ASSEMBLY, No. 1175
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman DALTON
An Act concerning the administrative determination of the invalidity of a proposed rule and amending P.L.1968, c.410.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1968, c.410 (C.52:14B-2) is amended to read as follows:
2. As used in this act:
[(a)]a. "State agency" or "agency" shall include each of the principal departments in the executive branch of the State Government, and all boards, divisions, commissions, agencies, departments, councils, authorities, offices or officers within any such departments now existing or hereafter established and authorized by statute to make, adopt or promulgate rules or adjudicate contested cases, except the office of the Governor.
[(b)]b. "Contested case" means a proceeding, including any licensing proceeding, in which the legal rights, duties, obligations, privileges, benefits or other legal relations of specific parties are required by constitutional right or by statute to be determined by an agency by decisions, determinations, or orders, addressed to them or disposing of their interests, after opportunity for an agency hearing, but shall not include any proceeding in the Division of Taxation, Department of the Treasury, which is reviewable de novo by the Tax Court.
[(c)]c. "Administrative adjudication" or "adjudication" includes any and every final determination, decision or order made or rendered in any contested case.
[(d)]d. "The head of the agency" means and includes the individual or group of individuals constituting the highest authority within any agency authorized or required by law to render an adjudication in a contested case.
[(e)]e. "Administrative rule" or "rule," when not otherwise modified, means each agency statement of general applicability and continuing effect that implements or interprets law or policy, or describes the organization, procedure or practice requirements of any agency. The term includes the amendment or repeal of any rule, but does not include: (1) statements concerning the internal management or discipline of any agency; (2) intraagency and interagency statements; and (3) agency decisions and findings in contested cases.
[(f)]f. "License" includes the whole or part of any agency license, permit, certificate, approval, chapter, registration or other form of permission required by law.
[(g)]g. "Secretary" means the Secretary of State.
[(h)]h. "Director" means the Director of the Office of Administrative Law, unless otherwise indicated by context.
i. "A description of the expected socio-economic impact of the rule" means:
(1) A statement which describes the expected social impact of the proposed rulemaking on the public, particularly on any segments of the public proposed to be regulated and including any proposed or expected differential impact on different segments of the public and justification therefor; for those proposals that will impact differently on those who will be regulated, the statement shall explain any scales or ranges built into the proposal to account for the differences or shall explain why the proposing agency has not accounted for the differences among those regulated; and
(2) A statement which describes the expected costs, revenues, and other economic impact upon governmental bodies of the State and any segments of the public proposed to be regulated; if the agency has considered and rejected modifications which would lessen the economic impact on the regulated, it shall explain why the modifications were undesirable.
j. "Standards of rulemaking" means:
(1) Authority and reference: the agency has demonstrated in the rulemaking record that it has the legal authority to adopt the rule and that the proposed rule is within the scope of that legal authority, that it has cited the appropriate statutory or judicial reference to the provisions of law which the rule implements or interprets, that it has provided an adequate description of the expected socio-economic impact of the rule and an adequate regulatory flexibility analysis, if required, and that it has complied with all applicable rulemaking requirements;
(2) Necessity and purpose: the agency has demonstrated in the rulemaking record the necessity for the rule and has provided an adequate explanation of the rule's intended purpose and effect;
(3) Consideration of objections and public burden: the agency has satisfactorily responded to formal objections offered in the rulemaking record and has demonstrated that any burden imposed by the rule is necessary and reasonable in light of the rule's intended purpose; and
(4) Clarity and consistency: the agency has written the rule in a manner that will enable those persons directly affected by it to understand the rule's meaning and effect, and has demonstrated that the rule is consistent with existing rules, laws, and judicial determinations.
