SMALL BUSINESS REGULATORY FAIRNESS ACT OF 1995
(Senate - March 19, 1996)

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[Pages S2309-S2322]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             SMALL BUSINESS REGULATORY FAIRNESS ACT OF 1995

  The PRESIDING OFFICER. Under the previous order, the clerk will 
report S. 942.
  The assistant 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 resumed the consideration of the bill.

[[Page S2310]]

  Mr. BINGAMAN. Mr. President, I intend to support the small business 
regulatory fairness bill, S. 942, as modified by the managers' 
amendment.
  This bill is a testament to the good work that occurred at the White 
House Conference on Small Business organized here in Washington last 
June. This national conference was the final step in a grassroots 
public discourse about small business needs and concerns that involved 
more than 21,000 small business people participating in 59 State 
conferences across the country. Starting with more than 3,000 issue 
recommendations at the State level, regional groups shaved the list to 
a set of 293 concerns. And finally, the White House Conference focused 
on 60 specific recommendations that might substantially improve the 
environment for the growth and success of small business activity.
  I think that the work of the White House Conference has given us a 
good roadmap of items to debate and discuss which directly impact our 
Nation's economic health. One of the major concerns of small business 
owners today is simply complying with Federal regulations, being able 
to understand the regulations--which are often extraordinarily complex, 
and not falling subject to arbitrary enforcement and penalties. It is 
important that our Government be accountable to those it governs and 
must avoid arbitrary and ad hoc enforcement.
  Mr. President, this legislation requires that Federal agencies 
produce small entity-compliance guides that outline in simple, 
understandable language what is required from small businesses. This is 
a commonsense adjustment in which both Federal regulators and small 
firms win. Furthermore, this act creates five-person regional citizen 
small business review boards in each of the 10 Government regions 
covered by the Small Business Administration. This measure gives small 
business a voice at the table when Federal guidelines are discussed, 
and this is as it should be.
  Also central to this act is the creation of more cooperative and less 
punitive regulatory environment between agencies and small business 
that is less threatening and more solution-oriented than we have 
achieved in the past. And equally important are provisions in this 
legislation making Federal regulators more accountable for enforcement 
actions by providing small businesses a meaningful opportunity for 
redress of excessive or arbitrary enforcement activities.

  As our Nation's larger firms continue a process of downsizing, 
restructuring, and outsourcing, our small business sector will continue 
to grow rapidly and will continue to be the major jobs generator for 
the country. It is crucial that the Federal Government do what it can 
to help small businesses thrive in a regulatory environment that is 
well defined and user friendly rather than to suffer because of 
uncertainty and unclear codes.
  I am frequently visited by small business people and groups from my 
own State of New Mexico and am very much pleased by their attention to 
the debates that occur in Washington about legislation that might 
impact them and their companies. These firms typically don't have a 
staff section designed to study the tax implications of everything we 
do here in this Chamber; nor do they have the time and personnel to 
devote to close monitoring of our legislative activities. But still, 
tens of thousands of small business people in the Nation do invest time 
and become personally involved with the legislative process and have 
committed themselves to improving the interaction between Government 
and the small business sector.
  I would like to mention one example from New Mexico, a person who 
demonstrates well a combination of entrepreneurial excellence, 
community concern and strong civic involvement. Ioana McNamara, the 
president and founder of an Albuquerque-based small business called 
Wall-Write, was one of those who participated from New Mexico in the 
White House Conference on Small Business. I want to publicly commend 
her for getting involved and working on these issues. She and others 
from the New Mexico small business delegation, including another small 
business person--Diane Denish--who served as the delegation chair for 
the White House Conference--have done a great deal to make sure that 
small firms in New Mexico do their part to achieve a more productive 
relationship between Government and business.
  Clearly, people like Ioana McNamara and Diane Denish have more than 
enough to do in growing their businesses without paying attention to 
whether this Chamber is about to do something that harms or helps their 
businesses--but they have decided to do what they can to help implement 
the measures decided on at the White House Conference. I think our 
Nation should express its gratitude to these people and the thousands 
of others who participate in the making of good policy.
  Mr. KERRY. Mr. President, the Small Business Regulatory Enforcement 
Fairness Act, represents an opportunity to change not only the 
regulatory burden on small business, but more importantly, to begin to 
change the way all Federal agencies, including the Internal Revenue 
Service [IRS], deal with small business. I am pleased to be a cosponsor 
of the bill.
  In far too many cases, the Federal Government has acted as the judge, 
jury, and executioner for small businesses. Testimony before the Small 
Business Committee indicated many small businesses fear agencies like 
the IRS will levy huge fines on them for failure to comply with minor 
rules and regulations--of which they may be entirely ignorant. The 
Federal Government must become a partner in the growth and development 
of small businesses, not an adversary.
  While not perfect, this legislation includes a number of provisions 
which will ease regulatory burdens and give small businesses some 
recourse when Federal bureaucrats are over zealous in the exercise of 
their power.
  The bill requires agencies to publish in plain English a guide to 
assist small business in complying with regulations. Federal 
regulations are often too difficult for anyone to understand, let alone 
a small businessperson who is trying to run his or her business. It 
will also allow Small Business Development Centers to offer assistance 
to small businesses in complying with Federal regulations.
  The bill would also establish an ombudsman to help small businesses 
get fair and legal treatment from the Government if they have been 
treated unfairly. The ombudsman would also assist small businesses in 
recovering legal fees as a result of unfair Government actions.
  Under the bill, Federal agencies would be required to waive civil 
penalties for first violations by small businesses that do not 
constitute a serious threat to public health, safety, or the 
environment.
  The bill provides that small business representatives are to be 
consulted in Federal agency rulemaking decisions that would have a 
significant impact on small businesses so that small business interests 
would be considered at the outset in the development of regulations.
  While these reforms will not end the difficulties many small 
businesses face in complying with Federal regulations, they should help 
ease the burden. I hope this legislation will mark the beginning of a 
new era of better relations between Government and small business. The 
Federal Government should be working in partnership with small 
businesses--not at cross-purposes with them.
  I am proud to support this legislation and would like to thank the 
chairman of the Small Business Committee, Senator Bond, and the ranking 
member Senator Bumpers along with their staffs for their effort in 
producing this legislation.
  Mrs. MURRAY. Mr. President, I would like to take this opportunity to 
commend Senator Bond for his leadership on small business issues, and 
lend my support to the Small Business Regulatory Fairness Act, which 
will lessen regulatory burdens imposed on small businesses by Federal 
agencies.
  Mr. President, I have talked with many small business owners in my 
home State and one thing they all tell me is how difficult and costly 
it has become to comply with many of the Federal regulations imposed 
upon the. Among other things, this legislation will require agencies to 
publish materials in plain language to help small businesses comply 
with regulations.

[[Page S2311]]

The bill will also enhance the small business communities' voice with 
the Small Business Administration by providing them a role in 
determining future regulations.
  When I was growing up, my father ran a small business in Bothell, WA. 
I know the time and energy small business people put into their 
companies. And, throughout my term, I have worked to reform a 
Government that continues to hamper small business owners.
  I was a cosponsor of the S-Corporation Reform Act of 1993, and 
returned as a cosponsor of S. 758 last year, which would remove 
obsolete provisions from the tax code, making it easier for small 
businesses to raise capital. I cosponsored the Family Health Insurance 
Protection Act which would provide health insurance market reform for 
small businesses and families. And, on the first full day of this 
Congress, I introduced the American Family Business Preservation Act 
which would reduce the rate of estate tax imposed on a family owned 
business, encouraging families to keep their businesses intact. And, as 
many of my colleagues will remember, last Congress, we fixed a problem 
that has been plaguing small businesses that wanted to refinance their 
SBA 503 loans. Now, many small businesses in Washington State and 
across the country will be able to refinance their 503 loans.
  Mr. President, I strongly believe Government cannot solve every 
problem in this country, but it can foster a healthy economic 
environment in which all businesses may prosper. I encourage each of my 
colleagues to support S. 942. The Small Business Regulatory Fairness 
Act continues our work by reducing redtape and making it easier for our 
small businesses to comply with often burdensome Federal regulations. I 
believe this is the type of reform our small businesses want and 
deserve.
  Mr. GLENN. Mr. President, I support the managers' amendment to S. 
942, the Small Business Regulatory Enforcement Fairness Act. I have 
been a long supporter of regulatory reform, and I believe this 
legislation provides significant regulatory relief to small businesses, 
small governments, and other small entities.
  I congratulate the managers of this bill--Senator Bond, chairman of 
the Small Business Committee, and Senator Bumpers, Ranking Democrat on 
the committee--for their efforts to craft a workable bill. I know they 
have consulted frequently with other members, the small business 
community, and the administration to address concerns and improve the 
legislation. In the midst of contentious debate about other regulatory 
reform issues, Senator Bond and Senator Bumpers have put together a 
regulatory reform bill that will provide significant relief to small 
business. This legislation should get broad bipartisan support in both 
the Senate and House, and I am sure will soon be signed into law.
  The purposes of this legislation are important and I support them. 
Some of the details, however, still concern me. For example, the bill 
provides for judicial review of Regulatory Flexibility Act decisions. 
This will put needed teeth into the Reg Flex Act and ensure that 
agencies prepare required regulatory impact analyses and pay more 
attention to the special impact of their rules on small business and 
other small entities, such as local governments. I am concerned, 
however, that these judicial review provisions may be overly broad and 
will lead to unnecessary litigation. Only time will tell whether my 
concern is well founded. At this point, I am prepared to give the new 
provisions the benefit of some doubt.

