REVISED MODEL
STATE ADMINISTRATIVE
PROCEDURE ACT
SECTION 101. SHORT TITLE. This [act] may be cited as the [state]
Administrative Procedure Act.
SECTION
102. DEFINITIONS. In this [act]:
(1) “Adjudication” means the process for
determination of facts or application of law pursuant to which an agency
formulates and issues an order.
(2)
“Adoption of a rule” includes amendment or repeal, unless the context clearly
indicates otherwise.
(3) “Agency” means a state board, authority,
commission, institution, department, division, officer, or other state entity,
that is authorized or required by law to make rules or to adjudicate. The term
does not include the governor, the legislature, and the judiciary.
(4) “Agency action” means:
(A) the whole or part of any agency order or
rule;
(B) the failure to issue an order or rule; or
(C) an agency’s performance of, or failure to
perform, any duty, function, or activity or to make any determination required
by law.
(5) “Agency head” means the individual in whom, or
one or more members of the body of individuals in which, the ultimate legal
authority of an agency is vested.
(6)
“Agency record” means the agency rulemaking record in rulemaking governed by
Section 302, the emergency rulemaking record in rulemaking governed by Section
309(a), the expedited rulemaking record in rulemaking governed by Section 309(b),
the agency hearing record in an adjudication governed by Section 407, and the
agency record in informal and emergency cases governed by Sections 406 and 408 .
(7) “Contested case” means an adjudication in
which an opportunity for an evidentiary hearing is required by the federal or
state constitution, or a federal or state statute, or a judicial decision.
(8) “Electronic” means relating to technology
having electrical, digital, magnetic, wireless, optical, electromagnetic, or
similar capabilities.
(9) “Electronic record” means a record created,
generated, sent, communicated, received, or stored by electronic means.
(10) “Emergency adjudication” means an
adjudication in a contested case in which
danger to the public health, safety, or welfare requires immediate
action.
(11) “Evidentiary hearing” means a hearing for the
receipt of evidence to resolve a contested issue in which the decision of the
hearing officer may be made only on material contained in the agency record
created at the hearing.
(12)
“Guidance document” means a record developed by an agency that lacks the force
of law but states the agency’s current approach to, or opinion of law,
including interpretations and general statements of policy that describe the
agency’s exercise of discretionary functions
(13) “Index” means a searchable list of items by
subject and caption in a record with a page number, hyperlink, or any other
connector that links the list with the record to which it refers.
(14)
“Internet website” means a centralized Internet website that permits the public
to search a permanent database that archives materials required to be published
with the [publisher] under this [act].
(15)
“Law” means the federal or state constitution, a federal or state statute, a judicial
decision, a rule of court, an executive order that rests on statutory or
constitutional authorization, or a rule or order of an agency.
(16) “License” means a permit, certificate, approval,
registration, charter, or similar form of permission required by law and issued
by an agency.
(17)
“Licensing” means the grant, denial, renewal, revocation, suspension,
annulment, withdrawal, or amendment of a license.
(18) “Notify” means to take such steps as may be
reasonably required to inform another person in the ordinary course, whether or
not the other person actually comes to know of it.
(19) “Order” means an agency decision that
determines the legal rights, duties, privileges or immunities, or other legal
interests of one or more specific persons.
(20) “Party” means the agency taking action, the
person against which the action is directed, and any other person named as a
party or permitted to intervene.
(21) “Person” means an individual, corporation,
business trust, estate, trust, statutory trust, partnership, limited liability
company, association, joint venture, public corporation, government, or
governmental subdivision, agency, or instrumentality, or any other legal or
commercial entity.
(22) “Presiding officer” means an individual who
presides over the evidentiary hearing in a contested case.
(23)
“Proceeding” means any type of formal or informal agency process or procedure commenced or conducted by an agency. The term
includes adjudication, rulemaking, and investigation.
(24) “Recommended decision” means a proposed
action issued by a presiding officer who is not the agency head which is
subject to review by the agency head.
(25) “Record” means information that is inscribed
on a tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(26) “Rule” means the whole or a part of an agency
statement of general applicability that implements, interprets, or prescribes
law or policy or the organization, procedure, or practice requirements of an
agency.
(27)
“Rulemaking” means the process for adopting, amending, or repealing a rule.
(28)
“Sign” means, with present intent to authenticate or adopt a record:
(A)
to execute or adopt a tangible symbol; or
(B)
to attach to or logically associate with the record an electronic symbol, sound,
or process.
(29)
“State” means a state of the United States,
the District of Columbia, Puerto Rico, the
United States Virgin Islands, or any territory or insular possession subject to
the jurisdiction of the United
States.
(30) “Written” means inscribed on a tangible
medium.
Comment
Adjudication.
This definition gives the general meaning of adjudication that distinguishes it
from rulemaking. See California
Government Code Section 11405.20. This Act and the definitions in this Section
also identify some categories of adjudication that require procedure specified
in this Act to be used to reach a decision.
For example, the term contested case, defines a subset of adjudications
that must be conducted as prescribed in Article 4 of this Act.
Agency. The
object of this definition is to subject as many state actors as possible to
this definition. See 1981 MSAPA Section 1-102(1). The exception for the
governor means the governor personally.
Agency
Action. This definition is added for purposes of identifying those matters
subject to judicial review. Failure to issue an order or rule is not judicially
reviewable except as provided in Section 501(a) of the Act. Failure to issue an
order or rule does not include an agency denial of a petition to initiate
rulemaking. See Section 317 of the Act. This definition is taken from 1981
MSAPA Section 1-102(2).
Agency
Head. This definition differentiates between the agency as an organic whole and
the particular persons (commissioners, board members or the like) in whom final
authority is vested. This definition is taken from 1981 MSAPA Section 1-102(3).
Contested
case. This term is similar to the “contested case” definition of the 1961
MSAPA. Like the 1961 MSAPA, this Act looks to external sources such as statutes
to describe situations in which a party is entitled to a hearing. However, this term differs from the 1961 MSAPA’s
term “contested case” because it also includes hearings required by the constitution,
federal or state, and makes provision in Article 4 for the type of hearing to
be held in a case where a constitution creates the right to a hearing. Including constitutionally created rights to
a hearing within the provisions of this Act eliminates the problem of looking
outside the Act to determine the type of hearing required in cases where the
right to the hearing is created by constitution. Hearing rights created by
judicial decisions means constitutional decisions by appellate courts. See
Goldberg v. Kelley, 397 U.S.
254 (1970), and Goss v. Lopez 419 U.S. 565 (1975). Contested cases do
not include investigatory hearings, pure administrative process proceedings
such as tests, elections, or inspections, and situations in which a party has a
right to a de novo administrative or judicial hearing. See Section 401 of the Act.
An agency may by rule make all or part
of article 4 applicable to adjudication that does not fall within the requirements
of Section 401, including hearing rights conferred by agency regulations. See California Government
Code Section 11410.10. The scope of hearing rights is governed by law other
than this act.
Record. Modern electronic-age statutes such as the
Uniform Computer Information Transactions Act and the Uniform Electronic
Transactions Act adopt a broad definition of the term record that includes the
term document. This act follows those definitions.
Electronic. The term “electronic” refers to the use of
electrical, digital, magnetic, wireless, optical, electromagnetic and similar
technologies. It is a descriptive term meant to include all technologies
involving electronic processes. The listing of specific technologies is not
intended to be a limiting one. The definition is intended to assure that this
act will be applied broadly as new technologies develop. For example, biometric identification
technologies would be included if they affect communication and storage of
information by electronic means. As electronic technologies expand and include
other competencies, those competencies should also be included under this
definition. The definition of the term “electronic”
in this act has the same meaning as it has in UETA SECTION 2(5) and in the
Uniform Real Property Electronic Recording Act.
Electronic
Record. This definition is identical to ' 2(7) of the Uniform Electronic
Transactions Act. An “electronic record”
is a document that is in an “electronic” form. Documents may be communicated in
electronic form; they may be received in electronic form; they may be recorded
and stored in electronic form; and they may be received in paper copies and
converted into an electronic record. This Act does not limit the type of
electronic documents received by the [publisher]. The purpose of defining and
recognizing electronic documents is to facilitate and encourage agency use of
electronic communication and maintenance of electronic records.
Emergency
Adjudication. This definition is designed to be used with the emergency adjudication
procedures provided by Section 408. The danger to the public health, safety, or
welfare standard requiring immediate action is a strict standard that is
defined by law other than this Act. Federal and state case law have held that
in an emergency situation an agency may act rapidly and postpone any formal
hearing without violation, respectively, of federal or state constitutional
law. FDIC v. Mallen, 486 U.S. 230 (1988); Gilbert v. Homar (1997) 520 U.S. 924; Dep’t
of Agric. v. Yanes, 755 P.2d 611 (OK. 1987).
Guidance
document. This definition is taken from
the Michigan APA, M.C.L.A. 24.203(6), and the Virginia APA, Va. Code Ann.
SECTION 2.2-4001. See also the; Idaho
I.C. SECTION 67-5250 and N.Y. McKinneys State Administrative Procedure Act, SECTION
102. This is a definition intended to
recognize that there exist agency statements for the guidance of staff and the
public that differ from, and that do not constitute, rules. Many states recognize such statements under
the label “interpretive statement” or “policy statement.” See Wash. Rev. Code, SECTION 34.05.010(8)
& (15). Later sections of this Act
will provide for the publication and availability of this type of record so
that they are not “secret” records. See:
Michael Asimow, Guidance Documents in the States, 54 Adm. L. Rev. 631 (2002);
Michael Asimow, California
Underground Regulations, 44 Adm. L. Rev. 43 (1992).
Index. The
definition of index has been added as a guide to agencies, [publisher]s and
editors about their duties to make records available and easily accessible to
the public in the form of an index, as that term is used throughout this act.
Internet
website. This definition is designed to be used by agencies and publishers to
comply with the requirements of Sections 201, 316, and 421 of this Act.
Law. Law includes an executive order that rests on
statutory or constitutional authorization. See Kevin M. Stack, “The Statutory
President,” 90 Iowa L. Rev. 539, 550-52 (2005); Jim Rossi,
“State Executive Law making in Crisis,” 56 Duke L. Rev. 237, 261-64 (2006).
License.
The definition of license is drawn largely from the 1961 MSAPA.
Order. Unlike the federal APA which defines rule,
but not order, this section provides a positive definition of order based on
case law and agency experience. The key concept is that an order includes
solely agency legal determinations that are addressed to particular, specific,
identified individuals in particular circumstances. An order may be addressed
to more than one person. Further, the definition is consistent with modern law
in rejecting the right/privilege distinction in constitutional law. The
addition of the language “or other interests” is intended to clarify this
change and to include entitlements. See also Cal.Gov.Code SECTION 11405.50.
Party. This definition includes the agency, any
person against whom agency action is brought and any person who
intervenes. Its terms also include any
person who may participate in a rulemaking proceeding, such as someone who
offers a comment. This section is not
intended to deal with the issue of a person=s
entitlement to review. Standing and
other issues relating to judicial review of agency action are addressed in
Article 5 of this Act.
Presiding
Officer. This definition includes an
agency staff member, an administrative law judge or one or more members of the
agency head when designated to preside at a hearing.
Person. The definition of a “person” is the standard
definition for that term used in acts adopted by the National Conference of
Commissioners on Uniform State Laws. It includes individuals, associations of
individuals, and corporate and governmental entities.
Rule. The essential part of this definition is the
requirement of general applicability of the statement. This criterion
distinguishes a rule from an order, which focuses upon particular applicability
to identified parties only. Applicability of a rule may be general, even though
at the time of the adoption of the rule there is only one person or firm
affected: persons or firms in the future who are in the same situation will
also be bound by the standard established by such a rule. It is sometimes
helpful to ask in borderline situations what the effect of the statement will
be in the future. If unnamed parties in the same factual situation in the
future will be bound by the statement, then it is a rule. The word “statement”
has been used to make clear that, regardless of the term that an agency uses to
describe a declaration or publication and whether it is internal or external to
the agency, if the legal operation or effect of the agency action is the same
as a substantive rule, then it meets this definition. The exceptions to the definition are widely
used in state APAs. Subsection 26(A) is drawn from 1981 Model State APA § 3-116(1). Subsection 26(E) is drawn from 1981 Model State APA § 3-116(9). Subsection 26(F) is drawn from 1981 Model State APA § 3-116(2). Subsection 26(H) is based on 1981 Model State APA § 3-116(7).
Written. This definition relates to the
definition of record in Section 102(25) in that written documents are inscribed
on a tangible medium. The definition of record in Section 102(25) includes both
tangible medium (written) and electronic documents.
SECTION
103. APPLICABILITY. This [act] applies to all agencies unless the
agency is expressly exempted by statutory law of this state.
Comment
This
section is intended to define which agencies are subject to the provisions of
this act. Many states have made use of
an applicability provision to define the coverage of their Administrative
Procedure Act. See: Iowa, I.C.A. SECTION 17A.23; Kansas, K.S.A. SECTION 77-503;
Kentucky, KRS SECTION 13B.020; Maryland, MD Code, State Government, SECTION
10-203; Minnesota, M.S.A. SECTION 14.03; Mississippi, Miss. Code Ann. SECTION
25-43-1.103; Washington, West’s RCWA 34.05.020.
SECTION
201. PUBLICATION, COMPILATION, INDEXING,
AND PUBLIC INSPECTION OF RULEMAKING DOCUMENTS.
(a) The [publisher] shall administer this section
and other sections of this [act] that require publication.
(b) The [publisher] shall publish all documents
in [electronic] [written] format. The [publisher] shall prescribe a uniform
numbering system, form, and style for all proposed and adopted rules.
(c)
The [publisher] shall maintain the official record of adoption for adopted
rules, including the text of the rule and any supporting documents, filed with
the [publisher] by the agency. The agency adopting the rule shall maintain the
rulemaking record, as defined in Section 302(b), for that rule.
(d) The [publisher] shall create and maintain an
Internet website [or other appropriate technology]. The [administrative bulletin and
administrative code] and any guidance document filed with the [publisher] by an
agency must be published online on the Internet website [or other appropriate
technology].
(e)
The [administrative bulletin] shall be published by the [publisher] at least
once per [month].
(f)
The [administrative bulletin] must be made available in written form upon
request, for which the [publisher] may charge a reasonable fee.
(g) The [administrative bulletin] must contain:
(1) notices of proposed rule adoption prepared so
that the text of the proposed rule shows the text of any existing rule proposed
to be changed and the change proposed;
(2) newly filed adopted rules prepared so that
the text of the newly filed adopted rule shows the text of any existing rule
changed and the change being made;
(3) any other notices and materials designated by
[law] [the [publisher] for publication in the [administrative bulletin]; and
(4) an index.
(h) The [administrative code] must be compiled,
indexed by subject, and published in a format and medium as prescribed by the [publisher].
The rules of each agency must be published and indexed in the [administrative
code].
(i)
The [publisher] shall also make available for public inspection and copying the
[administrative bulletin] and the [administrative code].
(j)
The [publisher] may make minor non substantive corrections in spelling, grammar, and format in proposed
or adopted rules after notification of the agency. The [publisher] shall make a
record of the corrections.
(k) An agency shall make its rules, guidance
documents, and orders in contested cases available through electronic
distribution unless exempt from disclosure under law other than this act. An agency shall make these materials available
through regular mail upon request for which the agency may charge a reasonable
fee.
(l) An agency may provide for electronic
distribution of notices related to rulemaking or guidance documents to a person
who requests it. If a notice is distributed electronically, the agency is not
required to transmit the actual notice form but must send all the information
contained in the notice.
(m)
All agencies, through the office of [publisher], shall make available on the
Internet website of the [publisher]:
(1) notice of each proposed rule adoption,
amendment, or repeal;
(2) the summary of regulatory analysis of each
proposed rule;
(3) each adopted rule, rule amendment, or rule
repeal;
(4) each guidance document;
(5) each notice;
(6) each order in a contested case; and
(7) any other notice or matter that an agency is
required to publish under this act.
(n) The [publisher] may not charge a fee for
public access to the [publisher]’s Internet website [or other appropriate
technology].
Legislative Note:
throughout this act the drafting committee has used the term [publisher] to
describe the official or agency to which substantive publishing functions are
assigned. All states have such an
official, but their titles vary. Each
state using this act should determine what that agency is, then insert its
title in place of [publisher] throughout this act.
Comment
This
section seeks to assure adequate notice to the public of proposed agency
action. It also seeks to assure adequate
record keeping and availability of records for the public. Article 2 is
intended to provide easy public access to agency law and policy that are
relevant to agency process. Article 2 also adds provisions for electronic
publication of the administrative bulletin and code. Section 201 does not address the issue
related to what languages rules should be published in, nor does it address
issues related to translation of information contained in these documents into
languages other than English.
The arrival
of the Internet and electronic information transfer, which occurred after the
last revision of the Model State Administrative Procedure Act, has
revolutionized communication. It has
made available rapid, efficient and low cost communication and information
transfer. Many states as well as the
federal agencies have found that it is an ideal medium for communication
between agencies and the public, especially in connection with rulemaking. Since the last Model Administrative Procedure
Act was written, many states have adopted various types of statutes that permit
agencies to use electronic technology to communicate with the public. The agencies have found this technology
particularly useful in connection with rulemaking.
Subsection
(c) requires that the [publisher] maintain the official record for adopted
rules, including the text of the rules and any supporting documents, filed by
the agency. Subsection (c) also requires that the agency adopting the rule
maintain the rulemaking record for that rule. Section 302(b) provides the
requirements for the rulemaking record.
