Florida Statutes § 120.541 — Statement of estimated regulatory costs.

120.541 Statement of estimated regulatory costs.—(1)(a) Within 21 days after publication of the notice required under s. 120.54(3)(a), a substantially affected person may submit to an agency a good faith written proposal for a lower cost regulatory alternative to a proposed rule which substantially accomplishes the objectives of the law being implemented. The proposal may include the alternative of not adopting any rule if the proposal explains how the lower costs and objectives of the law will be achieved by not adopting any rule. If submitted after a notice of change, a proposal for a lower cost regulatory alternative is deemed to be made in good faith only if the person reasonably believes, and the proposal states the person’s reasons for believing, that the proposed rule, as changed by the notice of change, increases the regulatory costs or creates an adverse impact on small businesses which was not created by the previously proposed rule. If such a proposal is submitted, the 90-day period for filing the rule is extended 21 days. Upon the submission of the lower cost regulatory alternative, the agency shall prepare a statement of estimated regulatory costs as provided in subsection (2), or shall revise its prior statement of estimated regulatory costs, and either adopt the alternative or provide a statement of the reasons for rejecting the alternative in favor of the proposed rule. The agency shall provide to the committee, within 7 days after its receipt, a copy of any proposal for a lower cost regulatory alternative, and within 7 days after its release, a copy of the agency’s response thereto. The agency may not file a rule for adoption before such documents, if applicable, have been provided to the committee. (b) If a proposed rule will have an adverse impact on small business or if the proposed rule is likely to directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate within 1 year after the implementation of the rule, the agency shall prepare a statement of estimated regulatory costs as required by s. 120.54(3)(b). (c) The agency shall revise a statement of estimated regulatory costs if any change to the rule made under s. 120.54(3)(d) increases the regulatory costs of the rule. (d) At least 21 days before filing the rule for adoption, an agency that is required to revise a statement of estimated regulatory costs shall provide the statement to the person who submitted the lower cost regulatory alternative and to the committee and shall provide notice on the agency’s website that it is available to the public. (e) Notwithstanding s. 120.56(1)(c), the failure of the agency to prepare a statement of estimated regulatory costs or to respond to a written lower cost regulatory alternative as provided in this subsection is a material failure to follow the applicable rulemaking procedures or requirements set forth in this chapter. (f) An agency’s failure to prepare a statement of estimated regulatory costs or to respond to a written lower cost regulatory alternative may not be raised in a proceeding challenging the validity of a rule pursuant to s. 120.52(8)(a) unless:1. Raised in a petition filed no later than 1 year after the effective date of the rule; and 2. Raised by a person whose substantial interests are affected by the rule’s regulatory costs. (g) A rule that is challenged pursuant to s. 120.52(8)(f) may not be declared invalid unless:1. The issue is raised in an administrative proceeding within 1 year after the effective date of the rule; 2. The challenge is to the agency’s rejection of a lower cost regulatory alternative offered under paragraph (a) or s. 120.54(3)(b)2.b.; and 3. The substantial interests of the person challenging the rule are materially affected by the rejection. (2) A statement of estimated regulatory costs shall include:(a) An economic analysis showing whether the rule directly or indirectly:1. Is likely to have an adverse impact on economic growth, private sector job creation or employment, or private sector investment in excess of $1 million in the aggregate within 5 years after the implementation of the rule; 2. Is likely to have an adverse impact on business competitiveness, including the ability of persons doing business in the state to compete with persons doing business in other states or domestic markets, productivity, or innovation in excess of $1 million in the aggregate within 5 years after the implementation of the rule; or 3. Is likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the aggregate within 5 years after the implementation of the rule. (b) A good faith estimate of the number of individuals and entities likely to be required to comply with the rule, together with a general description of the types of individuals likely to be affected by the rule. (c) A good faith estimate of the cost to the agency, and to any other state and local government entities, of implementing and enforcing the proposed rule, and any anticipated effect on state or local revenues. (d) A good faith estimate of the transactional costs likely to be incurred by individuals and entities, including local government entities, required to comply with the requirements of the rule. As used in this section, “transactional costs” are direct costs that are readily ascertainable by the agency based upon standard business practices, and may include:1. Filing fees. 2. Expenses to obtain a license. 