Small Business and the SBA Office of Advocacy

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Small Business and the SBA Office of Advocacy
An Overview

• Bruce Lundegren
• Assistant Chief Counsel
• Office of Advocacy
• U.S. Small Business Administration
• [phone]
• bruce.lundegren_at_sba.gov

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Overview of Presentation

• The SBA Office of Advocacy The Federal Watchdog
  for Small Business
• The Impact of Small Business on the Economy
• Overview of the Regulatory Process
  (Administrative Procedure Act and Executive Order
  12866)
• The Regulatory Flexibility Act
• The Small Business Regulatory Enforcement
  Fairness Act (SBREFA) of 1996
• Executive Order 13272
• OSHAs Regulatory Agenda Whats on the Horizon?

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SBA Office of Advocacy The Federal Watchdog for
Small Business

• Created in 1976 as an independent voice for small
  business
• Headed by the Chief Counsel for Advocacy
• Oversee agency compliance with the Regulatory
  Flexibility Act (1980)
• requires federal agencies to assess the impact of
  their regulations on small business and consider
  less burdensome alternatives
• Added small business consideration to the
  rulemaking process
• Agencies prepare IRFA and FRFA (or certify)

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The Impact of Small Business on the Economy

• Small businesses are the key to the nations well
  being
• Firm with fewer than 500 employees
• Represent 99.7 percent of all employer firms
• Employ about half of all private sector employees
• Pay 43 percent of total U.S. private payroll
• Have generated 65 percent of all net new jobs
  over the past 17 years

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The Impact of Small Business on the Economy

• In 2008, there were 27.3 million total small
  businesses
• Of these, 6 million were employers
• Accounted for 49.6 percent of U.S. private sector
  jobs
• In 2009, real GDP growth in U.S. increased by 0.7
  percent, while private sector employment
  decreased by 5.5 percent

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The Impact of Small Business on the Economy

• Business ownership is becoming more inclusive in
  the U.S
• Minority-owned businesses numbered 5.8 million in
  2007, and increase of 45.6 percent over 2002
• Woman-owned businesses totaled 7.8 million in
  2007, a 20.1 percent increase since 2002
• Businesses showed signs of stability and
  improvement over 2009

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The Cost of Regulation the Burden on Small
Business

• Study by Nicole and Mark Crain shows annual cost
  of regulations 1.75 trillion (2008)
• Disproportionate impact on small business
• Per Employee 10,585 lt 20 employees v. 7,755
  500 employees (36 percent more)
• Economic 4,120 lt 20 v. 5,835 500
• Environment 4,101 lt 20 v. 883 500
• Tax 800 lt 20 v. 517 500
• OSHA Homeland Security 610 lt 20 v. 520
  500

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An Overview of the Regulatory Process

• The Basic Framework The Administrative
  Procedure Act
• Requires federal agencies to publish proposed
  rules for public comment (notice and comment
  rulemaking)
• Great deference is given to federal agency
  decisions
• Courts overturn only if arbitrary and
  capricious
• Has been changed by Executive Order and RFA
  requirements
• OSHA rules must address significant risk and be
  technologically and economically feasible

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White House Review of Regulations OIRA and
Executive Order 12866

• White House (centralized) review of agency rules
  began in the Nixon administration and have become
  increasingly sophisticated
• President Reagan first required formal
  cost-benefit analysis in 1981
• Current manifestation is Executive Order 12866,
  signed by President Clinton in 1993 (remains in
  effect)
• Applies to significant regulatory actions (gt 100
  million)
• Requires agencies to prepare a regulatory impact
  analysis
• assess aggregate costs and benefits, consider
  feasible alternatives, avoid duplication, choose
  the most cost-effective alternative

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White House Review of Regulations (Continued)

• Centralized review conducted by OMBs Office of
  Information and Regulatory Affairs (OIRA)
• OIRA Administrator is Cass Sunstein
• Meets with interested stakeholders
• President Obama issued Executive Order 13563
  (supplements and reaffirms EO 12866
  retrospective review of regulations)
• OIRA also established government-wide standards
  for Information Quality, Peer Review, Risk
  Assessment, and the use of Guidance Documents

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Regulatory Flexibility Act of 1980

• Applies to rules that must undergo notice and
  comment rulemaking under the APA or any other
  statute
• Agencies must determine whether the rule, if
  promulgated, would have a significant economic
  impact on a substantial number of small
  entities
• Small entities include small businesses, small
  non-profits, and small governmental jurisdictions

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Regulatory Flexibility Act (Continued)

• Threshold Question Will the rule, if
  promulgated, would have a significant economic
  impact on a substantial number of small
  entities?
• If no, agency head may so certify and no
  further analysis is required
• If yes, agency must prepare and publish for
  comment an Initial Regulatory Flexibility
  Analysis (IRFA)

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Initial Regulatory Flexibility Analysis (IRFA)

• Reason action is being taken
• Objectives of the proposed rule
• Description and estimate of the number of small
  entities impacted
• Estimated compliance requirements
• Duplicative, overlapping, or conflicting rules
• Significant alternatives considered (e.g.,
  different compliance or reporting requirements,
  simplification, performance standards, exemption,
  etc.)

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Final Regulatory Flexibility Analysis (IRFA)

• Need for and objectives of the rule
• Description and estimate of the number of small
  entities impacted
• Issues raised by public comment
• Assessment of those issues and changes made to
  proposed rule as a result
• Steps the agency has taken to minimize impacts on
  small entities (consistent with objectives) or
  why alternatives were not selected

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RFA (Some Other Issues)

• Use SBA Small Business Size Standard
• Direct v. Indirect Impacts
• RFA is procedural, not substantive
• Final action subject to judicial review
• Advocacy can file amicus curie briefs

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Small Business Regulatory Enforcement Fairness
Act of 1996 (SBREFA)

• OSHA, EPA (and now the CFPB within the Federal
  Reserve) must convene Small Business Advocacy
  Review (SBAR) Panels before proposing certain
  rules
• Agencies must issue compliance guides for small
  business
• Allows for judicial review of agency compliance

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Executive Order 13272

• Strengthened the RFA by
• requiring agencies to issue RFA compliance
  policies
• notify Advocacy of upcoming rules
• address Advocacys comments with specificity
• Requires Advocacy to
• Issue RFA compliance guide
• train agencies on RFA compliance
• Report to Congress and OMB

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SBA Office of Advocacy

• Cost savings from 2002 - 2008 over 50 billion
• Legislative Priorities
• Review existing regulations - 610 - allow public
  petitions
• Improve SBREFA process - 120 days
• Consider indirect impacts - reasonably
  foreseeable effects

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OSHAs Regulatory Agenda Whats on the Horizon?

• Injury and Illness Prevention Program (I2P2)
• Review/Look-back of OSHA Chemical Standards
• Occupational Exposure to Crystalline Silica
• Improve Tracking of Workplace Injuries and
  Illnesses
• Cooperative Agreements
• Hazard Communication (GHS)
• Combustible Dust
• Injury and Illness Recording and Reporting
  Requirements - Musculoskeletal Disorders (MSD)
  Column

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MSHAs Regulatory Agenda Whats on the Horizon?

• Respirable Crystalline Silica
• Notification of Legal Identity
• Proximity Detection Systems for Mobile Machines
  in Underground Mines
• Proximity Detection Systems for Continuous Mining
  Machines in Underground Mines
• Patterns of Violations

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Thank you!

• Questions/Comments/Discussion?
• Contact Info
• Bruce Lundegren
• Assistant Chief Counsel
• Office of Advocacy
• U.S. Small Business Administration
• [phone]
• bruce.lundegren_at_sba.gov