Subsection (d)
requires the [publisher] to 1) maintain an Internet website, and 2) publish all
matters required to be published under this act on that website. If a state
chooses to use subsection (d), they will create a centralized website for use
by all agencies. Subsection (d) also requires that the [publisher] publish
agency guidance documents filed by the agency with the [publisher]. See section
202(4) and Section 310, below. Subsection (d) does not address issues related
to authentication, preservation and archival storage of electronic documents
published on an internet website. Subsection (d) does not address the
principles for deciding what rules are in effect and enforceable at a specific
point in time.
Subsection
(f) requires the publisher to make the administrative bulletin available in
written form upon request, for which the publisher may charge a reasonable fee.
This requirement can be satisfied by states making the administrative bulletin
available on the internet, searchable, and printable.
The
bracketed text of subsection (g)(1), and (g) (2) is included so that agencies
may utilize redlining or underlining and striking of the text of the proposed
or adopted rules so that changes from the existing text of the rule are clearly
delineated. Agencies that are proposing
or adopting new rules or that have some other system for showing changes need
not use the bracketed text.
It is
possible to go much further in providing for use of the Internet that the
publication adopted here. For example, a
state could choose to permit agencies to operate their own websites, and to
accept comments on rules on the website.
They could also provide for maintenance of a database of all comments
received that the public could access. These provisions are extremely useful, but may
be quite expensive. The central system
adopted here, means only one Internet website is required. In terms of cost benefit, this is an
effective method of providing for electronic communication and agency access.
Subsection
(h) requires the publisher to index the administrative code by subject. States
can satisfy this requirement by providing an administrative code that is
searchable by word on the internet.
Subsection
(j) provides for a limited nonsubstantive power to edit agency rules provided
that the agency is notified by the rules [publisher] of the changes. Subsection
(j) is based on the Maine Administrative Procedure Act, 5 M.R.S.A. Section 8056(10).
Subsections
(k) and (l) are drawn from the Washington Administrative Procedure Act. See WA
ST 34.05.260.
SECTION
202. REQUIRED AGENCY RULEMAKING AND RECORDKEEPING. In addition to any other rulemaking
requirements imposed by law, each agency shall:
(1) adopt as a
rule a description of its organization, stating the general course and
method of its operations and the methods by which the public may obtain
information or make submissions or requests;
(2) adopt as a rule the nature and requirements
of all formal and informal procedures available, including a description of all
forms and instructions used by the agency;
(3) adopt as a rule a description of the process for application for a license,
available benefits, or other matters for which an application is appropriate,
unless the process is prescribed by law other than this [act];
(4)
issue rules for the conduct of public
hearings [if the default procedural rules promulgated under Section 204 do not
include provisions for the conduct of public hearings];
(5)
file with the publisher in electronic format acceptable to the publisher the
agency’s proposed rules; adopted rules,
including rules adopted using the emergency process under Section 309(a) and
rules adopted using the expedited process under Section 309(b); notices; and
orders issued in contested cases;
(6) [maintain a separate, official, current, and
dated index and compilation of all rules adopted under [Article] 3, make the index
and compilation available at agency offices for public inspection and copying
[and online on the [publisher]’s Internet website], update the index and
compilation at least every [30 days], and file the index and the compilation and
all changes to both with the [publisher];] and
(7)
maintain [custody of] the agency’s
current rulemaking docket required by Section 302(b).
Comment
One object
of this section is to make available to the public all procedures followed by
the agency, including especially how to file for a license or benefit. It is modeled on the 1961 Model State
Administrative Procedure Act, Sections 2(a) (4) & 2(b), the 1981 Model
State APA Sections 2-104(1),(2), and the Kentucky Administrative Procedure Act,
KRS Section 13A.100. Persons seeking licenses or benefits should have a readily
available and understandable reference sources from the agency. A second reason
is to eliminate “secret law” by making all guidance documents used by the agency
available from the agency.
Agencies
could use expedited rulemaking procedures under Section 309(b) to adopt some of
the rules required by subsections (1), (2), (3), and (4).
SECTION 203. DECLARATORY ORDER.
(a) Any interested person may petition an agency
for a declaratory order that states whether or in what manner a rule, guidance
document, or order issued by the agency applies or does not apply to the
petitioner.
(b) Each agency shall adopt rules prescribing the
form of a petition for purposes of subsection (a) and the procedure for its
submission, consideration, and prompt disposition. The provisions of this [act] for formal,
informal, or other applicable hearing procedure do not apply to an agency
proceeding for a declaratory order, except to the extent provided in this
[article] or to the extent the agency so provides by rule or order.
(c) Not later than 60 days after receipt of a petition pursuant
to subsection (a), an agency shall issue a declaratory order in response to the
petition, decline to issue a declaratory order, or schedule the matter for
further consideration.
(d) If an agency declines to consider a petition
submitted under subsection (a), it shall promptly notify in a record the petitioner
of its decision and include a brief statement of the reasons for declining. An
agency decision to decline to issue a declaratory order is judicially
reviewable in court for abuse of discretion.
(e) If an agency issues a declaratory order, the order
must contain the names of all parties to the proceeding, the particular facts
on which it is based, and the reasons for the agency=s
conclusion. A declaratory order has the
same status and binding effect as an order issued in an adjudication. Declaratory
orders are subject to judicial review under Section 501.
Comment
This
section embodies a policy of creating a convenient procedural device that will
enable parties to obtain reliable advice from an agency. Such guidance is
valuable to enable citizens to conform with agency standards as well as to
reduce litigation. It is based on the 1981 MSAPA, Section 2-103 and Hawaii
Revised Statutes, Section 91-8.
Subsection
(d) states two alternatives: 1) agency decisions that decline to issue a
declaratory order are not judicially reviewable (See Heckler v. Chaney 470 U.S.
821 (1985) (FDA decision not to undertake enforcement action is not reviewable
under federal APA, 5 U.S.C. Section 701(a)(2).); 2) agency decisions that
decline to issue a declaratory order are judicially reviewable for abuse of
discretion (See Massachusetts v. EPA 127 S. Ct. 1438 (2007) (EPA decision to
reject rulemaking petition and therefore not to regulate greenhouse gases associated
with global warming was judicially reviewable and decision was arbitrary and
capricious.).
Subsection
(e) is based on the California APA, West’s Ann.Cal.Gov.Code Section 11465.60;
and the Washington APA, West’s RCWA 34.05.240.
A declaratory decision issued by an agency is judicially reviewable; is
binding on the applicant, other parties to that declaratory proceeding, and the
agency, unless reversed or modified on judicial review; and has the same
precedential effect as other agency adjudications. A declaratory decision, like
other decisions, only determines the legal rights of the particular parties to
the proceeding in which it was issued. The requirement in subdivision (e) that
each declaratory decision issued contain the facts on which it is based and the
reasons for its conclusion will facilitate any subsequent judicial review of
the decision=s
legality. It also ensures a clear record of what occurred for the parties and
for persons interested in the decision because of its possible precedential
effect.
[SECTION
204. DEFAULT PROCEDURAL RULES.
(a) The [governor] [attorney general] [designated
state agency] shall adopt default procedural rules for use by agencies. The
default rules must provide for the procedural functions and duties of as many
agencies as is practicable.
(b) Except as otherwise provided in subsection
(c), an agency shall use the default procedural rules published under
subsection (a).
(c) An agency may adopt a rule of procedure that
differs from the default procedural rules adopted under subsection (a) by
adopting a rule that states with particularity the need and reasons for the
variation from the default procedural rules.]
Comment
This
Section is based on Section 2-105 of the 1981 MSAPA. See also the provisions of
the California Administrative Procedure Act, California Government Code Section
11420.20 (adoption of model alternative dispute resolution regulations by
California Office of Administrative Hearings.) One purpose of this provision is
to provide agencies with a set of procedural rules. This is especially important for smaller
agencies. Another purpose of this
section is to create as uniform a set of procedures for all agencies as is
realistic, but to preserve the power of agencies to deviate from the common
model where necessary because the use of the model rules is demonstrated to be
impractical for that particular agency.
This section requires all agencies to use the model rules as the basis
for the rules that they are required to adopt under Section 202. An agency may
deviate from the model rules only for impracticability.
SECTION
301. CURRENT RULEMAKING DOCKET.
(a)
As used in this section, “rule” does not include a rule adopted using the
emergency process under Section 309(a) or a rule adopted using the expedited
process under Section 309(b).
(b)
Each agency shall maintain a current rulemaking docket that is indexed.
(c)
A current rulemaking docket must list each pending rulemaking proceeding. The
docket must state or contain:
(1) the subject matter of the proposed rule;
(2) notices related to the proposed rule;
(3) where comments may be inspected;
(4) the time within which comments may be made;
(5) requests for public hearing;
(6) appropriate information about a public
hearing, if any, including the names of the persons making the request;
(7) how comments may be made; and
(8) the timetable for action.
(d)
Upon request, the agency shall provide a written docket.
Comment
This
section is modeled on Minn. M.S.A. Section 14.366. This section and the following section,
Section 302 state the minimum docketing and rulemaking record keeping
requirements for all agencies. This
section also recognizes that many agencies use electronic recording and
maintenance of dockets and records.
However, for smaller agencies, the use of electronic recording and
maintenance may not be feasible. This
section therefore permits the use of exclusively written, hard copy dockets. The current rulemaking docket is a summary
list of pending rulemaking proceedings or an agenda referring to pending
rulemaking. This section includes expedited rules governed by Section 309.
SECTION
302. AGENCY RECORD IN RULEMAKING
PROCEEDING.
(a) An agency shall maintain a rulemaking record
for each rule it proposes to adopt. The record and materials incorporated by
reference must be readily available for public inspection in the central office
of the agency and available for public display on the internet website
maintained by the [publisher], unless the record and materials are privileged
or exempt from disclosure under state law other than this [act]. Where an
agency determines, in its sound discretion, that any portions of the rulemaking
record can not practicably be displayed or are inappropriate for public display
on the internet, the agency shall describe the documents, and shall note in the
public and internet record that these documents are not displayed.
(b) A rulemaking record must contain:
(1) copies of all publications in the
[administrative bulletin] with respect to the rule or the proceeding upon which
the rule is based;
(2) copies of any portions of the rulemaking
docket containing entries relating to the rule or the proceeding upon which the
rule is based;
(3) copies or an index of written factual
material, studies, and reports relied on or seriously consulted by agency
personnel in formulating the proposed or final rule;
(4) any official transcript of oral presentations
made in the proceeding upon which the rule is based or, if not transcribed, any
audio recording or verbatim transcript of those presentations, and any memorandum
prepared by the agency official who presided over the hearing, summarizing the
contents of those presentations;
(5) a copy of the rule and explanatory statement
filed with the [publisher]; and
(6) all petitions for any agency action on the
rule except for petitions governed by Section 203.
Comment
Several
states have adopted this type of agency rule-making record provisions: Az.,
A.R.S. Section 41-1029; Colo., C.R.S.A.
Section 24-4-103; Minn., M.S.A. Section
14.365; Miss., Miss.
Code Ann. Section 25-43-3.110; Mont.,
MCA 2-4-402; Okl., 75 Okl.St.Ann. Section 302; and Wash., RCWA 34.05.370.
The
language of subsection (a) is based on Section 3-112(a) of the 1981 Model Act.
Similar language is found in the Washington Administrative Procedures Act, RCWA
Section 34.05.370. The requirement of an official agency rulemaking record in
subsection (a) should facilitate a more structured and rational agency and
public consideration of proposed rules.
It will also aid the process of judicial review of the validity of
rules. The requirement of an official agency rulemaking record was suggested
for the Federal Act in S. 1291, the “Administrative Practice and Regulatory
Control Act of 1979,” title I, Section 102(d), [5 U.S.C. 553(d) ], 96 Cong.Rec.
S7126 at S7129 (daily ed. Jun.
6, 1979) (Sen. Kennedy). The second sentence of subsection (a) is
intended exclude privileged material from disclosure and display. Privileged
materials includes confidential business information and trade secrets, as well
as internal advice memoranda. The exemptions in the state open records laws would
be examples of records and materials that are exempt from disclosure and
display under law other than this act. The third sentence in subsection (a) is
intended to enable an agency to decide, for example, that indecent material or
copyrighted material should be available for inspection in hard copy but not
posted on the internet. It is not intended to authorize exclusion from the
internet record of, for example, information that reflects adversely on the
government.”
Subsection
(b) requires all written submissions made to an agency and all
written materials considered by an agency in connection with a rulemaking
proceeding to be included in the record. It also requires a copy of any
existing record of oral presentations made in the proceeding to be included in
the rulemaking record. The language in Subsection (b)(3) is based on language adopted
by the ABA. See
ABA Section of
Administrative Law and Regulatory Practice, “A Blackletter Statement of Federal
Administrative Law,” 54 Admin. L. Rev. 1, 34 (2002)
(a)
An agency may gather information relevant to the subject matter of possible
rulemaking and may solicit comments and recommendations from the public about
that possibility by publishing an advance notice of proposed rulemaking in the
[administrative bulletin] and indicating where, when, and how persons may
comment.
(b)
An agency may engage in negotiated rulemaking by appointing a committee to
comment or make recommendations on the subject matter of a possible rulemaking
under active consideration within the agency. The committee may seek, in
consultation with one or more agency representatives, to reach a consensus on
the terms or substance of a proposed rule. In making the appointments, the
agency shall seek to establish a balance in representation among interested
stakeholders and the public. The agency shall publish a list of all committees
with their membership at least [annually] in the [administrative bulletin]. Notice of meetings of committees appointed
under this subsection shall be published in the [administrative bulletin] at
least [15 days] before to the meeting.
Meetings of committees appointed under this section must be open to the
public.
(c)
This section does not prohibit agencies from obtaining information and opinions
from members of the public on the subject of the rulemaking by any other method
or procedure used in rulemaking.
Comment
This
section is based upon the provisions of Section 3-101 of the 1981 MSAPA. Seeking advice before proposing a rule
frequently alerts the agency to potential serious problems that will change the
notice of proposed rulemaking and the rule ultimately adopted. This section is designed to encourage
gathering information. It is not
intended to prohibit any type of reasonable agency information gathering
activities; however, the section seeks to insure that agencies act in a fashion
that will result in a balance among interested groups from whom information is
received.
Several
states have enacted provisions of this type in their APAs. Some of them merely authorize agencies to
seek informal input before proposing a rule; several of them indicate that the
purpose of this type of provision is to promote negotiated rulemaking. Those
states are Idaho, I.C. '
67-5220; Minnesota, M.S.A. ' 14.101; Montana,
MCA 2-4-304; and Wisconsin,
W.S.A. 227.13. Subsection (b) is intended to authorize negotiated rulemaking.
Subsection
(c) authorizes agencies to use other methods to obtain information and opinions.
Under subsection (c), agencies may meet informally with specific stakeholders
to discuss issues raised in the negotiated rulemaking process. Negotiated
rulemaking under subsection (b) is an option for agency use but is not required
to be used prior to starting a rulemaking proceeding. Negotiated rulemaking
committees are also used in federal administrative law. See the federal
Negotiating Rulemaking Act, 5 U.S.C. Sections 561 to 570.
SECTION
304. NOTICE OF PROPOSED RULEMAKING
(a) At least [30] days before the adoption,
amendment, or repeal of a rule, an agency shall file with the [publisher]
notice of the proposed action in the [administrative bulletin]. The notice must
include:
(1) a short explanation of the purpose of the proposed
rule;
(2) a citation or reference to the specific legal
authority authorizing the proposed rule;
(3) the text of the proposed rule;
(4) how copies of the full text of the regulatory
analysis of the proposed rule may be obtained; and
(5) where, when, and how a person may present
their views on the proposed rule and request a hearing thereon if one is not
already provided.
(b) Not later than three days after publication
of the notice of the proposed rulemaking in the [administrative bulletin], the agency
shall mail or send electronically the notice to
each person that has made a timely request to the agency for a mailed or
electronic copy of the notice. An agency may charge a reasonable fee for
written mailed copies if the person has made a request for a mailed copy.
Comment
Many states
have similar provisions to provide notice of proposed rulemaking to the public.
This section is based upon the provisions of Section 3-103 of the 1081 MSAPA. Rulemaking is defined in Section 102(28).
Adoption of a rule is defined in Section 102(2) to mean that adoption of a rule
includes amendment or repeal, unless the context clearly indicates otherwise.
SECTION
305. REGULATORY ANALYSIS.
(a)
An agency shall prepare a regulatory analysis for a proposed rule having an estimated economic impact of: (1) more
than [$ .]; (2) less than [$ .]; if not later than [20] days after the
notice of proposed rulemaking is published, a written request for the analysis
is filed with the agency by [the governor] [,] [another agency] [,] [or] [a
member of the Legislature]. ].
(b)
An agency shall prepare a statement of no estimated economic impact for any
rule proposed to be adopted, amended, or repealed by the agency the adoption,
amendment, or repeal of which has no economic impact.
(c) A regulatory analysis must contain:
(1) a description of any classes of persons that
would be affected by the proposed rule and the costs and benefits to that class of
persons;
(2) an estimate of the probable impact of the proposed
rule upon affected classes;
(3) a comparison of the probable costs and
benefits of the proposed rule to the probable costs and benefits of inaction;
and
(4) a determination of whether there are less
costly or less intrusive methods for achieving the purpose of the proposed rule.
(5)
“a citation to and summary of each scientific or statistical study, report, or
analysis that served as a basis for the rule, together with an indication of
how the full text may be obtained.”
(d) An agency preparing a regulatory analysis
under this section shall prepare a concise summary of the regulatory
analysis.
(e) An agency preparing a regulatory analysis
under this section shall submit the analysis to the [regulatory review agency] [department
of finance and revenue] [other]].
(f) The agency preparing a concise summary of a
regulatory analysis required under this section must file the concise summary
with the publisher for publication in the [administrative bulletin] at least
[20] days before the end of the period during which a person may make written
submissions on the proposed rule.
