House Bill No. 41

Introduced By cobb

A Bill for an Act entitled: "An Act providing mechanisms to increase the awareness of the contents, costs, and effects of, and possible problems with, administrative rules; amending sections 2-4-302, 2-4-314, 2-4-405, and 5-18-107, MCA; and providing an effective date."

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 2-4-302, MCA, is amended to read:

"2-4-302.   Notice, hearing, and submission of views. (1) Prior to the adoption, amendment, or repeal of any rule, the agency shall give written notice of its intended action. The notice shall must include a statement of either the terms or substance of the intended action or a description of the subjects and issues involved, the rationale for the intended action, and the time when, place where, and manner in which interested persons may present their views thereon on the proposal. If the agency proposes to adopt, increase, or decrease a monetary amount that persons shall pay or will receive, such as fees, costs, or benefits, the notice must include an estimate, IF KNOWN, of:

(a) the cumulative amount for all persons of the proposed amount, increase, or decrease; AND

(b) the number of persons affected; and

(c) the amount of time and money that it will cost a person to comply with rule requirements for payment or receipt of the fees, costs, or benefits.

(2)  (a) The notice shall must be filed with the secretary of state for publication in the register, as provided in 2-4-312, and mailed within 3 days of publication  to persons who have made timely requests to the agency for notice of its rulemaking proceedings and to the office of any professional, trade, or industrial society or organization or member thereof which of the society or organization that has filed a request with the administrative code committee when such the request has been forwarded to the agency as provided in subsection (2)(b).

(b)  The administrative code committee shall forward a list of all organizations or persons who have submitted a request to be informed of agency actions to all agencies publishing rulemaking notices in the Montana Administrative Register register. The list must be amended by the agency upon request of any person requesting to be added to or deleted from the list.

(c)  The notice shall must be published and mailed at least 30 days in advance of the agency's intended action.

(3)  If any statute provides for a different method of publication, the affected agency shall comply with the statute in addition to the requirements contained herein in this section. However, in no case may the notice period may not be less than 30 days or more than 6 months.

(4)  Prior to the adoption, amendment, or repeal of any a rule, the agency shall afford interested persons at least 20 days' notice of a hearing and 28 days from the day of notice to submit data, views, or arguments, orally or in writing. In the case of substantive rules, the notice of proposed rulemaking must state that opportunity for oral hearing shall will be granted if requested by either 10% or 25, whichever is less, of the persons who will be directly affected by the proposed rule, by a governmental subdivision or agency, by the administrative code committee, or by an association having not less than 25 members who will be directly affected.

(5)  An agency may continue a hearing date for cause. In the discretion of the agency, contested case procedures need not be followed in hearings held pursuant to this section. If a hearing is otherwise required by statute, nothing herein in this section alters that requirement.

(6)  If an agency fails to publish a notice of adoption within the time required by 2-4-305(7) and the agency again proposes the same rule for adoption, amendment, or repeal, the proposal must be considered a new proposal for purposes of compliance with this chapter.

(7)  At the commencement of any hearing on the intended action, the person designated by the agency to preside at the hearing shall read aloud the "Notice of Function of Administrative Code Committee" appearing in the register."

Section 2.  Section 2-4-314, MCA, is amended to read:

"2-4-314.   Biennial review by agencies -- recommendations by committee. (1) Each agency shall at least biennially review its rules during each state fiscal biennium to determine if any new rule should be adopted or if any existing rule should be modified or repealed.

(2) Each agency shall, after the end of each state fiscal biennium and IN DECEMBER before the start of the next A regular session of the legislature, report to the committee the rules repealed by the agency during the biennium and, except for rule changes proposed or adopted during the biennium, the substance, in detail for each rule, A SUMMARY of rule criticism received by the agency from any source during the biennium SINCE THE DECEMBER BEFORE THE LAST REGULAR SESSION.

(2)(3)  The committee may recommend to the legislature those modifications, additions, or deletions of agency rulemaking authority which that the committee considers necessary."

Section 3.  Section 2-4-405, MCA, is amended to read:

"2-4-405.   Economic impact statement. (1) Upon written request of the administrative code committee based upon the affirmative request of at least five members of the committee at an open meeting, an agency shall prepare a statement of the economic impact of the adoption, amendment, or repeal of a rule as proposed. The agency shall also prepare a statement upon written request to the agency and provision of a copy of the request to the committee by at least 15 legislators or upon written notification to the agency by the committee that 15 or more legislators have requested the committee in writing to request the agency for a statement RECEIPT BY THE AGENCY OR THE COMMITTEE OF A WRITTEN REQUEST FOR A STATEMENT MADE BY AT LEAST 15 LEGISLATORS. IF THE REQUEST IS RECEIVED BY THE COMMITTEE, THE COMMITTEE SHALL GIVE THE AGENCY A COPY OF THE REQUEST. IF THE REQUEST IS RECEIVED BY THE AGENCY, THE AGENCY SHALL GIVE THE COMMITTEE A COPY OF THE REQUEST. As an alternative, the administrative code committee may, by contract, prepare such an the estimate. Except to the extent that the request expressly waives any one or more of the following, the requested statement must include and the statement prepared by the committee may include:

(a)  a description of the classes of persons who will be affected by the proposed rule, including classes that will bear the costs of the proposed rule and classes that will benefit from the proposed rule;

(b)  a description of the probable economic impact of the proposed rule upon affected classes of persons and quantifying, to the extent practicable, that impact;

(c)  the probable costs to the agency and to any other agency of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues revenue;

(d)  an analysis comparing the costs and benefits of the proposed rule to the costs and benefits of inaction;

(e)  an analysis that determines whether there are less costly or less intrusive methods for achieving the purpose of the proposed rule;

(f)  an analysis of any alternative methods for achieving the purpose of the proposed rule that were seriously considered by the agency and the reasons why they were rejected in favor of the proposed rule;

(g)  a determination as to whether the proposed rule represents an efficient allocation of public and private resources; and

(h)  a quantification or description of the data upon which subsections (1)(a) through (1)(g) are based and an explanation of how the data was gathered.

(2)  A request to an agency for a statement or a decision to contract for the preparation of a statement must be made by the committee prior to the final agency action on the rule. The statement must be filed with the administrative code committee within 3 months of the committee's request or decision. The committee may withdraw its A request or decision for an economic impact statement may be withdrawn at any time.

(3)  Upon receipt of an impact statement, the committee shall determine the sufficiency of the statement. If the committee determines that the statement is insufficient, the committee may return it to the agency or other person who prepared the statement and request that corrections or amendments be made. If the committee determines that the statement is sufficient, a notice including a summary of the statement and indicating where a copy of the statement may be obtained must be filed with the secretary of state for publication in the register by the agency preparing the statement or by the committee, if the statement is prepared under contract by the committee, and must be mailed to persons who have registered advance notice of the agency's rulemaking proceedings.

(4)  This section does not apply to rulemaking pursuant to 2-4-303.

(5)  The final adoption, amendment, or repeal of a rule is not subject to challenge in any court as a result of the inaccuracy or inadequacy of a statement required under this section.

(6)  An environmental impact statement prepared pursuant to 75-1-201 that includes an analysis of the factors listed in this section satisfies the provisions of this section."

NEW SECTION. Section 4.  Rulemaking note for bill. The presiding officer of the house in which a bill that grants rulemaking authority or includes provisions that existing rulemaking authority will extend to may, at the time of introduction of the bill, request a rulemaking note. A note may also be requested, as the joint rules of the senate and the house of representatives may allow, by:

(1)  a committee considering the bill;

(2)  a majority of the members of the house in which the bill is to be considered, at the time of second reading; or

(3)  the sponsor, through the presiding officer.

NEW SECTION. Section 5.  Preparation of rulemaking note. The budget director, in cooperation with the state or local agencies or officials or organizations representing local agencies or officials affected by the bill, is responsible for the preparation of the rulemaking note and shall provide the note to the presiding officer within 6 days of the request for the note. The budget director may ask the presiding officer to allow additional time to complete a note.

NEW SECTION. Section 6.  Submission of rulemaking note -- sponsor's note -- distribution to legislators. (1) A completed rulemaking note must be submitted by the budget director to the presiding officer. Upon receipt of the completed note, the presiding officer shall notify the sponsor of the bill for which the note was prepared that the note has been completed and is available for review. Within 24 hours following notification, the sponsor shall:

(a)  notify the presiding officer that the sponsor concurs with the completed note;

(b)  request additional time, not to exceed 24 hours, to consult with the budget director on the note; or

(c)  elect to prepare a sponsor's note as provided in subsection (4).

(2)  (a) If the sponsor concurs with the completed note prepared by the budget director or elects to prepare a sponsor's note, the presiding officer shall refer the completed note prepared by the budget director to the committee considering the bill. If the bill is printed, the note must be reproduced and placed on the members' desks.

(b)  If the sponsor requests additional time to consult with the budget director, the presiding officer shall notify the sponsor and the budget director of the time, not to extend beyond the time limitation specified in subsection (1)(b), by which:

(i)  the budget director shall submit a revised completed note to the presiding officer;

(ii) the sponsor shall notify the presiding officer that the sponsor concurs with the original completed note; or

(iii) the sponsor shall elect to prepare a sponsor's note as provided in subsection (4).

(3)  At the time specified as provided in subsection (2)(b), the presiding officer shall refer the original or, if revised, the revised note to the committee considering the bill. If the bill is printed, the note must be reproduced and placed on the members' desks.

(4)  (a) A sponsor who elects to prepare a sponsor's note shall prepare the note as provided in [section 7] and return the completed note to the presiding officer within 4 days of the election to prepare a sponsor's note.

(b)  The presiding officer may grant additional time to the sponsor to prepare the sponsor's note.

(c)  Upon receipt of the completed sponsor's note, the presiding officer shall refer it to the committee hearing the bill. If the bill is printed, the note must be identified as a sponsor's note, reproduced, and placed on the members' desks.

