GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	1 

SENATE BILL 535

Short Title:  Simplify APA Rule Making Process.	(Public)
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Sponsors: Senator Johnson of Wake.
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Referred to:  Judiciary III.
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March 20, 1989

A BILL TO BE ENTITLED
AN ACT TO SIMPLIFY THE RULE MAKING PROCESS, TO MAKE THE PROCESS MORE UNIFORM, AND TO TRANSFER THE RESPONSIBILITY FOR THE NORTH CAROLINA ADMINISTRATIVE CODE AND THE NORTH CAROLINA REGISTER TO THE SECRETARY OF STATE.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 150B of the General Statutes is amended by adding a new Article to read:
“ARTICLE 6.
"Rule Making.
"Part 1. General Provisions.
"§ 150B-69.  Scope and effect.
This Article applies to the exercise of any rule making authority by an agency.  A rule is not valid unless it is adopted in substantial compliance with this Article.
"§ 150B-70.  Restrictions on what can be adopted as a rule.
An agency may not adopt a rule that:
(1)	Implements or interprets a law unless the authority to carry out the law is conferred by law on the agency;
(2)	Enlarges the scope of a trade or profession;
(3)	Imposes a penalty for an act or omission, including violating a rule, unless a statute specifically authorizes the agency to do so;
(4)	Repeats the content of a statute or federal regulation; or
(5)	Establishes a fee or charge for rendering a service or fulfilling a duty to the public unless a statute specifically authorizes the agency to do so or the rule establishes a fee or charge:
a.	To a State, federal, or local governmental unit;
b.	For providing a copy of part or all of a document;
c.	For a transcript of a public hearing;
d.	For registering for a conference or workshop; or
e.	For the agency's cost to provide data processing services to another person.
"§ 150B-71.  Petitioning an agency to adopt a rule.
(a)	A person may ask an agency to adopt a rule by submitting to the agency a written petition requesting the adoption.  The person may accompany his petition with written comments.  Each agency must prescribe by rule the procedure for submitting a rule making petition to it and the procedure followed by the agency in considering the petition.
(b)	An agency must grant or deny a rule making petition submitting to it within 30 days after it is submitted, unless the agency is a board or commission.  If the agency is a board or commission, it must grant or deny a rule making petition within 120 days after it is submitted or at its next regularly scheduled meeting, whichever comes first.
(c)	If an agency denies a rule making petition, it must send the person who submitted the petition a written statement of the reasons for denying the petition.  If an agency grants a rule making petition, it must inform the person who submitted the petition of its decision and must initiate rule making proceedings.  Denial of a rule making petition is a final agency decision and is subject to judicial review under Article 4 of this Chapter.
"§ 150B-72.  Declaratory rulings by an agency on a statue or rule.
(a)	A person affected by a statute or rule administered by an agency may ask the agency for a ruling on the validity of the rule or on the application of the statute or rule to a given set of facts by submitting to the agency a written petition requesting the ruling.  When an agency receives a request for a declaratory ruling, it must make a ruling unless it finds that making a ruling is not appropriate.  Each agency must prescribe by rule the procedure for submitting a request for a declaratory ruling to it, the procedure followed by the agency in considering the request, and the circumstances under which the agency will not make a declaratory ruling.
(b)	An agency must grant or deny a request for a declaratory ruling submitted to it within 30 days after it is submitted, unless the agency is a board or commission.  If the agency is a board or commission, it must grant or deny the request within 120 days after it is submitted or at its next regularly scheduled meeting, whichever comes first.
(c)	If an agency denies a request for a declaratory ruling, it must send the person who submitted the request a written statement of the reasons for denying the request.  If an agency grants a request for a declaratory ruling, it must send the person who submitted the request a copy of its ruling.  A declaratory ruling is a final agency decision and is subject to judicial review under Article 4 of this Chapter.  Failure of an agency to make a declaratory ruling is a denial of the request as well as a denial of the merits of the request and is subject to judicial review under Article 4 of this Chapter.
(d)	A declaratory ruling is binding on the agency that issued it, the person that requested it, and any other party to the proceeding except to the extent that it is altered or set aside by a court.  An agency may not retroactively change a declaratory ruling, but an agency may prospectively adopt a rule that differs from a declaratory ruling.
(e)	An agency must give a copy of a declaratory ruling concerning a specific rule or statute to a person who requests a copy of any rulings made by the agency on the rule or statute.
"§ 150B-73.  Agency must designate rule making coordinator.
Each agency must designate one or more administrative procedure coordinators to oversee the agency's rule making functions.  The coordinator must prepare notices of public hearings, coordinate access to the agency's rules, and serve as the liaison between the agency and other agencies in the rule making process and between the agency and the public.
"Part 2. Adoption of Rules.
"§ 150B-74.  Procedure for adopting permanent rules.
