Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Business and Economic Development, to which was referred S.B. No. 711 entitled:

begs leave to report as follows:

The purpose of this measure is to require the preparation and submission of small business impact statements to the small business regulatory review board as early as practicable in the rule drafting process, and to require that rules affecting small business be reviewed within five years of adoption.

Testimony in support of this measure was submitted by the Department of Business, Economic Development, and Tourism; the National Federation of Independent Business – Hawaii; and the Hawaii Agriculture Research Center.

Your Committee finds that upon the adoption of chapter 201M, Hawaii Revised Statutes (the Small Business Regulatory Flexibility Act), it was necessary to review administrative rules already in place before reviewing new or modified rules. Accordingly, each rulemaking agency has submitted a list of rules adopted before July 1, 1998 affecting small business and describing the public purpose for the rule and any other reasons to justify its continued implementation. The need to periodically review rules with a potential impact on small business remains valid. Your Committee believes that this measure will ensure the review of proposed new or amended rules.

Your Committee further finds that the timing of preparing and submitting a small business impact statement as required by chapter 201M should be earlier in the rulemaking process to ensure adequate time for review and comment on proposed new and amended rules. This measure specifies when an agency shall prepare and submit a small business impact statement.

Your Committee has amended this measure by making technical, non-substantive amendments for the purposes of style and clarity.

As affirmed by the record of votes of the members of your Committee on Business and Economic Development that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 711, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 711, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection, and Housing.