Administrative Procedures Act
| Model Bill Info | |
|---|---|
| Bill Title | Administrative Procedures Act |
| Date Introduced | August 10, 2018 |
| Date Finalized | September 18, 2018 |
| Type | Model Policy |
| Status | Final |
| Task Forces | Commerce, Insurance and Economic Development; Civil Justice |
Administrative Procedures Act
Section 1. {Short Title}
Section 2. {Purpose}
a. Rules shall be as simple and clear as possible. They shall achieve legislative goals effectively and efficiently. They shall not impose unnecessary burdens on the economy, on individuals, on public or private organizations, or on local governments.
b. Agencies should promulgate only such rules as are required by law or are necessary to interpret the law. In deciding whether and how to regulate, agencies should assess all costs and benefits of available alternatives, including the alternative of not regulating. Costs and benefits shall be understood to include both quantifiable measures (to the fullest extent that these can be usefully estimated) and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider.
c. To achieve these objectives, rules shall be developed through the processes in Sections 5, 6, and 12, which ensure that:
1. the need for and purposes of the rule are clearly established;
2. heads of agencies and policy officials exercise effective oversight;
3. opportunity exists for early participation and comment by other agencies, local governments, businesses, organizations and individual members of the public;
4. meaningful alternatives are considered and analyzed before the rule is issued; and
5. compliance costs, paperwork and other burdens on the public are minimized.
d. Criminal sanctions should be reserved for cases in which there is serious and intentional conduct and for which civil remedies are insufficient to create a just result.
Section 3 {Definitions}
For the purposes of this [chapter] —
a. “agency” means each authority of the Government of the [State], whether or not it is within or subject to review by another agency, but does not include—
1. any part of the Government of the United States
2. the [legislature];
3. the courts of the [State];
4. the governments of the territories or possessions of the United States;
b. “person” includes an individual, partnership, corporation, association, or public or private organization other than an agency;
c. “party” includes a person or agency named or admitted as a party, or properly seeking and entitled as o f right to be admitted as a party, in an agency proceeding, and a person or agency admitted by an agency as a party for limited purposes;
d. “rule” means any agency rule, standard, statement, or document of general applicability that describes the procedure or practice requirements of an agency; or implements, prescribes, or interprets an enactment of the general assembly or [the legislature] or a rule adopted by a state agency. “Rule” includes the establishment of a fee and the amendment or repeal of a prior rule. “Rule” does not include:
1. Declaratory orders;
2. Intra-agency memoranda;
3. General policy statement that are substantially repetitious of existing law; and
4. Guidance documents;
e. “rulemaking” means agency process for formulating, amending, or repealing a rule;
f. “order” means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rulemaking but including licensing;
g. “initial notice of proposed rulemaking” is a public notice issued by law when an agency wishes to add, remove, or change a rule or rule as part of the rulemaking process;
h. “adjudication” means agency process for the formulation of an order;
i. “license” means the whole or a part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption or other form of permission;
j. “licensing” means an agency process respecting the grant, renewal, denial, revocation, suspension, annulment, withdrawal, limitation, amendment, modification, or conditioning of a license;
k. “guidance document” means any agency statement of general applicability, whether styled as guidance or otherwise, that is designed to advise parties outside of the [state executive branch] about legal rights and obligations.
1. Guidance documents do not include: documents relating to internal agency procedures, agency reports, general information documents provided to consumers or professionals, speeches, journal articles and editorials, media interviews, press materials, warning letters, memoranda of understanding, or other communications directed to individual persons or firms;
l. “sanction” includes the whole or a part of an agency—
1. prohibition, requirement, limitation, or other condition affecting the freedom of a person;
2. withholding of relief;
3. imposition of penalty or fine;
4. destruction, taking, seizure, or withholding of property;
5. assessment of damages, reimbursement, restitution, compensation, costs, charges, or fees;
6. requirement, revocation, or suspension of a license; or
7. taking other compulsory or restrictive action;
m. “relief” includes the whole or a part of an agency—
1. grant of money, assistance, license, authority, exemption, exception, privilege, or remedy;
2. recognition of a claim, right, immunity, privilege, exemption, or exception; or
3. taking of other action on the application or petition of, and beneficial to, a person;
n. “agency proceeding” means an agency process as defined by Sections 5, 8, and 12;
o. “agency action” includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act;
p. “state action” means any action by the government or the implementation or application of any law, including state and local laws, ordinances, rules, rules and policies, whether statutory or otherwise, and whether the implementation or application is made or attempted to be made by the government or nongovernmental persons;
q. “ex parte communication” means an oral or written communication not on the public record with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports on any matter or proceeding covered by Sections 5, 6, 8, and 12;
r. “final agency action” means an agency action that reflect the consummation of an agency’s decision-making process, from which rights or obligations have been determined. The term includes, but may not be limited to, rules and administrative law judge adjudications;