  The bill also establishes a small business ombudsman process to help 
improve cooperation between regulatory agencies and regulated 
businesses. I support this idea. But, I am concerned that the 
implementation process, with its Small Business Fairness Boards, will 
end up creating a one-sided record of complaints that will distort the 
broad public mission of our agencies. Our agencies should not be viewed 
as the enemy when they carry out the laws passed by the people's 
representatives in Congress. I am happy, at least, that in the final 
version of the bill before us, the Ombudsman will focus on general 
agency enforcement activity and not attempt to evaluate or rate the 
performance of individual agency personnel.
  Finally, the legislation creates small business review panels to 
ensure that small business perspectives are fully considered by 
agencies during rulemaking. Again, I support the important purpose of 
ensuring that agencies hear the voices of the little guys who do not 
always get through the maze of agency process and the larger more 
organized commenters. It is, however, important to ensure that this 
opportunity for comment does not create a precedent of giving special 
leverage to one segment of the public. I am, at least, heartened by the 
fact that review panel comments on an agency proposed rule will go into 
the public record, and that other interested parties will have an 
opportunity to respond to those comments before the agency makes its 
rulemaking decision. The fact that these review panels, as well as the 
Fairness Boards, will be subject to the Federal Advisory Committee Act 
[FACA] and the Government in the Sunshine Act will also help ensure 
that the new process will be open to the public.
  On balance, I believe the managers' amendment should be supported. 
Again, I commend Senator Bond and Senator Bumpers for their openness to 
concerns about the bill. Since we first saw drafts a week or so ago, 
significant changes and improvements have been made. Given these 
changes, I will vote for the managers amendment. But given my concerns, 
let me also say that these provisions should not be modified by the 
House. If they are made more onerous, then they should not be 
supported. If House action leads to changes in conference, then the 
Senate should say no to the conference report.
  Let me clear up one fact about this legislation. A week and a half 
ago, on Thursday, March 7, 1996, Senator Bond stood here on the floor 
and described his hopes for a bipartisan agreement on this legislation. 
Our Minority Leader, Senator Daschle, agreed, saying that Democrats 
hoped to provide broad, if not unanimous, support for the final bill. 
Unfortunately, several other of our colleagues on the other side of the 
aisle then went on to accuse Democrats of delaying the bill and even of 
engaging in a filibuster. That could not be further from the truth.
  When the Small Business Committee considered the legislation on 
Wednesday, March 6, there was general agreement that a managers' 
amendment would be prepared for the bill. On the 7th, as we waited to 
see the proposed amendment, we were surprised to hear our Republican 
colleagues accusing Democrats of holding up the bill. As it turned out, 
I did not see the final proposed manager's amendment for another whole 
week--March 14, an entire week after Thursday the 7th. Far from 
Democrats holding up this legislation, the fact is that the managers of 
this bill were not ready to bring the bill to the floor until at least 
a full week after we were being accused of delay. I am definitely not 
criticizing the managers. Their careful deliberations are to be 
commended. But certainly, other Senators should not be falsely accused 
of delaying the bill, when they were only waiting to see the results of 
those deliberations.
  I hope I have set the record straight. There was never a filibuster 
on this legislation. We are happy there is finally an agreement on the 
managers' amendment. We are pleased that we now have it and can move 
forward and quickly pass the legislation.
  I must say though, that once again, I am very disappointed in the 
rhetorical excesses of my colleagues on the other side of the aisle. 
Rather than even admit to working cooperatively, which is the case with 
the bipartisan bill before us, they tried to mislead the public about 
the status of this legislation. There certainly are enough instances 
where we honestly disagree, but here where we are working together, 
there is nothing to disagree about.
  We need more of the bipartisan cooperation seen in the work of 
Senators Bond and Bumpers and the other members of the Small Business 
Committee on this legislation. We need much less of partisan sniping.

            The Nickles-Reid Congressional Review Amendment

  S. 942 comes to the floor with an agreement to consider one other 
amendment. This is the Nickles-Reid Congressional Review legislation 
and I urge my colleagues to support this

[[Page S2312]]

amendment. We passed this legislation last year, as a substitute to the 
Regulatory Moratorium. Congressional Review will create more work for 
us, but its expedited legislative veto process will ensure 
congressional accountability for Federal agency rules. I believe we 
need this process so that we can do our part for regulatory reform.
  I have always been struck when in hearings, agency officials--under 
successive administrations--have pointed out that most agency 
regulations are strictly required by laws passed by Congress. The 
Nickles-Reid Congressional Review process will close the loop, so that 
when an agency issues a rule that some may oppose, we will have an 
opportunity to consider it in the context of the law and determine its 
reasonableness. This will not only help with accountability for 
individual rules, but will also help us identify specific statutory 
provisions that need revision. For these reasons, I am happy to support 
the Nickles-Reid amendment, and urge my colleagues to do so, as well.


                               CONCLUSION

  With the combination of Small Business Regulatory Fairness and 
Congressional Review, we have significant bipartisan regulatory reform 
legislation. It should be passed by the House and be signed into law by 
the President.
  Our job as legislators is to create laws that can work and can 
improve conditions in our country. Some have wanted to bull through and 
legislate now on a larger regulatory reform package. The truth is that 
there is simply too much there that is unsettled and about which too 
many do not agree. Now is the time to move legislation that can work 
and that will improve the regulatory process.
  If in the quiet of committee we can return to the other regulatory 
reform issues of cost-benefit analysis and risk assessment, I think we 
should. But for now, let us work together on bills such as the 
legislation before us today that can pass and should pass.
  Mr. LAUTENBERG. Mr. President, I rise in support of S. 942, the Small 
Business Regulatory Enforcement Fairness Act.
  Mr. President, America's small businesses badly need relief from 
excessive and unnecessary regulations. For years, those of us on the 
Small Business Committee have heard first hand from men and women in 
small businesses about the disproportionate regulatory burden they 
face. This burden was confirmed late last year in a report by the Small 
Business Administration's Office of Advocacy. Among other things, the 
report found that while small businesses employ 53 percent of the 
workforce, they bear 63 percent of total business regulatory costs.
  The annual average cost of regulation, paperwork, and tax compliance 
for small businesses is about $5,000 per employee. By contrast, the 
comparable burden for businesses with over 500 workers is $3,400 per 
employee. This difference is significant. Big businesses already enjoy 
a competitive advantage over their smaller counterparts because of 
economies of scale. The Federal Government should not further 
disadvantage small businesses by imposing uniform regulations where 
tiering the regulation to account for business size would be just as 
effective.
  Mr. President, the bill before us will give teeth to the Regulatory 
Flexibility Act Congress passed in 1980. That act, known as the Reg 
Flex Act, requires agencies to assess the effects of their proposed 
rules on small entities. Based on this assessment, agencies either have 
to conduct a regulatory flexibility analysis describing the impact on 
small entities, or they must certify that their rule will not have a 
significant economic impact on a substantial number of small entities.
  Despite Congress's best intentions, agencies all too often have 
refused to comply with the Reg Flex Act. Unfortunately, there is 
nothing small businesses can do currently to enforce compliance. S. 942 
would correct this problem. The bill would enable small businesses to 
take agencies to court to challenge an agency's determination. This 
should provide the spur necessary to ensure much greater compliance in 
the future.
  In addition, this bill will require agencies to publish compliance 
guides for small businesses. In the study commissioned by SBA, 94 
percent of small businesses said that it was unclear what they had to 
do to be in compliance with regulations. By providing easily understood 
explanations of regulations, agencies will ensure greater compliance. 
In addition, the bill directs agencies to provide informal guidance to 
small businesses about what is required of them to be in compliance.
  In the case of regulations for which a regulatory flexibility 
analysis is required, small businesses will now be part of the 
rulemaking process by providing advice and recommendations to agencies 
before proposed and final rules are issued. To further help small 
businesses make their way through complicated regulations, the bill 
permits Small Business Development Centers and Manufacturing Technology 
Centers to offer regulatory compliance assistance and onsite 
assessments for small businesses.
  Finally, Mr. President, S. 942 makes it easier, in certain instances, 
for small businesses to obtain attorneys fees from the government for 
claims upon which they prevail. I had serious concerns about the 
language we considered in the Small Business Committee mark up, which 
modified the so-called Equal Access to Justice Act. I did, however, 
have the assurance of the Senator from Missouri that our offices would 
change these provisions so that we would not be rewarding companies 
with attorneys fees when they violated the law, because, for example, 
they prevailed on 1 of 10 claims. I believe the new language contained 
in sections 301 and 302 accomplishes the goal of aiding firms that had 
to fight the Government on meritless suits, while protecting taxpayers 
from paying the attorneys fees for companies that have broken the law.
  Mr. President, I want to commend Senator Bond and his staff for their 
willingness to adopt recommended changes suggested by myself and other 
members of the Small Business Committee. Most Members of this body 
express their desire to work with their colleagues across the aisle, 
but those expressions often prove hollow. In this case, however, I am 
happy to say that S. 942 is truly a bipartisan bill and I hope we will 
have many more such bills before the end of the 104th Congress.
  I also want to acknowledge the work of the Clinton Administration's 
``Reinventing Government'' initiative and last year's White House 
Conference on Small Business. Their efforts laid the groundwork for the 
legislation we are considering today.
  Again, I want to thank Senator Bond and Small Business Committee 
staffers Keith Cole and John Ball for their assistance on this 
legislation, and I hope my colleagues will join me in supporting S. 
942.
  Mr. MURKOWSKI. Mr. President, no one more strongly supports the goals 
sought by the statutes and regulations of this country than I do.
  I come from a beautiful State blessed with resources that I have 
worked to see used productively and conserved wisely, I myself enjoy 
the great outdoors in Alaska, along with my family, and intend to have 
these same kinds of experiences enjoyed by my children and 
grandchildren; I have been a banker, where it has been my privilege to 
see individuals succeed in small business; I have seen first hand how 
issues like safety and worker protection go hand in hand with ensuring 
that success, but there is no doubt that achieving better protection of 
human health and the environment can only happen if we regulate 
smarter.
  Individuals and businesses, big and small, spend too much time trying 
to comply with too much paperwork, and too much regulation from too 
many Washington bureaucrats. For example: above-ground storage tanks 
must comply with five different regulations that each require a 
separate spill prevention plan; this means that a business with tanks 
files five different sets of plans--one to the State, and two each to 
the EPA and the Coast Guard.
  If you buy a business that was once registered to produce pesticides, 
even if you don't produce pesticides, or never have, the EPA will still 
want you to send in annual production reports with zeros filled in. If 
you don't, you can be sued and potentially fined. For just one statute, 
the Resource Conservation and Recovery Act, EPA has issued 17,000 pages 
of regulations and proposed regulations. The volume I'm holding has 
over 1,000 pages, and on any one of

