S.F. 138 Section 1. Section 7.17, Code 2013, is amended to read as 1 follows: 2 7.17 Office of administrative rules coordinator. 3 1. The governor shall establish the office of the 4 administrative rules coordinator, and appoint its staff, which 5 shall be a part of the governor’s office. 6 2. The administrative rules coordinator shall receive all 7 notices and rules adopted pursuant to chapter 17A and provide 8 the governor with an opportunity to review and object to any 9 rule as provided in chapter 17A . 10 3. a. The administrative rules coordinator shall create a 11 citizens’ committee, consisting of regulators, stakeholders, 12 members of the public, and legislators, to advise the 13 administrative rules coordinator on rulemaking issues. 14 b. The members of the committee shall not be paid a per diem 15 but shall be reimbursed for travel expenses. 16 Sec. 2. Section 17A.4, subsection 1, paragraph b, Code 2013, 17 is amended to read as follows: 18 b. (1) Afford all interested persons not less than twenty 19 days to submit data, views, or arguments in writing , including 20 in an electronic format . If timely requested in writing by 21 twenty-five interested persons, by a governmental subdivision, 22 by the administrative rules review committee, by an agency, or 23 by an association having not less than twenty-five members, the 24 agency must give interested persons an opportunity to make oral 25 presentation. 26 (2) To the extent practicable, the agency shall provide an 27 opportunity to make these oral presentations using the Iowa 28 communications network or other electronic means and provide 29 public access at multiple sites throughout the state. If 30 a request is received from twenty-five interested persons 31 residing in the same city or county, the agency shall provide 32 an opportunity for oral presentation in that city or county. 33 (3) The opportunity for oral presentation must be held 34 at least twenty days after publication of the notice of its 35 -1- LSB 1884XS (4) 85 jr/rj 1/ 12

S.F. 138 time and place in the Iowa administrative bulletin. The 1 agency shall consider fully all written and oral submissions 2 respecting the proposed rule. Within one hundred eighty 3 days following either the notice published according to the 4 provisions of paragraph “a” or within one hundred eighty 5 days after the last date of the oral presentations on the 6 proposed rule, whichever is later, the agency shall adopt a 7 rule pursuant to the rulemaking proceeding or shall terminate 8 the proceeding by publishing notice of termination in the Iowa 9 administrative bulletin. 10 Sec. 3. Section 17A.4, subsection 2, Code 2013, is amended 11 to read as follows: 12 2. An agency shall include in a preamble to each rule 13 it adopts a brief explanation of the principal reasons for 14 its action pursuant to section 17A.5 a concise statement 15 of the principal reasons for and against the rule adopted, 16 incorporating in the statement the reasons for overruling 17 considerations urged against the rule and, if applicable, a 18 brief explanation of the principal reasons for its failure 19 to provide in that the rule for the waiver of the rule in 20 specified situations if no such waiver provision is included 21 in the rule. This explanatory requirement does not apply when 22 the agency adopts a rule that only defines the meaning of a 23 provision of law if the agency does not possess delegated 24 authority to bind the courts to any extent with its definition. 25 In addition, if requested to do so by an interested person, 26 either prior to adoption or within thirty days thereafter, the 27 agency shall issue a concise statement of the principal reasons 28 for and against the rule adopted, incorporating therein the 29 reasons for overruling considerations urged against the rule. 30 This concise statement shall be issued either at the time of 31 the adoption of the rule or within thirty-five days after the 32 agency receives the request. 33 Sec. 4. NEW SECTION . 17A.4B Job impact statement. 34 1. a. “Benefit” means the reasonably identifiable and 35 -2- LSB 1884XS (4) 85 jr/rj 2/ 12

