Bill Text: MI SB0389 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Administrative procedure; rules; delegation of legislative authority that violates constitutional prohibition against unfunded mandates; nullify under certain circumstances. Amends secs. 3, 5, 7a, 40, 44, 45, 45a & 45b of 1969 PA 306 (MCL 24.203 et seq.) & adds sec. 9. TIE BAR WITH: SB 0388'15

Spectrum: Partisan Bill (Republican 5-0)

Status: (Introduced - Dead) 2015-06-09 - Referred To Committee On Government Operations [SB0389 Detail]

Download: Michigan-2015-SB0389-Introduced.html

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SENATE BILL No. 389

 

 

June 9, 2015, Introduced by Senators KOWALL, CASPERSON, MARLEAU, COLBECK and BRANDENBURG and referred to the Committee on Government Operations.

 

 

 

     A bill to amend 1969 PA 306, entitled

 

"Administrative procedures act of 1969,"

 

by amending sections 3, 5, 7a, 40, 44, 45, 45a, and 45b (MCL

 

24.203, 24.205, 24.207a, 24.240, 24.244, 24.245, 24.245a, and

 

24.245b), section 3 as amended by 2011 PA 239, section 5 as amended

 

by 2006 PA 460, section 7a as amended by 1999 PA 262, section 40 as

 

amended by 2011 PA 243, section 44 as amended by 2004 PA 23,

 

section 45 as amended by 2013 PA 200, section 45a as amended by

 

2011 PA 245, and section 45b as added by 2011 PA 247, and by adding

 

section 9.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. As used in this act:

 

     (a) "Activity", as used in sections 9 and 44, means that term

 

as defined in section 2 of the Paul Harvey transparency act.

 

     (b) (1) "Adoption of a rule" means that step in the processing

of a rule consisting of the formal action of an agency establishing

 

a the rule before its promulgation.

 

     (c) (2) "Agency" means a state department, bureau, division,

 

section, board, commission, trustee, authority, or officer, created

 

by the constitution, statute, or agency action. Agency does not

 

include an agency in the legislative or judicial branch of state

 

government, the governor, an agency having direct governing control

 

over an institution of higher education, the state civil service

 

commission, or an association of insurers created under the

 

insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302, or

 

other association or facility formed under that act as a nonprofit

 

organization of insurer members.

 

     (d) "Committee" means the joint committee on administrative

 

rules.

 

     (e) (3) "Contested case" means a proceeding, including rate-

 

making, price-fixing, and licensing, in which a determination of

 

the legal rights, duties, or privileges of a named party is

 

required by law to be made by an agency after an opportunity for an

 

evidentiary hearing. When If a hearing is held before an agency and

 

an appeal from its decision is taken to another agency, the hearing

 

and the appeal are considered a continuous proceeding as though

 

before a single agency.

 

     (4) "Committee" means the joint committee on administrative

 

rules.

 

     (f) (5) "Court" means the circuit court.

 

     (g) (6) "Decision record" means, in regard to a request for

 

rule-making where as to which an agency receives recommendations or

comments by an advisory committee or other advisory entity created

 

by statute, both of the following:

 

     (i) (a) The minutes of all meetings related to the request for

 

rule-making.

 

     (ii) (b) The votes of members.

 

     (h) (7) "Guideline" means an agency statement or declaration

 

of policy that the agency intends to follow, that does not have the

 

force or effect of law, and that binds the agency but does not bind

 

any other person.

 

     Sec. 5. (1) As used in this act:

 

     (a) "License" includes the whole or part of an agency permit,

 

certificate, approval, registration, charter, or similar form of

 

permission required by law, but does not include a license required

 

solely for revenue purposes, or a license or registration issued

 

under the Michigan vehicle code, 1949 PA 300, MCL 257.1 to 257.923.

 

     (b) (2) "Licensing" includes agency activity involving the

 

grant, denial, renewal, suspension, revocation, annulment,

 

withdrawal, recall, cancellation, or amendment of a license.

 

     (c) "Local unit of government" means that term as defined in

 

section 3 of the Paul Harvey transparency act.

