The Small Business Watchdog

As the voice of small business in government, Advocacy invites you to post your thoughts on this moderated blog, provided as a forum for the small business community.

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The Regulatory Flexibility Act + The Office of Advocacy = Small Business’s Voice in Federal Rulemaking

September 27th, 2013 · Comments Off

Pictured: Sarah Bresolin Silver, assistant chief counsel, and Doug Babbitt, executive vice president of Rutland Plywood Corporation, on a site visit to the Vermont small business in July.
Pictured: Sarah Bresolin Silver, assistant chief counsel, and Doug Babbitt, executive vice president of Rutland Plywood Corporation, on a site visit to the Vermont small business in July.

The federal rulemaking process can be long and involved. The Office of Advocacy plays a small but important role in this process which is spelled out in the Regulatory Flexibility Act and several executive orders. The Environmental Protection Agency’s formaldehyde rulemaking is a current example of how the office makes sure small business is represented throughout a prolonged, complex process. (Table 1 contains a brief timeline.)


The topic of regulating formaldehyde in home building materials dates to 2005, when the trailers housing the residents displaced by Hurricane Katrina were found to have high levels of formaldehyde gas. The push for regulations was launched in 2008. In March of that year, 25 organizations and 5,000 individuals petitioned EPA to adopt the California Air Resource Board’s (CARB) airborne toxic control measures for formaldehyde in composite wood products nationally. In June, EPA announced a decision to grant some parts of the petition, and the agency issued an advance notice of proposed rulemaking in December.

Advocacy became involved in fall of 2010 when EPA convened a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel. SBREFA requires that EPA seek input from affected small businesses before proposed rules are published. At this early stage, small businesses can help shape the regulatory approach, which is much more effective than asking for substantive changes after a rule has been proposed.

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Comments OffTags: Regulatory Policy · State and Regional

Small Business Reg Alerts: U.S.–Canada Trade and Healthcare Reporting

September 18th, 2013 · Comments Off

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Progress of the U.S.–Canada Effort to Streamline Regulatory Differences

On August 29, the Office of Management and Budget asked for comments on the U.S.–Canada Regulation Cooperation Council’s progress.

Background: In February 2011, President Obama and Prime Minister Harper announced the creation of the Canada–U.S. Regulatory Cooperation Council (RCC). The council is charged with addressing regulatory differences between the two governments and working to improve free and open trade that encourages jobs and growth in both countries. Now, the RCC wants stakeholder input for issues and/or sectors that should be considered for future cooperation between countries. Comments are due by Friday, October 11, 2013.

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 Affordable Care Act Reporting Requirement

On September 5, the Internal Revenue Service (IRS) issued a proposed regulation to implement the information reporting requirements under the Affordable Care Act (ACA).

Background: The regulation would require insurers, self-insured employers, government-sponsored programs, and entities that provide minimum essential coverage to report information on this coverage to the IRS and to covered individuals. As part of the effort to minimize the cost and administrative steps associated with the reporting requirements, the proposed regulations do not require reporting information that would not be needed by individual taxpayers or the IRS for purposes of administering the individual shared responsibility provisions or the credit for small employers. All small businesses that provide minimum essential coverage are affected by this rule. The comment deadline is November 8, 2013.

Comments OffTags: Regulatory Policy

New England Small Business Weighs in on U.S.–E.U. Trade Arrangements

September 12th, 2013 · Comments Off

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The United States and European Union have begun negotiating a new trade agreement, the proposed U.S.–E.U. Transatlantic Trade and Investment Partnership (or T-TIP). This transatlantic trade partnership was announced by President Obama in February 2013. It is envisioned as an ambitious, high-standard trade and investment agreement that will promote U.S. international competitiveness, jobs, and growth.

As the voice for small business in the federal government, the Office of Advocacy has been helping small businesses make their concerns heard, especially those that pertain to regulatory differences between the U.S. and E.U. systems that pose barriers to our exports.

On July 26, Advocacy partnered with the Massachusetts Export Center to host a roundtable discussion on T-TIP. The event gave New England small businesses the opportunity to meet with the U.S. Trade Representative (USTR), the primary agency responsible for conducting trade negotiations.

Forty-one people registered for the roundtable, representing 26 companies in the areas of banking, high tech, energy, medical devices, eyewear, fisheries, and textiles.  Fifteen were goods or services exporters and four were import/export/trading companies. 

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Comments OffTags: Regulatory Policy · State and Regional

Hidden Hawaii: Tropical Climate Is also a Startup Paradise

August 29th, 2013 · 2 Comments

Pictured: A rainbow crossed the sky on the drive to the University of Hawaii.

