Session of 2024
HOUSE BILL No. 2648
By Committee on Commerce, Labor and Economic Development
Requested by Eric Stafford on behalf of the Kansas Chamber of Commerce
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AN ACT concerning administrative rules and regulations; requirements for
adoption of rules and regulations; relating to economic impact
statements; requiring legislative ratification for certain rules and
regulations; requiring the director of the budget to review an agency's
determination of implementation and compliance costs and disapprove
proposed rules and regulations with incomplete or inaccurate economic
impact statements; amending K.S.A. 2023 Supp. 77-415, 77-416 and
77-420 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) (1) If an economic impact statement required by
K.S.A. 77-420, and amendments thereto, or a revised economic impact
statement prepared pursuant to K.S.A. 77-416(b)(3), and amendments
thereto, indicates that $1,000,000 or more in implementation and
compliance costs are reasonably expected to be incurred by or passed
along to businesses, local governmental units and individuals as a result of
the proposed rule and regulation over the initial five-year period following
adoption of such rule and regulation, the state agency proposing such rule
and regulation shall not adopt such rule and regulation unless such rule
and regulation has been ratified by the legislature. A proposed rule and
regulation shall be deemed ratified if a bill authorizing such rule and
regulation is enacted by the legislature. Any member of the legislature may
introduce a bill authorizing a state agency to adopt a rule and regulation
that such agency is prohibited from adopting under this subsection. The
state agency may resume adopting such proposed rule and regulation upon
enactment of a bill introduced under this subsection.
(b) If a state agency is prohibited from adopting a proposed rule and
regulation under subsection (a), such agency may modify the proposed
rule and regulation to lower the implementation and compliance costs of
the proposed rule and regulation. Any such modification shall be germane
to the subject of the proposed rule and regulation. If a proposed rule and
regulation is modified pursuant this subsection, the state agency shall
prepare a revised economic impact statement pursuant to K.S.A. 77-416(b)
(3), and amendments thereto. A state agency may adopt such modified rule
and regulation if the revised economic impact statement indicates that
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$1,000,000 or more in implementation and compliance costs are not
reasonably expected to be incurred by or passed along to businesses, local
governmental units and individuals as a result of the proposed rule and
regulation over the initial five-year period following adoption of such
proposed rule and regulation.
(c) The provisions of this section shall not apply to temporary rules
and regulations adopted pursuant to K.S.A. 77-722, and amendments
thereto, or rules and regulations proposed because of a federal mandate as
described in K.S.A. 77-416(b)(1)(B), and amendments thereto.
(d) This section shall be a part of and supplemental to the rules and
regulations filing act.
Sec. 2. K.S.A. 2023 Supp. 77-415 is hereby amended to read as
follows: 77-415. (a) K.S.A. 77-415 through 77-438 77-440 and section 1,
and amendments thereto, shall be known and may be cited as the rules and
regulations filing act.
(b) (1) Unless otherwise provided by statute or constitutional
provision, each rule and regulation issued or adopted by a state agency
shall comply with the requirements of the rules and regulations filing act.
Except as provided in this section, any standard, requirement or other
policy of general application may be given binding legal effect only if it
has complied with the requirements of the rules and regulations filing act.
(2) Notwithstanding the provisions of this section:
(A) An agency may bind parties, establish policies, and interpret
statutes or regulations by order in an adjudication under the Kansas
administrative procedure act or other procedures required by law, except
that such order shall not be used as precedent in any subsequent
adjudication against a person who was not a party to the original
adjudication unless the order is:
(i) Designated by the agency as precedent;
(ii) not overruled by a court or later adjudication; and
(iii) disseminated to the public in one of the following ways:
(a) Inclusion in a publicly available index, maintained by the agency
and published on its website, of all orders designated as precedent;
(b) publication by posting in full on an agency website in a format
capable of being searched by key terms; or
(c) being made available to the public in such other manner as may be
prescribed by the secretary of state.
(B) Any statement of agency policy may be treated as binding within
the agency if such statement of policy is directed to:(i) agency personnel
relating to the performance of their duties.(ii) or the internal
management of or organization of the agency. No such statement of
agency policy listed in clauses (i) and (ii) this subparagraph may be relied
on to bind the general public.
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(C) An agency may provide forms, the content or substantive
requirements of which are prescribed by rule and regulation or statute,
except that no such form may give rise to any legal right or duty or be
treated as authority for any standard, requirement or policy reflected
therein.
