Bill Text: MI HB5799 | 2009-2010 | 95th 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. 40, 44, 45 & 45a of 1969 PA 306 (MCL 24.240 et seq.). TIE BAR WITH: HB 5802'10

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2010-11-10 - Referred To Second Reading [HB5799 Detail]

Download: Michigan-2009-HB5799-Introduced.html

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HOUSE BILL No. 5799

 

February 9, 2010, Introduced by Reps. McDowell, Kennedy, Mayes and Barnett and referred to the Committee on Judiciary.

 

     A bill to amend 1969 PA 306, entitled

 

"Administrative procedures act of 1969,"

 

by amending sections 40, 44, 45, and 45a (MCL 24.240, 24.244,

 

24.245, and 24.245a), section 40 as amended by 1999 PA 262, section

 

44 as amended by 2004 PA 23, and sections 45 and 45a as amended by

 

2004 PA 491.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 40. (1) When an agency proposes to adopt 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 proposing to adopt the rule shall reduce the economic

 

impact of the rule on small businesses by doing 1 or more of the

 

following when it is lawful and feasible in meeting the objectives

 

of the act authorizing the promulgation of the rule:

 

     (a) Establish differing compliance or reporting requirements

 

or timetables for small businesses under the rule.

 

     (b) Consolidate or simplify the compliance and reporting

 

requirements for small businesses under the rule.

 

     (c) Establish performance rather than design standards, when

 

appropriate.

 

     (d) Exempt small businesses from any or all of the

 

requirements of the rule.

 

     (2) If appropriate in reducing the disproportionate economic

 

impact on small business of a rule as provided in subsection (1),

 

an agency may 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.

 

     (3) For purposes of subsection (2), 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.

 

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

 

rule which is required by federal law and which 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 be published in the Michigan register at least 35 days

 

before the submission of the rule to the secretary of state

 

pursuant to section 46(1). A reasonable period, not to exceed 21

 

days, shall be provided for the submission of written or electronic

 

comments and views following publication in the Michigan register.

 

     (3) For purposes of subsection (2), "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 for in this

 

subsection, the agency shall submit the proposed rule to the

 

legislative service bureau for its formal certification. The

 

submission to the legislative service bureau for formal

 

certification shall be in the form of electronic transmission. If

 

requested by the legislative service bureau, the state office of

 

regulatory reform administrative hearings and rules shall also

 

transmit up to 4 paper copies of the proposed rule. The legislative

 

service bureau shall promptly issue a certificate of approval

 

indicating a determination that a 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 state office of regulatory reform administrative

 

hearings and rules may issue a certificate of approval. If the

 

submission to the legislative service bureau is returned by the

 

legislative service bureau 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 remainder

 

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

 

longer, shall be available for consideration by the legislative

 

service bureau for formal certification of the rule. The state

 

office of regulatory reform administrative hearings and rules may

 

approve a proposed rule if it considers the proposed rule to be

 

legal.

 

     (2) The state office of administrative hearings and rules

 

shall issue a report describing whether any provisions of the

 

proposed rule are in compliance with section 29 of article IX of

 

the state constitution of 1963 and implementing legislation and, as

 

part of the report, shall specifically certify whether the proposed

 

rule requires local units of government to provide either new

 

activities or services or an increase in the level of any activity

 

or service beyond that required by existing law. If the

 

certification indicates that the proposed rule requires local units

 

of government to provide either new activities or services or an

 

increase in the level of any activity or service beyond that

 

required by existing law, then the report shall describe whether a

 

fiscal note has been prepared regarding the new activity or service

 

or increase in the level of any activity or service beyond that

 

required by existing law and whether an appropriation compensating

 

the local units of government for the activity or service has been

 

made by the legislature and enacted into law. If the certification

 

indicates noncompliance with section 29 of article IX of the state

 

constitution of 1963 and implementing legislation, the state office

 

of administrative hearings and rules shall not transmit the

 

proposed rule to the committee.

 

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

 

is given as provided in this act and before the 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 and a copy of 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 state office of

 

regulatory reform administrative hearings and rules shall transmit

 

by notice of transmittal to the committee copies of the rule, the

 

agency reports, a copy of the regulatory impact statement, and

 

certificates of approval from the legislative service bureau and

 

the state office of regulatory reform administrative hearings and

 

rules. The state office of regulatory reform administrative

 

hearings and rules shall also electronically submit a copy of the

 

rule, any agency reports required under this subsection, any

 

regulatory impact statements required under subsection (3) (4), and

 

any certificates of approval required under subsection (1)

 

subsections (1) and (2) to the committee. 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 for a rule promulgated under sections 33, 44,

 

and 48, the agency shall prepare and include with the notice of

 

transmittal a regulatory impact statement containing 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) An identification of the behavior and frequency of

 

behavior that the rule is designed to alter.

 

     (c) 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.

 

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

 

behavior expected from the rule.

