April 2, 2009, Introduced by Senators GILBERT, KUIPERS, SANBORN, RICHARDVILLE, CROPSEY, PAPPAGEORGE, BROWN, JELINEK, JANSEN, ALLEN and KAHN and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1969 PA 306, entitled
"Administrative procedures act of 1969,"
by amending sections 3, 32, 39, 40, 43, 45, 61, and 64 (MCL 24.203,
24.232, 24.239, 24.240, 24.243, 24.245, 24.261, and 24.264),
section 3 as amended by 1988 PA 277, section 39 as amended by 2004
PA 23, section 40 as amended by 1999 PA 262, section 43 as amended
by 1989 PA 288, section 45 as amended by 2004 PA 491, and section
61 as amended by 1982 PA 413.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) "Adoption of a rule" means that step in the
processing of a rule consisting of the formal action of an agency
establishing a rule before its promulgation.
(2) "Agency" means a state department, bureau, division,
section, board, commission, trustee, authority or officer, created
by the constitution, statute, or agency action. Agency does not
include an agency in the legislative or judicial branch of state
government, the governor, an agency having direct governing control
over an institution of higher education, the state civil service
commission, or an association of insurers created under the
insurance
code of 1956, Act No. 218 of the Public Acts of 1956,
being
sections 500.100 to 500.8302 of the Michigan Compiled Laws
1956 PA 218, MCL 500.100 to 500.8302, or other association or
facility
formed under Act No. 218 of the Public Acts of 1956 that
act as a nonprofit organization of insurer members.
(3) "Contested case" means a proceeding, including rate-
making, price-fixing, and licensing, in which a determination of
the legal rights, duties, or privileges of a named party is
required by law to be made by an agency after an opportunity for an
evidentiary hearing. When a hearing is held before an agency and an
appeal from its decision is taken to another agency, the hearing
and the appeal are deemed to be a continuous proceeding as though
before a single agency.
(4) "Committee" means the joint committee on administrative
rules.
(5) "Court" means the circuit court.
(6) "Decision record" means, in regard to a request for rule-
making where an agency receives recommendations or comments by an
advisory committee or other advisory entity created by law, all of
the following:
(a) The minutes of all meetings related to the request for
rule-making.
(b) The votes of members.
(c) The discussion and reasoning in support of the decision.
(7) (6)
"Guideline" means an
agency statement or declaration
of policy which the agency intends to follow, which does not have
the force or effect of law, and which binds the agency but does not
bind any other person.
Sec. 32. (1) Definitions of words and phrases and rules of
construction
prescribed in any statute , and which that are made
applicable
to all statutes of this state , also shall apply to
rules unless clearly indicated to the contrary.
(2) A rule or exception to a rule shall not discriminate in
favor
of or against any person. , and a A person affected by a rule
is entitled to the same benefits as any other person under the same
or similar circumstances.
(3) The violation of a rule is a crime when so provided by
statute.
A Unless provided for by
statute, a rule shall not make an
act
or omission to act designate
as a crime or an act or omission
and shall not prescribe a criminal penalty for violation of a rule.
(4) An agency may adopt, by reference in its rules and without
publishing the adopted matter in full, all or any part of a code,
standard
or regulation which that has been adopted by an agency of
the United States or by a nationally recognized organization or
association. The reference shall fully identify the adopted matter
by date and otherwise. The reference shall not cover any later
amendments and editions of the adopted matter, but if the agency
wishes to incorporate them in its rule it shall amend the rule or
promulgate a new rule therefor. The agency shall have available
copies of the adopted matter for inspection and distribution to the
public at cost and the rules shall state where copies of the
adopted matter are available from the agency and the agency of the
United States or the national organization or association and the
cost thereof as of the time the rule is adopted.
(5) If an agency adopts rules in order to implement a
federally delegated program, the agency shall adopt the rules and
standards as promulgated or adopted by the federal government. The
agency is prohibited from promulgating or adopting a rule more
stringent than the applicable federal standard unless specifically
authorized by statute to do otherwise.
(6) A guideline, bulletin, interpretive statement, or form
with instructions shall not be given the force and effect of law by
the agency and is considered merely advisory. An agency shall not
rely upon a guideline, bulletin, interpretive statement, or form
with instructions to support an agency's decision to act or refuse
to act if that decision is subject to judicial review. A court
shall not rely upon a guideline, bulletin, interpretive statement,
or form with instructions to uphold such an agency decision.
(7) Where a statute provides that an agency may proceed by
rule-making or by order and an agency proceeds by order in lieu of
rule-making, the order shall not be given general applicability to
persons who were not parties to the proceeding or contested case
prior to the issuance of the order.
