BILL NUMBER: S5812               REVISED 05/31/19

SPONSOR: KAPLAN
 
PURPOSE OR GENERAL IDEA OF BILL:

This bill requires agencies proposing regulations that affect small
businesses or local governments to assess the minimum time such entities
will need to come into compliance with any new regulatory requirements.

 
SUMMARY OF SPECIFIC PROVISIONS:

Bill § 1 amends subdivision 2 of § 202-b of the State Administrative
Procedure Act (SAPA), which requires an agency to prepare a regulatory
flexibility analysis (RFA) when a new rule would impose adverse economic
impacts or reporting, recordkeeping or other compliance requirements on
small businesses or local governments.

Subdivision 2 is amended to require that the RFA include an assessment
of the minimum time that will be needed by small businesses and local
governments to come into compliance with the rule, taking into consider-
ation any applicable practical, legal and economic or fiscal constraints
on such compliance, and a description of the measures that the agency
              

intends to utilize to ensure that small businesses and local governments
are informed of new or amended compliance requirements with sufficient
lead time to achieve compliance without experiencing unnecessary costs
or burdens.

Bill § 2 amends subdivision 6 of SAPA . 202-b, which currently requires
agencies to assure that small businesses and local governments have been
given an opportunity to participate in the rulemaking requiring an RFA.

The amendments instead require the agency to actively solicit such
participation, and clarify that merely publishing the rule in the State
Register and posting it on the agency's website is not enough:  the
agency must take additional actions to ensure that affected entities are
aware of and invited to provide input on proposed policy changes.

 
EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:

SAPA § 202-a(3)(i) requires an agency to indicate in a rule's regulatory
impact statement "the estimated period of time necessary to enable regu-
lated persons to achieve compliance" with a rule, but does not require
any consideration of the different sizes or types of entities affected
by the rule.

SAPA § 202-b requires agencies to assure that small businesses and local
governments have been given an opportunity to participate in a rulemak-
ing that could affect them, and lists a number of targeted means of
outreach that agencies may employ. However, agencies frequently indicate
that the routine activities of Register publication and online posting
alone are sufficient to comply with this requirement.

 
JUSTIFICATION:

New regulations can be needed to protect health and the environment,
promote fairness or achieve other important social goals. However, such
goals are only met when affected entities come into compliance with such
regulations, which cannot always occur overnight. Small businesses
cannot immediately access funding, retool their physical plants or train
employees, and local governments must often observe specific legal and
fiscal procedures before acting.

This bill would require agencies proposing new rules that would impact
small businesses and local governments to give due consideration to the
practical, legal and economic or fiscal constraints that may affect the
ability of these entities to implement new regulatory requirements. It
also requires agencies to identify the means by which they intend to
communicate policy changes, since no such requirements will be effective
if the target audience does not actually receive timely and adequate
information on what is expected of them. Finally, to improve both the
awareness of pending regulations and the effectiveness of the rulemaking
process, the bill reiterates that an agency proposing a rule requiring
an RFA must engage in targeted outreach to actively solicit input from
affected entities.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
First day of November after becoming law.