Bill Aimed at Reducing Burden of Regulations on Small Businesses

Posted on 03-31-2022

For Immediate Release:  March 31, 2022

If a new bill becomes law, state agencies proposing new regulations would have to consider the burden they would impose on businesses and take steps to minimize those impacts.

“Regulations carry the weight of law and may require businesses to make large investments in time and other resources to achieve compliance,” said State Rep. Charles Postles (R-Milford North), the prime sponsor of the Regulatory Flexibility Act.

“I fully understand that regulations serve a valuable function, often playing a vital role in protecting public health, worker safety, and the environment”, Rep. Postles said.  “Having said that, the process of promulgating new regulations in Delaware is weighted in favor of the state agencies making the rules.  It is easy for state officials to become so preoccupied with carrying out their agency’s mission that other valid considerations are not given proper attention, resulting in rules that needlessly hamper the viability of job-creating enterprises.”

Rep. Postles and other supporters of the Regulatory Flexibility Act say it will help level the playing field by building on existing law.

One new requirement sought by the bill is the creation of an economic impact statement as part of the regulatory creation process.  State officials proposing a new rule expected to adversely impact small businesses would need to identify the affected enterprises; the administrative costs for compliance; and a description of any less intrusive or less expensive alternatives for achieving the same goal.

While present law requires every state regulation to be periodically reviewed, the new bill would mandate that this process emphasize minimizing the economic impact on small businesses.  Under the bill, the agency would need to consider the continued need for the regulation; comments received from the public; and the rule’s complexity.  The review would also be required to look at the extent to which the regulation overlaps, duplicates, or conflicts with other federal, state, or local regulations; and the degree to which technology, economic conditions, or other factors that have changed since the regulation was put into place.

“I hear entrepreneurs too frequently tell us that our state has become increasingly less business friendly over the last 10 to 15 years,” Rep. Postles said.  “That’s a trend we need to reverse if we hope to have a brighter economic future. Small businesses are collectively our top employer in the state.”

One analysis published last summer in U.S. News & World Report ranked Delaware among the “10 worst states to start a business” (#42 overall).  A 2019 ranking of the Best States to do Business by Forbes gave Delaware an overall standing of 23rd, but The First State came in 42nd in sub-category of “regulatory environment.”

The Regulatory Flexibility Act was originally introduced in the last legislative session but failed to get the hearing it was due in the House Administration Committee.  Rep. Postles says he is introducing a new version of the bill containing provisions to block any proposed regulations not complying with the economic impact disclosure reforms.  He added that he plans to work with other supporters of the measure to make a renewed push to get it to the floor for a vote before the end of the current legislative session.