Waivers/First Time Abatement of Penalties

    [sbull] ``I do a lot of OSHA issues and instead of having so 
many people that are there playing gotcha for a manufacturer that 
might have a paperwork violation, why not instead have someone go 
there and try to assist them in not just the recordkeeping but 
trying to make it a safer workplace instead of giving them a 
violation for not having their material safety data sheets or 
something like that * * * let's take some of the resources from a 
lot of their heavy-handed enforcement to compliance assistance.'' 
Chris Tampio, National Association of Manufacturers, p. 23.
    [sbull] ``I also work with OSHA issues * * * and I actually view 
OSHA as much more of an outreach and helpful to small businesses and 
the like, and I'd like to see EPA go more that way, that OSHA 
actually has programs where they reach out and help businesses 
comply * * * '' Fern Abrams, IPC, p. 26.
    [sbull] ``[t]here's a lot of problems with contractor-staffed 
hotlines where the people answering the questions don't really know 
the answers. They're making stuff up. And then the agencies, and I 
believe this is true of the IRS, as well, don't have to be held to 
the advice that is given out by their hotline. So someone can get 
advice, take it, and still be slapped later with an enforcement 
violation.'' Fern Abrams, IPC, p. 27-8.
    [sbull] ``[w]hat's important * * * not only is the person 
accountable but the agency's accountable, and this is a problem that 
came up during the last administration and I can't remember how it 
was resolved in the Department of Labor but they put out compliance 
guides and you could follow the compliance guide but you could still 
be cited if you follow the compliance guide because there was an 
error in the guide. So the agency was not accountable for having 
accurate assistance materials. The person wasn't accountable, the 
person or the program wasn't accountable, and the materials, there 
was no reliability in them.'' Anita Drummond, ABC, p. 74-5.
    [sbull] ``I think it's incumbent on the Task Force to actually 
strengthen [the suggestion of first-time abatement of penalties] and 
recommend that [agencies] come out on record as saying that they 
will have a first-time abatement of penalties based on minor 
paperwork infractions.'' Giovanni Coratolo, U.S. Chamber of 
Commerce, p. 75-6.
    [sbull] ``[w]hat is the ultimate goal of the regulatory system? 
* * * The ultimate goal is voluntary compliance * * * so to the 
extent that agencies make it easy to comply, then they are 
furthering their goal, whether it's a safer workplace or whether 
it's a better environment, what have you. So I think that the agency 
mindset still needs to be that voluntary compliance is their goal, 
not how many citations have they made * * * '' Larry Fineran, 
National Association of Manufacturers, p. 90-1.

7. Electronic Paperwork Reporting

    [sbull] ``I'll be the first to say our members are way behind in 
[technology]. The average size of our membership * * * is very 
small, less than 10, and a lot of these people are now having 
computers but they don't use their computers necessarily to be on 
the Web, so they're not going to get on EPA's Web site and all of a 
sudden have one magic form and fill all that out.'' Susan Eckerly, 
NFIB, p. 29-30.
    [sbull] ``[a]gencies * * * see a great opportunity in making 
everything electronic, that somehow this is going to achieve the 
greatest type of reduction and it's also perhaps the most cost-
efficient for an agency, but the reality of small business, the 
reality of those that actually have to go through this if they're 
going to fill out their own forms, more often than not the 
electronic option isn't available to them. So although [electronic 
reporting] is often the main way * * * in which agencies choose to 
reduce their overall burden numbers * * * it still isn't taking care 
of those who have the toughest part of the burden, which is those 
that are still filling out paper.'' Rosario Palmeri, House Committee 
on Small Business, p. 533.
    [sbull] ``I think there's still very large problems with the 
[EPA's] e-docket. I think it was a tool that was established to try 
to help small business * * * I even find it complicated and I've 
done this for 15 years. I get lost in it. I can't find some of the 
e-docket materials that EPA says are on the various dockets.'' 
Theresa Pugh, American Public Power Association, p. 65.
    [sbull] ``[t]here are a lot of people who are still on paper, 
especially in the small businesses who don't have computers or worse 
yet, have computers but they're dial-up computers and they're on one 
person's desk and when you start looking at 500 or whatever page 
things, it could take them hours to download it. So I think we need 
to look at the high-tech solutions that we didn't have a few years 
ago but we're not quite ready to replace the paper.'' Fern Abrams, 
IPC, p. 84.

