Out with the old, unneeded regs

MAKING THE CUT: Erik Godwin, right, director of the Office of Regulatory Reform, and Derrick Pelletier, principal economic and policy analyst, are implementing a new law that will reduce all state regulations by 10 percent, or 2,700 pages. / PBN PHOTO/MICHAEL SALERNO
MAKING THE CUT: Erik Godwin, right, director of the Office of Regulatory Reform, and Derrick Pelletier, principal economic and policy analyst, are implementing a new law that will reduce all state regulations by 10 percent, or 2,700 pages. / PBN PHOTO/MICHAEL SALERNO

The Administrative Procedures Act, recently signed into law, is forcing state agencies across the board to review all regulations and weed out those deemed either outdated or unnecessary.

“It is a substantial piece of legislation that brings Rhode Island’s regulatory process up to the current century,” said John C. Simmons, executive director of the R.I. Public Expenditure Council.

In May, the Office of Regulatory Reform tallied some 27,000 pages of regulations in state government. It estimates the new law would reduce that amount by 10 percent, or 2,700 pages, according to Director Erik Godwin.

“The statute is a shockingly comprehensive sweep of the regulatory landscape,” Godwin said.

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ORR, the division of state government tasked with improving Rhode Island’s business climate, has been crafting this legislation for the past three years.

The state’s reform follows an earlier effort in 2014 when the ORR – with the support of former Gov. Lincoln D. Chafee – reviewed more than 1,600 regulations and changed at least 167 that were deemed outdated, poorly designed or duplicated.

The new law will serve the business community in three ways: reduce the number of regulations, index and make searchable all regulations and create a website with a code of compliance, where the information for past and new regulations is easily accessible to the public. For the latter, Rhode Island is one of just four states in the nation and the only one in New England without one.

“That means that when a business is locating in Massachusetts they know what laws apply to them, but they can’t find them easily in Rhode Island,” said Godwin.

The impetus behind the new law stems from a plethora of disgruntled business owners, who over the years have complained about the difficulties associated with understanding the vast amount of regulations that affect individual companies or even entire industries. But more recently, in a more quantitative measure, ORR estimated more than one-third of businesses it surveyed reported having to hire a third-party consultant or lawyer just to navigate the state’s regulatory system.

“I’m probably taking money out of my own pocket here,” quipped Sen. William J. Conley Jr., D-East Providence, who’s a lawyer by trade, but sponsored and helped pen the new law. “But the experience of representing small businesses and helping them through the regulatory process has shown me how real this is.”

From a technical standpoint, state agencies – between now and Dec. 31, 2018 – will have to go through every page of regulation and decide what’s no longer needed and what should be carried over. The process, called an “opt-in requirement,” also forces the agencies to resubmit each regulation, and in laymen terms, to the R.I. Office of the Secretary of State. The idea, Godwin says, is to rid each agency of such unnecessary regulations as those governing fur traders, for example.

“This alone is going to result in a huge reduction,” he said.

Many state regulations right now are formatted as nonsearchable PDFs, creating an onerous process for business owners looking for relevant state laws. The effect, Godwin says, is a large volume of accidental noncompliance.

“If you can’t find the rules, you can’t follow them, except through good luck,” Godwin said.

Under the new law, an electrician will be able to search all regulations applicable to the industry as easily as a developer can look up those associated with wetlands or fire codes.

Finally, for new regulations, the law provides clearer guidelines on how those should be promulgated to the public and creates a platform for public comment through a new website being created by the secretary of state’s office. The latter received $700,000 for the new platform in the fiscal 2017 budget.

There are some risks associated with throwing out old regulations, however. They include inadvertently cutting relevant regulations that could still have a great impact on the business community. But Godwin says the new law has safeguards in place, requiring agencies to provide rationale and allow public comment – similarly to how it’s done now. ORR is responsible for coordinating the effort and making sure agencies stay compliant with the new law.

“The agencies have two and a half years to review 27,000 pages of regulations,” Godwin said.

Rhode Island businesses may not see an immediate effect, Godwin added, but the hope is a less-burdensome process will be realized before 2019. Rep. K. Joseph Schekarchi, D-Warwick, who sponsored the legislation in the House, said it’s a “huge win” for the business community.

“Over the long haul, businesses will be very happy with this,” he said. •

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