Comment
Regulatory
analyses are widely used as part of the rulemaking process in the states. The subsection also provides for submission
to the rules review entity in the state, if the state has one. States that
already have regulatory analysis laws can utilize the provisions of Section 305
to the extent that this section is not inconsistent with existing law other
than this act. Agencies may rely upon agency staff expertise and information
provided by interested stakeholders and participants in the rulemaking process.
Agencies are not required by this act to hire and pay for private consultants
to complete regulatory impact analysis.
Subsection
(c)(5) This language is adapted from N.Y. APA '
202-a. This language also codifies requirements used in federal administrative
law. In the federal cases, disclosure of technical information underlying a
rule has been deemed essential to effective use of the opportunity to
comment. See American Radio Relay
League v. FCC, 2008 WL 1838387 (D.C. Cir. April 25, 2008); Portland
Cement Ass=n v.
Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973).
SECTION
306. PUBLIC PARTICIPATION.
(a) For at least [30] days after publication of a
notice of the proposed rulemaking an agency shall allow a person to submit
information and comment on the proposed rule.
The information or comments may be submitted electronically or in written
form.
(b) The agency shall consider all information and
comments submitted respecting a proposed rule
(c) Unless a hearing is required by law other
than this [act], an agency is not required to hold a hearing on a proposed rule. If an agency does hold a hearing, the agency
may allow a person to make an oral presentation with information and comments about
the rule. Hearings must be open to the public and shall be recorded.
(d) A hearing on a proposed rule may not be held
earlier than [30] days after notice of its location and time is published in
the [administrative bulletin].
(e) An agency representative shall preside at a
hearing on a proposed rule. If the
presiding agency representative is not the agency head, the representative
shall prepare a memorandum for consideration by the agency head summarizing the
contents of the presentations made at the hearing.
Comment
This
section gives discretion to the agency about whether to hold an oral hearing on
proposed rules in the absence of a statutory or constitutional requirement that
an oral hearing be held.
(a) An agency may not adopt a rule until the
period for submitting information or comments has expired and notice has been
given under [Article] 7.
(b) Not later than [180] days after the date of
publication of the notice of proposed adoption of the rule, the agency shall
adopt the rule pursuant to the rulemaking proceeding or terminate the
proceeding by publication of a notice to that effect in the [administrative
bulletin]. The agency shall file adopted rules with the [publisher] within
[ ] days after the date of adoption of
the rule.
(c) [With the approval of the governor, an agency
may obtain one extension of the period specified in subsection (b). The governor, by executive order, may impose
an extension of the period of [ ]
days if there is a change in the rule from the rule initially proposed.]
(d) A rule not adopted and filed within the time
limits set by this section is void.
Comment
This
section codifies the final adoption and filing for publication requirements for
rulemaking that is subject to the procedures provided in sections 304 to 308 of
this Act. Section 702(a) of this act requires that the agency shall file a copy
of the adopted amended or repealed rule with the rules review committee at the
same time it is filed with the publisher. Subsection (d) provides that a rule
that is not properly adopted and filed for publication has no legal effect.
SECTION
308. VARIANCE BETWEEN PROPOSED RULE AND ADOPTED
RULE. An agency may not adopt a rule that
substantially differs from the rule proposed in the notice of proposed adoption
of a rule on which the rule is based unless the rule being adopted is a logical
outgrowth of the rule proposed in the notice, as determined from consideration
of the extent to which:
(1) any person affected by the adopted rule should have reasonably expected that the
published proposed rule would affect the person’s interest;
(2) the subject matter of the adopted rule or the issues determined by that rule are
different from the subject matter or issues involved in the published rule
proposed to be adopted; and
(3) the effect of the adopted rule differs from
the effect of the rule proposed to be adopted or amended.
Comment
This
section draws upon provisions from several states. See Mississippi
Administrative Procedure Act, Miss. Code Ann.
Section 25-43-3.107 and the Minn.
Administrative Procedure Act, M.S.A. Section 14.05. The following cases discuss and analyze the
logical outgrowth test, and this section seeks to incorporate the factors
identified in those cases. These
judicial opinions also convey the wide acceptance and use of the logical
outgrowth test in the states. First
Am. Discount Corp. v. Commodity Futures Trading Comm’n, 222 F.3d 1008, 1015
(D.C.Cir.2000); Arizona [publisher]. Serv. Co. v. EPA, 211 F.3d 1280,
1300 (D.C.Cir.2000); American Water Works Ass’n v. EPA, 40 F.3d 1266,
1274 (D.C.Cir.1994); Trustees for Alaska v. Dept. Nat. Resources,
___AK____, 795 P.2d 805 (1990); Sullivan v. Evergreen Health Care, 678
N.E.2d 129 (Ind. App. 1997); Iowa Citizen Energy Coalition v. Iowa St.
Commerce Comm. ___IA___, 335 N.W.2d 178 (1983); Motor Veh. Mfrs. Ass=n v. Jorling, 152 Misc.2d 405, 577
N.Y.S.2d 346 (N.Y.Sup.,1991); Tennessee
Envir. Coun. v. Solid Waste Control Bd., 852 S.W.2d 893 (Tenn.
App. 1992); Workers=
Comp. Comm. v. Patients Advocate, 47 Tex.
607, 136 S.W.3d 643 (2004); Dept. Of [publisher].
Svc. re Small Power Projects, 161 Vt. 97,
632 A.2d 13 73 (1993); Amer. Bankers Life Ins. Co. v. Div. of Consumer
Counsel, 220 Va.
773, 263 S.E.2d 867 (1980).
SECTION 309.
EMERGENCY RULEMAKING; EXPEDITED RULEMAKING.
(a) When an agency finds for good cause that an
imminent peril to the public health, safety, or welfare, including the imminent
loss of federal funding for agency programs, requires the immediate adoption of
a rule and states in a record its reasons for that finding, the agency, without
prior notice or hearing or upon any abbreviated notice and hearing that it
finds practicable, may adopt, a rule without complying with Sections 304 to 308.
The adoption may be effective for not longer than [180] days [renewable once up
to an additional [180] days]. The
adoption does not preclude adoption of an identical rule under Sections 304
through 308. The agency shall file under
Section 315 a rule not later than [ ]
days of the adoption under the subsection and shall notify persons who have
requested notice of rules related to that subject matter.
(b) If an agency proposes to adopt a rule and that
action is expected to be noncontroversial, it may use an expedited process in
accordance with this subsection and without complying with Sections 304 to 308. A rule adopted under this subsection must be
published in the [administrative bulletin] along with a statement by the agency
that it does not expect the rule to be controversial. If an objection to the
use of the expedited rulemaking process is received within the public comment
period from any person, the agency shall file notice of the objection with the [publisher]
for publication in the [administrative bulletin] and may proceed with the
normal rulemaking process specified in Sections 304 to 308, with the initial
publication of the rule serving as the notice of the proposed adoption of a
rule.
Comment
This
section is taken from the 1961 MSAPA, Section 3(2)(b), and the Virginia
Administrative Procedure Act, Va. Code Ann. Section 2.2-4012.1. Some state courts have indicated that any exemption
from rulemaking requirements must be strictly construed to be limited to an
emergency or virtual emergency situation.
Subsection
(a) can be used to adopt program requirements necessary to comply with federal
funding requirements, or to avoid suspension of federal funds for noncompliance
with program requirements.
Subsection
(b) is based upon a recommendation from the Administrative Conference of the
United States. Direct final rulemaking has been recommended by the
Administrative Conference of the United States [ACUS Recommendation
95-4, 60 Fed. Reg. 43110 (1995)]. The study that provided the basis for the
recommendation was prepared by Professor Ron Levin and has been published
[Ronald M. Levin, “Direct Final Rulemaking” 64 George Washington Law Review 1
(1995)]. [However, recognizing that there may be a few other justifications for
exemption, this section adopts a broader rule for matters that will be
noncontroversial. Thus, a situation where the agency is merely making a
stylistic correction or correcting an error that the agency believes is
noncontroversial may be adopted without formal rulemaking procedures. See the
VA Fast-Track Rule provision at Va. Code Ann. Section 2.2-4012.1.]
In order to
prevent misuse of this procedural device, noncontroversial rule promulgation
requires the consent of elected officials, and may be prevented by the
requisite number of persons filing objections.
SECTION
310. GUIDANCE DOCUMENTS.
(a) An agency may issue a guidance
document without following the procedures set forth in Sections 304 through
308. Guidance documents do not have the
force of law and do not constitute an exercise of an agency’s delegated
authority, if any, to establish the rights or duties of any person.
(b) An agency that proposes to rely on a guidance
document to the detriment of a person in any administrative proceeding must
afford that person a fair opportunity to contest the legality or wisdom of
positions taken in the document. The
agency may not use a guidance document to foreclose consideration of issues
raised in the document.
(c)
A guidance document may contain binding instructions to agency staff members,
provided that the agency’s procedures also afford to affected persons, in
compliance with subsection (b), an adequate opportunity to contest positions
taken in the document at an appropriate stage in the administrative process.
(d) When an agency proposes to act at
variance with a position expressed in a guidance document, it shall provide a
reasonable explanation for the departure. If affected persons may
have reasonably relied on the agency’s position, the explanation shall include
a reasonable justification for the agency’s conclusion that the need for the
departure outweighs such persons’ reliance interests.
(e) Each agency shall publish all
currently operative guidance documents.
(f) Each agency shall maintain an
index of all of its currently operative guidance documents, file the index with
the [publisher] on or before January 1 of each year, make the index readily
available for public inspection, and make available for public inspection the
full text of all guidance documents to the extent inspection is permitted by
law. Upon request, an agency shall make copies of guidance indexes or guidance
documents available without charge; at cost; or, where authorized by law, on
payment of a reasonable fee. If any
agency does not index a guidance document, the agency may not rely on that
guidance document or cite it as precedent against any party to a proceeding,
unless that party has actual and timely notice of the guidance document.
(g) A person may
petition under section 317 to request an agency to adopt a rule in place of an
existing guidance document.
(h) A person may
petition an agency to revise or repeal an existing guidance document. Not later
than [60] days after submission of such a petition, the agency shall: (1)
revise or repeal the guidance document; (2) initiate a proceeding for the
purpose of considering such a revision or repeal; or (3) deny the petition in a
record and state its reasons for the denial.
Comment
This
section seeks to encourage an agency to advise the public of its current
opinions, approaches, and likely courses of action by using guidance documents
(also commonly known as interpretive rules and policy statements). The section
also recognizes agencies’ need to promulgate such documents for the guidance of
both its employees and the public. Agency law often needs interpretation, and
agency discretion needs some channeling. The public needs to know the agency’s
opinion about the meaning of the law and rules that it administers. Increasing
public knowledge and understanding reduces unintentional violations and lowers
transaction costs. See Michael Asimow, “California
Underground Regulations,” 44 Admin. L. Rev. 43 (1992); Peter L. Strauss,
“Publication Rules in the Rulemaking Spectrum: Assuring Proper Respect for an
Essential Element,” 53 Admin. L. Rev. 803 (2001). This section strengthens agencies’ ability to
fulfill these legitimate objectives by excusing them from having to comply with
the full range of rulemaking procedures before they may issue these nonbinding
statements. At the same time, the
section incorporates safeguards to ensure that agencies will not use guidance
documents in a manner that would undermine the public’s interest in administrative
openness and accountability.
Four states
have adopted detailed provisions regulating guidance documents in their
administrative procedure acts. See Ariz. Rev. Stat. Ann. §§ 41-1001, 41-1091; Mich. Comp. Laws §§ 24.203, 24.224; Va. Code Ann. § 2.2-4008; Wash. Rev. Code
Ann. § 34.05.230. This section draws
upon those provisions, and also upon requirements and recommendations issued by
federal authorities and the American Bar Association.
Subsection (a) exempts guidance documents from the
procedures that are required for issuance of rules. Many states have recognized the need for this
type of exemption in their administrative procedure statutes. These states have
defined guidance documents—or interpretive rules and policy
statements—differently from rules, and have also excused agencies creating them
from some or all of the procedural requirements for rulemaking. See Ala. Code §
41-22-3(9)(c) (“memoranda, directives, manuals, or other communications which
do not substantially affect the legal rights of, or procedures available to, the
public”); Colo. Rev. Stat. § 24-4-102(15), 24-4-103(1) (exception for
interpretive rules or policy statements “which are not meant to be binding as
rules”); AMAX, Inc. v. Grand County Bd. of Equalization, 892 P.2d 409, 417
(Colo. Ct. App. 1994) (assessors’ manual is interpretive rule); Ga. Code Ann. §
50-13-4 (“Prior to the adoption, amendment, or repeal of any rule, other than interpretive rules or general
statements of policy, the agency shall [follow notice-and-comment
procedure]”) (emphasis added); Mich. Comp. Laws § 24.207(h) (defining “rule” to
exclude “[a] form with instructions, an interpretive statement, a guideline, an
informational pamphlet, or other material that in itself does not have the
force and effect of law but is merely explanatory”); Wyo. Stat. Ann. § 16-3-103
(“Prior to an agency’s adoption, amendment or repeal of all rules other than interpretative rules or
statements of general policy, the agency shall . . .”) (emphasis added); In
re GP, 679 P.2d 976, 996-97 (Wyo. 1984). See also Michael Asimow, “Guidance
Documents in the States: Toward a Safe Harbor,” 54 Admin. L. Rev. 631 (2002)
(estimating that more than thirty states have relaxed rulemaking requirements
for agency guidance documents such as interpretive and policy statements). The federal Administrative Procedure Act
draws a similar distinction. See 5 U.S.C. § 553(b)(A) (exempting
“interpretative rules [and] general statements of policy” from
notice-and-comment procedural requirements).
The second sentence of subsection (a) sets forth the
fundamental proposition that a guidance document, in contrast to a rule, lacks
the force of law. Many state and federal
decisions recognize the distinction.
See, e.g., Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533
(D.C. Cir. 1986); District of Columbia v. Craig, 930 A.2d 946, 968-69 (D.C.
2007); Clonlara v. State Bd. of Educ., 501 N.W.2d 88, 94 (Mich.
1993); Penn. Human Relations Comm’n v.
Norristown Area School Dist., 374 A.2d 671, 678 (Pa. 1977).
Subsection (b) requires an agency to allow affected
persons to challenge the legality or wisdom of guidance documents when it seeks
to rely on such documents to their detriment.
In effect, this subsection prohibits an agency from treating guidance
documents as though they were rules.
Because rules have the force of law (i.e., are binding), an agency need
not respond to criticisms of their legality or wisdom during an adjudicative
proceeding; the agency would be obliged in any event to adhere to them until
such time as they have been lawfully rescinded or invalidated. In contrast, a guidance document is not
binding. Therefore, when affected
persons seek to contest a position expressed in a guidance document, the agency
may not treat the document as determinative of the issues raised. See Recommendation 120C of the American Bar
Association, 118-2 A.B.A. Rep. 57, 380 (August 1993) (“When an agency proposes
to apply a nonlegislative rule . . . , it [should] provide affected private
parties an opportunity to challenge the wisdom or legality of the rule [and]
not allow the fact that a rule has already been made available to the public to
foreclose consideration of [their] positions”).
An integral aspect of a fair opportunity to challenge a
guidance document is the agency’s responsibility to respond reasonably to
arguments made against the document.
Thus, when affected persons take issue with propositions expressed in a
guidance document, the agency “must be prepared to support the policy just as
if the [guidance document] had never been issued.” Pacific Gas & Elec. Co. v. FPC, 506 F.2d
33, 38 (D.C. Cir. 1974); see Center for Auto Safety v. NHTSA, 452 F.3d 798, 807
(D.C. Cir. 2006); Professionals and Patients for Customized Care v. Shalala, 56
F.3d 592, 596 (5th Cir. 1995); American Mining Cong. v. MSHA, 995 F.2d 1106,
1111 (D.C. Cir. 1993).
An agency may not, therefore, treat its prior
promulgation of a guidance document as a justification for not responding to
arguments against the legality or wisdom of the positions expressed in such a
document. Flagstaff Broadcasting Found. v. FCC, 979
F.2d 1566 (D.C. Cir. 1992); Bechtel v. FCC, 957 F.2d 873 (D.C. Cir. 1992);
Giant Food Stores, Inc. v. Commonwealth, 713 A.2d 177, 180 (Pa. Cmwlth. 1998); Agency Policy Statements,
Recommendation 92-2 of the Admin. Conf. of the U.S. (ACUS), 57 Fed. Reg. 30,103
(1992), ¶ II.B. An agency may, however,
refer to a guidance document during a subsequent administrative proceeding and
rely on its reasoning, if it also recognizes that it has leeway to depart from
the positions expressed in the document.
See, e.g., Steeltech, Ltd. v. USEPA, 273 F.3d 652, 655-56 (6th Cir.
2001) (upholding decision of ALJ who “expressly stated that the [guidance
document] was not a rule and that she had the discretion to depart from [it], if
appropriate,” but who adhered to the document upon determining “that the
present case does not present circumstances that raise policy issues not
accounted for in the [document]”); Panhandle Producers & Royalty Owners
Ass’n v. Econ. Reg. Admin., 847 F.2d 1168, 1175 (5th Cir. 1988) (agency
“responded fully to each argument made by opponents of the order, without
merely relying on the force of the policy statement,” but was not “bound to
ignore [it] altogether”); American Cyanamid Co. v. State Dep’t of Envir.
Protection, 555 A.2d 684, 693 (N.J. Super. 1989) (rejecting contention that
agency had treated a computer model as a rule, because agency afforded opposing
party a meaningful opportunity to challenge the model’s basis and did not apply
the model uniformly in every case). See
generally John F. Manning, “Nonlegislative Rules,” 72 Geo. Wash. L. Rev. 893, 933-34 (2004); Ronald M.