(D) An agency may provide guidance or information to the public,
describing any agency policy or statutory or regulatory requirement except
that no such guidance or information may give rise to any legal right or
duty or be treated as authority for any standard, requirement or policy
reflected therein.
(E) None of the following shall be subject to the rules and regulations
filing act:
(i) Any policy relating to the curriculum of a public educational
institution or to the administration, conduct, discipline, or graduation of
students from such institution.
(ii) Any parking and traffic regulations of any state educational
institution under the control and supervision of the state board of regents.
(iii) Any rule and regulation relating to the emergency or security
procedures of a correctional institution, as defined in K.S.A. 75-5202(d),
and amendments thereto.
(iv) Any order issued by the secretary of corrections or any warden of
a correctional institution under K.S.A. 75-5256, and amendments thereto.
(F) When a statute authorizing an agency to issue rules and
regulations or take other action specifies the procedures for doing so, those
procedures shall apply instead of the procedures in the rules and
regulations filing act.
(c) As used in the rules and regulations filing act, and amendments
thereto, unless the context clearly requires otherwise:
(1) "Board" means the state rules and regulations board established
under the provisions of K.S.A. 77-423, and amendments thereto.
(2) "Environmental rule and regulation" means:
(A) A rule and regulation adopted by the secretary of agriculture, the
secretary of health and environment or the state corporation commission
that has as a primary purpose the protection of the environment; or
(B) a rule and regulation adopted by the secretary of wildlife and
parks concerning threatened or endangered species of wildlife as defined
in K.S.A. 32-958, and amendments thereto.
(3) "Implementation and compliance costs" means direct costs that
are readily ascertainable based upon standard business practices,
including, but not limited to, fees, the cost to obtain a license or
registration, the cost of equipment required to be installed or used,
additional operating costs incurred, the cost of monitoring and reporting
and any other costs to comply with the requirements of the proposed rule
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and regulation.
(4) "Person" means an individual, firm, association, organization,
partnership, business trust, corporation, company or any other legal or
commercial entity.
(4)(5) "Rule and regulation," "rule," and "regulation" means a
standard, requirement or other policy of general application that has the
force and effect of law, including amendments or revocations thereof,
issued or adopted by a state agency to implement or interpret legislation.
(5)(6) "Rulemaking" means the same as defined in K.S.A. 77-602,
and amendments thereto.
(6)(7) "Small employer" means any person, firm, corporation,
partnership or association that employs not more than 50 employees, the
majority of whom are employed within this state.
(7)(8) "State agency" means any officer, department, bureau, division,
board, authority, agency, commission or institution of this state, except the
judicial and legislative branches, which is authorized by law to promulgate
rules and regulations concerning the administration, enforcement or
interpretation of any law of this state.
Sec. 3. K.S.A. 2023 Supp. 77-416 is hereby amended to read as
follows: 77-416. (a) Every state agency shall file with the secretary of state
every rule and regulation adopted by it and every amendment and
revocation thereof in the manner prescribed by the secretary of state. Each
rule and regulation shall include a citation to the statutory section or
sections being implemented or interpreted and a citation of the authority
pursuant to which it, or any part thereof, was adopted. Every rule and
regulation filed in the office of the secretary of state shall be accompanied
by a copy of the economic impact statement required by subsection (b) and
a copy of the environmental benefit statement if required by subsection
(d). A copy of any document adopted by reference in a rule and regulation
shall be available from the state agency that adopted the rule and
regulation upon request by any person individual interested therein. The
state agency, under the direction of the secretary of state, shall number
each section with a distinguishing number and, in making a compilation of
the rules and regulations, the sections shall be arranged in numerical order.
A decimal system of numbering shall be prohibited.
