Forward
Critical to small businesses’ success is government that works for them
and with them. As most entrepreneurs know, government comes in many forms at all
levels—such as federal taxes, state workers’ compensation laws, and county
licensing regulations. Under its statutory mandate, the Office of Advocacy has endeavored
throughout its 20- year history to "measure the direct costs and other effects of
government regulations on small business" at all levels. After considering the
effects, we have recommended specific government policy and program solutions for
successful small businesses.
These solutions have resulted in major victories at the federal level. Many regulatory
burdens have been reduced or eliminated for small business in their day-to-day operations.
Congress has passed legislation that gives small businesses’ more information about
bank lending to entrepreneurs. And programs and policies have been adopted for increasing
small businesses’ share of federal government procurement dollars. However, as Milton
Stewart—the first chief counsel for advocacy—recognized, Advocacy has to
confront government at all levels on behalf of small businesses. Then-Chief Counsel
Stewart established a tradition of bringing together both state policy makers and small
business owners at state conferences to hammer out solutions. We have continued this
tradition. In December 1998, Advocacy hosted Vision 2000: The States and Small Business
Conference. At this event, we realized one overwhelming thing—states and local
governments and organizations are making tremendous strides to serve small businesses.
However, in an era of "downsizing," many federal programs and regulations
have been pushed off to state and local governments. It is possibly more critical now more
than ever for the Office of Advocacy, working with our small business partners and policy
makers, to make proposals for eliminating excessive and unnecessary regulations on small
business and bringing valuable resources to entrepreneurs.
While small business policies have come a long way, these successes indicate a
beginning—not an end. Building on these successes, the Office of Advocacy crafted a
blueprint for a comprehensive approach to small business policies and programs in every
state. The Models for Success is a roadmap for state and local leaders to serve
small businesses and ultimately their community.
The Office of Advocacy’s priority is recommending specific measures for
"creating an environment in which all businesses will have the opportunity to compete
effectively and expand to their full potential." I take that statutory mandate very
seriously, and we are pleased to offer the Models for Success towards that goal.
Jere W. Glover
Chief Counsel for Advocacy
Table of Contents
Introduction *
Leadership in Small Business Issues *
Governor’s Advisory Council *
Legislative Committee on Small Business *
Office of Advocacy/Ombudsman *
State Small Business Conference *
Regulations that Work for Small Business *
Compliance Assistance *
One-Stop Assistance *
Ombudsman in Every Agency *
Compliance Guidance *
Training Regulators *
Rule Development and Review *
Small Business Outreach and Participation *
Economic Analysis and Regulatory Alternatives *
Oversight *
Periodic Reviews *
Paperwork Reduction *
Equal Access to Justice *
Small Business Development *
Networking Existing Resources *
Online Services *
Partners *
Expanding Business Development *
One-Stop Shops *
Training and Certification of Economic Development Professionals *
Resources *
Serving Communities *
Home-based Businesses and Microenterprises *
Rural and Urban *
Minority-owned Businesses *
Women-owned Businesses *
Industries and the Work Force *
Access to Capital *
Micro-lending *
Incubator *
Seed and Patient Capital *
Small Business Loan Guarantees *
Venture Capital *
Government Procurement Opportunities *
Marketing Development *
Agency Goals and Strategies for Small Business Contracting *
Prompt Payment *
Appendices
Appendix A: North Carolina executive order *
Appendix B: Oklahoma’s Committees on Small Business--Chief Counsel’s
Special Awards for Small Business Advocacy *
Appendix C: Arizona Small Business Advocate job description and Arizona Business
Connection assistance materials *
Appendix D: Washington State Governor’s Conference on Small Business top 10
recommendations *
Appendix E: Maryland Office of Business Advocacy brochure *
Appendix F: Excerpt from Washington’s Online Permit Handbook *
Appendix G: Curriculum of Washington Program *
Appendix H: Compendium of state regulatory flexibility laws *
Appendix I: Utah Code Ann. § 9-2-302 (1998) *
Appendix J: Arizona Governor’s regulatory review council *
Appendix K: California Executive order W-144-97 *
Appendix L: Utah Code Ann. § 78-27a-4, § 78-27a-5; Rev. Code Wash. (ARCW)
§ 4.84.350 (1999) *
Appendix M: ACE-Net brochure *
Appendix N: PRO-Net information *
Appendix O: Arizona contractors’ bill of rights *
Appendix P: Maryland Real Property Code Ann. § 9-302 (1998) *
Introduction
Models for Success: Model State Small Business Programs and Policies
has been developed as a template for state policymakers and small business leaders. After
years of experience with state policies and programs, the Office of Advocacy at the U.S.
Small Business Administration is publishing Models for Success as a menu of program
and policy options.
Experience has shown that small businesses thrive when state and local governments
recognize the importance and characteristics of small businesses. By formulating a plan
that supports small business growth, governments build strong foundations for entire
communities. This publication was inspired by Vision 2000: The States and Small
Business Conference held December 4-5, 1998, in Washington, D.C. During the event,
successful small business policies and programs at the state and local level were
highlighted. Award-winning programs and policies advancing small business are outlined in Models
of Excellence (Office of Advocacy, U.S. Small Business Administration, 1998). This
publication goes one step further and provides a blueprint for state government and small
business leaders. Small businesses will lead the economy into a prosperous new millennium,
and states should support their contributions. Any state should have at least these five
fundamental elements in its small business plan:
- Leadership in Small Business Issues;
- Regulations that Work for Small Business;
- Small Business Development;
- Access to Capital; and
- Government Procurement Opportunities.
Each state will have differing needs, but these five components are necessary for every
state’s plan. Special demands can be addressed in each area. For instance, rural
business development may be an important aspect of a state’s economy while urban
businesses may be more advanced and looking for venture capital. Strengths among different
industries will obviously affect programs’ emphases, such as work force training or
international trade assistance.
The appendices include examples of many of the models covered in the Models for
Success, and the Office of Advocacy will gladly provide more information on any
policies or programs addressed. States have made tremendous strides to recognize and
enhance the value of small business. These initiatives are a beginning—not an
end—for successful programs and policies for small business.
Ultimately, the purpose of the Models for Success is to give small business
leaders and state policymakers a guide to developing small business programs and policies
that work.
Leadership in Small Business Issues
The bottom line: small business wants a voice in state government. When
policymakers make important business and economic decisions, guidance from large business
is common. But historically, small businesses were often surprised by new initiatives,
harmed by the long-term impact of policies, and left out of benefits derived from
programs. Some states have successfully welcomed entrepreneurs to the table and expanded
outreach to small firms.
Governor’s Advisory Council
Assure that small businesses have the ear of leadership by forming an official
government advisory committee that reports directly to the governor. Formed by executive
order, the council may include small businesses and ex-officio members from key state
leadership positions (e.g., secretary of commerce and lieutenant governor). Councils
should make recommendations to the governor and the legislature for legislation,
regulations, programs and other initiatives to boost small business growth. States such as
North Carolina and Oregon have used the small business councils to target tax and
regulatory reform efforts, increase funding for technology, and creating a clearinghouse
for small business. (Appendix A: North Carolina executive order.)
Legislative Committee on Small Business
State legislatures have often focused on the needs of business with the creation of
committees on commerce or economic development. However, agendas are often dominated by
big business while the impact of legislation on small firms goes unexplored. To address
this problem, state legislatures have developed small business committees to spearhead new
legislation or serve as a watchdog in the legislature. For example, Oklahoma’s
Committees on Small Business, in both the House and Senate, drove a small business agenda
that resulted in the enactment of the Oklahoma Regulatory Review Act and included small
business relief in omnibus tax legislation in 1998. (Appendix B: Oklahoma’s
Committees on Small Business--Chief Counsel’s Special Awards for Small Business
Advocacy.)
Office of Advocacy/Ombudsman
To amplify the voice of small business, policymakers should designate a single
person or office to speak independently for small firms within the government. The
ombudsman or advocate role can take various forms but it should be a high-ranking position
that allows direct access to the governor and legislature. For instance, Lieutenant
Governor Mary Fallin serves as the small business advocate in Oklahoma. The role played by
the advocate will vary from broad policy development to problem solving for state small
businesses. Under the Oklahoma model, the lieutenant governor has had a tremendous impact
on policy concerns of small business, such as workers’ compensation reform. In
Maryland, the advocacy office has developed one-on-one assistance for entrepreneurs
traveling the maze of government relations. The governor-appointed advocate in Arizona
also intermediates in problems between state agencies and small firms. Every state may
want to assess what offices or services are now serving small firms, and determine if they
should be consolidated or coordinated by an advocate. Often the independent quality of an
advocate will prevent programmatic oversight and allow for a strong investigative or
research role. (Appendix C: Arizona Small Business Advocate job description and Arizona
Business Connection assistance materials.)
