(Senate - March 15, 1996)

Text available as:

Formatting necessary for an accurate reading of this text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.

[Pages S2148-S2168]
From the Congressional Record Online through the Government Publishing Office []


  The PRESIDING OFFICER. Under the previous order, we will now turn to 
S. 942.
  The clerk will report.
  The legislative clerk read as follows:

       A bill (S. 942) to promote increased understanding of 
     Federal regulations and increased voluntary compliance with 
     such regulations by small entities, to provide for the 
     designation of regional ombudsmen and oversight boards to 
     monitor the enforcement practices of certain Federal agencies 
     with respect to small business concerns, to provide relief 
     from excessive and arbitrary regulatory enforcement actions 
     against small entities, and for other purposes.

  The Senate proceeded to consider the bill, which had been reported 
from the Committee on Small Business, with an amendment to strike all 
after the enacting clause and inserting in lieu thereof the following:


       This Act may be cited as the ``Small Business Regulatory 
     Enforcement Fairness Act of 1996''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) a vibrant and growing small business sector is critical 
     to creating jobs in a dynamic economy;
       (2) small businesses bear a disproportionate share of 
     regulatory costs and burdens;
       (3) fundamental changes that are needed in the regulatory 
     and enforcement culture of federal agencies to make agencies 
     more responsive to small business can be made without 
     compromising the statutory missions of the agencies;
       (4) three of the top recommendations of the White House 
     Conference on Small Business involve reforms to the way 
     government regulations are developed and enforced, and 
     reductions in government paperwork requirements;
       (5) the requirements of the Regulatory Flexibility Act have 
     too often been ignored by government agencies, resulting in 
     greater regulatory burdens on small entities than 
     necessitated by statute; and
       (6) small entities should be given the opportunity to seek 
     judicial review of agency actions required by the Regulatory 
     Flexibility Act.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to implement certain recommendations of the 1995 White 
     House Conference on Small Business regarding the development 
     and enforcement of Federal regulations;
       (2) to provide for judicial review of the Regulatory 
     Flexibility Act;
       (3) to encourage the effective participation of small 
     businesses in the Federal regulatory process;
       (4) to simplify the language of Federal regulations 
     affecting small businesses;
       (5) to develop more accessible sources of information on 
     regulatory and reporting requirements for small businesses;
       (6) to create a more cooperative regulatory environment 
     among agencies and small businesses that is less punitive and 
     more solution-oriented; and
       (7) to make Federal regulators more accountable for their 
     enforcement actions by providing small entities with a 
     meaningful opportunity for redress of excessive enforcement 


       This Act shall become effective on the date 90 days after 


       For purposes of this Act--
       (1) the terms ``rule'' and ``small entity'' have the same 
     meanings as in section 601 of title 5, United States Code;
       (2) the term ``agency'' has the same meaning as in section 
     551 of title 5, United States Code; and
       (3) the term ``small entity compliance guide'' means a 
     document designated as such by an agency.

[[Page S2149]]


       (a) Compliance Guide.--For each rule or group of related 
     rules for which an agency is required to prepare a final 
     regulatory flexibility analysis under section 604 of title 5, 
     United States Code, the agency shall publish one or more 
     guides to assist small entities in complying with the rule, 
     and shall designate such publications as ``small entity 
     compliance guides''. The guides shall explain the actions a 
     small entity is required to take to comply with a rule or 
     group of rules. The agency shall, in its sole discretion, 
     ensure that the guide is written using sufficiently plain 
     language to be understood by affected small entities. 
     Agencies may prepare separate guides covering groups or 
     classes of similarly affected small entities, and may 
     cooperate with associations of small entities to develop and 
     distribute such guides.
       (b) Single Source of Information.--Agencies shall cooperate 
     to make available to small entities through a single source 
     of information, the small entity compliance guides and all 
     other available information on statutory and 
     regulatory requirements affecting small entities.
       (c) Limitation on Judicial Review.--Except as provided by 
     this subsection, an agency's designation of a small entity 
     compliance guide shall not be subject to judicial review. In 
     any civil or administrative action against a small entity for 
     a violation occurring after the effective date of this 
     section, the content of the small business guide may be 
     considered as evidence of the reasonableness or 
     appropriateness of any proposed fines, penalties or damages.


       (a) In General.--Whenever appropriate in the interest of 
     administering statutes and regulations within the 
     jurisdiction of an agency, it shall be the practice of the 
     agency to answer inquiries by small entities concerning 
     information on and advice about compliance with such statutes 
     and regulations, interpreting and applying the law to 
     specific sets of facts supplied by the small entity. In any 
     civil or administrative action against a small entity, 
     guidance provided by an agency to a small entity may be 
     considered as evidence of the reasonableness or 
     appropriateness of any proposed fines, penalties or damages 
     imposed on such small entity.
       (b) Program.--Each agency shall establish a program for 
     issuing guidance in response to such inquiries no later than 
     1 year after enactment of this section, utilizing existing 
     functions and personnel of the agency to the extent 


       Section 21(c)(3) of the Small Business Act (15 U.S.C. 
     648(c)(3)) is amended--
       (1) in subparagraph (O), by striking ``and'' at the end;
       (2) in subparagraph (P), by striking the period at the end 
     and inserting a semicolon; and
       (3) by inserting after subparagraph (P) the following new 
       ``(Q) providing assistance to small business concerns 
     regarding regulatory requirements, including providing 
     training with respect to cost-effective regulatory 
       ``(R) developing informational publications, establishing 
     resource centers of reference materials, and distributing 
     compliance guides published under section 102(a) of the Small 
     Business Regulatory Enforcement Fairness Act of 1996 to small 
     business concerns; and
       ``(S) developing programs to provide confidential onsite 
     assessments and recommendations regarding regulatory 
     compliance to small business concerns and assisting small 
     business concerns in analyzing the business development 
     issues associated with regulatory implementation and 
     compliance measures.''.


       The Manufacturing Technology Centers and other similar 
     extension centers administered by the National Institute of 
     Standards and Technology of the Department of Commerce shall, 
     as appropriate, provide the assistance regarding regulatory 
     requirements, develop and distribute information and guides 
     and develop the programs to provide confidential onsite 
     assessments and recommendations regarding regulatory 
     compliance described in Section 104 of this Act.


       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 30 as section 31; and
       (2) by inserting after section 29 the following new 


       ``(a) Definitions.--For purposes of this section, the 
       ``(1) `Board' means a Regional Small Business Regulatory 
     Fairness Board established under subsection (c); and
       ``(2) `Ombudsman' means the Small Business and Agriculture 
     Regulatory Enforcement Ombudsman designated under subsection 
       ``(b) SBA Enforcement Ombudsman.--
       ``(1) Not later than 180 days after the date of enactment 
     of this section, the Administration shall designate a Small 
     Business and Agriculture Regulatory Enforcement Ombudsman 
     utilizing existing personnel to the extent practicable. Other 
     agencies shall assist the Ombudsman and take actions as 
     necessary to ensure compliance with the requirements of this 
     section. Nothing in this section is intended to replace or 
     diminish the activities of any Ombudsman or similar office in 
     any other agency.
       ``(2) The Ombudsman shall--
       ``(A) work with each agency with regulatory authority over 
     small businesses to ensure that small business concerns that 
     receive or are subject to an audit, on-site inspection, 
     compliance assistance effort, or other enforcement related 
     communication or contact by agency personnel are provided 
     with a confidential means to comment on and rate the 
     performance of such personnel;
       ``(B) establish means to solicit and receive comments from 
     small business concerns regarding actions by agency employees 
     conducting compliance or enforcement related activities with 
     respect to the small business concern, and maintain the 
     identity of the person and small business concern making such 
     comments on a confidential basis; and
       ``(C) based on comments received from small business 
     concerns and the Boards, annually report to Congress and 
     affected agencies concerning the enforcement activities of 
     agency personnel including a rating of the responsiveness to 
     small business of the various regional and program offices 
     and personnel of each agency; and
       ``(D) coordinate and report annually on the activities, 
     findings and recommendations of the Boards to the 
     Administration and to the heads of affected agencies.
       ``(c) Regional Small Business Regulatory Fairness Boards.--
       ``(1) Not later than 180 days after the date of enactment 
     of this section, the Administration shall establish a Small 
     Business Regulatory Fairness Board in each regional office of 
     the Small Business Administration.
       ``(2) Each Board established under paragraph (1) shall--
       ``(A) meet at least annually to advise the Ombudsman on 
     matters of concern to small businesses relating to the 
     enforcement activities of agencies;
       ``(B) report to the Ombudsman on instances of excessive 
     enforcement actions of agencies against small business 
     concerns including any findings or recommendations of the 
     Board as to agency enforcement policy or practice; and
       ``(C) prior to publication, provide comment on the annual 
     report of the Ombudsman prepared under subsection (b).
       ``(3) Each Board shall consist of five members appointed by 
     the Administration, after receiving the recommendations of 
     the chair and ranking minority member of the Small Business 
     Committees of the House and Senate.
       ``(4) Members of the Board shall serve for terms of three 
     years or less.
       ``(5) The Administration shall select a chair from among 
     the members of the Board who shall serve for not more than 2 
     years as chair.
       ``(6) A majority of the members of the Board shall 
     constitute a quorum for the conduct of business, but a lesser 
     number may hold hearings.
       ``(d) Powers of the Boards.--
       ``(1) The Board may hold such hearings and collect such 
     information as appropriate for carrying out this section.
       ``(2) The Board may use the United States mails in the same 
     manner and under the same conditions as other departments and 
     agencies of the Federal Government.
       ``(3) The Board may accept donations of services necessary 
     to conduct its business.
       ``(4) Members of the Board shall serve without 
     compensation, provided that, members of the Board shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Board.''.


       (a) In General.--Each agency regulating the activities of 
     small entities shall establish a policy or program to provide 
     for the reduction, and under appropriate circumstances for 
     the waiver, of civil penalties for violations of a statutory 
     or regulatory requirement by a small entity.
       (b) Conditions and Exceptions.--Policies or programs 
     established under this section may contain conditions or 
     exceptions such as--
       (1) requiring the small entity to correct the violation 
     within a reasonable correction period;
       (2) limiting the applicability to violations discovered by 
     the small entity through participation in a compliance 
     assistance or audit program operated or supported by the 
     agency or a State, or through a compliance audit resulting in 
     disclosure of the violation;
       (3) exempting small entities that have been subject to 
     multiple enforcement actions by the agency;
       (4) exempting violations involving willful or criminal 
     conduct; and
       (5) exempting violations that pose serious health, safety 
     or environmental threats or risk of serious injury.


       Section 504(b)(1) of title 5, United States Code, is 
       (1) by striking ``$75'' in subparagraph (A) and inserting 
       (2) by striking ``, or (ii)'' in subparagraph (B) and 
     inserting ``, (ii)'';
       (3) at the end of subparagraph (B), by striking ``;'' and 
     inserting the following: ``, or (iii) a small entity as 
     defined in section 601;'';
       (4) by striking ``; and'' in subparagraph (D) and inserting 
     ``;''; and
       (5) by adding at the end the following new subparagraphs:
       ``(F) `prevailing party' includes a small entity with 
     respect to claims in an adversary adjudication brought by an 
     agency (1) that the small entity has raised a successful 
     defense to, or (2) with respect to which the decision of the 
     adjudicative officer is substantially less than that sought 
     by the agency in the adversary adjudication, provided that 
     such small entity has not

[[Page S2150]]

     committed a willful violation of the law or otherwise acted 
     in bad faith, and
       ``(G) in an adversary adjudication brought by an agency 
     against a small entity, in the determination whether the 
     position of the agency, including any citation, assessment, 
     fine, penalty or demand for settlement sought by the agency, 
     is `substantially justified' only if the agency demonstrates 
     that such position does not substantially exceed the decision 
     of the adjudicative officer in the adversary adjudication, 
     and the position of the agency is consistent with agency 


       Section 2412 of title 28, United States Code, is amended in 
     paragraph (d)(2)--
       (1) by striking ``$75'' in subparagraph (A) and inserting 
       (2) by striking ``, or (ii)'' in subparagraph (B) and 
     inserting ``, (ii)'';
       (3) by striking ``; and'' subparagraph (G) and inserting 
       (4) in subparagraph (H)--
       (i) after ``prevailing party,'' by inserting ``includes a 
     small entity with respect to a claim in a civil action 
     brought by the United States (1) that the small entity has 
     raised a successful defense to, or (2) with respect to which 
     the final judgement in the action is substantially less than 
     that sought by the United States, provided that such small 
     entity has not committed a willful violation of the law or 
     otherwise acted in bad faith, and''; and
       (ii) at the end of the subparagraph, by striking the period 
     and inserting ``; and''; and
       (5) by adding at the end the following new subparagraph:
       ``(I) In a civil action brought by the United States 
     against a small entity, a position of the United States, 
     including any citation, assessment, fine, penalty or demand 
     for settlement sought by an agency, is ``substantially 
     justified'' only if the United States demonstrates that such 
     position does not substantially exceed the value of the final 
     judgement in the action, and the position of the United 
     States is consistent with agency policy.''.


       (a) Initial Regulatory Flexibility Analysis.--Section 
     603(a) of title 5, United States Code, is amended--
       (1) by inserting after ``proposed rule'', the phrase ``, or 
     publishes a notice of interpretive rule making of general 
     applicability for any proposed interpretive rule''; and
       (2) by inserting at the end of the subsection, the 
     following new sentence: ``In the case of interpretive rule 
     making involving the internal revenue laws of the United 
     States, this section applies only to regulations as that term 
     is used in section 7805 of the Internal Revenue Code of 1986 
     that impose a record keeping, reporting or paperwork 
     requirement on small entities.''.
       (b) Final Regulatory Flexibility Analysis.--Section 604 of 
     title 5, United States Code, is amended--
       (1) in subsection (a) to read as follows:
       ``(a) When an agency promulgates a final rule under section 
     553 of this title, after being required by that section or 
     any other law to publish a general notice of proposed 
     rulemaking, or otherwise publishing an initial regulatory 
     flexibility analysis, the agency shall prepare a final 
     regulatory flexibility analysis. Each final regulatory 
     flexibility analysis shall contain--
       ``(1) a succinct statement of the need for, and objectives 
     of, the rule;
       ``(2) a summary of the issues raised by the public comments 
     in response to the initial regulatory flexibility analysis, a 
     summary of the assessment of the agency of such issues, and a 
     statement of any changes made in the proposed rule as a 
     result of such comments;
       ``(3) a description of, and an estimate of the number of, 
     small entities to which the rule will apply or an explanation 
     of why no such estimate is available;
       ``(4) a description of the projected reporting, record 
     keeping and other compliance requirements of the rule, 
     including an estimate of the classes of small entities which 
     will be subject to the requirement and the type of 
     professional skills necessary for preparation of the report 
     or record; and
       ``(5) a description of the steps the agency has taken to 
     minimize the significant economic impact on small entities 
     consistent with the stated objectives of applicable statutes, 
     including a statement of the factual policy, and legal 
     reasons for selecting the alternative adopted in the final 
     rule and why each one of the other significant alternatives 
     to the rule considered by the agency was rejected.''; and
       (2) in subsection (b), by striking ``at the time'' and all 
     that follows and inserting ``such analysis or a summary 


       Section 611 of title 5, United States Code, is amended to 
     read as follows:

     ``Sec. 611. Judicial review

       ``(a)(1) For any rule subject to this chapter, a small 
     entity that is adversely affected or aggrieved by agency 
     action is entitled to judicial review of agency compliance 
     with the requirements of this chapter, except the 
     requirements of sections 602, 603, 609 and 612.
       ``(2) Each court having jurisdiction to review such rule 
     for compliance with section 553 of this title or under any 
     other provision of law shall have jurisdiction to review any 
     claims of noncompliance with this chapter, except the 
     requirements of sections 602, 603, 609 and 612.
       ``(3)(A) A small entity may seek such review during the 
     period beginning on the date of final agency action and 
     ending one year later, except that where a provision of law 
     requires that an action challenging a final agency action be 
     commenced before the expiration of such one year period, such 
     lesser period shall apply to a petition for judicial review 
     under this section.
       ``(B) In the case where an agency delays the issuance of a 
     final regulatory flexibility analysis pursuant to section 
     608(b) of this chapter, a petition for judicial review under 
     this section shall be filed not later than--
       ``(i) one year after the date the analysis is made 
     available to the public, or
       ``(ii) where a provision of law requires that an action 
     challenging a final agency regulation be commenced before the 
     expiration of the one year period, the number of days 
     specified in such provision of law that is after the date the 
     analysis is made available to the public.
       ``(4) If the court determines, on the basis of the 
     rulemaking record, that the agency action under this chapter 
     was arbitrary, capricious, an abuse of discretion or 
     otherwise not in accordance with the law, the court shall 
     order the agency to take corrective action consistent with 
     this chapter, which may include--
       ``(A) remanding the rule to the agency, or
       ``(B) deferring the enforcement of the rule against small 
     entities, unless the court finds good cause for continuing 
     the enforcement of the rule pending the completion of the 
     corrective action.
       ``(5) Nothing in this subsection shall be construed to 
     limit the authority of any court to stay the effective date 
     of any rule or provision thereof under any other provision of 
     law or to grant any other relief in addition to the 
     requirements of this section.
       ``(b) In an action for the judicial review of a rule, the 
     regulatory flexibility analysis for such rule, including an 
     analysis prepared or corrected pursuant to paragraph (a)(4), 
     shall constitute part of the entire record of agency action 
     in connection with such review.
       ``(c) Except as otherwise required by this chapter, the 
     court shall apply the same standards of judicial review that 
     govern the review of agency findings under the statute 
     granting the agency authority to conduct a rule making.
       ``(d) Compliance or noncompliance by an agency with the 
     provisions of this chapter shall be subject to judicial 
     review only in accordance with this section.
       ``(e) Nothing in this section bars judicial review of any 
     other impact statement or similar analysis required by any 
     other law if judicial review of such statement or analysis is 
     otherwise permitted by law.''.


