Regulatory fairness panel is proposed

Tuesday, February 11, 2003

JEFFERSON CITY, Mo. -- State agencies would be required to determine the economic impact of proposed regulations on small businesses and give business owners a greater say in the process under bills considered Monday by legislative committees.

"The idea behind the bill basically is to hold government accountable for what it does to small businesses," said state Rep. Brian Baker, R-Belton and the bill's House sponsor.

Baker's measure and an identical bill filed in the Senate would establish a Small Business Regulatory Fairness Board within the Department of Economic Development. The board, patterned on an existing federal panel, would review regulations before agencies implement them in order to ensure proposed rules serve a necessary purpose without imposing an undue burden on businesses.

State Sen. Anita Yeckel, R-Sunset Hills, said the measure, which she is sponsoring in the upper chamber, would help provide regulatory relief for businesses.

"Small business owners often feel overwhelmed by the impact of state regulations on their business operations," Yeckel said. "This regulatory board would tip the scales in favor of small businesses by offering them a greater opportunity to change a burdensome system."

The bills enjoy the full support of Republican legislative leaders and pro-business interest groups.

"This is a much-needed step forward for small businesses in our state," said Senate President Pro Tem Peter Kinder, R-Cape Girardeau.

No opposition in hearings

Supporters said the savings from decreasing regulatory costs could allow businesses to create additional jobs and expand operations, providing a benefits to the state economy.

During hearings on both measures, no opposition was raised.

Thomas M. Sullivan, the U.S. Small Business Administration's chief counsel for advocacy, testified in favor of the proposals before the House and Senate small business committees.

Sullivan said compliance with federal regulations costs "mom and pop" businesses $7,000 per employee annually -- approximately 60 percent more than the cost to large corporations that often have workers dedicated to compliance issues.

Forcing agencies to confer with the business community before imposing a rule, instead of after the fact, often leads to less costly alternatives.

"If a regulatory agency has to say exactly how much a rule is going to cost Main Street Missouri, they are going to sit down with business owners at the front end to try to keep that cost as low as possible," Sullivan said.

The federal Regulatory Fairness Board was created by 1996 legislation sponsored by U.S. Sen. Kit Bond, R-Mo. Sullivan said 26 states currently have laws similar to that being proposed in Missouri.

While providing more business involvement in the process, however, Sullivan said such laws do not give entrepreneurs veto power over regulations they oppose but which an agency can adequately justify.

"The agencies are still in the driver's seat," Sullivan said. "This does not supplant the intelligence of agencies with the views of small business."

Businesses could seek judicial review of rules they find egregious.

The fairness board would consist of nine members, all of whom would be current or former business owners. The governor and the chairmen of the House and Senate small business committees would each name two members. The lieutenant governor, Senate president pro tem and House speaker would pick one member each.

The board, whose members would not be paid, would meet at least twice a year to review proposed regulations and recommend changes to agencies.

The bills are SB 69 and HB 322.

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