Ms. Shawne McGibbon, Acting Chief Counsel
Office of Advocacy
US Small Business Administration
409 3rd St, SW
Washington, DC 20416
VIA ELECTRONIC MAIL

Re: Recommendation for the Office of Advocacy's R3 Initiative

Dear Ms. McGibbon:

This letter will serve as the recommendation of the Institute for Liberty for a regulation to be reviewed under the Small Business Administration's Office of Advocacy's R3 initiative. The Institute for Liberty is a 501c(4) advocacy organization based in Washington, DC. We focus on the impact of the federal regulatory state on small business and entrepreneurship.

Several years ago, I had the privilege of meeting with a group of fireworks manufacturers from around the United States. The firms that took part in that meeting all fell under multiple SBA definitions for "small business"-and they all shared a common problem. Each firm was being faced with a serious threat of being regulated out of existence by the Bureau of Alcohol, Tobacco and Firearms (ATF).

Following September 11th, the Congress passed the Safe Explosives Act (SEA), designed in part to deal with security issues arising from the manufacture and distribution of high explosives in the United States. One of the unintended consequences of SEA is that a number of small manufacturers of fireworks were caught in the ATF's regulatory net. As you are well-aware, small businesses are not as able to handle regulatory burdens as their larger counterparts are. Advocacy's own data shows that regulatory costs are 50% higher for firms with fewer than 20 employees, as many of these fireworks manufacturers are.

These businesses are not asking for an absence of regulation. What they are hoping is that the R3 initiative can review the situation and recommend that these firms be given their own regulatory framework, preferably one that lies outside of the ATF, and that takes into account the unique circumstances of being a small enterprise that is in the business of making an entertainment product.

They are not manufacturing firearms. They are manufacturing fireworks. The safety and security issues that they face can be best dealt with outside of ATF. Thank you for the consideration of our recommendation. If you have any questions or comments, do not hesitate to call me at IFL's office: (202) 261-6592, or to reach me via e-mail at Andrew.Langer@instituteforliberty.org.

Sincerely,

Andrew M. Langer,
President