(a)	Notice.  Before an agency adopts a permanent rule, it must publish notice of its intent to adopt a permanent rule in the North Carolina Register and as prescribed by any other statute.  The notice published in the Register must include:
(1)	Either the text of the rule or a statement of the subject matter of proposed rule making;
(2)	A short explanation of the reason for the proposed action;
(3)	A citation to the statute or other legal authority that gives the agency the authority to adopt the rule;
(4)	The period of time during which and the person to whom written comments may be submitted on the rule;
(5)	If the agency publishes a statement of the subject matter of the rule, the date, time, and place of the public hearing on the rule and instructions on how a person may obtain a copy of and comment on the text of the rule;
(6)	If the agency publishes the text of the rule and decides to hold a public hearing on the rule, the date, time, and place of the public hearing;
(7)	If the agency publishes the text of the rule and does not schedule a public hearing on the rule, instructions on how a person may demand a public hearing on the rule;
(8)	If a fiscal note has been prepared for the rule, a statement that a copy of the fiscal note can be obtained from the agency; and
(9)	If the rule incorporates material by reference, an indication of whether the incorporation by reference automatically includes subsequent changes to the material.
An agency may publish the notice or a synopsis of the notice in other ways selected by the agency to give notice to persons likely to be affected by the proposed rule.
(b)	Mailing list.  An agency must maintain a mailing list of persons who have requested to receive copies of notices of rule making.  When an agency publishes a rule making notice in the North Carolina Register, it must mail a copy of the notice to each person on the mailing list who has requested to receive a copy of a notice of rule making proceedings on the rule or subject area of the rule described in the notice.
(c)	Hearing.  An agency must hold a public hearing on a rule it proposes to adopt if it does not publish the text of the rule in the notice in the North Carolina Register.  The hearing date must be at least 30 days after the date the notice of the hearing is published.
An agency must hold a public hearing on a rule it proposes to adopt if it publishes the text of the rule in the notice in the Register, the notice does not schedule a public hearing, and, within 20 days after the notice is published, the agency receives a written request for a public hearing.  When an agency receives a written request for a public hearing, it must schedule a hearing and must publish the date, time, and place of the hearing in the Register.  The hearing date must be at least 20 days after the date the notice of the hearing is published.
A rule making hearing must be recorded.
(d)	Distribution of text.  When an agency does not publish the text of a proposed rule in the North Carolina Register, it must mail a copy of the text it proposes to adopt to each person who attended the public hearing on the rule, each person on its mailing list for rule making notices on the rule or subject matter of the rule, and each person who has requested a copy of the proposed text.  The proposed text must be mailed after the public hearing on the rule.
(e)	Comments.  An agency must accept comments on a proposed rule until it adopts the rule.  The agency must consider fully all written and oral comments received on a rule.
(f)	Adoption.  An agency that publishes a statement of the subject matter of a proposed rule in the North Carolina Register may not adopt a rule addressing that subject matter until 15 days after the agency mails the proposed text of the rule to those on its mailing list, those at the public hearing on the rule, and those who, as of the date of the hearing, had requested to receive a copy of the proposed text.  An agency that publishes the text of a proposed rule in the Register may not adopt the rule until the time for requesting a public hearing on the rule has elapsed or, if a public hearing is requested or otherwise scheduled, until after the hearing on the rule.
An agency may not adopt a rule that differs substantially from the proposed text of a rule published in the Register or distributed after a public hearing.  if the agency decides adoption of a substantially different rule is appropriate, the agency must terminate the rule making proceeding and begin a new rule making proceeding to adopt the substantially different rule.
An adopted rule differs substantially from a proposed rule if it:
(1)	Affects the interests of persons who, based on the proposed text of the rule, could not reasonably have determined that the rule would affect their interests;
(2)	Addresses a subject matter or an issue that is not addressed in the proposed rule; or
(3)	Produces an effect that could not reasonably have been expected based on the proposed text.
(g)	Explanation.  An agency must issue a concise written statement explaining why the agency adopted a rule if, within 30 days after the agency adopts the rule, a person asks the agency to do so.  The explanation must state the principal reasons for and against adopting the rule and must discuss why the agency rejected any arguments made or considerations urged against the adoption of the rule.
(h)	Record.  An agency must keep a record of a rule making proceeding.  The record must include all written comments received, the transcript or recording of any public hearing held on the rule, and any written explanation made by the agency for adopting the rule.
"§ 150B-75.  Procedure for adopting temporary rules.
(a)	Adoption.  An agency may adopt a temporary rule without prior notice or hearing or upon any abbreviated notice or hearing the agency finds practicable when it determines in writing that:
(1)	Adherence to the notice and hearing requirements of this Part would be contrary to the public interest; and
(2)	The immediate adoption of a rule is required by:
a.	A serious and unforseen threat to the public health, safety, or welfare;
b.	The effective date of a recent act of the General Assembly or the United States Congress;
c.	A recent change in federal or State budgetary policy;
d.	A federal regulation;
e.	A court order; or
f.	The need to control persons under the custody or supervision of the Department of Correction.
The written determination of need for a temporary rule must state the reasons for the determination and must be signed by the head of the agency that adopts the rule.  When an agency adopts a temporary rule, it must begin rule making proceedings for a permanent rule no later than the date it adopts the temporary rule.
