HF 2169

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 03/02/2012 10:32am

A bill for an act
relating to state government; providing methods for certain review of, and
reporting on, agency rules; amending Minnesota Statutes 2010, sections
3.842, subdivision 4a; 14.05, subdivision 1, by adding a subdivision; 14.116;
14.131; 14.388, subdivision 2; 14.389, subdivision 2; Minnesota Statutes 2011
Supplement, sections 3D.06; 3D.10; 3D.11.

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

Section 1.

Minnesota Statutes 2010, 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subdivision 3, paragraph (c) deleted text end new text begin ; (2) is inconsistent with the enabling statute; (3) is obsolete,
unnecessary, or duplicative; or (4) fails to meet the requirements of section 14.131. If the
commission or a 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 14.116,
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 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 The commission or committee that files an objection must, as soon as
practical, provide notice of the objection to the chairs and ranking minority members of
the legislative policy and budget committees with jurisdiction over the subject matter of
the rule or proposed rule.
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 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 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 2011 Supplement, section 3D.06, is amended to read:

3D.06 AGENCY REPORT TO COMMISSION.

Before September 1 of the odd-numbered year before the year in which a state agency
is subject to sunset review, the agency commissioner shall report to the commission:

(1) information regarding the application to the agency of the criteria in section
3D.10;

(2) a priority-based budget for the agency;

(3) an inventory of all boards, commissions, committees, and other entities related
to the agency; deleted text begin and
deleted text end

(4) new text begin a list of all rules promulgated by the state agency, and the following information
for each rule: (i) the statutory authority; (ii) the statement of need and reasonableness of
the rule; (iii) an assessment of any differences between the proposed rule and existing
federal regulations and a specific analysis of the need and reasonableness of each
difference; (iv) the reports filed under section 14.05, subdivision 5, for the preceding ten
years; (v) the rulemaking dockets prepared under section 14.366 for the preceding ten
years; (vi) a list of any rules that the agency recommends for repeal; (vii) a list and brief
rationale for rules that the agency believes should remain in effect; (viii) any changes
that would improve the agency's ability to meet the regulatory objectives prescribed by
the legislature, while reducing any unnecessary burdens on regulated parties; and (ix) a
summary of the means to better coordinate rulemaking between state agencies and other
local, state, and federal agencies; and
new text end

new text begin (5) new text end any other information that the agency commissioner considers appropriate or that
is requested by the commission.

deleted text begin The September 1 deadline in this section does not apply in 2011.
deleted text end

Sec. 3.

Minnesota Statutes 2011 Supplement, section 3D.10, is amended to read:

3D.10 CRITERIA FOR REVIEW.

The commission and its staff shall consider the following criteria in determining
whether a public need exists for the continuation of a state agency or its advisory
committees or for the performance of the functions of the agency or its advisory
committees:

(1) the efficiency and effectiveness with which the agency or the advisory committee
operates;

(2) an identification of the mission, goals, and objectives intended for the agency or
advisory committee and of the problem or need that the agency or advisory committee
was intended to address and the extent to which the mission, goals, and objectives have
been achieved and the problem or need has been addressed;

(3) an identification of any activities of the agency in addition to those granted by
statute and of the authority for those activities and the extent to which those activities
are needed;

(4) an assessment of authority of the agency relating to fees, inspections,
enforcement, and penalties;

(5) whether less restrictive or alternative methods of performing any function that
the agency performs could adequately protect or provide service to the public;

(6) the extent to which the jurisdiction of the agency and the programs administered
by the agency overlap or duplicate those of other agencies, the extent to which the agency
coordinates with those agencies, and the extent to which the programs administered by the
agency can be consolidated with the programs of other state agencies;

(7) the promptness and effectiveness with which the agency addresses complaints
concerning entities or other persons affected by the agency, including an assessment of the
agency's administrative hearings process;