S.F. 138 quantifiable positive effect or outcome that is expected to 1 result from implementation of a rule. 2 b. “Cost” means reasonably identifiable, significant, direct 3 or indirect, economic impact that is expected to result from 4 implementation of and compliance with a rule. 5 c. “Cost-benefit analysis” means regulatory analysis 6 to provide the public with transparency regarding the 7 cost-effectiveness of a rule, including the economic costs and 8 the effectiveness weighed by the agency in adopting the rule. 9 “Cost-benefit analysis” includes a comparison of the probable 10 costs and benefits of a rule to the probable costs and benefits 11 of less intrusive or less expensive methods that exist for 12 achieving the purpose of the rule. 13 d. “Jobs” means private sector employment including 14 self-employment and areas for potential for employment growth. 15 e. “Jobs impact statement” means a statement that does all 16 of the following: 17 (1) Identifies the purpose of a rule and the applicable 18 section of the statute that provides specific legal authority 19 for the agency to adopt the rule. 20 (2) Identifies and describes the cost that the agency 21 anticipates state agencies, local governments, the public, and 22 the regulated entities, including regulated businesses and 23 self-employed individuals, will incur due to the implementation 24 of and complying with a rule. 25 (3) Determines whether a rule would have a positive 26 or negative impact on private sector jobs and employment 27 opportunities in Iowa. 28 (4) Describes and quantifies the nature of the impact a rule 29 will have on private sector jobs and employment opportunities 30 including the categories of jobs and employment opportunities 31 that are affected by the rule, and the number of jobs or 32 potential job opportunities and the regions of the state 33 affected by the rule. 34 (5) Identifies, where possible, the additional costs to 35 -3- LSB 1884XS (4) 85 jr/rj 3/ 12

S.F. 138 employers per employee due to implementation of and complying 1 with a rule. 2 (6) Includes other relevant analysis requested by the 3 administrative rules coordinator. 4 2. Prior to implementation of a rule, an agency shall 5 take steps to minimize the adverse impact on jobs and 6 the development of new employment opportunities due to 7 implementation of the rule. 8 3. An agency shall provide a jobs impact statement to the 9 administrative rules coordinator prior to publication of a 10 notice of intended action or the publication of a rule without 11 notice. 12 4. The jobs impact statement shall be published as part 13 of the preamble to the notice of rulemaking in the Iowa 14 administrative bulletin, unless the administrative rules 15 coordinator determines that publication of the entire jobs 16 impact statement would be unnecessary or impractical. 17 5. An agency shall accept comments and information 18 from stakeholders prior to final preparation of the jobs 19 impact statement. Any concerned private sector employer or 20 self-employed individual, potential employer, potential small 21 business, or member of the public may submit information 22 relating to a jobs impact statement upon a request for 23 information or prior to publication of a notice of intended 24 action or publication of a rule without notice by an agency. 25 6. If a jobs impact statement is revised after a notice 26 of intended action or a rule without notice is published, the 27 revised jobs impact statement shall be published as part of 28 the preamble to the adopted version of the rule, unless the 29 administrative rules coordinator determines that publication 30 of the entire jobs impact statement would be unnecessary or 31 impractical. 32 7. The analysis in the jobs impact statement shall give 33 particular weight to jobs in production sectors of the economy 34 which includes the manufacturing and agricultural sectors of 35 -4- LSB 1884XS (4) 85 jr/rj 4/ 12

S.F. 138 the economy and shall include analysis, where applicable, of 1 the impact of the rule on expansion of existing businesses or 2 facilities. 3 8. The administrative rules coordinator may waive the jobs 4 impact statement requirement for rules proposed on an emergency 5 basis or if unnecessary or impractical. 6 9. By July 1, 2014, and every five years thereafter, an 7 agency shall prepare a comprehensive jobs impact statement 8 for all of the agency’s rules. An agency shall transmit 9 each five-year comprehensive jobs impact statement to the 10 administrative rules coordinator, the administrative rules 11 review committee, and the administrative code editor. The 12 administrative code editor shall publish the statement, or a 13 summary, in the Iowa administrative bulletin. 14 Sec. 5. NEW SECTION . 17A.4C Negotiated rulemaking. 15 1. An agency shall create a negotiated rulemaking group if 16 required by statute. An agency may, on its own motion or upon 17 request, create a negotiated rulemaking group if the agency 18 determines that a negotiated rulemaking group can adequately 19 represent the interests that will be significantly affected by 20 a draft rule proposal and that it is feasible and appropriate 21 in the particular rulemaking. Notice of the creation of a 22 negotiated rulemaking group shall be published in the Iowa 23 administrative bulletin. Upon establishing a negotiated 24 rulemaking group, the agency shall also specify a time frame 25 for group deliberations. 26 2. Unless otherwise provided by statute, the agency shall 27 appoint a sufficient number of members to the group so that 28 a fair cross section of interests and opinions regarding the 29 draft rule proposal is represented. One person shall be 30 appointed to represent the agency. The group shall select its 31 own chairperson and adopt its rules of procedure. All meetings 32 of the group shall be open to the public. A majority of the 33 membership constitutes a quorum. Members shall not receive 34 any per diem payment but shall be reimbursed for all necessary 35 -5- LSB 1884XS (4) 85 jr/rj 5/ 12

