Assigned to COM FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
FACT SHEET FOR H.B. 2599
administrative hearings; GRRC
Purpose
Modifies requirements relating to occupational licensure, the inspection of premises for
regulated persons, petitions to the Governor's Regulatory Review Council (GRRC), agency
rulemaking approval and appealable agency actions.
Background
Any person may petition an agency to: 1) make, amend or repeal a final rule; or 2) review
an existing agency practice or substantive policy statement that the petitioner alleges to constitute
a rule. The agency has 60 days after the submission of the petition to: 1) reject the petition; 2)
initiate rulemaking procedures; or 3) make a rule. If the agency rejects the petition, the petitioner
has 30 days to appeal to GRRC to review whether the existing agency practice or substantive
policy statement constitutes a rule. An appeal of an agency petition must be placed on GRRC's
agenda if at least three council members make such a request within two weeks after the filing of
the appeal.
A person may petition GRRC to request a review of an existing agency practice,
substantive policy statement, final rule or regulatory licensing requirement alleged to not be
authorized by statute, is unduly burdensome or is not demonstrated to be necessary to fulfill a
public health, safety or welfare concern. At least four GRRC members must request of the
chairperson that the matter be heard in a public meeting and make a determination under prescribed
timelines and procedures (A.R.S. § 41-1033).
An agency must serve notice of an appealable agency action or contested case. A party
may obtain a hearing on an appealable agency action or contested case by filing a notice of appeal
or request for a hearing with the agency within 30 days after receiving the notice. The agency must
notify the Office of Administrative Hearings (OAH) of the appeal or request for a hearing and
OAH must schedule a hearing. An administrative law judge (ALJ) of OAH must issue a written
decision within 20 days after the hearing is concluded. Within 30 days after the date OAH sends a
copy of the decision to the agency head, the agency head may review the decision and accept,
reject or modify it. The agency head's decision is the final administrative decision with outlined
exemptions (A.R.S. §§ 41-1092.03 and 41-1092.08).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
FACT SHEET
H.B. 2599
Page 2
Provisions
Occupational Licensure
1. Requires a regulating entity, before taking any official action to deny a professional or
occupational license applied for under licensure reciprocity, to submit the application and the
reason for denial to the Governor for review.
2. Requires the regulating entity to notify the Governor of any required time frames for approval
or denial of the license application by the regulatory agency.
3. Requires, beginning July 1, 2022, all regulating entities that are required to issue occupational
or professional licenses applied for under licensure reciprocity to:
a) track information about applications received in a format to be determined by the
Governor; and
b) annually report that information to the Governor.
4. Requires a regulating entity that issues occupational or professional licenses to:
a) prominently post on its website home page all current state policies that ease licensing
burdens and the exact steps applicants must complete to receive their license using such
policies;
b) have a designated area on its website home page that includes licensing information
specifically for military spouses, active-duty service members and veterans and all policies
that make it easier for the applicant groups to receive a license;
c) display all information required to be posted on its website homepage in a location that is
clear and concise; and
d) track, beginning July 1, 2022, whether each applicant is a veteran or military spouse and
annually report the information gathered to the Governor.
5. Allows a website home page feature to link to an internal website with more information if a
regulating entity deems it necessary.
6. Specifies that polices that ease licensing burdens include the following:
a) universal recognition of out-of-state licenses;
b) availability of temporary licenses;
c) fee waivers;
d) examination exemptions; and
e) allowing an applicant to substitute military education or experience for licensing
requirements.
7. Defines regulating entity.
Inspection of Premises – Regulated Persons
8. Requires an agency inspector, auditor or regulator who enters any premise of a regulated
person for an inspection to offer to review, at the end of the inspection, with an authorized
representative of the regulated person the following:
a) the findings of the inspection; and
b) what agency actions the regulated person can expect. FACT SHEET
H.B. 2599
Page 3
9. Specifies that deficiencies identified by an inspection are alleged deficiencies.
10. Modifies the criteria in an inspection report that would deny a regulated person an opportunity
to correct alleged deficiencies as follows:
a) the evidence of a pattern on noncompliance is demonstrated by alleged deficiencies
previously identified in an inspection report or other written notice at the same premises;
and
b) a risk is significant to any person, the public health, safety or welfare or the environment.
Petitions to GRRC
11. Deems a rule invalid unless it is:
a) consistent with statute; and
b) reasonably necessary to carry out statute.
12. Lowers, from four to three, the number of GRRC members that may request a petition be
placed on an agenda.
13. Authorizes a petition to GRRC to include allegations that a final rule, substantive policy
statement, agency practice or regulatory licensing requirement exceeds the agency's statutory
authority.
14. Prohibits a petition from being more than five double-spaced pages.
15. Allows GRRC to determine if an existing agency practice, substantive policy statement, final
rule or regulatory licensing requirement exceeds the agency's statutory authority or is not
specifically authorized by statute.
16. Specifies that a petition is placed on the agenda for consideration on the merits.
17. Limits an agency's response to a petition before GRRC to five double-spaced pages.
18. Requires GRRC, at a hearing, to allocate the petitioner and the agency an equal amount of time
for oral comments not including any time spent answering questions raised by council
members.
19. Allows GRRC to allocate time for members of the public who have an interest in the issue to
provide oral comments.
20. Deems void, on the determination by GRRC, an agency practice, substantive policy statement
or regulatory licensing requirement that exceeds the agency's statutory authority or is not
authorized by statute.
21. Requires GRRC, rather than allows, to modify, revise or declare an agency practice,
substantive policy statement, final rule or licensing requirement void if it is unduly burdensome
or is not demonstrated to be necessary to specifically fulfill a public health, safety or welfare
concern. FACT SHEET
H.B. 2599
Page 4
22. Specifies that an agency may only further pursue an agency practice, substantive policy
statement or licensing requirement that has been declared void or has been modified or revised
by GRRC pursuant to new rulemaking.
