S.F. 231 Section 1. Section 17A.4A, Code 2011, is amended to read as 1 follows: 2 17A.4A Regulatory analysis. 3 1. a. An agency shall issue a regulatory analysis of 4 a proposed rule that complies with subsection 2 , paragraph 5 “a” , if, within thirty-two days after the published notice of 6 proposed rule adoption, a written request for the analysis is 7 submitted to the agency by the administrative rules review 8 committee or the administrative rules coordinator. An agency 9 shall issue a regulatory analysis of a proposed rule that 10 complies with subsection 2 , paragraph “b” , if the rule would 11 have a substantial impact on small business and if, within 12 thirty-two days after the published notice of proposed rule 13 adoption, a written request for analysis is submitted to the 14 agency by the administrative rules review committee, the 15 administrative rules coordinator, at least twenty-five persons 16 signing that request who each qualify as a small business or by 17 an organization representing at least twenty-five such persons. 18 If a rule has been adopted without prior notice and an 19 opportunity for public participation in reliance upon section 20 17A.4, subsection 3 , the written request for an analysis that 21 complies with subsection 2 , paragraph “a” or “b” , may be made 22 within seventy days of publication of the rule. 23 b. An agency shall issue a regulatory analysis of a rule 24 that complies with subsection 2, paragraph “b” , if the rule is a 25 proposed rule, or has been adopted without prior notice and an 26 opportunity for public participation, if the rule would have an 27 adverse impact on small business. A regulatory analysis issued 28 pursuant to this paragraph shall be published as part of the 29 notice of proposed rule adoption or published along with a rule 30 that has been adopted without notice. 31 2. a. Except to the extent that a written request for 32 a regulatory analysis expressly waives one or more of the 33 following, the regulatory analysis must contain all of the 34 following: 35 -1- LSB 2398SS (2) 84 jr/nh 1/ 6

S.F. 231 (1) A description of the classes of persons who probably 1 will be affected by the proposed rule, including classes that 2 will bear the costs of the proposed rule and classes that will 3 benefit from the proposed rule. 4 (2) A description of the probable quantitative and 5 qualitative impact of the proposed rule, economic or otherwise, 6 upon affected classes of persons, including a description of 7 the nature and amount of all of the different kinds of costs 8 that would be incurred in complying with the proposed rule. 9 (3) The probable costs to the agency and to any other agency 10 of the implementation and enforcement of the proposed rule and 11 any anticipated effect on state revenues. 12 (4) A comparison of the probable costs and benefits of the 13 proposed rule to the probable costs and benefits of inaction. 14 (5) A determination of whether less costly methods or 15 less intrusive methods exist for achieving the purpose of the 16 proposed rule. 17 (6) A description of any alternative methods for achieving 18 the purpose of the proposed rule that were seriously considered 19 by the agency and the reasons why they were rejected in favor 20 of the proposed rule. 21 b. In the case of a rule that would have a substantial 22 impact on small business, the regulatory analysis must contain 23 a discussion of whether it would be feasible and practicable 24 to do any of the following to reduce the impact of the rule on 25 small business: 26 (1) Establish less stringent compliance or reporting 27 requirements in the rule for small business. 28 (2) Establish less stringent schedules or deadlines in 29 the rule for compliance or reporting requirements for small 30 business. 31 (3) Consolidate or simplify the rule’s compliance or 32 reporting requirements for small business. 33 (4) Establish performance standards to replace design or 34 operational standards in the rule for small business. 35 -2- LSB 2398SS (2) 84 jr/nh 2/ 6

S.F. 231 (5) Exempt small business from any or all requirements of 1 the rule. 2 c. The agency shall reduce the impact of a proposed rule 3 that would have a substantial an adverse impact on small 4 business by using a method discussed in paragraph “b” if the 5 agency finds that the method is legal and feasible in meeting 6 the statutory objectives which are the basis of the proposed 7 rule. For purposes of judicial review, a small business shall 8 be deemed to be aggrieved or adversely affected by an agency 9 determination that it would not be legal and feasible to reduce 10 the impact of a rule. 11 3. Each regulatory analysis must include quantifications 12 of the data to the extent practicable and must take account of 13 both short-term and long-term consequences. 14 4. Upon receipt by an agency of a timely request for 15 a regulatory analysis, the agency shall extend the period 16 specified in this chapter for each of the following until at 17 least twenty days after publication in the administrative 18 bulletin of a concise summary of the regulatory analysis: 19 a. The end of the period during which persons may make 20 written submissions on the proposed rule. 21 b. The end of the period during which an oral proceeding may 22 be requested. 23 c. The date of any required oral proceeding on the proposed 24 rule. 25 5. In the case of a rule adopted without prior notice and an 26 opportunity for public participation in reliance upon section 27 17A.4, subsection 3 , the summary must be published within 28 seventy days of the a request made pursuant to subsection 1, 29 paragraph “a” . 30 6. The published summary of the regulatory analysis 31 issued pursuant to subsection 1, paragraph “a” , must also 32 indicate where persons may obtain copies of the full text 33 of the regulatory analysis and where, when, and how persons 34 may present their views on the proposed rule and demand 35 -3- LSB 2398SS (2) 84 jr/nh 3/ 6