S.F. 138 expenses. Any vacancy shall be filled in the same manner as 1 the initial appointment. 2 3. Prior to the publication of a notice of intended action, 3 the group shall consider the terms or substance of the rule 4 proposed by the agency and shall attempt to reach a consensus 5 on the advisability of adopting the draft rule proposal. 6 4. If a group reaches a consensus on a draft rule proposal, 7 the group shall transmit to the agency a report containing the 8 consensus on the draft rule proposal. If the group does not 9 reach a consensus on a draft rule proposal within the specified 10 time frame, the group shall transmit to the agency a report 11 stating that inability to reach a consensus and specifying any 12 areas in which the group reached a consensus. The group may 13 include in a report any other information, recommendations, 14 or materials that the group considers appropriate. Any group 15 member may include as an addendum to the report additional 16 information, recommendations, or materials. A report issued 17 under this subsection shall not be considered final agency 18 action for purposes of judicial review. 19 5. Unless otherwise provided by statute, following 20 consideration of a draft rule proposal by a negotiated 21 rulemaking group, the agency may commence rulemaking as 22 provided in section 17A.4. The group is automatically 23 abolished upon the agency’s adoption of the rule pursuant to 24 the provisions of section 17A.5. 25 Sec. 6. Section 17A.7, subsection 2, Code 2013, is amended 26 by striking the subsection and inserting in lieu thereof the 27 following: 28 2. Over a five-year period of time, an agency shall conduct 29 an ongoing and comprehensive review of all of the agency’s 30 rules. The goal of the review is the identification and 31 elimination of all rules of the agency that are outdated, 32 redundant, overbroad, ineffective, unnecessary, or otherwise 33 undesirable. An agency shall commence its review by developing 34 a plan of review in consultation with major stakeholders and 35 -6- LSB 1884XS (4) 85 jr/rj 6/ 12

S.F. 138 constituent groups. As part of its review, an agency shall 1 review existing policy and interpretive statements or similar 2 documents to determine whether it would be necessary or 3 appropriate to adopt these statements or documents as rules. 4 a. An agency shall establish its five-year plan for review 5 of its rules and publish the plan in the Iowa administrative 6 bulletin. 7 b. An agency’s plan for review shall do all of the 8 following: 9 (1) Contain a schedule that lists when the review of each 10 rule or rule group will occur. 11 (2) State the method by which the agency will analyze 12 the rule under review regarding the considerations listed in 13 paragraph “c” . 14 (3) Provide a means for public participation in the review 15 process and specify how interested persons may participate in 16 the review. 17 (4) Identify instances where the agency may require an 18 exception to the review requirements. 19 (5) Provide a process for ongoing review of rules after the 20 initial five-year review period has expired. 21 c. An agency shall analyze its rules under review by 22 considering all of the following: 23 (1) The need for the rule. 24 (2) The clarity of the rule. 25 (3) The intent and legal authority for the rule. 26 (4) The qualitative and quantitative benefits and costs of 27 the rule. 28 (5) The fairness of the rule. 29 d. When an agency completes its five-year review of its 30 rules, the agency shall provide a summary of the results to the 31 administrative rules coordinator and the administrative rules 32 review committee. 33 Sec. 7. Section 17A.23, Code 2013, is amended to read as 34 follows: 35 -7- LSB 1884XS (4) 85 jr/rj 7/ 12

