HF 1433

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 02/27/2018 11:54am

A bill for an act
relating to state government; regulating rulemaking; providing for the review and
repeal of environmental assessment worksheets and impact statements; restricting
the implementation and enforcement of certain policies, guidelines, and statements;
increasing oversight of certain rules; modifying notice requirements; requiring an
impact analysis of certain rules; modifying SONAR requirements; establishing a
rulemaking reform task force; requiring a report; amending Minnesota Statutes
2016, sections 3.842, subdivision 4a; 14.002; 14.02, by adding a subdivision;
14.05, subdivisions 1, 2, 6, 7, by adding subdivisions; 14.101, subdivision 1;
14.116; 14.125; 14.127; 14.131; 14.14, subdivisions 1a, 2a; 14.19; 14.22,
subdivision 1; 14.23; 14.25, subdivision 1; 14.26; 14.365; 14.381, subdivision 3;
14.388, subdivisions 1, 2; 14.44; 14.45; 14.51; proposing coding for new law in
Minnesota Statutes, chapter 14; repealing Minnesota Statutes 2016, section 14.05,
subdivision 5.

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

Section 1.

Minnesota Statutes 2016, section 3.842, subdivision 4a, is amended to read:

Subd. 4a.

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

(a) For purposes of this subdivision,
"committee" means the house of representatives policy committee or senate policy committee
with primary jurisdiction over state governmental operations. The commission or a committee
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 ; (2) is inconsistent with
the enabling statute; (3) is unnecessary or redundant; (4) has a substantial economic impact
as defined in section 14.02, subdivision 5; (5) is not based on sound, reasonably available
scientific, technical, economic, or other information; (6) is not cost effective; (7) is unduly
burdensome; or (8) is more restrictive than the standard, limitation, or requirement imposed
by federal law or rule pertaining to the same subject matter. If the commission or committee
objects to all or some portion of a rule or proposed rule new text end , the commission or committee deleted text begin 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 or committee's 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 14.14, 14.22, 14.386, 14.388, 14.389, or 14.3895 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 or committee.

(c) The commission or committee 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 or committee 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 or committee 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 the annual legislative session that began
after the objection was filed. 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 or committee 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 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 or a committee 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 or a committee may
petition for a declaratory judgment to determine the validity of a rule objected to by the
commission or committee. The action must be started within two years after an objection
is filed in the Office of the Secretary of State.

(h) The commission or a committee 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 2016, section 14.002, is amended to read:

14.002 STATE REGULATORY POLICY.

The legislature recognizes the important and sensitive role for administrative rules in
implementing policies and programs created by the legislature. However, the legislature
finds that some regulatory rules and programs have become overly prescriptive and inflexible,
thereby increasing costs to the state, local governments, and the regulated community and
decreasing the effectiveness of the regulatory program. Therefore, deleted text begin whenever feasible, deleted text end state
agencies must develop rules and regulatory programs that emphasize superior achievement
in meeting the agency's regulatory objectives and maximum flexibility for the regulated
party and the agency in meeting those goals.

Sec. 3.

Minnesota Statutes 2016, 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 $5,000,000 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 fewer than 50 full-time employees, or for any one statutory
or home rule charter city that has fewer than ten full-time employees.
new text end

Sec. 4.

Minnesota Statutes 2016, 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 delegated by law new text begin ; new text end and new text begin (3)
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 deleted text begin section deleted text end new text begin sections 14.055, new text end 14.06, new text begin 14.388, 14.389, and 14.3895, new text end
sections 14.001 to 14.69 shall not be authority for an agency to adopt, amend, suspend, or
repeal rules.

Sec. 5.

Minnesota Statutes 2016, 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 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 interpretive statement that meets the definition of a rule under this chapter
if the policy, guideline, or other interpretive statement has not been adopted as a rule in
accordance with this chapter including but not limited to solid waste policy plan revisions
authorized by other law. In any proceeding under chapter 14 challenging an agency action
prohibited by this subdivision, the reviewing authority must independently and without
reference to the agency determine if the agency has violated this subdivision. The agency
must overcome the presumption that its action may not be enforced as a rule.
new text end

Sec. 6.

Minnesota Statutes 2016, section 14.05, subdivision 2, is amended to read:

Subd. 2.

Authority to modify proposed rule.

(a) An agency may modify a proposed
rule in accordance with the procedures of the Administrative Procedure Act. However, an
agency may not modify a proposed rule so that it is substantially different from the proposed
rule in the notice of intent to adopt rules or notice of hearing.

(b) A modification does not make a proposed rule substantially different if:

(1) the differences are within the scope of the matter announced in the notice of intent
to adopt or notice of hearing and are in character with the issues raised in that notice;

(2) the differences are a logical outgrowth of the contents of the notice of intent to adopt
or notice of hearing and the comments submitted in response to the notice; and

(3) the notice of intent to adopt or notice of hearing provided fair warning that the
outcome of that rulemaking proceeding could be the rule in question.

(c) In determining whether the notice of intent to adopt or notice of hearing provided
fair warning that the outcome of that rulemaking proceeding could be the rule in question
the following factors must be considered:

(1) the extent to which persons who will be affected by the rule should have understood
that the rulemaking proceeding on which it is based could affect their interests;

(2) the extent to which the subject matter of the rule or issues determined by the rule are
different from the subject matter or issues contained in the notice of intent to adopt or notice
of hearing; and

(3) the extent to which the effects of the rule differ from the effects of the proposed rule
contained in the notice of intent to adopt or notice of hearing.

new text begin (d) A modification makes a proposed rule substantially different if the modification
causes a rule that did not previously have a substantial economic impact to have a substantial
economic impact.
new text end

Sec. 7.

Minnesota Statutes 2016, section 14.05, is amended by adding a subdivision to
read:

new text begin Subd. 5a. new text end

new text begin Review and repeal of rules. new text end

new text begin By December 1 of each odd-numbered year,
beginning December 1, 2017, an agency must submit to the governor, the Legislative
Coordinating Commission, the policy and funding committees and divisions with jurisdiction
over the agency, and the revisor of statutes, a list of any rules or portions of rules that are
obsolete, unnecessary, or duplicative of other state or federal statutes or rules. The list must
also include an explanation of why the rule or portion of the rule is obsolete, unnecessary,
or duplicative of other state or federal statutes or rules. The agency must either report a
timetable for repeal of the rule or portion of the rule, or must develop a bill for submission
to the appropriate policy committee to repeal the obsolete, unnecessary, or duplicative rule.
A report submitted under this subdivision must be signed by the person in the agency who
is responsible for identifying and initiating repeal of obsolete rules. The report also must
identify the status of any rules identified in the prior report as obsolete, unnecessary, or
duplicative. If none of an agency's rules are obsolete, unnecessary, or duplicative, an agency's
report must state that conclusion.
new text end

Sec. 8.