[[Page S2313]]

them is a place where a small business can get tripped up. By the way, 
this is one volume of title 40 of the Code of Federal Regulations. 
Title 40 deals with environmental protection. Title 40 has 20 more 
volumes like this one. And its only title 40.
  The Code of Federal Regulations occupies an entire 4 foot by 8 foot 
bookcase in the Senate library. A copy of the code costs almost $1,000, 
and is updated four times a year. Even if a small business could afford 
to buy it, it would be impossible to read it all. Why do we want to 
force every business in America to have to keep a battery of lawyers 
around just to advise about the overwhelming details in the Code of 
Federal Regulations?
  Now, usually when I describe these examples, I talk about Anchorage, 
AK. There, fish guts were added to the waste water to comply with 
regulations that require a certain amount of organic waste removed 
during sewage treatment. The water was too clean, so material had to be 
added just to comply with the requirement to get a minimum amount out. 
But I am happy to say that today I am no longer using that example. It 
seems that in response to a lawsuit, EPA announced its intention to 
lift some of the restrictions on sewage treatment plants such as the 
one in Anchorage.
  EPA states, ``This change would provide the affected municipalities 
with additional flexibility and, in some cases, cost savings without 
compromising environmental quality.''
  If we are to move forward to a safer, cleaner, healthier future, we 
have to change the way Washington regulates. This bill is a positive 
and helpful step in that direction. S. 942 will ensure small business 
participates in rulemaking. This in turn will mean that rules will take 
small business needs into consideration before a rule is enacted. The 
bill also allows judicial review of regulations for compliance with the 
16-year-old Regulatory Flexibility Act. A court can now examine whether 
agencies considered adverse impacts to Small Business when it writes 
regulations, and determine if an agency acted in an arbitrary manner. 
Penalty waivers and reductions when appropriate for small business 
violations. Recovery of attorney's fees when small business is forced 
into defensive litigation due to enforcement excesses. Comprehensive 
regulatory reform will continue to be a high priority for this Senator.
  As science and technology continue to change, we must have a Federal 
Government that can be responsive to such changes. We need to plan for 
the future, not just for today, and that means a regulatory system that 
can keep up with improvements.
  Four fundamental changes to the regulatory system will have to occur 
to ensure those improvements in the future. First, we must do a 
thorough review of existing regulations in place, decide what we need 
and what we don't, and avoid adding any more we don't need; second, 
Washington should be required to disclose the expected cost of current 
and new regulations. The public has a right to know what laws and 
regulations cost; third, when making regulatory decisions, the 
Government should use best estimates and realistic assumptions rather 
than worst case scenarios advanced by extremists; and fourth, new 
regulations should be based on the most advanced and credible 
scientific knowledge available.
  Common sense must be returned to regulating. I applaud Senators Bond 
and Bumpers, and all those who worked to bring this bill to the floor. 
It is an important first step toward a safer, cleaner, healthier 
future.
  Mr. WELLSTONE. Mr. President, I am very pleased to vote for this 
bill, reported out of the Small Business Committee 2 weeks ago. I 
commend Chairman Bond for moving the bill through our Committee, as 
well as ranking member Senator Bumpers. I appreciate the cooperation of 
both in working with me and my staff to help ensure that the easing of 
regulatory burden accomplished in this bill, which is needed and 
desirable, will not turn back the clock in the area of necessary 
enforcement of worker safety laws and regulations when there are 
serious violations.
  The bill provides judicial review for agency actions under the 
Regulatory Flexibility Act. And it would require agencies to publish 
plain-English compliance guides to help small business meet Government 
rules. I appreciate that the Senate is taking this positive, bipartisan 
action in the area of regulatory reform policy with a bill that came 
from the Small Business Committee. It brings badly needed common sense 
to regulations affecting small businesses.
  Mr. President, it is important that we take this step on a key item 
from the agenda of the White House Conference on Small Business. 
Minnesota delegates to the White House Conference selected this issue, 
as expressed in a Conference resolution, to be one of their top 
priorities.
  Mr. STEVENS. Mr. President, I strongly support the Small Business 
Regulatory Enforcement Fairness Act. Small business is overloaded with 
unreasonable regulatory requirements and paperwork. We are long overdue 
in doing something about it.
  This legislation will help small business in several major ways. 
First, it provides judicial review of the Regulatory Flexibility Act to 
ensure that agencies will consider the impact of regulations on small 
businesses, small towns, and nonprofit organizations. The Reg-Flex Act 
has been on the books for 16 years, but agencies have ignored it 
because it could not be enforced in court. We are putting an end to 
that.
  Second, this legislation helps small business to participate in the 
federal regulatory process. Third, it provides an opportunity for small 
businesses to redress arbitrary Government enforcement actions.
  In addition, Senator Nickles is adding a provision that would allow 
Congress to review new rules under expedited procedures. This can 
provide redress for both big and small business, governments, and non-
profit organizations. If a rule is unreasonable, Congress will have an 
opportunity to veto it.
  Mr. President, small business is critical to the well-being of the 
country and my home State of Alaska. Over 99 percent of Alaska's 
businesses are small businesses. They are the largest employers of 
minorities, women, and youth in Alaska. Alaska boasts a higher 
percentage of women-owned businesses than any State. Small business 
creates new jobs, is a crucial source of entrepreneurial innovation, 
and makes the American dream a reality for countless Americans.
  Federal bureaucrats must be more sensitive to the devastating impact 
that overregulation can have on small business. About 65 percent of 
Alaska's small businesses employ one to four employees. Many could 
drown unless we stem the rising tide of federal rules and redtape. I 
congratulate Senator Bond and my other colleagues who have promoted 
this important legislation.


                      small business review panels

  Mr. GLENN. Let me make sure I understand how the Small Business 
Review Panels will work. Before the publication of an initial 
regulatory flexibility analysis for a proposed EPA or OSHA rule, the 
SBA's Chief Counsel for Advocacy will gather information from 
individual representatives of small businesses, and other small 
entities such as small local governments, about the potential impacts 
of that proposed rule. That information will then be reviewed by a 
panel composed of members from EPA or OSHA, OIRA, and the Chief 
Counsel. The panel will then issue a report on those individual's 
comments, which will become part of the rulemaking record. Then, after 
the proposed rule is published in the Federal Register and prior to the 
publication of a final regulatory flexibility analysis, a second review 
panel will be convened, and again it will review and report on the 
individual's comments on the proposed rule. Is this correct?
  Mr. BOND. Yes; my colleague from Ohio has correctly summarized the 
review panel process.
  Mr. GLENN. Good, now let me ask specifically with regard to the first 
review panel stage: I trust that it is the managers' intention that the 
review panel's report and related information be placed in the 
rulemaking record in a timely fashion so that others interested in the 
proposed rule may have a reasonable opportunity to review that 
information and submit their own responses to it before the close of 
the agency's public comment period for the proposed rule.

[[Page S2314]]

  Mr. BOND. That is correct.
  Mr. GLENN. Good. Now, let me ask about the second review panel stage: 
I trust that it is the managers' intention that should an agency decide 
to significantly modify a proposed final rule on the basis of the 
panel's report, the agency will reopen the rulemaking proceeding and 
allow public comment on the newly revised proposal. I believe that not 
to do so would be to overturn longstanding rules against ex parte 
communications. Again, securing meaningful input from small entities 
should not be at the price of undercutting the openness and fairness of 
the Government decisionmaking process.
  Mr. BOND. I agree. Again, our purpose is to ensure that the concerns 
of small business and other small entities be fully and carefully 
considered by rulemaking agencies. If those concerns lead to a 
significant change in the regulatory proposal, the process should be 
reopened to allow all interested parties to comment on the revised 
proposal.
  Mr. GLENN. I thank the Senator very much. I am glad that we agree on 
how this process will work.
  Mr. LEVIN. Mr. President, one of the proposals we have before us, in 
S. 942, would establish an ombudsman in the Small Business 
Administration. That ombudsman would solicit information from small 
businesses on Federal regulatory enforcement practices and develop 
ratings of how well Federal agencies perform their enforcement duties. 
The ombudsman would have the ability to refer serious cases of abuse to 
an agency's inspector general.
  This provision seeks to make regulatory agencies more responsive to 
the concerns of small businesses by giving small businesses a means to 
respond to excessive regulatory enforcement practices. While I firmly 
believe that we need to fight for fundamental change in the culture of 
small business regulation, I question whether this proposal, although 
well-intentioned, is the best catalyst for affecting that change.
  I am concerend that the Small Business Committee did not fully 
consider other options that could provide a better mechanism for giving 
small businesses a stronger voice within agencies that regulate them. 
In particular, I think the committee should have taken more time to 
look at the pros and cons of placing an ombudsman in each regulatory 
agency, rather than relying on a lone ombudsman in the Small Business 
Administration to cover all agencies.

