HB-4205, As Passed Senate, December 5, 2018

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4205

     A bill to amend 1969 PA 306, entitled

"Administrative procedures act of 1969,"

by amending sections 32 and 45 (MCL 24.232 and 24.245), section 32

as amended by 2011 PA 270 and section 45 as amended by 2016 PA 513.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 32. (1) Definitions of words and phrases and rules of

construction prescribed in any statute that are made applicable to

all statutes of this state also apply to rules unless clearly

indicated to the contrary.

     (2) A rule or exception to a rule shall must not discriminate

in favor of or against any person. 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 if provided by

statute. A Unless provided by statute, a rule shall must not make

designate an act or omission to act as a crime or 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 that has been adopted by an agency

of the United States or by a nationally recognized organization or

association. The reference shall must fully identify the adopted

matter by date and otherwise. The reference shall must 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 do so

by amending the rule or promulgate promulgating 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 must 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 of a copy as

of the time the rule is adopted.

     (5) A guideline, operational memorandum, bulletin,

interpretive statement, or form with instructions is not

enforceable by an agency, is considered merely advisory, and shall

must not be given the force and effect of law. An agency shall not

rely upon a guideline, operational memorandum, bulletin,

interpretive statement, or form with instructions to support the

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, operational memorandum, bulletin, interpretive

statement, or form with instructions to uphold an agency decision

to act or refuse to act.

     (6) Where If 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 agency shall not give the order shall not be given

general applicability to persons who were not parties to the

proceeding or contested case before the issuance of the order,

unless the order was issued after public notice and a public

hearing.

     (7) A rule shall must not exceed the rule-making delegation

contained in the statute authorizing the rule-making.

     (8) Except for an emergency rule promulgated under section 48,

and subject to subsection (10), if the federal government has

mandated that this state promulgate rules, an agency shall not

adopt or promulgate a rule more stringent than the applicable

federally mandated standard unless the director of the agency

determines that there is a clear and convincing need to exceed the

applicable federal standard.

     (9) Except for an emergency rule promulgated under section 48,

and subject to subsection (10), if the federal government has not

mandated that this state promulgate rules, an agency shall not

adopt or promulgate a rule more stringent than an applicable

federal standard unless specifically authorized by a statute of

this state or unless the director of the agency determines that

there is a clear and convincing need to exceed the applicable

federal standard.

     (10) Subsections (8) and (9) do not apply to the amendment of

the special education programs and services rules, R 340.1701 to R

340.1862 of the Michigan Administrative Code. However, subsections

(8) and (9) do apply to the promulgation of new rules relating to

special education with the rescission of R 340.1701 to R 340.1862

of the Michigan Administrative Code.

     Sec. 45. (1) Except as otherwise provided in this subsection,

an agency shall electronically submit a proposed rule to the

legislative service bureau for its formal certification. If

requested by the legislative service bureau, the office shall also

transmit up to 4 paper copies of the proposed rule. The legislative

service bureau shall promptly issue a certificate of approval

indicating whether the 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

office may issue a certificate of approval. If the legislative

service bureau returns the submission 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.

After resubmission, the legislative service bureau has the

remainder of the 21-calendar-day time period or 6 calendar days,

whichever is longer, to consider the formal certification of the

rule. The office 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, 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 office 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 office. The office shall also electronically submit to the

committee 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). 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.

     (3) Except as provided in subsection (6), an agency shall

prepare and include with a notice of transmittal under subsection

(2) the request for rule-making and the response from the office, a

small business impact statement prepared under section 40, and a

regulatory impact statement. The regulatory impact statement must

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) If section 32(8) applies and the proposed rule is more

stringent than the applicable federally mandated standard, a

statement of the specific facts that establish the clear and

convincing need to adopt the more stringent rule and an explanation

of the exceptional circumstances that necessitate the more

stringent standard.

     (c) If section 32(9) applies and the proposed rule is more

stringent than the applicable federal standard, either the statute

that specifically authorizes the more stringent rule or a statement

of the specific facts that establish the clear and convincing need

to adopt the more stringent rule and an explanation of the

exceptional circumstances that necessitate the more stringent

standard.

(d) (b) If requested by the office or the committee, a

comparison of the proposed rule to standards in similarly situated

states, based on geographic location, topography, natural

resources, commonalities, or economic similarities.

(e) (c) An identification of the behavior and frequency of

behavior that the rule is designed to alter.

(f) (d) 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.

(g) (e) An estimate of the change in the frequency of the

targeted behavior expected from the rule.

(h) (f) An identification of the businesses, groups, or

individuals who will be directly affected by, bear the cost of, or

directly benefit from the rule.

(i) (g) An identification of any reasonable alternatives to

regulation pursuant to under the proposed rule that would achieve

the same or similar goals.

(j) (h) A discussion of the feasibility of establishing a

regulatory program similar to that proposed in the rule that would

operate through market-based mechanisms.

(k) (i) An estimate of the cost of rule imposition on the

agency promulgating the rule.

(l) (j) An estimate of the actual statewide compliance costs

of the proposed rule on individuals.

(m) (k) A demonstration that the proposed rule is necessary

and suitable to achieve its purpose in proportion to the burdens it

places on individuals.

(n) (l) An estimate of the actual statewide compliance costs

of the proposed rule on businesses and other groups.

(o) (m) An identification of any disproportionate impact the

proposed rule may have on small businesses because of their size.

(p) (n) An identification of the nature of any report required

and the estimated cost of its preparation by small businesses

required to comply with the proposed rule.

(q) (o) 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.

(r) (p) 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.

(s) (q) An estimate of the ability of small businesses to

absorb the costs estimated under subdivisions (n) to (p) to (r)

without suffering economic harm and without adversely affecting

competition in the marketplace.

(t) (r) 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.

(u) (s) An identification of the impact on the public interest

of exempting or setting lesser standards of compliance for small

businesses.

(v) (t) 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.

(w) (u) A statement describing how the agency has involved

small businesses in the development of the rule.

(x) (v) An estimate of the primary and direct benefits of the

rule.

(y) (w) An estimate of any cost reductions to businesses,

individuals, groups of individuals, or governmental units as a

result of the rule.

(z) (x) An estimate of any increase in revenues to state or

local governmental units as a result of the rule.

(aa) (y) An estimate of any secondary or indirect benefits of

the rule.

(bb) (z) An identification of the sources the agency relied on

in compiling the regulatory impact statement, including the

methodology utilized used in determining the existence and extent

of the impact of a proposed rule and a cost-benefit analysis of the

proposed rule.

(cc) (aa) A detailed recitation of the efforts of the agency

to comply with the mandate to reduce the disproportionate impact of

the rule upon on small businesses as described in section 40(1)(a)

to (d).

(dd) (bb) Any other information required by the office.

     (4) The An agency shall electronically transmit the regulatory

impact statement required under subsection (3) to the office at

least 28 days before the public hearing required under section 41.

The agency shall not hold the public hearing until the regulatory

impact statement has been reviewed and approved by the office. 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 and 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 section 33 or 48 or a rule to which sections

41 and 42 do not apply as provided in section 44.

     Enacting section 1. This amendatory act takes effect January

1, 2018.