Small Business Rule Relief Bills Introduced

It’s no secret that government issued rules can have a severe impact on small businesses. For nearly a year, the Ohio Small Business Council (OSBC) has been working on ideas aimed at improving the state agency rule-making and rule-review process. Based on suggestions from OSBC members, two pieces of legislation, Senate Bill 303 and House Bill 503, were recently introduced. These pieces of legislation are companion bills, meaning the language is nearly identical.

The overarching concept behind SB 303 and HB 503 is to prevent state agencies from treating department policies, information releases, memos or any other document as if they are rules which are enforceable by the state agency. (Think Ohio EPA, Department of Taxation, Department of Insurance, and so on.) If the legislation were to pass, it would protect businesses from possibly dangerous or costly department policies.

SB 303 and HB 503 include a number of other changes that will benefit the small business community, including:

•The existing definition of what constitutes an “adverse business impact” is modified to include any rule that is shown to decrease the revenue of a business.

•The agency issuing the rule must make any “Incorporation by Reference” (IBR) text available to the public, either electronically or in hard copy, at no cost to the requester.

•Any new fee imposed that is found to create a profit for that state agency will automatically become subject to a review.

•If there is evidence that a rule has an unforeseen negative impact on business, it can be immediately subject to a review, even if the rule is in- between its normal five-year review period.

All rules reviews are conducted by the Joint Committee on Agency Rule Review, whose primary function is to review proposed new, amended, and rescinded rules to ensure they do not exceed the agency’s rulemaking authority.

Last Monday at a press conference to announce the introduction of SB 303 and HB 503, OSBC member and president of Durable Corporation, Tom Secor, spoke regarding his experience with a state agency. Mr. Secor described a run-in his business experienced with the Ohio EPA in the 1990’s. His business had been using scrap tires as a raw material for certain product lines, but little did he know that the Ohio EPA would begin regulating the storage and discarding of those scrap tires. This new regulation caused such a significant negative impact on his business that he ultimately had to lay off dozens of employees. If SB 303 or HB 503 had been in place at the time, the accelerated five-year rule review provision would have allowed for the possibility of having the destructive rule repealed.

As SB 303 and HB 503 advance through their respective chambers, OSBC will continue to be involved. However, it is critical that lawmakers hear directly from business owners as well. If you have a story that you believe would be helpful in showing the importance of this legislation, please let us know.