S 2665Economic Development

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

This bill requires state agencies to ensure that the costs of new regulations are proportional to a business's size.

Introduced

Population
Affected

Introduced Feb 27, 2026Committee Senate Finance

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 prepare an economic impact statement for a proposed regulation. Agencies must now find and verify that the costs of complying with a new rule are proportional to the size of the business. This implies that regulations should not impose fixed costs that are easy for large corporations to absorb but difficult for small businesses. The bill aims to prevent regulations from unfairly burdening small enterprises. Public utilities, banks, and insurance companies remain excluded from this requirement.

For younger readers

Imagine you have a small lemonade stand, and a giant soda factory is next door. Sometimes the government makes rules for businesses to follow. This bill says that when the government makes a new rule, they have to check to make sure it is fair for the little guys, like you. They have to make sure that the cost to follow the rule isn't too expensive for a small business compared to a big company. This helps small businesses stay open and not get crushed by costs that only big companies can afford.

Who & Where It Applies

Impacted groups

Small Business OwnersState AgenciesOffice of Regulatory ReformLarge CorporationsEntrepreneurs

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Protecting small businesses helps maintain diverse local economies and community wealth, preventing market consolidation by large, non-local corporations.
Ensures a more equitable playing field by acknowledging that flat-rate compliance costs disproportionately punish smaller entities with fewer resources.
Encourages the growth of local entrepreneurship, which is often a pathway for economic mobility for disadvantaged groups and community members.
Could create administrative hurdles that delay or water down important health, safety, and environmental regulations that protect workers and the public.
Might provide a loophole for businesses to argue against necessary compliance standards by claiming the costs are not "proportional," potentially endangering public welfare.
Excludes powerful industries like insurance and banking from these fairness requirements, leaving consumers in those sectors vulnerable to regulatory imbalances.

For Conservatives

Reduces the regulatory burden on small business owners by ensuring government mandates do not impose crushing fixed costs that only large corporations can absorb.
Forces unelected bureaucrats to justify the economic impact of their rules before implementing them, increasing government accountability and transparency.
Promotes a free market environment where small entrepreneurs can compete on merit rather than being stifled by the cost of government red tape.
Expands the administrative state by requiring more government paperwork and analysis, rather than simply cutting regulations altogether.
Explicitly excludes public utilities and financial institutions, suggesting the government is picking winners and losers rather than applying freedom universally.
Relies on government agencies to self-police and determine if their own rules are "proportional," which may result in biased findings rather than true deregulation.

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.