No. 219

October 2002

SMALL BUSINESS

RESEARCH

SUMMARY

Analysis of State Efforts to Mitigate Regulatory Burdens

on Small Businesses

by Management Research and Planning Corporation

2002. [50] pages. Raleigh, N.C. 27603

under contract no SBA-HQ-00-M-0796

This Small Business Research Summary (ISSN 1076-8904) summarizes one of a series of research papers prepared under contracts

issued by the U.S. Small Business Administration’s Office of Advocacy. The opinions and recommendations of the authors of this study do

not necessarily reflect official policies of the SBA or other agencies of the U.S. government. For more information, write to the Office of

Advocacy at 409 Third Street S.W., Washington, DC 20416, or visit the office’s Internet site at www.sba.gov/advo.

Purpose

At the federal level, a system of checks and balances

has been enacted to ensure that the interests of small

businesses are taken into account in the creation of

federal regulations. The Regulatory Flexibility Act,

the Small Business Regulatory Enforcement and

Fairness Act, Executive Order 12866 (concerning

regulatory planning and review), and Executive

Order 13272 (on proper consideration of small entities in agency rulemaking) provide a network of protection against undue regulatory burdens. This report

examines efforts by state and local governments to

mitigate burdensome regulations on small entities at

these levels of governance. The report compares

state and local protections with the federal statutes

and executive orders, identifies unique methods that

states are using to protect small businesses from burdensome regulations, and identifies best practices in

reducing small business regulatory burdens.

Overall Findings

The research discovered that few states are actively

implementing protections for small businesses

against burdensome regulations, and even fewer are

implementing meaningful programs that genuinely

benefit the small business community. Providing

genuine protection to small businesses requires wellwritten legislation and executive orders, as well as

the political support of the state government and particularly the governor’s office, to ensure that these

written protections are enforced. The study finds that

laws and executive orders that do not garner the support of the governor’s office typically fail to provide

regulatory protection to small businesses.

Highlights

Efforts by some states to keep the small business

community informed about regulatory policies have

proven to be a great help. The use of existing methods by the federal government and some states has

successfully proven that small business interests can

be protected from burdensome regulations by state

governments. The continued improvement on these

models and implementation of these practices by

more states will continue to ensure that small businesses are protected from regulatory burdens. The

researchers picked five states that, in their view,

were more effective than the other 45 in reducing

federal regulatory burdens on their constituents:

Arizona, California, Illinois, New York, and Virginia.

The value of this study lies in its scope and breadth.

It provides a benchmark for what exists today in

terms of states’ efforts in abating the impact of federal regulations.

Scope and Methodology

This project had two stages: telephone interviews

and case studies. The researchers conducted tele-
phone interviews with respondents from both small

business advocacy positions (Small Business

Development Center directors, lead personnel with

small business trade associations and advocacy

groups, and so forth) as well as with state government personnel involved with their states’ regulatory

policies (small business ombudsmen, staff members

of state government small business advocacy offices,

and others). They conducted more than 125 telephone interviews with respondents in 33 states who

were actively involved in their states’ small business

government policy arena. The researchers also did

secondary research using the Internet and other

sources to determine whether laws or executive

orders had been passed by states to provide protection for small businesses similar to what is provided

by the federal government. Where possible, this

information was compared to the information collected in the interviews to validate findings. Finally,

the researchers completed a case study of selected

states that have processes and procedures for analyzing regulatory requirements.

Ordering Information

The full text of this report and summaries of other

studies performed under contract to the U.S. Small

Business Administration’s Office of Advocacy are

available on the Internet at www.sba.gov/advo/research.

Printed copies are available for purchase from:

National Technical Information Service

5285 Port Royal Road

Springfield, VA 22161

Tel. (800) 553-6847

TDD: (703) 487-4639

www.ntis.gov

Order number: PB2002-108708

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research, press releases, regulatory communications,

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