  I have been working for the past several months on a proposal that 
would create an office of ombudsman in each major regulatory agency. My 
proposal would give the ombudsman sufficient authority within the 
agency to solve problems and sufficient independence from the 
regulatory structure to act fairly. The ombudsman would be the mediator 
or honest broker between the small business who is the subject of an 
inspection or enforcement action and the regulatory apparatus of the 
agency.
  This was a recommendation of the Administrative Conference of the 
United States back in 1990, and I think it makes a lot of sense. I 
believe that much of the dissatisfaction of the regulated public with 
regulations is not only with the content of some of our regulations but 
also with the way in which they are enforced. Agencies often view a 
small business as a violator to be caught instead of as a company to be 
helped into compliance. And that's a big difference. The ombudsman 
would be there to put a friendly place--the spirit of cooperation--on 
the implementation of regulatory requirements.
  I agree that we need to give small businesses a stronger voice in the 
agencies that regulate them, but we must make sure that agencies are 
ready and willing to listen. That's why we need to consider placing an 
ombudsman in each agency and not just rely on a single ombudsman in the 
Small Business Administration.
  Mr. President, I have a number of concerns about placing a lone 
ombudsman in the Small Business Administration.
  First, the ombudsman would be responsible for soliciting comments 
about and developing ratings of programs and offices in each Federal 
agency that regulates the small business community. Carrying out this 
responsibility would require the ombudsman to become familiar with the 
operations of hundreds of programs in dozens of agencies. That's just 
not a reasonable expectation.
  Second, ombudsmen have traditionally been neutral officials who field 
complaints and recommend solutions to individual disputes between the 
Government and the regulated public. The broad jurisdiction of the 
office proposed in this bill would prohibit the ombudsman from focusing 
on the day-to-day problems small businesses face in dealing with agency 
regulators. The EPA Small Business ombudsman fields thousands of such 
inquiries every year, and that's just for one agency. Rather than 
investigating and mediating individual disputes himself or herself, the 
ombudsman would have to refer alleged cases of agency misconduct to the 
inspector general of the relevant agency.
  In other words, the ombudsman wouldn't receive information for the 
purpose of mediating disputes, solving problems, and fostering 
collaboration between agencies and regulated parties. Instead the 
ombudsman would receive information primarily for assessing agency 
performance. That doesn't help get immediate and specific problems 
solved.
  At the hearing on S. 942 in the Small Business Committee, several 
representatives of the small business community said that they would 
prefer to have a single ombudsman in the Small Business Administration 
rather than an ombudsman in each individual regulatory agency. They 
argued that agency ombudsmen could be influenced by internal agency 
politics and that, because of this, small businesses would be 
susceptible to intimidation by regulators if they came forward with 
complaints. While I understand the reluctance of small businesses to 
complain directly to an agency official about inappropriate regulatory 
practices, I believe that ombudsmen in regulatory agencies can be given 
sufficient independence from the regulatory structure to act fairly and 
to assure regulated parties that their inquiries will not be used 
against them.
  One witness, Wendy Lechner from the Printing Industries of America, 
made a point of praising the work of the Small Business Ombudsman at 
the Environmental Protection Agency and recommended that such ombudsman 
programs should be replicated throughout the regulatory agencies. The 
EPA office is one of approximately half a dozen ombudsman offices 
operating throughout the Federal Government that address disputes 
between agencies and the regulated public. By and large, these 
ombudsmen have improved communications between the agencies and 
regulated parties, uncovered systemic problems and chronic abuses in 
the regulatory process, and saved valuable resources through informal 
dispute resolution that otherwise would have been wasted on the costs 
of formal legal proceedings.
  Mr. President, I do not think the ombudsman provision in S. 942 
solves the enforcement problem for small businesses. I will continue to 
work on legislation that would place an ombudsman in each regulatory 
agency. I think such an approach would foster collaboration between 
small businesses and the agencies that regulate them and achieve better 
results.
  I commend the chairman and ranking Democrat on the Small Business 
Committee for their hard work on this bill and look forward to working 
with them as my ombudsman proposal is developed.


     the small business regulatory enforcement fairness act of 1996

  Mr. DOMENICI. Mr. President, I know I do not have to tell you that 
small businesses create most of the jobs in America. Small businesses 
are the engine that keep the American economy running. I know that in 
my State small businesses make up 85 to 90 percent of private 
employers. In that regard, I have created a New Mexico small business 
advisory board.
  I have also participated in Small Business Committee field hearings 
throughout my State. Indeed, I was privileged to have had the chairman 
of the Small Business Committee, Senator Bond, come out to New Mexico 
and hear from those New Mexico small businesses firsthand at a Small 
Business Committee field hearing in Albuquerque.
  Mr. President, what we found was that almost all of the small 
business owners we talked to--who are the people who create almost all 
of the private sector jobs in my State--told us just

[[Page S2315]]

how smothering the explosion in Federal regulations has become.
  In particular, those small business owners identified the 
Occupational Safety and Health Administration [OSHA] and the 
Environmental Protection Agency [EPA] as the two Federal agencies which 
promulgate the most unreasonable and burdensome regulations. Mr. 
President, these small business painted a picture of the Federal 
bureaucracy at its worst: arrogant, unresponsive, inefficient, and 
unaccountable.
  Further, Mr. President, because a great number of new businesses are 
being started by women, some of the most vocal critics of EPA's and 
OSHA's unreasonable regulations are women-owned businesses.
  I believe one of the biggest reasons for these bureaucratic problems 
is that small businesses are just not adequately consulted when 
regulations affecting them are being proposed and promulgated. I am not 
alone in this belief. In 1994 five agencies--including the Small 
Business Administration, EPA, and OSHA--held a small business forum on 
regulatory reform, and they came up with some conclusions about the 
problems with the current regulatory process.
  Let me quote from the administration's own report summarizing the 
principal concerns identified at the forum:

       Concern: ``The inability of small business owners to 
     comprehend overly complex regulations and those that are 
     overlapping, inconsistent and redundant;''
       Concern: ``The need for agency regulatory officials to 
     understand the nuances of the regulated industry and the 
     compliance constraints of small business;''
       Concern: ``The perceived existence of an adversarial 
     relationship between small business owners and federal 
     agencies;''

  And finally, Mr. President, and I think most important:

       Concern: ``The need for more small business involvement in 
     the regulatory development process, particularly during the 
     analytic, risk assessment and preliminary drafting stages.''

  Mr. President, this is the agencies' own report on the problems with 
the regulatory process.
  During the floor debate on last year's regulatory reform bill, 
Chairman Bond and I successfully added an amendment that would have 
squarely addressed those concerns. That amendment had the support of 
the National Federation of Independent Business, and was accepted by 
the Senate. As we all know, however, the broader regulatory bill did 
pass.
  That is why I am so happy to have worked with Chairman Bond to ensure 
that my small business advocacy panel initiative was included as a 
section of the bill we are about to vote on today, the Small Business 
Regulatory Enforcement Fairness Act of 1996. The small business 
community has no greater champion than my good friend from Missouri, 
and I am proud to be associated with his outstanding bill.
  Mr. President, the structure and process of these advocacy panels is 
as follows:
  First, prior to publication of an initial regulatory flexibility--reg 
flex--analysis, an agency would notify the Chief Counsel for Advocacy 
of the Small Business Administration of potential impacts of a proposed 
rule on small business.
  Second, the Chief Counsel would identify individual representatives 
of small business for advice and recommendations about the proposed 
rule.
  Third, the agency would convene a review panel consisting of 
representatives of the agency, the Office of Information and Regulatory 
Affairs, and the Chief Counsel, to review the information collected on 
the impact of the proposed rule on small business.
  Pursuant to the information obtained at the review panels, and where 
appropriate, the agency shall modify its proposed rule.
  Finally, the findings and comments of the review panel shall be 
included as part of the rulemaking record.
  This process shall be repeated prior to the final publication of a 
reg flex analysis.
  Remember, Mr. President, the agencies themselves have recognized that 
small businesses are underrepresented during rulemakings. I believe 
that these review panels, convened before the initial and the final reg 
flex analyses, will ensure that small businesses finally have an 
adequate voice in the regulatory process. In addition, these panels, 
working together so all viewpoints are represented, will be the crux of 
reasonable, consistent, and understandable rulemaking. Finally, Mr. 
President, and perhaps most important, these panels will help reduce 
counterproductive, unreasonable Federal regulations at the same time 
they are helping to foster the nonadversarial, cooperative 
relationships that most agree are long overdue between small businesses 
and Federal agencies.
  Mr. HELMS. Mr. President, the pending bill, S. 942, the Small 
Business Regulatory Enforcement Fairness Act of 1996, deserves the 
support of all Senators--and the able chairman of the Small Business 
Committee, our good friend from Missouri, Mr. Bond, is to be commended 
for his persistence.
  This legislation is badly needed. In North Carolina literally 
hundreds of small businesses are struggling under the heavy regulatory 
burdens imposed by the Washington bureaucracy. These businesses are 
seeing their profit margins gobbled up by oppressive Federal 
regulations.
  Mr. President, S. 942, will go a long way toward leveling the playing 
field and giving small businesses some long overdue relief from a 
portion of existing burdensome regulations. Small businesses now will 
be better able to challenge burdensome regulations in the courts.
  Federal agencies hereafter will be required to obtain the views and 
opinions of small businesses before regulations are drafted, making 
small businesses players before regulations are drafted and imposed.
  Mr. President, Mary McCarthy in the October 18, 1958, New Yorker 
Magazine observed, ``Bureaucracy, the rule of no one, has become the 
modern form of despotism.''
  How true, and I'm hopeful that both the Senate and the House will 
pass this legislation, and that the President will sign it, because no 
bureaucracy or bureaucrat should be permitted to be a despot over the 
people they are supposed to be serving.