With its year-round warm winds, clear blue waters, and fresh scent of plumeria in the air, Hawaii is a popular destination for tourists from around the world. In the first half of 2013, some 4.2 million travelers visited Hawaii’s six islands, and in the month of June alone, tourists infused $1.3 billion into local businesses. Hawaii is truly a tropical paradise, and tourism is indeed its top economic sector. In addition to adventuresome tourists, the state has also been attracting another group of venture seekers—innovators and entrepreneurs who see Hawaii as a great place to locate high-tech and high-growth startups.

During my recent visit with government representatives and business leaders, they shared the numerous exciting innovative initiatives designed to support Hawaii’s cutting edge startups in life science, high tech and new energy. Their vibrant public-private partnership and the “Aloha” spirit of friendship and mutual support have yielded an ecosystem of Discovery (research), Development (incubators and accelerators), and Commercialization (capital investment) to attract entrepreneurs to invest in Hawaii.

Supporting these efforts from the public sector are the Hawaii Department of Business, Economic Development and Tourism; the High Technology Development Corporation; the Hawaii Strategic Development Corporation;  the Foreign Trade Zone; the University of Hawaii; and numerous federal agencies. Private sector collaborators include business leaders from HiBEAM—the Hawaii Business Entrepreneur Acceleration Mentors, Blue Startups, Hawaii Angels, Entrepreneurs Foundation of Hawaii  and  many  others.

According to a recent CNN Money article, Hawaii ranks among the 10 most entrepreneurial states for startups. While being in the middle of the Pacific Ocean can present some challenges, its close proximity to California and Asia provide opportunities to attract broad investments and a variety of strategic partners resulting in local and national economic growth.

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→ 2 CommentsTags: State and Regional

New England: America’s Collaboration Headquarters

August 28th, 2013 · 1 Comment

BID innovators meeting

Pictured: Dr. Sargeant and Regional Advocate Lynn Bromley participate in a conversation about the next generation of innovation—which includes communal living and office space—with entrepreneurs who run startup incubators and co-work spaces in Boston.

Growing up, we learn the value of a team. Whether we get an A on a group project or become the point guard in high school basketball, we understand the importance of working together toward a common goal. As adults, we sometimes forget the necessity of teamwork; instead, we put competition on a pedestal. We believe success only comes when we have surpassed our competitors. However, it’s another story in New England—the ecosystem of innovation through teamwork.

This summer I traveled to America’s collaboration headquarters on the University of Maine campus in Orono, Maine, and in the Boston Innovation District. Lynn Bromley, Advocacy’s New England regional advocate, accompanied me on the trip. Lynn covers Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, and Connecticut.

 My trip took me from student laboratories to entrepreneurial apartments. Whether I sat down with student inventors creating businesses and new jobs in Orono after graduation or accelerators hoping to empower more entrepreneurship in Boston, the collegial vibe filled the atmosphere.

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→ 1 CommentTags: State and Regional

OSHA Withdraws Proposed Changes to Its On-site Consultation Program

August 21st, 2013 · 1 Comment

Each year, thousands of small businesses take advantage of the Occupational Safety and Health Administration’s On-Site Consultation Program. This voluntary program offers small businesses free confidential advice to identify workplace hazards and to put in place effective safety and health management systems.

Following a safety inspection of the work site, a safety consultant works with the employer to abate any identified safety hazards in a timely manner.  Many small businesses utilize this popular program to ensure a safe workplace.  This is why the Office of Advocacy and other small business representatives were alarmed when OSHA published a draft rule proposing a change in the criteria surrounding enforcement inspections of participants in the On-site Consultation program.

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→ 1 CommentTags: Regulatory Policy

Small Business Regulatory Alert: Deadline Extended for Comments on Passenger Vessel Accessibility Guidelines

August 14th, 2013 · Comments Off

The Architectural and Transportation Barriers Compliance Board (Access Board) has extended the public comment period for proposed guidelines for passenger vessels. Comments are now due on January 24, 2014.

Developed under the Americans with Disabilities Act (ADA), the guidelines provide design criteria for newly constructed or newly altered large vessels to ensure that they are accessible to people with disabilities.  As proposed, the guidelines would apply to cruise ships and other vessels that carry over 150 passengers or at least 50 overnight passengers.  They also cover ferries designed to carry 100 or more passengers and tenders allowed to carry 60 or more passengers.  The Access Board is not proposing requirements for smaller vessels at this time due to design challenges, space constraints, and other factors.

