Wisconsin Department of Commerce Newsletter
December 2006
Commerce Ombudsman Helps Navigate Maze of Administrative Rules for Small Business Owners
Carol Dunn, Small Business Ombudsman
Carol Dunn, Small Business Ombudsman

More often than not, small business owners aren't aware of when state agencies write rules that affect them. Too often they find out about an administrative rule change after the fact, and, having missed the public hearing, simply have to live with an administrative rule change. Carol Dunn, the small business ombudsman at the Department of Commerce, concedes that the challenge of informing every small business owner in the state about every potential rule change affecting their business is a daunting one.

Since beginning her job as the state's only small business ombudsman three years ago, she has focused on her role of "assisting small business in a non-adversarial fashion when dealing with state regulations." What she continued to hear from business owners was that they were not familiar with the rulemaking procedures, the state agency requirements when writing rules, and were also unaware of new regulatory reforms designed to help them.

Says Dunn, "When the legislature makes a change in an existing statute, creates a new statute or deletes a statutory reference, they then direct the state agency that administers that part of the law to describe, in an administrative rule(s), the 'how' – how the statute will be carried out. "

The first notification an agency makes about its intention to work on a rule is called the Statement of Scope. The agency sends this notification to the state's Revisor of Statutes and it is published in the Administrative Register, a bi-weekly publication compiled by the Reviser of Statutes. Included in the Statement of Scope is a required description of all of the entities that may be affected by the rule.

The next notification is the state agency's notification of a public hearing, which is also published in the Administrative Register. The Notice of Public Hearing is required to contain an analysis and supporting documentation which the agency used to support its determination of the rule's effect on small business. During this stage of rule development, small business has the opportunity to provide comments about the '‘how' that the agency has drafted.

But how best, Dunn pondered, to get the word out to small businesses regarding rules that are being proposed - or changed - in time for them to have meaningful input? Most business owners haven't even heard of the Administrative Register, and those who have would find reading ita time-consuming chore, wading through pages and pages of legal speak in search of something – anything – that would pertain to their businesses.

The Illinois Small Business Ombudsman had taken a Reader's Digest/USA Today-style approach and condensed their pertinent regulatory facts into digestible sound bites. Recognizing that it was working for Illinois, in November, 2005, Dunn began compiling the Wisconsin Regulatory Alert, a monthly on-line report of all proposed and pending administrative rule changes that affect small businesses.

Dunn pulls out significant items that could, in some way, shape or form, have an impact on small business. She summarizes the proposed rule or rule change in what she calls "the bottom line" – a concise two or three sentence rule summary and directs the readers to experts at each agency who can provide more information about the rule.

A web link is provided in the rule summary that allows businesses to provide electronic comments to the agency. "The public comment period is when the voice of small business needs to be heard and made a part of the public record," says Dunn. "Written and electronic comments are great ways for small businesses to take part and have their voice heard at a time that is convenient for them."

Because so many of the regulatory reforms created in 2004 are new to the business community, the primary function of the small business ombudsman is to simply inform (them). One of new reforms is the Small Business Regulatory Review Board (SBRRB), created to oversee state agencies' compliance with the statutory requirements to analyze a new rule's economic impact on small business. If an agency determines that a rule has a significant economic impact on a substantial number of small businesses, it is required to be sent to the Board, which can also hear complaints about existing burdensome rules.

The SBRRB, which Dunn serves as the advisor for, is comprised of six small businesspersons, two members of the legislature and a representative from each of the eight state agencies. Part of Dunn's job is to assist small businesses in preparing for their appearances before the SBRRB. She can help him or her prepare for a hearing by determining what is the most appropriate information to share with the board, as well as helping "stay on point" to best utilize their limited time to speak.

Dunn spends a great deal of her time assisting small businesses in negotiating with an agency on behalf of small business when they feel a rule is not being administered fairly, or is creating economic hardships for their business. For example, a house moving company (Company X) was having problems obtaining a permit to move a home and comply with the terms of a business contract. The house was sitting on a trailer that was licensed to a Company A, which had recently lost it permitting rights to move homes. Company X was in a position to take over the contract for Company A. However, Company X was being asked to move the house onto a different trailer in order to obtain a permit. This action would have necessitated additional man hours and a loss of production time needed to fulfill the terms of the contract. Because there was no language in the administrative code that directed the agency to require the movement of the home onto a different trailer under the described circumstances, Dunn was able to assist Company X. The permit was obtained and the home moved on down the road to its new location.

Dunn cites another example of how the small business ombudsman can help "the little guy."

"As government agencies are frequently required to do more with less staff, there is often a presumption that requiring electronic filing of reports will not create hardships for small business," explains Dunn. "Recently, a state agency was writing a rule that provided instructions about electronic filing of reports and payment as the method of agency reporting.

"Collaborating with a small business organization, recommendations were made to the agency that the administrative rule should allow a small business to file paper reports. Following this recommendation, the agency allowed the continuation of paper filing by providing an option to request a hardship waiver from the department's secretary. A definition of an ‘undue hardship' was the inability of the business owner to have a computer and internet capabilities." Score one for small, small business.

Businesses in Wisconsin are not "one size fits all", and that is why procedures for rule writing require agencies to analyze the economic impact on small business and consider less burdensome alternatives.

"Ninety-seven percent of Wisconsin's for-profit businesses meet the definition of ‘small business'," says Dunn. "If a business has 25 or less employees, is independently owned and operated and has sales of less than $5 million, it is a small business. I don't know that people realize that in the state of Wisconsin, small businesses are the major employers."

Her allegiance, as it should be, is to the small businesspersons she provides services to. "The SBRRB needs to hear about any regulatory hurdles they experience in our existing administrative rules," says Dunn. She encourages small businesses owners to use the service of this board to alleviate the awareness of these issues.

Concludes Dunn, "The Board's existing rule review authority allows them to send recommendations to the Joint Committee on Administrative Rule Review who can take the necessary action on behalf of small businesses."

For a complete listing of what the Department of Commerce's Small Business Ombudsman can do to help small businesses – whether keeping them abreast of proposed rules, notifying them of public hearings, or helping them prepare to appear in front of the SBRRB, please visit Dunn's website at: commerce.wi.gov/BD/BD-FAX-0905.html. Carol Dunn can be reached directly at 608/267-0927 or carol.dunn@wisconsin.gov.

-- Barbro McGinn

The newsletter is issued electronically every other month.

Please send comments or questions to Barbro McGinn, editor.

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