Small Business Economic Impact Statement-SBEIS

MEMORANDUM

DATE:

???

TO:

[Interested small businesses, or...?]

Rules Coordinator

FROM:

[name and title of rule writer]

SUBJECT: Small Business Economic Impact Statement for Proposed Amendments to [Chapter ____ WAC, Title]

SUMMARY OF PROPOSED RULES

The Department of __________ is proposing amendments to Chapter ________ WAC, [title]. [This chapter replaces Chapter ____ WAC (same title)].

The purpose of this chapter is to:

The proposed amendments to this chapter include:

[If applicable, may want to say something like: This chapter has been rewritten in plain English, using a question and answer format to make it more understandable to our customers. Unnecessary rules have been eliminated and others have been clarified.]

Small Business Economic Impact Statement

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SMALL BUSINESS ECONOMIC IMPACT STATEMENT--DETERMINATION OF NEED

Chapter 19.85 RCW, The Regulatory Fairness Act, requires that the economic impact of proposed regulations be analyzed in relation to small businesses. The statute defines small businesses as those business entities that employ fifty or fewer people and are independently owned and operated.

These proposed rules impact [types of small businesses]. These businesses fall under the ____ [identify North American Industry Classification System (NAICS) codes corresponding to the industries/businesses].

Preparation of an SBEIS is required when a proposed rule has the potential of placing a disproportionate economic impact on small businesses. The statute outlines information that must be included in a Small Business Economic Impact Statement (SBEIS).

[The department] has analyzed the proposed rule amendments and has determined that small businesses will be impacted by these changes, with [some] costs considered "more than minor" and disproportionate to small businesses. [Remember to consider loss of revenue, too, as part of costs.]

INDUSTRY ANALYSIS

[If applicable, may want to mention that: The department is responsible for ________________________. As part of their monitoring, the program [or?] keeps a current internal database that identifies all affected small businesses. Using this database gives more accurate information about impacted small businesses for this analysis than the four-digit NAICS codes.]

[The department] has determined that there are [#? if known] existing agencies that meet the criteria for small businesses under RCW 19.85.020. These proposed rules impact [name all the types of small businesses].

INVOLVEMENT OF SMALL BUSINESSES

[Describe involvement by small business stakeholders in both rule development and for gathering cost data for analysis. Describe specifics about how you derived cost data, such as: the approach you used for doing a survey--the types of representative users you involved, from what types of businesses, in what areas of the state; the ways you conducted focus groups and collected information; and/or details about other methods you used.]

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COST OF COMPLIANCE

Explain if the rule will meet the definition of "Minor Costs". "Minor Cost" means a cost per business that is less than three-tenths of one percent of annual revenue or income, or one hundred dollars, whichever is greater, or one percent of annual payroll. When we compare the cost of compliance for small businesses we must compare with the cost of compliance for the 10% of businesses that are the largest business required to comply with the proposed rule. For comparison purposes you must use a) cost per employee; b) cost per hour of labor; or c) cost per one hundred dollars of sales.)

GENERAL COSTS

[Title of department] analysis revealed that there are costs imposed by the proposed amendments. [List the costs. If you're using survey results, be sure to include the percentage of total responses for each cost or cost area--you may also need to include the range of costs if the responses are widely divergent.]

SPECIFIC COST CATEGORY-SUBHEADING explain & list specific costs in area

SPECIFIC COST CATEGORY-SUBHEADING explain & list specific costs in area

SPECIFIC COST CATEGORY-SUBHEADING explain & list specific costs in area

[CHARTS AND/OR TABLES?]

[Conclude with a statement or paragraph about total costs for small businesses within a given period of time, such as a year]

Disproportionate Economic Impact Analysis

When proposed rule changes cause more than minor costs to small businesses, the Regulatory Fairness Act requires an analysis that compares these costs between small businesses and ten percent of the largest businesses. [Discuss this process, and outcome: which costs are considered disproportionate?]

Mitigating Costs

[The department] has plans for mitigating (lessening) disproportionate costs for small businesses by___________________. [If you cannot mitigate costs, you must give clear reasons why.]

Benefits for Proposed Rules (optional)

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[Although you are not required to include benefits, specifying them may give additional reasons for proposing these rules. If you are combining a SBEIS and CBA, you must include benefits. Be sure to address specific benefits for each cost area as well as other specific benefits. Example: Several [numerous?] benefits will result from the adoption of the proposed amendments. These benefits include:]

JOBS CREATED OR LOST

In collecting information from representative small businesses through a [survey, focus group meetings-- whatever data collection you did], the [department] estimates that [# jobs will be lost or # jobs will be created] as a result of small businesses complying with these rules.

CONCLUSION

[The department] has given careful consideration to the impact of proposed rules in [title] on small businesses. To comply with the Regulatory Fairness Act, Chapter 19.85 RCW, [the department] has analyzed impacts on small businesses and proposed ways to mitigate costs considered more than minor and disproportionate.

Please contact me if you have any questions at [phone number].

Small Business Economic Impact Statement

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