s. “civil investigative demand” means the process by which an agency, before the institution of any proceedings it is authorized to conduct, issues in writing, and causes to be served upon such person, a demand requiring such person to produce such documentary material for inspection and copying or reproduction, to submit such tangible things, to file written reports or answers to questions, to give oral testimony concerning documentary material or other information, or to furnish any combination of such material, answers, or testimony;
t. “element” means such conduct, such attendant circumstances, or such a result of conduct as:
1. is included in the description of the forbidden conduct in the definition of the offense; or
2. establishes the required kind of culpability; or
3. negatives an excuse or justification for such conduct; or
4. negatives a defense under the statute of limitations; or
5. establishes jurisdiction or venue;
u. “knowingly,” as related to an element of an offense, means:
1. if the element involves the nature of the conduct of a person or the attendant circumstances, that the person is aware that the conduct of the person is of that nature or that such circumstances exist; and
2. if the element involves a result of the conduct of a person, that the person is aware that it is practically certain that the conduct of the person will cause such a result;
v. “willfully,” as related to an element of an offense, means:
1. that the person acted with knowledge that the person’s conduct was unlawful; and
2. if the element involves the nature, attendant circumstances, object, or result of the conduct of a person, that
i. the person had knowledge of the nature, attendant circumstances, object, or result of his or her conduct; and
ii. it was the conscious object of the person to engage in conduct—
A. of that nature;
B. with that attendant circumstance;
C. with that object; or to cause such a result;
w. “grossly negligently,” as related to an element of an offense, means that a person consciously disregards a substantial and unjustifiable risk that the material element exists or will result from his conduct. The risk must be of such a nature and degree that, considering the nature and purpose of the actor’s conduct and the circumstances known to him, its disregard involves a gross deviation from the standard of conduct that a reasonable person would observe in the actor’s situation.
x. “arbitrariness and capriciousness” means a willful or unreasonable agency action without consideration of or in disregard of facts or law.
Section 4 {Scope of Rulemaking and Agency Action}
a. Agencies are required to follow the procedures in Sections 5 and 12 for anything that purports to create rights or obligations binding on persons or entities outside of the [executive branch], or to create binding standards by which the agency will determine compliance with existing statutory or regulatory requirements, whether styled as “rules” or otherwise.
1. This includes, but may not be limited to, final rules and consent decrees.
b. Guidance documents, statements of enforcement priorities, internal directives/memoranda, or other internal documents that are promulgated without adhering to the procedures in Sections 5 and 12 do not bind people nor may the agency use them in such a way.
1. Agencies are prohibited from using its guidance documents to coerce regulated parties into taking any action or refraining from taking any action beyond what is explicitly required by the applicable statute or rule.
2. When the agency issues a guidance document setting out voluntary standards or practices, noncompliance will; not in itself result in any enforcement action.
c. Culpability Required for Criminal Rules and Enforcement.
1. For all rules promulgated and enforcement actions commenced after [date of enactment of APA], and notwithstanding any provision to the contrary predating [date of enactment of APA], the agency must prove that every element of a purported criminal offense occurred because a person acted knowingly and willfully.
2. In the absence of a culpability requirement, all rules promulgated before [date of enactment of APA] shall be conclusively presumed to incorporate the culpability requirement in Section 4.c.1.
d. Culpability Required for Civil Monetary Penalties.
1. Penalties Greater Than or Equal to $100,000. For all enforcement actions commenced after [date of enactment of APA] with sought civil monetary penalties greater than or equal to $100,000, and notwithstanding any provision to the contrary predating [date of enactment of APA], the agency must prove that every element of a purported offense occurred because a person acted knowingly.
2. Penalties Less than $100,000. For all enforcement actions commenced after [date of enactment of APA] with sought civil monetary penalties less than $100,000, and notwithstanding any provision to the contrary predating [date of enactment of APA], the agency must prove that every element of a purported offense occurred because a person acted knowingly or grossly negligently.
e. Limitations on Civil Equitable Remedies. Agencies may not seek civil equitable remedies that are disproportionate to correct for the alleged violations and the potential for imminent and substantial harm. Agencies shall not seek and administrative law judges and courts shall not impose controls or penalties not otherwise required by law.
f. Guidance Document Process and Publication. Agencies must establish and make public internal procedures to generate guidance documents. Agencies must make clear to the public which agency documents are guidance documents that may be relied for purposes of the safe harbor provision provided by Section 10.c.
g. Applicability Determination. People may seek a determination from an agency whether any provision of any rule applies to that person, their facility, or their effects. The Agency does not need to make such determinations according to the rulemaking requirements provided by Sections 5 and 12.
1. Any such applicability determinations under Section 4.g are binding only between the agency and the person requesting the determination. Agencies may not use applicability determinations to establish the rights and obligations of third parties.