       (a) Section 605(b) of title 5, United States Code, is 
     amended to read as follows:
       ``(b) Sections 603 and 604 of this title shall not apply to 
     any proposed or final rule if the head of the agency 
     certifies that the rule will not, if promulgated, have a 
     significant economic impact on a substantial number of small 
     entities. If the head of the agency makes a certification 
     under the preceding sentence, the agency shall publish such 
     certification in the Federal Register, at the time of 
     publication of general notice of proposed rule making for the 
     rule or at the time of publication of the final rule, along 
     with a statement providing the factual and legal reasons for 
     such certification. The agency shall provide such 
     certification and statement to the Chief Counsel for Advocacy 
     of the Small Business Administration.''.
       (b) Section 612 of title 5, United States Code, is 
       (1) in subsection (a), by striking ``the committees on the 
     Judiciary of the Senate and the House of Representatives, the 
     Select Committee on Small Business of the Senate, and the 
     Committee on Small Business of the House of Representatives'' 
     and inserting ``the Committees on the Judiciary and Small 
     Business of the Senate and House of Representatives''.
       (2) in subsection (b), by striking ``his views with respect 
     to the'' and inserting in lieu thereof, ``his or her views 
     with respect to compliance with this chapter, the adequacy of 
     the rulemaking record and the''.


       (a) Small Business Outreach and Interagency Coordination.--
     Section 609 of title 5, United States Code, is amended--
       (1) before ``techniques,'' by inserting ``the reasonable 
     use of '';
       (2) in paragraph (4), after ``entities'', by inserting 
     ``including soliciting and receiving comments over computer 
       (3) by designating the current text as subsection (a); and
       (4) by adding the following new subsection:
       ``(b) Prior to publication of an initial regulatory 
     flexibility analysis--
       ``(1) an agency shall notify the Chief Counsel for Advocacy 
     of the Small Business Administration and provide the Chief 
     Counsel with information on the potential impacts of the 
     proposed rule on small entities and the type of small 
     entities that might be affected;
       ``(2) the Chief Counsel shall identify individuals 
     representative of affected small entities for the purpose of 
     obtaining advice and recommendations from those individuals 
     about the potential impacts of the proposed rule;
       ``(3) the agency shall convene a review panel for such rule 
     consisting wholly of full time federal employees of the 
     office within the agency responsible for carrying out the 
     proposed rule, the Office of Information and Regulatory 
     Affairs within the Office of Management and Budget, and the 
     Chief Counsel;
       ``(4) the panel shall review any material the agency has 
     prepared in connection with this chapter, collect advice and 
     recommendations of the small entity representatives 
     identified by the agency after consultation with the Chief 
     Counsel, on issues related to subsection 603(b), paragraphs 
     (3), (4) and (5);
       ``(5) the review panel shall report on the comments of the 
     small entity representatives and its findings as to issues 
     related to subsection 603(b),

[[Page S2151]]

     paragraphs (3), (4) and (5), provided that such report shall 
     be made public as part of the rulemaking record; and
       ``(6) where appropriate, the agency shall modify the 
     proposed rule or the decision on whether an initial 
     regulatory flexibility analysis is required.
       ``(c) Prior to publication of a final regulatory 
     flexibility analysis--
       ``(1) an agency shall reconvene the review panel 
     established under paragraph (b)(3), or if no initial 
     regulatory flexibility analysis was published, undertake the 
     actions described in paragraphs (b)(1) through (3);
       ``(2) the panel shall review any material the agency has 
     prepared in connection with this chapter, collect the advice 
     and recommendations of the small entity representatives 
     identified by the agency after consultation with the Chief 
     Counsel, on issues related to subsection 604(a), paragraphs 
     (3), (4) and (5);
       ``(3) the review panel shall report on the comments of the 
     small entity representatives and its findings as to issues 
     related to subsection 604(a), paragraphs (3), (4) and (5), 
     provided that such report shall be made public as part of the 
     rulemaking record; and
       ``(4) where appropriate, the agency shall modify the final 
     rule or the decision on whether a final regulatory 
     flexibility analysis is required.
       ``(d) An agency may in its discretion apply subsections (b) 
     and (c) to rules that the agency intends to certify under 
     subsection 605(b), but the agency believes may have a greater 
     than de minimis impact on a substantial number of small 
       (b) Small Business Advocacy Chairpersons.--Not later than 
     30 days after the date of enactment of this Act, the head of 
     each agency that has conducted a final regulatory flexibility 
     analysis shall designate a small business advocacy 
     chairperson using existing personnel to the extent possible, 
     to be responsible for implementing this section and to act as 
     permanent chair of the agency's review panels established 
     pursuant to this section.

  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, my ranking member, Senator Bumpers, and I 
are very pleased to be able to bring to the floor this vitally 
important small business regulatory reform bill. I want to express at 
the beginning my heartfelt thanks to Senator Bumpers, to his staff, and 
to the many Members on both sides of the aisle and their staffs who 
helped us work on this measure. We will be presenting a managers' 
amendment very shortly, when they complete drafting all of the good 
ideas that came in.
  We had a very good hearing on this in the Small Business Committee. 
Lots of people have had good ideas. We have been able to incorporate 
most of them. We are not able to handle all of them. But this measure 
is targeted clearly to small business.
  As we come up on the first anniversary of the White House Conference 
on Small Business, I think it is very important that we move forward. I 
appreciate the Members who have allowed us to go forward today with 
this bill.
  As most of my colleagues know, last June almost 2,000 delegates to 
the White House Conference on Small Business came to Washington to vote 
on an agenda of top concerns for small business. The top 60 
recommendations were published by the conference last September as a 
report to the President and Congress entitled, ``Foundation for a New 
Century.'' Three of the top recommendations in the White House 
conference call for reforms in the way that Government regulations are 
developed, the way they are enforced, and reforms in Government 
paperwork requirements.
  The common theme of all recommendations is the need to change the 
culture of Government agencies, the need to provide a responsive ear 
and a responsive attitude toward small business and small entities.
  Let me emphasize, while we are talking about small business, many 
people just think maybe it is the business downtown on the square or 
the mom-and-pop operation or the small contractor, but this bill also 
includes small entities. We have many entities of local government, 
charitable entities, educational entities, that would be affected and 
would be protected by the provisions in this bill.
  We held a hearing in Atlanta, GA, on small business. We were very 
graciously provided the facilities of Georgia Tech to hold that 
hearing. The president of Georgia Tech was kind enough to come and be 
with us. As he and I listened to the concerns of small business, he 
told me afterward, ``It is amazing how many of these concerns actually 
affect small colleges and universities as well.'' So, while 
traditionally we think of the small for-profit entities, there are 
benefits as well for nonprofits, for governmental entities, and 
charitable organizations as well as educational entities.

  One of the top recommendations of the conference of the White House 
and small business was to put teeth into the Regulatory Flexibility 
Act, to provide regulatory relief for small entities, small businesses, 
small towns, small school districts, small nonprofit organizations. 
Back in 1980, Congress passed what was called the Regulatory 
Flexibility Act. I suppose regulatory flexibility came from the idea 
that Federal agencies are supposed to look at the issuance of 
regulations and make them flexible, so the impact on the small entities 
could be made flexible enough to carry out the purpose of the 
underlying statute under which the regulations were issued, without 
imposing unnecessary burdens on those small entities, hence the name 
regulatory flexibility. ``Be flexible,'' is what Congress told Federal 
agencies, ``in dealing with regulations impacting small entities, small 
businesses, and not-for-profits.''
  There is a problem with that. Congress said we are not going to have 
any judicial enforcement of regulatory flexibility. With that, too many 
Federal agencies took that as a sign to say we are not going to pay any 
attention to it. When small businesses said, ``Have you paid attention 
to regulatory flexibility,'' they said, ``No, it did not apply.'' Even 
the advocacy council, the Small Business Administration, has been 
totally stiffed by many Federal agencies when it has gone before them 
and said, ``Look, we serve small business and believe there is a 
problem. It is not a reg-flex-compliant, small-entity regulation that 
you have issued.''
  We had hearings before the Small Business Committee in the past year, 
where the SBA's chief counsel for advocacy indicated that not only was 
regulatory flexibility being ignored, but that there is a tremendous 
burden on small business in many of these regulatory directives. In 
general, they say that the burden on small business is some 50 to 80 
percent more per employee than it is for larger businesses.
  Let me cite just one particular statistic that I found striking. In a 
manufacturing business, a large business can calculate that all the 
Federal regulations that I think we would all agree are designed to 
achieve worthwhile purposes of worker safety, a healthy environment, 
and a whole range of issues that we work on, cost about $2.50 per hour 
per employee.
  For every hour that is worked, the manufacturing business pays the 
employee his or her salary, plus they have to calculate another $2.50. 
For a small manufacturing business with 50 or fewer employees, that 
costs $5 an hour. That means the small business starts off with a $2.50 
an hour penalty over what the larger business has to pay. That makes 
our small businesses less competitive with larger businesses. It also 
makes our small businesses much less competitive with overseas 
competitors who may not have those burdens.
  As a result, there has been strong bipartisan support to provide for 
judicial enforcement of the Regulatory Flexibility Act. The President 
has called for it. The Administrator of the Small Business 
Administration has called for it. Leading Members on both sides of the 
aisle in this body have called for it.
  Mr. President, I ask unanimous consent to have printed in the Record 
letters of support for S. 942 that come from the National Federation of 
Independent Business, the Small Business Legislative Council, the 
National Retail Federation, the National Association of Home Builders, 
Associated Builders and Contractors, the National Association of Towns 
and Townships, and the National Association of Manufacturers.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                            National Federation of

                                         Independent Business,

                                    Washington, DC, March 7, 1996.
     Hon. Christopher Bond,
     Chairman, U.S. Senate,
     Washington, DC.
       Dear Mr. Chairman: On behalf of the more than 600,000 small 
     business owners of the National Federation of Independent 
     Business (NFIB), I urge all your colleagues to support S. 
     942, the Small Business Regulatory Enforcement Fairness Act 
     of 1996. The Bond-Bumpers legislation includes important 
     provisions that have been top priorities for NFIB members for 
     many years. It also includes provisions that were recommended 

[[Page S2152]]

     small business owners at the 1995 White House provisions that 
     were recommended by small business owners at the 1995 White 
     House Conference on Small Business. The bill has these 
     important elements:
       Strengthening the Regulatory Flexibility Act
       Provisions that would encourage a more cooperative 
     regulatory enforcement environment regulation.
       Updating the Equal Access to Justice Act.
       Providing for the judicial review of the Regulatory 
     Flexibility Act of 1980 is of particular concern to the small 
     business community because it has the potential to fulfill 
     the promise of that 16 year old law. The purpose of 
     ``reg.flex.'' was to fit regulations to the scale and 
     resources of the regulated entity. A strong ``reg.flex.'' 
     process will provide a substantial measure of the regulatory 
     reform that small business owners have wanted for years.
       The vote on S. 942 will be a ``Key Small Business Vote'' of 
     the 104th Congress.

                                             Donald A. Danner,

                                                   Vice President,
     Federal Government Relations.

                                                    Small Business

                                          Legislative Council,

                                    Washington, DC, March 7, 1996.
     Hon. Christopher Bond,
     Committee on Small Business, Washington, DC.
       Dear Mr. Chairman: On behalf of the Small Business 
     Legislative Council (SBLC), I wish to express our strong 
     support for your legislation to amend the Regulatory 
     Flexibility Act (RFA) to add judicial review, and to make 
     other small business regulatory process improvements.
       As long-time supporters of the RFA, we know from first-hand 
     experience that agencies have been able to ignore the law due 
     to the lack of judicial review. At the time of the enactment 
     of the original RFA, we thought it was a risk we could 
     reluctantly accept in order for us to overcome the then 
     formidable resistance of the bureaucracy to the entire law. 
     Time has proven that the price was too much to pay.
       The original concept of the original law is still sound. 
     The goal is to have agencies undertake an analysis of 
     proposed rules to determine whether they have an adverse 
     impact on small business. If such a determination is made, 
     then the agency must explore alternatives to mitigate the 
     impact on small business. Unfortunately, agencies have simply 
     ignored the law in the absence of judicial review.
       Small business is at the regulatory breaking point. All too 
     frequently, small business owners tell us, ``I am not sure I 
     can advise my son or daughter to join me in the business. It 
     is not worth it, the hassles outweigh the joys. They just 
     might be better off working for someone else.'' It is time to 
     reverse that trend.
       Enactment of the judicial review amendment to the RFA was 
     one of the priority recommendations of last year's White 
     House Conference on Small Business.
       Congratualtions on this initiative! We look forward to 
     working with you towards the passage and enactment.
       The SBLC is a permanent, independent coalition of nearly 
     one hundred trade and professional associations that share a 
     common commitment to the future of small business. Our 
     members represent the interests of small businesses in such 
     diverse economic sectors as manufacturing, 
     retailing, distribution, professional and technical 
     services, construction, transportation, and agriculture. 
     Our policies are developed through a consensus among our 
     membership. Individual associations may express their own 
     views. For your information, a list of our members is 
                                                    Gary F. Petty,
                                            Chairman of the Board.

           members of the small business legislative council

       Air Conditioning Contractors of America.
       Alliance for Affordable Health Care.
       Alliance for American Innovation.
       Alliance of Independent Store Owners and Professionals.
       American Animal Hospital Association.
       American Association of Equine Practitioners.
       American Association of Nurserymen.
       American Bus Association.
       American Consulting Engineers Council.
       American Council of Independent Laboratories.
       American Gear Manufacturers Association.
       American Machine Tool Distributors association.
       American Road & Transportation Builders Association.
       American Society of Interior Designers.
       American Society of Travel Agents, Inc.
       American Subcontractors Association.
       American Textile Machinery Association.
       American Trucking Associations, Inc.
       American Warehouse Association.
       Architectural Precast Association.
       Associated Builders & Contractors.
       Associated Equipment Distributors.
       Associated Landscape Contractors of America.
       Association of Small Business Development Centers.
       Automotive Service Association.
       Automotive Recyclers Association.
       Bowling Proprietors Association of America.
       Building Service Contractors Association international.
       Business Advertising Council.
       Christian Booksellers Association.
       Council of Fleet Specialists.
       Council of Growing Companies.
       Direct Selling Association.
       Electronics Representatives Association.
       Florists' Transworld Delivery Association.
       Health Industry Representatives Association.
       Helicopter Association International.
       Independent Bankers Association of America.
       Independent Medical Distributors Association.
       International Association of Refrigerated Warehouses.
       International Communications Industries Association.
       International Formalwear Association.
       International Franchise Association.
       International Television Association.
       Machinery Dealers National Association.
       Mail Advertising Service Association.
       Manufacturers Agents National Association.
       Manufacturers Representatives of America, Inc.
       Mechanical Contractors Association of America, Inc.
       National Association for the Self-Employed.
       National Association of Catalog Showroom Merchandisers.
       National Association of Plumbing-Heating-Cooling 
       National Association of Private Enterprise.
       National Association of Realtors.
       National Association of Retail Druggists.
       National Association of RV Parks and Campgrounds.
       National Association of Small Business Investment 
       National Association of the Remodeling Industry.
       National Chimney Sweep Guild.
       National Electrical Contractors Association.
       National Electrical Manufacturers Representatives 
       National Food Brokers Association.
       National Independent Flag Dealers Association.
       National Knitwear & Sportswear Association.
       National Lumber & Building Material Dealers Association.
       National Moving and Storage Association.
       National Ornamental & Miscellaneous Metals Association.
       National Paperbox Association.
       National Shoe Retailers Association.
       National Society of Public Accountants.
       National Tire Dealers & Retreaders Association.
       National Tooling and Machining Association.
       National Tour Association.
       National Wood Flooring Association.
       NATSO, Inc.
       Opticians Association of America.
       Organization for the Protection and Advancement of Small 
     Telephone Companies.
       Petroleum Marketers Association of America.
       Power Transmission Representatives Association.
       Printing Industries of America, Inc.
       Professional Lawn Car Association of America.
       Promotional Products Association International.
       The Retailer's Bakery Association.
       Small Business Council of America, Inc.
       Small Business Exporters Association.
       SMC Business Councils.
       Society of American Florists.
       Turfgrass Producers International.

                                   National Retail Federation,

                                   Washington, DC, March 13, 1996.
     Hon. Kit Bond,
     Chairman, Committee on Small Business, U.S. Senate, 
         Washington, DC.
       Dear Kit: On behalf of the National Retail Federation (NRF) 
     and America's 1.4 million U.S. retail establishments, I am 
     writing to strongly support your bipartisan, ``Small Business 
     Regulatory Enforcement Fairness Act'' (S. 942). For years 
     Main Street retailers have been shouting for relief from the 
     federal regulatory nightmare. The bipartisan legislation 
     you've assembled should provide exactly that.
       This bill includes important relief for small retailers--in 
     particular strengthening the Regulatory Flexibility Act. Reg-
     Flex was designed to force federal regulators to consider the 
     excessive burden regulations place on small businesses. The 
     improvements included in this bill will give family-owned 
     retailers the hammer necessary to break the regulatory 
     juggernaut. It will help provide Main Street businesses with 
     the common sense solutions they have been searching for.
       Other features of the bill such as its ``Plain English'' 
     requirement and its direction to agencies to set-up programs 
     to waive civil penalties for first-time violations are also 
     important and valuable. Small retailers simply cannot afford 
     to spend valuable time in non-productive activities.
       Again thank you on behalf of America's retailers and the 
     one in five Americans employed in the retail industry for 
     your leadership in important regulatory relief.

                                           John J. Motley III,

                                            Senior Vice President,
     Government and Public Affairs.

