S.F. 114 Section 1. Section 7.17, Code 2015, 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 2015, 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 1809XS (3) 86 je/rj 1/ 11

S.F. 114 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 2015, 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 1809XS (3) 86 je/rj 2/ 11

S.F. 114 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 8 and benefits and the effectiveness weighed by the agency 9 in adopting the rule. “Cost-benefit analysis” includes a 10 comparison of the probable costs and benefits of a rule to the 11 probable costs and benefits of less intrusive or less expensive 12 methods that exist for 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 implementing and 24 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 1809XS (3) 86 je/rj 3/ 11

S.F. 114 employers per employee due to implementing and complying with 1 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 1809XS (3) 86 je/rj 4/ 11

S.F. 114 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, 2016, 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 1809XS (3) 86 je/rj 5/ 11

S.F. 114 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 2015, is amended 26 to read as follows: 27 2. Beginning July 1, 2012, over each five-year period of 28 time, an agency shall conduct an ongoing and comprehensive 29 review of all of the agency’s rules. The goal of the review 30 is the identification and elimination of all rules of the 31 agency that are outdated, redundant, or overbroad, ineffective, 32 unnecessary, inconsistent or incompatible with statute or its 33 own rules or those of other agencies , or otherwise undesirable . 34 An agency shall commence its review by developing a plan of 35 -6- LSB 1809XS (3) 86 je/rj 6/ 11

S.F. 114 review in consultation with major stakeholders and constituent 1 groups. As part of its review, an agency shall review existing 2 policy and interpretive statements or similar documents to 3 determine whether it would be necessary or appropriate to adopt 4 these statements or documents as rules. 5 a. An agency shall establish its five-year plan for review 6 of its rules and publish the plan in the Iowa administrative 7 bulletin. 8 b. An agency’s plan for review shall do all of the 9 following: 10 (1) Contain a schedule that lists when the review of each 11 rule or rule group will occur. 12 (2) State the method by which the agency will analyze 13 the rule under review regarding the considerations listed in 14 paragraph “c” . 15 (3) Provide a means for public participation in the review 16 process and specify how interested persons may participate in 17 the review. 18 (4) Identify instances where the agency may require an 19 exception to the review requirements. 20 (5) Provide a process for ongoing review of rules after the 21 initial five-year review period has expired. 22 c. An agency shall analyze its rules under review by 23 considering all of the following: 24 (1) The need for the rule. 25 (2) The clarity of the rule. 26 (3) The intent and legal authority for the rule. 27 (4) The qualitative and quantitative benefits and costs of 28 the rule. 29 (5) The fairness of the rule. 30 d. When the agency completes the five-year review of the 31 agency’s own rules, the agency shall provide a summary of 32 the results to the administrative rules coordinator and the 33 administrative rules review committee. 34 Sec. 7. NEW SECTION . 17A.24 Rule implementation of federal 35 -7- LSB 1809XS (3) 86 je/rj 7/ 11

S.F. 114 statute, regulation, or policy. 1 1. Except as otherwise explicitly authorized by state law, 2 an agency charged with the implementation of a federal statute, 3 regulation, or policy shall not implement the federal statute, 4 regulation, or policy in a manner that exceeds the specific 5 requirements of the federal statute, regulation, or policy. 6 2. Any portion of an agency rule or policy that implements 7 a federal statute, regulation, or policy and that exceeds the 8 specific requirements of the federal statute, regulation, or 9 policy is automatically superseded by the specific requirements 10 of that federal statute, regulation, or policy. 11 Sec. 8. ENVIRONMENTAL REGULATION STUDY. 12 1. The legislative council, in consultation with the 13 department of natural resources, shall establish a study to 14 analyze the projected financial effects of current and proposed 15 United States environmental protection agency regulations and 16 Iowa department of natural resources rules on Iowa cities over 17 a ten-year period. 18 2. The study should include an analysis of projected 19 financial costs of such regulations and rules on a hypothetical 20 small Iowa community, medium-sized Iowa community, and large 21 Iowa community. 22 3. The study shall be concluded by June 30, 2016, and a 23 report shall be provided to the members of the general assembly 24 and to the governor. 25 Sec. 9. EFFECTIVE DATE. The section of this Act amending 26 section 17A.7, subsection 2, takes effect July 1, 2017. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill relates to the review of administrative rules and 31 the rulemaking process. 32 CITIZENS’ ADVISORY COMMITTEE. The bill requires that the 33 administrative rules coordinator create a citizens’ committee, 34 to advise the administrative rules coordinator on rulemaking 35 -8- LSB 1809XS (3) 86 je/rj 8/ 11

