HF 269

as introduced - 89th Legislature (2015 - 2016) Posted on 01/22/2015 02:16pm

A bill for an act
relating to state government; modifying the administrative procedure act;
proposing various rulemaking reform initiatives; enhancing legislative oversight;
providing additional statement of need and reasonableness requirements; limiting
the use of certain nonbinding interpretive statements; amending Minnesota
Statutes 2014, sections 3.842, subdivision 4a; 14.02, by adding a subdivision;
14.05, subdivision 1, by adding a subdivision; 14.116; 14.131; 14.19; 14.388,
subdivision 2; 14.389, subdivision 2; repealing Minnesota Statutes 2014, section
14.127.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 3.842, subdivision 4a, is amended to read:

Subd. 4a.

Objections to rules new text begin or proposed rules new text end .

(a) deleted text begin For purposes of this
subdivision, "committee" means the house of representatives policy committee or senate
policy committee with primary jurisdiction over state governmental operations. deleted text end The
commission deleted text begin or a committee deleted text end may object to a rule new text begin or proposed rule new text end as provided in this
subdivision deleted text begin . If the commission or a committee objects to all or some portion of a rule
because the commission or committee considers it to be deleted text end new text begin on the grounds that the rule or
proposed rule: (1) is new text end beyond the procedural or substantive authority delegated to the
agency deleted text begin , including a proposed rule submitted under section 14.15, subdivision 4, or 14.26,
subdivision 3, paragraph (c) deleted text end new text begin ; or (2) is inconsistent with the enabling statute; is unnecessary
or redundant; has a substantial economic impact as defined in section 14.02, subdivision
5; is not based on sound, reasonably available scientific, technical, economic, or other
information; is not cost effective; is unduly burdensome; or is more restrictive than the
standard, limitation, or requirement imposed by federal law or rule pertaining to the same
subject matter. If the commission objects to all or some portion of a rule or proposed rule new text end ,
the commission deleted text begin or committee may deleted text end new text begin shall new text end file that objection in the Office of the Secretary
of State. The filed objection must contain a concise statement of the commission's deleted text begin or
committee's deleted text end reasons for its action. deleted text begin An objection to a proposed rule submitted by the
commission or a committee under section 14.15, subdivision 4, or 14.26, subdivision 3,
paragraph (c), may not be filed before the rule is adopted deleted text end new text begin For a proposed rule, the objection
must be filed within 30 days of receipt of the notice under section 14.116, 14.388, or 14.389 new text end .

(b) The secretary of state shall affix to each objection a certification of the date and
time of its filing and as soon after the objection is filed as practicable shall new text begin electronically new text end
transmit a deleted text begin certified deleted text end copy of it to the agency issuing the rule in question and to the revisor
of statutes. The secretary of state shall also maintain a permanent register open to public
inspection of all objections by the commission deleted text begin or committee deleted text end .

(c) The commission deleted text begin or committee deleted text end shall publish and index an objection filed under
this section in the next issue of the State Register. The revisor of statutes shall indicate
the existence of the objection adjacent to the rule in question when that rule is published
in Minnesota Rules.

(d) Within 14 days after the filing of an objection by the commission deleted text begin or committee deleted text end to
a rule new text begin or proposed rule new text end , the issuing agency shall respond in writing to the objecting entity.
After receipt of the response, the commission deleted text begin or committee deleted text end may withdraw or modify its
objection. new text begin After the filing of an objection that is not subsequently withdrawn, the agency
may not adopt the rule until the legislature adjourns sine die. If the commission files an
objection that is not subsequently withdrawn, the commission must, as soon as practical,
make a recommendation on a bill that approves the proposed rule, prohibits adoption of
the proposed rule, or amends or repeals the law governing a previously adopted rule
for which an objection was filed.
new text end

(e) After the filing of an objection by the commission deleted text begin or committee deleted text end that is not
subsequently withdrawn, the burden is upon the agency in any proceeding for judicial
review or for enforcement of the rule to establish new text begin by clear and convincing evidence new text end that
the whole or portion of the rule objected to is valid new text begin and demonstrates that the objection
raised under paragraph (a) is not justified, based on the criteria for objecting to a rule
under paragraph (a) new text end .

(f) The failure of the commission deleted text begin or a committee deleted text end to object to a rule is not an implied
legislative authorization of its validity.

(g) In accordance with sections 14.44 and 14.45, the commission deleted text begin or a committee deleted text end
may petition for a declaratory judgment to determine the validity of a rule objected to
by the commission deleted text begin or committee deleted text end . The action must be started within two years after an
objection is filed in the Office of the Secretary of State.

(h) The commission deleted text begin or a committee deleted text end may intervene in litigation arising from agency
action. For purposes of this paragraph, agency action means the whole or part of a rule, or
the failure to issue a rule.

Sec. 2.

