BP BHEAD INT S

AN ACT Relating to business regulations; adding a new section to chapter 82.02 RCW; adding a new section to chapter 50.12 RCW; adding a new section to chapter 43.21A RCW; adding a new section to chapter 43.22 RCW; adding a new section to chapter 43.70 RCW; adding a new section to chapter 43.24 RCW; adding a new section to chapter 77.04 RCW; adding a new chapter to Title 43 RCW; creating new sections; and providing an expiration date.

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

NEW SECTION. Sec. 1. The legislature recognizes that the current volume of regulations small businesses are required to comply with are so voluminous and complex that it is generally impossible for small business owners to keep abreast of the various requirements and to continually monitor to assure compliance, and still have time to operate a profitable business.

The legislature recognizes the success of joint programs between business and government that aim for cooperation to achieve compliance and find that these programs are effective in gaining compliance with various regulations. Examples of these programs include the department of ecology's hazardous waste program and the department of labor and industries' Washington industrial safety and health act voluntary services and industrial insurance educational audits programs.

Therefore, the legislature directs the state agencies named in this act to engage in a cooperative compliance partnership pilot project to assist businesses that demonstrate a good faith effort of compliance, to correct minor issues of noncompliance through education rather than through citations, penalties, and fines.

NEW SECTION. Sec. 2. (1) The following agencies shall implement by January 1, 1995, a cooperative compliance partnership program:

(a) Department of revenue;

(b) Employment security department;

(d) Department of labor and industries;

(e) Department of health;

(f) Department of licensing; and

(g) Department of fish and wildlife.

(2) A cooperative compliance partnership program shall include:

(a) An agency-established set of criteria, based on the following guidelines, that shall be used to determine whether a business is making a good faith effort to comply with specific regulations.

(i) If the regulations require the payment of taxes or fees, good faith compliance shall be determined as follows:

(A) If the business was paying some of the tax or fee.

(B) The amount paid by the business was either:

(I) Seventy-five percent of the amount of the tax or fee that should have been paid; or

(II) An amount of the tax or fee that a reasonable person would have understood to be the proper amount according to the regulations as interpreted by the business and the business can justify its method of computing the tax or fee.

(ii) If the regulation requires actions to protect worker safety and health, customer safety and health, the public's safety and health, or the environment, and the good faith compliance shall be determined as follows:

(A) The actions of the business are sufficient so that there is no probability that death or serious physical harm could result due to conditions that exist; (B) the actions of the business protect the environment and do not pose a substantial present or potential hazard to human health, wildlife, or the environment.

(iii) Good faith compliance is presumed whenever a business is in compliance with federal law controlling the same activity or situation.

NEW SECTION. Sec. 3. (1) A business that has met the good faith criteria for compliance shall be given a reasonable time by the agency to correct deficiencies without the agency taking enforcement action.

(a) In the case of deficiencies that pose an immediate and serious threat to the safety, health, or welfare of workers or citizens, or that pose immediate threats to the environment, the agency shall direct the business to discontinue the activity posing the immediate risk until appropriate corrections are taken. Failure of a business to correct deficiencies within the reasonable period of time set by the agency, or failure of a business to immediately discontinue an activity that poses an immediate and serious threat shall be subject to enforcement actions by the agency.

(b) In the case of tax or fee issues, the corrections shall be made immediately, and for all future business activities, the agency shall advise the business in writing of the correct method of reporting and the records the business is required to maintain.

(2)(a) A business found to have met the good faith criteria for compliance shall be provided a written report by the agency as to deficiencies identified, the statutory or Washington Administrative Code reference that is the basis for the deficiency, the corrections needed, the sources at the agency available to provide the business technical assistance in making the corrections, and the reasonable period of time granted by the agency to make the corrections.

(b) In setting the reasonable period of time to make corrections, the agency shall take into consideration the size of the business, the economic capacity of the business to pay for the corrections required, and the degree of risk the deficiency poses to the public, to workers, or to the environment.

