Report Title:

Small Business; Remove Sunset

 

Description:

Removes the June 30, 2002, repeal date of the Hawaii Small Business Regulatory Flexibility Act and makes various amendments.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1251

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO SMALL BUSINESS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The purpose of this Act is to continue to assist Hawaii small businesses by:

(1) Making the Small Business Regulatory Flexibility Act and the small business regulatory review board permanent through removal of the sunset date in the enabling;

(2) Amending the size definition of "small business" to focus regulatory relief efforts on those businesses that do not have the resources to properly respond to regulations;

(3) Removing the requirement that members of the small business regulatory review board must come from firms that meet the size standard;

(4) Deleting the petition for an agency to review previously issued final rules since that process is duplicative of the existing petition process in section 91-6, Hawaii Revised Statutes;

(5) Allowing the small business regulatory review board to make nominations to fill board vacancies rather than have nominations made by ad hoc agency advisory committees; and

(6) Deleting the provision for a public defender to provide free legal services to small businesses that have been cited by an agency under certain conditions.

SECTION 2. Act 168, Session Laws of Hawaii 1998, section 2, is amended by amending the definition of "small business" in section -1 to read as follows:

""Small business" means a for—profit enterprise consisting of fewer than [two] one hundred full-time or part-time employees."

SECTION 3. Act 168, Session Laws of Hawaii 1998, section 2, is amended by amending subsections (b) and (c) of section    —5 to read as follows:

"(b) The board shall consist of eleven members, who shall be appointed by the governor pursuant to section 26—34. [Selection for the initial board shall come from a list of nominees submitted by the small business task force on regulatory relief. Thereafter, the nominations] Nominations to fill vacancies shall be made from names submitted by [any and all of the departmental advisory committees on small business.] the board. The appointments shall reflect representation of a variety of [small] businesses in the State; provided that no more than two members shall be representatives from the same type of [small] business, and that there shall be at least two [small business] representatives from each county.

(c) All members of the board shall be either a current or former owner of officer of a [small] business and shall not be an officer or employee of the federal, state, or county government. [The governor shall appoint the initial chairperson of the board and a] A majority of the board shall elect [subsequent chairpersons.] the chairperson. The chairperson shall serve a term of not more than one year, unless removed earlier by a two-thirds vote of all members to which the board is entitled."

SECTION 4. Act 168, Session Laws of Hawaii 1998, section 2, is further amended by repealing section —6:

["§ -6 Petition for regulatory review. (a) In addition to the basis for filing a petition provided in section 91—6, any affected small business may file a written petition with the agency that has adopted the rules objecting to all or part of any rule affecting small business on any of the following grounds:

(1) The actual effect on small business was not reflected in, or significantly exceeded, the small business impact statement submitted prior to the adoption of the rules;

(2) The small business impact statement did not consider new or significant economic information that reveals an undue impact on small business; or

(3) These impacts were not previously considered at the public hearing on the rules.

(b) For rules adopted prior to the effective date of this chapter, an affected small business may file a written petition with the agency that adopted the rules objecting to all or part of any rules affecting small business on any of the following grounds:

(1) The rules created an undue barrier to the formation, operation, and expansion of small businesses in a manner that significantly outweighs its benefit to the public;

(2) The rules duplicate, overlap, or conflict with rules adopted by another agency or violate the substantive authority under which the rules were adopted; or

(3) The technology, economic conditions, or other relevant factors justifying the purpose for the rules have changed or no longer exist.

(c) Upon submission of the petition, the agency shall forward a copy of the petition to the board as notification of a petition filed under this chapter. The agency shall promptly consider the petition and may seek advice and counsel regarding the petition from the appropriate departmental advisory committee on small business. Within sixty days after the submission of the petition, the agency shall determine whether the impact statement or the public hearing addressed the actual and significant impact on small business. The agency shall submit a written response of the agency’s determination to the small business review board within sixty days after receipt of the petition. If the agency determines that the petition merits the adoption, amendment, or repeal of a rule, it may initiate proceedings in accordance with section 91-3.

