MN HF1261

Defines "substantial economic impact" for rules as those resulting in $5,000,000+ adverse effect on Minnesota's economy in one year, significant cost increases, competitive impacts, or compliance costs exceeding $25,000 for small businesses (under 50 employees) or small cities (under 10 employees).

Requires agencies to obtain legislative approval before implementing rules with substantial economic impact, with the legislative auditor convening a five-person peer review advisory panel to analyze the proposed rule within 60 days.

Prohibits agencies from modifying proposed rules so they become substantially different from noticed proposals, including modifications that cause a rule without substantial economic impact to gain one.

Requires agencies to provide statements of need and reasonableness including findings on whether rules have substantial economic impact, and must notify legislative policy committees and the Legislative Coordinating Commission of all rulemaking activities.

Allows the governor to waive legislative approval requirements and permits small businesses and cities to claim temporary exemptions from rules with substantial economic impact pending legislative approval.