Minnesota Statutes 2016, section 14.05, is amended by adding a subdivision to
read:

new text begin Subd. 5b. new text end

new text begin Review and repeal of environmental assessment worksheets and impact
statements. new text end

new text begin By December 1, 2017, and each odd-numbered year thereafter, the
Environmental Quality Board, Pollution Control Agency, Department of Natural Resources,
and Department of Transportation, after consultation with political subdivisions, shall submit
to the governor; the Legislative Coordinating Commission; the chairs of the house of
representatives and senate committees having jurisdiction over environment and natural
resources; and the revisor of statutes a list of mandatory environmental assessment worksheets
or mandatory environmental impact statements for which the agency or a political subdivision
is designated as the responsible government unit, and for each worksheet or statement, a
document including:
new text end

new text begin (1) intended outcomes of the specific worksheet or statement;
new text end

new text begin (2) the cost to state and local government and the private sector;
new text end

new text begin (3) the relationship of the worksheet or statement to other local, state, and federal permits;
and
new text end

new text begin (4) a justification for why the mandatory worksheet or statement should not be eliminated
and its intended outcomes achieved through an existing permit or other federal, state, or
local law.
new text end

Sec. 9.

Minnesota Statutes 2016, section 14.05, subdivision 6, is amended to read:

Subd. 6.

Veto of adopted rules.

The governor may veto all or a severable portion of a
rule of an agency as defined in section 14.02, subdivisions 2 and 4, by submitting notice of
the veto to the State Register within 14 days of receiving a copy of the rule from the secretary
of state under section 14.16, subdivision 3, 14.26, subdivision deleted text begin 3 deleted text end new text begin 7 new text end , deleted text begin or deleted text end 14.386 new text begin , new text end or the agency
under section 14.389, subdivision 3, or section 14.3895. The veto is effective when the veto
notice is submitted to the State Register. This authority applies only to the extent that the
agency itself would have authority, through rulemaking, to take such action. If the governor
vetoes a rule or portion of a rule under this section, the governor shall notify the chairs of
the legislative committees having jurisdiction over the agency whose rule was vetoed.

Sec. 10.

Minnesota Statutes 2016, section 14.05, subdivision 7, is amended to read:

Subd. 7.

Electronic documents permitted.

new text begin (a) If sections 14.05 to 14.3895 require an
agency to provide notice or documents to the public, the legislature, or other state agency,
the agency may send the notice or document, or a link to the notice or document, using any
reliable method of electronic transmission.
new text end

new text begin (b) The agency must also send a paper copy of the notice or document if requested to
do so by a member of the public, legislature, or other state agency.
new text end

new text begin (c) new text end An agency may file rule-related documents with the Office of Administrative Hearings
by electronic transmission in the manner approved by that office and the Office of the
Revisor of Statutes by electronic transmission in the manner approved by that office.

Sec. 11.

Minnesota Statutes 2016, section 14.101, subdivision 1, is amended to read:

Subdivision 1.

Required notice.

In addition to seeking information by other methods
designed to reach persons or deleted text begin classes deleted text end new text begin categories new text end of persons who might be affected by the
proposal, an agency, at least 60 days before publication of a notice of intent to adopt or a
notice of hearing, shall solicit comments from the public on the subject matter of a possible
rulemaking proposal under active consideration within the agency by causing notice to be
published in the State Register. The notice must include a description of the subject matter
of the proposal and the types of groups and individuals likely to be affected, and must
indicate where, when, and how persons may comment on the proposal and whether and
how drafts of any proposal may be obtained from the agency.

This notice must be published within 60 days of the effective date of any new or
amendatory law requiring rules to be adopted, amended, or repealed.

new text begin An agency intending to adopt an expedited rule under section 14.389 is exempt from
the requirements of this section.
new text end

Sec. 12.

new text begin [14.105] RULE NOTIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Rule notification list. new text end

new text begin (a) Each agency shall maintain a list of all persons
who have registered with the agency for the purpose of receiving notice of rule proceedings.
A person may register to receive notice of rule proceedings by submitting to the agency:
new text end

new text begin (1) the person's electronic mail address; or
new text end

new text begin (2) the person's name and United States mail address, along with a request to receive
copies of the notices by mail.
new text end

new text begin (b) The agency shall post information on its Web site describing the registration process.
new text end

new text begin (c) The agency may inquire as to whether those persons on the list in paragraph (a) wish
to remain on it and may remove persons for whom there is a negative reply or no reply
within 60 days.
new text end

new text begin Subd. 2. new text end

new text begin Additional notice. new text end

new text begin (a) Each agency shall make reasonable efforts to notify
persons or categories of persons who may be significantly affected by the rule being proposed
by giving notice of its rule proceedings in newsletters, newspapers, or other publications,
or through other means of communication.
new text end

new text begin (b) For each rulemaking, the agency shall develop an additional notice plan describing
its efforts to provide additional notification to persons or categories of persons who may be
affected by the proposed rule or must explain why these efforts were not made. The additional
notice plan must be submitted to the administrative law judge with the other submissions
required by section 14.14, subdivision 2a, or 14.26. The agency also may seek prior approval
of the additional notice plan under the rules of the Office of Administrative Hearings.
new text end

Sec. 13.

Minnesota Statutes 2016, section 14.116, is amended to read:

14.116 NOTICE TO LEGISLATURE.

(a) By January 15 each year, each agency must submit its new text begin current new text end rulemaking docket
maintained under section 14.366 deleted text begin , and the official rulemaking record required under section
14.365 for any rule adopted during the preceding calendar year, deleted text end 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.
Each agency must post a link to its rulemaking docket on the agency Web site home page new text end .

(b) When an agency deleted text begin mails deleted text end new text begin sends a new text end notice of deleted text begin intent to adopt rules deleted text end new text begin hearing new text end under section
14.14 or new text begin a notice of intent to adopt rules or dual notice under section new text end 14.22, the agency must
send a copy of the same notice deleted text begin and a copy of the statement of need and reasonableness deleted text end 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.

deleted text begin (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.
deleted text end

Sec. 14.

Minnesota Statutes 2016, section 14.125, is amended to read:

14.125 TIME LIMIT ON AUTHORITY TO ADOPT, AMEND, OR REPEAL
RULES.

An agency shall publish a deleted text begin notice of intent to adopt rules or a deleted text end notice of hearing new text begin under
section 14.14, or a notice of intent to adopt rules or dual notice under section 14.22, new text end within
18 months of the effective date of the law authorizing or requiring rules to be adopted,
amended, or repealed. If the notice is not published within the time limit imposed by this
section, the deleted text begin authority for the rules expires. The agency shall not use other law in existence
at the time of the expiration of rulemaking authority under this section as authority to adopt,
amend, or repeal these rules deleted text end new text begin agency shall report to the Legislative Coordinating Commission,
other appropriate committees of the legislature, and the governor its failure to publish a
notice and the reasons for that failure new text end .

deleted text begin An agency that publishes a notice of intent to adopt rules or a notice of hearing within
the time limit specified in this section may subsequently amend or repeal the rules without
additional legislative authorization.
deleted text end

Sec. 15.

