2012 -- H 8024 SUBSTITUTE A

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LC02179/SUB A/2

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ADMINISTRATIVE

PROCEDURES

     Introduced By: Representatives Serpa, Morgan, Trillo, Ferri, and Keable

     Date Introduced: March 29, 2012

     Referred To: House Small Business

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 42-35.1-3 and 42-35.1-4 of the General Laws in Chapter 42-35.1

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entitled "Small Business Regulatory Fairness in Administrative Procedures" are hereby amended

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to read as follows:

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     42-35.1-3. Economic Impact statements. -- (a) Prior to the adoption of any proposed

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regulation that may have an adverse impact on small businesses, with the exception of emergency

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regulations adopted in accordance with subsection 42-35-3(b) and excluding those businesses

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defined in subsection 42-35-3.3(d) (c) of this section, each agency shall prepare, in conjunction

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with assistance and oversight from the office of regulatory reform and in congruence with the

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analysis required in section 42-35-3.3 subsection (b) of this section, an economic impact

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statements statement that includes the following:

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      (1) An identification and estimate of the number of the small businesses subject to the

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proposed regulation;

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      (2) The projected reporting, recordkeeping, and other administrative costs required for

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compliance with the proposed regulation, including the type of professional skills necessary for

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preparation of the report or record;

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      (3) A statement of the effect or probable effect on impacted small businesses;

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      (4) A description of any less intrusive or less costly alternative methods of achieving the

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purpose of the proposed regulation.

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      (b) The economic impact statement required herein shall be published in guide form as

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well as posted on the department of administration and the of economic development corporation

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office of management and budget websites. The guide should be published and/or posted on or

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around the same date as the regulation change and shall include a description of actions need by

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the small business to meet the requirement of the regulation. The office of regulatory reform shall

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develop criteria for the economic impact statement.

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     (c) The following professional and business activities shall not be considered a small

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business for purposes of this section:

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     (1) Financial institutions including banks, trusts, savings and loan associations, thrift

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institutions, consumer and industrial finance companies, credit unions, mortgage and investment

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bankers and stock and bond brokers;

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     (2) Insurance companies, both stock and mutual;

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     (3) Mineral, oil and gas brokers;

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     (4) Subdividers and developers;

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     (5) Landscape architects, architects and building designers;

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     (6) Entities organized as nonprofit institutions;

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     (7) Entertainment activities and productions including motion pictures, stage

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performances, television and radio stations and production companies;

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     (8) All utilities, water companies and power transmission companies, except electrical

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power generating transmission companies providing less than four and one-half (4.5) kilowatts;

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and

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     (9) All petroleum and natural gas producers, refiners and pipelines.

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     42-35.1-4. Regulatory flexibility -- Flexibility analysis required. -- (a)

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Notwithstanding any general or public law to the contrary, prior to the adoption of any proposed

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regulation on and after January 1, 2010, each agency shall prepare a regulatory flexibility analysis

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in which the agency shall, where consistent with health, safety, environmental, and economic

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welfare consider utilizing regulatory methods that will accomplish the objectives of applicable

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statutes while minimizing adverse impact on small businesses. The agency shall consider, without

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limitation, each of the following methods of reducing the impact of the proposed regulation on

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small businesses:

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      (1) The establishment of less stringent compliance or reporting requirements for small

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businesses;

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      (2) The establishment of less stringent schedules or deadlines for compliance or

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reporting requirements for small businesses;

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      (3) The consolidation or simplification of compliance or reporting requirements for small

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businesses;

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      (4) The establishment of performance standards for small businesses to replace design or

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operational standards required in the proposed regulation; and

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      (5) The exemption of small businesses from all or any part of the requirements contained

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in the proposed regulation.

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     (b) Prior to the adoption of any proposed regulation that may have an adverse impact on

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small businesses each agency shall notify the economic development corporation office of

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regulatory reform of its intent to adopt the proposed regulation. The economic development

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corporation office of regulatory reform shall advise and assist agencies in complying with the

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provisions of this section.

