Report on the Regulatory Flexibility Act
FY 2007
Annual Report of the Chief Counsel for Advocacy
on Implementation of the Regulatory Flexibility Act
and Executive Order 13272
February 2008
The full text of this report is available on the Office of Advocacy’s Internet site at
To the President and the Congress of the United States
I am pleased to present to Congress and the President the fiscal year (FY) 2007 Report on the Regulatory Flexibility Act. Included in this year’s edition is a report on agency compliance with Executive Order 13272 and the Regulatory Flexibility Act of 1980 (RFA), as well as Advocacy’s new Regulatory Review and Reform (r3) initiative. The RFA requires agencies to review the prospective impact of proposed rules on small entities and to consider significant alternatives that minimize small entity impacts. E.O. 13272 furthers Advocacy’s mission by directing agencies to post their implementation procedures publicly and by requiring the Office of Advocacy to train federal agencies in how to comply with the law.
The Office of Advocacy’s success in enhancing agency understanding of the RFA has steadily increased because of our strong commitment to RFA compliance training. In fulfillment of our five-year goal under E.O. 13272, we completed training for virtually all federal agencies that regulate small businesses in FY 2007. On September 12, 2007, Advocacy Attorneys Claudia Rodgers and Keith Holman and Regulatory Economist Joe Johnson conducted a multi-agency training session on the RFA in accordance with the requirements of E.O. 13272. This session concluded the first round of training efforts begun in 2003, and to date Advocacy has provided training to 58 federal rulemaking entities. In addition to training agencies, the office intervened in various small business issues by submitting comments about key agency rules, testifying before Congress, participating in Small Business Regulatory Enforcement Fairness Act (SBREFA) panels, advocating for legislative change on a number of small business concerns, and responding to specific small business requests for assistance with vital issues.
FY 2007 marked the culmination of Advocacy’s 15-year effort on behalf of small businesses seeking relief from the Environmental Protection Agency’s (EPA’s) toxics release inventory (TRI) reporting. Our involvement in this rulemaking began with the filing of a petition in 1991 and culminated on December 18, 2006, when the EPA expanded the number of TRI filings that qualify for the shorter Form A. EPA’s TRI reform creates an incentive for businesses to reduce toxic emissions and provides burden reduction relief to small firms, while preserving the integrity of the public’s right to know.
While most of our work does not warrant front-page news coverage, there is usually at least one issue that captures national attention. In 2007, that was small businesses’ concern with the Department of Homeland Security’s (DHS’s) new rule, "Final Safe Harbor Procedures for Employers Who Receive a No-Match Letter." The rule requires employers to take certain steps upon receipt of a letter from the Social Security Administration (SSA) indicating that an employee’s name and social security number in the SSA database do not match. On September 18, 2007, Advocacy wrote to DHS to assist the agency in fulfilling its RFA requirements with respect to this rule. Because the "no-match" rule would impose several costs and legal obligations on employers, working with DHS to address these small business concerns was critical.
Our progress in guiding agencies in how to consider the impact of rules on small entities and how to comply with the RFA has increased with each agency communication. Some agencies have made the Office of Advocacy their first point of contact when addressing small business concerns. Moreover, these agencies are strengthening their interaction with small businesses and the trade associations that represent them. These outreach efforts have been furthered through meetings and roundtables hosted by Advocacy. The coordination between small businesses and agencies has not only enhanced RFA compliance, but it also produced solid results in cost savings for small businesses in FY 2007.
The office’s success is also measurable through our efforts to connect the small business community with state regulatory bodies to assess the impacts of rules. Advocacy drafted model legislation based on the RFA to offer guidance to states in how to reduce the regulatory burden imposed by state agencies. Since 2002, 37 states have considered regulatory flexibility legislation and 22 states have implemented regulatory flexibility via executive order or legislation. This state-level awareness of the various regulatory impacts on small business bolsters the RFA’s long-term effectiveness. Our March 2007 conference in Kansas City, Missouri, "Building a Better Small Business Climate: State Regulatory Flexibility Best Practices," was a way to begin creating a community of small business advocates whose day-to-day responsibilities involve making their states’ regulatory flexibility laws a success.
Measuring the RFA’s effectiveness is not limited to efforts involving new or proposed regulations. To fully address the regulatory burden, agencies should also review existing rules that may have developed adverse economic impacts on small businesses over time. Section 610 of the RFA recognizes this important need for regulatory review and directs agencies to consider whether their current regulations are necessary. On August 16, 2007, Advocacy launched the Small Business Regulatory Review and Reform (r3) initiative, designed to further the important goals of section 610. The r3 initiative is intended to help agencies pinpoint existing federal rules that warrant review, and reform them if they are found to be ineffective, duplicative, or out of date. Advocacy believes that the r3 initiative will be a useful tool for small businesses and agencies alike in improving the quality of reviews of existing regulations.
Small businesses are the nation’s economic backbone, representing 99.9 percent of all employer firms and generating 60 to 80 percent of net new jobs annually over the past 10 years. Our office is dedicated to fostering a regulatory environment that enables these small entities to further innovate in the dynamic U.S. marketplace. With new long-term objectives like our r3 initiative, and cooperation from the federal agencies, we can work together to streamline the regulatory process and ensure that small businesses remain a competitive force.
Thomas M. Sullivan
/s/
Chief Counsel for Advocacy
Contents
To the President and the Congress of the United States
1 An Overview of the Regulatory Flexibility Act and Related Policy
2 Improvements Needed in Agency Section 610 Compliance
r3: Advocacy’s Regulatory Review and Reform Initiative Background
Designing the r3 Initiative
Outreach Effort and Nominations for Review / Reform
The 2008 Top 10 r3 Rules for Review / Reform
Next Steps
3 Federal Agency RFA Compliance and the Role of the Office of Advocacy
RFA Training under E.O. 13272
Measuring Effectiveness
Overview of RFA Implementation
Chart 3.1 Advocacy Comments by Key RFA Compliance Issue, Fiscal Year 2007
Table 3.1 Regulatory Comment Letters Filed by the Office of Advocacy, Fiscal
Year 2007
Table 3.2 Regulatory Cost Savings, Fiscal Year 2007
Table 3.3 Summary of Cost Savings, Fiscal Year 2007
4 Advocacy Review of Agency RFA Compliance in Fiscal Year 2007
Department of Agriculture
Department of Commerce
Department of Defense
Department of Education
Department of Energy
Department of Health and Human Services
Department of Homeland Security
Department of Housing and Urban Development
Department of the Interior
Department of Justice
Department of Labor
Department of State
Department of Transportation
Department of the Treasury
Department of Veterans Affairs
Architectural and Transportation Barriers Compliance Board
Consumer Product Safety Commission
Environmental Protection Agency
Federal Acquisition Regulation Council
Federal Communications Commission
Securities and Exchange Commission
Small Business Administration
U.S. Agency for International Development
Conclusion
5 Small Business Regulatory Flexibility Model Legislation Initiative
Puerto Rico’s Ice Makers Benefit from Regulatory Flexibilty Law
New Challenges and Opportunities
Table 5.1 State Regulatory Flexibility Legislation, 2007 Legislative
Activit
Table 5.2 State Regulatory Flexibility Legislation, Status as of October 2007
Chart 5.1 Mapping State Regulatory Flexibility Activity, Fiscal Year
2007
Appendices
Table A.1 Federal Agencies Trained in RFA Compliance, FY 2003-2007
Table A.2 SBREFA Panels through Fiscal Year 2007
B Regulatory Review and Reform (r3) Top Ten Rules, 2008
C RFA Section 610 Best Practices for Federal Agencies
D The Regulatory Flexibility Act
1 An Overview of the Regulatory Flexibility Act and Related Policy in Fiscal Year 2007
With the passage of the Regulatory Flexibility Act in 1980, Congress directed federal agencies specifically to consider the impact of their regulations on small businesses and the economy.
Over time, agencies began to certify that rules would not have an impact on small businesses, even as those businesses complained about the crippling burden of increasing federal regulation. The RFA needed teeth, and in 1996, the passage of the Small Business Regulatory Enforcement Fairness Act added the possibility of judicial review of agency actions to the mix. Some predicted a flood of anti-regulation litigation under the new act, but those floodgates never opened. A small, steady stream of cases did emerge, with some affirming agencies’ well-considered decisions and with others upholding challenges under the RFA where the agencies clearly had not followed the law.
Overall agency RFA performance improved with the additional requirements under SBREFA and the threat of judicial review. At the same time, some agencies resisted the idea that consideration of small business interests should be part of their rulemaking culture. In response, on March 19, 2002, President George W. Bush announced his Small Business Agenda, which included the goal of "tearing down the regulatory barriers to job creation for small businesses and giving small business owners a voice in the complex and confusing federal regulatory process."
On August 13, 2002, the President signed Executive Order (E.O.) 13272, titled "Proper Consideration of Small Entities in Agency Rulemaking." E.O. 13272 enhanced Advocacy’s RFA mandate by directing federal agencies to implement written procedures and policies for measuring the economic impact of their regulatory proposals on small entities. It also required agencies to notify Advocacy of draft rules expected to have a significant economic impact on a substantial number of small entities and to give every appropriate consideration to any comments provided by Advocacy, including publishing a response to Advocacy’s comments in the Federal Register. Under the executive order, the Office of Advocacy must provide periodic notification of the requirements of the RFA, as well as training all federal agencies in how to comply with its provisions.
After developing the curriculum for a hands-on training program, Advocacy’s staff began classroom training for agencies in 2003. In May 2006, Advocacy made computer-based RFA training modules available to agencies so that agency employees could obtain initial or refresher RFA expertise on demand. By late 2007, Advocacy had trained nearly all federal agencies, departments, and independent commissions that write rules affecting small businesses.
