GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	2 

SENATE BILL 535
Judiciary III Committee Substitute Adopted 4/24/89

Short Title:  Simplify APA Rule-Making Process.	(Public)
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Sponsors:
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Referred to:
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March 20, 1989

A BILL TO BE ENTITLED
AN ACT TO TRANSFER THE RESPONSIBILITY FOR THE NORTH CAROLINA ADMINISTRATIVE CODE AND THE NORTH CAROLINA REGISTER TO THE SECRETARY OF STATE AND TO ESTABLISH A STUDY COMMISSION ON THE SIMPLIFICATION OF THE ADMINISTRATIVE RULE-MAKING PROCESS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 7A-750 reads as rewritten:
"§ 7A-750. Creation; status; purpose.
There is created an Office of Administrative Hearings. The Office of Administrative Hearings is an independent, quasi-judicial agency under Article III, Sec. 11 of the Constitution and, in accordance with Article IV, Sec. 3 of the Constitution, has such judicial powers as may be reasonably necessary as an incident to the accomplishment of the purposes for which it is created. The Office of Administrative Hearings is established to provide a source of independent hearing officers to preside in administrative cases and thereby prevent the commingling of legislative, executive, and judicial functions in the administrative process. It shall also maintain dockets and records of contested cases."
Sec. 2.  G.S. 143B-30.2 reads as rewritten:
"§ 143B-30.2. Review of rules.
(a)	Rules adopted by an agency on or after September 1, 1986, shall be submitted to the Administrative Rules Review Commission, which shall review the rule to determine whether it:
(1)	Is within the authority delegated to the agency by the General Assembly;
(2)	Is clear and unambiguous;
(3)	Is reasonably necessary to enable the administrative agency to perform a function assigned to it by statute or to enable or facilitate the implementation of a program or policy in aid of which the rule was adopted.
Any rule filed by the 20th of a month shall be reviewed by the Commission by the last day of the next calendar month.  Any rule filed after the 20th of a month shall be reviewed by the Commission by the last day of the second subsequent calendar month.  The Commission may extend the time for review of a rule by a period of up to 70 days to obtain additional information on the rule.  The Commission shall file notice of the extension of time for review of a rule with the agency and the Secretary of State, as Codifier of Rules.  A rule may not be presented for filing with the Codifier of Rules under G.S. 150B-59 unless the rule has been reviewed by the Commission as provided in this section.
(b)	If the Commission reviews a rule and determines that it is within the authority delegated to the agency, is clear and unambiguous, and is reasonably necessary, the Commission shall note its approval, notify the agency, and file the rule with the Codifier of Rules under G.S. 150B-59, and the rule shall become effective as provided in that section.
(c)	If the Commission finds that an agency did not act within the authority delegated to it in promulgating a rule or a part of a rule, or that a rule is not clear and unambiguous, or that a rule is unnecessary, the Commission shall object and delay the filing of the rule or part of the rule under G.S. 150B-59 for a period not to exceed 90 days. The Commission shall send to the agency, the Governor, the President of the Senate, the Speaker of the House of Representatives, and the Codifier of Rules, a written report of the objection and delay of the rule or its part and the reasons for the delay. An agency may not present a rule or part of a rule that has been delayed to the Codifier of Rules for filing under G.S. 150B-59, and a rule or its part that is delayed is not ‘effective,' as defined in G.S. 150B- 2(2a).
(d)	Within 30 days after receipt of the Commission's written report as authorized by (c), the agency shall either (1) revise the rule to remove the cause of the objections of the Commission and return the revised rule to the Commission or (2) return the rule to the Commission without change with the Commission's objections attached; provided, however, that in the case of a board, committee, council, or commission the response is due within 30 days after receipt of the Commission's written report or within 10 days following the next regularly scheduled meeting of the board, committee, council, or commission, whichever time period is greater. The Commission shall determine whether a revision removes its objections to the rule.
(e)	If the Commission determines that a revision of a rule has removed the Commission's objections, the Commission shall note its approval and return the rule to the agency. The agency may then file the rule with the Codifier of Rules under G.S. 150B-59, and the rule shall become effective as provided in that section.
