January 13, 2011, Introduced by Reps. Kowall, Johnson, Shaughnessy, Yonker, Callton, Haines, O'Brien, MacGregor, Jacobsen, Knollenberg, Potvin and Meadows 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, and 45a (MCL 24.203,
24.205, 24.207a, 24.240, 24.244, 24.245, and 24.245a), section 3 as
amended by 1988 PA 277, section 5 as amended by 2006 PA 460,
sections 7a and 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,
and by adding section 9.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) "Activity" means that term as defined in section 2
of the prevention of unfunded mandates act.
(2)
(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.
(3) (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 1956 PA 218, MCL 500.100 to 500.8302, of the
Michigan
Compiled Laws, 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.
(4) (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 a continuous proceeding as though
before a single agency.
(5) (4)
"Committee" means the
joint committee on
administrative rules.
(6) (5)
"Court" means the circuit
court.
(7) "Existing law" means that term as defined in section 3 of
the prevention of unfunded mandates act.
(8) (6)
"Guideline" means an
agency statement or declaration
of policy which the agency intends to follow, which does not have
the force or effect of law, and which binds the agency but does not
bind any other person.
Sec. 5. (1) "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.
(2) "Licensing" includes agency activity involving the grant,
denial, renewal, suspension, revocation, annulment, withdrawal,
recall, cancellation, or amendment of a license.
(3) "Local unit of government" means that term as defined in
section 3 of the prevention of unfunded mandates act.
(4) (3)
"Michigan
register" means the publication described in
section 8.
(5) "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 prevention of unfunded mandates act.
(6) (4)
"Notice" means a written
or electronic record that
informs a person of past or future action of the person generating
the record.
(7) (5)
"Notice of objection"
means the record adopted by the
committee that indicates the committee's formal objection to a
proposed rule.
(8) (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.
(9) (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.
(10) (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.
(11) (9)
"Promulgation of a rule"
means that step in the
processing of a rule consisting of the filing of a rule with the
secretary of state.
(12) (10)
"Record" means
information that is inscribed on a
paper or electronic medium.
Sec. 7a. (1) "Service" means that term as defined in section 4
of the prevention of unfunded mandates act.
(2) "Small business" means a business concern incorporated or
doing business in this state, including the affiliates of the
business concern, which is independently owned and operated and
which employs fewer than 250 full-time employees or which has gross
annual sales of less than $6,000,000.00.
(3) "State requirement" means that term as defined in section
4 of the prevention of unfunded mandates act.
Sec. 9. To comply with section 29 of article IX of the state
constitution of 1963 and notwithstanding any provisions to the
contrary, the following apply:
(a) A new activity or service or an increase in the level of
any activity or service beyond that required by existing law shall
not be required of a local unit of government by any state agency
rule, regulation, bulletin, or directive unless an appropriation
has been made by the legislature and a disbursement system has been
established to pay the affected local units of government for any
necessary increased costs of that state requirement.
(b) An enforcement process or proceeding shall not be
initiated against a local unit of government and a sanction or
penalty of any sort, administrative, civil, or criminal, shall not
be imposed by a state agency on a local unit of government or its
administrators or other staff for noncompliance with the
requirements of any state agency rule, regulation, bulletin, or
directive unless a disbursement system has been established and an
appropriation has been made by the legislature to pay the affected
local units of government for any necessary increased costs of such
requirement.
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 the prevention of unfunded
mandates act 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 it is determined that the rules provide a new activity
or service or an increase in the level of an existing activity or
service, the state office of administrative hearings and rules
shall so inform the local government mandate panel described in the
prevention of unfunded mandates act and require that panel to
prepare and convey a fiscal note. That fiscal note shall be
prepared in the manner provided for in the prevention of unfunded
mandates act regarding enacted legislation. If the certification
indicates noncompliance with section 29 of article IX of the state
constitution of 1963 and the prevention of unfunded mandates act,
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 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. 4038(request no.
00052'11) of the 96th Legislature is enacted into law.