Minnesota Statutes 2016, section 14.127, is amended to read:

14.127 LEGISLATIVE APPROVAL REQUIRED.

Subdivision 1.

deleted text begin Cost thresholds deleted text end new text begin Substantial economic impact new text end .

An agency must
determine if deleted text begin the cost of complying with deleted text end a proposed rule deleted text begin in the first year after the rule takes
effect will exceed $25,000 for: (1) any one business that has less than 50 full-time employees;
or (2) any one statutory or home rule charter city that has less than ten full-time employees.
For purposes of this section, "business" means a business entity organized for profit or as
a nonprofit, and includes an individual, partnership, corporation, joint venture, association,
or cooperative deleted text end new text begin has a substantial economic impact, as defined in section 14.02, subdivision
5 new text end .

Subd. 2.

Agency determination.

An agency must make the determination required by
subdivision 1 before the deleted text begin close of the hearing record, or before the agency submits the record
to the administrative law judge if there is no hearing. The administrative law judge must
review and approve or disapprove the agency determination under this section deleted text end new text begin agency gives
notice under section 14.14, 14.22, 14.225, or 14.389 new text end .

Subd. 3.

Legislative approval required.

new text begin (a) If the agency determines that a proposed
rule has a substantial economic impact, the agency must request the legislative auditor to
convene a five-person peer review advisory panel to conduct an impact analysis of the
proposed rule. Within 30 days of receipt of the agency's request, the legislative auditor shall
convene a peer review advisory panel. The advisory panel must be made up of individuals
who have not directly or indirectly been involved in the work conducted or contracted by
the agency and who are not employed by the agency. The agency must pay each panel
member for the costs of the person's service on the panel, as determined by the legislative
auditor. The agency shall transfer an amount from the agency's operating budget to the
legislative auditor to pay for costs for convening the peer review advisory panel process.
The panel may receive written and oral comments from the public during its review. The
panel must submit its report within 60 days of being convened. The agency must receive a
final report from the panel before the agency conducts a public hearing on a proposed rule
or, if no hearing is held, before the rule is submitted to the administrative law judge. The
panel's report must include its conclusions on the extent to which the proposed rule:
new text end

new text begin (1) is based on sound, reasonably available scientific, technical, economic, or other
information or rationale; and
new text end

new text begin (2) is more restrictive than a standard, limitation, or requirement imposed by federal law
or rule pertaining to the same subject matter, and a justification based on sound, reasonably
available scientific, technical, economic, or other information and rationale that the more
stringent standard is necessary to protect the public's health, safety, or welfare.
new text end

new text begin (b) If the agency determines that a rule does not have a substantial economic impact,
the administrative law judge must review this determination. If the administrative law judge
determines that a rule may have a substantial economic impact, the agency must have the
legislative auditor arrange for the analysis required by paragraph (a), and the agency must
give new notice of intent to adopt the proposed rule after receiving this analysis. The
administrative law judge may make this determination as part of the administrative law
judge's report on the proposed rule, or at any earlier time after the administrative law judge
is assigned to the rule proceeding.
new text end

new text begin (c) new text end If the agency determines that the deleted text begin cost exceeds the threshold in subdivision 1 deleted text end new text begin proposed
rule has a substantial economic impact new text end , or if the administrative law judge disapproves the
agency's determination that the deleted text begin cost deleted text end new text begin rule new text end does not deleted text begin exceed the threshold in subdivision 1,
any business that has less than 50 full-time employees or any statutory or home rule charter
city that has less than ten full-time employees may file a written statement with the agency
claiming a temporary exemption from the rules. Upon filing of such a statement with the
agency, the rules do not apply to that business or that city until the rules are deleted text end new text begin have a substantial
economic impact, the agency or the administrative law judge shall deliver the determination
and peer review advisory panel report to the Legislative Coordinating Commission and to
the chairs and ranking minority members of the house of representatives and senate
committees and divisions with jurisdiction over the subject matter of the rule, and the
proposed rule does not take effect until the rule is new text end approved by a law enacted after the agency
determination or administrative law judge disapproval.

Subd. 4.

Exceptions.

deleted text begin (a) Subdivision 3 does not apply if the administrative law judge
approves an agency's determination that the legislature has appropriated money to sufficiently
fund the expected cost of the rule upon the business or city proposed to be regulated by the
rule.
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end Subdivision 3 does not apply if the administrative law judge approves an agency's
determination that the rule has been proposed pursuant to a specific federal statutory or
regulatory mandate.

deleted text begin (c) deleted text end new text begin (b) new text end This section does not apply if the rule is adopted under section 14.388 or under
another law specifying that the rulemaking procedures of this chapter do not apply.

deleted text begin (d) deleted text end new text begin (c) new text end This section does not apply to a rule adopted by the Public Utilities Commission.

deleted text begin (e) Subdivision 3 does not apply if the governor waives application of subdivision 3.
The governor may issue a waiver at any time, either before or after the rule would take
effect, but for the requirement of legislative approval. As soon as possible after issuing a
waiver under this paragraph, the governor must send notice of the waiver to the speaker of
the house and the president of the senate and must publish notice of this determination in
the State Register.
deleted text end

Subd. 5.

Severability.

If an administrative law judge determines that part of a proposed
rule deleted text begin exceeds the threshold specified in subdivision 1 deleted text end new text begin has a substantial economic impact new text end , but
that a severable portion of a proposed rule does not deleted text begin exceed the threshold in subdivision 1 deleted text end new text begin
have a substantial economic impact new text end , the administrative law judge may provide that the
severable portion of the rule that does not deleted text begin exceed the threshold deleted text end new text begin have a substantial economic
impact new text end may take effect without legislative approval.

Sec. 16.

new text begin [14.129] IMPACT ANALYSIS OF PROPOSED RULE.
new text end

new text begin (a) Within 30 days of receipt of the notice required under section 14.116, paragraph (b),
a standing committee with jurisdiction over the subject matter of a proposed rule may request
the legislative auditor to conduct an impact analysis of the proposed rule. The request must
be sent in writing to the legislative auditor and the agency. Upon receipt of the request, the
agency may not proceed to adopt the proposed rule until it has received a positive declaration
from the requesting standing committee. Within 60 days of receipt of a request, the legislative
auditor shall convene a five-person peer review panel to review the proposed rule. The
advisory panel must be made up of individuals who have not directly or indirectly been
involved in work conducted or contracted by the agency and who are not employed by the
agency. The panel may receive written and oral comments from the public during its review
of the proposed rule. The panel must prepare a report that includes a conclusion on whether
the proposed rule:
new text end

new text begin (1) is based on sound, reasonably available scientific, technical, economic, and other
information and rationale; and
new text end

new text begin (2) if the proposed rule is more restrictive than a standard, limitation, or requirement
imposed by federal law or rule pertaining to the same subject matter, a justification based
on sound, reasonably available scientific, technical, economic, or other information and
rationale that the more stringent standard is necessary to protect the public's health, safety,
or welfare.
new text end

new text begin (b) Within 150 days of being convened, the panel must submit its report to the chairs
and ranking minority members of the requesting committee and the legislative auditor.
Within five days of receipt of the panel's report, the requesting standing committee shall
send the report to the agency along with either:
new text end

new text begin (1) a positive declaration that the agency may proceed with the proposed rule; or
new text end

new text begin (2) a negative declaration that the agency may not proceed with the proposed rule in its
current form.
new text end

new text begin (c) If the requesting standing committee issues a negative declaration to an agency under
paragraph (b), clause (2), the agency may not adopt the rule until the legislature adjourns
the annual legislative session that began after the issuance of the negative declaration.
new text end

Sec. 17.

