Chapter 096

2005 -- H 5775 SUBSTITUTE B

Enacted 06/28/05

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ECONOMIC DEVELOPMENT CORPORATION -- SMALL BUSINESS ADVOCATE

Introduced By: Representatives Kennedy, Lewiss, E Coderre, Moura, and Kilmartin

Date Introduced: February 17, 2005

It is enacted by the General Assembly as follows:

SECTION 1. Chapter 42-64 of the General Laws entitled "Rhode Island Economic

Development Corporation" is hereby amended by adding thereto the following sections:

42-64-34. Appointment of small business advocate. – (a) The director shall appoint a

staff person to serve as the small business advocate.

(b) The small business advocate shall:

(1) Identify and convey specific concerns raised by small business in providing noticed to

the state agency proposing the regulation;

(2) Inform businesses regarding proposed regulation that may have a significant adverse

economic impact; and

(3) Formulate policies and procedures in accordance with chapter 42-35.

agency is authorized and directed to provide, any cooperation and assistance, services, and data as

will enable the small business advocate to properly perform or exercise any of his or her

functions, duties, and powers under this chapter.

42-64-34.1. Cooperation required. -- (a) The small business advocate may request from

any government agency, and the agency is authorized and directed to provide, any cooperation

and assistance, services, and data, within the jurisdiction of the agency, as will enable the small

business advocate to properly perform or exercise any of his or her functions, duties and powers

under this chapter.

SECTION 2. Sections 42-35-1, 42-35-3 and 42-35-3.3 of the General Laws in Chapter

42-35 entitled "Administrative Procedures" are hereby amended to read as follows:

42-35-1. Definitions. -- As used in this chapter:

(a) "Agency" includes each state board, commission, department, or officer, other than

the legislature or the courts, authorized by law to make rules or to determine contested cases, and

all authorities, as that term is defined below;

(b) "Authorities" includes the following: the Rhode Island industrial building authority,

the Rhode Island recreational building authority, the Rhode Island port authority and economic

development corporation, the Rhode Island industrial facilities corporation, the Rhode Island

refunding bond authority, the Rhode Island housing and mortgage finance corporation, the Rhode

Island solid waste management corporation, the Rhode Island public transit authority, the Rhode

Island student loan authority, the Howard development corporation, the water resources board,

the Rhode Island health and educational building corporation, the Rhode Island higher education

assistance authority, the Rhode Island turnpike and bridge authority, the Blackstone Valley

district commission, the Narragansett Bay water quality management district commission, their

successors and assigns, and any body corporate and politic with the power to issue bonds and

notes, which are direct, guaranteed, contingent, or moral obligations of the state, which is

hereinafter created or established in this state.

price fixing, and licensing, in which the legal rights, duties, or privileges of a specific party are

required by law to be determined by an agency after an opportunity for hearing;

(d) "License" includes the whole or part of any agency permit, certificate, approval,

registration, charter, or similar form of permission required by law, but it does not include a

license required solely for revenue purposes;

(e) "Licensing" includes the agency process respecting the grant, denial, renewal,

revocation, suspension, annulment, withdrawal, or amendment of a license;

(f) "Party" means each person or agency named or admitted as a party, or properly

seeking and entitled as of right to be admitted as a party;

(g) "Person" means any individual, partnership, corporation, association, governmental

subdivision, or public or private organization of any character other than an agency;

(h) "Rule" means each agency statement of general applicability that implements,

interprets, or prescribes law or policy or describes the organization, procedure, or practice

requirements of any agency. The term includes the amendment or repeal of a prior rule, but does

not include (1) statements concerning only the internal management of an agency and not

affecting private rights or procedures available to the public, or (2) declaratory rulings issued

pursuant to section 42-35-8, (3) intra-agency memoranda, or (4) an order.

(i) (1) "Small business" shall have the same meanings that are provided for under title

13, volume 1, part 121 of the Code of Federal Regulations (13 CFR 121, as may be amended

from time to time).

(j) "Order" means the whole or a part of a final disposition, whether affirmative,

negative, injunctive or declaratory in form, of a contested case. ;

(k) "Small business advocate" means the person appointed by the director of the

economic development corporation as provided in section 42-64-34.

42-35-3. Procedures for adoption of rules. -- (a) Prior to the adoption, amendment, or

repeal of any rule the agency shall:

(1) Give at least thirty (30) days notice of its intended action. The notice shall include a

statement of either the terms or substance of the intended action or a description of the subjects

and issues involved, and of the time when, the place where, and the manner in which interested

persons may present their views thereon. The notice shall be mailed to all persons who have made

timely request of the agency for advance notice of its rule-making proceedings, and published in a

newspaper or newspapers having aggregate general circulation throughout the state, provided,

however, that if the action is limited in its applicability to a particular area, then the publication

may be in a newspaper having general circulation in the area. Notwithstanding the above

requirements, in lieu of newspaper publication, advance notice of proposed rulemaking by the

Department of Health may be provided via electronic media on a website maintained by the

office of the secretary of state. Authorization for such electronic notice shall commence on July

1, 2005 and shall expire on June 30, 2006. Copies of proposed rules shall be available at the

agency and by mail to any member of the public upon request.

