6242.E AMH SG H4384.1

6242.E AMH SG H4384.1

ESB 6242 - H COMM AMD

By Committee on State Government

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 34.05.370 and 1988 c 288 s 313 are each amended to read as follows:

(1) Each agency shall maintain an official rule-making file for each rule that it (a) proposes by publication in the state register, or (b) adopts. The file and materials incorporated by reference shall be available for public inspection.

(2) The agency rule-making file shall contain all of the following:

(a) Copies of all publications in the state register with respect to the rule or the proceeding upon which the rule is based;

(b) Copies of any portions of the agency's public rule-making docket containing entries relating to the rule or the proceeding on which the rule is based;

(c) All written petitions, requests, submissions, and comments received by the agency and all other written material regarded by the agency as important to adoption of the rule or the proceeding on which the rule is based;

(d) Any official transcript of oral presentations made in the proceeding on which the rule is based or, if not transcribed, any tape recording or stenographic record of them, and any memorandum prepared by a presiding official summarizing the contents of those presentations;

(e) The concise explanatory statement required by RCW 34.05.355;

(f) All petitions for exceptions to, amendment of, or repeal or suspension of, the rule; ((~~and~~))

(g) Any other material placed in the file by the agency; and

(h) The written description of the agency's consideration of rule-making criteria required by section 3 of this act.

(3) Internal agency documents are exempt from inclusion in the rule-making file under subsection (2) of this section to the extent they constitute preliminary drafts, notes, recommendations, and intra-agency memoranda in which opinions are expressed or policies formulated or recommended, except that a specific document is not exempt from inclusion when it is publicly cited by an agency in connection with its decision.

(4) Upon judicial review, the file required by this section constitutes the official agency rule-making file with respect to that rule. Unless otherwise required by another provision of law, the official agency rule-making file need not be the exclusive basis for agency action on that rule.

Sec. 2. RCW 34.05.350 and 1989 c 175 s 10 are each amended to read as follows:

(1) If an agency for good cause finds:

(a) That immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest; or

(b) That state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule,

the agency may dispense with those requirements and adopt, amend, or repeal the rule on an emergency basis. The agency's finding and a concise statement of the reasons for its finding shall be incorporated in the order for adoption of the emergency rule or amendment filed with the office of the code reviser under RCW 34.05.380 and with the rules review committee.

(2) An emergency rule adopted under this section takes effect upon filing with the code reviser, unless a later date is specified in the order of adoption, and may not remain in effect for longer than one hundred twenty days after filing. Identical or substantially similar emergency rules may not be adopted in sequence unless conditions have changed or the agency has filed notice of its intent to adopt the rule as a permanent rule, and is actively undertaking the appropriate procedures to adopt the rule as a permanent rule. This section does not relieve any agency from compliance with any law requiring that its permanent rules be approved by designated persons or bodies before they become effective.

(3) The governor, in cooperation with the attorney general, shall ensure compliance with emergency rule-making requirements of this section.

(4) When adopting an emergency rule, an agency shall meet the requirements of section 3(1) and (2) of this act or provide written justification for its failure to provide the information.

NEW SECTION. Sec. 3. A new section is added to chapter 34.05 RCW to read as follows:

(1) Before adopting a rule, an agency shall evaluate:

(a) The need for the rule;

(b) Whether the likely benefits of the rule justify its likely costs;

(c) The economic and environmental consequences of adopting the rule or failing to adopt the rule, including the agency's compliance with chapters 19.85, 43.21C, and 43.21H RCW;

(d) Whether alternative rule language or alternatives to adopting the rule, including the no action alternative, may achieve the same purpose at less cost;

(e) Whether any conflict, overlap, or duplication with any other provision of federal or state law is reasonably justified;

(f) Whether any differences between the proposed rule and rules adopted by the federal government on the same subject are reasonably justified, the costs and benefits that may result from such differences, and the statutory authority for the rule; and

(g) Whether any differences in the applicability of the rule to public and private entities are reasonably justified.

(2) The agency shall prepare a written description of the evaluations required under subsection (1) of this section. The description shall be part of the official rule-making file for the rule.

(3) Within a reasonable period of time after adopting rules, an agency shall have a plan to evaluate whether rules filed under each adopting order achieve the purpose for which they were adopted.

(4) Agency evaluations under subsection (1) of this section and the requirements of subsections (2) and (3) of this section are subject to the full scope of judicial review authorized in RCW 34.05.570(2)(c).