(b)	Filing.  When an agency adopts a temporary rule, it must file with the Codifier of Rules and the Commission a copy of the rule, the agency's written determination of need for the rule, and a copy of the notice of rule making on the proposed permanent rule.
(c)	Expiration.  A temporary rule expires on the date specified in the rule or 180 days from the date the rule becomes effective, whichever comes first.
"§ 150B-76.  Effective date of rules.
(a)	Permanent rules.  A permanent rule approved by the Commission becomes effective on the date the Commission delivers the rule to the Codifier of Rules, unless the agency adopting the rule specifies a later effective date.  If the agency specifies a later effective date, the rule becomes effective on that date.
A permanent rule that is not approved by the Commission becomes effective on the date the agency adopting the rule delivers the rule to the Codifier of Rules, unless the agency specifies a later effective date.  If the agency specifies a later effective date, the rule becomes effective on that date.
(b)	Temporary Rules.  A temporary rule adopted for a reason other than to control persons under the custody or supervision of the Department of Correction becomes effective on the date the agency adopting the rule delivers the rule to the Codifier of Rules.  A temporary rule adopted to control persons under the custody or supervision of the Department of Correction becomes effective on the day it is adopted.
"§ 150B-77.  Fiscal notes on rules.
(a)	State Funds.  Before an agency adopts a rule that affects the agency's revenues or requires the expenditure or distribution of funds appropriated by the General Assembly or received from the federal government, it must submit the text of the proposed rule and a fiscal note on the proposed rule to the Director of the Budget and obtain certification from the Director that the funds required by the rule are available.  The fiscal note must state the amount of funds to be expended or distributed as a result of the proposed rule and explain how the amount was computed.  The director of the Budget must certify a rule if funds are available to cover the expenditure or distribution required by the rule.
(b)	Local Funds.  An agency must submit a fiscal note for a proposed rule that affects the expenditures or revenues of a unit of local government in accordance with G.S. 120-30.48.  The fiscal note must be submitted no later than the date when the notice of rule making on the proposed rule is published in the North Carolina Register.
(c)	Errors.  An erroneous fiscal note prepared in good faith does not affect the validity of a rule.
"§ 150B-78.  Circumstances when notice and rule making hearing not required.
(a)	Amendment.  An agency is not required to publish a notice of rule making in the North Carolina Register or hold a public hearing when it proposes to amend a rule, without changing the substance of the rule, to
(1)	Reletter or renumber the rule or subparts of the rule;
(2)	Substitute one name for another when an organization or position is renamed;
(3)	Correct a citation in the rule to another rule or law when the citation has become inaccurate since the rule was adopted because of the repeal or renumbering of the cited rule or law;
(4)	Change information that is readily available to the public, such as an address or a telephone number;
(5)	Correct a typographical error; or
(6)	Change a rule in response to a request or objection by the Commission.
(b)	Repeal.  An agency is not required to publish a notice of rule making in the North Carolina Register or hold a public hearing when it proposes to repeal a rule if the statute under which the rule was adopted is repealed, or if the statute under which the rule was adopted or the rule itself is declared unconstitutional.
"§ 150B-79.  Incorporating material in a rule by reference.
(a)	An agency may incorporate by reference in a rule, without repeating the text of the material:
(1)	Another rule or part of a rule adopted by the agency;
(2)	All or part of a code, standard, or regulation adopted by another agency, the federal government, or a generally recognized organization or association; or
(3)	Material adopted to meet a requirement of the federal government.
In incorporating material by reference, the agency must specify in the rule whether the incorporation is under subsection (b)	or subsection (c) of this section.  The agency can change this election only by a subsequent rule making proceeding.  The agency must have copies of the incorporated material available for inspection and must specify in the rule where copies of the material can be obtained and the cost of a copy on the date the agency adopts the rule.
(b)	If an agency incorporates material by reference under this subsection, the incorporation does not include subsequent amendments and editions of the material incorporated.  If the agency wants to incorporate subsequent changes in the incorporated material, it must amend the rule.
(c)	If an agency incorporates material by reference under this subsection, the incorporation automatically includes subsequent amendments and editions of the material incorporated.
"§ 150B-80.  Effect of transfer of duties or termination of agency on rules.
(a)	When a law that authorizes an agency to adopt a rule is repealed and another law gives the same agency substantially the same power to adopt a rule, the rule remains in effect until the agency amends or repeals the rule.  When a law that authorizes an agency to adopt a rule is repealed and another law does not give the same or another agency substantially the same power to adopt a rule, a rule adopted under the repealed law is repealed as of the date the law is repealed.
(b)	When a law or an executive order abolishes an agency and does not transfer the function of the agency to another agency, any rule related to the performance of a function assigned to that agency is repealed as of the effective date of the law or order.
(c)	The Codifier of Rules must enter in the North Carolina Administrative Code the repeal of a rule under this section.
"Part 3.  Review by Commission.
"§ 150B-81.  Review of rule by Commission.