                 duties and functions of the ombudsman

  Mr. LEVIN. One of the proposals put forward in S. 942 would establish 
an ombudsman position in the Small Business Administration. The 
proposal of the Senator from Missouri would provide a way to gather and 
publicize information about how agencies across the board treat small 
businesses in the regulatory enforcement process. I have concerns about 
the language the bill uses to describe the duties and functions of the 
ombudsman.
  Specifically, I would like to ask the Senator from Missouri about 
title II, section 30(b)(2) (A) and (C). In an earlier version of the 
bill, these sections, which outline the duties of the ombudsman, stated 
that the ombudsman shall

     work with each agency with regulatory authority over small 
     businesses to ensure that small business concerns that 
     receive or are subject to an audit, on-site inspection, 
     compliance assistance effort, or other enforcement related 
     communication or contact by agency personnel are [provided 
     with a means to comment on and rate the performance of such 
     personnel],

and,

     based on substantiated 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].

  This language appeared to direct small businesses and the ombudsman 
to publish employment ratings of specific agency employees who carry 
out regulatory enforcement actions. While the boards and the ombudsman 
are specifically directed to report on substantiated actions of agency 
personnel, I am concerned that this provision would have focused 
attention inappropriately on public ratings of individuals rather than 
on rating the performance of the agencies and agency offices. Such an 
individual rating system could interfere with the employment 
relationship between agencies and their employees.

  The language of the bill before us today is somewhat different from 
the earlier version. The current version of the bill states that the 
ombudsman shall

     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

[[Page S2316]]

     agency personnel are [provided with a means to comment on the 
     enforcement activity conducted by such personnel],

and

     based on substantiated comments received from small business 
     concerns and the Boards, annually report to Congress and 
     affected agencies [evaluating the enforcement activities of 
     agency personnel including a rating of the responsiveness to 
     small business of the various regional and program offices of 
     each agency].

  While the current language still allows for comment on the 
enforcement activities of agency personnel in order to identify 
potential abuses of the regulatory process, it appears to remove the 
mandate for the boards and the ombudsman to create a public performance 
rating of individual agency employees. Senator Bond, is this 
interpretation correct and, if so, was the change in language made in 
order to focus the reports of the boards and the ombudsman on rating 
overall agency performance rather than on rating individual regulators?
  Mr. BOND. The Senator's interpretation of the change in language is 
correct. My goal is to reduce the instances of excessive and abusive 
enforcement actions. Those actions obviously originate in the acts of 
individual enforcement personnel. Sometimes the problem is with the 
policies of an agency, and we are very definitely trying to change the 
culture and policies of Federal regulatory agencies. At other times, 
the problem is really that there are some bad apples at these agencies. 
It is for that reason that we specifically included a provision to 
allow the ombudsman, where appropriate, to refer serious problems with 
individuals to the agency's inspector general for proper action. The 
ombudsman's report to Congress should not single out individual agency 
employees by name or assign an individual evaluation or rating that 
might interfere with agency management and personnel policies. The 
intent of the bill is to give small businesses a voice in evaluating 
the overall performances of agencies and agency offices in their 
dealings with the small business community.
  Mr. LEVIN. I thank the chairman of the Small Business Committee. This 
is an important change and clarifies that the purpose of the 
ombudsman's report is not to rate individual agency personnel, but to 
assess each program's or agency's performance as a whole.
  Mr. DASCHLE. Mr. President, passage of the Small Business Regulatory 
Fairness Act will mark an important milestone in our efforts to provide 
American business with reasonable, common sense regulatory relief. It 
is a bill that should be passed by Congress and sent to the President 
with dispatch.
  This legislation, which was approved unanimously by the Senate Small 
Business Committee, and which I expect will pass the Senate with 
overwhelming bipartisan support, will provide much needed change in the 
way Federal agencies deal with American small business. It acknowledges 
that the Federal bureaucracy often chokes small business in red tape, 
and institutes a number of reforms that will unleash their productive 
energy without diminishing the Federal responsibility to protect the 
public health and safety. Passage of this bill will send an important 
message to small business owners across the country that their voice is 
being heard in Washington, DC.
  Small businesses already face a daunting array of challenges, from 
the uncertain economic climate to the myriad daily paperwork burdens of 
accounting, bookkeeping, and bill paying. The further burden of keeping 
up with, and complying with, Federal regulations can discourage even 
the most stalwart business men and women from striving to achieve their 
dream of entrepreneurship.
  The Federal Government has a responsibility to protect worker health 
and safety, public health, and the environment. In that effort, 
agencies issue regulations, but experience shows that many of those 
regulations look good on paper, but don't work in the real world. This 
bill acknowledges that fact and demonstrates our determination to both 
confront and correct mistakes.
  Federal agencies should be as sensitive as possible to the challenges 
faced by small businesses in America, and I expect this bill will help 
achieve that goal. Many of this bill's provisions were developed by 
small business owners from South Dakota and across the country during 
the White House Conference on Small Business last summer. No one knows 
more about the risks and pitfalls associated with owning a small 
business than businesspeople themselves. The White House conference 
gave them a forum in which to discuss how the regulatory process could 
be improved, and I am glad that Congress has taken to heart what they 
had to say on this subject.
  One of the most frequent criticisms I hear from small business owners 
is that Federal agencies bring harsh enforcement actions against 
businesses for relatively insignificant and unintentional violations of 
Federal rules. This legislation responds to that concern by requiring 
agencies to develop policies to waive fines for first-time, nonserious 
violations.
  The legislation also requires Federal agencies to publish easy-to-
read guidance for small business to comply with Federal rules and 
creates a small business and agricultural ombudsman at the Small 
Business Administration to provide a means to comment on agency 
enforcement personnel and to develop a customer satisfaction rating of 
Federal agencies. It assists small businesses in recovering attorneys' 
fees if they have been subject to excessive and unsustainable 
enforcement actions, and subjects final agency actions under the 
Regulatory Flexibility Act to judicial review. Small businesses will 
now be able to hold the feet of Federal agencies to the fire and ensure 
that they comply with the letter and spirit of the Regulatory 
Flexibility Act
  Finally, I am very pleased that the congressional veto legislation 
developed by Senators Reid and Nickles and passed by the Senate last 
year has been added to the Small Business Regulatory Fairness Act. The 
Reid/Nickles provision establishes a process through which Congress can 
review major regulations before they are issued, thereby ensuring that 
the agencies developing these rules adhere to the intent of Congress 
and develop reasonable requirements for American business.
  Mr. President, the Small Business Regulatory Fairness Act was written 
with advice from the small business community and will pass the Senate 
with strong bipartisan support. It reaffirms Congress' belief in the 
essential role that small business plays in the American economy and 
sends a clear signal that the public and private sectors are ready to 
work together in promoting the economic growth and expansion we will 
need to compete in the 21st century. I urge all my colleagues to 
support this important bill.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall the bill, as amended, pass? The yeas and nays have 
been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  The PRESIDING OFFICER (Mr. Smith). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 100, nays 0, as follows:

                      [Rollcall Vote No. 43 Leg.]

                               YEAS--100

     Abraham
     Akaka
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Bradley
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Feingold
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Pell
     Pressler
     Pryor
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simon
     Simpson
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner
     Wellstone
     Wyden
  The bill (S. 942) was passed, as follows:

                                 S. 942

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

[[Page S2317]]

     SECTION. 1. SHORT TITLE.

       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 
     activities.

     SEC. 4. EFFECTIVE DATE.

       This Act shall become effective on the date 90 days after 
     enactment, except that the amendments made by title IV of 
     this Act shall not apply to interpretive rules for which a 
     notice of proposed rulemaking was published prior to the date 
     of enactment.
             TITLE I--REGULATORY COMPLIANCE SIMPLIFICATION

     SEC. 101. DEFINITIONS.

       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.

     SEC. 102. COMPLIANCE GUIDES.

       (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, 
     taking into account the subject matter of the rule and the 
     language of relevant statutes, ensure that the guide is 
     written using sufficiently plain language likely 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) Comprehensive Source of Information.--Agencies shall 
     cooperate to make available to small entities through 
     comprehensive sources if information, the small entity 
     compliance guides and all other available information on 
     statutory and regulatory requirements affecting small 
     entities.
       (c) Limitation on Judicial review.--An agency's small 
     entity compliance guide shall not be subject to judicial 
     review, except that 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 
     entity compliance guide may be considered as evidence of the 
     reasonableness or appropriateness of any proposed fines, 
     penalties or damages.

     SEC. 103. INFORMAL SMALL ENTITY GUIDANCE.

       (a) 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 given by an agency applying the law to facts 
     provided by the small entity may be considered as evidence of 
     the reasonableness or appropriateness of any proposed fines, 
     penalties or damages sought against such small entity.
       (b) Program.--Each agency regulating the activities of 
     small entities shall establish a program for responding to 
     such inquiries no later than 1 year after enactment of this 
     section, utilizing existing functions and personnel of the 
     agency to the extent practicable.

     SEC. 104. SERVICES OF SMALL BUSINESS DEVELOPMENT CENTERS.

