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Law will make new rules prove their worth

By John Fryar
The Daily Times-Call

DENVER — Future proposals for state regulations affecting Colorado businesses may have to pass a test that weighs costs against benefits, under a measure Gov. Bill Owens signed into law this week.

Senate Bill 121, from Colorado Springs Republican Sen. Andy McElhany and Greeley Republican Rep. Tambor Williams, will require state agencies proposing business-related regulations to submit drafts to the Department of Regulatory Agencies.

If DORA officials decide the new regulation might hurt Colorado’s “economic competitiveness” or businesses with fewer than 500 employees, the department can order the agency to perform a cost-benefit analysis.

DORA officials said Tuesday that SB121 represents a “major victory for Colorado’s economy” because it promotes the principle of “First, do no harm.”

“This tool places Colorado at the top of the list among states seeking ways to create a better economic environment for businesses, especially small businesses,” said Rick O’Donnell, DORA’s executive director and the head of the governor’s policy office.

“Senate Bill 121 ensures that state agencies will be held accountable to Colorado’s business sector as we seek greater levels of good government,” O’Donnell said. “We are strongly committed to the survival, the revival and the resurgence of small businesses in Colorado.”

According to McElhany, state regulations were previously reviewed only after they already took effect.

The bill’s declaration says regulations can impede the ability of local businesses to compete with out-of-state businesses.

Under SB121, which takes effect Aug. 6, cost-benefit analyses would have to include:

• Anticipated economic benefits of the regulation, including “economic growth, the creation of new jobs and increased economic competitiveness.”

• The government’s projected costs of administering the new regulation, as well as any direct or indirect costs to the businesses that would be required to comply.

• Adverse effects on “the economy, consumers, private markets, small businesses, job creation and economic competitiveness.”

• At least two possible alternatives to the proposed rule, including the costs and benefits of the alternatives.

Supporters of the bill included the Colorado Association of Commerce and Industry, the National Federation of Independent Business, the Colorado Petroleum Association, the American Plastics Council, and the state’s trucking industry.