Senate Bill No. 11
(By Senator Facemyer)
____________
[Introduced January 9, 2002; referred to the Committee
on the Judiciary.]
____________
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
as follows:
ARTICLE 8. REGULATORY FLEXIBILITY ACT.
§29A-8-1. Short title.
This article may be cited as the "West Virginia Regulatory
Flexibility Act."
§29A-8-2. Legislative findings.
(a) The Legislature finds:
(1) In numerous instances compliance with the rules
promulgated by state agencies imposes unreasonable burdens on
individuals of limited means and on businesses and organizations
engaged in or planning business projects on a small scale;
(2) 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;
(3) This burden is adversely affecting competition in the
marketplace;
(4) 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;
(5) 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;
(6) The collection of information by the state has not
weighed adequately 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 commodity; and
(7) The deep public dissatisfaction with the regulatory
process has stemmed in large part from a public perception of
the failure of burdensome rules to correct key problems.
(b) The Legislature 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. Fewer and simpler requirements should be required of
individuals, small organizations, small businesses and larger
private entities engaged in business activity on a small scale.
To achieve these ends, state agencies should issue regulations
which rules proportionately to the size and scope of the
business or activity being regulated.
§29A-8-3. Definitions.
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
departments authorized by statute to make, adopt or promulgate
rules.
§29A-8-4. Analysis of cost to state; filing with legislative
auditor.
(a) Prior to the adoption and promulgation of a proposed
administrative rule, each state agency shall conduct an analysis
for the purpose of making a determination, based on the amount
of information collection the proposed rule would necessitate,
of the approximate amount of legal, enforcement, consulting and
accounting costs to the state which would be so necessitated and
of the approximate overall cost to persons or businesses other
than public entities of complying with the rule. Pursuant to an
analysis, of the cost compared with the importance of the public
policy to be achieved, the agency shall make a further
determination whether the 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 administrative rule
shall submit the rule, together with the analysis of its costs
and benefits as herein above provided, to the legislative
auditor. The legislative auditor shall review the proposed rule
and the analysis of costs and benefits and shall issue a
statement to the agency within ninety days of receipt of the
rule containing comments on the impact of the proposed rule. The statement shall also contain comments on the impact of the
proposed rule on businesses not directly regulated by it.
(c) The head of the agency proposing 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.
§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 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 would
apply, the agency shall issue the new rule in two or more parts,
with each part containing varying requirements for performance
or reporting, 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)
the value of the regulated 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 uniform criteria to facilitate
determinations by those engaged in the businesses and business
activities of the applicability of rules issued hereunder.
(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 in its official standards for
exemptions 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 exemptions will be included in the agency's official
standards. If an agency response is not postmarked within sixty
days from the date of receipt of an application, the application
shall be considered approved.
(c) The head of any agency issuing a rule in two or more
parts, shall transmit a copy, together with statements and
comments made 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 may 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
article.
During the five-year period beginning with the date of
enactment of this article, each agency shall review its
substantive rules which are in effect on that date and make the
determinations to which section four of this article refers with
respect to each rule.
NOTE: The purpose of this bill is to check the increasing
volume of administrative rules, by providing flexibility in how
the state agencies and private businesses are to be affected by
rules.
This article is new; therefore, strike-throughs and
underscoring have been omitted.