STATEMENT OF JOHN D. GRAHAM, PH. D.
OFFICE OF INFORMATION AND REGULATORY AFFAIRS
OFFICE OF MANAGEMENT AND BUDGET
EXECUTIVE OFFICE OF THE PRESIDENT OF THE UNITED STATES
SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES, AND
COMMITTEE ON GOVERNMENT REFORM
AND THE SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT
COMMITTEE ON SMALL BUSINESS
UNITED STATES HOUSE OF REPRESENTATIVES
January 28, 2004
Good afternoon, Messrs. Chairmen and Members of these Subcommittees. I am
John D. Graham, Ph. D., Administrator, Office of Information and Regulatory
Affairs (OIRA), Office of Management and Budget (OMB). Thank you for inviting
me today to discuss implementation of the Small Business Paperwork Relief
Act of 2002 (SBPRA). I have enjoyed working with you and the Subcommittees
to reduce the paperwork burden that Federal requirements impose on small
businesses. You asked me to testify about the status of each SBPRA mandate,
including agency single points of contact for small businesses, agency compliance
assistance resources, agency enforcement reports, and the OMB-led task force.
In addition, you invited me to testify about specific reductions in reporting
and recordkeeping requirements that exceeded 100,000 hours accomplished
since your July 18th hearing or planned in 2004 for small business.
By way of introduction, the Act imposes two specific requirements on OMB.
First, on an annual basis, in consultation with the Small Business Administration,
OMB must publish in the Federal Register and make available on the Internet,
on an annual basis, a list of compliance assistance resources available
to small businesses. Second, OMB must convene and chair a task force to
study the feasibility of streamlining requirements with respect to small
business concerns regarding collections of information and strengthening
dissemination of information.
Aside from these two specific duties assigned to OMB, the Act also imposes
four specific requirements on certain Federal agencies:
Act requires agencies to establish, no later than June 28, 2003, one
point of contact to act as liaison between the agency and small businesses
(as defined in Section 3 of the Small Business Act (15 USC 632)).
Act requires agencies to make efforts to further reduce the information
collection burden for small businesses with fewer than 25 employees.
The Act requires the heads of certain departments and agencies to designate
a representative or representatives to serve on a task force on information
collection and dissemination.
The Act requires each covered agency to submit an initial regulatory
enforcement report to Congress by December 31, 2003, and a final report
to Congress by December 31, 2004.
In my testimony today, I will summarize OMB activity to date with respect
to each of these six SBPRA requirements: the two specifically required of
OMB, and the four that relate to covered Federal agencies. In addition,
I will identify specific reductions in reporting and recordkeeping requirements
of at least 100,000 hours either accomplished since the July 2003 hearing
of this Subcommittee or planned in 2004 for small business.
OMB Commitment to Paperwork Reduction
The goal of the SBPRA is to reduce the paperwork burden on small business.
OMB is committed to reducing the regulatory and paperwork burdens that America’s
small businesses deal with every day. In previous testimony, I listed three
strategies that OMB uses to reduce needless paperwork burden on small business:
e-government, traditional paperwork reduction efforts, and regulatory review.
A fourth strategy—statutory reform—is in the purview of Congress.
The SBPRA Task Force, in its first report, emphasized the e-government strategy.
As that report noted, e-government is increasingly becoming the principal
means by which citizens and businesses engage with their government. The
President sees electronic government not only as a means for bringing more
services to the American citizen and businesses via the Internet, but also
as a tool for reducing the Federal government’s paperwork burden.
Because of our commitment to paperwork reduction, we take SBPRA implementation
seriously. Not only has OMB met its statutory requirements to issue a Task
Force report by June 28, 2003 and publish a list of compliance assistance
resources by that date, we have also undertaken actions not required under
the statute but which, we believe, will help ensure that agencies meet their
SBPRA obligations. For example, we have informed agencies of their responsibilities
under the Act. This communication was in the form of an October 28, 2003
memorandum to the President’s Management Council. In the memorandum,
I drew special attention to the December 31, 2003 deadline for submission
of regulatory enforcement reports to Congress.
Annual List of Compliance Assistance Resources
The Act requires OMB to publish, on an annual basis, a list of compliance
assistance resources available to small business. Because we thought it
would be helpful for the public to have the list of agency contacts along
with the list of compliance assistance resources, OMB published these lists
together. These lists are available on the OMB website (/omb/inforeg/infocoll.html#sbpra)
and the SBA website (http://www.sba.gov/ombudsman/compliance/complianceassist.html).