Minnesota Statutes 2014, section 14.02, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Substantial economic impact. new text end

new text begin A rule has a "substantial economic impact"
if the rule would result in, or likely result in:
new text end

new text begin (1) an adverse effect or impact on the private-sector economy of the state of
Minnesota of $1,000,000 or more in a single year;
new text end

new text begin (2) a significant increase in costs or prices for consumers, individual private-sector
industries, state agencies, local governments, individuals, or private-sector enterprises
within certain geographic regions inside the state of Minnesota;
new text end

new text begin (3) significant adverse impacts on the competitiveness of private-sector
Minnesota-based enterprises, or on private-sector employment, investment, productivity,
or innovation within the state of Minnesota; or
new text end

new text begin (4) compliance costs, in the first year after the rule takes effect, of more than $25,000
for any one business that has less than 50 full-time employees, or for any one statutory or
home rule charter city that has less than ten full-time employees.
new text end

Sec. 3.

Minnesota Statutes 2014, section 14.05, subdivision 1, is amended to read:

Subdivision 1.

Authority to adopt original rules restricted.

new text begin (a) new text end Each agency shall
adopt, amend, suspend, or repeal its rules new text begin : (1) new text end in accordance with the procedures specified
in sections 14.001 to 14.69 deleted text begin , and deleted text end new text begin ; (2) new text end only pursuant to authority new text begin expressly new text end delegated by new text begin
state or federal new text end law new text begin ; (3) only as necessary to serve the public interest; new text end and new text begin (4) new text end in full
compliance with its duties and obligations.

new text begin (b) new text end If a law authorizing rules is repealed, the rules adopted pursuant to that law are
automatically repealed on the effective date of the law's repeal unless there is another
law authorizing the rules.

new text begin (c) new text end Except as provided in section 14.06, sections 14.001 to 14.69 shall not be
authority for an agency to adopt, amend, suspend, or repeal rules.

Sec. 4.

Minnesota Statutes 2014, section 14.05, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin Limitation regarding certain policies, guidelines, and other
nonbinding interpretive statements. new text end

new text begin An agency shall not seek to implement or enforce
against any person a policy, guideline, or other nonbinding interpretive statement that
meets the definition of a rule under this chapter if the policy, guideline, or other nonbinding
interpretive statement has not been adopted as a rule in accordance with this chapter.
new text end

Sec. 5.

Minnesota Statutes 2014, section 14.116, is amended to read:

14.116 NOTICE TO LEGISLATURE.

(a) By January 15 each year, each agency must submit its rulemaking docket
maintained under section 14.366, and the official rulemaking record required under section
14.365 for any rule adopted during the preceding calendar year, to the chairs and ranking
minority members of the legislative policy and budget committees with jurisdiction over
the subject matter of the proposed rule new text begin and to the Legislative Coordinating Commission new text end .

(b) When an agency mails notice of intent to adopt rules under section 14.14 or
14.22, the agency must send a copy of the same notice and a copy of the statement of need
and reasonableness to the chairs and ranking minority party members of the legislative
policy and budget committees with jurisdiction over the subject matter of the proposed
rules and to the Legislative Coordinating Commission.

(c) In addition, if the mailing of the notice is within two years of the effective date
of the law granting the agency authority to adopt the proposed rules, the agency shall
make reasonable efforts to send a copy of the notice and the statement to all sitting
legislators who were chief house of representatives and senate authors of the bill granting
the rulemaking authority. If the bill was amended to include this rulemaking authority,
the agency shall make reasonable efforts to send the notice and the statement to the chief
house of representatives and senate authors of the amendment granting rulemaking
authority, rather than to the chief authors of the bill.

Sec. 6.

Minnesota Statutes 2014, section 14.131, is amended to read:

14.131 STATEMENT OF NEED AND REASONABLENESS.

By the date of the section 14.14, subdivision 1a, notice, the agency must
prepare, review, and make available for public review a statement of the need for and
reasonableness of the rule. The statement of need and reasonableness must be prepared
under rules adopted by the chief administrative law judge and must include the following
to the extent the agency, through reasonable effort, can ascertain this information:

(1) a description of the classes of persons who probably will be affected by the
proposed rule, including classes that will bear the costs of the proposed rule and classes
that will benefit from the proposed rule;

(2) the probable costs to the agency and to any other agency of the implementation
and enforcement of the proposed rule and any anticipated effect on state revenues;

(3) a determination of whether there are less costly methods or less intrusive
methods for achieving the purpose of the proposed rule;

(4) a description of any alternative methods for achieving the purpose of the
proposed rule that were seriously considered by the agency and the reasons why they
were rejected in favor of the proposed rule;

(5) the probable costs of complying with the proposed rule, including the portion
of the total costs that will be borne by identifiable categories of affected parties, such as
separate classes of governmental units, businesses, or individuals;

(6) the probable costs or consequences of not adopting the proposed rule, including
those costs or consequences borne by identifiable categories of affected parties, such as
separate classes of government units, businesses, or individuals;

(7) an assessment of any differences between the proposed rule and existing federal
regulations and a specific analysis of the need for and reasonableness of each difference; and

(8) an assessment of the cumulative effect of deleted text begin the rule with other federal and state
regulations related to the specific purpose of the rule deleted text end new text begin all rules adopted by the agency or
any other agency, and all federal regulations and local ordinances or regulations, related to
the specific purpose for which the rule is being adopted; and
new text end

new text begin (9) the agency's findings and conclusions that support its determination that the
proposed rule does not have a substantial economic impact new text end .

