SB435

Report Title:

Small Business Advocacy; DBEDT

Description:

Establishes an office of small business advocacy within the department of business, economic development, and tourism and amends the functions of the small business regulatory review board by including advocacy as one of its functions. Appropriates funds to establish small business advocacy program.

THE SENATE	S.B. NO.	435
TWENTY-THIRD LEGISLATURE, 2005
STATE OF HAWAII

A BILL FOR AN ACT

relating to small business advocacy.

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

SECTION 1. Chapter 201M, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§201M- Office of small business advocacy; established. There is established within the department of business, economic development, and tourism, an office of small business advocacy. The director of business, economic development, and tourism shall appoint an executive director of the office of small business advocacy who shall be exempt from chapter 76.

§201M- Salary and duties of executive director; benefits. (a) The director of business, economic development, and tourism, in consultation with the small business regulatory review and advocacy board, shall define the executive director's powers and duties and fix the executive director's compensation. The executive director and staff members of the office of small business advocacy shall be entitled to participate in any public employee benefit plan.

(b) In addition to the powers and duties established by the director of business, economic development, and tourism and the small business regulatory review and advocacy board, the executive director of the office of small business advocacy shall:

(1) Assist in the development of advocacy policies and directives to nurture, support, and promote small business sustainability and growth;

(2) Obtain and provide information on financing assistance for small businesses;

(3) Coordinate with the procurement policy board established under section 103D-201 and assist, and as practicable, educate and train small businesses on conducting business with public agencies through the procurement process established under chapter 103D;

(4) Act as a clearinghouse of information for small businesses to utilize when trying to obtain services, real estate, or other things necessary to start, sustain, or grow a small business;

(5) Provide or refer persons to small business counseling services to assist such persons in the starting, sustaining, or growing of a small business;

(6) Coordinate and disseminate information and services provided by other public and private agencies that are of benefit to small businesses; and

(7) Do any and all things necessary to promote the proliferation and success of small business in the State, as directed by the director of business, economic development, and tourism and the small business advocacy board."

SECTION 2. Section 201M-1, Hawaii Revised Statutes, is amended by amending the definition of "board" to read as follows:

""Board" means the small business regulatory review and advocacy board."

SECTION 3. Section 201M-3, Hawaii Revised Statutes, is amended to read as follows:

"[[]§201M-3[]] Small business statement after public hearing. For any proposed rules that affect small business, the agency shall also submit a small business statement to the small business regulatory review and advocacy board and the departmental advisory committee on small business after the public hearing is held. This section shall not apply to emergency rules. The small business statement required by this section shall provide the following information:

(1) A description of how opinions or comments from affected small business were solicited, a summary of the public and small business comments, and a summary of the agency's response to those comments;

(2) The number of persons who:

(A) Attended the public hearing;

(B) Testified at the hearing; and

(3) If there was a request to change the proposed rule at the hearing in a way that affected small business, a statement of the reasons for adopting the proposed rule without the requested change."

SECTION 4. Section 201M-5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§201M-5[]] Small business regulatory review and advocacy board; powers. (a) There shall be established, within the department of business, economic development, and tourism[,] for administrative purposes, a small business regulatory review and advocacy board to consider any request from small business owners for review of any rule adopted by a state agency and to make recommendations to the agency or the legislature regarding the need for a rule change or legislation. For requests regarding county ordinances, the board may make recommendations to the county council or the mayor for appropriate action.

(b) The board shall consist of eleven members, who shall be appointed by the governor pursuant to section 26-34. Nominations to fill vacancies shall be made from names submitted by the [~~review board.~~] small business community. 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 business[,] and that there shall be at least two representatives from each county.

(c) All members of the board shall be either a current or former owner or officer of a small business and shall not be an officer or employee of the federal, state, or county government. A majority of the board shall elect 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.

(d) A majority of all the members to which the board is entitled shall constitute a quorum to do business, and the concurrence of a majority of [~~all the members to which the board is entitled~~] the quorum shall be necessary to make any action of the board valid.

(e) In addition to any other powers provided by this chapter, the board may:

(1) Adopt any rules necessary to implement this chapter;

(2) Organize and hold conferences on problems affecting small business; [~~and~~]

(3) Develop and adopt advocacy policies and directives to nurture, support, and promote small business sustainability and growth;

(4) Advise the small business advocate regarding the implementation of small business advocacy policies and directives;

(5) Identify laws, government regulations, and practices that are proven obstacles for small businesses; and

[~~(3)~~] (6) Do any and all things necessary to effectuate the purposes of this chapter.

(f) The board shall submit an annual report to the legislature twenty days prior to each regular session, detailing any requests from small business owners for review of any rule adopted by a state agency, [~~and~~] any recommendations made by the board to an agency or the legislature regarding the need for a rule change or legislation[.], and the actions taken to implement subsection (e)(3), (4), and (5)."

SECTION 5. Section 201M-6, Hawaii Revised Statutes, is amended by amending subsections (c), (d), (e), and (f) to read as follows:

"(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 and advocacy 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 and advocacy 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 July 1, 1998, 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 July 1, 1998, the regulatory review and advocacy 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 and advocacy 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."

SECTION 6. Section 201M-7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§201M-7[]] Periodic review; evaluation report. (a) Each agency having rules that affect small business in effect on July 1, 1998, shall submit, by June 30 of each odd-numbered year, a list of those rules to the small business regulatory review and advocacy board. The agency shall also submit a report describing the specific public purpose or interest for adopting the respective rules and any other reasons to justify its continued implementation.

(b) The small business regulatory review and advocacy board shall provide to the head of each agency a list of any rules adopted by the agency that affect small business and have generated complaints or concerns, including any rules that the board determines may duplicate, overlap, or conflict with other rules[,] or exceed statutory authority. Within forty-five days after being notified by the board of the list, the agency shall submit a written report to the board in response to the complaints or concerns. The agency shall also state whether the agency has considered the continued need for the rules and the degree to which technology, economic conditions, and other relevant factors may have diminished or eliminated the need for maintaining the rules.

(c) The board may solicit testimony from the public regarding any report submitted by the agency under this section at a public meeting held pursuant to chapter 92. Upon consideration of any report submitted by an agency under this section and any public testimony, the small business regulatory review and advocacy board shall submit an evaluation report to each regular session of the legislature in even-numbered years. The evaluation report shall include an assessment as to whether the public interest significantly outweighs a rule's effect on small business and any legislative proposal to eliminate or reduce the effect on small business. The legislature may take such action in response to the report as it finds appropriate."

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2005-2006, and the same sum, or so much thereof as may be necessary for fiscal year 2006-2007, for the purpose of funding the operations of the office of small business advocacy established under this Act.

SECTION 8. The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2005.

INTRODUCED BY:	_____________________________