Compilation of this list of compliance assistance resources would have been
impossible were it not for the efforts of each Federal agency in developing
the summaries, descriptions, and lists of resources. Federal agencies have
established numerous programs to assist small businesses, and the list on
the OMB and SBA websites is testimony to their long-standing interest in
The SBA’s National Ombudsman significantly aided OMB in the compilation
of the compliance assistance resources and points of contact available to
small businesses. SBA went beyond consultation by helping with the collection
of compliance assistance summaries from the Federal executive branch and
identifying agency points of contact.
Task Force Activity
The Act requires the OMB Director or his representative to convene and chair
an interagency task force, which must issue two reports addressing a total
of five specific issues. Each report must be published in draft form in
the Federal Register to allow public comment. The first report was due by
June 28, 2003, and the second report is due June 28, 2004.
As you know, much work went into the first Task Force report. SBA’s
Office of Advocacy held a public meeting on March 4, 2003 to solicit views
of small business. A draft report of findings and recommendations was published
in the Federal Register on May 9, 2003 (68 FR 25166). The public comment
period ended June 4, 2003, after which the comments were compiled and incorporated
into the Final Report. The Final Report was delivered to Congress on June 26,
2003 and a Notice of Availability was published in the Federal Register
on June 27, 2003.
The Task Force found that reducing small business paperwork burden is a
challenge that raises both regulatory and information technology issues.
The Task Force also found that the presidential e-government initiatives,
such as the Business Compliance One-Stop Initiative, represent the best
opportunity for reducing the paperwork burden on small business. Since the
first Task Force report was released, the Business Compliance One-Stop Initiative
has been renamed the Business Gateway initiative.
The second Task Force report is due June 28, 2004. In this report, the Task
Force will (1) make recommendations to improve the electronic dissemination
of information collected under Federal requirements, and (2) recommend a
plan for the development of an interactive Government-wide system, available
through the Internet, to allow each small business to better understand
which Federal requirements regarding collection of information apply to
that particular business, and more easily comply with those Federal requirements.
While making its recommendations, the Task Force will consider opportunities
for coordination of Federal and State reporting requirements, and among
points of contact.
Because the topics of the second report differ from those of the first report,
different expertise is required. Therefore, in November 2003, OMB asked
agencies to designate representatives to the Task Force for the purposes
of developing the second and final report required under the Act. Agencies
have done so, and the initial meeting of this Task Force was held on January
20, 2004. I serve as co-chair of the SBPRA Task Force, along with my colleague
Karen Evans, the Administrator of OMB’s Office of Electronic Government.
The Task Force has formed two subgroups, one to address each issue identified
in the Act. The Task Force will meet periodically to ensure that a final
report is sent to Congress by the statutory deadline of June 28, 2004.
The SBA Office of Advocacy has graciously offered to convene a meeting for
the small business community to provide comment and input on each of the
two issues to be addressed by the Task Force. That meeting is schedule to
be held Monday, February 9, 2004. The input from that meeting will be used
by the Task Force to write both the draft report, which will be published
in the Federal Register for public comment, and the final report.
Agency Points of Contact
The Act requires each covered agency to designate an appropriate person
to serve as its point of contact. OMB, working in conjunction with the Small
Business Administration, has incorporated the list of points of contact
into the list of compliance assistance resources. Although such a consolidation
is not required by the Act, we believe there are advantages in doing so:
(1) it makes it easier for small businesses to find, (2) it provides us
with an annual mechanism to ask agencies to review and update their point
of contact information, and (3) it allows for public comment on the list
of points of contact.
In my memorandum of October 28, 2003 to the President’s Management
Council (PMC), I informed agencies where the list of points of contact can
be found. This list of agency points of contact has been available on the
OMB website since June 28, 2003, and is also available on the SBA website.
I also informed agencies how they can affect changes to their point of contact
information. Periodically, we have updated the list to reflect agency changes
to their point of contact information, and we will continue to do so.
The Subcommittees have, in the past, raised concerns about the accuracy,
completeness, and accessibility of this list. OMB has responded to many
of these concerns. For example, we re-posted our compliance assistance list
and point of contact list in HTML format. In addition, we have carefully
reviewed the November 2003 status report developed by the Subcommittee on
Energy Policy, Natural Resources, and Regulatory Affairs, showing which
agencies still need points of contact. This status report prompted us to
generate our own list of agencies that have one or more currently approved
information collections that may affect small business. When we compared
the results to our list of points of contact, we were able to verify that,
in a few cases, we needed to add an agency to our list. In a few other cases,
our list included agencies that do not currently impose paperwork burden
on small business. We have contacted the missing agencies and asked them
to designate a point of contact. Once we receive this information from each
of these few agencies, we will update our list. At that time, we will remove
from our list those agencies that do not currently have any approved information
collections that affect small business.
