hb1024_00

As Introduced

136th General Assembly

Regular Session H. B. No. 1024

2025-2026

To amend sections 101.64, 103.0511, 106.02, 106.03, 106.031, 106.032, 107.51, 107.57, 107.63, 121.81, 121.82, 121.951, 121.953, and 4798.02; to amend, for the purpose of adopting new section numbers as indicated in parentheses, sections 107.51 (101.37), 107.52 (101.372), 107.53 (101.373), 107.54 (101.374), 107.55 (101.378), 107.56 (101.377), 107.57 (101.376), and 107.62 (101.375); to enact section 101.371; and to repeal section 107.61 of the Revised Code to make changes to the Common Sense Initiative Office and to the process by which administrative rules are adopted and reviewed.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 101.64, 103.0511, 106.02, 106.03, 106.031, 106.032, 107.51, 107.57, 107.63, 121.81, 121.82, 121.951, 121.953, and 4798.02 be amended; sections 107.51 (101.37), 107.52 (101.372), 107.53 (101.373), 107.54 (101.374), 107.55 (101.378), 107.56 (101.377), 107.57 (101.376), and 107.62 (101.375) be amended for the purpose of adopting new section numbers as indicated in parentheses; and section 101.371 of the Revised Code be enacted to read as follows:

Sec. ~~107.51~~ 101.37. As used in sections ~~107.51~~ 101.37 to ~~107.55~~ 101.378 of the Revised Code, "agency" and "draft rule" have the meanings defined in section 121.81 of the Revised Code.

Sections ~~107.51~~ 101.37 to ~~107.55 and 107.61 to 107.63~~ 101.378 of the Revised Code are complementary to sections 107.63 and 121.81 to 121.82 of the Revised Code.

Sec. 101.371. The common sense initiative office is established within the legislative branch of government. The president of the senate and the speaker of the house of representatives shall organize, and as it becomes necessary or advisable may reorganize, the office. The president and the speaker shall, by mutual consent, appoint a director of the office. The director shall appoint professional, technical, and clerical personnel who are necessary for the work of the office to be carried out efficiently and successfully. The director and employees are in the unclassified service and serve at the pleasure of the president and speaker. The president and speaker shall provide the office with office space, and with furnishings, equipment, and resources, as is necessary for the work of the office to be carried out efficiently and successfully. References in law authorizing or requiring action by the "common sense initiative office" imply action being taken by the director or relevant personnel of the office.

Sec. ~~107.52~~ 101.372. A draft or existing rule that affects businesses has an adverse impact on businesses if a provision of the draft or existing rule that applies to businesses has any of the following effects:

(A) It requires a license, permit, or any other prior authorization to engage in or operate a line of business;

(B) It imposes a criminal penalty, a civil penalty, or another sanction, or creates a cause of action, for failure to comply with its terms;

(D) It would be likely to directly reduce the revenue or increase the expenses of the lines of business to which it will apply or applies.

Sec. ~~107.53~~ 101.373. The common sense initiative office shall develop, and as it becomes necessary or advisable shall improve, a business impact analysis instrument that shall be used as required by law to evaluate draft and existing rules that might have an adverse impact on businesses. The instrument shall be in writing, and shall include the following:

(A) Standards that encourage agencies to propose draft rules, and to evaluate existing rules, and proposed revisions thereto, in such a manner that the rules will be as easy to understand as their subject matter permits;

(B) Performance measures that can be applied to evaluate the likely efficiency and effectiveness of a draft or existing rule in achieving its regulatory objectives;

(C) Standards for evaluating alternative means of regulation that might reduce or eliminate the adverse impact a draft or existing rule might have on businesses;

(D) Standards that will promote transparency, predictability, consistency, and flexibility in the implementation and operation of a draft or existing rule, as well as an overall balance in a draft or existing rule between its regulatory objectives and the costs of compliance it imposes on regulated persons;

(E) Standards that require an agency to encourage businesses that might be adversely impacted by a draft rule to participate in the rule-making process, beginning at the earliest practicable stage, and that will encourage businesses that are or may be adversely impacted by an existing rule to offer advice and assistance to the agency when the existing rule is being implemented and administered; and

(F) Any other standards or measures, or any other criteria, the office concludes will reduce or eliminate adverse impacts on businesses and foster improved regulation and economic development in the state.

Alternative means of regulation include, and are not limited to, less stringent compliance or reporting requirements, less stringent schedules or deadlines, consolidation or simplification of requirements, establishment of performance standards to replace operational standards, and exemption of businesses.

The instrument does not need to be adopted as a rule. The office shall publish the current instrument in the register of Ohio.

Sec. ~~107.54~~ 101.374. (A)(1) When the common sense initiative office receives a draft rule and business impact analysis from an agency, the office shall evaluate the draft rule and analysis against the business impact analysis instrument and any other relevant criteria, and may prepare and transmit recommendations to the agency on how the draft rule might be revised to eliminate or reduce any adverse impact the draft rule might have on businesses.

(2) When the office receives an existing rule and business impact analysis from an agency under division (A)(2) of section 106.031 of the Revised Code, the office shall evaluate the existing rule and analysis against the business impact analysis instrument and any other relevant criteria, and may prepare and transmit recommendations to the agency on how the existing rule might be amended or rescinded to eliminate or reduce any adverse impact the existing rule has on businesses.

(B) The office shall transmit any such recommendations electronically to the agency. If the office fails to make such a transmission after receiving the draft or existing rule and business impact analysis, it is as if the office had elected not to make any recommendations.