Levin, “Nonlegislative Rules and the Administrative Open Mind,” 41 Duke L.J.
1497 (1992). The relevance of a guidance
document to subsequent administrative proceedings has been compared with that
of the agency’s adjudicative procedents.
See subsection (d) infra.
What constitutes a fair opportunity to contest a policy
statement within an agency will depend on the circumstances. See ACUS Recommendation 92-2, supra, ¶ II.B.
(“[A]ffected persons should be afforded a fair opportunity to challenge the
legality or wisdom of [a policy statement] and suggest alternative choices in
an agency forum that assures adequate consideration by responsible agency
officials,” preferably “at or before the time the policy statement is applied
to [them]”). Affected persons’ right to
a meaningful opportunity to be heard on the issues addressed in guidance documents
must be reconciled with the agency’s interest in being able to set forth its
interpretations and policies for the guidance of agency personnel and the
public without undue impediment. An
agency may use its rulemaking authority to set forth procedures that it
believes will provide affected persons with the requisite opportunity to be
heard. To the extent that these
procedures survive judicial scrutiny for compliance with the purposes of this
subsection (b), the agency will thereafter be able to rely on established
practice and precedent in determining what hearing rights to afford to persons
who may be affected by its guidance documents.
As new fact situations arise, however, courts should be prepared to
entertain contentions that procedures that have been upheld in past cases did
not, or will not, afford a meaningful opportunity to be heard to some persons
who may wish to challenge the legality or wisdom of a particular guidance
document.
Subsection (c) permits an agency to issue mandatory
instructions to agency staff members, typically those who deal with members of
the public at an early stage of the administrative process, provided that
affected persons will have a fair opportunity to contest the positions taken in
the guidance document at a later stage.
See Office of Management and Budget, Final Bulletin for Agency Good
Guidance Practices, 72 Fed. Reg. 3432 (2007), § II(2)(h) (significant guidance
documents shall not “contain mandatory language . . . unless . . . the language
is addressed to agency staff and will not foreclose agency consideration of
positions advanced by affected private parties”); ACUS Recommendation 92-2,
supra, ¶ III (an agency should be able to “mak[e] a policy statement which is
authoritative for staff officials in the interest of administrative uniformity
or policy coherence”). For example, an
agency manual might prescribe requirements that are mandatory for low-level
staff, leaving to higher-ranking officials the discretion to depart from the
interpretation or policy stated in the manual.
The question of what constitutes an adequate opportunity to be heard may
vary among agencies or programs. In some
programs, centralization of discretionary authority may be a necessary
concession to “administrative uniformity or policy coherence”; in other
programs, the obligation to proceed through multiple stages of review might be
considered so burdensome as to deprive members of the public of a meaningful
opportunity to obtain agency consideration of whether the guidance document
should apply to their particular situations. The touchstone in every case is whether the
opportunity to be heard prescribed by subsection (b) remains realistically
available to affected persons.
Subsection (d) is based on a similar provision in ABA
Recommendation No. 120C, supra. It is in
accord with general principles of administrative law, under which an agency’s
failure to reasonably explain its departure from established policies or
interpretations renders its action arbitrary and capricious on judicial review. See § 509(a)(3)(H) [Alternative 2] (court may
grant relief against agency action other than a rule if it is “inconsistent
with the agency’s prior practice or precedent, unless the agency has stated
credible reasons sufficient to indicate a fair and rational basis for the
inconsistency”); 1981 MSAPA § 5-116(c)(8)(iii) (equivalent provision); Yale-New
Haven Hospital v. Leavitt, 470 F.3d 71, 79-80 (2d Cir. 2006). It has been said that a guidance document
should constrain subsequent agency action in the same manner that the agency’s
adjudicative precedents do. See Peter L.
Strauss, “The Rulemaking Continuum,” 41 Duke L.J. 1463, 1472-73, 1486 (1992)
(cited with approval on this point in United States v. Mead Corp., 533 U.S.
218, 232 (2001)); see also Manning, supra, at 934-37.
One purpose of this subsection is to protect the
interests of persons who may have reasonably relied on a guidance
document. An agency that acts at
variance with its past practices may be held to have acted in an arbitrary and capricious
manner if the unfairness to regulated persons outweighs the government’s
interest in applying its new view to those persons. Heckler v. Community Health
Servs., 467 U.S. 51, 61 (1984) (“an administrative agency may not apply a new
[case law] rule retroactively when to do so would unduly intrude upon
reasonable reliance interests”); Miguel-Miguel v. Gonzales, 500 F.3d 941, 951
(9th Cir. 2007); Epilepsy Found. v. NLRB, 268 F.3d 1095, 1102 (D.C. Cir. 2001);
Microcomputer Tech. Inst. v. Riley, 139 F.3d 1044, 1050 (5th Cir. 1998). Accordingly, where persons may have
justifiably relied on a guidance document, the agency’s explanation for
departing from the position taken in that document should ordinarily include a
reasonable justification for the decision to override their reliance interests.
The first two sentences of subsection (f) are based
directly on Va. Code Ann. § 2.2-4008.
Similar provisions have been adopted in Arizona
and Washington. See Ariz. Rev. Stat. Ann. § 41-1091; Wash.
Rev. Code Ann. § 34.05.230(3)-(4).
The last sentence of the subsection is based on the
federal APA. See 5 U.S.C. § 552(a)(2);
Smith v. NTSB, 981 F.2d 1326 (D.C. Cir. 1993).
Subject to harmless error principles, see § 509(b), a court may invoke
the sanction prescribed in this section without necessarily concluding that the
party against whom the document is cited has valid objections to the substance
of the document.
Subsection
(g) is based on Wash. Rev. Code Ann. § 34.05.230(2), which provides for
petitions “requesting the conversion of interpretive and policy statements into
rules.” However, it is phrased more generally than the Washington provision, because an agency that
receives a rulemaking petition will not necessarily wish to “convert” the
existing guidance document into a rule without any revision. Knowing that
it will now be speaking with the force of law, in a format that would be more
difficult to alter than a guidance document is, the agency might prefer to
adopt a rule that is narrower than, or otherwise differently phrased than, the
guidance document that it would replace. In any event, the agency will,
as provided in section 317, need to explain any rejection of the petition,
whether in whole or in part, and such a rejection will be judicially reviewable
to the same extent as other actions taken under that section.
Subsection (h) extends the principles of section 317 by allowing interested
persons to petition an agency to revise or repeal an existing guidance
document. Thus, while this Act does not require an agency to obtain the
views of the public before issuing a guidance document, this subsection
provides a procedure by which members of the public may bring their views
regarding an existing guidance document to the agency’s attention and request
that the agency take account of those views. This process may be of
particular importance to persons who are indirectly affected by a guidance
document (such as persons who stand to benefit from the underlying regulatory
program) but are unlikely to be the targets of an enforcement action in which
they could challenge the legality or wisdom of the document under subsection
(b). See Nina A. Mendelson, “Regulatory Beneficiaries and Informal Agency
Policymaking,” 92 Cornell L. Rev. 397, 438-44 (2007); see also ACUS Recommendation
No. 76-5, 41 Fed. Reg. 56,769 (1976) (noting that section 553(e) of the federal
APA “allow[s] any person to petition at any time for the amendment or repeal of
. . . an interpretive rule or statement of general policy”).
The subsection requires an agency to respond to the petition in [sixty] or
fewer days. An agency that is not prepared to revise or repeal the
guidance document within that time period may initiate a proceeding for the
purpose of giving the matter further consideration. This proceeding can
be informal; the notice and comment requirements of Sections 304 through 308
are inapplicable to it, because those sections deal with rules rather than
guidance documents. The agency may, however, voluntarily solicit public
comments on issues raised by the petition. Cf. ACUS Recommendation 76-5,
supra, ¶ 2. This section does not prescribe a time period within which
the agency must complete the proceeding, but judicial intervention to compel
agency action “unlawfully withheld or unreasonably delayed” may be sought in an
appropriate case. § 501(a). If the agency declines to revise or
repeal the guidance document, within the [sixty] day period or otherwise, it
must explain its decision. Denials of petitions under this subsection,
like denials of petitions for rulemaking under section 317, are reviewable for
abuse of discretion, and the agency’s explanation will provide a basis for any
judicial review of the denial.
SECTION
311. CONTENTS OF RULE. Each rule filed by the agency with the
[publisher] under Section 315 must contain the text of the rule and be
accompanied by a record containing:
(1) the date the agency adopted the rule;
(2) a statement of the purpose of the rule
adopted;
(3) a reference to the specific statutory or
other authority authorizing the action;
(4) any findings required by any provision of law
as a prerequisite to adoption or effectiveness of the action;
(5) the effective date of the action;
(6)
the concise explanatory statement required by Section 312; and
(7)
any final regulatory analysis statement required by Section 305.
SECTION
312. CONCISE EXPLANATORY STATEMENT.
(a) At the time it adopts a rule, an agency shall
issue a concise explanatory statement containing:
(1) the agency’s reasons for the action, which
must include an explanation of the principal reasons for and against the
adoption of the rule, the agency’s reasons for overruling substantial arguments
and considerations made in testimony and comments, and its reasons for failing
to consider any issues fairly raised in testimony and comments; and
(2) the reasons for any substantial change
between the text of the proposed rule contained in the published notice of the
proposed adoption of the rule and the text of the rule as finally adopted.
(b) An agency may use the reasons contained in
the concise explanatory statement required by subsection (a) as justification
for the adoption, of the rule in any proceeding in which the validity of the
action is at issue.
Comment
Many states
have adopted the requirement of a concise explanatory statement. Arkansas (A.C.A. Section 25-15-204) and Colorado (C.R.S.A. Section 24-4-103) have
similar provisions. The federal Administrative Procedure Act uses the identical
terms in Section 553 (c) (5 U.S.C.A. Section 553). This provision also requires the agency to
explain why it rejected substantial arguments made in comments. Such explanation helps to encourage agency
consideration of all substantial arguments and fosters perception of agency
action as not arbitrary.
SECTION
313. INCORPORATION BY REFERENCE. A rule may incorporate by reference all or
any part of a code, standard, or rule that has been adopted by an agency of the
United States, this state, another state, or by a nationally recognized
organization or association, if:
(1) incorporation of the text of the code,
standard, or rule in the rule would be unduly cumbersome, expensive, or
otherwise inexpedient;
(2) the reference in the rule fully identifies the incorporated code,
standard, or rule by citation, location, and date, and states whether the rule includes any
later amendments or editions of the incorporated code, standard, or rule;
(3) the code, standard, or rule is readily
available to the public in written or electronic format;
(4) the rule states where copies of the code,
standard, or rule are available for a reasonable charge from the agency adopting the rule and where
copies are available from the agency of the United States, this state, another
state, or the organization or association originally issuing the code,
standard, or rule; and
(5)
The agency maintains a copy of the code, standard, or rule readily available
for public inspection at the agency office.
Comment
Several states have provisions that require
the agencies to retain the voluminous technical codes. See, Alabama,
Ala.Code 1975 Section 41-22-9; Michigan,
M.C.L.A. 24.232; and North Carolina,
N.C.G.S.A. '
150B-21.6. To avoid the problems created
by those retention provisions, but to assure that these technical codes are
available to the public, this section adopts several specific procedures. One protection is to permit incorporating by
reference only codes that are readily available from the outside promulgator,
and that are of limited public interest as determined by a source outside the
agency. See Wisconsin,
W.S.A. 227.21. These provisions will
guarantee that important material drawn from other sources is available to the
public, but that less important material that is freely available elsewhere
does not have to be retained.
SECTION
314. COMPLIANCE; EXEMPT RULES.
(a)
An action taken under this [article] including a rule adopted using the
emergency process under Section 309(a), or the expedited process under Section
309(b) is not valid unless taken in substantial compliance with the procedural
requirements of this [article].
(b)
Except as otherwise provided by law other than this act, this article does not
apply to:
(1)
statements concerning only the internal management of an agency and not
affecting private rights or procedures available to the public;
(2)
an intergovernmental or interagency memorandum, directive, or communication
that does not affect the rights of, or procedures and practices available to,
the public;
(3)
an opinion of the attorney general;
(4)
a statement that establishes criteria or guidelines to be used by the staff of
an agency in performing audits, investigations, or inspections, settling
commercial disputes, negotiating commercial arrangements, or in the defense,
prosecution, or settlement of cases, if disclosure of the criteria or
guidelines would enable law violators to avoid detection, facilitate disregard
of requirements imposed by law, or give a clearly improper advantage to persons
that are in an adverse position to the state; or
(5)
forms developed by an agency to
implement or interpret agency law or policy.
Comment
This
section is a slightly modified form of the 1961 Model State Administrative
Procedure Act, section (3)(c). See also section 3-113(a) and section 3-116 of
the 1981 Model State Administrative Procedures Act. Section 504(a) governs the
timing of judicial review proceedings to contest any rule on the ground of
noncompliance with the procedural requirements of this [act]. The scope of
challenges permitted under Section 504(a) includes all applicable requirements
of article 3 for the type of rule being challenged.
SECTION
315. FILING OF RULES. An agency shall file in written and
electronic format with the [publisher] each rule it adopts, including a rule adopted
under Section 309(a) or under Section 309(b), and all rules existing on [the
effective date of this [act]] that have not previously been filed. The filing must be done as soon after
adoption of the rule as practical. The [publisher]
shall affix to each rule and statement a certification of the time and date of
filing and keep a permanent register open to public inspection of all filed
rules and attached concise explanatory statements. In filing a rule, each
agency shall use a standard form prescribed by the [publisher].
Comment
This
section is based on the 1961 Model State Administrative Procedure Act, Section
4(a) and its expansion in the 1981 MSAPA, Section 3-114.
(a) Except as otherwise provided in subsection
(b), (c), or (d), [unless disapproved by the [rules review committee] or
[withdrawn by the agency under Section 703] after [the effective date of this
[act] each rule adopted, and the repeal of a rule, becomes effective [60] days
after publication of the rule in the [administrative bulletin] [on the [publisher]’s
Internet website.]
(b) The adoption of a rule may become effective
on a later date than that established by subsection (a) if the later date is
required by another statute or specified in the rule.
(c) The adoption of a rule becomes effective
immediately upon its filing with the [publisher] or on any subsequent date
earlier than that established by subsection (a) if it is required to be
implemented by a certain date by the federal or [state] constitution, a
statute, or court order.
(d)
A rule adopted using the emergency process under Section 309(a) becomes
effective immediately upon filing with the [publisher].
(e) A rule adopted using the expedited process
under Section 309(b) to which no objection is made becomes effective [30] days
after the close of the comment period, unless the rulemaking proceeding is
terminated or a later effective date is specified by the agency.
Comment
This is a
substantially revised version of the 1961 Model State Administrative Procedure
Act, Section 4 (b) & (c) and 1981 Model State Administrative Procedure Act,
Section 3-115. Most of the states have adopted provisions similar to both the
1961 Model State Administrative Procedure Act and the 1981 Model State
Administrative Procedure Act, although they may differ on specific time
periods. Some rules may have retroactive application or effect provided that
there is express statutory authority for the agency to adopt retroactive rules.
See Bowen v. Georgetown University Hospital
488 U.S.
204 (1988).
SECTION
317. PETITION FOR ADOPTION OF RULE. Any person may petition an agency to request
the adoption of a rule. Each agency shall prescribe by rule the form of the
petition and the procedure for its submission, consideration, and disposition. Not
later than [60] days after submission of a petition, the agency shall:
(1) deny the petition in a record and state its
reasons for the denial;
(2) initiate rulemaking proceedings in accordance
with this [act].
Comment
This
section is substantially similar to the 1961 MSAPA. See also section 3-117 of
the 1981 MSAPA. Agency decisions that decline to adopt a rule are judicially
reviewable for abuse of discretion (See Massachusetts v. EPA 127 S. Ct. 1438 (2007) (EPA decision to reject rulemaking
petition and therefore not to regulate greenhouse gases associated with global
warming was judicially reviewable and decision was arbitrary and capricious.).
SECTION 401. WHEN ARTICLE APPLIES; CONTESTED CASES. This [article] applies to an adjudication made
by an agency in a contested case.
Comment
Article 4 of this Act does not apply
to all adjudications but only to those adjudications, defined in Section 102 as
a “contested case.” Contested case is
the definition of the subset of adjudications that fall within this section
because law as defined in Section 102(14) requires an evidentiary hearing to
resolve particular facts or the application of law to facts. This section is subject to the exceptions in
Sections 405 and 406 for informal hearing and Section 408 for emergency hearing
if the requirements for those exceptions under this Article apply. If the
requirements for informal adjudication under Sections 405 and 406 or an
emergency adjudication under Section 408 are met, a hearing in a contested case
may be conducted following the procedures in those sections. All contested cases are also subject to
Section 402 of this article.
For a
statute to create a right to an evidentiary hearing, express use of the term “evidentiary
hearing” is not necessary in the statute. Statutes often use terms like “appeal”
or “proceeding” or “hearing”, but in context it is clear that they mean an
evidentiary hearing. An evidentiary hearing is one in which the resolution of
the dispute involves particular facts and the presiding officer is limited to
material in the record in making his decision.
Hearings
that are required by procedural due process guarantees include life, liberty
and property interests, which arise where a statute creates a justified
expectation or legitimate entitlement. This section includes more than what
were described as “rights” under older common law. In cases where the right to an evidentiary
hearing is created by due process, attention is directed to Section 405(2)D infra,
which may permit an informal hearing.
Section
401, governing contested case hearings, does not apply to investigatory
hearings, a hearing that merely seeks public input or comment, pure
administrative process proceedings such as tests, elections, or inspections,
and situations in which a party has a right to a de novo administrative or
judicial hearing. An agency may by rule
make all or part of article 4 applicable to adjudication that does not
fall within the requirements of Section 401, including hearing rights conferred
by agency regulations, or on the record appeals.