3. Necessary equipment. 4. Installation, utilities for, and maintenance of necessary equipment. 5. Necessary operations or procedures. 6. Accounting, financial, information management, and other administrative processes. 7. Labor, based on relevant wages, salaries, and benefits. 8. Materials and supplies. 9. Capital expenditures, including financing costs. 10. Professional and technical services, including contracted services necessary to implement and maintain compliance. 11. Monitoring and reporting. 12. Qualifying and recurring education, training, and testing. 13. Travel. 14. Insurance and surety requirements. 15. A fair and reasonable allocation of administrative costs and other overhead. 16. Reduced sales or other revenue. 17. Other items suggested by the rules ombudsman in the Executive Office of the Governor or by any interested person, business organization, or business representative. (e) An analysis of the impact on small businesses as defined by s. 288.703, and an analysis of the impact on small counties and small cities as defined in s. 120.52. The impact analysis for small businesses must include the basis for the agency’s decision not to implement alternatives that would reduce adverse impacts on small businesses. (f) In evaluating the impacts described in paragraphs (a) and (e), an agency must include, if applicable, the market impacts likely to result from compliance with the proposed rule, including:1. Changes to customer charges for goods or services. 2. Changes to the market value of goods or services produced, provided, or sold. 3. Changes to costs resulting from the purchase of substitute or alternative goods or services. 4. The reasonable value of time to be spent by owners, officers, operators, and managers to understand and comply with the proposed rule, including, but not limited to, time to be spent completing requiring education, training, or testing. (g) Any additional information that the agency determines may be useful. (h) In the statement or revised statement, whichever applies, a description of any regulatory alternatives submitted under paragraph (1)(a) and a statement adopting the alternative or a statement of the reasons for rejecting the alternative in favor of the proposed rule. (3) If the adverse impact or regulatory costs of the rule exceed any of the criteria established in paragraph (2)(a), the rule must be submitted to the President of the Senate and Speaker of the House of Representatives no later than 30 days before the next regular legislative session, and the rule may not take effect until it is ratified by the Legislature. The agency shall notify the committee of its submission of the rule to the Legislature for ratification within 3 business days after submittal. 1(4) Subsection (3) does not apply to the adoption of:(a) Federal standards pursuant to s. 120.54(6). (b) Triennial updates of and amendments to the Florida Building Code which are expressly authorized by s. 553.73. (c) Triennial updates of and amendments to the Florida Fire Prevention Code which are expressly authorized by s. 633.202. (d) Emergency rules adopted pursuant to s. 120.54(4). (5) For purposes of subsections (2) and (3), adverse impacts and regulatory costs likely to occur within 5 years after implementation of the rule include adverse impacts and regulatory costs estimated to occur within 5 years after the effective date of the rule. However, if any provision of the rule is not fully implemented upon the effective date of the rule, the adverse impacts and regulatory costs associated with such provision must be adjusted to include any additional adverse impacts and regulatory costs estimated to occur within 5 years after implementation of such provision. (6)(a) The Department of State shall include on the Florida Administrative Register website the agency website addresses where statements of estimated regulatory costs can be viewed in their entirety. (b) An agency that prepares a statement of estimated regulatory costs must provide, as part of the notice required under s. 120.54(3)(a), the agency website address where the statement of estimated regulatory costs can be read in its entirety to the Department of State for publication in the Florida Administrative Register. (c) If an agency revises its statement of estimated regulatory costs, the agency must provide notice that a revision has been made in the manner provided under s. 120.54(3)(d)1. Such notice must also include the agency website address where the revision can be viewed in its entirety. (7) The rules ombudsman in the Executive Office of the Governor must prescribe and post on a publicly accessible website a form that incorporates the factors in subsection (2). Agencies must use this form to prepare a statement of estimated regulatory costs as required by this section.