 

     (d) (3) "Michigan register" means the publication described in

 

section 8.

 

     (e) "New activity or service or increase in the level of an

 

existing activity or service" means that term as defined in section

 

3 of the Paul Harvey transparency act.

 

     (f) (4) "Notice" means a written or electronic record that

 

informs a person of past or future action of the person generating

the record.

 

     (g) (5) "Notice of objection" means the record adopted by the

 

committee that indicates the committee's formal objection to a

 

proposed rule.

 

     (h) (6) "Party" means a person or agency named, admitted, or

 

properly seeking and entitled of right to be admitted, as a party

 

in a contested case. In a contested case regarding an application

 

for a license, party includes the applicant for that license.

 

     (i) (7) "Person" means an individual, partnership,

 

association, corporation, limited liability company, limited

 

liability partnership, governmental subdivision, or public or

 

private organization of any kind other than the agency engaged in

 

the particular processing of a rule, declaratory ruling, or

 

contested case.

 

     (j) (8) "Processing of a rule" means the action required or

 

authorized by this act regarding a rule that is to be promulgated,

 

including the rule's adoption , and ending with the rule's

 

promulgation.

 

     (k) (9) "Promulgation of a rule" means that step in the

 

processing of a rule consisting of the filing of a the rule with

 

the secretary of state.

 

     (l) (10) "Record" means information that is inscribed on a

 

paper or electronic medium.

 

     Sec. 7a. As used in this act:

 

     (a) "Service", as used in sections 9 and 44, means that term

 

as defined in section 4 of the Paul Harvey transparency act.

 

     (b) "Small business" means a business concern incorporated or

doing business in this state, including the affiliates of the

 

business concern, which that is independently owned and operated

 

and which that employs fewer than 250 full-time employees or which

 

that has gross annual sales of less than $6,000,000.00.

 

     Sec. 9. If a rule or guideline requires a local unit of

 

government to provide a new activity or service or increase in the

 

level of an existing activity or service, both of the following

 

apply:

 

     (a) An agency shall not attempt to enforce the rule against or

 

apply the guideline with respect to a local unit of government or

 

an officer, employee, or agent of a local unit of government

 

     (b) A local unit of government is not required to comply with

 

the rule or take any action with respect to the guideline unless

 

this state has appropriated and provided for disbursement of the

 

amounts sufficient, based on the applicable fiscal note process

 

under the Paul Harvey transparency act, to fund the necessary cost

 

to local units of government of providing the new activity or

 

service or increase in the level of an existing activity or

 

service.

 

     Sec. 40. (1) When If an agency proposes to adopt the adoption

 

of a rule that will apply to a small business and the rule will

 

have a disproportionate impact on small businesses because of the

 

size of those businesses, the agency shall consider exempting small

 

businesses and, if not exempted, the agency proposing to adopt the

 

rule shall reduce the economic impact of the rule on small

 

businesses by doing all of the following when if it is lawful and

 

feasible in meeting the objectives of the act authorizing the

promulgation of the rule:

 

     (a) Identify and estimate the number of small businesses

 

affected by the proposed rule and its probable effect on small

 

businesses.

 

     (b) Establish differing compliance or reporting requirements

 

or timetables for small businesses under the rule after projecting

 

the required reporting, record-keeping, and other administrative

 

costs.

 

     (c) Consolidate, simplify, or eliminate the compliance and

 

reporting requirements for small businesses under the rule and

 

identify the skills necessary to comply with the reporting

 

requirements.

 

     (d) Establish performance standards to replace design or

 

operational standards required in the proposed rule.

 

     (2) The agency proposing the rule shall specifically address

 

the factors described in subsection (1)(a) to (d) shall be

 

specifically addressed in the a small business impact statement.

 

     (3) In reducing the disproportionate economic impact on small

 

business of a rule as provided in subsection (1), an agency shall

 

use the following classifications of small business:

 

     (a) 0-9 full-time employees.

 

     (b) 10-49 full-time employees.

 

     (c) 50-249 full-time employees.

 

     (4) For purposes of subsection (3), an agency may include a

 

small business with a greater number of full-time employees in a

 

classification that applies to a business with fewer full-time

 

employees.