State Small Business Conference
A small business conference is a critical forum for identifying issues important to
entrepreneurs and business growth. Held periodically, the conference may be officially
sponsored by the government or hosted by private sector groups with government
participation such as the Washington State Governor’s Conference. The conferences
have resulted in a consolidated agenda, a network of active small business people, and a
coordinated effort. For example after the Hawaii Congress on Small Business, the
legislature followed the recommendations of the 800-member delegation and enacted the
Regulatory Relief Act of 1998, requiring agencies to conduct small business impact
analysis of new regulations. Policymakers will benefit the most by keeping in touch with
the conference network after the event. (Appendix D: Washington State Governor’s
Conference on Small Business top 10 recommendations.)
Regulations that Work for Small Business
Small businesses are often faced with regulations that simply do not serve
to improve their operations. The reason: rules are usually developed for a big business
environment. Generally, small firms do not have personnel with expertise in tax laws,
environmental hazards, workplace safety, or other regulated sectors. While businesses want
to comply, many times they cannot. In research done by the Office of Advocacy, small
businesses identified four major hurdles to compliance: 1) an unclear understanding of
what is required to comply; 2) frequent changes in regulations; 3) high true costs (both
direct and indirect) to fully comply; and 4) difficulties in obtaining clear answers to
questions about compliance. Most states have taken some type of approach to regulatory
reform, but policies should be evaluated for the real value they offer to small
businesses. An effective approach includes compliance assistance for entrepreneurs and
mechanisms to ensure small business participation in rural development. With these factors
in mind, policymakers need to implement regulations that work for small business.
Compliance Assistance
Compliance assistance can be provided in a variety of ways, but the important
element is access. When new or small firms begin searching for answers, the government
should have a system in place that directs them to answers.
One-Stop Assistance
As discussed in the section under leadership, small businesses may be best served
by just one office that acts as their advocate to and liaison with the government. The
one-on-one approach is successful in Maryland, where the Office of Business Advocacy helps
entrepreneurs through the maze of regulations. However, states must be dedicated to
funding an office with resources. In Arizona’s One Stop Center, four representatives
handle 35,000 calls each year, and software has been designed to allow the office to
provide each caller with a custom package of materials in Spanish or English within 72
hours. The best services include online information, toll-free telephone lines,
publications, informational software, and professionals who are trained in many aspects of
government regulations. In addition, leadership must ensure that other agencies share
information and respect the advice from the small business office. (Appendix E: Maryland
Office of Business Advocacy Brochure.)
Ombudsman in Every Agency
Under the coordination of a one-stop small business office, ombudsmen may be
positioned in key agencies to assure cooperation. If a one-stop office is not funded,
states can benefit from assigning existing personnel within major agencies to be
responsible for responding to compliance questions from small businesses. In Pennsylvania,
the Small Business Resource Center brought together an interagency team from eight
agencies to develop a comprehensive seminar and manual for small businesses. Simple
solutions can work too. A special telephone line designated for small business signals
that the agency is accessible and willing to assist.
Compliance Guidance
For every rule that is issued, small firms have questions. Government can
demonstrate its commitment to compliance by publishing plain language guides. Guides
should be published in English and other languages appropriate to the State or region.
Software with a simple question-and-answer format can take a small business through the
labyrinth of a new rule. Application of a rule will vary and questions arise. Even
short-term telephone hotlines to answer questions about new regulations can be helpful.
Washington’s Department of Ecology uses it’s Web page to post a summary of
environmental permit requirements based on the type of activity or pollution a business
expects to conduct (See http://www.wa.gov/ecology/sea/pac/handbook/low/intro.html).
The online permit handbook allows businesses to view permit requirements at a glance and
provides them with links to the agency contact for each type of permit. Initiatives such
as this show that an agency is accessible and willing to provide guidance and answer
questions. Assistance efforts demonstrate an agency’s dedication to compliance.
(Appendix F: Excerpt from Washington’s online permit handbook.)
Training Regulators
If a state commits to advancing its regulatory assistance programs, government
professionals should be given the tools to deliver the best services. In 1991, the
Washington legislature established an educational and training component within the
state’s Department of Trade and Economic Development. In addition to training for
economic development practitioners, the program offered training on regulatory reform to
state and local regulators. Sessions are held on facilitating regulatory fairness and
developing clear and useful rules and guidelines. Successful programs invest in the
people, delivering on the promises of better government. (Appendix G: Curriculum of
Washington program.)
Rule Development and Review
"Regulatory reform" has been the mantra for many policymakers. States
must assure that reform results in a viable, flexible public policy. Just as small
businesses want to know how to get information about compliance, entrepreneurs want access
to government when policies are developed. If there is an institutional commitment to
public involvement, small businesses will be part of the solution to problems that
government is trying to resolve. (Appendix H: Compendium of state regulatory flexibility
laws.)
Small Business Outreach and Participation
Small business outreach and participation is the key to effective policy
development. By using leadership forums, such as governors’ small business
conferences and chambers of commerce, any agency can gain access to active, thoughtful
small business owners. Some states formalize small business oversight. In Utah, the Small
Business Advisory Council reviews the impact of new rules. Wisconsin requires hearings for
proposed rules that affect small firms. (Appendix I: Utah Code Ann. § 9-2-302.)
Economic Analysis and Regulatory Alternatives
If a rule is proposed, the public deserves to know the impact it will have on the
economy, including business. Many states now require some type of economic analysis
or a regulatory impact statement for every new rule. These laws are similar to the federal
Regulatory Flexibility Act. For instance, Georgia requires an economic impact analysis and
regulatory alternatives. By providing options for a regulation, including an assessment of
their costs, businesses and the public can make informed recommendations to the
government. In states like Kentucky and Delaware, the agencies are required to tier
administrative regulations to reduce the burden on smaller companies. Nearly 20 states
have some type of "regulatory flexibility" law in place. Hawaii’s statute
is probably the most comprehensive of all the state laws. The act establishes: 1) a
petition process to an agency for regulatory review; 2) periodic administrative review of
rules with small business impacts; and 3) an independent regulatory review board to
consider concerns of small businesses and make recommendations to adopt, amend, or repeal
rules.
Oversight
States have created a plethora of oversight mechanisms for regulatory impact
analysis and development of regulatory alternatives. Examples include: a small business
advisory council (Utah), a governor’s regulatory review council (Arizona), and a
small business defender in the legislature (Hawaii). Oversight may be most effective in an
independent agency, the legislature, or the courts. (Appendix J: Arizona review council
description.)
Periodic Reviews
Oversight is also appropriate for existing rules. Periodic reviews of rules provide
policymakers and small businesses an opportunity to reassess the intent, effectiveness and
need for an existing rule. Hawaii’s law includes both an administrative review and
review on petition process.
Paperwork Reduction
Paperwork reduction has been the mantra for many government reform efforts.
Simplification and consolidation of paperwork, recording, and reporting functions are
usually the goal. These efforts may be separate from small business regulatory reform, but
their goals can overlap. One-stop compliance assistance shops can be in the best position
to see how multiple agencies request similar information from a single company.
California has taken an initiative to limit paperwork burdens through sunset reviews of
regulations. In a 1997 executive order, the governor of California required state agencies
to review all existing regulations by 1999. This review includes "changes to the
regulation to minimize overlap and conflicts with comparable federal and local
regulations, unless the differences in state requirements can be shown to provide
additional benefits that exceed the additional costs." (Appendix K: California
Executive Order W-144-97.)
Equal Access to Justice
Fighting an administrative decision in court can substantially drain the financial
resources of a small company. States can alleviate this burden on small businesses by
enacting an equal access to justice act benefiting small businesses that prevail in the
courts against administrative agencies. Utah’s Small Business Equal Access to Justice
Act allows a court to award reasonable litigation expenses to any small business that is
named as a party in an appeal of an administrative action brought by the state if the
small business prevails, and the court finds that the state action was undertaken without
substantial justification. Washington assists small businesses with a similar statute that
puts a $25,000 cap on the award a court may give to the prevailing party. (Appendix L:
Utah Code Ann. § 78-27a-4, § 78-27a-5; Rev. Code Wash. (ARCW) § 4.84.350 (1999).)
