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
July 20, 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 (the Act). I have enjoyed working
with you and the Subcommittees to reduce the paperwork burden that Federal
requirements impose on small businesses.
By way of introduction, the Act imposes two specific requirements on OMB.
First, 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.
In addition, the Act also requires certain Federal agencies
to establish one point of contact to act as liaison between the agency
and small businesses; submit an initial regulatory enforcement report
to Congress by December 31, 2003, and a final report to Congress by December
31, 2004; and make efforts to further reduce the information collection
burden for small businesses with fewer than 25 employees.
In my testimony today, I will provide a status report
on these SBPRA requirements, with emphasis on the final Task Force report
and our annual list of compliance assistance information, both of which
were issued on June 28, 2004.
Task Force Reports
The Act requires OMB 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 was due by June 28, 2004.
In the first report, which was delivered to the Congress
on June 26, 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 concluded 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 businesses. Since
the first Task Force report was released, the Business Compliance One-Stop
Initiative has been renamed the Business Gateway initiative.
For the second Task Force report, the Act requires the
Task Force (1) to make recommendations to improve the electronic dissemination
of information collected under Federal requirements, and (2) to 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.
Earlier this year, the SBA Office of Advocacy convened a meeting for the
small business community to provide comment and input on each of the two
issues to be addressed in the second Task Force report. That meeting was
held on Monday, February 9, 2004. The input from that meeting was used by
the Task Force to write the draft report, which was published for comment
in the Federal Register on May 5, 2004.
On June 28, 2004, OMB published a Federal Register notice announcing
the availability of the final report. The report can be accessed through
the OMB website at: /omb/inforeg/sbpr2004.pdf.
With respect to improving the first task regarding electronic
dissemination of information, the Task Force makes several recommendations
The report includes several examples of cross-agency
initiatives that embody these recommendations. Such cross-agency initiatives
leverage the knowledge of leading agencies in an efficient and effective
With respect to the development of a plan for an interactive
Government-wide system, available through the Internet, to allow each
small business to better understand and comply with Federal requirements,
the Task Force recommended the development of the Business Gateway. This
initiative is designed specifically to meet the Act’s objective
of reducing the paperwork burden on America’s small businesses.
The initiative, directed by an interagency governance board led by SBA,
accomplishes this by:
augment small business outreach plans,
improve the organization and classification of information,
improve outreach to small businesses,
broaden and improve partnerships among agencies with similar or overlapping
use the e-government cross-agency initiatives to improve dissemination
determine customer needs,
explore public/private partnerships with web services companies, and
don’t forget the human interface
The Business Gateway, using the Internet as a service
delivery channel, will assist citizens and small businesses in their compliance
with government regulations, and save them millions of dollars which can
be reinvested in the growth of our economy.
providing a single Web point of access for relevant regulatory information
and Federal government forms that involve businesses and citizens, and
industry-specific information collection requirements to collect information
once and use it many times and reduce the overall number of forms to
Compliance Assistance Information
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 were published in the Federal Register on
June 28, 2004, and are also available on the OMB website (/omb/inforeg/infocoll.html#sbpra).
(There are slight differences in format between the Federal Register
notice and the list posted on the OMB website, but the information is the
Compilation of the 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 website is testimony to their long-standing interest
in this issue.
The SBA’s National Ombudsman significantly aided
OMB in the compilation of the initial list of 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.
In your letter of invitation, you asked me to provide
a reason for each agency that does not have compliance assistance resource
information on the consolidated OMB listing. Since we received your letter,
OMB has asked each agency without any listed compliance assistance information
to provide us with an explanation (the explanation could be that the agency
does not impose any requirements on small businesses, and therefore the
agency has not developed any compliance assistance resources). Once we
receive and compile this information, we will provide it to the Subcommittees.
Point of Contact Information
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 effect changes to their point of contact
information. We have updated the list to reflect agency changes to their
point of contact information, and we will continue to do so.
have, in the past, raised concerns about the accuracy, completeness, and
accessibility of this list. OMB responded to these concerns. For example,
we re-posted our compliance assistance list and point of contact list
in HTML format, which facilitates quicker access. In addition, we 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 businesses. 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 contact to our list. In a few
other cases, our list included agencies that do not currently impose paperwork
burden on small businesses. We removed from our list those agencies that
do not currently have any approved information collections that affect
small businesses, and added points of contact information for those agencies
that were missing.
the point of contact information upon notification from an agency. We
want this list to remain timely and accurate to ensure that small businesses
can obtain information quickly and easily.
requires each agency to develop two regulatory enforcement reports for
submission to congressional committees and the Small Business and Agriculture
Regulatory Enforcement Ombudsman. 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
number of enforcement actions in which a civil penalty is assessed,
number of enforcement actions in which a civil penalty is assessed against
a small entity,
number of enforcement actions described under subparagraphs (A) and
(B) in which the civil penalty is reduced or waived, and
total monetary amount of the reductions or waivers referred to under
In my October 28, 2003, memorandum to the President’s Management Council
(PMC), I noted that 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 to the PMC 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 and waivers."
