UPDATE 1-US small business may get permanent Sarb-Ox relief

* Small companies have repeatedly won delays

* Measure would stop SEC's June 15, 2010 deadline

* Panel to vote on investor protection bill Wednesday (Adds lawmaker on White House support, detail on investment adviser amendment)

WASHINGTON, Nov 3 (Reuters) - Small businesses would be granted a permanent reprieve from complying with part of 2002's Sarbanes-Oxley corporate reform law, under a draft U.S. House of Representatives bill debated on Tuesday.

Small companies have not had to comply fully with the rules since the Sarbanes-Oxley law was adopted in response to the Enron and WorldCom corporate scandals.

Companies with a market capitalization of less than $75 million have argued that they faced disproportionately higher costs compared with larger companies and have convinced regulators to delay compliance at least five times.

The Securities and Exchange Commission is now requiring small companies to report on the effectiveness of their internal controls as of June 15, 2010.

But some lawmakers, hoping to block this SEC requirement, introduced an amendment on Tuesday to a House Financial Services Committee draft bill to do just that.

Democratic Representative John Adler told the panel that White House Chief of Staff Rahm Emanuel supports the amendment, first introduced as legislation by Republican Representative Scott Garrett.

On Wednesday, the committee is set to vote on the amendment and the draft bill, which is designed to improve investor protections. Committee members will also vote on a Democratic amendment affirming the SEC's authority to give investors an easier and cheaper way to nominate corporate board directors.

The draft bill boosts the SEC's funding and expands its authority to go after aiders and abettors of securities fraud. It would also give the SEC powers to ban mandatory arbitration for investors claiming to be wronged by their broker dealers.

The draft bill was also amended to put some investment advisers under the auspices of the Financial Industry Regulatory Authority. FINRA, which polices brokerages and is funded by industry, would gain authority to inspect firms that are registered as both broker-dealers and investment advisers.

Committee Chairman Barney Frank is expected to oppose this measure when the bill goes to a full House vote.

If approved in committee, the bill would go next to a vote in the full House. The Senate would have to pass similar legislation before the president could sign it into law. (Reporting by Rachelle Younglai; Editing by Tim Dobbyn)