Summary: Small businesses play a significant role in the nation's economy, accounting for about half of the gross domestic product and 53 percent of private industry's workforce. In addition, small government's comprise 97 percent of all the local governments in the United States. Although these two groups can be disproportionately affected by federal regulatory requirements, federal agencies may not adequately weigh the impact of those requirements on small entities when they are implemented. As a result, Congress passed the Regulatory Flexibility Act requiring federal agencies to analyze the effects of proposed rules on small entities. Last year, Congress passed legislation to strengthen the act's protections for small entities. The Small Business Regulatory Enforcement Fairness Act requires that, before publishing a notice of proposed rulemaking that may have a significant economic impact on many small entities, the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) convene a small business advocacy review panel for the draft rule. This report (1) discusses whether EPA and OSHA had applied the advocacy review panel requirements to all rules that they proposed between June 1996 and June 1997 that may have a significant economic impact on many small entities; (2) determines whether the EPA and OSHA panels, the regulatory agencies themselves, and the Small Business Administration's Chief Counsel for Advocacy followed the statutes' procedural requirements for panels convened between June 1996 and November 1997 and whether differences existed among the panels in how the statute's requirements were implemented; (3) identifies the changes that EPA and OSHA made to notices of proposed rulemaking because of the panels' recommendations; and (4) discusses suggestions by agency officials and small entity representatives on how to improve the advocacy review panel process. GAO summarized this report in testimony before Congress; see: Regulatory Flexibility Act: Implementation of the Small Business Advocacy Review Panel Requirements, by L. Nye Stevens, Director of Federal Management and Workforce Issues, before the Subcommittees on Government Programs and Oversight and Regulatory Reform and Paperwork Reduction, House Committee on Small Business. GAO/T-GGD-98-75, Mar. 18 (13 pages).
