AB251: Bill Text

The bill

The bill makes various changes regarding the rule-making procedures established under current law. Significant changes regarding those procedures are described below.

Role of Office of Business Development and Small Business Regulatory Review Board; impacts on small businesses

The bill requires scope statements for proposed rules, and proposed rules in final draft form, to be submitted to OBD instead of to the governor. Following either submission, the bill requires the OBD 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 or proposed rule as under current law.

The bill also requires proposed rules that under current law must be submitted to the SBRRB to instead be submitted to the OBD. Following the submission, the OBD must make a determination as to whether the proposed rule may have an economic impact on small businesses, and if the OBD so determines, the OBD must submit the proposed rule to the SBRRB for an assessment of the extent of the economic impact.

The bill makes changes regarding the duties of the SBRRB, including requiring the SBRRB to determine whether a proposed rule will have any economic impact on small businesses. The bill requires any determination, notice, or report that the SBRRB is required to submit to an agency to be submitted within 45 days after receipt of the proposed rule from the OBD, except that the bill allows the SBRRB and the agency to extend that time by mutual agreement. The bill also makes other changes regarding the requirements for agencies to complete initial and final regulatory flexibility analyses for proposed rules.

Scope statements; preliminary public hearing and comment period on scope statements

Current law prohibits an agency head from approving a scope statement until at least ten days after publication of the scope statement in the register. The bill eliminates that prohibition.

The bill requires an agency, following approval of a scope statement by the governor, to submit to the LRB a notice of a preliminary public 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. The 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 do one of the following:

1. Submit a request for JCRAR to introduce a bill authorizing promulgation of the proposed rule, which JCRAR may introduce in its discretion. The agency may resume the rule-making procedure for the proposed rule upon enactment of such a bill.

2. Modify the proposed rule to address the implementation and compliance costs of the proposed rule. If a revised economic impact analysis, as approved by the secretary of revenue, prepared following the modification indicates 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.

3. Withdraw the proposed rule.

Independent economic impact analyses; duties of secretary of revenue

The bill allows the secretary of revenue, or his or her designee (secretary), or 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 the OBD for final approval, to request that an independent economic impact analysis be prepared for the proposed rule. If the secretary requests an independent economic impact analysis, the request must be submitted to the Department of Administration (DOA), which must then contract for the preparation of the independent economic impact analysis. If a cochairperson of JCRAR requests an independent economic impact analysis, 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 after contracting with DOA or the cochairperson 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 the OBD for final approval 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 DOA or JCRAR, whichever is applicable, for reimbursement of its actual and necessary costs of completing the analysis. DOA must assess the agency that is promulgating the proposed rule, in the case of a request by the secretary, for the costs of the independent economic impact analysis. In the case of a request by a cochairperson of JCRAR, 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 after JCRAR contracts for the analysis, and JCRAR's review period is extended to the 10th working day following receipt by JCRAR of the completed analysis.

The bill also requires the secretary to do all of the following:

1. Review and approve each initial economic impact analysis prepared by an agency, including by reviewing the economic data and analyses used by the agency in preparing the analysis. If the secretary determines that the agency's analysis does not accurately gauge the economic impact of a proposed rule, the secretary must recommend any modifications to the economic impact analysis that the secretary considers necessary and direct the agency to prepare a revised economic impact analysis for the proposed rule. An agency may not submit a proposed rule to the OBD for final approval unless the secretary has approved the agency's initial or revised economic impact analysis. The secretary may approve an economic impact analysis only upon determining that the economic impact analysis accurately gauges the economic impact of the proposed rule.

2. Provide training to agencies on appropriate data collection and methods of analysis for purposes of preparing economic impact analyses of proposed rules.

3. Attend JCRAR hearings and present testimony on proposed rules that he or she determines will have an economic impact on specific businesses, business sectors, public utility ratepayers, local governmental units, regulated individuals and entities, or the state's economy as a whole.

Approval of germane modifications to proposed rules

Current law permits an agency to make a germane modification to a proposed rule at certain points during the legislative review process. Under the bill, if an agency makes a germane modification to a proposed rule at any time during the legislative review process, the agency must also submit that modification to the governor for approval. The governor, in his or her discretion, may approve or reject the modification. If the governor does not approve the modification, the agency may not promulgate the proposed rule, except that the agency may resubmit the proposed rule to the legislature without the modification.

Statements of policy and interpretations

Under current law, if JCRAR determines that a statement of policy or an interpretation of a statute meets the definition of a rule, it may direct the agency to promulgate the statement or interpretation as an emergency rule within 30 days after JCRAR's action.