This
section draws upon the California, (see Cal. Cal.Gov.Code Section 11410.10);
Minnesota, (see Minnesota Statutes Annotated, Section 14.02, subd. 3;
Washington (see Revised Code of Washington, 34.05.413(2) and Kansas (see Kansas
Stat. Ann., KS ST Section 77-502(d) & Kansas Stat. Ann., KS ST Section
77-503).
(a) In a contested case, the presiding officer
shall manage the proceeding in a manner that will promote a fair, just, orderly
and prompt resolution.
(b)
The presiding officer shall be the agency head, one or more members of the
agency head that is a body of individuals [,
in the discretion of the agency head, one or more administrative law
judges assigned by the office in accordance with Section 602,] or, unless
prohibited by law, one or more persons designated by the agency head .
(c) An individual who has served as investigator,
prosecutor, or advocate at any stage in a contested case may not serve as a
presiding officer or assist or advise any presiding officer in the same
proceeding.
(d) An individual who is subject to the
authority, direction, or discretion of an individual who has served as
[investigator,] prosecutor [,] or advocate at any stage in a disputed case,
including investigation, may not serve as presiding officer or assist or advise
a presiding officer in the same proceeding.
(e) A presiding officer is subject to
disqualification for bias, prejudice, financial interest, or any other factor
that would provide reasonable doubts
about the impartiality of the presiding officer]. A presiding officer, after
making a reasonable inquiry, shall disclose to all parties any known facts related
to grounds for disqualification that would be material to the impartiality of
the presiding officer in the contested case proceeding.
(f) Any party may petition for the disqualification
of a presiding officer promptly after receipt of notice indicating that the
person will preside, or promptly upon discovering facts establishing grounds
for disqualification, whichever is later. The party requesting the
disqualification of the presiding officer must file a petition that states with
particularity the grounds upon which it is claimed that a fair and impartial
hearing cannot be accorded, or the applicable rule or canon of practice or
ethics that requires disqualification.
If grounds for disqualification are discovered at a time later than the
beginning of the taking of evidence, a party must request disqualification
promptly after discovery. The petition may be denied if the party fails to
exercise due diligence in requesting disqualification after discovering grounds
for disqualification.
(g) A presiding officer whose disqualification is
requested shall determine whether to grant the petition and state facts and
reasons for the determination in writing. A presiding officer’s decision to
deny disqualification is not immediately subject to judicial review.
(h) If a substitute presiding officer is
required, the substitute must be appointed [as required by law, or if no law
governs then] by:
(1) the Governor, if the original presiding
officer is an elected official; or
(2) the appointing authority, if the original
presiding officer is an appointed official.
(i)
The provisions of this section governing disqualification of a presiding
officer also govern disqualification of the agency head or other person or body
to which the power to hear or decide in the proceeding is delegated.
(j)
If participation of the agency head is necessary to enable the agency to take
legally effective action, an agency head may continue to participate notwithstanding
grounds for disqualification.
Comment
Subsection
(b) governs who may be appointed to serve as a presiding officer in a disputed
case. If the case is heard by more than
one presiding officer, as when the agency head hears a disputed case en banc,
one member of the agency head may serve as chair, but all of the persons
sitting as judge in the case are collectively the presiding officer.
Subsection
(b) confers a limited amount of discretion upon the agency head to determine
who will preside. The presiding officer
may be either the agency head, or one or more members of the agency head, or
one or more administrative law judges assigned by the Office of Administrative
Hearings in accordance with Section 603. Without the bracketed language,
subsection (b) resembles the law in a group of states that have created a
central panel of administrative law judges, and have made the use of
administrative law judges from the central panel mandatory unless the agency
head or one or more members of the agency head presides. In some states,
however, the use of central panel administrative law judges is mandatory only
in certain enumerated agencies or types of proceedings. If the bracketed
language is adopted, the agency head, in addition to the preceding options for
appointment and unless prohibited by law, may designate any one or more “other
persons” to serve as presiding officer.
This discretion is subject to subsections (c) & (d) on separation of
functions. This discretion is also
limited by the phrase “unless prohibited by law,” included in the bracketed
language, which prevents the use of “other persons” as presiding officers to
the extent that the other state law prohibits their use. Thus, if this language
is adopted by a state that has an existing central panel of administrative law
judges whose use is mandatory in enumerated types of proceedings, the agencies
must continue to use the central panel for those proceedings, but may exercise
their option to use “other persons” for other types of proceedings.
Subsection
(e) is based upon 1981 MSAPA Section 4-202(b). See also California Government
Code Section 11425.40(a). Disclosure duties under subsection (e) are based on
state ethics codes governing ethical standards for judges in the judicial branch
of the government, Section 12 of the 2000 Uniform Arbitration Act, and on state
law governing the ethical responsibilities of government officials and
employees. See Section 410.
Subsection
(f) is based on 1981 MSAPA Section 4-202(c).
Subsection
(i) is based on California Government Code Section 11425.40(c).
Subsection
(j) adopts the rule of necessity for decision makers. See California Government
Code Section 11512(c) (agency member not disqualified if loss of a quorum would
result); United States
v. Will (1980) 449 U.S. 200 (common law
rule of necessity applied to U.S. Supreme Court to decide issues before the
court relating to compensation all Article III judges.
SECTION
403. CONTESTED CASE PROCEDURE.
(a) Except for emergency adjudications, this
section applies to contested cases.
(b) Except as otherwise provided in Section
408(c), an agency shall give to the person to which an agency action is
directed notice that is consistent with Section 404.
(c) An agency shall make available to the person
to which an agency action is directed a copy of the agency procedures governing
the case.
(d) The following rules apply in a contested
case:
(1) Upon proper objection, the presiding officer [must]
[may] exclude evidence that is immaterial, irrelevant, unduly repetitious, or
excludable on constitutional, or statutory grounds or on the basis of an
evidentiary privilege recognized in the courts of this state. The presiding officer may exclude evidence
that is objectionable under the applicable rules of evidence. Evidence may not be excluded solely because
it is hearsay.
ALTERNATIVE A
Hearsay
evidence may be used for the purpose of supplementing or explaining other
evidence except that on timely objection it may not be sufficient in itself to
support a finding unless it would be admissible over objection in a civil
action.
ALTERNATIVE B
Hearsay
evidence may be sufficient to support fact findings if that evidence
constitutes reliable, probative, and substantial evidence.
(2)
An objection must be made at the time the evidence is offered. In the
absence of an objection, the presiding officer may exclude evidence at the time
it is offered. A party may make an offer
of proof when evidence is objected to, or prior to the presiding officer’s
decision to exclude evidence.
(3) Any part of the evidence may be received in
written form, if doing so will expedite the hearing without substantial
prejudice to the interests of a party.
Documentary evidence may be received in the form of copies or excerpts
or by incorporation by reference.
(4) All evidence must be made part of the hearing
record of the case. No factual
information or evidence may be considered in the determination of the case
unless it is part of the agency hearing record. If the agency hearing record
contains information that is not public, the presiding officer may conduct a
closed hearing to discuss the information, issue necessary protective orders,
and seal all or part of the hearing record.
(5) The presiding officer may take official
notice of all facts of which judicial notice may be taken and of other
scientific and technical facts within the specialized knowledge of the
agency. Parties must be notified at the
earliest practicable time, either before or during the hearing, or by reference
in preliminary reports, preliminary decisions or otherwise, of the facts
proposed to be noticed and their source, including any staff memoranda or
data. The parties must be afforded an
opportunity to contest any officially noticed facts before the decision is
announced.
(6) The experience, technical competence, and
specialized knowledge of the presiding officer may be used in the evaluation of
the evidence in the agency hearing record.
(e) Except for emergency hearings under Section
408, in a contested case, the presiding officer, at appropriate stages of the
proceedings, shall give all parties the opportunity to file pleadings, motions,
and objections in a timely manner. The presiding officer, at appropriate stages
of the proceeding, may give all parties full opportunity to file briefs,
proposed findings of fact and conclusions of law, and proposed, recommended, or
final orders. The presiding officer may, with the consent of all parties, refer
the parties in a contested case proceeding to mediation or other dispute
resolution procedure.
(f) Except for
emergency hearings under Section 408, in a contested, to the extent
necessary for full disclosure of all relevant facts and issues, the presiding
officer shall afford to all parties the opportunity to respond, present
evidence and argument, conduct cross-examination, and submit rebuttal evidence.
(g) Except as otherwise provided by law other than
this act, the presiding officer may conduct all, or part of, an evidentiary
hearing, or a prehearing conference, by telephone, television, video
conference, or other electronic means, if each party to a hearing has an
opportunity to hear, speak, and be heard in the proceeding as it occurs.
(h) All testimony of parties and witnesses must
be given under oath or affirmation and the presiding officer may administer an
oath or affirmation for that purpose.
(i) A hearing in a contested case is open to the
public, except for a hearing or part of a hearing that the presiding officer
closes on the same basis and for the same reasons that a court of this state
may close a hearing or closes pursuant to a statutory provision other than this
[act] that authorizes closure. To the extent that a hearing is conducted by
telephone, television, video conference, or other electronic means, and is not
closed, a hearing is open if members of the public have an opportunity, at
reasonable times, to hear or inspect the agency’s record, and to inspect any
transcript obtained by the agency.
(j) Unless prohibited by law other than this
[act], at the party’s expense, any party may be represented by counsel or may
be advised, accompanied, or represented by another individual.
(k)
a party may exercise the right to self representation in a contested case, and
the presiding officer may explain contested case procedures to the self
represented party to the extent
consistent with fair hearing requirements.
(l) The decision in a contested case must be written,
based on the agency hearing record, and include a statement of the factual and
legal bases of the decision.
(m) Subject to Section 204, the rules by which an
agency conducts a contested case may include provisions more protective of the
rights of the person to which the agency action is directed than the requirements
of this section.
Comment
This
section specifies the minimum hearing requirements that must be met in disputed
cases under this act. This section applies to all agencies whether or not an
agency rule provides for a different procedure; this procedure is excused only
if a statute expressly provides otherwise. This section does not prevent an
agency from adopting more stringent procedures than those in this section. This section does not supersede conflicting
state or federal statutes.
There are
several interrelated purposes for this procedural provision: 1) to create a
minimum fair hearing procedure; and 2) to attempt to make that minimum
procedure applicable to all agencies. In many states, individual agencies have
lobbied the legislature to remove various requirements of the state
Administrative Procedure Act from them. The result in a considerable number of
states is a multitude of divergent agency procedures. This lack of procedural
uniformity creates problems for litigants, the bar and the reviewing courts.
This section attempts to provide a minimum, universally applicable procedure in
all disputed cases. The important goal of this section is to protect citizens
by a guarantee of minimum fair procedural protections. The procedures required
here are only for actions that fit the definition of a disputed case and fall
within the provisions of Section 401.
Thus, they do not spread quasi judicial procedures widely, and do not
create any significant agency loss of efficiency or increased cost.
This
section is modeled in part on the Arizona Regulatory Bill of Rights, see A.R.S.
Section 41-1001.01 and the California Administrative Adjudication Bill of
Rights, see West Ann.Cal.Gov.Code Section 11425.10.
Under
subsection (c), agency procedures governing the case refers to rules of
practice adopted under Section 202, or default procedural rules adopted under
Section 204, or procedures required under the agency governing statute.
Under
subsection (d)(1) evidence is unduly repetitious if its probative value is
substantially outweighed by the probability that its admission will necessitate
undue consumption of time. In most
states a presiding officer=s
determination that evidence is unduly repetitious may be overturned only for
abuse of discretion. Under subsection (d)(1), the legal residuum rule is not
adopted and hearsay evidence can be sufficient to support fact findings if the
hearsay evidence is sufficiently reliable. This provision is based on the
federal A.P.A. provision, 5 U.S.C. Section 556 (d), Richardson
v. Perales, (1971) 402 U.S.
389 and the 1981 MSAPA Section 4-215(d). (reasonably prudent person standard
for reliability).
Subsection
(d)(4) information that is not a public record means information not subject to
disclosure under the applicable public records act in the jurisdiction.
Subsection
(d)(5) is based on 1981 MSAPA Section 4-212(f). See also California Government
Code Section 11515, and 1961 MSAPA Section 10(4).
Subsection
(d)(6) is based on 1981 MSAPA Section 4-215(d). See also California Government Code
Section 11425.50(c) which contains the same language.
Under
subsection (g) hearings in contested cases can be conducted using the
telephone, television, video conferences, or other electronic means. Subsection
(g) is based in part on California Government Code Section 11440.30. Due
process of law may require live in person hearings. See Whiteside v. State,
(2001) 20 P. 3d 1130 (Supreme Court of Alaska) (due process of law violated
with telephone hearing in driver’s license revocation hearing when driver’s
credibility was material to the hearing, and the driver was not offered an in
person hearing); But see Bancock v. Employment Division (1985) 72 Or. App. 486,
696 P. 2d 19, 21 (telephone hearings do not violate due process of law in hearings
in which the credibility of a party is at issue because audible indicia of a
witness’s demeanor are sufficient for credibility).
Subsection
(k) provides for a right of self representation for parties in contested case
proceedings. Subsection (k) also allows presiding officers to accommodate pro
se litigant’s unfamiliarity with agency procedures in contested cases by
explaining those procedures to the pro se litigant to the extent consistent
with fair hearing and impartial decision maker requirements. Goldberg v. Kelley
(1970) 397 U.S.
254 (impartial decision-making is essential to due process of law). The fair
hearing limits would be exceeded if the presiding officer violated impartial
decision maker requirements by improperly assisting one party in presenting
that parties case at the hearing.
The subsection
(l) written decision requirement is based in part on 1961 MSAPA Section 12, and
on1981 MSAPA Section 4-215(g). See also California Government Code Section
11425.50. See also sections 801, and 802, electronic publication of written
decisions, and the provisions of 15 U.S.C. Section 7004.
Section 10
of the 1961 MSAPA contained many similar provisions.
SECTION
404. NOTICE.
(a) Except for an emergency adjudication under
Section 408, an agency shall give reasonable notice of the right to an
evidentiary hearing in a contested case.
(b) In case of applications or petitions
submitted by persons other than the agency, within a reasonable time after
filing, the agency shall give notice to all parties that an action has been
commenced. The notice must include:
(1) the official file or other reference number,
the name of the proceeding, and a general description of the subject matter;
(2) the name, official title, mailing address
[e-mail address] [facsimile address] and telephone number of the presiding
officer;
(3) a statement of the time, place, and nature of
the prehearing conference or hearing, if any;
(4) [the name, official title, mailing address,
and telephone number of any attorney or employee who has been designated to
represent the agency]; and
(5) any other matter that the presiding officer
considers desirable to expedite the proceedings.
(c) In an action initiated by the agency, the
agency shall give an initial notice to the party or parties against which the
action is brought as provided by law. The
notice shall include:
(1) notification that an action that may result
in an order has been commenced against them;
(2) a short and plain statement of the matters
asserted, including the issues involved;
(3) a statement of the legal authority and
jurisdiction under which the hearing is held that includes identification of
the statutory sections involved;
(4) the official file or other reference number,
the name of the proceeding, and a general description of the subject matter;
(5) the name, official title, mailing address,
[e-mail address,] [facsimile address,] and telephone number of the presiding
officer or, if no officer has been appointed at the time the notice is given,
the name, official title, mailing address, [e-mail address,] [facsimile
address,] and telephone number of any attorney or employee designated to
represent the agency;
(6) a statement that a party who fails to attend or
participate in any subsequent proceeding in a contested case may be held in
default;
(7) a statement that the party served may request
a hearing and instructions in plain language about how to request a hearing;
and
(8) the names and last known addresses of all
parties and other persons to which notice is being given by the agency.
(d) When a prehearing meeting or conference is
scheduled, the agency shall give parties notice at least 14 days before the
hearing that contains the information contained in subsection (c).
(e) Notice may include other matters that the
presiding officer considers desirable to expedite the proceedings.
Comment
This
section is taken from: the 1961 Model State Administrative Procedure Act,
section 9 and the 1981 Model State Administrative Procedure Act, Section
4-206. See also; Oregon, O.R.S. Section
183.415; Kansas, K.S.A. Section 77-518; Iowa, I.C.A. Section 17A.12; Montana,
MCA 2-4-601; and Michigan, M.C.L.A. 24.271.
SECTION 405. AGENCY HEARING
RECORD IN CONTESTED CASE.
(a) An agency shall maintain an official hearing record
in each contested case.
(b) The agency hearing record consists of:
(1) notices of all proceedings;
(2) any pre-hearing order;
(3) any motions, pleadings, briefs, petitions,
requests, and intermediate rulings;
(4) evidence admitted, received, or considered;
(5) a statement of matters officially noticed;
(6) proffers of proof and objections and rulings
thereon;
(7) proposed findings, requested orders, and
exceptions;
(8) the record prepared for the presiding officer
at the hearing, and any transcript of all or part of the hearing considered
before final disposition of the proceeding;
(9) any final order, recommended decision, or
order on reconsideration;
(10) all memoranda, data, or testimony prepared
under Section 409; and
(11) matters placed on the record after an ex
parte communication.
(c)
The agency hearing record constitutes
the exclusive basis for agency action in a contested case and for judicial
review of the case.
SECTION 406. EMERGENCY ADJUDICATION PROCEDURE.
(a) Unless prohibited by law other than this
[act], an agency may conduct an emergency adjudication in a contested case
under the procedure provided in this section.
(b) An agency may issue an order under this
section only to deal with an immediate danger to the public health, safety, or
welfare. The agency may take only action
that is necessary to deal with the immediate danger to the public health, safety,
or welfare. The emergency action must be
limited to temporary relief.