Sec. ~~107.62~~ 101.375. The common sense initiative office shall establish a system through which any person may comment concerning:

(A) The adverse impact on businesses a draft rule might have;

(B) The adverse impact on businesses that a rule currently in effect is having; or

The office shall prepare a plan for the comment system, and shall revise or replace the plan to improve the comment system in light of learning, experience, or technological development. The office shall publish the current plan for the comment system in the register of Ohio.

At a minimum, the plan for the comment system shall provide for communication of comments as follows: The office shall accept comments in writing that are delivered to the office personally, by mail, or by express. The office shall establish a toll-free telephone number that a person may call to offer comments. (The telephone number shall be connected to a recording device at its answering point.) The office shall create a web site that enables a person to offer comments electronically. The web site also shall provide notification to the public of any draft or existing rule that may have an adverse impact on businesses, which notification shall include copies of the draft or existing rule and the business impact analysis of the draft rule.

The office shall forward written, telephoned, and electronically transmitted comments to the state agency having jurisdiction over the rule. The office has no other duty with regard to the comments.

Sec. ~~107.57~~ 101.376. (A) In the course of evaluating draft rules and business impact analyses under sections ~~107.51 to 107.55~~ 101.37, 101.372 to 101.374, and 101.378 of the Revised Code, or at any other time, the common sense initiative office may review any rules containing regulatory restrictions that a state agency is required to include in its inventory of regulatory restrictions under section 121.95 of the Revised Code. If the common sense initiative office determines, based on the criteria described in division (A) of section 106.03 of the Revised Code, that a state agency should eliminate a regulatory restriction, the common sense initiative office shall notify the state agency that it is required to eliminate that regulatory restriction, and the state agency shall eliminate it.

(B) If a state agency objects to the elimination of a regulatory restriction that the common sense initiative office has determined should be eliminated under division (A) of this section, the state agency may appeal that decision to the joint committee on agency rule review. If the joint committee also determines, based on the criteria described in division (A) of section 106.03 of the Revised Code, that the state agency should eliminate the regulatory restriction, the state agency shall eliminate it.

Sec. ~~107.56~~ 101.377. (A) As used in this section, "board or commission" means any of the following:

(1) The accountancy board;

(2) The architects board;

(3) The state cosmetology and barber board;

(4) The board of embalmers and funeral directors;

(5) The board of executives of long-term services and supports;

(6) The crematory review board;

(7) The motor vehicle dealers board;

(8) The motor vehicle repair board;

(9) The motor vehicle salvage dealer's licensing board;

(10) The Ohio athletic commission;

(11) The Ohio construction industry licensing board;

(12) The Ohio landscape architects board;

(13) The Ohio real estate commission;

(14) The real estate appraiser board;

(15) The state auctioneers commission;

(16) The state speech and hearing professionals board;

(17) The state board of education;

(18) The state board of emergency medical, fire, and transportation services;

(19) The board of nursing;

(20) The state board of pharmacy;

(21) The state board of registration for professional engineers and surveyors;

(22) The state board of psychology;

(23) The state chiropractic board;

(24) The state dental board;

(25) The state medical board;

(26) The state veterinary medical licensing board;

(27) The state vision professionals board;

(28) The counselor, social worker, and marriage and family therapist board;

(29) The chemical dependency professionals board;

(30) The Ohio occupational therapy, physical therapy, and athletic trainers board;

(31) Any other multi-member body created under state law that licenses or otherwise regulates an occupation or industry to which one or more members of the body belongs.

(B) The common sense initiative office shall review an action taken or proposed by a board or commission that is subject to review under this section and that is referred to the office pursuant to division (C) of this section.

(1) The following actions are subject to review under this section:

(a) Any action that directly or indirectly has an effect of any of the following:

(i) Fixing prices, limiting price competition, or increasing prices in this state for the goods or services that are provided by the occupation or industry regulated by the board or commission;

(ii) Dividing, allocating, or assigning customers, potential customers, or geographic markets in this state among members of the occupation or industry regulated by the board or commission;

(iii) Excluding present or potential competitors from the occupation or industry regulated by the board or commission;

(iv) Limiting the output or supply in this state of any good or service provided by the members of the occupation or industry regulated by the board or commission.

(b) Any other activity that could be subject to state or federal antitrust law if the action were undertaken by a private person or combination of private persons.

(2) Except as provided in division (H) of this section, the following actions are not subject to review under this section:

(a) Denying an application to obtain a license because the applicant has violated or has not complied with the Ohio Revised Code or the Ohio Administrative Code;

(b) Taking disciplinary action against an individual or corporation that is licensed by a board or commission for violations of the Ohio Revised Code or the Ohio Administrative Code.

(C)(1) The following persons or entities may refer an action to the office for review under this section:

(a) A board or commission that has taken or is proposing to take an action;

(b) A person who is affected by an action taken by a board or commission or is likely to be affected by an action proposed by a board or commission;

(2) A board or commission or person who refers an action to the office shall prepare a brief statement explaining the action and its consistency or inconsistency with state or federal antitrust law and file the statement with the office. If the action is in writing, the board or commission or person shall attach a copy of it to the statement. The person shall transmit a copy of the statement to the board or commission.

(3) The referral of an action by a board or commission for review by the office does not constitute an admission that the action violates any state or federal law.

(4) A person who is affected by an action taken by a board or commission or is likely to be affected by an action proposed by a board or commission shall refer the action to the office for review within thirty days after receiving notice of the action or proposed action.

(5) If an ongoing action or an action proposed by a board or commission is referred to the office for review under this section, the board or commission shall cease the ongoing action or not take the proposed action until the office has approved of the action pursuant to division (E) of this section and prepared and transmitted the memorandum required under division (F) of this section.

