H 7449Economic Development

State Affairs and Government - Small Business Regulatory Fairness in Administrative Procedures-Economic Impact Statements

Requires state agencies to ensure that the costs of new regulations are proportional to the size of the business.

Held for study

Population
Affected

Introduced Jan 30, 2026Committee House Small Business

Plain-English Summary

This legislation amends the "Small Business Regulatory Fairness in Administrative Procedures" laws. It adds a specific requirement for state agencies when they are preparing economic impact statements for proposed regulations. Agencies must now include a finding that the expected cost of complying with a new rule scales proportionally with the size of the business. The bill explicitly aims to prevent the imposition of fixed costs that are easily absorbed by large corporations but would be burdensome for small businesses.

For younger readers

Imagine a lemonade stand and a giant soda factory. Sometimes the government makes rules that cost money to follow. If a rule costs $100 for everyone, the giant factory can pay it easily, but the lemonade stand might lose all its money. This bill tells the government they have to be careful. When they make new rules, they have to make sure the cost fits the size of the business. So, a small business pays a small amount, and a big business pays a big amount.

Who & Where It Applies

Impacted groups

Small business ownersState agenciesOffice of Regulatory ReformAdministrative law attorneysRegulatory compliance officers

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Protects small, local businesses—which are often owned by minorities, women, and immigrants—from being priced out of the market by flat-rate regulatory costs that favor large corporations.
Helps prevent corporate consolidation and monopolies by ensuring that government regulations do not inadvertently act as barriers to entry for smaller competitors.
Promotes economic diversity and resilience within communities by supporting the viability of local enterprises over national chains.
Could delay or hinder the implementation of necessary health, safety, or environmental regulations by adding another layer of bureaucratic analysis and potential legal challenges.
May create a loophole where essential protections for workers or consumers are diluted for small businesses under the argument that full compliance is not "proportional" to their revenue.
Might be practically difficult to implement for safety equipment or standards that have fixed costs (e.g., a machine guard costs the same regardless of company size), potentially risking worker safety.

For Conservatives

Protects small business owners and entrepreneurs from burdensome government overreach that disproportionately harms them compared to large, politically connected corporations.
Forces government bureaucrats to acknowledge and calculate the real-world financial impact of their rules on the private sector before enacting them.
Encourages free enterprise and innovation by removing "one-size-fits-all" regulatory barriers that often stifle business growth.
Expands the administrative state by requiring agencies to produce more complex reports and analysis, potentially wasting taxpayer money on bureaucratic processes.
Grants government officials more discretion to decide what costs are "proportional," potentially leading to arbitrary decision-making or favoritism.
Does not actually reduce the volume of regulations or the size of government, but merely changes the paperwork process required to implement them.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 4 additions

SECTION 1. Section 42-35.1-3 of the General Laws in Chapter 42-35.1 entitled "Small Business Regulatory Fairness in Administrative Procedures" is hereby amended to read as follows: 42-35.1-3. Economic impact statements.

(a) Prior to the adoption of any proposed regulation that may have an adverse impact on small businesses, with the exception of emergency regulations adopted in accordance with § 42- 35-2.10 and excluding those businesses defined in subsection (c) of this section, each agency shall prepare and submit, in conjunction with assistance and oversight from the office of regulatory reform, the proposed regulations to both the governor’s office and the office of regulatory reform at least fifteen (15) days in advance of the commencement of the formal rulemaking process, and in congruence with the analysis required in subsection (b) of this section, an economic impact statement that includes the following:

(1) An identification and estimate of the number of the small businesses subject to the proposed regulation;

(2) The projected reporting, recordkeeping, and other administrative costs required for compliance with the proposed regulation, including the type of professional skills necessary for preparation of the report or record;

(3) A statement of the effect or probable effect on impacted small businesses and a finding that the anticipated compliance costs of a proposed rule scale proportionally with the business size, and do not impose fixed costs that larger businesses are able to absorb more easily;

(4) A description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation.

(b) The economic impact statement required herein shall be published in guide form as well as posted on the department of administration and the office of management and budget websites. The guide should be published and/or posted on or around the same date as the regulation change and shall include a description of actions needed by the small business to meet the requirement of the regulation. The office of regulatory reform shall develop criteria for the economic impact statement.

(c) The following professional and business activities, extensively regulated pursuant to state and federal law and subject to significant capital requirements and other regulatory standards, shall be excluded from this section:

(1) All public utilities, as defined in § 39-1-2, whose rates are subject to approval by the public utilities commission; and

(2) All regulated institutions as defined in § 19-1-1; broker-dealers as defined in § 7-11- 101(1); and insurance companies chartered or licensed pursuant to chapters 1 and 2 of title 27.

SECTION 2. This act shall take effect upon passage.