Minnesota Statutes 2016, 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 new text begin a citation to the most specific statutory
authority for the rule and new text end the following to the extent the agency, through reasonable effort,
can ascertain this information:

deleted text begin (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;
deleted text end

deleted text begin (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;
deleted text end

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

deleted text begin (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;
deleted text end

deleted text begin (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;
deleted text end

deleted text begin (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;
deleted text end

new text begin (1) a description of the persons or classifications of persons who will probably be affected
by the proposed rule;
new text end

new text begin (2) the probable costs of the rule to affected persons and the agency, including those
costs or consequences borne by identifiable categories of affected parties, such as separate
classes of government units, businesses, or individuals, and the probable benefits of adopting
the rule;
new text end

deleted text begin (7) deleted text end new text begin (3) new text end an assessment of any differences between the proposed rule and existing new text begin or
proposed new text end federal deleted text begin regulations deleted text end new text begin standards and similar standards in relevant states bordering
Minnesota or within Environmental Protection Agency Region 5 new text end and a specific analysis of
the need for and reasonableness of each difference; deleted text begin and
deleted text end

deleted text begin (8) deleted text end new text begin (4) new text end 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 (5) the agency's findings and conclusions that support its determination that the proposed
rule is based on sound, reasonably available scientific, technical, economic, or other
information and rationale; and if the proposed rule is more restrictive than a standard,
limitation, or requirement imposed by federal law or rule pertaining to the same subject
matter, a justification based on sound, reasonably available scientific, technical, economic,
or other information and rationale that the more stringent standard is necessary to protect
the public's health, safety, or welfare.
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 deleted text begin (8) deleted text end new text begin (4) new text end , "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.

deleted text begin 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.
deleted text end

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 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 new text begin no later than new text end when the notice of hearing is deleted text begin mailed under
section 14.14, subdivision 1a deleted text end new text begin sent new text end .

Sec. 18.

Minnesota Statutes 2016, section 14.14, subdivision 1a, is amended to read:

Subd. 1a.

Notice of rule hearing.

(a) deleted text begin Each agency shall maintain a list of all persons
who have registered with the agency for the purpose of receiving notice of rule proceedings.
Persons may register to receive notice of rule proceedings by submitting to the agency:
deleted text end

deleted text begin (1) their electronic mail address; or
deleted text end

deleted text begin (2) their name and United States mail address.
deleted text end

deleted text begin The agency may inquire as to whether those persons on the list wish to remain on it and
may remove persons for whom there is a negative reply or no reply within 60 days. deleted text end The
agency shall, at least 30 days before the date set for the hearing, give notice of its intention
to deleted text begin adopt deleted text end new text begin hold a hearing on the proposed new text end rules by United States mail or electronic mail to all
persons deleted text begin on its list deleted text end new text begin who have registered with the agency under section 14.105 new text end , and by
publication in the State Register.

deleted text begin The mailed notice must include either a copy of the proposed rule or an easily readable
and understandable description of its nature and effect and an announcement that a free
copy of the proposed rule is available on request from the agency. In addition, each agency
shall make reasonable efforts to notify persons or classes of persons who may be significantly
affected by the rule being proposed by giving notice of its intention in newsletters,
newspapers, or other publications, or through other means of communication. deleted text end The notice
in the State Register must include the proposed rule or an amended rule in the form required
by the revisor under section 14.07, together with an easily readable and understandable
summary of the overall nature and effect of the proposed rule, a citation to the most specific
statutory authority for the proposed rule, a statement of the place, date, and time of the
public hearing, new text begin a statement that a free copy of the proposed rule and the statement of need
and reasonableness may be requested from the agency, new text end a statement that persons may register
with the agency for the purpose of receiving notice of rule proceedings deleted text begin and notice that the
agency intends to adopt a rule deleted text end and other information required by law or rule. When an entire
rule is proposed to be repealed, the agency need only publish that fact, along with an easily
readable and understandable summary of the overall nature of the rules proposed for repeal,
and a citation to the rule to be repealed.

new text begin The mailed notice of hearing must be the same as the notice published in the State
Register, except that the mailed notice may omit the text of the proposed rule if it includes
an announcement of where a copy of the proposed rule may be obtained.
new text end

(b) The chief administrative law judge may authorize an agency to omit from the notice
of rule hearing the text of any proposed rule, the publication of which would be unduly
cumbersome, expensive, or otherwise inexpedient if:

(1) knowledge of the rule is likely to be important to only a small class of persons;

(2) the notice of rule hearing states that a free copy of the entire rule is available upon
request to the agency; and

(3) the notice of rule hearing states in detail the specific subject matter of the omitted
rule, cites the statutory authority for the proposed rule, and details the proposed rule's purpose
and motivation.

Sec. 19.

Minnesota Statutes 2016, section 14.14, subdivision 2a, is amended to read:

Subd. 2a.

Hearing procedure.

When a hearing is held on a proposed rule, it shall be
conducted by an administrative law judge assigned by the chief administrative law judge.
The administrative law judge shall ensure that all persons involved in the rule hearing are
treated fairly and impartially. The agency shall submit into the record the jurisdictional
documents, including the statement of need and reasonableness, new text begin comments and hearing
requests received, new text end and any written exhibits in support of the proposed rule. The agency may
also present additional oral evidence. Interested persons may present written and oral
evidence. The administrative law judge shall allow questioning of agency representatives
or witnesses, or of interested persons making oral statements, in order to explain the purpose
or intended operation of a proposed rule, or a suggested modification, or for other purposes
if material to the evaluation or formulation of the proposed rule. The administrative law
judge may limit repetitive or immaterial oral statements and questioning.

Sec. 20.

Minnesota Statutes 2016, 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 deleted text end new text begin .
new text end

deleted text begin (3) days during which the rule cannot be adopted because approval of the legislature is
required under section 14.127.
deleted text end

Sec. 21.

Minnesota Statutes 2016, section 14.22, subdivision 1, is amended to read:

Subdivision 1.

Contents.

