HCS HB 978 -- SMALL BUSINESS

SPONSOR:  St. Onge (Baker)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Small
Business by a vote of 15 to 0.

This substitute establishes the Small Business Regulatory
Fairness Board, which will work with agencies and small
businesses on issues concerning the impact of agency rules and
regulations on small businesses.  The substitute outlines the
membership of the board.  All members of the board, except for
the chair of the minority business advocacy committee, must be
current or former small business owners.

The board is specifically prohibited from interfering with,
modifying, preventing, or delaying an agency's enforcement
action; intervening in legal actions; and subpoenaing witnesses
to testify or produce documents at hearings held by the board.

The substitute defines "small business" as a for-profit
enterprise with fewer than 50 full- or part-time employees.  The
substitute requires state agencies to determine whether proposed
rules affect small businesses prior to submitting or filing
proposed rules with the Secretary of State's office.  For
proposed rules that affect small businesses, the agency must
consider creative, innovative, or flexible methods of compliance
for small businesses and prepare a small business impact
statement which will be submitted with the proposed rules to the
board on the day the proposed order of rulemaking is filed with
the Secretary of State's office.  The substitute outlines the
requirements of the impact statement.  Rules that are required to
have a small business impact statement but do not are invalid,
and the Secretary of State cannot publish the rule.

For any proposed rules that affect small business, the agency
will also submit a small business participation statement to the
board 30 days after a public hearing is held or at least 30 days
before the issuance of a final order of rulemaking if no public
hearing is held.  The substitute outlines the requirements of the
statement.

The board is allowed to file a written petition with the agency
that has adopted rules, objecting to or requesting the adoption,
amendment, or repeal of all or part of any rule affecting small
business.  Any small business may ask the board to file a
petition for the adoption, amendment, or repeal of a rule; and
the board may hold a hearing or solicit testimony to assist in
making its determination of whether to file a petition.  Within
60 days of receipt of the petition, the agency will determine
whether the rule should be adopted, amended, or repealed based on
specific factors.

The substitute requires the board to provide to the head of each
agency a list of any rules adopted by the agency that affect
small business and have generated complaints or concerns.
Forty-five days after being notified by the board of these rules,
the agency is required to submit a written report to the board in
response to the complaints or concerns.  The substitute requires
the board to submit an evaluation report to the Governor and the
General Assembly regarding these issues.

The substitute outlines occasions when an agency will waive or
reduce any administrative penalty or fine for violation of any
statute, ordinance, or rule by a small business.

Small businesses claiming a material violation of the small
business impact statement requirement are allowed to bring a
declaratory judgment action after the filing of the final order
of rulemaking, without exhausting their administrative remedies.

FISCAL NOTE:  Estimated Net Cost on General Revenue Fund of
$22,413 to Unknown in FY 2005, $22,413 to Unknown in FY 2006, and
Unknown in FY 2007.  Could exceed $100,000 per year.  Estimated
Net Cost on Other State Funds of Unknown in FY 2005, $63,968 to
Unknown in FY 2006, and $57,132 to Unknown in FY 2007.  Could
exceed $100,000 per year.

PROPONENTS:  Supporters say that the goal of the bill is to
facilitate communication between small businesses and state
agencies during the rulemaking process.  Small business owners
say that agency rules sometimes create a burden and that the bill
will allow them to have a voice in the process.  The procedure
outlined in the bill will assist the process between the
administrative branch, the legislative branch, and the Joint
Committee on Administrative Rules.  The bill works within the
rulemaking process and allows the board to act as an advisory
committee to provide input to the agencies.

Testifying for the bill were Representatives Baker and Byrd;
National Federation of Independent Businesses; Jim Baumgartner;
Bill Crull; Scott George; Missouri Merchants and Manufacturers
Association; Missouri Chamber or Commerce and Industry; and
Associated Industries of Missouri.

OPPONENTS:  Those who oppose the bill say that they don't believe
small businesses need additional protections from being assessed
violations and fines.  Businesses are more likely to pay
attention to rules and regulations if there is a risk that they
will have to pay a fine for violations.

Testifying against the bill was Sierra Club.

Amy Woods, Legislative Analyst

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:14 am