REVISED
MODEL STATE ADMINISTRATIVE PROCEDURE ACT
SECTION 101. SHORT TITLE. This [act] may be cited as the State
Administrative Procedure Act.
SECTION 102. DEFINITIONS. In this [act]:
(1) “Adjudication” means the process for determining
facts or applying law pursuant to which an agency formulates and issues an
order. “Adjudicate” has a corresponding
meaning.
(2) “Agency”
means a state board, authority, commission, institution, department, division, office,
officer, or other state entity that is authorized by law of this state to make
rules or to adjudicate. The term does not include the Governor, the [Legislature],
or the Judiciary.
(3) “Agency action” means:
(A) the whole or part of any agency order or
rule;
(B) the failure to issue an order or rule; or
(C) an agency’s performing or failing to perform any
duty, function, or activity or to make any determination required by law.
(4) “Agency head” means the individual in whom, or
one or more members of the body of individuals in which, the ultimate legal
authority of an agency is vested.
(5) “Agency record” means the agency rulemaking
record required by Section 302, the hearing record in adjudication required by Section
406, the hearing record in an emergency adjudication under Section 407, or the
record for review compiled pursuant to Section 507(b).
(6) “Contested case” means an adjudication in
which an opportunity for an evidentiary hearing is required by the federal constitution
or a federal statute or the constitution or a statute of this state.
(7) “Electronic” means relating to technology
having electrical, digital, magnetic, wireless, optical, electromagnetic, or
similar capabilities.
(8) “Electronic record” means a record created,
generated, sent, communicated, received, or stored by electronic means.
(9) “Emergency adjudication” means an
adjudication in a contested case when the public health, safety, or welfare
requires immediate action.
(10) “Evidentiary hearing” means a hearing for the
receipt of evidence on issues on which a decision of the presiding officer may
be made in a contested case.
(11) “Final order” means the order issued by the
agency head sitting as the presiding officer in a contested case, the order
issued following the agency head review of a recommended order, or the order
issued following the agency head review of an initial order.
(12) “Guidance document” means a record of general
applicability developed by an agency which lacks the force of law but states
the agency’s current approach to, or interpretation of, law, or describes how
and when the agency will exercise discretionary functions. The term does not
include records described in paragraph (30) (A), (B), (C), and (D).
(13) “Index” means a searchable list in a record of
subjects and titles with page numbers, hyperlinks, or other connectors that
link each index entry to the text to which it refers.
(14) “Initial
order” means an order that is issued by a presiding officer with final
decisional authority if the order is subject to discretionary review by the
agency.
(15) “Internet website” means a web site on the Internet
or other appropriate technology or successor technology that permits the public
to search a database that archives materials required to be published by the [publisher]
under this [act].
(16) “Law” means the federal or state constitution,
a federal or state statute, a federal or state judicial decision, a federal or
state rule of court, an executive order that rests on statutory or
constitutional authorization, or a rule or order of an agency.
(17) “License” means a permit, certificate,
approval, registration, charter, or similar form of permission required by law and
issued by an agency.
(18) “Licensing” means the grant, denial, renewal,
revocation, suspension, annulment, withdrawal, or amendment of a license.
(19) “Notify” means to take steps reasonably
required to inform a person, whether the
person actually comes to know of the information.
(20) “Order” means an agency decision that
determines or declares the rights, duties, privileges, immunities, or other
interests of a specific person.
(21) “Party” means the agency taking action, the
person against which the action is directed, and any other person named as a
party or permitted to intervene and that does intervene.
(22) “Person” means an individual, corporation,
business trust, statutory trust, estate, trust, partnership, limited liability
company, association, joint venture, public corporation, government or
governmental subdivision, agency, or instrumentality, or any other legal or
commercial entity.
(23) “Presiding officer” means an individual who
presides over the evidentiary hearing in a contested case.
(24) “Proceeding” means any type of formal or
informal agency process or procedure commenced or conducted by an agency. The
term includes adjudication, rulemaking, and investigation.
(25) “Recommended
order” means an order issued by a presiding officer other than the agency head if
the presiding officer does not have final decisional authority and the order is
subject to review by the agency head.
(26) “Record” means information that is inscribed
on a tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(27) “Rule” means the whole or a part of an agency
statement of general applicability that implements, interprets, or prescribes
law or policy or the organization, procedure, or practice requirements of an
agency and has the force of law. The term includes the amendment, or repeal, of
an existing rule. The term does not include:
(A) a statement that concerns only the internal
management of an agency and that does not affect private rights or procedures available to the
public;
(B)
an intergovernmental or interagency
memorandum, directive, or communication that does not affect private rights or
procedures available to the public;
(C)
an opinion of the Attorney General;
(D)
a statement that establishes criteria or
guidelines to be used by the staff of an agency in performing audits,
investigations, or inspections, settling commercial disputes, negotiating
commercial arrangements, or defending, prosecuting or settling cases, if disclosure of the criteria or
guidelines would enable persons violating the law to avoid detection,
facilitate disregard of requirements imposed by law, or give an improper advantage
to persons that are in an adverse position to the state;
(E) a form developed by an agency to implement or
interpret agency law or policy; or
(F)
a guidance document.
(28) “Rulemaking” means the process for the adoption
of a new rule, or the amendment or repeal of an existing rule.
(29) “Sign” means, with present intent to authenticate
or adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record
an electronic symbol, sound, or process.
(30) “Writing” means a record inscribed on a
tangible medium. “Written” has a corresponding meaning.
Comment
Adjudication. This definition is based on 1981 MSAPA
Section 4-101(a). The purpose of the definition is to differentiate between agency
proceedings under Article Four from rulemaking proceedings under Article Three.
This definition should be read in conjunction with the definitions of “contested
case” Section 102(6), “evidentiary hearing” under Section 102(10), and of “order”, Section 102(20), infra. Article
Four procedures apply to adjudications that are contested cases, Section 401,
and that result in a final order of the agency, Section 413.
Agency. This definition is based on 1961 MSAPA
Section 1(1), and 1981 MSAPA Section 102(1). The definition includes the
authorized by law to make rules or to adjudicate language from 1961 MSAPA
Section 1(1), which was omitted from 1981 MSAPA Section 102(1). This definition
uses the term to adjudicate rather than the term to determine contested cases
from the 1961 Act. The purpose of this definition is to subject as many state
actors in the executive branch of state government as possible to this
definition. The definition applies only to state actors, not local agencies. There are exceptions for the governor, the
legislature, and the judiciary. The exception for the governor means the governor
personally. The term agency is used numerous times in the other articles of the
Act. The term “agency” includes the Office of Administrative Hearings provided
in Article 6. The term “agency should be read in conjunction with the terms
“party” in section 102(21), and the term “person” in Section 102(22).
Agency Action. This definition is based on 1981 MSAPA
Section 1-102(2). The purpose of the definition is to identify those matters that
are subject to judicial review under Article Five. The term “agency action”
includes the term “rule”, defined in Section 102(27), and the term “order”,
defined in section 102(20). Failure to
issue an order or rule is not judicially reviewable except as provided in
Section 501(d) of the Act. Failure to issue an order or rule does not include
an agency denial of a petition for a declaratory order or to initiate
rulemaking. See Sections 204(d) and 318(1) of the Act. The third definition of agency action, under
Section 102(4)(C), is broader and includes agency action that is neither a
“rule” nor an “order”. The purpose of third definition is to make agency action
broadly subject to judicial review, but the availability of judicial review of
agency action is governed by the provisions of Article Five, See Section 501, and
the scope of review by Section 508.
Agency Head. This definition is based on 1981 MSAPA
Section 1-102(3). The purpose of the definition is to differentiate between the
agency as an organic whole and the particular person or persons (single agency
head, or commissioners, and board members ) in whom the final decisional authority
of the agency is vested . The term
“agency head” is also used numerous times throughout the act to differentiate
between agency employees other than the agency head who may be delegated the
responsibility to carry out functions under the Act from the agency head who
has the legal authority to carry out those functions. See, for example, Section
402(a) in which the agency head has the
authority to be the presiding officer in a contested case, but the agency head may also designate
another individual to be the presiding officer.
Agency Record. This definition is new to the Act. The
purpose of the definition is to differentiate between the different types of
agency records required to be maintained under
the provisions of Articles Three, Four, and Five. The definition lists
the different types of agency records by more specific terms and by sections of
the Act. The definition provides a roadmap for the various types of agency
records requirements in the Act. The definition should be read, as applicable,
in conjunction with the provisions of Sections 302, 309, 310, 406, 407, and
507(b). The term “record” defined in
Section 102 (26) refers to the medium for storage of information and does not
address the requirements of the content of agency records.
Contested case. This term is similar to the “contested case”
definition in Section 1(2) of the 1961 MSAPA. Like the 1961 MSAPA, this Act
looks to external sources such as statutes and constitutions to determine when
a party is entitled to an evidentiary hearing.
However, this term differs from the 1961 MSAPA=s
term “contested case” because it also includes evidentiary hearings required by
the constitution, federal or state, and makes provision in Article 4 for the
type of evidentiary hearing to be held in a case where a constitution creates
the right to an evidentiary hearing.
Including constitutionally created rights to an evidentiary hearing
within the provisions of this Act eliminates the problem of looking outside the
Act to determine the type of evidentiary hearing required in cases where the
right to the evidentiary hearing is created by a constitution. Evidentiary hearing
rights created by judicial decisions means constitutional decisions by courts
in that state. See Goldberg v. Kelly, 397 U.S. 254 (1970). The definition of
“contested case” should be read in conjunction with the definitions of
“adjudication” under Section 102(1), “evidentiary hearing” under Section 102(10),
and of “order”, Section 102(20), infra. Article Four procedures apply to
adjudications that are contested cases, Section 401, and that result in a final
order of the agency, Section 413. Article Four does not apply to informal
adjudications, which are not contested cases.
Electronic. This definition is new to the act. The
definition is based on and has the same meaning as the provisions of the Uniform
Computer Information Transactions Act Section 102(a)(26), and the Uniform
Electronic Transactions Act, Section 2(5). The term “electronic” refers to the
use of electrical, digital, magnetic, wireless, optical, electromagnetic and
similar technologies. It is a descriptive term meant to include all
technologies involving electronic processes. The listing of specific
technologies is not intended to be a limiting one. The definition is intended
to assure that this act will be applied broadly as new technologies
develop. For example, biometric
identification technologies would be included if they affect communication and
storage of information by electronic means. As electronic technologies expand
and include other competencies, those competencies should also be included
under this definition. State agencies widely use electronic media to
disseminate information to the public. See Article Two for agency duties to
provide public access to agency law. This definition should be read in
conjunction with the terms “record” defined in Section 102(26), “electronic
record” defined in Section 102(8), and “internet web site” defined in Section
102(15).
Electronic Record. This definition is new to the Act. The
definition is based on and has the same meaning as the provisions of the
Uniform Electronic Transactions Act, Section 2(7). An “electronic record” is a document that is
in an “electronic” form. Documents may be communicated in electronic form; they
may be received in electronic form; they may be recorded and stored in
electronic form; and they may be received in paper copies and converted into an
electronic record. This Act does not limit the type of electronic documents
received by the [publisher]. The purpose of defining and recognizing electronic
documents is to facilitate and encourage agency use of electronic communication
and maintenance of electronic records. State agencies widely use electronic
media to disseminate information to the public. See Article Two for agency
duties to provide public access to agency law. This definition should be read
in conjunction with the terms “record” defined in Section 102(26), “electronic”
defined in Section 102(7), and “internet web site” defined in Section 102(15).
Emergency Adjudication. This definition is based on 1981 MSAPA
Section 4-105(a). The definition should be read in conjunction with Section
407, emergency adjudication procedure.
The definition is designed to be used with the emergency adjudication
procedures provided by Section 408. The danger to the public health, safety, or
welfare standard requiring immediate action is a strict standard that is
defined by law other than this Act. Federal and state case law have held that
in an emergency situation an agency may act rapidly and postpone any formal
hearing without violation, respectively, of federal or state constitutional
law. FDIC v. Mallen, 486 U.S. 230 (1988);
Gilbert v. Homar (1997) 520 U.S. 924; Dep=t
of Agric. v. Yanes, 755 P.2d 611 (OK. 1987).
Evidentiary Hearing. This definition is new to this Act and describes
the process for an evidentiary hearing. This definition should be read in
conjunction with the definitions of “adjudication” under Section 102(1),
“contested case” under Section 102(6), , and of “order”, Section 102(20),
infra. Article Four procedures apply to adjudications that are contested cases,
Section 401, and that result in a final order of the agency, Section 413. The
definition of contested case in Section 102(6) includes the language
“opportunity for an evidentiary hearing”, and that term is defined here. The
contested case definition provides for external sources of law to determine the
opportunity for an evidentiary hearing, but the type of hearing provided is
defined in this definition. The
specifics of hearing procedure for contested cases are detailed in the
provisions of Article Four of this Act.
Final Order. This definition is new to this act and applies
to Article Four adjudication proceedings. See Section 413, Orders: Final,
Recommended, and Initial. This definition should be read in conjunction with
the terms “initial order” in Section 102(14), “order” in Section 102(20), and
“recommended order” in section 102(25).
Guidance document. This definition is new to this act and is similar
to the Michigan APA, M.C.L.A. 24.203(6),
and the Virginia APA, Va. Code Ann. SECTION 2.2-4001. See also the; Idaho I.C. SECTION 67-5250 and
N.Y. McKinneys State Administrative Procedure Act, SECTION 102. This is a definition intended to recognize
that there exist agency statements for the guidance of staff and the public
that differ from, and that do not constitute, rules. Many states recognize such statements under
the label “interpretive statement” or “policy statement.” See Wash. Rev. Code, SECTION 34.05.010(8)
& (15). See: Michael Asimow,
Guidance Documents in the States, 54 Adm. L. Rev. 631 (2002); Michael Asimow, California Underground
Regulations, 44 Adm. L. Rev. 43 (1992). This definition should be read in
conjunction with Section 311, Guidance Documents. Agencies are required by
Section 202(a) to publish guidance documents issued by agencies under Section
311 and to publish the index of currently effective guidance documents prepared
under Section 311(f).
Index. This definition is new to this act and is
designed to include both paper and electronic versions of an index. The
definition of index has been added as a guide to agencies, [publisher]s and
editors about their duties to make records available and easily accessible to
the public in the form of an index, as that term is used throughout this act.
States can satisfy the requirement of an index by providing a record that is
searchable by Word on the Internet, unless a hard copy index is required. Agencies
may also satisfy the index requirements by providing hypertext links to index
items. This definition should be read in conjunction with Sections 201, and
202. The rules publisher is required to
publish an index of the contents in the administrative bulletin, Section
201(g), and index of the contents of the administrative code, Section 201(h).
Agencies are required by Section 202 to publish an index of declaratory orders
prepared under Section 204(g), an index of currently effective guidance
documents prepared under Section 311(f), and an index of final orders in
contested cases prepared under Section 418(a).
Initial Order. This definition is new to this act and applies
to Article Four adjudication proceedings. See Section 413, Orders: Final,
Recommended, and Initial. This definition should be read in conjunction with
the terms “final order” in Section 102(11), “order” in Section 102(20), and
“recommended order” in section 102(25).
Internet website. This definition is new to the act and is designed
to be used by agencies and publishers to comply with the requirements of Section
201, publication: publisher’s duties, Section 202, publication: agency duties,
Section 316, filing of rules, and Section 418, availability of orders; index of
this Act. In many states, the Internet website is maintained by the
[publisher], and in some states the agency also maintains its own Internet website.
State agencies widely use electronic media to disseminate information to the
public. See Article Two for agency duties to provide public access to agency
law. This definition should be read in conjunction with the terms “electronic”
defined in Section 102(7), “electronic record” defined in Section 102(8), and
“record” defined in Section 102(26). The definition of “internet web site”
broadly includes successor technology so that the definition does not become
obsolete with technological changes that have not been anticipated.
Law. This definition is new to this act and
includes a broad definition of types of laws applicable to this Act. The
definition broadly defines “law” to include legal authority that is binding on
either the public or the agency. The term “Law” includes an executive order that
rests on statutory or constitutional authorization. Minnesota v. Mille Lacs Band of
Chippewa Indians, 526 U.S. 172, 188-89 (1999) ; Youngstown Sheet & Tube Co. v.
Sawyer, 343 U.S. 579, 585 (1952)
. See also Kevin M. Stack, “The Statutory President,” 90 Iowa
L. Rev. 539, 550-52 (2005); Jim Rossi, “State Executive Law making in Crisis,”
56 Duke L. Rev. 237, 261-64 (2006). For example, a Governor’s declaration of a
state of emergency would fall within the category of an executive order with
statutory or constitutional authorization.
See, e.g., New Mexico Executive Order 2005-040 (2005). This definition
should be read in conjunction with the defined terms “rule”, Section 102(27)
and “order”, Section 102(20).
License. This definition is based on 1981 MSAPA
Section 102(4), which is a revised version of 1961 MSAPA Section 1(3)
definition of license. This definition should be read in conjunction with
Section 419, licenses.
Licensing. This definition is based on 1961 MSAPA Section
14(a). This definition should be read in conjunction with Section 419,
licenses.
Notify. The definition of notify is new to this act
and is similar to the definition of notice in the Uniform Arbitration Act Section
2(a), and the Uniform Computer Information Transactions Act Section 102(a)(49),
which is based on the provisions of the Uniform Commercial Code Section
1-201(26). The definition is consistent with the due process of law
requirements for methods of notifying persons. Mullane v. Central Hanover Bank &
Trust Co. 339 U.S. 306, 314-316 (1950); Goldberg v. Kelley, 397 U.S. 254, 267-268
(1970); Dusenberry v. United States, 534 U.S. 161, 168-170 (2002); See Ho v. Donovan 569 F.3d 677, 680-681 (7th.
Cir., 2009). Under those requirements,
using a method of notice that is reasonable likely to inform is sufficient to
satisfy due process of law requirements. The notice sender does not have to
prove that the notice recipient received the notice in every case to satisfy
due process of law requirements. See
Section 405, notice in contested case, for more specific requirements of notice
in contested cases.
Order. This definition is based on 1981 MSAPA
Section 102(5).An order includes solely agency legal determinations that are
addressed to particular, , identified persons in particular circumstances. An
order may be addressed to more than one person. Further, the definition is
consistent with modern law in rejecting the right/privilege distinction in
constitutional law. The addition of the language “or other interests” is intended
to clarify this change and to include entitlements. The definition of “order” should be read in
conjunction with the definitions of “adjudication” under Section 102(1),
“contested case” under Section 102(6)”, and “evidentiary hearing” under Section
102(10). The term “order” is primarily used in Article Four contested case
proceedings. Article Four procedures apply to adjudications that are contested
cases, Section 401, and that result in a final order of the agency, Section
413. In addition to this term, three type of orders are defined in the act, and
the term “order” should be read in conjunction with the terms “final order” in section 102(11),
“initial order in section 102(14), and “recommended order in section 102(25)
Party. This definition is similar to 1961 MSAPA
Section 1(5), and 1981 MSAPA Section 102(6). The definition includes the
agency, any person against whom agency action is brought and any person who
intervenes. The term” party’ should be read in conjunction with the terms
“agency” in Section 102(2), and the term “person” in Section 102(22). The term
“party” is used in Article Four contested case proceedings. For example, See
Section 403, contested case procedure, Section 404, evidence in contested case,
Section 405, notice in contested case, and Section 409 intervention. The term
“agency” is also used extensively in Articles Three, Four, and Five. This section is not intended to deal with the
issue of a person’s entitlement to judicial review. Standing and other issues relating to judicial
review of agency action are addressed in Article 5 of this Act.
Person. This definition is based on 1961 MSAPA Section
1(6), and 1981 MSAPA Section 102(8). The term “person” should be read in
conjunction with the term “agency” in Section 102(2), and the term “party” in
Section 102(21). The term “person” is broadly defined to include individuals,
associations of individuals, and corporate and governmental entities.
The term “person” is used extensively in the act including
Article Two (See, e.g., Section 204(a)), Article Three (See, e.g., Section
306(a)), Article Four (See, e.g., Section 405(b)), and Article Five (See, e.g.,
Section 505). The term “person” is based on the standard definition used in
acts adopted by the National Conference of Commissioners on Uniform State Laws.
See UCITA Section 102 (a)(51).
Presiding Officer. This definition is new to the Act and should
be read in conjunction with the definitions of “adjudication” under Section
102(1), “agency head” under Section 102(4) “contested case” under Section 102(6),
“evidentiary hearing” under Section 102(10), and of “order”, Section 102(20).
The term ‘presiding officer” is used in Article Four procedures which apply to
adjudications that are contested cases, Section 401, and that result in a final
order of the agency, Section 413. The presiding officer presides over contested
case evidentiary hearings, Section 402.
Under Section 402(a), the “presiding officer” includes an agency staff
member, an administrative law judge appointed under Section 602, the agency
head, or one or more members of the agency head when designated to preside at a
hearing.
Proceeding. This definition is new to this act and broadly
defines agency actions including those conducted by an agency in rulemaking,
governed by Article Three, and in adjudication, governed by Article four.
Recommended Order. This definition is new to this act and applies
to Article Four adjudication proceedings. See Section 413, Orders: Final,
Recommended, and Initial. This definition should be read in conjunction with
the terms “final order” in section 102(11), “initial order” in Section 102(14),
and “order” in Section 102(20).
Record. This definition is new to the act and is based
on the broad definition of record in modern electronic age statutes such as the
Uniform Computer Information Transactions Act, Section 102(a)(55), and the
Uniform Electronic Transactions Act, Section 2(13). This definition is also
based on the definition of record in the E-Sign Act, 15 U.S.C. Section 7006(9).
The definition includes both paper and electronic documents. State agencies
widely use electronic media to disseminate information to the public. See
Article Two for agency duties to provide public access to agency law. This
definition should be read in conjunction with the terms “electronic” defined in
Section 102(7), “electronic record” defined in Section 102(8), and “internet
web site” defined in Section 102(15). The term “record” refers to the medium
for storage of information and does not address the requirements for the
content of agency records. See the definition of “agency record” in Section
102(5) and the types of agency records defined there for that purpose.
