September 17, 2013, Introduced by Senators JANSEN, PAPPAGEORGE, GREEN, PROOS, COLBECK, MARLEAU and EMMONS and referred to the Committee on Local Government and Elections.
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 2011 PA 242, 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. (1) "Activity" means that term as defined in section 2
of the Paul Harvey transparency 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
the 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, 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.
(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 considered 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) (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.
(8) "Existing law" means that term as defined in section 3 of
the Paul Harvey transparency act.
(9) (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) "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 Paul Harvey transparency 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 Paul Harvey transparency 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 the 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 Paul Harvey transparency act.
(2) "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.
(3) "State requirement" means that term as defined in section
4 of the Paul Harvey transparency act.
Sec. 9. To comply with section 29 of article IX of the state
constitution of 1963 and notwithstanding anything in this act or
other law to the contrary, the following apply:
(a) A new activity or service or an increase in the level of
an activity or service beyond that required by existing law shall
not be required of a local unit of government by a 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 the 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 a 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 the
state requirements.
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 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 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 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 for in this
subsection, the 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 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) The office of regulatory reinvention shall issue a report
describing whether a proposed rule complies with section 29 of
article IX of the state constitution of 1963 and the Paul Harvey
transparency act. As part of the report, the office of regulatory
reinvention 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 an 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, the report shall describe whether a fiscal note has been
prepared regarding the new activity or service or increase in the
level of activity or service beyond that required by existing law
and whether an appropriation compensating the affected local units
of government for the activity or service has been made by the
legislature and enacted into law. If the office of regulatory
reinvention determines that the proposed rule requires a new
activity or service or an increase in the level of an existing
activity or service, the office of regulatory reinvention shall so
inform the local government mandate panel described in the Paul
Harvey transparency act and require the panel to prepare and convey
a fiscal note as provided under the Paul Harvey transparency act.
If the certification indicates noncompliance with section 29 of
article IX of the state constitution of 1963 or the Paul Harvey
transparency act, the office of regulatory reinvention 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 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,
and
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 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
report required under subsection (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 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 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) An estimate of the actual statewide compliance costs of
the proposed rule on businesses and other groups.
(l) An estimate of the actual statewide compliance costs of the
proposed rule on local units of government.
(m) (l) An
identification of any disproportionate impact the
proposed rule may have on small businesses because of their size.
(n) (m)
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.
(o) (n)
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) (o)
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) (p)
An estimate of the ability of small
businesses to
absorb
the costs estimated under subdivisions (m) to (o) (n) to (p)
without suffering economic harm and without adversely affecting
competition in the marketplace.
(r) (q)
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) (r)
An identification of the impact on
the public interest
of exempting or setting lesser standards of compliance for small
businesses.
(t) (s)
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) (t)
A statement describing how the
agency has involved
small businesses in the development of the rule.
(v) (u)
An estimate of the primary and
direct benefits of the
rule.
(w) (v)
An estimate of any cost reductions
to businesses,
individuals, groups of individuals, or governmental units as a
result of the rule.
(x) (w)
An estimate of any increase in
revenues to state or
local
governmental units of
government 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.
(y) (x)
An estimate of any secondary or
indirect benefits of
the rule.
(z) (y)
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) (z)
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) (aa)
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 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 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, 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 section 33, 44, or 48.
Sec. 45a. (1) The committee shall reject a notice of
transmittal under section 45(3), refuse the receipt of the proposed
rule, and return the proposed rule to the office of regulatory
reinvention 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 a notice of transmittal by
the committee stays the ability of the office of regulatory
reinvention to proceed with the processing of the rule, until
compliance with section 29 of article IX of the state constitution
of 1963 and implementing legislation is demonstrated. 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) and accepted the notice
of transmittal as required
under this subsection, 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.
(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 report required under 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, 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 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 does not take effect
unless Senate Bill No. 495
of the 97th Legislature is enacted into law.