(D) The office shall determine whether an action referred to the office under this section is supported by, and consistent with, a clearly articulated state policy as expressed in the statutes creating the board or commission or the statutes and rules setting forth the board's or commission's powers, authority, and duties. If the office finds this to be the case, the office shall determine whether the clearly articulated state policy is merely a pretext by which the board or commission enables the members of an occupation or industry the board or commission regulates to engage in anticompetitive conduct that could be subject to state or federal antitrust law if the action were taken by a private person or combination of private persons.

(E) After making the determinations required under division (D) of this section, the office shall take one of the following actions:

(1) Approve the board or commission action if the office determines that the action is pursuant to a clearly articulated state policy and that the policy is not a pretext as described in division (D) of this section. If the office approves the board's or commission's action, the board or commission may proceed to take or may continue the action.

(2) Disapprove the board or commission action if the office determines that the action is not pursuant to a clearly articulated state policy or that if it is pursuant to a clearly articulated state policy, that policy is a pretext as described in division (D) of this section. If the office disapproves the board's or commission's action, the action is void.

(F) The office shall prepare a memorandum that explains the office's approval or disapproval. The office shall transmit a copy of the memorandum to the person and the board or commission or to the board or commission if only the board or commission is involved. The office shall post the memorandum on the web site maintained by the office.

(G)(1) A person having standing to commence and prosecute a state or federal antitrust action against a board or commission shall exhaust the remedies provided by this section before commencing such an action. This division shall not apply to the attorney general, a county prosecuting attorney, or any assistant prosecutor designated to assist a county prosecuting attorney.

(2) The state, a board or commission, or a member of a board or commission in the member's official capacity, may request a stay of any lawsuit alleging that a board or commission engaged in anticompetitive conduct by taking an action described in division (B)(1) or (2) of this section that has not been previously reviewed by the office under this section. If the lawsuit was initiated by a person other than the attorney general, a county prosecuting attorney, or any assistant prosecutor designated to assist a county prosecuting attorney, the court shall grant the request. If the lawsuit was initiated by the attorney general, a county prosecuting attorney, or any assistant prosecutor designated to assist a county prosecuting attorney, the court shall deny the request. Any stay granted under this division will continue in effect until the office has prepared and transmitted the memorandum required under division (F) of this section.

(H) The office shall review any action referred to the office by a party who has been granted a stay pursuant to division (G) of this section.

(I) Notwithstanding any provision of this section to the contrary, an action taken by a board or commission is not subject to review under this section if the members of the board or commission who are members of the occupation or industry affected by the action are prohibited by statute from hearing, considering, deciding, or otherwise participating in the action.

(J) The office shall adopt rules under Chapter 119. of the Revised Code that are necessary for the implementation and administration of this section.

Sec. ~~107.55~~ 101.378. The common sense initiative office, annually not later than the first day of February, shall prepare a report of the activities of the office during the preceding calendar year. The report shall include:

(A) A statement of the number of draft and existing rules reviewed during the calendar year;

(B) A description of the recommendations made to agencies with regard to draft and existing rules;

(D) An explanation of the performance measures developed to evaluate the efficiency and effectiveness of the office;

(E) An evaluation of the work of the office judged against the performance measures; and

(F) Any other information the office believes will explain the work of the office.

The office shall transmit a copy of the report to the governor, the lieutenant governor, the president and minority leader of the senate, and the speaker and minority leader of the house of representatives.

Sec. 101.64. The president of the senate and the speaker of the house of representatives shall notify the ~~chief~~ director of the common sense initiative office, established under section ~~107.61~~ 101.371 of the Revised Code, when a board is identified to be reviewed by a standing committee under section 101.63 of the Revised Code. The ~~chief~~ director or the ~~chief's~~ director's designee shall appear and testify before the standing committee, with respect to the board, and shall testify on at least all of the following:

(A) Whether or not the common sense initiative office has, within the previous six years, received commentary related to the board through the comment system established under section ~~107.62~~ 101.375 of the Revised Code;

(B) Whether or not the common sense initiative office has, within the previous six years, received advice from the small business advisory council with respect to rules of the board;

(C) Any other information the chief believes will elucidate the effectiveness and efficiency of the board and in particular the quality of customer service provided by the board.

Sec. 103.0511. The director of the legislative service commission shall establish and maintain, and enhance and improve, an electronic rule-filing system connecting:

(A) The legislative service commission, the joint committee on agency rule review, and the secretary of state;

(B) The governor, the senate and house of representatives, and the clerks of the senate and house of representatives;

(C) Each agency that files rules and other rule-making and rule-related documents with the legislative service commission, the joint committee on agency rule review, the department of aging, the governor, the secretary of state, the general assembly, or a committee of the senate or house of representatives under section 101.374, 106.02, 106.022, 106.024, 106.031, ~~107.54,~~ 111.15, 117.20, 119.03, 119.0311, 119.04, 121.39, 121.82, 173.01, or 5117.02 of the Revised Code or any other statute;

(D) The several publishers of the Administrative Code;

(E) The common sense initiative office; and

(F) Any other person or governmental officer or entity whose inclusion in the system is required for the system to be a complete electronic rule-filing system.

The electronic rule-filing system is to enable rules and rule-making and rule-related documents to be filed, and official responses to these filings to be made, exclusively by electronic means.