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Regulatory Alerts: FDA Issues Two Draft Rules on Safety of Imported Food

August 8th, 2013 · Comments Off

One in six Americans suffers from a food borne illness every year, according to the Food and Drug Administration (FDA). In July, the FDA announced two proposed rules to ensure the safety of imported foods. The rules are required by the FDA Food Safety Modernization Act (FSMA), the most sweeping reform of U.S. food safety laws in more than 70 years. Signed in 2011, FSMA aims to ensure the U.S. food supply is safe by shifting the focus from responding to contamination to preventing it. 

Foreign Supplier Verification Programs for Importers of Food for Humans and Animals, 78 Fed. Reg. 45729, published July 29, 2013.  The rule would require importers to conduct risk-based foreign supplier verification activities to verify that imported food is not, among other things, adulterated and that it was produced in compliance with FDA’s preventive controls or produce safety requirements, where applicable.  It would require importers to maintain a list of foreign suppliers, create and follow written procedures for supplier verification activities, review the results of verification activities and, if hazards are not adequately controlled, take appropriate corrective action.

Accreditation of Third-Party Auditors/Certification Bodies to Conduct Food Safety Audits and Issue Certifications, 78 Fed. Reg. 45781, published July 29, 2013. This rule would establish a program for accreditation of third-party auditors to conduct food safety audits and issue certifications of foreign facilities and their foods.  The proposal contains requirements relating to monitoring and oversight of participating accreditation bodies and auditors at every level.  These include procedures that FDA will follow when removing an auditor or an accreditation body from the program, for good cause. 

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Two Regulatory Alerts: Report on Trade Barriers, Updating Home Health Care Rules

August 2nd, 2013 · Comments Off

EU Trade Restrictions and U.S. Small and Medium-Sized Enterprises

The United States International Trade Commission has announced that it is seeking information for a report that will identify trade-related barriers that U.S. small and medium-sized enterprises (SMEs) perceive as disproportionately affecting their exports to the European Union (as compared to large firms). The commission will be releasing its report on July 31, 2014.  The notice appeared in the Federal Register on July 30.

  • A public hearing will be held in Washington, D.C., on October 8, 2013.
  • Deadline for filing requests to appear at the public hearing: September 13, 2013.
  • Deadline for filing pre-hearing briefs and statements: September 20, 2013.
  • Deadline for statements: October 15, 2013.

Advocacy contact: Assistant Chief Counsel Sarah Bresolin Silver


Updating Home Health Regulations

Centers for Medicare and Medicaid Services (CMS) published its proposed rule on Medicare and Medicaid Programs; Home Health Prospective Payment System Rate Update for Calendar Year 2014, Home Health Quality Reporting Requirements, and Cost Allocation of Home Health Survey Expenses.

Background: This proposed rule would update the Home Health Prospective Payment System (HH PPS) rates effective January 1, 2014.  This rule proposes “rebasing” rate adjustments for home health providers and also establishes some quality reporting requirements.

Key Issues: CMS certified no significant impact associated with reimbursement rate to home health providers.  Stakeholders suggest that there will be a significant impact associated and that CMS underestimated the costs associated with the rule.

Deadline: Advocacy is encouraging interested parties to comment on the rule especially with regards to the cost impacts associated with rebasing adjustments for home health agencies.  Comments due on August 26, 2013. 

Advocacy contact: Assistant Chief Counsel Linwood Rayford

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Advocacy’s RFA Training Program Teaches Federal Agencies How To Consider Small Business Impact

July 18th, 2013 · Comments Off

“Significant” and “substantial.” These two concepts are at the heart of the Office of Advocacy’s training on the Regulatory Flexibility Act (RFA). The RFA requires federal rulemaking agencies to consider small business impacts when they write new rules. But doing so is a many-step process requiring legal and economic expertise. To be sure agencies are properly equipped to implement the RFA, Executive Order 13272 directed the Office of Advocacy to offer training to rulemaking agencies.

Most recently, Assistant Chief Counsel Bruce Lundegren conducted RFA training for Congressional staff and federal agency personnel as part of Regulation University, a program of George Mason University’s Mercatus Center. “The goal of training,” Lundegren explained, “is to ensure that federal rule writers understand the RFA and tailor their rules so as not to unnecessarily burden small entities.” But how do you do this in practice? By applying this key concept: If a rule is expected to impose a significant economic impact on a substantial number of small entities, an agency must consider alternatives, or flexibilities.

How does this work in practice? For example, in 2011, after hearing from small business, the Department of Education made changes to its gainful employment regulations, providing flexibility to educational programs with under $7 million in revenues. The changes saved small programs approximately $218 million.

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