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The Honolulu Advertiser

Posted on: Friday, May 23, 2003

Rule list not ready for review by board

By Sean Hao
Advertiser Staff Writer

State agencies won't make a June 30 deadline to identify all rules affecting small businesses for outside review.

That will mark the third time that departments have missed a biennial deadline to provide such a list to the Small Business Regulatory Review Board. The panel was created in 1998 to deter state agencies from adopting regulations that are onerous to small businesses.

The board was hailed as a milestone in business advocacy in Hawai'i, which is commonly criticized as a state unfriendly to business. However, board insiders and others agree that until now the board has been largely ineffective because of a lack of cooperation from state agencies.

That attitude may be changing. The board, comprising business leaders on a volunteer basis, was invited to its first meeting with Cabinet-level officials Wednesday. At the meeting, Gov. Linda Lingle provided assurances that department heads would cooperate with the panel.

Where to call

• The Small Business Regulatory Review Board can be reached through the state's small-business advocate at 586-2594.

Atter the meeting, board members said they were optimistic about getting real support from state government.

"This is a huge step forward for the review board," said Denise Walker, a member from the Big Island and interim head of the board.

The effectiveness of the board could be a litmus test for pro-business efforts of Lingle's Republican administration, which took office in December.

Agencies won't make the June 30 deadline mainly because listings for this two-year review cycle were not started during the previous administration, said Ted Liu, director for the Department of Business, Economic Development and Tourism, which oversees the board.

"There's every intention to do the review, but we can't do over a couple of months what takes a couple of years," he said. Liu also said Lingle expects her Cabinet members and their departments not only to cooperate with the board but also to help "meet their legal mandate."

Since the board can't review the lists of all agency rules affecting small businesses, it will instead focus on any that exceed federal requirements, as well as regulations that businesses identify as burdensome.

Board members also will continue to review new rules that have a business impact. So far the board has played a role in altering only a handful of the state's regulations.

The regulatory review board was created by the Hawai'i Small Business Regulatory Flexibility Act, which has been praised by some outside the state as model legislation. According to the law, any new rule or rule change must be reviewed to determine the number of small businesses affected and to what extent.

In addition to reviewing existing, new and changed rules, the flexibility act allows businesses to file protests against rules adopted by state agencies. Despite continued criticism of the state's business climate by business owners, legislators and the administration, there hasn't been a single protest filed by a business against an agency rule since the legislation took effect.

A lack of public awareness and a distrust of government may be reasons for the absence of filed protests. DBEDT said it plans to heighten the board's public profile to attract business participation in the reviews.

The board, at the direction of the past legislative session, was also instructed to develop a small-business bill of rights. But the board meets only once a month and is short three members. Monthly meetings are supplemented by more frequent committee meetings.

"It certainly is a huge load," Woods said. "I think there will be a lot of accomplished in the next year."

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.