The statement must describe how the agency, in developing the rules, considered
and implemented the legislative policy supporting performance-based regulatory systems
set forth in section 14.002 new text begin in a cost-effective and timely manner new text end .

For purposes of clause (8), "cumulative effect" means the impact that results from
incremental impact of the proposed rule in addition to other rules, regardless of what
state or federal agency has adopted the other rules. Cumulative effects can result from
individually minor but collectively significant rules adopted over a period of time.

new text begin The statement must describe, with reasonable particularity, the scientific, technical,
and economic information that supports the proposed rule.
new text end

The statement must also describe the agency's efforts to provide additional
notification under section 14.14, subdivision 1a, to persons or classes of persons who may
be affected by the proposed rule or must explain why these efforts were not made.

The agency must consult with the commissioner of management and budget to
help evaluate the fiscal impact and fiscal benefits of the proposed rule on units of local
government. The agency must send a copy of the statement of need and reasonableness
to the Legislative Reference Library when the notice of hearing is mailed under section
14.14, subdivision 1a.

Sec. 7.

Minnesota Statutes 2014, section 14.19, is amended to read:

14.19 DEADLINE TO COMPLETE RULEMAKING.

Within 180 days after issuance of the administrative law judge's report or that of the
chief administrative law judge, the agency shall submit its notice of adoption, amendment,
or repeal to the State Register for publication. If the agency has not submitted its notice to
the State Register within 180 days, the rule is automatically withdrawn. The agency may
not adopt the withdrawn rules without again following the procedures of sections 14.05
to 14.28, with the exception of section 14.101, if the noncompliance is approved by the
chief administrative law judge. The agency shall report to the Legislative Coordinating
Commission, other appropriate committees of the legislature, and the governor its failure
to adopt rules and the reasons for that failure. The 180-day time limit of this section
does not include:

(1) any days used for review by the chief administrative law judge or the commission
if the review is required by law; new text begin or
new text end

(2) days during which the rule cannot be adopted, because of votes by legislative
committees under section 14.126 deleted text begin ; or (3) days during which the rule cannot be adopted
because approval of the legislature is required under section 14.127 deleted text end .

Sec. 8.

Minnesota Statutes 2014, section 14.388, subdivision 2, is amended to read:

Subd. 2.

Notice.

An agency proposing to adopt, amend, or repeal a rule under this
section must give new text begin notice to the chairs and ranking minority members of the legislative
policy and budget committees with jurisdiction over the subject matter of the proposed
rules and to the Legislative Coordinating Commission, must give new text end electronic notice of its
intent in accordance with section 16E.07, subdivision 3, and new text begin must give new text end notice by United
States mail or electronic mail to persons who have registered their names with the agency
under section 14.14, subdivision 1a. The notice must be given no later than the date the
agency submits the proposed rule to the Office of Administrative Hearings for review
of its legality and must include:

(1) the proposed rule, amendment, or repeal;

(2) an explanation of why the rule meets the requirements of the good cause
exemption under subdivision 1; and

(3) a statement that interested parties have five business days after the date of the
notice to submit comments to the Office of Administrative Hearings.

Sec. 9.

Minnesota Statutes 2014, section 14.389, subdivision 2, is amended to read:

Subd. 2.

Notice and comment.

The agency must publish notice of the proposed
rule in the State Register deleted text begin and deleted text end new text begin , new text end must mail the notice by United States mail or electronic
mail to persons who have registered with the agency to receive mailed notices new text begin , and must
give notice to the chairs and ranking minority members of the legislative policy and
budget committees with jurisdiction over the subject matter of the proposed rules and to
the Legislative Coordinating Commission new text end . The mailed notice new text begin and the notice to legislators
new text end must include either a copy of the proposed rule or a description of the nature and effect
of the proposed rule and a statement that a free copy is available from the agency upon
request. The notice in the State Register must include the proposed rule or the amended
rule in the form required by the revisor under section 14.07, an easily readable and
understandable summary of the overall nature and effect of the proposed rule, and a
citation to the most specific statutory authority for the rule, including authority for the
rule to be adopted under the process in this section. The agency must allow 30 days after
publication in the State Register for comment on the rule.

Sec. 10. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 14.127, new text end new text begin is repealed.
new text end