The SBREFA amendments to the RFA have been reasonably successful. In general, agencies are paying closer attention to their RFA obligations. Some agencies submit their draft regulations to Advocacy early in the process to obtain feedback on their RFA compliance and small business impact. Early interventions by Advocacy and improved agency compliance with the RFA have led to less burdensome regulations.
The RFA is achieving cost savings for small entities, yet more remains to be done to reduce the regulatory burden. In 2005, an Office of Advocacy study prepared by Mark Crain on The Impact of Regulatory Costs on Small Firms determined that the overall cost of federal regulation totals $1.1 trillion. The annual cost per employee for firms with fewer than 20 employees is $7,647—45 percent higher than for their larger counterparts with 500 or more employees. In addition to Advocacy’s work, legislative action is necessary to continue to lower regulatory costs and level the playing field for small entities.
Small entities are limited in what they can do about burdensome regulations currently in existence. Legal avenues that can be pursued to have these rules reviewed are costly and time consuming. The Office of Advocacy believes it is time for the next stage of RFA development. That stage involves greater emphasis on the review of the impact of existing rules under Section 610 of the RFA, and the appropriate consideration of existing rules nominated by small businesses for regulatory review and reform.
The regulatory burden likely to be imposed by a single proposed rule may be bearable; that rule, when added to numerous existing rules, may contribute to a crippling cumulative burden. Section 610 of the RFA requires agencies to periodically review their existing rules that may have a significant economic impact on a substantial number of small entities. The purpose of the review is to determine whether such rules should be continued without change, amended, or rescinded, consistent with the stated objectives of applicable statutes. Agency compliance with section 610 has historically been poor.
The automatic review of regulations afforded through section 610 was designed to ensure the removal of burdensome regulations and save small entities and federal agencies the hassle of costly litigation to obtain relief. Limiting the review to the regulations the agency deemed to have a significant economic impact at the time of promulgation is problematic. Since new regulations are promulgated each year, the cumulative impact of regulations on small entities can be staggering, even if individually the regulations may not have had a significant economic impact at the time they were promulgated.
The Office of Advocacy recently unveiled its Regulatory Review and Reform Initiative (r3) to address the cumulative impact of the federal regulatory burden. The r3 initiative is designed to identify and address existing federal regulations that should be revised because they may be ineffective, duplicative, or out of date. This is a tool for small business stakeholders to suggest needed reforms and includes the agency review process under Section 610. The r3 effort will monitor the progress that agencies make toward achieving reforms. Federal agencies will do a better job of identifying and revising rules that need to be reformed because of r3.
2 Improvements Needed in Agency Section 610 Compliance
Section 610 of the Regulatory Flexibility Act requires agencies to review existing regulations to determine if they are outdated, duplicative, or overly complex. Agency compliance has been spotty and lacks transparency. In an effort to increase compliance with section 610 and to ensure that agencies conduct transparent reviews in general, the Office of Advocacy developed the Regulatory Review and Reform (r3) initiative.
r3: Advocacy’s Regulatory Review and Reform Initiative
The r3 initiative is designed to identify and address existing federal rules that should be reviewed and may need reforming. r3 is a tool for small business stakeholders to suggest needed reforms to regulations that are outdated, ineffective, duplicative, or otherwise in need of review. r3 includes the process under section 610 of the Regulatory Flexibility Act (RFA) by which an agency considers whether a current regulation is still needed, and the degree to which technology, economic conditions, or other factors have changed since the regulation was first written. r3 also includes a process by which interested small business stakeholders can nominate existing rules for review and potential reform, and monitor the progress that agencies make toward achieving those reforms.
Background
The cost of complying with federal regulatory requirements has grown dramatically since the early 1970s, and small businesses have borne a disproportionate share of this regulatory burden. In 1979, the cost of federal regulations reached an estimated $100 billion, representing a fivefold increase from the 1970 total. Recent estimates indicate that this cost has further expanded to $1.1 trillion, or more than $10,000 per household in 2004—more than the amount the average household spent on health insurance. The Office of Advocacy has played a key role in voicing small business concerns about these rising costs. Advocacy has made significant progress in working with federal agencies to improve their proposed rules by reducing their impacts on small entities while still accomplishing their regulatory objectives.
Beyond efforts to reduce the small entity impacts of proposed rules, Advocacy is undertaking new efforts to persuade federal agencies to comply with the RFA by considering the impacts of their existing regulations. Section 610 of the RFA, enacted in 1980, requires agencies to look at their existing regulations within 10 years to see if they are outdated, ineffective, or duplicative. Agency compliance with section 610’s periodic review requirement has varied substantially from agency to agency; some agencies review few, if any, of their current rules. A Government Accountability Office (GAO) report released in August 2007 highlighted the need for clearer standards and enhanced public participation in the section 610 review process.(1)
Designing the r3 Initiative
In response to the GAO’s findings and concerns of small businesses, the r3 initiative was officially launched on August 16, 2007. The Office of Advocacy designed the r3 initiative to (1) assist agencies and small business stakeholders to better understand and benefit from section 610 reviews of existing rules, and (2) to give interested small entities the opportunity to nominate existing agency rules for review and potential reform. The initiative is intended to encourage agencies to undertake more meaningful section 610 reviews, and to consider tailoring similar reviews of existing rules conducted for other reasons to fit the section 610 criteria. Small business stakeholders are encouraged to suggest rules that should be reviewed and—if found to be outdated, ineffective, or duplicative—reformed.
In October 2007, Advocacy developed and released a "best practices" document to assist agencies in meeting their section 610 obligations. This best practices document is included in this report in Appendix C.(2)
Outreach Effort and Nominations for Review/Reform
On October 16, 2007, the Office of Advocacy hosted an r3 roundtable to provide representatives from small business associations, government, and academia an opportunity to learn about r3. The office also met with numerous small business groups to inform them about the initiative and the process for submitting r3 review nominations. By the submission deadline, Advocacy had received a total of 82 nominations for review and potential reform.(3)
The 2008 Top 10 r3 Rules for Review/Reform
After significant review and analysis of the 82 nominations received, the Chief Counsel for Advocacy selected the following nominations as the 2008 Top 10 rules for review and potential reform, listed here in alphabetical order by agency(4)
·
Environmental Protection Agency (EPA): Update Air Monitoring Rules for Dry Cleaners to Reflect Current Technology. EPA should revise outdated or inaccurate testing requirements so that modern dry cleaners can have a valid method for demonstrating compliance.·
EPA: Flexibility for Community Drinking Water Systems. EPA should consider expanding the ways for small communities to qualify to meet alternative drinking water standards, provided that the alternative standards are protective of human health and are approved by state authorities.·
EPA: Simplify the Rules for Recycling Solid Wastes. EPA should simplify the rules for recycling useful materials that, because of their current classification, must be handled, transported, and disposed of as hazardous wastes.·
EPA: EPA Should Clearly Define "Oil" in its Oil Spill Rules. EPA should clarify the definition of "oil" in its oil spill program, so that small facilities that store nonpetroleum-based products are not unintentionally captured by spill program requirements.·
Federal Aviation Administration (FAA): Update Flight Rules for the Washington, DC, Regional Area. FAA and other agencies should review the flight restriction rule for the region surrounding Washington, DC, to determine whether the rule could be revised to avoid harming small airports within the region.·
Federal Acquisition Regulation (FAR) Council: Eliminate Duplicative Financial Requirements for Architect-engineering Services Firms in Government Contracting. The duplicative retainage requirement should be removed or reduced in architect-engineering services contracts, as has been done for other services.·
Internal Revenue Service (IRS): Simplify the Home Office Business Deduction. The IRS should revise their rules to permit a standard deduction for home-based businesses, which constitute 53 percent of all small businesses.·
Mine Safety and Health Administration (MSHA): Update MSHA Rules on the Use of Explosives in Mines to Reflect Modern Industry Standards. MSHA should update its current rules to be consistent with modern mining industry explosives standards.·
Occupational Safety and Health Administration (OSHA): Update OSHA’s Medical/Laboratory Worker Rule. The current rule should be reviewed to determine whether it can be made more flexible in situations where workers do not have potential exposure to bloodborne pathogens.·
Office of Federal Procurement Policy (OFPP): Update Reverse Auction Techniques for Online Procurement. The current reverse auction techniques should be reviewed to determine whether a government-wide rule is necessary to create a more consistent and predictable online process.The 2008 Top 10 rules were ultimately chosen on the basis of several factors: (1) whether the rule could reasonably be tailored to accomplish its intended objectives while reducing the impact on small businesses or small communities; (2) whether the rule being nominated has ever been reviewed for its impact on small entities; (3) whether technology, economic conditions, or other factors have changed since the rule was originally written; (4) whether the rule imposes duplicative requirements; and (5) the overall importance of the rule to small businesses and small communities.
Some rules that were nominated were not selected as Top 10 rules because the Office of Advocacy is already working with agencies to implement the suggested reform or the agency has indicated that the suggested reform is already under way. One such nomination involved the recommendation that the National Highway Traffic Safety Administration (NHTSA) revise its Tire Registration and Recordkeeping rule to allow tire dealers to register tire sales with an online form, rather than asking customers to complete and mail a paper form. After Advocacy received the reform nomination, and was considering the nomination as a possible Top 10 candidate, NHTSA proposed revisions to the Tire Registration rule that would accomplish the suggested reform.(5)
Other nominations that were not chosen as 2008 Top 10 rules have given Advocacy valuable insight into the regulatory issues of concern to small businesses, which will help Advocacy prioritize its regulatory agenda in 2008.
