1 Comment

2 This section is intended to define which agencies are subject to the provisions of this act.
3 Many states have made use of an applicability provision to define the coverage of their
4 Administrative Procedure Act. See: Iowa, I.C.A. SECTION 17A.23; Kansas, K.S.A. SECTION
5 77-503; Kentucky, KRS SECTION 13B.020; Maryland, MD Code, State Government,
6 SECTION 10-203; Minnesota, M.S.A. SECTION 14.03; Mississippi, Miss. Code Ann.
7 SECTION 25-43-1.103; Washington, West’s RCWA 34.05.020.
8

1 [ARTICLE 2] 2 PUBLIC ACCESS TO AGENCY LAW AND POLICY 3 4 SECTION 201. PUBLICATION, COMPILATION, INDEXING, AND PUBLIC 5 INSPECTION OF RULEMAKING DOCUMENTSRULES. 6 (a) The [publisher] shall administer this section and other sections of this [act] that 7 require publication. 8 Legislative Note: throughout this act the drafting committee has used the term [publisher] to 9 describe the official or agency to which substantive publishing functions are assigned. All states 10 have such an official, but their titles vary. Each state using this act should determine what that 11 agency is, then insert its title in place of [publisher] throughout this act. Each state also has an 12 [administrative bulletin] and an [administrative code]. The bulletin is similar to the federal 13 register, and the code is similar to the code of federal regulations. The names of the 14 administrative bulletin and the administrative code vary from state to state. Each state should 15 insert the proper title in place of [administrative bulletin], and [administrative code]. 16 17 (b) The [publisher] shall publish all rulemaking documents in [electronic and written] 18 [electronic or written] format. The [publisher] shall prescribe a uniform numbering system, form, 19 and style for all proposed and adopted rules. 20 (c) The [publisher] shall maintain the official record of adoption for adopted rules that 21 have been adopted, including the text of the rule and any supporting documents, filed with the 22 [publisher] by the agency. The agency adopting the rule shall maintain the rulemaking record, as 23 defined in Section 302(b), for that rule. 24 (d) The [publisher] shall create and maintain an InternetInternet website [or other 25 appropriate technology] on which it maintains a searchable database. The [administrative 26 bulletin and administrative code] and any guidance document filed with the [publisher] by an 27 agency must be made available published online onvia the InternetInternet website [or other 28 appropriate technology]. The [publisher] may not charge for public access to the InternetInternet

website [or other appropriate technology].

(e)

The [administrative bulletin] mustshall be published by the [publisher] at least once eachper [month]. An issue of the [administrative bulletin] is deemed published on the date of publication.

(f)

The [administrative bulletin] must be provided 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 adoption of the 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 amendedadopted rule shows the text of any existing rule changed and the change that has been being made];

(3)

any other notices and materials required to be published designated by [law] [rulemaking] [the [publisher]] for publication in the [administrative bulletin]; and

(4) an index. to its contents by subject and caption.

(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 make available for public inspection and copying the [administrative bulletin] and the [administrative code]. (i) The [publisher] shall also make available for public inspection and copying those portions of the [administrative bulletin and administrative code] containing all rules adopted or used by an agency in the discharge of its

functions and an index to those rules.

(j)(j) The [publisher] may make minor nonsubstantive corrections correct minor, nonsubstantive errors in spelling, grammar, and format in proposed or adopted rules after notification to of the agency. The [publisher] shall make a record of the corrections.

(k)(k) An aAgencyies shall make itstheir rules, declaratory orders, guidance documents, and orders in contested cases [unless otherwise protected by law] available through electronic distribution as well as through the regular mail 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 eElectronic distribution of notices related to rulemaking or guidance documents to a persons thatwho requests it. may substitute for mailed copies related to rulemaking or guidance documents. If a notice is distributed electronically, the agency need not is not required to transmit the actual notice form but must send all the information contained in the notice.

(m)

Each agencyAll agencies shall provide to the , through the office of [publisher], shall make available on the Internet website of the [publisher]:

(1)

the notice of the adoption, amendment, or repeal of a rule each proposed rule adoption, amendment or repeal;

(2)

athe summary of the regulatory analysis required by section 305 for each proposed ruleof each proposed rule;

(3)

each adopted amended or repealed rule, rule amendment, or rule repeal;

(4)

each guidance document;

(5)

each notice; [and]

1 (5)(6) each order in a contested disputed case ;

2 (6) each declaratory order; and[;]

3 (77) any other notice or matter that an agency is required to publish under this

4 [act]].

5 (n) The [publisher] shall make available on the [publisher’s] Internet website all of the

6 documents provided by each agency under subsection (m). The [publisher] may not charge a fee

7 for access to the No fee may be charged for public access to the [publisher]’s] InternetInternet

8 website.

9 Comment

10 This section seeks to assure adequate notice to the public of proposed agency action. It 11 also seeks to assure adequate record keeping and availability of records for the public. Article 2 12 is intended to provide easy public access to agency law and policy that are relevant to agency 13 process. Article 2 also adds provisions for electronic publication of the administrative bulletin 14 and code. Section 201 does not address the issue related to what languages rules should be 15 published in, nor does it address issues related to translation of information contained in these 16 documents into languages other than English. Rulemaking documents includes materials in 17 written or electronic form that are related to an agency rulemaking proceeding, or that are 18 guidance documents in written or electronic form. Subsection (b) provides for publication of 19 rulemaking documents in alternative written and/or electronic formats. Publishers that administer 20 the provisions of this subsection must also comply with the applicable provisions of the federal 21 E-Sign Act (15 U.S.C. Section 7001 to 7031) and the Uniform Electronic Transactions Act 22 (UETA). 23 24 The arrival of the InternetInternet and electronic information transfer, which occurred 25 after the last revision of the Model State Administrative Procedure Act, has revolutionized 26 communication. It has made available rapid, efficient and low cost communication and 27 information transfer. Many states as well as the federal agencies have found that it is an ideal 28 medium for communication between agencies and the public, especially in connection with 29 rulemaking. Since the last Model Administrative Procedure Act was written, many states have 30 adopted various types of statutes that permit agencies to use electronic technology to 31 communicate with the public. The agencies have found this technology particularly useful in 32 connection with rulemaking. 33 34 Subsection (c) requires that the [publisher] maintain the official record for adopted rules, 35 including the text of the rules and any supporting documents, filed by the agency. Subsection (c) 36 also requires that the agency adopting the rule maintain the rulemaking record for that rule. 37 Section 302(b) provides the requirements for the rulemaking record.

1 2 Bracketed Ssubsection (d) requires the [publisher] to 1) maintain an InternetInternet 3 website, and 2) publish all matters required to be published under this act to be published on that 4 website. If a state chooses to use subsection (d), they will create a centralized website for use by 5 all agencies. Subsection (d) also requires that the [publisher] publish agency guidance documents 6 filed by the agency with the [publisher]. See section 202(4) and Section 310, below. Subsection 7 (d) does not address issues related to authentication, preservation and archival storage of 8 electronic documents published on an Internet website. Subsection (d) does not address the 9 principles for deciding what rules are in effect and enforceable at a specific point in time. 10 11 Subsection (f) requires the publisher to provide the administrative bulletin in written form 12 upon request, for which the publisher may charge a reasonable fee. This requirement can be 13 satisfied by states making the administrative bulletin available on the Internet, searchable, and 14 printable. 15 16 The bracketed text of subsection (g)(1), and (g) (2) is included so that agencies may 17 utilize redlining or underlining and striking of the text of the proposed or adopted rules so that 18 changes from the existing text of the rule are clearly delineated. Agencies that are proposing or 19 adopting new rules or that have some other system for showing changes need not use the 20 bracketed text. 21 22 It is possible to go much further in providing for use of the InternetInternet that the 23 publication adopted here. For example, a state could choose to permit agencies to operate their 24 own websites, and to accept comments on rules on the website. They could also provide for 25 maintenance of a database of all comments received that the public could access. These 26 provisions are extremely useful, but may be quite expensive. The central system adopted here, 27 means only one InternetInternet website is required. In terms of cost benefit, this is an effective 28 method of providing for electronic communication and agency access. 29 30 Subsection (h) requires the publisher to index the administrative code by subject. States 31 can satisfy this requirement by providing an administrative code that is searchable by word on 32 the Internet. 33 34 Subsection (ji) provides for a limited non substantive power to edit agency rules provided 35 that the agency is notified by the rules [publisher] of the changes. Subsection (jg) is based on the 36 Maine Administrative Procedure Act, 5 M.R.S.A. Section 8056(10). 37 38 Subsections (k) and (l) are drawn from the Washington Administrative Procedure Act. 39 See WA ST 34.05.260. 40

41 SECTION 202. REQUIRED AGENCY RULEMAKING AND

42 RECORDKEEPING. In addition to any other rulemaking requirements imposed by law other

43 than this act , 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 whichwhereby 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)

adoptissue rules for the conduct of public hearings [if the default procedural rules adoptedpromulgated under Section 204 do not include provisions for the conduct of public hearings]; .

(5)

file with the [publisher] in an 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 direct final process under Section 309(b)emergency rules; direct final rules; guidance documents; notices; declaratory orders; and orders issued in contested cases [unless otherwise protected by law] with the [publisher] in electronic format acceptable to the [publisher]; [and]

(6)

maintain [custody of] the agency’s current rulemaking docket required by Section 302(b) [;]

[(76) 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 onvia the [publisher]’s InternetInternet website], update the index and compilation at least every [30] days], and file the index and the compilation and all 1 changes to both with the [publisher].;]. and

2 (7) maintain [custody of] the agency’s current rulemaking dockets.

3 Comment 4 5 One object of this section is to make available to the public all procedures followed by 6 the agency, including especially how to file for a license or benefit. It is modeled on the 1961 7 Model State Administrative Procedure Act, Sections 2(a) (4) & 2(b), the 1981 Model State APA 8 Sections 2-104(1),(2), and the Kentucky Administrative Procedure Act, KRS Section 13A.100. 9 Persons seeking licenses or benefits should have a readily available and understandable reference 10 sources from the agency. A second reason is to eliminate “secret law” by making all guidance 11 documents used by the agency available from the agency and the administrative [publisher]. 12 Subsections (1),(2),(3), and (4) require the agency to codify by rule the description of the 13 organization of the agency and the procedures followed by the agency. 14 15 Agencies could use direct final rulemaking procedures under Section 309(b) to adopt 16 some of the rules required by subsections (1), (2), (3), and (4). Some states provide more detail 17 in subsection (1) including contact information for agency officials and organizational charts. 18 Subsection (5) requires agencies to file guidance documents with the publisher. Section 19 310(e) requires that agencies publish all current guidance documents. In states where the 20 publisher has the sole responsibility for publishing agency rules and other documents, including 21 guidance documents, an agency may satisfy the publication requirement by filing the guidance 22 document with the publisher under subsection (5). 23

21 ADOPTION.

22 (a) An agency may gather information relevant to the subject matter of possible

23 rulemaking and may solicit comments and recommendations from the public by publishing an

24 advanced notice of proposed rulemaking in the on a subject matter of possible rulemaking under

25 active consideration within the agency by causing notice of possible rulemaking on the subject

26 matter to be published in the [administrative bulletin] and indicating where, when, and how

27 persons may comment.

28 (b) An agency may engage in negotiated rulemaking by appointing a committee to

29 comment or to make recommendations on the subject matter of a possible rulemaking under

30 active consideration within the agency. The committee, in consultation with one or more agency

31 representatives, may attempt to reach a consensus on the terms or substance of a proposed rule.

32 In making the appointments, the agency shall attemptseek to establish a balance in representation

1 among persons known to have an interest interested stakeholders and the public. The agency

2 shall publish a list of all committees with their membership at least [annually] in the

3 [administrative bulletin]. Notice of a meetings of a committees appointed under this subsection

4 mustshall be published in the [administrative bulletin] at least [15 days] before prior to the

5 meeting. A mMeetings of a committees appointed under this section is shall be open to the

6 public.

7 (c) Except as otherwise provided by law, nothing in this This section does not prohibits

8 an agencyies from obtaining information and opinions from members of the public on the subject

9 of the rulemaking by any other method or procedure used in rulemaking.

10 Comment 11 12 This section is based upon the provisions of Section 3-101 of the 1981 MSAPA. Seeking 13 advice before proposing a rule frequently alerts the agency to potential serious problems that will 14 change the notice of proposed rulemaking and the rule ultimately adopted. This section is 15 designed to encourage gathering information. It is not intended to prohibit any type of 16 reasonable agency information gathering activities; however, the section seeks to insure that 17 agencies act in a fashion that will result in a balance among interested groups from whom 18 information is received. The advanced notice of proposed rulemaking under subsection (a) is a 19 preliminary step for seeking information and is not the same as the notice of proposed 20 rulemaking under Section 304, which begins the rulemaking process. 21 22 Several states have enacted provisions of this type in their APAs. Some of them merely 23 authorize agencies to seek informal input before proposing a rule; several of them indicate that 24 the purpose of this type of provision is to promote negotiated rulemaking. Those states are Idaho, 25 I.C. ' 67-5220; Minnesota, M.S.A. ' 14.101; Montana, MCA 2-4-304; and Wisconsin, W.S.A. 26 227.13. Subsection (b) is intended to authorize negotiated rulemaking. 27 28 Subsection (c) authorizes agencies to use other methods to obtain information and 29 opinions. Under subsection (c), agencies may meet informally with specific stakeholders to 30 discuss issues raised in the negotiated rulemaking process. Negotiated rulemaking under 31 subsection (b) is an option for agency use but is not required to be used prior to starting a 32 rulemaking proceeding. Negotiated rulemaking committees are also used in federal 33 administrative law. See the federal Negotiating Rulemaking Act, 5 U.S.C. Sections 561 to 570. 34

35 SECTION 304. NOTICE OF PROPOSED RULEMAKING ADOPTION.

(a) At least [30] days before the adoption, amendment, or repeal of a rule, an agency shall file with the [publisher] publish notice of the proposed actiondoption for publication in the [administrative bulletin]. The publisher shall publish the notice in the next issue of the administrative bulletin. The notice of the proposed adoption of a rule must include:

(1)

a short explanation of the purpose of the proposed actionrule proposed;

(2)

a citation or reference to the specific legal authority authorizing the proposed

action rule proposed ; ;

(3)

the text of any rule proposed to be adopted, amended, or repealed the rule ; proposed;

(4)

howwhere persons may obtain a copyies of the full text of the regulatory

analysis of any rule proposed to be adopted, amended, or repealedthe rule may be obtained; proposed; and

(5)

where, when, and how a persons may comment present their views on the proposed actionrule proposed and request an hearing oral proceeding thereon if one is not already provided; and

(6) a concise summary of any regulatory analysis prepared under Section 305(d).

