ADMINISTRATIVE RULES COMMITTEE

The Administrative Rules Committee is a statutory committee deriving its authority from North Dakota Century Code (NDCC) Sections 54-35-02.5, 54-35-02.6, 28-32-17, and 28-32-18. The committee is required to review administrative agency rules to determine whether:

1. Administrative agencies are properly implementing legislative purpose and intent.
2. There is dissatisfaction with administrative rules or statutes relating to administrative rules.
3. There are unclear or ambiguous statutes relating to administrative rules.

The committee may recommend rule changes to an agency, formally object to a rule, or recommend to the Legislative Council the amendment or repeal of the statutory authority for the rule. The committee also may find a rule void or agree with an agency to amend an administrative rule to address committee concerns, without requiring the agency to begin a new rulemaking proceeding.

The Legislative Council delegated to the committee its authority under NDCC Section 28-32-10 to distribute administrative agency notices of proposed rulemaking and to approve extensions of time for administrative agencies to adopt rules and its responsibility under Section 28-32-42 to receive notice of appeal of an administrative agency's rulemaking action.

Committee members were Representatives LeRoy G. Bernstein (Chairman), Duane DeKrey, William R. Devlin, Mary Ekstrom, Bette Grande, Nancy Johnson, Kim Koppelman, Jon O. Nelson, Darrell D. Nottestad, Sally M. Sandvig, Blair Thoreson, and Dwight Wrangham and Senators John M. Andrist, Thomas Fischer, Layton Freborg, Jerry Klein, Deb Mathern, David O'Connell, and Bob Stenehjem.

The committee submitted this report to the Legislative Council at the biennial meeting of the Council in November 2002. The Council accepted the report for submission to the 58th Legislative Assembly.

ADMINISTRATIVE AGENCY RULES REVIEW

Administrative agencies are those state agencies authorized to adopt rules under the Administrative Agencies Practice Act (NDCC Chapter 28-32). By statute, a rule is an agency's statement of general applicability that implements or prescribes law or policy or the organization, procedure, or practice requirements of the agency. Properly adopted rules have the force and effect of law. A copy of each rule adopted by an administrative agency must be filed with the office of the Legislative Council for publication in the North Dakota Administrative Code.

Under NDCC Section 54-35-02.6, it is the standing duty of the committee to review administrative rules adopted under Chapter 28-32. This continues the rules review process initiated in 1979.

For rules scheduled for review, each adopting agency is requested to address:

1. Whether the rules resulted from statutory changes made by the Legislative Assembly.
2. Whether the rules are related to any federal statute or regulation.
3. A description of the rulemaking procedure followed in adopting the rules, e.g., the type of public notice given and the extent of public hearings held on the rules.
4. Whether any person has presented a written or oral concern, objection, or complaint for agency consideration with regard to the rules. Each agency is asked to describe the concern, objection, or complaint and the response of the agency, including any change made in the rules to address the concern, objection, or complaint and to summarize the comments of any person who offered comments at the public hearings on these rules.
5. Whether a written request for a regulatory analysis was filed by the Governor or an agency, whether the rules are expected to have an impact on the regulated community in excess of $50,000, and whether a regulatory analysis was issued. A copy is to be provided to the committee if a regulatory analysis was prepared.
6. The approximate cost of giving public notice and holding hearings on the rules and the approximate cost (not including staff time) used in developing and adopting the rules.
7. The subject matter of the rules and the reasons for adopting the rules.
8. Whether a constitutional takings assessment was prepared as required by NDCC Section 28-32-09. A copy is to be provided to the committee if a constitutional takings assessment was prepared.
9. If the rules were adopted as emergency rules under NDCC Section 28-32-03, the agency is to provide the statutory grounds from that section for declaring the rules to be an emergency and the facts that support the declaration.

During committee review of the rules, agency testimony is required, and any interested party may submit oral or written comments.

Current Rulemaking Statistics

The committee reviewed 1,417 rules sections and 2,016 pages of rules that were changed from December 2000 through November2002. Although the number of sections affected was substantially fewer than in the previous biennial period, the number of pages of rules was slightly increased. Table A at the end of this report shows the number of rules amended, created, superseded, repealed, reserved, or redesignated for each administrative agency that appeared before the committee.

Although rules differ in length and complexity, comparison of the number of administrative rules sections affected during biennial periods is one method of comparing the volume of administrative rules reviewed by the committee. The following table shows the number of North Dakota Administrative Code sections amended, repealed, created, superseded, reserved, or redesignated during designated time periods:

For committee review of rules at each meeting the Legislative Council staff prepares an administrative rules supplement containing all rules changes submitted for publication since the previous committee meeting. The supplement is prepared in a style similar to bill drafts, with changes indicated by overstrike and underscore. Comparison of the number of pages of rules amended, created, or repealed is another method of comparing the volume of administrative rules reviewed by the committee. The following table shows the number of pages in administrative rules supplements during designated time periods:

Voiding of Rules

Under NDCC Section 28-32-18 the committee may void all or part of a rule within 90days after the date of the Administrative Code supplement in which the rule change appears or, for rules appearing in the Administrative Code supplement from November1 through May1 encompassing a regular legislative session, at the first committee meeting after the regular legislative session. The committee may carry over, for one additional meeting, consideration of voiding administrative rules. This allows the committee to act more deliberately in rules decisions and allows agencies additional time to work with affected groups to develop mutually satisfactory rules. The committee may void all or part of a rule if the committee makes the specific finding that with regard to the rule there is:

1. An absence of statutory authority;
2. An emergency relating to public health, safety, or welfare;
3. A failure to comply with express legislative intent or to substantially meet the procedural requirements of NDCC Chapter 28-32 for adoption of the rule;
4. A conflict with state law;
5. Arbitrariness and capriciousness; or
6. A failure to make a written record of an agency's consideration of written and oral submissions respecting the rule under NDCC Section 28-32-11.