Sec. 106.02. (A) Subject to division (B) of this section, when an agency files a proposed rule and rule summary and fiscal analysis with the joint committee on agency rule review, the joint committee shall review the proposed rule and rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, not later than the sixty-fifth day after the day on which the proposed rule was filed with the joint committee. If, after filing the original version of a proposed rule, the agency makes a revision in the proposed rule, the agency shall file the revised proposed rule and a revised rule summary and fiscal analysis with the joint committee. If the revised proposed rule is filed thirty-five or fewer days after the original version of the proposed rule was filed, the joint committee shall review the revised proposed rule and revised rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, not later than the sixty-fifth day after the original version of the proposed rule was filed. If, however, the revised proposed rule is filed more than thirty-five days after the original version of the proposed rule was filed, the joint committee shall review the revised proposed rule and revised rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, not later than the thirtieth day after the revised proposed rule was filed with the joint committee.

~~(B)~~(B)(1) If, after filing a proposed rule and rule summary and fiscal analysis with the joint committee, an agency determines that it needs additional time to consider the proposed rule and possibly file a revised proposed rule, the agency may notify the joint committee of the agency's intention to file a revised proposed rule. When the agency notifies the joint committee of its intention to file a revised proposed rule, the running of the time within which an invalidating concurrent resolution may be adopted is tolled.

If, after notifying the joint committee of the agency's intention to file a revised proposed rule, the agency makes a revision in the proposed rule, the agency shall file the revised proposed rule and a revised rule summary and fiscal analysis with the joint committee. If the revised proposed rule is filed thirty-five or fewer days after the agency filed the original version of the proposed rule, the joint committee shall review the revised proposed rule and revised rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, not later than the sixty-fifth day after the agency filed the original version of the proposed rule. If, however, the revised proposed rule is filed more than thirty-five days after the agency filed the original version of the proposed rule, the joint committee shall review the revised proposed rule and revised rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, not later than the thirtieth day after the revised proposed rule is filed with the joint committee.

(2) On a motion by any member of the committee, the joint committee, by a vote of a majority of its members, may extend the period to recommend a concurrent resolution invalidating a rule under this section by thirty days if a member of the committee has questions about the rule and a representative of the agency has not appeared to answer those questions during the sixty-five-day period or any extension of that period.

(C) When an original or revised version of a proposed rule and rule summary and fiscal analysis is filed with the joint committee in December or in the following January before the first day of the legislative session, the joint committee shall review the proposed rule and rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, as if the original version of the proposed rule and rule summary and fiscal analysis had been filed with the joint committee on the first day of the legislative session in the following January. If, however, the original version of a proposed rule and rule summary and fiscal analysis have been pending before the joint committee for more than thirty-five days, and the proposed rule and rule summary and fiscal analysis are revised in December or in the following January before the first day of the legislative session, the joint committee shall review the revised proposed rule and revised rule summary and fiscal analysis, and an invalidating concurrent resolution may be adopted, not later than the thirtieth day after the first day of the legislative session in the following January.

(D) A revised proposed rule supersedes each earlier version of the same proposed rule.

(E) The joint committee shall endeavor not to hold its public hearing on a proposed rule earlier than the forty-first day after the proposed rule was filed with the joint committee. The chairperson of the joint committee responsible for calling and conducting meetings under section 101.35 of the Revised Code may select a date for the committee's public hearing on a proposed rule that is earlier than the forty-first day after the proposed rule was filed.

Sec. 106.03. Prior to the review date of an existing rule, the agency that adopted the rule shall do both of the following:

(A) Review the rule to determine whether the rule should be amended or rescinded, including for the purpose of accomplishing the reductions in regulatory restrictions required by section 121.951 of the Revised Code, because it does any of the following, or otherwise for the purpose of reducing regulatory restrictions:

(1) Exceeds or conflicts with the purpose, scope, or intent of the statute under which the rule was adopted;

(2) Provides inadequate flexibility at the local level;

(3) Creates a compliance or oversight burden for the state agency, or for any person or entity, that is greater than the burden that would be created if the agency accomplished the intended purpose of the restriction by other means;

(4) Is no longer useful or beneficial;

(5) Incorporates a text or other material by reference and, if so:

(a) The citation accompanying the incorporation by reference is such as would not reasonably enable a reasonable person to whom the rule applies readily and without charge to find and inspect the incorporated text or other material;

(b) The citation accompanying the incorporation by reference is such as would not reasonably enable the joint committee on agency rule review readily and without charge to find and inspect the incorporated text or other material; or

(c) If the rule has been exempted in whole or in part from sections 121.71 to 121.74 of the Revised Code on grounds the incorporated text or other material has one or more of the characteristics described in division (B) of section 121.75 of the Revised Code, the incorporated text or other material does not actually have any of those characteristics.

(6) Duplicates, overlaps with, or conflicts with a federal law or rule or another law or rule of this state. A rule duplicates, overlaps with, or conflicts with another law or rule if it imposes a duty or liability on a person or entity that the other law or rule also imposes on that person or entity, in whole or in part, or imposes a duty or liability that may require a person or entity to violate the other law or rule in whole or in part. If the rule duplicates, overlaps with, or conflicts with a rule adopted by another state agency, the two agencies shall determine which agency shall amend or rescind its rule and shall develop and execute a plan to work together to achieve the required oversight.

(7) Has an adverse impact on businesses, as determined under section ~~107.52~~ 101.372 of the Revised Code;

(8) Has an adverse impact on any other person or entity;

(9) Contains words or phrases having meanings that in contemporary usage are understood as being derogatory or offensive;

(10) Requires liability insurance, a bond, or any other financial responsibility instrument as a condition of licensure;

(11) Imposes a more severe duty or liability than restrictions in neighboring states in order to accomplish the same goal;

(12) Implements a federal law or rule in a manner that is more stringent or burdensome than the federal law or rule requires.

