(a) As used in this section:

(1) “Agency”, “proposed regulation” and “regulation” have the same meanings as provided in § 4-166; and

(2) “Small business” means a business entity, including its affiliates, that (A) is independently owned and operated and (B) employs fewer than two hundred fifty full-time employees or has gross annual sales of less than five million dollars, except that an agency, in adopting regulations in accordance with the provisions of this chapter, may define “small business” to include a greater number of full-time employees, not to exceed applicable federal standards or five hundred, whichever is less, if necessary to meet the needs and address specific problems of small businesses.

(b) Prior to or concomitant with the posting of a notice pursuant to § 4-168, each agency shall prepare a regulatory flexibility analysis in which the agency shall identify:

(1) The scope and objectives of the proposed regulation;

(2) The types of businesses potentially affected by the proposed regulation;

(3) The total number of small businesses potentially subject to the proposed regulation;

(4) Whether small businesses, in order to comply with the proposed regulation, may be required to: (A) Create, file or issue additional reports; (B) implement additional recordkeeping procedures; (C) provide additional administrative oversight; (D) hire additional employees; (E) hire or contract with additional professionals, including, but not limited to, lawyers, accountants, engineers, auditors or inspectors; (F) purchase any product or make any capital investment; (G) conduct additional training, audits or inspections; or (H) pay additional taxes or fees;

(5) Whether and to what extent the agency communicated with small businesses or small business organizations in developing the proposed regulation and the regulatory flexibility analysis, if applicable;

(6) Whether and to what extent the proposed regulation provides alternative compliance methods for small businesses that will accomplish the objectives of applicable statutes while minimizing adverse impact on small businesses. Such methods shall be consistent with public health, safety and welfare and may include, but not be limited to:

(A) The establishment of less stringent compliance or reporting requirements for small businesses;

(B) The establishment of less stringent schedules or deadlines for compliance or reporting requirements for small businesses;

(C) The consolidation or simplification of compliance or reporting requirements for small businesses;

(D) The establishment of performance standards for small businesses to replace design or operational standards required in the proposed regulation; and

(E) The exemption of small businesses from all or any part of the requirements contained in the proposed regulation.

(c) Prior to the adoption of any proposed regulation that may have an adverse impact on small businesses, each agency shall notify the Department of Economic and Community Development and the joint standing committee of the General Assembly having cognizance of matters relating to commerce of its intent to adopt the proposed regulation. Said department and committee shall advise and assist agencies in complying with the provisions of this section.

(d) The requirements contained in this section shall not apply to emergency regulations issued pursuant to subsection (g) of § 4-168; regulations that do not affect small businesses directly, including, but not limited to, regulations concerning the administration of federal programs; regulations concerning costs and standards for service businesses such as nursing homes, long-term care facilities, medical care providers, child care centers, as described in § 19a-77, group child care homes, as described in § 19a-77, family child care homes, as described in § 19a-77, water companies, nonprofit 501(c)(3) agencies, group homes and residential care facilities; and regulations adopted to implement the provisions of sections 4a-60g to 4a-60i, inclusive.