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SENATE BILL 423
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Larry R. Scott and James G. Townsend and David M. Gallegos and
Jay C. Block
AN ACT
RELATING TO RULES; REQUIRING THE LEGISLATIVE FINANCE COMMITTEE
TO CONDUCT RULE IMPACT ANALYSES OF MAJOR RULES; PROVIDING
PROCEDURES; AMENDING THE ADMINISTRATIVE PROCEDURES ACT;
DEFINING TERMS; REQUIRING MAJOR RULES TO BE AUTHORIZED BY LAW
IN CERTAIN CIRCUMSTANCES; PROVIDING THAT ALL RULES PROMULGATED
BY A STATE AGENCY SHALL BE SUBJECT TO THE APPROVAL OF THE
GOVERNOR; PROVIDING PROCEDURES FOR JUDICIAL REVIEW OF RULES;
AMENDING AND ENACTING SECTIONS OF THE STATE RULES ACT;
PROVIDING NOTICE REQUIREMENTS; PROVIDING FOR THE AUTOMATIC
EXPIRATION OF RULES FIVE YEARS AFTER THE ADOPTION OF THE RULES;
PROVIDING A PROCESS FOR THE LEGISLATIVE RENEWAL OF RULES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 2-5-4 NMSA 1978 (being Laws 1967,
Chapter 267, Section 1) is amended to read:
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"2-5-4. LEGISLATIVE FINANCE COMMITTEE--ADDITIONAL
DUTIES.--
A. The legislative finance committee, in addition
to all other duties prescribed by law, shall annually review
budgets and appropriations requests and the operation and
management of selected state agencies, departments and
institutions and shall make recommendations with respect
thereto to the legislature.
B. To carry out the purposes of this section, the
legislative finance committee shall establish a budget analysis
division staffed with persons knowledgeable and proficient in
budget analysis and budget preparation.
C. Each state agency, department and institution
shall furnish to the legislative finance committee a copy of
its appropriation request made to the department of finance and
administration at the same time [such ] the request is made [to
such department]. Each state agency, department or institution
shall also furnish to the legislative finance committee and its
staff any other supporting information or data deemed necessary
to carry out the purposes of this section.
D. The legislative finance committee or, when it
deems necessary, its staff may hold such hearings and require
such testimony from officers and employees of each state
agency, department or institution as is necessary to carry out
the purposes of this section.
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E. Not later than the first week of any regular
legislative session, the legislative finance committee shall
furnish a document containing its budget recommendations to
each member of the senate finance committee and the house
appropriations and finance committee and to those other members
of the legislature [which ] who may request it. A copy shall
also be furnished to the governor and to the department of
finance and administration.
F. The legislative finance committee shall
determine whether an agency rule constitutes a major rule
pursuant to the Administrative Procedures Act, if requested by
the president pro tempore of the senate, the speaker of the
house of representatives or the chair or ranking minority
member of any legislative committee with jurisdiction over the
subject matter of the rule. The legislative finance committee
shall:
(1) provide a rule impact analysis within
fifteen days of submission of a major rule as determined
pursuant to this subsection, which shall include:
(a) an impact analysis of any grants
received from the federal government or from other sources
external to state government when requested by the president
pro tempore of the senate, the speaker of the house of
representatives or any chair or ranking minority member of any
legislative committee with jurisdiction over the subject matter
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of the grant;
(b) a statement of need;
(c) the authorizing statute for the rule
or the grant;
(d) an examination of alternatives to
the rule;
(e) an evaluation of the costs and
benefits of the rule, which shall include an estimation of: 1)
direct benefits of the rule; 2) cost savings or financial
benefits to the public; 3) cost compliance for entities
affected by the rule; 4) secondary or indirect costs; 5) effect
on state revenue; 6) effect on state expenditures, including
estimated administrative expenses; and 7) opportunity costs,
including the opportunity cost of compliance as a result of any
private capital from the market;
(f) the sources relied upon in
conducting the rule impact analysis; and
(g) any key assumptions and sources of
uncertainty;
(2) undertake such analysis during a
legislative session, as necessary; and
(3) make each rule impact analysis publicly
available and provide, at the end of each calendar year, the
president pro tempore of the senate and the speaker of the
house of representatives a report summarizing the rules
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evaluated in that year. "
SECTION 2. Section 12-8-2 NMSA 1978 (being Laws 1969,
Chapter 252, Section 2) is amended to read:
"12-8-2. DEFINITIONS.--As used in the Administrative
Procedures Act:
A. "agency" means any state board, commission,
department or officer that is authorized by law to make rules,
conduct adjudicatory proceedings, make determinations, grant
licenses, impose sanctions, grant or withhold relief or perform