Rule. This first sentence of this definition is
based on 1961 MSAPA Section 1(7), and 1981 MSAPA Section 102 (10). The language
“and has the force of law” is new to this act and is designed to contrast rules
with guidance documents which do not have the force of law. The second sentence
of this definition is based on the second sentence of 1981 MSAPA Section
102(10). The exceptions to the
definition are widely used in state APAs. Subsection (A) is drawn from 1981
Model State APA § 3-116(1). Subsection (B) is based on
1961 MSAPA Section 1(7)(C). Subsection (C) is drawn from 1981 Model State APA § 3-116(9). Subsection (D) is drawn from 1981 Model State APA § 3-116(2). Subsection (E) is based on 1981 Model State APA § 3-116(7). Subsection (f) is new to
this act, and should be read in conjunction with the term “guidance document”
in Section 102(13) and Section 311, Guidance documents. With the exception of
guidance documents which must be made available to the public under Section
311(c), the stated exceptions are designed to exempt those statements from the
procedural and publication requirements of Article Three that otherwise apply
to “rules”.
The essential part of this
definition is the requirement of general applicability of the statement. This
criterion distinguishes a rule from an order, which focuses on particular
applicability to identified parties only. Applicability of a rule may be
general, even though at the time of the adoption of the rule there is only one
person or firm affected: persons or firms in the future who are in the same
situation will also be bound by the standard established by such a rule. It is
sometimes helpful to ask in borderline situations what the effect of the
statement will be in the future. If unnamed parties in the same factual
situation in the future will be bound by the statement, then it is a rule. The
word “statement” has been used to make clear that, regardless of the term that
an agency uses to describe a declaration or publication and whether it is
internal or external to the agency, if the legal operation or effect of the
agency action is that it has the force of law, then it meets this definition. The
term “rule” applies primarily to Article Three rulemaking proceedings but the
term is also used in the other articles. The term “rule” should be read in
conjunction with the term “rulemaking” in Section 102(28).
Rulemaking.
This definition is a revised version of
1981 MSAPA Section 102(11). The purpose of this definition is to include
amendment or repeal of an existing rule within the meaning of adoption of a
rule. This definition eliminates the need to repeat the phrase “adopt, amend or
repeal” in numerous sections of the act. This definition should be read in
conjunction with the term “rule” in Section 102 (27). This term is primarily used in Article Three
which governs rulemaking by agencies.
This term
should be read in conjunction with the term “rule” in section 102(27). This
term applies primarily to Article Three rulemaking proceedings.
Sign. This definition is based on UETA Section 2(8),
and includes both paper and electronic signatures. See also the federal E-Sign
Act, 15 U.S.C. Section 7001 et. Seq.
Written. This definition is new to
this act and relates to the definition of record in Section 102(26) in that
written documents are inscribed on a tangible medium. The definition of record
in Section 102(26) includes both tangible medium (written) and electronic
documents.
SECTION 103. APPLICABILITY.
(a) This [act]
applies to an agency unless the agency is expressly exempted by a statute of
this state.
(b) This [act]
governs all agency proceedings and all proceedings for judicial review or civil
enforcement of agency action commenced after [the effective date of this [act]. This [act] does not govern an adjudication
for which notice was given before the effective date and rulemaking for which
notice was given or a petition filed before that
date.
Comment
Subsection (a) is intended to
define which agencies are subject to the provisions of this act. Many states have made use of an applicability
provision to define the coverage of their Administrative Procedure Act. See:
Iowa, I.C.A. SECTION 17A.23; Kansas, K.S.A. SECTION 77-503; Kentucky, KRS
SECTION 13B.020; Maryland, MD Code, State Government, SECTION 10-203;
Minnesota, M.S.A. SECTION 14.03; Mississippi, Miss. Code Ann. SECTION
25-43-1.103; Washington, West’s RCWA 34.05.020. States vary widely as to what
state agencies are subject to the APA, and what agencies are exempt from the
APA. The issue of what agencies are exempt from the APA will be decided by each
state using its own legislative process. Some states list the agencies or
agency proceedings that are exempt from the requirements of the APA. See
Washington, West’s RCWA 34.05.30.This section provides a way to resolve those
issues.
Subsection (b) is based on Section
1-108 of the 1981 MSAPA. Agency proceedings on remand following judicial review
after the act takes effect are governed by the prior law.
SECTION 201. PUBLICATION, COMPILATION, INDEXING, AND
PUBLIC INSPECTION OF RULEMAKING DOCUMENTS; ORDERS.
(a) The [publisher] shall administer this section
and other sections of this [act] that require publication. The [publisher]
shall publish the [administrative bulletin] and the [administrative code].
(b) The [publisher] shall publish in [electronic
and written] [electronic or written] [electronic] [written] format all
rulemaking-related documents listed in Section 202(c). The [publisher] shall
prescribe a uniform numbering system, form, and style for all proposed rules.
(c) The [publisher] shall maintain the official
record of the adoption of a rule, including the text of the rule and any
supporting documents, filed with the [publisher] by an agency. An agency
adopting a rule shall maintain the rulemaking record required by Section 302(b)
for that rule.
(d) The [publisher] shall create and maintain an Internet
web site on which it maintains a
searchable database. The [publisher]
shall make available on the Internet web site the [administrative bulletin], the
[administrative code], and any guidance document filed with the [publisher] by
an agency.
(e) The [publisher] must publish the
[administrative bulletin] at least once [each
month].
(f) The [administrative bulletin] must be provided
in written form on request, for which the [publisher] may charge a reasonable
fee.
(g) The [administrative bulletin] must contain:
(1) notices of the proposed adoption of a rule 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 a newly filed amended rule shows the text of the existing rule and
the change that is made;
(3) any other notice and material required to be
published in the [administrative bulletin]; and
(4) an index.
(h) The [administrative code] must be compiled,
indexed by subject, and published in a format and medium as prescribed by the [publisher].
The rules of an agency must be published and indexed in the [administrative
code].
(i) The [publisher] shall make the [administrative
bulletin] and the [administrative code] available for public inspection and, for
a reasonable charge, copying.
(j) The [publisher], with notification to the agency,
may make minor nonsubstantive corrections in spelling, grammar, and format in proposed
or adopted rules. The [publisher] shall make a record of the corrections.
(k) The [publisher] shall make available on the
[publisher’s] Internet website, at no charge, all of the documents provided by an
agency under Section 202(c).
Legislative Note: Throughout this act the drafting committee
has used the term [publisher] to describe the official or agency to which
substantive publishing functions are assigned. All states have such an official, but their
titles vary. Each state using this act
should determine what that agency is, then insert its title in place of
[publisher] throughout this act. Each
state also has an [administrative bulletin] and an [administrative code]. The bulletin is similar to the federal
register, and the code is similar to the code of federal regulations. The names of the administrative bulletin and
the administrative code vary from state to state. Each state should insert the proper title in
place of [administrative bulletin], and [administrative code]. The [publisher] has statutory authority under
subsections (f) and (i) to provide written materials for a reasonable charge. In many states, [publishers] have statutory
authority under public records act to adopt regulations setting fees for
providing written copies of documents under this section
Comment
Article 2 is intended to provide
easy public access to agency law and policy that are relevant to agency
process. Article 2 also adds provisions for electronic publication of the
administrative bulletin and code. The
development of the internet and the widespread use of electronic media have
made public access to agency law and policy much easier. The arrival of the Internet
and electronic information transfer, which occurred after the last revision of
the Model State Administrative Procedure Act, has revolutionized
communication. It has made available
rapid, efficient and low cost communication and information transfer. Many states as well as the federal agencies
have found that it is an ideal medium for communication between agencies and
the public, especially in connection with rulemaking. Since the last Model Administrative Procedure
Act was written, many states have adopted various types of statutes that permit
agencies to use electronic technology to communicate with the public. The agencies have found this technology
particularly useful in connection with rulemaking.
Section 201 is a revised and
modernized version of 1961 MSAPA Section 5 and 1981 MSAPA Section 2-101. The
purpose of this section is to provide adequate notice to the public of proposed
and final agency action in rulemaking.
It also seeks to assure adequate record keeping and availability of
records for the public. Subsection (a) provides for the publisher’s
responsibilities to administer publication provisions of this section and other
publication sections of the act, and to publish the administrative bulletin and
the administrative code. Throughout this article and article three, the term
publisher is bracketed. States have a variety of names for the agency that
performs publishing responsibilities. Each state should insert the correct name
for that state in the brackets whenever the term publisher appears in the
act. The terms administrative bulletin
and administrative code are also bracketed for similar reasons. Each state
should insert the correct name for that state whenever those terms appear in
that act. Section 201 does not address
the issue related to what languages rules should be published in, nor does it
address issues related to translation of information contained in these
documents into languages other than English.
Subsection (b) requires the
publisher to publish rulemaking documents that are filed by an agency with the
publisher under section 203(c). Subsection (b) has four bracketed options for
publication format. A state may select one of the four options. The issue
raised by these options is whether or not a state wants to make available to
its citizens a written publication option or electronic publication only.
Electronic publication provides for substantial cost savings to agencies but
some members of the public may lack access to the internet or may prefer a
written publication format. The second sentence of subsection (b) is based on
1981 MSAPA Section 2-101(b) [first clause]. Publishers that administer the provisions of
this subsection must also comply with the applicable provisions of the federal
E-Sign Act (15 U.S.C. Section 7001 to 7031) and the Uniform Electronic
Transactions Act (UETA).
Subsection (c) requires that the [publisher]
maintain the official record for adopted rules, including the text of the rules
and any supporting documents, filed by the agency. Subsection (c) also requires
that the agency adopting the rule maintain the rulemaking record for that rule.
Section 302(b) provides the requirements for the rulemaking record. While the
[publisher] is an agency, and the term “agency” is defined broadly in section
102(3), the term agency used in Article Two and Three means an agency other
than the publisher except to the extent that the publisher has rulemaking
authority and does adopt rules. In that case the publisher would have to comply
with the requirements of section 202, as well as administer the requirements of
this section.
Subsection (d) requires the [publisher]
to 1) maintain an Internet web site, and 2) publish the [administrative
bulletin], the [administrative code] and any guidance document filed with the [publisher]
by an agency on the Internet web site. The
term “Internet web site” is defined in Section 102(15) and includes successor
technology. The term “guidance document” is defined in Section 102(12), is
excluded from the term rule in section 102(27)(F), and is governed by the
provisions of section 311. Most states have internet web sites for state
agencies. The provisions of subsection (d) can be implemented with existing
internet technology. Subsection (d) does not address issues related
to authentication, preservation and archival storage of electronic documents
published on an Internet website. Subsection (d) does not address the
principles for deciding what rules are in effect and enforceable at a specific
point in time. Providing a hypertext link on an Internet website will satisfy
the publication requirements for agencies and publishers.
Subsection
(e) requires the publisher to publish the [administrative bulletin] at least
once [each month]. The term [each month] is bracketed to give states the option
of adapting this requirement to existing laws governing frequency of
publication of the [administrative bulletin] in each state.
Subsection (f) requires the
publisher to provide the administrative bulletin in written form on request,
for which the publisher may charge a reasonable fee. This requirement can be
satisfied by states making the administrative bulletin available on the Internet,
searchable, and printable.
Subsection (g) requires the
[administrative bulletin] to contain notices of proposed adoption of a rule,
newly filed rules, other notices and materials, and an index of the contents of
the bulletin. The text of subsection (g)(1)
and (g)(2) requires an agency to utilize redlining or underlining and striking
of the text of the proposed or adopted rules so that changes from the existing
text of the rule are clearly delineated.
Subsection (h) requires the
publisher to compile, index by subject, and publish the administrative code
which must include the publication and indexing of the rules of an agency States can satisfy this requirement by
providing an administrative code that is searchable by word on the Internet.
Subsection (i) requires the
publisher to make the [administrative bulletin] and the [administrative code]
available for public inspection and, for a reasonable charge, copying.
Subsection (j) provides for a
limited non substantive power of the publisher to make corrections in spelling,
grammar, and format in proposed or adopted rules of the agency provided that
the agency is notified by the rules [publisher] of the changes. The [publisher]
must make a record of the corrections. Subsection (j) is based on the Maine
Administrative Procedure Act, 5 M.R.S.A. Section 8056(10).
Subsection (k) is drawn from the
Washington Administrative Procedure Act.
See WA ST
34.05.260.
(a) Unless a particular record is exempt from
disclosure under law other than this [act], an agency shall publish on its Internet
web site and, on request and for a reasonable charge, make available through
the regular mail each notice of the proposed
adoption of a rule under Section 304, each rule filed under Section 316, each
summary of regulatory analysis required by Section 305, each declaratory order
issued under Section 204, the index of declaratory orders prepared pursuant to
Section 204(g), each guidance document issued pursuant to Section 311, the
index of currently effective guidance documents prepared pursuant to Section 311(e),
each final order in a contested case issued pursuant to Section 413, 414, or
415, and the index of final orders in contested cases prepared pursuant to
Section 418(a).
(b) An agency may provide for electronic
distribution of notices related to rulemaking or guidance documents to a person
that requests it. If a notice is
distributed electronically, the agency need not transmit the actual notice but shall
send all the information contained in the notice.
(c) An agency shall file with the [publisher] in
an electronic format acceptable to the [publisher]:
(1) notice of the adoption of a rule;
(2) a summary of the regulatory analysis required
by Section 305 for each proposed rule;
(3) each adopted rule;
(4) an index of currently effective guidance
documents under Section 311(f); and
(5) any other notice or matter that an agency is
required to publish under this [act].
Legislative note: Agencies have statutory authority under
subsection (a) to provide written materials for a reasonable charge. In many
states, agencies have statutory authority under public records act to adopt
regulations setting fees for providing written copies of documents under this
section.
Comment
This Section provides for the
publication duties of agencies. See
Section 201 for publication duties of the [publisher]. The term “agency” is broadly
defined in Section 102(3). The term “agency”, as used in Section 202, does not
include the publisher unless the publisher has rulemaking authority in which
case the publisher will have to comply with the publication responsibilities of
Section 202 when it engages in rulemaking a well as the Section 201 publication
responsibilities. In states in which the publisher is responsible for all
publication duties, particularly the maintenance of Internet web sites, the
agency can carry out its responsibilities under Section 202 by providing the
required information to the publisher.
Subsection (a) requires agencies to
publish on the agency Internet web site the following: notice of proposed
rulemaking, filed rules, summary of regulatory analysis, declaratory order and
index of declaratory orders, guidance documents and index of currently
effective guidance documents, final order and index of final orders. These
documents are also to be made available by the agency thorough the regular mail
on request an for a reasonable charge. In
states where the publisher has the sole responsibility for publishing agency
rules and other documents, including guidance documents, an agency may satisfy
the publication requirement of subsection (a) by filing the listed documents
with the publisher. The term “Internet web site” is defined in Section 102(15)
and includes successor technology. The term “guidance document” is defined in
Section 102(12), is excluded from the term rule in section 102(27)(F), and is
governed by the provisions of section 311.
Subsection (b) is drawn from the
Washington Administrative Procedure Act.
See WA ST 34.05.260. Subsection (b) authorizes agencies to utilize
electronic distribution of notices or guidance documents. The term “electronic”
is defined in Section 102(7), and the term “electronic record” is defined in
Section 102(8).
Subsection (c) requires an agency
to file with the [publisher] in an electronic format acceptable to the publisher
(1) notice of the adoption of a rule, (2) summary of the regulatory analysis,
(3) each adopted rule, (4) an index of currently effective guidance documents, and
(5) any other notice or matter that an agency is required to publish under this
act. Subsection (c)(5) would require the agency to file with the publisher the
list of documents stated in subsection (a).
SECTION 203. REQUIRED AGENCY PUBLICATION AND RECORDKEEPING. An agency shall:
(1) publish a description of its organization,
stating the general course and method of its operations and the methods by
which the public may obtain information or make submissions or requests;
(2) publish a description of all formal and
informal procedures available, including a description of all forms and instructions
used by the agency;
(3) publish 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) adopt rules for the conduct of public hearings
[if the standard procedural rules adopted under Section 205 do not include
provisions for the conduct of public hearings];
(5) maintain [custody of] the agency’s current
rulemaking docket required by Section 301(b); and
(6) maintain a separate, official, current, and
dated index and compilation of all rules adopted under [Article] 3, make the index
and compilation available for public inspection and, for a reasonable charge,
copying at the principal office of the agency [and online on the [publisher]’s Internet
website], update the index and compilation at least [monthly], and file the
index and the compilation and all changes to both with the [publisher].
Comment
One object of this section is to
make available to the public all procedures followed by the agency, including
especially how to file for a license or benefit. It is modeled on the 1961 Model State
Administrative Procedure Act, Sections 2(a) (1) & (2), the 1981 Model State
APA Sections 2-104(1), (2), and the Kentucky Administrative Procedure Act, KRS
Section 13A.100. Persons seeking licenses or benefits should have a readily
available and understandable reference sources from the agency. Subsections (1), (2), and (3), require the
agency to publish the description of the organization of the agency and the
procedures followed by the agency. This
is a modified version of the provisions in the 1961 and 1981 MSAPA’s which
required the agency to adopt rules providing this information. Some states provide more detail in subsection
(1) including contact information for agency officials, organizational charts,
and hours of operations for agency offices. The term methods of operation in
subsection (1) refers to information about how the agency carries out its
responsibilities that would be helpful to the public Subsection (2) is not intended to require
publication of internal procedures available to and applicable to employees
only, and that are of no real interest to the public. Subsection (3) requires
publication of a description of application processes that are appropriate to
the agency. For social welfare agencies, the publication would include
available benefits administered by that agency.
Subsection (4) requires that
agencies adopt rules for the conduct of public hearings. An agency may use a
guidance document to elaborate on issues not squarely addressed by these rules.
Subsection (5) requires the agency
to maintain custody of the agency’s current rulemaking docket required by
Section 302(b).
Subsection (6) requires an agency
to maintain the official version of the index and rules compilation and to make
that available to the public for inspection and for a reasonable charge copying
at the principal office of the agency. An agency must also make the index and
compilation available online on the publisher’s internet web site, must update
the index and compilation at least monthly, and must file the index and
compilation and all changes to both with the publisher. The publisher is the
repository of the official language of the rules. If questions arise about
authentication of agency rules, the publisher is the source for the official
version of the rule in question.
SECTION 204. DECLARATORY ORDER.
(a) A person may petition an agency for a declaratory
order that interprets or applies the statute
administered by the agency or states whether or in what manner a rule,
guidance document, or order issued by the agency applies to the petitioner.
(b) An agency shall adopt rules prescribing the
form of a petition for purposes of subsection (a) and the procedure for its
submission, consideration, and prompt disposition. The provisions of this [act] concerning
formal, informal, or other applicable hearing procedure do not apply to an
agency proceeding for a declaratory order, except to the extent provided in
this [article] or to the extent the agency provides by rule or order.
(c) Not later than 60 days [or at the next
regularly scheduled meeting of the agency, whichever is later,] after receipt
of a petition pursuant to subsection (a), an agency shall issue a declaratory
order in response to the petition, decline to issue the order, or schedule the
matter for further consideration. [If the agency fails to act within the
applicable time, the agency is deemed to have declined to issue the order.]
(d) If an agency declines to issue a declaratory
order as requested under subsection (a), it shall notify promptly the petitioner
of its decision. The decision shall be in a record and shall include a brief
statement of the reasons for declining. An agency decision to decline to issue
a declaratory order is subject to judicial review for abuse of discretion. This
subsection does not apply to agency failures to act within the applicable time
period under subsection (c).
(e) If an agency issues a declaratory order, the order
must contain the names of all parties to the proceeding, the facts on which it
is based, and the reasons for the agency’s conclusion. If an agency is
authorized not to disclose certain information in its records to protect confidentiality,
the agency may redact confidential information in the order. The order has the same status and binding
effect as an order issued in an adjudication and is subject to judicial review under
Section 501.
(f) An agency shall publish each currently
effective declaratory order.
(g) An agency shall maintain an index of all of
its currently effective declaratory orders, file the index [annually] with the
[publisher], make the index readily available for public inspection, and make available
for public inspection and, at a reasonable cost, copying the full text of all
declaratory orders to the extent inspection is permitted by law other than this
[act].
Comment
This section is a revised version
of 1961 MSAPA Section 8, and 1981 MSAPA Section 2-103 and Hawaii Revised
Statutes, Section 91-8. This section
embodies a policy of creating a convenient procedural device that will enable
parties to obtain reliable advice from an agency. Such guidance is valuable to
enable citizens to conform with agency standards as well as to reduce litigation.
The term “person” in Subsection (a) is broader than the term aggrieved person
for judicial review in Article 5, and is also broader than the term person
toward whom agency action is directed in adjudication under Article 4. Ripeness and standing requirements that
restrict court issued declaratory judgments do not apply to declaratory orders
issued by administrative agencies. Subsection (a) refers to declaratory orders
that interpret or apply the statue administered by the agency. In states that
have constitutional agencies, the term statute would include the entire body of
law, including constitutional provisions, that the agency is responsible for
enforcing.
Subsection (d) provides that agency
decisions to decline to issue a declaratory order are reviewable for abuse of
discretion (See Massachusetts v. EPA 549 U.S. 497(2007) (EPA decision to reject
rulemaking petition and therefore not to regulate greenhouse gases associated
with global warming was judicially reviewable and decision was arbitrary and
capricious.). Limited agency resources may provide a valid basis for an agency
to decline to issue a declaratory order. The term notify in subsection (d)
incorporates the definition of notify in section 102(19) (reasonable steps to
inform a person). Mailing [or e-mailing] a copy of the notice to the petitioner
at the address last known to the agency would satisfy the requirement to notify
the person.
Subsection (e) is based on the Washington
APA, West=s RCWA
34.05.240. A declaratory decision issued
by an agency is judicially reviewable; is binding on the applicant, other
parties to that declaratory proceeding, and the agency, unless reversed or
modified on judicial review; and has the same precedential effect as other
agency adjudications. A declaratory decision, like other decisions, only
determines the legal rights of the particular parties to the proceeding in
which it was issued. The requirement in subdivision (e) that each declaratory
decision issued contain the facts on which it is based and the reasons for its
conclusion will facilitate any subsequent judicial review of the decision=s legality. It also ensures a clear
record of what occurred for the parties and for persons interested in the decision
because of its possible precedential effect.
Subsections (f), and (g) require
that an agency publish and index all current declaratory orders. Subsection (f) requires publication of
currently effective declaratory orders. This would include all declaratory
orders issued by the agency that are currently being relied on by the agencies,
and this would exclude declaratory orders that have been amended, repealed, or
replaced by later orders.
