Regulations: small businesses.

(1) The Administrative Procedure Act generally sets forth the requirements for the adoption, publication, review, and implementation of regulations by state agencies. An agency that is considering adopting, amending, or repealing a regulation is authorized to consult with interested persons before initiating regulatory action, and requires an agency to do so when the regulation involves complex or numerous proposals. This bill would require the agency, if it does not, or is unable to, consult with these parties to inform in writing the Office of Small Business Advocate and the Department of Finance of its decision and the reasons for not consulting the impacted businesses. (2) The act requires every state agency subject to the act to submit, with the notice of the proposed adoption, amendment, or repeal of a regulation, an initial statement of reasons for proposing the adoption, amendment, or repeal of a regulation, which is required to include, among other things, a description of any reasonable alternatives that would lessen any adverse impact on small business and the agency's reasons for rejecting those reasonable alternatives. The act specifies the agency is not required, in this initial statement, to artificially construct alternatives, describe unreasonable alternatives, or justify why it has not described alternatives. This bill would require the agency to describe the agency's reasons for rejecting each specific alternative, and would delete the specification that an agency is not required to artificially construct alternatives, describe unreasonable alternatives, or justify why it has not described alternatives. (3) The act requires a state agency to assess the potential of a proposal to adopt, amend, or repeal a regulation to adversely affect business enterprises and individuals. This bill would also require an agency to submit an economic impact statement that makes that assessment and would also require an agency, before submitting a proposal, to prepare a small business economic impact statement that contains specified information. (4) Under the act, the agency must issue a notice of proposed action that includes prescribed information, including, if a state agency makes an initial determination that the adoption, amendment, or repeal of a regulation will not have a significant statewide adverse economic impact directly affecting business, a declaration of that determination. This bill would delete that requirement and instead require, if an agency declares that it is not aware of any cost impact, that the notice of proposed action include a statement describing how a private person or business could comply with the proposed regulation without incurring a cost. This bill would also require that the notice of proposed action include the small business economic impact statement that this bill requires an agency to prepare. (5) The act also requires the Department of Finance to adopt and update, as necessary, instructions for inclusion in the State Administrative Manual prescribing the methods that any agency is required to use in making the determinations relating to mandates on local agencies or school districts, as specified. This bill would also require the Department of Finance to adopt and update, as necessary, instructions prescribing the methods that any agency is required to use in making the determinations relating to significant, statewide adverse economic impacts directly affecting business, as specified. (6) The act requires the Office of Administrative Law to review and approve regulations that are adopted, amended, or repealed, using prescribed standards. The act requires that the office reject a proposed regulation in specified circumstances. This bill would require that the office reject a proposed regulation if the adopting agency does not provide specified information relating to the small business economic impact statement. (7) The act authorizes any interested person to obtain a judicial declaration as to the validity of specified regulations or orders of repeal, by bringing an action for declaratory relief in the superior court in accordance with the Code of Civil Procedure. This bill would specify that an interested person includes, but is not limited to, a small business or an organization or trade association that represents small businesses and whose members are affected by the regulation. (8) The bill would also make conforming changes to the act.