(b) (1) At the time of drafting a proposed rule and regulation or
amendment to an existing rule and regulation, the state agency shall
consider the economic impact of the proposed rule and regulation. The
state agency shall prepare an economic impact statement that shall include:
(A) An analysis, brief description, and cost and benefit quantification
of the proposed rules and regulations and what is intended to be
accomplished by their adoption. If the approach chosen by the Kansas
agency to address the policy issue is different from that utilized by
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agencies of contiguous states or of the federal government, the economic
impact statement shall include an explanation of why the Kansas agency's
rule and regulation differs;
(B) whether the proposed rule and regulation is mandated by federal
law as a requirement for participating in or implementing a federally
subsidized or assisted program and whether the proposed rules and
regulations exceed the requirements of applicable federal law;
(C) an analysis specifically addressing the following factors:
(i) The extent to which the rule and regulation will enhance or restrict
business activities and growth;
(ii) the economic effect, including a detailed quantification of
implementation and compliance costs, on the specific businesses, business
sectors, public utility ratepayers, individuals and local governmental units
that will be affected by the proposed rule and regulation and on the state
economy as a whole;
(iii) the businesses that would be directly affected by the proposed
rule and regulation;
(iv) the benefits of the proposed rule and regulation compared to the
cost;
(v) measures taken by the agency to minimize the cost and impact of
the proposed rule and regulation on business and economic development
within the state of Kansas, local government and individuals; and
(vi) an estimate of the total annual implementation and compliance
costs that are reasonably expected to be incurred by or passed along to
businesses, local governmental units or members of the public individuals
and a determination of whether those costs will exceed $1,000,000 over
any two-year the initial five-year period from the effective date of this act
through June 30, 2024, or exceed $3,000,000 over any two-year period on
and after July 1, 2024 following adoption of the proposed rule and
regulation.
(2) The state agency shall consult with the league of Kansas
municipalities, Kansas association of counties and the Kansas association
of school boards, as appropriate, when preparing the economic impact
statement of a proposed rule and regulation which increases or decreases
revenues of cities, counties or school districts or imposes functions or
responsibilities on cities, counties or school districts that will increase their
expenditures or fiscal liability. The agency shall consult and solicit
information from businesses, business associations, local governmental
units, state agencies or institutions and members of the public that may be
affected by the proposed rule and regulation or that may provide relevant
information.
(3) As required pursuant to the provisions of K.S.A. 77-420(d), and
amendments thereto, the state agency shall reevaluate and, when
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necessary, update the economic impact statement when directed to do so
by the director of the budget and, if approved by the director of the budget,
shall submit the revised economic impact statement at the time of filing a
rule and regulation with the secretary of state. If a public hearing was held
prior to the adoption of the rule and regulation, a state agency at the time
of filing a rule and regulation with the secretary of state shall include as a
part of the economic impact statement a statement specifying the time and
place at which the hearing was held and the attendance at the hearing. A
copy of the current economic impact statement shall be available from the
state agency upon request by any party interested therein.
(4) The implementation and compliance costs determined under
subsection (b)(1)(C)(vi) shall be those additional costs reasonably
expected to be incurred and shall be separately identified for the affected
businesses, local governmental units and members of the public
individuals. In determining total additional costs of such proposed rules
and regulations, the state agency shall not account for any actual or
estimated cost savings that may be realized by the implementing state
agency, local government or by members of the public individuals.
(c) Pursuant to the provisions of K.S.A. 77-420, and amendments
thereto, the director of the budget shall review the economic impact
statement prepared by any state agency and shall prepare a supplemental
or revised statement and an independent analysis by the director of the
budget of the cost and the factors as set forth in subsection (b)(1)(A) and
(C) and subsection (e). If possible, the supplemental or revised statement
shall include a reliable estimate in dollars of the anticipated change in
revenues and expenditures of the state. It also shall include a statement, if
determinable or reasonably foreseeable, of the immediate and long-range
economic impact of the rule and regulation upon persons individuals
subject thereto, small employers and the general public. If, after careful
investigation, it is determined that no dollar estimate is possible, the
statement shall set forth the reasons why no dollar estimate can be given.
Every state agency is directed to cooperate with the division of the budget
in the preparation of any statement pursuant to this subsection when, and
to the extent, requested by the director of the budget. The director of the
budget shall follow the procedures set forth in K.S.A. 77-420, and
amendments thereto, in evaluating and accepting or rejecting the proposed
rule and regulation. No agency shall submit a rule and regulation to the
secretary of state for filing before receiving the approval of the director of
the budget as provided in this subsection and K.S.A. 77-420, and
amendments thereto.