[[Page 25183]]

    [sbull] ``I wanted to suggest that the Air Office, at least at 
EPA and perhaps some other agencies, have a bad habit of 
establishing databases to indicate both paperwork and actual 
regulatory compliance costs and on some small business areas it's 
left blank. If you don't know any better and you read that, it look 
like there's no regulatory requirement * * * it sort of leads one to 
believe that they're not being regulated when they will be 
regulated.'' Theresa Pugh, American Public Power Association, p. 93.

8. Miscellaneous Comments

    [sbull] `` * * * I sat through an IRS paperwork reduction 
meeting. It was part of their normal review of forms and 
instructions. This one happened to be on taxes filed by small 
farmers and they devoted, I think, about 25 minutes of their eight-
hour session on this particular set of forms to paperwork reduction 
* * * But what we found is that the IRS, in figuring out who to put 
together in terms of a meeting to talk about paperwork reduction, 
they didn't have a single farmer, they didn't have a single 
representative from a farm trades or any other small group. They put 
together a group of practitioners who essentially were accountants * 
* * they start with the assumption that no small business and no 
farm is actually going to fill out their own taxes * * * and when 
they start from that basic assumption, they assume that the types of 
corrections and the types of things they want to do or make 
clarifications to are from a practitioner's standpoint rather than 
from the individual standpoint.'' Rosario Palmeri, House Committee 
on Small Business, p. 51-2.
    [sbull] ``If there were some way we could come up with a clever 
way of rewarding employees in various agencies * * * if there was a 
way that the regulatory agencies * * * would recognize the 
leadership of employees for taking a creative approach in trying to 
reduce regulatory burden in a responsible way * * *.'' Theresa Pugh, 
American Public Power Association, p. 66.
    [sbull] ``And I wanted to comment briefly on the same-time 
reporting option on your list * * * I hear negative feedback about 
that. Companies like that things are spaced out through the year so 
that they can spread the workload over the one or two or three 
people or however many they have who handle the reporting 
requirements, and that if it were all due at one time of the year, 
they couldn't have that one person.'' Fern Abrams, IPC, p. 85.

Appendix 5--Federal Government Initiatives To Reduce or Streamline 
Reporting Requirements for Businesses

    Currently there are a substantial number of Federal government 
efforts in operation or in development that use one or more of the 
approaches to reduce paperwork burden for businesses, as described 
in the task one section of this report. Several examples follow:
    1. The Food and Drug Administration (FDA) has harmonized its new 
drug application and biologics application forms which can be 
submitted electronically. Previously, there had been 21 different 
application forms. A second FDA example is its work underway with 
the European Union and Japan to harmonize product approval 
application requirements and adverse event reporting. As a result of 
this work, businesses will be able to collect and submit essentially 
the same information in the same format to satisfy many countries' 
pre-approval and post-marketing requirements for drugs and 
biologics.
    2. Below are two examples of cross agency consolidations of 
reporting requirements are instructive.
    (a) The Single Source Coal Reporting project, which involves 
several Federal agencies plus at least 1 state, consolidate 
reporting by coal producers on their production activity to a single 
point; using one form, common data definitions where practical and 
beneficial, and synchronized reporting with respect to timing.
    (b) The Employee Benefits Security Administration (EBSA), the 
Pension Benefit Guaranty Corporation (PBGC), and the Internal 
Revenue Service (IRS) jointly collect data from businesses on 
benefit plan operations using a single form. In the year 2000 the 3 
agencies together streamlined the information required to be 
reported on the form and implemented an electronic filing and 
processing system. The single report is filed with a contractor who 
then distributes the appropriate information to each of the 3 
agencies.
    3. The IRS has expanded the use of the Internet and web-based 
technology to reduce burden on small businesses. The Small Business 
Community Web Site provides a variety of information, tools and 
products to make it easier for small businesses to comply with tax 
laws.
    4. The Social Security Administration for many years has 
received Forms W-3, Transmittal of Wage and Tax Statements, and 
Forms W-2, Wage and Tax Statement, on behalf of both SSA and the 
Internal Revenue Service. SSA collects the data from employers, 
transcribes the paper documents not filed electronically, posts the 
data to their own files and provides the data to the IRS.
    5. The Occupational Safety and Health Administration (OSHA) and 
the Bureau of Labor Statistics (BLS) collect occupational injury and 
illness data from individual employers in annual sample surveys. By 
law, BLS cannot share micro-data collected from businesses with non-
statistical agencies. Although BLS is barred from sharing data with 
OSHA, the two agencies have developed sampling methodology and 
reporting procedures designed to reduce the burden on businesses in 
both surveys by minimizing overlap between the 2 surveys and 
providing businesses the opportunity to use a single form for 
reporting if they so choose.
    6. The Department of Transportation (DOT) currently has two 
initiatives for consolidating reporting requirements. The first 
initiative consolidates reporting requirements for six of its 
agencies into a 1 page form for businesses to report the results of 
safety-related drug and alcohol tests for nearly 10 million safety-
sensitive employees. This new form also reduces the number of data 
elements. The Coast Guard will continue to participate in this 
system after it is transitioned to the Department of Homeland 
Security.
    Another noteworthy effort underway at DOT is the creation of a 
new application form and uniform reporting requirements for the 
disadvantaged business enterprise (DBE) program. At this time a 
business seeking certification as a DBE must fill out a different 
form for three DOT agencies and for multiple state and local 
agencies. The new form will be used by federal, state and local 
agencies.

