HF 2368 (LSB 6086HH (1) 88)

HOUSE FILE 2368

BY  JACOBSEN

A BILL FOR

An Act requiring rescission of existing regulations by state agencies when new regulations are adopted, providing for approval by the department of management of rulemaking, providing related procedures, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  17A.24  Required rescission of regulations —— approval of rule filings by department of management —— report.
   1.  Definitions.  For purposes of this section:
   a.  “Department” means the department of management. 
   b.  “Notice of intended action” includes an amended notice of intended action.
   c.  “Regulation” means a rule as described in the preface to the Iowa administrative bulletin and does not include a subrule or other subunit or an entry designated in the Iowa administrative code as reserved or rescinded.
   d.  “Rule filing” means a notice of intended action pursuant to section 17A.4, subsection 1, paragraph “a”, a rule filed without notice pursuant to section 17A.4, subsection 3, or a rule adopted pursuant to section 17A.5.
   2.  Required rescission of regulations.
   a.  A rule filing that would add one or more regulations to the Iowa administrative code shall also rescind a number of regulations equal to at least twice the number of regulations added. If a regulation is rescinded and adopted anew in the same rule filing, the rescission of the prior rule shall count as one of the two required rescissions for purposes of this paragraph.
   b.  The department shall ensure that compliance with paragraph “a” is not accomplished solely by reorganizing or redesignating existing regulations by combining regulations or redesignating regulations as subrules or other subunits of the Iowa administrative code. The department may disapprove any rule filing submitted pursuant to subjection 3 that appears to be drafted so as to circumvent the requirements of paragraph “a”.
   c.  This subsection does not apply to rule filings submitted to the department pursuant to subsection 3 by an agency within seventy-eight weeks of the effective date of the statute that established the agency.
   3.  Submission of rules to department of management.  Before an agency submits a rule filing to the administrative rules coordinator and the administrative code editor pursuant to section 17A.4 or 17A.5, the agency shall submit the rule filing to the department for approval. The department shall prescribe procedures for making such submissions. The agency may include with the submission any additional information that may assist the department in making a determination pursuant to subsection 5.
   4.  Regulatory baseline statement.  The agency shall include a regulatory baseline statement with a rule filing submitted to the department pursuant to subsection 3. The department shall not approve a rule filing that does not include a regulatory baseline statement. The department shall post all regulatory baseline statements received on the department’s internet site. A regulatory baseline statement shall contain all of the following information: 
   a.  The applicable portion of the statute that provides specific legal authority for the agency to adopt the rule filing.
   b.  The purpose of the rule filing.
   c.  If the rule filing would add one or more regulations to the Iowa administrative code, a list of the regulations to be added as well as the regulations to be rescinded in compliance with subsection 2. In lieu of such a list, the agency may include a request for exemption from subsection 2 pursuant to subsection 7.
   5.  Evaluation by department of management.  In determining whether to approve a rule filing, the department, in consultation with the administrative rules coordinator, shall evaluate the rule filing and included regulatory baseline statement using all of the following criteria:
   a.  Whether the rule filing is the only effective and necessary means to achieve the desired outcome, including an analysis of all of the following:
   (1)  Whether the rule filing complements and does not duplicate existing rules.
   (2)  Whether the rule filing would be simple to administer in terms of both enforcement by the agency and compliance by any regulated persons.
   b.  The degree to which the rule filing or related rules or agency procedures include performance measures that are directly related to the desired outcome, including but not limited to a provision establishing periodic review to ensure intended outcomes or a provision providing for the rescission of the rule filing or related rules upon a determination that the rule filing or related rules no longer achieve the desired original outcomes.
   c.  The inclusion of clear justifications for the implementation of the rule filing, including the development or existence of implementation processes for the rule filing, which processes:
   (1)  Are transparent and easily accessible by the public.
   (2)  Contain appropriate, modern methods of public notification.
   (3)  Are written in plain language.
   (4)  Are designed to allow citizens and businesses to clearly understand their rights and obligations under the rule filing.
   d.  Whether the rule filing is the most cost-effective means to achieve the desired outcome and to what extent the benefits of the rule filing are greater than the burdens it imposes.
   e.  A determination that the rule filing does not have a detrimental effect on the state’s economy, including a determination that all of the following apply to the rule filing:
   (1)  The rule filing does not have a negative effect on the economic competitiveness of the state.
   (2)  The rule filing is not more difficult to comply with than similar regulatory requirements in similarly situated states.
   (3)  The rule filing is compatible with the following strategic goals for this state:
   (a)  Promoting equal application of regulatory requirements for all affected businesses and industries. 
   (b)  Increased job creation. 
   (c)  Increased economic growth.
   f.  Whether the rule filing is specifically required by a provision of law.
   6.  Approval by department of management.  If the department approves a rule filing, the agency shall submit the rule filing to the administrative rules coordinator and the administrative code editor pursuant to section 17A.4 or 17A.5, as applicable. If the department does not approve a rule filing, the department shall provide the agency with a written explanation for its disapproval.
   7.  Exemptions.
   a.  An agency may include a request for exemption from the requirements of subsection 2 or 5 or both with its submission to the department pursuant to subsection 3. The request shall include a detailed justification for the exemption. The department shall only grant an exemption if the department determines that the exemption is necessary to protect the health, safety, or welfare of the citizens of this state. 