(b)

Not later thanWithin three days after publication of the notice of the proposed rulemaking proposed adoption of a rule in the [administrative bulletin], the agency shall mail or send electronically the notice cause a copy of the notice to be mailed or sent electronically to each person that makeshas made a timely request to the agency for a mailed or electronic copy of the notice. An agency may charge a reasonable fee fora person for the actual cost of providing written mailed copies if the person has made a request for a mailedwritten copy.

1 SECTION 308. VARIANCE BETWEEN PROPOSED RULE AND ADOPTED

2 RULE. An agency may not adopt a rule that substantially differs from the rule proposed in the

3 notice of proposed adoption of a rule on which the rule is based unless the rule being adopted is

4 the logical outgrowth of the rule proposed in the notice. of proposed adoption of a rule on which

5 the rule is based unless the rule being adopted is the logical outgrowth of the rule proposed in the

6 notice, as determined from consideration of the extent to which:

7 (1) any persons affected by the adopted rule should have reasonably expected

8 that the published proposed rule would affect their interest;

9 (2) the subject matter of the adopted rule or the issues determined by that rule are

10 different from the subject matter or issues involved in the published rule proposed; and

11 (3) the effects of the adopted rule differ from the effects of the proposed rule had

12 it been adopted instead.

13 Comment 14 15 This section draws upon provisions from several states. See Mississippi Administrative 16 Procedure Act, Miss. Code Ann. Section 25-43-3.107 and the Minn. Administrative Procedure 17 Act, M.S.A. Section 14.05. The variance test adopted by state and federal courts is the logical 18 outgrowth test. If the adopted rule is the logical outgrowth of the proposed rule, no further 19 comment period is required. If it is not the logical outgrowth, then a further comment period is 20 required. Courts utilize several factors to apply the logical out growth test including: (1) any 21 person affected by the adopted rule should have reasonably expected that the published 22 proposed rule would affect the person’s interest; (2) the subject matter of the adopted rule or 23 the issues determined by that rule are different from the subject matter or issues involved in the 24 published rule proposed to be adopted ; and (3) the effect of the adopted rule differs from the 25 effect of the rule proposed to be adopted or amended. 26 27 The following cases discuss and analyze the logical outgrowth test and these factors , 28 and this section seeks to incorporate the factors identified in those cases. These judicial opinions 29 also convey the wide acceptance and use of the logical outgrowth test in the states. First Am. 30 Discount Corp. v. Commodity Futures Trading Comm=n, 222 F.3d 1008, 1015 (D.C.Cir.2000); 31 Arizona [publisher]. Serv. Co. v. EPA, 211 F.3d 1280, 1300 (D.C.Cir.2000); American Water 32 Works Ass=n v. EPA, 40 F.3d 1266, 1274 (D.C.Cir.1994); Trustees for Alaska v. Dept. Nat. 33 Resources, ___AK____, 795 P.2d 805 (1990); Sullivan v. Evergreen Health Care, 678 N.E.2d 34 129 (Ind. App. 1997); Iowa Citizen Energy Coalition v. Iowa St. Commerce Comm. ___IA___,

1 335 N.W.2d 178 (1983); Motor Veh. Mfrs. Ass=n v. Jorling, 152 Misc.2d 405, 577 N.Y.S.2d 346 2 (N.Y.Sup.,1991); Tennessee Envir. Coun. v. Solid Waste Control Bd., 852 S.W.2d 893 (Tenn. 3 App. 1992); Workers= Comp. Comm. v. Patients Advocate, 47 Tex. 607, 136 S.W.3d 643 (2004); 4 Dept. Of [publisher]. Svc. re Small Power Projects, 161 Vt. 97, 632 A.2d 13 73 (1993); Amer. 5 Bankers Life Ins. Co. v. Div. of Consumer Counsel, 220 Va. 773, 263 S.E.2d 867 (1980). 6 7 8 SECTION 309. EMERGENCY RULEMAKINGRULES; EXPEDITED DIRECT 9 FINAL RULEMAKING. 10 (a) If an If an agency finds finds that an imminent peril toan imminent peril to the public 11 health, safety, or welfare, including the imminent imminent loss of federal funding for agency 12 programs, requires the immediate adoption of a rule and states in a record its reasons for that 13 finding, the agency, without prior notice or hearing or upon any abbreviated notice and hearing 14 that it finds practicable, may adopt an emergency rule without complying with Sections 304 15 through 307. The adoption An emergency rule may be effective for not longer than [180] days 16 [renewable once up to an additional [180] days]. The adoption of an emergency rule does not 17 preclude adoption of an identical rule under Sections 304 through 308. The agency shall file 18 with the [publisher] publish an emergency rule adopted under this subsection not later than 19 within [ ] days afterof the adoption and shall personally notify persons known to the agency 20 who may be affected by the emergency rule [or who have requested notice]. of rules related to 21 that subject matter. 22 (b) If an agency proposes to adopt a rule that is noncontroversial, it may use a direct 23 final rulemaking process in accordance with this subsection and without complying with 24 Sections 304 through 307. A rule to be adopted under this subsection must be published in the 25 [administrative bulletin] along with a statement by the agency that it does not expect the rule to 26 be controversial. If no objection is received, the rule becomes final under Section 316(a). If an

1 objection to the use of the direct final rulemaking process is received within [ ] days of public

2 notice from any person, the agency shall file notice of the objection with the [publisher] for

3 publication in the [administrative bulletin], and may proceed with the rulemaking process under

4 Sections 304 through 308.

5 If an agency proposes to adopt a rule that is expected to be noncontroversial, it may adopt an

6 expedited rule in accordance with this subsection. An expedited direct finalrule is subject to

7 Sections 202 and 304, and must be published in the [administrative bulletin] along with a

8 statement by the agency setting out the reasons for using expedited direct finalrulemaking. If an

9 objection to the use of the expedited direct finalrulemaking process is received within the public

10 comment period from any person the agency shall file notice of the objection with the

11 [[publisher]] for publication in the [administrative bulletin] and proceed with the normal

12 rulemaking process set out in this [article], with the initial publication of the expedited direct

13 finalrule serving as the notice of the proposed adoption of a rule.

14 Comment 15 16 This section is taken from the 1961 MSAPA, Section 3(2)(b), and the Virginia 17 Administrative Procedure Act, Va. Code Ann. Section 2.2-4012.1. Some state courts have 18 indicated that any exemption from rulemaking requirements must be strictly construed to be 19 limited to an emergency or virtual emergency situation. 20 21 Subsection (a) can be used to adopt program requirements necessary to comply with 22 federal funding requirements, or to avoid suspension of federal funds for noncompliance with 23 program requirements. 24 25 Subsection (b) is based upon a recommendation from the Administrative Conference of 26 the United States. Direct final rulemaking has been recommended by the Administrative 27 Conference of the United States [ACUS Recommendation 95-4, 60 Fed. Reg. 43110 (1995)]. 28 The study that provided the basis for the recommendation was prepared by Professor Ron Levin 29 and has been published [Ronald M. Levin, “Direct Final Rulemaking” 64 George Washington 30 Law Review 1 (1995)]. [However, recognizing that there may be a few other justifications for 31 exemption, this section adopts a broader rule for matters that will be noncontroversial. Thus, a 32 situation where the agency is merely making a stylistic correction or correcting an error that the 33 agency believes is noncontroversial may be adopted without formal rulemaking procedures. See

1 the VA Fast-Track Rule provision at Va. Code Ann. Section 2.2-4012.1.] 2 3 In order to prevent misuse of this procedural device, noncontroversial rule promulgation 4 requires the consent of elected officials, and may be prevented by the requisite number of 5 persons filing objections. The public comment period in subsection (b) provides notice of the 6 noncontroversial rule and the opportunity to object to the adoption of the rule. If an objection to 7 the direct final rulemaking process is received within the public comment period, the agency 8 must give notice of the objection and then the agency may proceed with the normal rulemaking 9 process, including the public comment provisions of Section 306. 10 11 SECTION 310. GUIDANCE DOCUMENTS. 12 (a) An agency may issue a guidance document without following the procedures set 13 forth in Sections 304 through 308. Guidance documents do not have the force of law and 14 do not constitute an exercise of an agency’s delegated authority, if any, to establish the 15 rights or duties of any person. 16 17 (a) An agency may issue a guidance document. An agency may not issue a guidance document 18 in place of a rule. A guidance documents does not have the force of law and may not prescribe 19 the rights and duties of persons subject to agency regulation under a delegation of authority to 20 that agency. 21 (b) An agency need not follow the procedure set forth in Sections 304 through 308 to issue a 22 guidance document. 23 (c) A guidance document binds the agency, but is advisory to, and does not bind, any 24 other person. 25 (b) An agency that proposes to rely on a guidance document to the detriment of a 26 person in any administrative proceeding must afford that person a fair opportunity to 27 contest the legality or wisdom of positions taken in the document. The agency may not use 28 a guidance document to foreclose consideration of issues raised in the document. 29 (d) A reviewing court may not give deference to a guidance document and shall 30 determine de novo the validity of a guidance document. A reviewing court may consider whether

the agency followed the guidance document and may [or must] enforce the guidance document against the agency.

(c)

A guidance document may contain binding instructions to agency staff members if at an appropriate stage in the administrative process, the agency’s procedures provide affected persons an adequate opportunity to contest positions taken in the document.

(e)

Each agency shall publish all currently operative guidance documents and may file the guidance document with the [publisher].

(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 an affected person may have reasonably relied on the agency’s position, the explanation must include a reasonable justification for the agency’s conclusion that the need for the departure outweighs the affected person’s reliance interests.

(e) An agency shall publish all current guidance documents.

(f)

An agency shall maintain an index of all of its current 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 other than this [act]. Upon request, an agency shall make copies of guidance indexes or guidance documents available without charge; at cost; or, if authorized by law other than this [act], on payment of a reasonable fee. If an 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 an agency to adopt a rule in place of a guidance document

1 under Section 317. 2 (h) A person may petition an agency to revise or repeal an existing guidance 3 document. Not later than [60] days after submission of the petition, the agency shall: 4 (1) revise or repeal the guidance document; 5 (2) initiate a proceeding for the purpose of considering a revision or repeal; 6 or 7 (3) deny the petition in a record and state its reasons for the denial. 8 (f) Each agency shall maintain an index of all of its currently operative guidance 9 documents, file the index with the [publisher] on or before January 1 of each year, make the 10 index readily available for public inspection, and make available for public inspection the full 11 text of all guidance documents to the extent inspection is permitted by law. Upon request, an 12 agency shall make copies of guidance indexes or guidance documents available without charge, 13 at cost, or on payment of a reasonable fee. If any agency does not index a guidance document, 14 the burden of proof shall be upon the agency in any proceeding to establish that a party was not 15 entitled to rely upon the guidance document. 16 (g) A person may petition an agency to convert a guidance document into a rule pursuant 17 to Section 317. 18 Comment 19 20 This section seeks to encourage an agency to advise the public of its current opinions, 21 approaches, and likely courses of action by using guidance documents (also commonly known as 22 interpretive rules and policy statements). The section also recognizes agencies’ need to 23 promulgate such documents for the guidance of both its employees and the public. Agency law 24 often needs interpretation, and agency discretion needs some channeling. The public needs to 25 know the agency’s opinion about the meaning of the law and rules that it administers. Increasing 26 public knowledge and understanding reduces unintentional violations and lowers transaction 27 costs. See Michael Asimow, “California Underground Regulations,” 44 Admin. L. Rev. 43 28 (1992); Peter L. Strauss, “Publication Rules in the Rulemaking Spectrum: Assuring Proper 29 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.

This section draws upon the provisions of the Arizona, Michigan, Virginia, and Washington Administrative Procedure Acts. See: A.R.S. ' 41-1001 & A.R.S. ' 41-1091;

M.C.L.A. 24.203 & M.C.L.A. 24.224; Va. Code Ann. Section 2.2-4008; and WA RCWA '

34.05.230.

This section seeks to encourage an agency to advise the public of its current opinions, approaches, and likely courses of action by means of guidance documents. This section also recognizes the need for guidance documents that an agency will prepare 1) as a guide to its employees and 2) as a guide to the public. Agency law often needs interpretation, and agency discretion needs some channeling. The public needs to know the agency 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 Strauss, The Rulemaking Continuum, 44 Duke L. J. 1463 (1992). Excusing the agency from full procedural rulemaking for guidance documents furnishes a powerful economic incentive for agencies to use these devices to inform their employees and the public.

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).

Many states have recognized the need for this type of exemption in their statutes. They are also referred to as interpretive statements or policy statements. These states have defined interpretive and policy statements differently from rules, and also excused agencies creating them from some or all of the procedural requirements for rulemaking. See Ala. Ala. Code Section 41-22-3(9)(c) (2000) (“memoranda, directives, manuals, or other communications which do not substantially affect the legal rights of, or procedures available to, the public.”); Colo. Colo. Rev. Stat. Section 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) (2001); Ga. Ga. Code Ann., Section 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”) (emphasis added); Mich, M.C.L.A. 24.207(h) (excepts “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.). Wyoming, WY ST Section 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) and see 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). (Professor Asimow estimates that more than thirty states have adopted some provision for agency guidance documents such as interpretive and policy statements).

Four states in particular have adopted detailed provision for guidance documents. They are: Arizona, Michigan, Virginia, and Washington. See: A.R.S. ' 41-1001 & A.R.S. ' 41-1091;

M.C.L.A. 24.203 & M.C.L.A. 24.224; Va. Code Ann. Section 2.2-4008; and WA RCWA '

34.05.230. Their provisions strike a balance between the need of agencies for guidance documents and the need of the public to be protected from “secret” law or law adopted without the procedural protections of rulemaking. This section seeks to strike the same balance.

This section seeks to provide protection from abuse of guidance documents by various definitional and procedural measures. One measure not provided is a requirement of a notice on all guidance documents that informs members of the public of the right to petition the agency to convert the guidance document to a rule. Only one state, Arizona, has adopted this measure.

See A.R.S. ' 41-1091. Because of the numerous other protections in this section, that measure has not been included.

Subsection (b) requires an agency to allow affected persons to challenge the legality or wisdom of guidance documents when it seeks to rely on these 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.

The federal Administrative Procedure Act also makes a similar distinction. See 5 U.S.C. Section 553(b)(A) (1988) (Under this section “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” are excused from normal Section 553 notice and comment procedural requirements).