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
the deadline for the initial regulatory enforcement report has passed,
OMB continues to take advantage of opportunities to remind agencies of
their SBPRA obligations. On March 18, 2004, I attended the SBA Ombudsman’s
interagency meeting to underscore the Administration’s commitment
to small business paperwork reduction and SBPRA implementation. I thanked
the agencies in attendance for their hard work in implementing the Act,
and urged them to continue their efforts. My staff used that occasion
to remind delinquent agencies to submit their initial regulatory enforcement
reports, and urged all agencies to begin work on their final regulatory
On July 2, 2004, OMB reminded each agency by e-mail of its obligation to submit
a final regulatory enforcement report by December 31, 2004. Because this
statutory requirement may involve changes to current agency recordkeeping
practices, we sent this reminder to agencies six months in advance of
the statutory deadline, in order to ensure ample time for compliance.
We made clear to each agency that figures presented in the report should
be consistent with agency reporting under the CFO Act and the IG Act.
letter of invitation, you asked me to provide the reason for each agency
that did not submit a regulatory enforcement report. As stated in my previous
testimony, OMB has not required that agencies submit to us a copy of their
reports to Congress, and our efforts to date have focused on ensuring
submission by the major regulatory agencies. Nevertheless, since receiving
your letter, OMB has requested that each agency that has not submitted
a regulatory enforcement report provide us with an explanation (the explanation
could be that the agency does not have any regulatory enforcement activities).
Once we receive and compile this information, we will provide it to the
Efforts to Reduce Burden on Very Small Businesses
The Act directs agencies to “make efforts to further reduce the information
collection burden for small business concerns with fewer than 25 employees.”
For the purposes of our annual information collection budget (ICB), OMB
last fall 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). As a result of this request, the
FY 2004 Information Collection Budget included a chapter describing efforts
by OMB and agencies to implement the Act. That chapter included planned
or ongoing initiatives identified by agencies to reduce the paperwork burden
on a substantial number of small businesses.
of Task Force Recommendations
a number of recommendations contained in the initial and final Task Force
reports. To ensure that these recommendations are being implemented and
managed, the Administration is undertaking various interagency efforts.
The Administration believes that existing interagency efforts represent
the best means to achieve the goals developed by the Task Force. For example,
the Task Force recommendation of Business Gateway is being implemented
through a government-wide electronic government initiative led by a governance
board chaired by the Small Business Administration. Many of the Task Force’s
recommendations relating to information dissemination are being addressed
by the Interagency Committee on Government Information, an interagency
group, co-chaired by the Department of Commerce and OMB.
letter of invitation, you requested specific paperwork reduction accomplishments
resulting from the two Task Force reports. It is important to note that
the Task Force recommendations are incremental to current ongoing efforts
by agencies to reduce paperwork burden. It is also important to note that
the Task Force recommendations relate to process changes that will be
implemented over time. For these reasons, it is not possible to accurately
attribute specific paperwork burden reduction accomplishments to recommendations
in the Task Force reports. Changes in paperwork burden reflect a confluence
of factors, including statutory requirements, agency initiatives, and
Reductions in Paperwork Burden
In your letter of invitation, you asked for specific reductions in reporting
and recordkeeping requirements of at least 100,000 hours accomplished since
January 28, 2004, or planned for 2004 for small business. To respond to
this request, I refer the Subcommittee to the OMB fiscal year 2004 report,
Managing Information Collection:
Information Collection Budget of the United States Government.
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 2004 report—may
result in actions to reduce small business paperwork burden:
to receive updates on these initiatives for inclusion in our 2005 report
to Congress. In addition, other examples from the 2004 ICB might also
meet your criteria.
to agency initiatives planned for 2004, OMB has taken action on Information
Collection Requests that result in reduction in burden for small businesses.
For example, OMB recently approved an information collection request in
which the Department of Health and Human Services reduced, by 406,780
hours, the paperwork burden imposed on clinical laboratories. This reduction
was achieved through modification of existing regulations governing the
certification of clinical laboratories.
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.
- The Environmental
Protection Agency plans to significantly reduce the paperwork burden
imposed under the Resource Conservation and Recovery Act (RCRA). EPA
wants 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 in 2002, and public comment was solicited on new burden
reduction items in 2003.
- OSHA plans
to revise a number of health provisions in its standards for general
industry, shipyard employment, and construction that are outdated, duplicative,
unnecessary, or inconsistent. The Agency expects to publish a final
rule in the second quarter of 2004.
SBPRA implementation is on schedule. OMB has fulfilled its statutory requirement
to issue two Task Force reports and to publish an annual list of compliance
assistance resources. Agencies have established single points of contact,
and the major regulatory enforcement agencies have submitted their initial
regulatory enforcement reports to Congress.
recommendations are being implemented through several inter-agency efforts,
such as the Business Gateway Initiative, managed by SBA, and the Interagency
Committee for Government Information, co-chaired by the Department of
Commerce and OMB.
has and will continue its efforts to ensure the accuracy and completeness
of agency SBPRA information. 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 and
compliance assistance resources 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.