Small Business Development
States must take inventory. The plan for a state’s small business
development must entail an assessment of current programs, an understanding of the
characteristics of businesses (size, industry, geographic location, etc.), and
identification of required resources for and barriers to expanding businesses.
Networking Existing Resources
An inventory of small business resources in the state is a simple first step to
helping small business access assistance. By linking small business services and providing
a guide, the state can bring enhanced assistance. Services should be identified from
sources such as licensing offices, loan programs, university entrepreneur programs, small
business development centers, nonprofit organizations, and federal government partners.
Online Services
A published and Web site listing of small business services can provide tremendous
value. Many state home pages are not user-friendly for small business owners, but states
such as Utah have developed a sophisticated approach to help small firms on their home
page (See http://www.state.ut.us).
However, many small firms do not have easy access to the Web, so published materials
should be provided to trade associations, chambers of commerce, and depository libraries.
Partners
Going one step further, some states have established a consortium of organizations
assisting small firms. Formalizing the relationship among different entities, the Delaware
Small Business Resource Partnership was formed in 1996 and is coordinated by the state
economic development office. Business counseling, employment training, and micro-lending
are a few of the services available after one contact with the partnership.
Expanding Business Development
After a state takes inventory of its current
resources for small business, it may identify specific methods and required resources to
expand business development assistance.
One-Stop Shops
With professional personnel and resources, states can institutionalize one-stop
shops for small business owners. These sites offer individualized service. Acting as a
representative to entrepreneurs, the Maryland Office of Business Advocacy assists small
businesses in navigating government regulations and serves as a liaison to state, local,
and federal agencies for new businesses. (Appendix E: Maryland Office of Business Advocacy
brochure.)
Training and Certification of Economic
Development Professionals
To maximize the value of business development programs, the Washington State
Business Assistance Center includes training and certification of economic development
professionals. Pennsylvania’s Department of Community and Economic Development has
also initiated the "Train the Trainer" program to teach the staff of business
associations, chambers of commerce, local development districts, and service providers
(such as bankers and accountants) about regulations and other small business issues, so
they can train their members or clients.
Resources
Planning should be made for professional development, networking a small business
office with other agencies, centralized physical location(s), travel to remote areas, and
sophisticated methods to maximize accessibility to information (online services, toll free
telephone, etc.). State-funded development programs can be leveraged with other sources of
funding. Examples include the state-federal partnerships that fund the small business
development centers, and the University of Washington’s Business and Economic
Development program that teams school resources and business students with companies in
economically depressed areas (See the program’s Web site at http://weber.u.washington.edu/~busdev/report/98/).
Serving Communities
The needs of any one community will vary, so statewide programs may be tailored to
address the needs of specific regions, industries, or businesses of a certain size.
Therefore, thoughtful consideration should be given to the characteristics of the
state’s businesses and the demographics of the state’s population.
Home-based Businesses and Microenterprises
Most states have had a boom in home-based businesses and microenterprises. How to
approach these burgeoning businesses vary but every successful program seems to address 1)
the fundamentals of starting and operating a business; 2) how to comply with laws and
regulations; and 3) how to grow and obtain capital. Some states go further. The
Southeastern Utah Business and Technical Assistance Center, a nonprofit community
corporation sponsored by local governments, offers over 15,000 square feet of space to 20
new businesses. A similar approach was taken by the Bloomington Business Incubator and
Small Business Development Center in Indiana. The STAR Center (Start-up Training
Assistance Resources) in Indiana provides low-cost office space and an aggressive
micro-lending program.
Rural and Urban
States usually have both urban and rural business centers, but business development
must be tailored. Coupled with traditional business development components, rural programs
may be designed to reach fewer people over a larger geographic area. Businesses may be
smaller if customers come from local areas. However, businesses can grow in
sparsely-populated areas by marketing beyond the borders of the community. The Mountain
Association for Community Development in Berea, Kentucky, provides a Internet-based small
business support center that emphasizes the local community and its resources. In South
Dakota, the Northern State University found customers for its local businesses. The
business institute did a market feasibility study to target the top 10 foreign markets for
locally produced Native American products. Urban youth entrepreneurship was championed by
the North Philadelphia Business Chamber of Commerce. The chamber helped urban youth use
the Youth Entrepreneurial Training Program operated by the Pennsylvania Department of
Community and Economic Development.
Minority-owned Businesses
In addition to geographic distinctions, entrepreneurs are often cultivated in their
local ethnic community. Minority-owned and women-owned businesses are growing faster than
other small businesses. Minority-focused small business programs have become very
successful in many states. In New York, the Native American Jump-Start Program has become
successful by linking tribal leadership and the Small Business Development Center in
Albany. In Seattle, Washington, the Black Dollar Days Task Force has focused on promoting
self-sufficiency for inner city African Americans and supported a community endowment
fund.
Women-owned Businesses
Programs targeting women entrepreneurs are booming. The U.S. Small Business
Administration (SBA) has provided matching funds for women business centers throughout the
United States. Women-owned businesses are hitting a new glass ceiling—insufficient
capital to expand. So funding women-owned businesses has become the emphasis of many
public and private efforts. The State-operated Colorado Credit Reserve Program has been
especially helpful to this under-served market with loans under $150,000.
Industries and the Work Force
Any initiative to help small businesses will inevitably lead to a focus on the
prominent or fledgling industries and the ability of the work force to serve those
industries. States may find that industries need new customers or better trained
workers.
The New York State Industrial Retention Network was launched as an initiative to
strengthen New York’s manufacturing sector, to save well-paying jobs, and to build
the capacity of network participants to engage in economic development. The network
consists of over 80 local development corporations, government agencies, financial
institutions, unions, and other interested parties. Participating members use their
organizations’ specific skills to help shared clients. The Illinois Focused
Industrial Retention Support Team is a similar program that identifies and assists small
manufacturers going through a major transition who may need technical, technological,
relocation, or work force training assistance to remain competitive in a global economy.
The Governor of Pennsylvania formed a network of leaders in technology-based industries.
The result was the Technology 21 Initiative, a final report produced by the network that
outlined specific recommendations for the state to implement in order to strengthen
technology-based industries within the state.
Another state network, the Minnesota Jobs Skills Partnership, was formed to assist
businesses and the communities in which they operate to become more competitive through
the development of their work force. The partnership consists of the Minnesota Department
of Trade and Economic Development, Minnesota businesses, and Minnesota educational
institutions. Businesses within the program identify a specialized training need and are
matched with an educational institution. Up to 50 percent of the costs of the proposed
training can be funded by the Partnership.
Access to Capital
Small firms encounter difficulty obtaining financing from traditional
sources such as banks because a small or young firm may lack a revenue history. By
developing and sponsoring new sources of capital to fund small businesses, state and local
governments can enjoy the rewards of generated jobs, exports, and tax revenue that small
firms will bring to the state.
Micro-lending
Micro-lending programs can fill voids in the lending community and provide critical
financing to small businesses that are not quite bankable. State legislators can develop
micro-lending programs to encourage micro-enterprise development within their states. One
such program managed by the Montana Department of Commerce offers loans and operational
and training grants to regional microbusiness development corporations within the state.
These corporations then provide training, technical assistance in business planning, and
loans of up to $35,000 to small businesses that employ less than 10 people and generate
less than $500,000 in gross revenues. Montana’s MicroBusiness Finance Program is
completely self-sustained, and the services rendered by the state-administered
intermediaries are available at low cost.
Incubator
By sponsoring small business incubators in their state, state governments can
encourage local economic growth through job creation and job retention, the revitalization
of under-utilized property and the establishment of public-private partnerships. A small
business incubator can provide shared services and equipment to new businesses at
affordable rents. These services and equipment may include telephone service with voice
mail, facsimile machines, computers, business libraries, copy machines and conference
rooms. Clients of incubators are in an environment where small businesses can share
experiences and conduct business with one another. They share costs and building
maintenance responsibilities. Program sponsors can also identify buyers for the
clients’ own products and services. The Southeastern Utah Business and Technical
Center in Price, Utah, is an example of a small business incubator sponsored by city and
county governments. It is located in a restored building and now accommodates up to 20
small businesses. Since its establishment, the Utah incubator has assisted in the
development of 16 new businesses that have provided more than 300 jobs in Southeastern
Utah.
