Small Businesses help rate regulatory agencies

Small-business owners who feel they have been used, abused or ignored by such regulatory agencies as the IRS, EPA or OSHA, have an opportunity to voice their grievances and seek redress through the Region VII Small Business Regulatory Fairness Board.

For instance, did you know that small businesses can help grade the performance of the IRS, EPA, OSHA and more than 30 regulatory agencies?

Small-business owners can share their enforcement experiences and get responses from the agencies involved, and business owners can offer common sense solutions on how these agencies can achieve their regulatory missions with lower costs to small businesses.

At the regional hearing in Omaha last May, small-business owners testified regarding enforcement actions by the USDA, INS and EPA.

Rogue agents harassing small businesses, enforcement actions that deprived small businesses of their work force and implementation of new regulations without notifying affected small businesses were discussed.

The USDA and INS had representatives there who responded to these allegations and pledged to work with the small businesses to resolve the issues.

Testimony from such regional hearings, and from written small-business comments throughout the year, were sent to the highest levels of each agency with requests for prompt reviews regarding fair treatment for the small businesses involved.

In contrast to the testimony on other agencies, OSHA, particularly in our region, has committed itself to improving regulatory fairness for small businesses.

It has worked together with industry associations to develop goal-oriented, safe working practices in the construction and oil-extraction industries, appointed a proactive regulatory fairness coordinator in Marcia Drumm (drumm-marcia@dol.gov), and held open forums to help small businesses understand and comply with regulations.

As a result, OSHA's ratings are improving, favorable comments are rising and few negative comments are being received.

In a 2000 report just issued to Congress and agency heads, federal agencies were rated by Regulatory Fairness Boards, comprising 50 small-business owners across the country, and by Gail A. McDonald, the SBA national ombudsman for regulatory fairness.

Agencies were evaluated on how they treated small businesses, and ratings were based on comments and testimony from small-business owners and feedback from Regulatory Fairness Board members.

The report also rated agencies on their implementation of five of our 1999 recommendations:

1. Develop a small-business regulatory fairness protocol for federal agency staff to avoid enforcement activity that can be arbitrary, often depending on the training or attitude of the agent.

2. Establish expedited avenues to quickly resolve agency actions where delays may threaten the economic viability of the business.

3. Agencies should gather and publish data on agency enforcement activities. Small businesses believe that agencies sometimes target small businesses because they lack in-house resources and expertise.

4. The agency's regulatory fairness coordinators should be independent of enforcement or compliance activities. Small businesses want their fairness issues independently addressed to guard against retaliation.

5. Agencies should provide formal regulatory fairness training to compliance personnel. Small businesses believe that some agency personnel are not familiar with the regulatory fairness rules and regulations.

Our goal: radical regulatory reform. Since the Regulatory Fairness boards were established in 1996, I have been working with the 49 other small-business owners across the country and the SBA national ombudsman to radically reform the way federal agencies do business.

No, we haven't found the magic bullet that cures all that ails small business-agency relationships.

We have, however, been working methodically, with the help of thousands of small businesses, to identify concrete solutions to persistent federal agency regulatory enforcement and compliance problems.

We have begun holding federal agencies accountable for their small-business audits, inspections, penalties, denials and other enforcement and compliance activities. We have pressed for the adoption of new, agency-wide policies and practices that help safeguard small businesses and focus agencies on the mission of helping small businesses comply with federal regulations.

In a collaborative effort, we measure agency performance across the country, listen to small businesses about their enforcement and compliance concerns, and identify and develop recommendations and solutions that focus agencies on compliance assistance and make it easier for small businesses to comply.

Small businesses and agencies agree that government resources are better spent working in partnership with small business to achieve compliance, rather than taking punitive enforcement action for noncompliance.

The national ombudsman and the 50 Regulatory Fairness Board members promote these working partnerships between small businesses and federal agencies.

For example, small businesses have a very difficult time complying with complex and numerous EPA regulations.

This past year we have worked together with EPA and the dry cleaning industry on a pilot project that radically simplifies compliance and makes it easier for dry cleaners to be in compliance.

The success of these efforts reinforces the partnership approach by federal agencies and small businesses.

We recognize that federal agencies do not have a monopoly interest in a clean environment, worker safety, or in combating fraud, waste or abuse, and the overwhelming majority of small businesses are exemplary corporate citizens.

Agencies are beginning to work together with small businesses to develop solutions that work for business and accomplish the agencies' national policy goals.

How you can participate. Small business comments form the foundation of Regulatory Fairness Board ratings and recommendations to Congress and the administration.

These recommendations are aimed at improving the federal regulatory enforcement and compliance environment for small business.

Small-business owners may comment on agency enforcement actions in writing, by contacting the national ombudsman at 888-REG-FAIR or at the Web site

www.sba.gov/regfair.

Comments can range from confidential up to full disclosure, though it should be noted that full disclosure comments get high-level, independent, specific responses.

Interestingly enough, the first comment resolved through the Regulatory Fairness Board program resulted in an enforcement action being withdrawn by the Department of Transportation.

Small-business owners can also testify at regional hearings, and transcripts of prior years' hearings, and this year's hearing schedule, are available at the Web site above.

The most effective testimony comes when an entire industry is represented at all 10 regional hearings.

A prime example is home health care businesses, which had representatives at all hearings in 1998, resulting in a delay in the regulations that were driving such firms out of business at the rate of 1,100 a month.

On a personal level, should an inspector arrive to conduct a compliance activity, ask to be briefed on your small-business rights to regulatory fairness. Nearly every agency has committed to training their agents on regulatory fairness.

Who knows? Your next inspection might run much smoother when both you and the inspector are aware of your rights to regulatory fairness and your ability to comment on how that inspection is conducted.

(Scott George is general manager at Mid America Dental and Hearing Center in Mt. Vernon and vice chair of the SBA Region VII Regulatory Fairness Board, past chair of NFIB's Missouri Leadership Council, and president-elect of the Missouri Hearing Society.)