(d) At the time of drafting a proposed environmental rule and
regulation or amendment to an existing environmental rule and regulation,
the state agency shall consider the environmental benefit of such proposed
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rule and regulation or amendment. Prior to giving notice of a hearing on a
proposed rule and regulation, the state agency shall prepare an
environmental benefit statement that shall include a description of the need
for and the environmental benefits that will likely accrue as the result of
the proposed rule and regulation or amendment. The description shall
summarize, when applicable, research indicating the level of risk to the
public health or the environment being removed or controlled by the
proposed rule and regulation or amendment. When specific contaminants
are to be controlled by the proposed rule and regulation or amendment, the
description shall indicate the level at which the contaminants are
considered harmful according to currently available research. The state
agency may consult with other state agencies when preparing the
environmental benefit statement. The state agency shall reevaluate and,
when necessary, update the statement at the time of filing a rule and
regulation with the secretary of state. A copy of the current environmental
benefit statement shall be available from the state agency upon request by
any party interested therein.
(e) In addition to the requirements of subsection (b), the economic
impact statement for all environmental rules and regulations shall include:
(1) A description of the capital and annual costs of compliance with
the proposed rules and regulations, and the persons individuals or entities
who will bear those costs;
(2) a description of the initial and annual costs of implementing and
enforcing the proposed rules and regulations, including the estimated
amount of paperwork, and the state agencies, other governmental agencies
or other persons individuals or entities who will bear the costs;
(3) a description of the costs that would likely accrue if the proposed
rules and regulations are not adopted, the persons individuals or entities
who will bear the costs and those who will be affected by the failure to
adopt the rules and regulations; and
(4) a detailed statement of the data and methodology used in
estimating the costs used in the statement.
(f) In 2026, the legislative post audit committee shall direct the
legislative division of post audit to conduct an audit to study:
(1) The accuracy of economic impact statements submitted by state
agencies pursuant to this section for the immediately preceding seven
years;
(2) the impact the review by the director of the budget has had on the
accuracy of economic impact statements submitted by state agencies
pursuant to this section; and
(3) whether the $1,000,000 or $3,000,000 cost figure is the
appropriate amount of economic impact to trigger the hearing procedure
required by K.S.A. 77-420(a), and amendments thereto.
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Sec. 4. K.S.A. 2023 Supp. 77-420 is hereby amended to read as
follows: 77-420. (a) (1) Except as further provided by this subsection,
Every rule and regulation proposed to be adopted by any state agency,
after being submitted to the secretary of administration and the attorney
general as required by this section, shall be submitted with the economic
impact statement for the rule and regulation required by K.S.A. 77-416,
and amendments thereto, to the director of the budget for review of the
accuracy and completeness of the agency's economic impact statement.
The director of the budget shall review the agency's determination of the
amount of implementation and compliance costs reasonably expected to be
incurred by or passed along to businesses, local government and
individuals over the initial five-year period following adoption and shall
conduct an independent analysis to determine that the agency has
complied with the requirements for the economic impact statement set
forth in K.S.A. 77-416(b)(1)(A) and (b)(1)(C) and (e), and amendments
thereto. Every rule and regulation requiring approval by the director of the
budget shall be stamped as if approved, and the date of approval shall be
indicated.
(2) If the agency director independently determines that a proposed
rule and regulation submitted or resubmitted by the agency will not result
in implementation or compliance costs of more than $1,000,000 from the
effective date of this act through June 30, 2024, or more than $3,000,000
on and after July 1, 2024, for businesses, local government or individuals
in any two-year the initial five-year period following adoption of such rule
and regulation, the agency shall provide a copy of the economic impact
statement to the director, but the director shall not be required to review or
approve the proposed rule and regulation the director shall:
(A) Approve the rule and regulation if the director independently
determines that the economic impact statement, demonstrates a complete
analysis as required by K.S.A. 77-416(b)(1)(A) and (b)(1)(C) and (e), and
amendments thereto, and the director concurs with the economic impact
statement; or
(B) disapprove the rule and regulation if the economic impact
statement is incomplete or contains substantive inaccuracies.
(3) If the agency director of the budget determines that the proposed
rule and regulation will result in implementation and compliance costs of
more than $1,000,000 from the effective date of this act through June 30,
2024, or more than $3,000,000 on and after July 1, 2024, for businesses,
local government or individuals in any two-year the initial five-year period
following adoption of such rule and regulation, the director of the budget
shall:
(A) Approve the proposed rule and regulation, if:
(1) The proposed rule and regulation has been ratified by the
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legislature pursuant to section 1, and amendments thereto; and
(2) the agency, prior to the submission or the resubmission of a rule
and regulation to the director, holds a public hearing and finds that the
costs of the proposed rule and regulation have been accurately determined
and are necessary for achieving legislative intent and the director, after an
independent analysis, concurs with the agency's findings and analysis and
approves the economic impact statement. An agency's public hearing may
be held prior to or after ratification by the legislature; or
(B) disapprove the proposed rule and regulation if the economic
impact statement is incomplete or contains substantive inaccuracies.