Under the bill:

1. The OBD has the same power as JCRAR to direct an agency to promulgate a statement of policy or interpretation of a statute as an emergency rule.

2. JCRAR or the OBD must, if requiring the agency to promulgate the statement or interpretation as an emergency rule, also require the agency to promulgate the statement or interpretation as a permanent rule, using the permanent rule-making procedure.

3. JCRAR or the OBD may, in addition to, or instead of, requiring the agency to promulgate the statement or interpretation as a permanent or emergency rule, prohibit the agency from implementing or enforcing the statement of policy or interpretation until the statement or interpretation is promulgated as a rule or until any such prohibition is rescinded.

Emergency rules

Finally, the bill modifies JCRAR's authority under current law to extend the effective period of an emergency rule so that JCRAR may grant only a single extension of up to 120 days and only before the last floorperiod of the biennial legislative session. The bill also permits JCRAR, within 30 days before the last floorperiod of the biennial legislative session, to extend the effective period of an emergency rule for a period not to extend beyond March 31 of the following year. JCRAR may, if applicable, grant both types of extensions for a particular emergency rule.

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:

AB251,1 Section 1. 13.56 (3) of the statutes is amended to read:

AB251,6,3 13.56 (3) Powers and duties. The committee has the powers and duties specified under ss. 227.10 (1m), 227.139, 227.19, 227.24, and 227.26.

AB251,2 Section 2. 16.28 (1) of the statutes is renumbered 16.28 (1) (intro.) and amended to read:

AB251,6,7 16.28 (1) (intro.) The office of business development shall provide do all of the following:

AB251,6,9 (a) Provide administrative support to the small business regulatory review board and shall perform.

AB251,6,10 (g) Perform other functions determined by the secretary.

AB251,3 Section 3. 16.28 (1) (b) to (e) of the statutes are created to read:

AB251,6,13 16.28 (1) (b) Consult with and provide assistance to agencies and the small business regulatory review board regarding the promulgation of rules.

AB251,7,2 (c) Receive statements of scope for proposed rules submitted by agencies and make determinations under s. 227.135 (2).

AB251,7,4 (d) Receive rules in final draft form submitted by agencies and make determinations under ss. 227.185 (1) and 227.24 (1m) (b).

AB251,7,6 (e) Review proposed rules for economic impacts on small businesses under ss. 227.14 (2g) and 227.24 (1m) (a).

AB251,4 Section 4. 20.505 (1) (ks) of the statutes is created to read:

AB251,7,10 20.505 (1) (ks) Independent economic analyses for administrative rules. All moneys received under s. 227.137 (4m) (b) 2. to reimburse persons for conducting independent economic impact analyses under s. 227.137 (4m) (b) 2.

AB251,5 Section 5. 35.93 (2) (b) 3. bm. of the statutes is created to read:

AB251,7,13 35.93 (2) (b) 3. bm. Notices of preliminary public hearings and comment periods under s. 227.136.

AB251,6 Section 6. 35.93 (2) (b) 3. gr. of the statutes is created to read:

AB251,7,16 35.93 (2) (b) 3. gr. Submissions of the small business regulatory review board under ss. 227.14 (2g) and 227.24 (1m) (a).

AB251,7 Section 7. 73.16 (2) (b) of the statutes is amended to read:

AB251,8,2 73.16 (2) (b) The department may retroactively apply any rule change that is related to implementing a legislative act or a final and conclusive decision of the tax appeals commission or the courts to take effect no earlier than the act's effective date or the date on which the decision became final and conclusive, unless otherwise prescribed by the legislature, tax appeals commission, or court, and only if the department submits the rule's scope statement to the governor for approval under s. 227.135 (2) no later than 18 months after the latter of the legislative act's publication date, effective date, or initial applicability date, or the date on which the decision becomes final and conclusive. A retroactive application of a rule change not described under this paragraph shall be subject to approval under s. 227.185 (1).

AB251,8 Section 8. 73.17 of the statutes is created to read:

AB251,8,5 73.17 Duties of secretary; rulemaking. (1) In this section, "agency" has the meaning given in s. 227.01 (1).

AB251,8,6 (2) The secretary of revenue shall do all of the following:

AB251,8,9 (a) Provide training to agencies on appropriate data collection and methods of analysis for purposes of preparing economic impact analyses of proposed rules under s. 227.137 (3).

AB251,8,14 (b) Attend hearings of the joint committee for review of administrative rules and present testimony on proposed rules that the secretary determines will have an economic impact on specific businesses, business sectors, public utility ratepayers, local governmental units, regulated individuals and entities, or the state's economy as a whole.

