HB421
215312-12
By Representative Allen 3
RFD: State Government 4
First Read: 11-JAN-22 5
Page 0 215312-1:n:10/19/2021:LK/tgw LSA2021-21281
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SYNOPSIS: Existing law relating to the adoption of new8
rules by agencies grants the Joint Committee on9
Administrative Regulation Review discretionary10
authority to approve, disapprove, or recommend11
changes to an agency's proposed rule, or to render12
no action and approve an agency's proposed rule by13
implication.14
The existing review process for proposed15
rules also requires that: (1) proposed rules that16
have an economic impact on businesses must be17
accompanied by a Business Impact Analysis detailing18
the proposed rule's estimated impact on businesses;19
and (2) proposed rules that have any economic20
impact must be accompanied by a fiscal note21
detailing the rule's impact on the state, its22
governmental and non-governmental entities, and its23
residents, generally. The joint committee, upon24
receipt of these materials, may exercise its25
discretionary power to require the agency to26
Page 1 consider the feasibility of alternatives with less1
economic impact.2
This bill would set a minimum threshold for3
a proposed rule's economic impact where, if the4
total costs estimated within the fiscal note5
detailing the proposed rule's impact exceeds a $16
million threshold, the rule shall not take effect7
absent a joint resolution of approval by the8
Legislature, or submission to the joint committee9
for approval of a germane modification to the rule10
to reduce costs below the threshold. If that11
estimate exceeds $750,000, the Legislative Services12
Agency, Fiscal Division, would perform an analysis13
of the veracity and accuracy of the fiscal note.14
This bill would also allow any member of the15
Legislature or the joint committee to request that16
the joint committee require an agency to prepare17
and submit a Business Impact Analysis.18
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A BILL20
TO BE ENTITLED21
AN ACT22
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Relating to administrative procedure; to amend24
Sections 41-22-5.1, 41-22-5.2, and 41-22-23 of the Code of25
Alabama 1975; to set a minimum threshold for a proposed rule's26
economic impact; to set measures to reduce the cost of27
Page 2 proposed rules below that threshold; to require approval by1
the Joint Committee on Administrative Regulation Review for2
any rule with costs above that threshold to take effect; and3
to allow a member of the Legislature to petition the joint4
committee to request a Business Impact Analysis without5
prompting by a business.6
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:7
Section 1. Sections 41-22-5.1, 41-22-5.2, and8
41-22-23, Code of Alabama 1975, are amended to read as9
follows:10
"§41-22-5.1.11
"(a) This section and Section 41-22-5.2 shall be12
known and may be cited as "The Red Tape Reduction Act."13
"(b) When an agency files a notice of intent to14
adopt, amend, or repeal any rule, the agency shall make its15
best efforts to notify the public of the proposed rule. At a16
minimum, when the agency files the notice of intent, the17
agency shall post the text of the rule the agency proposes to18
adopt, amend, or repeal on its website or, if the agency has19
no website, on a website operated or maintained by the20
executive branch. Additionally, when the agency files a notice21
of intent to adopt, amend, or repeal a rule, the agency shall22
electronically notify any person who has registered with the23
agency his or her desire to receive notification of any24
proposal by the agency to adopt, amend, or repeal a rule.25
"(c) If, prior to the end of the notice period, a26
business notifies an agency that it will be negatively27
Page 3 impacted by an action proposed under subsection (b), the1
agency shall prepare and submit to the committee the2
information provided by the affected business as well as a3
business impact analysis of the proposed action. The analysis4
shall estimate the number of businesses subject to the5
agency's proposal as well as the projected reporting,6
recordkeeping, and other administrative costs required for7
compliance with the proposal. An agency shall prepare the8
business impact analysis using information available to the9
agency in the normal course of business and utilizing the10
expertise and experience of existing agency employees. 11
"(d) If, prior to the end of the notice period, any12
member of the Legislature or the joint committee notifies the13
committee that he or she wishes the agency to prepare and14
submit to the committee a business impact analysis as15
described in subsection (c), the committee may, upon a16
majority vote of the committee, require the agency to prepare17
and submit the statement.18
"(d) (e) After receiving a business impact analysis19
from an agency, the committee may require the agency to20
analyze and report to the committee the feasibility of some or21
all of the following methods of reducing the impact of the22
