SB-0962, As Passed Senate, September 8, 2016

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 962

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1969 PA 306, entitled

 

"Administrative procedures act of 1969,"

 

by amending sections 5, 44, 45, and 45a (MCL 24.205, 24.244,

 

24.245, and 24.245a), section 5 as amended by 2006 PA 460, section

 

44 as amended by 2004 PA 23, section 45 as amended by 2013 PA 200,

 

and section 45a as amended by 2011 PA 245, and by adding section

 

45c.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5. (1) As used in this act:

 

     (a) "License" includes the whole or part of an agency permit,

 

certificate, approval, registration, charter, or similar form of

 

permission required by law. , but License does not include a

 

license required solely for revenue purposes, or a license or

 

registration issued under the Michigan vehicle code, 1949 PA 300,

 

MCL 257.1 to 257.923.

 

     (b) (2) "Licensing" includes agency activity involving the

 

grant, denial, renewal, suspension, revocation, annulment,

 

withdrawal, recall, cancellation, or amendment of a license.

 

     (c) (3) "Michigan register" means the publication described in

 

section 8.

 

     (d) (4) "Notice" means a written or electronic record that

 

informs a person of past or future action of the person generating

 

the record.

 

     (e) (5) "Notice of objection" means the record adopted by the

 

committee that indicates the committee's formal objection to a

 

proposed rule.

 

     (f) "Office" means, unless expressly stated otherwise, the

 

office of performance and transformation.

 

     (g) "Office of regulatory reform", "state office of

 

administrative hearings and rules", and "office of regulatory

 

reinvention" mean the office.

 

     (h) (6) "Party" means a person or agency named, admitted, or

 

properly seeking and entitled of right to be admitted, as a party

 

in a contested case. In a contested case regarding an application

 

for a license, party includes the applicant for that the license.

 

     (i) (7) "Person" means an individual, partnership,

 

association, corporation, limited liability company, limited

 

liability partnership, governmental subdivision, or public or

 

private organization of any kind other than the agency engaged in

 

the particular processing of a rule, declaratory ruling, or

 

contested case.

     (j) (8) "Processing of a rule" means the action required or

 

authorized by this act regarding a rule that is to be promulgated,

 

including the rule's adoption, and ending with the rule's

 

promulgation.

 

     (k) (9) "Promulgation of a rule" means that step in the

 

processing of a rule consisting of the filing of a the rule with

 

the secretary of state.

 

     (l) (10) "Record" means information that is inscribed on a

 

paper or electronic medium.

 

     Sec. 44. (1) Sections 41 and 42 do not apply to an amendment

 

or rescission of a rule that is obsolete or superseded, or that is

 

required to make obviously needed corrections to make the rule

 

conform to an amended or new statute or to accomplish any other

 

solely formal purpose, if a statement to that effect is included in

 

the legislative service bureau certificate of approval of the rule.

 

     (2) Sections 41 and 42 do not apply to a rule that is

 

promulgated under the Michigan occupational safety and health act,

 

1974 PA 154, MCL 408.1001 to 408.1094, that is substantially

 

similar to an existing federal standard that has been adopted or

 

promulgated under the occupational safety and health act of 1970,

 

Public Law 91-596. , 84 Stat. 1590. However, notice of the proposed

 

rule shall must be published in the Michigan register at least 35

 

days before the submission of the rule to the secretary of state

 

pursuant to under section 46(1). A reasonable period, not to exceed

 

21 days, shall must be provided for the submission of written or

 

electronic comments and views following publication in the Michigan

 

register.

     (3) Sections 41 and 42 do not apply to a change to a proposed

 

rule by an agency during processing of the rule if the office

 

determines under section 45c(3) that the regulatory impact and

 

impact on small businesses of the changed proposed rule are not

 

more burdensome than the regulatory impact and impact on small

 

businesses of the original proposed rule.

 

     (4) (3) For purposes of subsection (2), "substantially

 

similar" means identical, with the exception of style or format

 

differences needed to conform to this or other state laws, as

 

determined by the office. of regulatory reform pursuant to section

 

45(1).

