Senate Bill No. 46
(By Senators Facemyer, Bailey, Smith and Weeks)
[Introduced January 8, 2003; referred to the Committee on the
Judiciary and then to the committee on Finance.]
A BILL to amend chapter twenty-nine-a of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article eight, relating to
the creation of the "West Virginia Regulatory Flexibility
Act"; legislative purpose; definitions; analysis of cost to
state filed with legislative auditor; issuing rules in two or
more parts; provisions not to apply in case of emergency; and
requiring agencies to review rules after enactment of this
Be it enacted by the Legislature of West Virginia:
That chapter twenty-nine-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by adding
thereto a new article, designated article eight, to read as
ARTICLE 8. REGULATORY FLEXIBILITY ACT.
§29A-8-1. Short title.
This article may be cited as the "West Virginia Regulatory
§29A-8-2. Legislative findings.
(a) The Legislature finds:
(1) In numerous instances compliance with the rules
promulgated by state agencies imposes unreasonable burdens on
individuals of limited means and on businesses and organizations
engaged in or planning business projects on a small scale;
(2) A regulatory dilemma has developed in which efforts to
protect the health, safety and economic welfare of the people of
this state have created a burden of required legal, accounting and
consulting services which is causing economic harm to individuals
and organizations of limited resources;
(3) This burden is adversely affecting competition in the
(4) The sheer scope and volume of rules already in place has
created high entry barriers in many industries, and discouraged
potential entrepreneurs from introducing beneficial products and
(5) The practice of treating all regulated individuals,
organizations, businesses and business activities as equivalent,
for purposes of regulatory and paperwork requirements, has led to
inefficient use of the resources of some state agencies and to enforcement problems;
(6) The collection of information by the state has not weighed
adequately the privacy rights of individuals and enterprises
against the state's need to know because the design of the
regulatory process has encouraged regulators to treat information
as a free commodity; and
(7) The deep public dissatisfaction with the regulatory
process has stemmed in large part from a public perception of the
failure of burdensome rules to correct key problems.
(b) The Legislature declares it to be in the best interest of
its citizens that this state establish as a principle of regulatory
issuance that regulatory and informational requirements fit the
scale of the persons and activities being regulated. Fewer and
simpler requirements should be required of individuals, small
organizations, small businesses and larger private entities engaged
in business activity on a small scale. To achieve these ends, state
agencies should issue regulations which rules proportionately to
the size and scope of the business or activity being regulated.
As used in this article:
(a) "Administrative rule" or "rule" means any agency statement
which is made, adopted and promulgated pursuant to law, is of
general applicability and continuing effect and which implements or
interprets any law or policy and applies to persons engaged in business.
(b) "Business" means any trade, business or professional
entity or activity which is conducted for profit.
(c) "Small business" means any independently owned and
operated enterprise which is not dominant in its field of
operation; has less than thirty employees and gross receipts of
less than four million dollars; or, any other business which an
agency using this criteria would deem as a small business.
(d) "Small organization" means any unincorporated business,
sheltered workshop or nonprofit enterprise which is not dominant
in its field of operation; has gross receipts of less than four
million dollars; or, any other organization which an agency using
this criteria would deem a small organization.
(e) "State agency" or "agency" means each of the principal
departments in the executive branch of the state government, and
all boards, divisions, commissions, agencies, departments,
councils, authorities, offices or officers within any departments
authorized by statute to make, adopt or promulgate rules.
§29A-8-4. Analysis of cost to state; filing with legislative
(a) Prior to the adoption and promulgation of a proposed
administrative rule, each state agency shall conduct an analysis
for the purpose of making a determination, based on the amount of
information collection the proposed rule would necessitate, of the approximate amount of legal, enforcement, consulting and accounting
costs to the state which would be so necessitated and of the
approximate overall cost to persons or businesses other than public
entities of complying with the rule. Pursuant to an analysis, of
the cost compared with the importance of the public policy to be
achieved, the agency shall make a further determination whether the
rule should apply at all or in the same manner to persons,
businesses and organizations of various sizes and resources, or to
business operations of different scope.
(b) The head of any agency preparing any administrative rule
shall submit the rule, together with the analysis of its costs and
benefits as herein above provided, to the legislative auditor. The
legislative auditor shall review the proposed rule and the analysis
of costs and benefits and, within ninety days of receipt of the
shall issue to the agency a statement
containing comments on
the impact of the proposed rule. The statement must also contain
comments on the impact of the proposed rule on businesses not
directly regulated by it.
(c) The head of the agency proposing an administrative rule
shall issue a notice that the analysis of costs and benefits and
any statement on the impact of the proposed rule made by the
legislative auditor is on file with the secretary of state and the
notice is to be included with the public notice which is to be
distributed to interested persons and published in the state register pursuant to the provisions of article three of this
(d) The legislative auditor and the secretary of state shall
maintain a file of all administrative rules submitted to them
pursuant to this article along with the analysis of costs and
benefits and the statement of impact.
§29A-8-5. Rules issuing in two or more parts.
(a) Whenever both the results of the analysis by a state
agency and comments by the legislative auditor indicate the
desirability of promulgating rules which differ with respect to
their substance or applicability to various segments of the
businesses or business activities to which the rules would apply,
the agency shall issue the new rule in two or more parts, with each
part containing varying requirements for performance or reporting,
to persons, business concerns and organizations of varying economic
sizes and resources engaged in business activities of varying
scope. These varying requirements shall take into account: (1)
The capitalization, annual income, number of employees and such
other factors as bear on the ability of the regulated persons,
concerns or organizations to sustain the costs attached to
compliance with the rule; and (2) the value of the regulated
activities to the economy of the state and the welfare of its
In establishing segments of regulated businesses or business activities for the purposes of this section, agencies shall
establish objective and uniform criteria to facilitate
determinations by those engaged in the businesses and business
activities of the applicability of rules issued hereunder.
(b) Whenever a state agency proposes to issue or issues a
rule, any business affected directly or indirectly by the rule may
at any time apply to the agency for any exemption to the rule as it
believes to be authorized by subsection (a) of this section. The
agency shall review all applications and may include any exemptions
requested in its official standards for exemptions upon finding
that the public health, safety or welfare will be protected.
Within sixty days after its receipt of an application the agency
shall inform the applicant of: (1) Its rejection of the
application and its reasons therefor; or (2) its approval of the
application and the approximate date when the exemptions will be
included in the agency's official standards. If an agency response
is not postmarked within sixty days from the date of receipt of an
application, the application shall be considered approved.
(c) The head of any agency issuing a rule in two or more
parts, shall transmit a copy, together with statements and comments
made by the legislative auditor, to the president of the Senate and
to the speaker of the House of Delegates.
§29A-8-6. Provisions not to apply in case of emergency.
The provisions of this article may not apply when an agency finds that an emergency exists which requires the immediate
adoption of a rule and states in writing its reasons for that
finding pursuant to the provisions of section fifteen, article
three of this chapter.
§29A-8-7. Agencies to review rules after enactment of this
During the five-year period beginning with the date of
enactment of this article, each agency shall review its substantive
rules which are in effect on that date and make the determinations
to which section four of this article refers with respect to each
NOTE: The purpose of this bill is to check the increasing
burden of administrative rules on individuals and organizations, by
providing flexibility in how the state agencies and private
businesses are to be affected by rules.
This article is new; therefore, strike-throughs and
underscoring have been omitted.