[[Page S2153]]

                                              National Association

                                             of Home Builders,

                                    Washington, DC, March 7, 1996.
       Dear Senator: It is my understanding that you may be 
     considering S. 942, the Small Business Regulatory Enforcement 
     Fairness Act of 1996. S. 942 was reported to the full Senate 
     unanimously by the Senate Small Business Committee on March 
     6, and on behalf of the 185,000 member firms of the National 
     Association of Home Builders (NAHB), I urge you to support 
     this bill and oppose any weakening amendments.
       S. 942 is based on several recommendations of the White 
     House Conference on Small Business (the Conference) which 
     addresses the regulatory burden currently faced by small 
     businesses in the United States. First of all, S. 942 would 
     require federal agencies to streamline and simplify their 
     regulations. Secondly, this legislation would create a Small 
     Business and Agriculture Enforcement Ombudsman to compile the 
     comments of small businesses with respect to regulatory 
     enforcement, and annually rate agencies based on these 
     comments. While this is a step in the right direction, NAHB 
     would respectfully suggest that the Ombudsman be given 
     meaningful authority to intervene on behalf of an aggrieved 
     small business.
       Additionally, S. 942 would establish a meaningful judicial 
     review process for regulations under the Regulatory 
     Flexibility Act, enabling small business owners to challenge 
     onerous regulations in court, forcing agencies to ensure that 
     rules do not adversely impact small businesses.
       Many of our members were active participants in the 
     Conference. Hence, we feel strongly that the recommendations 
     adopted by the Conference should be implemented by Congress. 
     As the recent report of the Small Business Administration 
     (SBA) points out, small businesses currently shoulder a 
     disproportionate share of the regulatory burden and generally 
     have the least amount of resources to devote to regulatory 
       Most NAHB members are truly small businesses, and we 
     support the provisions of S. 942. This legislation has broad, 
     bipartisan support, and we strongly urge you to pass this 
     bill without any weakening amendments.
       Thank you for considering our views.
                                                 Randall L. Smith,

                                               Associated Builders

                                        and Contractors, Inc.,

                                      Rosslyn, VA, March 11, 1996.
     Hon. Christopher S. Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: The Senate will soon be considering the 
     Small Business Regulatory Enforcement Fairness Act of 1996 
     (S. 942). On behalf of Associated Builders and Contractors 
     (ABC)--and its more than 18,000 contractors, subcontractors, 
     material suppliers, and related firms from across the 
     country--I urge you to support the legislation.
       S. 942 will implement key recommendations from the 1995 
     White House Conference on Small Business aimed to facilitate 
     compliance with federal regulatory and administrative 
     requirements imposed on the private sector. ABC believes S. 
     942 is an important step in managing the increasing 
     regulatory burden on U.S. companies and small businesses in 
       In particular, the legislation would strengthen enforcement 
     of the Regulatory Flexibility Act. It would grant judicial 
     review to ensure regulatory flexibility requirements are 
     carried out by allowing small businesses to challenge certain 
     agency actions or inactions in court. This will help enforce 
     the Regulatory Flexibility Act, which was intended to require 
     that federal agencies ``fit regulatory and informational 
     requirements to the scale of the businesses.'' It is critical 
     that Congress enact this judicial ``hammer'' to enforce 
     agencies to address regulatory impacts on small businesses.
       Although the nation's regulations are intended to benefit 
     the public, they in fact place a disproportionate burden on 
     small businessmen and women--those who actually create the 
     vast majority of jobs in America. The Small Business 
     Regulatory Enforcement Fairness Act of 1996 will help 
     alleviate this main obstruction to economic development and 
     free America's small business owners to generate valuable 
       The majority of ABC's members are small businesses. The 
     U.S. Small Business Administration has identified 
     construction contractors as one of the top small business-
     dominated industries responsible for generating a significant 
     number of new jobs annually. In fact, from 1993 to 1994, 
     general building and specialty construction contractors 
     created almost 290,000 new jobs.
       Over-regulation is not only burdensome for small 
     businesses, but also impacts the economy. For the 
     construction industry, excessive regulation translates into 
     higher costs that are eventually passed onto the consumer for 
     private sector contracts. Over-regulation on public sector 
     contracts costs the federal government and the taxpayer 
     millions of dollars per year. An additional burden is placed 
     on the nation's economy because the increased cost of doing 
     business from excessive regulations results in fewer jobs.
       Again, ABC urges you to vote in support of S. 942 to help 
     improve the ability of small businesses to comply with 
     federal regulations. The Small Business Regulatory 
     Enforcement Fairness Act of 1996 will encourage small 
     business participation in the regulatory process and provide 
     the necessary opportunity for redress of arbitrary 
     enforcement actions. Thank you for your consideration of this 
     important matter.

                                         Charlotte W. Herbert,

                                                   Vice President,
     Government Affairs.

                                           National Association of

                                          Towns and Townships,

                                    Washington, DC, March 7, 1996.
     Hon. Kit Bond,
     Chairman, Small Business Committee, U.S. Senate, Washington, 
       Dear Senator Bond: The National Association of Towns and 
     Townships (NATaT) would like to thank you for your leadership 
     in developing legislation to strengthen the Regulatory 
     Flexibility Act of 1980 (RFA). NATaT strongly supports S. 
     942, the Small Business Regulatory Enforcement Fairness Act 
     of 1996. NATaT has long supported judicial review of the 
     Regulatory Flexibility Act (RFA), which is a major component 
     of S. 942.
       NATaT represents approximately 13,000 of the nation's 
     39,000 general purpose units of local governments. Most of 
     our member local governments are small and rural and have 
     fewer than 10,000 residents. These small communities simply 
     do not have the resources to comply with many mandates and 
     regulations in the same fashion that larger localities are 
     able. The impact of federal regulations on small localities 
     was understood by the authors of the RFA and small localities 
     were therefore included under the definition of small 
     entities in that act.
       NATaT has long recognized the failings of the RFA and has 
     fought to strengthen it over the years. We have concluded 
     that the only way to get federal agencies to take notice of 
     their responsibilities under the RFA is to allow small 
     entities to take an agency to court for failure to follow the 
     provisions of the RFA. Strong judicial review language would 
     do just that. NATaT strongly supports the judicial review 
     language and would oppose any efforts to weaken it.
                                                      Tom Halicki,
     Executive Director.

                                              National Association

                                             of Manufacturers,

                                    Washington, DC, March 7, 1996.
     Hon. Christopher S. ``Kit'' Bond,
     U.S. Senate, Senate Russell Office Building, Washington, DC.
       Dear Kit: The National Association of Manufacturers (NAM) 
     is pleased to offer its strong support for S. 942, The Small 
     Business Regulatory Enforcement Fairness Act of 1996. This 
     measure, which may be considered on the Senate floor today, 
     is an important down payment on improvements to the nation's 
     regulatory system.
       Senate passage of S. 942 would be an important first step 
     toward lifting regulatory barriers to increased flexibility, 
     productivity and growth, particularly for small companies. 
     The measure would allow small companies to stay focused on 
     growing their businesses and creating jobs by increasing the 
     accountability of regulatory agencies and decreasing 
     unnecessary compliance burdens.
       A recent study commissioned by the U.S. Small Business 
     Administration concludes that small businesses shoulder 63 
     percent of the total regulatory burden while accounting for 
     50 percent of employment and sales. According to the report, 
     ``The Changing Burden of Regulation, Paperwork, and Tax 
     Compliance on Small Business,'' the average cost of 
     regulation per employee in firms with 500 or more workers is 
     $2,979. That compares with $5,532 for firms with 20 or fewer 
     employees, an intolerable burden that must be reduced.
       We also support the Nickles/Reid amendment, which will 
     provide Congress with an opportunity to review major 
     regulations under a fast track procedure. This will encourage 
     the Federal bureaucracy to do a better job of developing 
     sensible regulations.
       The NAM believes that this legislation will yield smarter 
     regulations that protect health, safety and the environment 
     and bolster economic growth and job creation. I strongly urge 
     you to support S. 942 and the Nickles-Reid amendment as part 
     of a continuing effort to modernize the nation's antiquated 
     regulatory system.
                                              Jerry J. Jasinowski,

  Mr. BOND. Mr. President, there are a number of other important 
amendments and provisions in this bill, in addition to providing 
judicial enforcement of regulatory flex. We take a very simple step of 
saying, with respect to compliance guides, when you write a regulation, 
you have to tell the small entities how, in plain English, they are 
supposed to abide by the regulation, what it is supposed to do, and how 
they can comply with it.
  If a regulatory agency brings an enforcement action against a small 
entity, the small entity has a right to take a look at those so-called 
plain English guidelines and present it to the court or the 
administrative hearing officer and say, ``Hey, look, we are doing what 
they told us to do,'' or if it is so confusing that they cannot figure 
it out, they have a case to make in the court or in the administrative 
hearing: ``We had no idea what we were supposed to do to comply with 

[[Page S2154]]

  Another area that we think is very, very important is to change the 
atmosphere of inspectors and examiners who go out into the field 
representing the Federal Government to administer regulations.
  Mr. President, you and I can cite many examples, I am sure. There are 
an overwhelming number of examples where dedicated public servants go 
out and work with the people they regulate to help them come into 
compliance. But I know we also can cite examples where a regulator goes 
out, an examiner goes out, and they think they have been sent from the 
king to impose fines, to impose sanctions and that their objective is 
to make life miserable. That is certainly the impression that too many 
of the witnesses before our hearings have held. They feel that there 
are some agencies in some areas or even some individuals who just have 
the wrong idea: They do not work for the people; they are there to 
collect fines and to impose penalties.
  We set up fairness rules, and we set up an ombudsman. The ombudsman 
provision creates a small business enforcement ombudsman to provide a 
place where small businesses can complain and voice their concerns on 
excessive regulatory enforcement actions.
  Right now, I have asked some of those small businesses why they do 
not complain to the guy's boss. They said, ``Well, as soon as we do 
that, he is going to tell the inspector who is giving us so much 
trouble, who fined us $4,000 for not having a warning label on a bottle 
of kitchen dishwashing soap, and we are liable to get twice that fine 
the next time.''
  We set up an ombudsman system, regional fairness boards where you can 
go to complain, and if a number of small entities pinpoint a particular 
agency or even a particular inspector, then through the Small Business 
Administration, which knows the identity of the complaining witnesses, 
the attention of the supervisory personnel in the enforcing agency can 
be advised that this particular inspector or maybe this particular 
office is overreaching, is not performing its function of seeing that 
the purpose of the statute is carried out, that they are more 
interested in the enforcement sanctions and the fines.

  We believe this will help change the culture so that regulators, 
examiners and inspectors know that their job, when they go out, is to 
see that the workplace is environmentally sound, healthful, safe and 
not to impose fines, and regulations. This does not take away any of 
the penalties. This says how you go about it should be designed to 
achieve compliance, not to impose penalties.
  There is another measure which is included in this bill, one which 
was introduced by Senator Domenici as a result of hearings we had in 
New Mexico, to provide, on a pilot basis, in OSHA and EPA for the 
involvement of small businesses and small entities in the early stages 
of regulatory development, so you can have somebody sitting at the 
table as you look at the statute and you try to determine how best to 
carry it out. Somebody can say, ``Well, to do this in the small 
entities, it will be easier to go this way to get the job done than to 
go that way.''
  We think that offers great promise. It will be tested, and we will 
see if we can, in fact, make sure that we get the job done of complying 
with the law.
  Finally, there is a change in the Equal Access to Justice Act. That 
act is supposed to provide compensation for small businesses and small 
entities who are subject to regulatory proceedings, the imposition of 
fines. If it turns out that the Federal Government has asked for much 
larger fines or penalties than are warranted in the case, they are 
supposed to get compensation. Under existing law, however, the 
standards are so strict that it is a promise without performance.
  We amend the Equal Access to Justice Act to level the playing field 
to bring some accountability to the actions between an agency and a 
small business entity so that when the agency makes a demand, it is 
going to have to be in proportion to what the violation is worth and 
what can actually be proven in a hearing, either administrative or 
judicial, to allow them to recover costs for representing themselves 
against an overreaching agency.
  These things, I think, make this a good starting point for ensuring 
that Federal agencies give a hearing to small businesses and to small 
entities and take account of how their activities may impact those 

  With that, Mr. President, I hope that when we vote on this measure 
next Tuesday, we will have overwhelming support from this body. The 
House has considered but has not moved forward on legislation. I hope 
that by listening to Members on both sides and doing a tremendous 
amount of staff work--and I want to compliment not only the staff on 
this side, but on the minority side for their diligent work--we have a 
reasonably good piece of legislation.
  We have made accommodations. There are a number of amendments we 
believe we can accept by voice vote. Senator Nickles and Senator Reid 
have one for congressional review that we think is vitally important. 
It has overwhelmingly passed the Congress. I think it was 100 to 0. 
That is about as good as you can get. It has already passed the Senate. 
I do not think we need another vote on that one, but we expect to 
accept that. And there will be a managers' amendment.

                         Privilege of the Floor

  With that, as I turn to my ranking member, I ask unanimous consent to 
allow Tom McCully, a legislative fellow in the Small Business 
Committee, privilege of the floor for the duration of the consideration 
of this bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. I thank the Chair.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized.
  Mr. BUMPERS. Mr. President, the chairman of the Small Business 
Committee, my colleague, Senator Bond, made a magnificent statement on 
this very comprehensive bill. As Mo Udall used to say, ``Just about 
everything that needs to be said has been said, but everybody hasn't 
said it.'' I know that what I have to say will be largely repetitious, 
but let me start, first, by just complimenting Senator Bond for his 
tenacity and determination in getting this bill out of the committee 
and getting it to the floor.
  I believe I can truthfully say this is one of the two or three times 
since I have been in the Senate where Members, if this becomes law, 
will have an opportunity to go home and actually tell the small 
business community that we have done something for them that was 
actually meaningful, that they can relate to and that they will 
  Sometimes the small business community can get very volatile and 
vocal about the fact that nobody here hears them or really cares about 
their problems. And there is some merit to that. Very few of the 
recommendations they have made at these various White House conferences 
on small business have ever resulted in legislation here. In 1980, when 
we passed the Regulatory Flexibility Act, we patted ourselves on the 
back and gave ourselves the good government award and went home and 
told the small business community what we had done for them. Not much 
time elapsed before they said, ``You didn't do anything for us.''
  They were absolutely right about that. The Regulatory Flexibility Act 
simply has not worked. If it had, we would not be here this morning. So 
really the initiative taken by Senator Bond is to correct that, and to 
fulfill a promise to the small business community--oh, yes, if you want 
to put the political aspect to it--to enable the Members of the U.S. 
Senate to go home and appear before small business groups and tell them 
how much you love them, but this time you can actually justify it by 
pointing to this legislation, if it becomes law, which I feel sure it 
  Why did the Regulatory Flexibility Act not work? Because it had a 
provision in it that said the agencies who write the rules that govern 
the people subject to their jurisdiction, it said that those agencies, 
first of all, had to make a determination that the rules they were 
writing were or were not unduly burdensome on the small business 
community. If they were, of course, then they had to do a regulatory 
analysis of how it affected small business as opposed to others. They 
have to do that to make a determination anyway. If they found that this 
was burdensome on the small business community, then they had to go 
through a lot of hoops.
  Agencies do not like to jump through hoops. So what did they do? 

[[Page S2155]]

without exception they would simply say these regulations are not 
unduly burdensome on the small business community; therefore, they did 
not have to do anything more to accommodate the burden of that 
regulation on small business.
  What was really the biggest omission of all in the Reg Flex Act of 
1980 was that once the agency said, no, this does not hurt small 
business, small business could not do anything but stand there and take 
it because there was no judicial review. Under this bill, if they make 
a decision that a regulation is not burdensome, unduly harsh on small 
business, if they make that decision, they are going to have to defend 
it in court because the small business community has a right of 
judicial review on that determination.