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     SECTION 2. Section 42-35-3.4 of the General Laws in Chapter 42-35 entitled

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"Administrative Procedures" is hereby amended to read as follows:

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     42-35-3.4. Periodic review of rules. -- (a) Within two (2) years after December 31,

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2008, each agency shall review all agency rules existing at the time of enactment to determine

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whether such rules should be continued without change, or should be amended or rescinded, by

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examining whether the rules are consistent with the stated objectives of applicable statutes and

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are authorized by, and conform with those statutes. The review must include, but need not be

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limited to, minimizing the economic impact of the rules on small businesses in a manner

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consistent with the objectives of applicable statutes and ensuring consistency with and

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conformance with those statutes. If the head of the agency determines that completion of the

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review of existing rules is not feasible by the established date, the agency shall publish a

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statement certifying that determination and shall provide a copy of that statement and

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determination to the speaker of the house, the senate president, the house fiscal advisor, and the

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senate fiscal advisor. The statement shall include the number of rules that have thus far been

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reviewed by the agency in accordance with this section, and the number still to be reviewed. The

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agency may extend the completion date by one year at a time for a total of not more than five (5)

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years.

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      (b) In reviewing rules, the agency shall consider the following factors:

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      (1) The continued need for the rules;

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      (2) The nature of complaints or comments received concerning the rule from the public;

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      (3) The complexity of the rule;

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      (4) The extent to which the rule overlaps, duplicates, or conflicts with other federal, state

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and local government rules;

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      (5) The length of time since the rule has been evaluated or the degree to which

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technology, economic conditions or other factors have changed in the area affected by the rule.

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      (6) Whether the rules are consistent with current agency practices and procedures; and

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      (7) Whether the rules are consistent with and authorized by applicable statutes.

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      (c) All rules reviewed in accordance with this section, shall be reviewed every five (5)

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years thereafter.

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     (d) In addition to the review required in this section, within four (4) years of enactment of

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this act, each agency shall review all agency rules existing at the time of enactment to determine

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whether such rules should be continued without change, or should be amended or rescinded, to

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minimize economic impact of the rules on small businesses in a manner consistent with the state

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objective of applicable statutes pursuant to this section. Beginning on July 1, 2012, each agency

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shall review twenty-five percent (25%) of its regulations each year for four (4) years until all

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existing regulations have been evaluated for any adverse impacts on small businesses and

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economic impact statements have been prepared, with the exception of emergency regulations

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adopted in accordance with subsection 42-35-3 (b);

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     The office of regulatory reform shall assist and coordinate with all agencies during the

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periodic review of rules.

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     SECTION 3. Sections 42-64.13-3, 42-64.13-5, 42-64.13-6, 42-64.13-7 and 42-64.13-8 of

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the General Laws in Chapter 42-64.13 entitled "Rhode Island Regulatory Reform Act" are hereby

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amended to read as follows:

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     42-64.13-3. Purposes of chapter. -- The purposes of this chapter are to create within the

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Rhode Island economic development corporation office of management and budget the office of

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regulatory reform that will facilitate the regular review of Rhode Island's regulatory processes and

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permitting procedures, report thereon in an effort to improve them and assist and facilitate

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economic development opportunities within the regulatory and permitting processes and

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procedures that exist within Rhode Island state and municipal government.

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     42-64.13-5. Creation of the office of regulatory reform. -- The Rhode Island economic

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development corporation office of management and budget shall create an office of regulatory

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reform that shall be adequately staffed and supervised in order to fulfill its functions as set forth

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in this chapter.

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     42-64.13-6. Director of office of regulatory reform. -- The office of regulatory reform

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shall be managed by a director of office of regulatory reform who shall report to the executive

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director of the Rhode Island economic development corporation director of the office of

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management and budget.

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     42-64.13-7. Powers of the office of regulatory reform. -- The office of regulatory

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reform shall have the following powers:

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     (1) The director of the office of regulatory reform is authorized to intervene or otherwise

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participate in any regulatory or permitting matter pending before any executive branch agency or

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department or before any municipal board, commission, agency or subdivision thereof at which a

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regulatory or permitting matter is pending for the expressed net benefit of a business. The director

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of the office of regulatory reform may so intervene or otherwise participate in such pending

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regulatory and permitting matters by providing written notice to the director of any department or

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state agency in the executive branch, or the chairman or presiding officer over any municipal

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department or subdivision thereof at which a regulatory or permitting matter is pending, that the

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director of the office of regulatory reform is so intervening or otherwise participating in such

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regulatory or permitting matter pending before such department, agency, board or commission.