Subsection (d) provides for de novo judicial review of the validity of guidance documents. Under this standard, also known as the independent judgment or the substituted judgment standard, reviewing courts considering the validity of guidance documents will not defer to the agency interpretation contained in the guidance document. Subsection (d) also contains provisions addressing reliance interests of persons who follow the provisions of agency guidance documents. If an agency fails to follow the provisions of the guidance document, the reviewing court may apply principles of equitable estoppel to preclude the agency from a change in position that causes detrimental reliance to the affected person. Equitable estoppel is generally not recognized in federal administrative law (Office of Personnel Management v. Richmond (1990) 496 U.S. 414) unless a due process of law fair notice standard is violated (General Electric Co., v. EPA, 53 Fed. 3d 1324 (DC Cir.1995). Equitable estoppel is more widely recognized in state administrative law (Footes Dixie Dandy, Inc. v. McHenry, 607 S. W. 2d 323 (Ark. 1980); Lentz v. McMahon, 49 Cal. 3d 393, 406-407, 777 P. 2d 83 (Cal. 1989). There is a balance between encouraging or requiring agencies to issue guidance documents that provide advice to members of the public and holding agencies responsible for mistaken advice that persons reasonable rely upon to their detriment.

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

1 denial. 2 3 SECTION 311. Required Information for Rule CONTENTS OF RULE. Each rule 4 filed by an agency with the [publisher] under Section 315adopted by an agency must contain the 5 text of the rule and be accompanied by a record containing: 6 (1) the date the agency adopted the rule; 7 (2) a statement of the purpose of the rule; 8 (3) a reference to all rules repealed or amended by the rule; 9 (2)(4) a reference to the specific statutory or other authority authorizing the actionrule; 10 (35) any findings required by any provision of law as a prerequisite to adoption or 11 effectiveness of the actionrule; 12 (46) the effective date of the actionrule; 13 (57) the concise explanatory statement required by Section 312; and 14 (68) anythe final regulatory analysis statement required by Section 305. 15 ` Comment 16 17 Agency action is defined in section 102(4) to include an agency rule or order 18 [(subsection (4)(a)], and the failure to issue a rule or order [(subsection (4)(b)]. In Section 19 311(2),(3), and (4), the term “action” refers to the rulemaking process related to the adoption, 20 amendment or repeal of a rule. See Section 102(2) definition of adoption of a rule which includes 21 amendment or repeal of a rule, unless the context clearly indicates otherwise. 22 23 SECTION 312. CONCISE EXPLANATORY STATEMENT. 24 (a) At the time it adopts a rule, an agency shall issue a concise explanatory statement 25 containing: 26 (1) the agency’s reasons for the actionadopting the rule, which must include an 27 explanation of the principal reasons for and against the adoption of the rule, the agency’s reasons 28 for not accepting substantial arguments reasons for overruling substantial arguments and

1 considerations mademade in testimony and comments;, and

2 and its reasons for failing to consider any issues fairly raised in testimony and

3 comments; and

4 ((2) the reasons for any substantial change between the text of the proposed rule

5 contained in the published notice of the proposed adoption oof the rule and the text of the rule as

6 finally adopted.

7 (b) Only the reasons contained in the concise explanatory statement required by

8 subsection (a) may be used by an agency as justification for the adoption of the rule in any

9 proceeding in which its validity is at issue.

10 Comment 11 12 Many states have adopted the requirement of a concise explanatory statement. Arkansas 13 (A.C.A. Section 25-15-204) and Colorado (C.R.S.A. Section 24-4-103) have similar provisions. 14 The federal Administrative Procedure Act uses the identical terms in Section 553 (c) (5 U.S.C.A. 15 Section 553). This provision also requires the agency to explain why it rejected substantial 16 arguments made in comments. Such explanation helps to encourage agency consideration of all 17 substantial arguments and fosters perception of agency action as not arbitrary. Subsection (2) 18 requires a statement of reasons for any substantial change between the text of the proposed rule, 19 and the text of the adopted rule. Section 308 prohibits adoption of a rule that differs from the 20 proposed rule unless the adopted rule is the logical outgrowth of the proposed rule. An adopted 21 rule that contains a substantial change from the proposed rule can be adopted under Section 308 22 if the logical outgrowth test is satisfied but the agency will have to provide a statement of 23 reasons under Section 312(2). If the logical outgrowth test is not met, then the rule can not be 24 adopted under Section 308, and section 312(2) does not apply. 25 26 Agency action is defined in section 102(4) to include an agency rule or order [(subsection 27 (4)(a)], and the failure to issue a rule or order [(subsection (4)(b)]. In Section 312(1), the term 28 “action” refers to the rulemaking process related to the adoption, amendment or repeal of a rule. 29 See Section 102(2) definition of adoption of a rule which includes amendment or repeal of a rule, 30 unless the context clearly indicates otherwise. 31 32

33 SECTION 313. INCORPORATION BY REFERENCE. An rule may agency may

34 adopt a rule that iincorporates by reference all or any part of a code, standard, or rule that has 1 been adopted by an agency of the United States, this state, another state, or by a nationally

2 recognized organization or association, if:

3 (1) repeating verbatimincorporation of the text of the code, standard, or rule in the rule

4 would be unduly cumbersome, expensive, or otherwise inexpedient;

5 (2) the reference in the agency rules fully identifies the incorporated code, standard, or

6 rule by citation, location, and date[, and states whether the rule includesmust state that the rule

7 does not include any later amendments or editions of the incorporated code, standard, or rule];

8 (3) the code, standard, or rule is readily available to the public in written or electronic

9 form;

10 (4) the rule states where copies of the code, standard, or rule are available for a

11 reasonable charge at cost from the agency adoptingissuing the rule and where copies are

12 available from the agency of the United States, this state, another state, or the organization or

13 association originally issuing the code, standard, or rule; and

14 (5) tThe agency maintains a copy of the code, standard, or rule readily available for

15 public inspection at the agency office.

16 Comment 17 18 Several states have provisions that require the agencies to retain the voluminous 19 technical codes. See, Alabama, Ala.Code 1975 Section 41-22-9; Michigan, M.C.L.A. 24.232; 20 and North Carolina, N.C.G.S.A. ' 150B-21.6. To avoid the problems created by those retention 21 provisions, but to assure that these technical codes are available to the public, this section adopts 22 several specific procedures. One protection is to permit incorporating by reference only codes 23 that are readily available from the outside promulgator, and that are of limited public interest as 24 determined by a source outside the agency. See Wisconsin, W.S.A. 227.21. These provisions 25 will guarantee that important material drawn from other sources is available to the public, but 26 that less important material that is freely available elsewhere does not have to be retained. The 27 bracketed language in subsection (2) is based on variations in state law as to whether later 28 amendments to codes are automatically incorporated into the rule, or whether a new rulemaking 29 proceeding would be required to include code amendments. This issue is discussed in Jim Rossi, 30 “Dual Constitutions and Constitutional Duels: Separation of Powers and State Implementation 31 of Federally Inspired Regulatory Programs and Standards ,” 46 WMMLR 1343 (2005)

1 2 3 SECTION 314. COMPLIANCE AND TIME LIMITATION. An action taken under 4 this [article], including a rule adopted using the emergency process under Section 309(a) or the 5 direct final process under Section 309(b), is not valid unless taken in No rule adopted under this 6 [act], including an emergency rule under Section 309(a) and an expedited rule under Section 7 309(b), is valid unless adopted in substantial compliance with the procedural requirements of this 8 [articleact]. 9 A proceeding to contest any rule on the ground of noncompliance with the procedural 10 requirements of this [act] must be commenced within two years from the effective date of the 11 rule. 12 Comment 13 14 This section is a slightly modified form of the 1961 Model State Administrative 15 Procedure Act, section (3)(c). See also section 3-113(ab) and section 3-116 of the 1981 Model 16 State Administrative Procedures Act. Section 504(a) governs the timing of judicial review 17 proceedings to contest any rule on the ground of noncompliance with the procedural 18 requirements of this [act]. The scope of challenges permitted under Section 504(a)this section 19 includes all applicable requirements of article 3 for the type of rule being challenged. 20 21 SECTION 315. FILING OF RULES. An agency shall file in written and electronic 22 form with the [publisher] each rule it adopts , including an emergency rule adopted under 23 Section 309(a) orand an expedited direct final rule under Section 309(b)., and all rules existing 24 on [the effective date of this [act]] that have not previously been filed. The agency shall also file 25 a rule under this section as an electronic record. The agency shall file a rule not later than [ ] 26 days after adoption. filing must be done as soon after adoption of the rule as practical. The 27 [publisher] shall keep open to public inspection a permanent register of all filed rules and 28 concise explanatory statements. The [publisher] shall affix to each rule and statement a

1 certification of the time and date of filing. and keep a permanent register open to public 2 inspection of all filed rules and attached concise explanatory statements.The [publisher] shall 3 publish the notice of adopted rules in the [administrative bulletin] In filing a rule, each agency 4 shall use a standard form prescribed by the [publisher]. 5 Comment 6 This section is based on the 1961 Model State Administrative Procedure Act, Section 7 4(a) and its expansion in the 1981 MSAPA, Section 3-114. Section 201(g)(1) provides that the 8 administrative bulletin must contain newly filed adopted rules. This section provides that the 9 publisher is responsible for publishing the notice of adopted rules in the administrative bulletin. 10 11 SECTION 316. EFFECTIVE DATE OF RULES. 12 (a) Except as otherwise provided in this section subsection (b), (c), or (d), [unless 13 disapproved by the [rules review committee] or [withdrawn by the agency under Section 14 703,]each rule adopted after [the effective date of this [act]] each rule adopted and the repeal of 15 a rule, becomes effective [3060] days after publication of the rule in the [administrative bulletin] 16 [on the [publisher]=s InternetInternet website.] 17 (b) The adoption of a A rule may become effective on a later date than that established 18 by subsection (a) if the later date is required by law other than this [act]another statute or 19 specified in the rule. 20 (c) The adoption of aA rule becomes effective immediately upon its filing with the 21 [publisher] or on any subsequent date earlier than that established by subsection (a) if it is 22 required to be implemented by a certain date by the federal or [state] constitution, a statute, or 23 court order. 24 (d) A rule adopted using the emergency process under An emergency rule adopted under 25 Section 309(a) becomes effective upon adoption by the agencyimmediately upon filing with the

1 [publisher]. 2 (e) An rule adopted using the direct final process under expedited rule adopted pursuant 3 to Section 309(b) to which no objection is made becomes effective [3015] days after the close of 4 the public comment period, unless the rulemaking proceeding is terminated or a later effective 5 date is specified by the agency. 6 (f) A guidance document becomes effective immediately upon adoption or at a later date 7 established by the agency. 8 Comment 9 This is a substantially revised version of the 1961 Model State Administrative Procedure 10 Act, Section 4 (b)&(c) and 1981 Model State Administrative Procedure Act, Section 3-115. Most 11 of the states have adopted provisions similar to both the 1961 Model State Administrative 12 Procedure Act and the 1981 Model State Administrative Procedure Act, although they may differ 13 on specific time periods. Some rules may have retroactive application or effect provided that 14 there is express statutory authority for the agency to adopt retroactive rules. See Bowen v. 15 Georgetown University Hospital 488 U.S. 204 (1988). 16 17 SECTION 317. PETITION FOR ADOPTION OF RULE. Any person may petition 18 an agency to request the adoption of a rule. Each agency shall prescribe by rule the form of the 19 petition and the procedure for its submission, consideration, and disposition. Not later 20 thanWithin [60] days after submission of a petition, the agency shall: 21 (1) deny the petition in a record and state its reasons for the denial; or 22 (2) initiate rulemaking proceedings in accordance with this [act].; or 23 (3) if otherwise lawful, adopt the rule. 24 Comment 25 This section is substantially similar to the 1961 MSAPA. See also section 3-117 of the 26 1981 MSAPA. Agency decisions that decline to adopt a rule are judicially reviewable for abuse 27 of discretion (See Massachusetts v. EPA 127 S. Ct. 1438 (2007) (EPA decision to reject 28 rulemaking petition and therefore not to regulate greenhouse gases associated with global 29 warming was judicially reviewable and decision was arbitrary and capricious.). 30

1 [ARTICLE] 4

2 ADJUDICATION IN A CONTESTED CASE

3

4 SECTION 401. WHEN ARTICLE APPLIES; CONTESTED CASES. This [article]

5 applies to an adjudication made by an agency in a contested case. A contested case proceeding

6 is available when, under the federal or state constitution or a federal or state statute, the

7 opportunity for an evidentiary hearing to determine facts is required for the formulation and

8 issuance of an agency decision. The provisions of article 4 apply to that contested case

9 proceeding. If the requirements for informal adjudication under Sections 405 and 406 or an

10 emergency adjudication under Section 408 are met, a hearing in a contested case may be

11 conducted following the procedures in those sections.

12 Comment 13 14 Article 4 of this Act does not apply to all adjudications but only to those adjudications, 15 defined in Section 102 as a “contested case.” Contested case is the definition of the subset of 16 adjudications that fall within this section because law as defined in Section 102(14) requires an 17 evidentiary hearing to resolve particular facts or the application of law to facts. This section is 18 subject to the exceptions in Sections 405 and 406 for informal hearing and in Section 408 for an 19 emergency hearing if the requirements for thatose exceptions under this Article appliesy. If the 20 requirements for informal adjudication under Sections 405 and 406 or an emergency 21 adjudication under Section 408 are met, a hearing in a contested case may be conducted 22 following the procedures in those sections. All contested cases are also subject to Section 402 of 23 this article. 24 25 For a statute to create a right to an evidentiary hearing, express use of the term 26 “evidentiary hearing” is not necessary in the statute. Statutes often use terms like “appeal” or 27 “proceeding” or “hearing”, but in context it is clear that they mean an evidentiary hearing. An 28 evidentiary hearing is one in which the resolution of the dispute involves particular facts and the 29 presiding officer is limited to material in the record in making his decision. 30 31 Hearings that are required by procedural due process guarantees include life, liberty and 32 property interests, which arise where a statute creates a justified expectation or legitimate 33 entitlement. This section includes more than what were described as “rights” under older 34 common law. In cases where the right to an evidentiary hearing is created by due process, 35 attention is directed to Section 405(2)D infra, which may permit an informal hearing.