other actions or duties delegated by law and [which ] that is
specifically placed by law under the Administrative Procedures
Act;
B. "adjudicatory proceeding" means a proceeding
before an agency, including but not limited to ratemaking and
licensing, in which legal rights, duties or privileges of a
party are required by law to be determined by an agency after
an opportunity for a trial-type hearing; but does not include a
mere rulemaking proceeding as provided in Section [3 of the
Administrative Procedures Act ] 12-8-3 NMSA 1978. It also
includes the formation and issuance of any order, the
imposition or withholding of any sanction and the granting or
withholding of any relief, as well as any of the foregoing
types of determinations or actions wherein no procedure or
hearing provision has been otherwise provided for or required
by law;
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C. "license" includes the whole or part of any
agency permit, certificate, approval, registration, charter,
membership, statutory exemption or other form of permission
required by law;
D. "licensing" includes the agency process
respecting the grant, denial, renewal, revocation, suspension,
annulment, withdrawal, amendment, limiting, modifying or
conditioning of a license;
E. "major rule" means a rule or an emergency rule
that will result in or is likely to result in:
(1) an annual effect on the state of ten
million dollars ($10,000,000) or more;
(2) costs to individuals or industries of ten
million dollars ($10,000,000) or more;
(3) significant adverse effects on
competition, employment, investment, productivity, innovation
or individual industries or regions; and
(4) significant changes in social or cultural
relations among citizens, including significant impact on
religions and ethnic, racial or gender populations;
[E.] F. "party" means each person or agency named
or admitted as a party or properly seeking and entitled as of
right to be admitted as a party, whether for general or limited
purposes;
[F.] G. "person" means any individual, partnership,
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corporation, association, governmental subdivision or public or
private organization of any character other than an agency;
[G.] H. "rule" includes the whole or any part of
every regulation, standard, statement or other requirement of
general or particular application adopted by an agency to
implement, interpret or prescribe law or policy enforced or
administered by an agency, if the adoption or issuance of such
rules is specifically authorized by the law giving the agency
jurisdiction over such matters. It also includes any statement
of procedure or practice requirements specifically authorized
by the Administrative Procedures Act or other law, but it does
not include:
(1) advisory rulings issued under Section [9
of the Administrative Procedures Act ] 12-8-9 NMSA 1978;
(2) regulations concerning only the internal
management or discipline of the adopting agency or any other
agency and not affecting the rights of, or the procedures
available to, the public or any person except an agency's
members, officers or employees in their capacity as such
member, officer or employee;
(3) regulations concerning only the
management, confinement, discipline or release of inmates of
state penal, correctional, public health or mental
institutions;
(4) regulations relating to the use of highways
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or streets when the substance of the regulations is indicated
to the public by means of signs or signals; or
(5) decisions issued or actions taken or denied
in adjudicatory proceedings;
[H.] I. "rulemaking" means any agency process for the
formation, amendment or repeal of a rule;
[I.] J. "order" means the whole or any part of the
final or interim disposition, whether affirmative, negative,
injunctive or declaratory in form, by an agency in any matter
other than rulemaking but including licensing;
[J.] K. "sanction" includes the whole or part of any
agency:
(1) prohibition, requirement, limitation or
other condition affecting the freedom of any person or [his ]
the person's property;
(2) withholding of relief;
(3) imposition of any form of penalty;
(4) destruction, taking, seizure or withholding
of property;
(5) assessment of damages, reimbursement,
restitution, compensation, taxation, costs, charges or fees;
(6) requirement, revocation, amendment,
limitation or suspension of a license; or
(7) taking or withholding of other compulsory,
restrictive or discretionary action;
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[K.] L. "relief" includes the whole or part of any
agency:
(1) grant of money, assistance, license,
authority, exemption, exception, privilege or remedy;
(2) recognition of any claim, right, interest,
immunity, privilege, exemption or exception; or
(3) taking of any other action upon the
application or petition of, and beneficial to, any person;
[L.] M. "agency proceedings" means any agency process
in connection with rulemaking, orders, adjudication, licensing,
imposition or withholding of sanctions or the granting or
withholding of relief; and
[M.] N. "agency action" includes the whole or part of
every agency rule, order, license, sanction or relief, or the
equivalent or denial thereof, or failure to act."
