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, 28-32-18, and 28-32-18.1. 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.

The Legislative Council assigned to the Administrative Rules Committee a study directed by 2003 House Bill No. 1212 regarding the effects and operation of requiring agency consideration of the effect of proposed administrative rules on small businesses, organizations, and political subdivisions.

Committee members were Representatives William R. Devlin (Chairman), LeRoy G. Bernstein, Jeff Delzer, Duane DeKrey, Rod Froelich, Matthew M. Klein, Kim Koppelman, Jon O. Nelson, Dan J. Ruby, Sally M. Sandvig, Blair Thoreson, Alon Wieland, and Dwight Wrangham and Senators John M. Andrist, Dennis Bercier, April Fairfield, Tom Fischer, Layton Freborg, Jerry Klein, Gary A. Lee, and Rich Wardner.

The committee submitted this report to the Legislative Council at the biennial meeting of the Council in November 2004. The Council accepted the report for submission to the 59th 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. 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.
6. The subject matter of the rules and the reasons for adopting the rules.
7. 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. If a regulatory analysis was prepared, a copy is to be provided to the committee.
8. Whether a regulatory analysis or economic impact statement of impact on small entities was prepared as required by NDCC Section 28-32-08.1. If a small entity impact assessment was prepared, a copy is to be provided to the committee.
9. Whether a constitutional takings assessment was prepared as required by NDCC Section 28-32-09. If a constitutional takings assessment was prepared, a copy is to be provided to the committee.
10. 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 and a copy of the Governor's approval of the emergency status of the rules.

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 2,306 rules sections and 4,085 pages of rules that were changed from December 2002 through November 2004. The number of sections affected was substantially more than the comparable amount and the number of pages of rules was more than double the comparable amount from the previous biennial period. Rules of the State Department of Health required for compliance with rules of the Environmental Protection Agency are extremely large in volume and will substantially influence the statistics for rulemaking activity in a rulemaking cycle. Much of the apparent increase in rulemaking activity appears to be attributable to environmental rules. 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:

Time Period	Number of Sections
November 1986 - October 1988	2,681
November 1988 - October 1990	2,325
November 1990 - October 1992	3,079
November 1992 - October 1994	3,235
November 1994 - October 1996	2,762
November 1996 - October 1998	2,789
November 1998 - November 2000	2,074
December 2000 - November 2002	1,417
December 2002 - November 2004	2,306

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:

Time Period	Supplement Pages
November 1992 - October 1994	3,809
November 1994 - October 1996	3,140
November 1996 - October 1998	4,123
November 1998 - November 2000	1,947
December 2000 - November 2002	2,016
December 2002 - November 2004	4,085

Voiding of Rules

Under NDCC Section 28-32-18, the committee may void all or part of a rule within 90 days after the date of the Administrative Code supplement in which the rule change appears or, for rules appearing in the Administrative Code supplement from November 1 through May 1 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 is required to provide written notice to the adopting agency and the chairman of the Legislative Council. Within 14 days 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.

Obsolete Rule Repeal

Under NDCC Section 28-32-18.1, an agency may amend or repeal a rule without complying with the normal requirements relating to adoption of administrative rules if the agency initiates the request to the committee, the agency provides notice to the regulated community of the time and place the committee will consider the request, and the agency and the Administrative Rules Committee agree the rule amendment or repeal eliminates a provision that is obsolete or no longer in compliance with law and that no detriment would result to the substantive rights of the regulated community.

Agency Rules Analysis

Under NDCC Section 28-32-08, an agency is required to issue a regulatory analysis of a proposed rule if a request for the analysis is filed by the Governor or a member of the Legislative Assembly or the proposed rule is expected to have an impact on the regulated community in excess of $50,000. A regulatory analysis is required to address persons who will be affected by the proposed rule, economic impact, implementation and enforcement costs, and consideration of alternative methods for achieving the purposes of the proposed rule.

Under NDCC Section 28-32-09, an agency is required to prepare an assessment of constitutional takings implications of a proposed rule that may limit the use of private property. The agency must assess the likelihood that the proposed rule may result in a taking or regulatory taking, identify the purpose of the proposed rule, explain the necessity of the proposed rule to substantially advance the purpose of the rule, examine any alternative action that could achieve the agency's goals while reducing impact to private property owners, estimate potential cost to the government if a court determines that the rule constitutes a taking or regulatory taking, identify the source within the agency's budget for payment of compensation that might be ordered, and certify that the benefits of the proposed rule exceed the estimated compensation costs.