Appendix 6--The Business Compliance One Stop as a Platform for 
Regulatory Burden Reduction

Background

    SBA is the managing partner for the Business Compliance One Stop 
(BCOS), an initiative that is a framework for achieving the goals of 
the (SBPRA) Task Force.
    The goal of the BCOS is to reduce the burden on business owners 
by making it easy to find, understand, and comply with governmental 
laws and regulations. The BCOS solution is to provide businesses 
with a single point of access to information and tools that will 
make it easy for them to comply. The portal offers value to the 
business community in three areas:
    (1) Find: efficient access to laws and regulations at all levels 
of government (helps you find what applies to you as a business 
owner, where you live);
    (2) Understand: compliance assistance digital guides that will 
help businesses determine if they are in compliance and how to 
comply;
    (3) Comply: online transactions, such as allowing businesses to 
register their business, apply for licenses and permits, and file 
information electronically.
    As the advocate and supporter of small businesses, SBA is the 
managing partner for the following reasons:
    [sbull] Core Mission--Small businesses comprise 99 percent of 
all business. With its legislative mandate to help small businesses 
succeed, SBA ``owns'' the relationship with the intended 
beneficiaries of the initiative.
    [sbull] Outreach--The intergovernmental scope of the project 
gives SBA another advantage, as no other federal agency has the 
breadth and depth of grassroots partnerships and experience with 
business development entities in over 1500 locations.
    [sbull] Relationship with the Regulatory Community--SBA works 
more closely with the federal regulatory community than any other 
agency through its congressionally created offices of Advocacy and 
National Regulatory Ombudsman. Building appropriate compliance 
assistance tools is a natural complement to its role of ``being a 
voice'' for small businesses.
    [sbull] Experience in Cross-Agency Web Portals--SBA is the 
creator and manager of Businesslaw.gov, a legal and regulatory 
information gateway to all 50 states and the platform for BCOS.
    [sbull] Focal Point--SBA is willing and able to forge the 
necessary partnerships to manage this effort, and offers the 
Executive and Legislative branches a focal point for cost effective 
stewardship and accountability for e-government expenditures.

Current Partners

    We presently have partnerships with nine Federal agencies, 
(i.e., DOT, DOI, DOE, EPA,

[[Page 25184]]

IRS, DOL, OSHA, INS, and GSA) and seven states (i.e., Illinois, 
Georgia, Washington, Missouri, Iowa, New Jersey and Texas). We have 
also enlisted the partnership of several associations to represent 
the business customer and provide us a true reality check, e.g., 
NGA, NFIB, NASCIO, ATA, etc. BCOS delivers these capabilities 
through an Internet portal (BusinessLaw.gov) providing content 
specific to particular industries as well as help for business in 
general.