2. People may challenge applicability determinations they requested to [court of appropriate appellate jurisdiction] according to the standard of review provided by Section 9.g.
Section 5 {Rulemaking Procedure}
a. Failure to Comply. Failure to comply with the rulemaking procedures in [Section 5] is a defect that shall render the rule void and unenforceable by any agency, administrative law judge, or court of appropriate jurisdiction. Any person shall have the authority to seek judicial review of the validity of the final rule in a court of appropriate appellate jurisdiction as provided by Section 9.b.
b. Rulemaking Procedure. Agencies shall comply with the following rulemaking process and accompanying explanatory subsections.
1. First, agencies may draft a proposed rule, for which independent statutory authority exists, and an accompanying Regulatory Impact Analysis, as provided by Section 5.i. Agencies shall have the authority to promulgate their own internal rules to guide this process.
2. Second, agencies must submit the proposed rule to [state agency] for review as provided by Section 12.b.i.1.
3. Third, agencies must submit the proposed rule for public notice and comment as provided by Section 5.d. Agencies may not submit a proposed rule for notice and comment until the [state agency] has reviewed the rule as provided by Section 12.b.
4. Fourth, after the period for notice and comment has ended, agencies must respond to public comments and draft its final rule. Agencies shall have the authority to promulgate their own internal rules to guide this process.
5. Fifth, agencies must submit the proposed final rule to the Joint Committee on Administrative Rules as provided by Section 6.c.
6. Finally, the proposed final rule shall take effect [x days] after the Joint Committee declines to void the proposed final rule. The effective date of a rule may not be before the end of the Joint Committee’s review period.
c. Initial Notice of Proposed Rulemaking. General notice of proposed rulemaking shall be [made publicly available] unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law. The notice shall include—
1. a statement of the time, place, and nature of public rulemaking proceedings;
2. reference to the legal authority under which the rules is proposed; and
3. either the terms or substance of the proposed rule or a description of the subjects and issues involved.
d. Notice and Comment. After notice required by Section 5.c, the agency shall give interested persons an opportunity to participate in the rulemaking through submission of written data, views, or arguments with or without opportunity for oral presentation. This period of public participation may be no shorter than 60 days. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose.
e. Public Hearing. After issuing a Notice of Proposed Rulemaking but before submission to the Joint Committee as provided by Section 6.c, the agency must conduct a public hearing to accept oral and written testimony to be included in the record.
f. Submission to Joint Committee on Administrative Rules. After complying with the procedures at Section 5.c–e, the agency must submit the final rule to the Joint Committee as provided by Section 6.c.
g. Publication of Final Rule. The required publication or service of a final rule shall be made not less than [30 days] before its effective date.
h. Private Petitions. Each agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.
i. Regulatory Impact Analysis. As part of drafting a proposed rule, and prior to submitting a proposed rule to [state agency], agencies must draft a Regulatory Impact Analysis (“RIA”). The RIA must include, but may not be limited to, the following statements:
1. Statement of Need. The agency must justify every new rule it proposes. The Statement of Need must include, but may not be limited to, the following criteria:
i. Intention of Rule. The agency must explain the problems or duties the rule is intended to address.
ii. Estimated Number Affected. The agency must estimate the number of individuals and businesses affected by the proposed rule.
iii. Policy/Goal of Rule. The agency must summarize the policy of the proposed rule and the problems it is intended to remedy. The agency’s explanation must include, but may not be limited to, the following criteria:
A. Conduct the Rule is Designed to Change. The agency must identify the public or private conduct the rule is designed to change and include a determination as to whether the proposed rule is intended to address a failure of government institutions or an overriding social need not better addressed by non-governmental actors or solutions.
B. Harm the Rule is Designed to Change. The agency must identify the public or private harm the rule is designed to change and why the harm requires regulatory response.
C. Involvement of the Regulated Entities in Rule Development. The agency must identify whether I) regulated entities requested the proposed rule or II) whether the regulated entities were consulted before or during the proposed rulemaking process.
D. Methodology. The agency must explain the methodology it used to identify the harmful conduct, the harm resulting from the conduct, and how it identified the regulated entities.
2. Legal Basis. The agency must identify the legal basis for the proposed rule which must include:
i. The authorizing state statute; and
ii. the federal or state statute, rule or grant the proposed rule is intended to address.