SECTION 205. STANDARD PROCEDURAL RULES.
(a) The [Governor] [Attorney General] [designated
state agency] shall adopt standard procedural rules for use by agencies. The standard
rules must provide for the procedural functions and duties of as many agencies
as is practicable.
(b) Except as otherwise provided in subsection
(c), an agency shall use the standard procedural rules adopted under subsection
(a).
(c) An agency may adopt a rule of procedure that
differs from the standard procedural rules adopted under subsection (a) by
adopting a rule that states with particularity the reasons for the variation.
Comment
This Section is based on Section
2-105 of the 1981 MSAPA. One purpose of
this provision is to provide agencies with a set of standard procedural
rules. This is especially important for
smaller agencies. Another purpose of this section is to create as uniform a set
of procedures for all agencies as is realistic, but to preserve the power of
agencies to deviate from the common model where necessary because the use of
the standard rules is demonstrated to be impractical for that particular
agency. This section requires all agencies to use the standard rules as the
basis for the rules that they are required to adopt under Section 203(4). An
agency may deviate from the standard rules only for impracticability. Agency
procedural rules must be consistent with the statutory requirements of this
Act. An agency may adopt a procedural rule that is more protective of the
rights of parties to a contested case under Section 403(k) provided that the
agency satisfies the requirements of Section 205(c). Procedural rules adopted
under Section 205 have the force of law and must be adopted consistent with the
requirements of Sections 304 to 308 of Article Three of the Act.
SECTION
301. CURRENT RULEMAKING DOCKET.
(a) In this section, “rule” does not include a
rule adopted using the emergency process under Section 309 or a rule adopted
using the direct final process under Section 310.
(b) An agency shall maintain a current rulemaking
docket that is indexed.
(c) A current rulemaking docket must list each
pending rulemaking proceeding. The docket must state or contain:
(1) the subject matter of the proposed rule;
(2) notices related to the proposed rule;
(3) how comments on the proposed rule may be submitted;
(4) the time within which comments may be submitted;
(5) where comments may be inspected;
(6) requests for a public hearing;
(7) appropriate information concerning a public
hearing, if any; and
(8) the timetable for action on the proposed rule.
(d) On request, the agency shall provide, for a
reasonable charge, a written rulemaking docket.
Comment
This section is modeled on Minn.
M.S.A. Section 14.366, and is similar to 1981 MSAPA Section 3-102. This section
and the following section, Section 302, state the minimum docketing and
rulemaking record keeping requirements for all agencies. This section also recognizes that many
agencies use electronic recording and maintenance of dockets and records. Electronic recording and docket maintenance
has become the standard practice for state agencies. However, under subsection
(d), a state agency is required to provide a written rulemaking docket on
request and for a reasonable charge. The current rulemaking docket is a summary
list of pending rulemaking proceedings or an agenda referring to pending
rulemaking. The requirements of this
section do not apply to emergency rules under Section 309, and direct final
rules under Section 310.
SECTION 302. AGENCY RECORD IN RULEMAKING.
(a) An agency shall maintain a rulemaking record
for each rule it proposes to adopt. Unless the record and materials are
privileged or exempt from disclosure under the law of this state other than
this [act], the record and materials incorporated by reference must be readily available
for public inspection in the principal office of the agency and available for
public display on the Internet website maintained by the [publisher]. If an
agency determines that any part of the rulemaking record cannot practicably be
displayed or is inappropriate for public display on the Internet website, the
agency shall describe the document and
note on the Internet website that the document is not displayed.
(b) A rulemaking record must contain:
(1) a copy of all publications in the
[administrative bulletin] relating to the rule and the proceeding on which the
rule is based;
(2) a copy of any part of the rulemaking docket
containing entries relating to the rule and the proceeding on which the rule is based;
(3) a copy and an index, if prepared, of all factual material, studies, and reports agency
personnel relied on or consulted in
formulating the proposed or final rule;
(4) any official transcript of oral presentations
made in the proceeding on which the rule is based or, if not transcribed, any audio
recording or verbatim transcript of the presentations, and any memorandum
summarizing the contents of the presentations prepared by the agency official
who presided over the hearing;
(5) a copy of all comments received by the agency under
Section 306(a) in response to the notice of proposed rulemaking;
(6) a copy of the rule and explanatory statement
filed with the [publisher]; and
(7) all petitions for any agency action on the
rule, except for petitions governed
by Section 204.
Comment
Several states have adopted this
type of agency rule-making record provisions: Az., A.R.S. Section 41-1029; Colo., C.R.S.A. Section 24-4-103; Minn.,
M.S.A. Section 14.365; Miss., Miss.
Code Ann. Section 25-43-3.110; Mont.,
MCA 2-4-402; Okl., 75 Okl.St.Ann. Section 302; and Wash., RCWA 34.05.370.
The language of subsection (a) is
based on Section 3-112(a) of the 1981 Model Act. Similar language is found in the
Washington Administrative Procedures Act, RCWA Section 34.05.370. The
requirement of an official agency rulemaking record in subsection (a) should
facilitate a more structured and rational agency and public consideration of
proposed rules. It will also aid the
process of judicial review of the validity of rules. The requirement of an
official agency rulemaking record was suggested for the Federal Act in S. 1291,
the “Administrative Practice and Regulatory Control Act of 1979,” title I,
Section 102(d), [5 U.S.C. 553(d) ], 96 Cong.Rec. S7126 at S7129 (daily ed. Jun.
6, 1979) (Sen. Kennedy). The second sentence of subsection (a) is intended to exclude
privileged material from disclosure and display. Privileged material includes
confidential business information and trade secrets, as well as internal advice
memoranda. Procedures that an agency may use in dealing with confidential
communications and materials in rulemaking are discussed in Jeffrey Lubbers,
Federal Agency Rulemaking Guide (4th ed., 2006), pp 331-333. The
exemptions in the state open records laws would be examples of records and
materials that are exempt from disclosure and display under law other than this
act. The third sentence in subsection (a) is intended to enable an agency to
decide, for example, that a blueprint that may not be practically displayed on
the internet, indecent material, or copyrighted material should be available
for inspection in hard copy but not posted on the Internet. It is not intended
to authorize exclusion from the Internet record of, for example, information
that reflects adversely on the government.
The language of subsection (b) is
based on 1981 MSAPA Section 3-112(b). Subsection (b) requires all written
submissions made to an agency and all written materials considered by an
agency in connection with a rulemaking proceeding to be included in the record.
It also requires a copy of any existing record of oral presentations made in
the proceeding to be included in the rulemaking record. The language in Subsection (b) (3) is based
on language endorsed by the ABA Section of Administrative Law & Regulatory
Practice. See ABA
Section of Administrative Law and Regulatory Practice, “A Blackletter Statement
of Federal Administrative Law,” 54 Admin. L. Rev. 1, 34 (2002)
Section 310 says that the agency must comply with Section
313(1) (concise explanatory statement) when it issues a direct final
rule. In the case of direct final rules, the agency is expected to publish
the rule in the administrative bulletin along with a statement that it does not
expect the rule to be controversial. This would then trigger Section
302(1) (“all publications in the [administrative bulletin] relating to the
rule”).
Section 309
doesn’t expressly require this, but neither is the agency exempted from Section
313. This statement would be incorporated into the agency record under Section
302(6). To issue an emergency rule, the agency has to determine that some
imminent peril requires immediate action, and this finding must be memorialized
in a record. This “record” (meaning stored information) needs to be
included in the Section 302 “agency record,” so that a court can potentially
review it. Section 302 includes this concept. Under Section 312(3), any
adopted rule must be filed with the publisher and be accompanied by “any
finding required by law as a prerequisite to adoption or effectiveness of the
adoption.” And Section 302(6) says the agency record must include “a copy
of the rule and explanatory statement filed with the [publisher].”
Reading the two together, the finding will have to be part of the agency
record.
(a) An agency may gather information relevant to
the subject matter of a potential rulemaking and may solicit comments and
recommendations from the public by publishing an advance notice of proposed
rulemaking in the [administrative bulletin] and indicating where, when, and how
persons may comment.
(b) An agency may engage in negotiated rulemaking
by appointing a committee to comment or make recommendations on the subject
matter of a proposed rulemaking under active consideration within the agency.
In making appointments to the committee, the agency shall make reasonable
efforts to establish a balance in representation among members of the public
known to have an interest in the subject matter of the proposed rulemaking. At
least annually, the agency shall publish in the [administrative bulletin] a
list of all committees with their membership.
Notice of a meeting of the committee must be published in the
[administrative bulletin] at least [15 days] before the meeting. A meeting of the committee is open to the
public.
(c) A committee appointed under subsection (b), in
consultation with one or more agency representatives, may attempt to reach a
consensus on the terms or substance of a proposed rule. The committee shall
present the consensus recommendation, if any, to the agency.
The agency shall consider whether
to use it as the basis for a proposed rule under Section 304, but the agency is
not required to propose or adopt it.
(d) This section does not prohibit an agency from
obtaining information and opinions from members of the public on the subject of
a proposed rule by any other method or procedure.
Comment
This section is based on the
provisions of Section 3-101 of the 1981 MSAPA. Seeking advice before proposing a rule
frequently alerts the agency to potential serious problems that will change the
notice of proposed rulemaking and the rule ultimately adopted. This section is designed to encourage
gathering information. This device is commonly used in federal administrative
law. See William Funk, “Public Participation and Transparency in Administrative
Law—Three Examples and an Object Lesson,” 61 Admin. L. Rev. 171, 191 -197
(2009). It is not intended to prohibit
any type of reasonable agency information gathering activities; however, the
section seeks to enable agencies to act in a fashion that will result in a balance
among interested groups from whom information is received. The advanced notice
of proposed rulemaking under subsection (a) is a preliminary step for seeking
information and is not the same as the notice of proposed rulemaking under
Section 304, which begins the rulemaking process.
Several states have enacted
provisions of this type in their APAs.
Some of them merely authorize agencies to seek informal input before
proposing a rule; several of them indicate that the purpose of this type of provision
is to promote negotiated rulemaking. Those states are Idaho,
I.C. ‘ 67-5220; Minnesota, M.S.A. § 14.101; Montana, MCA 2-4-304; and Wisconsin, W.S.A. 227.13. Subsection (b) is
intended to authorize negotiated rulemaking.
Subsection (c) provides that the
committee may seek to reach a consensus on the terms or substance of a proposed
rule but the agency is not required to propose or adopt the consensus
recommendation only to consider it.
Subsection (d) authorizes agencies
to use other methods to obtain information and opinions. Under subsection (d),
agencies may meet informally with specific stakeholders to discuss issues
raised in the negotiated rulemaking process. Negotiated rulemaking under
subsection (b) is an option for agency use but is not required to be used prior
to starting a rulemaking proceeding. Negotiated rulemaking committees are also
used in federal administrative law. See the federal Negotiating Rulemaking Act,
5 U.S.C. Sections 561 to 570.
SECTION 304. NOTICE OF PROPOSED ADOPTION OF RULE
(a) Not later than [30] days before the adoption
of a rule, an agency shall file notice of the proposed rulemaking with the
[publisher] for publication in the [administrative bulletin]. The publisher
shall publish the notice in the [administrative bulletin]. The notice must
include:
(1) a short explanation of the purpose of the proposed
rule;
(2) a citation or reference to the specific legal
authority authorizing the proposed rule;
(3) the text of the proposed rule;
(4) how a copy of the full text of any regulatory
analysis of the proposed rule may be obtained;
(5) where, when, and how a person may comment on
the proposed rule and request a hearing;
(6) a citation to and summary of each scientific
or statistical study, report, or analysis that served as a basis for the proposed
rule, together with an indication of how the full text of the study, report, or
analysis may be obtained; and
(7) any summary of a regulatory analysis prepared
under Section 305(d).
(b) Not later than three days after publication
of the notice of the proposed rulemaking in the [administrative bulletin], the
agency shall mail the notice or send it electronically to each person that has
made a timely request to the agency for a mailed or electronic copy of the
notice. An agency may charge a reasonable fee for a mailed copy requested by a
person.
Comment
Many states have similar provisions
to provide notice of proposed rulemaking to the public. Most states have an
administrative bulletin that is published regularly. If a state does not have
an administrative bulletin, it will still have to comply with the publication
requirement. This section is based on the provisions of Section 3-103 of the
1981 MSAPA. Rule is defined in Section
102(27). Rulemaking is defined in Section 102(28). The publisher has the
responsibility to publish a notice of proposed rulemaking under Section
201(g)(1). Subsection (b) requires that individual notice of the proposed
rulemaking be provided in written or electronic form to each individual who has
made a timely request to the agency. To be timely under this subsection, the
request would have to be made prior to the publication of the notice of
proposed rulemaking.
Subsection (a)(6) This language is
adapted from N.Y. APA § 202-a. This language also codifies requirements used in
federal administrative law. In the federal cases, disclosure of technical
information underlying a rule has been deemed essential to effective use of the
opportunity to comment. See American
Radio Relay League v. FCC, 524 F.3d 227(D.C. Cir., 2008); Portland Cement Ass=n v. Ruckelshaus, 486 F.2d 375
(D.C. Cir. 1973).
SECTION 305. REGULATORY ANALYSIS.
(a) An agency shall prepare a regulatory analysis
for a proposed rule that has an estimated economic impact of more than $[ ]. The analysis must be completed before the
notice of the proposed rulemaking is published. The summary of the analysis prepared
under subsection (d) must be published with the notice of proposed rulemaking.
(b) If a proposed rule has an economic impact of
less than $[ ], the agency shall
prepare a statement of minimal estimated economic impact.
(c) A regulatory analysis must contain:
(1) an analysis of the benefits and costs of a
reasonable range of regulatory alternatives reflecting the scope of discretion
provided by the statute authorizing the proposed rule; and
(2) a determination whether:
(A) the benefits of the proposed rule justify the
costs of the proposed rule; and
(B)
the proposed rule will achieve the objectives of the authorizing statute
in a more cost effective manner, or with greater net benefits, than other
regulatory alternatives.
(d) An agency preparing a regulatory analysis
under this section shall prepare a concise summary of the analysis.
(e) An agency preparing a regulatory analysis
under this section shall submit the analysis to the [appropriate state agency].
(f) If an agency has made a good faith effort to
comply with this section, a rule is not invalid solely because the regulatory
analysis for the proposed rule is insufficient or inaccurate.
Legislative Note: State laws vary as to which state agency or
body that an agency preparing the regulatory analysis should submit that
analysis. In some states, it is the
department of finance or revenue, in others it is a regulatory review agency,
or regulatory review committee. The
appropriate state agency in each state should be inserted into the brackets.
Comment
Regulatory analyses are widely used
as part of the rulemaking process in the states. See Robert W. Hahn, “State and
Federal Regulatory Reform: A Comparative Analysis,” 29 J. Legal Stud. 873,
875-78 (2000); Richard Wisnant & Diane De Witt Cherry, “Economic Analysis
of Rules: Devolution, Evolution, and Realism,” 31 Wake Forest L.Rev. 693, 694
n.2 (1996). States should set the dollar amount of estimated economic impact
for triggering the regulatory analysis requirement of this section at a dollar amount so that as they deem
appropriate or by other approach make the choice to prepare regulatory analyses
carefully so that the number of regulatory analyses prepared by any agency are proportionate
to the resources that are available . The subsection also provides for submission to
the rules review entity in the state, if the state has one. States that already
have regulatory analysis laws can utilize the provisions of Section 305 to the
extent that this section is not inconsistent with existing law other than this
act. Agencies may rely on agency staff expertise and information provided by
interested stakeholders and participants in the rulemaking process. Agencies
are not required by this act to hire and pay for private consultants to
complete regulatory impact analysis. The concise summary of the regulatory
analysis required by subsection (d) means a short statement that contains the
major conclusions reached in the regulatory analysis. Subsection (f) is based on
1981 MSAPA Section 3-105(f).
SECTION 306. PUBLIC PARTICIPATION.
(a) An agency proposing a rule shall specify a
public comment period of at least [30] days after publication of the notice of the
proposed rulemaking during which a person may submit information and comment on
the proposed rule. The information or
comment may be submitted in an electronic or written format. The agency shall consider all information and
comment on a proposed rule which is submitted pursuant to this subsection within
the comment period.
(b) An agency may consider any other information
it received concerning the proposed rule during the rulemaking. Any information
considered by an agency must be incorporated into the record under Section
302(b)(3). The information need not be submitted in an electronic or written
format. Nothing in this section prohibits an agency from discussing with any
person at any time the subject of a proposed rule.
(c) Unless a hearing is required by law other
than this [act], an agency is not required to hold a hearing on a proposed rule. If an agency holds a hearing, the agency may
allow a person to make an oral presentation with information and comment about the
rule. The hearing must be open to the public, recorded, and held not later than
[10] days before the end of the public-comment period.
(d) A hearing on a proposed rule may not be held
earlier than [20] days after notice of its location, date, and time is
published in the [administrative bulletin].
(e) An agency representative shall preside over a
hearing on a proposed rule. If the
presiding agency representative is not the agency head, the representative
shall prepare a memorandum summarizing the contents of the presentations made
at the hearing for consideration by the agency head.
Legislative Note: State laws vary on the length of public
comment periods and on whether a rulemaking hearing is required. The bracketed
number of days in subsections (a) and (d) should be interpreted to require that
if a rulemaking hearing is held, it will be held before the end of the public
comment period. In that case, the minimum time period would be 50 days rather
than 30 days.
Comment
This section gives discretion to
the agency about whether to hold an oral hearing on proposed rules in the
absence of a statutory or constitutional requirement that an oral hearing be
held. The first sentence of subsection (a) is based on 1981 MSAPA Section
3-104(a). Subsection (b) is based on 1981 MSAPA Section 3-104(b)(2). Under
subsection (c), the agency may extend the comment period for 10 days after the
hearing in cases in which the agency holds a rule making hearing under this
subsection. Subsection (e) is based on 1981 MSAPA Section 3-104(b)(3). The
agency representative described in subsection (e) need not be an officer or
employee of the agency unless that is required by law other than this [act]. In
some states, an employee of the state attorney general’s office will serve as
the agency representative presiding on a hearing related to rulemaking.
(a) An agency may not adopt a rule until the public
comment period has ended.
(b) Not later than [two years] after the notice of
proposed rulemaking, the agency shall adopt a rule pursuant to the rulemaking
proceeding or terminate the proceeding by publication of a notice of
termination in the [administrative bulletin]. [The agency may extend the time
for adopting the rule for an
additional [two years] by publishing a
statement of good cause for the extension, but must provide for additional
public participation as provided in Section 306 prior to adopting the rule.]
(c) An agency shall file an adopted rule with the [publisher]
not later than [ ] days after the
adoption of the rule.
(d) A rule is void unless it is adopted and filed
within the time limits set by this section.
Comment
This section codifies the final
adoption and filing for publication requirements for rulemaking that is subject
to the procedures provided in Sections 304 through 308 of this Act. Subsection
(a) is based on 1981 MSAPA Section 3-106 (a). Section 702(a) of this act
requires that the agency shall file a copy of the adopted amended or repealed
rule with the rules review committee at the same time it is filed with the
publisher. Subsection (d) provides that a rule that is not properly adopted and
filed for publication has no legal effect.
SECTION 308. VARIANCE BETWEEN PROPOSED AND ADOPTED RULE. An agency may not adopt a rule that
differs from the rule proposed in the notice of proposed rulemaking unless the rule
adopted is a logical outgrowth of the rule proposed in the notice.
Comment
This section draws on provisions
from several states. See Mississippi Administrative Procedure Act, Miss. Code Ann. Section 25-43-3.107 and the Minn. Administrative
Procedure Act, M.S.A. Section 14.05. The
variance test adopted by state and federal courts is the logical outgrowth
test. If the adopted rule is a logical outgrowth of the proposed rule, no
further comment period is required. If it is not a logical outgrowth, then a
further comment period is required. At a minimum, the logical outgrowth test is
designed to ensure fair notice to affected persons. Long Island Care at Home Ltd. v. Coke 551 U.S. 158 (2007). Fair
notice is met when changes between the adopted rule and the proposed rule are
reasonable foreseeable from the proposed rule. Courts utilize several factors
to apply the logical outgrowth test including: (1) any person affected by the adopted rule should
have reasonably expected that the change from the published proposed rule would
affect the person’s interest; (2) the subject matter of the adopted rule or the
issues determined by that rule are different from the subject matter or issues
involved in the published rule proposed to be adopted; and (3) the effect of
the adopted rule differs from the effect of the rule proposed to be adopted or
amended. 1981 MSAPA Section 3-107 dealt with variance by using the language
“substantially different” as the test for improper variance. The “logical outgrowth” language used in
Section 308 is based on the case law set forth below.
The following cases discuss and
analyze the logical outgrowth test and these factors. These judicial opinions also convey the wide
acceptance and use of the logical outgrowth test in the states. First Am. Discount Corp. v. Commodity
Futures Trading Comm=n,
222 F.3d 1008, 1015 (D.C.Cir.2000); Arizona Pub. Serv. Co. v. EPA, 211
F.3d 1280, 1300 (D.C.Cir.2000); American Water Works Ass=n v. EPA, 40 F.3d 1266, 1274
(D.C.Cir.1994); Trustees for Alaska v. Dept. Nat. Resources, 795 P.2d 805 (1990); Sullivan v. Evergreen
Health Care, 678 N.E.2d 129 (Ind. App. 1997); Iowa Citizen Energy
Coalition v. Iowa St. Commerce Comm. ___IA___, 335 N.W.2d 178 (1983); Motor
Veh. Mfrs. Ass=n
v. Jorling, 152 Misc.2d 405, 577 N.Y.S.2d 346 (N.Y.Sup.,1991); Tennessee
Envir. Coun. v. Solid Waste Control Bd., 852 S.W.2d 893 (Tenn.
App. 1992); Workers=
Comp. Comm. v. Patients Advocate, 47 Tex.
607, 136 S.W.3d 643 (2004); Dept. Of Pub. Svc. re Small Power Projects,
161 Vt. 97, 632 A.2d 13 73 (1993); Amer. Bankers Life Ins. Co. v. Div. of
Consumer Counsel, 220 Va. 773, 263 S.E.2d 867 (1980).