1 2 Section 401, governing contested case hearings, does not apply to investigatory hearings, 3 a hearing that merely seeks public input or comment, pure administrative process proceedings 4 such as tests, elections, or inspections, and situations in which a party has a right to a de novo 5 administrative or judicial hearing. An agency may by rule make all or part of article 4 applicable 6 to adjudication that does not fall within the requirements of Section 401, including hearing rights 7 conferred by agency regulations, or on the record appeals. This section does not apply to an 8 investigatory hearing, or a hearing that merely seeks public input or comment. Also, this section 9 is not applicable to the situation where a party is entitled to a de novo administrative or judicial 10 hearing. An agency may by rule make all or part of this article applicable to adjudication that 11 does not fall within requirements of this section. 12 13 This section draws upon the California, (see Cal. Cal.Gov.Code Section 11410.10); 14 Minnesota, (see Minnesota Statutes Annotated, Section 14.02, subd. 3; Washington (see Revised 15 Code of Washington, 34.05.413(2) and Kansas (see Kansas Stat. Ann., KS ST Section 77-502(d) 16 & Kansas Stat. Ann., KS ST Section 77-503). The definition of disputed case used in this Act is 17 similar to, but broader than, the definition of contested case in the 1961 MSAPA, Section 1(2). 18

19 SECTION 402. PRESIDING OFFICERS.

20 (a) In a contested case, the presiding officer shall manage the proceeding regulate the

21 hearing in a manner that will promote an fair, just, orderly and prompt resolution.

22 (b) The presiding officer shall be the agency head, one or more members of the agency

23 head that is a body of individuals [, in the discretion of the agency head, one or more

24 administrative law judges assigned by the office in accordance with Section 602,] or, unless

25 prohibited by law, one or more persons designated by the agency head .

26 (c) An individual who has served as investigator, prosecutor, or advocate at any stage in

27 a contesteddisputed case may not serve as a presiding officer or assist or advise any presiding

28 officer in the same contested case proceeding.

29 (d) An individual who is subject to the authority, direction, or discretion of an individual

30 who has served as [investigator,] prosecutor [,] or advocate at any stage in a disputed case,

31 including investigation, may not serve as presiding officer or assist or advise a presiding officer

32 in the same proceeding.

(e)

the provisions of subsection (c) and (d) governing separation of functions as to the presiding officer also govern separation of functions as to the agency head or other person or body to which the power to hear or decide in the proceeding is delegated.

(fe) 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]cause for which a judge is or may be disqualified. 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 that a reasonable person would consider likely to affect the impartiality of the presiding officer in the contested case proceeding., including:

(1)

a financial or personal interest in the outcome of the contested case proceeding; and

(2)

an existing or past relationship with any of the parties to the contested case proceeding, their counsel or representatives, or a witness.

(gf) Any party may petition for the disqualification of a presiding officer promptly after noticereceipt 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.

1 (hg) A presiding officer whose disqualification is requested [or the appointing authority, 2 or the Chief Administrative Law Judge] shall determine whether to grant the petition and state 3 facts and reasons for the determination in writing. A presiding officer’s decision to deny 4 determination to disqualification disqualify a presiding officer is not immediately subject to 5 judicial review. 6 (ih) If a substitute presiding officer is required, the substitute must be appointed [as 7 required by law, or if no law governs then] by: 8 (1) the Governor, if the original presiding officer is an elected official; or 9 (2) the appointing authority, if the original presiding officer is an appointed 10 official. 11 (ji) The provisions of this section governing disqualification of a presiding officer also 12 govern disqualification of the agency head or other person or body to which the power to hear or 13 decide in the proceeding is delegated. 14 (kj) If participation of the agency head is necessary to enable the agency to take legally 15 effective action, required by law to participate in the hearing or decision of a contested case, an 16 agency head may continue to participate notwithstanding grounds for disqualification. 17 Comment 18 Subsection (b) governs who may be appointed to serve as a presiding officer in a 19 disputed case. If the case is heard by more than one presiding officer, as when the agency head 20 hears a disputed case en banc, one member of the agency head may serve as chair, but all of the 21 persons sitting as judge in the case are collectively the presiding officer. 22 23 Subsection (b) confers a limited amount of discretion upon the agency head to determine 24 who will preside. The presiding officer may be either the agency head, or one or more members 25 of the agency head, or one or more administrative law judges assigned by the Office of 26 Administrative Hearings in accordance with Section 603. Without the bracketed language, 27 subsection (b) resembles the law in a group of states that have created a central panel of 28 administrative law judges, and have made the use of administrative law judges from the central 29 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 on California Government Code Section 11425.30.

Subsection (fe) 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 (gf) is based on 1981 MSAPA Section 4-202(c).

Subsection (ji) is based on California Government Code Section 11425.40(c).

Subsection (kj) 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 and except as otherwise provided in Section 406, 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 cases:

(1)

Except as otherwise provided by law, the party initiating the agency proceeding shall have the burden of proof. Upon proper objection the presiding officer must exclude evidence that is irrelevant, immaterial, and unduly repetitious or excludable on constitutional, or statutory grounds or on the basis of an evidentiary privilege recognized in the courts of this state. Any other relevant evidence, not privileged, may be received if it is of a type commonly relied upon by reasonably prudent people in the conduct of their affairs. 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 testimony of parties and witnesses must be made under oath or affirmation

(54)

AAll evidence must be made part of the hearing record of the case including, if the agency desires to avail itself of information or if it is offered into evidence by a party, records in the possession of the agency which contain information that is not a public record. 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 confidentialnot 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.

(65)

TThe 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.

(76)

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.

(7)

The presiding officer is not responsible to or subject to the supervision, direction, or direct or indirect influence of an officer, employee, or agent of an agency other than the [office of administrative hearings] engaged in the performance of investigatory, prosecutorial, or advisory functions for an agency.

(e)

In a contested case, eExcept for informal hearings under Sections 405 and 406 and emergency hearings under Section 408, in a disputed case, the presiding officer, at appropriate stages of the proceedings, shall give all parties a timely 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. If records are submitted, the original record must be filed with the agency and copies of all filings shall be sent to all parties. 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 informal hearings under Sections 405 and 406 and emergency hearings under Section 408, in a contested casedisputed case, 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, If all parties consent and, to the extent allowed by law, 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. Each party to the proceeding must be given if each party to a hearing has an opportunity to hear, speak, and be heard in the proceeding as it occurs., 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.

(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 Any party may represent themselves in a contested case, and the presiding officer may explain accommodate a pro se party’s unfamiliarity with agency contested case procedures by explaining those procedures to

1 the self represented pro se party to the extent consistent with [fair hearing] [impartial decision

2 maker] requirements

3 (l) The decision in a contested case must be written, based on the agency hearing record,

4 and include a statement of the factual and legal bases of the decision.

5 (m) This section applies to agency procedure in contested cases without further action by

6 the agency, and prevails over a conflicting or inconsistent provision of the agency’s rules.

7 (m)(n) Subject to Section 204, tThe rules by which an agency conducts a contested case

8 may include provisions more protective of the rights of the person to which the agency action is

9 directed than the requirements of this section.

10 (o) Agencies must train new presiding officers in contested case procedures and in the

11 rules of evidence applicable to contested case proceedings.

12 Comment 13 14 This section specifies the minimum hearing requirements that must be met in disputed 15 cases under this act. This section applies to all agencies whether or not an agency rule provides 16 for a different procedure; this procedure is excused only if a statute expressly provides 17 otherwise. This section does not prevent an agency from adopting more stringent procedures 18 than those in this section. This section does not supersede conflicting state or federal statutes. 19 20 There are several interrelated purposes for this procedural provision: 1) to create a 21 minimum fair hearing procedure; and 2) to attempt to make that minimum procedure applicable 22 to all agencies. In many states, individual agencies have lobbied the legislature to remove 23 various requirements of the state Administrative Procedure Act from them. The result in a 24 considerable number of states is a multitude of divergent agency procedures. This lack of 25 procedural uniformity creates problems for litigants, the bar and the reviewing courts. This 26 section attempts to provide a minimum, universally applicable procedure in all disputed cases. 27 The important goal of this section is to protect citizens by a guarantee of minimum fair 28 procedural protections. The procedures required here are only for actions that fit the definition of 29 a disputed case and fall within the provisions of Section 401. Thus, they do not spread quasi 30 judicial procedures widely, and do not create any significant agency loss of efficiency or 31 increased cost. 32 33 This section is modeled in part on the Arizona Regulatory Bill of Rights, see A.R.S. 34 Section 41-1001.01 and the California Administrative Adjudication Bill of Rights, see West 35 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.

1 2 Under subsection (o), training of new presiding officers in contested case procedures is 3 important to the quality of adjudication. Training of non lawyer presiding officer is especially 4 important because of relative lack of familiarity with adjudication procedures compared to 5 lawyer presiding officers. 6 7 Section 10 of the 1961 MSAPA contained many similar provisions. 8 9 SECTION 404. NOTICE. 10 (a) Except for an emergency adjudication under Section 408, an agency shall give 11 reasonable notice of the right to an evidentiary hearing in a contested case. 12 (b) In actions initiated by case of applications or petitions submitted by persons other 13 than the agency, within a reasonable time after filing, the agency shall give notice to all parties 14 that an action has been commenced. The notice must include: 15 (1) the official file or other reference number, the name of the proceeding, and a 16 general description of the subject matter; 17 (2) the name, official title, mailing address [e-mail address] [facsimile address] 18 and telephone number of the presiding officer; 19 (3) a statement of the time, place, and nature of the prehearing conference or 20 hearing, if any; 21 (4) [the name, official title, mailing address, and telephone number of any 22 attorney or employee who has been designated to represent the agency]; and 23 (5) any other matter that the presiding officer considers desirable to expedite the 24 proceedings. 25 (c) In an actions initiated by the agency that may or will result in an order, the agency 26 shall give an initial notice to the party or parties against which the action is brought as provided 27 by law. by personal service in a manner appropriate under the rules of civil procedure for the

service of process in a civil action in this state The notice shallwhich includes:

(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

1 expedite the proceedings. 2 Comment 3 4 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, 6 O.R.S. Section 183.415; Kansas, K.S.A. Section 77-518; Iowa, I.C.A. Section 17A.12; Montana, 7 MCA 2-4-601; and Michigan, M.C.L.A. 24.271. 8 9 SECTION 405. INFORMAL ADJUDICATION IN CONTESTED CASES. Unless prohibited by law other than this [act], an agency may use an informal hearing procedure in a 11 contested case if: 12 (1) there is no disputed issue of material fact; or 13 (2) the matter at issue is limited to any of the following: 14 (A) a monetary amount of not more than [one thousand dollars ($1,000)] whether liquidated in a sum certain or as periodic payments over no more than [12] months; 16 (B) a disciplinary sanction against a student that does not involve expulsion from 17 an academic institution or suspension for more than 10 days or a disciplinary sanction against an 18 employee that does not involve discharge from employment, demotion, or suspension for more 19 than five days;

(C) a disciplinary sanction against a licensee that does not involve revocation of 21 a license or suspension of a license for more than five days; 22 (D) a proceeding where the federal or state constitution requires an evidentiary 23 hearing, but the federal or state constitution does not require an agency to follow the 24 adjudication procedures of Section 403; or

(E) the parties by written agreement consent to an informal hearing.

26 Comment 27

1 The informal hearing procedure is intended to satisfy due process and public policy 2 requirements in a manner that is simpler and more expeditious than formal adjudication. The 3 informal hearing procedure provides a forum in the nature of a conference in which a party has 4 an opportunity to be heard by the presiding officer. The informal hearing procedure provides a 5 forum that may accommodate a hearing where by rule or statute a member of the public may 6 participate without appearing or intervening as a party. 7 8 This section adopts a single category of informal procedure that an agency may use to 9 perform the same functions, and the following section leaves to the discretion of the presiding 10 officer the exact hearing procedure to be followed. This section also draws upon the California 11 provision for an informal procedure, see Ann.Cal.Gov.Code SECTION 11445.20. 12 13 Subsection 2(D) is intended to deal with the situation that arises in federal constitutional 14 law where the constitution protects a life, liberty or property interest, but, under the holding of 15 Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893 (1976) do not require all the protections of a 16 formal hearing. See Goss v. Lopez, (1975) 419 U.S. 565, 581-582 (informal due process hearing 17 for school suspension of ten days or less), and Cleveland Board of Education v. Loudermill 18 (1985) 472 U.S. 532. 19

20 SECTION 406. INFORMAL ADJUDICATION PROCEDURE.

21 (a) Except as otherwise provided in subsection (b), the adjudication procedures required

22 under Section 403 apply to an informal adjudication.

23 (b) In an informal adjudication, the presiding officer shall regulate the course of the

24 proceeding consistent with the due process requirement of meaningful opportunity to be heard.

25 The presiding officer shall permit the parties and their representatives, and may permit others, to

26 offer written or oral comments on the issues. The presiding officer may limit the use of

27 witnesses, testimony, evidence, cross-examination, and argument and may limit or eliminate the

28 use of pleadings, intervention, discovery, prehearing conferences, and rebuttal. Where

29 appropriate in the discretion of the presiding officer, an informal adjudication may be in the

30 nature of a conference.

31 (c) In regulating the course of the informal adjudication proceedings, the presiding

32 officer shall recognize the rights of the parties: 1 (1) to notice that includes the decision to proceed by informal adjudication;

2 (2) to protest the choice of informal procedure, and to have that protest promptly

3 decided by the presiding officer;

4 (3) to participate in person or by a representative;

5 (4) to have notice of any contrary factual material in the possession of the agency

6 that may be relied on as the basis for adverse decision; and

7 (5) to be informed briefly, in writing, of the basis for an adverse decision in the

8 case.

9 (d) The agency record for review of informal adjudication consists of the official

10 transcript of oral testimony and any records that were considered by, prepared by, or submitted

11 to the presiding officer for use in the informal adjudication, or that are submitted by or to the

12 agency on review. The agency shall maintain these records as its record of the informal

13 adjudication.

14 Comment 15 16 This section draws on the informal adjudication provisions of several state 17 Administrative Procedure Acts. See: California Administrative Procedure Act, West=s 18 Ann.Cal.Gov.Code SECTION 11445.40; Va. Administrative Procedure Act, Section 2.2-4019, 19 Va. Code Ann. ' 2.2-4019; and Washington Administrative Procedure Act, Section 34.05.485, 20 West=s RCWA ' 34.05.485. Under this section, the informal adjudication procedure is a 21 simplified form of an adjudication under the control of the presiding officer. The informal 22 hearing may be in the nature of a conference at the discretion of the presiding officer. Although 23 the hearing is streamlined and informal, the hearing officer must observe basic protections of 24 fairness spelled out in subsection (c) and protections described in Mathews v. Eldridge, 424 U.S. 25 319, 96 S.Ct. 893 (1976). . See Goss v. Lopez, (1975) 419 U.S. 565, 581-582 (informal due 26 process hearing for school suspension of ten days or less), and Cleveland Board of Education v. 27 Loudermill (1985) 472 U.S. 532. . 28 29

30

31 SECTION 4057. 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 officiallyjudicially 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)

Except to the extent that law other than this [act] provides otherwise, Tthe agency hearing record constitutes the exclusive basis for agency action in a contesteddisputed case and for judicial review of the case.