 

     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 of

 

regulatory reinvention 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 of regulatory

 

reinvention 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.

 

The After resubmission, the legislative service bureau shall have

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 of regulatory reinvention 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 of regulatory reinvention 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. of regulatory

 

reinvention. The office of regulatory reinvention 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. unless the proposed rule

 

is a resubmission under section 45a(7).

     (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,

 

of regulatory reinvention, a small business impact statement

 

prepared under section 40(1), 40, and a regulatory impact

 

statement. The regulatory impact statement shall 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 requested by the office of regulatory reinvention 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.

 

     (c) An identification of the behavior and frequency of

 

behavior that the rule is designed to alter.

 

     (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.

 

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

 

behavior expected from the rule.

 

     (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.

 

     (g) An identification of any reasonable alternatives to

 

regulation pursuant to the proposed rule that would achieve the

same or similar goals.

 

     (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.

 

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

 

promulgating the rule.

 

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

 

the proposed rule on individuals.

 

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

 

suitable to achieve its purpose in proportion to the burdens it

 

places on individuals.

 

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

 

the proposed rule on businesses and other groups.

 

     (m) An identification of any disproportionate impact the

 

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

 

     (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.

 

     (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.

 

     (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.

 

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

 

the costs estimated under subdivisions (n) to (p) without suffering

 

economic harm and without adversely affecting competition in the

marketplace.

 

     (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.

 

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

 

exempting or setting lesser standards of compliance for small

 

businesses.

 

     (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.

 

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

 

businesses in the development of the rule.

 

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

 

rule.

 

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

 

individuals, groups of individuals, or governmental units as a

 

result of the rule.

 

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

 

governmental units as a result of the rule.

 

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

 

rule.

 

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

 

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.

 

     (aa) 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) to

 

(d).

 

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

 

regulatory reinvention.

 

     (4) The agency shall electronically transmit the regulatory

 

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

 

regulatory reinvention at least 28 days before the public hearing

 

required under section 42. Before 41. The agency shall not hold the

 

public hearing can be held, until the regulatory impact statement

 

must be has been reviewed and approved by the office. of regulatory

 

reinvention. 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 , 44, or 48 or a rule to which

 

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

 

     Sec. 45a. (1) Except as otherwise provided in subsections (7)

 

to (9), (10) to (12), after the committee has received the a notice

 

of transmittal specified in under section 45(2), the committee has

 

15 session days in which to consider the rule and to object do 1 of

 

the following:

 

     (a) Object to the rule by filing approving a notice of

 

objection approved by a concurrent majority of the committee

 

members or the committee may, by concurrent majority, waive the

 

under subsection (2) and filing the notice with the office.

 

     (b) Propose that the rule be changed. If the committee

 

proposes that a rule be changed under this subdivision, section 45c

 

applies.

 

     (c) Decide to introduce bills under subsection (5) to enact

 

the subject of the rule into law.

 

     (d) Waive any remaining session days. If the committee waives

 

the remaining session days, the clerk of the committee shall

 

promptly notify the office of regulatory reinvention of the waiver

 

by electronic transmission. The

 

     (2) To approve a notice of objection under subsection (1)(a),

 

a concurrent majority of the committee, may only approve a notice

 

of objection if the committee as provided in section 35, must

affirmatively determines by a concurrent majority determine that 1

 

or more of the following conditions exist:

 

     (a) The agency lacks statutory authority for the rule.

 

     (b) The agency is exceeding the statutory scope of its rule-

 

making authority.

 

     (c) There exists an emergency relating to the public health,

 

safety, and welfare that would warrant disapproval of the rule.

 

     (d) The rule conflicts with state law.

 

     (e) A substantial change in circumstances has occurred since

 

enactment of the law upon on which the proposed rule is based.

 

     (f) The rule is arbitrary or capricious.

 

     (g) The rule is unduly burdensome to the public or to a

 

licensee licensed by under the rule.