In making its review, the agency shall consider the continued need for the rule, the nature of any complaints or comments received concerning the rule, and any relevant factors that have changed in the subject matter area affected by the rule.

(B) On the basis of its review of the existing rule, the agency shall determine whether the existing rule needs to be amended or rescinded.

(1) If the existing rule needs to be amended or rescinded, the agency, on or before the review date of the existing rule, shall commence the process of amending or rescinding the existing rule in accordance with its review of the rule.

(2) If the existing rule does not need to be amended or rescinded, proceedings shall be had under section 106.031 of the Revised Code.

Upon the request of the agency that adopted an existing rule, the joint committee on agency rule review may extend the review date of the rule to a date that is not later than one hundred eighty days after the review date assigned to the rule by the agency. Not more than two such extensions may be allowed.

Sec. 106.031. If an agency, on the basis of its review of a rule under section 106.03 of the Revised Code, determines that the rule does not need to be amended or rescinded, proceedings shall be had as follows:

(A)(1) If, considering only the standard of review specified in division (A)(7) of section 106.03 of the Revised Code, the rule has an adverse impact on businesses, the agency shall prepare a business impact analysis that describes its review of the rule under that division and that explains why the regulatory intent of the rule justifies its adverse impact on businesses. If the rule does not have an adverse impact on businesses, the agency may proceed under division (B) of this section.

(2) The agency shall transmit a copy of the full text of the rule and the business impact analysis electronically to the common sense initiative office. The office shall make the rule and analysis available to the public on its web site under section ~~107.62~~ 101.375 of the Revised Code.

(3) The agency shall consider any recommendations made by the office.

(4) Not earlier than the sixteenth business day after transmitting the rule and analysis to the office, the agency shall either (a) proceed under divisions (A)(5) and (B) of this section or (b) commence, under division (B)(1) of section 106.03 of the Revised Code, the process of rescinding the rule or of amending the rule to incorporate into the rule features the recommendations suggest will eliminate or reduce the adverse impact the rule has on businesses. If the agency determines to amend or rescind the rule, the agency is not subject to the time limit specified in division (B)(1) of section 106.03 of the Revised Code.

(5) If the agency receives recommendations from the office, and determines not to amend or rescind the rule, the agency shall prepare a memorandum of response that explains why the rule is not being rescinded or why the recommendations are not being incorporated into the rule.

(B) The agency shall assign a new review date to the rule. The review date assigned shall be not later than five years after the immediately preceding review date pertaining to the rule. If the agency assigns a review date that exceeds the five-year maximum, the review date is five years after the immediately preceding review date. The immediately preceding review date includes the date of the review of a rule under section 106.032 of the Revised Code.

(C) The agency shall file all the following, in electronic form, with the joint committee on agency rule review, the secretary of state, and the director of the legislative service commission: a copy of the rule specifying its new review date, a complete and accurate rule summary and fiscal analysis, and, if relevant, a business impact analysis of the rule, any recommendations received from the common sense initiative office, and any memorandum of response.

(D) The joint committee shall publish notice of the agency's determination not to amend or rescind the rule in the register of Ohio for four consecutive weeks after the rule is filed under division (C) of this section.

~~(E) During~~ (E)(1) Except as provided in division (E)(2) of this section, during the ninety-day period after a rule is filed under division (C) of this section, but after the four-week notice period required by division (D) of this section has ended, the joint committee may recommend to the senate and house of representatives the adoption of a concurrent resolution invalidating the rule if the joint committee finds any of the following:

~~(1)~~(a) The agency improperly applied the standards in division (A) of section 106.03 of the Revised Code in reviewing the rule and in determining that the rule did not need amendment or rescission.

~~(2)~~(b) The rule has an adverse impact on businesses, and the agency has failed to demonstrate through a business impact analysis, recommendations from the common sense initiative office, and a memorandum of response that the regulatory intent of the rule justifies its adverse impact on businesses.

~~(3)~~(c) If the rule incorporates a text or other material by reference, any of the following applies:

~~(a)~~(i) The citation accompanying the incorporation by reference is not such as reasonably would enable a reasonable person to whom the rule applies readily and without charge to find and inspect the incorporated text or other material;

~~(b)~~(ii) The citation accompanying the incorporation by reference is not such as reasonably would enable the joint committee readily and without charge to find and inspect the incorporated text or other material; or

~~(c)~~(iii) The rule has been exempted in whole or in part from sections 121.71 to 121.74 of the Revised Code on grounds the incorporated text or other material has one or more of the characteristics described in division (B) of section 121.75 of the Revised Code, but the incorporated text or other material actually does not have any of those characteristics.

~~(4)~~(d) If the agency is subject to sections 121.95, 121.951, 121.952, and 121.953 of the Revised Code, the agency has failed to justify the retention of a rule containing a regulatory restriction.

~~(5)~~(e) The rule implements a federal law or rule in a manner that is more stringent or burdensome than the federal law or rule requires.

(2) On a motion by any member of the committee, the joint committee, by a vote of a majority of its members, may extend the period to recommend a concurrent resolution invalidating a rule under this section by an additional thirty days if a member of the committee has questions about the rule and a representative of the agency has not appeared to answer those questions during the period described in division (B)(1) of this section or any extension of that period.

(F) If ~~the~~ an agency fails to comply with section 106.03 or 106.031 of the Revised Code, the joint committee shall afford the agency an opportunity to appear before the joint committee to show cause why the agency has not complied with either or both of those sections. If the agency appears before the joint committee at the time scheduled for the agency to show cause, and fails to do so, the joint committee, by vote of a majority of its members present, may recommend the adoption of a concurrent resolution invalidating the rule for the agency's failure to show cause. Or if the agency fails to appear before the joint committee at the time scheduled for the agency to show cause, the joint committee, by vote of a majority of its members present, may recommend adoption of a concurrent resolution invalidating the rule for the agency's default.