     (5) This section and section 45(3) 45(4) do not apply to a

 

rule that is required by federal law and that an agency promulgates

 

without imposing standards more stringent than those required by

 

the federal law.

 

     Sec. 44. (1) Sections 41 and 42 do not apply to an amendment

 

or rescission of a rule that is obsolete or superseded, or that is

 

required to make obviously needed corrections to make the rule

 

conform to an amended or new statute or to accomplish any other

 

solely formal purpose, if a statement to that effect is included in

 

the legislative service bureau certificate of approval of the rule.

 

     (2) Sections 41 and 42 do not apply to a rule that is

 

promulgated under the Michigan occupational safety and health act,

 

1974 PA 154, MCL 408.1001 to 408.1094, that is substantially

 

similar to an existing federal standard that has been adopted or

 

promulgated under the occupational safety and health act of 1970,

 

Public Law 91-596. , 84 Stat. 1590. However, notice of the proposed

 

rule shall must be published in the Michigan register at least 35

 

days before the submission of the rule to is filed with the

 

secretary of state pursuant to under section 46(1). A reasonable

 

period, not to exceed 21 days, shall must be provided for the

 

submission of written or electronic comments and views following

 

publication in the Michigan register.

 

     (3) For purposes of subsection (2), As used in this section,

 

"substantially similar" means identical, with the exception of

 

style or format differences needed to conform to this or other

 

state laws. , as determined by the office of regulatory reform

 

pursuant to section 45(1).

     Sec. 45. (1) Except as otherwise provided in this subsection,

 

an agency shall electronically submit a proposed rule to the

 

legislative service bureau for its formal certification. If

 

requested by the legislative service bureau, the office of

 

regulatory reinvention shall also transmit up to 4 paper copies of

 

the proposed rule. The legislative service bureau shall promptly

 

issue a certificate of approval indicating whether the proposed

 

rule is proper as to all matters of form, classification, and

 

arrangement. If the legislative service bureau fails to issue a

 

certificate of approval within 21 calendar days after receipt of

 

the submission for formal certification, the office of regulatory

 

reinvention may issue a certificate of approval. If the legislative

 

service bureau returns the submission to the agency before the

 

expiration of the 21-calendar-day time period, the 21-calendar-day

 

time period is tolled until the rule is resubmitted by the agency.

 

The legislative service bureau shall have has the remainder of the

 

21-calendar-day time period or 6 calendar days, whichever is

 

longer, to consider the formal certification of the rule. The

 

office of regulatory reinvention may approve a proposed rule if it

 

considers the proposed rule to be legal and appropriate.

 

     (2) Before submitting a rule to the committee under subsection

 

(3), the office of regulatory reinvention shall determine whether

 

the rule may require a local unit of government to provide a new

 

activity or service or increase in the level of an existing

 

activity or service. If the office of regulatory reinvention

 

determines that the rule will do so, the office of regulatory

 

reinvention shall do both of the following:

     (a) Notify the senate fiscal agency and the house fiscal

 

agency of its determination.

 

     (b) After the senate and house fiscal agencies have followed

 

the fiscal note process under section 6 of the Paul Harvey

 

transparency act and presented the results to the office of

 

regulatory reinvention, prepare a report notifying the committee

 

whether this state has appropriated and provided for disbursement

 

of the amounts sufficient, based on the fiscal note process, to

 

fund the necessary cost to local units of government of providing

 

the new activity or service or increase in the level of an existing

 

activity or service and transmit the results and the report as

 

required under subsection (3).