The Subcommittees have also expressed an opinion that agency points of contact
be under the direct authority of the agency chief information officer (CIO).
In our view, the agencies are in the best position to determine their small
business contact. What is important is that agency points of contact are
able to assist small business; if they can provide this assistance, we do
not think their location within an agency is critical.
The Subcommittees have also urged OMB to provide training to points of contact.
With respect to training, it is important to note that each agency is unique
with respect to its paperwork requirements; the burden it imposes on small
business; its internal procedures for developing, maintaining, and distributing
information collections; and its procedures for enforcing paperwork violations.
For these reasons, OMB believes each agency is in the best position to train
its point of contact.
Agency Efforts to Further Reduce Paperwork Burden
The statute directs agencies to “make efforts to further reduce the
information collection burden for small business concerns with fewer than
25 employees.” OMB believes that agencies are undertaking efforts
to further reduce the paperwork burden on very small businesses, but documentation
of these efforts is unavailable. Therefore, for the purposes of our annual
information collection budget (ICB), OMB issued a bulletin to agencies requesting
information on initiatives to reduce paperwork burden for small business
concerns, with particular focus on businesses with fewer than 25 employees
(see OMB Bulletin 04-01
December 3, 2003). This is the first time we have requested this particular
information, which we believe will allow us to monitor agency performance
over time with respect to this provision of SBPRA.
Agency Designations to the Task Force
The Act requires certain agencies to designate representatives to the Task
Force. Specifically, the Task Force must include not less than two representatives
from Labor (including one from the Bureau of Labor Statistics and one from
the Occupational Safety and Health Administration); not less than one representative
of the Environmental Protection Agency; not less than one representative
of the Department of Transportation; not less than one representative of
the Office of Advocacy of the Small Business Administration; not less than
one representative of the Internal Revenue Service; not less than two representatives
of the Department of Health and Human Services (including one from the Centers
for Medicare and Medicaid Services); not less than one representative of
the Department of Agriculture; not less than one representative of the Department
of Interior; not less than one representative of the General Services Administration;
and not less than one representative of each of two agencies not identified
The roster for the first Task Force can be found within the Task Force report,
which is on the OMB web site. Because the subject matter of the second report
differs from the first report, different expertise is required. In November
2003, OMB asked agencies to designate representatives to the Task Force
for the purposes of developing the second and final report required under
SBPRA. Agencies have done so, and the Task Force held its initial meeting
on January 20, 2004.
Agency Regulatory Enforcement Reports
The Act requires each agency to develop two regulatory enforcement reports.
The initial regulatory enforcement report is to include information with
respect to the one-year period beginning October 1, 2002. The final report
is to include information with respect to the one-year period beginning
October 1, 2003. Each report is to include information on each of the following:
(A) the number of enforcement actions in which a civil penalty is assessed,
(B) the number of enforcement actions in which a civil penalty is assessed
against a small entity,
(C) the number of enforcement actions described under subparagraphs
(A) and (B) in which the civil penalty is reduced or waived, and
(D) the total monetary amount of the reductions or waivers referred
to under subparagraph (C).
The Act states that each report shall include definitions (selected at the
discretion of the reporting agency) of the terms “enforcement actions”,
“reduction or waiver”, and “small entity” as used
in the report.
Furthermore, the Act states that each agency shall submit its report to
(A) the chairpersons and ranking minority members of (i) the Committee on
Governmental Affairs and the Committee on Small Business and Entrepreneurship
of the Senate; and (ii) the Committee on Governmental Reform and the Committee
on Small Business of the House of Representatives; and (B) the Small Business
and Agriculture Regulatory Enforcement Ombudsman designated under section
30(b) of the Small Business Act (15 U.S.C. 657(b)).
In my October 28, 2003 memorandum to the PMC, I reminded each agency that
it should have some prior agency precedent in defining the terms "enforcement
actions", "reduction or waiver" and "small entity."
