1.2relating to state government; providing methods for certain review and reporting
1.3on agency rules;amending Minnesota Statutes 2010, sections 3.842, subdivision
1.44a; 14.05, subdivision 1; 14.116; 14.131; 14.388, subdivision 2; 14.389,
1.5subdivision 2; Minnesota Statutes 2011 Supplement, sections 3D.06; 3D.10;
1.63D.11.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8    Section 1. Minnesota Statutes 2010, section 3.842, subdivision 4a, is amended to read:
1.9    Subd. 4a. Objections to rules or proposed rules. (a) For purposes of this
1.10subdivision, "committee" means the house of representatives policy committee or senate
1.11policy committee with primary jurisdiction over state governmental operations. The
1.12commission or a committee may object to a rule or proposed rule as provided in this
1.13subdivision. If the commission or a committee objects to all or some portion of a rule
1.14because the commission or committee considers it to be on the grounds that the rule or
1.15proposed rule: (1) is beyond the procedural or substantive authority delegated to the
1.16agency, including a proposed rule submitted under section 14.15, subdivision 4, or 14.26,
1.17subdivision 3 , paragraph (c); or (2) is inconsistent with the enabling statute; is unnecessary
1.18or redundant; is not based on sound, reasonably available scientific, technical, economic,
1.19or other information; is not cost effective; is unduly burdensome; or is more restrictive
1.20than the standard, limitation, or requirement imposed by federal law or rule pertaining to
1.21the same subject matter. If the commission or a committee objects to all or some portion
1.22of a rule or proposed rule, the commission or committee may shall file that objection in
1.23the Office of the Secretary of State. The filed objection must contain a concise statement
1.24of the commission's or committee's reasons for its action. An objection to a proposed
1.25rule submitted by the commission or a committee under section 14.15, subdivision 4, or
2.114.26, subdivision 3, paragraph (c), may not be filed before the rule is adopted For a
2.2proposed rule, the objection must be filed within 30 days of receipt of the notice under
2.3section 14.116, 14.388, or 14.389.
2.4(b) The secretary of state shall affix to each objection a certification of the date and
2.5time of its filing and as soon after the objection is filed as practicable shall electronically
2.6transmit a certified copy of it to the agency issuing the rule in question and to the revisor
2.7of statutes. The secretary of state shall also maintain a permanent register open to public
2.8inspection of all objections by the commission or committee.
2.9(c) The commission or committee shall publish and index an objection filed under
2.10this section in the next issue of the State Register. The revisor of statutes shall indicate
2.11the existence of the objection adjacent to the rule in question when that rule is published
2.12in Minnesota Rules.
2.13(d) Within 14 days after the filing of an objection by the commission or committee to
2.14a rule or proposed rule, the issuing agency shall respond in writing to the objecting entity.
2.15After receipt of the response, the commission or committee may withdraw or modify its
2.16objection. After the filing of an objection that is not subsequently withdrawn, the agency
2.17may not adopt the rule until the legislature adjourns the annual legislative session that
2.18began after the vote of the commission or committee. The commission or committee
2.19that files an objection that is not subsequently withdrawn must, as soon as practical,
2.20make a recommendation on a bill that approves the proposed rule, prohibits adoption of
2.21the proposed rule, or amends or repeals the law governing a previously adopted rule
2.22for which an objection was filed.
2.23(e) After the filing of an objection by the commission or committee that is not
2.24subsequently withdrawn, the burden is upon the agency in any proceeding for judicial
2.25review or for enforcement of the rule to establish by clear and convincing evidence that
2.26the whole or portion of the rule objected to is valid and demonstrates that the objection
2.27raised under paragraph (a) is not justified, based on the criteria for objecting to a rule
2.28under paragraph (a).
2.29(f) The failure of the commission or a committee to object to a rule is not an implied
2.30legislative authorization of its validity.
2.31(g) In accordance with sections 14.44 and 14.45, the commission or a committee
2.32may petition for a declaratory judgment to determine the validity of a rule objected to
2.33by the commission or committee. The action must be started within two years after an
2.34objection is filed in the Office of the Secretary of State.
3.1(h) The commission or a committee may intervene in litigation arising from agency
3.2action. For purposes of this paragraph, agency action means the whole or part of a rule, or
3.3the failure to issue a rule.

