THE SMALL BUSINESS REGULATORY ENFORCEMENT FAIRNESS ACT
OF 1996 (SBREFA).
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), signed into law on March 29, 1996, provides, among
other things, for: (1) judicial review of the Regulatory Flexibility
Act; (2) preparation by Federal agencies of "plain English"
c ompliance guides to assist small entities in their efforts
to comply with Federal regulations: (3) an Ombudsman to be established
by the Small Business Administration (SBA) who will receive
comments and complaints from small businesses concerning their
ex periences in dealing with Federal regulatory agencies: and
(4) Regional Small Business Regulatory Fairness Boards, also
to be established by the Small Business Administration, to review
comments on Federal agency enforcement practices and make recommendat
ions to the SBA Administrator and the head of affected agencies
concerning those practices.
Although HUD is not generally regarded as a "regulatory agency",
HUD has the following important regulatory responsibilities:
oversight and enforcement of the Federal Fair Housing Act, the
Real Estate Settlement Procedures Act (RESPA) and the Interstate
Land Sales Full Disclosure Act; oversight over certain activities
of government-sponsored enterprises (GSEs); and the establishment
and enforcement of lead-based paint standards and manufactured
housing standards.
HUD has long had in place a systematic process for determining
whether newly developed rules are likely to have a significant
economic impact on a substantial number of small entities. The
typical HUD rule implements statutory directions for the adminis
tration of grant programs. Rules of this type are intended to
reflect Congressional mandates that, by their nature, have universal
applicability to the portion of the public affected by the rule.
These rules do not lend themselves to the provision of sp ecial
procedures, or exemptions from requirements, applicable to small
entities. This observation notwithstanding, HUD has developed
a process intended to introduce additional scrutiny to existing
procedures for safeguarding the interests of small entities
during development and following implementation of regulations.
HUD'S
PROCESS FOR ENSURING COMPLIANCE WITH THE SMALL BUSINESS REGULATORY
ENFORCEMENT FAIRNESS ACT.
To ensure that there is a meaningful assessment of HUD rules
to determine which rules, if any, will have an impact on small
businesses, HUD proposes to (1) target regulations that may
impact small businesses at the earliest opportunity in the development
process; (2) assign oversight responsibility to the Office of
Small and Disadvantaged Business Utilization (OSDBU) to review
(i) the analysis of economic impact required before the agency
head certifies no impact, (ii) the program office's assessment
and disposition of all alternative rule implementation strategies
submitted by small entities, and (iii) the compliance guides
prepared by the program offices where applicable; and (3) maintain
the requirements of the SBREFA and Regulatory Flexibility Act
on the HUD web site with instructions to small entities on the
OSDBU role as small business Ombudsman, as well as copies of
compliance guides, names of HUD staff with familiarity in HUD
programs that may impact small businesses, to answer questions,
and a u sers forum where representatives of small entities can
ask questions on a specific rule as a means of providing a fast
means of clarifying issues.
Specific applicability of this process to each of the subparts
of the SBREFA follows:
Subtitle A--Regulatory Compliance Simplification
The first step is to ensure early identification of rules that
may potentially impact small entities. Toward this end, HUD
will emphasize existing processes and add one additional intercept
point:
-
Maintain and Emphasize HUD Regulatory Form. HUD already tracks
the "Small Entity Impact" category on its own internal regulatory
clearance form (this form must be completed by all program
offices initiating regulatory actions). All program o ffices
are required to complete this category. The OSDBU will establish
a working relationship with all program offices which intend
to develop rules that may impact small entities to ensure
participation in and the timely review of required regulatory
f lexibility analysis.
-
Maintain and Emphasize the OMB Regulatory Form. The "Regulatory
Information Data Form" that must be completed by all Federal
agencies for each new regulatory action and that is submitted
to OMB for the semiannual agenda, includes a "Small Ent ity
Impact" category. All Federal agencies are required to complete
this category. Certain regulations, those identified as having
the potential to impact small entities (small entity impact)
will be tracked and program offices developing small entity
i mpact regulations will be monitored closely. The review
of potential small entity impact rules by OSDBU, while these
rules are in early development, is designed to promote accuracy
in identifying small entity impact rules.
- HUD
Statutory Implementation Guides. When new HUD legislation
is enacted, the Office of General Counsel prepares an implementation
guide that provides guidance to the program offices of regulatory
action or other type of guidance or notice tha t is required
by the statutory provisions. In future implementation guides,
the Office of General Counsel, in consultation and cooperation
with the OSDBU, will identify legislation provisions that
require regulatory action and that appear to potentially impact
small entities.
