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Maine’s First Small Business Advocate Sees Positive Early Returns

by Terrilyn Simpson

One of the stories Jay Martin tells when he speaks before groups is an account of a Maine environmental remediation consultant who’d been named business person of the year. She employed, said Martin, 15 people — until the state Department of Environmental Protection informed her it would be mandating replacement of a contractual agreement with an accredited chemist, who worked with the remediation business as a consultant, with employment of a fulltime staff chemist.

When the business owner decided, says Martin, to take a stand against the directive, on the basis the business couldn’t afford to fund the fulltime position, a series of overzealous inspections took her business to its knees. Though every legal round resulted in a win for the remediation consultant, the added scrutiny and burdensome legal fees finished off the business, putting 15 people out of work.

It is, says Martin, one of the inspirations for the creation of his position of Maine’s Small Business Advocate, a first for the state and as far as he’s ascertained, the country.

Martin hails from a background of community service, close family, small business and Paul Bunyan — with the folkloric lumberjack reference a hearkening back to his father, a Maine artist, who in the late 1950s, sculpted the diminutive model for the gargantuan, plaid-shirted woodcutter heralding entrance to Bangor.

He was working as an election day volunteer when someone suggested he submit his resume to the new LePage administration. The idea appealed but his follow-thru netted him only a “nothing right now but we’ll keep your resume on file” response — until the advocacy idea surfaced. Martin received the call out of the blue.

His background seemed an immediate fit — his work as a restaurant manager throughout his college years gave him awareness of the myriad of bureaucratic regulations confounding a small business. His professional backdrop of technical writer, editor, grant writer, fundraiser and marketing specialist suggested his comfort level with wearing many hats and an ability to promote the program himself — an important element for the shoestring budget with which he’d be working. And his ownership of a consulting business and his volunteer work suggested an ability to work with the diverse backgrounds of the many small business owners likely to avail themselves of the services the advocate’s office offers.

And he wanted the job. “What an opportunity to serve the state,” he said.

Asked where the idea for the position originated, he admitted uncertainty to the specifics but pointed to both Governor Paul LePage’s commitment to small business — with an emphasis on creating a friendlier climate in which to operate — and Maine Secretary of State Charlie Summers’ background as administrator of the US Small Business Administration. Martin’s advocacy position operates under the umbrella of the Secretary of State.

The position was formalized by legislative action: “The Bureau of the Special Advocate, referred to in this subchapter as “the bureau,” is established within the Department of the Secretary of State to assist in resolving regulatory enforcement actions affecting small businesses that, if taken, are likely to result in significant economic hardship and to advocate for small business interests in other regulatory matters.” Martin was appointed to fill the position on October 6, 2011. To adhere to the restrictions of the state hiring freeze, the advocacy position replaced a vacant communications slot in the Secretary of State’s office. “So there’s no additional cost to the state here. As a result, I don’t have much of a budget to work with. So I have my business cards and I have my web page and my little one-page fact sheet…and mileage. And I’ve been everywhere from Norway to Calais talking to folks around the state….”

“The first couple of months we really made an effort to get the word out about this new office….this being rather unique.” He went to business conventions. He did media interviews. He did a press release.

The single page fact sheet, with information front and back, reflects the frugality of his office. “Frugal but effective.”

It begins by defining his purpose. “Maine’s Small Business Advocate serves as an independent voice for Maine small business owners with our state’s regulatory system. The Advocate works directly with small businesses (50 employees or fewer) that have specific grievances with one or more regulatory agency’s enforcement actions. The Advocate’s top priority is to assist small business owners who feel they are being treated unfairly or improperly by state agencies.”

The referrals have been pouring in.

His primary tools are diplomacy and negotiation. In seeking compromise resolution, he looks for instances where discretion is allowed. There’s no cost to the business owner.

A sampling of cases includes a pharmacy, an outdoor recreation facility and a manufacturing business.

In the first, a business owner faced nearly a half million dollar repayment to the state because one of his staff members had failed to renew his practitioner’s license. Because the owner had failed to pick up on the employee’s failure to renew, the state’s calculation was based on the one and a half million dollar payment to the business, contingent on the work of three employees. The repayment would have shut the business down.

When Martin assessed the situation, he discovered the owner had paid for the educational recertification credits and so had assumed they’d been fulfilled. Martin determined there had been no errors so no one had been harmed. The errant employee had been terminated. While noting that the owner had been remiss, forcing him out of  business seemed extreme. “So we argued that just the dispensing fees and not the full cost of the pharmaceuticals should be reimbursed because the owner only saw profit from the dispensing fees…. and no harm could be found…” Working with the owner’s attorney and negotiating with DHHS, the compromise resulted in the repayment of $25,000 in dispensing fees. Fifteen year round, and ten seasonal, jobs were saved.

“I think,” said Martin, “someone looking at a case like this and knowing the facts could say that that’s a reasonable penalty for this business owner to have to pay without provoking this business owner to shed jobs or to sell or close his doors or sell his business — this is why this office was created — so that we can be involved in regulatory enforcement actions that may provoke a business to terminate employees or temporarily or permanently close.”

In another case, the owner of a new business, with an investment of about $300,000 and the hope of becoming a premier recreational facility had complied with local regulations but had been unaware of state DEP regulations. Strict enforcement by DEP would have impeded the function of the facility by about 70 percent. The owner, at a point where “he couldn’t see the light at the end of the tunnel,” contacted the governor’s office for help. “Governor LePage had established a reputation for regulatory reform.,” noted Martin. The governor’s office referred the case to Martin, who attended a DEP permitting meeting with the owner, who “gave some ground” and agreed to a compromise, as did DEP. With an additional total expenditure of $1,000, the owner was able to change some permanent structures to seasonal, in compliance with shoreland zoning provisions. “There’s reason to believe that business will not be impeded…” Martin anticipates a successful outcome.

The third example involved a manufacturing facility whose process water testing by DEP, for water going into a city sewer system, was affected by a fluke in the drainage system design – test results were being affected by rainwater runoff from the roof. A $200,000 reconfiguration of the roof drainage system was prohibitive and would have impeded a scheduled business expansion. The owner’s solution was sheer common sense – that the process water be tested only on dry days. “And that was the equitable solution we were able to achieve.”

If Martin is unable to achieve an equitable resolution, he is empowered with a Regulatory Impact Notice, allowing him to turn the case over to the Secretary of State who can hand the case to the governor and ask him to take a look. “That’s the sledgehammer in our tool box and I’ve yet to have to use that….“

In addition to direct advocacy, Martin also staffs the Regulatory Fairness Board and comments on pending rules and testifies on pending legislation that may affect small business.