(c) Before issuing an order under this section,
the agency, if practicable, shall give notice and an opportunity to be heard to
the person to which the agency action is directed. The notice and hearing may be oral or written
and may be communicated by telephone, facsimile, or other electronic
means.
(d) Any order issued under this section must
contain an explanation that briefly explains the factual and legal reasons for making
the decision using the procedures provided by this Section of the Act.
(e) An agency shall give notice of an order to
the extent practicable to the person to which the agency action is
directed. The order is effective when
issued.
(f) After issuing an order pursuant to this
section, an agency shall proceed as soon as practicable to provides an
opportunity for a hearing following contested case procedure under Section 403
in order to resolve the issues underlying the temporary relief.
(g) The agency record in an emergency adjudication
consists of any testimony or records concerning the matter that were considered
or prepared by the agency. The agency
shall maintain those records as its official record.
(h) On issuance of an order under this section,
the person against which the agency action is directed may obtain judicial
review without exhausting administrative remedies.
Comment
The
procedure of this section is intended permit immediate agency emergency
adjudication, but also to provide minimal protections to parties against whom
such action is taken. Emergencies
regularly occur that immediately threaten public health, safety or welfare:
licensed health professionals may endanger the public; developers may act
rapidly in violation of law; or restaurants may create a public health
hazard. In such cases the agencies must
possess the power to act rapidly to curb the threat to the public. On the other hand, when the agency acts in
such a situation, there should be some modicum of fairness, and the standards
for invoking such remedy must be clear, so that the emergency label may be used
only in situations where it fairly can be asserted that rapid action is
necessary to protect the public.
Federal and
state case law have held that in an emergency situation an agency may act rapidly
and postpone any formal hearing without violation, respectively, of federal or
state constitutional law. FDIC v.
Mallen, 486 U.S. 230 (1988);
Gilbert v. Homar (1997) 520 U.S.
924; Dep=t of
Agric. v. Yanes, 755 P.2d 611 (OK. 1987).
The generic
provision in this section has several advantages over the present divergent
approaches to emergency agency action.
First, all agencies have the needed power to act without delay, but
there is provision for some type of brief hearing, if feasible. Second, this article limits the agency to
action of this type only in a genuine, defined emergency. Third, there are pre and post deprivation
protections. This section seeks to
strike an appropriate balance between public need and private fairness.
This
section does not apply to an emergency adjudication, cease and desist order, or
other action in the nature of emergency relief issued pursuant to express
statutory authority arising outside of this act.
SECTION 407. EX PARTE COMMUNICATIONS.
(a)
Except as otherwise provided in subsections (b) and (c), while a contested case
is pending, the presiding officer may not make to or receive from any person any
communication regarding any issue in the proceeding without notice and
opportunity for all parties to participate in the communication. For the
purpose of this section, a proceeding is pending from the issuance of the
agency’s pleading, or from an application for an agency decision, whichever is
earlier.
(b)
The presiding officer may make communications to or receive communications from
a law clerk or may communicate on ministerial matters with a person who serves
on the personal staff of the presiding officer if the person providing legal
advice or ministerial information has not served as investigator, prosecutor,
or advocate at any stage of the proceeding. When acting as the decision maker,
the agency head may make communications to or receive communications from a
person authorized by law to provide legal advice to the agency if the person
providing legal advice has not served as investigator, prosecutor, or advocate
at any stage of the proceeding.
(c)
An employee or representative may make communications to or receive communications
from an agency head sitting as presiding officer if:
(1) the communications consist of an
explanation of the technical or scientific basis of, or technical or scientific
terms in, the evidence in the agency hearing record; and
(2) the employee or representative giving the
technical explanation has not served as investigator, prosecutor, or advocate
at any stage of the proceeding;
(3) the employee or representative giving the
technical explanation does not receive communications that the agency head is
prohibited from receiving; and
(4) the technical or scientific term on which
explanation is sought is not a contested issue or an issue whose application is
central to the decision in the case.
(d) If the presiding officer receives advice
under subsection (c), the advice, if written, must be made part of the agency hearing
record. If the advice is oral, a
memorandum containing the substance of the advice must be made part of the
record and the parties must be notified of the communication. The parties may respond to the advice of an
employee or representative of the agency in a record that is made part of the
hearing record.
(e)
If a presiding officer makes or receives a communication in violation of this
section, if the communication is:
(1) written, the presiding officer shall make
the communication a part of the hearing record and prepare and make part of the
record a memorandum that contains the response of the presiding officer to the
communication and the identity of the parties who communicated; or
(2) oral,
the presiding officer must prepare a memorandum that contains the substance of
the verbal communication, the response of the presiding officer, and the
identity of the parties who communicated.
(f) If a communication prohibited by this section
is made, the presiding officer shall notify all parties of the prohibited
communication and permit parties to respond in writing within 15 days. Upon good cause shown, the presiding officer
may permit additional testimony in response to the prohibited communication.
(g) When the presiding officer is a member of an
agency head that is a body of persons, the presiding officer may communicate
with the other members of the agency head. Otherwise, While a proceeding is
pending, there may be no communication, direct or indirect, regarding the
merits of any issue in the proceeding between the presiding officer and the
agency head or other person or body to which the power to hear or decide in the
proceeding is delegated.
(h) If necessary to eliminate the effect of a
communication received in violation of this section, a presiding officer may be
disqualified, the portions of the record pertaining to the communication may be
sealed by protective order, or other appropriate relief may be granted including
dismissal of the application or other adverse ruling on the merits as a
sanction.
Comment
This
section is not intended to be applied to communications made by or to a
presiding officer or personal staff assistant regarding noncontroversial
practice and procedure matters such as number of pleadings, number of copies or
type of service. Communications related
to contested procedural issues or motions are covered by Section 409(a). Other
communications not on the merits but related to security or to the credibility
of a party or witness are covered by Section 409(a). See Matthew Zaheri Corp.,
Inc. v. New Motor Vehicle Board (1997) 55 Cal. App. 4th 1305. However, this section goes further in
permitting advice to the presiding officer from staff members on complex
technical and scientific matters, but permits parties to reply to those staff
communications.
This
section also provides another remedy besides disclosure and party reply. In a case where disclosure and reply are
inadequate to cure or eliminate the effect of the ex parte contact, a
protective order may be issued. The
intent of authorizing the protective order is to keep the ex parte material
from the successor presiding officer.
This
section draws in part from the systematic California provisions on ex parte
contacts. See West=s Ann.Cal.Gov.Code Section 11430.10 to
11430.80. The California
sections address many of the problems that arise in this area, and attempt to
distinguish technical, advisory contacts from agency staff to presiding
officers or agency heads from other kinds of party contacts.
(a)
Except as otherwise provided in subsection (b), the administrative law judge
code of ethics adopted in the state governs the hearing and other conduct of a
a full time administrative law judge or
other presiding officer adjudicating a contested case.]
(b)
Section 407 governs the standards for ex parte communication. Section 402
governs disqualification of presiding officers. Restrictions on financial
interests, political activity or on accepting honoraria, gifts, or travel are
governed by state law other than this act.
Comment
Section 408
is based on the provisions of the California
A.P.A. California Government Code Sections 11475 to 11475.70 (Administrative
Adjudication Code of Ethics). This section applies to administrative law judges
the provisions of the Code of Judicial Ethics applicable to judges in the
judicial branch in the state, with exceptions as noted. Some of the exceptions
are based on provisions of this act. Other exceptions are based on state
statutes governing the ethical responsibilities of government officials and
employees. Section 408 provides applicable law to govern disqualification of
presiding officers under Section 402(e).
SECTION 409. INTERVENTION.
(a) A presiding officer shall grant a timely petition
for intervention in a contested case if:
(1) the petitioner has a statutory
right to initiate, or to intervene in, the proceeding in which intervention is
sought.
(2) the petitioner has an interest
that will or may be adversely affected by the outcome of the proceeding and
that interest is not adequately represented by existing parties.
(b)
A presiding office may grant a timely petition
for intervention when the petitioner has a conditional statutory right to
intervene, or when the petitioner’s claim or defense is based on the same
transaction or occurrence as the contested case.
(c)
When intervention is granted or at any
subsequent time, the presiding officer may impose conditions upon the
intervener’s participation in the proceedings.
(d) A presiding officer may permit intervention provisionally
and, at any time later in the proceedings or at the end of the proceedings, may
revoke the provisional intervention.
(e)
Upon request by the interveners or existing parties, the presiding officer may
hold a hearing on the intervention petition.
(f)
The presiding officer, at least [24
hours] before the hearing, shall issue an order granting or denying each
pending petition for intervention, specifying any conditions, and briefly
stating the reasons for the order. The presiding officer shall promptly give
notice to the petitioner for intervention and to all parties of an order
granting, denying, or modifying intervention.
Comment
Section 411
is based in part of 1981 MSAPA Section 4-209. See also Federal Rule of Civil
Procedure Rule 24 (intervention of right under Rule 24(a), and permissive
intervention under Rule 24(b)).
Subsection (c)
recognizes the normal judicial practice of limiting the participation of
intervenors, especially on cross examination, to their particular interest and
taking any other procedural steps or
limitations in order to maintaining an orderly and expeditious hearing. Mandatory
intervention is provided for in subsections (a)(1), and (2). Permissive
intervention is provided for in subsection (b).
Subsection (d) recognizes the power of the presiding officer to dismiss
a party who has intervened at any time after intervention has occurred when it
appears that the conditions of this section or the requirements for the
intervening party’s standing have not been satisfied. Subsection (f) provides for notice suitable
under the circumstances to enable parties to anticipate and prepare for changes
that may be caused by the intervention.
SECTION 410. SUBPOENAS.
(a) In a contested case, upon tender of the
proper fees for witnesses calculated in the same manner as under the rules of
civil procedure by the party
applying for the subpoena, the presiding officer or any other officer to whom
the power is delegated may issue subpoenas for the attendance of witnesses and
the production of books, records and other evidence for use at the hearing.
(b) After the commencement of a contested case,
when a written request for a subpoena to compel attendance by a witness at the
hearing of the case or to produce books, papers, records, or records that are
relevant and reasonable is made by a party, the presiding officer shall issue
subpoenas.
(c) Subpoenas, protective orders, and other
orders issued under this section may be enforced pursuant to the rules of civil
procedure.
Comment
Section 412
is based in part on 1981 MSAPA Section 4-210. See also California Government Code
sections 11450.05 to 11450.50 (subpoenas in administrative adjudication).
SECTION 411.
DISCOVERY.
(a)
As used in this section, “statement”
includes records signed by a person of his or her oral statements and records
that summarize these oral utterances.
(b)
Except in an emergency hearing under
Section 408, a party, upon written notice to another party at least [ ] days before an evidentiary hearing, is
entitled to:
(1) obtain the names and addresses of witnesses
that the disclosing party will present at the contested case hearing to the
extent known to the other party; and
(2) inspect and make a copy of any of the
following material in the possession, custody, or control of the other party:
(A) a statement of a person named in the initial
pleading or any subsequent pleading if it is claimed that respondent’s act or
omission as to that person is the basis for the adjudication;
(B) a statement relating to the subject matter of
the adjudication made by any party to another
party or person;
(C) statements of witnesses then proposed to be
called and of other persons having knowledge of facts that are the basis for
the proceeding;
(D) all writings, including reports of mental,
physical, and blood examinations and things which the party then proposes to
offer in evidence;
(E) investigative reports made by or on behalf of
the agency or other party pertaining to the subject matter of the adjudication,
to the extent that these reports contain the names and addresses of witnesses
or of persons having personal knowledge of the acts, omissions, or events that
are the basis for the adjudication or reflect matters perceived by the
investigator in the course of the investigation, or contain or include by
attachment any statement or writing described in this section;
(F) any exculpatory material in the possession of
the agency; or
(G) any other material for good cause shown.
(3)
Parties to contested case proceedings have a duty to supplement responses provided
under subsection (b) to include information thereafter acquired to the extent
that information will be relied upon in the contested case hearing.
(c) Upon petition, a presiding officer may issue
a protective order for any material for which discovery is sought under this
section that is exempt, privileged, or otherwise made confidential or protected
from disclosure by law.
(d)
Upon petition, the presiding officer may
issue an order compelling discovery for refusal to comply with a discovery
request unless good cause exists for refusal.
Failure to comply with the discovery order shall be enforced according
to the rules of civil procedure.
Comment
Discovery
in administrative adjudication is more limited than in civil court proceedings.
Nevertheless discovery is available for the items listed in subsection (b). See
California Government Code Section 11507.6 to 11507.7 (discovery in
administrative adjudication).
SECTION 412. CONVERSION.
(a) An adjudication in a contested case of one
type may be converted to an adjudication of another type under this [article]
if:
(1) the adjudication at the time of conversion no
longer meets the requirements under this [article] for adjudication of the type
for which it was originally commenced; and
(2) at the time it is converted it meets the
requirements under this [article] for the type of adjudication to which it is
being converted.
(b) To the extent practicable and consistent with
the rights of the parties and the requirements of this [article] relative to
the new proceeding, the record of the original proceeding must be used in the
new proceeding.
(c) The agency may adopt rules to govern the
conversion of one type of proceeding under this [article] to another. The rules may include an enumeration of the
factors to be considered in determining whether and under which circumstances
one type of proceeding will be converted to another.
Comment
Section 412
is based in part on 1981 MSAPA Section 1-107. See also California Government
Code Sections 11470.10 to 11470.50. Under this section the presiding officer is
empowered to convert from one type of disputed case adjudication to another in
appropriate circumstances. Conversion
may only occur if two requirements are satisfied: the situation that met the
requirements under this article for the original proceeding must no longer
exist, and the requirements for the new type of proceeding under this article
are now satisfied. Meeting both requirements is mandatory in order to prevent a
presiding officer from converting an adjudication under Section 402 to an
informal adjudication in a situation where the procedural
protections of Section 402 are still justified under this article.
SECTION 413. DEFAULT.
(a) Unless displaced or modified by law other
than this [act], if a party without good cause fails to attend or participate
in a pre-hearing conference, hearing, or other stage of a disputed case, the
presiding officer may issue a default order or proceed with a hearing in the
absence of the party.
(b) Under subsection (a), a default judgment must
be based on the absent party=s
admissions or other evidence and affidavits, which can be used without notice
to the absent party. This subsection
does not apply where the burden is on the absent party to establish that he or
she is entitled to the agency action sought.
(c) Within [ ] days after a decision is rendered
against a party who failed to appear, that party may petition the presiding
officer to vacate the recommended or final order. If adequate reasons are provided showing good
cause for the party’s failure to appear, the presiding officer shall vacate the
decision and, after proper service of notice, conduct another evidentiary
hearing. If adequate reasons are not provided showing good cause for the
party's failure to appear, the presiding officer shall deny the motion to
vacate.
Comment
Under this
section the presiding officer the power to impose a default judgment. However,
the default decision must be based upon prima facie evidence. Among the other laws that modify the
presiding officer’s discretion are the [state] rules of civil procedure. The
section thus authorizes a presiding officer to issue a default judgment for the
same reasons as contained in the state rules of civil procedure.
Subsection
(b) is adapted from the Alaska Administrative Procedure Act, AS 44.62.530 and
the California Administrative Procedure Act, West’s Ann.Cal.Gov.Code ' 11520.
SECTION 414. LICENSES.
(a) If an opportunity for an evidentiary hearing
is not required by law for agency action on an application for a license, the
agency shall give prompt notice of its action in response to an
application. If the agency denies an
application under this section, the agency shall include the reasons for
denial.
(b) When a licensee has made timely and
sufficient application for the renewal of a license, the existing license does not
expire until the application has been finally acted upon by the agency and, if
the application is denied or the terms of the new license are limited, the last
day for seeking review of the agency decision is 45 days from the date of the
agency decision denying the application or limiting the terms of the new
license or a later date fixed by order of the reviewing court.
(c) If the agency finds that emergency action
against a license is required, the action shall be conducted under Section 408.
Comment
Subsection
(b) was taken from the 1961 Model State Administrative Procedure Act, section
14(b), which has been adopted by many states. See, for example: Alabama, Ala.Code 1975 Section 41-22-19; Tennessee, T. C. A. Section 4-5-320; Michigan,
M.C.L.A. 24.291; and Wisconsin,
W.S.A. 227.51.
SECTION 415. ORDERS: FINAL AND RECOMMENDED.
(a) If the presiding officer is the agency head,
the presiding officer shall render a final order.
(b) If the presiding officer is not the agency
head, the presiding officer shall render a recommended decision [proposed
decision], when the presiding officer has not been delegated final decisional
authority. When the presiding officer
has been delegated final decisional authority, the presiding officer shall
render a decision which shall become a final order in [30] days, unless
reviewed by the agency head on its own motion or on petition of a party.
(c) Unless the time is extended by stipulation,
waiver, or upon a showing of good cause, a recommended or final order must be
served in writing within 90 days after conclusion of the hearing or after
submission of memos, briefs, or proposed findings, whichever is later.
(d) A recommended or final order must include
separately stated findings of fact and conclusions of law on all material
issues of fact, law, or discretion, the remedy prescribed, and, if applicable,
the action taken on a petition for stay.
A party may submit proposed findings of fact. If a party has submitted proposed findings of
fact, the order must include a ruling on the proposed findings. The order must also include a statement of
the available procedures and time limits for seeking reconsideration or other
administrative relief, and a statement of the time limits for seeking judicial
review of the agency order. A recommended decision must include a statement of
any circumstances under which the recommended decision, without further notice,
may become a final order.
(e) Findings of fact must be based exclusively
upon the evidence of the agency hearing record in the contested case and on matters
officially noticed.
(f) A presiding officer shall cause copies of the
recommended or final order to be delivered to each party and to the agency head
within the time limits set in subsection (c).
