HB-4573, As Passed House, June 16, 2011

SUBSTITUTE FOR

HOUSE BILL NO. 4573

     A bill to amend 1969 PA 306, entitled

"Administrative procedures act of 1969,"

by amending sections 3, 39, 45, and 64 (MCL 24.203, 24.239, 24.245,

and 24.264), section 3 as amended by 1988 PA 277, section 39 as

amended by 2004 PA 23, and section 45 as amended by 2004 PA 491.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3. (1) "Adoption of a rule" means that step in the

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

establishing a rule before its promulgation.

     (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, Act No. 218 of the Public Acts of 1956,

being sections 500.100 to 500.8302 of the Michigan Compiled Laws

1956 PA 218, MCL 500.100 to 500.8302, or other association or

facility formed under Act No. 218 of the Public Acts of 1956 that

act as a nonprofit organization of insurer members.

     (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 a hearing is held before an agency and an

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

and the appeal are deemed to be considered a continuous proceeding

as though before a single agency.

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

rules.

     (5) "Court" means the circuit court.

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

making where an agency receives recommendations or comments by an

advisory committee or other advisory entity created by statute,

both of the following:

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

rule-making.

     (b) The votes of members.

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

of policy which that the agency intends to follow, which that does

not have the force or effect of law, and which that binds the

agency but does not bind any other person.

     Sec. 39. (1) Before initiating any changes or additions to

rules, an agency shall electronically file with the office of

regulatory reform reinvention a request for rule-making in a format

prescribed by the office of regulatory reform reinvention. The

request for rule-making shall include the following:

     (a) The state or federal statutory or regulatory basis for the

rule.

     (b) The problem the rule intends to address.

     (c) An assessment of the significance of the problem.

     (d) If applicable, the decision record.

     (2) If an agency receives recommendations or comments by any

advisory committee or other advisory entity created by statute

regarding a request for rule-making, the advisory committee or

entity shall issue to the agency a decision record.

(3) (2) An agency shall not proceed with the processing of a

rule outlined in this chapter unless the office of regulatory

reform reinvention has approved the request for rule-making. The

office of regulatory reinvention is not required to approve a

request for rule-making and shall do so only after it has indicated

in its response to the request for rule-making submitted by an

agency that there are appropriate and necessary policy and legal

bases for approving the request for rule-making.

(4) (3) The office of regulatory reform reinvention shall

record the receipt of all requests for rule-making on the internet

and shall make electronic or paper copies of approved requests for

rule-making available to members of the general public. upon

request. The office of regulatory reinvention shall issue a written

or electronic response to the request for rule-making that

specifically addresses whether the request has appropriate and

necessary policy and legal bases for approving the request for

rule-making.

(5) (4) The office of regulatory reform reinvention shall

immediately make available to the committee electronic copies of

the request for rule-making submitted to the office of regulatory

reform reinvention. On a weekly basis, the office of regulatory

reform reinvention shall electronically provide to the committee a

listing of all requests for rule-making approved or denied during

the previous week. The committee shall electronically provide a

copy of the approved and denied requests for rule-making, not later

than the next business day after receipt of the notice from the

office of regulatory reform reinvention, to members of the

committee and to members of the standing committees of the senate

and house of representatives that deal with the subject matter of

the proposed rule.

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

subsection, the agency shall electronically submit the a 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

office of regulatory reform 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 a

determination that a 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 reform reinvention may

issue a certificate of approval. If the submission to the

legislative service bureau is returned by 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 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 to consider the formal certification of the rule. The

office of regulatory reform reinvention may approve a proposed rule

if it considers the proposed rule to be legal and appropriate.

     (2) Except as provided in subsection (6), 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 request for rule-making

and the regulatory impact statement required under subsection (3).

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 reform 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 reform

reinvention. The office of regulatory reform reinvention shall also

electronically submit a copy of the rule, any agency reports

required under this subsection, any regulatory impact statements

statement required under subsection (3), and any certificates

certificate of approval required under subsection (1) 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).

     (3) Except for a rule promulgated under sections section 33,

44, and or 48, the agency shall prepare and include with the notice

of transmittal the request for rule-making and the response from

the office of regulatory reinvention and a regulatory impact

statement. containing The regulatory impact statement shall contain

all of the following information:

     (a) A comparison of the proposed rule to standards in other

states in the Great Lakes region or other applicable region and a

statement of whether the rule exceeds standards in those states.

(b) (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.

(c) (b) An identification of the behavior and frequency of

behavior that the rule is designed to alter.

(d) (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.

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

targeted behavior expected from the rule.

(f) (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.

(g) (f) An identification of any reasonable alternatives to

regulation pursuant to the proposed rule that would achieve the

same or similar goals.

(h) (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.

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

agency promulgating the rule.

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

of the proposed rule on individuals.

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

of the proposed rule on businesses and other groups.

(l) (k) An identification of any disproportionate impact the

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

(m) (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.

(n) (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.

(o) (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.

(p) (o) An estimate of the ability of small businesses to

absorb the costs estimated under subdivisions (l) through (n) (m) to

(o) without suffering economic harm and without adversely affecting

competition in the marketplace.

(q) (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.

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

of exempting or setting lesser standards of compliance for small

businesses.

(s) (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.

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

involved small businesses in the development of the rule.

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

rule.

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

individuals, groups of individuals, or governmental units as a

result of the rule.

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

local governmental units as a result of the rule.

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

the rule.

(y) (x) An identification of the sources the agency relied

upon in compiling the regulatory impact statement, including the

methodology utilized in determining the existence and extent of the

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

proposed rule.

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

comply with the mandate to reduce the disproportionate impact of

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

(d).

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

regulatory reform reinvention.

     (4) The agency shall electronically transmit the regulatory

impact statement required under subsection (3) to the office of

regulatory reform reinvention at least 28 days before the public

hearing required pursuant to under section 42. Before the public

hearing can be held, the regulatory impact statement must be

reviewed and approved by the office of regulatory reform

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 approved by the office of regulatory

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

public hearing.

     (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.

     (6) Subsections (2), (3), and (4) do not apply to a rule that

is promulgated under sections section 33, 44, and or 48.

     Sec. 64. Unless an exclusive procedure or remedy is provided

by a statute governing the agency, the validity or applicability of

a rule, including the failure of an agency to accurately assess the

impact of the rule on businesses, including small businesses, in

its regulatory impact statement, may be determined in an action for

declaratory judgment when if the court finds that the rule or its

threatened application interferes with or impairs, or imminently

threatens to interfere with or impair, the legal rights or

privileges of the plaintiff. The action shall be filed in the

circuit court of the county where the plaintiff resides or has his

or her principal place of business in this state or in the circuit

court for Ingham county. The agency shall be made a party to the

action. An action for declaratory judgment may not be commenced

under this section unless the plaintiff has first requested the

agency for a declaratory ruling and the agency has denied the

request or failed to act upon it expeditiously. This section shall

not be construed to prohibit the determination of the validity or

applicability of the rule in any other action or proceeding in

which its invalidity or inapplicability is asserted.