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The director of the office of regulatory reform shall be considered a party to the action and shall

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be provided reasonable notice of any and all administrative hearings or meetings involving the

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parties in such matter and shall be the opportunity to participate in such meetings, hearings or

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other administrative procedures of such entity, of which such opportunity may be waived only by

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writing from the director of the office of regulatory reform, for the purpose of assuring the

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efficient and consistent implementation of rules and regulations in order to foster the creation and

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retention of jobs in Rhode Island or otherwise foster economic development in Rhode Island

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consistent with the purposes of this act. Any intervention or participation by the director of the

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office of regulatory reform, other than in contested cases, shall not be deemed to violate the

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provisions of the Rhode Island administrative procedures act at Title 42, Chapter 35 of the

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general laws. Provided, however, all contested cases shall be conducted in accordance with the

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provisions for hearings of contested cases in the administrative procedures act, Title 42, Chapter

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35, of the general laws. As used in this section, the term "contested case" means a proceeding in

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which conflicting rights between adverse parties are required by law to be determined in an

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adversary proceeding that is judicial or quasi-judicial in nature, and not purely administrative in

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character, before and/or by an agency.

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     (2) Promptly upon such intervention as set forth in subdivision (1) above, the director of

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the office of regulatory reform shall publish its rationale for its intervention in such pending

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regulatory or permitting matter. The director of the office of regulatory reform may so intervene

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upon findings that:

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     (i) That the pending, regulatory or permitting action, in and of itself or as part of a

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regulatory process, has significant economic development impact upon the state or any

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municipality herein; and

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     (ii) The pending regulatory or permitting matter, in and of itself or as part of a regulatory

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process, has significant impact on any industry, trade, profession or business that provides

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significant jobs or other significant economic development impact, including municipal and state

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taxes or other revenues, to the state or its citizens.

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     (iii) The office of regulatory reform shall upon the conclusion of each fiscal quarter

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promptly provide to the office of the governor and the general assembly through the offices of the

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president of the senate and the speaker of the house of representatives a written report identifying:

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     (A) All matters in which the director of the office of regulatory reform intervened;

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     (B) The rationale for his or her intervention;

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     (C) The status of the pending regulatory or permitting matter; and

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     (D) Any observations or recommendations from the director of the office of regulatory

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reform with respect to such regulatory or permitting policies or procedures relating to the subject

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matter of such pending regulatory or permitting matters in which the director so intervened.

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     (3) The office of regulatory reform is authorized to appear as an amicus curiae in any

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legal proceeding relating to any matter.

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     (5) The office of regulatory reform is authorized to coordinate, provide technical

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assistance, and oversee state agency regulatory review and accompanying economic impact

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statements on small businesses.

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     42-64.13-8. Regulatory analysis responsibilities. -- The office of regulatory reform

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shall have the following regulatory analysis and reporting responsibilities:

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      (1) The office of regulatory reform shall, upon the conclusion of each fiscal year, prepare

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and publish a report on the regulatory processes of state and municipal agencies and permitting

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authorities through a review and an analysis of proposed and existing rules and regulations to: (i)

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Encourage agencies to eliminate, consolidate, simplify, expedite or otherwise improve permits,

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permitting procedures and paperwork burdens affecting businesses, municipal government

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undertakings, industries and other matters of economic development impact in the state; (ii)

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Analyze the impact of proposed and existing rules and regulations on matters such as public

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health, safety and welfare, including job creation, and make recommendations for simplifying

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regulations and regulatory processes of state and municipal agencies and permitting authorities;

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(iii) Propose to any state or municipal agency consideration for amendment or repeal of any

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existing rules or procedures which may be obsolete, harmful to the economy or job growth in the

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state, or excessively burdensome with respect to any state or federal statutes or regulations; and

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(iv) Assist and coordinate with all agencies during the periodic review of rules required by

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section 42-35-3.4 of the Administrative Procedures Act.

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      (2) The ombudsman of the office of regulatory reform shall implement the provisions of

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section 42-35.1-1 of the general laws entitled Small Business Regulatory Fairness and

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Administrative Procedures, and shall be the small business regulatory enforcement office

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pursuant to section 42-35.1-5 of the general laws.

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     SECTION 4. This act shall take effect upon passage.

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LC02179/SUB A/2

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ADMINISTRATIVE

PROCEDURES

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     This act would require a cost/benefit analysis and periodic review of all regulations

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governing or impacting small businesses.

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     This act would take effect upon passage.

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LC02179/SUB A/2

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