S.F. 114 issues. The members of the committee shall not be paid a per 1 diem but shall be reimbursed for travel expenses. 2 RULEMAKING HEARINGS THROUGHOUT STATE. The bill requires 3 administrative agencies, to the extent practicable, to hold 4 rulemaking hearings in varied locations throughout the state 5 via the Iowa communications network or other electronic means 6 and provides that a hearing must be held in a particular city 7 or county when 25 interested persons from that city or county 8 make the request. 9 PRINCIPAL REASONS FOR AND AGAINST RULE. The bill requires 10 that every adopted rule must be accompanied by a concise 11 statement of the principal reasons for and against the rule 12 adopted. Under current law such a statement is only provided 13 on request. 14 JOBS IMPACT STATEMENTS. The bill requires that every 15 proposed rule under a notice of intended action or publication 16 without notice contain a jobs impact statement which outlines 17 the purpose and statutory authority of the rule and analyzes 18 and sets out in detail the impact of the proposed rule on state 19 agencies, local governments, the public, and the regulated 20 entities, including regulated businesses and self-employed 21 individuals affected by the rule. The statement must also 22 determine whether a proposed rule would have a positive 23 or negative impact on private sector jobs and employment 24 opportunities. 25 Commencing July 1, 2016, and every five years thereafter, 26 each agency shall prepare a jobs impact statement for all of 27 the agency’s rules. The statement must be published in the 28 Iowa administrative bulletin. 29 As part of this requirement, an agency is required to 30 takes steps to minimize the adverse impact on jobs and the 31 development of new employment opportunities before proposing 32 a rule. 33 The administrative rules coordinator may waive the jobs 34 impact statement requirement for emergency-filed rules or if 35 -9- LSB 1809XS (3) 86 je/rj 9/ 11

S.F. 114 unnecessary or impractical. 1 NEGOTIATED RULEMAKING GROUPS. If required by statute, 2 this bill requires an agency to create an ad hoc negotiated 3 rulemaking group to review draft rule proposals prior to 4 commencing a rulemaking proceeding. Where a statute does not 5 require this review, the bill allows an agency to create such 6 a review group. Members are appointed by the agency and the 7 composition must adequately represent a fair cross section of 8 interests and opinions regarding the rule. Once such a group 9 is created, the agency may only commence rulemaking after the 10 group has considered the draft rule proposal in question. This 11 provision is based on similar provisions found in the federal 12 Administrative Procedures Act. 13 FIVE-YEAR CYCLE OF AGENCY REVIEW OF RULES. Current 14 law requires that each state agency review all of its 15 administrative rules on a five-year cycle. The bill provides 16 additional procedures and criteria for such reviews. 17 FEDERAL LAW IMPLEMENTATION. The bill also provides that 18 state implementation of a federal statute, regulation, 19 or policy by a state agency shall not exceed the specific 20 requirements of the federal statute, regulation, or 21 policy, except as specifically allowed by state law. Any 22 portion of a state rule or policy that implements a federal 23 statute, regulation, or policy and that exceeds the specific 24 requirements of the federal statute, regulation, or policy is 25 automatically superseded by the specific requirements of that 26 federal statute, regulation, or policy. 27 ENVIRONMENTAL RULES STUDY. The bill provides that the 28 legislative council, in consultation with the department of 29 natural resources, shall establish a study to analyze the 30 projected financial effects of current and proposed United 31 States environmental protection agency regulations and Iowa 32 department of natural resources rules on Iowa cities over a 33 10-year period. The report of the study must be completed by 34 June 30, 2016. 35 -10- LSB 1809XS (3) 86 je/rj 10/ 11