1610 YOUR RIGHTS TO REGULATORY FAIRNESS FOR SMALL BUSINESS & AGRICULTURE

Overview of the Small Business Regulatory Enforcement Fairness Act of 1996

The Small Business Regulatory Enforcement Fairness Act (SBREFA) was enacted into law March 29, 1996.

The six key aspects of the legislation are as follows:

• Regulatory Compliance Simplification: Federal agencies are required to develop comprehensive guidelines and a well-defined process to respond to small business inquiries on actions that businesses are required to take to comply with rules established by the agencies. These guidelines must be written in plain English.
• Equal Access to Justice Amendments: Small businesses are given expanded authority to go to court to be awarded attorney’s fees and costs when an agency has been found to be excessive in its enforcement of federal regulations.
• Congressional Review: Congress is authorized to review each major rule promulgated before it can take effect.
• Regulatory Enforcement Reform of Penalties: Within one year each agency shall establish a policy to provide for the reduction and, in some circumstances, the waiver of civil penalties for violations of a regulation.

The final two key aspects most directly affect the U.S. Small Business Administration as follows:

• Small Business Advocacy Review Panels: Before proposed rules are published, the Environmental Protection Agency and the Occupational Safety and Health Administration are required to establish government panels that receive input from affected small businesses and make public the panels’ report as part of the record.
• Oversight of Regulatory Enforcement: The SBA administrator must appoint a small business and agriculture regulatory-enforcement ombudsman and 10 small businesses are provided with a procedure to comment on the enforcement activity conducted by federal regulatory agencies. The national ombudsman must annually report to Congress on the findings.

Your Rights to Fair Regulatory Enforcement

Federal agencies must establish a policy for the reduction or waiver of civil penalties for violation of a statutory or regulatory requirement. Agencies may consider ability to pay in determining penalty assessments. Policies or programs should contain the following conditions or exclusions:

• require the correction of a violation within a reasonable time,
• limit the applicability of violations discovered through small business participation in a compliance-assistance or audit program, and
• require a good-faith effort to comply with the law.

SBREFA makes certain that small businesses have a voice that will be heard by federal agencies as they go through the rule-making process. It also gives small businesses expanded opportunities to challenge an agency’s final regulatory decision.

Provision for Judicial Review

When small businesses believe a rule or regulation will adversely affect them, and the agency fails to met its analysis and disclosure obligation under the Regulatory Flexibility Act (RFA) of 1980, they have the opportunity to seek review of an agency’s compliance with the law.

The SBA’s chief counsel for advocacy can become directly involved in appeals by filing amicus (friend of the court) briefs in the court proceedings brought about by the small business appealing the rule and violations of the RFA.

The chief counsel participates in the small business advocacy review panels and identifies the small entities that the panel should consult. The chief counsel also submits comments on agency proposals. The comments can be viewed on Advocacy’s Home Page: http://www.sba.gov/ADVO. Concerns about proposed regulations should be addressed to the Chief Counsel of Advocacy: 409 3rd St., S.W., Suite 7800: Washington, DC 20416 or faxed to the Chief Counsel at (202) 205-69283

The Regional Fairness Boards

The SBA administrator is required to appoint 10 small business regulatory fairness boards. The boards are comprised of five small business owners. The 10 regional cities where they are based and the areas they cover are:

Boston: New England states
New York: Mid Atlantic states
Philadelphia: South Atlantic states
Chicago: Midwestern states
Dallas: Southern states
Kansas City: Heartland states
Denver: Rocky Mountain states
San Francisco: Western states and
Seattle: Northwestern states.

The Regulatory Fairness Boards will:

• receive a copy of your appraisal form,
• hold a follow-up meeting on your concern,
• report on significant enforcement issues, and
• reflect all concerns in their report to Congress.

The Regulatory Fairness Boards Cannot:

• adjudicate your complaints directly, or
• reverse agency decisions.

Therefore, you should continue exercising your rights and exhausting every option you believe is in your best interest.

How to Register Your Concerns

Call 1-888-REG-FAIR to obtain an appraisal form. If you have Internet capability, download the form from the SBA Home Page at .

• A completed appraisal form will be reviewed by the national ombudsman and by the fairness board members in your region.
• The ombudsman may follow up with the agency, requesting an explanation of the enforcement action taken.
• The ombudsman will inform you, the business owner, and the appropriate regional fairness board of the agency’s response.
• Public hearings may be held on issues that highlight significant regulatory problems or achievements of federal agencies.
• All comments received from small businesses will be reflected in the ombudsman and fairness boards’ annual report to Congress.

Major Developments Benefiting Small Business Related to Regulatory Compliance

Chronology of the Last 20 Years

1980 – Regulatory Flexibility Act of 1980
The Regulatory Flexibility Act of 1980 requires each federal agency to analyze the effects of its regulations on small businesses.

1981 – President Reagan’s Executive Order
President Reagan’s Executive Order requires the Office of Management and Budget to review each new rule being promulgated to analyze the cost/benefit of that regulation.

1993 – President Clinton’s Executive Order and
1995 – Memorandum of Penalty Waiver
President Clinton’s Executive Order 12866 directed agencies to provide the public with meaningful participation in the regulatory process and laid the foundation for public involvement. The April 1995 Memorandum gives compliance officials more flexibility in dealing with small businesses and the authority to waive penalties and use enforcement discretion to help bring entities into compliance.

1996 – Small Business Regulatory Enforcement Fairness Act of 1996, P.L. 104-121
The Small Business Regulatory Enforcement Fairness Act of 1996 was passed by Congress and signed into law by President Clinton on March 29, 1996. This law provides small businesses with new and meaningful ways to participate in the federal regulatory process. Specifically, it requires:

• agencies to develop written guidelines in plain English to help small businesses understand how to comply,
• Congress to review all major new rules,
• agencies to provide for the reduction and waiver of penalties imposed on small businesses,
• the creation of government small business advocacy panels to review rules proposed by EPA and OSHA and to consult with small businesses, and
• the creation of a national ombudsman and 10 regional fairness boards to monitor agency enforcement activities.

This law also provides small businesses with enhanced authority to go to court to challenge agency rules.

How to Contact Major Agencies that Regulate Small Business & Agriculture Concerning SBREFA Issues

Department of Agriculture – (202) 690-1516
Department of Commerce – (202) 482-4144
Department of Justice – (202) 514-0750
Department of Labor – (202) 219-9148
Department of Transportation – (202) 366-4723
Environmental Protection Agency – (202) 260-5480
Federal Energy Regulatory Commission – (202) 208-0004
Internal Revenue Service – (202) 622-4989
Securities and Exchange Commission – (202) 942-2950
SBA Office of the National Ombudsman – (312) 353-0880

All of the SBA’s programs and services are provided to the public on a nondiscriminatory basis.

Source: US Small Business Administration, Office of the National Ombudsman

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Last Update – 11-Nov-97