Smith bill to improve regulatory climate for state’s small businesses unanimously passes House

House Bill 1120, sponsored by Rep. Norma Smith to address problems uncovered by an audit of Washington’s Regulatory Fairness Act (RFA), was unanimously approved by the House Thursday. The audit, released in December by the Washington State Auditor’s Office (SAO), assessed the implementation and impact of the RFA on the state’s small businesses and found state agencies were chronically non-compliant with its requirements.

The SAO reviewed 331 rules proposed by 16 state agencies between 2014 and 2015. It was discovered agencies claimed an exemption from the RFA for 127 of them. However, in only slightly more than half of the 127 instances did agencies rely on and cite an allowable exemption.

Smith, R-Clinton, says that’s a serious concern her bill would address.

“Small businesses are uniquely and disproportionately impacted by the rules created by state agencies, and that’s why I was so troubled by the audit’s findings,” said Smith. “The Regulatory Fairness Act was created to protect small businesses from burdensome regulations, but it’s clear it hasn’t been working as intended. That’s why I introduced this bill and was pleased to see a unified House pass it unanimously off the floor.

I want to thank the governor’s office for reaching out and working with me on this bill to ensure we are taking the necessary steps to correct the problems uncovered by the audit. I am confident this bill will improve the regulatory climate for our state’s small businesses and help ensure they receive the customer service they deserve as key drivers of our state’s economic growth.”

House Bill 1120 would do five things to curb ongoing RFA compliance issues.

First, agencies able to demonstrate a proposed rule would have no effect on small businesses would be exempt from completing a small business economic impact statement.

Second, agencies proposing a rule that would only affect small businesses would be required to consider mitigation options to reduce the cost to small businesses.

Third, agencies whose proposed rules would impose more than minor costs on small businesses would be required to mitigate those costs if the agency did not have sufficient data to calculate disproportionate impacts.

Fourth, the Office of Regulatory Innovation and Assistance would be required to act as the state’s central entity to assist agencies with meeting the RFA’s requirements.

Fifth, beginning June 30, 2020, the SAO would be required to conduct performance reviews of agencies to assess their compliance with the RFA.

House Bill 1120 now moves to the Senate for further consideration.


Washington State House Republican Communications