SECTION 4068. 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 interim 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. The hearing may be conducted in the same manner as an informal hearing under this [article].

(d)

Any order issued under this section must contain an explanation that briefly explains the factual and legal reasonsbasis for making the decision using emergency adjudication procedures.the emergency decision.

(e)

To the extent practicable , aAn 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 feasible to provides an opportunity for a hearing conduct an adjudication following contested case procedure under Section 403 or, if appropriate under this [article], informal adjudication under Sections 405 and 406, in order to resolve the issues underlying the temporary, interim 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

1 This section is based upon the 1961 Model State Administrative Procedure Act, section 2 14(c) and the 1981 Model State Administrative Procedure Act, Section 4-501. The procedure of 3 this section is intended permit immediate agency emergency adjudication, but also to provide 4 minimal protections to parties against whom such action is taken. Emergencies regularly occur 5 that immediately threaten public health, safety or welfare: licensed health professionals may 6 endanger the public; developers may act rapidly in violation of law; or restaurants may create a 7 public health hazard. In suchthese cases the agencies must possess the power to act rapidly to 8 curb the threat to the public. On the other hand, when the agency acts in such a situation, there 9 should be some modicum of fairness, and the standards for invoking suchthis remedy must be 10 clear, so that the emergency label may be used only in situations where it fairly can be asserted 11 that rapid action is necessary to protect the public. 12 13 Federal and state case law have held that in an emergency situation an agency may act 14 rapidly and postpone any formal hearing without violation, respectively, of federal or state 15 constitutional law. FDIC v. Mallen, 486 U.S. 230 (1988); Gilbert v. Homar (1997) 520 U.S. 16 924; Dep=t of Agric. v. Yanes, 755 P.2d 611 (OK. 1987). 17 18 The generic provision in this section has several advantages over the present divergent 19 approaches to emergency agency action. First, all agencies have the needed power to act without 20 delay, but there is provision for some type of brief hearing, if feasible. Second, this article limits 21 the agency to action of this type only in a genuine, defined emergency. Third, there are pre and 22 post deprivation protections. This section seeks to strike an appropriate balance between public 23 need and private fairness. 24 25 This section does not apply to an emergency adjudication, cease and desist order, or other 26 action in the nature of emergency relief issued pursuant to express statutory authority arising 27 outside of this act. 28

29 SECTION 4079. EX PARTE COMMUNICATIONS.

30 (a) Except as otherwise provided in subsections (b) and (c), or unless required for the

31 disposition of ex parte matters authorized by statute, while a contested case is pending, the

32 presiding officer may not make to or receive from any person any communication regarding any

33 issue in the proceeding [or relevant to the merits of the proceeding] without notice and

34 opportunity for all parties to participate in the communication. For the purpose of this section, a

35 proceeding is pending from the issuance of the agency’s pleading, or from an application for an

36 agency decision, whichever is earlier.

37 (b) The presiding officer may make communications to or receive communications from

a person authorized by law to provide legal advice to the presiding officer law clerk or a person authorized by law to provide legal advice to the agency 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, and if the staff advisor does not furnish, augment, diminish or modify the evidence in the record. .; 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, and if the staff advisor does not furnish, augment, diminish or modify the evidence in the record.

(c)

An employee or representative may make communications to or receive communications from an agency head sitting as presiding officer or decision maker 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 and

informed of the contents 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, the presiding officer shall, 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. 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.

(h) As a sanction, iIf necessary to eliminate the effect of a communication received in 1 violation of this section, a presiding officer may be disqualified, the portions of the record

2 pertaining to the communication may be sealed by protective order, or other appropriate relief

3 may be granted including dismissal of the application or other adverse ruling on the merits. as a

4 sanction.

5 Comment 6 7 This section is not intended to be applied to communications made by or to a presiding 8 officer or personal staff assistant regarding noncontroversial practice and procedure matters such 9 as number of pleadings, number of copies or type of service. Communications related to 10 contested procedural issues or motions are covered by Section 409(a). Other communications not 11 on the merits but related to security or to the credibility of a party or witness are covered by 12 Section 409(a). See Matthew Zaheri Corp., Inc. v. New Motor Vehicle Board (1997) 55 Cal. 13 App. 4^th 1305. However, this section goes further in permitting advice to the presiding officer 14 from staff members on complex technical and scientific matters, but permits parties to reply to 15 those staff communications. 16 17 This section also provides another remedy besides disclosure and party reply. In a case 18 where disclosure and reply are inadequate to cure or eliminate the effect of the ex parte contact, a 19 protective order may be issued. The intent of authorizing the protective order is to keep the ex 20 parte material from the successor presiding officer. 21 22 This section draws in part from the systematic California provisions on ex parte contacts. 23 See West=s Ann.Cal.Gov.Code Section 11430.10 to 11430.80. The California sections address 24 many of the problems that arise in this area, and attempt to distinguish technical, advisory 25 contacts from agency staff to presiding officers or agency heads from other kinds of party 26 contacts. 27

28 SECTION 40810. ADMINISTRATIVE ADJUDICATION CODE OF ETHICS.

29 (a) Except as otherwise provided in subsection (b), the administrative law judge code of

30 ethics adopted in this state governs the hearing and other conduct of a a full time administrative

31 law judge or other presiding officer adjudicating a contested case.

32 Except as otherwise provided in subsection (b), the [code of judicial ethics] applicable to the

33 conduct of judges [in the judicial branch in this state] governs the hearing and other conduct of

34 an administrative law judge or other presiding officer adjudicating a contested case.

1 (b) Section 4079 governs the standards for ex parte communication. Section 402 governs 2 disqualification of presiding officers. Restrictions on financial interests, political activity or on 3 accepting honoraria, gifts, or travel are governed by state law other than this acte [code of 4 judicial ethics]. 5 Comment 6 7 Section 40810 is based on the provisions of the California A.P.A. California Government 8 Code Sections 11475 to 11475.70 (Administrative Adjudication Code of Ethics). This section 9 applies to administrative law judges the provisions of the Code of Judicial Ethics applicable to 10 judges in the judicial branch in the state, with exceptions as noted. Some of the exceptions are 11 based on provisions of this act. Other exceptions are based on state statutes governing the ethical 12 responsibilities of government officials and employees. Section 40810 provides applicable law to 13 govern disqualification of presiding officers under Section 402(e). 14 15 SECTION 40911. INTERVENTION. 16 (a) A presiding officer shall grant a timely petition for intervention in a contested case if: 17 (1) the petitioner has a statutory right to initiate, or to intervene in, the 18 proceeding in which intervention is sought; or. 19 (2) the petitioner has an interest that will or may be adversely affected by the 20 outcome of the proceeding and that interest is not adequately represented by existing parties. 21 (b) A presiding office may grant a timely petition for intervention when the petitioner 22 has a conditional statutory right to intervene, or when the petitioner’s claim or defense is based 23 on the same transaction or occurrence as the contested case. 24 (c) When intervention is granted or at any subsequent time, the presiding officer may 25 impose conditions upon the intervener’s participation in the proceedings. 26 (d) A presiding officer may permit intervention provisionallyconditionally and, at any 27 time later in the proceedings or at the end of the proceedings, may revoke the 28 provisionalconditional intervention.

1 (e) Upon request by the interveners or existing parties, the presiding officer may hold a

2 hearing on the intervention petition. Existing parties to a contested case proceeding have the

3 right to be heard on the issues related to whether the presiding officer shall grant or deny a

4 pending petition for intervention.

5 (f) The presiding officer, at least [24 hours] before the hearing, shall issue an order

6 granting or denying each pending petition for intervention, specifying any conditions, and briefly

7 stating the reasons for the order. The presiding officer shall promptly give notice to the petitioner

8 for intervention and to all parties of an order granting, denying, or revoking modifying

9 intervention.

10 Comment 11 12 Section 4101 is based in part of 1981 MSAPA Section 4-209. See also Federal Rule of 13 Civil Procedure Rule 24 (intervention of right under Rule 24(a), and permissive intervention 14 under Rule 24(b)). 15 16 Subsection (c) recognizes the normal judicial practice of limiting the participation of 17 intervenors, especially on cross examination, to their particular interest and taking any other 18 procedural steps or limitations in order to maintaining an orderly and expeditious hearing. 19 Mandatory intervention is provided for in subsections (a)(1), and (2). Permissive intervention is 20 provided for in subsection (b). Subsection (d) recognizes the power of the presiding officer to 21 dismiss a party who has intervened at any time after intervention has occurred when it appears 22 that the conditions of this section or the requirements for the intervening party’s standing have 23 not been satisfied. Subsection (f) provides for notice suitable under the circumstances to enable 24 parties to anticipate and prepare for changes that may be caused by the intervention. 25

26 SECTION 41012. SUBPOENAS.

27 (a) In a contested case, upon tender of the proper fees for a witnesses, calculated in the

28 same manner as under the rules of civil procedure by the party applying for the subpoena, the

29 presiding officer or any other officer to whom the power is delegated may issue a subpoenas for

30 the attendance of a witnesses and the production of books, records and other evidence upon a

31 showing of general relevance and reasonable scope of the evidence sought for use at the hearing.

1 Upon written request by a party, the presiding officer shall issue a subpoena. The presiding 2 office has the power to administer oaths. 3 (b) After the commencement of a contested case, when a party makes a written request 4 for a subpoena to compel attendance by a witness at the hearing of the case or to produce books, 5 papers, records, or records that are relevant and reasonable is made by a party, the presiding 6 officer shall issue a subpoenas. 7 (bc) Unless otherwise provided by law or agency rule, subpoenas so issued shall be 8 served and, upon application to the court by a party or the agency, enforced in the manner 9 provided by law for the service and enforcement of subpoenas in a civil action. Subpoenas, 10 protective orders, and other orders issued under this section may be enforced pursuant to the 11 rules of civil procedure. 12 Comment 13 Section 4102 is based in part on 1981 MSAPA Section 4-210. See also California 14 Government Code sections 11450.05 to 11450.50 (subpoenas in administrative adjudication). 15 Subsection (b) is based on Arizona administrative procedure act Section 41-1062A.4. 16 SECTION 41113. DISCOVERY. 17 (a) As used in this section, “statement” includes records signed by a person of his or her 18 written oral statements and records that summarize oral statements made by a personthese oral 19 utterances. 20 (b) Except in an emergency hearing under Section 4087, a party, upon written notice to 21 another party at least [ ] days before an evidentiary hearing, is entitled to: 22 (1) obtain the names and addresses of witnesses that the disclosing party will 23 present at the contested case hearing to the extent known to the other party; and 24 (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 writing or thing which is relevant and which would be admissible in evidence 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

1 which discovery is sought under this section that is exempt, privileged, or otherwise made 2 confidential or protected from disclosure by law, including attorney-client privilege, attorney 3 work product privilege, and deliberative process privilege or that would result in annoyance, 4 embarrassment, oppression, or undue burden or expense to any person or party. . 5 (d) Upon petition, the presiding officer may issue an order compelling discovery for 6 refusal to comply with a discovery request unless good cause exists for refusal. Failure to 7 comply with the discovery order shall be enforced according to the rules of civil procedure. 8 Comment 9 10 Discovery in administrative adjudication is more limited than in civil court proceedings. 11 Nevertheless discovery is available for the items listed in subsection (b). See California 12 Government Code Section 11507.6 to 11507.7 (discovery in administrative adjudication). 13 Section 411 is based on Section 11507.6. 1981 MSAPA Section 4-210 also provides 14 for discovery in administrative proceedings 15 SECTION 41214. CONVERSION. 16 (a) An adjudication in a contested case of one type may be converted to an adjudication 17 of another type under this [article] if: 18 (1) the adjudication at the time of conversion no longer meets the requirements under 19 this [article] for adjudication of the type for which it was originally commenced; and 20 (2) at the time it is converted it meets the requirements under this [article] for the type of 21 adjudication to which it is being converted. 22 (b) To the extent practicable and consistent with the rights of the parties and the 23 requirements of this [article] relative to the new proceeding, the record of the original proceeding 24 must be used in the new proceeding. 25 (c) The agency may adopt rules to govern the conversion of one type of proceeding 26 under this [article] to another. The rules may include an enumeration of the factors to be

1 considered in determining whether and under which circumstances one type of proceeding will 2 be converted to another. 3 Comment 4 5 Section 41214 is based in part on 1981 MSAPA Section 1-107. See also California 6 Government Code Sections 11470.10 to 11470.50. Under this section the presiding officer is 7 empowered to convert from one type of disputed case adjudication to another in appropriate 8 circumstances. Conversion may only occur if two requirements are satisfied: the situation that 9 met the requirements under this article for the original proceeding must no longer exist, and the 10 requirements for the new type of proceeding under this article are now satisfied. Meeting both 11 requirements is mandatory in order to prevent a presiding officer from converting an 12 adjudication under Section 402 to an informal adjudication in a situation where the procedural 13 protections of Section 402 are still justified under this article. 14 15 SECTION 41315. DEFAULT. 16 (a) Unless otherwise provided displaced or modified by law other than this [act], if a 17 party without good cause fails to attend or participate in a pre-hearing conference, hearing, or 18 other stage of a contesteddisputed case, the presiding officer may serve upon all parties written 19 notice of a proposed default order with a statement of reasonsissue a default order or proceed 20 with a hearing in the absence of the party. 21 (b) Within [10] days after service of a proposed default order, the party against whom 22 the order was issued may file a written motion with supporting reasons to vacate the order. 23 (c) The presiding officer shall either issue or vacate the default order promptly after 24 expiration of the time within which the party may file a written motion under subsection 25 (b).Under subsection (a), a default judgment must be based on the absent party=s admissions or 26 other evidence and affidavits, which can be used without notice to the absent party. This 27 subsection does not apply where the burden is on the absent party to establish that he or she is 28 entitled to the agency action sought.

1 (d) After issuing a default order, the presiding officer shall conduct any firther 2 proceedings necessary to complete the adjudication without the participation of the party in 3 default and shall determine all issues in the adjudication, including those affecting the defaulting 4 party. A recommended or final order issued against a defaulting party may be based on the 5 absent party’s admissions or other evidence affidavits which can be used without notice to the 6 absent party. When the burden of proof is on the defaulting party to establish that he or she is 7 entitled to the agency action sought, the presiding officer may issue a recommended or final 8 roder without taking evidence. 9 (ec) Within [ ] days after a recommended or final order decision is rendered against a 10 party subject to a default order, who failed to appear, that party may petition the presiding officer 11 to vacate the recommended or final order. For good cause shown If adequate reasons are 12 provided showing good cause for the party’s failure to appear, the presiding officer shall vacate 13 the decision and, after proper service of notice, conduct another evidentiary hearing. If good 14 cause is not shown adequate reasons are not provided showing good cause for the party's failure 15 to appear, the presiding officer shall deny the motion to vacate. Good cause includes but is not 16 limited to lack of notice to the defaulting party, mistake, inadvertence, surprise, excusable 17 neglect, or manifest injustice. 18 Comment 19 Under this section the presiding officer has the power to impose a default judgment. 20 However, the default decision must be based upon prima facie evidence. Among the other laws 21 that modify the presiding officer’s discretion are the [state] rules of civil procedure. The section 22 thus authorizes a presiding officer to issue a default judgment for the same reasons as contained 23 in the state rules of civil procedure. This section is based on 1981 MAPA Section 4-208 24 25 Subsection (b) is adapted from the Alaska Administrative Procedure Act, AS 44.62.530 26 and the California Administrative Procedure Act, West’s Ann. Cal.Gov.Code ' 11520. 27 Subsections (d) and (e) are based in part on 1981 MSAPA Section 4-208 and on California 28 Government Code Section 11520.

