March 1, 2006, Introduced by Reps. Huizenga, Green and Stahl and referred to the Committee on Commerce.
A bill to amend 1969 PA 306, entitled
"Administrative procedures act of 1969,"
by amending sections 39, 40, 43, 45, and 53 (MCL 24.239, 24.240,
24.243, 24.245, and 24.253), sections 39 and 53 as amended by 2004
PA 23, section 40 as amended by 1999 PA 262, section 43 as amended
by 1989 PA 288, and section 45 as amended by 2004 PA 491.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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 contain all of
the following, to be posted on the agency website not less than 24
months before the request for rule-making is submitted:
(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.
(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 proposed rule 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 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.
(e) (d) Exempt small businesses from any or all of the
requirements of the rule.
(2) An agency shall attach to the request for rule-making a
regulatory flexibility statement addressing the following methods
of reducing the regulatory impact of a proposed rule upon small
businesses:
(a) The establishment of less stringent compliance or
reporting requirements.
(b) The establishment of less stringent schedules or deadlines
for compliance or reporting requirements.
(c) The consolidation or simplification of compliance or
reporting requirements.
(d) The establishment of performance standards to replace
design or operational standards required in the proposed rule.
(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 39, 40, 41, and 42 or section 45(3) shall be commenced
within 2 years after the effective date of the rule.
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, the regulatory flexibility statement, 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 and the
regulatory flexibility statement, 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), a regulatory
flexibility statement prepared under section 40(2), 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.
(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 post the regulatory impact statement on its
website for a period of at least 24 months.
(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. 53. (1) Each agency shall prepare an annual regulatory
plan that reviews the agency's rules. The annual regulatory plan
shall
be electronically transmitted to the state
office of
regulatory
reform administrative
hearings and rules.
(2) In completing the annual regulatory plan required by this
section, the agency shall identify the rules it reasonably expects
to process in the next year, the mandatory statutory rule authority
it has not exercised, and the rules it expects to rescind in the
next year. The agency shall also issue a report stating or
describing all existing rules promulgated by the agency and shall
indicate whether the rules should be continued, changed, or
rescinded considering the statutory and public policy purpose of
the rules.
(3)
The annual regulatory plans completed pursuant to this
section
are advisory only and do not otherwise bind the agency or
in
any way prevent additional action.
(3) Within 5 years after the effective date of any rules
promulgated by an agency or 4 years after the effective date of the
amendatory act that added this subsection for rules in effect on
the effective date of the amendatory act that added this
subsection, an agency and the appropriations committees of the
senate and the house of representatives shall review each set of
rules to determine whether there is any increased impact on small
businesses since the effective date of those rules. The review
shall state the following:
(a) The continued need for the rules.
(b) The nature of any complaints or comments received from the
public concerning the rules.
(c) The complexity of complying with the rules.
(d) The extent to which the rules conflict with or duplicate
similar rules or regulations adopted by the federal government or
local units of government.
(e) The date of the last evaluation of the rules and the
degree, if any, to which technology, economic conditions, or other
factors have changed regulatory activity covered by the rules. The
agency shall also issue a report stating or describing all existing
rules promulgated by the agency and shall indicate whether the
rules should be continued, changed, or rescinded considering the
statutory and public policy purpose of the rules.
(4) Annual regulatory plans completed under subsection (1)
shall
be electronically filed with the state
office of regulatory
reform
administrative hearings and
rules by July 1 of each year.
After
the state office of regulatory reform administrative
hearings and rules approves the plan for review, the state office
of
regulatory reform administrative
hearings and rules shall
electronically provide a copy of the plan of review to the
committee. The committee shall electronically provide a copy of
each agency plan of review, not later than the next business day
after receipt of the plan of review 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 rules the agency may propose.