An Overview of the Small Business Advocacy Review Panel Process Joan B. Rogers EPA ASBESTOS AND Small Business OMBUDSMAN (ASBO) 507 Program - Education SUB-Committee Presentation DECEMBER12, 2016

Today’s Topics Regulatory Flexibility Act (RFA) as amended by Small Business Regulatory Enforcement Fairness Act (SBREFA) (slide 3) What is a Small Business Advocacy Review (SBAR) Panel and when is it required? (slide 4) How will I know if I need to conduct a SBAR Panel? (slide 5 ) What is the Screening Analysis Process/Questions? (slides 6 - 8) Who can participate and how? (slides 9 - 12) What’s the SBAR Panel process? (slides 13 - 17) Additional Reading and Follow-up Webinar (slides 18 - 19)

SBREFA The SBREFA provides small entities with an expanded opportunity to participate in the development of certain regulations. SBREFA contains five distinct sections: Subtitle A–Regulatory Compliance Simplification: Among other things, requires the agency to publish Small Entity Compliance Guides that are written in plain language and explain the actions a small entity must take to comply with a rule or group of rules. Subtitle B–Regulatory Enforcement Reforms: Requires agencies to support the rights of small entities in enforcement actions, specifically providing for the reduction, and in certain cases, the waiver of civil penalties for violations by small entities. Subtitle C–Equal Access to Justice: Provides small businesses with expanded authority to go to court to be awarded attorneys' fees and costs when an agency has been found to be excessive in enforcement of federal regulations. Subtitle D–Regulatory Flexibility Act Amendments: Provides small entities with expanded opportunities to participate in the development of certain regulations. Subtitle E–Congressional Review of Agency Rulemaking: Agencies generally must provide Congress and the General Accounting Office with copies of all final rules and supporting analyses. Congress may decide not to allow a rule to take effect.

WhAt IS a Small Business Advocacy Review (SBAR) Panel and When Is it REquired? A SBAR Panel is an additional means for small entities to provide input into certain EPA rulemakings to ensure their unique concerns are considered during the development of the rule. A SBAR Panel is required when the screening analysis performed for the rule indicates that the rule may likely have a significant economic impact on a substantial number of small entities (SISNOSE)? If the rule is likely to have a SISNOSE, SBREFA requires EPA to prepare an Initial Regulatory Flexibility Analysis (IRFA). (RFA section 603) If an IRFA is required, we must convene a Panel.

HOW WILL I KNOW IF I nEED TO CONDUCT A SBAR PANEL? First, determine if the rule is subject to SBREFA (notice & comment under APA or any other statute). Then: determine what, if any, impact the rule may have on small entities. Next: Perform a Screening Analysis (an assessment of the potential economic impacts of a rule on small entities, and generally indicates whether you can certify the rule as not having a SISNOSE). Finally, you must either: Certify no SISNOSE or undertake the following: Prepare Reg Flex Analysis Convene SBAR Panel Prepare Small Entity Compliance Guide

SCREENING ANALYSIS PROCESS Four Step Process Step 1. Determine which small entities are subject to the rule's requirements (see Section 2.5); Step 2. Select appropriate measures for determining economic impacts on these small entities and estimate those impacts (see Section 2.6); Step 3. Determine whether the rule may be certified as not having a SISNOSE (see Section 2.7); and Step 4. Document the screening analysis and include the appropriate RFA statements in the preamble (see Section 2.8).

SCREENING ANALYSIS QUESTIONS: Step 1. Which small entities are subject to the rule's requirements: Who is subject to the requirements of the rule? Are any of them small? Step 2. Appropriate measures for determining economic impacts on small entities: (significant and substantial) What is the best way to measure a rule's economic impacts on affected entities? 2) What level of economic impact (i.e., threshold), on what number of small entities is sufficient to establish that there may be a SISNOSE and the rule should thus not be certified? Qualitative/Quantitative*

SCREENING ANALYSIS QUESTIONS (continued): Step 3. Determine whether the rule may be certified as not having a SISNOSE: How should I use the screening analysis to determine if a rule may be certified no SISNOSE? 2) Is the level of the economic impact on small entities significant? 3) Are a substantial number of entities facing a significant economic impact? Certification Categories* Step 4. Document the screening analysis and include appropriate RFA statements in preamble: What should be done after assigning the rule to a SISNOSE Certification Category?