1 2 SECTION 41416. LICENSES. 3 (a) If an opportunity for an evidentiary hearing is not required by law for agency action 4 on an application for a license, the agency shall give prompt notice of its action in response to an 5 application. If the agency denies an application without the opportunity for an evidentiary 6 hearing under this section, the agency shall include the reasons for denial. If an opportunity for 7 an evidentiary hearing is required by law for the grant, denial, or renewal of a license, the 8 contested case provisions of Article 4 apply to that proceeding. 9 (b) When a licensee has made timely and sufficient application for the renewal of a 10 license, the existing license does not expire until the application has been finally acted upon by 11 the agency and, if the application is denied or the terms of the new license are limited, the last 12 day for seeking judicial review of the agency decision is 45 days from the date of the agency 13 decision denying the application or limiting the terms of the new license or a later date fixed by 14 order of the reviewing court. 15 (c) An agency may not revoke, suspend or modify a license unless the agency first gives 16 notice and an opportunity for a contested case proceeding under the provisions of article 4. 17 (dc) If the agency finds that emergency action against a license is required, the action 18 shall be conducted under Section 408. 19 Comment 20 The next to last sentence of subsection (a) was taken from the 1961 Model State 21 Administrative Procedure Act, Section 14(a). Subsection (b) was taken from the 1961 Model 22 State Administrative Procedure Act, section 14(b), which has been adopted by many states. See, 23 for example: Alabama, Ala.Code 1975 Section 41-22-19; Tennessee, T. C. A. Section 4-5-320; 24 Michigan, M.C.L.A. 24.291; and Wisconsin, W.S.A. 227.51. Subsection (c) is based on the 25 provisions of the 1961 Model State Administrative Procedure Act, Section 14(c), and is also 26 based on 1981 Model State Administrative Procedure Act Section 4-105. 27

SECTION 41517. 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 orderdecision [proposed orderdecision], 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 an initial orderdecision which shall becomes a final order 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 when the record closes, 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 orderdecision must include a statement of any circumstances under which the recommended orderdecision, without further notice, may become a final order.

(e) Findings of fact must be based exclusively upon the evidence of the agency hearing

1 record in the contested case and on matters officially noticed. 2 (f) A presiding officer shall notify and provide cause copies of the recommended or final 3 order to be delivered to each party and to the agency head within the time limits set in subsection 4 (c). 5 Comment 6 See Ssection 102(11) for the definition of “final order” Section 102(14 for the definition 7 of initial order, and section 102 (24) of this act for the definition of “recommended 8 orderdecision”. This section draws upon useful provisions from several states. E.g. see: 9 Alabama, Ala.Code 1975 Section 41-22-16; Iowa, I.C.A. Section 17A.15; Kansas, K.S.A. 10 Section 77-526; Michigan, M.C.L.A. 24.281; Montana, MCA 2-4-623; Washington, RCWA 11 34.05.461. This section is also based upon 1981 MSAPA Section 4-215. 12 13 The third sentence of subsection (d) is taken from the 1961 MSAPA. 14 15 SECTION 41618. AGENCY REVIEW OF RECOMMENDED AND INITIAL 16 ORDERS DECISIONS. 17 (a) An agency head may review a recommended or initial orderdecision on its own 18 motion. 19 (b) A party may petition the agency head to review a recommended or initial 20 orderdecision. Upon petition by any party, the agency head may shall review an initial order and 21 shall review a recommended order, except as otherwise provided by law other than this [act]. 22 agency order, except to the extent that: 23 (1) a provision of law precludes or limits agency review of the recommended decision; 24 or 25 (2) the agency head, in the exercise of discretion conferred by law other than this [act], 26 declines to review the recommended decision. 27 (c) A petition for review of a recommended orderdecision 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 orderdecision is rendered, or notice of the recommended order is given to the parties, whichever is later. . If the agency head decides to review a recommended orderdecision on its own motion, the agency head shall give written notice of its intention to review the recommended orderdecision within [10] days after it is rendered, or notice of the recommended order is given to the parties, whichever is later..

(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 orderdecision in subsection (b), is tolled by the submission of a timely petition for reconsideration of the recommended orderdecision 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 orderdecision 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 orderdecision 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 orderdecision, 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 orderdecisions by presiding officers, the agency head shall give due regard to the presiding officer's opportunity to observe the witnesses, and to determine the credibility of witnesses. . The agency head shall consider the agency record or suchthose portions of it as have been designated by the parties.

1 (f) An agency head may render a final order disposing of the proceeding or may remand 2 the matter for further proceedings with instructions to the presiding officer who rendered the 3 recommended order decision. Upon remanding a matter, the agency head may order such 4 temporary relief as is authorized and appropriate. 5 (g) A final order or an order remanding the matter for further proceedings under this 6 section must identify any difference between the order and the recommended orderdecision and 7 shall state the facts of record which support any difference in findings of fact, state the source of 8 law which supports any difference in legal conclusions, and state the policy reasons which 9 support any difference in the exercise of discretion. A final order under this section must 10 include, or incorporate by express reference to the recommended orderdecision, all the matters 11 required by Section 4156(d). The agency head shall cause an order issued under this section to 12 be delivered to the presiding officer and to all parties. 13 Comment 14 15 This section draws upon 1981 MSAPA, which reflects current practice in regard to 16 recommended ordersdecisions, initial orders, final orders and review of final orders more 17 accurately than the 1961 MSAPA. Subsections (b) and (e) draw upon the Washington APA, 18 West’s RCWA 34.05.464, and the Kansas APA, K.S.A. ' 77-527. The object of subsection (e) 19 is to assure agency head consideration of the issues tendered in the case. 20 21 SECTION 41719. RECONSIDERATION. 22 (a) Any party, within [ ] days after notice of a recommended or final order is given, may 23 file a petition for reconsideration that states the specific grounds upon which relief is requested. 24 The place of filing and other procedures, if any, shall be specified by agency rule and shall be 25 stated in the final order. 26 (b) If a petition for reconsideration is timely filed, and if the petitioner has complied with 27 the agency's procedural rules for reconsideration, if any, the time for filing a petition for judicial

1 review does not commence until the agency disposes of the petition for reconsideration as 2 provided in Section 504(d). 3 (c) If a petition is filed under subsection (a), the presiding officer shall render a written 4 order within [20] days denying the petition, granting the petition and dissolving or modifying the 5 recommended or final order, or granting the petition and setting the matter for further 6 proceedings. The petition may be granted only if the presiding officer states findings of facts, 7 conclusions of law, and the reasons for granting the petition. 8 Comment 9 This section is based in part on the Washington APA, West's RCWA 34.05.470. This 10 section creates a general right to seek reconsideration of a recommended or final order. 11 Subsection (b) must be read concurrently with Section 507(d), which excuses exhaustion to the 12 extent that a provision of this [act] provides for excuse. See also 1981 MSAPA Section 4-218 13 14 SECTION 41820. STAY. Except as otherwise provided by law other than this [act], a 15 party may request the an agency agency to stay a recommended or final order pending judicial 16 review within [sevenfive] days after notice of the order is given to the parties it is rendered. 17 When an agency finds that justice so requires, the agency may grant the request for a stay 18 pending judicial review. The agency may grant or deny the request for stay of the order either 19 before or after the effective date of the order. 20 Comment 21 The 1961 MSAPA ' 15 contained a provision for a stay. Stays are sometimes necessary 22 to preserve the status quo pending agency review or judicial review. This section is based in part 23 of 1981 MSAPA Section 4-217. The second sentence of this section is based on Section 705 of 24 the federal administrative procedure act. 25 26 SECTION 41921. AVAILABILITY OF ORDERS; INDEX. 27 (a)(a) Except as otherwise provided in subsections (b), and (c)(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] InternetInternet website without charge, or in writing upon request at a reasonable cost to be determined by the agency.

Legislative note. Most states have public records act that require disclosure of government documents and records to the public unless particular documents are exempt from disclosure under that act. Subsection (b) refers to those acts, and to exempt decisions under those acts.

(b)

Final orders or decisions that are exempt, privileged, or otherwise made confidential or protected from disclosure by the public records law of this state 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 indexing and disclosure only by order of the presiding officer with a written statement of reasons attached to the order. 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 form disclosure y the public records law of this state so that it complies with the requirements of that law, the redacted [or the generic version of the] order or decision may be indexed or published. 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 1 generic version of] a final order or decision that is exempt, privileged or otherwise made

2 confidential or protected from disclosure by law so that it complies with the requirements of law,

3 the redacted [ or the generic version of the] document may be indexed and published.

4 (de) An agency may not rely on a final order or a written final decision adverse to a

5 party other than the agency as precedent in future adjudications unless the order or decision has

6 been designated as a precedent by the agency, and the order or decision has been published,

7 indexed, and made available for public inspection.

8 Comment 9 10 This section is entirely new. This section continues the concept, seen earlier in 11 connection with rules, of preventing earlier decisional law known only to agency personnel from 12 constituting the basis for decision in a disputed case. Subsection (c) is based in part on the 13 provisions of California Government Code Section 11425.60. If the agency wishes to use a case 14 as precedent in the future, it must make the order and decision in that case available to the 15 public. The only situations in which an agency may rely on a contested case as precedent without 16 indexing and making that decision and order available to the public are described in subsection 17 (b) of this section. 18 19 In some states there have been attacks on agency adjudications on the basis that the 20 proceeding should be conducted under the provisions for rulemaking. In the case of SEC v. 21 Chenery Corp., 332 U.S. 194 (1947) the United States Supreme Court held that the choice of 22 whether to proceed by rulemaking or adjudication is left entirely to the discretion of the agency, 23 because not every principle can be immediately promulgated in the form of a rule. In the words 24 of the Supreme Court “Some principles must await their own development, while others must be 25 adjusted to meet particular, unforeseeable situations.” Most states follow Chenery. See 26 Illuminating a Bureaucratic Shadow World: Precedent Decisions under California=s Revised 27 Administrative Procedure Act, 21 J. Nat=l A. Admin. L. Judges 247 (2001) at n. 68. 28 29 This section makes clear that the choice between rulemaking and adjudication is entirely 30 in the discretion of the agency. However, in order to prevent law to which the public does not 31 have access from constituting the basis for decision, final orders must be indexed and available 32 to the public. See also the California administrative procedure act at West=s Ann. Cal. Gov. 33 Code, ' 11425.60 34

1 [ARTICLE 5] 2 JUDICIAL REVIEW 3 4 SECTION 501. RIGHT TO JUDICIAL REVIEW; FINAL AGENCY ACTION 5 REVIEWABLE. 6 (a) As used in this [article], final agency action means agency action that imposes an 7 obligation, grants or denies a right, confers a benefit or determines fixes asome legal relationship 8 as a result of an administrative process. Agency action that is a failure to act is not judicially 9 reviewable except that a reviewing court shall compel agency action that is unlawfully withheld 10 or unreasonably delayed. 11 (b) A person otherwise qualified under this [article] is entitled to judicial review of a 12 final agency action. 13 (c) A person who is likely to be entitled to judicial review of final agency action not 14 subject to review under subsection (a) is entitled to judicial review of non final agency action if 15 postponement of judicial review would result in an inadequate remedy or irreparable harm that 16 outweighs the public benefit derived from postponement. 17 (d) Final agency action is reviewable except to the extent that 18 (1) statutes prelude judicial review; or 19 (2) agency action is committed to agency discretion by law. 20 Comment 21 Subsection (a) of this section provides a right of judicial review of final agency action by 22 appropriate parties. Under this section, the person seeking review must meet all of the 23 requirements of this article, which include standing, exhaustion of remedies, and time for filing. 24 The definition of “agency action” is found in Section 102. This section is similar to the judicial 25 review provisions of Florida (West’s F.S.A. Section 120.68), Iowa (I.C.A. Section17A.19), 26 Virginia (Va. Code Ann. Section 2.2-4026) and Wyoming (W.S.1977 Section 16-3-114). Agency

1 failure to act is not judicially reviewable unless agency action is unlawfully withheld or 2 unreasonably delayed. This provisions is based on the federal A.P.A., 5 U.S.C. Section 706(1). 3 4 Subsection (a) also defines final agency action. The definition used here is found in state 5 and federal cases. See State Bd. Of Tax Comm’rs v. Ispat Inland, 784 N.E.2D 477 (Ind., 2003); 6 District Intown Properties v. D.C. Dept. Consumer and Regulatory Affairs, 680 A.2d 1373 (Ct. 7 Apps. D.C. 1996); Texas Utilities Co. v. Public Citizen, Inc, 897 S.W.2d 443 (Tex. App. 1995); 8 Bennet v. Spear, 520 U.S. 154, 117 S.Ct. 1154 (1997); Mobil Exploration and Producing Inc. v. 9 Dept. Interior, 180 F.3d 1192, 1197 (10^th Cir. 1999). 10 11 Subsection (c) creates a limited right to review of non-final agency action. 12 13 Subsection (d) is based Section 701(a)(1),(2) of the federal administrative procedure act. 14

15 SECTION 502. REVIEW OF AGENCY ACTION OTHER THAN ORDER. A

16 person otherwise qualified under this [article] is entitled to judicial review of agency rules and

17 final agency action other than an order when the agency has taken if the action is ripe. Factors to

18 be considered in making the determination are whether the agency has taken final action that

19 involves a concrete, specific legal issue and whether postponement of judicial review wouldill

20 subject the person to hardshipirreparable harm.

