AN ACT Relating to regulatory fairness; amending RCW 19.85.030, 19.85.040, and 34.04.070; adding a new section to chapter 19.85 RCW; adding new sections to chapter 34.04 RCW; adding a new section to chapter 43.31 RCW; and making an appropriation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 43.31 RCW to read as follows:

The director shall designate a person to act as the regulatory fairness compliance officer. The regulatory fairness compliance officer shall perform the following duties:

(1) Review all proposed rules by state agencies for compliance with chapter 19.85 RCW;

(2) Assist state agencies in complying with chapter 19.85 RCW by identifying sources of data and by explaining the responsibilities of the agencies under that chapter;

(3) Assist persons affected by a proposed rule in providing input to the proposing agency and to the joint administrative rules review committee;

(4) If the regulatory fairness compliance officer finds that a proposed rule by an agency does not comply with the requirements of chapter 19.85 RCW, notify the proposing agency and the joint administrative rules review committee of its findings and the information supporting the findings; and

(5) Notify the legislature and the governor by January 31 of each year of those agencies that have failed to comply with chapter 19.85 RCW.

Sec. 2. Section 3, chapter 6, Laws of 1982 and RCW 19.85.030 are each amended to read as follows:

In the adoption of any rule pursuant to RCW 34.04.025 which will have an economic impact on more than twenty percent of all industries, or more than ten percent of any one industry, the adopting agency:

(1) Shall reduce the economic impact of the rule on small business by doing one or more of the following when it is legal and feasible in meeting the stated objective of the statutes which are the basis of the proposed rule:

(a) Establish differing compliance or reporting requirements or timetables for small businesses;

(b) Clarify, consolidate, or simplify the compliance and reporting requirements under the rule for small businesses;

(d) Exempt small businesses from any or all requirements of the rule;

(2) Shall prepare a small business economic impact statement in accordance with RCW 19.85.040 and file such statement with the code reviser along with the notice required under RCW 34.04.025;

(3) ((~~May request from the office of small business available statistics which the agency can use in the preparation of the small business economic impact statement.~~)) Shall make a reasonable effort to obtain input from parties who may be potentially affected by the economic impact of the proposed rule.

Sec. 3. Section 4, chapter 6, Laws of 1982 and RCW 19.85.040 are each amended to read as follows:

(1) A small business economic impact statement shall analyze the costs of compliance based on existing data for businesses required to comply with the provisions of a rule adopted pursuant to RCW 34.04.025, including costs of equipment, supplies, labor, and increased administrative costs, and compare to the greatest extent possible the cost of compliance for small business with the cost of compliance for the ten percent of firms which are the largest businesses required to comply with the proposed new or amendatory rules. The small business economic impact statement shall use one or more of the following as a basis for comparing costs:

((~~(1)~~)) (a) Cost per employee;

((~~(2)~~)) (b) Cost per hour of labor;

((~~(3)~~)) (c) Cost per one hundred dollars of sales;

((~~(4)~~)) (d) Any combination of ((~~(1), (2), or (3)~~)) (a), (b), or (c) of this subsection.

(2) The small business economic impact statement shall indicate the alternatives considered by the agency to reduce the impact of the rule on small businesses and the reasons the agency decided on the provisions of the proposed rule. If an agency determines that a proposed rule requires the preparation of a small business economic impact statement, and there is no economic impact, the agency shall state that there is no economic impact in the statement.

NEW SECTION. Sec. 4. A new section is added to chapter 34.04 RCW to read as follows:

The joint administrative rules review committee may review any rule to determine whether an agency complied with the regulatory fairness requirements of chapter 19.85 RCW.

NEW SECTION. Sec. 5. A new section is added to chapter 34.04 RCW to read as follows:

The joint administrative rules review committee shall provide notice, conduct its hearings and reviews, and provide notice of committee objections to economic impact statements required under chapter 19.85 RCW in the same manner as is provided for notice, hearings, reviews, and objections to rules under this chapter.

Sec. 6. Section 7, chapter 234, Laws of 1959 as amended by section 8, chapter 6, Laws of 1982 and RCW 34.04.070 are each amended to read as follows:

(1) The validity of any rule may be determined upon petition for a declaratory judgment thereon addressed to the superior court of Thurston county, when it appears that the rule, or its threatened application, interferes with or impairs or immediately threatens to interfere with or impair, the legal rights or privileges of the petitioner. The agency shall be made a party to the proceeding. The declaratory judgment may be rendered whether or not the petitioner has first requested the agency to pass upon the validity of the rule in question.

(2) In a proceeding under subsection (1) of this section the court shall declare the rule invalid only if it finds that it violates constitutional provisions or exceeds the statutory authority of the agency or was adopted without compliance with statutory rule-making procedures.

(3) A petition for a declaratory judgment pursuant to this section may not be solely based on the contents of the small business economic impact statement. However, in the case of a petition for a declaratory judgment as to the validity of any rule which is adopted after June 10, 1982, and which is based on grounds other than the contents of the small business economic impact statement, the compliance or noncompliance by the agency with the provisions of this chapter and where applicable the small business economic impact statement shall constitute part of the whole record of the agency's action in connection with the petition.

(4) A person may petition for a declaratory judgment, however, on any rule found by the joint administrative rules review committee under RCW 34.04.240(2) not in compliance with chapter 19.85 RCW.

NEW SECTION. Sec. 7. A new section is added to chapter 19.85 RCW to read as follows:

Any person who prevails against a public agency in any action in the courts for a violation of this chapter shall be awarded all costs, including reasonable attorneys' fees, incurred in connection with such legal action.

NEW SECTION. Sec. 8. The sum of forty thousand dollars or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1987, from the general fund to the department of trade and economic development for the purposes of this act.