AB251,2,3 An Act to repeal 227.137 (6) and (7), 227.17 (3) (em), 227.19 (3) (h), 227.19 (3m), 227.24 (3m) (title) and 227.26 (2) (b) (title); to renumber 227.10 (2), 227.11 (2) (e) and 227.14 (2g) (a) and (b); to renumber and amend 16.28 (1), 227.14 (2g) (intro.), 227.16 (6), 227.185, 227.24 (2) (a), 227.24 (3m) and 227.26 (2) (b); to amend 13.56 (3), 73.16 (2) (b), 227.11 (title), 227.114 (6), 227.12 (4), 227.13, 227.135 (1) (intro.), 227.135 (2), 227.137 (3) (intro.), (a) and (b), 227.137 (4), 227.14 (2g) (title), 227.14 (2m), 227.14 (4m), 227.15 (1), 227.15 (1m) (intro.), 227.15 (1m) (bm), 227.15 (1m) (c), 227.15 (4), 227.16 (1), 227.16 (2) (d), 227.17 (1) (intro.), 227.17 (3) (f), 227.185 (title), 227.19 (2), 227.19 (3) (intro.), 227.19 (3) (c), 227.19 (3) (e) (intro.), 227.19 (5) (b) 1. (intro.), 227.22 (2) (e), 227.24 (1) (a), 227.24 (1) (e) 1d., 227.24 (1) (e) 1g., 227.24 (2) (am), 227.24 (3), 227.24 (4) and 227.26 (2) (k); and to create 16.28 (1) (b) to (e), 20.505 (1) (ks), 35.93 (2) (b) 3. bm., 35.93 (2) (b) 3. gr., 73.17, 227.10 (1m) (b), 227.136, 227.137 (3m), 227.137 (4m), 227.139, 227.14 (2) (a) 3m., 227.14 (2g) (c), 227.17 (3) (eg), 227.185 (2), 227.19 (5) (b) 3., 227.24 (1m) (intro.) and 227.24 (2) (a) 2. of the statutes; relating to: various changes regarding administrative rules and rule-making procedures; time limits for emergency rules; and making an appropriation.

Analysis by the Legislative Reference Bureau

Current law

Permanent rules

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. The agency must also submit a proposed rule that may have an economic impact on small businesses to the Small Business Regulatory Review Board (SBRRB), which must determine whether the proposed rule will have a significant economic impact on a substantial number of small businesses and may make certain other recommendations.

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 the economic impact analysis, plain-language analysis, and fiscal estimate for the proposed rule, are submitted to the legislature for review by one standing committee in each house and by the Joint Committee for Review of Administrative Rules (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.

Emergency rules

Under current law, an agency may promulgate a rule as an emergency rule without complying with the notice, hearing, and publication requirements for permanent 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. An agency must prepare, and obtain approval of, scope statements for emergency rules in the same manner as for permanent rules and must obtain final approval of emergency rules by the governor. In addition, an agency must submit a copy of an emergency rule it promulgates to the SBRRB, which must determine whether it will have a significant economic impact on a substantial number of small businesses and make certain other recommendations.

An emergency rule may only remain in effect for 150 days, except that, at the request of an agency, JCRAR may extend the effective period for an emergency rule for one or more periods of up to 60 days each, not to exceed a total of 120 additional days beyond the 150-day period.

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.