Sec. 4. RCW 34.05.325 and 1992 c 57 s 1 are each amended to read as follows:

(1) The agency shall make a good faith effort to insure that the information on the proposed rule published pursuant to RCW 34.05.320 accurately reflects the rule to be presented and considered at the oral hearing on the rule. Written comment about a proposed rule, including supporting data, shall be accepted by an agency if received no later than the time and date specified in the notice, or such later time and date established at the rule-making hearing.

(2) The agency shall provide an opportunity for oral comment to be received by the agency in a rule-making hearing.

(3) If the agency possesses equipment capable of receiving telefacsimile transmissions or recorded telephonic communications, the agency may provide in its notice of hearing filed under RCW 34.05.320 that interested parties may comment on proposed rules by these means. If the agency chooses to receive comments by these means, the notice of hearing shall provide instructions for making such comments, including, but not limited to, appropriate telephone numbers to be used; the date and time by which comments must be received; required methods to verify the receipt and authenticity of the comments; and any limitations on the number of pages for telefacsimile transmission comments and on the minutes of tape recorded comments. The agency shall accept comments received by these means for inclusion in the official record if the comments are made in accordance with the agency's instructions.

(4) The agency head, a member of the agency head, or a presiding officer designated by the agency head shall preside at the rule-making hearing. Rule-making hearings shall be open to the public. The agency shall cause a record to be made of the hearing by stenographic, mechanical, or electronic means. Unless the agency head presides or is present at substantially all the hearings, the presiding official shall prepare a memorandum for consideration by the agency head, summarizing the contents of the presentations made at the rule-making hearing. The summarizing memorandum is a public document and shall be made available to any person in accordance with chapter 42.17 RCW.

(5) Rule-making hearings are legislative in character and shall be reasonably conducted by the presiding official to afford interested persons the opportunity to present comment. Rule-making hearings may be continued to a later time and place established on the record without publication of further notice under RCW 34.05.320.

(6) Before the adoption of a final rule, an agency shall prepare a written summary of all comments received regarding the proposed rule, and a substantive response to the comments by category or subject matter, indicating how the final rule reflects agency consideration of the comments, or why it fails to do so. The agency shall provide the written summary and response to any person upon request or from whom the agency received comment.

Sec. 5. RCW 34.05.330 and 1988 c 288 s 305 are each amended to read as follows:

(1) Any person may petition an agency requesting the adoption, amendment, or repeal of any rule. Each agency may prescribe by rule the form for such petitions and the procedure for their submission, consideration, and disposition. Within sixty days after submission of a petition, the agency shall (1) either deny the petition in writing, stating its reasons for the denial, or (2) initiate rule-making proceedings in accordance with this chapter.

(2) If an agency headed by a nonelected official denies a petition to repeal or amend a rule under this section, the petitioner may, within thirty days of the denial, appeal to the governor. Within sixty days of receipt of the petition, the governor shall either reject the appeal in writing, stating reasons for the rejection, or order the agency to initiate rule-making proceedings in accordance with this chapter.

Sec. 6. RCW 34.05.355 and 1988 c 288 s 310 are each amended to read as follows:

((~~(1)~~)) At the time it files an adopted rule with the code reviser or within thirty days thereafter, an agency shall place into the rule-making file maintained under RCW 34.05.370 a concise explanatory statement about the rule, identifying ((~~(a)~~)) (1) the agency's reasons for adopting the rule, ((~~and (b)~~)) (2) a description of any difference between the text of the proposed rule as published in the register and the text of the rule as adopted, other than editing changes, stating the reasons for change, and (3) a written summary of the agency's substantive responses to comments or categories of comments received on the proposed rule.

(((2) Upon the request of any interested person within thirty days after adoption of a rule, the agency shall issue a concise statement of the principal reasons for overruling the considerations urged against its adoption.))

Sec. 7. RCW 19.85.030 and 1989 c 374 s 2 and 1989 c 175 s 72 are each reenacted and amended to read as follows:

In the adoption of any rule pursuant to RCW 34.05.320 that will have an economic impact on more than twenty percent of all industries, or more than ten percent of any one industry, the adopting agency:

(1) Shall reduce the economic impact of the rule on small business by doing one or more of the following when it is legal and feasible in meeting the stated objective of the statutes which are the basis of the proposed rule:

(a) Establish differing compliance or reporting requirements or timetables for small businesses;

(b) Clarify, consolidate, or simplify the compliance and reporting requirements under the rule for small businesses;

(d) Exempt small businesses from any or all requirements of the rule; and

(e) Other mitigation techniques.

(2) Before filing notice of a proposed rule, shall prepare a small business economic impact statement in accordance with RCW 19.85.040 and file such statement with the code reviser along with the notice required under RCW 34.05.320;

(3) May request assistance from the business assistance center in the preparation of the small business economic impact statement.

