Assigned to GOV AS
VETOED
Assigned to GOV AS
VETOED
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
VETOED
administrative hearings; procedures
Purpose
Allows parties to participate in settlement conferences or mediation during adjudicative proceedings and motions to seek disposition. Establishes conditions requiring an agency to pay costs and fees during administrative hearings.
Background
The Arizona Administrative Procedure Act (APA) establishes procedures for agency rulemaking and for appealing agency decisions. An agency may make rules only if the Legislature has given it authority to do so, unless exempt from rulemaking procedures. A rule is valid only if it is made in substantial compliance with the APA or other statutory procedures applicable to the agency.
Adjudicative proceedings address contested cases, involving agencies that are exempt from the administrative hearing process, impacting the legal rights, duties or privileges of a party. All parties have an opportunity for a hearing after notice is provided at least 20 days before the hearing date. The notice must include statutory references and rules including an assertion of the matters or issues involved (A.R.S. § 41-1061). A hearing can be conducted in an informal manner, without adherence to the rules of evidence required in judicial proceedings, and in a place determined by the agency. All parties have the right to be represented by counsel, submit evidence in the open hearing and cross-examination (A.R.S. § 41-1062). A final decision must include findings of fact and conclusions of law and the parties must be notified as outlined (A.R.S. § 41-1063).
Additionally, administrative hearings are held for every state agency, unless expressly exempted (A.R.S. § 41-1092.02). A party may file a notice of appeal or request a hearing on an appealable agency action or contested case (A.R.S. § 41-1092.03). The agency then notifies the Office of Administrative Hearings (OAH), which then schedules an appeal or hearing and notices the affected parties at least 30 days before the hearing. All parties have the opportunity to respond, present evidence and deliver arguments on all relevant issues discussed in the hearings (A.R.S. § 41-1092.07). The administrative law judge (ALJ) issues a written decision within 20 days after the hearing is concluded, which is accepted, rejected or modified by the agency head (A.R.S. § 41-1092.08).
Currently, agency is defined as the Arizona Department of Environmental Quality (ADEQ). If ADEQ takes action against a party that is arbitrary, capricious or not according to law, the action is considered an appealable agency action if: 1) the party notifies the agency director in writing within 10 days of the action; 2) the agency continues the specified action; and 3) the action is not excluded from appealable agency action as outlined. If the party prevails, ADEQ must pay reasonable costs and fees to the party. If the appealable action is determined to be frivolous, the ALJ may require the party to pay reasonable costs and fees to ADEQ (A.R.S. § 41-1092.12).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires the opportunity for all parties to participate in a settlement conference or mediation during adjudicative proceedings, unless declined by both parties or the hearing officer.
2. Allows parties in adjudicative proceedings to seek disposition of the case if there is not a genuine issue of material fact.
3. Permits an ALJ to require an agency pay reasonable costs and fees to the party for an administrative hearing if:
a) the ALJ finds against an agency after it prevailed in the initial agency determination; and
b) a subsequent appeal to an appeals board results in a decision against the agency.
4. Removes the definition of agency that references ADEQ.
5. Makes technical and conforming changes.
6. Becomes effective on the general effective date.
Governor's Veto Message
The Governor indicates in his veto message that while H.B. 2523 encourages the early settlement of disputes with administrative agencies, it is too broad and could allow the proliferation of litigation from agency actions taken prior to a final appealable agency decision.
House Action Senate Action
JPS 2/14/18 DP 7-1-0-1 GOV 3/14/18 DP 6-0-1
3rd Read 2/21/18 58-1-1 3rd Read 3/28/18 30-0-0
Vetoed by the Governor 4/4/18
Prepared by Senate Research
April 5, 2018
JO/lat