Next Steps
The Office of Advocacy will be working closely in 2008 with the agencies whose rules were selected for review/reform. To track agency progress, the recommended reforms will be posted on Advocacy’s website,
www.sba.gov/advo/r3, and monitored, and an update on the status of the rules will be made available to the public twice a year. Advocacy encourages small businesses and their representatives to follow the progress of the reviews/reforms and comment to the agencies on that progress. The r3 initiative will be a useful tool for small businesses and agencies alike in reviewing existing regulations, and where appropriate, improving them.(6)3 Federal Agency Compliance and the Role of the Office of Advocacy
In addition to the legal requirements of the Regulatory Flexibility Act itself, Executive Order 13272 sets forth additional compliance requirements to assist federal agencies in promulgating rules that are clear and that minimize undue economic burdens on small entities. Federal agencies must meet three requirements set forth under section 3 of E.O. 13272. First, they must consider the potential economic impact of their regulations on small entities and publicly document their policies containing this critical analysis.(7) Second, agencies must notify Advocacy of prepublication rules that may impose a significant economic impact on small businesses, either when the rule is sent to the Office of Information and Regulatory Affairs (OIRA) or at a reasonable time prior to its publication.(8) To best facilitate prompt agency compliance with the electronic notice requirements of E.O. 13272, Advocacy created an email address:
notify.advocacy@sba.gov. Finally, E.O. 13272 requires the agencies to consider Advocacy’s comments and recommendations on a proposed rule and to respond to Advocacy’s written comments in the final rule published in the Federal Register (9)RFA Training under E.O. 13272
E.O. 13272 requires that Advocacy train every federal agency in how to comply with the RFA.(10) When this task was given to Advocacy in 2002, the office identified 66 departments, agencies and independent commissions that promulgate regulations affecting small businesses. In FY 2007, Advocacy completed the mission of offering training to all of the important segments of the government that have an impact on small businesses. Advocacy has trained numerous economists, attorneys, and regulatory and policy staff at these agencies in how to consider the impact of their regulations on small entities before, during, and after the drafting of regulations.
Advocacy’s success in RFA compliance training of regulatory and policy experts throughout the federal agencies over the past five years has led to a greater willingness by the agencies to share draft documents with Advocacy. Advocacy’s training program has improved agency analysis of the federal regulatory burden on small businesses and has enhanced the factual basis for agency certifications of rules. Not all agencies are quick to consider small business impacts from the beginning of rule development, but these training sessions have indeed made a difference to many agencies in their rule development process, and therefore ultimately they have made a difference to small businesses.
Advocacy continues to train agencies as requests continue to be made for additional and more detailed assistance on RFA compliance. In the next phase of RFA training, Advocacy will be able to focus on agencies needing more training in the economic analysis of small business impacts, while offering the training to employees who were unable to attend previous sessions. This continued focus on the basics of the RFA—the importance of detailed economic analysis as an integral part of the public comment period, the foundation of a factual basis as a requirement for a threshold analysis of a rule’s impact, and contemplating a rule’s impact prior to a first draft—will continue to be important issues for Advocacy’s training team in the next fiscal year.
Measuring Effectiveness
In the FY 2006 annual report, the Office of Advocacy included a section on measuring its effectiveness following President Bush’s signing of E.O. 13272.(11) Historically Advocacy has measured its achievements under the RFA through a calculation of regulatory cost savings as reflected in final agency actions. The Office of Advocacy recognized that as it achieved more success in training agencies about how to comply with the complexities of the RFA, its ability to demonstrate effectiveness based solely on a measurement of cost savings would decrease. Therefore, the office undertook to modernize the measurement of effectiveness through the use of a new database that better reflected the tools Advocacy uses to intervene in the rulemaking process. This year’s report lists a number of rules for which Advocacy assisted the agencies in conducting small business impact analysis, but was unable to calculate cost savings. Advocacy will continue its efforts to better measure and highlight the goal of increasing agency compliance with the RFA and Executive Order 13272.
Overview of RFA Implementation
Advocacy continues to advance agency compliance with the RFA and E.O. 13272 by coordinating with attorneys and economists throughout the rulemaking process and identifying key areas of concern (See Chart 3.1 and Tables 3.1, 3.2, and 3.3).
Chart 3.1 Advocacy Comments by Key RFA Compliance Issue, FY 2007 (percent)
In FY 2007, the Office of Advocacy provided comments to several agencies on how to comply with the RFA. Chart 3.1 illustrates key concerns raised by Advocacy’s comment letters and prepublication review of draft rules. The chart highlights areas for improved compliance based on Advocacy’s analysis of its FY 2007 comment letters and other regulatory interventions summarized in this report
Table 3.1 Regulatory Comment Letters Filed by the Office of Advocacy, Fiscal Year 2007*
*See Appendix F for definitions of agency appreviations. The complete text of Advocacy’s regulatory comments is available on Advocacy’s website, www. sba.gov/advo/laws/comments/.
| Date | Agency | Comment Subject |
| 10/03/06 | FWS | Comment letter regarding the proposed designation of critical habitat for the contiguous United States Distinct Population Segment of the Canada Lynx, 71 Fed. Reg. 5515 (October 3, 2006). |
| 10/25/06 | FCC | Comment letter addressing the Missoula Plan for Intercarrier Compensation Reform in response to the FCC’s proposed rule on developing a Unified Intercarrier Compensation Regime, FCC Docket No. 01-92 (March 3, 2005). |
| 11/02/06 | CPSC | Comment letter addressing the standards for the flammability of mattress sets, 71 Fed. Reg. 13472 (March 15, 2007). |
| 11/02/06 | OSHA | Comment letter on OSHA’s advance notice of proposed rulemaking on Hazard Communication, 71 Fed. Reg. 53617 (September 12, 2006). |
| 11/08/06 | EPA | Comment letter regarding the proposed multisector general permit (MSGP) for industrial facilities, 71 Fed. Reg. 408 (July 18, 2006). |
| 11/09/06 | Access Board | Comment letter regarding the Americans with Disabilities Act (ADA) Accessibility Guidelines for Passenger Vehicles, Reopening of Comment Period, 71 Fed. Reg. 53630 (September 12, 2006). |
| 12/07/06 | FCC | Comment letter regarding the Service and Auction Rules for the 700 MHz Auction, WT Dkt. No. 06-150 (August 10, 2006). |
| 02/05/07 | FAA | Comment letter regarding the proposed rule on production and airworthiness approvals, parts marking, and miscellaneous proposals, 71 Fed. Reg. 58914 (October 5, 2006). |
| 02/07/07 | DHS | Comment letter regarding the proposed chemical facility antiterrorism standards rule, 71 Fed. Reg. 58276 (December 28, 2006). |
| 02/08/07 | DOL | Comment letter in response to DOL’s request for information on the Family and Medical Leave Act of 1993, 71 Fed. Reg. 69504 (December 1, 2006). |
| 02/16/07 | CMS | Comment letter regarding the Medicaid program, prescription drugs, 71 Fed. Reg. 77174 (December 22, 2006). |
| 02/21/07 | SEC | Comment letter regarding the proposed rule on the Manager’s Report on Internal Control over Financial Reporting, 71 Fed. Reg. 77635 (December 27, 2006). |
| 03/02/07 | EPA | Request for an extension of the public comment period regarding NPDES Permit Fee Incentive for Clean Water Act Section 106 Grants, 72 Fed. Reg. 293 (January 4, 2007). |
| 03/23/07 | IRS | Comment letter regarding the NPRM on tax classifications of cigars and cigarettes, 71 Fed. Reg. 62500 (October 25, 2006). |
| 03/26/07 | FCC | Comment letter regarding the FCC’s video programming access rules, 72 Fed. Reg. 9289 (March 1, 2007). |
| 03/30/07 | FAA | Comment letter on the initial regulatory flexibility analysis for the proposed rule regarding aircraft production and airworthiness approvals, parts making and miscellaneous proposals, 72 Fed. Reg. 6968 (February 14, 2007). |
| 05/10/07 | FCC | Comment letter requesting that the FCC open a rulemaking to examine the relevant market data on copper retirement. |
| 05/14/07 | EPA | Comment letter evaluating the EPA’s "NPDES Permit Fee Incentive for Clean Water Act Section 106 Grants; Allotment Formula" proposal; Fed. Reg. 293 (January 4, 2007). |
| 05/21/07 | GSA | Comment letter regarding the NPRM on contractor code of ethics and business conduct, 72 Fed. Reg. 7588 (February 16, 2007). |
| 05/21/07 | FCC | Letter in response to the FCC’s request for comment on the 700 MHz auction rules (April 27, 2007). |
| 05/25/07 | GSA | Comment letter regarding the NPRM on the Representations and Certifications—Tax Delinquency regulation, 72 Fed. Reg. 15093 (March 30, 2007). |
| 05/25/07 | SEC | Letter regarding the SEC failure to provide small public companies with an extension of the date for compliance with Section 404 of the Sarbanes-Oxley Act (May 23, 2007). |
| 06/27/07 | SEC | Comment letter on a proposed rule amending FAST and DRS Limited Requirements for Transfer Agents, 72 Fed. Reg. 30648 (June 1, 2007). |
| 08/03/07 | FWS | Comment letter regarding the revised critical habitat designation proposed for five endangered and two threatened mussels in four Northeast of Mexico drainages, 72 Fed. Reg. 34215 (June 21, 2007). |
| 08/08/07 | FCC | Response to the FCC’s request for comment to refresh the record in the Special Access Notice of Proposed Rulemaking, 72 Fed. Reg. 40814 (July 25, 2007). |
| 08/13/07 | FCC | Comment letter regarding the Verizon Telephone Company’s petition for forbearance under 47 USC §160(c) from Title II and Computer Inquiry Rules with respect to their broadband services, WC Docket No. 04-440 (July 30, 2007). |
| 08/23/07 | SEC | Comment letter on a proposed revision of the Eligibility Requirements for Primary Security Offerings on Forms S-3 and F-3, 72 Fed. Reg. 35117 (June 26, 2007). |
| 09/11/07 | SEC | Comment letter regarding the SEC’s Small Company Regulatory Reporting Relief and Simplification, 72 Fed. Reg. 39669 (July 19, 2007). |
| 09/13/07 | CMS | Comment letter regarding the surety bond requirement for suppliers of durable medical equipment, 72 Fed. Reg. 42001 (August 1, 2007). |
| 09/18/07 | DHS | Comment letter regarding the final safe harbor procedures for employers who receive a "no match" letter, 72 Fed. Reg. 45611 (August 15, 2007). |
Table 3.2 Regulatory Cost Savings, Fiscal Year 2007
| Agency | Subject Description | Cost
Savings/Impact Measures |
| CMS | Durable
Medical Equipment Competitive Bidding. Pursuant to provisions in the
Medicare Prescription Drug Improvement and Modernization Act of 2003,
the Centers for Medicare and Medicaid Services (CMS) promulgated a
regulation creating a competitive bidding program covering certain
Medicare Part B durable medical equipment (DME). Although this
rulemaking is still expected to have a significant impact on small DME
suppliers, Advocacy's suggestions to CMS throughout the regulatory
process helped to assure small DME supplier participation in the bidding
process. Some of these suggestions included helping CMS draft a size
standard modification letter to the Small Business Administration
pursuant to the Small Business Act which reduced the small business size
standard for the rulemaking from $6.5 million to $3.5 million. This
modification helped to ensure that the smallest suppliers will have a
chance to participate in the bidding program. Additionally, CMS reserved
30 percent of the available DME business for small businesses. If the 30
percent target is not met, CMS will offer contracts to small suppliers
with submitted bids that are above, but closest to, the pivotal bid
until the target number is reached. |
Because of the breadth of the industries affected, Advocacy has not been able to calculate cost savings attributable to changes helpful for small entities. |
| CPSC | Standards
for the Flammability (Open Flame) of Mattress Sets.
