SENATE BILL REPORT

SB 6406

BYSenators Wojahn, Lee, West, Warnke, Smitherman, McMullen and Anderson

Enforcing the regulatory fairness act.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):January 20, 1988; January 27, 1988

Majority Report:  That Substitute Senate Bill No. 6406 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; Cantu, Conner, Deccio, McMullen, Saling, Smitherman, Warnke, Williams.

Senate Staff:Bill Lynch

                  January 27, 1988

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, JANUARY 27, 1988

BACKGROUND:

The Regulatory Fairness Act requires agencies to reduce the impact their rules have on small business.  A small business is defined as an independent business entity with 50 or less employees with the purpose of making a profit.

An agency must prepare a small business economic impact statement whenever the adoption of a rule will have an economic impact on more than 20 percent of all industries, or more than 10 percent of any one industry.  An agency must attempt to develop alternative means of compliance if there is such an economic impact on small business.  The alternatives an agency must consider include:  simplifying reporting requirements, establishing performance rather than design standards, and exempting small business from any or all requirements.

Some agencies have experienced difficulty in complying with the law.

SUMMARY:

The director of the Department of Trade and Economic Development is required to designate a staff person to serve as the regulatory fairness compliance officer.  This officer is required to:  assist agencies in the preparation of small business economic impact statements by identifying sources of data and explaining agency responsibilities under the Regulatory Fairness Act, review all agency rules for compliance with the Regulatory Fairness Act, and assist persons affected by a proposed rule in providing input to the proposing agency.

If an agency's proposed rule does not comply with regulatory fairness requirements, the compliance officer must notify the agency and the Joint Administrative Rules Review Committee of the noncompliance.

The Joint Administrative Rules Review Committee may review any rule to determine if an agency complied with regulatory fairness requirements.  The committee shall conduct its hearings the same way as it reviews agency rules.  A person may petition superior court for a declaratory judgment on a rule found by the committee to be out of compliance with regulatory fairness.

EFFECT OF PROPOSED SUBSTITUTE:

If the Joint Administrative Rules Review Committee determines that the safety considerations associated with a rule outweigh the inadequacy of the small business economic impact statement, then the Committee may not make an adverse finding on the rule nor recommend its suspension.

Appropriation:    $40,000 from the general fund to the Department of Trade and Economic Development.

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Dave Dougherty, Small Business Assistance Center; Bob Dilger, Washington State Building and Construction Trades Council; Gary Smith, Independent Business Association