Comment
See section
102(24) of this act for the definition of “recommended decision”. This section draws upon useful provisions
from several states. E.g. see: Alabama, Ala.Code 1975 Section 41-22-16; Iowa,
I.C.A. Section 17A.15; Kansas, K.S.A. Section 77-526; Michigan, M.C.L.A.
24.281; Montana, MCA 2-4-623; Washington, RCWA 34.05.461.
The third
sentence of subsection (d) is taken from the 1961 MSAPA.
SECTION 416. AGENCY REVIEW OF RECOMMENDED DECISIONS.
(a) An agency head may review a recommended
decision on its own motion.
(b) A party may petition the agency head to review
a recommended decision. Upon petition by any party, the agency head shall
review an agency order, except to the extent that:
(1) a provision of law precludes or limits agency
review of the recommended decision; or
(2) the agency head, in the exercise of
discretion conferred by law other than this [act], declines to review the
recommended decision.
(c) A petition for review of a recommended
decision must be filed with the agency head, or with any person designated for
this purpose by rule of the agency, within [10] days after the recommended
decision is rendered. If the agency head
decides to review a recommended decision on its own motion, the agency head
shall give written notice of its intention to review the recommended decision
within [10] days after it is rendered.
(d) The [10]-day period for a party to file a
petition, or for the agency head to give notice of its intention to review a
recommended decision in subsection (b), is tolled by the submission of a timely
petition for reconsideration of the recommended decision pursuant to this
section. A new [10]-day period starts to run upon disposition of any petition
for reconsideration or agency head review under subsection (b). If a recommended decision is subject both to a
timely petition for reconsideration and to a petition for appeal or to review
by the agency head on its own motion, the petition for reconsideration must be
disposed of first, unless the agency head determines that action on the
petition for reconsideration has been unreasonably delayed.
(e) An agency head that reviews a recommended
decision shall exercise all the decision-making power that the agency head
would have had if the agency head had conducted the hearing that produced the
recommended decision, except to the extent that the issues subject to review
are limited by a provision of law other than this [act] or by order of the
agency head upon notice to all the parties.
In reviewing findings of fact in recommended decisions by presiding
officers, the agency head shall give due regard to the presiding officer's
opportunity to observe the witnesses.
The agency head shall consider the agency record or such portions of it
as have been designated by the parties.
(f) An agency head may render a final order
disposing of the proceeding or may remand the matter for further proceedings
with instructions to the presiding officer who rendered the recommended
decision. Upon remanding a matter, the agency head may order such temporary
relief as is authorized and appropriate.
(g) A final order or an order remanding the
matter for further proceedings under this section must identify any difference
between the order and the recommended decision and shall state the facts of
record which support any difference in findings of fact, state the source of
law which supports any difference in legal conclusions, and state the policy
reasons which support any difference in the exercise of discretion. A final order under this section must
include, or incorporate by express reference to the recommended decision, all
the matters required by Section 416(d).
The agency head shall cause an order issued under this section to be
delivered to the presiding officer and to all parties.
Comment
This section draws upon 1981 MSAPA, which
reflects current practice in regard to recommended decisions, final orders and
review of final orders more accurately than the 1961 MSAPA. Subsections (b) and (e) draw upon the
Washington APA, West’s RCWA 34.05.464, and the Kansas APA, K.S.A. ' 77-527. The object of subsection (e) is to assure
agency head consideration of the issues tendered in the case.
SECTION 417. RECONSIDERATION.
(a) Any party, within [ ] days after notice of a recommended or final
order is given, may file a petition for reconsideration that states the
specific grounds upon which relief is requested. The place of filing and other procedures, if
any, shall be specified by agency rule.
(b) If a petition for reconsideration is timely
filed, and if the petitioner has complied with the agency's procedural rules
for reconsideration, if any, the time for filing a petition for judicial review
does not commence until the agency disposes of the petition for reconsideration
as provided in Section 504(d).
(c) If a petition is filed under subsection (a),
the presiding officer shall render a written order within [20] days denying the
petition, granting the petition and dissolving or modifying the recommended or
final order, or granting the petition and setting the matter for further
proceedings. The petition may be granted
only if the presiding officer states findings of facts, conclusions of law, and
the reasons for granting the petition.
Comment
This section is based in part on the
Washington APA, West’s RCWA 34.05.470.
This section creates a general right to seek reconsideration of a
recommended or final order. Subsection
(b) must be read concurrently with Section 507(d), which excuses exhaustion to
the extent that a provision of this [act] provides for excuse.
SECTION 418. STAY. Except as
otherwise provided by law other than this [act], a party may request an agency
to stay a recommended or final order within [five] days after it is rendered.
Comment
The 1961
MSAPA ' 15 contained
a provision for a stay. Stays are sometimes necessary to preserve the status
quo pending agency review or judicial review.
SECTION 419. AVAILABILITY OF ORDERS; INDEX.
(a) Except as otherwise provided in subsections
(b), (c), and (d), an agency shall index, by caption and subject, all final
orders and final written decisions in contested cases and make the index and
all final orders and decisions available for public inspection and copying, at
cost in its principal offices. The agency must also furnish the index and all
final orders and decisions in contested cases online through the [publisher]
via the [publisher’s] Internet website without charge, or in writing upon
request at a cost to be determined by the agency.
(b) Final orders or decisions that are exempt,
privileged, or otherwise made confidential or protected from disclosure by law,
[the disclosure of which would constitute an unwarranted invasion of privacy or
release of trade secrets], are not public records and may not be indexed.
(c) A final order or decision under this
subsection may be excluded from disclosure only by order of the presiding
officer. The justification for the
exclusion must be explained in writing and attached to the order.
(d) If, in the judgment of the presiding officer,
it is possible to redact [or to prepare a generic version of] a final order or
decision that is exempt, privileged or otherwise made confidential or protected
from disclosure by law so that it complies with the requirements of law, the
redacted [or the generic version of the] document may be indexed and published.
(e) An agency may not rely on a final order or a
written final decision as precedent in future adjudications unless the order or
decision has been designated as a precedent by the agency, and the order or
decision has been published, indexed, and made available for public inspection.
Comment
This
section is entirely new. This section
continues the concept, seen earlier in connection with rules, of preventing
earlier decisional law known only to agency personnel from constituting the
basis for decision in a disputed case. Subsection
(c) is based in part on the provisions of California Government Code Section
11425.60. If the agency wishes to use a case as precedent in the future, it
must make the order and decision in that case available to the public. The only
situations in which an agency may rely on a contested case as precedent without
indexing and making that decision and order available to the public are
described in subsection (b) of this section.
In some
states there have been attacks on agency adjudications on the basis that the
proceeding should be conducted under the provisions for rulemaking. In the case of SEC v. Chenery Corp., 332 U.S.
194 (1947) the United States Supreme Court held that the choice of whether to
proceed by rulemaking or adjudication is left entirely to the discretion of the
agency, because not every principle can be immediately promulgated in the form
of a rule. In the words of the Supreme
Court “Some principles must await their own development, while others must be
adjusted to meet particular, unforeseeable situations.” Most states follow Chenery. See Illuminating a Bureaucratic Shadow World:
Precedent Decisions under California=s Revised Administrative Procedure Act,
21 J. Nat=l A.
Admin. L. Judges 247 (2001) at n. 68.
This section makes clear that the
choice between rulemaking and adjudication is entirely in the discretion of the
agency. However, in order to prevent law
to which the public does not have access from constituting the basis for
decision, final orders must be indexed and available to the public. See also
the California
administrative procedure act at West=s
Ann. Cal. Gov. Code, '
11425.60
SECTION 501. RIGHT TO JUDICIAL REVIEW; FINAL AGENCY ACTION
REVIEWABLE.
(a) As used in this [article], final agency
action means agency action that imposes an obligation, denies a right, or fixes
some legal relationship as a result of an administrative process. Agency action that is a failure to act is not
judicially reviewable except that a reviewing court shall compel agency action
that is unlawfully withheld or unreasonably delayed.
(b) A person otherwise qualified under this
[article] is entitled to judicial review of a final agency action.
(c) A person is entitled to judicial review of
agency action not subject to review under subsection (a) if postponement of
judicial review would result in an inadequate remedy or irreparable harm that
outweighs the public benefit derived from postponement.
Comment
Subsection
(a) of this section provides a right of judicial review of final agency action
by appropriate parties. Under this
section, the person seeking review must meet all of the requirements of this article,
which include standing, exhaustion of remedies, and time for filing. The
definition of “agency action” is found in Section 102. This section is similar to the judicial
review provisions of Florida (West’s F.S.A.
Section 120.68), Iowa (I.C.A. Section17A.19),
Virginia (Va. Code Ann. Section 2.2-4026) and Wyoming (W.S.1977 Section 16-3-114). Agency
failure to act is not judicially reviewable unless agency action is unlawfully
withheld or unreasonably delayed. This provisions is based on the federal A.P.A.,
5 U.S.C. Section 706(1).
Subsection
(a) also defines final agency action.
The definition used here is found in state and federal cases. See State Bd. Of Tax Comm’rs v. Ispat Inland,
784 N.E.2D 477 (Ind.,
2003); District Intown Properties v. D.C. Dept. Consumer and Regulatory
Affairs, 680 A.2d 1373 (Ct. Apps. D.C. 1996); Texas Utilities Co. v. Public
Citizen, Inc, 897 S.W.2d 443 (Tex. App. 1995);
Bennet v. Spear, 520 U.S.
154, 117 S.Ct. 1154 (1997); Mobil Exploration and Producing Inc. v. Dept. Interior,
180 F.3d 1192, 1197 (10th Cir. 1999).
Subsection (c) creates a limited right to review of
non-final agency action.
SECTION
502. REVIEW OF AGENCY ACTION OTHER THAN
ORDER. A person otherwise qualified under this
[article] is entitled to judicial review of agency rules and final agency
action other than an order if the action is ripe. Factors to be considered in making the
determination are whether the agency has taken final action that involves a
concrete, specific legal issue and whether postponement of judicial review will
subject the person to irreparable harm.
Comment
This
section seeks to recognize the prudential exception to finality and ripeness
sometimes recognized for rules and other types of agency action by agencies
such as rules, advisory letters and guidance documents. It seeks to incorporate the general tests for
finality and ripeness taken from the cases of Abbott Laboratories v. Gardner,
387 U.S. 136, 148-149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); FTC v. Standard
Oil Co.,449 U.S. 232, 101 S.Ct. 488 (1980) and Bennett v. Spear, 520 U.S. 154,
117 S.Ct. 1154 (1997), which have been cited with approval and followed in many
states. Under this subsection, some
appellant challenges or bases for challenge will be ripe for review, but many
will not. The subsection seeks to
furnish guidance to state courts attempting to apply the doctrines of finality
and ripeness. Under this section, the person seeking review must meet all of
the requirements of this article, which include standing, exhaustion of
remedies, and time for filing.
The
finality determination is to be made case by case in a pragmatic, flexible
fashion. Fitness for review is present
where issues to be considered are purely legal ones, so that further factual
development of the issues is not necessary. Hardship involves imposition of
significant practical harm. Some cases
have equated that harm with impact that would justify equitable
intervention. The harm element has also
been approached by asking the question: does the agency action pose a difficult
dilemma for the party, so that he or she must immediately take action that will
be very expensive and cannot be recovered or face expensive prosecution in the
future.
SECTION
503. RELATION TO OTHER JUDICIAL REVIEW
LAW AND RULES. Unless otherwise provided by a statute of
this state other than this [act], judicial review of final agency action may be
taken only by proceeding as provided by [state] [rules of appellate procedure]
[rules of civil procedure]. An appeal
from final agency action may be taken regardless of the amount involved. The court may grant any type of relief that
is available and appropriate.
Comment
This
section places appeals from final agency action within the existing state rules
of appellate procedure. Such action may
be preferred by some states because of constitutional provisions or because of
the existence of rules of appellate procedure that the legislature may not wish
to change. This practice was followed
under the 1961 MSAPA, and is followed in a number of states today. See e.g.: Alaska (AS 44.62.560), California
(West’s Ann.Cal.Gov.Code Section 11523), Delaware (29 Del.C. Section 10143),
Florida (West’s F.S.A. Section 120.68), Iowa (I.C.A. '
17A.20), Michigan (M.C.L.A. 24.302), Minnesota (M.S.A. '
14.63) (Appeal integrated with state appellate rules),Virginia (Va. Code Ann.
Section 2.2-4026), Wyoming
(W.S.1977 '
16-3-114).
SECTION
504. TIME FOR SEEKING JUDICIAL REVIEW OF
AGENCY ACTION, LIMITATIONS.
(a) A proceeding to contest any rule on the
ground of noncompliance with the procedural requirements of this [act] must be
commenced within two years from the effective date of the rule. Otherwise
subject to Section 502, judicial review of a rule may be sought at any time.
(b) Judicial review of an order or other final
agency action other than a rule must be commenced within 30 days after issuance
of the order or other agency action.
(c) A time for seeking judicial review under this
section is tolled during any time a party is pursuing an administrative remedy
before the agency which must be exhausted as a condition of judicial review.
(d) A party may not file or petition for judicial
review while seeking reconsideration under Section 418. During the time that a petition for
reconsideration is pending before an agency, the time for seeking judicial
review in subsection (b) is tolled.
Comment
The first
sentence of subsection (a) is based on 1961 Model State Administrative
Procedure Act, section (3)(c), and on Section
3-113(b) of the 1981 Model State Administrative Procedures Act. The scope of
challenges permitted for noncompliance with procedural requirements under Section
314 includes all applicable requirements of article 3 for the type of rule
being challenged.
SECTION
505. STAYS PENDING APPEAL. The initiation of judicial review does not
automatically stay an agency decision. An appellant may petition the reviewing
court for a stay upon the same basis as stays are granted under the [state]
rules of [appellate] [civil] procedure, and the reviewing court may grant a
stay whether or not the appellant first sought a stay from the agency.
Comment
This
provision for stay permits a party appealing agency final action to seek a stay
of the agency decision the court. This
is similar to the 1961 MSAPA.
SECTION
506. STANDING. The following persons have standing to obtain
judicial review of a final agency action:
(1) a person eligible for standing under law of
this state other than this [act]; and
(2) a person otherwise aggrieved or adversely
affected by the agency action.
Comment
Subsection (1) confers standing that
arises under any other provision of law.
Examples of this type of standing are statutes that expressly confer
standing in general language such as, for example, Aany
person may commence a civil suit in his own behalf... to enjoin... an agency...
alleged to be in violation of this chapter. . . . 16 U.S.C.A. ' 1540, explained in Bennett v. Spear,
520 U.S.
154, 117 S.Ct. 1154(1997). Another
example is standing recognized in judicial decision or common law.
Subsection
(2) uses the term person “aggrieved or adversely affected”. This term is based
in part on the provisions of the federal A.P.A., 5 U.S.C. Section 702. These
words have become terms of art used to describe types of injury that were not
recognized at common law. An example of
a person entitled to standing who is intended to be included under subsection
(2) is a competitor. These terms have
also been used to recognize standing based on non-economic values, such as
aesthetic or environmental injuries.
SECTION
507. EXHAUSTION OF ADMINISTRATIVE
REMEDIES.
(a) Subject to subsection (e) or a statute other
than this [act] that provides that a person need not exhaust their
administrative remedies, a person may file a petition for judicial review under
this [act] only after exhausting all administrative remedies available within
the agency whose action is being challenged and within any other agency
authorized to exercise administrative review.
(b) Filing a petition for reconsideration or a
stay of proceedings is not a prerequisite for seeking administrative or
judicial review.
(c) A petitioner for judicial review of a rule
need not have participated in the rulemaking proceeding upon which that rule is
based.
(d) If the issue that a petitioner for judicial
review of a rule under this section raises was not raised and considered in a
rulemaking proceeding, before bringing a petition for judicial review, the
petitioner must petition the agency to initiate rulemaking under Section 317 to
take action to resolve or cure the issue or issues that the petitioner is
challenging. In the petition for judicial review, the petitioner must disclose to
the court the petition for rulemaking and the agency action on that petition.
(e) The court may relieve a petitioner of the
requirement to exhaust any or all administrative remedies to the extent that
the administrative remedies are inadequate or would result in irreparable harm.
Comment
This
section creates a default requirement of exhaustion, which is generally
followed in the states. However, the
section creates several exceptions to the default rule. Subsection (b) requires issue exhaustion in
appeals from rulemaking for persons who did not participate in the challenged
rulemaking. It excuses persons seeking
judicial review of a rule who were not parties before the agency from the
exhaustion requirement; but, if the issue that they seek to raise was not
raised and considered in the rulemaking proceeding that they challenge, then
they must first petition the agency to conduct another rulemaking to consider
the issue. If the agency refuses to do so or if the agency conducts a second
rulemaking that is adverse to the petitioner on the issue or issues raised in
his petition for rulemaking, then the petitioner may seek judicial review.
Subsection (d) recognizes the judicially created exception to the exhaustion
requirement where agency relief would be inadequate or would result in
irreparable harm. In some states courts
have held that irreparable harm that is a sufficient condition to excuse
exhaustion exists only if it outweighs the public interest in exhaustion. State courts are free under this section to
engage in that weighing test.
SECTION
508. AGENCY RECORD ON JUDICIAL REVIEW;
EXCEPTION. Judicial review of adjudication and
rulemaking is confined to the agency record or arising from the record except
when the petitioner alleges procedural error arising from matters outside the
agency record or alleges matters that are not evident from the record that
involve new evidence or changed circumstances.
The record may be opened only to avoid manifest injustice.
Comment
This
section establishes a default closed record for judicial review of adjudication
and rulemaking. It is well established
in most states and in federal administrative procedure that, in case of
adjudication, judicial review is based upon that evidence which was before the
agency on the record. Otherwise, the
standards of judicial review could be subverted by the introduction of
additional evidence to the court that was not before the agency. See Western States Petroleum Ass’n v.