On March 15, 2006, the Consumer Product Safety Commission (CPSC)
published the Consumer Standards for the Flammability (Open Flame) of
Mattresses final rule in the Federal Register with an effective
date of July 1, 2007. The new standards established performance criteria
to assure that mattresses exposed to an open flame would generate a
smaller fire with a slower growth rate, thereby reducing the chances of
a flash fire. Advocacy filed comments on the regulation alerting CPSC to
the rule’s potential negative impact on small mattress manufacturers. As
a result of Advocacy's comments and those filed by small mattress
manufacturing firms, the CPSC used alternatives to remove the need for
the manufacturers to keep a sample of the mattresses on site after
testing. |
These changes
reduced the economic burden on the industry and resulted in cost savings
totaling $198,445. Source: CPSC economic analysis |
| DHS | Safe Harbor
Procedures for Employers Who Receive a No-match Letter. On August
15, 2007, the Department of Homeland Security (DHS) and its Bureau of
Immigration and Customs Enforcement (ICE) published a final rule that
would have required employers who receive a "no-match" letter from the
Social Security Administration indicating a discrepancy between an
employee’s name and social security number to take certain actions to
resolve those discrepancies. If the employer and employee were unable to
correct the discrepancy within a specified time, the employer would have
been obligated to terminate the employee or be deemed to have
"constructive knowledge" that the employee may be an unauthorized alien.
DHS certified that the rule would not have a significant economic impact
on a substantial number of small entities. Following promulgation of the
final rule, labor, civil liberties, and business groups challenged the
rule in federal district court, arguing, among other things, that DHS
failed to comply with the RFA because the agency did not have a "factual
basis" for its certification and, moreover, that the certification was
erroneous because the rule would have a significant impact on a
substantial number of small entities. The Office of Advocacy sent a
letter to DHS agreeing with this claim and offering to assist DHS in
curing the RFA defect in the rule. On October 10, 2007, the Federal
District Court for the Northern District of California issued a
preliminary injunction prohibiting DHS from including requirements
contained in the final rule with the "no-match" letters from the Social
Security Administration. The Court's decision acknowledged that the
plaintiffs had raised serious legal questions and would suffer
irreparable harm if the rule went into effect. |
No cost savings estimates are available for this rule |
| EPA |
Hydrochlorofluorocarbon (HCFC) 22. On March 28, 2007, EPA published
a final rule setting a compliance date of September 1, 2009, instead of
the proposed January 1, 2008, for the marine sector to transition from
HCFC-22 (an ozone-depleting substance that is a member of the
hydrochlorofluorocarbon family) to other substitutes. The rule
previously in effect had allowed for a transition extending to January
1, 2010, but EPA proposed to accelerate the timetable based on new
information to January 2008. Advocacy supported the extension of time
for the marine sector because of their particular hardships. Other
sectors are required to meet the January 1, 2008, date except for the
extruded polystyrene foam sector, which has a January 1, 2010, date. |
This change would result in unquantified savings for up to 3,000 boat builders (nearly all small firms) who were having difficulty meeting the compressed timetable. |
| EPA | Toxics Release
Inventory (TRI). On December 18, 2006, the Environmental Protection
Agency (EPA) signed a final rule to expand the number of Toxics Release
Inventory filings that may be reported to EPA using the shorter Form A.
The final rule provides needed relief to small businesses while
maintaining the integrity of the TRI database. This major small business
achievement marks the end of a 15-year effort that started with a
petition filed by the Office of Advocacy with EPA in August 1991.
Advocacy also filed supportive comments on the EPA proposal in February
2006. This rule provides the first significant small business relief
from toxics release inventory reporting since 1994. For chemicals that
are not persistent, bioaccumulative, and toxic (non-PBT), the rule
allows businesses to use the simpler reporting form if their releases
are no more than 2,000 pounds of waste as part of an overall waste
management limit of 5,000 pounds. By imposing the 2,000-pound cap on
releases for non-PBT chemicals, EPA is encouraging businesses to rely on
preferred waste management methods, such as recycling and treatment,
rather than disposal and other releases. The rule would also extend the
use of Form A to businesses that manage less than 500 pounds of PBT
chemicals and have zero emissions or discharges to the environment. |
This final rule
is expected to save 123,000 hours per year by EPA’s estimate or about
$5.9 million annually.
Source: EPA |
| EPA | Spill
Prevention Control and Countermeasure (SPCC) Rule. On December 12,
2006, the Environmental Protection Agency (EPA) promulgated changes to
its Spill Prevention, Control and Countermeasure program. The SPCC
program is designed to prevent spills of oil into waterways and to
contain spills after they occur. Facilities subject to the program must
develop spill prevention plans designed to prevent and minimize such
discharges. In July 2002, EPA amended the SPCC program requirements for
hundreds of thousands of small businesses, farms, manufacturers, and
electrical facilities. EPA subsequently agreed to postpone the effective
date of the amended rule while the agency studied several suggested
burden reduction approaches for small facilities and other SPCC
facilities. Advocacy filed comments in June 2004 and February 2006. In
the final rule, EPA utilized Advocacy’s recommendations for revisions in
two distinct areas: small facilities (under 10,000 gallons aggregate
capacity for oil) and oil-filled equipment. |
The changes
reduce the annual regulatory and paperwork burden on small facilities by
$128 million, while increasing overall compliance with the SPCC program
and focusing facilities on measures that prevent oil spills from
reaching waterways. Source: EPA |
| EPA | Guidance in
Lieu of Rules to Reduce Volatile Organic Compound (VOC) Emissions from
Five Industrial Sectors. On October 5, 2006, the Environmental
Protection Agency (EPA) promulgated control techniques guidelines (CTGs)
for the control of volatile organic compounds emissions from each of
five product categories in consumer and commercial products. These CTGs
will provide guidance to the states concerning EPA’s recommendations for
reasonably available control technology level controls for these product
categories. Advocacy submitted comments on September 5, 2006, supporting
EPA’s proposal to issue control techniques guidelines, rather than
promulgating formal rules, and agreed that the CTG approach will result
in additional VOC emission reductions over the rule approach. These
rules will affect thousands of facilities, primarily small businesses.
As a result of EPA’s outreach to the small business community, the final
CTGs provide a balance between environmental protection and regulatory
flexibility. |
Although savings are estimated to be in the tens of millions of dollars, the results cannot be verified at this time. The Office of Advocacy is continuing to seek reliable industry estimates. |
| EPA | Definition of
Solid Waste. On March 26, 2007, EPA issued a supplemental proposal
to its 2003 proposal, which would exclude certain types of recycling
activities involving hazardous secondary materials from the federal
hazardous waste regulations. By removing unnecessary regulatory controls
over certain recycling practices, EPA expects to make it easier to
recycle hazardous secondary material safely. Exclusions are now proposed
for the following: • Materials that are generated and reclaimed under the con- trol of the generator; • Materials that are generated and transferred to another person or company for reclamation under specific condi- tions; and • Materials that EPA deems nonwaste through a case-by-case petition process. EPA estimates about 4,600 facilities handling over a half million tons of hazardous secondary materials annually may be affected by this proposed rule. At Advocacy’s request EPA expanded its approach from the 2003 proposal. The industry sectors that could be most affected are chemical manufacturing, coating and engraving, semiconductor and electronics manufacturing, pharmaceutical manufacturing, and the industrial waste management industry. |
Annual cost
savings of $107 million are estimated for the affected firms. Source: EPA . |
| EPA | Area Source
Standard for Gasoline Distribution.