  So they are going to be much more circumspect about the regulation 
and certainly going to be much more circumspect about finding that the 
rules are not harsh on small business.
  There are people who do not much like the judicial review part of 
this and say, you are going to clog the courts up with small business 
people contesting every regulation that has ever been written. That is 
powerful nonsense. Small business people do not like to spend money in 
court more than anybody else does.
  But let me tell you, if I were going to summarize the vitality and 
the effectiveness of this bill in one sentence, or the reasons for it, 
it is because the small business people of this country spend 60 to 80 
percent more dollars per employee to comply with Government regulations 
than big business does. How would you like to be a small business 
making widgets, and let us assume General Motors, one of the biggest 
corporations in America, also makes widgets, and you have to compete 
with General Motors, and then they come out with all these burdensome 
regulations, which are a piece of cake to General Motors, but, you 
know, you are going to have to spend 60 to 80 percent more than they 
are per employee to comply with those rules?
  That is what this is all about, Mr. President. It is going to sail 
through. If there is a vote against this bill I am going to be 
surprised because everybody here knows those things I just described to 
you make sense.
  The equal access to justice, which gives the small business community 
the right to go two court and to challenge some of the findings of the 
agencies, is long overdue. The equal access to justice, which says if 
the Government sues you for $1 million, and they wind up getting an 
award of $10,000 or even $50,000, the Justice Department, the small 
business person can sue for his attorney fees. This is a point that the 
Justice Department helped us with. And we accepted it. I applaud the 
Justice Department for it because the language says that if the award 
is disproportionately smaller than that requested, you are entitled to 
attorney fees.
  Mr. BUMPERS. Mr. President, I am pleased to cosponsor S. 942 and the 
pending managers' amendment with the distinguished chairman of our 
committee, Senator Bond. This bill is one of the most significant 
accomplishments of the 104th Congress, and it is one of the best bills 
for the small business community in the last 15 years. It is important 
because it resolves major concerns to the small business community that 
have been unresolved for many years. And, it follows by less than 1 
year the conclusion and recommendations of the 1995 White House 
Conference on Small Business.
  Senators who support this bill can say to their small business 
constituents, ``We not only hear you; we agree with much of what you 
are saying, and we are responding.'' With this bill, Senators can do 
more than give platitudes for small business. We can do something that 
will effect the lives of every business owner who deals with a Federal 
  S. 942 makes important, positive changes in two statutes which grew 
out of the 1980 White House Conference on Small Business: The 
Regulatory Flexibility Act and the Equal Access to Justice Act. This is 
a bill--all too rare in this Congress--which I can assure my colleagues 
that we would be considering if my party were in the majority. Some of 
today's bill's issues--particularly the judicial enforceability of the 
Regulatory Flexibility Act, or Reg Flex--have been the subject of 
consternation among small business owners almost since the act was 
passed in 1980. The recommendations of the White House Conference, as 
well as the work done by the National Performance Review under Vice 
President Gore, are the foundations of today's bill.
  I want to emphasize that the spirit of S. 942 is one of reforming the 
regulatory environment--a cause which President Clinton's 
administration has championed since its inception both in the National 
Performance Review and in Executive orders which the President has 
signed. We are not only endorsing the Clinton administration's new 
regulatory philosophy, we are writing some of its program into law so 
that this new attitude does not change under some future President. 
Section 202 of the bill is specifically based on an Executive order, 
which President Clinton signed, providing for waiver or reduction of 
penalties and fines for small businesses in certain circumstances. His 
Executive order is exactly that approach to take if we are to change 
the climate of animosity between Government and small business which 
has existed for years.
  There are several specific provisions of this bill which deserve 
mention. First, however, I want to compliment the chairman for the way 
he has handled this bill in our committee and since it was reported. 
Although the administration did not testify on the bill before the 
Small Business Committee, in subsequent days the chairman, the staff 
and I have held literally dozens of consultations with various agency 
officials about the bill. More importantly, we have worked very hard to 
accommodate the views and suggestions of the Clinton administration. 
Without exception, the suggestions and requests both from the 
administration and from Senators on and off the committee have been 
constructive and helpful. The staffs of the Finance Committee and the 
Governmental Affairs Committee have been especially helpful in crafting 
this far-reaching bill.
  The Managers' amendment incorporates dozens of changes, some quite 
significant, in either language or policy from the bill reported by the 
committee. However, it does not retreat in any way from the main 
purpose of the bill. In fact, the administration's views have helped us 
to make the bill stronger and more effective for small business. I want 
to dispel any notion that the so-called bureaucrats have opposed this 
bill for fear that it would create more work for their agencies. The 
General Counsels' offices at Treasury, Justice, Labor, and other 
departments have offered advice which has improved upon what our 
committee originally approved 2 weeks ago.
  Allowing judicial enforcement of the rights created under the 
Regulatory Flexibility Act of 1980--which S. 942 for the first time 
does--removes a bone that has been stuck in the throat of small 
business owners for over 15 years. The original act did not permit 
anyone to go to Federal court to enforce the promise that agencies 
would: First, consider whether a proposed rule significantly affected a 
substantial number of small entities; and second, consider whether 
steps should be taken to account for the special problems of small 
entities. The only enforcement of the act was the moral authority of 
the law and SBA's Chief Counsel for Advocacy who is charged with 
monitoring agencies' implementation of Reg Flex.
  Small firms, according to the GAO, pay between 60 and 80 percent 
more, per employee, for the cost of complying with Government 
regulations than do the big businesses who are often their competitors. 
Small business owners do not have armies of accountants, clerks, and 
lawyers to help them comply with the Government's endless demand for 
information and enforcement of rules.
  For several years, the SBA Chief Counsel for Advocacy has reported to 
the Senate Small Business Committee on the performance of agencies in 
following the mandate of the Reg Flex Act. Some agencies have been 
conscientious, others sadly have not. That report, to date, has been 
almost the only means of enforcing agency compliance with the act. 
There is at least a perception that some agencies of the Government 
have routinely used the act's escape clause by saying that a 
significant number of small entities would not be substantially 
affected. This has occasionally been done when

[[Page S2156]]

the facts were obviously to the contrary. Yet there was no legal 
recourse for businesses affected.
  Today, all that changes. Those who should be protected by the Reg 
Flex Act will be. Small business owners, small town governments, and 
small nonprofit associations will be empowered to go into Federal court 
and obtain justice if a Federal agency has not followed the law. This 
law puts the Reg Flex Act on the same footing with other parts of the 
Administrative Procedure Act--which is to say that individuals are 
protected against actions which are arbitrary, capricious, an abuse of 
discretion, or otherwise not in accord with the law.
  Judicial review of reg flex was one of the top recommendations of the 
1995 White House Conference on Small Business, as was overall 
regulatory reform. Less than a year after the end of that conference, 
Congress is acting on those recommendations--a large part of them--by 
enacting these major changes in Federal regulatory law and policy. 
Important as judicial enforcement is, however, it is not the only big 
change made in this bill.
  Perhaps the headline for this bill should be: IRS made subject to reg 
flex law. For the first time, the scope of the Reg Flex Act is being 
extended to cover so-called interpretative rulemakings. IRS and a few 
other agencies issue what are termed interpretative rules which, they 
say, merely explain the requirements of the statute. Nonetheless, these 
rules have great weight in the courts. They must be observed if the 
business owner wants to avoid a confrontation with the Government. 
Until the present moment, interpretative rules have not been subject to 
the requirements of the Reg Flex Act. Today, that also changes. IRS 
will be required to conduct an analysis under the act if a new rule 
substantially effects a significant number of small entities. And that 
finding will itself be subject to judicial review under section 5 of 
the Administrative Procedures Act.
  Let me hasten to add that we do not believe allowing judicial review 
will result in a flurry of spurious lawsuits against the Government. 
Instead, we believe that agency rule writers will follow the new reg 
flex law and perform analyses which will avoid the necessity of anyone 
going to court. IRS particularly has a problem with tax protesters 
filing frivolous suits against the Government. The courts should deal 
summarily with such people, including imposing costs and fines in 
appropriate cases for those who sue to obstruct the Government.
  The Equal Access to Justice Act [EAJA] which this bill amends 
deserves special mention. This important law allows individuals of 
small firms who have been sued by Government to recover their attorneys 
fees if they prevailed in the suit. This law has often failed of its 
purpose because it contained a two-part test which court decisions made 
nearly impossible to achieve. Under existing law, the small company 
must first show that he or she is a prevailing party. So, if the 
Government alleged 10 or 100 violations, and then only proved one minor 
one, the company was not a prevailing party.
  Second, even if someone prevailed on each and every count, he has to 
show that the Government's action was not substantially justified. 
Courts have interpreted this phrase to mean that the Government's suit 
must have been without foundation in law or fact--virtually a frivolous 
suit under rule 11 of the civil rules. This is an almost impossible 
task, since the Government invariably has some basis for acting, even 
if it is not enough to persuade a judge or jury.
  Our bill changes both these standards and makes it possible for the 
business owner to recover his fees by showing that the Government's 
final judgment was disproportionately less than an express demand by 
the Government during the course of the suit. So, if the Government 
sought $1 million to settle the case, and the judge or jury awarded, 
for example, $1,000 or $5,000, the defendant should be able to recover 
his fees. The phrase ``disproportionately less'' than an express demand 
by the Government was suggested by the Justice Department, and it was a 
very helpful suggestion. Obviously, this will not prohibit any agency 
from telling anyone the maximum legal penalty for a violation.
  Additionally--and this should be emphasized by all who read and apply 
this section--the court or agency can deny attorneys fees if it finds 
that ``special circumstances make such an award unjust.'' This phrase 
also came from the Justice Department, and it is contained in the 
current law. Clearly, we do not want to pay attorneys fees for someone 
who escaped conviction on a mere technicality but who was, nonetheless, 
probably guilty.
  It is certainly not our intention to pay the lawyers for people who 
are essentially bad actors but who escaped punishment by the grace of 
the Almighty. Many circumstances, such as an exclusionary rule 
challenge, can be imagined where it would be wrong for the taxpayers to 
reimburse someone's attorneys fees, and the courts are empowered to use 
some reasonable discretion.
  Finally, the courts are not obliged to allow the maximum rate of $125 
per hour in every case. This is an increase from the $75 per hour 
maximum in current law, a figure which has not been changed in many 
years. The courts should look to existing law under section 1988 of the 
Civil Rights Act for guidance. Fees should be set in relation to 
prevailing fees actually charged in the community. Moreover, courts 
should require attorneys to substantiate their fees through time-sheets 
or other appropriate records.
  The Justice Department is still not entirely satisfied with this 
language, as the statement of administration policy indicates. But the 
administration has my assurance, and that of Senator Bond, that we will 
continue to work with them to improve upon this language in conference 
with the House.
  The House previously passed a bill allowing for some judicial review 
of reg flex decisions, but our bill is broader. Moreover, the House 
bill does not amend the EAJA, does not contain an ombudsman provision, 
and does not allow for Regulatory Advisory Boards. It is a rather 
narrow bill, and I hope that we will be able to persuade the House to 
substantially broaden it or, better yet, to accept our bill. To this 
point, the House has not been able to bring major regulatory reform to 
a conclusion, just as the Senate failed to complete debate on S. 343 
earlier in this session. This bill, however, can and should go forward 
regardless of the outcome of those debates. This bill can only help our 
economy's small business sector, and I hope our colleagues in the other 
body will move expeditiously to send this bill to the President for his 
  I urge my colleagues to support this important bill. The small 
business community will undoubtedly appreciate those who have helped us 
  Again, I want to thank Senator Bond and his staff, particularly Keith 
Cole and Louis Taylor, for their cooperation and support during the 
development and consideration of this bill. This bill shows that 
reasonable people of good will can still accomplish a great deal in 
this Congress, and I hope it will be a precedent for other bills.
  Mr. President, on the equal access to justice, I point out it was the 
Justice Department that came up with the phrase which I think is almost 
a stroke of genius when they said, ``Why don't you use the term 
`disproportionate award'?'' That is, if the Government sues for $1 
million and they get a disproportionately smaller amount than that, 
then the small businessperson is entitled to his attorney fees. There 
are some exceptions to that, of course--if he has been guilty of a 
criminal act or willful wrongdoing or something like that--but normally 
he not only will be entitled to attorney fees, but the equal-access-to-
justice provision, which is essentially incorporated here with Senator 
Feingold, essentially the amendment he offered on the floor--I think it 
passed 98-0--that increased the amount the small businessperson could 
recover from $75 an hour to $225 an hour. We have put that in this 
  Now, Mr. President, there are some cases in which offenses can be 
waived, penalties can be waived, under a certain set of conditions. If 
you really want, sometimes, to enforce a regulation, no exception, 
cross every ``t'' and dot every ``i'', you can still make things a 
little tough for some small business people.
  The National Performance Review Group headed up by Vice President 
Gore had recommended that there be a provision in here that some people

[[Page S2157]]

could be excused from burdensome penalties if it was rather 
unintentional and had been corrected. That ought to be a source of some 
strength. I, frankly, thought that labor might oppose that, but they 
did not. It is not designed to ratify or condone bad conduct on the 
part of some small businessman but just to keep it from being too 
  Now, Mr. President, the final thing that I want to mention, there is 
a provision in here--and it may not be perfect; some people have voiced 
considerable reservation about it--but the provision is that the Small 
Business Administration will be home to an omsbudsman, and that 
ombudsman is there to take complaints from the small business 
  You have heard that classic joke for 100 years, ``I'm here from the 
IRS and I am here to help you,'' and people are terrified when the IRS 
walks in. Usually if that agent happens to be abusive--and I use the 
IRS because they are everybody's favorite whipping boy--if that agent 
happens to be abusive on top of the fact you know that he is there to 
get in your pocketbook, it makes it doubly troublesome. This is also 
true of a lot of people who come into your plant to enforce the OSHA 
laws or all the other regulations that they write. If a small business 
man or woman feels that he or she has been put upon in an unfair, 
burdensome, and abusive way, they will have somebody to report that to.

  It just occurred to me, Mr. President, one of the biggest cases I 
ever had involved a defense contract. My client was a manufacturer of 
tent pins. Tent pins came in different sizes, anywhere from 18 inches 
to 24 inches, and they were designed, of course, to drive in the ground 
to hold a tent up for the army, for the troops. Now, you have to 
understand the tent pins had to be absolutely perfect--sanded. You 
would not believe the regulations that my client had to comply with to 
build a tent pin which, when used, was going to be hit by a 
  He had one of those crazy, as luck would have it, a crazy inspector. 
The guy used to go through his trash at night after he would leave to 
see if he could find something. The reason I am telling you that--it is 
humorous now because that happened 35 years ago; it was not funny 
then--it bankrupted my client. It took 7 years--I had never had a case 
in the U.S. Court of Claims before. They sent a referee down to Fort 
Smith, AR, and we tried that thing. It took a week. Happily, the 
referee of the Court of Claims was a very attentive judge. He was an 
elderly man. He understood the problem. He listened very carefully. He 
awarded my client, I believe, $100,000, one of the biggest judgments I 
ever got. You would think I could remember to the penny what it was.
  It turned out, as a personal note, that Betty and I were getting 
ready to take our daughter to Boston to Children's Hospital for what we 
knew was going to be a tremendous expense and we did not know how to 
pay for it, and I collected on that judgment 3 days before we left. It 
saved my life.
  I have had firsthand experience with the Government inspector who 
bankrupted my client. We did get that amount of money. But that was 
after 7 years. We did not get a dime of interest. We did not get a dime 
of penalty. We did not get a dime in attorney fees. All we got were 
actual damages.
  Now, as a country lawyer in a town of 2,000 people, I could not 
believe the Government treated people like that. They admitted they 
were wrong, but no attorney fees, no interest, no penalty, after 7 
years. Well, at least these people are going to be entitled to attorney 
  Mr. President, I ask unanimous consent to add Senator Carol Moseley-
Braun as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUMPERS. I yield the floor.
  Mr. BOND. Mr. President, I yield myself 2 minutes. I would like to 
add--to make sure we have a list of cosponsors, I will read for the 
record the cosponsors:
  In addition to Senator Moseley-Braun, Senator Bumpers and myself, we 
have Senator Burns, Senator Coats, Senator Coverdell, Senator DeWine, 
Senator Dole, Senator Domenici, Senator Faircloth, Senator Frist, 
Senator Grams of Minnesota, Senator Grassley, Senator Hutchison, 
Senator Kempthorne, Senator Kerry of Massachusetts, Senator Lieberman, 
Senator Lott, Senator Lugar, Senator Pressler, Senator Robb, Senator 
Stevens, and Senator Warner.
  I also note that a number of these people, including Senator Robb, 
are working very actively with us, with Senator Nickles, with Senator 
Johnston, Senator Dole and others on a broader regulatory reform 
package. I think they want it understood, as I certainly do, that this 
does not supplant the need for other regulatory reform efforts, and it 
in no way is a substitute for them. We think this is a very important 
rifle shot to deal with the problems of small business, and we believe 
it does not deal with the broader regulatory issues.
  Now, Mr. President, I ask unanimous consent to have printed in the 
Record a statement of the legislative history of this measure which is 
prepared by staff for Senator Bumpers and me on behalf of the 
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                Committee Legislative History for S. 942

                     i. summary of the legislation

       The final version of the bill, embodied in a managers 
     amendment, makes a series of technical and other amendments 
     to S. 942, the Small Business Regulatory Enforcement Fairness 
     Act of 1996. The amendment resolves many of the questions 
     raised by the Administration with the bill as reported by the 
     Small Business Committee. The amendment also makes changes 
     for better implementation of certain recommendations of the 
     1995 White House Conference on Small Business regarding the 
     development and enforcement of Federal regulations, including 
     judicial review of agency actions under the Regulatory 
     Flexibility Act (RFA). The scope of the RFA requires a 
     regulatory flexibility analysis of all rules that have a 
     ``significant economic impact on a substantial number'' of 
     small entities. Under the RFA, this term ``small entities'' 
     includes small businesses, small non-profit organizations, 
     and small governmental units.
       As amended, S. 942 provides a framework to make federal 
     regulators more accountable for their enforcement actions by 
     providing small entities with an opportunity for redress of 
     arbitrary enforcement actions. The goal of the Act is to 
     foster a more cooperative, less threatening regulatory 
     environment between agencies and small businesses and other 
     entities. In addition, S. 942 provides a vehicle for 
     effective and early participation by small businesses in the 
     Federal regulatory process by incorporating amended 
     provisions of S. 917, the Small Business Advocacy Act.

                    ii. section-by-section analysis

                               Section 1

       This section entitles the Act the ``Small Business 
     Regulatory Enforcement Fairness Act of 1996.''

                               Section 2

       The bill makes findings as to the need for a strong small 
     business sector, the disproportionate impact of regulations 
     on small businesses, the recommendations of the 1995 White 
     House Conference on Small Business, and the need for judicial 
     review of the Regulatory Flexibility Act.

                               Section 3

       This section outlines the purposes for the bill. The bill 
     addresses some key federal regulatory recommendations of the 
     1995 White House Conference on Small Business. The White 
     House Conference produced a consensus that small businesses 
     should be included earlier and more effectively in the 
     regulatory process. The bill provides for a more cooperative 
     and less threatening regulatory environment to help small 
     businesses in their compliance efforts. The bill also 
     provides small businesses with legal redress from arbitrary 
     enforcement actions by making federal regulators accountable 
     for their actions.

                               Section 4

       This section provides that the effective date of the Act is 
     90 days after enactment. Proposed rules published after the 
     effective date must be accompanied by an initial regulatory 
     flexibility analysis or a certification under section 605 of 
     the RFA. Final rules published after the effective date must 
     be accompanied by a final regulatory flexibility analysis or 
     a certification under section 605 of the RFA, regardless of 
     when the rule was first proposed. However, IRS interpretive 
     rules proposed prior to enactment will not be subject to the 
     amendments made in chapter four of the Act expanding the 
     scope of the RFA to include IRS interpretive rules. Thus, the 
     IRS could finalize previously proposed interpretive rules 
     according to the terms of currently applicable law, 
     regardless of when the final interpretive rule is published.