S.F. 138 17A.23 Construction —— delegation of authority . 1 1. Except as expressly provided otherwise by this chapter 2 or by another statute referring to this chapter by name, the 3 rights created and the requirements imposed by this chapter 4 shall be in addition to those created or imposed by every other 5 statute in existence on July 1, 1975, or enacted after that 6 date. If any other statute in existence on July 1, 1975, or 7 enacted after that date diminishes a right conferred upon a 8 person by this chapter or diminishes a requirement imposed upon 9 an agency by this chapter , this chapter shall take precedence 10 unless the other statute expressly provides that it shall take 11 precedence over all or some specified portion of this named 12 cited chapter. 13 2. This chapter shall be construed broadly to effectuate 14 its purposes. This chapter shall also be construed to apply 15 to all agencies not expressly exempted by this chapter or by 16 another statute specifically referring to this chapter by name 17 citation ; and except as to proceedings in process on July 1, 18 1975, this chapter shall be construed to apply to all covered 19 agency proceedings and all agency action not expressly exempted 20 by this chapter or by another statute specifically referring to 21 this chapter by name citation . 22 3. An agency shall have only that authority or discretion 23 delegated to or conferred upon the agency by law and shall not 24 expand or enlarge its authority or discretion beyond the powers 25 delegated to or conferred upon the agency. Unless otherwise 26 specifically provided in statute, a grant of rulemaking 27 authority shall be construed narrowly. 28 Sec. 8. NEW SECTION . 17A.24 Rule implementation of federal 29 statute, regulation, or policy. 30 1. Except as otherwise explicitly authorized by state law, 31 an agency charged with the implementation of a federal statute, 32 regulation, or policy shall not implement the federal statute, 33 regulation, or policy in a manner that exceeds the specific 34 requirements of the federal statute, regulation, or policy. 35 -8- LSB 1884XS (4) 85 jr/rj 8/ 12

S.F. 138 2. Any portion of an agency rule or policy that implements 1 a federal statute, regulation, or policy and that exceeds the 2 specific requirements of the federal statute, regulation, or 3 policy is automatically superseded by the specific requirements 4 of that federal statute, regulation, or policy. 5 Sec. 9. ENVIRONMENTAL REGULATION STUDY. 6 1. The legislative council, in consultation with the 7 department of natural resources, shall establish a study to 8 analyze the projected financial effects of current and proposed 9 United States environmental protection agency regulations and 10 Iowa department of natural resources rules on Iowa cities over 11 a ten-year period. 12 2. The study should include an analysis of projected 13 financial costs of such regulations and rules on a hypothetical 14 small Iowa community, medium-sized Iowa community, and large 15 Iowa community. 16 3. The study shall be concluded by June 30, 2014, and a 17 report shall be provided to the members of the general assembly 18 and to the governor. 19 EXPLANATION 20 This bill relates to the review of administrative rules and 21 the rulemaking process. 22 CITIZENS’ ADVISORY COMMITTEE. The bill requires that the 23 administrative rules coordinator create a citizens’ committee, 24 to advise the administrative rules coordinator on rulemaking 25 issues. The members of the committee shall not be paid a per 26 diem but shall be reimbursed for travel expenses. 27 RULEMAKING HEARINGS THROUGHOUT STATE. The bill requires 28 administrative agencies, when feasible, to hold rulemaking 29 hearings in varied locations throughout the state via the Iowa 30 communications network or other electronic means and provides 31 that a hearing must be held in a particular city or county 32 when 25 interested persons from that city or county make the 33 request. 34 PRINCIPAL REASONS FOR AND AGAINST RULE. The bill requires 35 -9- LSB 1884XS (4) 85 jr/rj 9/ 12