On November 9, 2006, the U.S. Environmental Protection Agency (EPA)
published a proposed Clean Air Act rule that would require new emission
controls for bulk gasoline terminals, pipeline facilities, bulk gasoline
plants, and potentially gasoline stations. The proposal would reduce
hazardous air pollutants by requiring these sources to install floating
roofs and seals, or by improving work practices such as leak detection
and repair programs. Advocacy recommended that EPA consult with several
affected small business representatives early in the planning process.
Based on comments and data received from these parties, EPA proposed a
less costly regulatory approach than the agency’s earlier preferred
alternative of vapor balancing of gasoline cargo tanks with bulk storage
tanks. |
In total, the
proposed rule represents a one-time cost savings of $117.2 million. Source: EPA |
| EPA | Halogenated
Solvent Cleaning Residual Risk Standard. On May 3, 2007, EPA issued
a final rule to revise emission limits for facilities that use
halogenated solvents such as methylene chloride, trichloroethylene, and
percholorethylene to clean metal parts. The rule places new restrictions
on the amounts of solvent that can be used in cleaning operations.
Advocacy worked with a subgroup of companies that use these solvents to
clean metal tubes that are long and that have extremely narrow
diameters. These specialty applications require cleaning with larger
quantities of solvent and are not suited to the emission control
techniques EPA has required for standard cleaning operations. Based on
feedback from Advocacy and small businesses, EPA determined that the
required emission controls are not technically feasible for narrow-tube
operations. |
EPA’s decision to
exempt these operations from the standard resulted in one-time cost
savings of $50 million. Source: Halogenated Solvents Industry Association |
| EPA | Control of
Emissions from Nonroad Spark-ignition Engines and Equipment.
On May 18, 2007, EPA proposed a rule to control air pollution from
gasoline-powered engines and equipment below 50 horsepower. These
engines and equipment are primarily used in lawn and garden applications
and in the marine industry. The proposed rule would affect many small
manufacturers and would require catalyst-based emission controls on some
engines, as well as evaporative emission controls for boats. Because of
concerns about the economic impacts of the rule on small businesses and
the technical feasibility of proposed emission controls, EPA convened a
Small Business Regulatory Enforcement Fairness Act (SBREFA) panel on
August 17, 2006. Twenty-seven small entity representatives (SERs)
participated in the panel and provided technical data to EPA about the
potential impacts of the rule, along with OMB’s Office of Information
and Regulatory Affairs and the Office of Advocacy. Based on
recommendations from the panel, EPA proposed granting small businesses
extended compliance deadlines, streamlined testing and certification
requirements, and hardship exemptions for small businesses unable to
comply by the deadline. |
$36.4 million in
first-year cost savings and $5.6 million in recurring annual cost
savings. Source: EPA |
| EPA | Pollution
Control Standards for Iron and Steel Foundries.
On September 17, 2007, EPA published a proposed rule establishing new
air pollution control standards for iron and steel foundries under the
Clean Air Act. The proposal would require foundries above a specified
melting capacity to install pollution control equipment. Because of
information received from small business stakeholders, the Office of
Advocacy persuaded EPA to co-propose a higher melting capacity threshold
that would allow small foundries to operate without installing new
controls. |
One-time cost
savings from this co-proposal are an estimated $13.9 million, with an
estimated $2.8 million saved in recurring operating and maintenance
costs. Source: EPA |
| EPA | Clean Air
Act, Particulate Matter National Ambient Air Quality Standards. On
September 21, 2006, EPA revised the national standards for particulate
matter (PM). EPA lowered the daily standard for fine particles smaller
than 2.5 microns, but left the standards for coarse particles (2.5 - 10
microns) unchanged. In addition, EPA indicated that farming operations
in rural areas could satisfy coarse PM requirements by meeting
state-based best management practices (BMPs), rather than more stringent
requirements. Advocacy worked with the U.S. Department of Agriculture
and agricultural trade associations to support EPA’s flexible
interpretation of farming requirements. |
Cost savings
for small farms and other agricultural operations are estimated at $1
million in the first year and ongoing.
Source: Industry estimates. |
| EPA | Permit Fee
Incentive for Clean Water Act Grant Allotments.
On January 4, 2007, EPA proposed
revisions to the Clean Water Act, Section 106, grant allocation formula
to create a new incentive for states to fund National Pollutant
Discharge Elimination System (NPDES) programs through fees paid by
dischargers. Many states currently do not require all dischargers,
including small entities, to pay the full costs of their permitting
programs through permit fees. Numerous state, local, and small business
organizations expressed concerns that the proposed revision would result
in substantial permit fee increases and/or the loss of grant monies, and
that EPA had not adequately considered the potential impact on states
and small entities. On March 2, 2007, Advocacy requested that EPA extend
the comment period on the proposal for an additional 60 days, so that
small entities could gather more detailed information about potential
impacts. EPA extended the comment period for 60 days, and on May 14,
2007, Advocacy submitted a technical memorandum evaluating the potential
impacts on small entities. The technical memorandum concluded that the
rule was likely to have an impact on states and small entities. Based on
the comments of Advocacy and small business representatives, EPA has
delayed finalizing the rule until the late FY 2008 budget cycle. |
The delayed
implementation of the rule represents one-time cost savings to small
entities in affected states of at least $5.65 million. Source: American Public Power Association |
| FAA | National Air
Tour Safety Standards (NATSS). On October 22, 2003, the FAA
published a proposed rule that would establish new safety standards for
commercial air tour operators. The rule as proposed would eliminate
existing exceptions for commercial air tours conducted under Title 14,
Part 91 (small sightseeing operators) of the Code of Federal
Regulations. Part 91 exempts certain nonstop sightseeing flight
operators who use the same airport for takeoff and landing and fly
within a 25-mile radius, from required Part 119 certification. The
proposed rule would have required all air tour operators to obtain Part
119 certification. Advocacy worked closely with affected small entities
and trade associations to identify the economic impacts of the proposed
regulation. In April 2004, Advocacy submitted a public comment letter to
the agency expressing concern that many small air tour operators would
be unduly burdened by the cost of obtaining Part 119 certification and
would ultimately be forced out of the market. The FAA published the
NATSS final rule on February 13, 2007, and made significant changes to
the final rule. The Part 91 exceptions are maintained and operators must
obtain a letter of authorization (LOA) from the FAA instead of obtaining
a new certification. |
FAA’s decision to
keep the Part 91 exception and eliminate some additional provisions
contained in the proposed rule resulted in $127.3 million in cost
savings. Source: FAA |
| FCC | Customer
Proprietary Network Information (CPNI). On March 13, 2007, the FCC
adopted its order and released a further notice of proposed rulemaking
to strengthen the technology used by carriers to protect confidential
customer data. The order requires companies to install specialized
equipment to update their networks to protect this information. Because
of information received from small business stakeholders, Advocacy filed
comments to persuade the FCC to provide the smallest Voice over Internet
Protocol (VoIP) providers with a six-month extension to comply with this
rule. |
The estimated
one-time cost savings for this extension are $6.2 million. Source: Industry estimates |
| FCC |
Implementation of the Cable Television Consumer Protection and
Competition Act of 1992, Development of Competition and Diversity in
Video Programming Distribution: Section 628 (c)(5) of the Communications
Act: Sunset of Exclusive Contract Prohibition. Section 628(c)(2)(D)
of the Communications Act of 1934, as amended, generally prohibits
exclusive contracts for satellite cable programming or satellite
broadcasting between vertically integrated programmers and cable
operators. Small providers rely on this ban to prevent large cable
operators from blocking premium video programming from them and
negatively affecting their ability to compete in the market. To express
the concerns of small entities, Advocacy sent a public comment letter to
the FCC on March 26, 2007. On September 11, 2007, the FCC adopted its
Report and Order and Notice of Proposed Rulemaking (FCC 07-169; MB
Docket No. 07-29; MB Docket No. 07-198), which extended the ban on
exclusive contracts for five more years. |
The savings to small providers have not yet been quantified. |
| FDA | Dietary
Supplement Current Good Manufacturing Practices. The Food and Drug
Administration (FDA) promulgated a rule requiring current good
manufacturing practice (CGMP) for dietary supplements. Advocacy has been
involved in the rulemaking since 1997 in an effort to ensure that small
dietary supplement manufacturers were not unduly affected by the
regulation. In summary, Advocacy’s involvement helped to reduce testing
requirements under certain circumstances for small businesses; more
important, the rule includes a 36-month delay for establishments with
fewer than 20 employees and a 24-month delay for establishments with
more than 20 employees and fewer than 500. |
These actions
resulted in a total of $364.6 million in cost savings. Source: FDA |
| FWS | Canada Lynx
Critical Habitat Designation. In November 2006, the U.S. Fish and
Wildlife Service (FWS) published a final critical habitat designation of
1,841 square miles on federal lands for the Canada lynx. FWS originally
proposed to designate 18,031 square miles in February 2006. Responding
to comments by Advocacy and other small business entities, FWS excluded
16,190 square miles (more than 10 million acres) of private land in
Idaho, Maine, Minnesota, Montana, and Washington because of biological
studies, existing lynx management programs, and economic factors. |
FWS’s exclusion
of these high-cost areas resulted in $919 million in cost savings. Source: FWS |
| FWS | Alabama
Beach Mouse Critical Habitat Designation. On January 30, 2007, the
U.S. Fish and Wildlife Service (FWS) published a final critical habitat
designation of 1,211 acres of coastal habitat in Baldwin County,
Alabama. Responding to comments by Advocacy and small business entities,
FWS excluded two developments from the designation, Beach Club West and
Gulf Highlands. |
FWS’s exclusion
of the high-cost areas will save $31.6 million in costs. Source: FWS |
| FWS | Spikedace
and Loach Minnow Critical Habitat Designation. On March 2007, the
U.S. Fish and Wildlife Service (FWS) published a final critical habitat
designation of 522.2 river miles in New Mexico and Arizona. Responding
to comments by Advocacy and small business entities, FWS excluded
private lands in the lower portion of the Verde River from the final
critical habitat designation because of economic factors. |
FWS’s exclusion
of the high-cost areas saved $46.9 million in costs. Source: FWS |
| HHS | Medicare
Program; Reporting Hospital Quality Data for FY 2008 Inpatient
Prospective Payments System Annual Payment Update Program - HCAHPS
Survey). On November 24, 2006, CMS published a rule that would
require hospitals to submit a survey to their patients in an effort to
assist patients in selecting hospitals that deliver high-quality care.
