Prior to adopting rules under the "State Administrative Procedure Act" (APA), a state agency (agency) is required to prepare a regulatory flexibility analysis in which the agency considers using regulatory methods that will accomplish the objectives of applicable statutes while minimizing the adverse impact on small businesses. For purposes of the regulatory flexibility analysis, the bill defines "small business" as a business that is independently owned and operated and employs 100 or fewer employees.
When preparing the regulatory flexibility analysis, an agency is required to consider methods to reduce the impact on small businesses, including the following:
- Establishing less stringent compliance or reporting requirements;
- Establishing less stringent schedules or deadlines for compliance or reporting requirements;
- Consolidating or simplifying compliance or reporting requirements;
- Establishing different performance standards; and
- Exempting small businesses from compliance requirements.
The agency is also required to:
- Determine the necessity for the proposed rules;
- Identify the fiscal impact of the rules;
- Identify and analyze the least costly alternatives to the rules and adopt the least costly alternatives unless the agency provides written justification for adopting a more costly regulatory approach; and
- Analyze whether small businesses should be exempted from the rules or whether less burdensome rules should be applied to small businesses and adopt exemptions or less burdensome rules, unless the agency provides written justification for a more burdensome regulatory approach.
The agency is required to file the regulatory flexibility analysis with the secretary of state for publication in the Colorado register at the same time that it files its notice of proposed rule-making and the draft of proposed rules.
The existing provision in the APA on forming a representative group to give input on proposed rules is amended to require an agency proposing rules that are likely to have an impact on small businesses to expand outreach to and actively solicit representatives of small businesses to participate in the representative group and in the rule-making hearing for the rules. The agency must make good faith efforts to expand outreach and notification to small businesses that lack a trade association or lobbyist to represent the types of small businesses impacted by the proposed rules.
The executive director of the department of regulatory agencies (executive director), or the executive director's designee, shall develop a one-stop location on the department's website that provides a place for small businesses and the public to access the regulatory flexibility analyses that agencies prepare.
A small business that is adversely affected or aggrieved by the failure of an agency to comply with the regulatory flexibility analysis requirements may:
- File a request with the executive director to require the agency to prepare a cost-benefit analysis of the proposed rules and to direct the agency to adjust the rule-making schedule to allow for the preparation of the cost-benefit analysis; or
- Request a hearing on the matter before an administrative law judge.
(Note: This summary applies to this bill as introduced.)