Government

Regulatory Fairness Act

The legislature enacted the Regulatory Fairness Act (RFA), chapter 19.85 RCW, in 1982 with the intent to reduce disproportionate costs of state regulations on small businesses. Under the RFA, a state agency must develop a small business economic impact statement (SBEIS) if a rule they propose to adopt under the Administrative Procedures Act will impose more than "minor" costs on businesses.

In 2017, the Washington State Legislature passed House Bill 1120, requiring the state to provide tools and guidance to improve state agency implementation of the RFA. Provisions of the bill required ORIA to "act as the central entity to collaborate with and provide support to state agencies" in meeting RFA requirements.

If you are a state agency, or business in the state of Washington, and have questions about rulemaking and the Regulatory Fairness Act please email Elle Hirotaka at elle.hirotaka@gov.wa.gov. or call 360-890-0366.

Tools & Guidance

The state's Regulatory Fairness Act (RCW 19.85) (RFA) requires state agencies to take the financial effects of proposed regulations into account as they finalize them. During each rulemaking, there is an expectation that when a proposed rule impacts a small business, the agency must consider several cost comparisons and analyze other business-related information.

"Small business" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, and that has fifty or fewer employees.

The RFA requires state agencies to consider three main decision points during the early phase of their rulemaking to help determine the need to complete a Small Business Economic Impact Statement (SBEIS)-one of the RFA’s main requirements.

If the agency determines they are required to complete an SBEIS, the statute requires several steps in this analysis including calculating all costs to businesses, determining estimated lost sales and revenues, and determining jobs gained or lost as a result of the proposed rules. Where feasible, the agency must also mitigate costs that are disproportionate for small businesses.

Over 20 state regulatory agencies have collaborated with ORIA to share best practices, identify information needs and develop online resources. These resources are provided below.

RFA SBEIS Decision Tree:
  • Are all the components of the proposed rule exempt from a need to perform a Small Business Economic Impact Statement (SBEIS)?
  • Are all the businesses impacted by the proposed rule large businesses?
  • Does the proposed rule impose more than minor-cost on a business in an industry? *
  • A state agency may also decide to complete a Small Business Economic Impact statement even if the proposed rule is exempt or the cost is less than minor.

Guidance
Documents
Data & Business Information Sources
Minor-Cost Threshold Calculator