       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 
     subparagraphs:
       ``(Q) providing assistance to small business concerns 
     regarding regulatory requirements, including providing 
     training with respect to cost-effective regulatory 
     compliance;
       ``(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.''.

     SEC. 105. MANUFACTURING TECHNOLOGY CENTERS AND PROGRAMS 
                   ESTABLISHED UNDER SECTION 507 OF THE CLEAN AIR 
                   ACT AMENDMENTS OF 1990.

       (a) General.--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 to the same extent as provided for in 
     section 104 of this Act with respect to Small Business 
     Development Centers.
       (b) Section 507 Programs.--Nothing in this Act in any 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.

     SEC. 106. COOPERATION ON GUIDANCE.

       Agencies may, to the extent resources are available and 
     where appropriate, in cooperation with the States, develop 
     guides that fully integrate requirements of both Federal and 
     State regulations where regulations within an agency's area 
     of interest at the Federal and State levels impact small 
     businesses. Where regulations vary among the States, separate 
     guides may be created for separate States in cooperation with 
     State agencies.
                TITLE II--REGULATORY ENFORCEMENT REFORMS

     SEC. 201. SMALL BUSINESS AND AGRICULTURE ENFORCEMENT 
                   OMBUDSMAN.

       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 
     section:

     ``SEC. 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

       ``(a) Definitions.--For purposes of this section, the 
     term--
       ``(1) ``Board'' means a Regional Small Business Regulatory 
     Fairness Board established under subsection (c); and
       ``(2) ``Ombudsman'' means the Small Business and 
     Agriculture Regulatory Enforcement Ombudsman designated under 
     subsection (b).
       ``(b) SBA Enforcement Ombudsman.--
       ``(1) Not later than 180 days after the date of enactment 
     of this section, the Administration shall designate a Small 
     Business and Agriculture Regulatory Enforcement Ombudsman 
     utilizing personnel of the Small Business Administration to 
     the extent practicable. Other agencies shall assist the 
     Ombudsman and take actions as necessary to ensure compliance 
     with the requirements of this section. Nothing in this 
     section is intended to replace or diminish the activities of 
     any Ombudsman or similar office in any other agency.
       ``(2) The Ombudsman shall--
       ``(A) work with each agency with regulatory authority over 
     small businesses to ensure that small business concerns that 
     receive or are subject to an audit, onsite inspection, 
     compliance assistance effort, or other enforcement related 
     communication or contact by agency personnel are provided 
     with a means to comment on the enforcement activity conducted 
     by such personnel;
       ``(B) establish means to receive comments from small 
     business concerns regarding actions by agency employees 
     conducting compliance or enforcement activities with respect 
     to the small business concern, means to refer comments to the 
     Inspector General of the affected agency in the appropriate 
     circumstances, and otherwise seek to maintain the identity of 
     the person and small business concern making such comments on 
     a confidential basis to the same extent as employee 
     identities are protected under section

[[Page S2318]]

     7 of the Inspector General Act of 1978 (5 U.S.C. App.);
       ``(C) based on substantiated comments received from small 
     business concerns and the Boards, annually report to Congress 
     and affected agencies evaluating the enforcement activities 
     of agency personnel including a rating of the responsiveness 
     to small business of the various regional and program offices 
     of each agency;
       ``(D) coordinate and report annually on the activities, 
     findings, and recommendations of the Boards to the 
     Administration and to the heads of affected agencies; and
       ``(E) provide the affected agency with an opportunity to 
     comment on draft reports prepared under paragraph (C) and 
     include a section of the final report in which the affected 
     agency may make such comments as are not addressed by the 
     Ombudsman in revisions to the draft.
       ``(c) Regional Small Business Regulatory Fairness Boards.--
       ``(1) Not later than 180 days after the date of enactment 
     of this section, the 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 substantiated instances of 
     excessive enforcement actions of agencies against small 
     business concerns including any findings or recommendations 
     of the Board as to agency enforcement policy or practice; and
       ``(C) prior to publication, provide comment on the annual 
     report of the Ombudsman prepared under subsection (b).
       ``(3) Each Board shall consist of five members appointed by 
     the Administration, who are owners or operators of small 
     entities, after receiving the recommendations of the chair 
     and ranking minority member of the Committees on Small 
     Business of the House of Representatives and the Senate.
       ``(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: Provided, That the donations and 
     their sources are disclosed by the Board.
       ``(4) Members of the Board shall serve without 
     compensation: Provided, That members of the Board shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Board.''.

     SEC. 202. RIGHTS OF SMALL ENTITIES IN ENFORCEMENT ACTIONS.

       (a) In General.--Each agency regulating the activities of 
     small entities shall establish a policy or program within 1 
     year of enactment of this section 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. Under appropriate 
     circumstances, an agency may consider ability to pay in 
     determining penalty assessments on small entities.
       (b) Conditions and Exclusions.--Subject to the requirements 
     or limitations of other statutes, policies or programs 
     established under this section shall contain conditions or 
     exclusions which may include, but shall not be limited to--
       (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;
       (3) excluding small entities that have been subject to 
     multiple enforcement actions by the agency;
       (4) excluding violations involving willful or criminal 
     conduct;
       (5) excluding violations that pose serious health, safety 
     or environmental threats; and
       (6) requiring a good faith effort to comply with the law.
       (c) Reporting.--Agencies shall report to Congress no later 
     than 2 years from the effective date on the scope of their 
     program or policy, the number of enforcement actions against 
     small entities that qualified or failed to qualify for the 
     program or policy, and the total amount of penalty reductions 
     and waivers.
           TITLE III--EQUAL ACCESS TO JUSTICE ACT AMENDMENTS

     SEC. 301. ADMINISTRATIVE PROCEEDINGS.

       Section 504 of title 5, United States Code, is amended--
       (1) in subsection (b), by striking ``$75'' in subparagraph 
     (b)(1) and inserting ``$125''; and
       (2) in subsection (a) by adding the following new 
     paragraph:
       ``(4) In an adversary adjudication brought by an agency, an 
     adjudicative officer of the agency shall award attorney's 
     fees and other expenses to a party or a small entity, as 
     defined in section 601, if the decision of the adjudicative 
     officer is disproportionately less favorable to the agency 
     than an express demand by the agency, unless the party or 
     small entity has committed a willful violation of law or 
     otherwise acted in bad faith, or special circumstances make 
     an award of attorney's fees unjust. For purposes of this 
     paragraph, an `express demand' shall not include a recitation 
     by the agency of the maximum statutory penalty (A) in the 
     administrative complaint, or (B) elsewhere when accompanied 
     by an express demand for a lesser amount. Fees and expenses 
     awarded under this paragraph may not be paid from the claims 
     and judgments account of the Treasury from funds appropriated 
     pursuant to section 1304 of title 31, United States Code.''.

     SEC. 302. JUDICIAL PROCEEDINGS.

       Section 2412 of title 28, United States Code, is amended--
       (1) in paragraph (d), by striking ``$75'' in subparagraph 
     (2)(A) and inserting ``$125''; and
       (2) in paragraph (d)(1) by adding the following new 
     subparagraph:
       ``(D) In a civil action brought by the United States, a 
     court shall award attorney's fees and other expenses to a 
     party or a small entity, as defined in section 601 of title 
     5, United States Code, if the judgment finally obtained by 
     the United States is disproportionately less favorable to the 
     United States than an express demand by the United States, 
     unless the party or small entity has committed a willful 
     violation of law or otherwise acted in bad faith, or special 
     circumstances make an award of attorney's fees unjust. For 
     purposes of this subparagraph, an `express demand' shall not 
     include a recitation of the maximum statutory penalty (i) in 
     the complaint, or (ii) elsewhere when accompanied by an 
     express demand for a lesser amount. Fees and expenses awarded 
     under this subparagraph may not be paid from the claims and 
     judgments account of the Treasury from funds appropriated 
     pursuant to section 1304 of title 31, United States Code.''.
            TITLE IV--REGULATORY FLEXIBILITY ACT AMENDMENTS

     SEC. 401. REGULATORY FLEXIBILITY ANALYSES.

       (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 proposed rulemaking for an interpretive 
     rule involving the internal revenue laws of the United 
     States''; and
       (2) by inserting at the end of the subsection, the 
     following new sentence: ``In the case of an interpretive rule 
     involving the internal revenue laws of the United States, 
     this chapter applies to interpretive rules published in the 
     Federal Register for codification in the Code of Federal 
     Regulations, but only to the extent that such interpretive 
     rules impose on small entities a collection of information 
     requirements, as defined in the Paperwork Reduction Act of 
     1995.''.
       (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 is otherwise required to publish 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 significant 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 which affect the impact 
     on small business was rejected.''; and
       (2) in subsection (b), by striking ``at the time'' and all 
     that follows and inserting ``such analysis or a summary 
     thereof.''.

     SEC. 402. JUDICIAL REVIEW.

       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 final 
     agency action is entitled

[[Page S2319]]

     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 one year, 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 final 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, and
       ``(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 rulemaking.
       ``(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.''.

     SEC. 403. TECHNICAL AND CONFORMING AMENDMENTS.

       (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 rulemaking 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 
     amended--
       (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 with respect to small entities and 
     the''.

     SEC. 404. SMALL BUSINESS ADVOCACY REVIEW PANELS.