Seed and Patient Capital
Often a small business idea is too big to develop on personal savings, and too
small to attract venture capitalists. Seed and patient capital programs can fill this gap
in small business financing. Through public-private partnerships, states can develop
venture funds that make equity investments in seed-stage companies seeking financing. An
example of such a fund is the Technology Bridge Program of the Illinois Development
Finance Authority. It is a $5 million venture fund that makes equity investments in early
and seed-stage Illinois technology companies that are seeking financing for the
development, testing or initial marketing of a new technological product, process or
invention. The Illinois partnership provides a steady source of funds and expertise in
reviewing all applications. An important feature of the Technology Bridge Program is that
one or more investors, such as a venture capital firm or experienced "angel"
investor, must match the investment sought from the program fund on at least a one-to-one
basis. The matching requirement leverages limited public resources and ensures significant
due diligence by applicant companies. All proceeds from program investments are used to
provide financing to additional qualified applicants.
Small Business Loan Guarantees
Through tax revenue returns states may be able to double their investment in small
business loan guarantees. To accomplish this, a state agency could manage a trust fund
that would back loan guarantees extended by non-profit small business financial
development corporations (SBFDCs) to lenders on loans that are not bankable for a variety
of reasons, but that experience has shown are sound business risks. To further leverage
public resources, the SBFDCs in California can collectively lend up to four times the
reserves held in the trust fund managed by the California Trade and Commerce Agency. The
California Loan Guarantee Program includes term loans, lines of credit, and farm loans. It
complements SBA loan programs in making loans to some types of businesses ineligible at
SBA, such as agricultural enterprises. It also provides bridge loans to disaster victims
waiting for approval of federal disaster assistance.
Venture Capital
State legislators can facilitate entrepreneurial development within their state by
forming a committee that will develop a new legislative agenda aimed at increasing the
accessibility and availability of equity capital to help fast-growing small businesses.
The committee may include highly experienced professionals from both the public and
private sectors, including the legal and investment communities. The new legislation could
permit the creation of regulated "capital access companies" that could easily
become publicly held small business capital funds through new federal regulatory
exemptions. These new funds can attract venture capital from accredited investors for
reinvestment in potentially high-growth small firms, which now have very little access to
such capital. California’s Capital Formation and Business Investment Committee helped
develop the legislative agenda that resulted in the approval of that state’s Capital
Access Company Law in 1998 (see Cal. Corp. Code §28000 (1999)). The committee continues
to work on other venture capital-friendly legislative initiatives.
In addition to capital-friendly legislation, states can facilitate entrepreneurial
development by joining ACE-Net, the Access to Capital Electronic Network, as
network operators. Ace-Net is an Internet-based securities listing service for
entrepreneurs seeking equity financing in the range typically too low to attract most
venture capitalists¾ $25,000 to $3 million. The system allows
accredited investors to search for companies from around the country that are listed on
the system without giving up their own privacy. The program is a public-private
partnership between not-for-profit local network operators (typically university- or
state-based entrepreneurial development centers) and the SBA Office of Advocacy. There are
currently 38 states participating in the Ace-Net partnership. (Appendix M: Ace-Net
brochure.)
Government Procurement
Opportunities
States can demonstrate their commitment to small business and efficient
government with an aggressive campaign to advance government procurement opportunities.
States will enjoy a larger pool of competitors if contractors—including small
businesses—are provided with the information, tools, and opportunity to win
government contracts.
Marketing Development
Exchanging information about contract opportunities is probably the best way to
encourage small business bidding on government contracts. This exchange is a two way
street. Government should solicit bids in a easy-to-access forum and provide sufficient
time for smaller contractors to develop proposals. The most common form is a printed,
subscription based compilation of requests for proposals. However, using an on-line,
email-based service could be a less expensive, more efficient option for many small
businesses. A small business listing service should be provided that allows businesses to
profile their services or products. Small business can be responsible for keeping the
profiles updated. By providing a listing, government contract officials (and prime
contractors) are encouraged to tap into the listing, and solicit contractors directly. It
is an inexpensive but simple tool. Governments may use the Pro-Net, the on-line listing
service offered by the SBA. Encourage small businesses to place their profile on Pro-Net
for exposure to state, federal, and private prime contracts. (Appendix N: Pro-Net
information.)
Some states require small business certification to assure contractors qualify for any
small business preferences offered in government procurement. Certification may be a
formalized, thorough state program, a self-certification process, or recognition of a
private certification program. Whatever approach, the state should have clear definitions
of small business that fit different types of industries. Some states follow the
definitions provided by the SBA (See Title 13 of the Code of Federal Regulations, Part
121).
Agency Goals and Strategies for Small
Business Contracting
To develop awareness of small business contractors and provide enhancements for
soliciting them, agencies often establish small business contracting goals. A certain
goal, either in terms of number of contract actions or dollars, can be set to ensure
contracting officials are encouraging and considering the small business contractor.
Sometimes institutional problems have discouraged small businesses from bidding or created
impossible thresholds that make it impossible for small businesses to receive contracts.
A state should take several steps to ensure small businesses have the opportunity to
win contracts. Prohibit bundling contracts into mega-projects that result in prohibitively
large contracts that small firms cannot serve. Small businesses aren’t the only ones
harmed by this practice—the government limits its field of competitors. States should
allow small businesses to partner on larger contracts to obtain and fulfill a prime
contract.
State and local governments should also encourage prime contractors to use techniques
that advance small business subcontracting. To complement agency small business
procurement goals, prime contracts should be required, at the time of solicitation, to
provide a list of subcontractors, their size, and their portion of the contract. Bid
listing encourages prime contracts to seek small businesses early in the process and
assures prime contractors do not "bid shop" after the award of a contract and
drop subcontractors. In addition, prime contractors should not be allowed to force
subcontractors to sign hold harmless clauses that indemnify prime contracts from loss or
injury. This type of strong arming weakens small businesses’ position and ultimately
hurt government contracting practices. (Appendix O: Arizona’s contractors’ bill
of rights.)
Prompt Payment
Small contractors will thrive and provide the best service and products to
government if safeguards are in place to ensure prompt payment. Cash flow is one of
greatest hurdles to operating a small business, especially a firm that is growing fast.
States have used effective methods for assuring prompt payment. The state of Maryland
requires prompt payment of the state to prime contractors and prime contractors to
subcontractors. Beyond contractual promises of prompt payment, states may issue direct
disbursement to subcontractors or use escrow accounts. Finally, the use of payment bonds,
usually used in construction, is a effective protection for subcontractors and suppliers
on public contracts. It provides guarantees of payment and completion of the job for the
government. (Appendix P: Maryland Real Property Code Ann. § 9-302 (1998).)
Appendix A: North Carolina executive order
9 N.C.A.C. 2B, Exec. Ord. No. 10
EXECUTIVE ORDER NUMBER 10. NORTH CAROLINA SMALL BUSINESS COUNCIL
By the authority vested in me as Governor by the Constitution and laws of North Carolina
it is ORDERED:
Section 1. I hereby establish the North Carolina Small Business Council.
The Council shall be composed of at least 20 members appointed by the Governor to serve at
the pleasure of the Governor. The Governor shall designate one of the members as Chairman.
Section 2. The Council shall meet at least once in each quarter and may hold special
meetings at any time at the call of the Chairman, the Governor or the Secretary of
Commerce.
Section 3. The members of the Council shall not receive any compensation, per diem, or
reimbursement for travel and subsistence expenses for their services.
Section 4. Purposes of the Council. The purposes of the North Carolina Small
Business Council are as follows:
(A) To prepare and present recommendations to the Governor and General Assembly for
changes in statutes, rules and regulations, including the state tax structure, which
affect small businesses in North Carolina.
(B) To make recommendations to the Governor and General Assembly for new legislation,
agency programs and other actions needed to assist small business growth and development.
(C) To assist the Small Business Development Section of the Business Assistance Division
of the Department of Commerce in determining the need for programs for small businesses in
education, training, marketing, funding resources, technological assistance and related
areas.
(D) The Council is authorized to conduct interviews and solicit non-confidential
information to carry out the provisions of (A), (B) and (C) above.
Section 5. The Small Business Development Section of the Business Assistance Division of
the Department of Commerce shall provide staff and support services for the Council.