When the joint committee recommends that a rule be invalidated, the recommendation does not suspend operation of the rule, and the rule remains operational pending action by the senate and house of representatives on the concurrent resolution embodying the recommendation. If the senate and house of representatives adopt the concurrent resolution, the rule is invalid. If, however, the senate and house of representatives do not adopt the resolution, the rule continues in effect, and shall next be reviewed according to the new review date assigned to the rule.

Sec. 106.032. If the chairperson of the joint committee on agency rule review responsible for calling and conducting meetings under section 101.35 of the Revised Code becomes aware that an existing rule has had or is having an unintended or unexpected effect on businesses that is not reasonably within the express or implied scope of the statute under which the existing rule purportedly was adopted, that chairperson may move that the joint committee order the agency that is administering the existing rule to submit the existing rule for review under section 106.031 of the Revised Code, the same as if the agency had made a determination with regard to the existing rule under division (B)(2) of section 106.03 of the Revised Code. The joint committee may adopt the motion by vote of a majority of its members. The joint committee shall not adopt a motion under this paragraph for a rule if the joint committee previously has adopted a motion under this paragraph for the same rule within the immediately preceding five-year period.

The joint committee shall prepare the order in writing, and shall transmit the order electronically to the agency. The joint committee also shall transmit a copy of the order electronically to the director of the legislative service commission and to the common sense initiative office. The joint committee shall indicate in the order the date on which the order is transmitted. The director shall publish the order in the register of Ohio.

Upon receiving the order, the agency shall comply with the order as soon as reasonably possible, but shall commence compliance with the order not later than thirty days after the date on which the order was transmitted.

When an agency complies with the order, proceedings are to be had with regard to the existing rule under section 106.031 of the Revised Code, the same as if the agency had made a determination with regard to the existing rule under division (B)(2) of section 106.03 of the Revised Code. In addition to the standards of review stated in division ~~(E)~~(E)(1) of section 106.031 of the Revised Code, the joint committee may recommend to the senate and house of representatives the adoption of a concurrent resolution invalidating the existing rule if the joint committee finds that the existing rule has an unintended or unexpected effect on businesses that is not reasonably within the express or implied scope of the statute under which the agency purportedly adopted the existing rule.

Sec. 107.63. (A) As used in this section~~, "small~~ :

(1) "Small business" means an independently owned and operated for-profit or nonprofit business entity, including affiliates, that has fewer than five hundred full time employees or gross annual sales of less than six million dollars, and has operations located in the state.

(2) "Draft rule" has the same meaning as in section 121.81 of the Revised Code.

(B) The small business advisory council is established in the office of the governor. The council shall advise the governor, and the lieutenant governor~~, and the common sense initiative office~~ on the adverse impact draft and existing rules might have on small businesses. The council shall meet at the discretion of the ~~director of the common sense initiative office~~governor.

(C) The council consists of nine members. The governor~~, or the person to whom the governor has delegated responsibilities for the common sense initiative office under section 107.61 of the Revised Code,~~ shall appoint five members, the president of the senate shall appoint two members, and the speaker of the house of representatives shall appoint two members. A member serves at the pleasure of the member's appointing authority. The appointing authorities shall consult with each other and appoint only individuals who are representative of small businesses, and shall do so in such a manner that the membership of the council is composed of representatives of small businesses that are of different sizes, engaged in different lines of business, and located in different parts of the state.

(D) This section is complementary to sections 101.37 to 101.378 and sections 121.81 to 121.82 of the Revised Code.

Sec. 121.81. As used in sections 121.81 to 121.82 of the Revised Code:

(A) "Agency" means a state agency that is required to file proposed rules for legislative review under division (D) of section 111.15 or division (C) of section 119.03 of the Revised Code.

(B) "Draft rule" means any newly proposed rule and any proposed amendment, adoption, or rescission of a rule prior to the filing of that rule for legislative review under division (D) of section 111.15 or division (C) of section 119.03 of the Revised Code and includes a proposed amendment, adoption, or rescission of a rule in both its original and any revised form. "Draft rule" does not include an emergency rule adopted under division (B)(2) of section 111.15 or division (G) of section 119.03 of the Revised Code, but does include a rule that is proposed to replace an emergency rule that expires under those divisions.

Sections 121.81 to 121.82 and 121.91 of the Revised Code are complementary to sections ~~107.51~~ 101.37 to ~~107.55~~ 101.378 and ~~107.61 to~~ 107.63 of the Revised Code.

Sec. 121.82. In the course of developing a draft rule that is intended to be proposed under division (D) of section 111.15 or division (C) of section 119.03 of the Revised Code, an agency shall:

(A) Evaluate the draft rule against the business impact analysis instrument. If, based on that evaluation, the draft rule will not have an adverse impact on businesses, the agency may proceed with the rule-filing process. If the evaluation determines that the draft rule will have an adverse impact on businesses, the agency shall incorporate features into the draft rule that will eliminate or adequately reduce any adverse impact the draft rule might have on businesses;

(B) Prepare a business impact analysis that describes its evaluation of the draft rule against the business impact analysis instrument, that identifies any features that were incorporated into the draft rule as a result of the evaluation, and that explains how those features, if there were any, eliminate or adequately reduce any adverse impact the draft rule might have on businesses;

(C) Transmit a copy of the full text of the draft rule and the business impact analysis electronically to the common sense initiative office, which information shall be made available to the public on the office's web site in accordance with section ~~107.62~~ 101.375 of the Revised Code;

(D) Consider any recommendations made by the common sense initiative office with regard to the draft rule, and either incorporate into the draft rule features the recommendations suggest will eliminate or reduce any adverse impact the draft rule might have on businesses or document, in writing, the reasons those recommendations are not being incorporated into the draft rule; and

(E) Prepare a memorandum of response identifying features suggested by any recommendations that were incorporated into the draft rule and features suggested by any recommendations that were not incorporated into the draft rule, explaining how the features that were incorporated into the draft rule eliminate or reduce any adverse impact the draft rule might have on businesses, and explaining why the features that were not incorporated into the draft rule were not incorporated.