3. Evaluation of Costs and Benefits. The agency must address the costs and benefits of the proposed rule. All costs and benefits will be reported by the agency as either quantified and monetized, quantified, but not monetized, or not quantified. In addition to a clear statement of whether the benefits of the proposed rule will exceed its costs, the evaluation must include, but may not be limited to, the following criteria:
i. Estimated Primary and Direct Benefits. The agency must provide a statement of the direct benefits of the proposed rule, including the impact on consumer protection, worker safety, the environment, and business competitiveness with projections covering at least 10 years. The agency must, when practicable, quantify these benefits.
ii. Estimated Secondary or Indirect Benefits. The agency must provide a statement of the indirect benefits of the proposed rules and an explanation of how the conduct regulated by the rule is linked to the primary and secondary benefits with projections covering at least 10 years. The agency must, when practicable, quantify these benefits.
iii. Estimated Compliance Costs for Regulated Entities. The agency must provide a statement of the costs of complying with the proposed rule, including but not limited to the costs of fees, new equipment or supplies, increased labor and training, education, supervisory costs, and any other compliance cost imposed by the requirements of the proposed rule. If the proposed rule will affect different parties differently, the analysis should distinguish between them. The agency must, when practicable, quantify these costs.
iv. Estimated Effect on Revenue. The agency must identify any sources of revenue affected by the proposed rule, the estimated increase or decrease in revenues or expenditures of state and local government that would result from the implementation of the proposed rule, including the costs necessary to enforce the rule.
v. Estimated Effect on Expenditures. The agency must identify any appropriation, distribution, or other expenditures of revenue affected by the rule. As part of this analysis, the agency must analyze whether the proposed rule requires a state or local government to perform certain actions, with no money provided for fulfilling the requirements.
vi. Estimated Administrative Expenses. The agency must provide a statement of the administrative costs the proposed rule imposed on regulated entities, the agency promulgating the proposed rule, and other agencies or government entities, including but not limited to any legal, consulting, reporting, accounting or other administrative expenses imposed by the requirements of the proposed rule.
vii. Estimated Cost Savings to Regulated Entities. The agency must identify any cost savings for the regulated entity, the agency promulgating the rule, or other agencies or government entities as a result of the proposed rule.
viii. Sources Consulted and Methodology Used. The agency must explain the methodology and sources it used to estimate the costs and benefits of the proposed rule.
A. In preparing a cost benefit analysis under this section, the agency shall consider in its analysis any verified data provided voluntarily by interested parties, regulated persons, and nonprofit corporations whose members may be affected by the proposed rule. If an agency rejects any submitted data as not verified, it must include the methodology used in making the calculation. If such data is considered verified, but not considered by the agency in the cost benefit analysis, the agency must explain and provide the methodology which excluded it.
B. Agencies should supply independent verification or studies to support the policy rationale and types and quantifications of the costs and benefits:
I. Any research, studies, data, algorithms, software, or other diagnostic tools used by the agency in formulating the rule and/or for the required implementation of specific policies or practices by affected parties under the rule must be available for public inspection and included in electronic format in the agency’s report.
II. For any studies, surveys, or research materials used by the agency in formulating the rule and/or for the implementation of specific policies or practices by affected parties under the rule the agency must provide the following: the author and funding source; the classification of such research as a “case study,” “experimental” or “quasi-experimental” design, and/or “quantitative,” “qualitative,” or “mixed-method design;” and any available independent reports on the validity and/or reliability of the research design or methodology.
4. Examination of Alternatives. The agency must examine whether alternatives to the rule exist and why the agency chose not to pursue them. The agency’s explanation must include, but may not be limited to, the following criteria:
i. Alternatives Defined by Statute. The agency must identify whether any alternatives are provided by statute.
ii. The Feasibility of Market-Oriented or Private Sector Approaches. The agency must identify whether any market-oriented approaches exist.
iii. Measures to Improve the Availability of Information, as an Alternative to Rule. The agency must examine whether the goals of the proposed rule could be furthered by expanding access to information rather than through the proposed rule.
iv. Various Enforcement Methods. The agency must consider the various ways it plans to enforce the proposed rule.
v. Performance Standards Rather Than Design Standards. The agency must consider whether imposing performance standards would better achieve its desired goals than specific design standards or other prescriptive requirements.
vi. Different Requirements for Different Sized Regulated Entities. The agency must consider whether the proposed rule would have higher benefits or lower costs by regulating differently sized entities in different manners.
vii. Establish a Baseline. The agency must establish a baseline against which the agency will measure benefits and costs in the future.
viii. Different Compliance Dates. The agency must consider whether imposing different compliance dates for different classes of regulated parties would reduce the costs or the increase benefits of the proposed rule.
ix. Redundancy. The agency must determine whether the proposed rule replicates another statute or rule, including those promulgated by other agencies.
5. Policy/Authority Impact. The agency must also provide a statement of analysis on the impact of the proposed rule on state and local policy, including any resulting line of accountability or transfer of governing control from state or local officials to any entity inside or outside this state, whether the federal government, a private corporation or association, or any other entity.
6. Effect on Individual Liberties. The agency must provide a statement of analysis on the impact of the proposed rule on individual liberties, including which individual liberties it considered and why it believes that the regulation does or does not impair those liberties.
7. Effect on Small Businesses. The agency must provide a statement of analysis of the impact of the proposed rule on small businesses, included but not limited to, the direct economic effect to small businesses and the effect on the relevant market.
8. Failure to conduct a RIA and provide it the [state agency] renders any proposed rule void and unenforceable by the agency, administrative law judge, or court of appropriate jurisdiction.
Section 6 {Joint Committee on Administrative Rules}
a. Establishing the Joint Committee on Administrative Rules.
1. The [speakers] of the [senate] and the [house of representatives] shall designate six committee members from each of their respective houses to jointly conduct the review of agency rules as provided in this chapter. Every [term], the chambers shall alternate which chamber may designate an additional and seventh member from its house to make the total number of committee members thirteen.
2. Each chamber shall designate one co-chair of the committee. The two chairs shall each appoint subcommittees in their respective chambers to conduct the review of each agency rule.
3. The appropriate subcommittees shall meet as a joint committee as the evaluation committee to review each agency rule assigned to such committee. There shall be an equal number of senators and representatives on the two subcommittees and committees when meeting as a joint evaluation committee for the review of any specific governmental entity.
4. Members of the evaluation committee shall serve until their successors are appointed in accordance with Section 6.a.1 so long as such members remain members of the general assembly. In the event a majority of the membership of any subcommittee comprising an evaluation committee shall cease to be members of the general assembly, the [speaker] of the chamber in which such vacancies occur shall designate members of that house to interim appointments until such time as the evaluation committee is reconstituted as provided in this section.
b. Objectives
1. The review of present programs and strategies of entities to determine the quality, efficiency, and success of such programs and strategies in implementation of legislative mandates; and
2. The continuation of successful and efficient rules that are beneficial to the citizens of the state and the repeal of any rule that would result in more efficient or effective service to the public.
c. Review of Rules
1. Before a rule can take effect, and after it has been submitted for notice and comment and revised by the agency based on the public input, the agency promulgating such rule shall submit or make available upon request to each [chamber] and the co-chairs of the Joint Committee a report containing—
i. a copy of the proposed final rule;
ii. a concise general statement relating to the rule and the Regulatory Impact Analysis as provided by Section 5.i;
iii. a copy of each written comment and a written summary of each oral comment on the rule; and
iv. the proposed effective date of the rule.
2. The Joint Committee shall have the power to subpoena agencies for any information related to the rule during the review period.
3. A proposed rule shall not take effect if the Joint Committee voids the proposed rule within [x days].
4. Any rule that takes effect and later is made of no force or effect by voiding shall be treated as though such rule had never been promulgated and had never taken effect.
5. If the [legislature] does not enact a joint resolution of disapproval under Section 6.d respecting a rule, no court or agency may infer any intent of the [the legislature] from any action or inaction of the [the legislature] with regard to such rule, related statute, or joint resolution of disapproval.
6. Grounds to Void a Rule. The Joint Committee may void a rule only for the following reasons:
i. An absence of statutory authority;
ii. An emergency relating to public health, safety, or welfare;
iii. A failure to comply with express legislative intent or to substantially meet the procedural requirements of this chapter for adoption of the rule;
iv. A conflict with state law;
v. Arbitrariness and capriciousness; or
vi. A failure to make a written record of its consideration of written and oral submission.
d. Procedure to Void Rule
1. For purposes of this section, the term “void” means only a joint resolution introduced in the period beginning on the date on which the report referred to in Section 6.c.1 is received by [the legislature] and ending 90 days thereafter (excluding days either chamber is adjourned for more than 3 days during a session), the matter after the resolving clause of which is as follows: “That [the legislature] disapproves the rule submitted by the relating to , and such rule shall have no force or effect.” (The blank spaces being appropriately filled in).
i. If the Joint Committee chooses to void a proposed rule, it may provide an explanation for its voiding. But the Joint Committee’s authority shall not extend to revising or otherwise changing the proposed rule.
2. For purposes of this section, the term “submission date” means the date on which [the legislature] receives the report submitted under Section 6.c.1.
3. If the Joint Committee has not reported such voiding at the end of 20 calendar days after the submission date, such committee may be discharged from further consideration of such joint resolution upon a petition supported in writing by [x members] of the Joint Committee, and such joint resolution shall be placed on the calendar.
4. If a majority of the joint committee votes to void the rule, then each chamber shall submit a resolution to void the rule.
i. The Joint Committee shall have the authority to set its own internal rules of voting and submitting resolutions.
e. Joint Committee Report. On an [annual] basis, the Joint Committee must make publicly available a report on their activities. The Joint Committee shall identify the rules it reviewed and the rules it voided.
Section 7 {Prohibited Agency Action}
a. Notwithstanding any statutory provision enacted into law before [date of enactment of APA], agency authority to discharge its statutory obligations shall not extend to the following practices:
1. Enforcement Without Notice. Agencies may not take any enforcement action without first providing the regulated party 60 days’ notice except in situations for which there is a serious risk of imminent harm.