Section 6. It shall be the responsibility of each Cabinet Department Secretary to make
every reasonable effort for his or her department to cooperate with the North Carolina Small
Business Council to carry out the provisions of this Order.
Section 7. The elected heads of the Council of State Departments are encouraged and
invited to join in the provisions of this Order. All services of the Council available to
the Governor and his Cabinet under this Order shall be available to each of the heads of
the Council of State Departments electing to participate.
Section 8. Executive Order Number 51, dated May 16, 1980, is hereby rescinded. All records
of the North Carolina Small Business Advocacy Council created pursuant to said executive
order, are transferred to the Council created herein. The Council herein shall be the
successor to the North Carolina Small Business Advocacy Council.
Section 9. This Order shall be effectively immediately and shall remain in effect until
June 30, 1987, unless terminated earlier or extended by further Executive Order.
Done in the Capital City of Raleigh, North Carolina, this twenty-eighth day of June, 1985.
AMENDMENT TO EXECUTIVE ORDER NUMBER 10 NORTH CAROLINA SMALL BUSINESS COUNCIL
By The authority vested in me as Governor by the Constitution and laws of North Carolina
it is ORDERED:
Section 1. Lines 1 and 2 of Subparagraph (C) of Section 4 of Executive Order Number 10 are
amended by deleting the words "Small Business Development Section of the Business
Assistance Division" and inserting in lieu thereof "Small Business Development
Division" and lines 1 and 2 of Section 5 of Executive Order Number 10 are amended by
deleting the words "Small Business Development Section of the Business Assistance
Division" and inserting in lieu thereof "Small Business Development
Division."
Section 2. This amendment is made because the Business Assistance Division previously
described has been replaced by the Small Business Development Division.
This action effective the 25th day of July, 1985.
Appendix B: Oklahoma’s Committees on
Small Business--Chief Counsel’s Special Awards for Small Business Advocacy
- The Committees on Small Business of the Oklahoma Senate and the Oklahoma House of
Representatives
Senator Jim Maddox
Chairman
Committee on Small Business
Oklahoma Senate
State Capitol
2300 North Lincoln Blvd.
Oklahoma City, OK 73105
Phone (405) 521-5779
Representative Jack Bonny
Chairman
Committee on Small Business
Oklahoma House of Representatives
State Capitol
2300 North Lincoln Boulevard
Oklahoma City, OK 73105
Phone (405) 521-2711
In 1997, recognizing the importance of the state’s small business community and
the issues which concerns it, Oklahoma’s speaker of the House of Representatives and
the president pro-tempore of the Senate created a Committee on Small Business in each
respective body. With the organization of these committees, Oklahoma small businesses now
have a direct link to the legislative process.
Responding immediately to one of the greatest problems facing small business
everywhere, government regulation, the Small Business Committees secured the enactment, by
unanimous vote in both chambers, of the Oklahoma Regulatory Review Act. The Act requires
all state agencies to review all regulations under their purview and rescind or amend any
redundant or unnecessary rules already in place. On or before July 1, 1999, each agency is
required to report their findings and actions to implement the act.
Tax reform has also been a major focus of the Small Business Committees. Specifically,
they were successful in passing small business provisions in an omnibus tax reform
legislation. The bill included estate tax relief and a provision allowing a tax credit for
Oklahoma businesses to offset the federally-mandated fee charged by the SBA on its small
business loan guarantees. They also secured approval of legislation harmonizing tax filing
dates for both corporate and franchise taxes.
Another notable achievement was Governor Keating’s approval of the
committees’ request to name a cabinet-level Oklahoma Small Business Advocate.
Lieutenant Governor Mary Fallin was appointed, and her work has already had a major
impact. The Oklahoma Small Business Committees were nominated by L. Matt Robison, Director
of the Small Business Division of the Oklahoma State Chamber.
Appendix C: Arizona Small Business Advocate job
description and Arizona Business Connection assistance materials
Arizona Small Business Advocate
The Arizona Small Business Advocate reports to the Governor and is responsible
for keeping an open line of communication between the Governor and small businesses. The
advocate works with chambers of commerce and other advocacy groups to develop policies and
programs that will address fundamental statewide issues of concern to all small
businesses. In addition, the advocate interacts with state regulatory agencies to improve
their responsiveness to small businesses and assists entrepreneurs in resolving matters
involving state government offices. Governor Jane Dee Hull has designated the advocate as
Arizona's point person for information on Y2K small business issues. To receive a free
brochure with a checklist to take your business into the Year 2000, please call (602)
280-1480 or (800) 542-5684.
Joe Dean, Director
Arizona Small Business Advocate
(602) 280-1480 or 1-800-542-5684
FAX: (602) 280-1339
Web site: http://www.azcommerce.com/ABC.htm
The Arizona Business Connection
The Arizona Business Connection meets the needs of businesses in
every stage of development. Whether you have just begun to think about starting a
company—or you are already well-established—or you are relocating your business
to Arizona—the Business Connection is here for you. The Business Connection is a
resource for information, referrals assistance and advice.
Call for:
- Information on licenses, applications, permits and any other requirements (most state
documents may be obtained directly from the ABC office) .
- A customized packet containing the forms you need for starting your business
- Information on applicable taxes
- Clarification of government regulations
- Help in communicating and resolving problems with government agencies
- Information on financing
- Referral to local, state and federal agencies
- Referral to professional associations in your field
- Assistance and referral for minority and women owned business entrepreneurs, including
certification and procurement
- Information regarding our Minority/Women Owned Business Data Base
- Information on employee training programs
- Referral to resources for:
- Formulating business plans
- Designing marketing strategies
- Importing and exporting
- Answers to other questions you might have
Since each packet of information is customized for the type of business, community,
applicable regulations etc., our courteous staff needs to briefly discuss your business
plans.
To obtain your free custom packet of information including the booklet "Guide
To Establishing and Operating a Business In Arizona," call the Arizona Business
Assistance Center toll free, at the number listed below.
Arizona Business Assistance Center
(602) 280-1480 or 1-800-542-5684
FAX: (602) 280-1339
Appendix D: Washington State Governor’s
Conference on Small Business top 10 recommendations
1998 Governor’s Conference on Small Business
Top 10 Issue Results
April 22, 1998
- Raise B&O exemption to $500,000.
- Legislature should pass a bill (like SB6699), so employers can give and get honest
employees reference without penalty.
- Government agencies need to:
- Talk more with small businesses affected by the agencies’ actions.
- Establish a "micro business" definition for firms with 10 or fewer employees
and where the business is the primary source of income for the owner, and establish
programs for these businesses.
- Become more small business friendly.
- Recognize the differences between big businesses and small businesses
- Clarify tax laws and waive penalties if business is trying to comply.
- Agencies should not exceed legislative authority (i.e.; child labor laws) and agencies
should notify businesses affected by a new regulation about the regulation.
- Involve business in a process, which will prioritize the allocation of resources for
infrastructure.
- Increase the emphasis on basic education (K-12) in math & science.
- Base B&O tax on profits, rather than gross income.
- Provide more community colleges/vocational college technical training opportunities.
- State Growth Management Act left too much to rule-making and agency decision. The GMA
environmental review should be combined with SEPA environmental review. The state panel of
non-elected officials has too much power over local growth management plans.
Appendix E: Maryland Office of
Business Advocacy brochure
The Office of Business Advocacy was created in August 1995 as part of the Maryland
Department of Business and Economic Development. Simply put, the mission of the Office of
Business Advocacy is to assist Maryland businesses in navigating through the processes and
regulations of local, state, and federal government.
Small businesses in Maryland, as well as in other states, must obtain a variety of
permits and licenses from the federal, state, and local levels in order to operate. In
fact, there are over 400 different permits issued by the State of Maryland, in addition to
permits issued by the federal and local governments. The process of understanding the
requirements and obtaining all the permits needed can be very confusing, time-consuming,
and frustrating, especially for a small business with limited resources.
In looking at ways to improve the business climate in Maryland, one major criticism
heard from the business community was the difficulty businesses had in obtaining the
permits necessary to operate. Another problem frequently cited was a lack of
responsiveness from government agencies in getting answers regarding pending permit
applications and other regulatory issues. In an effort to address these concerns, the
Office of Business Advocacy was created.