                               title one

                              Section 101

       This section defines certain terms as used in the act. The 
     term ``small entity'' is currently defined in the RFA to 
     include small business concerns, as defined by the Small 
     Business Act, small nonprofit organizations

[[Page S2158]]

     and small governmental jurisdictions. The process of 
     determining whether a given business qualifies as a small 
     entity is straightforward, using thresholds established by 
     the SBA for Standard Industrial Classification codes. The RFA 
     also defines small organization and small governmental 
     jurisdiction. Any definition established by an agency for 
     purposes of implementing the RFA would also apply to this 

                              Section 102

       The bill requires agencies to publish ``small entity 
     compliance guides'' to assist small entities in complying 
     with regulations which are the subject of a required Reg Flex 
     analysis. The bill does not allow judicial review of the 
     guide itself. However, the agency's claim that the guide 
     provides ``plain English'' assistance would be a matter of 
     public record. In addition, the small business compliance 
     guide would be available as evidence of the reasonableness of 
     any proposed fine on the small entity.
       Agencies should endeavor to make these ``plain English'' 
     guides available to small entities through a coordinated 
     distribution system for regulatory compliance information 
     utilizing means such as the SBA's U.S. Business Advisor, the 
     Small Business Ombudsman at the Environmental Protection 
     Agency, state-run compliance assistance programs established 
     under section 507 of the Clean Air Act, Manufacturing 
     Technology Centers or Small Business Development Centers 
     established under the Small Business Act.

                              Section 103

       The bill directs agencies that regulate small businesses to 
     answer inquiries of small entities seeking information on and 
     advice about regulatory compliance. Some agencies already 
     have established successful programs to provide compliance 
     assistance and the amendment intends to encourage these 
     efforts. For example, the IRS, SEC and the Customs Service 
     have an established practice of issuing private letter 
     rulings applying the law to a particular set of facts. This 
     legislation does not require other agencies to establish 
     programs with the same level of formality as found in the 
     current practice of issuing private letter rulings. The use 
     of toll free telephone numbers and other informal means of 
     responding to small entities is encouraged. This legislation 
     does not mandate changes in current programs at the IRS, SEC 
     and Customs Service, but these agencies should consider 
     establishing less formal means of providing small entities 
     with informal guidance in accordance with this section.
       The bill gives agencies discretion to establish procedures 
     and conditions under which they would provide advice to small 
     entities. There is no requirement that the agency's advice to 
     small businesses be binding as to the legal effects of the 
     actions of other entities. Any guidance provided by the 
     agency applying statutory or regulatory provisions to 
     facts supplied by the small entity would be available as 
     relevant evidence of the reasonableness of any 
     subsequently proposed fine on the small entity.

                              Section 104

       The bill creates permissive authority for Small Business 
     Development Centers (SBDC) to offer regulatory compliance 
     assistance and confidential on-site assessments for small 
     businesses. SBDCs would not become the single-point source of 
     regulatory information, but would supplement agency efforts 
     to make this information widely available. Neither this 
     section nor the related language in section 105 are intended 
     to grant any exclusive franchise on regulatory compliance 
     assistance. Rather, these sections are designed to add to the 
     currently available resources to small businesses for 
     assistance with regulatory compliance.

                              Section 105

       the bill authorizes Manufacturing Technology Centers, 
     commonly known as ``Hollings Centers,'' and other similar 
     extension centers administered by the National Institute of 
     Standards and Technology, to engage in the types of 
     compliance assistance activities described in Section 104 
     with respect to SBDCs.
       This legislation places strong emphasis on compliance 
     assistance programs for small businesses. These programs can 
     save businesses money, improve their environmental 
     performance and increase their competitiveness. They can help 
     small businesses learn about cost-saving pollution prevention 
     programs and new environmental technologies. Most 
     importantly, they can help small business owners avoid 
     potentially costly regulatory citations and adjudications. 
     The bill calls for both the Small Business Development 
     Centers and the Department of Commerce's Manufacturing 
     Technology Centers to provide a range of technical and 
     compliance assistance to small businesses. Some of the 
     manufacturing technology centers already are providing 
     environmental compliance assistance in addition to general 
     technology assistance.
       The bill also provides that it in no way limits the 
     authority and operation of the small business stationary 
     source technical and environmental compliance assistance 
     programs established under section 507 of the Clean Air Act 
     Amendments of 1990. There is strong support for that program. 
     There are also other excellent small business technical 
     assistance programs in various forms in different states. 
     This bill is not intended to affect the operation and 
     authority of those programs. comments from small business 
     representatives in a variety of fora support the need for 
     expansion of technical assistance programs.

                              Section 106

       This section directs agencies to cooperate with states to 
     create guides that fully integrate federal and state 
     requirements on small businesses. Separate guides may be 
     created for each state, or states may modify or supplement a 
     guide to federal requirements. Since different types of small 
     businesses are affected by different agency regulations, or 
     are affected in different ways, agencies should consider 
     preparing separate guides for the various sectors of the 
     small business community subject to their jurisdiction. 
     priority in producing these guides should be given to areas 
     of law where rules are complex and where businesses tend to 
     be small. Agencies may contract with outside entities to 
     produce these guides and, to the extent practicable, agencies 
     should utilize entities with the greatest experience in 
     developing similar guides.

                               TITLE TWO

                              Section 201

       The bill creates a Small Business and Agriculture 
     Regulatory Enforcement Ombudsman at SBA to give small 
     businesses a confidential means to comment on and rate the 
     performance of agency enforcement personnel. This might 
     include providing toll-free telephone numbers, computer 
     access points, or mail-in forms allowing businesses to rate 
     the performance and responsiveness of inspectors, auditors 
     and other enforcement personnel. As used in this section of 
     the bill, the term ``audit'' is not intended to refer to 
     audits conducted by Inspectors General. This Ombudsman would 
     not replace or diminish any similar ombudsman programs in 
     other agencies.
       The Ombudsman will compile the comments of small businesses 
     and provide an annual evaluation similar to a ``customer 
     satisfaction'' rating for different agencies, regions, or 
     offices. The goal of this rating system is to see whether 
     agencies and their personnel are in fact treating small 
     businesses more like customers than potential criminals. 
     Agencies will be provided an opportunity to comment on the 
     Ombudsman's draft report, as is currently the practice with 
     reports by the General Accounting Office. The final report 
     may include a section in which an agency can address any 
     concerns that the Ombudsman does not choose to address.
       The bill also creates Regional Small Business Regulatory 
     Fairness Boards at SBA to coordinate with the Ombudsman and 
     to provide small businesses a greater opportunity to track 
     and comment on agency enforcement policies and practices. 
     These boards provide an opportunity for representatives of 
     small businesses to come together on a regional basis to 
     assess the enforcement activities of the various federal 
     regulatory agencies. The boards may meet to collect 
     information about these activities, and report and make 
     recommendations to the Ombudsman about the impact of agency 
     enforcement policies or practices on small businesses. The 
     boards will consist of owners or operators of small entities 
     who are appointed by the Administrator of the Small Business 
     Administration. Prior to appointing any board members, the 
     Administrator must consult with the leadership of the 
     Congressional small Business Committees. There is nothing in 
     the bill that would exempt the boards from the Federal 
     Advisory Committee Act, which would apply according to its 

                              Section 202

       The bill directs all federal agencies that regulate small 
     businesses to develop policies or programs providing for 
     waivers or reductions of civil penalties for violations by 
     small businesses in certain circumstances. This section 
     builds on the current Executive Order on small business 
     enforcement practices and is intended to allow agencies 
     flexibility to tailor their specific programs to their 
     missions and charters. Agencies should also consider the 
     ability of a small entity to pay in determining penalty 
     assessments under appropriate circumstances. Each agency 
     would have discretion to condition and limit the policy or 
     program on appropriate conditions. For purposes of 
     illustration, these could include requiring the small 
     business to act in good faith, requiring that violations be 
     discovered through participation in agency supported 
     compliance assistance programs, or requiring that violations 
     be corrected within a reasonable time.
       An agency's policy or program could also provide for 
     suitable exclusions. Again, for purposes of illustration, 
     these could include circumstances where the small entity has 
     been subject to multiple enforcement actions, the violation 
     involves criminal conduct, or poses a grave threat to worker 
     safety, public health, safety or the environment.
       In establishing their programs, agencies may distinguish 
     among types of small entities and among classes of civil 
     penalties. Some agencies have already established formal or 
     informal policies or programs that would meet the 
     requirements of this section. For example, the Environmental 
     Protection Agency has adopted a small business enforcement 
     policy that satisfies this section. While this legislation 
     sets out a general requirement to establish penalty waiver 
     and reduction programs, some agencies may be subject to other 
     statutory requirements or limitations applicable to the 
     agency or to a particular program. For example, this section 

[[Page S2159]]

     not intended to override, amend or affect provisions of the 
     Occupational Health and Safety Act or the Mine Safety and 
     Health Act that may impose specific limitations on the 
     operation of penalty reduction or waiver programs.

                              title three

                           Sections 301 & 302

       The bill would amend the Equal Access to Justice Act to 
     assist small businesses in recovering their attorneys fees 
     and expenses in certain instances when agency demands for 
     fines or civil penalties in enforcement actions are not 
     sustained. While this is a significant change from current 
     law, it is not the intention of the Committee that attorneys 
     fees be awarded as a matter of course. Rather, the 
     Committee's intention is that awards be made frequently 
     enough to change the incentives of enforcement personnel and 
     to assist in changing the culture among government regulators 
     to increase the reasonableness and fairness of their 
     enforcement practices. Past agency practice too often has 
     been to treat small businesses like suspects. A goal of this 
     bill is to encourage Government regulatory agencies to treat 
     small businesses as partners sharing in a common goal of 
     informed regulatory compliance. Government enforcement 
     attorneys often take the position that they must zealously 
     advocate for their client, in this case a regulatory agency, 
     to the maximum extent permitted by law, as if they were 
     representing an individual or other private party. But in the 
     new regulatory climate for small businesses under this 
     legislation, government attorneys with the advantages and 
     resources of the federal government behind them in dealing 
     with small entities must adjust their actions accordingly.
       The Equal Access to Justice Act (EAJA) provides a means for 
     prevailing small parties to recover their attorneys fees in a 
     wide variety of civil and administrative actions between 
     small parties and the government. This bill amends the EAJA 
     to create a new avenue for small entities to recover their 
     attorneys fees in situations where the government has 
     instituted an administrative or civil action against the 
     small entity to enforce a statutory or regulatory 
     requirement. In these situations, the test for recovering 
     attorneys fees in whether the final outcome imposed or 
     ordered in the case (whether a fine, injunctive relief or 
     damages) is disproportionately less burdensome on the small 
     entity than the government's actual demand. This test does 
     not provide attorneys fees if there has merely been a 
     reduction in the burden on a small entity between the demand 
     and the final outcome. The test is whether the demand is out 
     of proportion with the actual value of the violation.
       The comparison is always between an ``express demand'' by 
     the government and the final outcome of the case. An express 
     demand is just that--any demand for payment or performed by 
     the government, including a fine, penalty notice, demand 
     letter or otherwise. However, the term ``express demand'' 
     should not be read to extend to a mere recitation of facts 
     and law in a compliant.
       This test should not be a simple mathematical comparison. 
     The Committee intends for it to be applied in such a way that 
     it identifies and corrects situations were the agency's 
     demand is so far in excess of the true value of the case, as 
     demonstrated by the final outcome, that it appears the 
     agency's assessment or enforcement action did not represent a 
     reasonable effort to match the penalty to the facts and 
     circumstances of the case. In addition, the bill excludes 
     attorneys fee awards in connection with willful violations, 
     bad faith actions and in special circumstances that would 
     made such an award unjust.
       The bill also increases the maximum hourly rate for 
     attorneys fees under the EAJA from $75 to $125. Agencies 
     could avoid the possibility of paying attorneys fees by 
     settling with the small entity prior to final judgment. The 
     Committee anticipates that if a settlement is reached, all 
     further claims of either party, including claims for 
     attorneys fees, could be included as part of the settlement. 
     The government may obtain a release specifically including 
     attorneys fees under EAJA.

                               title four

                              Section 401

       The bill expands the coverage of the FRA to including IRS 
     interpretive rules that provide for a ``collection of 
     information'' from small entities. The intention of the 
     Committees to permit enforcement of the RFA for those IRS 
     rulemakings that will be codified in the Code of Federal 
     Regulations. Although the Committee believes IRS should take 
     an expansive approach in interpreting which of its actions 
     could have significant economic impact on small businesses, 
     less formal IRS publications such as revenue rulings, revenue 
     procedures, announcements, publications or private letter 
     rulings are not covered by the bill. The term ``collection of 
     information'' as used in the Paperwork Reduction Act (Title 
     44 U.S.C., Section 3502(4)) is defined to include the 
     obtaining or soliciting of facts or opinions by an agency 
     through a variety of means including the use of written 
     report forms, schedules, or reporting or record keeping 
     requirements, which the Committee interprets to include all 
     tax recordkeeping, filing and similar compliance activities.
       If an agency is required to publish an initial regulatory 
     flexibility analysis, the agency also must publish a final 
     regulatory flexibility analysis. In the final regulatory 
     flexibility analysis, agencies will be required to describe 
     the impacts of the rule on small entities and to specify the 
     actions taken by the agency to modify the proposed rule to 
     minimize the regulatory impact or small entities. Nothing in 
     the bill directs the agency to choose a regulatory 
     alternative that is not authorized by the statute granting 
     regulatory authority. The goal of the final regulatory 
     flexibility analysis is to demonstrate how the agency has 
     minimized the impact of small entities consistent with the 
     underling statute and other applicable legal requirements.

                              Section 402

       The bill removes the current prohibition on judicial review 
     of agency compliance with the RFA and allows adversely 
     affected small entities to seek judicial review of agency 
     compliance with the Act within one year after final agency 
     action, except where a provision of law requires a shorter 
     period for challenging a final agency actions. The 
     prohibition on judicial enforcement of the RFA is contrary to 
     the general principle of administrative law, and it has long 
     been criticized by small business owners. Many small business 
     owners believe that agencies have given lip service at best 
     to RFA, and small entities have been denied legal recourse to 
     enforce the Act's requirements.
       The amendment is not intended to encourage or allow 
     spurious lawsuits which might hinder important governmental 
     functions. The one-year limitation on seeking judicial review 
     ensures that this legislation will not permit indefinite, 
     retroactive application of judicial review. The bill does not 
     subject all regulations issued since the enactment of the RFA 
     to judicial review. After the effective date, if the court 
     finds that a final agency action was arbitrary, capricious, 
     an abuse of discretion or otherwise not in accordance with 
     the law, the court may set aside the rule or order the agency 
     to take other corrective action. The court may also decide 
     that the failure to comply with the RFA warrants remanding 
     the rule to the agency or delaying the application of the 
     rule to small entities pending completion of the court 
     ordered corrective action. However, in some circumstances, 
     the court may find that there is good cause to allow the rule 
     to be enforced and to remain in effect pending the corrective 

                              Section 403

       The bill requires agencies to publish their factual, policy 
     and legal reasons when making a certification under section 
     605 of the RFA that the regulations will not impose a 
     significant economic impact on a substantial number of small 

                              Section 404

       The bill amends the existing requirements of RFA section 
     609 for small business participation in the rulemaking 
     process by incorporating a modified version of S. 917, the 
     Small Business Advocacy Act, introduced by Senator Domenici, 
     to provide early input from small businesses into the 
     regulatory process. For proposed and final rules with a 
     significant economic impact on a substantial number of small 
     entities, EPA and OSHA would have to collect advice and 
     recommendations from small businesses to better inform the 
     agency's regulatory flexibility analysis on the potential 
     impacts of the rule.
       The agency promulgating the rule would consult with the 
     SBA's Chief Counsel for Advocacy to identify individuals who 
     are representative of affected small businesses. The Agency 
     would designate a senior level official to be responsible for 
     implementing this section and chairing an interagency review 
     panel for the rule. The findings of the panel and the 
     comments of small business representatives would be made 
     public as part of the rulemaking record. The final bill 
     includes modifications requested by Senator Domenici after 
     consultations with the Administration. These modifications 
     clarify the timing of the review panel and create a limited 
     process allowing the Chief Counsel to waive certain 
     requirements of the section after consultation with the 
     Office of Information and Regulatory Affairs and small 

  Mr. BOND. How much time does the Senator from Montana require?
  Mr. BURNS. How much time does the Senator have?
  Mr. BOND. I ask the Chair that question.
  The PRESIDING OFFICER. The Senator from Missouri has 24 minutes, and 
the Senator from Arkansas has 29 minutes.
  Mr. BOND. I yield to the Senator from Montana 5 minutes.
  Mr. BURNS. I thank the Chair. It has been my pleasure to serve on the 
Small Business Committee ever since I came to the Senate, and under the 
chairmanship of both Senator Bond and Senator Bumpers. I know of the 
hours they put in on this and the leadership they display. They have 
been trying to do this for quite a while. Finally, we have a product on 
the floor that I think will work.
  Mr. President, I rise today in support of S. 942, the Small Business 
Regulatory Fairness Act. This is a bill that we have worked on in the 
Small Business Committee, with the help of many

[[Page S2160]]