(a) deleted text begin Unless an agency proceeds directly to a public hearing on
a proposed rule and gives the notice prescribed in section 14.14, subdivision 1a, the agency
shall give notice of its intention to adopt a rule without public hearing. deleted text end new text begin The agency shall
give the notice required by this section, unless the agency gives notice of a hearing under
section 14.14 or a notice under section 14.389, subdivision 2. new text end The new text begin agency shall give new text end notice
deleted text begin must be given deleted text end new text begin of its intention to adopt a rule new text end by publication in the State Register and by
United States mail or electronic mail to persons who have registered their names with the
agency under section deleted text begin 14.14, subdivision 1a deleted text end new text begin 14.105 new text end . deleted text begin The mailed notice must include either
a copy of the proposed rule or an easily readable and understandable description of its nature
and effect and an announcement that a free copy of the proposed rule is available on request
from the agency. In addition, each agency shall make reasonable efforts to notify persons
or classes of persons who may be significantly affected by the rule by giving notice of its
intention in newsletters, newspapers, or other publications, or through other means of
communication. deleted text end The notice in the State Register must include the proposed rule or deleted text begin the deleted text end
amended rule in the form required by the revisor under section 14.07 deleted text begin , deleted text end new text begin ; new text end an easily readable
and understandable summary of the overall nature and effect of the proposed rule deleted text begin , deleted text end new text begin ; new text end a citation
to the most specific statutory authority for the proposed rule deleted text begin , deleted text end new text begin ; new text end new text begin a statement that a free copy
of the statement of need and reasonableness may be requested from the agency; new text end a statement
that persons may register with the agency deleted text begin for the purpose of receiving deleted text end new text begin to receive new text end notice of
rule proceedings deleted text begin and notice that a rule has been submitted to the chief administrative law
judge, deleted text end new text begin ; new text end and other information required by law or rule. When an entire rule is proposed to
be repealed, the notice need only state that fact, along with an easily readable and
understandable summary of the overall nature of the deleted text begin rules deleted text end new text begin rule new text end proposed for repeal, and a
citation to the rule to be repealed. The notice must include a statement advising the public:

(1) that the public has new text begin at least new text end 30 days in which to submit comment in support of or in
opposition to the proposed rule and that comment is encouraged;

(2) that each comment should identify the deleted text begin portion deleted text end new text begin part and subpart, if any, new text end of the proposed
rule addressed, the reason for the comment, and any change proposed;

new text begin (3) that the requester is encouraged to propose any change desired;
new text end

deleted text begin (3) deleted text end new text begin (4) new text end that if 25 or more persons submit a written request for a public hearing within
the deleted text begin 30-day deleted text end comment period, a public hearing will be held new text begin and the agency will use the process
under section 14.14 new text end ;

deleted text begin (4) deleted text end new text begin (5) new text end of the manner in which persons must request a public hearing on the proposed
rule new text begin , including the requirements contained in section 14.25 relating to a written request for
a public hearing new text end ; new text begin and
new text end

deleted text begin (5) of the requirements contained in section 14.25 relating to a written request for a
public hearing, and that the requester is encouraged to propose any change desired;
deleted text end

(6) that the new text begin agency may modify the new text end proposed rule deleted text begin may be modified deleted text end if the modifications
are supported by the data and views submitted deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (7) that if a hearing is not required, notice of the date of submission of the proposed rule
to the chief administrative law judge for review will be mailed to any person requesting to
receive the notice.
deleted text end

In connection with the statements required in clauses (1) and deleted text begin (3) deleted text end new text begin (4) new text end , the notice must
also include the date on which the deleted text begin 30-day deleted text end comment period ends. new text begin The mailed notice of intent
to adopt a rule must be the same as the notice published in the State Register, except that
the mailed notice may omit the text of the proposed rule if it includes an announcement of
where a copy of the proposed rule may be obtained.
new text end

(b) The chief administrative law judge may authorize an agency to omit from the notice
of intent to adopt the text of any proposed rule, the publication of which would be unduly
cumbersome, expensive, or otherwise inexpedient if:

(1) knowledge of the rule is likely to be important to only a small class of persons;

(2) the notice of intent to adopt states that a free copy of the entire rule is available upon
request to the agency; and

(3) the notice of intent to adopt states in detail the specific subject matter of the omitted
rule, cites the statutory authority for the proposed rule, and details the proposed rule's purpose
and motivation.

Sec. 22.

Minnesota Statutes 2016, section 14.23, is amended to read:

14.23 STATEMENT OF NEED AND REASONABLENESS.

By the date of the section 14.22 notice, the agency shall prepare a statement of need and
reasonableness, which must be available to the public. The statement of need and
reasonableness must include the deleted text begin analysis deleted text end new text begin information new text end required in section 14.131. deleted text begin The
statement must also describe the agency's efforts to provide additional notification under
section 14.22 to persons or classes of persons who may be affected by the proposed rules
or must explain why these efforts were not made. For at least 30 days following the notice,
the agency shall afford the public an opportunity to request a public hearing and to submit
data and views on the proposed rule in writing.
deleted text end

The agency shall send a copy of the statement of need and reasonableness to the
Legislative Reference Library new text begin no later than new text end when the notice of intent to adopt is deleted text begin mailed deleted text end new text begin sent new text end .

Sec. 23.

Minnesota Statutes 2016, section 14.25, subdivision 1, is amended to read:

Subdivision 1.

Requests for hearing.

If, during the deleted text begin 30-day deleted text end period allowed for comment new text begin
under section 14.22 new text end , 25 or more persons submit to the agency a written request for a public
hearing of the proposed rule, the agency shall proceed under the provisions of sections 14.14
to 14.20. The written request must include: (1) the name and address of the person requesting
the public hearing; deleted text begin and deleted text end (2) the deleted text begin portion or portions deleted text end new text begin part or subpart, if any, new text end of the rule to which
the person objects deleted text begin or a statement that the person opposes the entire rule. If not previously
published under section 14.22, subdivision 2, a notice of the public hearing must be published
in the State Register and mailed to those persons who submitted a written request for the
public hearing. Unless the agency has modified the proposed rule, the notice need not include
the text of the proposed rule but only a citation to the State Register pages where the text
appears deleted text end new text begin ; and (3) the reasons for the objection to each portion of the rule identified new text end .

A written request for a public hearing that does not comply with the requirements of
this section is invalid and may not be counted by the agency for purposes of determining
whether a public hearing must be held. new text begin A written request for a public hearing is not invalid
due to failure of the request to correctly identify the portion of the rule to which the person
objects if the agency reasonably can determine which portion of the rule is the basis for the
objection.
new text end

Sec. 24.

Minnesota Statutes 2016, section 14.26, is amended to read:

14.26 ADOPTION OF PROPOSED RULE; SUBMISSION TO ADMINISTRATIVE
LAW JUDGE.

Subdivision 1.

Submission.