(8) A rule shall not exceed the rule-making delegation
contained in the statute authorizing the rule-making.
Sec. 39. (1) Before initiating any changes or additions to
rules, an agency shall electronically file with the state office of
regulatory
reform administrative
hearings and rules a request for
rule-making in a format prescribed by the state office of
regulatory
reform administrative
hearings and rules. The request
for rule-making shall include the following:
(a) The state or federal statutory or regulatory basis for the
rule.
(b) The problem the rule intends to address.
(c) An assessment of the significance of the problem.
(d) If applicable, the decision record.
(2) In the case where an agency receives recommendations or
comments by any advisory committee or other advisory entity created
by law, the advisory committee or entity shall issue to the agency
a decision record regarding any action or discussion regarding the
request for rule-making. The decision record shall be posted on an
agency website not less than 60 days before the request for rule-
making is submitted to the state office of administrative hearings
and rules.
(3) (2)
An agency shall not proceed with the processing of a
rule
outlined in this chapter unless the state
office of regulatory
reform
administrative hearings and
rules has approved the request
for rule-making. The state office of administrative hearings and
rules is not required to approve a request for rule-making and
shall do so only after it has indicated in its response to the
request for rule-making submitted by an agency that there are
appropriate and necessary policy and legal bases for approving the
request for rule-making.
(4) (3)
The state office of regulatory reform administrative
hearings and rules shall record the receipt of all requests for
rule-making on the internet and shall make electronic or paper
copies of approved requests for rule-making available to members of
the
general public. upon request. The state office of
administrative hearings and rules shall issue a written or
electronic response to the request for rule-making that
specifically addresses the issues of whether the request has
appropriate and necessary policy and legal bases for approving the
request for rule-making.
(5) (4)
The state office of regulatory reform administrative
hearings and rules shall immediately make available to the
committee electronic copies of the request for rule-making
submitted
to the state office of regulatory reform administrative
hearings and rules. On a weekly basis, the state office of
regulatory
reform administrative
hearings and rules shall
electronically provide to the committee a listing of all requests
for rule-making approved or denied during the previous week. The
committee shall electronically provide a copy of the approved and
denied requests for rule-making, not later than the next business
day
after receipt of the notice from the state
office of regulatory
reform
administrative hearings and
rules, to members of the
committee and to members of the standing committees of the senate
and house of representatives that deal with the subject matter of
the proposed rule.
Sec. 40. (1) When an agency proposes to adopt a rule that will
apply to a small business and the rule will have a disproportionate
impact on small businesses because of the size of those businesses,
the agency shall consider exempting small businesses and, if not
exempted, the agency proposing to adopt the rule shall reduce the
economic
impact of the rule on small businesses by doing 1 or more
all of the following when it is lawful and feasible in meeting the
objectives of the act authorizing the promulgation of the rule:
(a) Identify and estimate the number of small businesses
affected by the proposed rule and its probable effect on small
businesses.
(b) (a)
Establish differing compliance or reporting
requirements or timetables for small businesses under the rule
after projecting the required reporting, record-keeping, and other
administrative costs.
(c) (b)
Consolidate, or simplify, or eliminate the
compliance
and reporting requirements for small businesses under the rule and
identify the skills necessary to comply with the reporting
requirements.
(d) (c)
Establish performance rather than design standards,
when
appropriate standards to
replace design or operational
standards required in the proposed rule.
(d)
Exempt small businesses from any or all of the
requirements
of the rule.
(2) The factors described in subsection (1)(a) through (d)
shall be specifically addressed in the small business impact
statement.
(3) (2)
If appropriate in In reducing the disproportionate
economic impact on small business of a rule as provided in
subsection
(1), an agency may shall use the following
classifications of small business:
(a) 0-9 full-time employees.
(b) 10-49 full-time employees.
(c) 50-249 full-time employees.
(4) (3)
For purposes of subsection (2) (3), an agency may
include a small business with a greater number of full-time
employees in a classification that applies to a business with fewer
full-time employees.
(5) (4)
This section and section 45(3) do not apply to a rule
which
that is required by federal law and which that
an agency
promulgates without imposing standards more stringent than those
required by the federal law.
Sec. 43. (1) Except in the case of an emergency rule
promulgated in the manner described in section 48, a rule is not
valid
unless processed in compliance with section 42 sections 39,
40, 42, and 45(3) and unless in substantial compliance with section
41(2), (3), (4), and (5).