SECTION 309. EMERGENCY RULE. If an agency finds that an imminent peril
to the public health, safety, or welfare, or the loss of federal funding for an
agency program, requires the immediate adoption of a rule and publishes in a
record its reasons for that finding, the agency, without prior notice or
hearing or on any abbreviated notice and hearing that it finds practicable, may
adopt a rule without complying with Sections 304 through 307. The adoption may
be effective for not longer than [180] days [renewable once up to an additional
[180] days]. The adoption of an
emergency rule does not preclude the adoption of a rule under Sections 304
through 307. The agency shall file with
the [publisher] a rule adopted under this section as soon as practicable given
the nature of the emergency, shall publish the rule on its Internet website, and
shall notify persons that have requested notice of rules related to that
subject matter. This section does not prohibit the adoption of a new emergency
rule if, at the end of the effective period of the original emergency rule, the
agency finds that the imminent peril to the public health, safety, or welfare,
including the loss of federal funding
for an agency program, still exists.
Comment
This section is taken from the 1961
MSAPA, Section 3(2)(b), and the Virginia Administrative Procedure Act, Va. Code
Ann. Section 2.2-4012.1. Many states
have emergency rulemaking provisions that are based on these provisions of the
1961 MSAPA. See N.Y.S. A. Section 202(6); F.S.A. Section 120.54(4)(a); 29 Del.
Stats. Ch. 101, Section 10119; Utah Stats.Ch 63G-3-304; and Wash. Stats.RCW
34.05.350. Some state courts will invalidate an emergency rule when the agency
has not established that there is an emergency that justifies the use of
emergency rulemaking procedures. Citizens for a Better Environment v. Illinois
Pollution Control Bd. 152 Ill.App.3d 105, 504 N.E.2d 166 (Ill.App. 1 Dist., 1987).
Both the 1981 MSAPA Section 3-108(a) and the federal Administrative Procedure
Act, 5 U.S.C. Section 553(b)(B) use the “unnecessary, impracticable or contrary
to the public interest” good cause standard for the same purposes as the imminent
peril standard used in this section and in the 1961 MSAPA Section (3)(2)(b).
For scholarly commentary, See Michael Asimow, “Interim Final Rules: Making
Haste Slowly,” 51 Admin. L. Rev. 703, 712-15 (1999); Ellen R. Jordan, “The
Administrative Procedure Acts Good Cause Exemption,” 36 Admin. L. Rev. 113,
132-33(1984).
This Section can be used to adopt program requirements necessary to
comply with federal funding requirements, or to avoid suspension of federal funds
for noncompliance with program requirements. When an emergency rule has the
effect of repealing an existing rule, the impact of the end of the emergency on
the repealed rule, whether the repealed rule comes back into existence, is not
governed by the provisions of Section 309 but would be governed by law of this
state other than this act, such as the governing statute that delegates
rulemaking authority to the agency that issued the emergency rule.
SECTION 310. DIRECT FINAL RULE.
If an agency proposes to adopt a rule which is expected to be noncontroversial, it
may use direct final rulemaking authorized
by this subsection and must comply with Section 304 (a)(1), (2), (3), and (5), Section
304(b), and Section 313(1). The proposed rule must be published in the
[administrative bulletin] along with a statement by the agency that it does not
expect the adoption of the rule to be controversial and that the proposed rule takes
effect 30 days after publication if no objection is received. If no objection is received, the rule becomes
final under Section 317(e). If an objection to the use of direct final rulemaking
is received from any person not later than [ ] days after publication of the public
notice, the proposed rule does not become final. The agency shall file notice
of the objection with the [publisher] for publication in the [administrative
bulletin], and may proceed with rulemaking under Sections 304 through 307.
Comment
Section 310 Direct final rulemaking
has been recommended by the Administrative Conference of the United States
[ACUS Recommendation 95-4, 60 Fed. Reg. 43110 (1995)]. The study that provided
the basis for the recommendation was prepared by Professor Ronald M. Levin and
has been published [Ronald M. Levin, “Direct Final Rulemaking” 64 George
Washington Law Review 1 (1995)]. Section 310 provides a procedure for direct
final rulemaking that applies to noncontroversial rules. Under this rule when
the agency is merely making a stylistic correction or correcting an error that
the agency believes is noncontroversial, the rule may be adopted without full
rulemaking procedures. See the VA Fast-Track Rule provision at Va. Code Ann.
Section 2.2-4012.1.]
In order to prevent misuse of this
procedural device, noncontroversial rule promulgation may be prevented by the
objection of any person. The public comment period provides notice of the
noncontroversial rule and the opportunity to object to the adoption of the
rule. If an objection to the direct
final rulemaking process is received within the public comment period, the agency
must give notice of the objection and then the agency may proceed with the
normal rulemaking process, including the public comment provisions of Section 306.
SECTION 311. GUIDANCE DOCUMENT.
(a) An agency may issue a guidance document
without following the procedures set forth in Sections 304 through 308.
(b) An agency that proposes to rely on a guidance
document to the detriment of a person in any administrative proceeding must
afford the person an adequate opportunity to contest the legality or wisdom of a
position taken in the document. The
agency may not use a guidance document to foreclose consideration of issues
raised in the document.
(c) A guidance document may contain binding
instructions to agency staff members if, at an appropriate stage in the
administrative process, the agency’s procedures provide an affected person an
adequate opportunity to contest a position taken in the document as illegal or
unwise.
(d)
If an agency proposes to act in an adjudication
at variance with a position expressed in a guidance document, it shall provide
a reasonable explanation for the variance.
If an affected person in an adjudication 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 variance outweighs the
affected person’s reliance interest.
(e) An agency shall maintain an index of all of
its currently effective guidance documents, publish the index on its Internet
web site, make all guidance documents available to the public, and file the
index [annually] with the [publisher]. The agency may not rely on a guidance
document, or cite it as precedent against any party to a proceeding, unless the
guidance document is published on its Internet website.
(f) A guidance document may be considered by a
presiding officer or final decision maker in an agency adjudication, but it
does not bind the presiding officer or the final decision maker in the exercise
of discretion.
(g) A
person may petition an agency under Section 318 to adopt a rule in place of a
guidance document.
(h) A person may petition an agency to revise or
repeal a guidance document. Not later than [60] days after submission of the
petition, the agency shall:
(1) revise or repeal the guidance document;
(2) initiate a proceeding for the purpose of
considering a revision or repeal; or
(3) deny the petition in a record and state its
reasons for the denial.
Comment
This
section seeks to encourage an agency to advise the public of its current
opinions, approaches, and likely courses of action by using guidance documents
(also commonly known as interpretive rules and policy statements). The section
also recognizes agencies’ need to promulgate such documents for the guidance of
both its employees and the public. Agency law often needs interpretation, and
agency discretion needs some channeling. The public needs to know the agency’s
opinion about the meaning of the law and rules that it administers. Increasing
public knowledge and understanding reduces unintentional violations and lowers
transaction costs. See Michael Asimow, “California Underground Regulations,” 44
Admin. L. Rev. 43 (1992); Peter L. Strauss, “Publication Rules in the
Rulemaking Spectrum: Assuring Proper Respect for an Essential Element,” 53
Admin. L. Rev. 803 (2001). This section
strengthens agencies’ ability to fulfill these legitimate objectives by
excusing them from having to comply with the full range of rulemaking procedures
before they may issue these nonbinding statements. At the same time, the section incorporates
safeguards to ensure that agencies will not use guidance documents in a manner
that would undermine the public’s interest in administrative openness and accountability.
Four states
have adopted detailed provisions regulating guidance documents in their
administrative procedure acts. See Ariz. Rev. Stat. Ann. §§ 41-1001, 41-1091; Mich. Comp. Laws §§ 24.203, 24.224; Va. Code Ann. § 2.2-4008; Wash. Rev. Code
Ann. § 34.05.230. This section draws on
those provisions, and also on requirements and recommendations issued by
federal authorities and the American Bar Association.
The term guidance document is
defined in section 102(12) and is excluded from the definition of rule in
section 102(27)(F). 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).
A guidance document, in contrast to
a rule, lacks the force of law. Many
state and federal decisions recognize the distinction. See, e.g., Brock v. Cathedral Bluffs Shale
Oil Co., 796 F.2d 533 (D.C. Cir. 1986); District of Columbia v. Craig, 930 A.2d
946, 968-69 (D.C. 2007); Clonlara v. State Bd. of Educ., 501 N.W.2d 88, 94
(Mich. 1993); Penn. Human Relations Comm’n v. Norristown Area School Dist., 374
A.2d 671, 678 (Pa. 1977).
Subsection (b) requires an agency
to allow affected persons to challenge the legality or wisdom of guidance
documents when it seeks to rely on 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”); Robert A.
Anthony, “Interpretive Rules, Policy Statements, Guidances, Manuals, and the
Like – Should Federal Agencies Use Them to Bind the Public?,” 41 Duke L.J. 1311
(1992).
An integral aspect of an adequate
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); Anthony, supra. 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 on 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 precedents.
See subsection (d) infra.
What constitutes an adequate
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 an adequate 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 1981 MSAPA § 5-116(c)(8)(iii) (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”); 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. Subsection (d) refers only to official acts of the agency
(compare the definition of “agency action” in Section 102(3)), not to informal
acts of agency staff, such as inspections. The latter types of conduct are
frequently not accompanied by a written statement at all, so it would be
outside the scope of requirements imposed by subsection (d) to require these
government personnel to “explain” a departure from the position taken in a
guidance document.
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 (e) 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 Section
508(b), a court may invoke the sanction prescribed in this section without
necessarily concluding that the party against whom the document is cited has
valid objections to the substance of the document.
Subsection
(g) is based on Wash. Rev. Code Ann. § 34.05.230(2), which provides for
petitions “requesting the conversion of interpretive and policy statements into
rules.” However, it is phrased more generally than the Washington provision, because an agency that
receives a rulemaking petition will not necessarily wish to “convert” the
existing guidance document into a rule without any revision. Knowing that
it will now be speaking with the force of law, in a format that would be more
difficult to alter than a guidance document is, the agency might prefer to
adopt a rule that is narrower than, or otherwise differently phrased than, the
guidance document that it would replace. In any event, the agency will,
as provided in section 318, 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 318 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(b). 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 318, are reviewable for abuse of
discretion, and the agency’s explanation will provide a basis for any judicial
review of the denial.
When an agency grants a petition to
revise or repeal a guidance document in part, and denies the petition in part,
the agency should explain the partial denial to comply with the requirements of
Section 311(h)(3).
SECTION 312. REQUIRED INFORMATION FOR RULE. An adopted rule filed by an agency with the
[publisher] under Section 316 must contain the text of the rule adopted and be
accompanied by a record that contains:
(1) the date the agency adopted the rule;
(2) a reference to the specific statutory or
other authority authorizing the rule;
(3) any finding required by law as a prerequisite to adoption or
effectiveness of the rule;
(4) the effective date of the rule; and
(5) the statement required by Section 313.
Comment
This section is based on 1981 MSAPA
Section 3-111 (a). Agency action is defined in section 102(3) to include an
agency rule or order [(subsection (3)(a)], and the failure to issue a rule or
order [(subsection (3)(b)]. The term adoption in this section should be read
with the definition of the term “rulemaking” in Section102 (28). The term rulemaking
includes the adoption of a new rule and the amendment or repeal of an existing
rule.
SECTION 313. CONCISE EXPLANATORY STATEMENT. At the time it adopts a rule, an agency shall
issue a concise explanatory statement that contains:
(1) the agency’s reasons for adopting the rule, including
the agency’s reasons for not accepting substantial arguments made in testimony
and comments;
(2) subject to Section 308, the reasons for any change
between the text of the proposed rule contained in the notice of
proposed rulemaking and the text of the rule as finally adopted; and
(3)
the summary of any regulatory analysis
prepared under Section 305(d).
Comment
This section is based on 1981 MSAPA
Section 3-110(a). Many states have adopted the requirement of a concise
explanatory statement. Arkansas (A.C.A.
Section 25-15-204) and Colorado
(C.R.S.A. Section 24-4-103) have similar provisions. The federal Administrative
Procedure Act uses equivalent terms in Section 553 (c) (5 U.S.C.A. Section
553). This provision also requires the
agency to explain why it rejected substantial arguments made in comments. Such explanation helps to encourage agency
consideration of all substantial arguments and fosters perception of agency
action as not arbitrary. Subsection (2) requires a statement of reasons for any
substantial change between the text of the proposed rule, and the text of the
adopted rule. Section 308 prohibits adoption of a rule that differs from the proposed
rule unless the adopted rule is the logical outgrowth of the proposed rule. An
adopted rule that contains a substantial change from the proposed rule can be
adopted under Section 308 if the logical outgrowth test is satisfied but the
agency will have to provide a statement of reasons under Section 313(2). If the
logical outgrowth test is not met, then the rule can not be adopted under
Section 308, and section 313(2) does not apply.
Agency action is defined in section
102(3) to include an agency rule or order [(subsection (3)(a)], and the failure
to issue a rule or order [(subsection (3)(b)]. The term adoption in this
section should be read with the definition of the term “rulemaking” in
Section102 (28). The term rulemaking includes the adoption of a new rule and
the amendment or repeal of an existing rule.
SECTION 314. INCORPORATION BY REFERENCE. A rule may incorporate by reference all or
any part of a code, standard, or rule that has been adopted by an agency of the
United States, this state, or another state, or by a nationally recognized
organization or association, if:
(1) repeating verbatim the text of the code,
standard, or rule in the rule would be unduly cumbersome, expensive, or
otherwise inexpedient;
(2) the reference in the rule fully identifies
the incorporated code, standard, or rule by citation, place of inspection, and date[,
and states whether the rule includes any later amendments or editions of the
incorporated code, standard, or rule];
(3) the code, standard, or rule is readily
available to the public in written or electronic form at no charge or for a
reasonable charge;
(4) the rule states where copies of the code,
standard, or rule are available from the
agency adopting the rule, for a reasonable charge, if any, or where copies are
available from the agency of the United States, this state, another state, or
the organization or association originally issuing the code, standard, or rule;
and
(5) the agency maintains a copy of the code,
standard, or rule readily available for public inspection at the principal
office of the agency.
Comment
Several states have provisions that require
the agencies to retain the voluminous technical codes. See, Alabama,
Ala.Code 1975 Section 41-22-9; Michigan,
M.C.L.A. 24.232; and North Carolina,
N.C.G.S.A. § 150B-21.6. To avoid the
problems created by those retention provisions, but to assure that these
technical codes are available to the public, this section adopts several
specific procedures. One protection is
to permit incorporating by reference only codes that are readily available from
the outside promulgator, and that are of limited public interest as determined
by a source outside the agency. See Wisconsin,
W.S.A. 227.21. These provisions will
guarantee that important material drawn from other sources is available to the
public, but that less important material that is freely available elsewhere
does not have to be retained. The bracketed language in subsection (2) is based
on variations in state law as to whether later amendments to codes are
automatically incorporated into the rule, or whether a new rulemaking
proceeding would be required to include code amendments. This issue is
discussed in Jim Rossi, “Dual Constitutions and
Constitutional Duels: Separation of Powers and State Implementation of
Federally Inspired Regulatory Programs and Standards,” 46 W&M L.Rev. 1343
(2005).
SECTION 315. COMPLIANCE. An action taken under this [article], including
the adoption of a rule under Section 309 or 310, is not valid unless taken in
substantial compliance with this [article].
Comment
This section is a slightly modified
form of the 1961 Model State Administrative Procedure Act, section (3)(c). See
also 1981 MSAPA Section 3-113(a). Section
503(a) governs the timing of judicial review proceedings to contest any rule on
the ground of noncompliance with the procedural requirements of this [act]. The
scope of challenges permitted under Section 503(a) includes all applicable
requirements of article 3 for the type of rule being challenged.
SECTION 316. FILING OF RULE. An agency shall file in written and
electronic form with the [publisher] each rule it adopts, including a rule adopted
under Section 309 or 310. In filing an adopted rule, an agency shall use a
standard form prescribed by the [publisher]. The agency shall file the rule not later than
[ ] days after adoption. The [publisher] shall maintain a permanent
register of all filed rules and concise explanatory statements for the rules.
The [publisher] shall affix to each adopted rule a certification of the time
and date of filing. The [publisher] shall publish the notice of each adopted rule
in the [administrative bulletin].
Comment
This section is based on the 1961
Model State Administrative Procedure Act, Section 4(a) and its expansion in the
1981 MSAPA, Section 3-114(a). Section 201(g)(2) provides that the
administrative bulletin must contain newly filed adopted rules. This section
provides that the publisher is responsible for publishing the notice of adopted
rules in the administrative bulletin.
SECTION 317.
EFFECTIVE DATE OF RULES.
(a) Except as otherwise
provided in this section, [unless disapproved by the [rules review committee]
or [withdrawn by the agency under Section 703,] a rule becomes effective [30]
days after publication of the rule [in the administrative bulletin] [on the [publisher]=s Internet web site.]
(b) A rule may become effective on a date later than
that established by subsection (a) if that date is required by law other than
this [act] or specified in the rule.
(c) A rule becomes effective immediately on its
filing with the [publisher] or on any subsequent date earlier than that
established by subsection (a) if it is required to be implemented by a certain
date by the federal or [state] constitution, a statute, or court order.
(d) A rule adopted using the emergency process
under Section 309 becomes effective on adoption by the agency.
(e) A rule adopted using direct final rulemaking under
Section 310 to which no objection is made becomes effective [30] days after publication,
unless the agency specifies a later effective date.
Comment
This is a substantially revised
version of the 1961 Model State Administrative Procedure Act, Section 4 (b) &
(c) and 1981 Model State Administrative Procedure Act, Section 3-115. Most of
the states have adopted provisions similar to both the 1961 Model State
Administrative Procedure Act and the 1981 Model State Administrative Procedure
Act, although they may differ on specific time periods. Some rules may have
retroactive application or effect provided that there is express statutory
authority for the agency to adopt retroactive rules. See Bowen v. Georgetown University
Hospital 488 U.S. 204 (1988).
SECTION 318. PETITION FOR ADOPTION OF RULE. Any person may petition an agency to adopt a
rule. An agency shall prescribe by rule the form of the petition and the
procedure for its submission, consideration, and disposition. Not later than
[60] days after submission of a petition, the agency shall:
(1) deny the petition in a record and state its
reasons for the denial; or
(2) initiate rulemaking .
Comment
This section is substantially
similar to the 1961 MSAPA Section 6.. See also Section 3-117 of the 1981 MSAPA.
Agency decisions that decline to adopt a rule are judicially reviewable for
abuse of discretion (See Massachusetts v. EPA 127 S. Ct.
1438 (2007) (EPA decision to reject rulemaking petition and therefore not to
regulate greenhouse gases associated with global warming was judicially
reviewable and decision was arbitrary and capricious.). When an agency grants a
rulemaking petition in part, and denies the petition in part, the agency should
explain the partial denial to comply with the requirements of Section 318(1).
SECTION
401. CONTESTED CASE. This [article] applies to an adjudication
made by an agency in a contested case.
Comment
Article 4 of this Act does not
apply to all adjudications but only to those adjudications, defined in Section
102(7) as a “contested case.” An adjudication that is not made in a contested
case is not subject to this article but is subject to Sections 311(d) and (f),
and Article 5. For a statute to create a right to an evidentiary hearing,
express use of the term “evidentiary hearing” is not necessary in the statute.
Statutes often use terms like “appeal” or “proceeding” or “hearing”, but in
context it is clear that they mean an evidentiary hearing. An evidentiary
hearing is one in which the resolution of the dispute involves particular facts
and the presiding officer’s decision is based on the hearing record. Hearing
rights are created by statutes that establish an agency and delegate powers to
the agency (agency enabling acts). The provisions of this [act] do not create
hearing rights. Article Four does not apply to adjudications that are not a
contested case. See Goss v. Lopez 419 U.S. 565 (1975) for an example of
informal adjudication procedures required when a public school district
suspends students for ten days or less. In those circumstances the constitution
does not require an an opportunity for an evidentiary hearing.
The term “contested case” used in this section
is similar to the “contested case” definition in Section 1(2) of the 1961
MSAPA. Like the 1961 MSAPA Section 9, this Act looks to external sources such
as statutes and constitutions to determine when a party is entitled to a hearing. However, this term differs from the 1961
MSAPA’s term “contested case” because it also includes hearings required by the
constitution, federal or state, and makes provision in Article 4 for the type
of hearing to be held in a case where a constitution creates the right to a
hearing. Including constitutionally
created rights to a hearing within the provisions of this Act eliminates the
problem of looking outside the Act to determine the type of hearing required in
cases where the right to the hearing is created by a constitution. Hearing
rights created by judicial decisions mean a constitutional decision by a court
in that state. See Goldberg v. Kelley, 397 U.S. 254 (1970). The definition of
“contested case” should be read in conjunction with the definitions of
“adjudication” under Section 102(1), “evidentiary hearing” under Section 102(10),
and of “order”, Section 102(20), infra. Article Four procedures apply to
adjudications that are contested cases, Section 401, and that result in a final
order of the agency, Section 413.
This Section is subject to the
exception in Section 407 for an emergency hearing if the requirements for that
exception under this Article apply. If
the requirements for an emergency adjudication under Section 407 are met, a
hearing in a contested case may be conducted following the procedures in that
section. This is an external hearing rights approach that is consistent with
the 1961 MSAPA Section 9. Hearings that
are required by procedural due process guarantees serve to protect life,
liberty and property interests, which arise where a statute creates a
justified expectation or legitimate entitlement. This section includes more
than what were described as “rights” under older common law.
Section 401 does not apply to
adjudications that are not a contested case. However, these types of
adjudications are subject to the provisions of Article 5 governing judicial
review, and they are subject to the provisions of Section 311(d), and (f),
governing variance by the agency from a position supported by a guidance
documents and use of guidance documents in agency adjudication, respectively.
Those requirements apply to all adjudications, including informal
adjudications, and not just to contested cases. Section 401, governing
contested case hearings, does not apply to investigatory hearings, a hearing
that merely seeks public input or comment, pure administrative process
proceedings such as tests, elections, or inspections, and situations in which a
party has a right to a de novo administrative or judicial hearing. An agency
may by rule make all or part of article 4 applicable to adjudication that does
not fall within the requirements of Section 401, including hearing rights
conferred by agency regulations, or on the record appeals.