AB251,8,16 (c) Review and approve economic impact analyses as provided under s. 227.137 (3m).

AB251,8,18 (d) Request independent economic impact analyses under s. 227.137 (4m) when appropriate.

AB251,9 Section 9. 227.10 (1m) (b) of the statutes is created to read:

AB251,8,22 227.10 (1m) (b) Prohibit the agency from implementing or enforcing the statement of policy or interpretation until the statement or interpretation is promulgated as a rule or until any prohibition under this subsection is rescinded.

AB251,10 Section 10. 227.10 (2) of the statutes is renumbered 227.11 (1m).

AB251,11 Section 11. 227.11 (title) of the statutes is amended to read:

AB251,9,2 227.11 (title) Extent to which chapter confers Agency rule-making authority.

AB251,12 Section 12. 227.11 (2) (e) of the statutes is renumbered 227.22 (4).

AB251,13 Section 13. 227.114 (6) of the statutes is amended to read:

AB251,9,15 227.114 (6) When an agency, under s. 227.20 (1), files with the legislative reference bureau a rule that is subject to this section, the An agency shall include with the a rule filed with the legislative reference bureau under s. 227.20 (1) a summary of the any analysis prepared under s. 227.19 (3) (e) if required and a summary of the comments of the legislative standing committees, if any. If, under s. 227.19 (3m), the rule does not require the analysis under s. 227.19 (3) (e), the agency shall include with the rule a the small business regulatory review board's statement of the reason for the small business regulatory review board's its determination that the rule will not have a significant an economic impact on a substantial number of small businesses. The legislative reference bureau shall publish the any summaries or the statement in the register with the rule.

AB251,14 Section 14. 227.12 (4) of the statutes is amended to read:

AB251,9,25 227.12 (4) If a petition to the department of revenue establishes that the department has established a standard by which it is construing a state tax statute, but has not promulgated a rule to adopt the standard or published the standard in a manner that is available to the public, the department shall, as provided under s. 227.135, submit a statement of the scope of the proposed rule to the governor office of business development no later than 90 days after receiving the petition. No later than 270 days after the statement is approved by the governor, the department shall submit the proposed rule in final draft form to the office of business development for review by the office of business development and approval by the governor for the governor's approval, as provided under s. 227.185 (1). At the department's request, the governor office of business development may, at any time prior to the expiration of any deadline specified in this subsection, extend the time for submitting the statement or proposed rule in draft form for any period not to exceed 60 days. The governor may grant more than one extension under this subsection, but the total period for all such extensions may not exceed 120 days. The office may only grant one extension under this subsection. The rule need not adhere to the standard established by the department, but shall address the same circumstances as the standard addresses. If the department fails to comply with this subsection, any of the petitioners may commence an action in circuit court to compel the department's compliance. If an action is commenced under this subsection, the court may compel the department to provide information to the court related to the degree to which the department is enforcing the standard, except that the information provided by the department shall not disclose the identity of any person who is not a party to the action.

AB251,15 Section 15. 227.13 of the statutes is amended to read:

AB251,10,23 227.13 Advisory committees and informal consultations. An agency may shall, when possible, use informal conferences and consultations to obtain the viewpoint and advice of interested persons, the office of business development, or members of the small business regulatory review board with respect to contemplated rule making. An agency also may appoint a committee of experts, interested persons, or representatives of the public to advise it with respect to any contemplated rule making. The Such a committee shall have advisory powers only.

AB251,16 Section 16. 227.135 (1) (intro.) of the statutes is amended to read:

AB251,11,4 227.135 (1) (intro.) An agency shall prepare a statement of the scope of any rule that it plans to promulgate, which shall be approved by the individual or body with policy-making powers over the subject matter of the proposed rule. The statement shall include all of the following:

AB251,17 Section 17. 227.135 (2) of the statutes is amended to read:

AB251,11,23 227.135 (2) An agency that has prepared a statement of the scope of the proposed rule shall present the statement to the governor and to the individual or body with policy-making powers over the subject matter of the proposed rule for approval office of business development. The office of business development shall make a determination as to the agency's authority to promulgate the rule as proposed in the statement of scope and shall report the statement of scope and its determination to the governor who, in his or her discretion, may approve or reject the statement of scope. The agency may not send the statement to the legislative reference bureau for publication under sub. (3) until the governor issues a written notice of approval of the statement. The individual or body with policy-making powers may not approve the statement until at least 10 days after publication of the statement under sub. (3). No Except for an activity required to draft a corresponding emergency rule under s. 227.24, no state employee or official may perform any activity in connection with the drafting of a proposed rule except for an activity necessary to prepare the statement of the scope of the proposed rule until the governor and the individual or body with policy-making powers over the subject matter of the proposed rule approve approves the statement and the preliminary public hearing and comment period required under s. 227.136 are both concluded.

