Smith bill to improve regulatory climate for state’s small businesses signed into law

A bill sponsored by Rep. Norma Smith, R-Clinton, to curb ongoing compliance issues with the state’s Regulatory Fairness Act (RFA) was signed into law Wednesday. Smith introduced House Bill 1120 in response to an audit conducted by the State Auditor’s Office (SAO) last year that found many state agencies were not complying with the requirements of the RFA.

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

Smith says that’s an issue her bill addresses.

“I want to thank the governor’s office and representatives of our small business community for working with me on this bill,” said Smith. “It’s important for the RFA to work as intended, and for that to happen, state agencies need to be in full compliance. I’m confident this bill will iron out the problems uncovered by last year’s audit and provide better guidance to agencies, which will help ensure small businesses are being treated fairly as key drivers of our state’s economic growth.”

The RFA was enacted by the Legislature in 1982 to reduce the disproportionate impact of state administrative rules on small businesses.

House Bill 1120 makes five changes to curb ongoing RFA compliance issues.

  • Agencies able to demonstrate a proposed rule would have no effect on small businesses will be exempt from completing a small business economic impact statement.
  • Agencies proposing a rule that would only affect small businesses will be required to consider mitigation options to reduce the cost to small businesses.
  • Agencies whose proposed rules would impose more than minor costs on small businesses will be required to mitigate those costs if the agency does not have sufficient data to calculate disproportionate impacts.
  • The Office of Regulatory Innovation and Assistance will be required to act as the state’s central entity to assist agencies with meeting the RFA’s requirements.
  • Beginning June 30, 2020, the SAO would be required to conduct performance reviews of agencies to assess their compliance with the RFA.

The bill will take effect 90 days after the adjournment of the 2017 regular legislative session, scheduled for Sunday, April 23.


Washington State House Republican Communications