LRBs0060/2
MED:ahe
2017 - 2018 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO ASSEMBLY BILL 42
April 26, 2017 - Offered by Representative Neylon.
AB42-ASA1,1,10
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.), 227.19 (5) (d), 227.19 (5) (dm),
6227.19 (5) (em), 227.19 (5) (f) (title), 227.19 (5) (fm), 227.19 (6) (b), 227.24 (1) (a),
7227.24 (1) (e) 1d. and 227.24 (4); and
to create 35.93 (2) (b) 3. bm., 227.136,
8227.137 (3) (b) 1. and 2., 227.137 (4m), 227.139, 227.14 (2) (a) 3m., 227.17 (3)
9(eg) and 227.19 (5) (b) 3. of the statutes;
relating to: various changes regarding
10administrative rules and rule-making procedures.
Analysis by the Legislative Reference Bureau
This substitute amendment 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; 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; and
5) allows JCRAR to make an indefinite objection to a proposed rule to prevent the
agency from promulgating the 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 substitute amendment
The substitute amendment 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 substitute amendment requires scope statements for proposed rules to be
submitted to DOA instead of to the governor. Following the submission, the
substitute amendment requires DOA to make a determination as to whether the
agency has the explicit 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 substitute amendment 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 substitute amendment is in addition to the public hearing required under
current law for certain rules.
Passage of bill required for certain rules
The substitute amendment 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.
The substitute amendment exempts from these provisions certain proposed
rules of the Department of Natural Resources relating to air quality that are
necessary to comply with an explicit call for a state implementation plan by the
federal Environmental Protection Agency under the federal Clean Air Act.
Independent economic impact analyses
The substitute amendment 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 for 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 the governor for final approval until the agency receives the
completed independent economic impact analysis. The substitute amendment
specifies circumstances under which either the agency or the legislature must pay
the costs of the independent economic impact analysis or, for certain independent
economic impact analyses, requires the Joint Committee on Finance to specify the
funding source for the costs.
In addition, the substitute amendment 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.
Indefinite objections to proposed rules
Under current law, when a proposed administrative rule is in final draft form
following its approval by the governor, the agency proposing the rule must submit
the rule for review by one standing committee in each house of the legislature. A
standing committee to which a rule is referred may take certain actions with respect
to the proposed rule, including objecting to the proposed rule. Following review by
the standing committees, the rule is then referred to JCRAR, which may also object
to the proposed rule, regardless of any standing committee objection. Subject to an
exception for certain rules promulgated by the Department of Safety and
Professional Services, if JCRAR objects to a proposed rule, JCRAR must introduce
bills to support the objection in each house of the legislature. The objection, however,
is temporary in that unless one of those bills is enacted, the agency may promulgate
the proposed rule or part of the proposed rule that was objected to. A temporary
objection may be made only for one of several specified reasons.
Under the exception, however, an objection to a DSPS rule that would increase
the cost of home construction or remodeling by more than $1,000 is indefinite in that
if JCRAR objects to the proposed rule, DSPS may not promulgate the proposed rule
unless a bill that authorizes its promulgation is enacted. Such a bill may be
introduced by any member of the legislature.
This substitute amendment expands the exception described above so that
JCRAR may make an indefinite objection to any proposed rule, thereby requiring the
enactment of a bill in order for the proposed rule to be promulgated. The substitute
amendment allows an indefinite objection to be made for any of the reasons specified
for temporary objections. Under the substitute amendment, therefore, JCRAR may
make either a temporary or an indefinite objection to a proposed rule and must, when
making an objection to a proposed rule, specify which type of objection it is making.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB42-ASA1,1
1Section
1. 35.93 (2) (b) 3. bm. of the statutes is created to read:
AB42-ASA1,5,32
35.93
(2) (b) 3. bm. Notices of preliminary public hearings and comment periods
3under s. 227.136.
AB42-ASA1,2
4Section
2. 227.12 (4) of the statutes is amended to read:
AB42-ASA1,6,25
227.12
(4) If a petition to the department of revenue establishes that the
6department has established a standard by which it is construing a state tax statute,
7but has not promulgated a rule to adopt the standard or published the standard in
8a manner that is available to the public, the department shall, as provided under s.
9227.135, submit a statement of the scope of the proposed rule to the
governor 10department of administration no later than 90 days after receiving the petition. No
11later than 270 days after the statement is approved by the governor, the department
12shall submit the proposed rule in final draft form to the governor for the governor's
13approval, as provided under s. 227.185. At the department's request, the governor
14or the department of administration may, at any time prior to the expiration of any
15deadline specified in this subsection, extend the time for submitting the statement
16or proposed rule in draft form for any period not to exceed 60 days. The governor
or
17the department of administration may grant more than one extension under this
18subsection, but the total period for all such extensions may not exceed 120 days. The
19rule need not adhere to the standard established by the department, but shall
20address the same circumstances as the standard addresses. If the department fails
21to comply with this subsection, any of the petitioners may commence an action in
22circuit court to compel the department's compliance. If an action is commenced
23under this subsection, the court may compel the department to provide information
24to the court related to the degree to which the department is enforcing the standard,
1except that the information provided by the department shall not disclose the
2identity of any person who is not a party to the action.
