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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
VETOED
regulatory costs; rulemaking; ratification
Purpose
Prohibits a proposed rule from becoming effective if the proposed rule is estimated to increase regulatory costs by $500,000 until the Legislature enacts legislation ratifying the proposed rule.
Background
Statute outlines administrative procedures relating to rulemaking (A.R.S. Title 41, Chapter 6). Any rules must be submitted to the Administrative Rules Oversight Committee (Committee) which consists of: 1) five members of the House of Representatives (House) who are appointed by the Speaker of the House; 2) five members of the Senate who are appointed by the President of the Senate; and 3) the Governor or their designee who is not an agency director. The Committee may review any proposed rule, final rule, expedited rule, agency practice alleged to constitute a rule or substantive policy statement to ensure conformity with statute and legislative intent. The committee may make comments and designate a representative to testify on whether the outlined rule is consistent with statute or legislative intent to the Governors Regulatory Review Council (GRRC). GRRC must consider the comments and testimony of the Committee. GRRC may review and approve or return the rule or parts of the rule (A.R.S. §§ 41-1047 and 41-1052).
Statute outlines timeframes that govern the procedures of rulemaking. Within 120 days after the close of the record of the public oral proceedings for the proposed rulemaking, the agency must either submit that rule to GRRC or terminate the proposed rule. If an agency finds that a rule is necessary as an emergency measure, the rule may be made, amended or repealed as an emergency measure, without prescribed notice and to prior review by GRRC. An emergency rule that is made, amended or repealed is valid for 180 days after its filing and can be renewed for one more 180-day period if the rule meets the prescribed requirements (A.R.S. § 41-1026). A rule is an agency statement of general applicability that implements, interprets or prescribes law or policy, or describes the procedure or practice requirements of an agency (A.R.S. § 41-1001).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits, for a proposed rule that is estimated to increase regulatory costs by $500,000 or more within five years after implementation, a proposed rule from becoming effective until the Legislature enacts legislation ratifying the rule.
2. Requires the agency to submit the proposed rule to the Committee within 30 days before the next legislative session.
3. Requires the Committee to submit the proposed rule to the Legislature as soon as practicable.
4. Allows any member of the Legislature to introduce legislation to ratify the proposed rule.
5. Prohibits an agency from filing a final rule with the Secretary of State before obtaining legislative approval of the proposed rule through legislation ratifying the rule.
6. Requires, if the Legislature does not enact legislation to ratify the proposed rule during the current legislative session, an agency to terminate the proposed rulemaking by publishing a notice of termination in the register.
7. Exempts the proposed rule subject to the requirements relating to legislative ratification from statutorily prescribed timeframes for rulemaking.
8. Exempts emergency rules from the requirements relating to legislative ratification.
9. Deems, beginning on the general effective date, any rule that increases the regulatory costs by $500,000 as void and unenforceable, unless the legislature enacts legislation ratifying the rule.
10. Exempts the Arizona Corporation Commission from the requirements relating to legislative ratification for certain proposed rules.
11. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Decreases, from $1,000,000 to $50,000, the threshold for a proposed rule that must be ratified by legislation.
Amendments Adopted by Committee of the Whole
1. The committee amendment was withdrawn.
2. Decreases, from $1,000,000 to $500,000, the threshold for a proposed rule that must be ratified by legislation.
Amendments Adopted by the House of Representatives
1. Exempts the Arizona Corporation Commission from the requirement.
2. Makes conforming changes.
Governor's Veto Message
The Governor indicates in her veto message that the current rulemaking process that state agencies follow is rigorous, transparent and essential to allowing the state government to function at its best for the people of Arizona.
Senate Action House Action
GOV 2/15/23 DPA 5-3-0 GOV 3/22/23 DPA 5-4-0-0
3rd Read 2/28/23 16-14-0 3rd Read 4/11/23 31-26-3
Vetoed by the Governor 5/8/23
Prepared by Senate Research
May 9, 2023
AN/SB/slp