03/19/2007
Though the federal Regulatory Flexibility Act was enacted almost 30 years ago, many states still don't have their own legislation to protect small-business owners from the disproportionate burden of regulatory compliance. NFIB has long led the fight for the reduction of regulatory burdens, advocating common-sense approaches to ensure that rules are easier to read, understand and follow.
According to the Small Business Administration's Office of Advocacy, 11 states have introduced regulatory flexibility legislation in 2007, and 13 states currently have active statutes. This year, Arkansas, Connecticut, Hawaii, Illinois, Mississippi, Montana, Tennessee and Washington have all introduced some form of regulatory flexibility legislation. The following are highlights of activity in these states and others.
Arkansas
In 2005, Gov. Mike Huckabee signed an executive order implementing regulatory flexibility, and Gov. Mike Beebe recently signed S.B. 55 into law, creating a friendlier regulatory environment for small businesses in Arkansas. The law will call for state agencies to analyze the economic impact a proposed rule will have on small businesses, as well as require them to consider less burdensome alternatives.
Mississippi
Regulatory flexibility in Mississippi has faced staunch opposition by the chairman of the Tax Commission, and legislation has been shot down consistently since its initial introduction. In 2003, Mississippi's Administrative Procedures Act implemented several features similar to the federal Regulatory Flexibility Act, but due to its lack of a review committee and detailed instructions of what to look for regarding regulatory flexibility, it didn't serve small business well.
In 2005, the Mississippi Small-Business Regulatory Flexibility Act passed the Senate and the House Ways & Means Committee, but was stopped by a full House vote. In 2006, the legislation was introduced again, this time passing both the House Ways & Means Committee and the full House, only to be held on a motion to reconsider by the committee chairman, where it died again.
After this year's legislative session is over, NFIB/Mississippi hopes Gov. Haley Barbour will sign an executive order making regulatory flexibility for Mississippi small businesses a reality. NFIB/Mississippi State Director Ron Aldridge has been working with the Office of Advocacy to achieve this goal, and Secretary of State Eric Clark has endorsed the legislation as well.
New Jersey
Legislation to reduce the disproportionate burden of compliance with state regulations passed 80-0 in the Assembly in July 2006, and the bill now awaits consideration by the full Senate. NFIB/New Jersey has placed the issue of regulatory flexibility on its 2007 agenda, and is working to ensure that the state's small businesses will soon see relief from overregulation.
North Carolina
NFIB/North Carolina members are working hard to convince state legislators to adopt a law similar to the federal Regulatory Flexibility Act, and NFIB continues to monitor the issue closely. Regulatory flexibility has been placed on the 2007 NFIB/North Carolina agenda, and NFIB/North Carolina encourages members to contact their lawmakers and tell them that the state's small businesses are depending on them to help ease their regulatory burden.
Pennsylvania
Regulatory flexibility legislation has passed the General Assembly twice, only to be vetoed twice by Gov. Edward G. Rendell. NFIB/Pennsylvania has placed the issue back on its agenda for 2007, and the state Leadership Council recently met with the governor to discuss the importance of this issue to the small-business community.
Tennessee
NFIB/Tennessee State Director Gary Selvy currently is working to codify the regulatory flexibility executive order signed by Gov. Bredesen in May 2006. NFIB/Tennessee applauded the governor's leveling the playing field for small business.
"Governor Bredesen's executive order establishing regulatory flexibility for small-business owners will ensure entrepreneurs spend less time cutting red tape and more time creating jobs in Tennessee," NFIB President and CEO Todd Stottlemyer said. "Small-business owners know a 'one-size-fits-all' approach to regulating businesses can be particularly burdensome on them, and NFIB appreciates Governor Bredesen for his leadership in helping restore regulatory fairness."
Texas
NFIB/Texas is working closely with state Sen. Eddie Lucio (Brownsville) and state Rep. Gary Elkins (Houston), as they have filed identical legislation that will make Texas a model state for regulatory flexibility. While Texas law currently contains some provisions governing agency regulatory actions affecting small business, enhancing the economic impact analysis and regulatory flexibility requirements and adding periodic and judicial review provisions would increase its effectiveness.
"It is imperative that the state of Texas recognize that the cost of regulatory compliance for small-business owners is 45 percent higher than it is for their large business counterparts," said NFIB/Texas Executive Director Will Newton. "That is inherently unfair and must be reformed."
Victories in other states
Regulatory flexibility legislation has found success in several states, and Arizona, Colorado, Connecticut, Indiana, Missouri, Nevada, New York, North Dakota, Oklahoma, Oregon, South Carolina, Virginia and Wisconsin all have active statutes. These states have taken steps to ensure that their small businesses are not subjected to a "one-size-fits-all" approach to compliance with complex state regulations, and require any new regulations to be reviewed before being implemented.
What you can do
If your business operates in a state that has not implemented legislation to ensure regulatory flexibility, contact your lawmakers and tell them your experiences with spending an exorbitant amount of time, money and effort on unbalanced regulatory compliance. You can also contact your NFIB state director for a listing of Area Action Councils or other ways to get involved with supporting your state's pro-small-business agenda.