 

     (3) (2) Except as provided in subsection (6), (7), after

 

notice is given as provided in this act and before the adoption of

 

a rule by an agency, proposing the rule has formally adopted the

 

rule, the agency shall prepare an agency report containing a

 

synopsis of the comments contained in the public hearing record, a

 

copy of the request for rule-making, and the regulatory impact

 

statement required under subsection (3). (4). In the report, the

 

agency shall describe any changes in the proposed rules that were

 

made by the agency after the public hearing. The office of

 

regulatory reinvention shall transmit by notice of transmittal to

 

the committee copies of the rule, the agency reports containing the

 

request for rule-making, a copy of the regulatory impact statement,

 

and certificates of approval from the legislative service bureau

 

and the office of regulatory reinvention. The office of regulatory

 

reinvention shall also electronically submit to the committee a

copy of the rule, any agency reports required under this

 

subsection, any regulatory impact statements required under

 

subsection (3), and (4), any certificates of approval required

 

under subsection (1), and the results and report described in

 

subsection (2). The agency shall electronically transmit to the

 

committee the records described in this subsection within 1 year

 

after the date of the last public hearing on the proposed rule

 

unless the proposed rule is a resubmission under section 45a(7).

 

     (4) (3) Except as provided in subsection (6), (7), an agency

 

shall prepare and include with a notice of transmittal under

 

subsection (2) (3) the request for rule-making and the response

 

from the office of regulatory reinvention, a small business impact

 

statement prepared under section 40(1), 40(2), and a regulatory

 

impact statement. The regulatory impact statement shall must

 

contain all of the following information:

 

     (a) A comparison of the proposed rule to parallel federal

 

rules or standards set by a state or national licensing agency or

 

accreditation association, if any exist.

 

     (b) If requested by the office of regulatory reinvention or

 

the committee, a comparison of the proposed rule to standards in

 

similarly situated states, based on geographic location,

 

topography, natural resources, commonalities, or economic

 

similarities.

 

     (c) An identification of the behavior and frequency of

 

behavior that the rule is designed to alter.

 

     (d) An identification of the harm resulting from the behavior

 

that the rule is designed to alter and the likelihood that the harm

will occur in the absence of the rule.

 

     (e) An estimate of the change in the frequency of the targeted

 

behavior expected from the rule.

 

     (f) An identification of the businesses, groups, or

 

individuals, who and local units of government that will be

 

directly affected by, bear the cost of, or directly benefit from

 

the rule.

 

     (g) An identification of any reasonable alternatives to

 

regulation pursuant to under the proposed rule that would achieve

 

the same or similar goals.

 

     (h) A discussion of the feasibility of establishing a

 

regulatory program similar to that proposed in the rule that would

 

operate through market-based mechanisms.

 

     (i) An estimate of the cost of rule imposition on the agency

 

promulgating the rule.

 

     (j) An estimate of the actual statewide compliance costs of

 

the proposed rule on individuals.

 

     (k) A demonstration that the proposed rule is necessary and

 

suitable to achieve its purpose in proportion to the burdens it

 

places on individuals.

 

     (l) An estimate of the actual statewide compliance costs of

 

the proposed rule on businesses and other groups.

 

     (m) An identification of any disproportionate impact the

 

proposed rule may have on small businesses because of their size.

 

     (n) An identification of the nature of any report required and

 

the estimated cost of its preparation by small businesses required

 

to comply with the proposed rule.

     (o) An analysis of the costs of compliance for all small

 

businesses affected by the proposed rule, including costs of

 

equipment, supplies, labor, and increased administrative costs.

 

     (p) An identification of the nature and estimated cost of any

 

legal consulting and accounting services that small businesses

 

would incur in complying with the proposed rule.

 

     (q) An estimate of the ability of small businesses to absorb

 

the costs estimated under subdivisions (n) to (p) without suffering

 

economic harm and without adversely affecting competition in the

 

marketplace.

 

     (r) An estimate of the cost, if any, to the agency of

 

administering or enforcing a rule that exempts or sets lesser

 

standards for compliance by small businesses.

 

     (s) An identification of the impact on the public interest of

 

exempting or setting lesser standards of compliance for small

 

businesses.

 

     (t) A statement describing the manner in which the agency

 

reduced the economic impact of the rule on small businesses or a

 

statement describing the reasons such a reduction was not feasible.

 

     (u) A statement describing how the agency has involved small

 

businesses in the development of the rule.

 

     (v) An estimate of the primary and direct benefits of the

 

rule.

 

     (w) An estimate of any cost reductions to businesses,

 

individuals, groups of individuals, or governmental units as a

 

result of the rule.

 

     (x) An estimate of any increase in revenues to state or local

governmental units of government as a result of the rule.