(f)	Regardless of whether the agency returns the rule to the Commission without change instead of revising the rule to remove the Commission's objections or whether the Commission determines that a revision of a rule has not removed its objections, the Commission shall note its review of and objection to the rule once 90 days have passed since the Commission objected and delayed the filing of the rule or part of the rule pursuant to G.S. 143B-30.2(c) and shall return the rule to the agency.  The agency may then file the rule with the Codifier of Rules under G.S. 150B-59, and the rule shall become  effective as provided in that section. If the agency did not remove the Commission's objections to the rule or part of the rule, the Commission may send to the President of the Senate and the Speaker of the House of Representatives a written report of its objections to the rule. Thereafter, if the General Assembly enacts legislation disapproving the rule, the rule shall no longer be effective.
The Legislative Services Officer shall send a copy of any law disapproving a rule to the agency and the Codifier of Rules as soon as a copy is available.
(g)	While the filing of a rule or its part is delayed, the agency that promulgated it may not adopt another rule, including a temporary rule, that has substantially identical provisions to those for which the Commission delayed the filing of the original rule or part of a rule.
(h)	The filing of an amendment to a rule places the entire rule before the Commission for its review.
(i)	Rules adopted in accordance with the procedure in G.S. 150B-13 shall be reviewed by the Commission and are subject to objection as provided in (c).
The Commission shall review the reasons given for the adoption of a temporary rule and may object to the rule due to the agency's failure to make the finding required by G.S. 150B-13."
Sec. 3.  G.S. 150B-2 is amended by adding a new subsection to read:
"(1a)	‘Codifier of Rules' means the Secretary of State or his designee."
Sec. 4.  G.S. 150B-10 is rewritten to read:
"§ 150B-10. Statements of organization and means of access to be published.
To assist interested persons dealing with it, each agency shall, in a manner prescribed by the Codifier of Rules, prepare a description of its organization, stating the process whereby the public may obtain information or make submissions or requests. The Codifier of Rules shall publish these descriptions annually."
Sec. 5.  G.S. 150B-12(g) is rewritten to read:
"(g)	No rulemaking hearing is required if the Codifier of Rules determines that the amendment to a rule does not change the substance of the rule and that the amendment is:
(1)	A relettering or renumbering instruction; or
(2)	The substitution of one name for another when an organization or position is renamed; or
(3)	The correction of a citation to rules or laws which has become inaccurate since the rule was adopted because of repealing or renumbering of the rule or law cited; or
(4)	The correction of a similar formal defect; or
(5)	A change in information that is readily available to the public such as addresses and telephone numbers."
Sec. 6.  G.S. 150B-13 reads as rewritten:
"§ 150B-13. Temporary rules.
(a)	Except as provided in subsection (b) of this section, if an agency which is not exempted from the notice and hearing requirements of this Article by G.S. 150B-1 determines in writing that:
(1)	Adherence to the notice and hearing requirements of this Article would be contrary to the public interest; and that
(2)	The immediate adoption, amendment, or repeal of a rule is necessitated by and related to:
a.	A serious and unforeseeable threat to 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; or
e.	A court order, the agency may adopt, amend, or repeal the rule without prior notice or hearing or upon any abbreviated notice or hearing the agency finds  practicable. The agency must accompany its rules filing with the Codifier of Rules and the Governor with the agency's written certification of the finding of need for the temporary rule, together with the reasons for that finding and a copy of the notice of hearing on the proposed permanent rule.
(a1)	The written certification of the finding of need for the temporary rule shall be signed by:
(1)	The member of the Council of State in the case of the Departments of Justice, Insurance, Public Education, Labor, Agriculture, Treasurer, State Auditor, or Secretary of State.
(2)	The chairman of the board in the case of an occupational licensing board or the Director of the Office of Administrative Hearings in the case of that agency.
(3)	The Governor in the case of all other agencies.
(b)	If the Department of Crime Control and Public Safety, Transportation, Revenue, or Correction determines in writing that the  immediate adoption, amendment, or repeal of a rule is necessitated by:
(1)	The public health, safety, or welfare;
(2)	The effective date of a recent act of the General Assembly or the United States Congress;
(3)	A federal regulation; or
(4)	A court order, the agency may adopt, amend, or repeal the rule. The agency must accompany its rule filing with the Codifier of Rules and the Governor with the agency's written certification of the finding of need for the temporary rule signed by the Governor together with the reasons for that finding. In the case of the Department of Correction, in addition to the reasons set forth in subdivisions (1) through (4) of this subsection, the Department may file a temporary rule when necessary for the management and control of persons under the custody or supervision of the Department in extraordinary circumstances as certified by the Secretary. The Department shall file any temporary rule within two working days of its adoption by the Secretary under G.S. 148-11.
