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Office of Advocacy Statute

Original Text

Effective Dates
6/4/1976 - Present

Reform Goals
The Office of Advocacy within the Small Business Administration was established in 1976 as an independent voice for small businesses inside the government. 

Requirements (What of Whom?)
The Office of Advocacy’s original duties regarding regulatory oversight included: 

  • Measure the direct costs and other effects of government regulation on small businesses
  • Make legislative and non-legislative proposals for eliminating excessive or unnecessary regulations of small businesses
  • Evaluate the efforts of Federal agencies, business and industry to assist minority enterprises

In 1980, the role of the Office of Advocacy expanded to oversee federal agency compliance with the Regulatory Flexibility Act (RFA), which encourages federal agencies to consider rule alternatives with lower impacts on small businesses (see “Regulatory Flexibility Act”).

Oversight for rule compliance
The Office of Advocacy is answerable to Congress as well as the Small Business Administration (SBA).

Reform “Teeth”
Government agencies are required by law to share information requested by the Office of Advocacy’s Chief Counsel. The Office of Advocacy itself does not have the power to approve or block new regulations impacting small businesses, and their $9.12 million dollar annual budget and roughly fifty full time staff [1] is small in comparison to the size of the agencies they monitor. 

Outcomes
Since 2009, the Office of Advocacy has reported annual one-time savings for small business compliance of between $1.53-$14.9 billion dollars due to their efforts [2] ( < 1%  of total annual federal compliance costs in the U.S). 

Despite Office of Advocacy efforts, the costs of federal compliance for small businesses are high and continue to rise:

  • 1992 - $9,463 per employee [3]
  • 2000 - $9,722 per employee [4] 
  • 2008 - $11,800 per employee [5] 
  • 2012 - $ 11,886 per employee [6]

*Costs represented 2016 dollars

Commentary
The Office of Advocacy relies on the goodwill of regulators themselves to take action on their reports, which has only modestly slowed the increasing burden of regulations on small businesses.

References

  1. Sba.gov. "Office of Advocacy Staff." Accessed February 1, 2017.  Link
  2. Nicole V. Crain and W. Mark Crain. The Impact of Regulatory Costs on Small Firms." Contract number SBAHQ-08-M-0466. Small Business Administration. Office of Advocacy. September 2010. Link , PDF 
  3. Thomas D. Hopkins. "Profile of Regulatory Costs. Report to the U.S. Small Business Administration." November 1995. Link , PDF
  4. Cited for firms with less than 20 employees. W. Mark Crain and Thomas D. Hopkins. "The Impact of Regulatory Costs on Small Firms. a report for The Office of Advocacy, U. S. Small Business Administration." RFP No. SBAHQ-00-R-0027. 2000 Link , PDF 
  5. Cited for firms with less than 20 employees. Nicole V. Crain and W. Mark Crain. The Impact of Regulatory Costs on Small Firms." Contract number SBAHQ-08-M-0466. Small Business Administration. Office of Advocacy. September 2010. Link , PDF
  6. Cited for firms with less than 50 employees. W. Mark Crain and Nicole V. Crain. "The cost of federal regulations to the U.S. economy, manufacturing, and small business." National Association of Manufacturers. September 10, 2014. Link , PDF