January 5, 2005 The Honorable John D. Graham, Ph.D. Administrator Office of Information and Regulatory Affairs Office of Management and Budget New Executive Office Building, Rm. 10235 725 17th Street, N.W. Washington, D.C. 20503 Re: Office of Advocacy’s Review of 189 Rules and Guidance Documents listed in OMB’s 2004 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local and Tribal Entities Dear Dr. Graham: Two weeks ago, your office released its final report to Congress entitled, “Progress in Regulatory Reform: 2004 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local and Tribal Entities.”1 In the report, the Office of Management and Budget (OMB) listed 189 regulatory reform nominations relevant to the manufacturing sector from 41 public comments submitted to OMB in response to the draft 2004 report to Congress released in February 2004. In addition, the final report asks the Office of Advocacy to review the 189 reform nominations and identify for agencies those rules that offer “the potential to reduce unjustified regulatory burdens on small manufacturers.” This letter responds to that request and serves as notice to the agencies, listed in the attached table, of rules that Advocacy believes are of greatest importance to small businesses. Congress established Advocacy under Pub. L. No. 94-305 to advocate the views of small business before Federal agencies and Congress. Because Advocacy is an independent office within the U.S. Small Business Administration (SBA), the views expressed by Advocacy do not necessarily reflect the position of the Administration or the SBA. Among Advocacy’s primary statutory mandates is the requirement to measure the direct costs and other effects of government regulation on small businesses, and make legislative and non-legislative proposals for eliminating excessive or unnecessary regulations on small businesses.2 On August 13, 2002, President Bush underscored the Office of Advocacy's role in giving a voice to small businesses 1 OMB’s report is available at http://www.whitehouse.gov/omb/inforeg/regpol-reports_congress.html. 2 15 U.S.C. § 634(b)(3). The Honorable John D. Graham, Ph.D. January 5, 2005 Page 2 in the rulemaking process when he signed Executive Order 13272, titled "Proper Consideration of Small Entities in Agency Rulemaking."3 The Executive Order enhanced Advocacy’s ability to affect agency compliance with the Regulatory Flexibility Act (RFA)4 and realize small business cost savings as a result.5 In addition to the Executive Order, your office and mine have worked well together under parameters set by the President’s Small Business Agenda. As you know, part of the President’s Small Business Agenda sought to strengthen Advocacy by bolstering its relationship with OMB’s Office of Information and Regulatory Affairs (OIRA).6 This letter, and your reliance on the Office of Advocacy to prioritize reform nominations on behalf of the small business community, are further evidence of our offices’ mutual commitment to instill a regulatory climate where entrepreneurship can flourish. While reform of many of the regulations and guidance documents identified in OMB’s most recent report could achieve benefits for small businesses, Advocacy has reviewed the rules and the guidance documents listed in Table 8 of the final 2004 report and selected 48 of them as high priorities for small business. This subset of high priorities is listed on the attached table. Advocacy made its determinations based on the comments submitted to OMB, input received from small businesses in preparing Advocacy’s comments on OMB’s draft 2004 report,7 and Advocacy’s direct involvement in agency rulemakings affecting small businesses. This letter and the attached table serve as a notice to the agencies of Advocacy’s concerns regarding the impact of those rules on small business. A copy of the letter and table will be sent to the head of each of the agency listed in the attached table. Advocacy’s Office of Interagency Affairs will reach out to their agency counterparts to offer further assistance in the agencies’ internal reviews of the reform nominations. 3 Exec. Order No. 13272, 67 Fed. Reg. 53,461 (August 16, 2002). 4 5 U.S.C. § 601, et seq. 5 Cost savings realized through the RFA and the Executive Order are documented in an annual report. The most recent annual report can be located at http://www.sba.gov/advo/laws/flex/03regflx.pdf. 6 President Bush’s Small Business Agenda, announced March 19, 2002, can be viewed at http://www.whitehouse.gov/infocus/smallbusiness/regulatory.html. A Memorandum of Understanding (MOU) between the Office of Advocacy and OIRA was signed on March 19, 2002, and can be viewed at http://www.sba.gov/advo/laws/law_mou02.pdf. 7 Advocacy’s May 14, 2004, letter to OIRA on its draft report is available in pdf format on Advocacy’s website, http://www.sba.gov/advo/laws/comments/omb04_0514.pdf. The Honorable John D. Graham, Ph.D. January 5, 2005 