NEW SECTION. Section 7.  Contents of rulemaking note. (1) A rulemaking note must, if possible, include:

(a) a description of the subjects that the rules must address and the subjects that the rules may have to address;

(b) a description of the various types of approaches that the rules could take in addressing those subjects;

(c)(B) an estimate of the number of persons or entities that will be affected by the rules and of the short-term and long-term costs to the average person or entity of complying with the rules;

(d)(C) an estimate of the short-term and long-term costs to the rulemaking agency of administering the rules; and

(e)(D) those subjects to be addressed by rules that could instead have been adequately addressed in the bill and the reasons why those subjects were not addressed in the bill.

(2) No comment or opinion relative to merits of the bill, except for matters and issues relating to rulemaking, may be included. Technical or mechanical defects may be noted.

NEW SECTION. Section 8.  Background information on rulemaking note to legislators on request. The budget director shall make available on request to any member of the legislature all background information used in developing a rulemaking note.

Section 9.  Section 5-18-107, MCA, is amended to read:

"5-18-107.   Powers and duties of committee -- duty to review revenue rules -- legislative oversight of department of revenue -- committee reports -- revenue estimating and use of estimates -- coal tax oversight. (1) The committee shall review all proposed rules of the department of revenue filed with the secretary of state.

(2)  The committee may:

(a)  request and obtain the department's rulemaking records for the purpose of reviewing compliance with 2-4-305;

(b)  prepare written recommendations for the adoption, amendment, or rejection of a rule and submit the recommendations to the department;

(c)  submit oral or written testimony at a rulemaking hearing;

(d)  require the department to appear before the committee and respond to the committee's recommendations for the adoption, amendment, or rejection of a rule;

(e)  require that a rulemaking hearing be held in accordance with the provisions of 2-4-302 through 2-4-305;

(f)  recommend to the legislature the repeal, amendment, or adoption of a rule as provided in 2-4-412;

(g)  institute, intervene in, or otherwise participate in proceedings involving the legality of a rule under the Montana Administrative Procedure Act in the state and federal courts and administrative agencies;

(h)  review the incidence and conduct of the department's administrative proceedings;

(i)  require the department to publish the full or partial text of any pertinent material adopted by reference under 2-4-307;

(j)  by an affirmative vote of at least six members of the committee, contract for the preparation of an economic impact statement or require the department to prepare an economic impact statement, following the provisions of 2-4-405;. The department shall also prepare a statement upon written request of 15 or more legislators communicated directly to the department by the legislators or communicated to the committee and forwarded to the department in the manner AS provided in 2-4-405.

(k)  petition the department to promulgate, amend, or repeal a rule. Within 60 days after submission of a petition, the department shall either deny the petition in writing, stating its reasons for the denial, or shall initiate rulemaking proceedings in accordance with 2-4-302 through 2-4-305.

(l)  make written objection to a proposed rule of the department for lack of substantial compliance with 2-4-302 through 2-4-305. The provisions of 2-4-406 govern the objection procedure, the department's response, and the procedure for and effect of publication of the objection in the Montana Administrative Register and the Administrative Rules of Montana.

(m)  petition the department for a declaratory ruling as to the applicability of any statutory provision or of any rule or order of the department. A copy of a declaratory ruling must be filed with the secretary of state for publication in the register Montana Administrative Register. A declaratory ruling or the refusal to issue a ruling is subject to judicial review in the same manner as decisions or orders in contested cases under the Montana Administrative Procedure Act.

(n)  petition for judicial review of the sufficiency of the reasons for the department's finding of imminent peril to the public health, safety, or welfare, cited in support of an emergency or temporary rule proposed by the department under 2-4-303; and

(o)  require the department to conduct the biennial review of its rules as required in 2-4-314 and report its findings to the committee.

(3)  The committee shall exercise legislative oversight of the department of revenue, including without limitation the review of:

(a)  proposed budgets;

(b)  proposed legislation;

(c)  pending litigation; and

(d)  major contracts and personnel actions of the department.

(4)  The committee may investigate and issue reports on any matter concerning taxation or the department of revenue.

(5)  (a) The committee shall have prepared by December 1 for introduction during each regular session of the legislature in which a revenue bill is under consideration an estimate of the amount of revenue projected to be available for legislative appropriation.

(b)  The committee's estimate, as introduced in the legislature, constitutes the legislature's current revenue estimate until amended or until final adoption of the estimate by both houses. It is intended that the legislature's estimates and the assumptions underlying the estimates will be used by all agencies with responsibilities for estimating revenues revenue or costs, including the preparation of fiscal notes.

(c)  The legislative council shall provide staff assistance to the committee. The committee may request the assistance of the staffs of the office of the legislative fiscal analyst, the legislative auditor, the department of revenue, and any other agency that has information regarding any of the tax or revenue bases of the state.

(6)  The committee may:

(a)  review the programs financed by coal severance tax funds;

(b)  consider any matters relating to coal taxation; and

(c)  prepare for the legislature a report, as provided in 5-11-210, on potential uses of the coal tax trust fund to develop a stable, strong, and diversified Montana economy that meets the needs of present and future generations of Montanans while maintaining and improving a clean and healthful environment as required by Article IX, section 1, of the Montana constitution."

NEW SECTION. Section 10.  Effective date. [This act] is effective July 1, 1997.

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