Within three business days after the committee finds a rule void, the office of the Legislative Council must provide written notice to the adopting agency and the chairman of the Legislative Council. Within 14days after receipt of the notice, the agency may file a petition with the chairman of the Legislative Council for Legislative Council review of the decision of the committee. If the adopting agency does not file a petition, the rule becomes void on the 15th day after the notice to the adopting agency. If within 60 days after receipt of a petition from the agency the Legislative Council has not disapproved the finding of the committee, the rule is void.

COMMITTEE ACTION ON RULES REVIEWED
State Water Commission and Department of Transportation

Under 1999 House Bill No.1310 the State Water Commission and Department of Transportation were given joint rulemaking authority to establish stream crossing standards to govern highway construction and permit the natural flow and drainage of surface waters and relieve political subdivisions of liability for damage caused by water detained at a highway crossing constructed in accordance with the stream crossing standards. Representatives of political subdivisions and other interested parties expressed concerns about the necessity and expense of replacing culverts on county and township roads, who would be qualified to do hydrologic analysis of stream crossing compliance, and the effect of the standards on political subdivision immunity from damages in civil actions. After further discussions among concerned parties and the affected agencies, the committee agreed with the State Water Commission and Department of Transportation on further amendments to the rules to make clear that compliance with the stream crossing standards rules is optional for political subdivisions, but political subdivisions that comply with the rules are protected by statutory provisions for immunity from civil actions. An amendment was also agreed upon relating to design standards based on flood recurrence interval for township road culverts to provide a 10-year township road culvert flood recurrence interval standard.

Department of Financial Institutions

The Department of Financial Institutions adopted rules to implement 2001 legislation governing activities of deferred presentment service providers or "payday" lenders. One of the rules prohibited payday lenders from advertising "low rates" or using other specified phrases in advertising and prohibited advertising in a false, misleading, or deceptive manner. Committee members expressed concern that by prohibiting use of specific phrases, the limitations of the rule could be avoided by carefully worded advertising that would still be misleading. Representatives of the North Dakota Newspaper Association and North Dakota Broadcasters Association opposed the advertising rule on several grounds, including potential violation of the constitutionally protected right to free speech. The committee determined that statutory authority exists to prohibit lenders from engaging in unfair or deceptive acts, practices, or advertising and that the rule in question might be interpreted to limit that enforcement authority. The committee approved a motion to void the deferred presentment service provider advertising rule. The department did not petition for reconsideration of the committee action.

Superintendent of Public Instruction

The Superintendent of Public Instruction adopted rules relating to a variety of topics, including issuance of licenses for school administrators. Representatives of three groups representing school administrators opposed the rules. Representatives of the Department of Public Instruction suggested it would be more convenient for licensees to obtain administrator licenses from the Education Standards and Practices Board, where they now obtain teaching licenses, and that the application process and effective dates of the two types of licenses could be unified. After further discussions among Department of Public Instruction representatives and concerned parties, the committee agreed with further rule amendments proposed by the Superintendent of Public Instruction to make clear that school administrator licenses will be issued by the Department of Public Instruction.

Education Standards and Practices Board

The Education Standards and Practices Board adopted rules relating to several aspects of teacher licensure. One rule change substituted state approval for college approval of the curricula for college elementary teacher education programs. Committee members questioned this change and whether it was coordinated with higher education institutions' programs. The committee approved a motion to carry over consideration of these issues, and upon receiving further information on these issues, the committee took no further action.

Committee Consideration

The committee considered a bill draft based on 2001 Senate Bill No.2258, which was defeated. The bill draft would have imposed a limitation on occupational and professional licensing boards to prohibit license fee increases by administrative rule by more than 10percent during any two-year period. It was suggested this would limit fee increase authority by rule and would require larger fee increases to be introduced as legislation and reviewed by the full Legislative Assembly. Concerns were expressed that establishing a maximum fee increase would serve as an incentive to take the maximum fee increase and that the rule may have a harsher impact on smaller occupational and professional licensing boards and commissions that have fewer members and smaller budgets. The committee does not recommend the bill draft.

The committee considered statutory provisions and legal interpretations regarding when rulemaking by agencies is optional or mandatory. Committee members expressed concern that when legislation requires rulemaking to be administered and implemented, inaction by an agency would amount to an "administrative veto" of legislation. It was the apparent consensus of the committee that there is no blanket approach that would adequately address all possible agency rulemaking situations and statutory provisions. It was also the apparent consensus of committee members that members of the Legislative Assembly should consider whether mandatory rulemaking provisions should be included in each bill under standing committee consideration.

CONCLUSION

The committee makes no recommendation regarding statutes relating to administrative rules.

TABLE A

« Back

Top