(c)	Rules filed under subsections (a) and (b) of this section shall be effective for a period of not longer than 180 days and are subject to review as provided in G.S. 143B-30.2(i). An agency adopting a temporary rule shall begin normal rule-making procedures on the permanent rule under this Article at the same time the temporary rule is adopted."
Sec. 7.  G.S. 150B-59 reads as rewritten:
"§ 150B-59. Filing of rules and executive orders.
(a)	Rules adopted by an agency and executive orders of the Governor shall be filed with the Codifier of Rules no sooner than 90 days before their effective date. No rule, except temporary rules adopted under the provisions of G.S. 150B-13 or rules approved under G.S. 143B- 30.2(e) or reviewed and objected to under (f) [G.S. 143B-30.2(f)], shall become effective earlier than the first day of the second calendar month after that filing.
(b)	The acceptance for filing of a rule by the Codifier of Rules, by his notation on its face, shall constitute prima facie evidence of compliance with this Article.
(c)	Rules adopted by an agency subject to the provisions of Article 2 of this Chapter in effect on January 1, 1986, that conflict with or violate the provisions of G.S. 150B-9(c) are repealed. Rules adopted by an agency subject to the provisions of Article 2 of this Chapter in effect on September 1, 1986, that do not conflict with or violate the provisions of G.S. 150B-9(c) shall remain in effect until July 15, 1988. These rules are repealed effective July 16, 1988, unless the Administrative Rules Review Commission determines that a rule complies with G.S. 143B-30.2(a). Provided, however, that:
(1)	The rules of the Office of State Personnel and the occupational licensing boards shall remain in effect until February 28, 1989, but are repealed effective March 1, 1989, unless approved by the Administrative Rules Review Commission.
(2)	The rules of the Department of Human Resources shall remain in effect until June 30, 1989, but are repealed effective July 1, 1990, unless approved by the Administrative Rules Review Commission.
(3)	Although the Department of Cultural Resources, the Office of the Governor, and the Council of State did not file the reports required under Chapter 746, Session Laws of 1985, nevertheless the rules of these three agencies shall remain in effect until February 28, 1989, but are repealed effective March 1, 1989, unless approved by the Administrative Rules Review Commission.
Review of these rules shall be carried out in the manner prescribed in G.S. 143B-30.2 except that a rule determined to be in compliance shall remain in effect. In the event of rules which the Commission determines do not comply with G.S. 143B-30.2, such rules may be revised or repealed by the agency without a rulemaking hearing in accordance with G.S. 150B-12(h). Revised rules shall be returned to the Commission. If the Commission approves the rules, the Commission shall notify the agency and file the rules with the Office of Administrative Hearings. Rules adopted on or after January 1, 1986, shall become effective as provided in this Chapter."
Sec. 8.  G.S. 150B-60 reads as rewritten:
"§ 150B-60. Form of rules; responsibilities of agencies; assistance to  agencies.
(a)	In order to be acceptable for filing, the rule must:
(1)	Cite the statute or other authority pursuant to which the rule is adopted;
(2)	Bear a certification by the agency of its adoption;
(3)	Cite any prior rule or rules of the agency or its predecessor in authority which it rescinds, amends, supersedes, or supplements;
(4)	Be in the physical form specified by the Codifier of Rules; and
(5)	Bear a notation from the Administrative Rules Review Commission that it has reviewed the rule in accordance with G.S. 143B-30.2.
(b)	Each agency shall designate one or more administrative procedure coordinators whose duties shall be to oversee all departmental functions required by this Chapter. The coordinator's duties shall include providing notice of public hearings; serving as liaison between the agency and the Codifier of Rules, the Administrative Rules Review Commission and the public; and coordinating access to agency rules.
(c)	The Codifier of Rules shall:
(1)	Maintain an agency rule-drafting section in the Codifier of Rules to draft or aid in the drafting of rules or amendments to rules for any agency; and
(2)	Prepare and publish an agency rule-drafting guide which sets out the form and method for drafting rules and amendments to rules, and to which all rules shall comply."
