Regulatory Reform Could Help PA's Small Businesses Recover

Date: July 14, 2020

Policymakers in Harrisburg have wrangled with a slew of issues over the last few months, including which businesses can be open, how to provide relief to struggling small businesses, getting unemployment benefits to those who need them, and whether or not a mask is required. However, as the focus begins to shift to recovery and the $3.2 billion shortfall in tax funds collected by the state last fiscal year, regulatory reform is coming to the forefront of potential solutions.

Many legislators understand the critical role small businesses will play in our recovery going forward and are considering actions that would set them up for success. They also know burdensome regulations disproportionately impact small businesses, which don’t usually have attorneys and compliance staff to deal with layers of red tape. For this reason, several regulatory reform bills are moving in the state Senate, which would provide relief to many small businesses.

 SB 5 (DiSanto) would strengthen the state’s regulatory review process by requiring economically significant regulations be approved by the state legislature before going into effect. This step would prevent the Governor from implementing costly mandates without legislative review and approval. It will also ensure that policymakers understand the true costs the regulation will have on businesses, workers, and the state economy.

SB 119 (DiSanto) would start Pennsylvania down the path of examining its regulatory requirements with a critical eye toward eliminating unnecessary and burdensome restrictions. It would do this by first requiring each agency to conduct a baseline regulatory review, documenting each of the regulatory requirements within its purview. This review, which would be publicly available and updated twice a year, will serve as a guideline as the agency looks to implement the repeal requirements of the bill. It will also allow citizens to understand the scope of the regulatory burden in Pennsylvania. SB 119 would then require that every new proposed regulatory requirement from an agency be accompanied by two repeal requests for a period of 6 years, after which, one repeal request would be necessary. This provision will slowly but surely begin the process of eliminating unnecessary, duplicative, and burdensome regulations.

SB 251 (Phillips Hill) would establish an Independent Office of the Repealer to review all existing regulations, including those recommended by citizens, and make recommendations for changing unreasonable and unnecessarily burdensome rules. The bill will also require agencies promulgating regulations to propose two for repeal for every new one proposed, further helping to limit the burden of onerous rules on businesses.

SB 252 (Phillips Hill) would require agencies to provide timely responses and post permit information online so the public may track progress, final approval, and the specific reason for any rejection of a permit application. It also asks agencies to provide a public inventory and reports of the permits they issue, along with the statutory authority for them, and disclose the expected amount of time to receive each permit.

SB 253 (Phillips Hill) requires agencies to appoint Regulatory Compliance Officers that can work collaboratively – rather than punitively – with the regulated community, issue advisory opinions, and allow a business that follows the advice not to be penalized. SB 253 would provide a specific touchpoint where small businesses can work with regulatory agencies to comply without fear of reprisal if they misunderstand or inadvertently misinterpret a rule.

SB 609 (Brooks) will ensure that economically significant regulations are reviewed shortly after going into effect to determine if the costs and impacts were as expected. It will also provide lawmakers additional oversight abilities and gives other stakeholders the chance to review and provide input into how agencies have implemented these impactful regulations.

These six bills are currently before the Senate Appropriations Committee and could be brought up for final passage when the Senate returns to session. Companion bills to several of these Senate bills have already passed the House.

 

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