(2) A proceeding to contest the validity of the processing of
a rule on the ground of noncompliance with the requirements of
sections
section 39, 40, 41, and 42, or 45(3), or any combination
thereof, shall be commenced within 2 years after the effective date
of the rule.
(3) An agency determined to have violated this chapter
regarding the processing of a rule is subject to damages as a
result of an action brought by a person under section 64(2).
Sec. 45. (1) Except as otherwise provided for in this
subsection, the agency shall submit the proposed rule to the
legislative service bureau for its formal certification. The
submission to the legislative service bureau for formal
certification shall be in the form of electronic transmission. If
requested by the legislative service bureau, the state office of
regulatory
reform administrative
hearings and rules shall also
transmit up to 4 paper copies of the proposed rule. The legislative
service bureau shall promptly issue a certificate of approval
indicating a determination that a proposed rule is proper as to all
matters of form, classification, and arrangement. If the
legislative service bureau fails to issue a certificate of approval
within 21 calendar days after receipt of the submission for formal
certification,
the state office of regulatory reform administrative
hearings and rules may issue a certificate of approval. If the
submission to the legislative service bureau is returned by the
legislative service bureau to the agency before the expiration of
the 21-calendar-day time period, the 21-calendar-day time period is
tolled until the rule is resubmitted by the agency. The remainder
of the 21-calendar-day time period or 6 calendar days, whichever is
longer, shall be available for consideration by the legislative
service bureau for formal certification of the rule. The state
office
of regulatory reform administrative
hearings and rules may
approve a proposed rule if it considers the proposed rule to be
legal and appropriate.
(2) Except as provided in subsection (6), after notice is
given as provided in this act and before the agency proposing the
rule has formally adopted the rule, the agency shall prepare an
agency report containing a synopsis of the comments contained in
the public hearing record and a copy of the request for rule-making
and the regulatory impact statement required under subsection (3).
In the report, the agency shall describe any changes in the
proposed rules that were made by the agency after the public
hearing.
The state office of regulatory reform administrative
hearings and rules shall transmit by notice of transmittal to the
committee copies of the rule, the agency reports containing the
request for rule-making, a copy of the regulatory impact statement,
and certificates of approval from the legislative service bureau
and
the state office of regulatory reform administrative hearings
and
rules. The state office
of regulatory reform administrative
hearings and rules shall also electronically submit a copy of the
rule, any agency reports required under this subsection, any
regulatory impact statements required under subsection (3), and any
certificates of approval required under subsection (1) to the
committee. The agency shall electronically transmit to the
committee the records described in this subsection within 1 year
after the date of the last public hearing on the proposed rule
unless the proposed rule is a resubmission under section 45a(7).
(3) Except for a rule promulgated under sections 33, 44, and
48, the agency shall prepare and include with the notice of
transmittal the request for rule-making and the response from the
state office of administrative hearings and rules, a small business
impact statement prepared under section 40(1), and a regulatory
impact
statement. containing The regulatory impact statement shall
contain all of the following information:
(a) A comparison of the proposed rule to parallel federal
rules or standards set by a state or national licensing agency or
accreditation association, if any exist.
(b) An identification of the behavior and frequency of
behavior that the rule is designed to alter.
(c) An identification of the harm resulting from the behavior
that the rule is designed to alter and the likelihood that the harm
will occur in the absence of the rule.
(d) An estimate of the change in the frequency of the targeted
behavior expected from the rule.
(e) An identification of the businesses, groups, or
individuals who will be directly affected by, bear the cost of, or
directly benefit from the rule.
(f) An identification of any reasonable alternatives to
regulation pursuant to the proposed rule that would achieve the
same or similar goals.
(g) A discussion of the feasibility of establishing a
regulatory program similar to that proposed in the rule that would
operate through market-based mechanisms.
(h) An estimate of the cost of rule imposition on the agency
promulgating the rule.
(i) An estimate of the actual statewide compliance costs of
the proposed rule on individuals.
(j) An estimate of the actual statewide compliance costs of
the proposed rule on businesses and other groups.
(k) An identification of any disproportionate impact the
proposed rule may have on small businesses because of their size.
(l) An identification of the nature of any report and the
estimated cost of its preparation by small business required to
comply with the proposed rule.
(m) An analysis of the costs of compliance for all small
businesses affected by the proposed rule, including costs of
equipment, supplies, labor, and increased administrative costs.
(n) An identification of the nature and estimated cost of any
legal consulting and accounting services that small businesses
would incur in complying with the proposed rule.
(o) An estimate of the ability of small businesses to absorb
the costs estimated under subdivisions (l) through (n) without
suffering economic harm and without adversely affecting competition
in the marketplace.