rule on businesses:23
"(1) The establishment of less stringent compliance24
or reporting requirements for businesses.25
Page 4 "(2) The establishment of less stringent schedules1
or deadlines for compliance or reporting requirements for2
businesses.3
"(3) The consolidation or simplification of4
compliance or reporting requirements for businesses.5
"(4) The establishment of performance standards for6
businesses to replace design or operational standards required7
in the rule.8
"(e) (f) The agency shall state in the business9
impact analysis whether the proposed rule is proposed as a10
result of a requirement issued by a federal agency or11
self-regulatory organization or an act of the Legislature to12
administer a non-discretionary tax, license, fee, or penalty .13
If so, the agency shall submit information identifying the14
specific requirement issued by the federal agency or15
self-regulatory organization or required by an act of the16
Legislature.17
"(f) (g) A business impact analysis required to be18
filed pursuant to this section shall be filed with the19
Legislative Services Agency, Legal Division, at the same time20
as the certified rule is filed and shall be available for21
public inspection.22
"(g) (h) Each agency that files a business impact23
analysis, at the time it is filed, shall place that statement24
on its website in a location that is easily accessible by the25
general public, or, if the agency does not have a website, on26
a website operated or maintained by the executive branch.27
Page 5 "(h) (i) If the committee determines that an agency1
or a division of an agency exists primarily to perform2
certification or licensing-related functions, the agency is3
not required to comply with this section unless the committee4
determines in writing that an agency's proposal has such a5
negative impact on businesses that the filing of a business6
impact analysis is warranted. Notwithstanding subsection (c)7
of Section 41-22-6, which provides that a rule is effective 458
days after notice that the agency filed the certified rule9
with the Legislative Services Agency, Legal Division, is10
published in the Alabama Administrative Monthly, in any case11
in which the committee determines that the filing of a12
business impact analysis is warranted as provided in this13
section, the effective date of the rule shall be 45 additional14
days after the effective date specified in subsection (c) of15
Section 41-22-6. In all other respects, the remainder of this16
chapter shall continue to apply to the proposed rule.17
"(i) (j) An agency or department shall fulfill any18
request for license or permit within 28 (30) calendar days19
after receiving the application or notify the applicant of the20
reason for failure to issue the license or permit.21
"(j) (k) An agency is not required to comply with22
this section if the proposed rule is being adopted in order23
for the agency to comply with membership requirements in a24
multi-state or national membership organization.25
Page 6 "(k) (l) This section shall not apply to the1
adoption of an emergency rule adopted pursuant to subsection2
(b) of Section 41-22-5.3
"§41-22-5.2.4
"(a) Within five years of July 1, 2013, and every5
five years thereafter, each agency shall review all agency6
rules existing on that date to determine whether the rules7
should be continued without change, or should be amended or8
rescinded , and shall certify that the agency completed the9
review to the Legislative Services Agency, Legal Division . The10
agency may indicate compliance with the requirements of this11
section by filing a notice in the Alabama Administrative12
Monthly certifying its compliance. If the head of the agency13
determines that completion of the review of existing rules is14
not feasible by the established date, the agency shall publish15
a statement certifying that determination.16
"(b) A rule adopted after July 1, 2013, shall be17
reviewed every five years in a manner consistent with18
subsection (a).19
"(b) If an agency does not certify that the agency20
has reviewed its rules within each five-year period pursuant21
to subsection (a), the agency shall not adopt any new rules22
within each five-year period pursuant to subsection (a),23
unless those new rules are required to be adopted,24
implemented, or amended pursuant to a requirement issued by a25
federal agency, federal law, self-regulatory organization, or26
required by an act of the Legislature.27
Page 7 "§41-22-23.1
"(a) The notice required by subdivision (a)(1) of2
Section 41-22-5 shall be given, in addition to the persons3
named in the notice, to each member of the committee and such4
other persons in the legislative department as the committee5
requires. The form of the proposed rule presented to the6
committee shall be as follows: New language shall be7
underlined and language to be deleted shall be typed and lined8
through. The notice may be provided in an electronic format.9
"(b)(1) Within the 45-day period between the date of10