White House Committee on Small Business delegates. It is a bill that 
will give much needed relief to small businesses all across the 
country. And the end result will benefit us all.
  Small businesses are responsible for the vast majority of new jobs 
created in the last year, in spite of everything the Government is 
doing to hinder that growth. In Montana, where 98 percent of our 
businesses are considered small business, not 1 day goes by that I do 
not hear ``Get the Government off our backs and we would be creating 
more jobs,'' or ``If you would just get out of the way, more folks 
would be starting new businesses and our economy would be improving.''
  Mr. President, from the awesome amount of paperwork that various 
Government agencies require to the fines that threaten small businesses 
if they do not comply with the thousands of regulations imposed on 
them, it is no wonder that some folks are discouraged from starting or 
growing their business.
  This bill will ease some of that burden. It makes it easier for small 
businesses to comply with regulations by letting them know what is 
expected from them--in clear, simple language. And if the rule is not 
clear or not spelled out specifically in a compliance guide, the small 
business cannot be penalized. It is just one way of making the 
Government agency more responsible--and of making compliance easier on 
our small businesses. Who can argue with that?
  It also directs the SBA to set up regional ombudsmen for small 
business and agriculture, giving folks a place to go to voice their 
complaints about unfair enforcement of regulations--without fear of 
retribution. This provides a check on the agency, forcing their 
inspectors to be accountable for their actions. Small businesses can 
critique the inspectors and Government lawyers, and we then get an idea 
of how responsive different agencies are to small business.
  There are a lot of ways we can help small business today. The White 
House Conference on Small Business produced 60 recommendations of what 
we can do to help. In nearly every category, dealing with regulations 
was mentioned. There is much more to be done to curtail unnecessary 
regulations and reduce the presence of Government in our lives--but 
this is just a first step.
  We will always have rules and regulations--that is just the way our 
Government works. And no doubt we need some of those. But let us make 
it easy to understand and easy to comply. Let us give those being 
regulated a fair chance. I would encourage my colleagues to support 
this important legislation on Tuesday by voting for its passage. I know 
Montana's small businesses are counting on this and I would imagine 
that small businesses all across the country, as well as their 
customers, would be eager to see this passed.
  Mr. President, we hear stories in our home States--we all have them--
when we go home and sit down with the people who are providing the 
biggest percentage of new jobs in this country, which is the small 
business community, the entrepreneurs just starting out, and they are 
expanding. We know how important this is. They are also saying that we 
have to get Government off of their backs. If we just get out of the 
way, more folks would go into business and they would start expanding 
the economy as much as they can, just on a new idea, making some things 
  Government rules and regulations are always going to exist in some 
areas of business and in other areas of our life, but now we will have 
a part of Government that is actually going to be an advocate for small 
business. This will put a person in the region to whom a small business 
can go and take the problem they are having with a regulatory agency--
someone to hear them out and who they could have a relationship with, 
so that they might solve their problems.
  Mr. President, we had a big problem in the State of Montana in the 
wood products industry, which is a big industry. We have some post and 
pole people who treated fencepost or treated lumber. They used some 
chemicals that, yes, are highly toxic. Rather than working with the 
people to get them in compliance, the EPA just went and found the 
violations and made the fines so big, and the cleanup so expensive, 
that they all went broke. I can cite four in the State of Montana 
alone. Here is the bad part about it. I forget the chemical they dip 
the posts into now, but there was one full 55-gallon drum and one half-
full of creosote. What they did is, after they took the soil, they 
hired a person from Portland with an incinerator to burn the soil, and 
a soil handler from Florida to bring it clear to Montana, and we have 
people in Montana that can do the same thing. That was all charged 
against the owner. Then they left this big hole in the ground. They did 
not finish burning their soil. They gave up on that. They actually 
opened up the 55-gallon drum and poured what was left in it back into 
the hole, contaminating the whole area.
  Now, this is our Government at work. And then they told the poor guy, 
``Fence that off, would you?'' He put up a 36-inch web around it 
without any barb on top of it.
  We can cite time after time after time examples of regulators or 
regulation enforcers that set up their own little fiefdom, and they are 
king for a day. And we hope this piece of legislation, which all of us 
had a hand in developing, will do something about that.
  I am really happy that our good friend from Oklahoma is pursuing the 
way we write our regulations, the way we write our administrative 
rules, after the piece of legislation has been introduced. I have been 
preaching on that for a long time. Those rules and regulations should 
come back to the committee of jurisdiction, if nothing else, to be 
reviewed so that they do reflect the intent of the law and the intent 
that we had.
  I congratulate my chairman and ranking member on this committee 
because I think it is a humongous step in the right direction.
  I yield the floor.
  Mr. BOND. Mr. President, I thank the distinguished Senator from 
Montana. I note that he has been a very active participant in hearings, 
and he also held a very useful and productive hearing in Montana. He 
has contributed greatly to his committee.
  Now I will yield 5 minutes to the Senator from Oklahoma, who has been 
very active in our issues and has come before our committee to testify 
on a number of small business issues. We are very happy to be able to 
accept an amendment that he and Senator Reid of Nevada have offered.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, first, I want to compliment my colleague, 
the chairman of the Small Business Committee, Senator Bond, for his 
leadership, as well as that of Senator Bumpers. It is great to see two 
people work together and push legislation that will be a real asset to 
small business. That is exactly what they have done. They have worked 
tirelessly in this committee. I served on that committee, and I tell my 
colleague, when I served on that committee, it was kind of frustrating 
because we talked a lot, but we did not do much.
  Frankly, the Senator from Missouri and the Senator from Arkansas are 
doing things, passing legislation to help small business, trying to 
make sure with the legislation they have introduced today that the 
impact of regulations on small business will be heard. If, for some 
reason, the regulatory agencies do not take small business impacts into 
account, their legislation will provide a means for directing the 
agencies to take those impacts into account in their regulations. So I 
compliment them for their efforts and leadership.

                           Amendment No. 3534

                (Purpose: To provide for a substitute.)

  Mr. BOND. Mr. President, in order to make the procedural activities 
work appropriately, if the Senator from Oklahoma will withhold, I send 
to the desk the managers' amendment on behalf of Senator Bumpers and 
myself and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the managers' amendment.
  The bill clerk read as follows:

       The Senator from Missouri [Mr. Bond], for himself and Mr. 
     Bumpers, proposes an amendment numbered 3534.
  Mr. BOND. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.

[[Page S2161]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')

                Amendment No. 3535 to Amendment No. 3534

   (Purpose: To ensure economy and efficiency of Federal Government 
   operations by establishing a moratorium on regulatory rulemaking 
                    actions, and for other purposes)

  Mr. NICKLES. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Oklahoma [Mr. Nickles], for himself, Mr. 
     Reid, Mrs. Hutchison, Mr. Dole, Mr. Baucus, and Mr. Feingold, 
     proposes an amendment numbered 3535 to amendment No. 3534.

  Mr. NICKLES. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. NICKLES. Mr. President, this is an amendment on which Senator 
Reid, myself, and many others in the Senate, including Senator 
Hutchison, Senator Bond, Senator Bumpers, have had a lot of input. We 
worked on it a lot and actually passed this amendment through the 
Senate on March 29, 1995, by a vote of 100 to 0. This amendment was in 
contrast to some legislation that the House passed. The House passed a 
moratorium on all regulations. We considered in the Senate actually a 
bill somewhat similar to that, which had passed through the 
Governmental Affairs Committee. However, this is a substitute.
  The moratorium would have lasted only until the end of last year; it 
would have expired December 31, 1995. It would not have an impact 
today. It might have stopped some regulations that were going forward 
in that period of time. This legislation, though, will be permanent 
law. We did pass it with bipartisan support. I thank Senator Reid. It 
is not often that we have bipartisan support on legislation that will 
really have a significant impact. I am glad we have it in the 
legislation that Senator Bond and Senator Bumpers had, the so-called 
reg flex proposal, and also the congressional review proposal that 
Senators Reid, Hutchison, and myself are pushing today.
  This legislation, instead of having a moratorium, we will have a 
permanent law that says Congress should review all new regulations. If 
you find that an agency passes a final rule and it has a significant 
impact, and you do not like it, you should stop it, you should change 
it. We, in Congress, many times will pass a law and congratulate 
ourselves and say we did a good job, give the regulatory agencies a 
fair amount of flexibility in implementing that law, but then we kind 
of turn our backs and we get busy and forget about what we did.
  Then we find the full impact of the law once it is final and the 
rules are promulgated. It may be a year or two after we pass the 
legislative language that we find that rules issued pursuant to that 
law have a very significant economic impact--sometimes very, very 
significant negative economic impact. Sometimes the rules can be 
enormously expensive. Sometimes they can be ludicrous.
  Yet we are sitting on our hands in Congress. And our constituents are 
saying, ``When did you guys pass that law? What did you do? Do you know 
what you were doing?'' A lot of times we sit back and say, ``Well, the 
law had very good intentions.'' And, if you read the statutory 
language, it sounded pretty good. But the final rules implementing the 
statutory language leave a lot to be desired.
  This proposal would say that when the regulatory agencies make their 
final rule, notification of that final rule will be sent to Congress, 
and sent to the GAO. And we can review it. If it is a major rule, or 
significant rule as determined by the administration, usually if it has 
an economic impact over $100 million on the economy, that rule will be 
suspended for 45 days. So it does not go into effect immediately. So we 
have a chance to listen to people, and before it becomes final we can 
stop it. Under this proposal, Congress can pass a joint resolution of 
disapproval. We have expedited procedures in the bill so no one can 
filibuster, or stop the will of the majority.
  So, you can get a vote in both Houses passing a resolution of 
disapproval, and send it to the White House, and say, ``No. We think 
this rule is a mistake. This is not what we meant. We think it goes too 
far. It is too expensive, too cumbersome''--for whatever reason; maybe 
because our constituents are telling us this rule does not make sense. 
Maybe the rule does not have an economic impact over $100 million. It 
does not have to, if our constituents convince us that the rule does 
not make sense. We can stop it.
  That is what this legislation is all about. This is going to 
encourage congressional review of rules and I think put more 
responsibility on Congress. We have not done very good in legislative 
oversight. Maybe we are too busy. For whatever reason, there are lots 
of rules and regulations out there that many people say are idiotic and 
do not make sense, and they are too expensive.
  I see the occupant of the chair. I know of his profession prior to 
coming to the Senate as a physician. And I can think of one law that 
passed--the Clinical Laboratory Improvement Act. It had very good 
intentions. But the net result was that in a lot of areas it was very 
expensive. As a matter of fact, I had physicians in my State telling 
me, ``Wait a minute. We cannot do lab tests in our own office. We have 
been doing it for 20 years. And I have to give blood tests. I have to 
give results to my patients, and quickly, if I am going to give quality 
health care. And now I have a rule implementing the Clinical Laboratory 
Improvement Act which says that I cannot do that in my office. I have 
to send it off to a pathologist in Nashville, TN, or Oklahoma City, or 
Maine. Their office is 200 miles away, and it may take 24 hours or 48 
hours to turn that around.'' That is dangerous medicine. Maybe that 
rule implementing the legislative act went too far.
  This proposal would give us a chance, if a regulatory agency comes 
down with a rule, to review that rule. And, if we do not like it for 
any reason, we can stop it and we send it to the President. If he 
disagrees with us, he can veto it.
  Mr. President, I can think of any number of agencies that Congress 
needs to spend more time watching. And, again, maybe all of the 
legislation had very good intent. But the regulations' impact went too 
  There is a rule floating around right now in OSHA called ergonomics. 
It sounds very good. It protects people from injuries caused by 
repetitive motions. But, all of a sudden, the Department of Labor is 
telling people how high their desk has to be, or are getting ready to 
tell people that they cannot lift a box or a package which is over 25 
pounds. The Department of Labor is suggesting you must have two people. 
There are implications from this regulatory proposal that could cost 
billions of dollars. Maybe something needs to be done to prevent injury 
to people from repetitive motions in the workplace. However, if the 
Department of Labor comes up with a final rule that is similar to the 
ergonomics language they have been floating, I think of a lot of us 
would say, ``Stop that. Wait a minute.''

  I grew up in a machine shop. If you had someone saying that you 
cannot move anything over 25 pounds--we move a lot of heavy equipment 
around--that rule would not work.
  So again we need a little common sense. That is what this legislation 
is all about. It is congressional review. If regulatory agencies pass a 
rule and it does not make sense, we have 45 days to pass a joint 
resolution of disapproval, and we have expedited procedures. People 
will not be able to filibuster that rule. So we can get it through the 
Senate, if you have 51 votes, and through the House if they have a 
majority vote, and send it to the President. If he feels very strongly 
that that rule does not need to be rewritten or reviewed, he can veto 
it. And we can try to override his veto. So we still have checks and 
balances. We do not suspend all rules for the 45 days, but only those 
rules that have significant economic impact as defined by the 
  We made a few changes--which are different in the legislation that we 
passed last year in March. We changed

[[Page S2162]]

the name of the legislation to the Congressional Review Act. We put in 
an exemption for hunting and fishing rules. The 45-day delay provision 
was changed to a complete exemption--which is different in the 
legislation the Senate passed last March. That was sought by Senator 
Stevens. And I appreciate his input.
  Also, final rules that were issued pursuant to the Telecommunications 
Act of 1996 are made exempt from the automatic 45-day delay provision 
to ensure that short deadlines recently given the FCC under 
Telecommunications Act can better be met.
  Also, the look-back provision that was provided to permit 
congressional review of significant final rules issued between November 
20, 1994 and date of enactment was modified by replacing ``November 20, 
1994'' with ``March 1, 1996.'' In other words, we say that this law 
will be effective for congressional review beginning March 1, 1996.
  Again, I thank my colleagues--most of all, Senator Reid because I 
have worked with him on many issues over the years, and regulatory 
reform has been in the forefront of our efforts. We know that we need 
to reduce--if not eliminate--unnecessary, burdensome, and excessively 
costly regulations. Adoption of our amendment is an important step in 
putting Congress back to the table.
  This bill that we will pass shortly--finally I guess next Tuesday--in 
the Senate is going to make Congress be more responsible. Then if the 
regulatory agency passes a bad rule and we do not review it, that is 
our fault. Congress needs to step up. Committee chairs need to step up 
and monitor what the regulatory agencies are doing. And, if they do a 
bad job, we need to hold them accountable.
  So it puts more responsibility on the Congress. We just cannot blame 
the agencies and wash our hands. If we pass a good bill--and say, ``I 
cannot believe those regulatory agencies interpreted it that way. I 
cannot believe they did it''--now we have a chance to say, ``Wait, 
agencies. You went too far. Rewrite your rules. Change it. Take into 
account what people are saying in rural Tennessee, or rural Missouri, 
or whatever that impact is in Arkansas.''
  So I think it is vitally important. This is good legislation. This 
will help.
  Again, I thank my colleagues from Missouri and Arkansas for their 
legislation both on reg flex, and for their cooperation and support on 
congressional review.
  I yield the floor.
  Mr. REID. Mr. President, last year, this same amendment passed this 
body unanimously by a vote of 98 to 0. I remain convinced that this 
legislation, offered by my good friend, the senior Senator from 
Oklahoma, and myself, is a good solution to the problem of excessive 
bureaucratic regulation. This amendment, like this bill, will do a lot 
to put common sense back into our regulations.
  As I visit the communities around Nevada, big and small, I see many 
small businesses trying to compete in these evolving markets. I know of 
many local shops and enterprises that cater to small towns just trying 
to remain solvent. It is the same in our big cities, Mr. President. 
Government should not be an obstacle to commerce and competition. I am 
afraid that in too many cases it is.
  The U.S. Chamber of Commerce has estimated the cost of complying with 
regulations is $510 billion a year, approximately 9 percent of our 
gross domestic product.
  The amount of time spent filling out paperwork has also been 
estimated at about $7 billion. I think that is too low. I think it is 
much higher than that. Now, not all regulations are bad. Some 
regulations are valuable and serve important purposes, but because of 
the regulatory efforts that we have made, we have made great progress. 
Our workplaces are generally safer. We have much cleaner water than we 
used to have, both in our rivers and streams and in our drinking water. 
Air quality standards are better than they used to be. The problem, 
though, is that many times we pass laws and then the bureaucrats step 
in and make very complicated regulations that go beyond the intent of 
our law, beyond our sound policy.
  These complex regulations, as I have stated, go way beyond the intent 
of Congress and fail to recognize the practical implications and impact 
of these regulations. Under the current regulatory environment, small 
business owners must hire entire legal departments to comply with these 
countless regulations. This reality has led Americans to become 
frustrated and skeptical of Government, and that is not the way it 
should be. According to polls, more than half the American public 
believe that regulations affecting businesses do more harm than good. 
That is certainly too bad.