If a rule or group of related rules issued by HUD is determined
to have a significant economic impact on a substantial number
of small entities, and consequently determined to require
a regulatory flexibility analysis, the HUD program office
with respons ibility for implementation and enforcement
of the regulation will undertake the following: (1) solicit
and review for feasibility alternative strategies for rule
implementation which may mitigate impacts on small entities;
and (2) prepare a compliance gui de to assist small entities
in complying with the rule. Additionally, the program offices
will continue to be responsible for answering inquiries
by small entities concerning information on, and advice
about, compliance with applicable statutes and regul ations.
HUD proposes to maintain a specific users forum on the Internet
where small entities may review the rule and the compliance
guide, and engage in an online dialogue with program experts
to seek clarification and guidance on the rule.
The OSDBU, as HUD's Ombudsman for small business, will monitor
and assist the program offices throughout the development
and implementation process and act as an honest broker for
small businesses seeking additional information or who express
concerns du ring development and implementation.
Subtitle B--Regulatory Enforcement Reforms
Subtitle B provides for the SBA Administrator to designate a
Small Business and Agriculture Regulatory Enforcement Ombudsman
and the Regional Small Business Regulatory Fairness Boards.
This subtitle is primarily directed at the SBA. This subtitle,
howe ver, also provides that "each agency regulating the activities
of small entities shall establish a policy or program within
1 year of enactment of this section to provide for the reduction,
and under appropriate circumstances for the waiver of civil
penal ties for violations of a statutory or regulatory requirement
by a small entity."
Subtitle B provides that under appropriate circumstances an
agency may consider ability to pay in determining penalty assessments
on small entities. HUD notes that the ability to pay is a legislative
directive for many programs under the Department of H ousing
and Urban Development Reform Act of 1989, Pub.L. 101-235, approved
December 15, 1989. Additionally, as HUD stated in its June 15,
1995 Report to President Clinton on the President's Regulatory
Reform Initiatives, HUD has authority to issue civil m oney
penalties for violations of requirements governing its grant,
mortgage insurance, and regulatory programs. HUD's policy to
date has been to assist regulated entities in achieving compliance
with requirements in order to avoid any penalty process.
Where penalties are determined appropriate, HUD's policy is
to take into consideration the resources of the regulated entity.
It is not HUD's intent to put any individual or entity out of
business by the penalties or settlement amounts paid to the
Federa l Government. HUD will continue to follow this practice,
which is consistent with President Clinton's April 24, 1995
memorandum to Federal agencies, and which is consistent with
SBREFA.
Subtitle
C--Equal Access to Justice Act Amendments.
This subtitle provides, among other things, that if, in an adversary
adjudication arising from an agency action to enforce a party's
compliance with a statutory or regulatory requirement, the demand
by the agency is substantially in excess of the decisio n of
the adjudicative officer and is unreasonable when compared with
such decision, under the facts and circumstances of the case,
the adjudicative officer shall award to the party the fees and
other expenses related to defending against the excessive dem
and, unless the party has committed a willful violation of law
or otherwise acted in bad faith, or special circumstances make
an award unjust.
Subtitle D--Regulatory Flexibility Act Amendments.
This subtitle, among other things, identifies the information
that must be included in a final regulatory flexibility analysis,
provides for judicial review, and, for rules that do not have
a significant economic impact on a substantial number of small
e ntities, requires that the rules include a certification by
the head of the agency to this effect. HUD's rules are in compliance
with the requirements of subtitle D. As discussed under subtitle
A, HUD has established a process of enhanced review for small
entity impact which should further ensure compliance. The Office
of General Counsel and the OSD BU will review the certification
for rules that do not have a significant economic impact on
a substantial number of small entities prior to signature by
the head of the agency. Federal Register notices and information
on the Internet will stipulate the role of the OSDBU in assisting
small entities in obtaining information and seeking clarifications
the small entities believe have not been forthcoming.
Subtitle D also provides that prior to publication of an initial
regulatory flexibility analysis, an agency is to notify the
Chief Counsel for Advocacy of the SBA and to provide the Chief
Counsel with information on the potential impacts of the proposed
rule on small entities and the type of small entities that have
been affected. The HUD OSDBU will perform this role.
Since March 29, 1996, HUD has not published any rules that have
a significant economic impact on a substantial number of small
agencies.