SENATE BILL REPORT

HB 1352

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.

As Reported by Senate Committee On:

Commerce, Labor & Sports, March 9, 2017

Title: An act relating to the licensing and regulatory requirements of small business owners.

Brief Description: Concerning licensing and regulatory requirements of small business owners.

Sponsors: Representatives Barkis, Chapman, J. Walsh, Shea, Koster, Wilcox, McCabe, Harmsworth, Cody, Tarleton, Kretz, Schmick, Short, Vick, Harris, Manweller, Smith, Stokesbary, MacEwen, Nealey, Condotta, Orcutt, Lytton, Springer, Kirby, Blake, Caldier, Jinkins, Taylor, Pike, Hayes, Muri, Holy, Haler, Steele, Kilduff and Tharinger.

Brief History: Passed House: 2/27/17, 96-0.

Committee Activity: Commerce, Labor & Sports: 3/09/17 [DP].

Brief Summary of Bill

  • Requires the Attorney General (AG) to review the Administrative Procedure Act and certain other laws to identify the rights and protections for small business owners subject to agency audits, inspections, and other enforcement actions.

  • Requires certain agencies to review agency statutes, rules, and other documents to identify the rights and protections for small business owners and provide information to the AG.

  • Requires the AG to report and make recommendations to the relevant committees of the Legislature.

SENATE COMMITTEE ON COMMERCE, LABOR & SPORTS

Majority Report: Do pass.

Signed by Senators Baumgartner, Chair; Keiser, Ranking Minority Member; Conway, Hasegawa, Saldaña and Wilson.

Staff: Susan Jones (786-7404)

Background: There are laws and regulations (rules) that apply to businesses and professions in Washington State.

The Legislature made findings that:

Therefore, the Legislature enacted the Regulatory Fairness Act (RFA) with the intent of reducing the disproportionate impact. The RFA requires an agency to prepare a small business economic impact statement with respect to new rules in certain situations.

Under the Administrative Procedure Act (APA), agencies must provide a small business with a copy of the state law or agency rule that a small business is violating and at least seven calendar days to correct the violation before the agency may impose any fines, civil penalties, or administrative sanctions for the violation. There are exceptions.

Agencies must waive any fines, civil penalties, or administrative sanctions for first-time paperwork violations by a small business. If waived, the small business is generally required to correct the violation within a reasonable period of time. The waiver rule does not apply for first-time paper work violations if:

Any waived amount may be reinstated and imposed in addition to any additional fines, penalties, or administrative sanctions associated with a subsequent violation for noncompliance with a substantially similar paperwork requirement, or the failure to correct the previous violation as required by the agency.

Under the APA, small business means a business with 250 or fewer employees or a gross revenue of less than $7 million annually. Other definitions of small business under Washington law generally provide that the business have 50 or fewer employees. 

Summary of Bill: Legislative findings are made regarding the effects of regulatory requirements and costs related to enforcement actions for small business owners and that greater agency coordination promotes economic vitality and increases state program efficiency. An intent section is also provided. Small business is defined as provided under the APA.

The AG must review the APA and certain other laws to identify the rights and protections for small business owners subject to agency enforcement actions including, inspections, audits, site visits, or records review.

The Departments of Agriculture, Ecology, Labor and Industries, and Revenue, the Employment Security Department, and the State Fire Marshal must each review their statutes, rules, other policies, guidance, and directives (agency documents) to identify the rights and protections for small business owners. By August 31, 2017, each agency must provide the AG with:

The AG must report to the relevant committees of the Legislature by November 30, 2017. The report must include:

The AG must provide a copy of the recommendations by October 30, 2017, to the agencies who provide written comments by November 13, 2017.

The Act expires December 31, 2017.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony: No public hearing was held.

Persons Testifying: N/A.

Persons Signed In To Testify But Not Testifying: N/A.