BCOS Focus

    During its first year the BCOS effort focused on compliance 
assistance in the areas of environment, workplace health and safety, 
taxes and employment. For its second and third years, while 
continuing to make it easy to find, understand, and comply with 
governmental regulations, with the primary focus on creating 
compliance assistance tools, the BCOS initiative will place a 
greater emphasis on reducing the paperwork reduction, i.e., the 
regulatory burden that emanates from having to comply with 
government requests for information. OMB estimates that the total 
federal paperwork burden is 7.7 billion hours annually of which 6.6 
billion hours stem from the Department of Treasury. Evaluations of 
modern forms management systems which include interactive, 
electronic forms as well as streamlining collection processes and 
harmonizing data requirements across agencies have the potential to 
reduce by 50 percent agency costs and the small business burden.
    This paperwork reduction emphasis emanates from the Small 
Business Paperwork Relief Task Force recommendations to reduce the 
burden using the following three strategies:
    4. Reduce the information required through analyzing if 
information is needed, if definitions in different forms and forms 
in different agencies can be harmonized to reduce overlap;
    5. Increase the effectiveness of data collection processes by 
collecting once and sharing data among programs and agencies;
    6. Reduce the work of submitting data by using interactive, 
electronic, forms that aid the user.
    To get faster results, the BCOS initiative will concentrate on 
highly regulated industries such as trucking, health care, food, and 
chemicals. To achieve this, the BCOS will look to a Governance Board 
made up of senior staff from the key regulatory agencies that can be 
a decision-making body. Through the guidance from the BCOS project 
management, the Board will ratify key development teams led by 
individual regulatory agencies. For instance, DOT will take the lead 
on reviewing the over 40 Information Collection Reports (ICRs) from 
11 federal agencies and the 4 state transactions to determine where 
E-forms should be applied and including streamlining and harmonizing 
the data capture processes. Financing for these efforts will be made 
available by OMB or the regulatory agencies. SBA as the general 
manager of the BCOS will function as a secretariat for the 
Governance Board or Steering committee, work with associations and 
small businesses to analyze the regulatory information burden, hold 
focus sessions, create the project plans and develop proposals for 
harmonizing and streamlining information requirements across 
government as well as providing interactive, electronic forms and 
suggesting how collection processes can be streamlined. We will also 
take the lead in building the portal and functioning prototypes or 
proof of concepts for the burden reduction applications.

BCOS Results

    One of the most important outcomes of BCOS is the demonstration 
that Federal and state agencies can work together to reduce the 
regulatory burden through a variety of means. It has shown that 
compliance assistance is possible and effective. The following 
describes some of the results achieved:

BusinessLaw Portal

    BCOS uses BusinessLaw.gov as its foundation and framework. This 
portal provides nearly 20,000 links to federal and state legal and 
regulatory information on 39 different topics, where to go to 
complete transactions such as licenses and permits, and a host of 
information on rulemaking, compliance assistance, and regulatory 
fairness. The portal also offers useful information on where to get 
help, how to contact Congress and associations, and principal 
considerations in choosing legal help. In concert with the goals of 
the BCOS team, the site is adding new navigation aids, additional 
digital guides or expert tools, and user-friendly transactions. 
Estimated savings: $56 million annually.

Compliance Assistance Guides

[sbull] Alien Employee Visa Classification eTool
[sbull] Employment Eligibility Verification tool
[sbull] OSHA emergency building evacuation procedures e-Tool
[sbull] Coal Mining Report Harmonization
[sbull] Integrated State Registration and Federal EIN Web Services 
Application
[sbull] Choosing a Legal Structure
[sbull] Auto Dismantler & Recycler Environmental Audit Advisor
[sbull] Motor Vehicle (Class V) Waste Disposal Wells Advisor
    Estimated savings from a total of 30 expert tools: $300 million 
annually to businesses and $12 million to agencies.

Coal Mining Report Harmonization

    This project is an excellent example of agencies working 
together to reduce the information burden on nearly 1,000 coal 
miners who submit reports to DOI, DOE, EPA, DOL, IRS, and State 
EPAs. Eighty percent of the data in these reports are identical and 
require about 50,000 hours annually. A tool developed by DOI 
provides a one-stop submission of data that is then distributed to 
participating agencies. Data metrics using different definitions is 
automatically changed to the metric required by each agency and 
results in an estimated 25,000 hours saved. As the project has been 
progressing, agencies have begun to look at streamlining 
definitions, reporting periods and the need for the information in 
the first place. Estimated savings: $1 million annually.

Integrated State Registration and Federal Employer Identification 
Number Application

    This example demonstrates that significant savings can ensue 
when state and Federal processes are integrated and offered as a 
single web services. State business registration requires many of 
the same data elements as the Federal Employer Identification Number 
(FEIN) submission. This tool permits the user to apply on-line for a 
state registration and then elect to apply for a FEIN, which is pre-
populated with data from the state application. For additional 
information, the application asks for additional data in an 
interview format. IRS estimates that more than 2.4 million 
businesses acquire EINs annually. Estimated savings: $96 million 
annually.