(a)	Temporary Rules.  An agency must submit a temporary rule adopted by it to the Commission when it files the rule with the Codifier of Rules.  The Commission reviews a temporary rule in accordance with the standards in G.S. 150B-82 and reviews the agency's written determination of need for the temporary rule.
If the Commission finds that the rule does not meet the standards for review, the Commission notifies the Codifier of Rules and the agency of its findings.  When the Codifier is notified of the Commission's objection to a temporary rule, the Codifier must make an entry in the code to reflect the Commission's objection.
If the Commission finds that the reasons given in the agency's determination of need are inadequate, the Commission notifies the governor, if the agency is headed by a person appointed by the governor, and the head of the agency that adopted the rule of its findings.
(b)	Permanent Rules.  An agency must submit a permanent rule adopted by it to the Commission before the rule can be included in the North Carolina Administrative Code.  The Commission reviews a permanent rule in accordance with the standards in G.S. 150B-82 and the procedure in this Part.
(c)	Scope.  When the commission reviews an amendment to a rule, it may review the entire rule that is being amended.
"§ 150B-82.  Standard and timetable for review by Commission.
(a)	The Commission must determine whether a rule:
(1)	Is within the authority delegated to the agency by the General Assembly;
(2)	Is clear and unambiguous; and
(3)	Is reasonably necessary.
(b)	The Commission must review a rule submitted to it on or before the 20th of a month by the last day of the next month.  The Commission must review a rule submitted to it after the 20th of a month by the last day of the second subsequent month.
"§ 150B-83.  Commission action on permanent rule.
At the first meeting at which a permanent rule is before the Commission for review, the Commission must:
(1)	Approve the rule, if the Commission determines that the rule meets the standards for review; or
(2)	Object to the rule, if the Commission determines that the rule does not meet the standards for review; or
(3)	Extend the period for reviewing the rule, if the Commission determines it needs additional information on the rule to be able to decide whether the rule meets the standards for review.
In reviewing a rule, the Commission may request an agency to make technical changes to the rule and may condition its action on the rule on the agency's making the requested technical changes.
"§ 150B-84.  Procedure when Commission extends period of review of permanent rule.
When the Commission extends the period for review of a permanent rule, it must notify the agency of the extension and the reason for the extension.  After the Commission extends the period for reviewing a rule, it must decide whether to approve or object to the rule within 70 days of the extension.
"§ 150B-85.  Procedure when Commission objects to a permanent rule.
When the Commission objects to a permanent rule, it must send the agency that adopted the rule a written statement of the objection and the reason for the objection.  The agency that adopted the rule must:
(1)	Change the rule to satisfy the Commission's objection and submit the revised rule to the Commission; or
(2)	Submit a written response to the Commission indicating that the agency has decided not to change the rule.
An agency that is not a board or commission must take one of these actions within 30 days after receiving the Commission's statement.  A board or commission must take one of these actions within 30 days after receiving the Commission's statement or 10 days after the board or commission's next regularly scheduled meeting, whichever comes later.
When an agency changes a rule in response to an objection by the Commission, the Commission must determine whether the change satisfies the Commission's objection.  If it does, the Commission must approve the rule.
(If a proposed agency change does not satisfy the Commission's objection or if the agency elects not to change the rule, the Commission may keep the rule for up to 90 days after the date the Commission originally objected to the rule.  During that time, the agency may submit additional changes to the rule in response to the Commission's objection.  When 90 days have expired and the rule has not been changed to satisfy the Commission's objection, the Commission may send to the President of the Senate and each member of the General Assembly a report of its objection to the rule.
"§ 150B-86.  Public hearing on a rule.
(a)	At any time before the Commission approves or objects to a rule that is before it for review, it may call a public hearing on the rule.  On its own motion, the Commission may also call a public hearing on a rule that is not before it for review.  Calling a public hearing on a rule not already before the Commission for review places the rule before the Commission for review.  When the commission decides to call a public hearing on a rule, it must give notice of the hearing to the agency that adopted the rule, to those who have asked to receive notice of any public hearing called on the rule or subject area of the rule, and to those who, as determined by the Commission, may be affected by the rule.
After a public hearing on a rule, the Commission must approve the rule or object to the rule in accordance with the standards and procedures in this Part.  The Commission must make its decision of whether to approve or object to the rule within 70 days after the public hearing.
"§ 150B-87.  Transmittal to Codifer of Rules.
When the Commission approves a rule, it must deliver the approved rule to the codifier of Rules by the end of the month in which the Commission approved the rule.  When the Commission objects to a rule and the agency does not change the rule to satisfy the Commission's objection, the Commission must return the rule to the agency that adopted it.  The agency may submit the rule to the Codifier of Rules for inclusion in the North Carolina Administrative Code.  When the Codifier enters a permanent rule submitted by an agency in the Code, the entry must reflect the Commission's objection to the rule.
"§ 150B-88. Burden of proof for rules to which Commission objects.
