SS/SS/SB 718 - This act requires state agencies which are proposing rules to determine whether the proposed rulemaking affects small businesses and to prepare a small business impact statement. A small business is defined as a for-profit enterprise consisting of fewer than 50 full or part-time employees. The provisions of this act shall not apply to emergency rules, federally mandated rules, any rule that substantially codifies existing federal or state law, or to constitutionally required rulemaking by the Department of Conservation.

For proposed rules that affect small business, the state agency shall prepare a small business impact statement to be submitted to the Secretary of State and the Joint Committee on Administrative Rules. The statement must include a determination of the small businesses required to comply with the rule (unless the agency has filed a fiscal note), the dollar amount of increased costs to small businesses (unless the agency has filed a fiscal note), the costs and benefits to the implementing agency, any methods considered to reduce the impact on small businesses, and how the agency involved small businesses in the development of the proposed rule. Any proposed rule that is required to have a small business impact statement but fails to include the statement shall be invalid. If the agency determines that its rule does not affect small business, it shall certify that determination to the Secretary of State.

The act creates the Small Business Regulatory Fairness Board. The Department of Economic Development will provide staff for the Board. The Board shall provide agencies with input regarding proposed rules, conduct hearings and solicit input from regulated small businesses and prepare an annual evaluation report to the Governor and General Assembly.

The Board shall consist of nine members: one member each appointed by the chair of the Minority Business Advocacy Commission, the President Pro tem of the Senate, the Minority leader of the Senate, the Speaker of the House of Representatives, the Minority Leader of the House, and four members appointed by the Governor. Members shall serve a term of three years. Appointments shall be made so that one-third of the board shall terminate each year. Minutes of all meetings of the board shall be provided to all members, the Governor and the Joint Committee on Administrative Rules.

If the board conducts a hearing based on a request from a small business owner, the board may make recommendations to the state agency. Such recommendations shall be based on the following: whether the rules creates an undue barrier to the formation, operation or expansion of small business to the extent that it outweighs the public benefit of the rule, new or significant economic information indicates the rule would create an undue impact on small business, technology or other factors justifying the rule have changed, or whether the actual effect of a rule adopted after August 28, 2004 was not reflected or exceeded the small business impact statement. Any state agency receiving recommendations may file a response within 60 days of receiving the recommendations. The agency should explain its reasons for taking any action or failing to take any action.

Any agency that can assess administrative penalties or fines may consider waiving or reducing such fines upon a business if the business meets certain conditions relating to correction of the violation by the business or the unintentional nature of the violation. The act sets out conditions where the agency is not required to consider the waiver or reduction of the fine.

This act is similar to CCS/HCS/SCS/SB 69 (2003).
JIM ERTLE