21 Comment 22 23 This section seeks to recognize the prudential exception to finality and ripeness 24 sometimes recognized for rules and other types of agency action by agencies such as rules, 25 advisory letters and guidance documents. It seeks to incorporate the general tests for finality and 26 ripeness taken from the cases of Abbott Laboratories v. Gardner, 387 U.S. 136, 148-149, 87 27 S.Ct. 1507, 18 L.Ed.2d 681 (1967); FTC v. Standard Oil Co.,449 U.S. 232, 101 S.Ct. 488 (1980) 28 and Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154 (1997), which have been cited with approval 29 and followed in many states. Under this subsection, some appellant challenges or bases for 30 challenge will be ripe for review, but many will not. The subsection seeks to furnish guidance to 31 state courts attempting to apply the doctrines of finality and ripeness. Under this section, the 32 person seeking review must meet all of the requirements of this article, which include standing, 33 exhaustion of remedies, and time for filing. 34 35 The finality determination is to be made case by case in a pragmatic, flexible fashion. 36 Fitness for review is present where issues to be considered are purely legal ones, so that further 37 factual development of the issues is not necessary. Hardship involves imposition of significant 38 practical harm. Some cases have equated that harm with impact that would justify equitable 39 intervention. The harm element has also been approached by asking the question: does the

1 agency action pose a difficult dilemma for the party, so that he or she must immediately take 2 action that will be very expensive and cannot be recovered or face expensive prosecution in the 3 future. 4 5 SECTION 503. RELATION TO OTHER JUDICIAL REVIEW LAW AND 6 RULES. Unless otherwise provided by a statute of this state other than this [act], judicial review 7 of final agency action may be taken only by proceeding as provided by [state] [rules of appellate 8 procedure] [rules of civil procedure]. An appeal from final agency action may be taken 9 regardless of the amount involved. The court may grant any type of relief that is available and 10 appropriate. 11 Comment 12 13 This section places appeals from final agency action within the existing state rules of 14 appellate procedure. Such action may be preferred by some states because of constitutional 15 provisions or because of the existence of rules of appellate procedure that the legislature may not 16 wish to change. This practice was followed under the 1961 MSAPA, and is followed in a 17 number of states today. See e.g.: Alaska (AS 44.62.560), California (West=s Ann.Cal.Gov.Code 18 Section 11523), Delaware (29 Del.C. Section 10143), Florida (West=s F.S.A. Section 120.68), 19 Iowa (I.C.A. ' 17A.20), Michigan (M.C.L.A. 24.302), Minnesota (M.S.A. ' 14.63) (Appeal 20 integrated with state appellate rules),Virginia (Va. Code Ann. Section 2.2-4026), Wyoming 21 (W.S.1977 ' 16-3-114). 22 23 SECTION 504. TIME FOR SEEKING JUDICIAL REVIEW OF AGENCY 24 ACTION, LIMITATIONS. 25 (a) A proceeding to contest any rule on the ground of noncompliance with the procedural 26 requirements of this [act] must be commenced within two years from the effective date of the 27 rule.Except as Ootherwise provided in Section 314, and subject to Section 502, judicial review 28 of a rule may be sought at any time. 29 (b) Judicial review of an order or other final agency action other than a rule must be 30 commenced within [30] days after the date of notice to the parties of the issuance of the order or

1 other agency action. 2 (c) A time for seeking judicial review under this section is tolled during any time a party 3 is pursuing an administrative remedy before the agency which must be exhausted as a condition 4 of judicial review. 5 (d) A party may not file or petition for judicial review while seeking reconsideration 6 under Section 418. During the time that a petition for reconsideration is pending before an 7 agency, the time for seeking judicial review in subsection (b) is tolled. 8 Comment 9 The first sentence of subsection (a) is based on 1961 Model State Administrative 10 Procedure Act, section (3)(c)., and on Section 3-113(b) of the 1981 Model State Administrative 11 Procedures Act. The scope of challenges permitted for noncompliance with procedural 12 requirements under Section 314 includes all applicable requirements of article 3 for the type of 13 rule being challenged. 14 15 SECTION 505. STAYS PENDING APPEAL. The initiation of judicial review does 16 not automatically stay an agency decision. An appellant may petition the reviewing court for a 17 stay upon the same basis as stays are granted under the [state] rules of [appellate] [civil] 18 procedure, and the reviewing court may grant a stay whether or not the appellant first sought a 19 stay from the agency. 20 Comment 21 This provision for stay permits a party appealing agency final action to seek a stay of the 22 agency decision in the court. This is similar to the 1961 MSAPA. See also 1981 MSAPA 23 Section 5-111. 24 25 SECTION 506. STANDING. The following persons have standing to obtain judicial 26 review of a final agency action: 27 (1) a person eligible for standing under law of this state other than this [act]; and

1 (2) a person otherwise aggrieved or adversely affected by the agency action.

2 Comment 3 4 Subsection (1) confers standing that arises under any other provision of law. Examples 5 of this type of standing are statutes that expressly confer standing in general language such as, 6 for example, Aany person may commence a civil suit in his own behalf... to enjoin... an agency... 7 alleged to be in violation of this chapter. . . . 16 U.S.C.A. ' 1540, explained in Bennett v. Spear, 8 520 U.S. 154, 117 S.Ct. 1154(1997). Another example is standing recognized in judicial 9 decision or common law. 10 11 Subsection (2) uses the term person “aggrieved or adversely affected”. This term is based 12 in part on the provisions of the federal A.P.A., 5 U.S.C. Section 702. These words have become 13 terms of art used to describe types of injury that were not recognized at common law. An 14 example of a person entitled to standing who is intended to be included under subsection (2) is a 15 competitor. These terms have also been used to recognize standing based on non-economic 16 values, such as aesthetic or environmental injuries. 17

18 SECTION 507. EXHAUSTION OF ADMINISTRATIVE REMEDIES.

19 (a) Subject to subsection (e) or a statute other than this [act] that provides that a person

20 need not exhaust their administrative remedies, a person may file a petition for judicial review

21 under this [act] only after exhausting all administrative remedies available within the agency

22 whose action is being challenged and within any other agency authorized to exercise

23 administrative review.

24 (b) Filing a petition for reconsideration or a stay of proceedings is not a prerequisite for

25 seeking administrative or judicial review.

26 (c) A petitioner for judicial review of a rule need not have participated in the rulemaking

27 proceeding upon which that rule is based.

28 (d) If the issue that a petitioner for judicial review of a rule under this section raises was

29 not raised and considered in a rulemaking proceeding, before bringing a petition for judicial

30 review, the petitioner must petition the agency to initiate rulemaking under Section 317 to take

31 action to resolve or cure the issue or issues that the petitioner is challenging. In the petition for

1 judicial review, the petitioner must disclose to the court the petition for rulemaking and the

2 agency action on that petition.

3 (e) The court may relieve a petitioner of the requirement to exhaust any or all

4 administrative remedies to the extent that the administrative remedies are inadequate or would

5 result in irreparable harm.

6 Comment 7 8 This section creates a default requirement of exhaustion, which is generally followed in 9 the states. However, the section creates several exceptions to the default rule. Subsection (b) 10 requires issue exhaustion in appeals from rulemaking for persons who did not participate in the 11 challenged rulemaking. It excuses persons seeking judicial review of a rule who were not parties 12 before the agency from the exhaustion requirement; but, if the issue that they seek to raise was 13 not raised and considered in the rulemaking proceeding that they challenge, then they must first 14 petition the agency to conduct another rulemaking to consider the issue. If the agency refuses to 15 do so or if the agency conducts a second rulemaking that is adverse to the petitioner on the issue 16 or issues raised in his petition for rulemaking, then the petitioner may seek judicial review. 17 Subsection (d) recognizes the judicially created exception to the exhaustion requirement where 18 agency relief would be inadequate or would result in irreparable harm. In some states courts 19 have held that irreparable harm that is a sufficient condition to excuse exhaustion exists only if it 20 outweighs the public interest in exhaustion. State courts are free under this section to engage in 21 that weighing test. 22

23 SECTION 508. AGENCY RECORD ON JUDICIAL REVIEW; EXCEPTION.

24 Judicial review of adjudication and rulemaking is confined to the agency record or arising from

25 the record except when the petitioner alleges procedural error arising from matters outside the

26 agency record or alleges matters that are not evident from the record that involve new evidence

27 or changed circumstances. The record may be opened only to avoid manifest injustice.

28 Comment 29 30 This section establishes a default closed record for judicial review of adjudication and 31 rulemaking. It is well established in most states and in federal administrative procedure that, in 32 case of adjudication, judicial review is based upon that evidence which was before the agency on 33 the record. Otherwise, the standards of judicial review could be subverted by the introduction of 34 additional evidence to the court that was not before the agency. See Western States Petroleum 35 Ass=n v. Superior Court, 888 P.2d 1268 (Cal. 1995). For rulemaking, the record for judicial

1 review is defined in Section 302 of this Act. 2 3 The section contains an exception to the closed record on review where petitioner alleges 4 error, such as ex parte contacts, that does not appear in or is not evident from the record. Other 5 examples of error that do not appear or are not evident from the record are: improper constitution 6 of the decision making body, grounds for disqualification of a decision maker, or unlawful 7 procedure. However, the standard for opening the record on appeal is high. 8 9 SECTION 509. SCOPE OF REVIEW. 10 (a) In judicial review of an agency action, the following rules apply: 11 (1) Except as provided by law of this state other than this [act], the burden of 12 demonstrating the invalidity of agency action is on the party asserting invalidity. 13 (2) The court shall make a separate and distinct ruling on each material issue on 14 which the court’s decision is based. 15 ALTERNATIVE 1 16 (3) The court may grant relief only if it determines that a person seeking judicial 17 review has been prejudiced by one or more of the following: 18 (A) the agency erroneously interpreted or applied the law, or acted in 19 excess of its authority under the law; 20 (B) the agency committed an error of procedure; 21 (C) the agency action is arbitrary, capricious, an abuse of discretion, or 22 otherwise not in accordance with law; 23 (D) an agency determination of fact is not supported by substantial 24 evidence in the record as a wholeconsidered in light of the entire record; or 25 (E) to the extent that the facts are subject to trial de novo by the reviewing 26 court, the action was unwarranted by the facts. 27 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 1 discretion.

2 END OF ALTERNATIVES

3 (b) In making the determinations under this section, the court shall review the whole

4 agency record, or those parts designated by the parties, and shall take due account of the rule of

5 harmless error.

6 7 NOTE: The drafting committee is divided on the scope of review provisions and seeks guidance 8 from the committee of the whole. There are two schools of thought on the drafting committee. 9 10 One view is that scope of review is notoriously difficult to capture in verbal formulas, 11 and its application varies depending on context. For that reason, some members urge return to 12 shorter, skeletal formulations of the scope of review, similar to the 1961 MSAPA. See Ronald 13 M. Levin, Scope of Review Legislation, 31 Wake Forest L. Rev. 647 (1996) at 664-66. William 14 D. Araiza, In Praise of a Skeletal APA, 56 Admin. L. Rev. 979 (2004). (Judiciary, not 15 legislature, appropriate body to evolve specific standards for review, because of great variety of 16 agency action and contexts, and inability to describe how general standards of review should 17 apply to many of them). Alternative 1 reflects this view. 18 19 The other view is that judicial review is sometimes almost perfunctory, and more detailed 20 standards will result in closer judicial scrutiny. A related view strongly argued in drafting 21 committee meetings was that scope of review is a device by which the judiciary assists the 22 legislature to keep the agencies within the bounds set by the legislature, helps to assure agency 23 action consistent with the intent of the legislature, and protects citizens from agency error. More 24 detailed scope of review provisions also make the task of the judiciary easier because they 25 provide clearer instructions from the legislature about how to review agency decisions. More 26 detailed scope of review provisions lead to more intense judicial review, and that is an approach 27 that legislatures welcome for the same reason that they have embraced regulatory review: it 28 controls agency action. Alternative 2, which draws heavily on the Iowa provisions on scope of 29 review ( I.C.A. 17. A.19(10)), represents this position. 30 31 Comment 32 33 Judicial review is essential and exists in all states. Subsections (a) (1) & (2) describe the 34 general burdens on the appellant and the approach under this Act. They are substantially similar 35 to the general scope of review provisions of the Federal APA, 5 U.S.C. Section 706. 36 37 Subsections (a)[(3) alternative 1](A) & (B) identify the courts’ power to decide questions 38 of law and procedure. Subsection (a)[(3) alternative 1](A) includes, but is not limited to, 39 violations of constitutional or statutory provisions and actions that are in excess of statutory 40 authority from Section 15(g) of the 1961 MSAPA, and includes subsections (c) (1), (2) and (4) 41 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.

[ARTICLE] 6
OFFICE OF ADMINISTRATIVE HEARINGS

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 in the executive branch of state government [within the [ ] agency] for the purpose of separating the adjudication function from the investigative, prosecution or policy making functions of agencies in the executive branch, 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 competitive examinationused in the [civil classified service of state employment] or [by the chief administrative law judge].

(d)

The administrative law judges of the agencies to which this [articleact] applies are employees of the office.

Comment

Section 601 is based upon Section 1-2 of the Model Act Creating a State Central Hearing

Agency (Office of Administrative Hearings) adopted by the house of delegates of the American Bar Association (February 2, 1997). Thirty states (including the District of Columbia) have established central panel agencies. Representative state statutes creating a central panel include Alaska statutes, section 44.64.010, California Government Code Section 11370.2, Louisiana: statutes, Section 49.991, and Washington Administrative Procedure Act, Section 34.12.010.

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)

Whenever a state agency subject to this article conducts a hearing which is not presided over by officials of the agency who are to render the final decision, the hearing shall be conducted by an administrative law judge assigned under this article to serve as presiding officer Except as provided in this [article], the office shall provide an administrative law judge to serve as presiding officer in a contested case unless the agency head hears the case.

Comment

Subsection (a) is similar to Louisiana statutes, Section 994A,B. Subsection (b) is based on Washington administrative procedure act section 34.12.040.

SECTION 603. APPOINTMENT OF CHIEF ADMINISTRATIVE LAW JUDGE.

(a)

The office is headed by a chief administrative law judge [appointed by the Governor ]with [the advice and consent of the [Senate] [House of Representatives] for a term of [56] years], and until a successor is appointed and qualifies for office. A chief administrative law judge may be removed before the end of a term of office 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.

Comment

Section 603 is based upon Section 1-4(a) of the Model Act Creating a State Central Hearing Agency (Office of Administrative Hearings) adopted by the house of delegates of the American Bar Association (February 2, 1997). There are similar provisions in Washington administrative procedure Act Section 34.12.010, Louisiana statutes, §49:995, and Alaska statutes, Section 44.64.010

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.

