Senate Bill No. 392
(By Senators Anderson, Sharpe, Buckalew, Ross and Bowman)
[Introduced February 16, 1995; referred to the Committee
on Small Business; and then to the Committee on Finance.]
A BILL to amend chapter twenty-nine-a of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
by adding thereto a new article, designated article eight,
relating to the creation of the "West Virginia Regulatory
Flexibility Act"; legislative purpose; definitions; analysis
of cost to state filed with legislative auditor; rules
issuing in two or more parts; provisions not to apply in
case of emergency; and requiring agencies to review rules
after enactment of this article.
Be it enacted by the Legislature of West Virginia:
That chapter twenty-nine-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article eight, to read
ARTICLE 8. REGULATORY FLEXIBILITY ACT.
§29A-8-1. Short title.
This article shall be known and may be cited as the "West
Virginia Regulatory Flexibility Act."
§29A-8-2. Legislative finding.
The Legislature finds that in numerous instances compliance
with the rules issued and promulgated by state agencies imposes
unreasonable demands and burdens on individuals of limited means
and on businesses and organizations engaged in or planning
business projects on a small scale; that a regulatory dilemma has
developed in which efforts to protect the health, safety and
economic welfare of the people of this state have created a
burden of required legal, accounting and consulting services
which is causing economic harm to individuals and organizations
of limited resources, and is adversely affecting competition in
the marketplace; that the sheer scope and volume of rules already
in place has created high entry barriers in many industries, and
discouraged potential entrepreneurs from introducing beneficial
products and processes; that the practice of treating all
regulated individuals, organizations, businesses and business
activities as equivalent, for purposes of regulatory and
paperwork requirements, has led to inefficient use of the
resources of some state agencies and to enforcement problems;
that the collection of information by the state has not
adequately weighted the privacy rights of individuals and
enterprises against the state's need to know because the design
of the regulatory process has encouraged regulators to treat information as a free good; and that the deep public
dissatisfaction with the regulatory process has stemmed in large
part from a public perception of the failure of burdensome
regulations to correct key problems.
The Legislature, therefore, declares it to be in the best
interest of its citizens that this state establish as a principle
of regulatory issuance that regulatory and informational
requirements fit the scale of the persons and activities being
regulated, that fewer and simpler requirements be made of
individuals, small organizations, small businesses and larger
private entities engaged in business activity on a small scale,
and that to achieve these ends state agencies should be empowered
and encouraged to issue regulations which apply differently to
different segments of regulated industries and activities.
As used in this article:
(a) "Administrative rule" or "rule" means any agency
statement which is made, adopted and promulgated pursuant to law,
is of general applicability and continuing effect and which
implements or interprets any law or policy and applies to persons
engaged in business.
(b) "Business" means any trade, business or professional
entity or activity which is conducted for profit.
(c) "Small business" means any independently owned and
operated enterprise which is not dominant in its field of operation; has less than thirty employees and gross receipts of
less than four million dollars; or, any other business which an
agency using this criteria would deem as a small business.
(d) "Small organization" means any unincorporated business,
sheltered workshop or nonprofit enterprise which is not dominant
in its field of operation; has gross receipts of less than four
million dollars; or, any other organization which an agency using
this criteria would deem a small organization.
(e) "State agency" or "agency" means each of the principal
departments in the executive branch of the state government, and
all boards, divisions, commissions, agencies, departments,
councils, authorities, offices or officers within any such
departments now existing or hereafter established and authorized
by statute to make, adopt or promulgate rules.
§29A-8-4. Analysis of cost to state; filed with legislative
(a) Each state agency shall, prior to the adoption and
promulgation of a proposed administrative rule, conduct an
analysis for the purpose of making a determination, based on the
amount of governmental information collection the proposed rule
would necessitate, of the approximate amount, if any, of legal,
enforcement, consulting and accounting costs to the state which
would be so necessitated and of the approximate overall cost to
persons other than public entities of compliance with the rule,
averaged, for each person, business concern and organization affected by it, as compared with the importance of the public
policy to be achieved, and shall, pursuant to such an analysis,
make a further determination whether such rule should apply at
all or in the same manner to persons, businesses and
organizations of various sizes and resources, or to business
operations of different scope.