Bureau of Citizenship and Immigration Services I-9 Interactive, 
Electronic Tool

    All U.S. employers are responsible for completion and retention 
of Form I-9s for each individual they hire to certify work 
eligibility in the United States. This includes citizens and non-
citizens. On the form, the employer must verify the employment 
eligibility and identity documents presented by the employee and 
record the document information on the Form I-9. The U.S. Department 
of Homeland Security, Bureau of Citizenship and Immigration Services 
(BCIS), maintains the form. This tool developed by BCOS in 
cooperation with BCIS, guides the employer using an Intuit-type 
approach through a set of questions at the end of which the form is 
completed. Throughout the tool, educational material is provided in 
terms of instructions and answers to frequently asked questions. 
Estimated savings: $12 million annually with a substantial increase 
in the quality of the completed form.

Trucking One-Stop Portal

    Trucking is an important industry, contributing to 1 out of 
every 12 jobs and local economies. A large part of the 900,000 plus 
trucking firms works interstate and needs to comply with information 
from the Federal and state governments. The Integrated Truck One-
Stop is an example of how using harmonized data capture, electronic 
forms and transactions and offering web services for both federal 
and state requirements can work for a specific industry. The 
planning phase is being completed for this project.
    We have developed the data reference model for both federal and 
state regulatory requirements. With this understanding, we can 
develop web services that let truckers submit data to a common front 
end portal that then processes the requests, distributes the data to 
the participating user states and Federal agencies, and returns 
credentials, licenses, permits and payment schedules. Additionally 
the trucking one-stop portal will provide compliance assistance 
information and tools to reduce the regulatory burden. The 
development of a trucking one-stop portal with E-forms and 
streamlining and harmonization of data collection will yield an 
estimated savings of $400 million annually.

[[Page 25185]]

The Profiler--Personalization for Finding Compliance Assistance 
Resources

    This tool allows the user to characterize his firm in terms of 
where it is located, size, industry as well as what kind of 
assistance the user is looking for. The tool then locates available 
compliance assistance resources available from five major Federal 
agencies. The estimated savings are $62 million annually.

Appendix 7--Compliance Assistance Best Practices

    Best practices and lessons learned are shown for three areas:\1\ 
cross-jurisdictional State-wide services, other cross-jurisdictional 
portal applications and specific compliance and permitting services. 
In addition, other sites representative of specific navigational 
practices and assistance tools are included in the discussion of 
challenges.
---------------------------------------------------------------------------

    \1\ From a paper titled ``One-Stop Business Compliance Proposed 
Best Practices'' prepared for the Federal CIO council and the 
Business Compliance Assistance One Stop initiative in 2002 by a 
consortium of consulting firms. The whole paper can be found at 
http://www.cio.gov/index.cfm?function=documents&section=best%20practices.
---------------------------------------------------------------------------

Cross-Jurisdictional State Portals

    The following sources are examples of State-wide services 
providing compliance assistance across multiple jurisdictions:
    1. The Georgia Technology Authority (GTA) is designing an 
enterprise portal to integrate information from disparate sources 
throughout the Georgia State Government. The first to benefit from 
this portal are the projected 400,000 Georgians a year likely to 
renew their driver's licenses online. It is one of the first Web 
services portals based on Simple Object Access Protocol (SOAP) and 
Extensible Markup Language (XML) to take advantage of cross-
jurisdictional transactions.
    2. Washington State has implemented a State portal that serves 
as a one-stop registry for companies to do business in the State by 
providing relevant information and supporting transactions online. 
It was developed with a comprehensive understanding of customers and 
their needs and deployed using a component-based architecture to 
support its growth and sustainability. It is one of the first and 
largest Government-to-Business (G2B) transaction sites available in 
the nation.
    3. The Commonwealth of Pennsylvania has implemented a one-stop 
business services portal that allows businesses to electronically 
identify, complete and submit all business-specific registration 
data required to multiple State regulatory agencies. Three State 
agencies currently participate in the initial phase: the Department 
of Revenue, the Department of State, and the Department of Labor and 
Industry. Each agency performs critical approval and oversight 
functions in registering new enterprises. Fifteen hundred (1,500) 
businesses have submitted or changed their registrations online 
without incurring legal and accounting expenses previously required.
    4. The State of Virginia Department of Taxation offers the 
ability for a business to file its sales and withholding tax online. 
It provides for electronic filing and payments by both individuals 
and businesses, and is jointly supported by the Virginia Employment 
Commission and the Virginia Department of Taxation. Future plans 
call for seamless transactions across State agencies and integration 
for Federal Internal Revenue Service (IRS) and Social Security 
Administration (SSA) transactions.
    5. The State of Mississippi has embarked upon a three-year 
initiative to develop a comprehensive State portal to provide e-
Government services to its constituencies by building upon a 
flexible, open, and scalable technology foundation. Occupational 
license renewals for the Board of Architecture and payment 
processing were the first applications deployed with the initial 
release of the new portal in October 2001. Their success is based on 
a strategy of building a standards-based component architecture at 
the State level that can provide plug-and-play compatibility and 
interoperability for future applications.