 

     (3) (2) If the committee does not file approve a notice of

 

objection, propose that the rule be changed, or decide to introduce

 

bills under subsection (5) within the time period prescribed in

 

subsection (1), or if the committee waives the remaining session

 

days by concurrent majority, under subsection (1), the office of

 

regulatory reinvention may immediately file the rule, with the

 

certificate of approval required under section 45(1), with the

 

secretary of state. The rule takes effect immediately upon its

 

filing on being filed with the secretary of state unless a later

 

date is indicated within in the rule.

 

     (4) (3) If the committee files a notice of objection within

 

the time period prescribed in under subsection (1), (1)(a), the

 

committee chair, the alternate chair, or any member of the

 

committee shall cause introduce bills to be introduced in both

houses of the legislature, simultaneously to the extent

 

practicable. Each house shall place the bill or bills directly on

 

its calendar. The bills shall must contain 1 or more of the

 

following:

 

     (a) A rescission of a rule upon its effective date.

 

     (b) A repeal of the statutory provision under which the rule

 

was authorized.

 

     (c) A bill staying the effective date of the proposed rule for

 

up to 1 year.

 

     (5) If the committee decides to proceed under this subsection

 

as provided in subsection (1)(c), the committee chair and the

 

alternate chair shall, as soon as the bills have been prepared,

 

introduce or cause to be introduced in both houses of the

 

legislature bills to enact into law the subject of the proposed

 

rule. The language of a bill introduced under this subsection is

 

not required to be identical to the language of the proposed rule.

 

The legislative service bureau shall give priority to the

 

preparation of the bills.

 

     (6) (4) The notice of objection filed under subsection (3)

 

stays the ability of the office of regulatory reinvention to shall

 

not file the rule with the secretary of state a rule as to which

 

the committee has filed a notice of objection under subsection

 

(1)(a) until the earlier after whichever of the following applies:

 

     (a) Fifteen Unless subdivision (b) applies, 15 session days

 

after the date the notice of objection is filed. under subsection

 

(3).

 

     (b) The date of the a rescission of the issuance of the notice

of objection , approved by a concurrent majority of the committee

 

members. as provided in this subdivision. The committee may meet to

 

rescind the issuance of the a notice of objection under this

 

subdivision. filed under subsection (1)(a). If the committee

 

rescinds the issuance of a notice of objection under this

 

subdivision, the clerk of the committee shall promptly notify the

 

office of regulatory reinvention by electronic transmission of the

 

recission.rescission.

 

     (7) If the committee decides to introduce bills under

 

subsection (5) with respect to the subject of a rule, the office

 

shall not file the rule with the secretary of state until 1

 

calendar year after the bills were introduced.

 

     (8) (5) If the legislation introduced under subsection (3) (4)

 

or (5) is defeated in either house and if the vote by which the

 

legislation failed to pass is not reconsidered in compliance with

 

the rules of that house, or if legislation introduced under

 

subsection (3) (4) or (5) is not adopted by both houses within the

 

time applicable period specified in subsection (4), (6) or (7), the

 

office of regulatory reinvention may file the rule with the

 

secretary of state. The rule takes effect immediately upon its

 

filing on being filed with the secretary of state unless a later

 

date is specified within in the rule.

 

     (9) (6) If the legislation introduced under subsection (3) (4)

 

or (5) is enacted by the legislature and presented to the governor

 

within the 15-session-day period under subsection (6) or before the

 

expiration of 1 calendar year under subsection (7), the rule does

 

not take effect unless the legislation is vetoed by the governor as

provided by law. If the governor vetoes the legislation, the office

 

of regulatory reinvention may file the rule with the secretary of

 

state immediately. The rule takes effect 7 days after the date of

 

its filing it is filed with the secretary of state unless a later

 

effective date is indicated within in the rule.