S.F. 138 that every adopted rule must be accompanied by a concise 1 statement of the principal reasons for and against the rule 2 adopted. Under current law such a statement is only provided 3 on request. 4 JOBS IMPACT STATEMENTS. The bill requires that every 5 proposed rule under a notice of intended action or publication 6 without notice contain a jobs impact statement which outlines 7 the objective and statutory authority of the rule and analyzes 8 and sets out in detail the impact of the proposed rule on state 9 agencies, local governments, the public, and the regulated 10 entities, including regulated businesses and self-employed 11 individuals affected by the rule. The statement must also 12 determine whether a proposed rule would have a positive 13 or negative impact on private sector jobs and employment 14 opportunities. 15 Commencing July 1, 2014, and every five years thereafter, 16 each agency shall prepare a jobs impact statement for all of 17 the agency’s rules. The statement will be published in the 18 Iowa administrative bulletin. 19 As part of this requirement, an agency is required to 20 takes steps to minimize the adverse impact on jobs and the 21 development of new employment opportunities before proposing 22 a rule. 23 The administrative rules coordinator may waive the jobs 24 impact statement requirement for emergency-filed rules or if 25 unnecessary or impractical. 26 NEGOTIATED RULEMAKING GROUPS. If required by statute, 27 this bill requires an agency to create an ad hoc negotiated 28 rulemaking group to review draft rule proposals prior to 29 commencing a rulemaking proceeding. Where a statute does 30 not require this review, the bill allows an agency to create 31 such a review group. Members are appointed by the agency 32 and the composition must adequately represent a fair balance 33 of the interests affected by the rule. Once such a group is 34 created, the agency may only commence rulemaking after the 35 -10- LSB 1884XS (4) 85 jr/rj 10/ 12

S.F. 138 group has considered the draft rule proposal in question. This 1 provision is based on similar provisions found in the federal 2 Administrative Procedures Act. 3 USER-FRIENDLY INTERNET SITES. The bill requires each 4 agency to make available to the public a uniform, searchable, 5 and user-friendly rules database, published on an internet 6 site, subject to the direction of the administrative rules 7 coordinator. Each agency’s internet site must contain 8 specified information relating to the agency’s rules and 9 available procedures for public participation. 10 FIVE-YEAR CYCLE OF AGENCY REVIEW OF RULES. Current 11 law requires that each state agency review all of its 12 administrative rules on a five-year cycle. The plan for this 13 review must be developed in consultation with stakeholders 14 and constituent groups. The goal of the review is the 15 identification and elimination of all rules of the agency that 16 are outdated, redundant, overbroad, ineffective, unnecessary, 17 or otherwise undesirable. 18 The bill requires that each agency develop a plan for 19 conducting the five-year review, which includes detailing the 20 methodology for conducting the review and a means for public 21 participation. 22 NARROW CONSTRUCTION OF RULES. The bill also establishes 23 a new rule of statutory construction: Unless otherwise 24 specifically provided in statute, any grant of rulemaking 25 authority shall be construed narrowly. 26 FEDERAL LAW IMPLEMENTATION. The bill also provides that 27 state implementation of a federal statute, regulation, 28 or policy by a state agency shall not exceed the specific 29 requirements of the federal statute, regulation, or 30 policy, except as specifically allowed by state law. Any 31 portion of a state rule or policy that implements a federal 32 statute, regulation, or policy and that exceeds the specific 33 requirements of the federal statute, regulation, or policy is 34 automatically superseded by the specific requirements of that 35 -11- LSB 1884XS (4) 85 jr/rj 11/ 12

S.F. 138 federal statute, regulation, or policy. 1 ENVIRONMENTAL RULES STUDY. The bill provides that the 2 legislative council, in consultation with the department of 3 natural resources, shall establish a study to analyze the 4 projected financial effects of current and proposed United 5 States environmental protection agency regulations and Iowa 6 department of natural resources rules on Iowa cities over a 7 10-year period. The report of the study must be completed by 8 June 30, 2014. 9 -12- LSB 1884XS (4) 85 jr/rj 12/ 12