SB745: Bill Text

LRB-5307/1

MED:ahe

2017 - 2018 LEGISLATURE

2017 Senate BILL 745

January 29, 2018 - Introduced by Senators Craig and Stroebel, cosponsored by Representatives Jacque, Sanfelippo, Brandtjen, Horlacher, Katsma, Neylon, Tittl, Wichgers, Hutton and R. Brooks. Referred to Committee on Labor and Regulatory Reform.

SB745,1,6 An Act to amend 227.01 (13) (intro.), subchapter II (title) of chapter 227 [precedes 227.10], 227.11 (title), 227.53 (1) (intro.) and 227.57 (11); and to create 35.93 (2) (b) 3. im., 227.01 (3m), 227.10 (2g), 227.11 (3) and 227.112 of the statutes; relating to: deference by courts to agency interpretations of law, notice and comment requirements for guidance documents issued by agencies, and agency rule-making authority.

Analysis by the Legislative Reference Bureau

This bill 1) prohibits a court from according deference to agency interpretations of law in certain proceedings and prohibits agencies from seeking deference in any proceeding to agency interpretations of law; 2) establishes various requirements with respect to the adoption and use of guidance documents by agencies, including requirements that agencies must comply with in order to adopt guidance documents; and 3) provides that settlement agreements do not confer rule-making authority.

Agency interpretations of law

Generally under current law, when reviewing an agency decision in a contested case or other matter subject to judicial review under the law governing administrative procedure for state agencies, a court must accord due weight to the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it. The bill limits this directive such that a court performing judicial review of such a decision must accord no deference to an agency's interpretation of law.

The bill also provides that no agency may seek deference in any proceeding based on the agency's interpretation of any law.

Guidance documents

Subject to various exceptions, the bill defines “guidance document" as any formal or official document or communication issued by an agency, including a manual, handbook, directive, or informational bulletin, that 1) explains the agency's implementation of a statute or rule enforced or administered by the agency, including the current or proposed operating procedure of the agency; or 2) provides guidance or advice with respect to how the agency is likely to apply any statute or rule enforced or administered by the agency, if that guidance or advice is likely to apply to a class of persons similarly affected.

The bill requires each agency, no less than 21 days before adopting a guidance document, to post the proposed guidance document on the agency's Internet site and submit it to the Legislative Reference Bureau for publication in the register and to provide a period for persons to submit written comments to the agency on the proposed guidance document. The agency must retain all written comments submitted during the public comment period and consider those comments in determining whether to adopt the guidance document as originally proposed, modify the proposed guidance document, or take any other action. The bill allows for a comment period of less than 21 days with the approval of the governor. The bill also requires each adopted guidance document, while valid, to remain available on the agency's Internet site and requires the agency to permit continuing public comment on the guidance document. Each guidance document must be signed by the head of the agency below a statement containing certain certifications.

The bill provides that a guidance document does not have the force of law and does not provide the authority for implementing or enforcing a standard, requirement, or threshold, including as a term or condition of any license. An agency that proposes to rely on a guidance document to the detriment of a person in any proceeding must afford the person an adequate opportunity to contest the legality or wisdom of a position taken in the guidance document, and an agency may not use a guidance document to foreclose consideration of any issue raised in the guidance document. The bill also contains other provisions with respect to agency use of and reliance upon guidance documents, and allows certain persons to petition an agency to promulgate a rule in place of a guidance document.

The bill also provides that any action or inaction by an agency related to the requirements of the bill regarding guidance documents constitutes a decision subject to judicial review under the law governing administrative procedure for state agencies.

The bill provides that on July 1, 2018, any guidance document that does not comply with the requirements in the bill is considered to be rescinded.

Agency rule-making authority; settlement agreements

The bill provides that a settlement agreement, consent decree, or court order does not confer rule-making authority and cannot be used by an agency as authority to promulgate rules. The bill provides that no agency may agree to promulgate a rule as a term in any settlement agreement, consent decree, or stipulated order of a court unless the agency has explicit statutory authority to promulgate the rule at the time the settlement agreement, consent decree, or stipulated order of a court is executed.

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:

SB745,1 Section 1. 35.93 (2) (b) 3. im. of the statutes is created to read:

SB745,3,3 35.93 (2) (b) 3. im. Notices of public comment periods on proposed guidance documents under s. 227.112 (1) (a).

SB745,2 Section 2. 227.01 (3m) of the statutes is created to read:

SB745,3,8 227.01 (3m) (a) “Guidance document" means, except as provided in par. (b), any formal or official document or communication issued by an agency, including a manual, handbook, directive, or informational bulletin, that does any of the following:

SB745,3,11 1. Explains the agency's implementation of a statute or rule enforced or administered by the agency, including the current or proposed operating procedure of the agency.

SB745,3,14 2. Provides guidance or advice with respect to how the agency is likely to apply a statute or rule enforced or administered by the agency, if that guidance or advice is likely to apply to a class of persons similarly affected.

SB745,3,15 (b) “Guidance document" does not include any of the following:

SB745,3,17 1. A rule that has been promulgated and that is currently in effect or a proposed rule that is in the process of being promulgated.

SB745,4,4 2. A standard adopted, or a statement of policy or interpretation made, whether preliminary or final, in the decision of a contested case, in a private letter ruling under s. 73.035, or in an agency decision upon or disposition of a particular matter as applied to a specific set of facts.

SB745,4,8 3. Any document or activity described in sub. (13) (a) to (zz), except that “guidance document" includes a pamphlet or other explanatory material described under sub. (13) (r) that otherwise satisfies the definition of “guidance document" under par. (a).

SB745,4,10 4. Any document that any statute specifically provides is not required to be promulgated as a rule.

SB745,4,11 5. A declaratory ruling issued under s. 227.41.

SB745,4,12 6. A pleading or brief filed in court by the state, an agency, or an agency official.

SB745,4,15 7. A letter or written legal advice of the department of justice or a formal or informal opinion of the attorney general, including an opinion issued under s. 165.015 (1).

SB745,4,17 8. Any document or communication for which a procedure for public input, other than that provided under s. 227.112 (1), is provided by law.

SB745,4,19 9. Any document or communication that is not subject to the right of inspection and copying under s. 19.35 (1).

SB745,3 Section 3. 227.01 (13) (intro.) of the statutes is amended to read:

SB745,5,3 227.01 (13) (intro.) “Rule" means a regulation, standard, statement of policy, or general order of general application which that has the effect force of law and which that is issued by an agency to implement, interpret, or make specific legislation enforced or administered by the agency or to govern the organization or procedure of the agency. “Rule" includes a modification of a rule under s. 227.265. “Rule" does not include, and s. 227.10 does not apply to, any action or inaction of an agency, whether it would otherwise meet the definition under this subsection, which that:

SB745,4 Section 4. Subchapter II (title) of chapter 227 [precedes 227.10] of the statutes is amended to read:

SB745,5,6 Chapter 227

SB745,5,7 Subchapter II

SB745,5,9 ADMINISTRATIVE RULES and GUIDANCE DOCUMENTS

SB745,5 Section 5. 227.10 (2g) of the statutes is created to read:

SB745,5,12 227.10 (2g) No agency may seek deference in any proceeding based on the agency's interpretation of any law.

SB745,6 Section 6. 227.11 (title) of the statutes is amended to read:

SB745,5,15 227.11 (title) Extent to which chapter confers Agency rule-making authority.

SB745,7 Section 7. 227.11 (3) of the statutes is created to read: