LRB-0042/1
MED:ahe
2017 - 2018 LEGISLATURE
January 31, 2017 - Introduced by Representatives Neylon, Jarchow, Brandtjen,
E. Brooks, R. Brooks, Duchow, Edming, Gannon, Jacque, Jagler, Katsma,
Kleefisch, Kooyenga, Kremer, Krug, Kulp, Murphy, Petersen, Quinn, Ripp,
Rodriguez, Schraa, Spiros, Summerfield, Swearingen, Thiesfeldt, Tittl,
Tranel, Tusler, Vorpagel, Weatherston, Wichgers, Hutton, Knodl,
Sanfelippo, Tauchen and Skowronski, cosponsored by Senators LeMahieu,
Darling, Kapenga, Lasee, Marklein, Nass, Stroebel, Tiffany and Vukmir.
Referred to Committee on State Affairs.
AB42,1,10 1An Act to repeal 227.137 (6) and (7) and 227.17 (3) (em); to renumber and
2amend
227.137 (3) (b) and 227.16 (6); to amend 227.12 (4), 227.135 (2),
3227.135 (3), 227.137 (3) (intro.) and (a), 227.14 (4m), 227.15 (1), 227.15 (1m)
4(bm), 227.16 (1), 227.17 (1) (intro.), 227.185, 227.19 (3) (intro.), 227.19 (3) (c),
5227.19 (4) (b) 1. (intro.), 227.19 (5) (b) 1. (intro.), 227.24 (1) (a), 227.24 (1) (e) 1d.
6and 227.24 (4); and to create 20.765 (1) (kt), 35.93 (2) (b) 3. bm., 227.136,
7227.137 (3) (b) 1. and 2., 227.137 (4m), 227.139, 227.14 (2) (a) 3m., 227.17 (3)
8(eg) and 227.19 (5) (b) 3. of the statutes; relating to: various changes regarding
9administrative rules and rule-making procedures and making an
10appropriation.
Analysis by the Legislative Reference Bureau
This bill 1) requires scope statements for proposed administrative rules to be
reviewed by the Department of Administration for a determination of an agency's
authority to promulgate a rule; 2) requires agencies to hold preliminary public
hearings and comment periods on scope statements for rules if directed to do so by
the Joint Committee for Review of Administrative Rules (JCRAR); 3) requires the

passage of a bill in order for an agency to promulgate a rule that would result in
implementation and compliance costs of $10 million over any two-year period,
subject to certain exceptions; and 4) allows either a cochairperson of JCRAR or
JCRAR as a whole, at certain steps in the rule-making process, to request the
preparation of an independent economic impact analysis for a proposed rule.
Current law
Current law sets forth the procedure for promulgating administrative rules.
Generally, that procedure consists of the following steps:
1. The agency planning to promulgate the rule prepares a statement of the
scope of the proposed rule (scope statement), which must be approved by the
governor and the agency head before any state employee or official may perform any
activity in connection with the drafting of the proposed rule.
2. The agency drafts the proposed rule, together with an economic impact
analysis, plain-language analysis, and fiscal estimate for the proposed rule, and
submits those materials to the Legislative Council Staff for review.
3. Subject to certain exceptions, the agency holds a public hearing on the
proposed rule.
4. The final draft of the proposed rule is submitted to the governor for approval
who, in his or her discretion, may approve or reject the proposed rule.
5. The final draft of the proposed rule, together with a report including certain
information, is submitted to the legislature for review by one standing committee in
each house and by JCRAR.
6. The proposed rule is filed with the Legislative Reference Bureau (LRB) for
publication in the Wisconsin Administrative Register (register), and, subject to
certain exceptions, the rule becomes effective on the first day of the first month
beginning after publication of the rule changes in the Wisconsin Administrative
Code.
An agency may also promulgate rules as emergency rules if preservation of the
public peace, health, safety, or welfare necessitates putting the rule into effect prior
to the time it would take effect if the agency complied with the requirements for
permanent rules. The emergency rules procedure varies from the procedure for
permanent rules in a number of ways and includes exemptions from some of the steps
required for permanent rules. Emergency rules may generally remain in effect for
up to 150 days, but may be extended for up to an additional 120 days by JCRAR.
The bill
The bill makes various changes regarding the rule-making procedures
established under current law. Significant changes regarding those procedures are
described below.
Submission statements of scope to DOA
The bill requires scope statements for proposed rules to be submitted to DOA
instead of to the governor. Following the submission, the bill requires DOA to make
a determination as to the agency's authority to promulgate the proposed rule and
report its determination to the governor, who may then approve or reject the
statement of scope as under current law.

Preliminary public hearings and comment periods on scope statements
The bill requires an agency, following approval of a scope statement by the
governor, to hold a preliminary public hearing and comment period on a scope
statement if directed to do so by a cochairperson of JCRAR. Following such a
directive, the agency must submit to the LRB a notice of the hearing and comment
period to allow for public comment and feedback on the scope statement. The agency
must hold the preliminary public hearing no sooner than the third day after
publication of the notice in the register and submit all comments and feedback
received to the agency head. A preliminary public hearing and comment period
under the bill is in addition to the public hearing required under current law for
certain rules.
Passage of bill required for certain rules
The bill provides that if an economic impact analysis, a revised economic impact
analysis, or an independent economic impact analysis for a proposed rule indicates
that $10 million or more in implementation and compliance costs are reasonably
expected to be incurred by or passed along to businesses, local governmental units,
and individuals over any two-year period as a result of the proposed rule, the agency
proposing the rule must stop work on the proposed rule and may not continue to
promulgate the rule except as follows:
1. The agency may resume the rule-making procedure for the proposed rule
upon enactment of a bill that authorizes its promulgation.
2. The agency may modify the proposed rule to address the implementation and
compliance costs of the proposed rule. If a revised economic impact analysis
prepared by an agency and any independent economic impact analysis prepared
following the modification all indicate that $10 million or more in implementation
and compliance costs are not reasonably expected to be incurred by or passed along
to businesses, local governmental units, and individuals over a two-year period as
a result of the proposed rule, the agency may then resume the rule-making
procedure for the proposed rule.
Independent economic impact analyses
The bill allows a cochairperson of JCRAR, after an agency submits a copy of an
economic impact analysis for a proposed rule to the legislature, but before the
proposed rule is submitted to DOA for review and final approval by the governor, to
request that an independent economic impact analysis be prepared for the proposed
rule. In that case, the cochairperson must contract for the preparation of the
independent economic impact analysis. The person preparing the independent
economic impact analysis must complete the independent economic impact analysis
within 60 days and must include most of the same information and analysis that is
required for an economic impact analysis prepared by an agency. If an independent
economic impact analysis is requested for a proposed rule, an agency may not submit
the proposed rule to DOA for final review until the agency receives the completed
independent economic impact analysis. Upon completion of an independent
economic impact analysis, the person preparing the analysis may submit a request
to JCRAR for reimbursement of its actual and necessary costs of completing the

analysis. The bill specifies circumstances under which either the agency or the
legislature must pay the costs of the independent economic impact analysis.
In addition, the bill allows JCRAR, when a proposed rule is before JCRAR for
final review, to request an independent economic impact analysis for the proposed
rule. If JCRAR requests an independent economic impact analysis at that time, the
analysis must similarly be completed within 60 days and JCRAR's review period is
extended to the tenth working day following receipt by JCRAR of the completed
analysis.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB42,1 1Section 1. 20.765 (1) (kt) of the statutes is created to read:
AB42,4,52 20.765 (1) (kt) Independent economic analyses for administrative rules. All
3moneys received from agencies under s. 227.137 (4m) (b) 2. a. to reimburse persons
4for conducting independent economic impact analyses under ss. 227.137 (4m) and
5227.19 (5) (b) 3.
AB42,2 6Section 2. 35.93 (2) (b) 3. bm. of the statutes is created to read:
AB42,4,87 35.93 (2) (b) 3. bm. Notices of preliminary public hearings and comment periods
8under s. 227.136.
AB42,3 9Section 3. 227.12 (4) of the statutes is amended to read:
AB42,5,1510 227.12 (4) If a petition to the department of revenue establishes that the
11department has established a standard by which it is construing a state tax statute,
12but has not promulgated a rule to adopt the standard or published the standard in
13a manner that is available to the public, the department shall, as provided under s.
14227.135, submit a statement of the scope of the proposed rule to the governor
15department of administration no later than 90 days after receiving the petition. No
16later than 270 days after the statement is approved by the governor, the department

1shall submit the proposed rule in final draft form to the governor for the governor's
2approval, as provided under s. 227.185. At the department's request, the governor
3or the department of administration may, at any time prior to the expiration of any
4deadline specified in this subsection, extend the time for submitting the statement
5or proposed rule in draft form for any period not to exceed 60 days. The governor or
6the department of administration
may grant more than one extension under this
7subsection, but the total period for all such extensions may not exceed 120 days. The
8rule need not adhere to the standard established by the department, but shall
9address the same circumstances as the standard addresses. If the department fails
10to comply with this subsection, any of the petitioners may commence an action in
11circuit court to compel the department's compliance. If an action is commenced
12under this subsection, the court may compel the department to provide information
13to the court related to the degree to which the department is enforcing the standard,
14except that the information provided by the department shall not disclose the
15identity of any person who is not a party to the action.
AB42,4 16Section 4. 227.135 (2) of the statutes is amended to read:
AB42,6,1217 227.135 (2) An agency that has prepared a statement of the scope of the
18proposed rule shall present the statement to the governor and to the individual or
19body with policy-making powers over the subject matter of the proposed rule for
20approval
department of administration, which shall make a determination as to the
21agency's authority to promulgate the rule as proposed in the statement of scope and
22shall report the statement of scope and its determination to the governor who, in his
23or her discretion, may approve or reject the statement of scope
. The agency may not
24send the statement to the legislative reference bureau for publication under sub. (3)
25until the governor issues a written notice of approval of the statement. The agency

1shall also present the statement to the individual or body with policy-making powers
2over the subject matter of the proposed rule for approval.
The individual or body with
3policy-making powers may not approve the statement until at least 10 days after
4publication of the statement under sub. (3) and, if a preliminary public hearing and
5comment period are held by the agency under s. 227.136, until the individual or body
6has received and reviewed any public comments and feedback received from the
7agency under s. 227.136 (5)
. No state employee or official may perform any activity
8in connection with the drafting of a proposed rule, except for an activity necessary
9to prepare the statement of the scope of the proposed rule or an activity necessary
10to draft a corresponding emergency rule under s. 227.24,
until the governor and the
11individual or body with policy-making powers over the subject matter of the
12proposed rule approve the statement.
AB42,5 13Section 5. 227.135 (3) of the statutes is amended to read:
AB42,7,214 227.135 (3) If the governor approves a statement of the scope of a proposed rule
15under sub. (2), the agency shall send an electronic copy of the statement to the
16legislative reference bureau, in a format approved by the legislative reference
17bureau, for publication in the register. On the same day that the agency sends the
18statement to the legislative reference bureau, the agency shall send a copy of the
19statement to the secretary of administration and to the chief clerks of each house of
20the legislature, who shall distribute the statement to the cochairpersons of the joint
21committee for review of administrative rules
. The agency shall include with any
22statement of scope sent to the legislative reference bureau the date of the governor's
23approval of the statement of scope. The legislative reference bureau shall assign a
24discrete identifying number to each statement of scope and shall include that

1number and the date of the governor's approval in the publication of the statement
2of scope in the register.
AB42,6 3Section 6. 227.136 of the statutes is created to read:
AB42,7,9 4227.136 Preliminary public hearing and comment period. (1) Within
510 days after publication of a statement of the scope of a proposed rule under s.
6227.135 (3), either cochairperson of the joint committee for the review of
7administrative rules may submit a written directive to the agency that prepared the
8statement for the agency to hold a preliminary public hearing and comment period
9on the statement of scope as provided in this section.
AB42,7,19 10(2) If the agency is directed to hold a preliminary public hearing and comment
11period on a statement of scope as provided in sub. (1) or if the agency otherwise opts
12to do so on its own initiative, the agency shall submit to the legislative reference
13bureau, in a format approved by the legislative reference bureau, a notice of a
14preliminary public hearing and comment period to allow for public comment and
15feedback on the statement of scope. The agency may also take any other action it
16considers necessary to provide notice of the preliminary public hearing and comment
17period to other interested persons. The notice shall be approved by the individual
18or body with policy-making powers over the subject matter of the proposed rule and
19shall include all of the following:
AB42,7,2020 (a) A statement of the date, time, and place of the preliminary public hearing.
AB42,7,2221 (b) The place where comments on the statement of scope should be submitted
22and the deadline for submitting those comments.
AB42,7,25 23(3) The agency shall hold the preliminary public hearing and comment period
24in accordance with the notice required under sub. (2), but may not hold the hearing
25sooner than the 3rd day after publication of the notice in the register.
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