1.1                          A bill for an act 
  1.2             relating to state government; requiring local 
  1.3             government impact notes; requiring a determination of 
  1.4             the aggregate cost of complying with proposed rules; 
  1.5             specifying certain contents for a statement of need 
  1.6             and reasonableness for proposed administrative rules; 
  1.7             amending Minnesota Statutes 2002, section 14.131; 
  1.8             proposing coding for new law in Minnesota Statutes, 
  1.9             chapter 14. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [14.112] [LOCAL GOVERNMENT IMPACT.] 
  1.12     The elected governing body of a statutory or home rule 
  1.13  city, a county, a school district, a township, or a sanitary 
  1.14  district may request the commissioner of finance to prepare a 
  1.15  local impact note on a rule proposed by a state agency.  The 
  1.16  request must be made by submitting a resolution of the governing 
  1.17  body to the commissioner of finance before a public hearing on a 
  1.18  proposed rule is held, or if the agency intends to adopt the 
  1.19  rule without a public hearing, before the deadline for 
  1.20  requesting a public hearing.  Upon receipt of a request, the 
  1.21  commissioner of finance must prepare an estimate of the fiscal 
  1.22  impact of the rule on each category of political subdivision 
  1.23  requesting a local impact note.  The commissioner may require 
  1.24  any political subdivision or any state agency to supply 
  1.25  information necessary for the commissioner to determine fiscal 
  1.26  impact.  The commissioner must prepare the local impact note 
  1.27  before the close of the hearing record, or if there is no public 
  2.1   hearing, before the agency submits the record to the 
  2.2   administrative law judge.  
  2.3      Sec. 2.  [14.127] [AGGREGATE COST OF COMPLYING WITH 
  2.4   PROPOSED RULES; LEGISLATIVE APPROVAL REQUIRED.] 
  2.5      An agency must determine if the aggregate cost of complying 
  2.6   with proposed rules on all affected persons or entities will 
  2.7   exceed $100,000,000 in the first ten years that the rules are 
  2.8   effective.  An agency must make this determination before the 
  2.9   close of the hearing record, or before the agency submits the 
  2.10  record to the administrative law judge if there is no hearing.  
  2.11  If the agency determines that the aggregate costs will exceed 
  2.12  $100,000,000 in the first ten years, the rules may not take 
  2.13  effect until the rules are approved by a law enacted after the 
  2.14  agency determination.  The administrative law judge must review 
  2.15  and approve the agency's determination under this section.  If 
  2.16  the administrative law judge does not approve the agency's 
  2.17  determination, the rules may not take effect until the rules are 
  2.18  approved by a law enacted after the agency determination. 
  2.19     Sec. 3.  Minnesota Statutes 2002, section 14.131, is 
  2.20  amended to read: 
  2.21     14.131 [STATEMENT OF NEED AND REASONABLENESS.] 
  2.22     By the date of the section 14.14, subdivision 1a, notice, 
  2.23  the agency must prepare, review, and make available for public 
  2.24  review a statement of the need for and reasonableness of the 
  2.25  rule.  The statement of need and reasonableness must be prepared 
  2.26  under rules adopted by the chief administrative law judge and 
  2.27  must include the following to the extent the agency, through 
  2.28  reasonable effort, can ascertain this information: 
  2.29     (1) a description of the classes of persons who probably 
  2.30  will be affected by the proposed rule, including classes that 
  2.31  will bear the costs of the proposed rule and classes that will 
  2.32  benefit from the proposed rule; 
  2.33     (2) the probable costs to the agency and to any other 
  2.34  agency of the implementation and enforcement of the proposed 
  2.35  rule and any anticipated effect on state revenues; 
  2.36     (3) a determination of whether there are less costly 
  3.1   methods or less intrusive methods for achieving the purpose of 
  3.2   the proposed rule; 
  3.3      (4) a description of any alternative methods for achieving 
  3.4   the purpose of the proposed rule that were seriously considered 
  3.5   by the agency and the reasons why they were rejected in favor of 
  3.6   the proposed rule; 
  3.7      (5) the probable costs of complying with the proposed rule, 
  3.8   including the portion of the total costs that will be borne by 
  3.9   identifiable categories of affected parties, such as separate 
  3.10  classes of governmental units, businesses, or individuals; and 
  3.11     (6) an assessment of any differences between the proposed 
  3.12  rule and existing federal regulations and a specific analysis of 
  3.13  the need for and reasonableness of each difference.  
  3.14     The statement must describe how the agency, in developing 
  3.15  the rules, considered and implemented the legislative policy 
  3.16  supporting performance-based regulatory systems set forth in 
  3.17  section 14.002. 
  3.18     The statement must also describe the agency's efforts to 
  3.19  provide additional notification under section 14.14, subdivision 
  3.20  1a, to persons or classes of persons who may be affected by the 
  3.21  proposed rule or must explain why these efforts were not made. 
  3.22     The agency must send a copy of the statement of need and 
  3.23  reasonableness to the legislative reference library when the 
  3.24  notice of hearing is mailed under section 14.14, subdivision 1a. 
  3.25     Sec. 4.  [EFFECTIVE DATE.] 
  3.26     Section 3 is effective July 1, 2003, and applies to a 
  3.27  rulemaking proceeding for which notice of intent to adopt rules 
  3.28  is published in the State Register on or after that date.