Other Cross-Jurisdictional Portals

    The following sources are examples of other services providing 
compliance assistance across multiple jurisdictions:
    1. Inland Revenue, United Kingdom, Online Tax Filing deployed a 
tax filing system for employers and agents filing pay-as-you-earn 
taxes on behalf of employees; and a self assessment filing system 
for individual taxpayers. This site is an example of the rapid 
integration of commercial-off-the-shelf (COTS) forms processing, 
transaction engines and business rules to support businesses filing 
tax information online.
    2. Miami-Dade County, Florida has one of the largest local e-
Government transaction-based systems, allowing businesses and 
individuals to request services, track and review status of service 
and make payments online. It supports a host of county services from 
occupational licensing to the payment of parking tickets. They 
created a component-based architecture that promotes 
interoperability and enables the easy addition of Web-based 
transactions and tools.
    3. Nova Scotia Atlantic Canada Online electronic business system 
(in partnership with an industry provider and the provinces of New 
Brunswick, Nova Scotia, Prince Edward Island and Newfoundland) 
provides third-party client organizations with secure Internet 
access to Government information. Electronic access is provided to 
personal property registries and records, vehicle information, 
business registries, court filings and documents and more. The 
business model relies on an industry provider to invest $10M in the 
development, implementation and management of the business and 
technical infrastructure that supports the online services. 
Organizations such as banks and law firms establish online accounts, 
from which small fees are automatically deducted for each 
transaction.

Specific Compliance and Permitting Applications

    The following sources are examples of services providing 
specific compliance and permitting transactions for specific 
jurisdictions:
    1. The Illinois Department of Revenue focused on reducing the 
tax and wage-reporting burden on businesses by providing an 
integrated capability for electronic registration, simplified tax 
and wage reporting, and online filing and payments. The department 
achieved success by developing a solid understanding of its 
customers' requirements and building the necessary infrastructure to 
provide secure digital transactions to more than 100,000 businesses. 
It defined a business model consistent with its mission and relied 
on a component-based architecture to deliver the needed business 
services.
    2. The Ohio Bureau of Workers Compensation allows injured 
workers to fill out insurance claims forms electronically. As many 
as 80 percent of Ohio workers using the new system have been able to 
file claims within seven days of receiving their job-related injury, 
as opposed to 25-27 days for paper-based claims. Nine hundred 
companies have paid their workers compensation premiums online using 
credit cards. This site demonstrates the ability of individuals and 
businesses to file forms electronically, make payments online and 
have transactions synchronized across multiple State agencies within 
Ohio.
    New Jersey's DEPonline is a one-stop environmental information 
sharing and regulatory compliance portal for business, industry and 
the public. DEPonline seamlessly interoperates with the New Jersey 
Environmental Management System (NJEMS), an integrated enterprise 
regulatory management solution. The portal enables business users to 
access status of compliance information and up-to-date regulations, 
apply and pay for (by credit card or check) a variety of permits and 
licenses and submit compliance reports online.

General Findings

    Most cross-jurisdictional portals, particularly those at the 
State level, are currently in development and are facing similar 
issues, integrating solutions across multiple jurisdictions, 
developing common repeatable frameworks and addressing the diverse 
needs of a large customer base. While most have not achieved their 
stated goals, they do reveal some useful lessons learned:
    Start with a comprehensive understanding of the customers, and 
address the services that have the largest potential gains in 
reducing the compliance burden and promoting efficiencies;
    [sbull] Define an effective business model for delivery of 
services to customers, consistent with the mission and leveraging 
agency core competencies;
    [sbull] Develop a component enterprise architecture that 
exploits common, repeatable standards and supports continued growth, 
promotes interagency collaboration and addresses user privacy and 
security concerns;
    [sbull] Deploy proven technologies and tools, particularly those 
currently in use by the more successful implementations from 
compliance organizations; and
    [sbull] Achieve interagency and intergovernmental cooperation 
and collaboration, an essential element in

[[Page 25186]]

providing a common, seamless One-Stop Business Compliance 
capability.

[FR Doc. 03-11311 Filed 5-8-03; 8:45 am]
BILLING CODE 3110-01-P