Page 3 We welcome the opportunity to work with OMB and our federal regulatory partners in their efforts to modify or rescind burdensome regulations and guidance documents affecting small businesses. Please do not hesitate to contact me, or the Acting Director of Interagency Affairs, Linwood L. Rayford at 202-401-6880. Sincerely, /s/______________ Thomas M. Sullivan Chief Counsel for Advocacy /s/______________ Linwood L. Rayford Acting Director of Interagency Affairs Enclosure cc: Al Frink, Assistant Secretary for Manufacturing and Services, International Trade Administration, U.S. Department of Commerce The Honorable Tommy Thompson, Secretary United States Department of Health and Human Services The Honorable Mark B. McClellan, Administrator Centers for Medicare and Medicaid Services Lester M. Crawford, Acting Commissioner of the U.S. Food and Drug Administration The Honorable Elaine Chao, Secretary United States Department of Labor Jonathan Snare, Acting Assistant Secretary of Labor for Occupational Safety and Health David Dye, Acting Assistant Secretary of Labor for Mine Safety and Health The Honorable Michael K. Powell, Commissioner Federal Communications Commission The Honorable Michael O. Leavitt, Administrator United States Environmental Protection Agency The Honorable Norman Y. Mineta, United States Secretary of Transportation Samuel G. Bonasso, United States Department of Transportation, Deputy Administrator Research and Special Programs Administration Annette M. Sandberg, United States Department of Transportation, Administrator of the Federal Motor Carrier Safety Administration The Honorable John D. Ashcroft, Attorney General of the United States, United States Department of Justice Mark W. Everson, Commissioner United States Internal Revenue Service The Honorable John D. Graham, Ph.D. January 5, 2005 Page 4 The Honorable Ann M. Veneman, Secretary of the United States Department of Agriculture Barbara J. Masters, Administrator of the Food Safety and Inspection Service, United States Department of Agriculture Hilda Gay Legg, Administrator Rural Utilities Service, United States Department Of Agriculture Agency High Priorities for Small Business Selected by the Office of Advocacy from Table 8: Manufacturing Reform Nominations Ref. Number(s*) All Small Business Liaisons 1 DOT/FMCSA Hours of Service 14 DOT/RSPA Hazardous Materials Rules (HM-223) 25 EPA "Whole Effluent Toxicity" (WET) Methods 27 EPA Chemical Inventory Update Rule 32 EPA Hazardous Waste Rules Should Be Amended to Encourage Recycling 42 EPA Lead Reporting Burdens Under the Toxic Release Inventory Program 43 EPA Pretreatment Streamlining Rule Under the Clean Water Act 47 EPA Provide More Flexibility in the Management of Wastewater Treatment Sludge to Encourage Recycling 48 EPA Regulation of Air Toxics from Area Sources 49, 50 EPA Reporting and Paperwork Burden in the Toxic Release Inventory Program 52 EPA Spill Prevention Control and Countermeasures (SPCC) Rule 54-58 EPA Method of Detection Limit/Minimum Level (MDL/ML) Procedure under the Clean Water Act 86 EPA Reportable Quantity (RQ) Threshold for Nitrogen Oxide and Dioxide at Combustion Sources 97 EPA Deferral of Duplicative Federal Permitting 108 EPA Reporting of Coincidental Manufactured Compounds under the Toxic Release Inventory Program 109 EPA SARA Title III Reporting Requirements 111 FCC "Do Not Fax" Rule 121 HHS Privacy of Individually Identifiable Health Information 124 HHS/CMS HIPAA 125 HHS/FDA Use of Term "Fresh" for Baked Goods 127 Justice Administration of Federal Prison Industries (FPI)--Guidance 133 Labor FMLA/Intermittent Leave 134 Labor FMLA/Perfect Attendance Awards 135 Labor FMLA/Request for Leave 136 Labor FMLA/Serious Health Condition 137 Labor FMLA/Health Care Provider Certification 141 Labor FMLA/Penalty Provisions 142 Labor FMLA/Substitution of Paid Leave 143 Labor FMLA/Unable to Perform 144 Labor/MSHA Diesel PM Exposure 146 Labor/OSHA Hazard Communication 154 Labor/OSHA Hexavalent Chromium 157 Labor/OSHA Sling Standard 159 Labor/OSHA Threshold Limit Values 161 OMB Administration of Federal Prison Industries (FPI)--Guidance 171 Treasury/IRS "Statutory Employees"--Bakery Drivers 176 Treasury/IRS Communications Distance Sensitivity 177 Treasury/IRS Election to Expense Certain Depreciable Business Assets 178 Treasury/IRS "Statutory Employees"--Bakery Drivers 179 Treasury/IRS Bonus Depreciation 180 Treasury/IRS Mobile Machinery Exemption 181 USDA/FSIS Ready to Eat Meat Establishments to Control for Listeria Monocytogenes 188 USDA/RUS Guarantees for Bonds and Notes Issued for Electrification or Telephone Purposes (Proposal) 189 * Hyperlinks to the report titled “Progress in Regulatory Reform: 2001 Report to Congress on the Cost and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities”, which can be located at http://www.whitehouse.gov/omb/inforeg/2004_cb_final.pdf. Caution: Use of hyperlink takes you to a voluminous document.