(d) If the agency determines that the petition does not merit the adoption, amendment, or repeal of any rule, any affected small business may seek a review of the decision by the small business regulatory review board. The board shall promptly convene a meeting pursuant to chapter 92 for the purpose of soliciting testimony that will assist in its determination whether to recommend that the agency initiate proceedings in accordance with section 91—3. For rules adopted after the effective date of this chapter, the board may base its recommendation on any of the following reasons:

(1) The actual effect on small business was not reflected in, or significantly exceeded, the impact statement submitted prior to the adoption of the rules;

(2) The impact statement did not consider new or significant economic information that reveals an undue impact on small business; or

(3) These impacts were not previously considered at the public hearing on the rules.

(e) For rules adopted prior to the effective date of this chapter, the regulatory review board may base its recommendation to the agency on any of the following reasons:

(1) The rules created an undue barrier to the formation, operation, and expansion of small businesses in the State in a manner that significantly outweighs its benefit to the public;

(2) The rules duplicate, overlap, or conflict with rules adopted by another agency or violate the substantive authority under which the rules were adopted; or

(3) The technology, economic conditions, or other relevant factors justifying the purpose for the rules have changed or no longer exist.

(f) If the small business regulatory review board recommends that an agency initiate rulemaking proceedings for any reason provided in subsection (d) or (e), it shall submit to the legislature an evaluation report and the agency’s response as provided in subsection (c). The legislature may subsequently take such action in response to the evaluation report and the agency's response as it finds appropriate.

(g) Nothing in this section shall entitle an affected small business to a contested case hearing under chapter 91."]

SECTION 5. Act 168, Session Laws of Hawaii 1998, is amended by repealing section 3:

["SECTION 3. The Hawaii Revised Statutes is amended by adding a new chapter to title 3 to be appropriately designated and to read as follows:

"CHAPTER

SMALL BUSINESS DEFENDER

§ -1 Small business defender. (a) There is established within the legislature a small business defender. The small business defender shall be appointed by the senate president and speaker of the house of representatives. The senate president and speaker of the house of representatives shall determine the salary of the small business defender. The senate president and speaker of the house of representative may also appoint administrative support personnel who shall assist and support the small business defender.

(b) Unless otherwise specifically provided by law, and upon written request by a small business, the small business defender may represent, defend, and provide legal representation to any small business, during any adjudicatory or contested proceeding involving any civil citation issued by a state or county agency in which the small business is a party; provided that the small business shall seek its own legal representation whenever the potential remedies against the small business may include fines or penalties that exceed $25,000 or may result in the suspension or revocation of a license. The small business defender shall have the discretion to accept or refuse any case for good cause. The small business defender may also engage in the following activities:

(1) Advocate and negotiate, upon consultation with the small business regulatory review board, with federal, state, and county agencies and officials on any matter relating to and promoting the interests of small business;

(2) Conduct investigations to secure information useful in the lawful administration of any provision in this chapter;

(3) Refer any appropriate matter to the auditor or ombudsman for examination or investigation; and

(4) Do any and all things necessary to effectuate the purposes of this chapter.

(c) Each small business shall waive and release any and all claims, damages, causes of action, and any request for relief made against the small business defender or staff, the State or counties, their officers, employees, or agents, and arising from the legal representation of the small business by the small business defender provided under this section.

§ -2 Annual report. The small business defender shall submit an annual report to the legislature detailing its activities and expenditures no later than twenty days prior to convening of the regular session."]

SECTION 6. Act 168, Session Laws of Hawaii 1998, is amended by amending section 5 to read as follows:

"SECTION 7. This Act shall take effect on July 1, 1998[, and shall be repealed as of June 30, 2002]."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon approval.

INTRODUCED BY:

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