AB251,18 Section 18. 227.136 of the statutes is created to read:

AB251,12,10 227.136 Preliminary public hearing and comment period. (1) Following approval of a statement of scope by the governor under s. 227.135 (2), other than a revised statement of scope prepared under s. 227.135 (4), the agency shall submit to the legislative reference bureau, in a format approved by the legislative reference bureau, a notice of a preliminary public hearing and comment period to allow for public comment and feedback on the statement of scope. The agency may also take any other action it considers necessary to provide notice of the preliminary public hearing and comment period to other interested persons. The notice shall be approved by the individual or body with policy-making powers over the subject matter of the proposed rule and shall include all of the following:

AB251,12,11 (a) A statement of the date, time, and place of the preliminary public hearing.

AB251,12,13 (b) The place where comments on the statement of scope should be submitted and the deadline for submitting those comments

AB251,12,17 (2) The agency shall hold the preliminary public hearing and comment period in accordance with the notice required under sub. (1), but the agency may not hold the hearing sooner than the 3rd day after after publication of the notice in the register. The agency shall hold the hearing in accordance with s. 227.18.

AB251,12,20 (3) Failure of any person to receive notice of a preliminary public hearing as provided in this section is not grounds for invalidating any resulting rule if notice of the hearing was published in the register in accordance with s. 35.93 (2) (b) 3. bm.

AB251,19 Section 19. 227.137 (3) (intro.), (a) and (b) of the statutes are amended to read:

AB251,13,9 227.137 (3) (intro.) An economic impact analysis of a proposed rule shall contain information on the economic effect of the proposed rule on specific businesses, business sectors, public utility ratepayers, local governmental units, regulated individuals and entities, and the state's economy as a whole. When The agency or person preparing the analysis, the agency shall solicit information and advice from businesses, associations representing businesses, local governmental units, and individuals that may be affected by the proposed rule. The agency or person shall prepare the economic impact analysis in coordination with local governmental units that may be affected by the proposed rule. The agency or person may also request information that is reasonably necessary for the preparation of an economic impact analysis from other businesses, associations, local governmental units, and individuals and from other agencies. The economic impact analysis shall include all of the following:

AB251,13,16 (a) An analysis and quantification of the policy problem that the proposed rule is intending to address, including comparisons with the approaches used by the federal government and by Illinois, Iowa, Michigan, and Minnesota to address that policy problem and, if. If the approach chosen by the agency to address that policy problem is different from those approaches, an economic impact analysis prepared by an agency shall include a statement as to why the agency chose a different approach.

AB251,13,25 (b) An analysis and detailed quantification of the economic impact of the proposed rule, including the implementation and compliance costs that are reasonably expected to be incurred by or passed along to the businesses, local governmental units, and individuals that may be affected by the proposed rule, specifically including a determination, for purposes of the requirement under s. 227.139, as to whether $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 2-year period as a result of the proposed rule.

AB251,20 Section 20. 227.137 (3m) of the statutes is created to read:

AB251,14,20 227.137 (3m) The secretary of revenue shall review each agency's initial economic impact analysis prepared under sub. (2) and determine whether the data used by the agency in preparing the analysis are appropriate for determining the economic impact of the proposed rule and whether the analysis accurately gauges the economic impact of the proposed rule. If the secretary determines that the agency's analysis does not accurately gauge the economic impact of the proposed rule, the secretary shall recommend any modifications to the economic impact analysis that the secretary considers necessary and direct the agency to prepare a revised economic impact analysis as provided in sub. (4). An agency may not submit a proposed rule for approval under s. 227.185 unless the secretary of revenue has approved the agency's initial economic impact analysis or, if the agency prepares a revised economic impact analysis as required under this subsection, unless the secretary of revenue has approved the agency's revised economic impact analysis. The secretary of revenue shall similarly review and approve any revised economic impact analysis submitted under s. 227.139 (1) (b). The secretary of revenue may approve an economic impact analysis only upon determining that the economic impact analysis accurately gauges the economic impact of the proposed rule. The secretary of revenue shall, upon approving an economic impact analysis, submit a statement indicating that approval to the agency.