This section draws on the Minnesota,
(see Minnesota Statutes Annotated, Section 14.02, subd. 3); Washington (see
Revised Code of Washington, 34.05.413(2)) and Kansas (see Kansas Stat. Ann., KS
ST Section 77-502(d) & Kansas Stat. Ann., KS ST Section 77-503)
Administrative Procedure Acts.
(a) A presiding officer must be an administrative
law judge assigned in accordance with Section 604(2), the individual who is the
agency head, a member of a multi-member body of individuals that is the agency
head, or, unless prohibited by law of this state other than this [act], an individual
designated by the agency head.
(b) An individual who has served as investigator,
prosecutor, or advocate at any stage in a contested case or who is subject to
the authority, direction, or discretion of an individual who has served as
investigator, prosecutor, or advocate at any stage in a contested case may not
serve as the presiding officer in the same case. An agency head who has
participated in a determination of probable cause or other preliminary determination
in an adjudicative proceeding may serve as the presiding officer or final
decision maker in the same proceeding unless a party demonstrates grounds for
disqualification under subsection (c).
(c) A presiding officer or agency head is subject
to disqualification for bias, prejudice, financial interest, ex parte
communications as provided in Section 408(h), or any other factor that would cause
a reasonable person to question the impartiality of the presiding officer or
agency head. A presiding officer or
agency head, after making a reasonable inquiry, shall disclose to all parties any
known facts related to grounds for disqualification which are material to the
impartiality of the presiding officer or agency head in the proceeding.
(d) Any party may petition for the
disqualification of a presiding officer or agency head promptly after notice that
the person will preside or, if later, promptly on discovering facts
establishing a ground for disqualification. The petition must state with
particularity the ground on 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. The petition may be denied if the party
fails to exercise due diligence in requesting disqualification after
discovering a ground for disqualification.
(e) A presiding officer or agency head whose
disqualification is requested shall determine whether to grant the petition and
state in a record facts and reasons for the determination in a record. The
decision of a presiding officer or an agency head to deny disqualification is
not subject to interlocutory judicial review.
(f) If a substitute presiding officer is
required, the substitute must be appointed [as required by law, or if no law governs,]
by:
(1) the Governor, if the original presiding
officer is an elected official; or
(2) the appointing authority, if the original
presiding officer is an appointed official.
(g) If participation of the agency head is
necessary to enable the agency to take action, the agency head may continue to
participate notwithstanding a ground for disqualification or exclusion.
Legislative Note: The first alternative under subsection (a)
would be applicable in states that have adopted central panel hearing offices
but would not apply to states that do not have central panel hearing
offices. Article 6 governs central panel
hearing offices under this act. If a state does not have a central panel
hearing agency, presiding officers would include administrative law judges who
are employees of the agency with final decisional authority. States
vary in the terms used to describe agency employees who are presiding officers.
The term includes administrative judges, hearing officers, and hearing
examiners. Administrative law judges can
be employees of the central panel hearing office or of the agency with final
decision authority.
Comment
Section 402(a) is based on 1981
MSAPA Section 4-202(a). Subsection (a) governs who may be appointed to serve as
a presiding officer in a contested case.
If the case is heard by a multimember body of individuals as the agency
head, , one member of the agency head
may serve as chair, but all of the persons sitting as judge in the case are
collectively the presiding officer. Otherwise, the presiding officer will be a
single individual, either the agency head, or an individual designated by the
agency head, or one or more administrative law judges assigned by the Office of
Administrative Hearings in accordance with Section 604(2). The term presiding
officer is defined in Section 102(23), and the term agency head is defined in
Section 102(4). Subsection (a) confers a limited amount of discretion on the
agency head to determine who will preside.
This discretion is also limited by the phrase “unless prohibited by law
of this state other than this act,” 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 (a) provides for states that have created a central panel of
administrative law judges, and have made the use of administrative law judges
from the central panel mandatory unless the agency head or one or more members
of the agency head presides. In some states, however, the use of central panel
administrative law judges is mandatory only in certain enumerated agencies or
types of proceedings. Half of the states have central panels. For those states
with central panels, the first clause in subsection (a) would harmonize Section
401 with the existing central panel legislation. For states that do not have a
central panel agency, this first clause would not apply.
Subsection (b) is based on 1981
MSAPA Section 4-214. Subsection (b) prohibits agency employees from serving as
presiding officers in a specific contested case if they have served in the same
case as a staff adversary or advocate, or if they are subject to supervision by
a staff advocate or adversary in the same case. These employees are subject to
the ex parte communication prohibitions contained in section 408 and to
disqualification under subsection (c).
Subsection (c) is based in part on
1981 MSAPA Section 4-202(b).
Subsection (d) is based on 1981
MSAPA Section 4-202(c).
Subsection (e) is based in part on
1981 MSAPA Section 4-202(d). 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.
Subsection (f) is based on 1981
MSAPA Section 4-202(e). Subsection (g)
adopts the rule of necessity for agency 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 of all
Article III judges).
SECTION 403. CONTESTED CASE PROCEDURE.
(a) This section does not apply to an emergency
adjudication.
(b)
In a contested case, the agency shall
make available to the person to which the agency action is directed a copy of the
agency procedures governing the case. The
agency shall give notice of the agency decision to a person when the agency
takes an action as to which the person has a right to a contested case hearing.
The notice must be in writing, set forth the agency action, and inform the
person of the right, procedure, and time limit to file a contested-case
petition.
(c) In a contested case, the presiding officer
shall give all parties a timely opportunity to file pleadings, motions, and objections.
The presiding officer may give all parties the opportunity to file briefs,
proposed findings of fact and conclusions of law, and recommended, initial, or
final orders. The presiding officer,
with the consent of all parties, may refer the parties in a contested case
proceeding to mediation or other dispute resolution procedure.
(d) In a contested 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.
(e) Except as otherwise provided by law other than
this [act], the presiding officer may conduct all or part of an evidentiary
hearing or a prehearing conference by telephone, television, video conference, or
other electronic means as provided in this subsection. The hearing may be
conducted by telephone or other method by which the witnesses may not be seen only
if the parties consent [or the presiding officer finds that this method will
not impair reliable determination of the credibility of testimony]. Each party must
be given an opportunity to attend, hear, speak, and be heard at the proceeding
as it occurs. Nothing in this subsection prevents an agency from providing by
rule for electronic hearings.
(f) Except as otherwise provided in subsection
(g), a hearing in a contested case must be open to the public. A hearing conducted by telephone, television,
video conference, or other electronic means is open to the public if members of
the public have an opportunity to attend the hearing at the place where the
presiding officer is located or they have an opportunity to hear or see the
proceeding as it occurs.
(g) A presiding officer may close a hearing to the
public on a ground on which this state may close a judicial proceeding to the
public or pursuant to a statute other than this [act].
(h) Unless prohibited by law other than this
[act], a party, at the party’s expense, may be
represented by counsel or may be
advised, accompanied, or represented by another individual.
(i) A presiding officer shall ensure that a
hearing record is created.
(j) The decision in a contested case must be
based on the hearing record, and contain a statement of the factual and legal
bases of the decision. Findings of fact, if set forth in statutory language,
shall be accompanied by a concise and explicit statement of the underlying
facts supporting the findings. The decision must be prepared electronically or,
on request, in writing,
(k) Subject to Section 205, the rules by which an
agency conducts a contested case may include provisions more protective of the
rights of parties to an agency adjudication than the requirements of this
section.
(l) Unless prohibited by law other than this [act],
an agency may make an informal disposition of any contested case by
stipulation, agreed settlement, consent order, or default.
Comment
This section specifies the minimum
hearing procedure requirements that must be met in contested cases under this
act. This section applies to all agencies whether or not an agency rule
provides for a different procedure; this procedure is excused only if a statute
expressly provides otherwise. This section does not prevent an agency from
adopting more stringent procedures than those in this section. This section does not supersede conflicting
state or federal statutes.
There are several interrelated
purposes for this procedural provision: 1) to create a minimum fair hearing
procedure; and 2) to attempt to make that minimum procedure applicable to all
agencies. In many states, individual agencies have lobbied the legislature to
remove various requirements of the state Administrative Procedure Act from
them. The result in a considerable number of states is a multitude of divergent
agency procedures. This lack of procedural uniformity creates problems for
litigants, the bar and the reviewing courts. This section attempts to provide a
minimum, universally applicable procedure in all disputed cases. The important
goal of this section is to protect citizens by a guarantee of minimum fair
procedural protections. The procedures required here are only for actions that
fit the definition of a contested case and fall within the provisions of
Section 401. Thus, they do not spread
quasi judicial procedures widely, and do not create any significant agency loss
of efficiency or increased cost.
This section is modeled in part on
the Arizona Regulatory Bill of Rights, see A.R.S. Section 41-1001.01 and the
California Administrative Adjudication Bill of Rights, see West
Ann.Cal.Gov.Code Section 11425.10.
Subsection (a) excludes emergency
adjudications from the requirements of this Section. Section 407 provides for
the procedures to be used in emergency adjudications.
Subsection
(b) requires the agency to make available to a person to which an agency action
is directed a copy of the agency procedures governing the contested case. Those
agency procedures would include applicable procedures published by the agency
under Section 203(2), procedures required under the agency governing statute, and
procedural rules adopted under Section 205(a), or (c). The second sentence of subsection (b)
requires that the agency give notice to a person when the agency takes an
action and the person has a right to a contested case hearing to challenge the
agency action. This notice would precede the filing of a contested case
proceeding. The notice requirements in Section 405 would apply when the
contested case proceeding has commenced. The third sentence of subsection (b)
is based on provisions of the North Carolina Administrative Procedure Act. N.C.
stats. § 150B-23(f).
Subsection
(c) is based in part on 1981 MSAPA Section 4-207. The first sentence of
subsection (c) is based on 1981 MSAPA Section 4-207(a). The second sentence of
subsection (c) is based on 1981 MSAPA Section 4-207(b). The third sentence of
subsection (c) is new, and authorizes the use of mediation and other
alternative dispute resolution procedures to resolve or settle contested cases.
Since the 1981 MSAPA was adopted, the use of mediation and other alternative
dispute resolution procedures has become widespread not only in civil
litigation but also in administrative adjudication. See the Administrative
Dispute Resolution Act, 5 U.S.C. Sections 571 to 583 (1990).
Subsection
(d) is based on 1981 MSAPA Section 4-211(2).
Subsection
(e) is based on 1981 MSAPA Section 4-211(4). Under subsection (e) hearings in
contested cases can be conducted using the telephone, television, video
conferences, or other electronic means. Due
process of law may require live in person hearings when there are disputed
issues of material fact that require the fact finder to make credibility
determinations. 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 Babcock 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). Telephone hearings are
widely used in high volume short hearing dockets such as unemployment
compensation hearings.
Subsection
(f) is based on the second sentence of 1981 MSAPA Section 4-211(6).
Subsection (g) is based on the
first sentence of 1981 MSAPA Section 4-211(6).
Subsection (h) is based on 1981
MSAPA Section 4-203(b).
Subsection (i) is based on the
first sentence of 1981 MSAPSA Section 4-211(5).
Subsection
(j) is based on 1961 MSAPA Section 12, and on 1981 MSAPA Section 4-211(5).
See also Section 202(a) requiring
an agency to publish on its Internet web site each final order in a contested
case, and the provisions of 15 U.S.C. Section 7004.
Subsection (k) is new, and permits
an agency to adopt procedural rules that are more protective of the rights of
parties to an agency adjudication than the requirements of this section,
subject to the provisions of Section 205(a) which provide for the adoption of
procedural rules which must be used by all agencies in the state under Section
205(b) unless the agency adopts their own rules under Section 205(c).
Subsection (l) is based on 1961
MSAPA Section 9(d).
SECTION 404. EVIDENCE IN CONTESTED CASE. The
following rules apply in contested cases:
(1) Except as otherwise provided by law other than this [act], when
the agency initiates a contested case, the agency has the burden of proof. When a party other than the agency initiates a
contested case, that party has the burden of proof.
(2) On proper objection, the presiding officer shall
exclude evidence that is irrelevant, immaterial, unduly repetitious,
excludable on constitutional or statutory grounds, or excludable on the basis
of an evidentiary privilege recognized in the courts of this state. Any other relevant evidence [including
hearsay evidence] may be received if it is of a type commonly relied on by a reasonably
prudent individual in the conduct of the affairs of the individual.
(3) The presiding officer may exclude evidence at
the time it is offered with or without objection. An objection must be made at
the time the evidence is offered. A party may make an offer of proof when
evidence is objected to or before the presiding officer’s decision to exclude
evidence.
(4) Evidence may be received in written form if
doing so will expedite the hearing without substantial prejudice to a
party. Documentary evidence may be
received in the form of a copy if the original is not readily available or by
incorporation by reference. On request,
parties must be given an opportunity to compare the copy with the original.
(5) Testimony must be made under oath or
affirmation.
(6) Evidence must be made part of the hearing
record of the case. Information or evidence may not be considered in determining
the case unless it is part of the hearing record. If the hearing record contains
information that is confidential, 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.
(7) The presiding officer may take official
notice of all facts of which judicial notice may be taken and of scientific,
technical, or other facts within the specialized knowledge of the agency. A party must be notified at the earliest
practicable time of the facts proposed to be noticed and their source, including
any staff memoranda or data. The party
must be afforded an opportunity to contest any officially noticed facts before
the decision becomes final.
(8) The experience, technical competence, and
specialized knowledge of the presiding officer may be used in the evaluation of
the evidence in the hearing record.
Comment
Subsection 404(1) is based on the
provisions of the Federal Administrative Procedures Act, 5 U.S.C. Section
556(d) and it governs the burden of proof in contested case hearings. The
burden of proof is assigned based on which party, the agency or the non agency
party, initiates a contested case. The
burden of proof includes the burden of production, which party has the
responsibility of coming forward with evidence, and it includes the burden of
persuasion, which party has the responsibility to be convincing in the evidence
presented. In most contested case hearings, the burden of persuasion is the
preponderance of the evidence standard. This is the same standard used in civil
trials in the court systems of most states. In some contested case hearings,
the clear and convincing evidence standard of persuasion is used, such as when
licensing agencies seek to revoke the license of a professional such as a
doctor or a lawyer.
The first sentence of subsection
(2) is based upon 1981 MSAPA Section 4-212(a). The second sentence of
subsection (2) is based upon 1961 MSAPA Section 10(1), and 1981 MSAPA Section
4-215(d). Subsection (2) codifies the rule that hearsay evidence is admissible
in contested case hearings whether or not a hearsay exception applies. This is
a relaxed standard for admissibility in contrast to the evidence rules in civil
jury proceedings in which hearsay evidence would not be admissible unless a
hearsay exception applied. See Section 413(f) for the legal residuum rule and
the reliability alternatives. Under
subsection (2) 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. The term statutory in subsection (2) refers to evidence
rules that are codified by statute in some states with an evidence code (See
California Evidence code).
The first sentence of subsection
(3) is based upon 1981 MSAPA Section 4-212(a). The second sentence of
subsection (3) is new but codifies generally accepted practices for evidentiary
objections.
The first sentence of subsection
(4) is based upon 1961 MSAPA Section 10 (1) and 1981 MSAPA Section 4-212(d). The
second and third sentences of subsection (4) is based upon 1961 MSAPA Section
10 (2), and 1981 MSAPA section 4-212(e).
Subsection
(5) is based on 1981 MSAPA Section 4-212(b).
Government Code Section 11515, and 1961 MSAPA
Section 10(4).
The first
and third sentences of subsection (6) are new. The second sentence of
subsection (6) is based on 1981 MSAPA Section 4-215(d), first sentence.
Subsection
(7) is based generally on 1961 MSAPA Section 10 (4), and on 1981 MSAPA Section
4-212(f).
Subsection
(8) is based upon 1961 MSAPA Section 10(4), fourth sentence, and 1981 MSAPA
Section 4-215(d), third sentence.
SECTION 405. NOTICE IN CONTESTED CASE.
(a) Except as otherwise provided for in an
emergency adjudication under Section 407, an agency shall give notice as
provided in this section.
(b) In a contested case initiated by a person
other than an agency, within [5] days after filing, the agency shall give
notice to all parties that an action has been commenced. The notice must contain:
(1) the official file or other reference number,
the name of the proceeding, and a general description of the subject matter;
(2) contact information for communicating with
the agency, including the agency mailing address and telephone number;
(3) a statement of the time, place, and nature of
the prehearing conference or hearing, if any; and
(4) the name, official title, mailing address,
and telephone number of any attorney or employee who has been designated to
represent the agency.
(c) In a contested case initiated by the agency,
the agency shall give an initial notice to the party against which the action
is brought. The notice must contain:
(1) notification that an action that may result
in an order has been commenced against the party;
(2) a short and plain statement of the matters
asserted, including the issues involved;
(3) a statement of the legal authority under
which the hearing is held citing the statutes and any rules involved;
(4) the official file or other reference number
and the name of the proceeding;
(5) the name, official title, [and] mailing
address, [and] [electronic mail address,] [and] [facsimile number,] of the
presiding officer and the name, official
title, [and] mailing address, [and] [electronic mail address,] [and] [facsimile
number,] and telephone number of the
agency’s representative;
(6) a statement that a party that 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 hearing or a prehearing conference is
scheduled, the agency shall give parties notice that contains the information required
by subsection (c) at least [30] days before the hearing or prehearing
conference.
(e) Notice may include other matters that the
presiding officer considers desirable to expedite the proceedings.
Comment
Section 405 is based generally on
1961 MSAPA Section 9 (a), and (b), and 1981 MSAPA Section 4-206. See also; Oregon, O.R.S. Section 183.415;
Kansas, K.S.A. Section 77-518; Iowa, I.C.A. Section 17A.12; Montana, MCA
2-4-601; and Michigan, M.C.L.A. 24.271.
Subsection (a) is new and provides
that notice requirements in this section apply to contested case proceedings
but do not apply to emergency adjudications which are governed by Section 407.
Subsection (b) is also new and codifies
a timing requirement for notice (within 5 days) and separate notice requirements
for an agency when a person other than an agency initiates a contested case proceeding.
This subsection would apply when a person other than an agency applies for a
license or for governmental benefits, and the agency denies the application.
The person may commence a contested case proceeding to challenge the denial of
the application. When a contested case proceeding is commenced, subsection (b)
requires the agency to give notice to all parties that the proceeding has been
commenced. The notice must contain the matters listed in subsection (b)(1) to
(b)(4). Subsection (b)(1) is based upon 1981 MSAPA Section 4-206(c)(3). Subsection
(b)(2) is new, and requires notice of agency contact information including the
agency mailing address and telephone number. Subsection (b)(3) is based upon
1961 MSAPA Section 9(b)(1), and 1981 MSAPA Section 4-206(c)(4). Subsection
(b)(4) is based upon 1981 MSAPA Section 4-206(c)(2).
Subsection (c) is new and applies
when the agency initiates a contested case proceeding against a person other
than the agency. This subsection applies when the agency seeks the revocation
of an existing professional license or seeks to terminate a recipient’s governmental benefits. When the
agency is required to provide the licensee or recipient with the opportunity
for a contested case hearing, the notice requirements of this subsection apply.
Subsection (c)(1) is new and requires notice that an action that may result in
an order has been commenced against the party notified. Subsection (c)(2) is
based on 1961 MSAPA Section 9(b)(4), and 1981 MSAPA Section 4-206(c)(7). Subsection
(c)(3) is based upon 1961 MSAPA Section 9 (b)(2), and 1981 MSAPA Section
4-206(c)(5). Subsection (c)(4) is based
upon 1981 MSAPA Section 4-206(c)(3). Subsection (c)(5) is a modified version of
1981 MSAPA Section 4-206(c)(2),(6) with electronic mail and facsimile
information requested. Subsection (c)(6) is based upon 1981 MSAPA Section
4-206(c)(8). Subsection (c)(7) is new and provides for plain language
instructions on how to request a hearing. Subsection (c)(8) is based upon 1981
MSAPA Section 4-206(c)(1).
Subsection (d) is a modified
version of 1981 MSAPA Section 4-206(a), with a minimum time limit of 30 days
notice before the hearing.
Subsection (e) is based upon 1981 MSAPA
section 4-206(d).
SECTION 406. HEARING RECORD
IN CONTESTED CASE.
(a) An agency shall maintain the hearing record created
under Section 403(i) in each contested case.
(b) The hearing record must contain:
(1)
a recording of the proceeding;
(2) notices of all proceedings;
(3) any prehearing order;
(4) any motion, pleading, brief, petition,
request, and intermediate rulings;
(5) evidence admitted, received, or considered;
(6) a statement of any matter officially noticed;
(7) any proffer of proof and objection and ruling
thereon;
(8) any proposed finding, requested order, and
exception;
(9) any transcript of the hearing;
(10) any recommended decision, final order, or
order on reconsideration; and
(11) any matter placed on the record after an ex
parte communication under Section 408(f).
(c) The hearing record constitutes the exclusive
basis for agency action in a contested case.
Comment
Section 406 is based generally on
1961 MSAPA Section 9(e) and 1981 MSAPA Section 4-221. Subsection (a) is a
modified version of 1981 MSAPA Section 4-221(a). Subsection (b)(1) is a modified
version of 1981 MSAPA Section 4-221(b)(8). Subsections (b)(2) to (8) are based
upon 1981 MSAPA Section 4-221(b)(1) to (7). Subsection (b)(9) is a modified
version of 1981 MSAPA Section 4-221(b)(8). Subsection (b)(10) is a modified
version of 1981 MSAPA Section 4-221(b)(9). Subsection (b)(11) is based upon
1981 MSAPA Section 4-221(b)(11).
Subsection (c) is a revised version of 1981 MSAPA Section 4-221(c). The
recording of an agency hearing can be made by certified shorthand reporter,
video or audio recording, or other electronic means. Judicial review under
Section 507 is limited to matters in the agency hearing record.
SECTION 407. EMERGENCY ADJUDICATION PROCEDURE.
(a) Unless prohibited by law other than this
[act], an agency may conduct an emergency adjudication in a contested case under
this section.
(b) An agency may take action and issue an order
under this section only to deal with an imminent peril to the public health,
safety, or welfare.
(c) Before issuing an order under this section, an
agency, if practicable, shall give notice and an opportunity to be heard to the
person to which the agency action is directed.
The notice and hearing may be oral or written and may be communicated by
telephone, facsimile, or other electronic means.
