Tennessee agencies must estimate costs of some rules

Agencies must estimate actual compliance costs for a new or amended rule they expect to have a negative financial impact on regulated people or groups. This applies to agencies whose rules need General Assembly approval and to rules affecting the regulated community. That community excludes people affected only as applicants for or recipients of government services. The estimate must exclude speculative, anticompetitive, and hypothetical costs and explain its assumptions and reasoning. Agencies must seek feedback from affected businesses, trades, and their representatives, and include relevant cost information shared during public comment. People or businesses may submit feedback anonymously. These rules do not cover federally required rules or rules about specified professional, occupational, facility, or statutory fees. For an emergency rule, the agency must file the estimate with the secretary of state within 45 days after the rule takes effect. The law takes effect January 1, 2027, and applies to rules whose notice was not filed before that date.

Agencies must publish covered new or amended rules and make a good faith effort to notify affected trade groups or organizations. This applies to agencies whose rules need General Assembly approval and to rules affecting the regulated community. The notice must include a copy of the rule and invite comments during the public comment period or directly to the agency, for use in preparing the cost estimate. These rules do not cover federally required rules or rules about specified professional, occupational, facility, or statutory fees. The rule must be published on the agency's website during the 45-day period referenced in the law. The notice effort must happen at least 45 days before the public hearing. These requirements apply to rules whose notice was not filed before January 1, 2027.

A covered rule with an estimated negative impact above $1 million takes effect only after approval by a majority vote in both legislative chambers as a separate measure. This applies to rules affecting the regulated community that are made by agencies whose rules need General Assembly approval. The joint government operations committee must first approve the rule. The estimate must exceed $1 million over five years for a regular rule or over one year for an emergency rule. Federally required rules and rules about specified professional, occupational, facility, or statutory fees are excluded. The $1 million estimate covers five years for a regular rule and one year for an emergency rule.

Agencies must file cost estimates for covered emergency rules within 45 days; certain rules stop being effective or expire on set schedules. These rules cover emergency rules affecting the regulated community that are made by agencies whose rules need General Assembly approval. If an agency misses the filing deadline, the emergency rule stops being effective the next day. If the estimate shows a negative impact above $1 million over one year, the rule expires at the earliest of 180 days after it takes effect, the end of the next special session, or the fourteenth legislative day of the next regular session. Both chambers may approve it by majority vote while in session. Exceptions include federally required rules, rules about specified fees, and temporary rules made while an agency develops a permanent rule under a new or amended state law. The filing deadline runs from when the emergency rule takes effect. For a rule above the cost threshold, the expiration schedule starts when it takes effect.

Each agency must compile and file an annual report of cost estimates for covered rules that took effect during the prior year; the secretary of state must link to each report on its website. This applies to each agency whose rules need General Assembly approval and to rules affecting the regulated community that took effect in the preceding year. The report must show the total and combined estimated fiscal impact of the agency's rules. Reports are due by January 31, 2028, and each January 31 after that.