Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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CONTENTS: |
To waive fines or penalties for paperwork violations that are
first-time offenses committed by small businesses |
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STATE FUND |
FY 2009 |
FY 2010 |
FUTURE YEARS |
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Various Agency Funds |
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Revenues |
Potential loss in fees and
fines |
Potential loss in fees and
fines |
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Expenditures |
- 0 - |
- 0 - |
- 0 - |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2009 is July 1, 2008 – June 30, 2009.
·
The
bill waives administrative fines or civil penalties on small businesses for
first-time "paperwork" violations and could result in minimal revenue
losses for state agencies, boards, and commissions that regulate small
business. The bill would work in combination
with a February 12, 2008 executive order that requires agencies, boards, and
commissions, where appropriate, to forgive first-time paperwork infractions
committed by any business regulated in Ohio.
·
Ohio
Department of Development statistics from April 2008 show that there are
889,600 entities in Ohio that meet the bill's definition of small business.
·
No
direct fiscal effect on political subdivisions.
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Waiver for first-time paperwork violations
The
bill generally provides that, for any small business that is found to have made
a first-time paperwork violation, the state agency or regulatory authority that
regulates the field of operation in which the business operates must waive any
and all administrative fines or civil penalties on the small business for the
violation. The exemption would not
apply in situations where the violation:
·
Has
the potential to cause serious harm to the public interest;
·
Involves
a small business knowingly or willfully engaging in conduct that results in a
felony conviction;
·
If
not cited, would impede or interfere with the detection of criminal activity;
·
Is
of a law concerning the assessment or collection of any tax, debt, revenue, or
receipt; or
·
Presents
a direct danger to the public health or safety, or presents the risk of severe
environmental harm, as determined by the head of the agency or regulatory
authority.
Since the bill would waive fines or assessments for
minor infractions, the bill would most likely cause a limited loss in fine
revenue for state agencies, boards, and commissions that regulate small
business. Agencies and regulatory
authorities would have to determine on a case-by-case basis situations where
the exemption for first-time violations would apply.
Small businesses operating
in Ohio
The bill
defines small business using criteria established by the U.S. Small Business
Administration and set out in Title 13, Chapter 1, Part 121 of the Code of
Federal Regulations. This definition
uses business revenue or the number of employees to determine what qualifies as
a small business. For example, most
crop production businesses qualify as small businesses if their annual revenue
is $750,000 or less, whereas many food manufacturing businesses are determined
to be small businesses if they have 500 or fewer employees. As of April 2008, the Small Business
Development Centers (SBDC) of Ohio report that there are 889,600 small
businesses in the state.
Fiscal impact of the bill and Executive Order
2008-04S
The bill would
appear to work in conjunction with Executive Order 2008-04S, "Implementing
Common Sense Business Regulation," signed into effect on February 12,
2008. Item 5(f) of that order instructs
state regulatory authorities to ". . . when appropriate, waive penalties
for first-time or isolated paperwork or procedural regulatory
noncompliance." Given this
existing process, regulatory agencies, boards, and commissions would most
likely follow procedures similar to those outlined in the Executive Order to
determine when fine and penalty waivers would be granted.
LSC fiscal staff: Terry Steele, Budget Analyst