The Office of Business Advocacy does not seek to supplant the regulatory or licensing
authority of any government agency. Rather, the goal is to provide Maryland businesses
with a liaison to all federal, state, and local government authorities to facilitate the
process of opening and operating a business in Maryland. In addition to providing this
ombudsman service, the Office also acts as an information source and central point of
contact on behalf of the business community, in efforts to establish a more seamless
regulatory process. The Office also works to identify duplicative, excessive, and
cumbersome regulations at all levels of government, and provides analysis of proposed
legislation’s impact on small business and economic development as a whole.
A small business either operating or intending to operate in Maryland may contact the
Office of Business Advocacy directly for assistance. An ombudsman trained in regulatory
issues will assist that businesses in securing the necessary licenses and permits needed
from any regulatory agency. The ombudsman handling the matter will be the point person
charged with ensuring that the business understands all of the regulatory requirements,
and that the government agencies are granting the permits in a timely manner.
In order to accomplish the goals set forth by the Office of Business Advocacy, common
sense solutions are sought. Often, problems can be resolved for businesses by asking
simple questions as to why a particular permit or regulation is needed, what is required
of the business, and how long it will take for a permit to be issued. This is a
"customer service" approach, and an attempt to make it easier to start, operate,
and expand a business in Maryland, while ensuring that all regulatory requirements are
met.
The Office of Business Advocacy measures success by the number of businesses it assists
in dealing with the bureaucracy. To date, more than 500 businesses in Maryland have
benefited from the services of the Office of Business Advocacy. Although it is difficult
to quantify success in terms of "return on investment," one example of how the
Office of Business Advocacy helps businesses is that of a financial services business that
requested assistance. The company was constructing several new, two-story parking garages.
The Americans with Disabilities Act (ADA) required a certain number of handicapped parking
spaces on each floor of the garages and an elevator to provide handicapped access to each
floor of the respective garages. The Office of Business Advocacy was able to assist the
company in obtaining a variance from the ADA regulations. Rather than having handicapped
spaces scattered throughout the floors, the company would simply put all of the
handicapped spaces on the ground level of the garages. This approach allowed the company
to avoid the cost of installing and operating elevators in these garages, and yet
maintained compliance with ADA regulations. This simple solution resulted in a savings to
the company of nearly $500,000.
In another matter, a small ice cream store chain, which made its own ice cream, was
considered a manufacturer by every taxing authority except the one in which it was a
benefit to be classified as such. At the request of the business, the Office of Business
Advocacy got involved in an attempt to rectify the matter. After tough discussions with
the appropriate taxing bodies, the law was changed to classify the business as a
manufacturer across the board. The cost to the company of the incorrect classification was
over $35,000. Thus, the efforts of the Office of Business Advocacy yielded a considerable
savings to the company and allowed the business to continue operations at a higher profit
margin.
Prior to the establishment of the Office of
Business Advocacy, small businesses were on their own to work their way through the
regulatory maze. The Office of Business Advocacy gives small businesses an ally on the
inside of government. The Office hopes to assist many more businesses in the near future,
and will continue efforts to make the regulatory environment more accountable, predictable
and thereby more business friendly. The intended end result of all these efforts is make
it easier for small business to operate in Maryland.
Appendix F: Excerpt from
Washington’s online permit handbook
http://www.wa.gov/ecology/sea/pac/handbook/low/intro.html
This Web site is the electronic version of Permit Handbook: Commonly Required
Environmental Permits for Washington State (Publication No. 90-29, Revised
October 1998). This site provides information about the most commonly required state
environmental permits. The site also includes limited information on federal and local
permits. Table 1 is a summary of permit requirements.
Please refer to Ecology's On-line
Permit Assistance page for more detailed information, or consult the resource agencies
listed on the "Contacts"
page for more project-specific permit information. These agencies will work with project
proponents to help them determine what permits are needed for a specific project. It is
important to keep in mind that the person conducting an activity is responsible for
ensuring that all necessary permits are obtained.
The type of impacts that a project may generate and the location of a project will
determine which federal, state and/or local permits are required. For example, certain
permits will be required if your proposal involves discharges only to the air, discharges
to water, or if it is located in or near water.
Projects often involve a variety of natural resources requiring review by an assortment
of specialists. Traditionally, separate applications and permits have been developed to
address each of these special project features and natural resource functions. Agencies
are working to streamline some of these processes without jeopardizing Washington's
natural resources. Agencies will work with all applicants to ensure that this process runs
as smoothly as possible.
Appendix G: Curriculum of Washington program
Education & Training
Washington State Community, Trade
and Economic Development (CTED)
*Examples below are overhead slide excerpts from class presentations on
"Developing Clear and Usable Regulations"
Clear and usable regulations help everyone
The Federal Communications Commission
had five people answering calls
about regulations for citizens' band radios.
The telephone company told them
that only 10% of callers were getting through.
The other 90% called later or gave up.
They could have added more telephones and more staff.
Instead they rewrote the regulations.
The phone calls dropped so much that the five people were assigned to other jobs.
An example of clear and usable regulations
Here are the original and revised versions of one paragraph from the
regulations for citizens' band radios:
Original rule:
- Mailing address furnished by licensee
Except for applications submitted by Canadian citizens pursuant to agreement
between the United States and Canada (TIAS No. 6913), each application shall set forth and
each licensee shall furnish the Commission with an address in the United Stated to be used
by the Commission in serving documents or directing correspondence to that licensee.
Unless any licensee advises the Commission to the contrary, the address contained in the
licensee's most recent application will be used by the Commission for these purposes.
Revised rule:
95.423 What address do I put on my application?
(a) You must include your current complete mailing address and station address in
the United States on your CB license application.
(b) A Canadian General Radio Service licensee may supply a Canadian address if he or
she is applying for permission to operate under TIAS No. 6931.
A process for developing clear and usable regulations
Planning the Documents
Get agreement on:
- purposes
- audiences
- users' tasks
- scope
Planning the Project
Get agreement on:
- schedule
- staffing
- budget
- style standards
- other issues
Organizing
- gather information
- select the content
- organize the text
Drafting and Testing Producing the Final Copy D Continuing the
Process
- write - copyedit again 0 - distribute
- include tables - proofread again C - gather feedback
- edit - print U - keep it up-to-date
- review for accuracy M
- review for usability E
- revise N
- test!! T
- repeat the process
Agreeing on the purposes
All regulations serve several purposes.
Think about a specific regulation from your agency.
Write down the name of the regulation:
____________________________________
____________________________________
What does the agency want to achieve
through this regulation?
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
Use gender-neutral words
Here are several techniques for writing
gender-neutral regulations:
• Use an article, "a," "an," or "the,"
instead of a pronoun.
Gender-specific:
The Secretary shall in the course of his day...
Gender-neutral:
The Secretary shall in the course of the day…
• Use the plural.
Gender-specific:
This section does not apply to a physician
unless he practices dentistry as a specialty.
Gender-neutral:
This section does not apply to physicians
unless they practice dentistry.
Even better:
This section applies to dentists. It does not
apply to other physicians.
• Turn a noun phrase into a verb.
Gender-specific:
Any person who shall import or have in his
possession any...
Gender-neutral:
Any person who shall import or possess…
• Change the verb so you do not need a pronoun.
Gender-specific:
... the public official shall inform himself
concerning the conditions...
Gender-neutral:
... the public official shall ascertain the
conditions...
• Change the sentence structure
to put the noun in a different place.
Gender-specific:
If the Commissioner finds that…, he may...
Gender-neutral:
Upon finding that..., the Commissioner may...
Adapted from Maryanne Corbett,
"Making state laws gender neutral,"
Simply Stated 75, 1987.
Be careful with "shall."
Consider using "must" for "shall"
The Bill Drafting Guide has an excellent
discussion of "shall," "may, " and "must"
on pages 50 - 51.
Very few Americans use "shall" correctly.
Ordinary people will not understand
the distinction between "shall" and "must."
Consider using "must" for "shall" consistently in regulations.
Department of Revenue
WAC 458-20-166(4):
Persons providing lodging and other services
generally must collect retail sales tax
on...They must pay retail sales or use tax on...
Getting useful information from reviews
When a draft is almost ready,
• talk to the reviewers
• remind them it is coming
• deliver the draft with a cover memo
that says
- what stage the draft is at
- what specific help you need
- when you must have the draft back
When the review is ready,
• be open to the reviewers' comments
• do not just blindly accept the changes
• do not ignore comments,
communicate back to reviewers about
changes you question
• negotiate to make sure the information
will be clear and usable for the users
Testing regulations
for clarity and usability
When writing, you may be trying
to put yourself in the users' places.
