STAND. COM. REP. NO. 529

Honolulu, Hawaii

RE:    S.B. No. 188

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Economic Development and Taxation, to which was referred S.B. No. 188 entitled:

"A BILL FOR AN ACT RELATING TO THE SMALL BUSINESS REGULATORY FLEXIBILITY ACT,"

begs leave to report as follows:

     The purpose of this measure is to clarify the Small Business Regulatory Flexibility Act, chapter 201M, Hawaii Revised Statutes (HRS). 

     Specifically, this Act:

     (1)  Provides that a small business impact statement will be prepared and submitted to the Small Business Regulatory Review Board as early as practicable in the rule drafting process;

     (2)  Provides that adopted rules affecting small business will be reviewed to determine if they are still appropriate within five years after adoption; and

     (3)  Makes nonsubstantive changes to chapter 201M, HRS, to clarify the definition of a rule and to remove outdated sections of the chapter.

     Testimony in support of this measure was received from the Department of Business, Economic Development, and Tourism; Small Business Regulatory Review Board; and The Hawaii Business League.

     Your Committee finds that the Small Business Regulatory Flexibility Act, Act 168, Session Laws of Hawaii 1998, serves as a model for many other states in helping local small businesses through a fair and equitable regulatory process.  It has been particularly successful in the past three years with regard to rulemaking by public agencies, and their effects on small businesses.

     Your Committee is in strong support of the work of the Small Business Regulatory Review Board and believes the amendments in this measure will further assist their work.

     Your Committee has considered a concern regarding the proposed changes to section 201M-8, HRS, regarding violations related to safety or environmental impact, and believes that this issue may need further review.

     Your Committee has amended this measure accordingly, by:

     (1)  Requiring that a petition for regulatory review under section 201M-6, HRS, and the list of rules adopted in the previous five years under section 201M-7, HRS, be sent to the Ombudsman;

     (2)  Deleting the proposed changes to section 201M-8, HRS; and

     (3)  Making technical amendments for the purposes of clarity and to conform the measure to the preferred drafting style.

     As affirmed by the record of votes of the members of your Committee on Economic Development and Taxation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 188, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 188, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection, and Affordable Housing.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Taxation,

____________________________

CAROL FUKUNAGA, Chair