Superior Court, 888 P.2d 1268 (Cal.
1995). For rulemaking, the record for
judicial review is defined in Section 302 of this Act.
The section
contains an exception to the closed record on review where petitioner alleges
error, such as ex parte contacts, that does not appear in or is not evident
from the record. Other examples of error
that do not appear or are not evident from the record are: improper
constitution of the decision making body, grounds for disqualification of a
decision maker, or unlawful procedure.
However, the standard for opening the record on appeal is high.
SECTION 509. SCOPE
OF REVIEW.
(a) In judicial review of an agency action, the
following rules apply:
(1) Except as provided by law of this state other
than this [act], the burden of demonstrating the invalidity of agency action is
on the party asserting invalidity.
(2) The court shall make a separate and distinct
ruling on each material issue on which the court’s decision is based.
Alternative 1
(3) The court may grant relief only if it
determines that a person seeking judicial review has been prejudiced by one or
more of the following:
(A) the agency erroneously interpreted or applied
the law, or acted in excess of its authority under the law;
(B) the agency committed an error of procedure;
(C) the agency action is arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law;
(D) an agency determination of fact is not
supported by substantial evidence in the record as a whole; or
(E) to the extent that the facts are subject to
trial de novo by the reviewing court, the action was unwarranted by the facts.
Alternative 2
(3) The court may grant relief only if it
determines that a person seeking judicial review has been prejudiced and the
agency action is:
(A) unconstitutional on its face or as applied or
is based upon a provision of law that is unconstitutional on its face or as
applied;
(B) beyond the authority delegated to the agency
by any provision of law or is in violation of any provision of law;
(C) based upon an erroneous interpretation of a
provision of law whose interpretation has not clearly been vested by a
provision of law in the discretion of the agency;
(D) based upon a procedure or decision-making
process prohibited by law or was taken without following the prescribed
procedure or decision-making process;
(E) the product of decision-making undertaken by
persons who were improperly constituted as a decision-making body, were
motivated by an improper purpose, or were subject to disqualification;
(F) based upon a determination of fact clearly
vested by a provision of law in the discretion of the agency that is not
supported by substantial evidence in the agency record before the court when
that record is viewed as a whole. “Substantial evidence” means the quantity and
quality of evidence that would be deemed sufficient by a neutral, detached, and
reasonable person, to establish the fact at issue when the consequences
resulting from the establishment of that fact are understood to be serious and
of great importance.
“When that record is viewed as a whole” means
that the adequacy of the evidence in the record before the court to support a
particular finding of fact must be judged in light of all the relevant evidence
in the record cited by any party that detracts from that finding as well as all
of the relevant evidence in the record cited by any party that supports it,
including any determinations of veracity by the presiding officer who
personally observed the demeanor of the witnesses and the agency’s explanation
of why the relevant evidence in the record supports its material findings of
fact.
(G) action other than a rule that is inconsistent
with a rule of the agency;
(H)
action other than a rule that is
inconsistent with the agency’s prior practice or precedent, unless the agency
has stated credible reasons sufficient to indicate a fair and rational basis
for the inconsistency;
(I) the product of reasoning that is so illogical
as to render it wholly irrational;
(J)
the product of a decision-making process
in which the agency did not consider a relevant and important matter relating
to the propriety or desirability of the action in question that a rational
decision maker in similar circumstances would have considered prior to taking
that action;
(K)
not required by law and its negative impact
on the private rights affected is so grossly disproportionate to the benefits
accruing to the public interest from that action that it must necessarily be
deemed to lack any foundation in rational agency policy;
(L)
based upon an irrational, illogical, or
wholly unjustifiable interpretation of a provision of law whose interpretation
has clearly been vested by a provision of law in the discretion of the agency;
(M)
based upon an irrational, illogical, or
wholly unjustifiable application of law to fact that has clearly been vested by
a provision of law in the discretion of the agency; or
(N)
otherwise unreasonable, arbitrary,
capricious, or an abuse of discretion.
End of Alternatives
(b) In making the determinations under this
section, the court shall review the whole agency record, or those parts
designated by the parties, and shall take due account of the rule of harmless
error.
NOTE: The
drafting committee is divided on the scope of review provisions and seeks
guidance from the committee of the whole.
There are two schools of thought on the drafting committee.
One view is
that scope of review is notoriously difficult to capture in verbal formulas,
and its application varies depending on context. For that reason, some members urge return to
shorter, skeletal formulations of the scope of review, similar to the 1961
MSAPA. See Ronald M. Levin, Scope of
Review Legislation, 31 Wake
Forest L. Rev. 647 (1996)
at 664-66. William D. Araiza, In Praise
of a Skeletal APA, 56 Admin. L. Rev. 979 (2004). (Judiciary, not legislature,
appropriate body to evolve specific standards for review, because of great
variety of agency action and contexts, and inability to describe how general
standards of review should apply to many of them). Alternative 1 reflects this view.
The other
view is that judicial review is sometimes almost perfunctory, and more detailed
standards will result in closer judicial scrutiny. A related view strongly argued in drafting
committee meetings was that scope of review is a device by which the judiciary
assists the legislature to keep the agencies within the bounds set by the
legislature, helps to assure agency action consistent with the intent of the
legislature, and protects citizens from agency error. More detailed scope of review provisions also
make the task of the judiciary easier because they provide clearer instructions
from the legislature about how to review agency decisions. More detailed scope of review provisions lead
to more intense judicial review, and that is an approach that legislatures
welcome for the same reason that they have embraced regulatory review: it
controls agency action. Alternative 2,
which draws heavily on the Iowa
provisions on scope of review ( I.C.A. 17. A.19(10)), represents this position.
Comment
Judicial
review is essential and exists in all states.
Subsections (a) (1) & (2) describe the general burdens on the
appellant and the approach under this Act.
They are substantially similar to the general scope of review provisions
of the Federal APA, 5 U.S.C. Section 706.
Subsections
(a)[(3) alternative 1](A) & (B) identify the courts’ power to decide
questions of law and procedure.
Subsection (a)[(3) alternative 1](A) includes, but is not limited to,
violations of constitutional or statutory provisions and actions that are in
excess of statutory authority from Section 15(g) of the 1961 MSAPA, and
includes subsections (c) (1), (2) and (4) of the 1981 MSAPA. The section thus includes challenges to the
facial or applied constitutionality of a statute, challenges to the
jurisdiction of the agency, erroneous interpretation of the law, and may
include erroneous application of the law.
This section is not intended to preclude courts from according deference
to agency interpretations of law, where such deference is appropriate.
SECTION
601. CREATION OF OFFICE OF
ADMINISTRATIVE HEARINGS.
(a) As used in this [article], office means the
[Office of Administrative Hearings].
(b) The [Office of Administrative Hearings] is
created as an independent nonpartisan agency to perform adjudicatory function and
not perform the investigatory, prosecutorial, and policy-making functions of
agencies.
(c) Administrative law judges shall be selected
and appointed to the office through state employment selection processes used
in the [civil service of state employment] or [by the chief administrative law
judge].
(d) The administrative law judges of the agencies
to which this [article] applies are employees of the office.
SECTION
602. DUTIES OF OFFICE.
(a)
The office shall employ administrative law judges as necessary to conduct adjudicative
proceedings required by this [act] or provisions of law other than this [act].
(b)
Except as provided in this [article], the office shall provide an
administrative law judge to serve as presiding officer unless the agency head
hears the case.
SECTION
603. APPOINTMENT OF CHIEF ADMINISTRATIVE
LAW JUDGE.
(a) The office is headed by a chief
administrative law judge [appointed by the Governor with advice and consent of
the [Senate] [House of Representatives] for a term of [6] years], and until a
successor is appointed and qualifies for office. A chief administrative law judge may be
removed only for good cause following notice and an opportunity for a contested
case hearing.
(b) The chief administrative law judge:
(1) shall take an oath of office as required by
law prior to the commencement of duties;
(2) shall have substantial experience in
administrative law;
(3) shall devote full time to the duties of the
office and may not engage in the practice of law;
(4) is eligible for reappointment;
(5) shall receive the salary provided by law;
(6) shall be licensed to practice law in the
state and admitted to practice for a minimum of five years; and
(7) is subject to the code of conduct for
administrative law judges pursuant to Section 410.
(c) The chief administrative law judge may employ
a staff in accordance with law.
SECTION
604. POWERS AND DUTIES OF CHIEF
ADMINISTRATIVE LAW JUDGE. The chief administrative law judge shall:
(1) supervise and manage the office;
(2) assign randomly administrative law judges in
any case referred to the office, taking into account administrative law judge
expertise;
(3) protect and attempt to ensure the decisional
independence of each administrative law judge;
(4) establish and implement standards for
equipment, supplies, and technology for administrative law judges;
(5) provide and coordinate continuing education
programs and services for administrative law judges and advise them of changes
in the law relative to their duties;
(6) adopt rules to implement this [article]
through rulemaking proceedings in accordance with this [act];
[(7)
[appoint and remove administrative law judges in accordance with this
[article]; ]
[(8)]
monitor the quality of adjudications in contested
cases through training, observation, feedback and evaluation for professional
development; and
[(9)]
when necessary, discipline administrative law judges who do not meet
appropriate standards of conduct and competence.
SECTION
605. APPOINTMENT OF ADMINISTRATIVE LAW
JUDGES.
(a) An administrative law judge:
(1) shall take an oath of office as required by
law prior to the commencement of duties;
(2) shall be admitted to practice law for at
least [3] years [in the state];
(3) is subject to the requirements and
protections of [classified service of state employment] and the state [code of
judicial ethics];
(4) is subject to the code of conduct for
administrative law judges adopted in the state;
(5) may be removed, suspended, demoted, or
subject to disciplinary or adverse action only for good cause, after notice and
an opportunity to be heard and a finding of good cause by an impartial
presiding officer [or other appropriate state agency [civil service] [merit
system];
(6) receive compensation provided by law;
(7) be subject to a reduction in force only in
accordance with established [civil service][ merit system] procedure;
(8) [must devote full time to the duties of the
position] [may not engage in the practice of law unless serving as a part-time
administrative law judge];
(9) may not perform duties inconsistent with the
duties and responsibilities of an administrative law judge; and
(10) is subject to administrative supervision by
the chief administrative law judge.
SECTION
606. POWERS OF ADMINISTRATIVE LAW JUDGES. An administrative law judge shall exercise
all the powers of a presiding officer under this [act].
Comment
The powers
and duties of presiding officers are contained in Sections 403 (contested case
procedures, and Section 406 (informal adjudication procedures).
SECTION 607. COOPERATION OF STATE AGENCIES.
(a) All agencies must cooperate with the chief
administrative law judge in the discharge of the duties of the office,
including, but not limited to, provision of information and coordination of
schedules.
(b) An agency may not select or reject a
particular administrative law judge for a particular proceeding.
SECTION
608. DECISION-MAKING AUTHORITY OF
ADMINISTRATIVE LAW JUDGES.
(a) Unless the agency head elects to conduct the
hearing, in which case the agency head shall render a final decision under
Section 417(a), in a contested case, an administrative law judge shall be
assigned to serve as the presiding officer.
The administrative law judge shall render the recommended [or final] decision
of the agency in all adjudications in a contested case except for contested
cases involving the following agencies:
(1) [List name of agency] or [list subject matter
of proceeding].
(b) Except as otherwise provided by law, an
administrative law judge shall issue a recommended decision unless the agency head
authorizes the issuance of a final decision. A recommended decision of an
administrative law judge is a final agency decision unless the agency decides
to review the decision. This section does
not prevent an administrative law judge from issuing an order as a result of an
emergency adjudication under Section 408.
(c)
Except as provided by law other than this act, if a matter is referred to the [office]
by an agency, the agency may take no further adjudicatory action with respect
to the proceeding, except as a party litigant, as long as the [office] has
jurisdiction over the proceeding. [This subsection does not prevent an
appropriate interlocutory review by the agency or an appropriate termination or
modification of the proceeding by the agency when authorized by law other than
this act.]
[NOTE: A
state may choose the legislative rule review process stated in this article.]
SECTION 701. [LEGISLATIVE RULES REVIEW COMMITTEE]. There is created a joint standing [rules review
committee] of the legislature designated the [rules review committee].
Legislative note: States
that have existing rules review committees can incorporate the provisions of
Sections 701, and 702, using the existing number of members of their current
rules review committee. Because state practice varies as to how these
committees are structured, and how many members of the legislative body serve
on this committee, as well as how they are selected, the act does not specify
the details of the legislative review committee selection process. Details of
the committee staff and adoption of rules to govern the rules review committee
staff and organization are governed by law other than this act including the
existing law in each state.
SECTION
702. REVIEW BY [RULES REVIEW COMMITTEE].
(a)
An agency shall file a copy of an adopted, amended, or repealed rule with the
[rules review committee] at the same time it is filed with [the [publisher]].
(b) The [rules review committee] may examine newly
adopted, amended, or repealed rules to determine whether the:
(1) rule is a valid exercise of delegated
legislative authority;
(2) statutory authority for the rule has expired
or been repealed;
(3) rule is necessary to accomplish the apparent
or expressed intent of the specific statute that the rule implements;
(4) rule is a reasonable implementation of the
law as it affects persons particularly affected by the rule;
(5) The rule complies with the regulatory
analysis requirements of Section 305, and properly determines the factors under
Section 305(c).
(c) The [rules review committee] may request from
an agency such information as is necessary to carry out the duties of
subsection (a). The [rules review committee]
shall consult with standing committees of the legislature with subject matter
jurisdiction over the subjects of the rule under examination.]
(d) The [rules review committee]:
(1) shall maintain oversight over agency
rulemaking; and
(2) shall exercise other duties assigned to it
under this [article].
Comment
This
section adopts a rules review committee process that is widely followed in
state administrative law as a method for legislative review of agency rules.
Subsection (b) requires the legislative rules review committee to review all
final agency rules as well as newly adopted rules. The rules review committee
may establish priorities for rules review including review of newly adopted or
amended rules, and may manage the rules review process consistent with
committee staff and budgetary resources.
SECTION 703. [RULES REVIEW COMMITTEE] PROCEDURE AND POWERS.
(a) Not later than [60] days after receiving the
notice of an adopted, amended, or repealed rule from an agency under Section 307, the
[Rules Review Committee] may
(1)
approve the adopted, amended, or repealed rule;
(2)
propose an amendment to the adopted or amended rule; or
(3)
disapprove the adopted, amended, or repealed rule.
(b) If the [rules review committee] approves the
adopted, amended or repealed rule, or does not propose an amendment under
subsection (a)(2) or disapprove under subsection (a)(3), the adopted, amended,
or repealed rule becomes effective as provided under Section 316.
(c)
If the [rules review committee] proposes an amendment to the adopted or amended
rule under subsection (a)(2), the agency
may make the amendment, and resubmit the rule, as amended, to the [rules review
committee]. The amended rule must be one that the agency could have adopted on
the basis of the record in the rulemaking proceeding, and the legal authority
granted to the agency. The agency must provide an explanation for the amended
rule as provided in section 312. An agency is not required to hold a hearing on
an amendment made under this subsection. If the agency makes the amendment, it
shall also give notice to the [publisher] for publication of the rule, as so
amended, in the [administrative bulletin]. The notice shall include the text of
the rule as amended. If the [rules review committee] does not disapprove of the
rule, as amended, or propose a further amendment, the rule becomes effective on
the date specified for the original rule under Section 314.
(d) If the [rules review committee] disapproves
the adoption, amendment, or repeal of a
rule under subsection (a)(3), the adopted, amended, or repealed rule becomes
effective upon adjournment of the next regular session of the legislature
unless prior to that adjournment the legislature adopts a joint resolution
sustaining the action of the committee.
(e) An agency may withdraw the adoption,
amendment, or repeal of a rule by giving notice of the withdrawal to the [rules
review committee] and to the [publisher] for publication in the [administrative
bulletin]. A withdrawal under this
subsection terminates the rulemaking proceeding with respect to the adoption,
amendment, or repeal, but does not prevent the agency from initiating a new
rulemaking proceeding for the same or substantially similar adoption,
amendment, or repeal.
Legislative Note. State
constitutions vary on the federal constitutional issue decided by the U.S.
Supreme Court in I.N.S. v. Chadha (1983) 462 U.S. 919, 103 S.Ct. 2764. The
U.S. Supreme Court held that the one house legislative veto provided for in
section 244(c)(2) violated the Article I requirement that legislative action requires passage of a
law by both houses of congress (bicameralism) and presentation to the president
for signing or veto (presentation requirement). Those state constitutions that
require presentment to the governor need an additional step, presentment of the
joint resolution to the governor for approval or disapproval. With state
constitutions that do not require presentment to the governor the rules review
process can be completed with legislative adoption of a joint resolution.
Comment
This is a
type of veto that provides for cooperation between the Legislature and the
Governor, and attempts to avoid the Chadha v. I.NS problem of
unconstitutionality by delaying the effective date of the rule until the
legislature has the opportunity to enact legislation to annul or modify
it. The governor may veto the act by
which the legislature seeks to annul or modify the rule. This type of veto provision is widely used in
the states.
SECTION 801. EFFECTIVE DATE.
This [act] takes effect on [date] and governs all agency
proceedings, and all proceedings for judicial review or civil enforcement of
agency action, commenced after that date.
The [act] does not govern adjudications for which notice was given prior
to that date under Section 403 and all rulemaking proceedings for which notice
was given or a petition filed before that date.
Comment
Section 801
is based on Section 1-108 of the 1981 MSAPA. See Also California Government Code Sections
11400.10, and 11400.20 (operative date of California APA revisions). Agency proceedings on remand following
judicial review after the act takes effect are governed by the prior law.
