Wednesday, February 27, 2008

Goldwater Institute: Sunrise review laws protect entrepreneurs

Sunny Delight

By Jennifer Perkins

As Ronald Reagan famously noted, "Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States." Why is it, then, that every year we see more proposed government regulations that make it harder for small businesses to open and operate?

Senate Bill 1502 could help address this regulatory creep: It would require the legislature to conduct a "sunrise review" process before erecting new regulatory barriers to entrepreneurship. Sunrise reviews require proponents of a regulation to demonstrate an actual need for it before the legislature may adopt it.

Sunrise requirements in other states have effectively caused lawmakers to scrutinize proposed regulations and reject government overreaching. For example, every state with a sunrise process that has considered regulating interior designers has ended up deciding against it because those seeking the regulations fail to provide evidence that regulation would benefit the public. On the other hand, in states without sunrise requirements, interior design regulations have been adopted with limited legislative scrutiny.

Sunrise review requirements can effectively protect entrepreneurs if they meet two crucial requirements. First, they must be either binding against the legislature or enforceable through private action. Second, they must require evidence demonstrating an actual need for regulation, not merely a desire to protect an interest group from competition.

Sunrise review requirements go a long way toward creating the environment of economic liberty that Reagan dreamed of and that the Institute for Justice fights to make a reality.

Jennifer Perkins is a staff attorney with the Arizona Chapter of the Institute for Justice.

No comments: