Regulatory bill lets small operators flex muscles

Nation's Restaurant News, April 22, 1996 by Robin Lee Allen

WASHINGTON -- A measure recently signed into law by President Clinton should give small restaurateurs new muscle in standing up to big government.

Called the Small Business Regulatory Enforcement Fairness Act of 1996, the law allows small-business operators to challenge unfair federal regulations legally and increases their ability to influence regulations before they become burdensome.

"It's so small-business people could, for lack of a better term, have their day in court," said Perry Moy, who is owner of Plum Garden Restaurant in McHenry, Ill., and helped push the measure. "Before, all you could do was grin and bear it. With this bill we have a platform."

Specifically, the law strengthens the Regulatory Flexibility Act of 1980 -- commonly referred to as "Reg Flex" -- by giving it judicial teeth.

Although Reg Flex was intended to minimize the impact of federal regulations by having agencies analyze their effects on business before promulgating them, it has not worked for lack of enforcement, said Kenneth E. Bricker, spokesman for the Senate Committee on Small Business, whose chairman, Sen. Christopher S. "Kit" Bond, R-Mo., sponsored the bill together with Sen. Dale Bumpers, D-Ark.

"There was no statutory requirement that forces an agency to do an analysis," Bricker explained, adding that limited resources were often a deterrent. "Now a small entity, including businesses -- if an agency rule seems unfair -- can challenge it in court. And if they prevail, they can modify it or strike it to reduce the impact on that entity."

Also included in the law is a provision that would reimburse the attorneys' fees spent by small business operators who use the courts to prove regulations are overly harsh.

Moy points to the Americans with Disabilities Act of 1990 as an instance where small businesses could have made a difference in creating more practical regulations had the new law been in effect.

"I have a 100-year-old building where the bathrooms don't adhere to ADA," he explained. "With this regulatory bill I would have had a platform and been part of the decision making."

The law also requires agencies to prepare guide books plainly explaining how to comply with regulations as well as a provision establishing regional ombudsmen to provide an objective sounding board for regulatory-related complaints from business.

The law also establishes a 60-day review period in which Congress could reject new regulations deemed unnecessary.

"The whole idea is to give small business and the private sector a real voice in the regulatory process," Bricker said.

Reg Flex came out of the White House Conference on Small Business held in 1980, and regulatory reform was among the top recommendations sent to the Clinton administration by 2,000 delegates -- including Moy -- at the White House Conference on Small Business last June.

The Senate Small Business Committee also has conducted 14 "Entrepreneurship in America" hearings nationwide during the past year and a half, in which the same themes have recurred.

"A common complaint from all owners, including restaurateurs, is that regulators don't have a realistic understanding of how business operates," Bricker said. "They find violations with a `gotcha' mentality. And often the penalties are enormous compared to the violation."

Because the issue of regulatory reform enjoys wide support, the bill sailed through both congressional chambers with the Senate passing it as freestanding legislation and the House as part of a measure to increase the federal debt limit.

Officials at the National Restaurant Association are calling the new law, which was previously part of a larger reform proposal, a small step in the right direction. "It's good," noted Lee Culpepper, senior legislative representative. "But compared to the whole package we envisioned, it's not as good."

And even as Congress discusses reform, federal agencies continue to churn out regulations, he said, noting that OSHA -- in an effort to improve the level of workplace safety and related statistics -- has proposed a regulation requiring restaurateurs to fill out injury and illness logs.

While many restaurateurs may be required by states or the Bureau of Labor Statistics to fill out such forms, there is currently no federal mandate to do so, he added.

"We are opposed because the majority of our injuries still tend to be minor injuries, we think the forms are poorly written and we also think this is going to create additional paperwork for employers and subject them to fines for paperwork errors and other violations," Culpepper stated.

The comment period on the proposed regulation was extended from May 2 to May 30.