The effective date of the rule is January 1, 2007. Advocacy filed a
public comment letter with CMS on January 18, 2005, suggesting that the
survey requirement would prove onerous to hospitals (especially rural
ones) because it would increase their costs and paperwork burden.
Hospital representatives were concerned that they would have to make
substantial changes to the survey most hospitals already used to measure
patient satisfaction and that patients would be disinclined to return a
substantially longer survey after their discharge. As a result of
Advocacy’s involvement and that of industry, CMS reduced the number of
survey questions from 66 to 27, reduced the number of calls required to
complete the survey from 10 to 5, reduced the number of mailings from 3
to 2, and, most important for small hospitals, reduced the number of
completed questionnaires requirement from 300 to 100. CMS agreed to
offer training to hospitals and provided software on the survey free of
cost to hospitals. |
These changes
led to an estimated $11.6 million in first-year and recurring cost
savings to small hospitals. Source: CMS |
| HHS | Medicare and
Medicaid Programs; Hospital Conditions of Participation: Patients’
Rights. The rule, which stemmed from CMS patient rights initiatives,
required all inpatient psychiatric hospitals to have a physician or
other licensed independent practitioner evaluate a patient face-to-face
within one hour after the patient had been placed in restraints or
seclusion. In July 1999, per a request by Congressman Saxby Chambliss,
Advocacy submitted comments to HHS on the interim final rule that dealt
with Medicare conditions of participation, including standards for the
use of patient restraints in hospitals. Representative Chambliss
specifically requested Advocacy’s opinion whether the agency had
complied with the RFA in issuing the hospital restraint rule. Advocacy
concluded that the one-hour restriction on the use of restraints could
be burdensome for rural hospitals in particular. HHS had not
specifically discussed the one-hour standard in the proposed rule and
did not analyze the impact of the one-hour evaluation provision in the
interim final rule. On the same date that Advocacy sent its comments to
Representative Chambliss, a court decision was rendered (see National
Association of Psychiatric Health Systems v. Shalala, No. Civ. A.
99-2025 GK, 2000 WL 1677210, D.D.C. Sept.14, 2000), that essentially
upheld the hospital restraint rule, but remanded the rule to the agency
and directed HHS to complete a final regulatory flexibility analysis.
The final rule was published in the Federal Register on December
11, 2006, with an effective date of January 8, 2007. Changes included a
revision to expand the type of practitioners permitted to conduct the
one-hour face-to-face evaluation and changes to the training and
staffing requirements. Cost savings were generated from both changes
made to the rule and the delay in implementation (the interim final
effective date was March 23, 2001, but the rule was stayed). |
In the absence
of estimates, Advocacy is using the upper range of an estimate of the
costs in the comments to the rule as a proxy for cost savings in the
amount of $750,000. Source: HHS |
| PHMSA | Hazardous
Materials: Transportation of Lithium Batteries.
On April 2, 2002, the Department
of Transportation, Pipeline and Hazardous Materials Safety
Administration (PHMSA) issued a proposed rule regulating the
transportation of lithium batteries. The proposal required producers and
transporters of lithium batteries to adhere to more stringent packaging
and testing requirements. PHMSA certified the proposed rule, and small
entities affected by the proposal raised concerns about the potential
economic impact of the rule to Advocacy. In August 2003, OMB and
Advocacy recommended that the agency either complete an IRFA or provide
a statement of factual basis for the certification contained in the
rule. In June 2005 PHMSA published an IRFA for the proposed rule in the
Federal Register which addressed many of Advocacy’s concerns. On
August 9, 2007, PHMSA issued the final rule on transportation of lithium
batteries. The FRFA considered eight possible alternatives and adopted
four, including exceptions for small lithium batteries and for small
production runs of lithium batteries. Additionally, the agency provided
for a two-year implementation period. |
The revisions
adopted in the final rule resulted in a cost savings of $13.2 million. Source: PHMSA |
| PTO | Changes to
Practice for Continued Examination Filings, Patent Applications
Containing Patentably Indistinct Claims, and Examination of Claims in
Patent Applications. On January 3, 2006, the U.S. Patent and
Trademark Office (PTO) published two proposed rules that would reform
the patent application and prosecution process. The rule would restrict
the number of allowable representative claims in a patent application
and limited the number of continuation applications to one. PTO
certified that both rules would not have a significant economic impact
on a substantial number of small entities. In April 2006, Advocacy
submitted a public comment letter to PTO on the proposed rules, advised
the agency of the potential impact of the rules on small entities, and
urged the completion of an IRFA. In response to Advocacy’s comments, the
agency performed an analysis of the impacts of the proposed rules on
small entities. On August 21, 2007, the PTO issued a final rule that
combined both rules into a single rule package. In the final rule, the
agency considered Advocacy’s recommendations and made some revisions to
reduce the potential impacts on small entities. |
A full estimate of the savings to small business has not yet been assessed, as most provisions remain unquantifiable. |
| SEC | Management Guidance for Periodic Reports. As required by the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission (SEC) published final rules on June 18, 2003, requiring businesses that raise funds from public investors to report on internal controls and audit procedures. Advocacy urged the SEC to establish management guidance on the process of evaluating internal controls for small public companies that would focus on risks and clarify ambiguous terms. On June 27, 2007, the SEC published a final rule adopting management guidance and amendments to facilitate more effective and efficient evaluations over internal controls reporting. The SEC cited an estimate based on survey data of 10 percent cost savings as a result of the management guidance in the first year of implementation. | These changes
represent $561 million in cost savings in the first year of
implementation. Source: SEC |
| State | Exchange
Visitor Program (J-1 Visa Program). On June 19, 2007, the U.S.
Department of State (State) published an interim final rule on its
Exchange Visitor Program for Trainees and Interns. The initial proposed
rule would have imposed new requirements on designated program sponsors
in the J-1 visa program before they could accept a participant into
their program. The proposed rule included special provisions related to
aviation flight training schools that would limit the ratio of
on-the-job training to classroom study and reduce the maximum duration
of the training program from 24 to 18 months. The provisions would have
had a particularly damaging effect on aviation flight schools, although
State certified that the rule would have no significant impact under the
RFA. After extensive outreach to the aviation flight schools that
operate under the J-1 visa program, Advocacy submitted public comments
on the proposed rule stating that the agency’s RFA certification was
improper because it failed to include a factual basis, and recommended
that State re-evaluate the costs and impacts of the proposed rule on
aviation flight schools. The nine designated J-1 aviation flight schools
said they would lose all or most of their foreign students if the rule
were finalized as proposed. The final rule exempted the aviation flight
schools and left current rules governing them in place. |
First-year cost
savings total $22.2 million, and annual ongoing cost savings are $22.2
million. Source: Affected flight schools |
| USAID |
Mentor-Protégé Rule. On November 26, 2006, the U.S. Agency for
International Development (USAID) issued a proposed regulation to amend
its acquisition regulations to encourage prime contractors to assist
small disadvantaged firms in enhancing their contract and subcontract
performance for federal agencies. The final regulation, published on
June 13, 2007, was modified to incorporate the joint concerns expressed
by SBA and the Office of Advocacy. As a result, USAID’s rule will
operate more smoothly in conjunction with SBA’s responsibilities in the
federal contracting arena.