If the Commission objects to a rule and the agency that adopted the rule decides to file the rule in the North Carolina Administrative Code, the agency has the burden in a proceeding for judicial review that concerns the rule or in an action to enforce the rule to establish that the rule is within the authority delegated to the agency.
"§ 150B-89.  Legislation concerning rules to which Commission objects.
On or before December 31 of each year, the Commission must report to the Codifier of Rules the rules that were the subject of an objection by the Commission during that year, based on lack of statutory authority, and were not changed to satisfy the Commission's objection.  The Codifier must recommend to each regular session of the General Assembly the enactment of statutory changes needed to delegate statutory authority to an agency concerning each rule included in the Commission's report.  The Codifier's recommendation must be presented in bill form to the Speaker of the House of Representatives and the President Pro Tempore of the Senate.
Failure of part or all of the bill to be enacted creates no implications concerning the existence or adequacy of authority for a rule whose authority is addressed in the bill or part of the bill that is not enacted.  The enactment of legislation that makes it clear that an agency does not have authority for a rule included in the Commission's report repeals the rule as of the effective date of the legislation.  The Codifier of Rules must enter in the North Carolina Administrative Code the repeal of a rule under this section.
"Part 4.  Publication of Code and Register.
"§ 150B-90.  North Carolina Register.
(a)	The Codifier of Rules must publish the North Carolina Register.  The Register must be published at least two times a month and must contain notices of:
(1)	Proposed adoptions of rules;
(2)	Notices of receipt of a petition for municipal incorporation, as required by G.S. 120-165;
(3)	Executive orders of the Governor;
(4)	Final decision letters from the United States Attorney General concerning changes in laws that affect voting in jurisdiction subject to the Voting Rights Act of 1965, as required by G.S. 120-30.9H;
(5)	Decisions of the Tax Review Board;
(6)	Other information the Codifier determines helpful to the public.
(b)	When an agency decides to publish the proposed text of a new rule or amendment to a rule or the text of a rule it proposes to repeal, the Codifier must publish the complete text of the rule.  In publishing the text of a proposed amendment to a rule, the Codifier must indicate deleted text with overstrikes and added text with underlines.
"§ 150B-91.  North Carolina Administrative Code.  
The Codifier of  Rules must compile all rules into a Code known as the North Carolina Administrative Code. The format and indexing of the Code must conform as nearly as practicable to the format and indexing of the North Carolina General Statutes.  The Codifier must publish printed copies of the Code and may publish the Code in other forms.  The Codifier must keep the Code current by publishing the Code in a loose-leaf format and periodically providing new pages to be substituted for outdated pages, by publishing the Code in volumes and periodically publishing cumulative supplements, or by another means.
"§ 150B-92. Requirements for including rule in Code.
To be acceptable for inclusion in the North Carolina Administrative Code, a rule must:
(1)	Cite the statute or other authority under which the rule is adopted;
(2)	Be signed by the agency that adopted the rule;
(3)	Be in the physical form specified by the Codifier of Rules; and
(4)	Have been reviewed by the Commission.
"§ 150B-93.  Codifier's authority to revise form of rules.
(a)	The Codifier of Rules may revise the form of a rule submitted for inclusion in the Code within 10 days after the rule is submitted to:
(1)	Rearrange the order of the rule in the Code or the order of the subsections, subdivision, or other subparts of the rule;
(2)	Provide or revise the catch line or heading of the rule;
(3)	Reletter or renumber the rule or the subparts of the rule in accordance with a uniform system;
(4)	Rearrange definitions and lists; or
(5)	Make other changes in arrangement or in form that do not change the substance of the rule and are necessary or desirable for a clear and orderly arrangement of the rule.
(b)	Revision of a rule by the Codifier under this section does not affect the effective date of the rule or require the agency to readopt or resubmit the rule.  When the Codifier revises the form of a rule, the Codifier must send the agency that adopted the rule a copy of the revised rule.  The revised rule is the official rule.
"§ 150B-94.  Notice of rule making and publication of rules of certain exempt agencies.
(a)	Notwithstanding G.S. 150B-1, the Employment Security Commission, the Industrial Commission, and the Utilities Commission must publish notice in the North Carolina Register of pending rule making proceedings before adopting a rule.  The notice must state the subject of the rule making proceedings and the date of any scheduled public hearing.  In addition, these Commissions must submit rules adopted by them to the Codifier of Rules for inclusion in the North Carolina Administrative Code.  A rule must be submitted within 15 days after it is adopted.
(b)	The North Carolina State Bar must submit rules adopted or approved by it and entered in the minutes of the North Carolina Supreme Court to the Codifier of Rules for inclusion in the North Carolina Administrative Code.  The State Bar must submit a rule within 15 days after it is entered in the minutes of the Supreme Court.
(c)	The Codifier must compile, make available for public inspection, and publish rules included in the Code under this section in the same manner as other rules in the Code.
"§ 150B-95.  Effect of inclusion in Code.
Official or judicial notice can be taken of a rule in the North Carolina Administrative Code.  Codification of a rule in the North Carolina Administrative Code is prima facie evidence of compliance with this Article.