publication in the Alabama Administrative Monthly that a rule11
has been certified and the date it becomes effective, and12
subject to subsection (h) of Section 41-22-5.1, the committee13
shall study all proposed rules and may hold public hearings.14
The committee may adopt a policy providing when a public15
hearing will be held on a rule meeting specified criteria. In16
the event the committee fails to give notice to the agency of17
either its approval or disapproval of the proposed rule within18
45 days after the notice is published in the Alabama19
Administrative Monthly that the rule has been certified and20
filed with the Legislative Services Agency, Legal Division,21
pursuant to Section 41-22-6, the committee shall be deemed to22
have approved the proposed rule for the purposes of this23
section.24
(2) In the event the committee disapproves a25
proposed rule or any part thereof, it shall give notice of the26
disapproval to the agency. The disapproval of any rule may be27
Page 8 appealed to the Lieutenant Governor in writing by the agency1
that submitted the rule within 15 days of disapproval. The2
Office of the Lieutenant Governor shall stamp the written3
appeal to denote the date the appeal was received. If the4
disapproval of a rule is appealed to the Lieutenant Governor,5
the Lieutenant Governor, within the 15 days after the notice6
of appeal of the disapproval of the rule is filed, may review7
the rule and hold public hearings he or she determines8
necessary.9
"(3) If the Lieutenant Governor sustains the10
disapproval of the rule, he or she shall notify the committee11
and return the rule to the agency and the disapproval shall be12
final.13
"(4) If the Lieutenant Governor approves the rule,14
he or she shall notify the chair of the committee. The rule15
shall become effective upon adjournment of the next regular16
session of the Legislature that commences after the approval17
unless, prior to that time, the Legislature adopts a joint18
resolution that overrules the approval by the Lieutenant19
Governor and sustains the action of the committee.20
"(5) If the Lieutenant Governor fails to either21
approve or disapprove the rule within the 15 days after the22
notice of appeal of the disapproval of the committee, the rule23
shall be deemed approved and the rule shall become effective24
upon adjournment of the next regular session of the25
Legislature that commences after the deemed approval unless,26
prior to that time, the Legislature adopts a joint resolution27
Page 9 that overrides the deemed approval of the Lieutenant Governor1
and sustains the action of the committee. In the event the2
Office of the Lieutenant Governor is vacant, a rule3
disapproved by the committee shall be suspended until the4
adjournment of the next regular session of the Legislature5
following the disapproval. The rule shall be reinstated on6
adjournment of that regular session unless the Legislature, by7
joint resolution, sustains the disapproval.8
"(c) The committee may propose an amendment to any9
proposed rule and return it to the agency with the suggested10
amendment. In the event the agency accepts the rule as11
amended, the agency may resubmit the rule as amended to the12
committee and the rule shall become effective on the date13
specified in the rule, or on the date the amended rule is14
submitted, whichever is later. In the event the agency does15
not accept the amendment, the proposed amended rule shall be16
deemed disapproved, as provided in subsection (b).17
"(d) An agency may withdraw a proposed or certified18
rule. An agency may resubmit a rule so withdrawn or returned19
under this section with minor modification. Such a rule is a20
new filing and subject to this section but is not subject to21
further notice as provided in subsection (a) of Section22
41-22-5.23
"(e) The committee is authorized to review and24
approve or disapprove any rule adopted prior to October 1,25
1982.26
Page 10 "(f) A rule submitted to the committee which has an1
economic impact shall be accompanied by a fiscal note prepared2
by the agency and include a specific dollar amount of3
anticipated economic impact in accordance with this4
subsection. The fiscal note shall be resubmitted with any5
changes when filing the certified rule. For any fiscal note6
anticipating seven hundred fifty thousand dollars ($750,000)7
or more of implementation and compliance costs, the8
Legislative Services Agency, Fiscal Division, within 21 days9
of certification of the rule, shall provide to the committee a10
brief analysis of the accuracy and veracity of the agency's11
fiscal note and anticipated economic impact. Upon receiving12
the fiscal note, and analysis, if any, the committee may13
require additional information from the submitting agency,14
other state agencies, or other sources. A state agency shall15
cooperate and provide information to the committee. At a16
minimum, the fiscal note submitted with a proposed rule shall17
include the following:18
"(1) A determination of the need for the rule and19
the expected benefit of the rule.20