       (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 
     networks'';
       (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 which a covered agency is required to 
     conduct by this chapter--
       ``(1) a covered 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) not later than 15 days after the date of receipt of 
     the materials described in paragraph (1), 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, including any draft 
     proposed rule, collect advice and recommendations of the 
     small entity representatives identified by the agency after 
     consultation with the Chief Counsel, on issues related to 
     subsections 603(b), paragraphs (3), (4) and (5) and 603(c);
       ``(5) not later than 60 days after the date a covered 
     agency convenes a review panel pursuant to paragraph (3), the 
     review panel shall report on the comments of the small entity 
     representatives and its findings as to issues related to 
     subsections 603(b), paragraphs (3), (4) and (5) and 603(c): 
     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, the initial regulatory flexibility analysis or 
     the decision on whether an initial regulatory flexibility 
     analysis is required.
       ``(c) Prior to publication of a final regulatory 
     flexibility analysis that a covered agency is required by 
     this chapter to conduct--
       ``(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, including any draft 
     rule, 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) not later than 15 days after the date a covered 
     agency convenes a review panel pursuant to paragraph (1), 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, the final regulatory flexibility analysis 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 
     entities.
       ``(e) For purposes of this section, the term `covered 
     agency' means the Environmental Protection Agency and the 
     Occupational Health and Safety Administration of the 
     Department of Labor.
       ``(f) The Chief Counsel for Advocacy, in consultation with 
     the individuals identified in paragraph (b)(2) and with the 
     Administrator of the Office of Information and Regulatory 
     Affairs within the Office of Management and Budget, may waive 
     the requirements of paragraphs (b)(3), (b)(4), and (b)(5), 
     and subsection (c) by including in the rulemaking record a 
     written finding, with reasons therefor, that those 
     requirements would not advance the effective participation of 
     small entities in the rulemaking process. For purposes of 
     this subsection, the factors to be considered in making such 
     a finding are as follows--
       ``(1) in developing a proposed rule, the extent to which 
     the covered agency consulted with individuals representative 
     of affected small entities with respect to the potential 
     impacts of the rule and took such concerns into 
     consideration; or in developing a final rule, the extent to 
     which the covered agency took into consideration the comments 
     filed by the individuals identified in paragraph (b)(2);
       ``(2) special circumstances requiring prompt issuance of 
     the rule; and
       ``(3) whether the requirements of subsection (b) or (c) 
     would provide the individuals identified in subsection (b)(2) 
     with a competitive advantage relative to other small 
     entities.''.
       (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.
                     TITLE V--CONGRESSIONAL REVIEW

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Congressional Review Act 
     of 1996''.

[[Page S2320]]

     SEC. 502. FINDING.

       The Congress finds that effective steps for improving the 
     efficiency and proper management of Government operations 
     will be promoted if a moratorium on the effectiveness of 
     certain significant final rules is imposed in order to 
     provide Congress an opportunity for review.

     SEC. 503. MORATORIUM ON REGULATIONS; CONGRESSIONAL REVIEW.

       (a) Reporting and Review of Regulations.--
       (1) Reporting to congress and the comptroller general.--
       (A) Before a rule can take effect as a final rule, the 
     Federal agency promulgating such rule shall submit to each 
     House of the Congress and to the Comptroller General a report 
     containing--
       (i) a copy of the rule;
       (ii) a concise general statement relating to the rule; and
       (iii) the proposed effective date of the rule.
       (B) The Federal agency promulgating the rule shall make 
     available to each House of Congress and the Comptroller 
     General, upon request--
       (i) a complete copy of the cost-benefit analysis of the 
     rule, if any;
       (ii) the agency's actions relevant to section 603, section 
     604, section 605, section 607, and section 609 of Public Law 
     96-354;
       (iii) the agency's actions relevant to title II, section 
     202, section 203, section 204, and section 205 of Public Law 
     104-4; and
       (iv) any other relevant information or requirements under 
     any other Act and any relevant Executive Orders, such as 
     Executive Order 12866.
       (C) Upon receipt, each House shall provide copies to the 
     Chairman and Ranking Member of each committee with 
     jurisdiction.
       (2) Reporting by the comptroller general.--
       (A) The Comptroller General shall provide a report on each 
     significant rule to the committees of jurisdiction to each 
     House of the Congress by the end of 12 calendar days after 
     the submission or publication date as provided in section 
     504(b)(2). The report of the Comptroller General shall 
     include an assessment of the agency's compliance with 
     procedural steps required by subparagraph (B) (i) through 
     (iv).
       (B) Federal agencies shall cooperate with the Comptroller 
     General by providing information relevant to the Comptroller 
     General's report under paragraph (2)(A) of this section.
       (3) Effective date of significant rules.--A significant 
     rule relating to a report submitted under paragraph (1) shall 
     take effect as a final rule, the latest of--
       (A) the later of the date occurring 45 days after the date 
     on which--
       (i) the Congress receives the report submitted under 
     paragraph (1); or
       (ii) the rule is published in the Federal Register;
       (B) if the Congress passes a joint resolution of 
     disapproval described under section 504 relating to the rule, 
     and the President signs a veto of such resolution, the 
     earlier date--
       (i) on which either House of Congress votes and fails to 
     override the veto of the President; or
       (ii) occurring 30 session days after the date on which the 
     Congress received the veto and objections of the President; 
     or
       (C) the date the rule would have otherwise taken effect, if 
     not for this section (unless a joint resolution of 
     disapproval under section 504 is enacted).
       (4) Effective date for other rules.--Except for a 
     significant rule, a rule shall take effect as otherwise 
     provided by law after submission to Congress under paragraph 
     (1).
       (5) Failure of joint resolution of disapproval.--
     Notwithstanding the provisions of paragraph (3), the 
     effective date of a rule shall not be delayed by operation of 
     this title beyond the date on which either House of Congress 
     votes to reject a joint resolution of disapproval under 
     section 504.
       (b) Termination of Disapproved Rulemaking.--A rule shall 
     not take effect (or continue) as a final rule, if the 
     Congress passes a joint resolution of disapproval described 
     under section 504.
       (c) Presidential Waiver Authority.--
       (1) Presidential determinations.--Notwithstanding any other 
     provision of this section (except subject to paragraph (3)), 
     a rule that would not take effect by reason of this title may 
     take effect, if the President makes a determination under 
     paragraph (2) and submits written notice of such 
     determination to the Congress.
       (2) Grounds for determinations.--Paragraph (1) applies to a 
     determination made by the President by Executive order that 
     the rule should take effect because such rule is--
       (A) necessary because of an imminent threat to health or 
     safety or other emergency;
       (B) necessary for the enforcement of criminal laws; or
       (C) necessary for national security.
       (3) Waiver not to affect congressional disapprovals.--An 
     exercise by the President of the authority under this 
     subsection shall have no effect on the procedures under 
     section 504 or the effect of a joint resolution of 
     disapproval under this section.
       (d) Treatment of Rules Issued at End of Congress.--
       (1) Additional opportunity for review.--In addition to the 
     opportunity for review otherwise provided under this title, 
     in the case of any rule that is published in the Federal 
     Register (as a rule that shall take effect as a final rule) 
     during the period beginning on the date occurring 60 days 
     before the date the Congress adjourns sine die through the 
     date on which the succeeding Congress first convenes, section 
     504 shall apply to such rule in the succeeding Congress.
       (2) Treatment under section 504.--
       (A) In applying section 504 for purposes of such additional 
     review, a rule described under paragraph (1) shall be treated 
     as though--
       (i) such rule were published in the Federal Register (as a 
     rule that shall take effect as a final rule) on the 15th 
     session day after the succeeding Congress first convenes; and
       (ii) a report on such rule were submitted to Congress under 
     subsection (a)(1) on such date.
       (B) Nothing in this paragraph shall be construed to affect 
     the requirement under subsection (a)(1) that a report must be 
     submitted to Congress before a final rule can take effect.
       (3) Actual effective date not affected.--A rule described 
     under paragraph (1) shall take effect as a final rule as 
     otherwise provided by law (including other subsections of 
     this section).
       (e) Treatment of Rules Issued Before This Title.--
       (1) Opportunity for congressional review.--The provisions 
     of section 504 shall apply to any significant rule that is 
     published in the Federal Register (as a rule that shall take 
     effect as a final rule) during the period beginning on March 
     1, 1996, through the date on which this title takes effect.
       (2) Treatment under section 504.--In applying section 504 
     for purposes of Congressional review, a rule described under 
     paragraph (1) shall be treated as though--
       (A) such rule were published in the Federal Register (as a 
     rule that shall take effect as a final rule) on the date of 
     the enactment of this Act; and
       (B) a report on such rule were submitted to Congress under 
     subsection (a)(1) on such date.
       (3) Actual effective date not affected.--The effectiveness 
     of a rule described under paragraph (1) shall be as otherwise 
     provided by law, unless the rule is made of no force or 
     effect under section 504.
       (f) Nullification of Rules Disapproved by Congress.--Any 
     rule that takes effect and later is made of no force or 
     effect by the enactment of a joint resolution under section 
     504 shall be treated as though such rule had never taken 
     effect.
       (g) No Inference to be Drawn Where Rules Not Disapproved.--
     If the Congress does not enact a joint resolution of 
     disapproval under section 504, no court or agency may infer 
     any intent of the Congress from any action or inaction of the 
     Congress with regard to such rule, related statute, or joint 
     resolution of disapproval.

     SEC. 504. CONGRESSIONAL DISAPPROVAL PROCEDURE.