3.4    Sec. 2. Minnesota Statutes 2011 Supplement, section 3D.06, is amended to read:
3.53D.06 AGENCY REPORT TO COMMISSION.
3.6Before September 1 of the odd-numbered year before the year in which a state agency
3.7is subject to sunset review, the agency commissioner shall report to the commission:
3.8(1) information regarding the application to the agency of the criteria in section
3.93D.10 ;
3.10(2) a priority-based budget for the agency;
3.11(3) an inventory of all boards, commissions, committees, and other entities related
3.12to the agency; and
3.13(4) a list of all rules promulgated by the state agency; and the following information
3.14for each rule: (i) the statutory authority; (ii) intended outcomes; (iii) the cost to state and
3.15local government, businesses, and individuals; (iv) the scientific, technical, and economic
3.16information that supports it; (v) the relationship of the specified rule to other local, state,
3.17and federal statutes, rules, regulations, or ordinances; (vi) a summary of any inconsistency
3.18and redundancy between the specified rule and other local, state, and federal statutes,
3.19rules, regulations, and ordinances; and (vii) a summary of the means to better coordinate
3.20rulemaking between state agencies and other local, state, and federal agencies and a
3.21strategy and schedule to repeal or amend agency rules so as to achieve intended outcomes
3.22of the rules more effectively and efficiently; and
3.23(5) any other information that the agency commissioner considers appropriate or that
3.24is requested by the commission.
3.25The September 1 deadline in this section does not apply in 2011.

3.26    Sec. 3. Minnesota Statutes 2011 Supplement, section 3D.10, is amended to read:
3.273D.10 CRITERIA FOR REVIEW.
3.28The commission and its staff shall consider the following criteria in determining
3.29whether a public need exists for the continuation of a state agency or its advisory
3.30committees or for the performance of the functions of the agency or its advisory
3.31committees:
3.32(1) the efficiency and effectiveness with which the agency or the advisory committee
3.33operates;
4.1(2) an identification of the mission, goals, and objectives intended for the agency or
4.2advisory committee and of the problem or need that the agency or advisory committee
4.3was intended to address and the extent to which the mission, goals, and objectives have
4.4been achieved and the problem or need has been addressed;
4.5(3) an identification of any activities of the agency in addition to those granted by
4.6statute and of the authority for those activities and the extent to which those activities
4.7are needed;
4.8(4) an assessment of authority of the agency relating to fees, inspections,
4.9enforcement, and penalties;
4.10(5) whether less restrictive or alternative methods of performing any function that
4.11the agency performs could adequately protect or provide service to the public;
4.12(6) the extent to which the jurisdiction of the agency and the programs administered
4.13by the agency overlap or duplicate those of other agencies, the extent to which the agency
4.14coordinates with those agencies, and the extent to which the programs administered by the
4.15agency can be consolidated with the programs of other state agencies;
4.16(7) the promptness and effectiveness with which the agency addresses complaints
4.17concerning entities or other persons affected by the agency, including an assessment of the
4.18agency's administrative hearings process;
4.19(8) an assessment of the agency's rules and rulemaking process and the extent to
4.20which the agency has encouraged participation by the public in making its rules and
4.21decisions and the extent to which the public participation has resulted in rules that benefit
4.22the public;
4.23(9) an assessment of whether any of the agency's rules are:
4.24(i) beyond the procedural or substantive authority delegated to the agency; or
4.25(ii) inconsistent with the enabling statute; unnecessary or redundant; not based on
4.26sound, reasonably available scientific, technical, economic, or other information; not
4.27cost effective; unduly burdensome; or more restrictive than the standard, limitation, or
4.28requirement imposed by federal law or rule pertaining to the same subject matter;
4.29(9) (10) the extent to which the agency has complied with federal and state laws and
4.30applicable rules regarding equality of employment opportunity and the rights and privacy
4.31of individuals, and state law and applicable rules of any state agency regarding purchasing
4.32guidelines and programs for historically underutilized businesses;
4.33(10) (11) the extent to which the agency issues and enforces rules relating to
4.34potential conflicts of interest of its employees;
5.1(11) (12) the extent to which the agency complies with chapter 13 and follows
5.2records management practices that enable the agency to respond efficiently to requests for
5.3public information; and
5.4(12) (13) the effect of federal intervention or loss of federal funds if the agency is
5.5abolished.