AB42-ASA1,3
3Section
3. 227.135 (2) of the statutes is amended to read:
AB42-ASA1,6,234
227.135
(2) An agency that has prepared a statement of the scope of the
5proposed rule shall present the statement to the
governor and to the individual or
6body with policy-making powers over the subject matter of the proposed rule for
7approval department of administration, which shall make a determination as to
8whether the agency has the explicit authority to promulgate the rule as proposed in
9the statement of scope and shall report the statement of scope and its determination
10to the governor who, in his or her discretion, may approve or reject the statement of
11scope. The agency may not send the statement to the legislative reference bureau
12for publication under sub. (3) until the governor issues a written notice of approval
13of the statement.
The agency shall also present the statement to the individual or
14body with policy-making powers over the subject matter of the proposed rule for
15approval. The individual or body with policy-making powers may not approve the
16statement until at least 10 days after publication of the statement under sub. (3)
and,
17if a preliminary public hearing and comment period are held by the agency under s.
18227.136, until the individual or body has received and reviewed any public comments
19and feedback received from the agency under s. 227.136 (5). No state employee or
20official may perform any activity in connection with the drafting of a proposed rule
, 21except for an activity necessary to prepare the statement of the scope of the proposed
22rule until the governor and the individual or body with policy-making powers over
23the subject matter of the proposed rule approve the statement.
AB42-ASA1,4
24Section
4. 227.135 (3) of the statutes is amended to read:
AB42-ASA1,7,13
1227.135
(3) If the governor approves a statement of the scope of a proposed rule
2under sub. (2), the agency shall send an electronic copy of the statement to the
3legislative reference bureau, in a format approved by the legislative reference
4bureau, for publication in the register. On the same day that the agency sends the
5statement to the legislative reference bureau, the agency shall send a copy of the
6statement to the secretary of administration
and to the chief clerks of each house of
7the legislature, who shall distribute the statement to the cochairpersons of the joint
8committee for review of administrative rules. The agency shall include with any
9statement of scope sent to the legislative reference bureau the date of the governor's
10approval of the statement of scope. The legislative reference bureau shall assign a
11discrete identifying number to each statement of scope and shall include that
12number and the date of the governor's approval in the publication of the statement
13of scope in the register.
AB42-ASA1,5
14Section
5. 227.136 of the statutes is created to read:
AB42-ASA1,7,20
15227.136 Preliminary public hearing and comment period. (1) Within
1610 days after publication of a statement of the scope of a proposed rule under s.
17227.135 (3), either cochairperson of the joint committee for the review of
18administrative rules may submit a written directive to the agency that prepared the
19statement for the agency to hold a preliminary public hearing and comment period
20on the statement of scope as provided in this section.
AB42-ASA1,8,5
21(2) If the agency is directed to hold a preliminary public hearing and comment
22period on a statement of scope as provided in sub. (1) or if the agency otherwise opts
23to do so on its own initiative, the agency shall submit to the legislative reference
24bureau, in a format approved by the legislative reference bureau, a notice of a
25preliminary public hearing and comment period to allow for public comment and
1feedback on the statement of scope. The agency may also take any other action it
2considers necessary to provide notice of the preliminary public hearing and comment
3period to other interested persons. The notice shall be approved by the individual
4or body with policy-making powers over the subject matter of the proposed rule and
5shall include all of the following:
AB42-ASA1,8,66
(a) A statement of the date, time, and place of the preliminary public hearing.
AB42-ASA1,8,87
(b) The place where comments on the statement of scope should be submitted
8and the deadline for submitting those comments.
AB42-ASA1,8,11
9(3) The agency shall hold the preliminary public hearing and comment period
10in accordance with the notice required under sub. (2), but may not hold the hearing
11sooner than the 3rd day after publication of the notice in the register.
AB42-ASA1,8,13
12(4) The agency shall conduct a hearing under this section in accordance with
13s. 227.18.
AB42-ASA1,8,17
14(5) The agency shall report all public comments and feedback on the statement
15of scope of the proposed rule that the agency receives at the preliminary public
16hearing and comment period to the individual or body with policy-making powers
17over the subject matter of the proposed rule.
AB42-ASA1,8,20
18(6) Failure of any person to receive notice of a preliminary public hearing as
19provided in this section is not grounds for invalidating any resulting rule if notice of
20the hearing was published in the register in accordance with s. 35.93 (2) (b) 3. bm.
AB42-ASA1,6
21Section 6
. 227.137 (3) (intro.) and (a) of the statutes are amended to read: