Regulatory Streamlining
The Small Business Administration (SBA) has made a concerted effort to serve its customers better over the last three years by eliminating regulations that no longer make sense, reducing paperwork requirements, and streamlining internal procedures. This Regulatory Plan continues to highlight that initiative and responds to President Clinton's mandate that regulations be effective, consistent, sensible, and understandable.
In his memorandum of March 4, 1995, President Clinton directed the SBA to complete a page-by-page, line-by-line review of all of its existing regulations to determine which might be revised or eliminated. SBA conducted that review in part through Grassroots Regulatory Partnership Meetings held throughout the country between April 10 and April 27, 1995. These meetings brought together more than 250 small business owners, contractors, lenders, loan recipients, State agencies, Service Core of Retired Executives (SCORE) volunteers, SBA employees, and others to discuss how SBA programs can be made more efficient, less burdensome, and more ``user-friendly.''
As announced in last year's Regulatory Plan, as a result of the review, SBA proposed to reinvent 100 percent of its current SBA-specific regulations in time for their publication in the January 1996 edition of 13 CFR. By clarifying and streamlining its regulations, SBA sought to conserve resources, improve procedures, and serve its customers more effectively.
The 1995 version of 13 CFR consisted of 38 parts totalling 700 pages of SBA-related regulations (152 pages of rules with Governmentwide application which SBA lacked discretion to change; 548 pages of rules within SBA's area of discretion). In proposing to streamline its regulations and convert them to a ``plain language'' format, SBA predicted that it would eliminate more than half the pages. The remaining rules would remain unchanged only because they are uniform rules applying to all executive branch agencies (including regulations relating to civil rights enforcement and the affirmative action section 8(a) program).
CFR Elimination/Reinvention
SBA completed its CFR elimination/reinvention project on time. In doing so, it streamlined all of its regulations and converted them to plain language, while eliminating 55 percent of the pages under its control (302 out of 548). This represented full achievement of the regulatory reinvention goal announced in last year's Regulatory Plan.
Significant Initiatives
During the next 12 months, SBA hopes to obtain Department of Justice approval to review and revise the regulations dealing with its section 8(a) program. These revisions would streamline and clarify the regulations, converting them to plain language and incorporating substantive changes necessary to comply with the Justice Department's broader affirmative action guidance.
SBA also anticipates that legislation may be enacted during September 1996 which would alter salient features of SBA's lending and investment programs (13 CFR 107 and 120). Should this occur, SBA would need to promulgate regulations within the first 6 months of fiscal year 1997. These regulations would authorize the collection of fees in conjunction with the lending and investment programs, offsetting program costs and reducing corresponding subsidy rates in each case. The regulations may also describe methods by which certain private sector participants in the finance programs would liquidate the loans they make and permit participants to securitize the unguaranteed portion of SBA guaranteed loans (13 CFR section 120.420). Finally, the regulations may alter the size standards applicable to the small business investment company program and increase capital requirements for participation in that program (13 CFR section 121.103(b)(5)).
Whether or not such legislation is enacted, SBA expects to propose, early in fiscal year 1997, new regulations which would broaden the permissible control of an investee by a small business investment company and permit securitization of the unguaranteed portion of SBA guaranteed loans by all participating lenders.
All of the regulations referred to in this section of SBA's Regulatory Plan qualify for review under section 610(c) of the Regulatory Flexibility Act.