Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

SB 12-086 Study Cost of Regulatory Compliance Sen. Cadman Staff Name: Jailyn Soto What the Bill Does This bill creates a task force to study the cost of regulatory compliance for businesses in Colorado. It establishes guidelines for member selection, including the number of members appointed, and outlines the length, focus, content, and reporting requirements for the study. Funding for the study may come from both private and public funding, and the Legislative Council is required to track all funding sources. Colorado Context: Colorados executive branch consists of 19 principal departments, housing more than 100 distinct agencies, each with some form of regulatory authority. 1 Gov. Hickenlooper recently signed an executive order directing state agencies to review their regulations to find ways they can be improved to help businesses.2 The order directs all state agencies to conduct periodic reviews to determine need, appropriateness and cost-effectiveness of those regulations. The order stems from the recommendations made by the Pits and Peeves roundtable meetings, outlining business leaders complaints about burdensome, duplicative regulations blocking business growth.3 Hickenlooper said he believes regulatory practices can be retooled without legislation.4 DORA will develop implementation guidance, and he expects state agencies to drive the process.5

Cutting Red Tape in Colorado State Government, Department of Regulatory Agencies, December 2011, http://www.dora.state.co.us/dora_pages/CuttingRedTape.pdf 2 Colorado.gov, Gov. Hickenlooper signs Executive Order, (last visited Feb. 1, 2012), http://www.colorado.gov/cs/Satellite/GovHickenlooper/CBON/1251615471126 3 The Durango Press, Hickenlooper sets CO business regulation goals, (last visited Feb. 1, 2012) http://durangoherald.com/article/20120109/NEWS01/701099934/-1/News01/Hickenlooper-sets-CO-businessregulation-goals 4 Patrick Malone, Governor Acts to Slash Business Red Tape, Chieftain.com, (Jan. 10, 2012), http://www.chieftain.com/business/local/governor-acts-to-slash-business-red-tape/article_568c6804-3b42-11e1a4d4-0019bb2963f4.html 5 Id.

DRAFT 2/6/2012 9:56 AM

For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.

National Context: The Small Business Administration (SBA) performs tasks similar to those proposed by SB 12-086. According to the SBA, the total cost of federal regulations has increased to $1.75 trillion, and the cost to firms with fewer than 20 employees is now $10,585/employee.6 Bill Provisions: Creates a legislatively appointed task force to study the cost of regulatory compliance for businesses in Colorado subject to Colorados regulatory system Establishes guidelines for the member selection process: o The task force is comprised of nine members. o Two of the members are appointed by the Senate president, two by the Senate minority leader, two by the Speaker of the House of Representatives, two by the House of Representatives minority leader, and one member is jointly appointed by the Senate president and House speaker. The duration of the study is two years with an interim report and a final report to the general assembly of the results of the study at its conclusion. The bill establishes the general guidelines for the contents of the study and authorizes the task force to consult similar studies. The bill requires the task force to be funded privately by gifts, grants, and donations and adequate funding for the study must be tracked by the legislative council staff as provided by law. The bill authorizes the directors of the legislative council staff and the office of legislative legal services and the state auditor to provide staff to the task force if adequate funding is received. The task force may also accept staff support from the private sector. Fiscal Impact: There is no fiscal note available for SB 12-086 at this time.

The costs imposed on small businesses are 36% higher than those experienced by their larger counterparts. Nicole V. Crain and W. Mark Crain, The Impact of Regulatory Costs on Small Firms, Sept. 2010, http://www.sba.gov/advocacy/853/2016.

DRAFT 2/6/2012 9:56 AM

For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.