WHO CAN PARTICIPATE

Who Can Participate AND HOW? A SBAR Panel consists of full time representatives from the: Agency authoring the regulation (i.e., EPA) OMB’s Office of Information and Regulatory Affairs (OIRA) SBA’s Office of Advocacy Small Business Advocacy Review Chair - Under SBREFA section 244(b), SBAR Panels are chaired by a Small Business Advocacy Chair designated by EPA's Administrator. The Chair is responsible for implementing the Panel review process. (read after) A Panel conducts its outreach to Small Entity Representatives (SERs). Therefore, SERs are not a part of the Panel, they inform the Panel.

Who Can Participate AND HOW? (continued) Small Entity Representatives (SERs)- Those who inform the Panel members. Typically a subset of the broader stakeholder group (small entities likely to be directly subject to the regulation). EPA prefers that SERs be owner-operators of small businesses, small organizations or small government officials potentially subject to the rule. Persons other than owner-operators who wish to act as SERs are evaluated on a case by case basis. (read after) A Panel conducts its outreach to Small Entity Representatives (SERs). Therefore, SERs are not a part of the Panel, they inform the Panel. Small Business Ombudsman – EPA’s Ombudsman reviews all material produced by the Panel and reviewed by the SERs. Informs SERs of their rights to share material. Ensures fair opportunity. Attends all Pre Panel and Panel meetings. Assists in facilitating outreach and distributing materials. Assists with SECGs.

Who Can Participate AND HOW? (continued) Small Business Environmental Assistance Providers: Help distribute the solicitation notice for SERS (EPA posts on its website); Provide a list of small entities to EPA that may be subject to the rule; Petition to act as a SER (see Section 5.7.1); Assist small entities/trade association representatives in evaluating the likely impacts of the rulemaking (once SERs get the package of information from EPA). (see Section 5.8.3); Once Panel Report is in the docket (published with proposal), provide comments to the Agency about the small business impacts; After promulgation of the rule, assist in timely review of the draft guidance;(see Section 6.3) and Assist in the distribution of Small Entity Compliance Guides. (see Section 6.7) (read after) A Panel conducts its outreach to Small Entity Representatives (SERs). Therefore, SERs are not a part of the Panel, they inform the Panel.

SBAR Panel PROCESS A Panel conducts its own outreach to Small Entity Representatives (SERs)(those who inform the Panel members) likely to be subject to the rule and prepares a report to the Administrator of EPA on ways to reduce the potential impact of the rule on small entities. Each Panel’s report becomes part of the rulemaking record. (See Chapter 5)

SBAR Panel PROCESS (continued) EPA notifies SBA Advocacy of rule, potential impacts on small entities, and the type of small entities that may be affected. Within 15 days, SBA Advocacy identifies potential representatives of small entities that may be affected by rule. EPA selects small entity representatives (SERs). 3). EPA convenes and chairs SBAR Panel (*Pre-Panel and Panel meetings). 4). Panel reviews material prepared by EPA, and collects advice and recommendations of SERs regarding potential impacts on small entities, as well as significant alternatives to the rule. (14 days)

SBAR Panel PROCESS (continued) 5). Panel prepares report on small entity representatives' comments and panel findings regarding potential impacts on small entities, as well as significant alternatives to the rule. 6). Panel report due 60 days after panel convenes. 7). EPA makes changes to the draft proposed rule, IRFA, or decision regarding No SISNOSE certification, as appropriate. 8). EPA makes Panel report publicly available by including it in the rulemaking record (e.g., docket) once the NPRM is issued.

SBAR Panel PROCESS (continued) The types of materials the Panel will review and which the SERs will provide advice and recommendations are specified by law. Section 609(b)(4): “the panel shall review any material the agency has prepared…on issues related to”: “a description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply” (Sec. 603(b)(3)) “a description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record” (Sec. 603(b)(4))

SBAR Panel PROCESS (continued) “an identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap or conflict with the proposed rule” (Sec. 603(b)(5)) “a description of any significant alternatives to the proposed rule which accomplish the stated objective of applicable statutes and which minimize any significant economic impact …on small entities” (Sec. 603(c))

Additional Reading Slide 7: *Qualitative/Quantitative: Qualitative see Section 2.6.1 Quantitative see Section 2.6.2 Slide 8: *Certification Categories see Section 2.7 - 2.7.5.3 RFA/SBREFA: https://www.epa.gov/reg-flex EPA’s RFA Guidance: https://www.epa.gov/reg-flex/epas-action- development-process-final-guidance-epa-rulewriters-regulatory- flexibility-act Small Entity Definitions: https://www.epa.gov/reg-flex/learn-about- regulatory-flexibility-act

Follow-Up Webinar January 2017 (TBD by NSC Education Sub-Committee)