(cf: P.L.1981, c.511, s.21)
2. Section 4 of P.L.1968, c.410 (C.52:14B-4) is amended to read as follows:
4. [(a)]a. Prior to the adoption, amendment, or repeal of any rule, except as may be otherwise provided, the agency shall:
(1) Give at least 30 days' notice of its intended action. The notice shall include a statement of either the terms or substance of the intended action or a description of the subjects and issues involved, and the time when, the place where, and the manner in which interested persons may present their views thereon. The notice shall be mailed to all persons who have made timely requests of the agency for advance notice of its rule-making proceedings and in addition to other public notice required by law shall be published in the New Jersey Register and shall be filed with the President of the Senate and the Speaker of the General Assembly. The notice shall be additionally publicized in such manner as the agency deems most appropriate in order to inform those persons most likely to be affected by or interested in the intended action. Methods that may be employed include publication of the notice in newspapers of general circulation or in trade, industry, governmental or professional publications, distribution of press releases to the news media and posting of notices in appropriate locations;
(2) Prepare for public distribution at the time the notice appears in the Register a statement setting forth a summary of the proposed rule, a clear and concise explanation of the purpose and effect of the rule, the specific legal authority under which its adoption is authorized, a description of the expected socio-economic impact of the rule, and a regulatory flexibility analysis, or the statement of finding that a regulatory flexibility analysis is not required, as provided in section 4 of P.L.1986, c.169 (C.52:14B-19);
(3) Afford all interested persons reasonable opportunity to submit data, views, or arguments, orally or in writing. The agency shall consider fully all written and oral submissions respecting the proposed rule.
The agency shall conduct a public hearing on the proposed rule at the request of a committee of the Legislature, or a governmental agency or subdivision, provided such request is made to the agency within 15 days following publication of the proposed rule in the Register. The agency shall provide at least 15 days' notice of such hearing, which shall be conducted in accordance with the provisions of subsection[(g)]h. of this section;
(4) Prepare for public distribution and publish in the Register a notice of pending adoption along with a report listing all parties offering written or oral submissions concerning the rule, summarizing the content of the submissions and providing the agency's response to the data, views and arguments contained in the submissions.
b. (1) Within 15 days after the publication of the notice of pending adoption, any substantially affected person may file a petition seeking an administrative determination of the invalidity of any proposed rule on the ground that the proposed rule is in violation of one or more of the standards of rulemaking. The petition shall be filed with the director and shall state with particularity the provisions of the rule alleged to be invalid with sufficient explanation of the facts or grounds for the alleged violation of the standards of rulemaking and facts sufficient to show that the person challenging the proposed rule would be substantially affected by it.
(2) Within 10 days after receiving the petition, if the director determines that the petition complies with the above requirements, an administrative law judge shall be assigned who shall conduct a hearing within 30 days thereafter, unless the petition is withdrawn. Within 30 days after conclusion of the hearing, the administrative law judge shall render a decision and state the reasons therefor in writing. The administrative law judge may declare the proposed rule invalid in whole or in part. The proposed rule or provision of a proposed rule declared invalid shall not be adopted. In the event part of a proposed rule is declared invalid, the adopting agency may, in its sole discretion, withdraw the proposed rule in its entirety. The agency whose proposed rule has been declared invalid in whole or in part shall give notice of the decision in the New Jersey Register. A proposed rule which has been declared valid may be adopted by the agency and any subsequent appeal shall be to the Appellate Division of the Superior Court.
(3) Hearings held under this subsection shall be conducted on an expedited basis, and the administrative law judge's order shall be the final administrative decision. The agency proposing the rule and the person requesting the hearing shall be adversary parties. Other substantially affected persons may join the proceedings as parties or intervenors on appropriate terms which will not substantially delay the proceedings. Failure to proceed under this subsection shall not constitute failure to exhaust administrative remedies. Any party may appeal the order of the administrative law judge to the Appellate Division of the Superior Court.
[(b)]c. A rule prescribing the organization of an agency may be adopted at any time without prior notice or hearing. Such rules shall be effective upon filing in accordance with section 5 of this act or upon any later date specified by the agency.
[(c)]d. If an agency finds that an imminent peril to the public health, safety, or welfare requires adoption of a rule upon fewer than 30 days' notice and states in writing its reasons for that finding, and the Governor concurs in writing that an imminent peril exists, it may proceed without prior notice or hearing, or upon any abbreviated notice and hearing that it finds practicable, to adopt the rule. The rule shall be effective for a period of not more than 60 days unless each house of the Legislature passes a resolution concurring in its extension for a period of not more than 60 additional days. The rule shall not be effective for more than 120 days unless repromulgated in accordance with normal rule-making procedures.