Passage of House Bill No. 1212 (2003) created NDCC Section 28-32-08.1, requiring agency analysis of rules affecting small entities. This section requires agency consideration of impact of proposed rules on small entities, including a small business, small nonprofit organization, or small political subdivision. The agency must consider methods of reducing impact of proposed rules on small entities, including establishing less stringent compliance or reporting requirements for small entities, establishing less stringent schedules or deadlines for compliance or reporting for small entities, consolidating or simplifying compliance or reporting requirements for small entities, establishing performance standards for small entities to replace design or operational standards required by the rule, and exemption of small entities from all or any part of the proposed rule. This section does not apply to rules mandated by federal law, to any occupational or professional licensing agency, or to 16 specifically listed agencies.

COMMITTEE ACTION ON RULES REVIEWED

Obsolete Rules Repeal

The committee approved a request by Workforce Safety and Insurance for repeal of a rule on employee staffing arrangements because the rule was superseded by 2003 legislation.

The committee approved a request by the Department of Human Services for repeal of a Medicaid rule relating to treatment of annuities in determining Medicaid eligibility, which was in conflict with 2003 legislation.

The committee approved a request by the Department of Human Services for repeal of transitional living services for foster care children rules that duplicate federal law.

The committee approved a request by the Superintendent of Public Instruction to repeal rules relating to teacher qualifications because the authority over those qualifications was transferred to the Education Standards and Practices Board.

The committee approved a request by the Securities Commissioner for repeal of securities rules because the substance of the rules has been incorporated in statutory provisions.

Rules Amendments by Committee Approval

Department of Human Services

The Department of Human Services adopted a rule extending the noncitizen immigrant eligibility waiting period for temporary assistance for needy families from five to seven years. The department pointed out that this extension would not comply with federal standards, and the committee agreed with the department on a rule amendment to change the noncitizen immigrant eligibility waiting period back to five years.

With regard to rules adopted by the Department of Human Services, the committee agreed with the department on an amendment to Medicaid rules to make clear that a health care provider has three business days, rather than three calendar days, to secure prior approval of Medicaid coverage for ambulatory behavioral health care and an amendment to allow Medicaid nursing home reimbursement as direct care costs for salaries and benefits to nursing home employees with developmental disabilities or cognitive impairments who provide services under the supervision of a registered nurse.

The Department of Human Services adopted rules requiring prior authorization for Medicaid coverage of prescription drugs. In 2001, the Legislative Assembly defeated House Bill No. 1116, which would have required prior authorization for prescription drugs. After discussion of the issue, the committee agreed with the Department of Human Services on an amendment to the Medicaid rules to provide authority for a prescriber to continue use of a prescription drug for a patient by signing a statement that the prescriber has considered generic or other alternatives and has determined that continuing current therapy is in the best interest for successful medical management of the patient.

Division of Community Services

The committee agreed with the Division of Community Services on amendments to the State Building Code rules to conform with 2003 statutory changes approved by the Legislative Assembly relating to modular structure participation in the third-party inspections program, annual certification processes for manufacturers of modular structures, and local amendments to the State Building Code.

Real Estate Appraiser Qualifications and Ethics Board

The Real Estate Appraiser Qualifications and Ethics Board adopted a rule that would have allowed anonymous complaints against licensees to be filed with the board. The committee expressed concern that allowing anonymous complaints may overwhelm the board with an increase in complaints and that an appraiser would be reluctant to put the appraiser's name on a complaint if not required to do so. It was stated that anonymous complaints make investigations more difficult. After further consideration, the board agreed with the committee on an amendment to require a complainant to submit a signed, written statement describing the facts supporting the complaint. The amendment also allows the board to initiate and investigate a complaint on its own motion.

Superintendent of Public Instruction

The Superintendent of Public Instruction adopted rules governing teacher credential requirements. The committee pointed out an ambiguous provision in the credential requirements for teachers of mentally retarded individuals and, upon further review, the Department of Public Instruction identified a similar ambiguity in special education strategic credential requirements. The committee agreed with the Superintendent of Public Instruction on amendments to clarify that credentials for those professionals require 20 semester hours of credits taken from coursework in listed areas, including some coursework in each of the listed areas.