(8) an assessment of the agency's new text begin rules and new text end rulemaking process and the extent to
which the agency has encouraged participation by the public in making its rules and
decisions and the extent to which the public participation has resulted in rules that benefit
the public;

new text begin (9) an assessment of whether any of the agency's rules:
new text end

new text begin (i) are beyond the procedural or substantive authority delegated to the agency;
new text end

new text begin (ii) are inconsistent with the enabling statute;
new text end

new text begin (iii) are obsolete, unnecessary, or duplicative; or
new text end

new text begin (iv) are not justified given the requirements of section 14.131;
new text end

deleted text begin (9) deleted text end new text begin (10) new text end the extent to which the agency has complied with federal and state laws and
applicable rules regarding equality of employment opportunity and the rights and privacy
of individuals, and state law and applicable rules of any state agency regarding purchasing
guidelines and programs for historically underutilized businesses;

deleted text begin (10) deleted text end new text begin (11) new text end the extent to which the agency issues and enforces rules relating to
potential conflicts of interest of its employees;

deleted text begin (11) deleted text end new text begin (12) new text end the extent to which the agency complies with chapter 13 and follows
records management practices that enable the agency to respond efficiently to requests for
public information; and

deleted text begin (12) deleted text end new text begin (13) new text end the effect of federal intervention or loss of federal funds if the agency is
abolished.

Sec. 4.

Minnesota Statutes 2011 Supplement, section 3D.11, is amended to read:

3D.11 RECOMMENDATIONS.

(a) In its report on a state agency, the commission shall:

(1) make recommendations on the abolition, continuation, or reorganization of each
affected state agency and its advisory committees and on the need for the performance of
the functions of the agency and its advisory committees;

(2) make recommendations on the consolidation, transfer, or reorganization of
programs within state agencies not under review when the programs duplicate functions
performed in agencies under review; deleted text begin and
deleted text end

(3) make recommendations to improve the operations of the agency, its policy body,
and its advisory committees, including management recommendations that do not require
a change in the agency's enabling statute deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) make recommendations for the repeal, consolidation, transfer, or amendment of
the rules promulgated by the affected state agency.
new text end

(b) The commission shall include the estimated fiscal impact of its recommendations
and may recommend appropriation levels for certain programs to improve the operations
of the state agency.

(c) The commission shall have drafts of legislation prepared to carry out the
commission's recommendations under this section, including legislation necessary
to continue the existence of agencies that would otherwise sunset if the commission
recommends continuation of an agency.

(d) After the legislature acts on the report under section 3D.09, the commission shall
present to the legislative auditor the commission's recommendations that do not require
a statutory change to be put into effect. Subject to the legislative audit commission's
approval, the legislative auditor may examine the recommendations and include as part
of the next audit of the agency a report on whether the agency has implemented the
recommendations and, if so, in what manner.

Sec. 5.

Minnesota Statutes 2010, 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 that are 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. 6.

Minnesota Statutes 2010, 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 Except as specifically authorized by law, 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 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. 7.

Minnesota Statutes 2010, section 14.116, is amended to read:

14.116 NOTICE TO LEGISLATURE.

new text begin (a) By January 15 each year, each agency proposing to adopt, amend, or repeal a
rule that calendar year must give notice of its rulemaking docket required under section
14.366 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 end

new text begin (b) new text end 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 new text begin and to the Legislative Coordinating Commission new text end .

new text begin (c) new text end 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. 8.

Minnesota Statutes 2010, 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; deleted text begin and
deleted text end

(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 deleted text begin . deleted text end new text begin ;
and
new text end

new text begin (8) an assessment of the cumulative effect of the rule with other federal and state
regulations and local ordinances or regulations related to the specific purpose of the rule.
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 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 local,
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 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. 9.

Minnesota Statutes 2010, 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, 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. 10.

Minnesota Statutes 2010, 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. 11. new text begin REPORTS.
new text end

new text begin By January 15, 2013, the Pollution Control Agency, Department of Natural
Resources, Board of Water and Soil Resources, Environmental Quality Board, and
Department of Agriculture must each report to the governor, the Legislative Coordinating
Commission, and the policy and funding committees and divisions with jurisdiction over
the agency. Each report must: (1) list any rules that the agency recommends for repeal; (2)
list and briefly describe the rationale for rules that the agency believes should remain in
effect; (3) suggest any changes in rules that would improve the agency's ability to meet
the regulatory objectives prescribed by the legislature, while reducing any unnecessary
burdens on regulated parties; and (4) include a summary of the means to better coordinate
rulemaking between state agencies and other local, state, and federal agencies. Any
costs of preparing this report must be absorbed within funds otherwise appropriated to
the agency.
new text end