"§ 150B-96.  Rule publication manual.
The Codifier of Rules must publish a manual that sets out the form and method for publishing a notice of rule making in the North Carolina Register and for filing a rule in the North Carolina Administrative Code.
"§ 150B-97.  Free copies of Register and Code.
(a)	Register.  Notwithstanding Article 1A of Chapter 125 of the General Statutes, copies of the North Carolina Register must be distributed by the Codifier as soon after publication as practicable, without charge, to the following:
(1)	Persons who receive free copies of the North Carolina Administrative Code; and
(2)	Upon request, one copy to each member of the General Assembly.
(b)	Code.  Notwithstanding Article 1A of Chapter 125 of the General Statutes, copies of the North Carolina Administrative Code must be distributed by the Codifier as soon after publication as practicable, without charge, to the following:
(1)	One copy to the board of commissioners of each county in the State;
(2)	One copy to the clerk of superior court of each county in the State;
(3)	One copy to the Commission;
(4)	One copy to the clerk of the Supreme Court and to the clerk of the Court of Appeals of North Carolina;
(5)	One copy to the Supreme Court Library and one copy to the library of the Court of Appeals;
(6)	One copy to the Administrative Office of the Courts;
(7)	One copy to the Governor;
(8)	Five copies to the Legislative Services Commission for the use of the General Assembly;
(9)	Upon request, one copy to each State official and department to which copies of the appellate division reports are furnished under G.S. 7A-343.1; and
(10)	Five copies to the Division of State Library of the Department of Cultural Resources pursuant to G.S. 125-11.7.
"§ 150B-98.  Paid copies of Register and Code.
A person who is not entitled to a free copy of the Code or Register may obtain a copy by paying a fee set by the Codifier.  The Codifier must set separate fees for the North Carolina Register and the Administrative Code in amounts that cover publication, copying, and mailing costs.  All monies received under this section must be deposited in the General Fund."
Sec. 2.  G.S. 150B-1 reads as rewritten:
"§ 150B-1. Policy and scope.
					
				(a)	This Chapter establishes a uniform system of administrative rule making and adjudicatory procedures for agencies.  It confers procedural rights but does not confer substantive rights.
(b)	This Chapter applies to every agency except:
(1)	The Employment Security Commission;
(2)	The Industrial Commission;
(3)	The Utilities Commission;
(4)	The North Carolina National Guard in exercising its court-martial jurisdiction; or
(5)	The Department of Human Resources in exercising its authority over the Camp Butner reservation granted in Article 6 of Chapter 122C of the General Statutes.
(c)	The administrative hearing provisions and the judicial review provisions of this Chapter do not apply to:
(1)	The Department of Correction;
(2)	The Department of Revenue; or
(3)	The Department of Insurance in its ratemaking proceedings.
(d)	The rule making provisions and the administrative hearing provisions of this Chapter do not apply to The University of North Carolina.
(e)	The rule making provisions of this Chapter do not apply to the Commission."
Sec. 3.  The Rules Review Commission must review the rules of the Departments of Correction, Transportation, and Revenue to determine if the rules meet the standards for review in G.S. 150B-82.  A rule that does not meet the standards is repealed effective January 1, 1991.  The departments may adopt, recodify, amend, or repeal a rule in response to an objection by the Commission in the course of this review without publishing notice in the North Carolina Register or holding a rule making hearing.
Sec. 4.  G.S. 150B-2 reads as rewritten:
"§ 150B-2. Definitions.
As used in this Chapter,
(01)	‘Administrative law judge' means a person appointed under G.S. 7A-752, 7A-753, or 7A-757.
(1)	‘Agency' means an agency in the executive branch of the government of this State and includes the Council of State, the Governor's Office, a board, a commission, a department, a division, a council, and any other unit of government in the executive branch.  A local unit of government is not an agency.
(1a)	‘Adopt' means to take final action to create, amend, or repeal a rule.
(1b)	‘Codifier of Rules' means the Secretary of State or his designee.
(1c)	‘Commission' means the Rules Review Commission.
(2)	‘Contested case' means an administrative proceeding pursuant to this Chapter to resolve a dispute between an agency and another person that involves the person's rights, duties, or privileges, including licensing or the levy of a monetary penalty. ‘Contested case' does not include rule making, declaratory rulings, or the award or denial of a scholarship or grant.
	(2b)	‘Hearing officer' means a person or group of persons designated by an agency that is subject to Article 3A of this Chapter to preside in a contested case hearing conducted under that Article.
(3)	‘License' means any certificate, permit or other evidence, by whatever name called, of a right or privilege to engage in any activity, except licenses issued under Chapter 20 and Subchapter I of Chapter 105 of the General Statutes and occupational licenses.
(4)	‘Licensing' means any administrative action issuing, failing to issue, suspending, or revoking a license or occupational license. ‘Licensing' does not include controversies over whether an examination was fair or whether the applicant passed the examination.
(4a)	‘Occupational license' means any certificate, permit, or other evidence, by whatever name called, of a right of privilege to engage in a profession, occupation, or field of endeavor that is issued by an occupational licensing agency.
