PA 09-19—sHB 5930

Commerce Committee

AN ACT REQUIRING SMALL BUSINESS IMPACT ANALYSES FOR PROPOSED REGULATIONS

SUMMARY: This act requires any state agency proposing a regulation to identify how it affects small businesses (i. e. , small business impact analysis) and include the analysis as part of the fiscal note it must submit to the Regulations Review Committee. The law already requires agencies to determine if a proposed regulation adversely affects small businesses, which the act redefines as those employing 75 rather than 50 employees, and, if it does, to consider other less burdensome ways to achieve the regulation's goal (i. e. , regulatory flexibility analysis). The act does not define “small business” for the small business impact analysis.

Before adopting a regulation, the act requires agencies to notify the public about how to obtain copies of the small business impact and regulatory flexibility analyses. The agencies must also notify the Commerce Committee about the regulation if they believe it could adversely affect small businesses, and the committee must help agencies prepare the flexibility analysis. Agencies must already notify the Department of Economic and Community Development about proposed regulations that could adversely affect small businesses, and the department must help them prepare the analysis.

Under the act, a proposed regulation does not take effect until the agency submits the regulatory flexibility analysis to the Regulations Review Committee. The law already specifies that the regulation does not take effect until the agency gives the committee the original proposed regulation, as approved by the attorney general, and 18 copies.

EFFECTIVE DATE: October 1, 2009

SMALL BUSINESS IMPACT ANALYSIS

Scope

By law, agencies must prepare and attach a fiscal note to a proposed regulation when they submit it to the Regulations Review Committee. The fiscal note must include the regulation's cost and revenue impact on the state or any municipalities. The act requires agencies to prepare the fiscal note either before or at the same time as, rather than after, publishing the regulation's public notice. It also requires that the fiscal note include an estimate of the regulation's cost or revenue impact on the state's small businesses, including the (1) estimated number of small businesses that would have to comply with the regulation and (2) how much it would cost them to do so. Costs include reporting, recordkeeping, and administration. The law already requires the agency to include the regulatory flexibility analysis in the fiscal note, which it must also submit to the committee.

Public Notice

The act requires agencies to inform the public about how it can obtain copies of the small business impact and regulatory flexibility analyses before adopting a regulation. (The act contains an incorrect statutory reference regarding the small business impact analyses. ) They must include this information in the notice advising the public of their intent to adopt regulations. By law, agencies must publish this notice in the Connecticut Law Journal at least 30 days before adopting a regulation.

REGULATORY FLEXIBILITY ANALYSES

The law requires agencies to determine if a proposed regulation adversely affects small businesses and, if it does, to prepare a regulatory flexibility analysis to consider ways to minimize the impact and still accomplish the regulation's purpose without compromising public health, safety, and welfare. The act specifies that the regulatory methods must be consistent with public health, safety, and welfare. And it makes a technical change.

The act requires agencies to include the regulatory flexibility analysis in the regulation's official record.

By law, agencies do not have to prepare regulatory flexibility analyses for emergency regulations, those indirectly affecting small businesses, or certain other types of regulations.

Small Business Definition

Under prior law, independently owned and operated businesses with fewer than 50 full-time employees or gross sales under $5 million were considered small businesses. The act increases this threshold to 75 employees. By law, agencies may set a higher full-time employee threshold if necessary to meet or address specific small business needs and concerns. The limit cannot exceed the applicable federal standard or 500 employees, whichever is less.

OLR Tracking: RP: RC: JL: TS