ADOPTION OF RULES WITH ADVERSE ECONOMIC EFFECT.

(a) A state agency considering adoption of a rule that would have an adverse economic effect on small businesses, micro-businesses, or rural communities shall reduce that effect if doing so is legal and feasible considering the purpose of the statute under which the rule is to be adopted.

(b) To reduce an adverse effect on small businesses and rural communities, as applicable, an agency may:

(1) establish separate compliance or reporting requirements for small businesses and rural communities;

(2) use performance standards in place of design standards for small businesses and rural communities; or

(3) exempt small businesses and rural communities from all or part of the rule.

(c) Before adopting a rule that may have an adverse economic effect on small businesses or rural communities, as applicable, a state agency shall prepare:

(1) an economic impact statement that estimates the number of small businesses or rural communities subject to the proposed rule, projects the economic impact of the rule on small businesses or rural communities, and describes alternative methods of achieving the purpose of the proposed rule; and

(2) a regulatory flexibility analysis that includes the agency's consideration of alternative methods of achieving the purpose of the proposed rule.

(c-1) The analysis under Subsection (c) shall consider, if consistent with the health, safety, and environmental and economic welfare of the state, using regulatory methods that will accomplish the objectives of applicable rules while minimizing adverse impacts on small businesses or rural communities, as applicable. The state agency must include in the analysis several proposed methods of reducing the adverse impact of a proposed rule on a small business or rural community.

(d) The agency shall include the economic impact statement and regulatory flexibility analysis as part of the notice of the proposed rule that the agency files with the secretary of state for publication in the Texas Register and shall provide copies to:

(1) the standing committee of each house of the legislature that is charged with reviewing the proposed rule; and

(2) if feasible, each member of the legislature who represents a rural community adversely impacted by the proposed rule.

(e) This section does not apply to a rule adopted under Title 2, Tax Code.

(f) To reduce an adverse effect of rules on micro-businesses, a state agency shall adopt provisions concerning micro-businesses that are uniform with those outlined in Subsections (b)-(d) for small businesses.

(g) The attorney general, in consultation with the comptroller, shall prepare guidelines to assist a state agency:

(1) in determining a proposed rule's potential adverse economic effects on small businesses and rural communities, as applicable; and

(2) in identifying and evaluating alternative methods of achieving the purpose of a proposed rule.