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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
AMENDED
permit; license; denials; agency hearing
Purpose
Requires criteria for a state, county or municipal license or permit to be stated in clear and unambiguous language, unless the criteria are established by federal law. Outlines requirements for informal hearings relating to appealable actions and contested cases involving state agencies.
Background
All parties must be afforded an opportunity for a hearing in a contested case involving a state agency (A.R.S. § 41-1061). Most contested cases and appeals of state agency actions are overseen by the Office of Administrative Hearings (OAH) pursuant to the Uniform Administrative Hearing Procedures requirements (OAH hearings) (A.R.S. Title 41, Chapter 6, Article 10). The Director of the OAH is required to assign administrative law judges from the OAH to a state agency on a temporary or permanent basis to preside over OAH hearings (A.R.S. § 41-1092.01). Contested cases within agencies exempt from OAH hearing requirements are instead conducted by each state agency pursuant to the requirements for adjudicative proceedings (state agency adjudicative hearings) (A.R.S. Title 41, Chapter 6, Article 6).
State agency adjudicative hearings and OAH hearings may be conducted in an informal manner without adherence to the rules of evidence required in judicial proceedings. Neither the manner of conducting the hearing or the failure to adhere to the rules of evidence are grounds for reversing any administrative decision, so long as the evidence supporting the decision or order is substantial, reliable and probative (A.R.S. §§ 41-1062 and 41-1092.07).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Criteria for a License or Permit
1. Requires a state agency, municipality or county, in any case in which a license or permit is required before a person engages in a constitutionally-protected activity, to specify the criteria for license or permit approval in clear and unambiguous language, unless the criteria are established by federal law.
2. Exempts licenses or permits required by statute from the requirement that a state agency specify criteria for license or permit approval in clear and unambiguous language.
3. Requires a court to determine whether criteria for a license or permit is clear and unambiguous in any court proceeding involving a denial of a license or permit for a constitutionally-protected activity.
4. Requires a court to determine whether language for a state agency license or permit is clear and unambiguous without deference to the Legislature or state agency.
5. Specifies that if a state agency issues a written clarification or adopts a rule pursuant to statutory rulemaking requirements, the language is presumed clear and unambiguous.
6. Specifies that an applicant is entitled to approval or denial of an application for a municipal or county license or permit involving a constitutionally-protected activity within 30 days of submitting an application, unless another timeframe is specified in statute or rule.
7. Requires state agencies to approve or deny an application for a license or permit for a constitutionally-protected activity within 30 days of submission, unless another timeframe is specified by law or rule.
8. Specifies that an application is deemed approved if a state agency does not take action within the applicable approval or denial timeframe, unless the application is incomplete and the applicant fails to correct the deficiency after notification.
State Agency Adjudicative Hearings and OAH Hearings
9. Prohibits a state agency adjudicative hearing from being conducted in an informal manner, unless:
a) the parties agree to an informal hearing;
b) the agency is authorized by statute to use an informal hearing;
c) the agency is determining eligibility for a medical or welfare program;
d) there is no disputed issue of material fact; or
e) there is a disputed issue of material fact and the matter involves an amount of $1,000 or less.
10. Requires a state agency to state the agency's selection of an informal state agency adjudicative hearing in the notice of the hearing.
11. Allows a party to object to the use of an informal state agency adjudicative hearing, unless the hearing is to determine eligibility for a medical or welfare program.
12. Requires a party that objects to an informal state agency adjudicative hearing to object in the party's pleading.
13. Requires the presiding officer to resolve an objection to the use of an informal state agency adjudicative hearing:
a) before the hearing, based on the pleadings and written submissions in support of the pleadings; and
b) in favor of the licensee in a disciplinary proceeding involving an occupational license.
14. Allows the presiding officer to deny the use of an informal state agency adjudicative hearing or require a formal hearing after an informal hearing is commenced, if it is determined that:
a) a cross-examination is necessary for proper determination of the matter; and
b) the delay, burden or complication due to allowing cross-examination in the informal hearing will be more than minimal.
15. Requires the presiding officer in an informal OAH hearing to regulate the course of the hearing and allow the parties to offer written and oral comments on issues.
16. Allows the presiding officer in an informal OAH hearing to:
a) limit the use of witnesses, testimony, evidence and argument; and
b) limit or prohibit the use of pleadings, intervention, discovery, prehearing conferences and rebuttal.
17. Transfers, from the applicant to the state agency, the burden of persuasion in an OAH hearing relating to the:
a) denial of a license or permit;
b) denial of an application for a license or permit; and
c) request for modification of a license or permit.
18. Requires the burden of proof in all state agency OAH hearings to be at least a preponderance of the evidence.
19. Makes technical and conforming changes.
20. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole
1. Reinserts the exemption for state agency adjudicative hearings from adherence to the rules of evidence and the specification that, if certain conditions are met, the following are not grounds for reversing an administrative decision or order from a state agency adjudicative or OAH hearing:
a) the manner of conducting the hearing; or
b) a failure to adhere to the rules of evidence.
2. Allows state agency adjudicative hearings to be conducted in an informal manner if the state agency is determining eligibility for a medical or welfare program and prohibits a party from objecting to the use of an informal state agency adjudicative hearing held to determine eligibility for a medical or welfare program.
3. Removes language allowing the presiding officer in a OAH hearing to allow individuals other than the parties to offer written or oral comments on the issues of the hearing.
4. Exempts statutory licenses and permits from the requirement that a state agency specify criteria for approval in clear and unambiguous language.
5. Specifies that applications for licenses and permits are not automatically deemed approved due to inaction by a state agency if the application is incomplete and the applicant fails to correct the deficiency after notification by the state agency.
6. Makes technical and conforming changes.
House Action Senate Action
RA 2/4/19 DPA 4-3-0-0 GOV 3/18/19 DP 4-3-0
3rd Read 2/14/19 31-29-0
Prepared by Senate Research
April 23, 2019
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