Comment

Section 604 is based upon Section 1-5(a) of the Model Act Creating a State Central Hearing Agency (Office of Administrative Hearings) adopted by the house of delegates of the American Bar Association (February 2, 1997). There are similar provisions in California Government Code Section 11370.3, Washington administrative procedure Act Section 34.12.030, 34.12.040, Louisiana statutes, §49:996, and Alaska statutes, Section 44.64.020

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;

1 (5) may be removed, suspended, demoted, or subject to disciplinary or adverse 2 action only for good cause, after notice and an opportunity to be heard and a finding of good 3 cause by an impartial presiding officer [or other appropriate state agency [civil service] [merit 4 system]; 5 (6) receive compensation provided by law; 6 (7) be subject to a reduction in force only in accordance with established [civil 7 service][ merit system] procedure; 8 (8) [must devote full time to the duties of the position] [may not engage in the 9 practice of law unless serving as a part-time administrative law judge]; 10 (9) may not perform duties inconsistent with the duties and responsibilities of an 11 administrative law judge; and 12 (10) is subject to administrative supervision by the chief administrative law 13 judge. 14 Comment 15 16 Section 605 is based upon Section 1-6(a) of the Model Act Creating a State Central 17 Hearing Agency (Office of Administrative Hearings) adopted by the house of delegates of the 18 American Bar Association (February 2, 1997). There are similar provisions in Washington 19 administrative procedure Act Section 34.12.030, Louisiana statutes, §49:994, and Alaska 20 statutes, Section 44.64.040 21 22 SECTION 606. POWERS OF ADMINISTRATIVE LAW JUDGES. An 23 administrative law judge shall exercise all the powers of a presiding officer under this [act]. 24 Comment 25 The powers and duties of presiding officers are contained in Sections 403 (contested case 26 procedures, and Section 406 (informal adjudication procedures). The Alaska statutes, section 27 44.64.040 contains provisions governing the powers of administrative law judges. 28

1 SECTION 607. COOPERATION OF STATE AGENCIES. 2 (a) All agencies must cooperate with the chief administrative law judge in the discharge 3 of the duties of the office, including, but not limited to, provision of information and 4 coordination of schedules. 5 (b) An agency may not select or reject a particular administrative law judge for a 6 particular proceeding. 7 Comment 8 9 Section 607 is based upon Section 1-7 of the Model Act Creating a State Central Hearing 10 Agency (Office of Administrative Hearings) adopted by the house of delegates of the American 11 Bar Association (February 2, 1997). There are similar provisions in Alaska statutes, section 12 44.64.080: 13 14 SECTION 608. DECISION-MAKING AUTHORITY OF ADMINISTRATIVE 15 LAW JUDGES. 16 (a) Unless the agency head elects to conduct the hearing, in which case the agency head 17 shall render a final decision under Section 417(a), in a contested case, an administrative law 18 judge shall be assigned to serve as the presiding officer. The administrative law judge shall 19 render the recommended [or final] decision of the agency in all adjudications in a contested case 20 [except for contesteddisputed cases involving the following agencies]: 21 (1) [List name of agency] or [list subject matter of proceeding]. 22 (b) Except as otherwise provided by law, an administrative law judge shall issue a 23 recommended decision unless the agency head authorizes the issuance of a final decision. A 24 recommended decision of an administrative law judge is a final agency decision unless the 25 agency decides to review the decision. This section does not prevent an administrative law judge 26 from issuing an order as a result of an emergency adjudication under Section 408.

1 (c) Except as provided by law other than this act, if a matter is referred to the [office] by

2 an agency, the agency may take no further adjudicatory action with respect to the proceeding,

3 except as a party litigant, as long as the [office] has jurisdiction over the proceeding. [This

4 subsection does not prevent an appropriate interlocutory review by the agency or an appropriate

5 termination or modification of the proceeding by the agency when authorized by law other than

6 this act.]

7 Comment

8

9 Section 608 is based upon Section 1-10 of the Model Act Creating a State Central Hearing 10 Agency (Office of Administrative Hearings) adopted by the house of delegates of the American 11 Bar Association (February 2, 1997). Subsection (a) contains brackets that provide the two maost 12 widely used alternatives for agencies that are subject to the central panel. The first option is the 13 list of agencies, and the second alternative is the exclusion of agencies from the central panel.

1 [[ARTICLE] 7 2 RULES REVIEW 3 [NOTE: A state may choose the legislative rule review process stated in this article.] 4 5 SECTION 701. [LEGISLATIVE RULES REVIEW COMMITTEE]. 6 (a) There is created a joint standing [rRules rReview cCommittee] of the lLegislature 7 designated the [rRules rReview cCommittee]. 8 Legislative note: States that have existing rules review committees can incorporate the 9 provisions of Sections 701, and 702, using the existing number of members of their current rules 10 review committee. Because state practice varies as to how these committees are structured, and 11 how many members of the legislative body serve on this committee, as well as how they are 12 selected, the act does not specify the details of the legislative review committee selection 13 process. Details of the committee staff and adoption of rules to govern the rules review 14 committee staff and organization are governed by law other than this act including the existing 15 law in each state. 16 17 SECTION 702. REVIEW BY [RULES REVIEW COMMITTEE] DUTIES. 18 (a) An agency shall file a copy of an adopted, amended, or repealed rule with the [rules 19 review committee] at the same time it is filed with [the [publisher]]. An agency is not required to 20 file an emergency rule adopted under Section 309(a) with the [rules review committee]. 21 (b) The [rRules rReview cCommittee] may shall examine currently effective rules and 22 final agency rules and shall review newly adopted, amended, or repealed rules on an ongoing 23 basis to determine whether the: 24 (1) rule is a valid exercise of delegated legislative authority; 25 (2) statutory authority for the rule has expired or been repealed; 26 (3) rule is necessary to accomplish the apparent or expressed intent of the 27 specific statute that the rule implements; 28 (4) rule is a reasonable implementation of the law as it affects persons

1 particularly affected by the rule; and 2 (5) The rule complies with the regulatory analysis requirements of Section 305, 3 and properly determines the factors under Section 305(c). 4 (c) The [rRules rReview cCommittee] may request from an agency such information as 5 is necessary to carry out itsthe duties underof subsection (ba). The [rRules rReview 6 cCommittee] shall consult with standing committees of the lLegislature with subject matter 7 jurisdiction over the subjects of the rule under examination.] 8 (d) The [rRules rReview cCommittee]: 9 (1) shall maintain oversight over agency rulemaking; and 10 (2) shall exercise other duties assigned to it under this [article]. 11 Comment 12 This section adopts a rules review committee process that is widely followed in 13 state administrative law as a method for legislative review of agency rules. Subsection (b) allows 14 the legislative rules review committee to review currently effective rules and newly adopted 15 rules. The rules review committee may establish priorities for rules review including review of 16 newly adopted or amended rules, and may manage the rules review process consistent with 17 committee staff and budgetary resources. If the content of the rule changes because of legislative 18 amendments, the agency will be required to file the amended rule with the publisher, and the 19 amended rule will replace the original rule that was filed with the publisher. The rules review 20 process applies to rules adopted following the requirements of Sections 304 to 308. This process 21 does not apply to emergency rules adopted under Section 309(a), 22 23 SECTION 703. [RULES REVIEW COMMITTEE] PROCEDURE AND POWERS 24 SECTION 703. [RULES REVIEW COMMITTEE] PROCEDURE AND POWERS. 25 Legislative note the 30 day time period in subsection (a) is the same aos the 30 day time 26 period in section 316(a). 27 (a) Not later than Within [3060] days afterof receiving the notice of an an adopted, 28 amended, or repealed rule notice of a proposed rule from an agency under Section 307, the

[rRules rReview cCommittee] may:

(1) approve the adopted, amended, or repealed rule; or d

(2)

disapprove the rule and propose an amendment to the adopted, amended, or repealed rule; or

(3)

disapprove the adopted, amended, or repealed rule.of the rule by committee resolution and, if the rule is disapproved, then the rule is suspended until the legislature adopts a joint resolution sustaining the action of the committee or until adjournment of the [next] legislative session.

(b)

If the [rules review committee] approves the adopted, amended, or repealed rule or does not disapprove and propose a amendment under subsection (a)(2) or disapprove under subsection (a)(3), the adopted, amended, or repealed rule becomes effective on the date specified for the original rule under Section 316. In case of legislative disapproval or the offer of withdrawal or reconsideration, an agency within [ ] days in writing shall notify the [Rules Review Committee] and [publisher] that the agency:

(1)

withdraws the rule;

(2)

amends the rule to the extent permitted by Section 308; or

(3)

refuses to amend or withdraw the rule.

(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

1 subsection. If the agency makes the amendment, it shall also give notice to the [publisher] for 2 publication of the rule, as amended, in the [administrative bulletin]. The notice must include the 3 text of the rule as amended. If the [rules review committee] does not disapprove the rule, as 4 amended, or propose a further amendment, the rule becomes effective on the date specified for 5 the original rule under Section 316. If the agency withdraws the rule, it shall give notice of 6 withdrawal to the [publisher] for publication in the [administrative bulletin] and shall notify the 7 [Rules Review Committee] of withdrawal in writing at the same time. The rule shall be 8 withdrawn without public hearing. Withdrawal is effective on the date of publication of the 9 notice of withdrawal in the [administrative bulletin]. 10 Legislative note; state constitutions vary as to whether or not a joint resolution is a 11 valid way of disapproving an agency rule. In some states, the legislature must use the bill 12 process with approval by the governor. In other states the joint resolution process is proper. 13 States should use the alternative that complies with their state constitution. 14 15 (d) If the [rules review committee] disapproves the adoption, amendment, or repeal of a 16 rule under subsection (a)(3), the adopted, amended, or repealed rule becomes effective upon 17 adjournment of the next regular session of the legislature unless before the adjournment the 18 legislature adopts a [joint resolution] [bill] sustaining the action of the committee. If the agency 19 amends the rule to comply with the [Rules Review Committee] objections, it shall make only the 20 changes necessary to meet the objections, and shall resubmit the rule, as amended, to the [Rules 21 Review Committee]. The agency shall also give notice to the [publisher] for publication in the 22 [administrative bulletin] of the change made to comply with the [Rules Review Committee] 23 objection that shall include the text of the rule as changed and the objection to which it is 24 directed. The agency is not required to hold a public hearing on an amendment made under this 25 subsection. 26 (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. If the agency refuses to withdraw or amend the rule in response to the objection of the [Rules Review Committee], the agency shall give notice of the refusal to the [Rules Review Committee] and the [publisher] within [ ] days of receiving the [Rules Review Committee] objection. If the agency fails to respond to the objection within [ ] days, or if an amendment that an agency makes in response to [Rules Review Committee] objections in the opinion of the [Rules Review Committee] does not correct the objection, the [Rules Review Committee]:

(1)

may post notice of the detailed objections of the [Rules Review Committee] to the rule in the [administrative bulletin] together with a reference to the location in the [administrative bulletin] where the full text of the rule can be found. Posting notice of the detailed objections shall place upon the agency the burden of proving, in any later action challenging the legality of the rule or portion of the rule objected to by the [Rules Review Committee], that the rule or portion of the rule objected to was not unreasonable, arbitrary, capricious, not adopted in compliance with [Article] 3, or otherwise beyond the authority delegated to the agency; and

(2)

may submit a recommendation to the [Speaker of the House of Representatives] and the [President of the Senate] that legislation be enacted to annul or modify the rule together with proposed legislation to accomplish it.

(3) Within [ ] days of recommending annulling or modifying legislation under this 1 subsection the [Rules Review Committee] shall notify the agency of the recommendation and

2 request that the agency temporarily suspend the operation of the rule.

3 (f) Within [ ] days of receiving request for temporary suspension, the agency shall reply

4 in writing to the [Rules Review Committee] either agreeing to temporarily suspend the rule or

5 refusing to do so.

6 (1) If the agency agrees to temporarily suspend the rule, then it shall cause notice

7 of the suspension to be published in the [administrative bulletin].

8 (2) If the agency refuses to temporarily suspend the rule, then the [Rules Review

9 Committee] shall cause notice of the refusal to suspend operation of the rule in the

10 [administrative bulletin]. Posting notice under this subparagraph shall suspend the operation of

11 the rule for [[ ] days] [until the end of the next regular session of the Legislature]. ]

12 Legislative Note. State constitutions vary on the federal constitutional issue decided by the U.S. 13 Supreme Court in I.N.S. v. Chadha (1983) 462 U.S. 919, 103 S.Ct. 2764. The U.S. Supreme 14 Court held that the one house legislative veto provided for in section 244(c)(2) violated the 15 Article I requirement that legislative action requires passage of a law by both houses of 16 congress (bicameralism) and presentation to the president for signing or veto (presentation 17 requirement). Those state constitutions that require presentationment to the governor need an 18 additional step, presentationment of the joint resolution to the governor for approval or 19 disapproval. With state constitutions that do not require presentationment to the governor the 20 rules review process can be completed with legislative adoption of a joint resolution. 21

22 Comment

23 This is a type of veto that provides for cooperation between the Legislature and the 24 Governor, and attempts to avoid the I.N.S. v. Chadha (1983) 462 U.S. 919, 103 S.Ct. 25 2764.Chadha v. I.NS problem of unconstitutionality by delaying the effective date of the rule 26 until the legislature has the opportunity to enact legislation to annul or modify it. The governor 27 may veto the act by which the legislature seeks to annul or modify the rule. This type of veto 28 provision is widely used in the states. For disapproval of a rule to be effective, the legislature as 29 a whole must adopt a joint resolution, and in many states the governor must by presented with 30 the joint resolution for approval or disapproval. While the rules review committee can 31 recommend disapproval, the committee recommendation must be approved by the legislature by 32 joint resolution. In some states, the legislature must comply with the legislative process for 33 enacting a bill including presentation to the governor to exercise the power of legislative veto over an agency regulation. In at least one state use of a joint resolution without the governor’s participation violates the state constitution. State v. A.L.I.V.E. Voluntary (Alaska, 1980) 606 P.2d 769. The rules review committee has the power to temporarily suspend an agency rule pending enactment of a permanent suspension by action of both houses of the state legislature, and presentation to the governor. Martinez v. Department of Industry, Labor, & Human Relations (Wisconsin, 1992) 165 W.2d 687, 478 N.W.2d 582 (temporary suspension statute held not to violate state constitution separation of powers doctrine).

1 [ARTICLE 8] 2 3 SECTION 801. EFFECTIVE DATE. This [act] takes effect on [date] and governs all 4 agency proceedings, and all proceedings for judicial review or civil enforcement of agency 5 action, commenced after that date. The [act] does not govern adjudications for which notice was 6 given prior to that date under Section 403 and all rulemaking proceedings for which notice was 7 given or a petition filed before that date. 8 Comment 9 10 Section 801 is based on Section 1-108 of the 1981 MSAPA. See Also California 11 Government Code Sections 11400.10, and 11400.20 (operative date of California APA 12 revisions). Agency proceedings on remand following judicial review after the act takes effect 13 are governed by the prior law.