(d) An order issued under this section must
briefly explain the factual and legal reasons for making the decision using emergency
adjudication procedures.
(e) To the extent practicable, an agency shall
give notice of an order to the person to which the agency action is
directed. The order is effective when signed
by the agency head or the designee of the agency head.
(f) After issuing an order pursuant to this
section, an agency shall proceed as soon as practicable to provide notice and an
opportunity for a hearing following the procedure
under Section 403 to determine the issues underlying the temporary order.
(g) The emergency order is effective for 180 days,
or until the effective date of an order issued under the procedures of Section
403, whichever is shorter.
Comment
Section 407 is based generally on
the 1961 Model State Administrative Procedure Act, section 14(c) and the 1981
Model State Administrative Procedure Act, Section 4-501. Subsection (a) is new and authorizes
emergency adjudication in a contested case following the requirements of this
section unless law other than this act prohibits such action. Subsection (b) is
a revised version of 1961 MSAPA Section 14(c), and 1981 MSAPA Section 4-501(b).
subsection (b) uses the terms “imminent peril to the public health, safety or
welfare, rather than the 1981 MSAPA terms “immediate danger to the public
health, safety, or welfare” but no operative difference in emergency
adjudication standards is intended. Subsection (c) is new, and requires the agency,
if practicable, to give advance notice and opportunity to be heard to the
person to whom the agency action is directed. The means of notice and hearing
are also specified. Subsection (d) is a revised version of 1981 MSAPA Section
4-501(c). Subsection (e) is a revised
version of 1981 MSAPA Section 4-501(d). Subsection (f) is a revised version of
1981 MSAPA Section 4-501(e). Subsection
(g) is new, and provides for a time limit for the effectiveness of the
emergency order either 180 days, or the effective date of an order in a
contested case proceeding governed by Section 403 procedures, whichever is
shorter.
The procedure of this section is
intended permit immediate agency emergency adjudication, but also to provide
minimal protections to parties against whom such action is taken. Emergencies regularly occur that immediately
threaten public health, safety or welfare: licensed health professionals may
endanger the public; developers may act rapidly in violation of law; or
restaurants may create a public health hazard.
In these cases the agencies must possess the power to act rapidly to
curb the threat to the public. On the
other hand, when the agency acts in such a situation, there should be some
modicum of fairness, and the standards for invoking this remedy must be clear,
so that the emergency label may be used only in situations where it fairly can
be asserted that rapid action is necessary to protect the public.
Federal and state case law have
held that in an emergency situation an agency may act rapidly and postpone any
formal hearing without violation, respectively, of federal or state
constitutional law. FDIC v. Mallen, 486
U.S. 230 (1988); Gilbert v. Homar (1997) 520 U.S. 924; Dep=t of Agric. v. Yanes, 755 P.2d 611 (OK.
1987).
The generic provision in this
section has several advantages over the present divergent approaches to
emergency agency action. First, all
agencies have the needed power to act without delay, but there is provision for
some type of brief hearing, if feasible.
Second, this article limits the agency to action of this type only in a
genuine, defined emergency. Third, there
are pre and post deprivation protections.
This section seeks to strike an appropriate balance between public need
and private fairness.
This section does not apply to an
emergency adjudication, cease and desist order, or other action in the nature
of emergency relief issued pursuant to express statutory authority arising
outside of this act.
SECTION 408. EX PARTE COMMUNICATIONS.
(a) In
this section, “final decision maker” means the agency head or another
person or body to which the power to decide the proceeding is delegated.
(b) Except as otherwise provided in subsections (c),
(d), (e), or (h), while a contested case is pending, the presiding officer and
the final decision maker may not make to or receive from any person any
communication concerning a pending contested case without notice and
opportunity for all parties to participate in the communication. For the
purpose of this section, a proceeding is pending from the issuance of the
agency’s pleading, or from an application for an agency decision, whichever is
earlier.
(c) A presiding officer or the final decision
maker may communicate about a pending contested case with any person if the communication
is required for the disposition of ex parte matters authorized by statute or
concerns an uncontested procedural issue.
(d) A presiding officer or the final decision
maker may communicate about a pending contested case with an individual authorized
by law to provide legal advice to the presiding officer or to the final
decision maker and may communicate on ministerial matters with an individual who
serves on the [administrative] [personal] staff of the presiding officer or the
staff of the final decision maker if the person providing legal advice or
ministerial information has not served as investigator, prosecutor, or advocate
at any stage of the contested case, and if the communication does not augment, diminish, or modify the evidence in
the record.
(e) An agency head who is the presiding officer or
final decision maker in a pending contested case may communicate about that
case with an employee or representative of the agency if:
(1) the employee or representative:
(A) has not served as an investigator, prosecutor,
or advocate at any stage of the contested case;
(B)
has not otherwise had a communication
with any person about the case other
than a communication a presiding officer or decision maker is permitted to make
or receive under subsection (c) or (d) or a communication of the type permitted
by paragraph (2); and
(2) the communication does not augment, diminish,
or modify the evidence in the agency hearing record and is:
(A)
an explanation of the technical or scientific
basis of, or technical or scientific terms in, the evidence in the agency
hearing record;
(B)
an explanation of the precedent,
policies, or procedures of the agency; or
(C) any other communication that does not address
the quality or sufficiency of, or the weight that should be given to, evidence
in the agency hearing record or the credibility of witnesses.
(f) If a presiding officer or the final decision
maker makes or receives a communication in violation of this section, the
presiding officer or the final decision maker:
(1) if the communication is written, 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 and the
final decision maker to the communication and the identity of the party or
person that communicated; or
(2) if the communication is oral, shall prepare a
memorandum that contains the substance of the verbal communication, the
response of the presiding officer and the final decision maker, and the
identity of the party or person that communicated.
(g) If a communication prohibited by this section
is made, the presiding officer or the final decision maker shall notify all
parties of the prohibited communication and permit parties to respond in
writing within 15 days after the notice.
On good cause shown, the presiding officer or the final decision maker may
permit additional testimony in response to the prohibited communication.
(h) If a presiding officer is a member of a multi-member
body of individuals that is the agency head, the presiding officer may
communicate with the other members of the body when sitting as the presiding
officer and final decision maker. Otherwise, while a proceeding is pending,
there may be no communication, direct or indirect, regarding 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 the proceeding is delegated.
(i) If necessary to eliminate the effect of a
communication received in violation of this section, a presiding officer and
final decision maker may be disqualified under Section 402 (d) and (e), the parts
of the record pertaining to the communication may be sealed by protective order,
or other appropriate relief may be granted, including an adverse ruling on the
merits of the case or dismissal of the application.
Comment
Section 408 governs ex parte communications.
Many of the provisions in this section are new, but some are based upon 1961 MSAPA
Section 13, and 1981 MSAPA Section 4-213. Ex parte communication provisions are
also contained in the federal Administrative Procedure Act, 5 U.S.C. Section
557(d).
Subsection (a) is new and provides a
definition of “final decision maker” for purposes of this section.
The first sentence of subsection (b)
is a revised version of 1981 MSAPA Section 4-213(a),(c). One major difference
between the two provisions is that the 1981 MSAPA limited the prohibition on types
of ex parte communications to those relating to any issues in the proceeding,
and subsection (b) is broader and prohibits any communication concerning a
pending contested case. Another difference is that there are four exceptions to
the prohibition that are referenced in in current subsection (b), whereas 1981
MSAPA Section 4-213(b) had three exceptions. The second sentence of subsection
(b) is new and provides a specific definition of when a proceeding is pending
for purposes of subsection (b). Subsection (b) prohibits ex parte communications
but recognizes four exceptions to the prohibition that are codified in
subsections (c), (d),(e), and (h)
Subsection (c) contains two
exceptions. The first exception is for disposition of ex parte matters
authorized by statute, and this exception is based upon 1961 MSAPA Section 13,
and 1981 MSAPA Section 4-213(a),(c). The second exception is new and applies to
communications related to uncontested procedural issues. This exception does
not apply to contested procedural issues nor does it apply to issues that do
not easily fall into the procedural category. For example, other
communications not on the merits but are related to security or to the
credibility of a party or witness are prohibited by subsection (b). See Matthew
Zaheri Corp., Inc. v. New Motor Vehicle Board (1997) 55 Cal. App. 4th
1305.
Subsection (d) contains two
exceptions. The first exception is new and allows communications by a presiding
officer or final decision maker with an individual authorized by law to provide
legal advice to the presiding officer or final decision maker. This recognizes
the role of agency counsel in advising agency officials in adjudication. The
second exception for communications on ministerial matters with staff who work
for the presiding officer or final decision maker is based upon 1961 MSAPA
Section 13(2), and 1981 MSAPA Section 4-213(b). Both exceptions require that
the communicating individual that provides legal advice or ministerial
information to the presiding officer or final decision maker must not have
served as an investigator, prosecutor or advocate in the same contested case
and that the communication must not augment diminish or modify the evidence in
the record. The first requirement of separation of functions is similar to the
requirements of Section 402(b) for presiding officers. The second requirement,
relating to augmenting, diminishing, or modifying the evidence in the record,
is based upon 1981 MSAPA Section 4-213(b)(ii).
Subsection (e) is new and provides
an exception for communications about a pending contested case between an
agency employee or representative and the agency head acting as a presiding
officer or final decisions maker in that case. The exception is limited by the
conditions stated in in subsections (e)(1), and (2). Subsection (e)(1) requires
that the employee or representative (a) not have served as an investigator,
prosecutor or advocate in the contested case, and (b) not have had an ex
parte communication that would be
improper for the agency head acting as
presiding officer or final decision maker to make or receive. Subsection
(e)(1)(A)is based upon 1981 MSAPA Section 4-214(a). Subsection (e)(1)(B) is
based upon 1981 MSAPA Section 4-213(b)(i). Subsection (e)(2) is based upon 1981
MSAPA Section 4-213(b)(ii). Subsections (e)(2)(A)(B) and (C) are new and
provide alternative descriptions of types of communications that are allowed
under this exception. Subsections (e)(2)(A)(B)(C) were added based on a
compromise reached by the drafting committee after lengthy discussion. The
opposing positions on the issue of whether there should be an ex parte
communications exception for agency head communications with employees are 1)
no exception for agency head communications with employees, and thus no
subsection (e); and 2) an exception for agency head communications with
employees with subsection (e)(2) but not subsections (e)(2) (A),(B), or (C).
The current compromise is more restrictive than (e)(2) because a communication
has to satisfy one of the alternatives under (e)(2)(A)(B)(C) in addition to
meeting the (e)(2) requirements of not augmenting, diminishing, or modifying
the evidence in the agency hearing record.
Subsection
(f) is based upon 1981 MSAPA Section 4-213(e).
Subsection
(g) is a revised version of 1981 MSAPA Section 4-213(e). The major differences
are that subsection (g) provides for a 15 day time period after notice for a
party to respond in writing to the prohibited communication and under
subsection (g) the presiding officer must find that there is good cause shown
to permit additional testimony in response to the prohibited communication.
The first
sentence of subsection (h) is a revised version of 1961 MSAPA Section 13(1) and
of the first clause of 1981 MSAPA Section 4-213(b). The second sentence of
subsection (h) is new and prohibits ex parte communications between the
presiding officer and the agency head or other person or body to whom the power
to hear or decide is delegated. This sentence is based upon California Govt.
Code Section 11430.80.
Subsection
(i) is a revised version of 1981 MSAPA Section 4-213(f).
SECTION
409. INTERVENTION.
(a) A presiding officer shall grant a timely petition
for intervention in a contested case if:
(1) the petitioner has a statutory right under law
other than this [act] to initiate or to intervene in the proceeding in which
intervention is sought; or
(2) the petitioner has an interest that may be adversely affected by the outcome of
the proceeding and that interest is not adequately represented by existing
parties.
(b) A presiding officer may grant a timely petition
for intervention if the petitioner has a permissive statutory right under law
other than this [act] to intervene or if the petitioner’s claim or defense is
based on the same transaction or occurrence as the contested case.
(c) A presiding officer may impose conditions at
any time on the intervener’s participation in the proceedings.
(d) A presiding officer may permit intervention provisionally
and, at any time later in the proceedings or at the end of the proceedings, may
revoke the provisional intervention.
(e) On request by the interveners or existing
parties or by action of the presiding officer, the presiding officer may hold a
hearing on the intervention petition.
(f) A presiding officer shall promptly give notice
of an order granting, denying, or revoking intervention to the petitioner for
intervention and to all parties. The notice must be given at a reasonable time
to allow parties to reasonably prepare for the hearing on the merits.
Comment
Section 409 is based on 1981 MSAPA
Section 4-209, and on Federal Rule of Civil Procedure Rule 24 (intervention of
right under Rule 24(a), and permissive intervention under Rule 24(b)). Subsection
(a) is a revised version of 1918 MSAPA Section 4-209(a). Subsections (a)
(1),(2) are adapted from Rule 24(a), intervention of right in the Federal Rules
of Civil Procedure. Under subsection (a) a petition for intervention must be
timely. Under ordinary circumstances a timely petition would be filed far enough
in advance of the contested case hearing so that the intervenor would be able
to prepare for that hearing, and the existing parties would have time to
respond to the intervenor’s petition.
Subsection (b) is a revised version
of 1981 MSAPA Section 4-209(b). Subsection (b) is also based upon Rule 24(b),
permissive intervention in the Federal Rules of Civil Procedure.
Subsection (c) is a revised version
of the first sentence of1981 MSAPA Section 4-209(c).
Subsection (d) is new and allows
for provisional intervention.
Subsection (e) is new and allows
the presiding officer to schedule a hearing on the intervention petition on
request of the intervenors, or existing parties, or the presiding officer’s
decision.
Subsection (f) is a revised version
of 1981 MSAPA Section 4-209(d). Subsection (f) provides for notice suitable
under the circumstances to enable parties to anticipate and prepare for changes
that may be caused by the intervention.
SECTION 410. SUBPOENAS.
(a) On a request in a record by a party in a
contested case, the presiding officer or any other officer to whom the power is
delegated pursuant to statute shall issue a subpoena for the attendance of a witness
and the production of books, records, and other evidence on a showing of
general relevance and reasonable scope of the evidence sought for use at the
hearing.
(b) Unless otherwise provided by law or agency rule, a subpoena issued
under subsection (a) shall be served and, on application to the court by a
party or the agency, enforced in the manner provided by law for the service and
enforcement of subpoenas in a civil action.
(c) Witness fees shall be paid by the party
requesting the subpoena in the manner as provided by law for witness fees in a civil action.
Comment
Section 410 is similar to 1981
MSAPA Section 4-210. Subsection (a) authorizes the presiding officer upon
request by a party to issue subpoenas for the attendance of witnesses and the
production of books, records, and other evidence for use at the contested case
hearing upon a showing of general relevance and reasonable scope of evidence.
This provides a stricter standard for subpoena issuance than the provisions of
1981 MSAPA Section 4-210(a) which authorizes the presiding officer to issue
subpoenas and other orders based on a request by a party or based on the presiding
officer’s own motion.
Subsection (b) is based on Arizona administrative
procedure act Section 41-1062A.4.
Subsection (c) is based upon
California Government Code Section 11450.40.
SECTION 411. DISCOVERY.
(a) In this section, “statement” includes a record
of a person’s written statement signed by a person and a record that summarizes
an oral statement made by a person.
(b) Except in an emergency hearing under Section
407, a party, on written notice to another party at least [ ] days before an evidentiary hearing and unless
otherwise provided by agency rule under subsection (f), may:
(1) obtain the names and addresses of witnesses the
disclosing party will present at the hearing to the extent known to the other
party; and
(2) inspect and copy any of the following
material in the possession, custody, or control of the other party:
(A) statements of parties and witnesses proposed to be called;
(B) all records, including reports of mental, physical,
and blood examinations, and other evidence the party proposes to offer;
(C) investigative reports made by or on behalf of
the agency or other party pertaining to the subject matter of the adjudication;
(D) statements of expert witnesses proposed to be
called;
(E) any exculpatory material in the possession of
the agency; or
(F) other materials for good cause shown.
(3) Parties to a contested case proceeding have a
duty to supplement responses provided under subsection (b) to include information
thereafter acquired to the extent that the information is relied on in the hearing.
(c) On petition, a presiding officer may issue a
protective order for any material for which discovery is sought under this
section that is exempt, privileged, or otherwise made confidential or protected
from disclosure by law, including material subject to the attorney-client
privilege, attorney work product, and [executive] [deliberative process]
privilege, and material the disclosure of which would result in annoyance,
embarrassment, oppression, or undue burden or expense to any person or party.
(d)
On petition, the presiding officer shall
issue an order compelling discovery for refusal to comply with a discovery
request unless good cause exists for refusal.
Failure to comply with the discovery order may be enforced according to
the rules of civil procedure.
(e)
On petition and for good cause shown, the
presiding officer shall issue an order authorizing discovery in accordance with
the rules of civil procedure.
(f)
An agency may provide by rule that some
or all discovery procedures afforded by this section do not apply to a
specified program or category of cases if it finds for good cause that:
(1) the availability of discovery would unduly
complicate or interfere with the hearing process in those cases, because of the
volume of the applicable caseload and the need for expedition and informality
in that process; and
(2)
that alternative procedures for the
sharing of relevant information are sufficient to ensure the fundamental
fairness of the agency proceedings.
Comment
1981 MSAPA
Section 4-210(a) authorized the presiding officer to issue discovery orders and
protective orders in accordance with the rules of civil procedure. Presiding
officers were required to follow and apply the discovery rules used in the
civil courts in the state in which the contested case proceeding was held.
Section 411 does not follow that approach. Under Section 411, mandatory
disclosure of party and witness statements and documents is provided for in
subsection (b), with protective orders and orders compelling discovery provided
for in subsections (c), and (d). Under subsection (e), a presiding officer can
issue an order, for good cause shown, authorizing discovery in accordance with
the rules of civil procedure. This order could authorize taking of depositions,
interrogatories, medical examinations, production of documents, and requests
for admissions. Finally, in subsection (f), an agency can provide by rule for
good cause that specific programs or a category of cases are exempt from some
or all of the discovery procedures provided in Section 411. Contested case proceedings can vary widely in
the length and complexity of the issues to be decided. Providing a range of
options for discovery procedures will allow for flexibility. Under subsection
(f), presiding officers in high volume short duration cases would not use
discovery procedures if their agency exempted those cases by rule. . In
contrast, presiding officers in complex and lengthy contested case proceedings
could authorize more extensive discovery than provided in subsection (b).
Presiding officers in contested case proceedings that do not fit either of the
above categories could rely upon the discovery requirements provided for in
subsection (b).
Subsection (a) provides a
definition of the term statement for purposes of subsection (b) (2). Subsection
(a) is a revised version of the definition of statements taken from California
Government Code Section 11507.6.
Subsection (b) is new and provides
for disclosure by a party to a contested case of the items listed in
subsections (b) (1), and (2) upon written notice of another party unless the
contested case proceeding is an emergency hearing under Section 407, or unless
the proceeding has been exempted from discovery by agency rule under subsection
(f). Subsection (b) (1) is based upon California Government Code Section
11507.6(1). Subsection (b)(2) is based upon California Government Code Section
11507.6(2). Subsections (b)(2)(A) to (F) are a revised version of California
Government Code Section 11507.6(2) (a)to (f). Subsection (b)(3) is new and
requires parties to contested case proceedings to supplement responses to include after
acquired information relied on at the hearing.
Subsection (c) is new and
authorizes the presiding officer to issue protective orders for material sought
to be discovered that is protected by confidentiality laws, recognized
privileges, or material the disclosure of which would result in annoyance,
embarrassment, oppression or undue burden or expense.
Subsection (d) is new and
authorizes the presiding officer to issue orders compelling discovery for
refusal to comply with a discovery request unless good cause for refusal
exists. Failure to comply with the discovery order is enforceable under the
rules of civil procedure. The presiding officer has the authority to apply the
discovery sanctions rules in the state in which the contested case proceeding
is held.
Subsection (e) is new and authorizes
the presiding officer, for good cause shown, to issue an order authorizing
discovery in accordance with the rules of civil procedure.
Subsection (f) provides that an
agency can provide by rule that some or all of the discovery procedures
authorized in section 411 do not apply to a specified program or a category of
cases when the agency finds for good cause that the provisions of subsection 9(f)(1)
and (2) are satisfied.
SECTION 412. DEFAULT.
(a) Unless otherwise provided by law other than
this [act], if a party without good cause fails to attend or participate in a
prehearing conference or hearing in a contested case, the presiding officer may
issue a default order.
(b) If a default
order is issued, the presiding officer may conduct any further proceedings
necessary to complete the adjudication without the defaulting party and shall
determine all issues in the adjudication, including those affecting the
defaulting party.
(c) A recommended,
initial, or final order issued against a defaulting party may be based on the defaulting
party’s admissions or other evidence that may be used without notice to the defaulting
party. If the burden of proof is on the defaulting party to establish that the
party is entitled to the agency action sought, the presiding officer may issue
a recommended, initial, or final order without taking evidence.
(d) Not later than [ ] days after the date of
notifying a party subject to a default order that a recommended, initial, or
final order has been rendered against that party, that party may petition the
presiding officer to vacate the recommended, initial, or final order. If good cause is shown for the party’s
failure to appear, the presiding officer shall vacate the decision and, after
proper service of notice, conduct another evidentiary hearing. If good cause is
not shown for the party’s failure to appear, the presiding officer shall deny
the motion to vacate.
Comment
Section 412 is based upon 1981
MSAPA Section 4-208. Under this section, the presiding officer has the power to
enter a default order against a party to a contested case proceeding.
Subsection (a) is a revised version
of 1981 MSAPA Section 4-208(a).The major difference is that the presiding
officer may issue a default order for the parties’ failure to attend or
participate in a hearing or prehearing conference unless good cause is shown. This
simplifies the procedures for determining a default compared to the 1981 MSAPA
Section 4-208(a) requirement of a written notice of a proposed default order.
Subsection (b) is a revised version
of the second sentence of 1981 MSAPA Section 4-208(b).
Subsection (c) is a revised version
of California Government Code Section 11520(a).
Subsection (d) is a revised version
of California Government Code Section 11520(c).
SECTION 413. ORDERS: FINAL, RECOMMENDED, INITIAL.
(a) If the presiding officer is the agency head,
the presiding officer shall render a final order.