However, you are not the users.
• You know more about regulations
than many users.
• You know the agency's language
better than many users.
• You already know the details of this
regulation better than many users.
To really know if the regulation
is clear and usable, you must have
representative users try to work with it.
Appendix H: Compendium of state regulatory
flexibility laws
| Arizona |
Governor's Regulatory
Review Council, considers among other things, small business impact statements |
A.R.S. § 41-1052
(1998) |
| California |
Regulatory impact statement and
plain English rules |
Cal Gov. Code § 11346.5 (1997) |
| Connecticut |
Regulatory flexibility analysis |
Conn. Gen. Stat. § 4-168a (1997) |
| Delaware |
Consider feasibility of exempting small
businesses |
29 Del C. § 10404 (1997) |
| Florida |
Regulatory impact and alternatives; small
business ombudsman |
Fla. Stat. § 120.54 (1998) |
| Georgia |
Economic impact analysis and alternatives |
O.C.G.A. § 50-13-4 (1998) |
| Hawaii |
Small Business Regulatory Flexibility Act;
analysis, regulatory alternatives, small business regulatory review board, and small
business defender (within the legislature) |
1998 Hi, ALS 168 |
| Illinois |
Regulatory flexibility analysis, effects
on economic growth of small businesses, and alternatives |
5 ILCS 100/5-30 (1998) 415 ILCS 5/27
(1998) |
| Iowa |
Regulatory flexibility analysis,
alternatives and small business review |
Iowa Code § 17A.31 (1997) |
Kentucky
KY Revised
Statutes |
Tiering administrative regulations to reduce burden (PDF
File)
Regulatory impact analysis
(PDF File) |
KRS § 13A.210
KRS § 13A.240 |
| Michigan |
Regulatory impact statement and small firm
involvement |
MSA § 3.560(145) (1998) |
| New Jersey |
Regulatory flexibility analysis and
alternatives |
N.J. Stat. § 52: 14B-17 (1998) |
| New York |
Regulatory flexibility analysis |
NY CLS St. Admin. Act §§ 202-202a |
| Pennsylvania |
1. Regulatory analysis and small business
provisions
2. Small Business Advocacy Council and Advocate |
71 P.S. § 745.5 (1998)
71 P.S. § 1709.704; 73 P.S. § 399.45 (1998) |
| Utah |
Small Business Advisory Council reviews
impacts |
Utah Code Ann. § 9-2-302 (1998) |
| Vermont |
Economic impact statement and small
business alternatives |
3 V.S.A. § 838 (1998) |
| Washington |
Economic impact statement and review of
impacts |
Rev. Code Wash. §§ 19.85.020-70 (1997) |
| Wisconsin |
Regulatory flexibility analysis, hearings,
and alternatives |
WWis. Stat. §§ 227.17-19 |
Appendix I: Utah Code Ann. § 9-2-302 (1998)
Small Business Advisory Council
Utah Code -- Title 09 -- Community and
Economic Development
9-2-302. Council duties. The council shall:
(1) advise the governor on matters of concern to small businesses;
(2) review and evaluate proposed and existing laws and regulations of the state that
affect small businesses and make recommendations for regulatory and statutory changes
needed to encourage the stability and growth of small business;
(3) study any special problems confronting small businesses and recommend solutions to
such problems;
(4) review existing programs of assistance to small businesses at federal, state, and
local levels of government and recommend priorities for the delivery of such programs;
(5) provide a public forum and schedule hearings at which the views of the small business
person may be solicited and represented to state government; and
(6) maintain communication and cooperation with small business individuals and local,
state, and national small business organizations.
Renumbered and Amended by Chapter 241, 1992 General Session
Appendix J: Arizona Governor’s
regulatory review council
A.R.S § 41-1052
41-1052 Council review and approval
A. Before filing a final rule with the secretary of state, an agency shall
prepare, transmit to the council and the committee and obtain the council's approval of
the rule, preamble, concise explanatory statement and economic, small business and
consumer impact statement which meets the requirements of section 41-1055.
B. Within ninety days of receipt of the rule, preamble, concise explanatory statement
and economic, small business and consumer impact statement, the council
shall review and approve or return, in whole or in part, the rule, preamble, concise
explanatory statement or economic, small business and consumer impact statement. An agency
may resubmit a rule, preamble, concise explanatory statement or economic, small business
and consumer impact statement if the council returns the rule or economic, small business
and consumer impact statement, in whole or in part, to the agency.
C. The council shall not approve the rule unless:
1. The economic, small business and consumer impact statement contains the information,
data and analysis prescribed by this article.
2. The economic, small business and consumer impact statement is generally accurate.
3. The probable benefits of the rule outweigh the probable costs of the rule.
4. The rule is clear, concise and understandable.
5. The rule is not illegal, inconsistent with legislative intent or beyond the agency's
statutory authority.
6. The agency adequately addressed the comments on the proposed rule and any
supplemental proposals.
7. The rule is not a substantial change, considered as a whole, from the proposed rule
and any supplemental notices.
D. The council shall verify that a rule with new fees does not violate section 41-1008.
The council shall not approve a rule that contains a fee increase unless two-thirds of the
voting quorum present vote to approve the rule.
E. The council may require a representative of an agency whose rule is under
examination to attend a council meeting and answer questions. The council may also
communicate to the agency its comments on any rule, preamble, concise explanatory
statement or economic, small business and consumer impact statement and require the agency
to respond to its comments in writing.
F. A person may submit written comments to the council that are within the scope of
subsection C of this section. The council may permit oral comments at a council meeting
within the scope of subsection C of this section.
G. If the agency makes a good faith effort to comply with the requirements prescribed
in this article and has explained in writing the methodology used to produce the economic,
small business and consumer impact statement, the rule may not be invalidated after it is
finalized on the ground that the contents of the economic, small business and consumer
impact statement are insufficient or inaccurate or on the ground that the council
erroneously approved the rule, except as provided for by section 41-1056.01.
H. The absence of comments pursuant to subsection C of this section or article 4.1 of
this chapter does not prevent the council from acting pursuant to this section.
Appendix K: California Executive order
W-144-97
|
EXECUTIVE ORDER W-144-97
WHEREAS, as California continues to build a competitive, dynamic economy to meet
our needs in the 21st Century, government must do its part by continually
improving the regulatory structure to recognize and accommodate these dynamic changes; and
WHEREAS, just as Californians have demanded through the State Constitution that
government limit its spending and taxing powers, so too must state agencies minimize the
hidden taxes to consumers, business, and local government inherent in regulations; and
WHEREAS, the Legislature through measures such as AB 2061 (Polanco, 1991), AB
3511 (Jones, 1992), AB 969 (Jones, 1993), AB 1144(Goldsmith, 1993), SB 513 (Morgan, 1993),
and SB 1082 (Calderon, 1993) has repeatedly directed state agencies to consider the cost
effectiveness of regulations, in an effort to minimize the regulatory impact on business,
local governments, the state's business climate, and the state's economic competitiveness;
and
WHEREAS, on February 8, 1996, I signed Executive Order W-131-96 which directed
each state agency to forward all regulations identified as unnecessary or redundant to the
Office of Administrative Law for appropriate action, and also directed the Governor's
Office of Planning and Research to hold regional meetings throughout the state to receive
public testimony on further reform; and
WHEREAS, more than 300 citizens, businesses, and organizations offered extensive
and varied suggestions for regulatory improvements at the California regulatory
Roundtables held throughout California in the Spring of 1996; and
WHEREAS, as a result of Executive Order W-131-96 and the California Regulatory
Roundtables, 3900 redundant and outdated regulations have been -- or are in the process of
-- being repealed, with an additional 1700 regulations identified to date for
modification; and
WHEREAS, on June 3, 1996, the Governor's Office of Planning and Research
presented its final recommendations and findings in the report entitled
"Recommendations from the regulatory Review Roundtables."