State Department of Health

The State Department of Health adopted rules governing emergency medical services providers. A representative of an air ambulance service provider expressed concerns to the committee with several aspects of the rules. After further discussion and consideration, the department agreed with the committee on further amendments to the rules to address the concerns and fulfill the legislative intent of House Bill No. 1202 (2001) regarding these issues. The amendments approved provide that basic life support air ambulance services may be available as needed and advanced life support air ambulance services must be available 24 hours a day and 7 days a week, except as limited by weather or aircraft maintenance or pilot duty limitations under Federal Aviation Administration regulations. The amendments approved also provide that for basic life support air ambulance service, the minimum number of personnel required is one primary care provider and for advanced life support air ambulance service, the minimum number of personnel required is one primary care provider, except when either the transferring or receiving physician believes the patient's status requires a minimum of two providers.

Board of Nursing

The Board of Nursing adopted rules governing nurse practice. After adoption of the rules, discussions with representatives of the State Board of Medical Examiners and the North Dakota Medical Association led the Board of Nursing to conclude that further amendments to the rules were necessary to address concerns of those groups. The Board of Nursing suggested and the committee approved further amendments to the rules to address concerns relating to the scope of practice of nurses to make clear that advanced practice registered nurses are not to act as independent practitioners of medicine.

Committee Voiding of Agency Rules

The committee did not void any agency rules in its 2003-04 rules review.

PROPOSED RULES IMPACT ON SMALL ENTITIES STUDY

The requirement of NDCC Section 28-32-08.1 relating to agency analysis of rules affecting small entities became effective for administrative rules adopted after July 31, 2003. The committee had the opportunity to review several small entity impact analyses prepared by agencies. The committee received no comments from small entities regarding small entity impact analyses prepared, or not prepared, by any agency. It appears that agencies were able to comply with the requirement and that no particular problems resulted from compliance with the new requirement. One agency pointed out that there is difficulty in interpretation regarding the requirement for consideration of performance standards for small entities to replace design or operational standards required in the proposed rule. Agency representatives said they are unable to determine the meaning of this requirement and would appreciate statutory clarification.

CONCLUSION

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

TABLE A

STATISTICAL SUMMARY OF RULEMAKING December 2002 Through November 2004 Supplements 282 Through 305
Agency	Amend	Create	Supersede	Repeal	Special	Reserved	Total
State Board of Accountancy	9						9
Office of Management and Budget	106	90		8			204
Agriculture Commissioner	13						13
Attorney General		46					46
Department of Financial Institutions	7	8					15
State Board of Dental Examiners	10	1					11
State Board of Registration for Professional Engineers and Land Surveyors	28	17					45
State Department of Health	395	237		16	35	191	874
Industrial Commission	31	2					33
Insurance Commissioner	20	62		4			86
State Board of Animal Health	11	1					12
State Board of Medical Examiners	4			1			5
Board of Nursing	99	22		25			146
State Board of Examiners for Nursing Home Administrators	14	1		1			16
Board of Occupational Therapy Practice	8	1					9
Human Resource Management Services	9						9
Pesticide Control Board	14	13		1			28
State Board of Pharmacy	7	3					10
State Examining Committee for Physical Therapists	20			2			22
Department of Public Instruction	44	47		3			94
Education Standards and Practices Board	24	9					33
Public Service Commission	15	7		1			23
Real Estate Commission	6						6
Public Employees Retirement System	68	20		2			90
Secretary of State		8					8
Department of Human Services	202	19	8	10			239
Board of Social Work Examiners	9	3					12
Teachers' Fund for Retirement Board of Trustees	8	2					10
Board of Veterinary Medical Examiners	4	2					6
State Water Commission	11	3					14
Workforce Safety and Insurance	20	1					21
Office of Administrative Hearings	17	2					19
State Gaming Commission	62	1					63
Real Estate Appraiser Qualifications and Ethics Board	9			1			10
Department of Commerce		14					14
Peace Officer Standards and Training Board		51					51
Sections Affected	1,304	693	8	75	35	191	2,306
Grand Total All Sections							2,306

« Back

Top