If no hearing is required, the agency shall submit to an
administrative law judge assigned by the chief administrative law judge the proposed rule
and notice as published, the rule as adopted, any written comments received by the agency,
and a statement of need and reasonableness for the rule. The agency shall give notice to all
persons who requested to be informed that these materials have been submitted to the
administrative law judge. This notice must be given on the same day that the record is
submitted. If the proposed rule has been modified, the notice must state that fact, and must
also state that a free copy of the proposed rule, as modified, is available upon request from
the agency. The rule and these materials must be submitted to the administrative law judge
within 180 days of the day that the comment period for the rule is over or 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 its failure to adopt the rules and the reasons for that failure to the Legislative
Coordinating Commission, other appropriate legislative committees, and the governor.

deleted text begin Subd. 2. deleted text end

deleted text begin Resubmission. deleted text end

deleted text begin Even if the 180-day period expires while the administrative
law judge reviews the rule, if the administrative law judge rejects the rule, the agency may
resubmit it after taking corrective action. The resubmission must occur within 30 days of
when the agency receives written notice of the disapproval. If the rule is again disapproved,
the rule is withdrawn. An agency may resubmit at any time before the expiration of the
180-day period. If the agency withholds some of the proposed rule, it may not adopt the
withheld portion without again following the procedures of sections 14.14 to 14.28.
deleted text end

Subd. 3.

Review.

deleted text begin (a) deleted text end Within 14 days new text begin of receiving a submission under subdivision 1 new text end , the
administrative law judge shall approve or disapprove the rule as to its legality and its form
to the extent that the form relates to legality, including the issues of whether the rule if
modified is substantially different, as determined under section 14.05, subdivision 2, from
the rule as originally proposed, whether the agency has the authority to adopt the rule, and
whether the record demonstrates a rational basis for the need for and reasonableness of the
proposed rule. deleted text begin If the rule is approved, the administrative law judge shall promptly file four
paper copies or an electronic copy of the adopted rule in the Office of the Secretary of State.
The secretary of state shall forward one copy of each rule to the revisor of statutes, to the
agency, and to the governor. deleted text end If the rule is disapproved, the administrative law judge shall
state in writing the reasons for the disapproval and make recommendations to overcome
the defects.

new text begin Subd. 4. new text end

new text begin Harmless error. new text end

new text begin The administrative law judge shall disregard any error or
defect in the proceeding due to the agency's failure to satisfy any procedural requirements
imposed by law or rule if the administrative law judge finds:
new text end

new text begin (1) that the failure did not deprive any person or entity of an opportunity to participate
meaningfully in the rulemaking process; or
new text end

new text begin (2) that the agency has taken corrective action to cure the error or defect so that the
failure did not deprive any person or entity of an opportunity to participate meaningfully
in the rulemaking process.
new text end

new text begin Subd. 5. new text end

new text begin Correction of defects. new text end

deleted text begin (b) deleted text end new text begin (a) new text end The written disapproval must be submitted to
the chief administrative law judge for approval. If the chief administrative law judge approves
of the findings of the administrative law judge, the chief administrative law judge shall send
the statement of the reasons for disapproval of the rule to the agency, the Legislative
Coordinating Commission, the house of representatives and senate policy committees with
primary jurisdiction over state governmental operations, and the revisor of statutes and
advise the agency and the revisor of statutes of actions that will correct the defects. The rule
may not be filed in the Office of the Secretary of State, nor be published, until the chief
administrative law judge determines that the defects have been corrected or, if applicable,
that the agency has satisfied the rule requirements for the adoption of a substantially different
rule.

new text begin (b) The agency may resubmit the disapproved rule under paragraph (a) to the chief
administrative law judge after correcting the defects. If the 180-day period expires while
the chief administrative law judge is reviewing the rule, the agency may resubmit the rule
within 30 days of the date the agency received written notice of disapproval. In all other
cases, the agency may resubmit the rule at any time before the expiration of the 180-day
period in subdivision 1. If the resubmitted rule is disapproved by the chief administrative
law judge, the rule is withdrawn. If the agency does not resubmit a portion of the rule, it
may not adopt that portion of the rule without again following the procedures of sections
14.14 to 14.28.
new text end

new text begin Subd. 6. new text end

new text begin Need or reasonableness not established. new text end

deleted text begin (c) deleted text end If the chief administrative law
judge determines that the need for or reasonableness of the rule has not been established,
and if the agency does not elect to follow the suggested actions of the chief administrative
law judge to correct that defect, then the agency shall submit the proposed rule to the
Legislative Coordinating Commission and to the house of representatives and senate policy
committees with primary jurisdiction over state governmental operations for advice and
comment. The agency may not adopt the rule until it has received and considered the advice
of the commission and committees. However, the agency need not wait for advice for more
than 60 days after the commission and committees have received the agency's submission.

deleted text begin (d) The administrative law judge shall disregard any error or defect in the proceeding
due to the agency's failure to satisfy any procedural requirements imposed by law or rule
if the administrative law judge finds:
deleted text end

deleted text begin (1) that the failure did not deprive any person or entity of an opportunity to participate
meaningfully in the rulemaking process; or
deleted text end

deleted text begin (2) that the agency has taken corrective action to cure the error or defect so that the
failure did not deprive any person or entity of an opportunity to participate meaningfully
in the rulemaking process.
deleted text end

new text begin Subd. 7. new text end

new text begin Filing. new text end

new text begin If the rule is approved, the chief administrative law judge shall promptly
file four paper copies or an electronic copy of it in the Office of the Secretary of State. The
secretary of state shall forward one copy of the rule to the revisor of statutes, one copy to
the agency, and one copy to the governor.
new text end

deleted text begin Subd. 3a. deleted text end

deleted text begin Filing. deleted text end

deleted text begin If the rule is approved, the administrative law judge shall promptly
file four paper copies or an electronic copy of the adopted rule in the Office of the Secretary
of State. The secretary of state shall forward one copy of each rule to the revisor of statutes,
to the agency, and to the governor.
deleted text end

Subd. deleted text begin 4. deleted text end new text begin 8. new text end

Costs.

The Office of Administrative Hearings shall assess an agency for the
actual cost of processing rules under this section. Each agency shall include in its budget
money to pay the assessment. Receipts from the assessment must be deposited in the
administrative hearings account created in section 14.54.

Sec. 25.