SECTION 3. Section 12-8-4 NMSA 1978 (being Laws 1969,
Chapter 252, Section 4) is amended to read:
"12-8-4. RULEMAKING PREREQUISITES.--
A. Prior to the adoption, amendment or repeal of any
rule, the agency shall, within the time specified by law or, if
no time is specified, then at least thirty days prior to its
proposed action:
(1) publish notice of its proposed action in the
manner specified by law or, if no manner is specified, then in
newspapers or trade, industrial or professional publications as
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will reasonably give public notice to interested persons; [and ]
(2) notify any person specified by law and, in
addition, any person or group filing written request, the
request to be renewed yearly as the agency directs by rule, for
notice of proposed action which may affect that person or
group, notification being by mail or otherwise to the last
address specified by the person or group. The notice shall:
(a) give the time and place of any public
hearing or state the manner in which data, views or arguments
may be submitted to the agency by any interested person;
(b) either state the express terms or
adequately describe the substance of the proposed action or
adequately state the subjects and issues involved; and
(c) include any additional matter required
by any law, together with specific reference to the statutory
authority under which the rule is proposed; and
(3) afford all interested persons reasonable
opportunity to submit data, views or arguments orally or in
writing and examine witnesses, unless otherwise provided by
law. If the agency finds that oral presentation is unnecessary
or impracticable, it may require that presentation be made in
writing. The agency shall consider fully all written and oral
submissions respecting the proposed rule. Upon adoption of a
rule contested at hearing or otherwise, the agency shall issue
a concise statement of its principal reasons for adoption of
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the rule and a statement of positions rejected in adopting the
rule together with the reasons for the rejections. All persons
heard or represented at any hearing or who submit any writing
to be considered in connection with the proposed rule shall
promptly be given a copy of the decision, by mail or otherwise.
B. Subject to the exceptions of this section, a major
rule shall not take effect before the legislature authorizes
the major rule by law. A major rule may take effect no later
than sixty days, if so specified in the proposed major rule and
if such major rule was not disapproved by the legislature
before its effective date. The legislative finance committee
shall provide a report on each major rule to each chamber of
the legislature by the end of the tenth regularly scheduled
legislative day during a regular legislative session after the
major rule's submission. The report shall include an
assessment of the agency's compliance with the procedure
required pursuant to Subsection B of Section 14-4-5.2 NMSA
1978.
[B.] C. If the agency finds that immediate adoption,
amendment or suspension of a rule is necessary for the
preservation of the public peace, health, safety or general
welfare, or if the agency for good cause finds that observance
of the requirements of notice and public hearing would be
contrary to the public interest, the agency may dispense with
such requirements and adopt, amend or suspend the rule as an
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emergency. The agency's finding and a brief statement of the
reasons for its finding shall be incorporated in the emergency
rule, amendment or suspension filed under Section [5 of the
Administrative Procedures Act ] 12-8-5 NMSA 1978. Upon adoption
of an emergency rule, amendment or suspension which shall
remain in effect for longer than sixty days, notice shall be
given within seven days as required in this section for
proposed rules.
D. A major rule may go into effect earlier than
specified in Subsection B of this section if the governor
publishes a statement with the rule:
(1) explaining why an emergency exists that
requires an earlier effective date for the rule or why a
federal requirement or federal funding requires an earlier
effective date; and
(2) explaining why the issuance of the major
rule otherwise complies with the emergency powers laws of this
state or is otherwise required pursuant to federal law or for
federal funding purposes.
E. A major rule promulgated pursuant to Subsection D
of this section shall remain in effect until the succeeding
regular legislative session, after which the rule shall expire
unless the rule is authorized by law during that regular
legislative session.
F. The adoption of any rule proposed by an agency
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shall be subject to the approval of the governor. An agency
shall not submit for publication in the New Mexico register any
required notice of adoption of a rule or the amendment of an
existing rule without first receiving from and including a copy
of the written approval of the adopted or amended rule from the
governor."
SECTION 4. Section 12-8-8 NMSA 1978 (being Laws 1969,
Chapter 252, Section 8) is amended to read:
"12-8-8. JUDICIAL REVIEW BY DECLARATORY JUDGMENT--
GRANTING RELIEF NOT OTHERWISE PROVIDED FOR.--
A. Unless otherwise provided by law, the validity or
applicability of a rule may be determined in an action for
declaratory judgment in the district court of Santa Fe county
if the rule, or its threatened application, interferes with or
impairs, or threatens to interfere with or impair, the
interests, rights or privileges of the plaintiff. Any
representative association, including but not limited to trade
associations, labor unions or professional organizations, may
file the action if one or more of its members could qualify as
a plaintiff. The agency shall be made a party to the action.
