- The Washington Times - Thursday, January 9, 2003

Lawmakers in a number of states are backing a movement to require government regulators to take the concerns of small businesses into account when they promulgate new regulations and policies.
Americans spend nearly a trillion dollars a year complying with state and federal regulations, according to the Small Business Administration, the federal office for small businesses.
So far, state senators in North Dakota, Washington and West Virginia said they will introduce bills this month that require state agencies to review effects of regulation on small businesses.
Virginia and Maryland legislators have not introduced similar bills during the new session.
The bills are largely based on model legislation by the Small Business Administration, which calls for state and federal agencies to better define small businesses, conduct cause-and-effect studies for new policies, and allow judicial review and alternatives for more burdensome regulations.
"Bureaucrats need to start thinking about how their administrative rules are affecting small businesses," said state Sen. George Keiser, Republican for the 47th District of North Dakota.
Mr. Keiser will introduce a bill later this month, requiring state agencies to calculate the financial effect of new rules on small businesses in addition to having judicial review of any rules challenged by the private sector.
Currently, state offices are only required to determine the economic effect of administrative policies on the state budget.
"This law takes that one step further and puts some public scrutiny on administrative rulings that are normally never openly discussed," Mr. Keiser said.
Compliance costs the public $843 billion annually, according to a SBA report. While all individuals and businesses share in the costs, Thomas Sullivan, chief counsel for the SBA, said small businesses in particular are hit hardest by regulations and tax compliance.
"Just in being tax compliant, small businesses pay twice as much as a larger company that has an accounting department," Mr. Sullivan said.
Small businesses with fewer than 20 employees face annual regulatory expenses of $6,975 per employee, compared with the $4,463 per worker costs larger companies with more than 500 employees pay, the SBA report said.
"If state legislators removed just a small percentage of the more cumbersome costs, employers would put that money toward improving the economy by providing more health care or hiring another worker," Mr. Sullivan said.
Environmental regulations and tax compliance make up the bulk of total regulatory costs, with environmental rules averaging $3,328 per worker and tax compliance costing $1,202 per worker, the report said.
Christine Eppstein, of the Environmental Council of the States, countered that the majority of environmental and health regulations protect the general public and environment from corrupt business practices.
"States have the responsibility of protecting the welfare of the general public and most of those regulations do so," said Ms. Eppstein, senior project manager for the D.C. nonprofit organization for states' environmental agencies.
"Regulations that are too burdensome can be reviewed, but workers would be without health care or workers' comp if we didn't have those rules," she added.
But state Sen. Patricia Hale, Republican for the Eighth District of Washington, wants to lessen the state's authority in environmental and health departments, calling their mission statements too broad.
"The appropriate regulation-review committee needs more teeth to make a difference for small businesses, because right now some overzealous state officials have too broad of control in their mission statement to serve the public," Ms. Hale said.
The bill, expected to be submitted to the Washington Legislature by late January, also keeps larger proposed regulations in the Legislature for a full term before being passed.
But lawmakers say the challenge of passing such bills is adding more work on government agencies that are cutting back on programs as a result of growing budget deficits.
State Sen. Karen Facemyer, Jackson County Republican, said she toned down the wording in her bill for regulatory reform in West Virginia state agencies, fearing that strong language would result in another stalling.
Ms. Facemyer proposed that the state consolidate business tax and workers' compensation paperwork under the Governor's Office of Technology to reduce the amount of time business owners spend in complying with government standards.
"If we can have businesses spend less time on having to comply with the government to get started, that will help small-business owners more than any of these proposed studies," Ms. Facemyer said.

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