Rep. Norma Smith releases statement on Regulatory Fairness Act audit findings for small businesses

Following today’s release of an audit from the Washington State Auditor’s Office regarding the implementation and impact of Washington’s Regulatory Fairness Act (RFA) on the state’s small businesses, Rep. Norma Smith, R-Clinton, says she’s deeply concerned by the audit’s discovery of chronic non-compliance of state agencies with the RFA. Smith is drafting legislation and will invite her colleagues at the beginning of the 2017 legislative session to join her in taking action to correct the situation.

The RFA requires agencies to consider how their proposed rules would impact the state’s businesses. If an agency’s proposed rule would put more than minor compliance costs on a business, the agency is required to prepare a Small Business Economic Impact Statement (SBEIS). If the SBEIS finds the rule would impose higher costs on a small business than a larger business, the agency must then mitigate those costs by creating revisions to the rule.

The auditor’s office reviewed 331 rules proposed by 16 state agencies between 2014 and 2015. The audit found state agencies were often out of compliance with the law in a variety of ways. Of the 331 rules proposed, agencies claimed an exemption from the RFA for 127 of them. However, in only slightly more than half of those 127 instances did the agencies rely on and cite an allowable exemption. Instead, agencies interpreted exemptions from the law inconsistently or relied on invalid or nonexistent exemptions.

“The RFA was enacted to protect small businesses from burdensome regulations, so it’s troubling state agencies are so often disregarding this important law,” said Smith. “These agencies take enforcement actions against citizens for far less serious acts of non-compliance. It’s clear they need to be held to the same standard, so I am authoring legislation to address the audit’s findings and improve the regulatory climate for our state’s small businesses.”

The auditor’s office also found that in half the cases reviewed, the state agency in question determined the cost impacts on business would be less than minor, but could not supply sufficient support for that determination.

Smith says she wants to know whether agency leadership was facilitating a concerted effort to work around the requirement to conduct an SBEIS to avoid the law’s requirement to revise regulations to mitigate costs.

“We don’t have many tools in our arsenal that compel state agencies to respect small businesses,” said Smith. “This is one of them, however, and I will do everything in my power to ensure these agencies are complying with state law. We will get this cleaned up for the citizens of Washington state.”

To read the “Assessing Implementation of the Regulatory Fairness Act” performance audit, click here.


Washington State House Republican Communications