A BILL
To improve state rulemaking by creating procedures to
analyze the availability of more flexible regulatory
approaches for small businesses.
Findings
(1) A vibrant and growing small business sector is critical
to creating jobs in a dynamic economy;
(2) Small businesses bear a disproportionate share of
regulatory costs and burdens;
(3) Fundamental changes that are needed in the regulatory
and enforcement culture of state agencies to make them more
responsive to small business can be made without
compromising the statutory missions of the agencies;
(4) When adopting regulations to protect the health, safety
and economic welfare of [State], state agencies should seek
to achieve statutory goals as effectively and efficiently as
possible without imposing unnecessary burdens on small
employers;
(5) Uniform regulatory and reporting requirements can impose
unnecessary and disproportionately burdensome demands
including legal, accounting and consulting costs upon small
businesses with limited resources;
(6) The failure to recognize differences in the scale and
resources of regulated businesses can adversely affect
competition in the marketplace, discourage innovation and
restrict improvements in productivity;
(7) Unnecessary regulations create entry barriers in many
industries and discourage potential entrepreneurs from
introducing beneficial products and processes;
(8) The practice of treating all regulated businesses as
equivalent may lead to inefficient use of regulatory agency
resources, enforcement problems, and, in some cases, to
actions inconsistent with the legislative intent of health,
safety, environmental and economic welfare legislation;
(9) Alternative regulatory approaches which do not conflict
with the stated objective of applicable statutes may be
available to minimize the significant economic impact of
rules on small businesses;
(10) The process by which state regulations are developed
and adopted should be reformed to require agencies to
solicit the ideas and comments of small businesses, to
examine the impact of proposed and existing rules on such
businesses, and to review the continued need for existing
rules.
Section 1. Short Title
This act may be cited as the Regulatory Flexibility Act of
[2003].
Section 2.  Definitions
(a) As used in this section:
(1) "Agency" means each state board, commission, department
or officer authorized by law to make regulations or to
determine contested cases;
(2) "Proposed regulation" means a proposal by an agency for
a new regulation or for a change in, addition to or repeal
of an existing regulation;
(3) "Regulation" means each agency statement of general
applicability, without regard to its designation, that
implements, interprets, or prescribes law or policy, or
describes the organization, procedure, or practice
requirements of any agency. The term includes the amendment
or repeal of a prior regulation, but does not include (A)
statements concerning only the internal management of any
agency and not affecting private rights or procedures
available to the public, (B) declaratory rulings  or (C)
intra-agency or interagency memoranda;
(4) "Small business" means a business entity, including its
affiliates, that (A) is independently owned and operated and
(B) employs fewer than [five hundred] full-time employees or
has gross annual sales of less than [six] million dollars.
Section 3. Economic Impact Statements
(a) Prior to the adoption of any proposed regulation that
may have an adverse impact on small businesses, each agency
shall prepare an economic impact statement that includes the
following:
(1) An identification and estimate of the number of the
small businesses subject to the proposed regulation;
(2) The projected reporting, recordkeeping and other
administrative costs required for compliance with the
proposed regulation, including the type of professional
skills necessary for preparation of the report or record;
(3) A statement of the probable effect on impacted small
businesses;
(4) A description of any less intrusive or less costly
alternative methods of achieving the purpose of the proposed
regulation.
Section 4. Regulations Affecting Small Businesses
(a) Prior to the adoption of any proposed regulation on and
after [January 1, 2003], each agency shall prepare a
regulatory flexibility analysis in which the agency shall,
where consistent with health, safety, environmental and
economic welfare consider utilizing regulatory methods that
will accomplish the objectives of applicable statutes while
minimizing adverse impact on small businesses. The agency
shall consider, without limitation, each of the following
methods of reducing the impact of the proposed regulation on
small businesses:
(1) The establishment of less stringent compliance or
reporting requirements for small businesses;
(2) The establishment of less stringent schedules or
deadlines for compliance or reporting requirements for small
businesses;
(3) The consolidation or simplification of compliance or
reporting requirements for small businesses;
(4) The establishment of performance standards for small
businesses to replace design or operational standards
required in the proposed regulation; and
(5) The exemption of small businesses from all or any part
of the requirements contained in the proposed regulation.
(b) Prior to the adoption of any proposed regulation that
may have an adverse impact on small businesses, each agency
shall notify the [Department of Economic and Community
Development or similar state department or council that
exists to review regulations] of its intent to adopt the
proposed regulation. The [Department of Economic and
Community Development or similar state department or council
that exists to review regulations] shall advise and assist
agencies in complying with the provisions of this section.
Section 5. Judicial Review
(a)  For any regulation subject to this section, a small
business that is adversely affected or aggrieved by final
agency action is entitled to judicial review of agency
compliance with the requirements of this section.
(b) A small business may seek such review during the period
beginning on the date of final agency action and ending one
year later.
Section 6. Periodic Review of Rules
(a) Within four years of the enactment of this law, each
agency shall review all agency rules existing at the time of
enactment to determine whether such rules should be
continued without change, or should be amended or rescinded,
consistent with the stated objectives of those statutes, to
minimize economic impact of the rules on small businesses in
a manner consistent with the stated objective of applicable
statutes.  If the head of the agency determines that
completion of the review of existing rules is not feasible
by the established date the agency shall publish a statement
certifying that determination.  The agency may extend the
completion date by one year at a time for a total of not
more than five years.
(b) Rules adopted after the enactment of this law should be
reviewed every five years of the publication of such rules
as the final rule to ensure that they minimize economic
impact on small businesses in a manner consistent with the
stated objectives of applicable statutes.
(c) In reviewing rules to minimize economic impact of the
rule on small businesses, the agency shall consider the
following factors--
(1) The continued need for the rule;
(2) The nature of complaints or comments received concerning
the rule from the public;
(3) The complexity of the rule;
(4) The extent to which the rule overlaps, duplicates or
conflicts with other Federal, State and local governmental
rules; and
(5) The length of time since the rule has been evaluated or
the degree to which technology, economic conditions, or
other factors have changed in the area affected by the rule.