Minnesota Statutes 2016, section 14.365, is amended to read:

14.365 OFFICIAL RULEMAKING RECORD.

The agency shall maintain the official rulemaking record for every rule adopted under
sections 14.05 to deleted text begin 14.389 deleted text end new text begin 14.3895 new text end . The record must be available for public inspection. The
record required by this section constitutes the official and exclusive agency rulemaking
record with respect to agency action on or judicial review of the rule. The record must
contain:

(1) copies of all publications in the State Register pertaining to the rule;

(2) all written petitions, and all requests, submissions, or comments received by the
agency or the administrative law judge after publication of the notice of intent to adopt or
the notice of hearing in the State Register pertaining to the rule;

(3) the statement of need and reasonableness for the rule;

new text begin (4) any report prepared by the peer review panel pursuant to section 14.129;
new text end

deleted text begin (4) deleted text end new text begin (5) new text end the official transcript of the hearing if one was held, or the tape recording of the
hearing if a transcript was not prepared;

deleted text begin (5) deleted text end new text begin (6) new text end the report of the administrative law judge, if any;

deleted text begin (6) deleted text end new text begin (7) new text end the rule in the form last submitted to the administrative law judge under sections
14.14 to 14.20 or first submitted to the administrative law judge under sections 14.22 to
14.28;

deleted text begin (7) deleted text end new text begin (8) new text end the administrative law judge's written statement of required modifications and
of approval or disapproval by the chief administrative law judge, if any;

deleted text begin (8) deleted text end new text begin (9) new text end any documents required by applicable rules of the Office of Administrative
Hearings;

deleted text begin (9) deleted text end new text begin (10) new text end the agency's order adopting the rule;

deleted text begin (10) deleted text end new text begin (11) new text end the revisor's certificate approving the form of the rule; and

deleted text begin (11) deleted text end new text begin (12) new text end a copy of the adopted rule as filed with the secretary of state.

Sec. 26.

Minnesota Statutes 2016, section 14.381, subdivision 3, is amended to read:

Subd. 3.

Costs.

The agency is liable for all Office of Administrative Hearings costs
associated with review of the petition. If the administrative law judge rules in favor of the
agency, the agency may recover all or a portion of the costs from the petitioner unless the
petitioner is entitled to proceed in forma pauperis under section 563.01 or the administrative
law judge determines that the petition was brought in good faith and that an assessment of
the costs would constitute an undue hardship for the petitioner. deleted text begin If an agency has reason to
believe it will prevail in the consideration of a petition, and that an effort to recover costs
from the petitioner will be unsuccessful, it may request the chief administrative law judge
to require the petitioner to provide bond or a deposit to the agency in an amount the chief
administrative law judge estimates will be the cost to the Office of Administrative Hearings
to review the petition.
deleted text end

Sec. 27.

Minnesota Statutes 2016, section 14.388, subdivision 1, is amended to read:

Subdivision 1.

Requirements.

If an agency for good cause finds that the rulemaking
provisions of this chapter are unnecessary, impracticable, or contrary to the public interest
when adopting, amending, or repealing a rule to:

(1) address a serious and immediate threat to the public health, safety, or welfare;

(2) comply with a court order or a requirement in federal law in a manner that does not
allow for compliance with sections 14.14 to 14.28;

(3) incorporate specific changes set forth in applicable statutes when no interpretation
of law is required; or

(4) make changes that do not alter the sense, meaning, or effect of a rule,

the agency may adopt, amend, or repeal the rule after satisfying the requirements of
subdivision 2 and section 14.386, paragraph (a), clauses (1) to (4). The agency shall
incorporate its findings and a brief statement of its supporting reasons in its order adopting,
amending, or repealing the rule.

After considering the agency's statement and any comments received, the Office of
Administrative Hearings shall determine whether the agency has provided adequate
justification for its use of this section.

Rules adopted, amended, or repealed under deleted text begin clauses deleted text end new text begin clause new text end (1) deleted text begin and (2) deleted text end are effective for
a period of two years from the date of publication of the rule in the State Register.

Rules adopted, amended, or repealed under clause new text begin (2), new text end (3) new text begin , new text end or (4) are effective upon
publication in the State Register.

Sec. 28.

Minnesota Statutes 2016, 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. 29.

Minnesota Statutes 2016, section 14.44, is amended to read:

14.44 DETERMINATION OF VALIDITY OF RULE.

new text begin (a) new text end The validity of any rule new text begin , or the validity of any agency policy, guideline, bulletin,
criterion, manual standard, or similar pronouncement that the petitioner believes is a rule
as defined in section 14.02, subdivision 4, new text end may be determined upon the petition for a
declaratory judgment thereon, addressed to the Court of Appeals, when it appears that the
rule new text begin or pronouncement new text end , or its threatened application, interferes with or impairs, or threatens
to interfere with or impair the legal rights or privileges of the petitioner. The agency shall
be made a party to the proceeding. The declaratory judgment may be rendered whether or
not the petitioner has first requested the agency to pass upon the validity of the rule in
question, new text begin whether or not the petitioner has petitioned the Office of Administrative Hearings
under section 14.381, new text end and whether or not the agency has commenced an action against the
petitioner to enforce the rule.

new text begin (b) If the subject of the petition is an agency policy, guideline, bulletin, criterion, manual
standard, or similar pronouncement, the agency must cease enforcement of the
pronouncement upon filing of the petition until the Court of Appeals rules on the matter.
The agency is liable for all costs associated with review of the petition. If the Court of
Appeals rules in favor of the agency, the agency may recover all or a portion of the cost
from the petitioner unless the petitioner is entitled to proceed in a forma pauperis under
section 563.01, or the court determines that the petition was brought in good faith or the
assessment of the costs would constitute an undue hardship for the petitioner.
new text end

Sec. 30.

Minnesota Statutes 2016, section 14.45, is amended to read:

14.45 RULE DECLARED INVALID.

In proceedings under section 14.44, the court shall declare the rule new text begin or agency policy,
guideline, bulletin, criterion, manual standard, or similar pronouncement new text end invalid if it finds
that it violates constitutional provisions or exceeds the statutory authority of the agency or new text begin
if the rule new text end was adopted new text begin or the policy, guideline, bulletin, criterion, manual standard, or
similar pronouncement was improperly implemented new text end without compliance with statutory
rulemaking procedures. Any party to proceedings under section 14.44, including the agency,
may appeal an adverse decision of the Court of Appeals to the Supreme Court as in other
civil cases.

Sec. 31.

Minnesota Statutes 2016, section 14.51, is amended to read:

14.51 PROCEDURAL RULES.

The chief administrative law judge shall adopt rules to govern: (1) the procedural conduct
of all hearings, relating to both rule adoption, amendment, suspension or repeal hearings,
contested case hearings, and workers' compensation hearings, and to govern the conduct of
voluntary mediation sessions for rulemaking and contested cases other than those within
the jurisdiction of the Bureau of Mediation Services; and (2) the review of rules adopted
without a public hearing. The chief administrative law judge may adopt rules to govern the
procedural conduct of other hearings conducted by the Office of Administrative Hearings.
The procedural rules shall be binding upon all agencies and shall supersede any other agency
procedural rules with which they may be in conflict. The procedural rules shall include in
addition to normal procedural matters provisions relating to the procedure to be followed
when the proposed final rule of an agency is substantially different, as determined under
section 14.05, subdivision 2, from that which was proposed. The procedural rules shall
establish a procedure whereby the proposed final rule of an agency shall be reviewed by
the chief administrative law judge on the issue of whether the proposed final rule of the
agency is substantially different than that which was proposed or failure of the agency to
meet the requirements of chapter 14. The rules must also provide: (1) an expedited procedure,
consistent with section 14.001, clauses (1) to (5), for the adoption of substantially different
rules by agencies; and (2) a procedure to allow an agency to receive prior binding approval
of its plan regarding the additional notice contemplated under sections 14.101, 14.131,
14.14, 14.22, deleted text begin and deleted text end 14.23 new text begin , and 14.389 new text end . Upon the chief administrative law judge's own initiative
or upon written request of an interested party, the chief administrative law judge may issue
a subpoena for the attendance of a witness or the production of books, papers, records or
other documents as are material to any matter being heard by the Office of Administrative
Hearings. The subpoenas shall be enforceable through the district court in the district in
which the subpoena is issued.