Sec. 9.  G.S. 150B-61 reads as rewritten:
"§ 150B-61. Authority to revise form.
(a)	The Codifier of Rules shall have the authority, following acceptance of a rule for filing, to revise the form of the rule as follows:
(1)	To rearrange the order of rules, Chapters, Subchapters, Articles, sections, paragraphs, and other divisions or subdivisions;
(2)	To provide or revise titles or catchlines;
(3)	To reletter or renumber the rules and various subdivisions in accordance with a uniform system;
(4)	To rearrange definitions and lists; and
(5)	To make other changes in arrangement or in form that do not alter the substance of the rule and that are necessary or desirable for an accurate, clear, and orderly arrangement of the rules.
Revision of form by the Codifier of Rules shall not alter the effective date of a rule, nor shall revision require the agency to readopt or to refile the rule. No later than the close of the fifth working day after the filing of a rule by an agency, the Codifier of Rules shall return to the agency that filed the rule a copy of the rule in any revised form made by the Codifier of Rules, together with his certification of the date of the rule's filing.
The rule so revised as to form shall be substituted for and shall bear the date of the rule originally filed, and shall be the official rule of the agency.
(b)	In determining the drafting form of rules the Codifier of Rules shall:
(1)	Minimize duplication of statutory language;
(2)	Not permit incorporations into the rules by reference to publications or other documents which are not conveniently available to the public; and
(3)	To the extent practicable, use plain language in rules and avoid technical language.
(c)	The agency shall be responsible for notifying the Codifier of Rules within 30 days after a rule becomes effective of any typographical or technical error in the rule as codified. The Codifier of Rules shall correct the codified rule if it differs from the rule as adopted by the agency. Errors in any rule discovered more than 30 days after codification shall be changed only by the procedures established by Article 2 of this Chapter."
Sec. 10.  G.S. 150B-62 reads as rewritten:
"§ 150B-62. Public inspection and notification of current and replaced  rules.
(a)	Immediately upon notation of a filing as specified in G.S. 150B-59(b), the Codifier of Rules shall make the rule available for public inspection during regular office hours. Superseded, amended, revised, and rescinded rules filed in accordance with the provisions of this Article shall remain available for public inspection. The current and the prior rules so filed shall be separately arranged in compliance with the provisions of G.S. 150B-61(a).
(b)	The Codifier of Rules shall make copies of current and prior rules, filed in accordance with the provisions of this Article, available to the public at a cost to be determined by him.
(c)	Within 50 days of the acceptance by the Codifier of Rules of a rule for  filing, the agency filing the rule:
(1)	Shall publish the rule as prescribed in any applicable statute; and
(2)	May distribute the rule in a manner selected by the agency as best calculated to give notice to persons likely to be affected by the rule.
The rule so published or distributed shall contain the legend: ‘The form of this rule may be revised by the Codifier of Rules pursuant to the provisions of G.S. 150B-61."
Sec 11.  G.S. 150B-63 reads as rewritten:
"§ 50B-63. Publication of executive orders and rules; the North Carolina Register.
(a)	The Codifier of Rules shall compile, index and publish executive orders of the Governor and all rules filed and effective pursuant to the provisions of this Article.
(b)	As nearly as practicable the compilation shall, in classification, arrangement, numbering, and indexing, conform to the organization of the General Statutes.
(c)	If the Codifier of Rules determines that publication of any rule would be impracticable, he shall substitute a summary with specific reference to the official rule on file in his office.
(d)	As soon as practicable after July 1, 1985, the Codifier of Rules shall publish, in print or other form, a compilation of all rules in force pursuant to the provisions of this Article. Cumulative supplements shall be published annually or more frequently in the discretion of the Codifier of Rules.  Recompilations shall be made in the Codifier of Rules' discretion.
(d1)	The Codifier of Rules shall also publish at periodic intervals, but not less often than once each month, the North Carolina Register which shall contain information required by law to be published in it, and information relating to agency, executive, legislative or judicial actions that are performed under the authority of, or are required by, or are issued to interpret, or that otherwise affect, this Chapter. The North Carolina Register shall also contain notices under G.S. 120-165(a).