2. Civil Investigative Demands. In the absence of probable cause, no agency shall have the authority to—before the institution of any proceedings it is otherwise authorized to conduct—issue in writing, and cause to be served upon such person, a demand requiring such person to produce such documentary material for inspection and copying or reproduction, to submit such tangible things, to file written reports or answers to questions, to give oral testimony concerning documentary material or other information, or to furnish any combination of such material, answers, or testimony. Any such demand and any such claim of probable cause may be challenged in a court of appropriate jurisdiction.
3. Enforcement Without Considering Relevant Factors. Agencies may not enforce against parties without considering factors of fairness, equity and proportionality, including, but not limited to:
i. The potential consequences to a party’s employees, investors, pensioners, and customers, many of whom may, depending on the size and nature of the party and their role in its operations, have played no role in the alleged violation(s), have been unaware of it, or have not been in a position to prevent it; and
ii. If the enforcement is for a criminal matter, non-penal sanctions that may accompany a criminal charge, such as potential suspension or debarment from eligibility for government contracts or federally funded programs, including health care programs.
4. Enforcement for Regulatory Violations. Agencies shall not have any authority to initiate any new enforcement for violations of rules that do not meet the culpability requirements provided by Section 4.c–d.
5. Issuance of Final Rules Beyond Scope of Proposed Rule. Agencies may not promulgate final rules that differ so much from their proposed version that:
i. The final rule presents the first opportunity for public comment on the rule;
ii. The final rule uses means that are too broad to justify the specific intent of the proposed rule;
iii. The final rule reflects a previously unexpressed intention of the agency;
iv. Changes to language purported to clarify the rule actually change the meaning, scope, or effect of the rule; or
v. The changes between the proposed and final rule are so substantial that the new rule is inequitable to regulated parties, the commenting public, and those who did not comment.
Section 8 {Agency Adjudications}
a. Agency adjudications shall be conducted by administrative law judges employed by the State Office of Administrative Hearings.
1. An administrative law judge who conducts an adjudication shall consider applicable agency rules or policies in conducting the hearing, but the state agency deciding the case may not supervise the administrative law judge.
2. A state agency shall provide the administrative law judge with a written statement of applicable rules or policies.
3. A state agency may not attempt to influence the finding of facts or the administrative law judge’s application of the law in a contested case except by proper evidence and legal argument.
b. [Adjudication Procedure]
Section 9 {Judicial Review}
a. Right of Review: A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of [the state] seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against [the state] or that [the state] is an indispensable party. [The state] may be named as a defendant in any such action, and a judgment or decree may be entered against the [the state]: Provided, that any mandatory or injunctive decree shall specify the state officer or officers (by name or by title), and their successors in office, personally responsible for compliance. Nothing herein
1. affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or
2. confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.
b. Forum and Venue of Proceeding. The [appellate court of appropriate jurisdiction] shall have exclusive jurisdiction over appeals from final agency action.
c. Timing of Appeals. If not otherwise provided by statute, appeals of final agency action shall take place within [x days].
d. Actions Reviewable: All final agency actions are subject to review, while other preliminary or intermediate agency actions made reviewable by statute are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. A non-exhaustive list of agency actions for which a person can seek judicial as of right review includes:
1. Any adjudication
i. against the person seeking judicial review; or
ii. directly affecting the personal, property, or business interests of the person seeking judicial review;
2. Any guidance document;
3. Any rule; and
4. Any civil investigative demand and claim of probable cause.
e. Relief Pending Review:
1. When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review.
2. On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.
f. Scope of Review:
1. An action to review a final administrative decision shall be heard and determined with convenient speed.
2. The court’s review is limited to the record generated by agency proceedings, which includes only:
i. each pleading, motion, and intermediate ruling;
ii. evidence received or considered, including testimony provided at the hearing required by Section 5.e;
iii. a statement of matters officially noticed, except matters so obvious that statement of them would serve no useful purpose;
iv. questions and offers of proof, objections, and rulings on them;
v. proposed findings and exceptions;
vi. each decision, opinion, or report by the officer presiding at the hearing; and
vii. all staff memoranda or data submitted to or considered by the hearing officer or members of the agency who are involved in making the decision.
g. Standard of Review
1. For review of agency action under Section 9, the review shall be de novo if de novo review is demanded in the notice of appeal or motion of an appellee other than the agency.
2. The record in the [court of appropriate jurisdiction] shall consist of the record of the administrative proceeding as provided by Section 9.f.2.
3. After reviewing the record, the court may affirm, reverse, modify or vacate and remand the agency action. The court shall affirm the agency action unless the court concludes that the agency’s action is contrary to law, is not supported by substantial evidence in the record, is arbitrary and capricious, or is an abuse of discretion. In a proceeding brought by or against the regulated party, the court shall decide all questions of law, including the interpretation of a constitutional or statutory provision or a rule adopted by an agency, without deference to any previous determination that may have been made on the question by the agency. Notwithstanding any other law, this subsection applies in any action for judicial review of any agency action that is authorized by law.