[(d)]e. No rule hereafter adopted is valid unless adopted in substantial compliance with this act. A proceeding to contest any rule on the ground of noncompliance with the procedural requirements of this act shall be commenced within one year from the effective date of the rule.
[(e)]f. An agency may file a notice of intent with respect to a proposed rule-making proceeding with the Office of Administrative Law, for publication in the New Jersey Register at any time prior to the formal notice of action required in subsection[(a)]a. of this section. The notice shall be for the purpose of eliciting the views of interested parties on an action prior to the filing of a formal rule proposal. An agency may use informal conferences and consultations as means of obtaining the viewpoints and advice of interested persons with respect to contemplated rule-making. An agency may also appoint committees of experts or interested persons or representatives of the general public to advise it with respect to any contemplated rule-making.
[(f)]g. An interested person may petition an agency to promulgate, amend or repeal any rule. Each agency shall prescribe the form for the petition and the procedure for the submission, consideration and disposition of the petition. The petition shall state clearly and concisely:
(1) The substance or nature of the rule-making which is requested;
(2) The reasons for the request and the petitioner's interest in the request;
(3) References to the authority of the agency to take the requested action.
Within 30 days following receipt of any such petition, the agency shall either deny the petition, giving a written statement of its reasons, or shall proceed to act on the petition, which action may include the initiation of a formal rule-making proceeding. Upon the receipt of the petition, the agency shall file a notice stating the name of the petitioner and the nature of the request with the Office of Administrative Law for publication in the New Jersey Register. Notice of formal agency action on such petition shall also be filed with the division for publication in the Register.
[(g)]h. All public hearings shall be conducted by a hearing officer, who may be an official of the agency, a member of its staff, a person on assignment from another agency, a person from the Office of Administrative Law assigned pursuant to subsection o. of section 5 of P.L.1978, c.67 (C.52:14F-5o.) or an independent contractor. The hearing officer shall have the responsibility to make recommendations to the agency regarding the adoption, amendment or repeal of a rule. These recommendations shall be made public. At the beginning of each hearing, or series of hearings, the agency, if it has made a proposal, shall present a summary of the factual information on which its proposal is based, and shall respond to questions posed by any interested party. Hearings shall be conducted at such times and in locations which shall afford interested parties the opportunity to attend. A verbatim transcript of each hearing shall be maintained, and copies of the transcript shall be available to the public at no more than the actual cost.
(cf: P.L.1986, c.169, s.7)
3. This act shall take effect immediately.
STATEMENT
This bill establishes a procedure for the administrative determination of the invalidity of a proposed rule. It requires an agency which is proposing a rule to file a notice of pending adoption in the New Jersey Register at the time the agency publishes a report summarizing the submissions received and the agency's response to the submissions.
Within 15 days after the publication of the notice of pending adoption, any substantially affected person may file a petition seeking an administrative determination of the invalidity of any proposed rule on the ground that the proposed rule is in violation of one or more of the standards of rulemaking. The standards of rulemaking are defined in detail under the topics of authority and reference, necessity and purpose, consideration of objections and public burden, and clarity and consistency.
If, within 10 days after receiving the petition, the Director of the Office of Administrative Law determines that the petition complies with the specified requirements, an administrative law judge will be assigned who will conduct a hearing within 30 days thereafter. The administrative law judge will render a decision within 30 days after the conclusion of the hearing and may declare the proposed rule invalid in whole or in part. A proposed rule which has been declared valid may be adopted. Hearings will be on an expedited basis, and the administrative law judge's decision shall be the final administrative decision. Any party may appeal the order of the administrative law judge to the Appellate Division of the Superior Court.
The bill also defines the description of the expected socio-economic impact of a proposed rule, one of the impact statements which is published in the Register when a rule is initially proposed.
Provides procedure for the administrative determination of the invalidity of a proposed rule.