(4b)	‘Occupational licensing agency' means any board, commission, committee or other agency of the State of North Carolina which is established for the primary purpose of regulating the entry of persons into, and/or the conduct of persons within a particular profession, occupation or field of endeavor, and which is authorized to issue and revoke licenses. ‘Occupational licensing agency' does not include State agencies or departments which may as only a part of their regular function issue permits or licenses.
(5)	‘Party' means any person or agency named or admitted as a party or properly seeking as of right to be admitted as a party and includes the agency as appropriate. This subdivision does not permit an agency that makes a final decision, or an officer or employee of the agency, to petition for initial judicial review of that decision.
(6)	‘Person aggrieved' means any person or group of persons of common interest directly or indirectly affected substantially in his or its person, property, or employment by an administrative decision.
(7)	‘Person' means any natural person, partnership, corporation, body politic and any unincorporated association, organization, or society which may sue or be sued under a common name.
(8)	‘Residence' means domicile or principal place of business.
(8a)	‘Rule' means any agency regulation, standard, or statement of general applicability that implements or interprets laws enacted by the General Assembly or Congress or regulations adopted by a federal agency or that describes the procedure or practice requirements of an agency. The term does not include the following:
a.	Statements concerning only the internal management of an agency or group of agencies within the same principal office or department enumerated in G.S. 143-11 or 143B-6, including policies and procedures manuals, if the statement does not directly or substantially affect the procedural or substantive rights or duties of a person not employed by the agency or group of agencies.
b.	Budgets and budget policies and procedures issued by the Director of the Budget, by the head of a department, as defined by G.S. 143A-2 or G.S. 143B-3, by an occupational licensing board, as defined by G.S. 93B-1, or by the State Board of Elections.
c.	Nonbinding interpretative statements within the delegated authority of an agency that merely define, interpret, or explain the meaning of a statute or rule. 
d.	A form, the contents or substantive requirements of which are prescribed by rule or statute. 
e.	Statements of agency policy made in the context of another proceeding, including:
1.	Declaratory rulings under G.S. 150B-17.
2.	Orders establishing or fixing rates or tariffs.
f.	Instructions, communicated to the public by the use of signs or symbols, concerning the use of public roads, bridges, or facilities. 
			g.	Statements that set forth criteria or guidelines to be used by the staff of an agency in performing audits, investigations, or inspections; in settling financial disputes or negotiating financial arrangements; or in the defense, prosecution, or settlement of cases;
h.	Scientific, architectural, or engineering standards, forms, or procedures.
i.	Job classification standards, job qualifications, and salaries established for positions under the jurisdiction of the State Personnel Commission.
(8b)	‘Substantial evidence' means relevant evidence a reasonable mind might accept as adequate to support a conclusion.
	."
Sec. 5.  Articles 2 and 5 of Chapter 150B of the General Statutes and G.S. 143B-30 and 143B-30.3 are repealed.
Sec. 6.  G.S. 84-21 reads as rewritten:
"§ 84-21. Organization of council; publication of rules, regulations and bylaws.
Upon receiving notification of the election of a councilor for each judicial district, or, if such notification shall not have been received from all said districts, within 120 days after this Article shall have gone into effect, the clerk of the Supreme Court of North Carolina shall call a meeting of the councilors of whose election he shall have been notified, to be held in the City of Raleigh not less than 20 days nor more than 30 days after the date of said call; and at the meeting so held the councilors attending the same shall proceed to organize the council by electing officers, taking appropriate steps toward the adoption of rules and regulations, electing councilors for judicial districts which have failed to elect them, and taking such other action as they may deem to be in furtherance of this Article. The regular term of all officers shall be one year, but those first elected shall serve until January 1, 1935. The council shall be the judge of the election and qualifications of its own members. When the council shall have been fully organized and shall have adopted such rules, regulations and bylaws, not inconsistent with this Article, as it shall deem necessary or expedient for the discharge of its duties, the secretary-treasurer shall file with the clerk of the Supreme Court of North Carolina a certificate, to be called the ‘certificate of organization,' showing the officers and members of the council, with the judicial districts which the members respectively represent, and their post-office addresses, and the rules, regulations and bylaws adopted by it; and thereupon the Chief Justice of the Supreme Court of North Carolina, or any judge thereof, if the court be then in vacation, shall examine the said certificate and, if of opinion that the requirements of this Article have been complied with, shall cause the said certificate to be spread upon the minutes of the court; but if of opinion that the requirements of this Article have not been complied with, shall return the said certificate to the secretary-treasurer with a statement showing in what respects the provisions of this Article have not been complied with; and the said certificate shall not be again presented to the Chief Justice of the Supreme Court or any judge thereof, until any such defects in the organization of the council shall have been corrected, at which time a new certificate of organization shall be presented and the same course taken as hereinabove provided, and so on until a correct certificate showing the proper organization of the council shall have been presented, and the organization of the council accordingly completed. Upon (a)	the entry of an order upon the minutes of the court that the requirements of this Article have been complied with, or (b) if for any reason the Chief Justice or judge should not act thereon within 30 days, then, after the lapse of 30 days from the presentation to the Chief Justice or judge, as the case may be, of any certificate of organization hereinbefore required to be presented by the secretary-treasurer, without either the entry of an order or the return of said certificate with a statement showing the respects in which this Article has not been complied with, the organization of the council shall be deemed to be complete, and it shall be vested with the powers herein set forth; and the certificate of organization shall thereupon forthwith be spread upon the minutes of the court. A copy of the certificate of organization, as spread upon the minutes of the court, shall be published in the next ensuing volume of the North Carolina Reports and in the North Carolina Administrative Code. The rules and regulations set forth in the certificate of organization, and all other rules and regulations which may be adopted by the council under this Article, may be amended by the council from time to time in any manner not inconsistent with this Article. Copies of all such rules and regulations adopted subsequently to the filing of the certificate of organization, and of all amendments so made by the council, shall be certified to the Chief Justice of the Supreme Court of North Carolina, entered by it upon its minutes, and published in the next ensuing number of the North Carolina Reports and in the North Carolina Administrative Code: Provided, that the court may decline to have so entered upon its minutes any of such rules, regulations and amendments which in the opinion of the Chief Justice are inconsistent with this Article."