If the draft rule requires liability insurance, a bond, or any other financial responsibility instrument as a condition of licensure, the agency shall conduct a diligent search to determine if the liability insurance, bond, or other financial responsibility instrument is readily available in the amounts required as a condition of licensure, and, when the agency transmits the draft rule to the common sense initiative office, shall certify to the office that the search was conducted.

An agency may not file a proposed rule for legislative review under division (D) of section 111.15 or division (C) of section 119.03 of the Revised Code earlier than the sixteenth business day after electronically transmitting the draft rule to the common sense initiative office.

Sec. 121.951. (A)(1) Using the criteria listed in division (A) of section 106.03 of the Revised Code, a state agency shall amend or rescind rules identified in its base inventory of regulatory restrictions prepared under section 121.95 of the Revised Code as necessary to reduce the total number of regulatory restrictions by thirty per cent, according to the following schedule:

(a) A ten per cent reduction not later than June 30, 2023;

(b) A twenty per cent reduction not later than June 30, 2024; and

~~When~~ Except as provided in section 121.953 of the Revised Code, when a state agency has achieved a reduction of any percentage in regulatory restrictions, whether or not as specified in this section, the state agency may not adopt or maintain regulatory restrictions that would negate the reduction.

(2) Beginning July 1, 2025, a state agency that has not achieved the specified thirty per cent reduction may not adopt a new regulatory restriction unless it simultaneously removes two or more other existing regulatory restrictions, until the specified thirty per cent reduction has been achieved. The state agency may not fulfill this requirement by merging two or more existing regulatory restrictions into a single surviving regulatory restriction.

(3) A state agency that has achieved the specified thirty per cent reduction may not adopt a new regulatory restriction unless it simultaneously removes one or more other existing regulatory restrictions. The state agency may not fulfill this requirement by merging two or more existing regulatory restrictions into a single surviving regulatory restriction.

(4) A state agency is encouraged to continue to reduce regulatory restrictions after it has achieved the specified thirty per cent reduction.

(B)(1) Not later than September 15, 2022, a state agency shall prepare an historical report of its progress in reducing regulatory restrictions over the period of time beginning when the agency prepared its base inventory under section 121.95 of the Revised Code and ending on June 30, 2022. Annually thereafter, a state agency shall prepare an historical report of its progress in reducing regulatory restrictions over the preceding fiscal year. The state agency shall explain in the report how it applied the criteria described in division (A) of section 106.03 of the Revised Code to its determinations as to which regulatory restrictions to amend or rescind. The state agency shall include a revised inventory of regulatory restrictions with the report.

(2) In the revised inventory, in addition to the information required by section 121.95 of the Revised Code, the state agency shall compute the percentage net reduction in regulatory restrictions by subtracting the current number of regulatory restrictions from the number of regulatory restrictions identified in the base inventory and then dividing the resulting number by the number of regulatory restrictions in the base inventory.

(3) The state agency shall transmit the report electronically to the joint committee on agency rule review. The joint committee shall review the report and shall transmit it electronically to the speaker of the house of representatives and the president of the senate. The state agency shall continue preparing and transmitting annual reports until it has reported that it has achieved the required reduction in regulatory restrictions.

Sec. 121.953. (A) ~~Effective~~ Except as provided in division (C) of this section, effective July 1, 2025, the number of regulatory restrictions in this state shall not exceed a number of regulatory restrictions determined by the joint committee on agency rule review in accordance with this section. The joint committee shall determine that number by calculating, for each agency, the number of regulatory restrictions identified by the agency in the base inventory prepared under section 121.95 of the Revised Code, minus the number of regulatory restrictions that represents the percentage reduction the state agency is required to achieve, and then totaling the resulting numbers for all state agencies. The joint committee shall consider any lessened required reductions under section 121.952 of the Revised Code.

(B) A state agency shall contact the joint committee before submitting a proposed rule containing a regulatory restriction, and the joint committee shall determine whether adopting the regulatory restriction would cause the state to exceed the number of regulatory restrictions permitted under this section. A Except as provided in division (C) of this section, a state agency may not adopt a rule if by adopting the rule the state agency would cause the number of regulatory restrictions to exceed the state limit as determined by the joint committee.

(C) Beginning on the effective date of this amendment, a state agency may appear before the joint committee to show cause why the agency should be permitted to adopt a rule that would negate the reduction in regulatory restrictions achieved by the agency under section 121.951 of the Revised Code or cause the number of regulatory restrictions to exceed the state limit as determined by the joint committee. If the joint committee determines that the state agency has shown cause, the joint committee may, by a vote of a majority of its members, permit the state agency to adopt the rule notwithstanding section 121.951 of the Revised Code or the state limit on regulatory restrictions determined by the joint committee. The joint committee shall annually prepare a report summarizing all the rules it has considered in accordance with this division. In the report, the committee shall identify each instance in which the committee authorized a state agency to adopt a rule containing a regulatory restriction notwithstanding section 121.951 of the Revised Code or the state limit on regulatory restrictions. The joint committee shall transmit the report electronically to the speaker of the house of representatives and the president of the senate not later than the thirty-first day of December of each year.