S.F. 231 an oral proceeding thereon if one is not already provided. 1 Agencies shall make available to the public, to the maximum 2 extent feasible, the published summary and the full text of 3 the regulatory analysis described in this subsection in an 4 electronic format, including , but not limited to , access to the 5 documents through the internet. 6 7. If the agency has made a good faith effort to comply 7 with the requirements of subsections 1 through 3, the rule 8 may not be invalidated on the ground that the contents of the 9 regulatory analysis are insufficient or inaccurate. 10 8. a. For the purpose of this section , “small business” 11 means any entity including but not limited to an individual, 12 partnership, corporation, joint venture, association, or 13 cooperative, to which all of the following apply: 14 (1) It is not an affiliate or subsidiary of an entity 15 dominant in its field of operation. 16 (2) It has either twenty or fewer full-time equivalent 17 positions or less than one million dollars in annual gross 18 revenues in the preceding fiscal year. 19 b. For purposes of this definition, “dominant in its field 20 of operation” means having more than twenty full-time equivalent 21 positions and more than one million dollars in annual gross 22 revenues, and “affiliate or subsidiary of an entity dominant in 23 its field of operation” means an entity which is at least twenty 24 percent owned by an entity dominant in its field of operation, 25 or by partners, officers, directors, majority stockholders, 26 or their equivalent, of an entity dominant in that field of 27 operation. 28 9. By July 1, 2013, and every five years thereafter, each 29 agency shall review all existing rules under its purview to 30 determine whether such rules should be continued without 31 change, or should be amended or rescinded, consistent with 32 the stated objectives of the applicable statutes, to minimize 33 economic impact of the rules on small businesses in a manner 34 consistent with the stated objectives of the applicable 35 -4- LSB 2398SS (2) 84 jr/nh 4/ 6

S.F. 231 statutes. If the agency determines that completion of the 1 review of existing rules is not feasible by July 1, 2013, 2 the agency shall publish notice of that finding in the Iowa 3 administrative bulletin. The agency may then extend the 4 completion date by one year at a time for a total of not more 5 than five years. In reviewing rules to minimize the economic 6 impact of the rules on small businesses, the agency shall 7 consider all of the following factors: 8 a. The continued need for the rule. 9 b. The nature of complaints or comments received concerning 10 the rule from the public. 11 c. The complexity of the rule. 12 d. The extent to which the rule overlaps, duplicates, or 13 conflicts with other federal, state, or local governmental 14 statutes or rules. 15 e. The length of time since the rule has been evaluated or 16 the degree to which technology, economic conditions, or other 17 factors have changed in the area affected by the rule. 18 EXPLANATION 19 Code section 17A.4A sets out a procedure for requesting a 20 regulatory analysis for proposed rules or rules adopted without 21 notice. This analysis is essentially a cost/benefit study 22 identifying the impact of a rule on the affected public and, 23 in the case of a rule that would have a substantial impact 24 on small business, the regulatory analysis must contain a 25 discussion of whether it would be feasible and practicable to 26 reduce the impact of the rule on small business. 27 This bill requires an analysis on every new rule which has an 28 adverse impact on small business and requires the analysis to 29 be published in the Iowa administrative bulletin along with the 30 new rule. If an agency determines that it would not be legal 31 and feasible to reduce the adverse impact on small business, a 32 small business would have judicial standing to challenge that 33 determination in district court. The bill also requires a 34 periodic review of all rules to minimize the economic impact of 35 -5- LSB 2398SS (2) 84 jr/nh 5/ 6

S.F. 231 the rules on small businesses. 1 The initial review must be completed by July 1, 2013, and 2 will be repeated every five years. The review must analyze all 3 of the following: 4 1. The continued need for the rule. 5 2. The nature of complaints or comments received. 6 3. The complexity of the rule. 7 4. Duplication of or conflict with other federal, state, or 8 local governmental statutes or rules. 9 5. The length of time since the rule has been evaluated or 10 the degree to which various factors have changed in the area 11 affected by the rule. 12 -6- LSB 2398SS (2) 84 jr/nh 6/ 6