|
The savings to small businesses have not yet been quantified. |
Table 3.3 Summary of Cost Savings,
FY 2007 (Dollars)
1
| Rule/Intervention |
First-Year Costs
|
Annual Costs
|
| Durable Medical Equipment Competitive Bidding (CMS)2 |
|
|
| Mattress Flammability Standards (CPSC)3 |
198,445
|
|
| Safe Harbor Procedures for Employees with a No-match Letter (DHS)2 |
|
|
| HCFC 22 Final (EPA)2 | ||
| Toxics Release Inventory Final Rule (EPA)4 |
5,900,000
|
5,900,000
|
| SPCC Final (EPA)4 |
128,000,000
|
128,000,000
|
| Volatile Organic Compound Emissions (EPA)2 | ||
| Definition of Solid Waste (EPA)4 |
107,000,000
|
107,000,000
|
| Area Source Standards for Gasoline Distribution (EPA)4 |
117,200,000
|
|
| Halogenated Solvent Cleaning Residual Risk Standard (EPA)5 |
50,000,000
|
|
|
Control of Emissions from Nonroad Spark-ignition Engines and Equipment (EPA)4 |
36,400,000
|
5,600,000
|
| Clean Air Act, Pollution Controls, Iron and Steel Foundries (EPA)4 |
13,900,000
|
2,800,000
|
| Clean Air Act, Particulate Matter (EPA)12 |
1,000,000
|
1,000,000
|
| Permit Fee Incentive for Clean Water Act Grant Allotments (EPA)12 |
5,650,000
|
|
| National Air Tour Safety Standards (FAA)7 |
127,300,000
|
|
| Customer Proprietary Network Information (CPNI) (FCC)8 |
6,176,000
|
|
| Cable Television Consumer Protection and Competition Act (FCC)2 | ||
| Dietary Supplement Rule (FDA)9 |
364,552,000
|
|
| Canada Lynx Critical Habitat (FWS)10 |
919,000,000
|
|
| Alabama Beach Mouse Critical Habitat Designation (FWS)10 |
31,600,000
|
|
| Spikedace and Loach Minnow Critical Habitat Designation (FWS)10 |
46,900,000
|
|
| HCAHPS Survey (HHS)11 |
11,600,000
|
11,600,000
|
| One-Hour Rule (HHS)12 |
750,000
|
750,000
|
| Lithium-ion Battery Rule (PHMSA)13 |
13,200,000
|
|
| Patent Applications Containing Patentably Indistinct Claims (PTO)2 | ||
| Management Guidance for Periodic Reports (SEC)14 |
561,000,000
|
|
| Exchange Visitor Program (J-1 Visa Program) (State)15 |
22,215,250
|
22,215,250
|
| USAID Mentor-protégé Program2 | ||
| TOTAL |
2,569,541,695
|
284,865,250
|
|
1 The Office of Advocacy generally bases its cost savings estimates on agency estimates. Cost savings for a given rule are captured in the fiscal year in which the agency agrees to changes in the rule as a result of Advocacy’s intervention. Where possible, the Office of Advocacy limits the savings to those attributable to small businesses. These are best estimates. First-year cost savings consist of either capital or annual costs that would be incurred in the rule’s first year of implementation. Recurring annual cost savings are listed where applicable. |
||
|
2 No estimates are available. |
||
|
3 Source: Consumer Product Safety Commission (CPSC) economic analysis. |
||
|
4 Source: Environmental Protection Agency (EPA). |
||
|
5 Source: Halogenated Solvents Industry Association. |
||
|
6 Source: American Public Power Association. |
||
|
7 Source: Federal Aviation Administration (FAA). |
||
|
8 Source: Industry comments. |
||
|
9 Source: Food and Drug Administration (FDA). |
||
|
10 Source: Fish and Wildlife Service (FWS). |
||
|
11 Source: U.S. Department of Health and Human Services (HHS). |
||
|
12 Source: Industry estimate. |
||
|
13 Source: Pipeline and Hazardous Materials Safety Administration (PHMSA). |
||
|
14 Source: Securities and Exchange Commission (SEC) |
||
|
15 Source: Affected flight schools. |
||
4 Advocacy Review of Agency RFA Compliance in Fiscal Year 2007
Since the enactment of the Regulatory Flexibility Act in 1980, the Office of Advocacy has been an independent voice for small business in policy deliberations, working with agencies to examine how their regulatory proposals will affect small entities. In fiscal year 2007 (October 2006 through September 2007), the Office of Advocacy:
Held 14 Regulatory Flexibility Act training sessions with federal agencies, state officials, congressional staff, and small business stakeholder organizations,
Reviewed 469 regulations to assess RFA compliance,
Convened 29 roundtables to solicit the opinions, views, priorities, and comments of small entity stakeholders on regulatory proposals,
Presented testimony or positions on pending legislation before Congress six times, and
Submitted 30 public comment letters to federal agencies on regulatory proposals.
The sum total of Advocacy’s involvement in the regulatory process is not easily calculated. However, this chapter’s count of Advocacy’s public activities and descriptions of the office’s involvement should provide an accurate account of how Advocacy worked to achieve cost savings for small entities in FY 2007 and helped agencies comply with the RFA and E.O. 13272.
Department of Agriculture
E.O. 13272 Compliance
The U.S. Department of Agriculture (USDA) has made its policies for considering small entity impacts when promulgating regulations publicly available; they are sometimes, but not always in full compliance with section 3(b) of the executive order. Two agencies within USDA consistently notify Advocacy of rules that may have a significant economic impact on small entities: the Animal and Plant Health Inspection Service (APHIS) and the Grain Inspection, Packers and Stockyard Administration (GIPSA).
Generally, the agencies submit draft regulations to Advocacy’s email notification system as well as to the advocate responsible for reviewing its rules. On a few occasions, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) personnel have notified Advocacy of draft regulations that were not submitted to Advocacy by APHIS.
Advocacy continues to work with APHIS on its RFA compliance. The agency completes initial regulatory flexibility analyses (IRFAs) and certifications for most of its rules; however, the quality of the IRFAs and certifications varies. In addition to submitting draft proposals to Advocacy for review, APHIS regularly invites Advocacy to interagency briefings to discuss draft rules. In FY 2007, the agency sought Advocacy’s assistance on regulatory issues prior to developing a proposed rule. APHIS did not publish a final rule that was the subject of an Advocacy comment in FY 2007; thus, the agency’s compliance with section 3(c) cannot be determined at this time.
Advocacy maintains an active interagency exchange with GIPSA. Advocacy did not file any formal written comments on GIPSA rules in FY 2007; therefore GIPSA compliance with section 3(c) of the executive order cannot be assessed at this time.
Department of Commerce
E.O. 13272 Compliance
The Department of Commerce (DOC) continues to comply with the requirements of E.O. 13272. Its RFA policies are publicly available in compliance with section 3(a) of E.O. 13272, and DOC’s agencies notify Advocacy of draft rules as required by section 3(b) of E.O. 13272. For example, the National Marine Fisheries Service (NMFS) routinely submits draft proposed and final rules to the Office of Advocacy. Similarly, in the last year, the United States Patent and Trademark Office (PTO) submitted draft rules to Advocacy in compliance with the requirements of section 3(b) of E.O. 13272. The agency also complied with section 3(c) of E.O. 13272. In FY 2007, the PTO published one final rule on which Advocacy had comments, and PTO responded to Advocacy’s comments in the final rule. As one of the agencies involved in Advocacy’s RFA training pilot program, NMFS was one of the first agencies to receive RFA training from the Office of Advocacy.
Patent and Trademark Office
Issue: Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications. On January 3, 2006, the PTO published two proposed rules that would reform the patent application and prosecution process. The proposed rules restricted the number of allowable representative claims for initial review in a patent application to 10, unless accompanied by an examination support document (ESD). Further, the proposals reduced the number of permissible continuation applications to one. Previously, applicants could complete an unlimited number of continuation applications. The PTO certified that neither rule would have a significant economic impact on a substantial number of small entities. In March 2006, Advocacy hosted a roundtable attended by patent attorneys, trade association representatives and PTO personnel to discuss the two proposed rules. In April 2006, Advocacy submitted a public comment letter to the PTO advising the agency of the potential impact of the rules on small entities. Advocacy also urged the PTO to complete an initial regulatory flexibility analysis. In response to Advocacy’s comments, the agency performed an analysis of the impacts of the proposed rules on small entities. After completing the analysis, PTO officials briefed Advocacy on the conclusions and shared the document with the office for review and comment.
On August 21, 2007, the PTO published a final rule in the Federal Register that combined the two proposals into a single rule package. In the final rule, the PTO considered Advocacy’s comments and revised its initial proposals. The agency increased its threshold for allowable claims to a total of 25, before requiring an ESD. Additionally, the final rule permits applicants to file up to three continuation applications. The agency’s decision to modify certain provisions in the proposed rule will result in significant, but unquantifiable, cost savings for affected small entities.
Department of Defense
E.O. 13272 Compliance
The Federal Acquisition Regulation Council (FAR Council) promulgates procurement regulations that are government-wide and affect small businesses. The FAR Council statutorily includes representation from the Department of Defense (DOD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA). The DOD regulations, called the Defense Federal Acquisition Regulation Supplement (DFARS), are specific to DOD and can only supplement the FAR Council regulations. However, because the FAR Council and DOD regulatory processes are interrelated, DOD’s procedures comply with section 3(a) of E.O. 13272. DOD submits prepublication rulemakings for Advocacy consideration in compliance with section 3(b) of E.O. 13272. DOD did not publish any final rules in FY 2007 that were the subject of any written Advocacy comments; therefore, DOD compliance with section 3(c) cannot be assessed. DOD’s staff received RFA training in FY 2005.
Advocacy worked closely with OIRA’s Defense regulatory team, providing significant interagency input on several regulations in fiscal year 2007.
Department of Education
E.O. 13272 Compliance
The Department of Education (Education) has made its policies and procedures publicly available as required by section 3(a) of E.O. 13272. Education notifies Advocacy through Advocacy’s email notification system of draft rules that may have a significant impact on a substantial number of small entities, as required by section 3(b) of E.O. 13272. Education has not published any final rules in FY 2007 that were the subject of any of Advocacy’s comments; therefore, Education’s compliance with section 3(c) cannot be assessed.
Department of Energy
E.O. 13272 Compliance
The Department of Energy (DOE) continues to comply with section 3(a) of E.O. 13272 by maintaining its policies and procedures concerning the Regulatory Flexibility Act on its website. In FY 2007, all of DOE’s draft rules that were sent to the Office of Management and Budget (OMB) for review were also sent to Advocacy, in compliance with section 3(b) of E.O. 13272. DOE did not publish any final rules in FY 2007 that were the subject of Advocacy’s comments. Therefore, DOE’s compliance with section 3(c) of E.O. 13272 cannot be assessed.
Department of Health and Human Services
E.O. 13272 Compliance
The Department of Health and Human Services (HHS) made its policies and procedures publicly available as required by section 3(a) of the executive order. The Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA), two agencies that often promulgate rules that affect small businesses, did not consistently submit drafts of rules pursuant to section 3(b) of E.O. 13272 in FY 2007.
