PA House Advances Regulatory Impact Legislation

November 2011Newsletters In the Zone

On October 5, 2011, the Pennsylvania House of Representatives approved legislation that seeks to give small businesses a seat at the table when it comes to advancing state regulations.

Sponsored by Rep. Tina Pickett, (R-Sullivan County), House Bill 1349 ensures that small business advocates be contacted whenever new state regulations are proposed. It allows the small business community to have greater input into the proposed regulations and communicate to state regulators about any potential negative impacts.

The overall intent of the bill is to help the private sector create jobs by considering the impact proposed regulations have on small businesses. If a negative impact exists, the state agencies would be required to offer alternative requirements to meet the intent of the regulation.

According to the sponsor, the cost of regulations to a small business is about 60 percent more than the cost to a large employer.

Small businesses are often defined as those employing less than 100 people, but this legislation would follow federal definitions of small businesses. In Pennsylvania, that includes nearly half of the private-sector workforce.

Under House Bill 1349, agencies must inform the Independent Regulatory Review Commission (IRRC) of the following when submitting regulatory proposals:

  • The type of small business that would be affected by the proposed regulation.
  • Any financial, economic or social impacts on small businesses.
  • An economic impact statement to include estimated number of small businesses affected; cost of compliance to the regulation; probable effect on impacted small businesses; and a description of any less intrusive or less costly alternative.
  • Alternatives to small businesses that would still achieve the effect of the proposed regulation.

Supporters of the bill argue the need for policymakers to better understand how the cost pressures associated with government regulations and mandates ultimately impact job creators’ ability to effectively and efficiently operate. Allowing small business greater flexibility will ensure compliance with reasonable, necessary regulations in a manner that does not take away from their ability to operate, maintain and potentially grow their business and workforce and stay competitive.
The measure now goes to the Pennsylvania Senate for consideration.

For more information, please contact Kimberly A. Freimuth, at 215.918.3627 or [email protected].

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