4. If the reviewing court determines that the rule or statute is ambiguous, it must construe the rule or statute in favor of the person subject to agency action and against the agency.
Section 10 {Defenses to Agency Action}
The following defenses are applicable to all agency action:
a. Notice. Agencies may not enforce for violation of a rule that a reasonable person in that person’s position would not be aware of.
b. Rule of Lenity. Agencies may not enforce an ambiguous statute or rule against any person. A party to an adjudication may raise ambiguity as a defense. There is an independent duty on the administrative law judge to determine whether any rule is ambiguous.
c. Safe Harbor for Compliance with Guidance Documents. Parties that comply with guidance documents issued by an agency must not be have enforcement proceedings brought against them for violation of the rule for which the guidance was issued. This defense shall not be construed by any court to stand for the proposition that failure to comply with guidance documents is any evidence of failure to comply with rules
Section 11 {Establishing State Office of Administrative Hearings}
a. Establishment and Duties of the State Office of Administrative Hearings.
1. Generally
i. There is established a State Office of Administrative Hearings, for purposes of Section 11, the “Office.”
ii. The Office is created to serve as an independent forum for adjudications in the executive branch of state government. The purpose of the Office is to separate the adjudicative function from the investigative, prosecutorial, and policymaking functions in the executive branch in relation to hearings that the Office is authorized to conduct.
iii. The Office:
1. shall conduct all administrative hearings in adjudications that are before a state agency;
2. shall conduct administrative hearings in matters for which the Office is required to conduct the hearing under other law; and
3. shall conduct alternative dispute resolution procedures that the Office is required to conduct under law.
2. Administrative Law Judges
i. Chief Administrative Law Judges
1. Chief Administrative Law Judge
a. The Office is under the direction of a chief administrative law judge appointed by the governor and confirmed by the [senate] for a [two-year term] that expires on [May 15] of each [even-numbered year]. The chief administrative law judge is eligible for reappointment.
b. To be eligible for appointment as chief administrative law judge, an individual must:
i. be licensed to practice law in this state; and
ii. for at least five years, have:
1. practiced administrative law;
2. conducted administrative hearings; or
3. engaged in a combination of the two activities in Section 11.a.1.i.b.ii.1–2.
c. The chief administrative law judge serves in a full-time position. The chief administrative law judge may not engage in the practice of law while serving as chief administrative law judge.
d. The chief administrative law judge shall:
i. supervise the Office;
ii. protect and ensure the decisional independence of each administrative law judge;
iii. adopt a code of conduct for administrative law judges that may be modeled on the Code of Judicial Conduct; and
iv. monitor the quality of administrative hearings conducted by the Office.
ii. Removal of Chief Administrative Law Judge. It is a ground for removal from the position of chief administrative law judge that an appointee:
1. does not have at the time of taking Office the qualifications as provided by Section 11.a.1.i.b;
2. does not maintain during service as chief administrative law judge a license to practice law in this state;
3. is ineligible to hold the position;
4. cannot, because of illness or disability, discharge the appointee’s duties for a substantial part of the appointee’s term; or
5. engages in the practice of law in violation of Section 11.a.1.i.c.
iii. Appointment of Administrative Law Judges
1. Employment of Administrative Law Judges.
a. The chief administrative law judge shall employ administrative law judges to conduct hearings for state agencies subject to this chapter.
b. To be eligible for employment with the Office as an administrative law judge, an individual must be licensed to practice law in this state and meet other requirements prescribed by the chief administrative law judge.
c. An administrative law judge employed by the Office is not responsible to or subject to the supervision, direction, or indirect influence of any person other than the chief administrative law judge or a senior or master administrative law judge designated by the chief administrative law judge. In particular, an administrative law judge employed by the Office is not responsible to or subject to the supervision, direction, or indirect influence of an officer, employee, or agent of another state agency who performs investigative, prosecutorial, or advisory functions for the other agency
Section 12 {Procedure for Administrative Review of Rules}
a. The duties in Section 12 shall be assigned to [state agency].
b. Centralized Review of Rules. These rules shall apply to all regulatory actions, for both new and existing rules, by all agencies.
i. Additional Agency Responsibilities.