(b) Except as otherwise provided by law other
than this [act], if the presiding officer is not the agency head and has not
been delegated final decisional authority, the presiding officer shall render a
recommended order. If the presiding officer is not the agency head and has been
delegated final decisional authority, the presiding officer shall render an
initial order that becomes a final order [30] days after issuance, unless
reviewed by the agency head on its own motion or on petition of a party.
(c) A recommended, initial, or final order must
be served in a record on each party and the agency head within [90] days after
the hearing ends, the record closes, or memos, briefs, or proposed findings are
submitted, whichever is later. The time may
be extended by stipulation, waiver, or on a showing of good cause.
(d) A recommended, initial, or final order must contain
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.
At the discretion of the presiding officer, a party may submit proposed
findings of fact and conclusions of law.
The order must also contain 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 or initial order must contain a statement of any circumstances
under which the order, without further notice, may become a final order.
(e) Findings of fact must be based exclusively on
the evidence in the hearing record in the contested case and on matters
officially noticed.
Alternative A
(f) Hearsay evidence may be used to supplement or
explain other evidence, but on timely objection, is not sufficient by itself to
support a fact finding unless it would be admissible over objection in a civil
action.
Alternative B
(f) Hearsay evidence is sufficient to support
fact findings if it constitutes reliable, probative, and substantial evidence.
End of Alternatives
(g) An order is issued under this section when it
is signed by the agency head, presiding officer, or an individual authorized by
law other than this [act] to sign the order.
Comment
This section is based upon 1981
MSAPA Section 4-215. This section also draws on useful provisions from several
states. E.g. see: Alabama, Ala.Code 1975 Section 41-22-16; Iowa, I.C.A. Section
17A.15; Kansas, K.S.A. Section 77-526; Michigan, M.C.L.A. 24.281; Montana, MCA
2-4-623; Washington, RCWA 34.05.461. See Section 102(12) for the definition of
“final order” Section 102(15) for the definition of initial order, and section
102 (27) of this act for the definition of “recommended order”. Emergency
orders are issued under the provisions of Section 408, not this section.
Subsection (a) is based on 1981
MSAPA Section 4-215 (a), and provides that if the presiding officer is the
agency head, the presiding office shall render a final order.
Subsection (b) is new and varies
from the provisions of 1981 MSAPA Section 4-215(b). Subsection (b) provides for
both recommended orders, and initial orders. Initial orders are issued by
presiding officers who are not the agency head but who have been delegated
final decisional authority. Recommended orders are issued by presiding officers
who are not the agency head but who have not been delegated final decisional
authority. The three types of orders are recognized in this section, but which
type of order, initial, final, or recommended, will apply to which type of
decision is based on law other than this act, usually the organic statute that
the agency is responsible for administering or enforcing.
Subsection (c) is a revised version
of 1981 MSAPA Section 4-215(g),(h).
Subsection (d) is a revised version
of 1981 MSAPA Section 4-215(c).
Subsection (e) is based on the
first sentence of 1981 MSAPA Section 4-215(d).
Subsection (f), Alternative A,
adopts the legal residuum rule, and provides that hearsay evidence may be used
to supplement or explain other evidence but would not be sufficient to support
a fact finding unless admissible over objection in a civil action. The legal
residuum rule is followed in many states. States that follow the legal residuum
rule include California (California Government Code Section 11513(d)), Wisconsin
(Gehin v. Wisconsin Group Insurance Board 278 Wisc.2d 111, 692 N.W.2d 572
(Wisc. 2005)), Utah, (McMillen v.
Matheson 741 P.2d 960 (Utah, 1987)) , and New Mexico (Trujillo v. Employment
Sec. Commission of New Mexico 94 N.M.
343, 610 P. 2d 747 (N.M., 1981)).
Subsection (f), Alternative B is based on the second sentence of 1981
MSAPA Section 4-215(d). Alternative B provides that 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). States that follow the reliability standard include
Oregon (Reguero v. Teacher Standards and Practices Commission 822 P. 2d 1171
(Ore.1991)), Pennsylvania (Commonwealth, Unemployment Compensation Board of
Review v. Ceja 493 Pa. 588, 427 A. 3d
631 (Pa. 1981),Vermont (Watker v. Vermont Parole Board, 157 Vt. 72, 596 A.2d
1277 (Vt., 1991), and New York (300 Gramaton Avenue Associates v. State
Division of Human Rights 45 N.Y.2d 156, 379 N.E.2d 1183.
Subsection (g) is new and defines
when an order is issued under this section as the time when an order is signed
by the agency head, presiding officer, or other authorized individual.
SECTION 414. AGENCY REVIEW OF INITIAL ORDER.
(a) An agency head may review an initial order on
its own motion.
(b) A party may petition an agency head to review
an initial order. On petition by a party, the agency head may review an initial
order.
(c) A petition for review of an initial order
must be filed with the agency head, or with any person designated for this
purpose by agency rule not later than [15] days after the initial order is issued,
or from the date that the parties are notified of the order, whichever is
later. If the agency head decides to
review an initial order on its own motion, the agency head shall give notice in
a record of its intention to review the order within [15] days after it is issued,
or the parties are notified of the order, whichever is later. If a petition for
review is not filed or the agency head does not elect to review the initial
order within the proscribed time limit, the initial order becomes a final
order.
(d) The [15]-day period in subsection (c) for a
party to file a petition or for the agency head to notify the parties of its
intention to review an initial order, is tolled by the submission of a timely
petition under Section 416 for reconsideration of the order. A new [15]-day
period begins on disposition of the petition for reconsideration. If an order is subject both to a timely
petition for reconsideration and to a petition for review by the agency head,
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) When reviewing an initial order, the agency
head 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 order,
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 on notice to all
the parties. In reviewing findings of
fact in an initial order by the presiding officer, the agency head shall consider
the presiding officer’s opportunity to observe the witnesses and to determine
the credibility of witnesses. The agency
head shall consider the hearing record or parts of the record designated by the
parties.
(f) If an agency
head reviews an initial order under Section 413(b), an agency head may render a
final order disposing of the proceeding within 120 days, or may remand the
matter for further proceedings with instructions to the presiding officer who
rendered the initial order. On remanding
a matter, the agency head may order such temporary relief as is authorized and
appropriate.
(g) A final order or an order remanding the
matter for further proceedings must identify any difference between the order
and the initial order and must state the facts of record that support any difference
in findings of fact, the source of law that supports any difference in legal
conclusions, and the policy reasons that support any difference in the exercise
of discretion. Findings of fact must be
based exclusively on the evidence in the hearing record in the contested case
and on matters officially noticed. A
final order under this section must include, or incorporate by express
reference to the initial order, all the matters required by Section 413(d). The agency head shall deliver the order to
the presiding officer and all parties.
Comment
Subsection (a) is a revised
version of 1981 MSAPA Section 4-216(a).
Subsection
(b) is a revised version of 1981 MSAPA Section 4-216(a).
Subsection
(c) is a revised version of the first two sentences of 1981 MSAPA Section
4-216(b).
Subsection (d) is a revised
version of the last two sentences of 1981 MSAPA Section 4-216(b).
The first sentence of subsection
(e) is based on the 1981 MSAPA Section 4-216(d). the second sentence of
subsection (e) is based upon provisions of the Washington Administrative
Procedure Act (R.C.W. Section 34.05.464(4)). The third sentence of subsection
(e) is new and requires the agency head to consider the hearing record or parts
of the record designated by the parties.
Subsection
(f) is based upon 1981 MSAPA Section 4-216(g).
Subsection
(g) is a revised version of 1981 MSAPA Section 4-216(i),(j).
SECTION 415. AGENCY
REVIEW OF RECOMMENDED ORDER.
(a) An agency head shall review a recommended
order pursuant to this section.
(b) When reviewing a recommended order, the agency
head 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 order,
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 on notice to all
the parties. In reviewing findings of
fact in a recommended order by the presiding officer, the agency head shall consider
the presiding officer’s opportunity to observe the witnesses and to determine
the credibility of witnesses. The agency
head shall consider the hearing record or parts that are designated by the
parties.
(c) An agency head may render a final order
disposing of the proceeding or may remand the matter for further proceedings
with instructions to the presiding officer who rendered the recommended order. On remanding a matter, the agency head may
order such temporary relief as is authorized and appropriate.
(d) A final order or an order remanding the
matter for further proceedings must identify any difference between the order
and the recommended order and must state the facts of record that support any difference
in findings of fact, the source of law that supports any difference in legal
conclusions, and the policy reasons that support any difference in the exercise
of discretion. Findings of fact must be
based exclusively on the evidence in the hearing record in the contested case
and on matters officially noticed. A
final order under this section must include, or incorporate by express
reference to the recommended order, all the matters required by Section 413(d). The agency head shall deliver the order to
the presiding officer and all parties.
Comment
Section 415 provides for a review
procedure for recommended orders. The agency is required to review a
recommended order.
Subsection (a) is new and provides
for mandatory review of a recommended order by an agency head.
The first sentence of subsection (b)
is based on the 1981 MSAPA Section 4-216(d). the second sentence of subsection
(b) is based upon provisions of the Washington Administrative Procedure Act
(R.C.W. Section 34.05.464(4)). The third sentence of subsection (b) is new and
requires the agency head to consider the hearing record or parts of the record
designated by the parties.
Subsection (c) is based upon 1981
MSAPA Section 4-216(g).
Subsection (d) is a revised version
of 1981 MSAPA Section 4-216(i),(j).
SECTION 416. RECONSIDERATION.
(a) Any party, not later than [ ] days after the date of notification to the
parties that a final order has been issued, may file a
petition for reconsideration that states the specific grounds on which relief
is requested. The place of filing and
other procedures, if any, must be specified by agency rule and must be stated
in the final order.
(b) If a petition for reconsideration is timely
filed, and if the petitioner has complied with an agency’s procedural rules for
reconsideration, if any, the time for filing a petition for judicial review
does not begin until the agency disposes of the petition for reconsideration as
provided in Section 503(d).
(c) If a petition is filed under subsection (a),
the decision maker shall issue a written
order not later than [20] days after the filing denying the petition, granting
the petition and dissolving or modifying the final order, or granting the
petition and setting the matter for further proceedings. If the decision maker
does not respond to the petition within [30] days after filing, or a longer
period agreed to by the parties, the petition is deemed denied. The petition
may be granted only if the decision maker states findings of facts, conclusions
of law, and the reasons for granting the petition.
Comment
This section provides a right to
seek reconsideration of a final order of an agency. This section is based in
part on the Washington APA, West’s RCWA 34.05.470, and in part on 1981 MSAPA
Section 4-218.
Subsection (a) is based upon the
Washington APA, R.C.W. 34.05.470(1).
Subsection (b) is based upon the
Washington APA, R.C.W. 34.05.470(3).
Subsection (c) is based upon the
1981 MSAPA Section 4-218(3).
SECTION 417. STAY. Except as otherwise provided by law other
than this [act], a party, not later than [seven] days after the parties are
notified of the order, may request the agency to stay a final order pending judicial
review. The agency may grant the request for a stay pending judicial review if
an agency finds that justice so requires. The agency may grant or deny the
request for stay of the order before, on, or after the effective date of the
order.
Comment
This section is based upon 1961
MSAPA Section 15(c), and on 1981 MSAPA Section 4-217 The first and third
sentences of this section are based upon 1981 MSAPA Section 4-217. The second sentence
of this section is based on the first sentence of Section 705 of the federal
administrative procedure act, 5 U.S.C. Section 705.
SECTION 418. AVAILABILITY OF ORDERS; INDEX.
(a) Except as otherwise provided in subsections
(b) and (c), an agency shall create an index of all final orders in contested cases
and make the index and all final orders available for public inspection and
copying, at cost, in its principal offices.
(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] are not public records and may not be indexed.
(c) A final order may be excluded from an index
and disclosure only by order of the presiding officer with a written statement
of reasons attached to the order. If the
presiding officer determines it is possible to redact a final order that is
exempt, privileged, or otherwise made confidential or protected from disclosure
by [the public records law of this state] so that it complies with the
requirements of that law, the redacted order may be placed in the index and
published.
(d) An agency may not rely on a final order adverse
to a party other than the agency as precedent in future adjudications unless
the agency designates the order as a precedent, and the order has been published,
placed in an index, and made available for public inspection.
Comment
This section is entirely new. This section continues the concept, seen
earlier in connection with rules, of preventing earlier decisional law known
only to agency personnel from constituting the basis for decision in a disputed
case. Subsection (d) is based in part on
the provisions of California Government Code Section 11425.60. If the agency
wishes to use a case as precedent in the future, it must make the order and
decision in that case available to the public. The only situations in which an
agency may rely on a contested case as precedent without indexing and making
that decision and order available to the public are described in subsection (c)
of this section.
In some states there have been
attacks on agency adjudications on the basis that the proceeding should be
conducted under the provisions for rulemaking.
In the case of SEC v. Chenery Corp., 332 U.S. 194 (1947) the United
States Supreme Court held that the choice of whether to proceed by rulemaking
or adjudication is left entirely to the discretion of the agency, because not
every principle can be immediately promulgated in the form of a rule. In the words of the Supreme Court “Some
principles must await their own development, while others must be adjusted to
meet particular, unforeseeable situations.”
Most states follow Chenery. See
Illuminating a Bureaucratic Shadow World: Precedent Decisions under California=s Revised Administrative Procedure Act,
21 J. Nat=l A.
Admin. L. Judges 247 (2001) at n. 68.
This section makes clear that the
choice between rulemaking and adjudication is entirely in the discretion of the
agency. However, in order to prevent law
to which the public does not have access from constituting the basis for
decision, final orders must be indexed and available to the public. See also
the California
administrative procedure act at West=s
Ann. Cal. Gov. Code, § 11425.60
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.
Subsections (b) and (c) refer to those acts, and to exempt decisions under
those acts.
(a) When a licensee has made timely and sufficient
application for the renewal of a license or a new license with reference to any
activity of a continuing nature, the existing license does not expire until the
application has been finally determined by the agency and, in case the
application is denied or the terms of the new license limited, until the last
day for seeking review of the agency order or a later date fixed by order of
the reviewing court.
(b) No revocation, suspension, annulment, or
withdrawal of any license is lawful unless, before the institution of agency
proceedings, the agency gave notice by mail to the licensee of facts or conduct
which warrant the intended action, and the licensee was given an opportunity to
show compliance with all lawful requirements for the retention of the license.
If the agency finds that public health, safety, or welfare requires emergency
action, and incorporates a finding to that effect in its order, summary
suspension of a license may be ordered pending proceedings for revocation or
other action. These proceedings must be promptly instituted and determined.
Comment
Section 419
is based on Section 14 of the 1961 MSAPA. Subsection (a) is based on Section
14(b), 1961 MSAPA. Subsection (b) is based on Section 14(c), 1961 MSAPA.
Section 401 of this [act] governs licensing proceedings when the licensee has a
right to notice and an opportunity to be heard before the agency action
granting, denying, or renewing a license becomes final agency action.
SECTION 501. RIGHT TO JUDICIAL REVIEW; FINAL AGENCY ACTION
REVIEWABLE.
(a) In this [article], “final agency action” means
an act of an agency that imposes an obligation, grants or denies a right, confers
a benefit, or determines a legal relationship as a result of an administrative
process.
(b) Except to the extent that a statute of this
state other than this [act] limits or precludes judicial review, a person who
meets the requirements of this [article]
is entitled to judicial review of a final agency action.
(c) A person that may be entitled to judicial
review of a final agency action under subsection (b) is entitled to judicial
review of an agency action that is not final if postponement of judicial review
would result in an inadequate remedy or irreparable harm that outweighs the
public benefit derived from postponement.
(d) Agency action that is a failure to act is not subject
to judicial review. However, a reviewing court shall compel agency action that
is unlawfully withheld or unreasonably delayed.
Comment
Section 501 is similar to the judicial review provisions
of Florida (West’s F.S.A. Section 120.68), Iowa (I.C.A. Section17A.19),
Virginia (Va. Code Ann. Section 2.2-4026) and Wyoming (W.S.1977 Section 16-3-114). Under
this section, the person seeking review must meet all of the requirements of
this article, which include standing (Section 505), exhaustion of remedies
(Section 506), and time for filing (Section 503). The definition of “agency
action” is found in Section 102(4).
Subsection (a) defines “final
agency action” for purposes of Article 5.
This definition is based on state and federal cases. See State Bd. Of Tax Comm’rs v. Ispat Inland,
784 N.E.2D 477 (Ind., 2003); District Intown Properties v. D.C. Dept. Consumer
and Regulatory Affairs, 680 A.2d 1373 (Ct. Apps. D.C. 1996); Texas Utilities
Co. v. Public Citizen, Inc, 897 S.W.2d 443 (Tex. App. 1995); Bennet v. Spear,
520 U.S. 154, 117 S.Ct. 1154 (1997); Mobil Exploration and Producing Inc. v.
Dept. Interior, 180 F.3d 1192, 1197 (10th Cir. 1999).
Subsection
(b) of this section provides a right of judicial review of final agency action
by appropriate parties. Under subsection (b), final agency action includes a
final order in a contested case and a final rule. The exception in subsection
(b) for statutes that limit or preclude judicial review applies to limit or
preclude judicial review of final agency action when a statute of the state
other than this Act limits or precludes judicial review of that type of action.
See the laws of the following states: Wyoming (W.S.A. Section 16-3-114(a)); New
York (McKinneys’ Civil Service law Section 76.3; New York City Dept. of Environmental
Protection v. New York City Civil Service Com’n, 78 N.Y.2d 318, 579 N.E.2d 1385
(N.Y., 1991); and the District of Columbia (District of Columbia v. Sierra
Club, 670 A2d. 354 (D.C., 1996).
Subsection (c) is based on 1981
MSAPA Section 5-103 and it creates a limited right to review of non-final
agency action.
Subsection (d) is based on the
federal A.P.A., 5 U.S.C. Section 706(1). Agency failure to act is not
judicially reviewable unless agency action is unlawfully withheld or
unreasonably delayed. Agency action is defined in section 102(4), and includes
in subsection (4)(B), the failure to issue an order or rule, and in subsection
(4)(C), failure to perform, duties, functions, activities, or determinations required
by law.
SECTION 502. RELATION TO OTHER JUDICIAL REVIEW LAW AND
RULES.
(a) Except as provided by law of this state other
than this [act], judicial review of final agency action may only be taken as
provided by rules of [appellate] [civil] procedure [of this state]. The court may grant any type of legal and
equitable remedies that are appropriate.
(b) This [article] does not limit utilization of or the scope of
judicial review available under other means of review, redress, relief, or
trial de novo provided by law of this state other than this [act]. Except to the extent that prior, adequate and exclusive opportunity for
judicial review is available under this [article] or under law other than this [act],
final agency action is subject to judicial review in civil or criminal
proceedings for judicial enforcement
Comment
This section places appeals from
final agency action within the existing state rules of appellate
procedure. Such action may be preferred
by some states because of constitutional provisions or because of the existence
of rules of appellate procedure that the legislature may not wish to
change. This practice was followed under
the 1961 MSAPA, and is followed in a number of states today. See e.g.: Alaska
(AS 44.62.560), California (West=s Ann.Cal.Gov.Code Section 11523), Delaware (29 Del.C.
Section 10143), Florida (West=s
F.S.A. Section 120.68), Iowa (I.C.A. § 17A.20), Michigan (M.C.L.A. 24.302),
Minnesota (M.S.A. § 14.63) (Appeal integrated with state appellate rules), Virginia
(Va. Code Ann. Section 2.2-4026), Wyoming
(W.S.1977 § 16-3-114).
The first sentence of subsection (b) is based on the second
sentence of Section 15a of the 1961 MSAPA. The second sentence of
(b) is based on the last sentence of Section 703, federal Administrative
Procedure Act, 5 U.S.C. Section 703.
SECTION 503. TIME FOR
SEEKING JUDICIAL REVIEW OF AGENCY ACTION; LIMITATIONS.
(a) Judicial review of a rule on the ground of
noncompliance with the procedural requirements of this [act] must be commenced not
later than [two] years after the effective date of the rule. Judicial review of a rule or guidance
document on other grounds may be sought at any time.
(b) Judicial review of an order or other final
agency action other than a rule or guidance document must be commenced not
later than [30] days after the date the parties are notified of the order or
other agency action.
(c) The time for seeking judicial review under
this section is tolled during any time a party pursues an administrative remedy
before the agency which must be exhausted as a condition of judicial review.
(d) A party may not petition for judicial review
while seeking reconsideration under Section 416. During the time a petition for
reconsideration is pending before an agency, the time for seeking judicial
review in subsection (b) is tolled.
Comment
The first sentence of subsection
(a) is based on 1961 Model State Administrative Procedure Act, section (3)(c),
and on Section 3-113(b) of the 1981 Model State Administrative Procedures Act.
The scope of challenges permitted for noncompliance with procedural
requirements under Section 314 includes all applicable requirements of article
3 for the type of rule being challenged.
Subsection (b) is based on 1981
MSAPA Section 5-108(2).
Subsection (c) is based on 1981
MSAPA Section 5-108(3).
Subsection (d) is new and provide
for tolling of the time to seek judicial review while a reconsideration
petition is pending before an agency.
SECTION 504. STAYS PENDING APPEAL. A petition for judicial review does not
automatically stay an agency decision. An appellant may petition the reviewing
court for a stay on the same basis as stays are granted under the rules of
[appellate] [civil] procedure [of this state], and the reviewing court may grant
a stay regardless of whether the appellant first sought a stay from the agency.
Comment
This provision for stay permits a
party appealing agency final action to seek a stay of the agency decision in the
court. The first sentence of this
section is based upon 1961 MSAPA Section
15(c). See also 1981 MSAPA Section 5-111 which governs stays. Unlike the 1981
MSAPA Section 5-111, this section authorizes the granting of a stay by the
reviewing court but not by the agency.
SECTION 505. STANDING. The following persons have standing to obtain
judicial review of a final agency action:
(1) a person aggrieved or adversely affected by
the agency action; or
(2) a person that has standing under law of this
state other than this [act].
Comment
Standing requirements are contained
in the first sentence of 1961 MSAPA Section 15(a), and 1981 MSAPA Section
5-106.
Subsection (1) is a revised version
of 1981 MSAPA Section 5-106(a)(5), and is also based on the first sentence of
Section 702 of the federal Administrative Procedure Act, 5 U.S.C. Section 702.