Two CMS rules that Advocacy commented on were made final in FY 2007. CMS was compliant with section 3(c) of the executive order as it addressed Advocacy’s comments in the respective final regulatory flexibility analyses (FRFAs). None of the FDA’s rules that were the subject of Advocacy’s comments were made final in FY 2007, so Advocacy cannot comment on FDA’s compliance with section 3(c) of E.O. 13272. Advocacy will continue to work with HHS to improve its compliance with the executive order.
Centers for Medicare and Medicaid Services
Issue: Medicaid Program; Prescription Drugs (Proposed Rule: 71 Fed. Reg. 77174, December 22, 2006; Final Rule: 72 Fed. Reg. 39142, July 17, 2007). In December 2006, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule in the Federal Register to codify requirements for drug manufacturers’ calculation and reporting of average manufacturer price (AMP) under the Medicaid Drug Rebate Program, and revisions to existing regulations that set upper payment limits for certain covered outpatient drugs. Pursuant to the Regulatory Flexibility Act, CMS correctly prepared an initial regulatory flexibility analysis (IRFA) and readily acknowledged that the rule would have a significant impact on approximately 18,000 small retail pharmacies. CMS admitted that the rule would result in payments to pharmacies and would likely reduce pharmacy revenues by about $800 million in 2007, and $2 billion annually by 2011. Advocacy filed comments outlining several concerns with the rule’s requirements believed likely to have a negative impact on small independent pharmacies. As a result of Advocacy’s comments and those made by industry, CMS chose to redefine the term of art, "retail class of trade," in the definition of AMP by excluding sales to pharmacy benefit managers and nursing home pharmacies. CMS hopes this redefinition will reduce the economic burden on small independent pharmacies. The final rule was published July 17, 2007.
Issue: Medicare Program; Competitive Acquisition for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and Other Issues (72 Fed. Reg. 17992, August 10, 2007). On August 10, 2007, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule in the Federal Register titled Medicare Program; Competitive Acquisition for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and Other Issues. The rule established and implemented competitive bidding programs for certain Medicare-covered durable medical equipment. Advocacy was alerted by concerned small DMEPOS suppliers that the regulation would have a significant negative economic impact on their industry. Advocacy filed comments on the regulation in support of the CMS plan to create an alternative size standard that would allow more small durable medical equipment (DME) suppliers to participate in the competitive bidding program. Advocacy also noted that CMS had not analyzed how the rule would affect the small DME suppliers in the proposed rule. As a result, CMS included a final regulatory impact analysis in the final rule, published August 10, 2007. Alternatives for the rule were 1) a requirement of CMS to ensure that 30 percent of the winning bids would be earmarked for small DME suppliers, 2) allowing small suppliers to network to make it easier for them to win bids for supplying DME, and 3) permission for CMS to reduce the SBA size standard from $6.5 million to $3.5 million in annual revenues to ensure that more small suppliers would be eligible to participate in the competitive bidding program.
Issue: Medicaid Program; Surety Bond Requirement for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) (72 Fed. Reg. 42001, August 1, 2007). On August 1, 2007, the Centers for Medicare and Medicaid Services published a proposed rule in the Federal Register titled Medicare Program; Surety Bond Requirement for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. The rule requires that any durable medical equipment supplier must furnish CMS with a $65,000 surety bond. CMS noted in the rule that the public policy behind the regulation was to limit the Medicare program’s risk from fraudulent DME suppliers. On September 13, 2007, the Office of Advocacy filed a comment letter with CMS after representatives from small DME suppliers approached Advocacy concerned that CMS had not adequately analyzed the regulation’s economic impacts on their businesses. In its comment letter, Advocacy suggested that CMS do a better job analyzing the rule’s economic impacts on DME suppliers pursuant to the RFA’s requirements. Advocacy also provided CMS data and alternatives suggested by many small DME suppliers. Advocacy hoped that the information would serve to reduce the rule’s burden on DME suppliers. No information is available on the expected date of publication of the final rule
Department of Homeland Security
E.O. 13272 Compliance
The Department of Homeland Security (DHS) has made progress in complying with E.O. 13272. DHS has posted its RFA policy on its website, as required by section 3(a) of E.O. 13272. The Transportation Security Administration (TSA) and the United States Coast Guard were trained in RFA compliance in FY 2005. DHS did not submit all draft rules to Advocacy in FY 2007, as required by section 3(b). DHS published one final rule in FY 2007 that was the subject of Advocacy comments, and addressed Advocacy’s concerns in the final rule; therefore DHS has complied with section 3(c) of E.O. 13272.
Issue: DHS Final Chemical Facility Anti-Terrorism Standards Rule. DHS issued an interim final rule that requires chemical facilities meeting a certain risk profile to complete an initial risk assessment screening through a secure DHS website. DHS will use this information to determine whether the facility presents a high security risk. If it does, the facility must prepare and submit to DHS a vulnerability assessment and site security plan. DHS will evaluate these submissions for compliance with certain risk-based performance standards and conduct an inspection and audit of the facility.
DHS’s interim final rule implements section 550 of the Homeland Security Appropriations Act of 2007, which required DHS to issue interim final regulations within six months of its passage. Advocacy submitted a comment letter to DHS recommending that the agency prepare a formal regulatory flexibility analysis after publication of the interim final rule. Advocacy understands that Congress authorized DHS to proceed without traditional notice and comment rulemaking, but believes the agency should prepare an IRFA if it makes any subsequent revisions of the rule.
DHS responded to Advocacy’s comment in the final rule, but declined to prepare a post-promulgation IRFA. The agency cited the congressional instruction to issue an interim final rule as justification to bypass the traditional notice and comment rulemaking process.
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ssue: DHS Final Safe Harbor Procedures for Employers Who Receive a No-match Letter Rule. The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for an employer to knowingly hire or continue to employ a person not authorized to work in the United States. Under the final rule, employers who receive a "no-match" letter from the Social Security Administration (SSA) indicating a discrepancy between an employee’s name and social security number would have to take certain actions to resolve those discrepancies. If the employer and employee are unable to correct the discrepancy within a specified timeframe, the employer would be obligated to terminate the employee or be deemed to have "constructive knowledge" that the employee may be an unauthorized alien, which could lead to civil and criminal penalties.Advocacy did not submit formal comments to DHS during the comment period. Following issuance of the final rule, several labor and civil rights groups filed a lawsuit against DHS claiming that the SSA database was unreliable as an immigration enforcement tool. Several business groups intervened in the case, charging that DHS also failed to analyze the impact of the rule on small businesses in accordance with the Regulatory Flexibility Act. In response to a request for assistance from these business groups, Advocacy sent a letter to DHS supporting the RFA claim and offering to assist DHS in satisfying their requirements under the RFA.
On October 10, 2007, a federal district court granted a preliminary injunction barring DHS from implementing the rule pending further order. Further action is pending.
Department of Housing and Urban Development
E.O. 13272 Compliance
The Department of Housing and Urban Development (HUD) has made its policies and procedures available to the public in compliance with section 3(a) of E.O. 13272. HUD has notified Advocacy of rules that may have a significant impact on a substantial number of small entities as required by section 3(b) of E.O. 13272. HUD received RFA training in FY 2005. HUD did not publish any final rules in FY 2007 that were the subject of any Advocacy public comments; therefore, HUD’s compliance with section 3(c) of E.O. 13272 cannot be assessed.
Department of the Interior
E.O. 13272 Compliance
The Department of the Interior (DOI) has made the departmental manual listing the requirements and guidance to promote RFA compliance publicly available in compliance with section 3(a) of E.O. 13272. As required by section 3(b), the National Park Service (NPS) has continued to notify Advocacy of rules that it has determined could have a significant economic impact on a substantial number of small entities. NPS did not submit any final rules in FY 2007 that were the subject of any of Advocacy’s comments; therefore, NPS’s compliance with section 3(c) of E.O. 13272 cannot be assessed.
The U.S. Fish and Wildlife Service (FWS) does not notify Advocacy of any draft rules that may have a significant economic impact on a substantial number of small entities, as required by section 3(b) of E.O. 13272. FWS fails to prepare an IRFA or a certification at the time of proposal, as required by the RFA. Advocacy believes that these delays in completing the necessary RFA analysis hinder the ability of affected small entities to provide meaningful comment on the proposals’ impacts. FWS continues to certify its final designations of critical habitat for endangered species as not having a significant economic impact on a substantial number of small entities despite small business views to the contrary voiced during the rulemaking process. FWS has not been completing IRFAs or FRFAs for its critical habitat designations. FWS submitted two final rules in FY 2007 that were the subject of Advocacy comments, and complied with section 3(c) of E.O. 13272 by responding directly to the comments.
U.S. Fish and Wildlife Service
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ssue: Designation of Critical Habitat for the Spikedace and Loach Minnow. On December 20, 2005, FWS proposed to designate 633 stream miles of land in Arizona and New Mexico as critical habitat for the spikedace and loach minnow. FWS certified that the proposed rule would not have a significant economic impact on a substantial number of small entities. On July 6, 2006, Advocacy submitted a public comment letter to FWS, recommending revisiting the economic impacts of the proposed designations and considering less burdensome alternatives. Responding to comments by Advocacy and other small business entities, FWS excluded private lands in the lower portion of the Verde River from the final critical habitat designation because of economic factors. Based on the FWS economic analysis, Advocacy believes that the agency’s decision to eliminate these high-cost areas from its final designation resulted in $46.9 million in cost savings over 20 years, discounted at 7 percent.(12)Issue: Designation of Critical Habitat for the Canada Lynx. On November 9, 2005, FWS proposed to designate 26,935 square miles (more than 17 million acres) of land for the Canada lynx. FWS subsequently revised this designation downward to 18,031 square miles of land in Idaho, Maine, Minnesota, Montana, and Washington.
On September 11, 2006, FWS published a draft economic impact analysis and an initial regulatory flexibility analysis. In October, A