Sec. 32. new text begin STATE ADMINISTRATIVE RULEMAKING REFORM TASK FORCE.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin (a) The State Administrative Rulemaking Reform Task
Force is established. The task force consists of the following members:
new text end

new text begin (1) one representative appointed by the speaker of the house;
new text end

new text begin (2) one representative appointed by the minority leader of the house of representatives;
new text end

new text begin (3) one senator appointed by the Subcommittee on Committees of the senate Committee
on Rules and Administration;
new text end

new text begin (4) one senator appointed by the minority leader of the senate;
new text end

new text begin (5) four members appointed by the governor;
new text end

new text begin (6) one member appointed by the chief administrative law judge;
new text end

new text begin (7) one member appointed by the League of Minnesota Cities;
new text end

new text begin (8) one member appointed by the Association of Minnesota Counties;
new text end

new text begin (9) one member appointed by the Minnesota Townships Association; and
new text end

new text begin (10) one member appointed by the Minnesota Chamber of Commerce.
new text end

new text begin (b) Any vacancy shall be filled by appointment of the appointing authority for the vacating
member.
new text end

new text begin (c) Members shall be appointed no later than July 1, 2017. Members of the task force
may be reimbursed for expenses as provided in Minnesota Statutes, section 15.059,
subdivision 6.
new text end

new text begin Subd. 2. new text end

new text begin Duties. new text end

new text begin (a) The task force must review existing rulemaking procedures,
prioritizing a thorough examination of the safeguards currently in place to ensure an agency's
administrative rules do not exceed the statutory authority granted to the agency. If necessary,
proposals for reform that improve the efficiency and transparency of Minnesota's
administrative rulemaking processes may be developed by the task force and recommended
for legislative consideration. The task force is not required to develop a reform proposal if,
after its review of existing rulemaking procedures and receipt of public input, it determines
that reform is not necessary.
new text end

new text begin (b) If a reform proposal is developed, it must provide for a system that is accessible to
local governments, businesses, and individuals who are directly impacted by administrative
rules, and must include:
new text end

new text begin (1) a process to be used by state agencies, the governor, and the legislature to identify
and prioritize rules, and related laws and programs, requiring legislative review;
new text end

new text begin (2) a process for the legislature to actively review rules and related laws and programs
identified under clause (1);
new text end

new text begin (3) an estimate of the agency and legislative time and resources required for review of
rules and related laws and programs under the processes recommended under clauses (1)
and (2);
new text end

new text begin (4) the expected impact to the state budget and to the benefits to citizens of the state
resulting from the repeal of rules;
new text end

new text begin (5) recommendations on the need for amendments to statutory rulemaking procedures
given increased legislative review of rules; and
new text end

new text begin (6) an analysis of strategies to ensure or encourage compliance with state policies and
goals using methods other than rulemaking, such as administrative penalty orders, descriptive
guidelines, best management practices, compliance incentives, technical assistance, training,
and procedural templates.
new text end

new text begin (c) In conducting the review and developing reform proposals, the task force must consult
with interested parties, and must consider relevant state and federal laws and commitments.
An opportunity for interested parties to give general input on the need for reform and describe
their experience with existing rulemaking procedures must be provided during at least two
public meetings of the task force.
new text end

new text begin Subd. 3. new text end

new text begin First meeting; chair. new text end

new text begin The member appointed by the speaker of the house shall
convene the initial meeting of the task force no later than July 21, 2017. The members of
the task force must elect a chair and vice-chair from the members of the task force at the
first meeting.
new text end

new text begin Subd. 4. new text end

new text begin Open meetings. new text end

new text begin Meetings of the task force are subject to Minnesota Statutes,
chapter 13D.
new text end

new text begin Subd. 5. new text end

new text begin Staff. new text end

new text begin The Legislative Coordinating Commission, in collaboration with
appropriate staff of the house of representatives and the senate, shall provide administrative
and research support to the task force. The Pollution Control Agency, the Department of
Labor and Industry, and the Department of Transportation must provide additional assistance
at the task force's request.
new text end

new text begin Subd. 6. new text end

new text begin Report. new text end

new text begin No later than February 15, 2018, the task force must submit a report
describing its activities and findings to the chairs and ranking minority members of the
committees in the senate and house of representatives with primary jurisdiction over
administrative rulemaking. If applicable, the report must describe, in detail, any reform
proposal recommended to the legislature under subdivision 2.
new text end

new text begin Subd. 7. new text end

new text begin Sunset. new text end

new text begin The task force shall sunset the day following the submission of the
report as required by subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 33. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 14.05, subdivision 5, new text end new text begin is repealed.
new text end

Sec. 34. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin This act is effective August 1, 2017, and applies to rules for which a notice of hearing
under Minnesota Statutes, section 14.14; a notice of intent to adopt under Minnesota Statutes,
section 14.22; or a dual notice under Minnesota Statutes, section 14.225, is published in the
State Register on or after that date.
new text end

APPENDIX

Repealed Minnesota Statutes: HF1433-1

14.05 GENERAL AUTHORITY.

Subd. 5.

Review and repeal of rules.

By December 1 of each year, an agency must submit to the governor, the Legislative Coordinating Commission, the policy and funding committees and divisions with jurisdiction over the agency, and the revisor of statutes, a list of any rules or portions of rules that are obsolete, unnecessary, or duplicative of other state or federal statutes or rules. The list must also include an explanation of why the rule or portion of the rule is obsolete, unnecessary, or duplicative of other state or federal statutes or rules. By December 1, the agency must either report a timetable for repeal of the rule or portion of the rule, or must develop a bill for submission to the appropriate policy committee to repeal the obsolete, unnecessary, or duplicative rule. Such a bill must include proposed authorization to use the expedited procedures of section 14.389 to repeal or amend the obsolete, unnecessary, or duplicative rule. A report submitted under this subdivision must be signed by the person in the agency who is responsible for identifying and initiating repeal of obsolete rules. The report also must identify the status of any rules identified in the prior year's report as obsolete, unnecessary, or duplicative. If none of an agency's rules are obsolete, unnecessary, or duplicative, an agency's December 1 report must state that conclusion.