Assigned to GOV AS VETOED
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
VETOED
AMENDED
FACT SHEET FOR H.B. 2254
rulemaking; regulatory costs; legislative ratification
Purpose
Prohibits a proposed rule from becoming effective if the proposed rule is estimated to
increase regulatory costs or have an adverse impact on economic growth in the state by $500,000
or more within five years until the Legislature enacts legislation ratifying the proposed rule.
Background
Statute outlines administrative procedures relating to rulemaking (A.R.S. Title 41, Chapter 6).
Any rules must be submitted to the Administrative Rules Oversight Committee (Committee) which
consists of: 1) five members of the House of Representatives (House) who are appointed by the
Speaker of the House; 2) five members of the Senate who are appointed by the President of the
Senate; and 3) the Governor or their designee who is not an agency director. The Committee may
review any proposed rule, final rule, expedited rule, agency practice alleged to constitute a rule or
substantive policy statement to ensure conformity with statute and legislative intent. The
Committee may make comments and designate a representative to testify on whether the outlined
rule is consistent with statute or legislative intent to the Governor's Regulatory Review Council
(GRRC). GRRC must consider the comments and testimony of the Committee. GRRC may review
and approve or return the rule or parts of the rule (A.R.S. §§ 41-1047 and 41-1052).
Statute outlines timeframes that govern the procedures of rulemaking. Within 120 days
after the close of the record of the public oral proceedings for the proposed rulemaking, the agency
must either submit that rule to GRRC or terminate the proposed rule. If an agency finds that a rule
is necessary as an emergency measure, the rule may be made, amended or repealed as an
emergency measure, without prescribed notice and prior review by GRRC. An emergency rule
that is made, amended or repealed is valid for 180 days after its filing and can be renewed for one
more 180-day period if the rule meets the prescribed requirements (A.R.S. § 41-1026). A rule is
an agency statement of general applicability that implements, interprets or prescribes law or policy,
or describes the procedure or practice requirements of an agency (A.R.S. § 41-1001).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Prohibits, for a proposed rule that is estimated to increase regulatory costs or to have an adverse
impact on economic growth in Arizona by $500,000 or more within five years after
implementation, the proposed rule from becoming effective until the Legislature enacts
legislation ratifying the rule. FACT SHEET – Amended/Vetoed
H.B. 2254
Page 2
2. Requires the agency to submit the proposed rule to the Committee within 30 days before the
next legislative session.
3. Requires the Committee to submit the proposed rule to the Legislature as soon as practicable.
4. Allows any member of the Legislature to introduce legislation to ratify the proposed rule.
5. Prohibits an agency from filing a final rule with the Secretary of State before obtaining
legislative approval of the proposed rule through legislation ratifying the rule.
6. Requires, if the Legislature does not enact legislation to ratify the proposed rule during the
current legislative session, an agency to terminate the proposed rulemaking by publishing a
notice of termination in the register.
7. Exempts the proposed rule subject to the requirements relating to legislative ratification from
statutorily prescribed timeframes for rulemaking.
8. Exempts emergency rules from the requirements relating to legislative ratification.
9. Deems, beginning on the general effective date, any rule that increases the regulatory costs by
$500,000 or more as void and unenforceable, unless the Legislature enacts legislation ratifying
the rule.
10. Becomes effective on the general effective date.
Amendments Adopted by Committee
• Prohibits, from becoming effective until ratified by the Legislature, a proposed rule that is
estimated to increase regulatory costs in Arizona $500,000 or more within five, rather than
two, years after implementation.
Amendments Adopted by Committee of the Whole
• Prohibits, from becoming effective until ratified by the Legislature, a proposed rule that is
estimated to have an adverse impact on economic growth in Arizona $500,000 or more within
five, rather than two, years after implementation.
Governor's Veto Message
The Governor indicates in her veto message that the current rulemaking process that state
agencies follow is rigorous, transparent and effective.
House Action Senate Action
GOV 2/15/23 DPA 5-4-0-0 GOV 3/22/23 DPA 5-3-0
3
rd
Read 2/28/23 31-27-2 3
rd
Read 4/4/23 16-14-0
Final Read 5/15/23 31-27-1-0-1
Vetoed by the Governor 5/19/23
Prepared by Senate Research
May 23, 2023
AN/SB/slp