Small Business Says End Criminal Sanctions for Paperwork Mistakes

Date: October 01, 2015

September 24, 2015 (Lansing)
– The state’s leading small business organization, the National Federation
of Independent Business (NFIB), urged the House Oversight
and Ethics Committee today to report out House Bill 4713 that would
address the problem of criminal sanctions for minor regulatory mistakes.

The legislation, sponsored by
State Representative Ed McBroom (108th District), would provide a
defense to a person accused of a crime due to the unintentional violation of a
regulation or rule. Specifically, the legislation would establish a default
“mens rea” standard that would require the state agency pursuing the violation
to prove that the violator had criminal intent in breaking the rule.

“This is a serious concern
for many small – family owned businesses that find themselves facing a criminal
prosecution for minor paperwork violations or running afoul of a rule or
regulation without any knowledge or intent to do wrong,” said NFIB State
Director Charlie Owens. “When you consider the absolute avalanche of rules and
regulations heaped on a business owner by federal, state and local governments
it should be no surprise that honest mistakes happen.”

Owens told the committee that
small business is more susceptible to violating a rule or regulation as they do
not have the staff to keep up – and in compliance with – the rules and
regulations that seem to proliferate in today’s business environment.

As an example of the
magnitude of regulatory overload Owens said that, for 2015 Year to Date there
were 2,975 final rules published, 2079 proposed rules and 6,245 rule notices
for a total of 11,319 documents added to the Federal Register website. Owens
added that this does not include the additional layers of state and local

“In addition to being unfair
and unjust, pursuing criminal prosecution and penalties against a small
business owner for an honest mistake is a waste of taxpayer money,” said Owens.

The bill was reported out of
the committee with a unanimous vote and it now goes to the House Floor for
further action.

Related Content: Small Business News | Michigan

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