Sec. 4798.02. With respect to occupational regulation of individuals, all of the following are the policy of the state:

(A) Occupational regulations shall be construed and applied to increase economic opportunities, promote competition, and encourage innovation.

(B) Where the state finds it is necessary to displace competition, the state will use the least restrictive regulation to protect consumers from present, significant, and substantiated harms that threaten public health, safety, or welfare. The policy of employing the least restrictive regulation shall presume that market competition and private remedies are sufficient to protect consumers. Where needed, regulations shall be tailored to meet the predominate identified need to protect consumers, as follows:

(1) If regulations are intended to protect consumers against fraud, the appropriate state action shall be to strengthen powers under deceptive trade practices acts.

(2) If regulations are intended to protect consumers against unsanitary facilities and general health, safety, or welfare concerns, the appropriate state action shall be to require periodic inspections.

(3) If regulations are intended to protect consumers against potential damages to third parties who are not party to a contract between the seller and buyer, and other types of externalities, the appropriate state action shall be to require bonding or insurance.

(4) If regulations are intended to protect consumers against potential damages by transient providers, the appropriate state action shall be to require registration with the secretary of state.

(5) If regulations are intended to protect consumers against asymmetrical information between the seller and buyer, the appropriate state action shall be to offer voluntary certification, unless suitable, privately offered voluntary certification for the relevant occupation is available.

As used in this division, "suitable" means widely recognized as reflecting established standards of competency, skill, or knowledge in the field.

(6) If regulations are intended to facilitate governmental reimbursement for providing medical services for an emerging medical specialty, the appropriate state action shall be to require a specialty occupational license for medical reimbursement.

(7) If regulations are required to perform services regulated by both federal laws and laws of this state, require the state to recognize an individual's occupational license from another United States state or territory to allow that individual to practice in this state, and are based on uniform national laws, practices, and examinations that have been adopted by at least fifty United States states and territories, the appropriate state action shall be to require an occupational license.

For purposes of this division, a uniform national law is one that has been adopted in a substantially equivalent manner in at least fifty United States states and territories.

(C) An occupational regulation may be enforced against an individual only to the extent the individual sells goods and services that are included explicitly in the statute that defines the occupation's scope of practice.

(D) Nothing in this chapter is intended to restrict an occupational licensing board from requiring, as a condition of licensure or renewal of licensure, that an individual's personal qualifications include obtaining or maintaining certification from a private organization that credentials individuals in the relevant occupation.

By establishing and executing the policies in this section, in concert with section ~~107.56~~ 101.377 of the Revised Code, the state intends to ensure that occupational licensing boards and board members will avoid liability under federal antitrust laws.

Section 2. That existing sections 101.64, 103.0511, 106.02, 106.03, 106.031, 106.032, 107.51, 107.52, 107.53, 107.54, 107.55, 107.56, 107.57, 107.62, 107.63, 121.81, 121.82, 121.951, 121.953, and 4798.02 of the Revised Code are hereby repealed.

Section 3. That section 107.61 of the Revised Code is hereby repealed.

Section 4. (A) The amendment by this act of sections 101.64, 103.0511, 106.03, 107.51, 107.52, 107.53, 107.54, 107.55, 107.56, 107.57, 107.62, 107.63, 121.81, 121.82, and 4798.02 of the Revised Code takes effect six months after the effective date of this section.

(B) Section 3 of this act takes effect six months after the effective date of this section.

(C) The amendment to division (A)(2) of section 106.031 of the Revised Code applies on and after the date that is six months after the effective date of this section.

Section 5. On the date that is six months after the effective date of this section, the Common Sense Initiative Office established within the Office of the Governor under former Section 107.61 of the Revised Code is abolished. All records of the Common Sense Initiative Office established within the Office of the Governor, and all of its other assets and liabilities, shall be transferred to the Common Sense Initiative Office established within the legislative branch of government under Section 101.371 of the Revised Code. The Common Sense Initiative Office established within the legislative branch of government is successor to, and assumes the obligations of, the Common Sense Initiative Office established within the Office of the Governor.

Any business commenced, but not completed, by the Common Sense Initiative Office established within the Office of the Governor or the Chief of that office on the date that is six months after the effective date of this section shall be completed by the Director of the Common Sense Initiative Office established within the legislative branch of government in the same manner, and with the same effect, as if completed by the Common Sense Initiative Office established within the Office of the Governor or by the Chief of that office. No validation, cure, right, privilege, remedy, obligation, or liability is lost or impaired by reason of the transfer required by this section.

Subject to the authority of the Director of the Common Sense Initiative Office under section 101.371 of the Revised Code to appoint and remove staff, all of the employees of the Common Sense Initiative Office established within the Office of the Governor are transferred to the Common Sense Initiative Office established within the legislative branch and retain their positions and all of the benefits accruing thereto.

Wherever the Chief or the Common Sense Initiative Office established within the Office of the Governor is referred to in any law, contract, or other document, the reference shall be deemed to refer to the Director or the Common Sense Initiative Office established within the legislative branch, whichever is appropriate.

No action or proceeding pending on the date that is six months after the effective date of this section is affected by the transfer, and any such action or proceeding shall be prosecuted or defended in the name of the Director or the Common Sense Initiative Office established within the legislative branch. In all such actions and proceedings, the Director or the Common Sense Initiative Office established within the legislative branch, on application to the court, shall be substituted as a party.