Subsection (2) is a revised version
of 1981 MSAPA Section 5-106(a)(4). This subsection confers standing that arises
under any other provision of law.
Examples of this type of standing are statutes that expressly confer
standing in general language such as, for example, Aany
person may commence a civil suit in his own behalf... to enjoin... an agency...
alleged to be in violation of this chapter. . . .” 16 U.S.C.A. § 1540,
explained in Bennett v. Spear, 520 U.S. 154, 117 S.Ct.
1154(1997). Another example is standing
recognized in judicial decision or common law.
Most states have established case
law detailing the standing requirements for that particular jurisdiction.
Section 505 is drafted broadly but generically so that existing state law on
standing will be compatible with this section.
SECTION 506. EXHAUSTION OF ADMINISTRATIVE REMEDIES.
(a) Subject to subsection (d) or law of this
state other than this [act] which provides that a person need not exhaust administrative
remedies, a person may file a petition for judicial review under this [act]
only after exhausting all administrative remedies available within the agency the
action of which is being challenged and within any other agency authorized to
exercise administrative review.
(b) Filing a petition for reconsideration or a
stay of proceedings is not a prerequisite for seeking judicial review.
(c) A petitioner for judicial review of a rule
need not have participated in the rulemaking proceeding on which the rule is
based nor have filed a petition to adopt a rule under Section 318.
(d) The court may relieve a petitioner of the
requirement to exhaust any or all administrative remedies to the extent the
administrative remedies are inadequate or would result in irreparable harm.
Comment
The first clause of the first
sentence of subsection (a) is based upon 1981 MSAPA Section 5-107(2). The
remaining language in subsection (a) is based upon the first sentence of 1981
MSAPA Section 5-107.
Subsection (b) is based upon the
second sentence of 1981 MSAPA Section 4-218(1).
Subsection (c) is based upon 1981
MSAPA Section 5-107(1).
Subsection (d) is a revised version
of 1981 MSAPA Section 5-107(3).
SECTION 507. AGENCY RECORD ON JUDICIAL REVIEW; EXCEPTION.
(a) In a contested case, the court’s review is
confined to the hearing record and to matters arising from that hearing record.
The court, however, may receive additional evidence if the party seeking
judicial review makes allegations of procedural error arising from matters
outside the hearing record or except when necessary to avoid manifest
injustice.
(b) In any case that is not a contested case, the
record for review consists of the agency record and all unprivileged material
that an agency decision maker directly or indirectly considered, or that was
submitted for consideration by any person, in connection with the action under
review, including information reasonably available to the agency at the time of
the agency’s action that is adverse to the agency’s position. The court may
allow discovery and other evidentiary proceedings in order to supervise the
agency’s completion of the record for review. The court may also consider
evidence outside of the agency record:
(1)
if the agency action was ministerial or
was rendered without an administrative record or on the basis of a minimal
administrative record; or
(2)
[insofar as the petitioner alleges
procedural error not disclosed by the record]; or
[except when necessary to avoid manifest
injustice].
Comment
This section establishes a default
closed record for judicial review of adjudication and rulemaking. It is well established in most states and in
federal administrative procedure that, in case of adjudication, judicial review
is based on that evidence which was before the agency on the record. Otherwise, the standards of judicial review
could be subverted by the introduction of additional evidence to the court that
was not before the agency. See
Western States Petroleum Ass=n
v. Superior Court, 888 P.2d 1268 (Cal. 1995). For rulemaking, the record for judicial
review is defined in Section 302 of this Act. The section contains an exception
to the closed record on review where petitioner alleges error, such as ex parte
contacts, that does not appear in or is not evident from the record. Other examples of error that do not appear or
are not evident from the record are: improper constitution of the decision
making body, grounds for disqualification of a decision maker, or unlawful procedure. However, the standard for opening the record
on appeal is high.
Subsection (a) is a revised version
of 1961 MSAPA Section 15(f).
Subsection (b) is new and defines
the record for review in any case that is not a contested case.
SECTION 508. SCOPE OF REVIEW.
(a) Except as provided by law of this state other
than this [act], in judicial review of an agency action, the following rules
apply:
(1) The burden of demonstrating the invalidity of
agency action is on the party asserting invalidity.
(2) The court shall make a separate and distinct
ruling on each material issue on which the court’s decision is based.
(3) The court may grant relief only if it
determines that a person seeking judicial review has been prejudiced by one or
more of the following:
(A) the agency erroneously interpreted the law;
(B) the agency committed an error of procedure;
(C) the agency action is arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law;
(D) an agency determination of fact, in a
contested case, is not supported by substantial evidence in the record as a
whole; or
(E) to the extent that the facts are subject to
trial de novo by the reviewing court, the action was unwarranted by the facts.
(b) In making determinations under this section,
the court shall review the whole agency record, or the parts designated by the
parties and shall apply the rule of harmless error.
Comment
Subsection (a) (1) is based upon
1981 MSAPA Section 5-116(a)(1). Subsection (a)(2) is based upon 1981 MSAPA
Section 5-116(b). They are substantially similar to the general scope of review
provisions of the Federal APA, 5 U.S.C. Section 706.
Judicial review is essential and
exists in all states. Section 508
follows the approach that scope of
review is notoriously difficult to capture in verbal formulas, and its
application varies depending on context.
For that reason, Section 508(3)
follows the shorter, skeletal formulations of the scope of review,
similar to the 1961 MSAPA Section 15(g), and the Federal APA, 5 U.S.C. Section
706(2). See Ronald M. Levin, Scope of
Review Legislation, 31 Wake Forest L. Rev. 647 (1996) at 664-66. William D. Araiza, In Praise of a Skeletal
APA, 56 Admin. L. Rev. 979 (2004). (Judiciary, not legislature, appropriate
body to evolve specific standards for review, because of great variety of
agency action and contexts, and inability to describe how general standards of
review should apply to many of them).
Most states have established bodies
of law governing judicial review of agency rules and orders. Section 508(a)(3)
has been drafted generally to make it easier for states to adopt Article Five
because state specific understandings of the scope of review of agency action
can be more easily accommodated with general standards of review.
The first
clause of subsection (a)(3) is based on
1981 MSAPA Section 5-116(c). Subsection
(a)(3) (A) includes, but is not limited to, violations of constitutional or
statutory provisions and actions that are in excess of statutory authority from
Section 15(g)(1), and (2) of the 1961 MSAPA, and includes 1981 MSAPA Section
5-116 subsections (c) (1), (2) and (4).
The subsection 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. Subsection (a)(3)(B) includes violations
of procedures required by law from 1961 MSAPA Section 15(g)(3) and includes
1981 MSAPA Section 5-116 subsections (c)(5) and (6).
Subsection
(a)(3)(C) includes discretionary decisions of agencies that are judicially
reviewable from 1961 MSAPA Section 15(g)(6) and 1981 MSAPA Section 5-116(8),
and federal A.P.A. Section 706 (2)(A). Section
(a)(3)(D) includes the fact determinations in contested cases form 1981 MSAPA
Section 5-116(c)(7) and the federal APA Section 706(2)(E). Section (a)(3)(E)
includes fact determinations that are not made in contested cases and is based
upon the Federal APA Section 706(2)(F). Subsection
(b) is based upon the federal APA section 706, last sentence.
SECTION 601. CREATION
OF OFFICE OF ADMINISTRATIVE HEARINGS.
(a) In this
[article], “office” means the [Office of Administrative Hearings].
(b) The [Office of Administrative Hearings] is
created in the executive branch of state government [within the [ ]
agency].
Comment
Section 601
is based on Section 1-2(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). Twenty five 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.
Article Six has been drafted to include the necessary minimum provisions for a
state that wants to adopt a central panel hearing agency. For states that adopt
this act, Article Four procedures for contested cases would be followed by
administrative law judges who work for the Office of Administrative Hearings. States
that adopt Article Six would provide for a separate hearing agency and would
ensure impartiality and fairness in contested cases by separating the
adjudication function from the prosecution and investigative functions. Administrative
law judges that work for the Office of Administrative Hearings would not be
subject to command influence from the agency head whose contested cases the
administrative law judge is presiding over.
(a)
The office is headed by a chief administrative law judge appointed by
[the Governor] [with the advice and consent of the Senate].
(b) A chief administrative law judge serves a term
of [five] years, and until a successor is appointed and qualifies for office, is
entitled to the salary provided by law, and may be reappointed.
(c) At the time of appointment, the chief
administrative law judge must have been admitted to the practice of law in this
state for at least five years and have substantial experience in administrative
law.
(d) A chief administrative law judge:
(1) must take the oath of office required by law before
beginning the duties of the office;
(2) shall devote full time to the duties of the
office and may not engage in the private practice of law; and
(3)
is subject to the code of conduct for administrative law judges adopted pursuant
to Section 604(7).
(e) A chief administrative law judge may be
removed from office only for cause and only after notice and an opportunity for
a contested case hearing.
Comment
Section 602 is based on Section 1-4
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).
(a)
The chief administrative law judge shall appoint administrative law
judges pursuant to the [state merit system].
(b)
In addition to meeting other requirements of the [state merit system],
to be eligible for appointment as an administrative law judge, an individual
must have been admitted to the practice of law in this state for at least [three]
years.
(c)
An administrative law judge:
(1) shall take the oath of office required by law before
beginning duties as an administrative law judge;
(2)
is subject to the code of conduct for administrative law judges adopted
pursuant to Section 604(7);
(3)
is entitled to the compensation provided
by law; and
(4) may not perform any act inconsistent with the
duties and responsibilities of an administrative law judge.
(d) An administrative law judge:
(1)
is subject to the administrative supervision
of the chief administrative law judge;
(2) may be disciplined pursuant to the [state
merit system law];
(3) Except as otherwise provided in paragraph (4),
may be removed from office only for cause and only after notice and an
opportunity for a contested case hearing; and
(4) is subject to a reduction in force in
accordance with the [state merit system law].
(e) On the [effective date of this [act]],
administrative law judges employed by agencies to which this [article] applies
are transferred to the office and, regardless of the minimum qualifications
imposed by this [article], are administrative law judges in the office.
Comment
Section 603 is based on Sections
1-2(b), and 1-6 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).
SECTION 604. CHIEF ADMINISTRATIVE LAW JUDGE; POWERS;
DUTIES. The chief administrative law judge has the
powers and duties specified in this section. The chief administrative law judge:
(1) shall supervise and manage the office;
(2) shall assign administrative law judges in any
case referred to the office;
(3) shall assure the decisional independence of
each administrative law judge;
(4) shall establish and implement standards for
equipment, supplies, and technology for administrative law judges;
(5)
shall provide and coordinate continuing education programs and services
for administrative law judges and advise them of changes in the law concerning
their duties;
(6)
shall adopt rules pursuant to this [act] to implement [Article] 4 and
this [article];
(7)
shall adopt a code of conduct for administrative law judges;
(8)
shall monitor the quality of adjudications conducted by administrative
law judges;
(9) shall discipline [pursuant to the [state merit
system law] administrative law judges who do not meet appropriate standards of
conduct and competence;
(10) may accept grants and gifts for the benefit
of the office; and
(11)
may contract with other public agencies for the services of the office.
Comment
Section 604 is based on Section 1-5
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).
SECTION 605. COOPERATION
OF AGENCIES.
(a) All agencies shall cooperate with the chief
administrative law judge in the discharge of the duties of the office.
(b) Subject to Section 402, an agency may not
reject a particular administrative law judge for a particular hearing.
Comment
Section 605
is based on Section 1-7(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
Alaska statutes, Section 44.64.080. Agencies should cooperate with the office
of administrative hearings by providing information and coordinating schedules
for contested case hearings.
SECTION 606. ADMINISTRATIVE
LAW JUDGES; POWERS; DUTIES; DECISION MAKING AUTHORITY.
(a)
[Except as otherwise provided in subsection (d), in] In a contested
case, unless the hearing is conducted by a presiding officer other than an administrative
law judge assigned under Section 402(a), an administrative law judge must be
assigned to be the presiding officer. The administrative law judge shall issue
a recommended or initial order to the agency head in the contested case
pursuant to Section 413.
(b)
Except as provided by law of this state other than this [act], if a
matter is referred to the office by an agency, the agency may not take further
action with respect to the proceeding, except as a party, until a recommended
or initial order is issued. [This subsection does not prevent an appropriate
interlocutory review by the agency or an appropriate termination or
modification of the proceeding by the agency when authorized by law other than
this [act].]
(c)
In addition to acting as the presiding officer in contested cases under
this [act], subject to the direction of the chief administrative law judge, an
administrative law judge may perform such other duties as are authorized by law
of this state other than this [act].
[(d) This
section does not apply to the following agencies: [list agencies exempted]].
Comment
Section 606(b)
is based on Section 1-10(c) 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).
SECTION 701. [LEGISLATIVE RULES REVIEW COMMITTEE]. There is created a standing committee of the [Legislature]
designated the [rules review committee].
Legislative Note: States that have existing rules review
committees can incorporate the provisions of Sections 701 and 702, using the
existing number of members of their current rules review committee. Because
state practice varies as to how these committees are structured, and how many
members of the legislative body serve on this committee, as well as how they
are selected, the act does not specify the details of the legislative review
committee selection process. Details of the committee staff and adoption of
rules to govern the rules review committee staff and organization are governed
by law other than this act including the existing law in each state.
Comment
This
section is based on the first sentence of 1981 MSAPA Section 3-203.
SECTION 702. REVIEW BY [RULES REVIEW COMMITTEE].
(a) An agency shall file a copy of an adopted rule
with the [rules review committee] at the same time it is filed with the [publisher].
An agency is not required to file an emergency rule adopted under Section 309
with the [rules review committee].
(b) The [rules review committee] may examine
rules in effect and newly adopted rules to determine whether the:
(1) rule is a valid exercise of delegated
legislative authority;
(2) statutory authority for the rule has expired
or been repealed;
(3) rule is necessary to accomplish the apparent
or expressed intent of the specific statute that the rule implements;
(4) rule is a reasonable implementation of the
law as it applies to any affected class of persons; and
(5) agency complied with the regulatory analysis
requirements of Section 305 and the analysis properly reflects the effect of
the rule.
(c) The [rules review committee] may request from
an agency information necessary to exercise its powers under subsection (b). The [rules review committee] shall consult
with standing committees of the [Legislature] with subject matter jurisdiction
over the subjects of the rule under examination.
(d) The [rules review committee] shall:
(1) maintain oversight over agency rulemaking;
and
(2) exercise other duties assigned to it under
this [article].
Comment
This
section adopts a rules review committee process that is widely followed in
state administrative law as a method for legislative review of agency rules.
States that have rules review committees include Texas, TX GOVT § 2001.032, Iowa, I.C.A.
§ 17A.8, Utah, U.C.A. 1953 § 63G-3-501, Wisconsin,
W.S.A. 227.26 and Montana, MCA § 2-4-402.
The first sentence of subsection (a) requires
the agency to file a copy of an adopted rule with the [rules review committee]
at the same time it is filed with the publisher. Section 316 requires the
agency to file adopted rules with the publisher. The second sentence of subsection (a) exempts
emergency rules adopted under Section 309 from the rules review process.
Emergency rules take effect upon adoption and are effective for a short period
of time.
Subsection (b) allows the
legislative rules review committee to review currently effective rules and newly
adopted rules. The rules review committee may establish priorities for rules
review including review of newly adopted or amended rules, and may manage the
rules review process consistent with committee staff and budgetary resources.
If the content of the rule changes because of legislative amendments, the
agency will be required to file the amended rule with the publisher, and the
amended rule will replace the original rule that was filed with the publisher. The
rules review process applies to rules adopted following the requirements of
Sections 304 to 307. This process does not apply to emergency rules adopted
under Section 309 nor to direct final rules adopted under Section 310.
Subsection (b)(1)
requires the [rules review committee] to determine whether the rule is a valid
exercise of delegated legislative authority. Subsection (b)(2) requires the
[rules review committee] to determine whether the statutory authority for the
rule has expired or been repealed
Subsection (b)(3) requires the [rules review committee] to
determine whether the rule is necessary to accomplish the apparent or expressed
intent of the specific statute that the rule implements. Subsection (b)(4)
requires the [rules review committee] to determine whether the rule is a
reasonable implementation of the law as it applies to any affected class of
persons.
Subsection (b)(5) requires the [rules review committee] to
determine whether the agency complied with the regulatory analysis requirements
of Section 305and the analysis properly reflects the effect of the rule. See
section 305 for the regulatory analysis requirements agencies are required to
undertake as part of the rulemaking process.
The first
sentence of subsection (c) permits the [rules review committee] to request from
the adopting agency information necessary to make the determinations under
subsection (2). The second sentence of subsection (c) directs the [rules review
committee] to consult with the standing committees of the legislature with
subject matter authority over the subjects of the rule in question.
SECTION 703. [RULES
REVIEW COMMITTEE] PROCEDURE AND POWERS.
(a) Not later than [30] days after receiving a
copy of an adopted rule from an agency under Section 702, the [rules review committee]
may:
(1)
approve the adopted rule;
(2) disapprove the rule and propose an amendment
to the adopted rule; or
(3)
disapprove the adopted rule.
(b) If the [rules review committee] approves an
adopted rule or does not disapprove and propose an amendment under subsection
(a)(2) or disapprove under subsection (a)(3), the adopted rule becomes
effective on the date specified for the rule in Section 317.
(c) If the [rules review committee] proposes an
amendment to an adopted 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 shall provide an explanation for the amended rule as
provided in Section 313. An agency is not required to hold a hearing on an
amendment made under this subsection. If the agency makes the amendment, it
shall give notice to the [publisher] for publication of the rule, as amended,
in the [administrative bulletin]. The notice must include the text of the rule
as amended. If the [rules review committee] does not disapprove the rule, as
amended, or propose a further amendment, the rule becomes effective on the date
specified for the rule under Section 317.
(d) If the [rules review committee] disapproves
the adoption of a rule under subsection (a)(3), the adopted rule becomes
effective on adjournment of the next regular session of the [Legislature]
unless before adjournment the [Legislature]
[adopts a [joint] [ concurrent] resolution] [enacts a bill] sustaining the
action of the committee.
(e) An agency may withdraw the adoption 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 with respect to the adoption but does not prevent the agency from
initiating new rulemaking for the same
or substantially similar adoption.
Legislative Note: The 30-day time period in subsection (a) is
the same as the 30-day time period in section 317. State constitutions vary as
to whether or not a joint resolution is a valid way of disapproving an agency
rule. In some states, the Legislature must use the bill process with approval
by the Governor. In other states the joint resolution process is proper. States
should use the alternative that complies with their state constitution. State
constitutions vary on the federal constitutional issue decided by the U.S. Supreme
Court in I.N.S. v. Chadha (1983) 462
U.S. 919, 103 S.Ct. 2764. The U.S. Supreme Court held that the one house
legislative veto provided for in section 244(c)(2) violated the Article I
requirement that legislative action requires passage of a law by both houses of
congress (bicameralism) and presentation to the president for signing or veto
(presentation requirement). Those state constitutions that require presentation
to the governor need an additional step, presentation of the joint resolution
to the governor for approval or disapproval. With state constitutions that do
not require presentation to the governor the rules review process can be
completed with legislative adoption of a joint resolution.
Comment
This is a
type of veto that provides for cooperation between the Legislature and the
Governor, and attempts to avoid the I.N.S. v. Chadha (1983) 462 U.S. 919, 103
S.Ct. 2764. problem of unconstitutionality by delaying the effective date of
the rule until the legislature has the opportunity to enact legislation to
annul or modify it. The governor may
veto the act by which the legislature seeks to annul or modify the rule. This type of veto provision is widely used in
the states. For example the following states have legislative review statutes
as part of their state administrative procedures act: Texas, TX GOVT § 2001.032, Iowa, I.C.A. § 17A.8, Utah, U.C.A. 1953 §
63G-3-501, Wisconsin, W.S.A. 227.26 and Montana, MCA § 2-4-402.
For
disapproval of a rule to be effective, the legislature as a whole must adopt a
joint resolution, and in many states the governor must by presented with the
joint resolution for approval or disapproval. While the rules review committee
can recommend disapproval, the committee recommendation must be approved by the
legislature by joint resolution. In some states, the legislature must comply
with the legislative process for 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).
SECTION 801. RELATION TO
ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, and supersedes
the federal Electronic Signatures in Global and National Commerce Act, 15
U.S.C. Section 7001, et seq., but does not modify, limit, or supersede Section
101 (c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic
delivery of any of the notices described in Section 103(b) of that act, 15
U.S.C. Section 7003(b).
Comment
The federal
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section
7001 et. seq., was enacted in summer of the year 2000. It precludes States from
denying enforceability to an electronic record or an electronic signature
solely because the record or signature is electronic, rather than in writing.
The Electronic Signatures Act applies to cases where a state (or federal) law
requires a writing or a written signature in order to have a particular effect.
The Electronic Signatures Act allows state law to modify, limit or supersede
its effect by laws consistent with it that are technologically neutral and that
refer specifically to the Electronic Signatures Act.
This
Act recognizes the validity of both electronic and written records. It is thus
consistent with the policy of the Electronic Signatures Act in avoiding
discrimination against electronics. Furthermore, the provisions of this Act
relating to the effect of a record or an authentication are technologically
neutral. This Act does not modify the consumer protection provisions of 15 USC
§ 7001(c) and, like the federal act, is neutral on whether the notices
referenced in 15 USC § 7003 (b) may be provided electronically.
SECTION 802. REPEALS. The
following acts are repealed:
(1)
[the 1961 Model State Administrative
Procedure Act].
(2)
[the 1981 Model State Administrative
Procedure Act].
Comment
The purpose of this section is
to provide for the repeal of the prior model act applicable to the state when
the state legislature adopts this model act. While this section has two
subsections providing for repeal of both the 1961 MSAPA and the 1981 MSAPA,
most states will have only one of the two acts, and many of those will have the
1961 MSAPA. The prior act provisions are bracketed so that state legislatures
can include the specific name of the prior model act in their state.
SECTION 803. EFFECTIVE DATE. This [act]
takes effect on [ ].
Comment
This section is based upon the
first clause of 1961 MSAPA Section 19, and the first clause of 1981 MSAPA Section
1-108. See Section 103(b) for applicability of the Act to agency proceedings.