(b) The head of any agency preparing any such administrative
rule shall submit the rule, together with the analysis of its
costs and benefits as hereinabove provided, to the legislative
auditor. The legislative auditor shall review the proposed rule
and the analysis of costs and benefits and shall, if it
determines that the proposed rule will have a substantial effect
on any significant number of businesses, issue a statement to the
agency within ninety days of receipt of the rule, containing
comments on the impact of the proposed rule should it be
promulgated. The statement shall also contain comments on the
impact of the proposed rule on businesses not directly regulated
(c) The head of the agency proposing such an administrative
rule shall issue a notice that the analysis of costs and benefits
and any statement on the impact of the proposed rule made by the
legislative auditor is on file with the secretary of state and
the notice is to be included with the public notice which is to
be distributed to interested persons and published in the state
register pursuant to the provisions of article three of this chapter.
(d) The legislative auditor and the secretary of state shall
maintain a file of all administrative rules submitted to them
pursuant to this article along with the analysis of costs and
benefits and the statement of impact, if any.
§29A-8-5. Rules issuing in two or more parts.
(a) Whenever both the results of the analysis by a state
agency and comments by the legislative auditor indicate the
desirability and feasibility of promulgating rules which differ
with respect to their substance or applicability to various
segments of the businesses or business activities to which the
rules, as proposed, would apply, the agency shall issue the new
rule in two or more parts, with each part containing varying
requirements for performance or reporting, as appropriate, to
persons, business concerns and organizations of varying economic
sizes and resources engaged in business activities of varying
scope, these varying requirements shall take into account: (1)
The capitalization, annual income, number of employees and such
other factors as bear on the ability of the regulated persons,
concerns or organizations to sustain the costs attached to
compliance with the rule; and (2) in the case of regulated
activities, the value of the activities to the economy of the
state and the welfare of its citizens. In establishing segments
of regulated businesses or business activities for the purposes
of this section, agencies shall establish objective and, to the maximum extent feasible, uniform criteria to facilitate
determinations by those engaged in such businesses and business
activities of the applicability to themselves of rules issued
(b) Whenever a state agency proposes to issue or issues a
rule, any business affected directly or indirectly by the rule
may at any time apply to the agency for any exemption to the rule
as it believes to be authorized by subsection (a) of this
section. The agency shall review all applications and may
include any exemptions requested therein in its official criteria
and standards for such exemptions, or in any revision thereof,
upon finding that the public health, safety or welfare will be
protected. Within sixty days after its receipt of an application
the agency shall inform the applicant of: (1) Its rejection of
the application and its reasons therefor; or (2) its approval of
the application and the approximate date when the applied for
exemptions will be included in the agency's official criteria and
standards therefor, or in any revision thereof. If an agency
response is not postmarked within the aforesaid sixty days, the
application shall be considered approved.
(c) Notwithstanding any other provisions of this chapter or
any other law, the head of any agency issuing such a rule in two
or more parts, as hereinabove provided, shall upon issuing the
rule transmit a copy of the same, together with such statements
and comments as may be made in connection therewith by the legislative auditor to the president of the Senate and to the
speaker of the House of Delegates.
§29A-8-6. Provisions not to apply in case of emergency.
The provisions of this article shall not apply when an
agency finds that an emergency exists which requires the
immediate adoption of a rule and states in writing its reasons
for that finding pursuant to the provisions of section fifteen,
article three of this chapter.
§29A-8-7. Agencies to review rules after enactment of this
Each agency shall, during the five-year period beginning
with the date of enactment of this article, review its
substantive rules which are in effect on such date and make the
determinations referred to in section four hereof with respect to
NOTE: The purpose of this bill is to check the increasing
volume of administrative regulations, by providing flexibility in
how the state agencies and private businesses are to be affected
by such regulations.
This article is new; therefore, strike-throughs and
underscoring have been omitted.