 

     (y) An estimate of any secondary or indirect benefits of the

 

rule.

 

     (z) An identification of the sources the agency relied upon on

 

in compiling the regulatory impact statement, including the

 

methodology utilized used in determining the existence and extent

 

of the impact of a proposed rule and a cost-benefit analysis of the

 

proposed rule.

 

     (aa) A detailed recitation of the efforts of the agency to

 

comply with the mandate to reduce the disproportionate impact of

 

the rule upon on small businesses as described in section 40(1)(a)

 

to (d).

 

     (bb) Any other information required by the office of

 

regulatory reinvention.

 

     (5) (4) The An agency shall electronically transmit the

 

regulatory impact statement required under subsection (3) (4) to

 

the office of regulatory reinvention at least 28 days before the

 

public hearing required under section 42. 41. Before the public

 

hearing can be held, the regulatory impact statement must be

 

reviewed and approved by the office of regulatory reinvention. The

 

agency shall also electronically transmit a copy of the regulatory

 

impact statement to the committee before the public hearing and the

 

agency shall make copies available to the public at the public

 

hearing. The agency shall publish the regulatory impact statement

 

on its website at least 10 days before the date of the public

 

hearing.

 

     (6) (5) The committee shall electronically transmit to the

senate fiscal agency and the house fiscal agency a copy of each

 

rule and regulatory impact statement filed with the committee and a

 

copy of the agenda identifying the proposed rules to be considered

 

by the committee. The senate fiscal agency and the house fiscal

 

agency shall analyze each proposed rule for possible fiscal

 

implications that, if the rule were adopted, would result in

 

additional appropriations in the current fiscal year or commit the

 

legislature to an appropriation in a future fiscal year. The senate

 

fiscal agency and the house fiscal agency shall electronically

 

report their findings to the senate and house appropriations

 

committees and to the committee before the date of consideration of

 

the proposed rule by the committee.

 

     (7) (6) Subsections (2), (3), and (4), and (5) do not apply to

 

a rule that is promulgated under section 33, 44, or 48.

 

     Sec. 45a. (1) Except as otherwise provided in subsections (7)

 

to (9), after the committee has received the a notice of

 

transmittal specified in under section 45(2), 45(3), the committee

 

has 15 session days in which to consider the rule and to object to

 

the rule by filing a notice of objection approved by a concurrent

 

majority of the committee members or the committee may, by

 

concurrent majority, waive the remaining session days. If the

 

committee waives the remaining session days, the clerk of the

 

committee shall promptly notify the office of regulatory

 

reinvention of the waiver by electronic transmission. The committee

 

may only approve a notice of objection if the committee

 

affirmatively determines by a concurrent majority that 1 or more of

 

the following conditions exist:

     (a) The agency lacks statutory authority for the rule.

 

     (b) The agency is exceeding the statutory scope of its rule-

 

making authority.

 

     (c) There exists an emergency relating to the public health,

 

safety, and welfare that would warrant disapproval of the rule.

 

     (d) The rule conflicts with state law.

 

     (e) A substantial change in circumstances has occurred since

 

enactment of the law upon on which the proposed rule is based.

 

     (f) The rule is arbitrary or capricious.

 

     (g) The rule is unduly burdensome to the public or to a

 

licensee licensed by the rule.

 

     (h) The rule violates section 29 of article IX of the state

 

constitution of 1963 or the Paul Harvey transparency act because of

 

a failure to adequately fund a new activity or service or increase

 

in the level of an existing activity or service required to be

 

provided by local units of government, as described in the results

 

and report transmitted under section 45(2).

 

     (2) If the committee does not file a notice of objection

 

within the time period prescribed in subsection (1) or if the

 

committee waives the remaining session days by concurrent majority,

 

the office of regulatory reinvention may immediately file the rule,

 

with the certificate of approval required under section 45(1), and

 

the results and report described in section 45(2), with the

 

secretary of state. The rule takes effect immediately upon its

 

filing on being filed with the secretary of state unless a later

 

date is indicated within in the rule.