(4) If an agency is proposing a rule and regulation because of a
federal mandate as described in K.S.A. 77-416(b)(1)(B), and amendments
thereto, the agency shall provide a copy of the economic impact statement
to the director, but the director shall not be required to review or approve
the proposed rule and regulation, regardless of the implementation and
compliance cost of the proposed rule and regulation.
(5) For the purposes of this subsection, the implementation and
compliance cost shall be calculated from the effective date of the rule and
regulation.
(b) The director of the budget shall submit an annual report to the
legislature and to the joint committee on administrative rules and
regulations on the first day of the 2019 regular legislative session and
subsequent regular legislative sessions on all rules and regulations
approved or denied by the director. The report shall include the text of
each rule and regulation reviewed, the final economic impact statement
and a summary of the director's analysis supporting the decision to
approve or reject the rule and regulation. The director shall immediately
submit a separate report to the legislature, if in session, and the joint
committee on administrative rules and regulations upon the approval or
denial of a rule or regulation with costs determined to be greater than
$1,000,000 from the effective date of this act through June 30, 2024, or
greater than $3,000,000 on and after July 1, 2024, for businesses, local
government or individuals over any two-year the initial five-year period
following adoption of such rule and regulation. The report shall include an
analysis of the agency's and the director's decisions with respect to the
necessity of the cost of the rule and regulation to achieve legislative intent.
(c) Every rule and regulation proposed to be adopted by any state
agency, before being submitted to the attorney general and the director of
the budget as required under this section, shall be submitted to the
secretary of administration for approval of its organization, style,
orthography and grammar subject to such requirements as to organization,
style, orthography and grammar as the secretary may adopt. Every rule and
regulation submitted to the secretary of administration under this
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subsection shall be accompanied by a copy of any document which that is
adopted by reference by the rule and regulation. Every rule and regulation
approved by the secretary of administration under this subsection shall be
stamped as approved and the date of such approval shall be indicated
therein.
(d) Every rule and regulation proposed by any state agency that has
been approved by the secretary of administration as provided in subsection
(c), before being submitted to the director of the budget as required under
this section, shall be submitted to the attorney general for an opinion as to
the legality of the same, including whether the making of such rule and
regulation is within the authority conferred by law on the state agency. The
attorney general shall promptly furnish an opinion as to the legality of the
proposed rule and regulation so submitted. Every rule and regulation
submitted to the attorney general under this subsection shall be
accompanied by a copy of any document which is adopted by reference by
the rule and regulation. Every rule and regulation approved by the attorney
general under this subsection shall be stamped as approved and the date of
such approval shall be indicated therein.
(e) No rule and regulation shall be filed by the secretary of state
unless:
(1) The rule and regulation has complied with the provisions of
subsection (a);
(2) The organization, style, orthography and grammar have been
approved by the secretary of administration;
(3)(2) the rule and regulation has been approved in writing by the
attorney general as to legality;
(3) the rule and regulation has complied with the provisions of
subsection (a);
(4) the rule and regulation has been formally adopted by the state
agency after it has complied with the provisions of subsection (a),
approved by the secretary of administration and the attorney general and
has complied with the provisions of subsection (a) and is accompanied by
a certified or other formal statement of adoption when adoption is by an
executive officer of a state agency, or by a certified copy of the roll call
vote required for its adoption by K.S.A. 77-421, and amendments thereto,
when adoption is by a board, commission, authority or other similar body;
(5) the rule and regulation to be filed is accompanied by a copy of the
economic impact statement as provided by K.S.A. 77-416, and
amendments thereto, that has been reviewed and approved by the director
of the budget and complies with the provisions of subsection (a);
(6) the rule and regulation has complied with the provisions of
section 1, and amendments thereto, if applicable; and
(6)(7) the rule and regulation to be filed is accompanied by a copy of
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the environmental benefit statement required by K.S.A. 77-416, and
amendments thereto, if applicable.
Sec. 5. K.S.A. 2023 Supp. 77-415, 77-416 and 77-420 are hereby
repealed.
Sec. 6. This act shall take effect and be in force from and after its
publication in the statute book.
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