23. Requires a GRRC decision on a petition to be made by a majority of the council members who
are present and voting on the issue.
24. Prohibits GRRC from basing any decision concerning an agency's compliance with
requirements in issuing a final rule or substantive policy statement on whether any party or
person commented on the rulemaking or substantive policy statement.
Agency Rulemaking Approval
25. Prohibits a state agency from conducting any rulemaking, including regular, expedited,
informal, formal, emergency or exempt rulemaking, without prior written approval of the
Governor.
26. Requires a state agency in seeking approval of rulemaking to address any of the following as
justification:
a) fulfilling an objective related to job creation, economic development or economic
expansion in Arizona;
b) reducing or ameliorating a regulatory burden on the public, while achieving the same
regulatory objective;
c) preventing a significant threat to public health, peace or safety;
d) avoiding violating a court order or federal law that would result in sanctions by a federal
court for failure to conduct the rulemaking action;
e) complying with a new state statutory or regulatory requirement if the compliance is related
to a condition for the receiving federal monies or participating in any federal program;
f) complying with a new state statutory requirement;
g) fulfilling an obligation related to fees or any other action necessary to implement the state
budget that is certified by the Governor's Office of Strategic Planning and Budgeting;
h) adopting a rule or other item that is exempt from rulemaking requirements;
i) matters pertaining to the control, mitigation or eradication of waste, fraud or abuse within
a state agency or wasteful, fraudulent or abusive activities perpetuated against a state
agency; and
j) eliminating rules that are antiquated, redundant or otherwise no longer necessary for the
operation of state government.
27. Prohibits a state agency, after the public comment period and close of rulemaking record, from
submitting the proposed rules to GRRC without a written final approval from the Governor.
28. Requires GRRC, before considering rules submitted by a state agency, to obtain from the state
agency the initial and final approval of the Governor.
29. Requires a state agency, that submits a rulemaking request, to recommend for consideration
by the Governor at least three existing rules to eliminate for every additional rule requested by
the agency. FACT SHEET
H.B. 2599
Page 5
30. Prohibits a state agency from publicizing any directives, policy statements, documents or forms
on its website unless the directive, policy statement, document or form is explicitly authorized
by statute or rule.
31. Defines state agency.
Appealable Agency Actions
32. Specifies that a notice of appealable agency action or contested case must include, rather than
is limited to, prescribed criteria.
33. Adds to the items that must be included in a request for a hearing on an appealable agency
action or contested case as follows:
a) detailed and complete information regarding all questions of law that are the basis for the
appeal;
b) all relevant supporting documentation; and
c) how the party is an adversely affected party, if applicable.
34. Specifies that an agency-issued license that substantially complied with applicable licensing
requirements establishes a prima facie demonstration that the license:
a) meets all state and federal legal and technical requirements; and
b) would protect public health, welfare and the environment.
35. Allows an adversely affected party to rebut a prima facie demonstration by presenting clear
and convincing evidence demonstrating that one or more provisions in the license violate a
specifically applicable state or federal requirement.
36. Allows the applicant or licensee and the agency director to present additional evidence to
support issuing the license, if an adversely affected party rebuts a prima facie demonstration.
37. Requires the ALJ to serve a copy of the final administrative decision to all parties to the
appealable agency action or contested case, rather than only to the agency.
38. Expands the exceptions to an agency director's decision being the final administration decision
to include when the licensee accepts the ALJ's decision as final for an appeal of a licensing
decision.
39. Specifies that a license is not stayed during an appeal unless the affected individual who has
appealed applies to the superior court for an order requiring a stay pending final disposition of
the appeal as necessary to prevent imminent and substantial endangerment to public health and
the environment.
40. Allows the licensee, for any appealable agency action or contested case involving a licensing
decision, to accept the decision within 10 days after receiving the ALJ's written decision,
exempt for where it is determined that the licensee:
a) poses a threat of grave harm or danger to the public; or
b) has acted with complete disregard for the well-being of the public in engaging or in being
allowed to engage in the licensee's regulated business activity. FACT SHEET
H.B. 2599
Page 6
41. Requires the decision to be certified as the final decision by OAH if the licensee accepts the
ALJ's written decision.
42. Allows the agency head to review the decision and accept, reject or modify the decision, if the
licensee does not accept the ALJ's written decision as the final decision in the matter.
43. Requires the parties to meet and confer, within 30 days after receiving the ALJ's decision and
the agency head intends to reject or modify the decision, concerning the agency's proposed
modifications to the findings of fact and conclusions of law.
44. Requires the agency head to file its final decision within 20 days after conferring.
45. Entitles a licensee that prevails in an appeal of an agency's final decision following a
conference to recover reasonable attorney fees and costs incurred during all stages of the
proceeding.
46. Requires an agency action that is arbitrary, capricious or not in accordance with the law to be
appealed within 10 days of written notification of the action, rather than 10 days after the action
takes place.
47. Allows a licensee to forgo an administrative appeal and seek judicial review of an agency's
grant, denial, modification or revocation of a permit issued under the environment statute.
48. Modifies the definition of action against the party to include any notice of violation that results
in the expenditure of costs and fees.
49. Defines adversely affected parties, licensee, and notice of violation.
Miscellaneous
50. Makes technical and conforming changes
51. Becomes effective of the general effective date.
House Action
COM 2/15/22 DPA 10-0-0-0
3
rd
Read 2/22/22 59-0-1
Prepared by Senate Research
March 14, 2022
JT/sr