(p) An estimate of the cost, if any, to the agency of
administering or enforcing a rule that exempts or sets lesser
standards for compliance by small businesses.
(q) An identification of the impact on the public interest of
exempting or setting lesser standards of compliance for small
businesses.
(r) A statement describing the manner in which the agency
reduced the economic impact of the rule on small businesses or a
statement describing the reasons such a reduction was not feasible.
(s)
A statement describing whether and how the agency has
involved small businesses in the development of the rule.
(t) An estimate of the primary and direct benefits of the
rule.
(u) An estimate of any cost reductions to businesses,
individuals, groups of individuals, or governmental units as a
result of the rule.
(v) An estimate of any increase in revenues to state or local
governmental units as a result of the rule.
(w) An estimate of any secondary or indirect benefits of the
rule.
(x) An identification of the sources the agency relied upon in
compiling the regulatory impact statement, including the
methodology utilized in determining the existence and extent of the
impact of a proposed rule and a cost-benefit analysis of the
proposed rule.
(y) A detailed recitation of the efforts of the agency to
comply with the mandate to reduce the disproportionate impact of
the rule upon small businesses as described in section 40(1)(a)
through (d).
(z) (y)
Any other information required by
the state office of
regulatory
reform administrative
hearings and rules.
(4) The agency shall electronically transmit the regulatory
impact statement required under subsection (3) to the state office
of
regulatory reform administrative
hearings and rules at least 28
days before the public hearing required pursuant to section 42.
Before the public hearing can be held, the regulatory impact
statement must be reviewed and approved by the state office of
regulatory
reform administrative
hearings and rules. The agency
shall also electronically transmit a copy of the regulatory impact
statement to the committee before the public hearing and the agency
shall make copies available to the public at the public hearing.
The agency shall publish the regulatory impact statement on its
website at least 10 days before the date of the public hearing.
(5) The committee shall electronically transmit to the senate
fiscal agency and the house fiscal agency a copy of each rule and
regulatory impact statement filed with the committee, as well as a
copy of the agenda identifying the proposed rules to be considered
by the committee. The senate fiscal agency and the house fiscal
agency shall analyze each proposed rule for possible fiscal
implications that, if the rule were adopted, would result in
additional appropriations in the current fiscal year or commit the
legislature to an appropriation in a future fiscal year. The senate
fiscal agency and the house fiscal agency shall electronically
report their findings to the senate and house appropriations
committees and to the committee before the date of consideration of
the proposed rule by the committee.
(6) Subsections (2), (3), and (4) do not apply to a rule that
is promulgated under sections 33, 44, and 48.
Sec. 61. (1) The filing of a rule under this act raises a
rebuttable presumption that the rule was adopted, filed with the
secretary of state, and made available for public inspection as
required by this act.
(2) The publication of a rule in the Michigan register, the
Michigan administrative code, or in an annual supplement to the
code raises a rebuttable presumption that the following occurred:
(a) The rule was adopted, filed with the secretary of state,
and made available for public inspection as required by this act.
(b) The rule printed in the publication is a true and correct
copy of the promulgated rule.
(c)
All requirements of this act relative to the rule have
been
complied with.
(3) The courts shall take judicial notice of a rule which
becomes effective under this act.
Sec. 64. (1) Unless an exclusive procedure or remedy is
provided by a statute governing the agency, the validity or
applicability of a rule, including the failure of an agency to
assess the impact of the rule on small businesses in its regulatory
impact statement, may be determined in an action for declaratory
judgment when the court finds that the rule or its threatened
application interferes with or impairs, or imminently threatens to
interfere with or impair, the legal rights or privileges of the
plaintiff. The action shall be filed in the circuit court of the
county where the plaintiff resides or has his principal place of
business in this state or in the circuit court for Ingham county.
The
agency shall be made a party to the action. An action for
declaratory
judgment may not be commenced under this section unless
the
plaintiff has first requested the agency for a declaratory
ruling
and the agency has denied the request or failed to act upon
it
expeditiously. This section shall
not be construed to prohibit
the determination of the validity or applicability of the rule in
any other action or proceeding in which its invalidity or
inapplicability is asserted.
(2) A person alleging a violation of chapter 3 regarding the
processing of a rule, as described in section 43(3), may bring an
action in the circuit court of the county in which the plaintiff
resides or in the circuit court for Ingham county for an award of
damages. If the court determines that such a violation has
occurred, it may award up to 10 times the cost of any permit fees
as well as the actual and reasonable costs relating to witness and
attorney fees.