       (a) Joint Resolution Defined.--For purposes of this 
     section, the term ``joint resolution'' means only a joint 
     resolution introduced during the period beginning on the date 
     on which the report referred to in section 503(a) is received 
     by Congress and ending 45 days thereafter, the matter after 
     the resolving clause of which is as follows: ``That Congress 
     disapproves the rule submitted by the ____ relating to ____, 
     and such rule shall have no force or effect.''. (The blank 
     spaces being appropriately filled in.)
       (b) Referral.--
       (1) In general.--A resolution described in paragraph (1) 
     shall be referred to the committees in each House of Congress 
     with jurisdiction. Such a resolution may not be reported 
     before the eighth day after its submission or publication 
     date.
       (2) Submission date.--For purposes of this subsection the 
     term ``submission or publication date'' means the later of 
     the date on which--
       (A) the Congress receives the report submitted under 
     section 503(a)(1); or
       (B) the rule is published in the Federal Register.
       (c) Discharge.--If the committee to which is referred a 
     resolution described in subsection (a) has not reported such 
     resolution (or an identical resolution) at the end of 20 
     calendar days after the submission or publication date 
     defined under subsection (b)(2), such committee may be 
     discharged from further consideration of such resolution in 
     the Senate upon a petition supported in writing by 30 Members 
     of the Senate and in the House upon a petition supported in 
     writing by one-fourth of the Members duly sworn and chosen or 
     by motion of the Speaker supported by the Minority Leader, 
     and such resolution shall be placed on the appropriate 
     calendar of the House involved.
       (d) Floor Consideration.--
       (1) In general.--When the committee to which a resolution 
     is referred has reported, or when a committee is discharged 
     (under subsection (c)) from further consideration of, a 
     resolution described in subsection (a), it is at any time 
     thereafter in order (even though a previous motion to the 
     same effect has been disagreed to) for a motion to proceed to 
     the consideration of the resolution, and all points of order 
     against the resolution (and against consideration of 
     resolution) are waived. The motion is not subject to 
     amendment, or to a motion to postpone, or to a motion to 
     proceed to the consideration of other business. A motion to 
     reconsider the vote by which the motion is agreed to or 
     disagreed to shall not be in order. If a motion to proceed to 
     the consideration of the resolution is agreed to, the 
     resolution shall remain

[[Page S2321]]

     the unfinished business of the respective House until 
     disposed of.
       (2) Debate.--Debate on the resolution, and on all debatable 
     motions and appeals in connection therewith, shall be limited 
     to not more than 10 hours, which shall be divided equally 
     between those favoring and those opposing the resolution. A 
     motion further to limit debate is in order and not debatable. 
     An amendment to, or a motion to postpone, or a motion to 
     proceed to the consideration of other business, or a motion 
     to recommit the resolution is not in order.
       (3) Final passage.--Immediately following the conclusion of 
     the debate on a resolution described in subsection (a), and a 
     single quorum call at the conclusion of the debate if 
     requested in accordance with the rules of the appropriate 
     House, the vote on final passage of the resolution shall 
     occur.
       (4) Appeals.--Appeals from the decisions of the Chair 
     relating to the application of the rules of the Senate or the 
     House of Representatives, as the case may be, to the 
     procedure relating to a resolution described in subsection 
     (a) shall be decided without debate.
       (e) Treatment if Other House Has Acted.--If, before the 
     passage by one House of a resolution of that House described 
     in subsection (a), that House receives from the other House a 
     resolution described in subsection (a), then the following 
     procedures shall apply:
       (1) Nonreferral.--The resolution of the other House shall 
     not be referred to a committee.
       (2) Final passage.--With respect to a resolution described 
     in subsection (a) of the House receiving the resolution--
       (A) the procedure in that House shall be the same as if no 
     resolution had been received from the other House; but
       (B) the vote on final passage shall be on the resolution of 
     the other House.
       (f) Constitutional Authority.--This section is enacted by 
     Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a resolution described in 
     subsection (a), and it supersedes other rules only to the 
     extent that it is inconsistent with such rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

     SEC. 505. SPECIAL RULE ON STATUTORY, REGULATORY AND JUDICIAL 
                   DEADLINES.

       (a) In General.--In the case of any deadline for, relating 
     to, or involving any rule which does not take effect (or the 
     effectiveness of which is terminated) because of the 
     enactment of a joint resolution under section 504, that 
     deadline is extended until the date 12 months after the date 
     of the joint resolution. Nothing in this subsection shall be 
     construed to affect a deadline merely by reason of the 
     postponement of a rule's effective date under section 503(a).
       (b) Deadline Defined.--The term ``deadline'' means any date 
     certain for fulfilling any obligation or exercising any 
     authority established by or under any Federal statute or 
     regulation, or by or under any court order implementing any 
     Federal statute or regulation.

     SEC. 506. DEFINITIONS.

       For purposes of this title--
       (1) Federal agency.--The term ``Federal agency'' means any 
     ``agency'' as that term is defined in section 551(1) of title 
     5, United States Code (relating to administrative procedure).
       (2) Significant rule.--The term ``significant rule''--
       (A) means any final rule that the Administrator of the 
     Office of Information and Regulatory Affairs within the 
     Office of Management and Budget finds--
       (i) has an annual effect on the economy of $100,000,000 or 
     more or adversely affects in a material way the economy, a 
     sector of the economy, productivity, competition, jobs, the 
     environment, public health or safety, or State, local, or 
     tribal governments or communities;
       (ii) creates a serious inconsistency or otherwise 
     interferes with an action taken or planned by another agency;
       (iii) materially alters the budgetary impact of 
     entitlement, grants, user fees, or loan programs or the 
     rights and obligations of recipients thereof; or
       (iv) raises novel legal or policy issues arising out of 
     legal mandates, the President's priorities, or the principles 
     set forth in Executive Order 12866; and
       (B) shall not include any rule promulgated under the 
     Telecommunications Act of 1996 and the amendments made by 
     such Act.
       (3) Final rule.--The term ``final rule'' means any final 
     rule or interim final rule. As used in this paragraph, 
     ``rule'' has the meaning given such term by section 551 of 
     title 5, United States Code, except that such term does not 
     include any rule of particular applicability including a rule 
     that approves or prescribes for the future rates, wages, 
     prices, services, or allowances therefor, corporate or 
     financial structures, reorganizations, mergers, or 
     acquisitions thereof, or accounting practices or disclosures 
     bearing on any of the foregoing or any rule of agency 
     organization, personnel, procedure, practice or any routine 
     matter.

     SEC. 507. JUDICIAL REVIEW.

       No determination, finding, action, or omission under this 
     title shall be subject to judicial review.

     SEC. 508. APPLICABILITY; SEVERABILITY.

       (a) Applicability.--This title shall apply notwithstanding 
     any other provision of law.
       (b) Severability.--If any provision of this title, or the 
     application of any provision of this title to any person or 
     circumstance, is held invalid, the application of such 
     provision to other persons or circumstances, and the 
     remainder of this title, shall not be affected thereby.

     SEC. 509. EXEMPTION FOR MONETARY POLICY.

       Nothing in this title shall apply to rules that concern 
     monetary policy proposed or implemented by the Board of 
     Governors of the Federal Reserve System or the Federal Open 
     Market Committee.

     SEC. 510. EXEMPTION FOR HUNTING AND FISHING.

       Nothing in this title shall apply to rules that establish, 
     modify, open, close, or conduct a regulatory program for a 
     commercial, recreational, or subsistence activity relating to 
     hunting, fishing, or camping.

     SEC. 511. EFFECTIVE DATE.

       This title shall take effect on the date of the enactment 
     of this Act and shall apply to any rule that takes effect as 
     a final rule on or after such effective date.

  Mr. BOND. Mr. President, I move to reconsider the vote by which the 
bill was passed.
  Mr. DOLE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. BOND. Mr. President, I would like to express my appreciation to 
my colleagues for the overwhelming endorsement of this small business 
regulatory relief measure. Particularly, I want to thank my ranking 
member, Senator Bumpers. He and all the members of the committee worked 
very hard on this bill.
  The purpose of the bill is to provide targeted relief to small 
businesses, small entities such as townships, counties, and cities, and 
not-for-profit organizations who feel overwhelmed by Government 
regulation.
  This is a measure providing judicial enforcement and therefore, 
putting teeth into the requirements of the measure that Congress 
adopted in 1980 saying that regulations affecting small business and 
small entities must have an analysis to make sure that flexibility for 
these small entities was included and was a No. 3 priority for small 
business. At the White House Conference on Small Business held in 
Washington last year, 2,000 delegates from all across the country said 
this was the third most important item on their agenda.
  We took that message from the small businesses, from small entities, 
from people who attended our hearings across the country and in 
Washington, and people who contacted us in our States, and we crafted a 
measure that had the strongest bipartisan support. Our staffs worked 
with a wide variety of groups. We had the full support of the President 
and the Administrator of the Small Business Administration. But lots of 
people had lots of concerns and lots of little issues that needed to be 
addressed in this bill. As a result, we made significant numbers of 
minor changes to make sure that the bill did what it accomplishes.
  I believe that while the project is not perfect, it is an excellent 
measure. I hope we will see quick action on it in the House so that we 
may come to conference and agree, and send to the President something 
at least very close to this measure.

  I wish to extend a very special thanks to the counsel for the 
minority, John Ball, to the director of the Small Business Committee, 
Louis Taylor, and to Keith Cole. Among them, they listened to many, 
many hours of telephone calls and concerns from people who had a little 
fix here and a little fix there. The end product, I think, reflected 
much good advice and some advice that could not be taken. But I express 
appreciation, first, to the members of the Small Business Committee 
themselves who worked hard on this, to all of their staffs, and to the 
representatives of small business who showed the strength and the 
resolve to keep us focused on this, a measure designed to provide 
regulatory relief to an area which has experienced tremendous burdens 
from Government regulations.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.

[[Page S2322]]

  Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak as if 
in morning business for 8 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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