A declaratory judgment may be rendered whether or not the
plaintiff has requested the agency to pass upon the validity or
applicability of the rule in question. The district court may
determine whether an agency or the legislature has completed
the necessary requirements for a rule to take effect, including
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de novo review of whether a rule is a major rule that requires
delayed legislative consideration or approval by the
legislature before it takes effect.
B. The district court of Santa Fe county may enter
orders after reasonable notice and hearing upon any matter not
otherwise provided for in the Administrative Procedures Act,
including but not limited to procedural or substantive matters
of law or equity. This right may be utilized at any stage of a
proceeding, and failure to utilize the right until final
decision, action or order shall not be deemed a waiver
[thereof] of that right. If such questions are raised upon
review or appeal in the court of appeals, the court of appeals
may enter any orders which could have been entered by the
district court.
C. Legislation authorizing the promulgation of a
major rule pursuant to Section 12-8-4 NMSA 1978 shall not be
interpreted to serve as a grant or modification of statutory
authority by the legislature for the promulgation of a rule.
The court shall not extinguish any substantive or procedural
claim against any alleged defect in a rule on the basis of the
rule's authorizing statute, and the authorizing statute shall
not form part of the record before the court in any judicial
proceeding concerning a rule except for purposes of determining
whether or not the rule is in effect violating that statutory
authority."
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SECTION 5. Section 14-4-2 NMSA 1978 (being Laws 1967,
Chapter 275, Section 2, as amended) is amended to read:
"14-4-2. DEFINITIONS.--As used in the State Rules Act:
A. "agency" means any agency, board, commission,
department, institution or officer of the state government
except the judicial and legislative branches of the state
government;
B. "major rule" means a rule or an emergency rule
that will result in or is likely to result in:
(1) an annual effect on the state of ten million
dollars ($10,000,000) or more;
(2) costs to individuals or industries of ten
million dollars ($10,000,000) or more;
(3) significant adverse effects on competition,
employment, investment, productivity, innovation or individual
industries or regions; and
(4) significant changes in social or cultural
relations among citizens, including significant impact on
religions and ethnic, racial or gender populations;
[B.] C. "person" includes individuals, associations,
partnerships, companies, business trusts, political
subdivisions and corporations;
[C.] D. "proceeding" means a formal agency process or
procedure that is commenced or conducted pursuant to the State
Rules Act;
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[D.] E. "proposed rule" means a rule that is provided
to the public by an agency for review and public comment prior
to its adoption, amendment or repeal, and for which there is
specific legal authority authorizing the proposed rule;
[E.] F. "provide to the public" means for an agency
to distribute rulemaking information by:
(1) posting it on the agency website, if any;
(2) posting it on the sunshine portal;
(3) making it available in the agency's
district, field and regional offices, if any;
(4) sending it by electronic mail to persons who
have made a written request for notice from the agency of
announcements addressing the subject of the rulemaking
proceeding and who have provided an electronic mail address to
the agency;
(5) sending it by electronic mail to persons who
have participated in the rulemaking and who have provided an
electronic mail address to the agency;
(6) sending written notice that includes, at a
minimum, an internet and street address where the information
may be found to persons who provide a postal address; and
(7) providing it to the New Mexico legislative
council for distribution to appropriate interim and standing
legislative committees;
[F.] G. "rule" means any rule, regulation or
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standard, including those that explicitly or implicitly
implement or interpret a federal or state legal mandate or
other applicable law and amendments thereto or repeals and
renewals thereof, issued or promulgated by any agency and
purporting to affect one or more agencies besides the agency
issuing the rule or to affect persons not members or employees
of the issuing agency, including affecting persons served by
the agency. An order or decision or other document issued or
promulgated in connection with the disposition of any case or
agency decision upon a particular matter as applied to a
specific set of facts shall not be deemed such a rule, nor
shall it constitute specific adoption thereof by the agency.
"Rule" does not include rules relating to the management,
confinement, discipline or release of inmates of any penal or
charitable institution, the New Mexico boys' school, the girls'
welfare home or any hospital; rules made relating to the
management of any particular educational institution, whether
elementary or otherwise; or rules made relating to admissions,
discipline, supervision, expulsion or graduation of students
from any educational institution; and
[G.] H. "rulemaking" means the process for adoption
of a new rule or the amendment, readoption or repeal of an
existing rule."