   b.  An agency that receives an exemption from subsection 2 for a rule filing that is not a notice of intended action shall subsequently adopt rules that rescind regulations sufficient to meet the requirements of subsection 2 for the exempted rule filing. If an agency does not do so, all regulations added to the Iowa administrative code in the exempted rule filing are void seventy-eight weeks from the date of publication of the exempted filing in the Iowa administrative bulletin. An agency shall designate in the regulatory baseline statement included with a subsequent rule filing the regulations rescinded in compliance with this paragraph. 
   c.  If the department grants an exemption from subsection 5 for a rule filing, the department shall complete a subsequent review of the rule filing based on the criteria provided in subsection 5 within two weeks. If the department determines that the rule filing did not satisfy the criteria provided in subsection 5, all regulations added to the Iowa administrative code in the exempted rule filing are void seventy-eight weeks from the date of publication of the exempted filing in the Iowa administrative bulletin.
   d.  If a rule filing receives an exemption pursuant to this section, the department shall provide the agency’s request for exemption and the department’s determination to the administrative rules coordinator and the administrative code editor. The exemption and determination shall be published as part of the preamble to the rule filing in the Iowa administrative bulletin unless the administrative code editor determines that publication of the entire exemption and determination would be unnecessary or impractical.
   8.  Report.  The department shall by November 1 each year, beginning in 2021, submit a report to the general assembly and the governor on the total number of regulations included in the Iowa administrative code, including a calculation of the change in the total from November 1 of the previous year. The report shall include any recommendations for amendments to this section.
   9.  Technical assistance by legislative services agency.  The legislative services agency shall provide the department with information regarding the Iowa administrative code and technical assistance as necessary to facilitate the implementation of this section.
    Sec. 2.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 3.  APPLICABILITY.  This Act applies to rule filings, as defined in section 17A.24, subsection 1, as enacted by this Act, submitted for publication in the Iowa administrative bulletin beginning in volume XLIII, number 8, dated October 7, 2020.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to procedures for rulemaking by executive branch agencies under Code chapter 17A, the Iowa administrative procedure Act.
   The bill provides that a rule filing that would add one or more regulations to the Iowa administrative code shall also rescind a number of regulations equal to at least twice the number of regulations added. The bill specifies that if a regulation is rescinded and adopted anew in the same rule filing, the rescission of the prior rule shall count as one of the two required rescissions. This requirement does not apply to rule filings by an agency within 78 weeks of the effective date of the statute that established the agency.
   The bill defines “regulation” as a rule as described in the preface to the Iowa administrative bulletin, not including a subrule or other subunit or an entry designated in the Iowa administrative code as reserved or rescinded. The bill defines “rule filing” as a notice of intended action, a rule filed without notice, or an adopted rule.
   The bill requires that an agency, before submitting a rule filing to the administrative rules coordinator and the administrative code editor as required under current law, to submit the rule filing to the department of management for approval. The bill requires that the department ensure compliance with the requirement to rescind a number of regulations equal to at least twice the number of regulations added in a rule filing is not accomplished solely by reorganizing or redesignating existing regulations. The bill authorizes the department to disapprove any rule filing that appears to be drafted so as to circumvent the requirement.
   The bill requires an agency to include a regulatory baseline statement with the submission. The bill prohibits the department from approving a rule filing that does not include such a statement. The statement shall include the applicable portion of the statute that provides specific legal authority for the agency to adopt the rule filing, the purpose of the rule filing, and, if the rule filing would add one or more regulations to the Iowa administrative code, a list of the regulations to be added as well as the regulations to be rescinded in compliance with the bill. In lieu of such a list, the agency may include a request for exemption as provided in the bill.
   The bill provides criteria for evaluation of rule filings by the department, in consultation with the administrative rules coordinator, in determining whether to provide approval. The criteria relate to effectiveness and necessity, performance measures, clear justifications, cost effectiveness, economic impact, and whether the regulations are specifically required by a provision of law. 
   If the department approves a rule filing, the agency shall submit the rule filing to the administrative rules coordinator and the administrative code editor as required under current law. If the department does not approve a rule filing, the department shall provide the agency with a written explanation for its disapproval.
   The bill provides a process for an agency to request an exemption from the department from the requirement to rescind a number of regulations equal to at least twice the number of regulations added in a rule filing, the requirement for an evaluation of the rule filing by the department, or both. The request shall include a detailed justification for the exemption. The department shall only grant an exemption if the department determines that the exemption is necessary to protect the health, safety, or welfare of the citizens of Iowa. The bill provides additional procedural requirements for rule filings that receive such exemptions. If the additional procedural requirements are not met, regulations contained in such rule filings are void 78 weeks after publication in the Iowa administrative bulletin. The exemption request and the department’s determination regarding the request shall be published in the Iowa administrative bulletin. 
   The bill requires the department to submit an annual report to the general assembly and the governor by November 1 beginning in 2021 on the total number of regulations included in the Iowa administrative code, including a calculation of the change in the total from November 1 of the previous year. The report shall include any recommendations regarding changes to the bill. 
   The report requires the legislative services agency to provide the department with information regarding the Iowa administrative code and technical assistance as necessary to facilitate the implementation of the bill.
   The bill takes effect upon enactment. The bill applies to rule filings, as defined in the bill, submitted for publication in the Iowa administrative bulletin beginning in volume XLIII, number 8, dated October 7, 2020.