"(2) A determination of the costs and benefits21
associated with the rule and an explanation of why the rule is22
considered to be the most cost effective, efficient, and23
feasible means for allocating public and private resources and24
for achieving the stated purpose.25
"(3) The effect of the rule on competition.26
Page 11 "(4) The effect of the rule on the cost of living1
and doing business in the geographical area in which the rule2
would be implemented.3
"(5) The effect of the rule on employment in the4
geographical area in which the rule would be implemented.5
"(6) The source of revenue to be used for6
implementing and enforcing the rule.7
"(7) A conclusion on the short-term and long-term8
economic impact upon all persons substantially affected by the9
rule, including an analysis containing a description of which10
persons will bear the costs of the rule and which persons will11
benefit directly and indirectly from the rule.12
"(8) The uncertainties associated with the13
estimation of particular benefits and burdens and the14
difficulties involved in the comparison of qualitatively and15
quantitatively dissimilar benefits and burdens. A16
determination of the need for the rule shall consider17
qualitative and quantitative benefits and burdens.18
"(9) The effect of the rule on the environment and19
public health.20
"(10) The detrimental effect on the environment and21
public health if the rule is not implemented.22
"(11) Whether the proposed rule is proposed as a23
result of a requirement issued by a federal agency or24
self-regulatory organization or required to be adopted,25
implemented, or amended by an act of the Legislature to26
administer a non-discretionary tax, license, fee, or penalty.27
Page 12 "(g)(1) If the total economic impact estimated1
within the fiscal note submitted with a certified rule exceeds2
one million dollars ($1,000,000) in implementation and3
compliance costs, or if the Legislative Services Agency,4
Fiscal Division determines that the estimated economic impact5
exceeds one million dollars ($1,000,000) in implementation and6
compliance costs, the rule shall not take effect unless a7
joint resolution of approval is passed by the Legislature or a8
modification is approved by the joint committee pursuant9
subdivision (2). This subdivision shall not apply to rules10
required to be adopted, implemented, or amended as a result of11
a change in federal law, a requirement issued by a federal12
agency or self-regulatory organization, or as a result of an13
act of the Legislature to administer a non-discretionary tax,14
license, fee, or penalty.15
"(2) The agency may submit to the committee for16
approval a germane modification to the rule to reduce the17
economic impact below one million dollars ($1,000,000); if the18
committee approves the proposed amendment, the rule shall take19
effect as amended. The agency, in modifying the certified20
rule, shall consider the following criteria: 21
"a. The establishment of less stringent compliance22
or reporting requirements for businesses, governmental23
entities, and individuals.24
"b. The establishment of less stringent schedules or25
deadlines for compliance or reporting requirements for26
businesses, governmental entities, and individuals.27
Page 13 "c. The consolidation or simplification of1
compliance or reporting requirements for businesses,2
governmental entities, and individuals.3
"d. The establishment of performance standards for4
businesses or governmental entities to replace design or5
operational standards required in the bill.6
"(g) (h) In determining whether to approve or7
disapprove proposed rules, the committee shall consider the8
following criteria:9
"(1) Is there a statutory authority for the proposed10
rule?11
"(2) Would the absence of the rule or rules12
significantly harm or endanger the public health, safety, or13
welfare?14
"(3) Is there a reasonable relationship between the15
state's police power and the protection of the public health,16
safety, or welfare?17
"(4) Is there another, less restrictive method of18
regulation available that could adequately protect the public?19
"(5) Does the rule or do the rules have the effect20
of directly or indirectly increasing the costs of any goods or21
services involved and, if so, to what degree?22
"(6) Is the increase in cost, if any, more harmful23
to the public than the harm that might result from the absence24
of the rule or rules?25
Page 14 "(7) Are the qualitative and quantitative benefits1
to businesses, governmental entities, and individuals2
outweighed by the estimated burden?3
"(7) (8) Are all facets of the rulemaking process4
designed solely for the purpose of, and so they have, as their5
primary effect, the protection of the public?6
"(8) (9) Any other criteria the committee may deem7
appropriate."8
Section 2. This act shall become effective on the9
first day of the third month following its passage and10
approval by the Governor, or its otherwise becoming law.11
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