Sec. 7.  G.S. 143B-30.1 reads as rewritten:
"§ 143B-30.1. Rules Review Commission created.
The Rules Review Commission is created. The Commission shall consist of eight members to be appointed by the General Assembly, four upon the recommendation of the President of the Senate, and four upon the recommendation of the Speaker of the House of Representatives. These appointments shall be made in accordance with G.S. 120-121, and vacancies in these appointments shall be filled in accordance with G.S. 120-122. All appointees shall serve two-year terms. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, ineligibility, death, or disability of any member shall be for the balance of the unexpired term. The chairman shall be elected by the Commission, and he shall designate the times and places at which the Commission shall meet. The Commission shall meet at least once a month. A quorum of the Commission shall consist of five members of the Commission. The Commission is an independent agency under Article III, Section 11 of the Constitution.
Members of the Commission who are not officers or employees of the State shall receive compensation of two hundred dollars ($200.00) for each day or part of a day of service plus reimbursement for travel and subsistence expenses at the rates specified in G.S. 138-5. Members of the Commission who are officers or employees of the State shall receive reimbursement for travel and subsistence at the rate set out in G.S. 138-6.
Any other provision of the General Statutes notwithstanding, the appointment of employees of the Commission shall be made by the Commission. Nothing in this Article shall be construed to exempt employees of the Commission from the State Personnel Act.
The Commission shall prescribe procedures and forms to be used in submitting rules to the Commission for review."
Sec. 8.  G.S. 143B-30.2 reads as rewritten:
"§ 143B-30.2. Purpose of Commission.
The Rules Review Commission reviews administrative rules in accordance with Chapter 150B of the General Statutes.
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Sec. 9.  G.S. 147-16.1 reads as rewritten:
"§ 147-16.1. Publication of executive orders.
The Governor must submit Executive Orders to the Secretary of State, who must compile, index, and publish the Executive Orders. The Governor's office shall also send a copy of each executive order to the President of the Senate, to the Speaker of the House of Representatives, to the Principal Clerk of the House of Representatives and to the Principal Clerk of the Senate."
Sec. 10.  G.S. 148-11 reads as rewritten:
"§ 148-11. Authority to make regulations.
Rules adopted by the Secretary to govern the State prison system must be adopted in accordance with Chapter 150B of the General Statutes.  The Secretary shall  have such portion of these rules and regulations as pertain to enforcing discipline read to every prisoner when received in the State prison system and a printed copy of these rules and regulations shall be made available to the prisoners."
Sec. 11.  Section 19 of Chapter 746 of the 1985 Session Laws reads as rewritten:
"Sec. 19.  This act is effective upon ratification, except Sections 1, 4, 5, 6, 8, 13, 14, 15, 16, 17, 18, and 18.1. Sections 1, 4, 8, 13, 14, 15, 16, 17, and 18 shall become effective January 1, 1986.  Sections 5 and 6 shall become effective 30 days from the date the Supreme Court issues an advisory opinion on the constitutionality of those sections unless the opinion states that those sections are unconstitutional, in which event those sections shall not become effective.  Section 18.1 shall become effective only if the Supreme Court issues an advisory opinion that the appointment of the chief hearing officer by the Chief Justice is unconstitutional and shall become effective on the date that opinion is issued.  All but Section 5 of this act shall expire January 1, 1992, and shall not be effective on or after that date.  This act shall not affect contested cases commenced before January 1, 1986."
Sec. 12.  This act shall become effective October 1, 1989.  The procedures in G.S. 150B, Article 6, as set forth in this act, shall apply to all rules for which a notice of rule making is published in the North Carolina Register on or after that date, and to all rules that do not require publication of a notice of rule making and are adopted on or after that date.