SECTION 6. Section 14-4-5.2 NMSA 1978 (being Laws 2017,
Chapter 137, Section 4) is amended to read:
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"14-4-5.2. NOTICE OF PROPOSED RULEMAKING.--
A. Not later than thirty days before a public rule
hearing, the agency proposing the rule shall provide to the
public and publish in the New Mexico register a notice of
proposed rulemaking. The notice shall include:
(1) a summary of the full text of the proposed
rule;
(2) a short explanation of the purpose of the
proposed rule;
(3) a citation to the specific legal authority
authorizing the proposed rule and the adoption of the rule;
(4) information on how a copy of the full text
of the proposed rule may be obtained;
(5) information on how a person may comment on
the proposed rule, where comments will be received and when
comments are due;
(6) information on where and when a public rule
hearing will be held and how a person may participate in the
hearing; [and]
(7) a citation to technical information, if any,
that served as a basis for the proposed rule, and information
on how the full text of the technical information may be
obtained;
(8) a classification of a rule as a major rule
or a rule that is not a major rule, including an explanation
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for why the rule is or is not a major rule;
(9) a list of any other proposed rulemaking
intended to implement the same authorizing statute or other
objective and individual and aggregate economic effects of
those rulemaking actions; and
(10) the proposed effective date of the proposed
rule.
B. On the date of submission of a notice pursuant to
this section, the agency shall submit to the legislative
finance committee and to each chamber of the legislature a
cost-benefit analysis of the proposed rule, including an
analysis of any employment positions added or lost,
differentiating between public and private sector employment.
[B.] C. An agency may charge a reasonable fee for
providing any records in nonelectronic form when provided to a
person pursuant to this section. An agency shall not charge a
fee for providing any records in electronic form when provided
to a person pursuant to this section.
[C.] D. An internet link providing free access to the
full text of the proposed rule shall be included on the notice
of proposed rulemaking.
[D.] E. If the agency changes the date of the public
rule hearing or the deadline for submitting comments as stated
in the notice, the agency shall provide notice to the public of
the change.
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[E.] F. The state records administrator or the
administrator's designee shall timely publish the notice of
proposed rulemaking in the next publication of the New Mexico
register."
SECTION 7. A new section of the State Rules Act is
enacted to read:
"[NEW MATERIAL] AUTOMATIC RULE EXPIRATION--RULE RENEWAL BY
LEGISLATIVE AUTHORIZATION.--
A. Except as otherwise provided by law, a rule or
major rule adopted pursuant to the State Rules Act shall expire
on January 1 of the fifth year after the rule takes effect,
unless the rule expires or is repealed on an earlier date.
B. The legislature may authorize by law the renewal
of a rule or a major rule. If the legislature does not renew a
rule for an additional term of five years by law within sixty
days of receiving an agency's review of the rule, the rule
shall terminate. Nothing in this subsection shall preclude the
legislature from repealing a rule prior to the expiration date
of the rule.
C. An agency may request the renewal by the
legislature of a rule subject to expiration. The request shall
be submitted no more than two years prior to the expiration of
the rule, shall demonstrate why the rule is required for
another five years and shall include a cost-benefit analysis of
the rule. The agency shall publish the request on its website
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at the time that the agency submits the request to the
legislature.
D. The state records administrator shall provide
notice to the promulgating agency at least eighteen months
prior to a rule's expiration date."
SECTION 8. Section 14-4A-6 NMSA 1978 (being Laws 2005,
Chapter 244, Section 6) is amended to read:
"14-4A-6. PERIODIC REVIEW OF RULES.--
A. By July 1, 2010, each agency shall have reviewed
all of its rules that existed on the effective date of the
Small Business Regulatory Relief Act to determine whether the
rules should be continued without change or should be amended
or repealed to minimize the economic impact of the rules on
small businesses, subject to compliance with the stated
objectives of the laws pursuant to which the rules were
adopted.
B. Rules adopted and promulgated after [the effective
date of the Small Business Regulatory Relief Act ] July 1, 2005
shall be reviewed every five years to ensure that they continue
to minimize economic impacts on small businesses while
implementing the state objectives of the laws pursuant to which
the rules were adopted.
C. In reviewing its rules to minimize economic
impacts on small businesses, an agency shall consider the
following factors:
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(1) continued need for the rule;
(2) the nature of complaints or comments
received from the public concerning the rule;
(3) the complexity of the rule;
(4) the extent to which the rule overlaps,
duplicates or conflicts with other federal, state and local
government rules; and
(5) the length of time since the rule has been
evaluated or the degree to which technology, economic
conditions or other factors have changed in the topical area
affected by the rule.
D. After conducting a review pursuant to this
section, an agency shall submit the agency's review findings to
the legislature."
SECTION 9. TEMPORARY PROVISION--EXPIRATION OF EXISTING
RULES.--All existing rules adopted by state agencies pursuant
to the State Rules Act shall be considered adopted on the
effective date of this act.
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