Office of advocacy wants to know what gives small firms heartburn: reducing regulatory burden on small businesses at state level is latest push.

* The Small Business Administration is trying to prevent the imposition of onerous, rules and regulations upon business owners nationwide.

The SBA's Office of Advocacy has made federal agencies more accountable for proposed rules and regs through the Regulatory Flexibility Act. Now, it's pushing states to adopt legislation modeled from that act. Such legislation would require state agencies and departments to make proposed roles and regs available to the public for comment. In Colorado, it would allow Department of Regulatory Agencies--and any individual, as well--to request a cost benefit analysis on proposed roles and regs.

"In these tough economic times, states are feeling the pinch more than anyone else," says Thomas Sullivan, chief counsel for advocacy in Washington, D.C. "We want to empower business owners to pour more money into the economy by hiring more people, purchasing more equipment and providing health care for their employees.

"Where does that money come from? One of the ways to put more money back in employers' pockets is to remove regulatory barriers."

The Office of Advocacy has 45 employees, with 35 in Washington and the rest spread around the country in regional offices.

Sullivan says 26 states already had enacted some or all of the desired provisions before the national office began its push for further adoption.

"In December, we hit upon an idea while looking at states that were already doing this, like New York and Arizona," he says. "We said, 'Why don't we put the best parts of these state laws together and tell state leaders you can help state (small) business?'"

As of early June, Colorado, North Dakota and Missouri had passed similar legislation; Colorado Coy. Bill Owens signed the bill June 3 and it became effective Aug. 1. Five other states were working on similar legislation and legislative sessions expired in four other states before the proposals could be acted upon.

Advocates can cite numerous examples of how such state legislation has helped small businesses.

Sullivan cites an example in New York, where a transportation rule was adopted that required anyone who towed equipment to meet highway safety rules. "The problem proposed regulations. was, small farmers who had to tow a fertilizer spreader across a dirt road to get to the other part of their farm had to comply with the same state rules as other companies."

The solution? "They simply exempted farmers who were towing farm equipment.

And to preserve safety, they required that they couldn't tow after dark. So that worked out. You maintain the safety standard, but also exclude businesses that were never meant to be included in the first place."

SBA Region 8 Advocate Jim Henderson covers Colorado, the Dakotas, Montana, Wyoming and Utah. Part of his job is to build relationships with small-business leaders, chambers of commerce and trade associations.

"I gather up all that information and feed it to Washington so they have a view of what is causing heartburn to the small-business community," Henderson says. "Many regulators, when they design their rules and regs, are so focused on their regulatory mission that they design a rope to tie down an aircraft carrier and do a good job of it.

"But if you're not a Fortune 500 company, but a small business with a rowboat, if you throw the same type of rope over the bow, you sink it.

"A small-business person does not have a compliance officer and does not have an in-house attorney who can figure out how to respond to these regulatory requirements, whether from the IRS, OSHA or the EPA. That's why we seek to work with agencies; let's see if there are alternative ways to achieve your regulatory goal."

Henderson cites a couple of examples where the Office of Advocacy worked with federal agencies to stop the imposition of difficult rules and regs.

* The Environmental Protection Agency wanted to impose electronic reporting requirements on any business with a computer. But that would have cost each business $40,000 in software and hardware. "We worked out another way for them to obtain their regulatory end of it without imposing that $40,000 clip," Henderson says.

* The U.S. Department of Transportation wanted all buses to have wheelchair lifts to make them compliant with the Americans with Disabilities Act. But the cost would have been prohibitive for operators of small fleets. The Office of Advocacy helped find an alternative solution that would require carriers under a certain size to retrofit at least one of their vehicles--but not every one in their fleet.

"I think there are a lot of rules and regulations that sound reasonable," says Rep. Tambor Williams, chairwoman of the House Business Affairs and Labor Committee in Colorado. "But when we get closer to them, they don't play out that way."

She and State Sen. Andy McElhany helped push the legislation through the Colorado General Assembly. "If nothing else happens, state agencies will know that rules and regs will be up for review," McElhany says. "So when they propose one, they'll know someone will be looking over their shoulder. That's got to have a beneficial effect."

What would trigger the Colorado Department of Regulatory Agencies to request a cost-benefit analysis?

"That's an inexact science," says Rick O'Donnell, DORA executive director. "We're going to look for sweeping regulations that seem to have a large impact economywise, or (if) it appears compliance costs would be too high for small businesses."

O'Donnell plans to solicit feedback from small-business owners through a Web site.

Tim Jackson, state director for the Colorado chapter of the National Federation of Independent Business, lobbied for the bill.

"Many regulations have been implemented without the analysis that this bill will require," he says. "With it, we can expect a better and fairer and more comprehensive hearing before new regulations are initiated."

Office of Advocacy

The U.S. Small Business Administration's Office of Advocacy was created by Congress in 1976. An independent voice for small business within the federal government, the office is directed by the chief counsel for advocacy. The chief counsel, nominated by the president and confirmed by the U.S. Senate, advances the views, concerns, and interests of small business to Congress, the White House, federal agencies, federal courts, and state policy makers. Economic research, policy analyses, and small-business outreach help identify issues of concern.

Thomas Sullivan is the present chief counsel. He was nominated by President Bush and confirmed by the Senate in January 2002.

His office recently launched a Regulatory Alerts Web page to provide information on proposed regulations by federal agencies that may impact small businesses and provides the ability for small-business owners to submit comments on the proposals.

The Regulatory Alerts page is in the Office of Advocacy Web site at www.sba.gov/advo.

For more information on the Office of Advocacy, visit www.sba.gov/advo or call [phone].

The office's address is: Office of Advocacy U.S. Small Business Administration 409 Third St., SW Washington, DC 20416