(d2)	In publishing proposed amendments to rules, the Codifier of Rules shall show the portion of the rule being amended as it is to the degree necessary to provide adequate notice of the nature of the proposed amendment, with changes shown by striking through portions to be deleted and underlining portions to be added.
(e)	Notwithstanding Article 1A of Chapter 125 of the General Statutes, reference copies of the compilation, supplements, and recompilations of the rules, and the North Carolina Register shall be distributed by the Codifier of Rules as soon after publication as practicable, without charge, only to the following officials and departments:
(1)	One copy to each county of the State, which copy may be maintained for public inspection in the county in a place determined by the county commissioners; one copy to the Administrative Rules Review Commission; one copy each to the clerk of the Supreme Court of North Carolina and the clerk of the North Carolina Court of Appeals; one copy each to the libraries of the Supreme Court of North Carolina and the North Carolina Court of Appeals; one copy to the Administrative Office of the Courts; one copy to the office of the Governor; five copies to the Legislative Services Commission for the use of the General Assembly; and one copy to the Office of Administrative Hearings;
(2)	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;
(3)	Five copies to the Division of State Library of the Department of Cultural Resources, pursuant to G.S. 125-11.7; and
(4)	Upon request, one copy of the North Carolina Register to each member of the General Assembly.
(f)	The Codifier of Rules shall make available to persons not listed in subsection (e) copies of the compilation, supplements, and recompilations of the rules and the North Carolina Register. The Codifier of Rules shall set a fee to be charged for publications and documents made available under this subsection at an amount that covers publication, copying, and mailing costs. All moneys received by the Codifier of Rules pursuant to this subsection shall be deposited in the State treasury in a special funds account to be held in trust for the Codifier of Rules to defray the expense of future recompilation, publication, and distribution of such documents. All moneys involved shall be subject to audit by the State Auditor.
(g)	Notwithstanding any other provision of law, the Employment Security Commission shall, within 15 days of adoption, file all rules adopted by it with the Codifier of Rules for public inspection and publication purposes only. The Codifier of Rules shall compile, make available for inspection, and publish the rules filed under this subsection in the same manner as is provided for other rules."
Sec. 12.  The assets used by or allocated the Office of Administrative Hearings for publication of the North Carolina Register and the North Carolina Administrative Code and the personnel positions used for those purposes are transferred from the Office of Administrative Hearings to the Department of Secretary of State.
Sec. 13.  There is created a Study Commission on the Simplification of the Administrative Procedure Act Rule-Making Process.
The Commission shall consist of 12 members.  The President Pro Tempore of the Senate shall appoint six members, including one member recommended by the North Carolina State Bar and one member recommended by the Attorney General.  The Speaker of the House shall appoint six members, including one member from State government who is familiar with the Administrative Procedure Act, and one member recommended by the State Auditor.
The Commission may call upon other agencies of State government, including the Office of Administrative Hearings and the Administrative Rules Review Commission to assist in the work of the Commission.
All appointments shall be made no later than October 1, 1989.  The President Pro Tempore of the Senate and the Speaker of the House shall each appoint a cochairman from the membership of the Commission.  Either cochairman may call the first meeting.
The Commission shall examine the existing statutes and rules governing the administrative rule-making and hearings process, and the operation and organization of the Office of Administrative Hearings and the Administrative Rules Review Commission.  The Commission may recommend legislation to improve the administrative rule-making and hearings process.
The Commission shall submit a written report to the 1991 General Assembly upon its convening.  Upon submitting the findings of the report, the Study Commission shall terminate.
With the prior approval of the Legislative Services Commission, necessary professional and clerical assistance shall be provided by the Legislative Services Commission.  The Legislative Services Commission may also enter into contracts for the provision of technical assistance it finds necessary for the performance of its responsibilities under this section.
Members of the Commission who are also members of the General Assembly shall be paid subsistence and travel expenses in accordance with G.S. 120-3.1.  All other members of the Commission shall be paid the per diem allowances in accordance with G.S. 138-5.
Sec. 14.  There is appropriated from the General Fund to the General Assembly $20,000 for the 1989-90 fiscal year to fund the study authorized by this act.
Sec. 15.  This act shall become effective October 1, 1989, except for Sections 13 and 14, which are effective upon ratification.