Washington State

House of Representatives

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BILL

ANALYSIS

State Government & Tribal Affairs Committee

HB 1671

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Enacting the regulatory fairness act of 2011.

Sponsors: Representatives Overstreet, Blake, Taylor, Haler, Takko, Johnson, Klippert, Shea, Short, Kristiansen, Angel, Hinkle, Bailey, McCune, Warnick, Zeiger, Wilcox, Orcutt, Schmick, Fagan, Ross, Condotta and Harris.

Brief Summary of Bill

  • Establishes that an administrative rule having a specified economic impact cannot be enforced until enacted into law by the Legislature.

  • Requires that an agency provide notification to the Legislature before adopting a rule having a specified economic impact.

  • Requires an agency to conduct an annual review of its rules to determine whether any existing rules have resulted in a specified economic impact.

Hearing Date: 2/9/11

Staff: Thamas Osborn (786-7129).

Background:

Rulemaking under the Administrative Procedure Act.

The Administrative Procedure Act (APA) details requirements that must be satisfied in order for an agency to adopt a significant legislative rule. A significant legislative rule is one that:

 

Significant legislative rules do not include emergency rules, procedural rules, interpretative rules, or rules adopted through expedited rule-making. Examples of the requirements for adoption of a significant legislative rule include a cost/benefit analysis, a determination of whether the rule imposes more stringent requirements on private entities than on public entities, and a determination of whether the rule differs from federal regulations and law. The following agencies must satisfy the APA requirements in order to adopt a significant legislative rule: 

 

The final order by which any rule is adopted by an agency must contain:

Agency Review of Business Rules

Each agency must have a plan to periodically review its rules in order to minimize their impact on small businesses. When conducting the review, the agency must consider

Each agency is required to publish an annual list of rules to be reviewed during the year.

Regulatory Fairness Act and Small Business Economic Impact Statements.

Under the Regulatory Fairness Act (RFA), an agency must develop a small business economic impact statement (SBEIS) if a rule it is adopting under the APA will impose more than minor costs on businesses in an industry or if the agency is ordered to do so by the Joint Administrative Rules Review Committee.

A SBEIS must contain a variety of information, including:

If the SBEIS shows that a rule will have a disproportionate impact on small businesses, the agency must, where legal and feasible, reduce the costs imposed by the rule on small businesses. Methods the agency can use to do this include:

The SBEIS must list the steps taken to reduce the costs on small businesses or a reasonable justification for not doing so.

The RFA defines "small business" as any business entity, including a sole proprietorship, corporation, partnership, or other legal entity that is owned and operated independently from all other businesses and has 50 or fewer employees.

Summary of Bill:

Before adopting a rule, an agency must determine whether the rule will result in a specified economic impact. If so, the agency must provide notification, and may not enforce the rule until it is enacted into law by the Legislature.

"Specified economic impact" means the:

"Provide notification" means to transmit a proposed or existing rule having a specified economic impact to the Code Reviser for publication in the state register and to the appropriate committees of the of the Senate and the House of Representatives. The required notification must include the findings supporting the determination that the rule has a specified economic impact as well as any relevant public comments.

Within 180 days of the effective date of this act, and annually thereafter, each agency must determine whether any of its existing rules have resulted in a specified economic impact during the preceding year. If so, the agency must provide notification, and may not continue to enforce the rule until it is enacted into law by the Legislature.

A person may bring an action in Superior Court for either an injunction or a writ of mandamus in order to enforce the requirements of this act.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.