(3)(a) A business may appeal the reasonable time period set by an agency. The business must show in its appeal how the reasonable time period will impose an undue hardship on the business and must recommend a reasonable time period in which it can make the correction.

(b) A showing of undue hardship includes, but is not limited to, one or more of the following: (i) The insufficient financial capacity of the business to effect the corrections within the time period allowed; (ii) the inability of the business to secure needed financing, authorizations, or permits to effect the corrections within the time period allowed; and (iii) the inability of the business to remain competitive in its market due to the costs incurred in making the corrections within the time period allowed.

(4) Businesses that do not meet the good faith criteria for compliance as provided in sections 2 and 3 of this act, shall be subject to immediate enforcement action by the agency.

(5) The cooperative compliance partnership program provided in this section shall not apply to the following types of inspections:

(a) Inspections to verify the compliance of a business that has previously received a written compliance notice, infraction notice, agency order, or other written agency directive issued prior to the agency implementing the cooperative compliance partnership program.

(b) Inspections to verify compliance of the business with a specific permit issued by the agency to that specific business.

NEW SECTION. Sec. 4. Agencies identified in section 2(1) of this act shall:

(1) Adopt under chapter 34.05 RCW good faith criteria by September 1, 1994.

(2) Conduct the necessary inspection, employee education, and prepare needed materials in order to implement the provisions of sections 2 and 3 of this act by January 1, 1995, for all inspections made by the agency.

(3) In inspection programs that include the delegation of authority to the state of Washington to enforce federal rules, an agency shall:

(a) By June 1, 1994, submit a written petition to the federal agency for authorization to implement the cooperative compliance partnership program for all inspections while retaining the state's federal delegation; and

(b) If the federal agency fails to provide the authorization by November 1, 1995, the agency shall apply the cooperative compliance partnership program to all inspections except the minimum number of inspections required by the federal government for the program delegated to the state of Washington for enforcement.

(4) Report to the office of financial management by November 1, 1995, and November 1, 1996, the agency's experience with the cooperative compliance partnership program and make recommendations to improve the program.

NEW SECTION. Sec. 5. The office of financial management shall provide a report to the legislature by December 31, 1995, and December 31, 1996, detailing the experience of the agencies with the cooperative compliance partnership program and recommendations to improve the program.

NEW SECTION. Sec. 6. A new section is added to chapter 82.02 RCW to read as follows:

The director of the department of revenue shall ensure that sections 2 through 4 of this act are enforced within the department of revenue.

NEW SECTION. Sec. 7. A new section is added to chapter 50.12 RCW to read as follows:

The commissioner of the employment security department shall ensure that sections 2 through 4 of this act are enforced within the employment security department.

NEW SECTION. Sec. 8. A new section is added to chapter 43.21A RCW to read as follows:

The director of the department of ecology shall ensure that sections 2 through 4 of this act are enforced within the department of ecology.

NEW SECTION. Sec. 9. A new section is added to chapter 43.22 RCW to read as follows:

The director of the department of labor and industries shall ensure that sections 2 through 4 of this act are enforced within the department of labor and industries.

NEW SECTION. Sec. 10. A new section is added to chapter 43.70 RCW to read as follows:

The secretary of the department of health shall ensure that sections 2 through 4 of this act are enforced within the department of health.

NEW SECTION. Sec. 11. A new section is added to chapter 43.24 RCW to read as follows:

The director of the department of licensing shall ensure that sections 2 through 4 of this act are enforced within the department of licensing.

NEW SECTION. Sec. 12. A new section is added to chapter 77.04 RCW to read as follows:

The director of the department of fish and wildlife shall ensure that sections 2 through 4 of this act are enforced within the department of fish and wildlife.

NEW SECTION. Sec. 13. Sections 2 through 12 of this act shall expire July 1, 1997.

NEW SECTION. Sec. 14. Sections 2 through 4 of this act shall constitute a new chapter in Title 43 RCW.