Section 223 of the 1996 "Small Business Regulatory Enforcement Fairness
Act of 1996" (P.L. 104-121), entitled "Rights of Small Entities
in Enforcement Actions," required each agency by the spring of 1997
to "establish a policy or program . . . for the reduction, and under
appropriate circumstances for the waiver, of civil penalties for violations
of a statutory or regulatory requirement by a small entity." In addition,
I noted that Section 223 also required each agency to report to Congress
by the spring of 1998 "on the scope of their program or policy, the
number of enforcement actions against small entities that qualified or failed
to qualify for the program or policy, and the total amount of penalty reductions
In addition to the October 28, 2003 PMC memorandum, OMB used other forums
to communicate to agencies about their obligation to submit a regulatory
enforcement report. On November 19, 2003, agencies were reminded of this
obligation at the SBA Ombudsman’s semi-annual interagency meeting.
At that meeting, OMB staff told participants that the first regulatory enforcement
report is due by December 31, 2003 and that information in this report should
be consistent with agency information reported under the authority of the
IG Act and the CFO Act. In the first week of December 2003, OMB desk officers
sent e-mail reminders to all cabinet-level agencies to reiterate that (1)
OMB expects agencies to submit their regulatory enforcement reports on time,
and that (2) the information contained in these reports should be consistent
with agency reports submitted pursuant to the IG Act and the CFO Act.
Specific Reductions in Reporting and Recordkeeping Requirements
In your invitation letter, you requested that I identify specific reductions
in reporting and recordkeeping requirements that exceeded 100,000 hours
accomplished since the July 2003 hearing of this Subcommittee or planned
in 2004 for small business. To respond to this request, I refer the Subcommittee
to our 2003 ICB report, Managing Information Collection and Dissemination.
That report identified specific agency initiatives that are designed to
reduce paperwork burden. Many of these initiatives represent multi-year
efforts, and some can be expected to reduce burden for small business in
2004. For example, the following initiatives—taken from our 2003 report—may
result in actions to reduce small business paperwork burden in 2004:
- The Environmental
Protection Agency (EPA), through rulemaking, will significantly reduce
the paperwork burden imposed by regulations under the Resource Conservation
and Recovery Act (RCRA). EPA is undertaking this initiative to ensure
that only the information actually needed to run the RCRA program is
collected. EPA estimates that the initiative will reduce burden by 929,000
hours and save $120 million annually. A proposed rule was published
- The Occupational
Safety and Health Administration is undertaking rulemaking to update
numerous health standards that are inconsistent, duplicative, or outdated.
The proposal affects 18 information collections and would result in
a 207,892-burden hour reduction. Time for completion of this project
hinges upon the number and complexity of public comments received on
the proposed rule.
We expect to receive updates on these initiatives for inclusion in our 2004
report to Congress. In addition, other examples from the 2003 ICB might
also meet your criteria, but we will not know for sure about the status
or timing of these ongoing initiatives—or about new agency initiatives
to reduce burden—until we receive agency submissions for our 2004
In addition to agency initiatives planned for 2004, OMB has taken action
on Information Collection Requests that are expected to reduce burden for
small business. For example, last November, OMB approved an extension of
the ICR for EPA’s Energy Star program. Since the previous information
collection was approved, EPA streamlined its information requirements. The
estimated burden reduction is 134,371 hours. This burden reduction was partially
achieved through electronic means.
When these efforts are considered in addition to the various e-government
initiatives agencies have underway, agencies appear to be making a substantial
effort to reduce burden on small business. As part of this effort, we continue
to push agencies to include the PRA as an integral part of their management
strategies. We want agencies to continue reducing burden on small businesses
as efficiently as possible, regardless of whether these reductions are realized
in the electronic or non-electronic realm.
To conclude, Mr. Chairman, SBPRA implementation is on schedule. OMB has
fulfilled its statutory requirement to issue a Task Force report and to
publish a list of compliance assistance resources by the June 28, 2003 deadline.
The Task Force is already working on the second report, which is due June
28, 2004. Aside from these statutory requirements, we have undertaken actions
to ensure effective implementation of the Act. We have used a variety of
methods to remind agencies of their obligations under the Act; we have taken,
and will continue to take, steps to ensure that our list of agency points
of contact is complete and accurate; and we have asked agencies to identify
their efforts to further reduce the paperwork burden on small businesses
with fewer than 25 employees. We know we have more work to do, but we believe
we have made progress since the last time I testified before the Subcommittees.
Perhaps more importantly, the Administration continues its efforts to reduce
paperwork burden through a variety of strategies. We continue to believe
that e-government initiatives, such as the Business Gateway, provide an
enormous opportunity to reduce the paperwork burden on small businesses.