NOW, THEREFORE, I, PETE WILSON, Governor of the State of California, by virtue
of the power and authority vested in me by the Constitution and statutes of the State of
California, do hereby issue this order to become effective immediately:
- Consolidated Regulatory Program
. By July 1, 1997 the Directors of the Office of
Administrative Law and the Office of Planning and Research, in consultation with the
Department of Finance and other members of the Cabinet, shall develop procedures for a
Consolidated regulatory Program. This program shall be based on the annual Rulemaking
Calendar pursuant to Government Code section 11017.6, and shall incorporate the following
provisions:
- Beginning in 1997 and by November 1 of each year thereafter, all state agencies shall
develop a process of all regulations, regulatory policies, goals, and objectives that the
agency proposes to pursue during the following year. The overview shall include: (1) the
primary goals and authorities of the agency; (2) the specific statutory authority for the
proposed regulation, including any specific legislative intent; (3) a statement of how the
proposed regulation relates to those goals and authorities; (4) the relationship of the
proposed regulation to other existing regulations, including federal and local
requirements: and (5) estimated costs to develop and implement the regulations, including
both state costs and compliance costs to be bome by the regulated community, local
govemments, and consumers.
- For all agencies. the Rulemaking Calendar, published each year by January 30 pursuant to
Government Code Section 110017.6, shall be expanded to include the following summary
information for each newly proposed regulation: (1) the promulgating agency and contact
person; (2) the title of regulation and proposed location in the California Administrative
Code; (3) the legal authority to adopt regulations and the specific statute that will be
implemented; (4) an abstract describing the problem the regulation will address; (5)
alternatives being considered; (6) the intended benefits; (7) any legal deadline for the
adoption of the regulation; (8) a sunset review date not to exceed five years by which the
proposed rule, if adopted, would be reviewed for retention, revision, or proposed
elimination; (9) a schedule for the proposed regulatory action; (10) all budget
information required on Form 399; (11) the levels of Government affected; ( 12)
identification of any federal authority with which the regulatory action will comply; (13)
the fiscal impact, including an initial estimate of costs to state and local governments;
and (14) the economic impact, including an initial estimate of the economic impacts of the
proposed regulations, the regulation's likely costs to the regulated community, local
Government, and consumers and whether or not the rule qualifies as a Major Regulation.
- Any State agency that proposes adoption of a regulation that diverges from a comparable
established state, federal, or local law or regulation which governs the same program or
conduct shall: 1) identify the manner in which the proposed regulation is different than
the applicable federal, state, or local law or regulation; 2) identify the benefit to the
public health, safety, or welfare or the environment expected from adopting a regulation
that is different from the existing law or regulation; and 3) identify whether having a
different provision places an additional burden or cost on regulated persons, local
governments, businesses, or consumers.
- State agencies shall not issue new regulations unless they are first published in the
annual regulatory Overview and Rulemaking Calendar, unless otherwise required by state or
federal law or as required by a Declaration of a State of Emergency, Executive Order, or
by the need to protect immediate public health, safety, and welfare. Agencies proposing to
issue new regulations that are not first published in the annual regulatory Overview and
Rulemaking Calendar shall provide a statement to the Cabinet Secretary documenting the
requirement for such a regulation.
- Sunset Review of Regulations
. Beginning with the 1997 Annual Rulemaking Calendar.
all state agencies shall establish a schedule to complete a sunset review of all existing
regulations by 1999. This review shall include the following provisions:
- A review of the authority and continued necessity for and cost effectiveness of each
regulation, along with a determination to retain, modify, or repeal the regulation,
including development of recommended legislation if required to implement the
determination;
- An updated estimate of the fiscal and economic impacts of the regulation on all levels
of Government, consumers, and the regulated community;
- Changes to the regulation to minimize overlap and conflicts with comparable federal and
local regulations, unless the differences in state requirements can be shown to provide
additional benefits that exceed the additional costs; and
- Changes to the regulation to consider alternative approaches that are less intrusive or
more cost effective. In completing the 1997-1999 regulatory sunset review. each agency
shall identify sufficient efficiencies and cost reductions to meet a goal of reducing the
total compliance costs--including fees--paid by business, local Government, and the public
by 5 percent per year. In calculating the projected compliance cost reductions, agencies
may include cost efficiencies achieved as a result of actions taken in accordance with
Executive Order W-13 1-96.
- Economic Impact Statements
. By July I, 1997, the Department of Finance, the Trade
and Commerce Agency, and the Governor s Office of Planning and Research, in consultation
with the other Cabinet Members, Office of Emergency Services. and the Office of
Administrative Law, shall develop a standard economic impact statement to be included in
each rulemaking record. The economic impact statement shall provide for consistent
application of all existing statutory requirements for economic analysis of regulations,
shall be used as the basis for the determination of fiscal impacts, and shall be
incorporated into the fiscal impact statement required for proposed regulations. As
provided in section 15363.6 of the Government Code and section 57005 of the Health and
safety Code, the economic impact statement shall be submitted to the regulation review
unit of the Trade and Commerce Agency, and all state agencies and departments shall
respond to the Trade and Commerce Agency's comments.
- Continuous Review
. In order to ensure continuous improvement in California s
regulatory structure and to identify areas where additional efficiencies or other changes
are warranted, the following two provisions shall be implemented immediately:
- The Director of the Office of Planning and Research, in cooperation with the other
members of the Cabinet, shall hold at least two Regutatory Review Roundtables annually and
submit an annual report on further recommendations for regulatory improvement; and
- Each state agency shall institute a customer service survey process. Each Cabinet
Officer shall develop procedures for the review, tracking, and response to surveys for
each of their reporting boards, commissions, departments, and offices. For agencies not
reporting to a Cabinet Officer such procedures shall be developed by the chief executive
officer in consultation with the Director of the Office of Planning and Research.
- Open Regulatory Process
. From existing resources, each agency shall develop a
regulatory ombudsman program by designating an employee or employees reporting directly to
the chief executive officer to serve as ombudsmen. The ombudsman program shall provide an
opportunity for any person to raise regulatory issues at both headquarters and any
regional offices of the agency.
- Regulatory Consistency
. The following provisions shall be implemented to ensure
consistent implementation of regulations:
- The Director of the Office of Planning and Research shall compile a list of statutory
deadlines set for the review of applications and other regulatory filings. In coordination
with the Cabinet Officers, the Director shall complete by May I, 1997 a review of the
effectiveness of these deadlines, adherence of the agencies to deadlines. and existing
enforcement mechanisms such as the refund of application fees when deadlines are exceeded
without good cause. The Director s evaluation on shall include recommendations for broader
application of regulatory deadlines, improved tracking and reporting and other applicable
provisions to ensure timely action by the regulatory agencies.
- By May 1, 1997, the Legal Affairs Secretary shall complete a review of existing
statutory and administrative provisions dealing with minor regulatory violations, and
prepare recommendation' to ensure consistent application by the affected agencies. This
review shall include recommendations as appropriate for legislation that would extend
recent provisions enacted by the Legislation such as AB 2937 (Brulte, 1996) AB 59 (Skier,
1995), and SB 1899 (Peace, 1994).
- State Constitutional Officers, the University of California the California State
University, the California community Colleges, the State Board of Education, and state
agencies, departments. boards, and commissions not directly under the authority of the
Executive Branch are requested to take all necessary action to comply with the intent and
the requirements of this executive order.
|
IN WITNESS WHEREOF I have hereunto set my hand
and caused the Great Seal of the State of California to
be affixed this 10th day of January 1997.
Appendix L: Utah Code Ann. § 78-27a-4, §
78-27a-5; Rev. Code Wash. (ARCW) § 4.84.350 (1999)
Utah Code Ann. § 78-27a-4 (1998)
SMALL BUSINESS
EQUAL ACCESS TO JUSTICE ACT
§ 78-27a-4. Litigation expense award authorized in actions by state
In any civil judicial action commenced by the state, which action involves the business regulatory
functions of the state, a court may award reasonable litigation expenses to any small
business which is a named party in the action if the small business
prevails and the court finds that the state action was undertaken without substantial
justification.
HISTORY: L. 1983, ch. 298, § 4.
Utah Code Ann. § 78-27a-5 (1998)
SMALL BUSINESS
EQUAL ACCESS TO JUSTICE ACT
§ 78-27a-5. Litigation expense award authorized in appeals from administrative decisions
(1) In any civil judicial appeal taken from an administrative decision regarding a matter
in which the administrative action was commenced by the state, and which involves the
business regulatory functions of the state, a court may award reasonable
litigation expenses to any small business which is a named party if the small
business prevails in the appeal and the court finds that the state action was
undertaken without substantial justification.
(2) Any state agency or political subdivision may
