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.