  This amendment will allow the Congress to look at these major rules 
before they go into effect. We are going to pass some more laws, but 
when the regulations are promulgated, we are going to have the 
opportunity to look at them. If we do not like these regulations, we 
can veto them, in effect. That is the way it should be.
  This amendment will allow Congress to look at these major rules. This 
amendment enables Congress to examine the regulations that are being 
promulgated and decide whether they achieve the purposes they were 
supposed to achieve in a rationale, economic, and least burdensome way. 
Congress is intended to be more than just a roadblock for regulators, 
but a voice representing the many segments of society to put democracy 
back in public policy.
  This amendment is one that Members on both sides of the aisle can 
vote for because when we first offered it, it passed 98 to 0. And, 
second, it takes a commonsense approach to an issue that we all agree 
is a significant problem, that is, complex and burdensome regulations.
  Mr. President, Americans want Congress to work together to get 
Government working for them, not against them. This amendment is one of 
those that will probably not receive a single line of print in a 
newspaper. Why? Because it is going to be accepted unanimously, 
probably, unless someone makes a mistake and votes against it. But it 
will pass overwhelmingly. It is being offered by the chairman of the 
Democratic Policy Committee and the chairman of the Republican Policy 
Committee--Senators Reid and Nickles. We need to do more stuff 
together. We need to set an example to the American public that we can 
work together in a bipartisan fashion to solve burdensome problems.
  The way regulations are promulgated is a burdensome problem, and this 
amendment will do a lot to alleviate a problem that faces all 
  The PRESIDING OFFICER (Mr. Frist). Who yields time?
  Mr. BOND. Mr. President, I yield myself 1 minute. As I have already 
said, I believe that this is an excellent amendment. We have reviewed 
it on both sides. I commend Senator Nickles, Senator Reid, and the 
others for it. We are prepared to accept it.
  Mr. BUMPERS. Mr. President, I compliment the Senator from Oklahoma 
for offering the amendment. I think it is an excellent amendment. We 
certainly are prepared to accept it.
  The PRESIDING OFFICER. The question is on agreeing to the amendment 
of the Senator from Oklahoma.
  The amendment (No. 3535) was agreed to.
  Mr. BUMPERS. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. BOND. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. BUMPERS. Mr. President, at this point I ask unanimous consent 
that Senators Baucus and Feingold be added as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BUMPERS. How much time does the Senator from Virginia wish? Five 
  I yield the Senator 5 minutes.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. Thank you, Mr. President. I thank my colleagues from 
Arkansas and from Missouri.
  Mr. President, I rise today as a cosponsor of S. 942, the Small 
Business Regulatory Enforcement Fairness Act of 1996 as reported from 
the Small Business Committee.
  As our colleagues know, several of us--actually quite a number of 
us--have been working for many months to try to develop a responsible 
comprehensive regulatory reform package which can achieve bipartisan 

[[Page S2163]]

  The bill that we are debating this morning and will vote on on 
Tuesday contains elements that were included in that broader package, 
and I am very pleased to see those provisions move forward now with 
very significant support on both sides of the aisle.
  Specifically, this bill on which I have had a chance to work with 
Senator Bond, the National Federation of Independent Businesses, and 
others, allows judicial review of the Regulatory Flexibility Act.
  We passed the Regulatory Flexibility Act in 1980 to guarantee that 
the special concerns of small businesses were addressed by agencies 
when issuing rules, but the provisions of that act were not reviewable 
in court. Unfortunately, the fact that the act was therefore, in 
effect, unenforceable led many agencies to simply disregard its 
provisions. Needless to say, this has created enormous frustrations for 
small businesses. Not only were agencies failing to consider the impact 
of regulations on small businesses, but some agencies were actually 
flouting the law by that failure. Because of agency failure to take 
small business concerns into account as the law required, small 
businesses in many instances were forced to comply with rules that were 
more onerous than necessary simply because the agencies were refusing 
to follow the law because no courts were looking over their shoulders 
to make sure that they complied.
  In order to make the Regulatory Flexibility Act work as intended, it 
has become necessary to make it judicially enforceable. Agencies will 
now be required to explain how a rule likely to have significant impact 
on small businesses has been crafted to minimize that impact on those 
businesses or else risk court action.
  While I am pleased that the regulatory flexibility provision is 
moving swiftly toward becoming law, I hope--and I ask my colleagues to 
join in this effort--that it will not divert our effort to continue to 
work on a more comprehensive bill. I still believe that we can develop 
legislation requiring agencies to regulate in a more cost-effective 
fashion without undermining the ability to protect our environment, our 
workers or our public health. As I have stated in the past, if we can 
maintain the level of protections and increase the efficiency in how we 
attain it, consumers will ultimately reap the benefits. Of course, 
every dollar that business spends beyond what is necessary to protect 
us in our environment is one less dollar that can be used to hire an 
employee or fund a pay raise or pay for plant expansion. Not only will 
consumers benefit but so will the economy.

  Regulating in a cost-effective fashion simply makes sense. If we can 
achieve the same environmental benefit for less money, or, even better, 
achieve more environmental benefit for the same money, then we simply 
ought to do it. I will continue to work with our colleagues to try to 
make that happen. Senator Johnston of Louisiana and I are circulating 
today a discussion draft which I believe meets the dual and not 
mutually exclusive goals of eliminating unnecessary costs while 
safeguarding our environment and ourselves.
  Again, Mr. President, I commend our colleagues, particularly the 
chairman and ranking members of the Small Business Committee, Senators 
Bond and Bumpers, for taking the first steps in moving responsible 
regulatory reform. I look forward to continuing to work with all of our 
colleagues as we try to craft a responsible comprehensive regulatory 
reform bill.
  With that, Mr. President, I yield the floor.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. BOND. Mr. President, I will be happy to yield the Senator such 
time as she may require.
  Mrs. HUTCHISON. Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I want to take this opportunity to say 
how much I appreciate the leadership that the Senator from Missouri, 
Senator Bond, the Senator from Arkansas, Senator Bumpers, have provided 
for the small business people of our country.
  We have been working together in the Small Business Committee for 
over a year to try to get regulatory relief for those who cannot afford 
the excesses to spend money, frankly, on things that do not help the 
bottom line, that do not help the ability to create jobs, that do not 
help the ability to create new capital, and that is our small business 
  They are the ones that just do not have that margin to be able to 
fight excessive regulations that sometimes do not make sense. I think 
all of us have come together in a very bipartisan spirit, under the 
leadership of Senator Bumpers and Senator Bond, to say, let us give 
relief at least to the small business people of our country so that 
they will be able to grow and prosper because what will make this 
country economically viable once again is strong small businesses.
  That is what this bill does. This bill will give some relief where it 
is so needed. I especially appreciate the willingness of Senator Bond 
and Senator Bumpers to work with Senator Nickles and myself on the 
amendment that will allow congressional review. Of course, that bill 
has passed the Senate by an overwhelming margin. That would allow 
Congress to be able to review regulations that come through.
  I think that is going to be a very important first step for 
accountability in our regulatory agencies. It is really a matter of 
Congress taking responsibility for the laws it passes and the 
delegation that it gives to our regulators.
  Mr. President, I ask unanimous consent to be listed as a cosponsor of 
the Nickles amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Mr. President, I applaud the efforts of Senator Bond 
and Senator Bumpers once again. I hope that we can pass this regulatory 
bill, regulatory relief bill for our small businesses with a 100-
percent vote. I cannot imagine anyone not wanting to do this on a very 
timely basis. The small business owners of our country deserve this 
relief. It will help our economy because once we free small businesses 
to be able to grow and prosper, what will happen is more jobs will be 
available for the working people of our country. That is in all of our 
best interests.
  So I applaud the sponsors of the bill. I appreciate the time, and 
yield back my time. Thank you.
  Mr. BUMPERS. Mr. President, I yield myself such time as I may 
consume. I compliment Senator Hutchison on a very fine statement. She 
is also one of the faithful attendants at the Small Business Committee. 
Sometimes we have difficulty getting a quorum. She is dedicated to the 
small business community and manifests that dedication by being a good 
steward on that committee.
  Ms. SNOWE. Mr. President, the legislation that is before us today--S. 
942, the Small Business Regulatory Enforcement Fairness Act, addresses 
what I believe is one of the most significant problems facing America's 
entrepreneurs and small business people, and that is the burden of 
excessive Federal regulations. These overreaching regulations prevent 
the birth and stunt the growth of small businesses all across the 
country. As part of our continuing efforts on this committee to 
stimulate business activity and increase job opportunities, this 
legislation acts as a Heimlich maneuver for the small businesses 
community that is choking on gobs of Federal redtape.
  I would first like to thank the chairman of the Small Business 
Committee, Senator Bond, for crafting the legislation that is before 
us--and for working to develop the strong bipartisan consensus that now 
exists for its passage. Although many often speak of their support for 
relieving the regulatory burden shouldered by our Nation's small 
entrepreneurs, Senator Bond has taken action in the offering of this 
  Using the recommendations of the White House Conference on Small 
Business, S. 942 provides fundamental regulatory reform in the small 
business sector. This legislation contains several important measures 
essential to the future of small business in America.
  It requires that regulators provide for a cooperative and 
consultative regulatory environment, no longer viewing small business 
as the enemy.
  It establishes a Small Business and Agriculture Enforcement Ombudsman 
at the Small Business Administration [SBA] that will allow small 

[[Page S2164]]

to express their concerns and complaints concerning the enforcement 
actions of agencies without fear of reprisal or retaliation.
  It requires agencies to simplify language and to use forms that can 
actually be read and understood. I don't know how many of my colleagues 
have attempted to read the thousands of pages of regulations that are 
issued by Federal agencies, but as the small business owners in my 
State can attest, finding the time to read the regulations is only one 
one-hundreth of the battle--actually understanding them is the rest of 
the war.
  And perhaps most importantly, it allows small businesses to finally 
be able to enforce a law that was enacted to fundamentally change the 
process by which Federal regulations are written and considered with 
respect to small businesses: the Regulatory Flexibility Act of 1980.
  I believe the Regulatory Flexibility Act remains an excellent tool 
for serving the needs of the Nation's small business community. But I 
also believe it must be strengthened if it is to ever fulfill its 
objective of forcing agencies to consider the impact of their 
regulations on small businesses and giving small business owners a 
louder voice in the regulatory process.
  For years, the call for judicial enforcement of Reg Flex has been 
clearly sounded by our Nation's small businesses. Indeed the annual 
report of the Chief Counsel for Advocacy in the Small Business 
Administration even concludes that ``the only solution is to subject 
agency decisions * * * to judicial scrutiny.'' Therefore, by providing 
for judicial enforcement of the Regulatory Flexibility Act, the 
legislation we are now considering will at last provide small 
businesses with the fundamental right to enforce a law that has been on 
the books for over 16 years.
  Small businesses play a critical role in the long-term growth and 
prosperity of our Nation by providing stable, permanent jobs. My home 
State of Maine is particularly reliant on small businesses for economic 
growth and job creation. Of the 29,920 firms with employees in Maine, 
all but 700 are small businesses. In addition, 61.4 percent of Maine's 
private nonfarm workers were employed by small businesses in 1991--far 
exceeding the national average of 54 percent.
  Nationwide, the number of small businesses has increased by 49 
percent since 1982. These entrepreneurs are responsible for 52 percent 
of all sales in the country, and for 50 percent of private GDP. As 
these numbers show, small business truly is the backbone of the U.S. 
  This legislation recognizes that the health of the small business 
community has far-reaching implications for the future, and that the 
excessive regulatory climate facing today's small businesses is a 
threat to the overall strength of the entire American economy.
  This legislation represents a significant step toward our goal of 
releasing the American entrepreneurial spirit from the bonds of 
excessive Federal regulation, and I urge my colleagues to join me in 
supporting it.
  Mr. FEINGOLD. Mr. President, I rise to support this legislation, the 
committee substitute amendment to S. 942, and I want to commend the 
distinguished chairman of the Small Business Committee, Mr. Bond, for 
his leadership on this bill.
  The measure before us contains several provisions that will afford 
regulatory relief to our Nation's small businesses, and will also help 
begin to change the attitude of Government regulators who are often 
viewed by small business as adversaries rather than as sources of help 
and guidance.
  I am pleased that S. 942 contains many of the provisions that are 
also in bills I have introduced, S. 1350, the Small Business Fair 
Treatment Act of 1995, and S. 554, a bill I introduced about a year ago 
that strengthens the Equal Access to Justice Act.
  Mr. President, the regulatory structure that has developed over the 
years performs important safety, health, and consumer protection 
functions. At the same time, few would dispute that the current 
regulatory system needs meaningful reform.
  Mr. President, I have held nearly 250 listening sessions in my home 
State of Wisconsin during the past 3 years at which many of my 
constituents have expressed their tremendous frustration and anger with 
certain aspects of the regulatory process that sometimes is 
impractical, impersonal, and needlessly burdensome.
  This body debated a regulatory reform proposal last summer that 
sought to respond to this widespread frustration and anger. But, in 
large part, that debate focused more on changes in the actual 
rulemaking process, and featured solutions that, if not entirely 
Washington-centered, at best took a Washington perspective in 
addressing the issue.
  The measure before us takes a different approach--focusing on the 
day-to-day, practical problems of regulation with which small 
businesses must contend. I want to point to just a few of the bill's 
provisions in which I have had a special interest, and let me begin 
with the language strengthening the Equal Access to Justice Act.
  That 1980 law that was intended to help small businesses and 
individuals who get into the ring with the Federal Government over 
enforcement of regulations by allowing them to recover their legal fees 
and certain other expenses if they prevail.
  In general, I oppose the so-called loser pays or English rule under 
which the loser in civil litigation must pay the costs of the 
prevailing party. The additional risk of those costs can act as a 
barrier to the courts for those who are most vulnerable. That is not 
true, however, for the Government.
  In cases where the Government brings an action against a small 
business or an individual, the potential cost of losing poses no such 
barrier to Government with its vast resources. In fact, the opposite is 
  The costs confronting a small business or an individual that is the 
target of a Government action may become a barrier to a just outcome, 
possibly forcing them to concede a violation, even when none existed, 
just to avoid costly litigation.
  When I was elected to the Wisconsin State Senate, I authored our 
State Equal Access to Justice Act, and have been working to strengthen 
the Federal protections since coming to this body, introducing S. 554 
to update and streamline the law.
  The language in this bill raises the rate at which attorney's fees 
may be awarded from $75 to $125 an hour.
  Further, it modifies the present standard by easing the requirement 
that a successful claimant, in addition to prevailing on the merits, 
show that the Government's actions were unreasonable.
  To its credit, this bill makes that standard easier to attain, and in 
turn helps small businesses and individuals to recover their attorney's 
fees. I am pleased they were included.
  Frankly, I believe that the substantial justification defense by 
Federal agencies should be deleted entirely and proposed doing so in my 
own legislation, S. 554.
  While I look forward to pursuing the additional reforms found in my 
bill in the future, I applaud the authors for the improvements they 
have included in this legislation.
  We all know how difficult it can be on a small business owner to 
overcome what is sometimes overbearing Government regulation.
  I believe that the Equal Access to Justice Act helps ease that burden 
and that the improvements offered in S. 942 will make the act work 
better in the future.
  Mr. President, as I noted earlier, there are a number of provisions 
in this bill that were the basis of many of the provisions in my own 
small business regulatory reform initiative, S. 1350, the Small 
Business Fair Treatment Act.
  And I was glad to see the committee retained a number of those 
provisions, including a modified version of the sections requiring 
agencies to publish compliance guides describing regulations in 
straightforward, understandable language, and then holding agencies to 
that description when they are enforcing the regulation.
  Beyond the obvious help these guides could provide to businesses 
affected by a Government regulation, requiring an agency to think out 
and describe a new regulation in a clear and understandable way will 
only enhance the ability of that agency to administer the regulation.
  Another provision common to S. 942 and my proposal relates to so-
called No-action Letters.

[[Page S2165]]

  Again, though the provision is slightly different from the approach I 
took, it represents a real step forward in helping small businesses 
needing clarification of a law or regulation in a particular instance.
  I was also pleased to see the section in S. 942 requiring agencies to 
establish procedures under which, in some circumstances, they will 
waive penalties on small businesses.
  I had included a number of provisions in my own bill that included 
similar features, because it is far better to allow small firms that 
want to comply with laws and regulations to devote their limited 
resources to correcting problems rather than paying fines.
  Mr. President, this provision will also help improve and enhance the 
relationship between small businesses and Government agencies.
  In listening to small businessmen and women in Wisconsin, one of the 
most troubling complaints that is raised with respect to Government 
regulation is the feeling that Government agencies too often take a 
confrontational or adversarial approach in dealing with the business.
  Whether or not this feeling is justified in every instance, in many 
instances, or in only a few, it is honestly felt and reveals a problem 
that needs fixing.
  In one instance, the owner of a small contracting company that does 
construction on older houses contacted my office expressing concern 
that certain OSHA regulations being applied to his business were 
probably originally created for larger construction companies dealing 
with different types of structures and should be modified for companies 
engaged in his kind of business.

  He cited requirements that he prepare a safety program for every job 
he does--even though the homes on which he works are much the same--as 
being inappropriate and time-consuming, and he outlined various other 
  After my office contacted the agency and asked its views on his 
suggestions, OSHA showed up at his work site to conduct a surprise 
  Mr. President, a small business ought to be able to raise concerns 
about an agency's regulations without fear of triggering an enforcement 
  When the relationship between those who oversee and enforce 
regulations and those who must observe them deteriorates in this 
manner, it only hinders compliance.
  By requiring agencies to establish procedures to waive penalties 
under certain circumstances, the bill can help shape the regulatory 
structure in a way that will begin to change the attitude of regulators 
to encourage cooperation rather than confrontation.
  The provisions establishing a Small Business and Agriculture 
ombudsman to review agency enforcement activities will also help in 
changing agency attitudes.
  I took a slightly different approach in my own legislation, by 
explicitly prohibiting agency personnel practices that reward employees 
based on the number of violations they can find or the fines they can 
  I included this provision in response to comments made to my office 
by small business people who have reported that agency personnel have 
felt compelled to find something wrong, even if it is small, in order 
to justify their visit to the firm.
  Again, though the provision in my own legislation differs from the 
bill before us, the language in S. 942 is headed in the right 
direction, and I commend the chairman for his leadership in advocating 
the kinds of structural changes that I believe will help change the 
relationship between regulators and small business.
  Mr. President, the current system is not acceptable; the need for 
reform is clear and imperative.
  And though the larger regulatory reform legislation has bogged down, 
I very much hope a compromise can be worked out and a meaningful reform 
package can be enacted into law.
  But, even if a compromise on the larger regulatory reform measure can 
be hammered out, it is likely to reflect a process-oriented approach 
that may provide large corporate interests with avenues for relief, but 
does little to address the day-to-day problems facing small business.
  Nor does such legislation address the very real feeling of small 
businesses that Government regulators too often act as adversaries 
rather than to provide guidance in helping firms to comply with the 
  By contrast, the provisions outlined in this measure both provide 
some practical regulatory relief and can improve the relationship 
between businesses and agencies.
  Mr. President, I again congratulate the senior Senator from Missouri 
for his leadership on this measure, and I urge my colleagues to support 
the bill.
  I yield the floor.
  Mr. FAIRCLOTH. Mr. President, I am proud to support the Small 
Business Regulatory Fairness Act as a cosponsor.
  Before I was elected to the Senate in 1992, I spent more than 40 
years in the private sector as a farmer and a businessman. I know 
firsthand how hard it is to run a small business successfully, and how 
much harder it has become due to burdensome Government regulations.
  It is only fair that we recognize the limited resources of small 
businesses, and the need to provide the small business community with 
greater access to the regulatory process. This bill contains important 
provisions that encourage comment from small business on proposed 
regulations; promote easier compliance with regulatory requirements; 
provide that regulations be explained in a way that they can be 
understood by small businessmen, not just by bureaucrats; and offer 
improved protection for small business from punitive or capricious 
actions by regulators.
  It is encouraging that this effort to provide greater consideration 
for small business in the regulatory process is a bipartisan effort. 
Many of the provisions in this bill are based on recommendations from 
last year's White House Conference on Small Business. The staging of 
this conference is a noteworthy exception to the hostility that the 
Clinton administration has otherwise shown to small business.
  Hillary Clinton built her health care plan around an employer mandate 
that would have devastated small business. And the President vetoed 
increased deductibility for health insurance purchased by the self-
employed. Also, President Clinton's vocal support for a higher minimum 
wage demonstrates his indifference to the precarious conditions that 
are the norm for most small businesses.
  Mr. President, I think it is ironic that President Clinton would like 
to take credit for creating more than 8 million jobs over the past 3 
years, when he has done so much to cripple the largest producer of new 
jobs, small business.
  I hope that we can pass the Small Business Regulatory Fairness Act as 
the first of several bills that would provide much needed relief for 
small business. In particular, product liability reform, and broader 
regulatory reform are desperately needed. Also, I believe that we 
should not ignore small business when we take up health care reform. We 
should include the deducibility provisions for the self-employed, as 
well as provisions like medical savings accounts that would make health 
care more affordable for small businessmen and their employees.
  I commend the Senator from Missouri for his work on behalf of the 
small business community. The provisions of his bill add some badly 
needed common sense to the regulatory process. I urge my colleagues to 
support it.
  Mr. BAUCUS. Mr. President, I rise in very strong support of the Small 
Business Regulatory Enforcement Fairness Act. This bill is regulatory 
reform in the very best sense. It will make a practical difference in 
the daily lives of men and women who operate small businesses and 
create jobs in Montana and all across the country. It will do so 
without undermining the environmental and health and safety laws that 
protect our families and our communities.
  Mr. President, we need to cut back the Federal bureaucracy. I do not 
think there is anybody who disagrees with that. There is too much 
redtape. People know that. They tell Congress that. They are correct. 
Already the administration has eliminated some 16,000 pages of Federal 
rules and redtape. Think of that. The administration has already 
eliminated 16,000 pages. It is a good start but we can do more.
  Moreover, some Federal regulations just do not make sense like the 