(2) Afford all interested persons reasonable opportunity to submit data, views, or

arguments, orally or in writing. In the case of rules, opportunity for oral hearing must be granted

if requested by twenty-five (25) persons, or by a governmental subdivision or agency, or by an

association having not less than twenty-five (25) members. The agency shall consider fully all

written and oral submissions respecting the proposed rule. Upon adoption of a rule, the agency, if

requested to do so by an interested person, either prior to adoption or within thirty (30) days

thereafter, shall issue a concise statement of the principal reasons for and against its adoption,

incorporating therein its reasons for overruling the considerations urged against its adoption.

(3) Demonstrate the need for the adoption, amendment, or repeal of any rule in the

record of the rulemaking proceeding. The agency shall demonstrate that there is no alternative

approach among the alternatives considered during the rulemaking proceeding which would be as

effective and less burdensome to affected private persons as another regulation. This standard

requires that an agency proposing to adopt any new regulation must identify any other state

regulation which is overlapped or duplicated by the proposed regulation and justify any overlap

or duplication.

(4) Comply with section 42-35-3.3.

(5) Ensure that any proposed additions, deletions or other amendments to the rules and

regulations be clearly marked. An agency's lawful promulgation of amendments to an existing

rule shall be deemed to supersede and repeal the previous enactments of that rule, provided that

the public notice required under subsection (a)(1) of this section indicated such an intent.

(b) If an agency finds that an imminent peril to the public health, safety, or welfare

requires adoption of a rule upon less than thirty (30) days' notice, and states in writing its reasons

for that finding, it may proceed without prior notice or hearing or upon any abbreviated notice

and hearing that it finds practicable, to adopt an emergency rule. The rule so adopted may be

effective for a period of not longer than one hundred twenty (120) days renewable once for a

period not exceeding ninety (90) days, but the adoption of an identical rule under subsections

(a)(1) and (a)(2) is not precluded.

section, but no contest of any rule on the ground of noncompliance with the procedural

requirements of this section may be commenced after two (2) years from its effective date.

42-35-3.3. Regulations affecting small business. -- (a) Prior to the adoption of any

proposed regulation ~~on or after January 1, 2005,~~ each agency shall notify the governor's office

and the economic development corporation of its intent to adopt the proposed regulation. The

agency shall submit the proposed regulation to both the governor's office and the economic

development corporation at a time reasonably in advance of the commencement of the formal

rule-making process, but in any case no later than the date of public notice. If the governor's

office or the economic development corporation shall, within fifteen (15) days of receipt of such

notice, identify a proposed regulation as one that may have a significant adverse economic impact

on small businesses the proposing agency shall prepare a regulatory flexibility analysis in which

the agency shall, where consistent with health, safety and environmental and economic welfare,

consider utilizing regulatory methods that will accomplish the objectives of applicable laws while

minimizing adverse impact on small business. The ~~economic development corporation~~ small

business advocate shall identify and convey specific concerns raised by small business in

providing notice to the agency proposing the regulation, and shall, when appropriate, act as

advocate for a small business raising concerns hereunder. To the extent that a proposed regulation

is required to be promulgated by a state agency in order to comply with a requirement for the

establishment of specific standards under federal law, such regulations or nondiscretionary

portions thereof shall not be subject to the requirements of this section. The analysis shall, to the

extent ascertainable, include the following:

(1) An identification and estimate of the number of small businesses subject to the

proposed regulation;

(2) The projected reporting, record keeping and other administrative costs required for

compliance with the proposed regulation, including the type of professional skills necessary for

preparation of the report or record;

(3) A statement of the probable effect on impacted small businesses; and

(4) A description of any less intrusive or less costly alternative methods of achieving the

purpose of the proposed regulation.

(b) The agency shall consider, without limitation, each of the following methods of

reducing the impact of the proposed regulation on small businesses:

(1) The establishment of less stringent compliance or reporting requirements for small

businesses;

(2) The establishment of less stringent schedules or deadlines for compliance or

reporting requirements for small businesses;

(3) The consolidation or simplification of compliance or reporting requirements for small

businesses;

(4) The establishment of performance standards for small businesses to replace design or

operational standards required in the proposed regulation; and

(5) The exemption of small businesses from all or any part of the requirement contained

in the proposed regulation.

with the provisions of this section and provide such data as is available to the corporation in order

to support the intent of this section and develop alternatives for consideration by the proposing

agency. The economic development corporation shall provide written comment specifically

detailing any information that relates to the components of analysis in subsections (a)(1) -- (a)(4)

above and, such alternatives as they may have identified pursuant to subsections (b)(1) --(b)(5)

above. Such review and advice shall be completed within the notice and review periods required

by this chapter and shall not serve to delay the promulgation of rules.

(d) The following professional and business activities shall not be considered a small

business for purposes of this section:

(1) Financial institutions including banks, trusts, savings and loan associations, thrift

institutions, consumer and industrial finance companies, credit unions, mortgage and investment

bankers, and stock and bond brokers;

(2) Insurance companies, both stock and mutual;

(3) Mineral, oil and gas brokers; subdividers and developers;

(4) Landscape architects, architects and building designers;

(5) Entities organized as nonprofit institutions;

(6) Entertainment activities and productions including motion pictures, stage

performances, television and radio stations, and production companies;

(7) All utilities, water companies, and power transmission companies, except electrical

power generating transmission companies providing less than four and one-half (4.5) kilowatts;

(8) All petroleum and natural gas producers, refiners and pipelines.

SECTION 3. This act shall take effect upon passage and shall apply to all rules or

regulations proposed on or after January 1, 2006.

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LC02099/SUB B

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