FINAL BILL REPORT

HB 1358

                                  C 175 L 89

BYRepresentatives Crane, Padden, P. King, Sayan, Heavey, Rector, Ebersole and Inslee;by request of Governor Gardner and Attorney General

Modifying the new Administrative Procedure Act and making conforming amendments.

House Committe on Judiciary

Senate Committee on Law & Justice

SYNOPSIS AS ENACTED

BACKGROUND:

The 1988 Legislature enacted a substantial revision of the Administrative Procedure Act (APA).  This revision takes effect July 1, 1989.  The 1988 act changes the terminology of the APA.  For example, the term "contested case" is replaced by "adjudicative hearing."  A large number of statutes contain cross-references to the APA that will no longer be correct when the 1988 act takes effect or use terminology that has been changed by the 1988 act.

The 1988 act provides more detailed procedures governing the process by which individuals and state agencies interact, including provisions concerning notification of proceedings.  The act does not contain standards for giving that notice.

Although the 1988 act establishes a number of time limits with which agencies must comply, it enables agencies to adopt rules to modify those time limits.

Under the 1988 act, agencies are required to adopt rules governing both formal and informal procedures before the agency. The act also requires the Chief Administrative Law Judge to adopt model rules of procedure.

The 1988 act authorizes agencies to adopt emergency rules in appropriate circumstances. The rules take effect upon filing with the code reviser.  There is no provision allowing emergency rules to take effect at a specified time after filing.

The 1988 act provides a procedure for disqualification of a presiding officer in an adjudicative proceeding.  This procedure requires a party to the proceeding to file a petition for disqualification with the presiding officer. Another statute provides a procedure for disqualification of administrative law judges.  The procedure requires a party to file a motion of prejudice.  It is not clear which of these procedures applies if the presiding officer is an administrative law judge.

Under the 1988 act, a party to an adjudicative proceeding may file a petition for reconsideration.  The agency is required to act on the petition within twenty days or the petition is deemed to have been denied.  The agency head has authority to extend the time for disposition of the petition for good cause.

The 1988 act recognizes three different types of judicial review: review of agency rules, review of orders, and review of other agency action.  Rules may be reviewed in a declaratory judgment proceeding or during review of an agency order in an adjudicative proceeding.  In a declaratory judgment proceeding the court may only consider whether the rule is unconstitutional, beyond the agency's statutory authority, or was adopted under an improper procedure.  Rules which are reviewed during proceedings involving agency orders may also be reviewed to determine whether they are arbitrary or capricious.

The 1988 act establishes statutory procedures for the civil enforcement of agency orders.  The act also limits the defenses which may be raised in the enforcement proceeding. One defense that is permitted is that the rule or order is unconstitutional or beyond the statutory authority of the agency.

The 1988 act authorizes the presiding officer to issue subpoenas, but does not provide a procedure for their enforcement.

The 1988 Legislature passed legislation with a provision amending the Public Disclosure Law.  The Public Disclosure Law authorizes agencies to declare that indexing of some material would be unduly burdensome.  The amendment to the Public Disclosure Law approved by the legislature would have eliminated this exemption for agency orders.  The Governor vetoed this section of the bill because of concerns about the adverse fiscal impact it would have on state agencies.  In his veto message, the Governor declared that he would seek an alternative that would meet the legislature's concern for full public access without unduly impeding the ability of agencies to conduct their business.

SUMMARY:

Terminology and cross-references to the Administrative Procedure Act (APA) throughout the Revised Code of Washington are corrected to reflect the revision of the APA enacted by the legislature in 1988.

A definition for "service" of pleadings and other papers is added to the APA. Service means posting in the United States mail or personal service.  Agencies may authorize service by electronic transmission or by commercial parcel delivery.

Agencies may not modify the time periods governing the procedures for adoption of rules or the time limits for filing a petition for judicial review.

The requirement that agencies adopt rules governing formal and informal proceedings is modified.  An agency may chose not to adopt procedural rules.  If an agency does not adopt rules, the model rules adopted by the chief administrative law judge apply to the agency's proceedings.

Emergency rules take effect when filed with the code reviser, unless a later date is specified in the order of adoption.

If the presiding officer in an adjudicative proceeding is an administrative law judge, both the procedure for disqualification found in the APA and the procedure for a motion for prejudice which applies to administrative law judges are applicable.

The procedure for processing applications for reconsideration is modified.  If a petition for reconsideration is filed, the agency must respond within 20 days, or the petition is deemed to be denied.  The agency may either dispose of the petition or set a date certain by which it will act on the petition.

The standards for judicial review of agency rules are modified.  The same standards apply regardless of the context in which the court is asked to review the rules.  Rules may be declared invalid only if the court finds the rules unconstitutional, beyond the agency's statutory authority, out of compliance with procedures for adoption, or if the rules "could not conceivably have been the product of a rational decision- maker."

In civil enforcement proceedings, the respondent may not raise defenses that he or she raised or could have raised before the agency or a court in a prior proceeding.  The respondent may assert that the interest of justice requires resolution of an issue because of a change in controlling law or subsequent agency action.  The respondent may also claim that the rule or order is inapplicable or raise any other defense specifically authorized by statute.

Subpoenas issued by presiding officers may be enforced by petitioning the superior court for enforcement. After a show cause hearing, the court may hold a person in contempt for failure to comply with the subpoena.  An agency may use the same procedure for the enforcement of investigative subpoenas.

A developmentally disabled person may appeal the decision of the Department of Social and Health Services to change the person's category of residential services.

The Public Disclosure Law is amended to require agencies to adopt and implement a system for indexing certain agency documents.  In addition to retaining prior indexes which the agencies maintained, agencies must index final orders and declaratory orders issued on or after July 1, 1990, that contain an analysis or decision of substantial importance to the agency.  Agencies must also index all interpretive and policy statements issued after that date.

Except for the revision to the Public Disclosure Law, the act takes effect July 1, 1989, when the 1988 APA revisions take effect.  The amendments to the Public Disclosure Law take effect July 1, 1990.

VOTES ON FINAL PASSAGE:

      House 95   0

      Senate    43     0 (Senate amended)

      House 91   0 (House concurred)

EFFECTIVE:July 1, 1989ql July 1, 1990 (Section 36)