 

     (10) (7) An agency may withdraw a proposed rule under the

 

following conditions:

 

     (a) With permission of the committee chair and alternate

 

chair, the agency may withdraw the rule to change the rule and

 

resubmit it as changed. If permission to withdraw is granted, the

 

15-session-day time period described in subsection (1) is tolled

 

until the rule is resubmitted. , except that However, the committee

 

shall must have at least 6 session days after resubmission to

 

consider the resubmitted rule, and if necessary, the period under

 

subsection (1) is extended to give the committee the 6 days.

 

     (b) Without permission of the committee chair and alternate

 

chair, the agency may withdraw the rule to change the rule and

 

resubmit it as changed. If permission to withdraw is not granted, a

 

new and untolled 15-session-day time period described in subsection

 

(1) shall begin upon begins on resubmission of the rule to the

 

committee for consideration.

 

     (11) (8) Subsections (1) to (5) do This section does not apply

 

to rules adopted under sections section 33 , 44, and or 48 or a

 

rule to which sections 41 and 42 do not apply as provided in

 

section 44(1) or (2).

 

     (12) (9) An agency shall withdraw any rule pending before the

 

committee at the final adjournment of a regular session held in an

even-numbered year and resubmit that the rule. A new and untolled

 

15-session-day time period described in subsection (1) shall begin

 

upon begins on resubmission of the rule to the committee for

 

consideration.

 

     (13) (10) As used in this section only, "session day" means a

 

day in which both the house of representatives and the senate

 

convene in session and a quorum is recorded.

 

     Sec. 45c. (1) If the committee proposes that a proposed rule

 

be changed under section 45a(1), the agency shall, within 30 days,

 

do 1 of the following:

 

     (a) Decide to change the rule and, within the 30 days,

 

resubmit the rule, as changed, to the committee. If the agency

 

decides to change the rule, subsections (2) to (5) apply.

 

     (b) Decide to not change the rule. If the agency decides to

 

not change the rule, subsection (6) applies.

 

     (2) If an agency decides to change a proposed rule under

 

subsection (1), the agency shall withdraw the rule. A withdrawal

 

under this subsection is a withdrawal with permission under section

 

45a(10). After withdrawing the rule under this subsection, the

 

agency shall give notice to the office for publication of the

 

proposed rule, as changed, under section 8. The notice must include

 

the text of the rule as changed.

 

     (3) After receiving the text of a proposed rule as changed

 

under subsection (2), the office shall review the rule as changed

 

and determine whether the regulatory impact or the impact on small

 

businesses of the rule as changed would be more burdensome than the

 

regulatory impact or the impact on small businesses of the rule as

originally proposed. If the language of the rule as changed is

 

identical to the language of the corresponding rule promulgated and

 

in effect at the time of the review, the regulatory impact and

 

impact on small businesses of the rule as changed are not more

 

burdensome. The office shall notify the agency of its determination

 

under this subsection.

 

     (4) If the office's determination under subsection (3) is that

 

the regulatory impact and the impact on small businesses of the

 

rule as changed would not be more burdensome, the agency is not

 

required to prepare a new agency report under section 45(2) or

 

conduct a new public hearing on the rule as changed. If the

 

determination is that the regulatory impact and the impact on small

 

businesses of the rule as changed would be more burdensome, the

 

agency shall prepare a new agency report under section 45(2) and

 

conduct a new public hearing.

 

     (5) After receiving the office's determination under

 

subsection (3), the agency shall submit a supplement to the agency

 

report under section 45(2) that includes all of the following:

 

     (a) A statement of the determination of the office under

 

subsection (3) and whether a new agency report under section 45(2)

 

and public hearing are required.

 

     (b) An explanation for the proposed changed rule.

 

     (6) If an agency decides to not change a rule under subsection

 

(1), the agency shall within the 30-day period under subsection (1)

 

notify the committee of the decision and the reasons for the

 

decision and file the notice with the office. After the notice is

 

filed, the committee has 15 session days in which to consider the

agency's decision and take 1 of the actions listed in section

 

45a(1).

 

     Enacting section 1. This amendatory act takes effect January

 

1, 2017.