SB2487 HD1.DOC

SECTION 1. The legislature finds that Act 168, Session Laws of Hawaii 1998, codified as chapter 201M, Hawaii Revised Statutes, established the small business regulatory flexibility act. Act 168 provided for a petition process to an agency for regulatory review, periodic administrative review of rules with small business impacts, and an independent regulatory review board, known as the small business regulatory review board, to consider concerns of small businesses and make recommendations to adopt, amend, or repeal rules.

Unfortunately, the legislature also finds that the small business regulatory review board has not been functioning as originally envisioned. The legislature further finds that the small business regulatory review board's role is to look at the impact of rules on small businesses.

The legislature additionally finds that in order for the small business regulatory review board to function effectively, board members must have a thorough understanding of the role of board members and the parameters of that role. Clarifying the contents of the board's annual report to the legislature will also assist with the efficient operation of the board.

Accordingly, the purpose of this Act is to better ensure that the small business regulatory review board functions as originally envisioned by:

(1) Requiring members of the small business regulatory review board to receive training by the appropriate division of the department of the attorney general to ensure that the members have a clear understanding of the role of board members and the parameters of the members' role, including the hierarchy of the Hawaii Revised Statutes and the Hawaii Administrative Rules; and

(2) Clarifying the contents of the annual report that the small business regulatory review board must submit to the legislature.

SECTION 2. Section 201M-5, Hawaii Revised Statutes, is amended to read as follows:

"§201M-5 Small business regulatory review board; powers. (a) There shall be established within the department of business, economic development, and tourism, for administrative purposes, a small business regulatory review board to review any proposed new or amended rule or to consider any request from small business owners for review of any rule adopted by a state agency and to make recommendations to the agency or the legislature regarding the need for a rule change or legislation. For requests regarding county ordinances, the board may make recommendations to the county council or the mayor for appropriate action.

(b) The board shall consist of nine members, who shall be appointed by the governor pursuant to section 26-34; provided that:

(1) Three members shall be appointed from a list of nominees submitted by the president of the senate;

(2) Three members shall be appointed from a list of nominees submitted by the speaker of the house of representatives;

(3) Two members shall be appointed by the governor;

(4) The director of business, economic development, and tourism, or the director's designated representative, shall serve as an ex officio[[],[]] voting member of the board;

(5) The appointments shall reflect representation of a variety of businesses in the State;

(6) No more than two members shall be representatives from the same type of business; and

(7) There shall be at least one representative from each county.

For the purposes of paragraphs (1) and (2), nominations shall be solicited from small business organizations, state and county chambers of commerce, and other interested business organizations.

(c) Except for the ex officio member, all members of the board shall be either a current or former owner or officer of a business and shall not be an officer or employee of the federal, state, or county government. A majority of the board shall elect the chairperson. The chairperson shall serve a term of not more than one year, unless removed earlier by a two-thirds vote of all members to which the board is entitled.

(d) A majority of all the members to which the board is entitled shall constitute a quorum to do business, and the concurrence of a majority of all the members to which the board is entitled shall be necessary to make any action of the board valid.

(e) The members of the board shall receive training by the division of the department of the attorney general that oversees the State's boards and commissions to ensure that the members have a clear understanding of the role of board members and the parameters of the members' role, including the hierarchy of the Hawaii Revised Statutes and the Hawaii Administrative Rules.

[~~(e)~~] (f) In addition to any other powers provided by this chapter, the board may:

(1) Adopt any rules necessary to implement this chapter;

(2) Organize and hold conferences on problems affecting small business; and

(3) Do any and all things necessary to effectuate the purposes of this chapter.

[~~(f)~~] (g) The board shall submit an annual report to the legislature twenty days prior to each regular session detailing [~~any~~]:

(1) Any requests from small business owners for review of any rule adopted by a state agency[~~, and~~];

(2) The impact or effect any such rule adopted by a state agency would have on small businesses;

(3) Any action taken by the board in response to any requests from small business owners for review of rules adopted by state agencies, including any recommendations made by the board to an agency or the legislature regarding the need for a rule change or legislation[~~. The report shall also contain a~~];

(4) The outcome of any action taken pursuant to paragraph (3); and

(5) A summary of the comments made by the board to agencies regarding its review of proposed new or amended rules.

(h) The department of business, economic development, and tourism shall provide sufficient financial and administrative support reasonably necessary for the board to conduct small business regulatory review activities."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	2487
TWENTY-SEVENTH LEGISLATURE, 2014		S.D. 1
STATE OF HAWAII		H.D. 1