1. In addition to adhering to its own rules and procedures and to the requirements of the Administrative Procedure Act and other applicable law, each agency shall develop its regulatory actions in a timely fashion and adhere to the following procedures with respect to a regulatory action:
a. Each agency shall provide the [state agency], at such times and in the manner specified by the [head of state agency], with a list of its planned regulatory actions.
b. For each regulatory action, the issuing agency shall provide to the [state agency]:
i. The text of the draft regulatory action; and
ii. The regulatory impact analysis as provided by Section 5.i.
c. In emergency situations or when an agency is obligated by law to act more quickly than normal review procedures allow, the agency shall notify the [state agency] as soon as possible and, to the extent practicable, comply with Section 12.b.i.1. For those regulatory actions that are governed by a statutory or court-imposed deadline, the agency shall, to the extent practicable, schedule rulemaking proceedings so as to permit sufficient time for the [state agency]to conduct its review.
ii. [State Agency] Responsibilities. The [head of state agency] shall provide meaningful guidance and oversight so that each agency’s regulatory actions are consistent with applicable law and the Governor’s priorities, and do not conflict with the policies or actions of another agency. The [state agency] shall, to the extent permitted by law, adhere to the following:
1. The [state agency] shall waive review or notify the agency in writing of the results of its review within the following time periods:
a. For any notices of inquiry, advance notices of proposed rulemaking, or other preliminary regulatory actions prior to an Initial Notice of Proposed Rulemaking, within [10 working days] after the date of submission of the draft action to the [state agency];
b. For all other regulatory actions, within [90 calendar days] after the date of submission of the information set forth Section 12.b.i.1.b, unless the [state agency] has previously reviewed this information and, since that review, there has been no material change in the facts and circumstances upon which the regulatory action is based, in which case, the [state agency] shall complete its review within [45 days]; and
c. The review process may be extended
i. once by no more than 30 calendar days upon the written approval of the Administrator and
ii. at the request of the agency head.
2. For each regulatory action that the [head of state agency] returns to an agency for further consideration of some or all of its provisions, the [head of state agency] shall provide the issuing agency a written explanation for such return, setting forth the pertinent provision of law on which the [head of state agency] relies.
3. The [state agency] shall maintain a publicly available log that shall contain, at a minimum, the following information pertinent to regulatory actions under review:
a. The status of all regulatory actions;
b. A notation of all written communications forwarded to an issuing agency; and
c. The dates and names of individuals involved in all substantive oral communications, including meetings and telephone conversations, between the [state agency] personnel and any person not employed by the executive branch, and the subject matter discussed during such communications.
d. After the regulatory action has been issued to the public, or after the agency has announced its decision not to publish or issue the regulatory action, the [state agency] shall make available to the public all documents exchanged between the [state agency] and the agency during the review by the [state agency] under this section.
e. All information provided to the public by the [state agency] shall be in plain, understandable language.
iii. Agency Authority. Nothing in this section shall be construed as displacing the agencies’ authority or responsibilities, as authorized by law.
iv. Judicial Review. Nothing in this section shall affect an otherwise available judicial review of agency action. This section does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the [state], its agencies or instrumentalities, its officers or employees, or any other person.
Drafting Notes
1. The state agency (identified as “[state agency]”) that is granted the responsibilities outlined in Section 12 {Procedure for Administrative Review of Rules}, should ideally be a state agency that a) already exists and b) is able to carry out the functions identified in Section 12. State agencies that could serve as a model include Indiana’s State Budget Agency and Arizona’s Governor’s Regulatory Review Council. Should no suitable agencies exist, the State Office of Administrative Hearings may be an appropriate place to house these responsibilities with some small structural changes.
2. As provided by the definition of “rule” in Section 2, agencies have the authority to repeal old rules and must comply with the rulemaking procedures to do so.
3. The model includes two procedures for the Joint Committee to void proposed rules in Section 6. The default procedure Section 6.d is modeled after the Congressional Review Act and is designed to meet the federal constitutional requirements of bicameralism. As a result, the default procedure requires the entire legislature to approve a joint resolution to void a proposed rule. The alternate procedure Section 6.f allows the Joint Committee to void proposed rules by a simple majority vote within the Joint Committee itself.
a. [Alternative Veto Procedure]
i. For purposes of this section, the term “void” means only a majority vote by the Joint Committee made in the period beginning on the date on which the report referred to in Section 6.c.1 is received by [the legislature] and ending 90 days thereafter (excluding days either chamber is adjourned for more than 3 days during a session), the matter after the resolving clause of which is as follows: “That [the Joint Committee] disapproves the rule submitted by the relating to , and such rule shall have no force or effect.” (The blank spaces being appropriately filled in).
1. If the Joint Committee chooses to void a proposed rule, it may provide an explanation for its voiding. But the Joint Committee’s authority shall not extend to revising or otherwise changing the proposed rule.
ii. For purposes of this section, the term “submission date” means the date on which [the legislature] receives the report submitted under Section 6.c.1.
iii. If the Joint Committee has not reported such voiding at the end of 20 calendar days after the submission date, the Joint Committee may be discharged from further consideration upon a petition supported in writing by [x members] of the Joint Committee.
iv. The Joint Committee shall have the authority to set its own internal rules of voting