[[Page S2166]]

that required loggers in northwest Montana to buy steel toed boots even 
though they work on slippery frozen slopes where those kinds of boots 
can actually create a hazard, or the rule that would have banned the 
use of common bear sprays that hikers need to protect themselves.
  Rules like these drive Montanans crazy, with good reason.
  We got those rules withdrawn. But we need a more comprehensive 
solution, so we do not have to react to every stupid rule that comes 
along. And, in large measure, this bill provides it.
  Three aspects of the bill are particularly important.
  The first is making is simpler for business to comply with the law.
  We need strong health and safety laws. And we need them enforced. 
But, when it comes to small businesses, regulators need to start with 
an attitude of cooperation rather than confrontation.
  Montana small businesses want to comply with the law. After all, they 
live in the community. They want it to be clean and safe.
  But, in too many cases, the laws and regulations are written in such 
gobbledy-gook that average folks cannot figure out what they are 
supposed to do.
  This bill helps. For example, it requires agencies to issue 
guidebooks, written in plain English, explaining what steps a small 
business must take to comply with new rules.
  And it requires agencies to give decent answers to small businesses 
that have specific questions about how a new rule applies to them.
  Now, these requirements may be bad news for lawyers, but they are 
good news for small businesses.
  The second is strengthening the Regulatory Flexibility Act.
  Reg flex, as it is called, is designed to make sure that as they 
write new rules, the bureaucrats pay specific attention to how small 
businesses and towns will be affected. Unfortunately, this requirement 
has been ignored to often.
  So the bill allows a small business to go to court to require an 
agency to comply with the law.
  During last year's debate on regulatory reform, I was concerned about 
creating dozens of new opportunities for lawsuits, especially from 
large corporations, that would clog the courts and bring things to a 
  But I think the provision in this bill makes good sense. It will not 
have that same defect. It is focused on small business. And it just 
assures that agencies have taken a reasonable look at the impact their 
rules will have on small businesses.
  The third is the Nickles-Reid amendment. This provision requires 
agencies to submit major new rules to Congress for review before they 
become effective.
  This review will inject an important check into the system. We in 
Congress can be a backstop for common sense. We can help sort out the 
good rules from the bad.
  If an agency goes haywire, like OSHA did with its logging rule, 
Congress can reject the rule. But if an agency is doing a good job, 
protecting public health and safety, things will stay right on track.
  All told, Mr. President, this is a solid bill. It will cut redtape 
and make the bureaucracy more responsive to the concerns of small 
  Moreover, it is a bipartisan bill. It is a model of how we should be 
legislating around here.
  I compliment the chairman of the Small Business Committee, Senator 
Bond, and the ranking member, Senator Bumpers, for their hard work 
drafting this bill, developing a consensus, and bringing the bill to 
the floor. I am proud to cosponsor it and hope it will pass with 
overwhelming support.
  Mr. GRAMS. Mr. President, as a former small businessman, I understand 
the need for regulatory relief and flexibility for small businesses.
  Recent estimates indicate that regulations cost employees more than 
$5,000, with much of the cost wrapped into an unbelievable 1.9 billion 
hours filling out forms, each year.
  In addition to killing jobs, the cost of this red tape is passed 
directly to consumers through higher prices on goods and services. The 
workers are tired of Washington bureaucrats eating up their wage 
  Over the last 3 years I have met with hundreds of workers who have 
detailed the tremendous burdens of Government rules and regulations.
  I also met with many job providers at last year's White House 
Conference on Small Business. Delegates from every State came together 
to discuss the problems that job providers face and to suggest ways in 
which Congress could help.
  The bill before us today is a direct result of their efforts. 
Although it addresses just a few of their suggestions, I am here to 
lend my support to this first step in providing small business with 
some real regulatory relief.
  In 1980, Congress passed the Regulatory Flexibility Act. This bill 
required that Federal agencies consider the impact of proposed 
regulations on job. Unfortunately, that law didn't give job providers 
much of an enforcement mechanism.
  This bill will change that.
  At the suggestion of the White House Conference, this legislation 
will reduce the impact of Federal regulations on job providers by 
authorizing judicial review of the Regulatory Flexibility Act. A court 
could set aside a rule, or order an agency to take corrective action if 
it finds an action was arbitrary, capricious, an abuse of discretion or 
otherwise not in accordance with law.
  The bill will also create an atmosphere of cooperation between job 
providers and regulatory agencies, by giving job providers the 
opportunity to participate in the rulemaking process and by allowing 
agencies to wave penalties for first-time rule infractions.
  This bill allows job providers to conduct their work on a level 
playing field by providing an opportunity to correct arbitrary 
enforcement actions and require Federal agencies to be less punitive 
and more solution oriented.
  Most importantly, the Small Business Regulatory Enforcement Fairness 
Act will require Federal agencies to examine the need for regulations 
and weigh them against the Nation's need for job creation.
  In closing, Mr. President, regulatory reform is absolutely essential 
if job providers and workers are going to grow and continue to create 
the jobs that propel the economy and promote prosperity.
  I encourage my colleagues to support this bill. It is a first step in 
changing Federal agencies policies that kill jobs, and a first step 
toward removing the shackles of unnecessary Government rules and 
regulation from American workers.
  The PRESIDING OFFICER. Who yields time?
  Mr. BOND. Mr. President, how much time remains on this side?
  The PRESIDING OFFICER. The Senator has 6 minutes and 20 seconds.
  Mr. BOND. Six minutes.
  The PRESIDING OFFICER. Six minutes, twenty-four seconds, and twenty-
four minutes on the other side.
  Mr. BOND. I yield the Senator from Georgia 3 minutes.
  Mr. COVERDELL. I thank my distinguished colleague from Missouri.
  I rise in support of his extended efforts to reduce and relieve 
American business of the enormous regulatory burdens that we have put 
on the sector of our economy that generates the vast majority of the 
new jobs.
  We just held a field hearing of the Small Business Committee in 
Georgia, and this quote was most alarming. One businessman came before 
the committee, and he said:

       The Federal Government of the United States of America has 
     become the No. 1 enemy of small business.

  It was astounding to hear the presentations of these business people 
as they pointed time and time again to the onerous burdens that are 
being put on them and their inability to match them. Sixty percent of 
America's businesses have four employees or less. How in the world can 
they possibly keep up with the staggering requirements coming year 
after year on these small businesses? The result is they do not hire 
another employee.
  The Lord's prayer has 66 words; the Gettysburg Address 286 words. 
There are 1,322 words in the Declaration of Independence, Mr. 
President. But Government regulations on the sale of cabbage has a 
total of 26,911 words--on the sale of cabbage. According to the Georgia 
NFIB, there are 168,000 businesses in Georgia, and 53 percent have four 
or less employees.

[[Page S2167]]

  I wish to reiterate again and again, there is absolutely no way for 
these very small businesses to match the enormous regulatory burden 
that has built up over the last 20 years. This is where we are creating 
new jobs. We have to take steps, as this bill does, to make it more 
possible for small businesses to expand and to hire new employees.
  The greatest thing we can do for that person standing in line trying 
to find a new job is to make a healthier climate for small business in 
  I yield back whatever time is remaining to the chairman.
  Mr. BOND. Mr. President, I might say to my colleague from Georgia 
that we have been graciously offered additional time from the minority 
side. If the Senator has additional comments, we would be happy to 
yield, speaking on behalf of the minority, 3 minutes.
  Mr. COVERDELL. I thank the Senator. I appreciate the extension of the 
time from the minority. I do have a few more things to say about the 
hearing that was held in Georgia.
  The Georgia Public Policy Foundation conducted a survey on behalf of 
my own small business advisory task force and found the following: The 
estimated cost of regulation as a percentage of sales was approximately 
1.5 percent; 24 percent of these businesses have been involved in 
regulation-related lawsuits. That means that one in four companies, one 
in four small businesses in our State has had to be involved in a 
lawsuit, a lawsuit and all the expenses associated with that, over 
regulation; 53 percent of the respondents indicated--and this is the 
most important fact--53 percent, over half, responded that they would 
hire additional employees in the last 3 years if it had not been for 
the costs of regulation.

  So, once again, as I said a moment ago, regulation itself and the 
extent of it and the size of it and scope of it is causing people to 
not get hired because the money is going to manage the regulations and 
not to pay the salary of a person who is looking for a job.
  Prof. Gerald Gay, chairman of the department of finance at Georgia 
State University, strongly endorsed the concept of strengthening the 
Regulatory Flexibility Act, which is what we are doing today, 
specifically calling for judicial review, which is what we are doing 
  He went on to note that regulations are of concern to large and small 
businesses. The difference is that small business cannot absorb the 
excessive regulatory compliance costs that larger businesses can. This 
puts them at a competitive disadvantage. As I said, it keeps them from 
hiring another employee, and keeps them from starting a business in the 
first place.
  Professor Gay, in his testimony, had an interesting quote from one of 
our early Presidents and writers of the Declaration of Independence, 
Thomas Jefferson. I have often used this quote:

       A wise and frugal government which shall restrain men from 
     injuring one another, which shall leave them otherwise free 
     to regulate their own pursuits of industry and improvement, 
     and which shall not take from the mouth of labor the bread it 
     has earned.

  This is the sum of good government. It is that very salient point 
that American Government has forgotten in the last 20 or 30 years. We 
are denying the people the ability to be entrepreneurial, we are 
denying people the opportunity to focus on their work, and we have 
turned the Government from being a good partner into being a bully 
boss. This legislation remembers that the Government is supposed to be 
a partner first.
  I yield.
  Mr. BOND. Mr. President, I ask unanimous consent that the Senator 
from Tennessee be granted 4 minutes from the minority side on the bill.
  The PRESIDING OFFICER (Mr. Coverdell). Without objection, it is so 
  Mr. FRIST. Mr. President, I rise today to speak in strong support of 
S. 942, the Small Business Regulatory Enforcement Fairness Act. First, 
I want to commend the distinguished managers of this legislation, 
Senator Bond and Senator Bumpers, for their tireless, bipartisan 
efforts to bring this legislation to the floor of the Senate. Today, I 
am proud to join them and my colleagues on the Small Business Committee 
in providing regulatory relief for our Nation's job creation engine--
small business.
  Mr. President, the high cost of Federal regulations is restricting 
economic growth in this country. Regulations are really hidden taxes; 
they drive up the cost of doing business. As this chart shows, the cost 
of regulations has risen rapidly over the last 10 years. Today, 
regulatory costs exceed $600 billion a year, a 30-percent increase over 
a decade ago. That's $600 billion in lost job creation, lost 
productivity, and lost economic growth. By the year 2000, regulatory 
costs are expected to continue growing.
  However, this chart does not show that regulatory burdens fall 
disproportionately on small business. Recent research by the SBA found 
that small businesses bear over 60 percent of total business regulatory 
costs. Specifically, the average annual cost of regulatory, paperwork, 
and tax compliance for small business is $5,000 per employee while the 
cost for large businesses is only $3,400 per employee. This is no way 
to treat our Nation's No. 1 job creators who employ more than half of 
our entire work force.
  Mr. President, let me briefly illustrate this problem in more 
personal terms. Last year, Chairman Bond joined me in Memphis for a 
Small Business Committee field hearing where we listened directly to 
the regulatory problems of small business owners. Ron Coleman, an auto 
parts manufacturer in Memphis, told us about the unique regulatory 
burdens that he faces. He said ``Government regulation is the single 
most time-consuming aspect of my business. Small businesses must deal 
with the same rules and regulations as large businesses, only we are 
unable to call the human resource director, the vice president of 
governmental affairs, the corporate legal department, or the OSHA 
coordinator for help.'' The legislation before us today will help hard-
working entrepreneurs like Ron.
  S. 942 includes many provisions that will reform the regulatory 
process, but I want to highlight the enforcement reforms in particular. 
One of the stated purposes of this bill is ``to create a more 
cooperative regulatory environment among agencies and small businesses 
that is less punitive and more solution-oriented.''
  Senator Shelby and I have worked very hard over the last year to 
enact a small business regulatory bill of rights to change the 
confrontational nature of regulatory enforcement. We believe that small 
businesses should be able to participate in voluntary compliance audit 
and compliance assistance programs that protect them from excessive 
fines and penalties. We also believe that agencies should factor 
ability to pay into their penalty assessments so that small firms are 
not driven out of business by an excessive fine. Section 202 begins to 
address these concerns, but it can be strengthened. I thank Senators 
Bond and Bumpers for working with me and Senator Shelby on this 
section. I look forward to working with both of you in further hearings 
on this issue.
  Mr. President, I would like to close today with this thought. For 
years, business owners and their employees on the front lines have been 
delivering the same clear and concise message to Congress: the Federal 
Government is strangling us with regulations, compliance, burdens, and 
aggressive enforcement, and we need relief. If Congress passes the bill 
before us today and the President signs it into law, we at last can 
reply to them with an equally clear message: we have heard you, and we 
are taking action. I strongly urge my colleagues to support this 
legislation that will foster a new era of entrepreneurial growth in 
  The PRESIDING OFFICER. Who yields time?
  Mr. BOND. Mr. President, I want to take a minute to say how much we 
appreciate the contributions of the Senator from Tennessee. He 
organized a very productive field hearing for us. It was most 
informative. He has been an active participant in the work of the Small 
Business Committee, and we certainly appreciate his efforts. I thank 
him for his remarks today as well as his contributions in making this a 
better bill.
  Mr. President, we have no other business on this side and not much 
time. If the ranking member agrees, I think we might proceed to a voice 
vote on the adoption of the substitute amendment

[[Page S2168]]

or such comments as the Senator from Arkansas might have.
  Mr. BUMPERS. Mr. President, I just want to close my part of the 
program by complimenting my very able and long-time assistant, John 
Ball, who has been with the Small Business Committee as both staff 
director and director for the ranking member now for many, many years. 
He has performed yeoman service on this.
  I also hasten to say that the work of Keith Cole and Louis Taylor has 
been truly outstanding. Between these three people, and Senator Bond 
and myself, but especially the staff members, we think we have crafted 
a pretty good bill. I want to pay my special thanks publicly to these 
staffers who have labored very hard to make this possible.
  I am prepared to go forward with final passage.
  The PRESIDING OFFICER (Mr. Frist). The question is on agreeing to the 
substitute amendment, as amended.
  The amendment (No. 3534), as amended, was agreed to.
  Mr. BOND. Mr. President, I move to reconsider the vote.
  Mr. BUMPERS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The question is on agreeing to the committee 
amendment in the nature of a substitute, as amended.
  The committee amendment, as amended, was agreed to.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  Mr. BOND. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. BOND. Mr. President, I ask that this measure be set aside 
pursuant to the previous agreement.
  The PRESIDING OFFICER. The bill is set aside.
  Mr. BOND. Mr. President, pursuant to a previous agreement between the 
leaders, the vote will be set aside until Tuesday.
  Mr. President, I ask unanimous consent that Senator Murkowski be 
added as a cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Mr. President, I join with my ranking member in 
complimenting the staff. John Ball I have worked with for several 
years. We are very pleased with the leadership of Louis Taylor on the 
Small Business Committee and Keith Cole who has had previous experience 
on the other side in Congress, and we are delighted that he has come to 
be with us on the Senate side.
  These three staffers have had a very interesting several weeks. They 
have had an opportunity to meet more people in this administration. We 
have had the support from the elected officials in the Federal 
Government for regulatory reform, but we have certainly had a 
tremendous amount of interest and attention and full-time, around-the-
clock work for our staff members dealing with the members of the 
agencies who will be affected.
  I can say to all of our friends in small businesses and small 
entities around the country that it is quite apparent that this measure 
will have an impact on the way that agencies deal with small entities 
and small businesses.
  I believe that we have, with the help of many useful comments from 
the agencies themselves, crafted a workable but significant change in 
the culture of the Federal agencies in regard to small entities and 
small businesses.
  Mr. BUMPERS. Mr. President, I have nothing further to add. I suggest 
the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HATFIELD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.