Sec. 8. RCW 19.85.020 and 1993 c 280 s 34 are each amended to read as follows:

Unless the context clearly indicates otherwise, the definitions in this section apply through this chapter.

(1) "Small business" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, that has the purpose of making a profit, and that has fifty or fewer employees.

(2) "Small business economic impact statement" means a statement meeting the requirements of RCW 19.85.040 prepared by a state agency pursuant to RCW 19.85.030.

(3) "Industry" means all of the businesses in this state in any one ((~~three-digit~~)) four-digit standard industrial classification as published by the United States department of commerce. However, if the four-digit standard industrial classification would result in the release of data that would violate state confidentiality provisions, "industry" means all businesses in a three-digit standard industrial classification.

Sec. 9. RCW 19.85.040 and 1989 c 374 s 3 and 1989 c 175 s 73 are each reenacted and amended to read as follows:

(1) A small business economic impact statement must include:

(a) A brief description of the reporting, recordkeeping, and other compliance requirements of the rule, and the kinds of professional services that a small business is likely to need in order to comply with such requirements((~~. A small business economic impact statement shall analyze,~~));

(b) An analysis based on existing data and any new data gathered by the agency, of the costs of compliance for businesses required to comply with the provisions of a rule adopted pursuant to RCW 34.05.320, including costs of equipment, supplies, labor, and increased administrative costs, and compare to the greatest extent possible the cost of compliance for small business with the cost of compliance for the ten percent of firms which are the largest businesses required to comply with the proposed new or amendatory rules;

(c) A summary of the mitigation options considered by the agency and an explanation of each option not included in the rule.

(2) The small business economic impact statement shall use one or more of the following as a basis for comparing costs:

((~~(1)~~)) (a) Cost per employee;

((~~(2)~~)) (b) Cost per hour of labor; and

((~~(3)~~)) (c) Cost per one hundred dollars of sales((;

~~(4) Any combination of (1), (2), or (3)~~)).

(3) Agencies are encouraged to use committees pursuant to RCW 34.05.310 in analyzing the costs of compliance and identifying steps to be taken to minimize the cost impact on small business.

Sec. 10. RCW 19.85.010 and 1982 c 6 s 1 are each amended to read as follows:

The legislature finds that small businesses in the state of Washington have in the past been subjected to rules adopted by agencies, departments, and instrumentalities of the state government which have placed a proportionately higher burden on the small business community in Washington state. The legislature also finds that such proportionately higher burdens placed on small businesses have reduced competition, reduced employment, reduced new employment opportunities, reduced innovation, and threatened the very existence of some small businesses. Therefore, it is the intent of the legislature that rules affecting the business community shall not place proportionately higher burdens on small businesses. The legislature therefore enacts this Regulatory Fairness Act to minimize such proportionately higher impacts of rules on small businesses in the future and reduce the economic impact of state rules on small business.

Sec. 11. RCW 34.05.640 and 1993 c 277 s 2 are each amended to read as follows:

(1) Within seven days of an agency hearing held after notification of the agency by the rules review committee pursuant to RCW 34.05.620 or 34.05.630, the affected agency shall notify the committee of its action on a proposed or existing rule to which the committee objected or on a committee finding of the agency's failure to adopt rules. If the rules review committee determines, by a majority vote of its members, that the agency has failed to provide for the required hearings or notice of its action to the committee, the committee may file notice of its objections, together with a concise statement of the reasons therefor, with the code reviser within thirty days of such determination.

(2) If the rules review committee finds, by a majority vote of its members: (a) That the proposed or existing rule in question has not been modified, amended, withdrawn, or repealed by the agency so as to conform with the intent of the legislature, or (b) that the agency is using a policy statement, guideline, or issuance in place of a rule, or that the policy statement, guideline, or issuance is outside of the legislative intent, the rules review committee may, within thirty days from notification by the agency of its action, file with the code reviser notice of its objections together with a concise statement of the reasons therefor. Such notice and statement shall also be provided to the agency by the rules review committee.

(3) If the rules review committee makes an adverse finding under subsection (2) of this section, the committee may, by a ((~~two-thirds~~)) majority vote of its members, recommend suspension of an existing rule. Within seven days of such vote the committee shall transmit to the governor, the code reviser, and the agency written notice of its objection and recommended suspension and the concise reasons therefor. Within thirty days of receipt of the notice, the governor shall transmit to the committee, the code reviser, and the agency written approval or disapproval of the recommended suspension. If the suspension is approved by the governor, it is effective from the date of that approval and continues until ninety days after the expiration of the next regular legislative session.

(4) If the governor disapproves the recommendation by the rules review committee to suspend the rule, the transmittal of such decision, along with the findings of the rules review committee, shall be treated by the agency as a petition by the rules review committee to repeal the rule pursuant to RCW 34.05.330. Within sixty days the agency shall either commence appropriate rule repeal or rule amendment proceedings or state in writing why the rule was adopted within the scope of the agency's statutory authority.

(5) The code reviser shall publish transmittals from the rules review committee or the governor issued pursuant to subsection (1), (2), or (3) of this section in the Washington state register and shall publish in the next supplement and compilation of the Washington Administrative Code a reference to the committee's objection or recommended suspension and the governor's action on it and to the issue of the Washington state register in which the full text thereof appears.

((~~(5)~~)) (6) The reference shall be removed from a rule published in the Washington Administrative Code if a subsequent adjudicatory proceeding determines that the rule is within the intent of the legislature or was adopted in accordance with all applicable laws, whichever was the objection of the rules review committee.

Sec. 12. RCW 19.85.060 and 1989 c 374 s 5 are each amended to read as follows:

An agency is not required to prepare a small business economic impact statement if the agency files a statement that:

(1) The rule is being adopted solely for the purpose of conformity or compliance, or both, with federal law or regulations; or

(2) The rule will have a minor or negligible economic impact when it does not exceed 0.001 multiplied by the average profits for businesses in any industry affected by a rule. The business assistance center shall develop guidelines ((~~for~~)) to assist agencies in determining whether a proposed rule will have minor or negligible impacts. The business assistance center may review a proposed rule that indicates that there is only a minor or negligible economic impact to determine if the agency's finding is within the guidelines developed by the business assistance center. The business assistance center is authorized to advise the joint administrative rules review committee on disputes involving agency determinations under this section.

NEW SECTION. Sec. 13. A new section is added to chapter 34.05 RCW to read as follows:

If the rules review committee by a vote of two-thirds of its members recommends to the governor that an existing rule be suspended, such recommendation shall establish a rebuttable presumption in any proceeding challenging the validity of the rule that such rule was adopted outside the scope of the authority of the agency adopting the rule.

Sec. 14. RCW 34.05.660 and 1988 c 288 s 606 are each amended to read as follows:

Except as provided in section 13 of this act, it is the express policy of the legislature that establishment of procedures for review of administrative rules by the legislature and the notice of objection required by RCW 34.05.630(2) and 34.05.640(2) in no way serves to establish a presumption as to the legality or constitutionality of a rule in any subsequent judicial proceedings interpreting such rules.

NEW SECTION. Sec. 15. The department of community, trade, and economic development shall develop a model standardized format for reporting information that is commonly required from the public by state and local government agencies for permits, licenses, approvals, and services. In the development of the format, the department shall work in conjunction with representatives from state and local government agencies and representatives of the business community.

The department shall submit the standardized format together with recommendations for implementation to the legislature by December 31, 1994.

NEW SECTION. Sec. 16. A new section is added to chapter 43.17 RCW to read as follows:

(1) The governor shall, where appropriate, require state agencies with regulatory enforcement authority to designate one or more technical assistance representatives to coordinate voluntary compliance and provide technical assistance concerning compliance with the agency's laws and rules.

(2) An employee designated by an agency as a technical assistance representative or as a member of a technical assistance unit may not, during the period of the designation, have authority to issue orders or assess penalties on behalf of the agency. Such an employee who provides on-site consultation at an industrial or commercial facility and who observes violations of the law shall inform the owner or operator of the facility of the violations and provide technical assistance concerning compliance. On-site consultation visits by such an employee may not be regarded as inspections or investigations and no notices or citations may be issued or civil penalties assessed during such a visit. However, violations of the law must be reported to the appropriate officers within the agency. If the owner or operator of the facility does not correct the observed violations within a reasonable time, the agency may reinspect the facility and take appropriate enforcement action. If a technical assistance representative or member of a technical assistance unit observes a violation of the law that places a person in danger of death or substantial bodily harm, is causing or is likely to cause significant environmental harm, or has caused or is likely to cause physical damage to the property of others in an amount exceeding one thousand dollars, the agency may initiate enforcement action immediately upon observing the violation.

(3) The state, the agency, and officers or employees of the state shall not be liable for damages to a person to the extent that liability is asserted to arise from the performance by technical assistance representatives of their duties, or if liability is asserted to arise from the failure of the agency to supply technical assistance."