 

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

 

individuals who will be directly affected by, bear the cost of, or

 

directly benefit from the rule.

 

     (f) An identification of any reasonable alternatives to

 

regulation pursuant to the proposed rule that would achieve the

 

same or similar goals.

 

     (g) A discussion of the feasibility of establishing a

 

regulatory program similar to that proposed in the rule that would

 

operate through market-based mechanisms.

 

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

 

promulgating the rule.

 

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

 

the proposed rule on individuals and local units of government.

 

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

 

the proposed rule on businesses and other groups.

 

     (k) An identification of any disproportionate impact the

 

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

 

     (l) An identification of the nature of any report and the

 

estimated cost of its preparation by small business required to

 

comply with the proposed rule.

 

     (m) 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.

 

     (n) 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.

 

     (o) An estimate of the ability of small businesses and local

 

units of government to absorb the costs estimated under

 

subdivisions (l) through (n) without suffering economic harm and

 

without adversely affecting competition in the marketplace.

 

     (p) 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.

 

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

 

exempting or setting lesser standards of compliance for small

 

businesses.

 

     (r) 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.

 

     (s) A statement describing whether and how the agency has

 

involved small businesses and local units of government in the

 

development of the rule.

 

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

 

rule.

 

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

 

individuals, groups of individuals, or governmental units as a

 

result of the rule.

 

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

 

governmental units as a result of the rule and facts demonstrating

 

compliance with section 29 of article IX of the state constitution

 

of 1963 and implementing legislation.

 

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

 

rule.

 

     (x) An identification of the sources the agency relied upon in

 

compiling the regulatory impact statement.

 

     (y) Any other information required by the office of regulatory

 

reform.

 

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

 

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

 

the state office of regulatory reform administrative hearings and

 

rules at least 28 days before the public hearing required pursuant

 

to section 42. Before the public hearing can be held, the

 

regulatory impact statement must be reviewed and approved by the

 

state office of regulatory reform administrative hearings and

 

rules. 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.

 

     (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, as

 

well as 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 sections 33, 44, and 48.

 

     Sec. 45a. (1) The committee shall reject the notice of

 

transmittal, refuse the receipt of a proposed rule, and return a

 

proposed rule to the state office of administrative hearings and

 

rules if the proposed rule is not certified to be in compliance

 

with section 29 of article IX of the state constitution of 1963 and

 

implementing legislation, as further described in section 45(1) and

 

(2). The rejection of the notice of transmittal by the committee

 

stays the ability of the state office of administrative hearings

 

and rules to proceed with the processing of the rule, until such

 

time as the compliance with section 29 of article IX of the state

 

constitution of 1963 and implementing legislation is demonstrated.

 

Except as otherwise provided for in subsections (7) and (8), after

 

receipt and acceptance, as applicable, by the committee of the

 

notice of transmittal specified in 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 state office of regulatory

 

reform administrative hearings and rules of the waiver by

 

electronic transmission. A notice of objection may only be approved

 

by the committee 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 is in conflict with state law.

 

     (e) A substantial change in circumstances has occurred since

 

enactment of the law upon 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.

 

     (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 state office of regulatory reform administrative hearings and

 

rules may immediately file the rule, with the certificate of

 

approval required under section 45(1) and (2), with the secretary

 

of state. The rule shall take effect immediately upon its filing

 

unless a later date is indicated within 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 rule upon its effective date.

 

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

 

was authorized.

 

     (c) A bill staying the effective date of the proposed rule for

 

up to 1 year.

 

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

 

the ability of the state office of regulatory reform administrative

 

hearings and rules 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

 

state office of regulatory reform administrative hearings and rules

 

by electronic transmission of the recission rescission.

 

     (5) If the legislation introduced pursuant to 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 pursuant to

 

subsection (3) is not adopted by both houses within the time period

 

specified in subsection (4), the state office of regulatory reform

 

administrative hearings and rules may file the rule with the

 

secretary of state. The rule shall take effect immediately upon

 

filing with the secretary of state unless a later date is specified

 

within the rule.

 

     (6) If the legislation introduced pursuant to subsection (3)

 

is enacted by the legislature and presented to the governor within

 

the 15-session-day period, the rules do not become effective unless

 

the legislation is vetoed by the governor as provided by law. If

 

the governor vetoes the legislation, the state office of regulatory

 

reform administrative hearings and rules may file the rules

 

immediately. The rule shall take effect 7 days after the date of

 

its filing unless a later effective date is indicated within 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 the committee shall have at least 6

 

session days after resubmission 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 resubmission of the rule to the committee for consideration.

 

     (8) Subsections (1) through to (5) do not apply to rules

 

adopted under sections 33, 44, and 48.

 

     (9) As used in this section only, "session day" means each day

 

in which both the house of representatives and the senate convene

 

in session.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No.____ or House Bill No. 5802(request no.

 

05809'10) of the 95th Legislature is enacted into law.