 

     (3) If the committee files a notice of objection within the

time period prescribed in subsection (1), the committee chair, the

 

alternate chair, or any member of the committee shall cause bills

 

to be introduced in both houses of the legislature simultaneously.

 

Each house shall place the bill or bills directly on its calendar.

 

The bills shall contain 1 or more of the following:

 

     (a) A rescission of a the rule upon on its effective date.

 

     (b) A repeal of the statutory provision under which the rule

 

was authorized.

 

     (c) A bill staying stay of the effective date of the proposed

 

rule for up to 1 year.

 

     (4) The A notice of objection filed under subsection (3) stays

 

the ability of the office of regulatory reinvention to file the

 

rule with the secretary of state until the earlier of the

 

following:

 

     (a) Fifteen session days after the notice of objection is

 

filed under subsection (3).

 

     (b) The date of the rescission of the issuance of the notice

 

of objection, approved by a concurrent majority of the committee

 

members. The committee may meet to rescind the issuance of the

 

notice of objection under this subdivision. If the committee

 

rescinds the issuance of a notice of objection under this

 

subdivision, the clerk of the committee shall promptly notify the

 

office of regulatory reinvention by electronic transmission of the

 

recission.

 

     (5) If the legislation introduced under subsection (3) is

 

defeated in either house and if the vote by which the legislation

 

failed to pass is not reconsidered in compliance with the rules of

that house, or if legislation introduced under subsection (3) is

 

not adopted by both houses within the time period specified in

 

subsection (4), the office of regulatory reinvention may file the

 

rule with the secretary of state. The rule takes effect immediately

 

upon its filing on being filed with the secretary of state unless a

 

later date is specified within in the rule.

 

     (6) If the legislation introduced under subsection (3) is

 

enacted by the legislature and presented to the governor within the

 

15-session-day period under subsection (4), the rule does not take

 

effect unless the legislation is vetoed by the governor as provided

 

by law. If the governor vetoes the legislation, the office of

 

regulatory reinvention may file the rule with the secretary of

 

state immediately. The rule takes effect 7 days after the date of

 

its filing it is filed with the secretary of state unless a later

 

effective date is indicated within in the rule.

 

     (7) An agency may withdraw a proposed rule under the following

 

conditions:

 

     (a) With permission of the committee chair and alternate

 

chair, the agency may withdraw the rule and resubmit it. If

 

permission to withdraw is granted, the 15-session-day time period

 

described in subsection (1) is tolled until the rule is

 

resubmitted. , except that After resubmission, the committee shall

 

have at least has the remainder of the 15 session days or 6 session

 

days, after resubmission whichever is longer, to consider the

 

resubmitted rule.

 

     (b) Without permission of the committee chair and alternate

 

chair, the agency may withdraw the rule and resubmit it. If

permission to withdraw is not granted, a new and untolled 15-

 

session-day time period described in subsection (1) shall begin

 

upon begins on resubmission of the rule to the committee for

 

consideration.

 

     (8) Subsections (1) to (5) do not apply to rules adopted under

 

sections 33, 44, and 48.

 

     (9) An agency shall withdraw any rule pending before the

 

committee at the final adjournment of a regular session held in an

 

even-numbered year and resubmit that the rule. A new and untolled

 

15-session-day time period described in subsection (1) shall begin

 

upon begins on resubmission of the rule to the committee for

 

consideration.

 

     (10) As used in this section only, "session day" means a day

 

in which both the house of representatives and the senate convene

 

in session and a quorum is recorded.

 

     Sec. 45b. (1) The office of regulatory reinvention shall post

 

the following on its website within 2 business days after

 

transmittal pursuant to under section 45:

 

     (a) The regulatory impact statement required under section

 

45(3).45(4).

 

     (b) Instructions on any existing administrative remedies or

 

appeals available to the public.

 

     (c) Instructions regarding the method of complying with the

 

rules, if available.

 

     (d) Any rules filed with the secretary of state and the

 

effective date of those rules.

 

     (2) The office of regulatory reinvention shall facilitate

linking the information posted under subsection (1) to the

 

department or agency website.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless Senate Bill No. 388                                      

 

          of the 98th Legislature is enacted into law.