5.6    Sec. 4. Minnesota Statutes 2011 Supplement, section 3D.11, is amended to read:
5.73D.11 RECOMMENDATIONS.
5.8(a) In its report on a state agency, the commission shall:
5.9(1) make recommendations on the abolition, continuation, or reorganization of each
5.10affected state agency and its advisory committees and on the need for the performance of
5.11the functions of the agency and its advisory committees;
5.12(2) make recommendations on the consolidation, transfer, or reorganization of
5.13programs within state agencies not under review when the programs duplicate functions
5.14performed in agencies under review; and
5.15(3) make recommendations to improve the operations of the agency, its policy body,
5.16and its advisory committees, including management recommendations that do not require
5.17a change in the agency's enabling statute; and
5.18(4) make recommendations for the repeal, consolidation, transfer, or amendment of
5.19the rules promulgated by the affected state agency.
5.20(b) The commission shall include the estimated fiscal impact of its recommendations
5.21and may recommend appropriation levels for certain programs to improve the operations
5.22of the state agency.
5.23(c) The commission shall have drafts of legislation prepared to carry out the
5.24commission's recommendations under this section, including legislation necessary
5.25to continue the existence of agencies that would otherwise sunset if the commission
5.26recommends continuation of an agency.
5.27(d) After the legislature acts on the report under section 3D.09, the commission shall
5.28present to the legislative auditor the commission's recommendations that do not require
5.29a statutory change to be put into effect. Subject to the legislative audit commission's
5.30approval, the legislative auditor may examine the recommendations and include as part
5.31of the next audit of the agency a report on whether the agency has implemented the
5.32recommendations and, if so, in what manner.

5.33    Sec. 5. Minnesota Statutes 2010, section 14.05, subdivision 1, is amended to read:
6.1    Subdivision 1. Authority to adopt original rules restricted. (a) Each agency shall
6.2adopt, amend, suspend, or repeal its rules: (1) in accordance with the procedures specified
6.3in sections 14.001 to 14.69, and; (2) only pursuant to authority expressly delegated by
6.4state or federal law; (3) only that are necessary to serve the public interest; and (4) in full
6.5compliance with its duties and obligations.
6.6(b) If a law authorizing rules is repealed, the rules adopted pursuant to that law are
6.7automatically repealed on the effective date of the law's repeal unless there is another
6.8law authorizing the rules.
6.9(c) Except as provided in section 14.06, sections 14.001 to 14.69 shall not be
6.10authority for an agency to adopt, amend, suspend, or repeal rules.

6.11    Sec. 6. Minnesota Statutes 2010, section 14.116, is amended to read:
6.1214.116 NOTICE TO LEGISLATURE.
6.13When an agency mails notice of intent to adopt rules under section 14.14 or 14.22,
6.14the agency must send a copy of the same notice and a copy of the statement of need and
6.15reasonableness to the chairs and ranking minority party members of the legislative policy
6.16and budget committees with jurisdiction over the subject matter of the proposed rules and
6.17to the Legislative Coordinating Commission.
6.18In addition, if the mailing of the notice is within two years of the effective date
6.19of the law granting the agency authority to adopt the proposed rules, the agency shall
6.20make reasonable efforts to send a copy of the notice and the statement to all sitting
6.21legislators who were chief house of representatives and senate authors of the bill granting
6.22the rulemaking authority. If the bill was amended to include this rulemaking authority,
6.23the agency shall make reasonable efforts to send the notice and the statement to the chief
6.24house of representatives and senate authors of the amendment granting rulemaking
6.25authority, rather than to the chief authors of the bill.

6.26    Sec. 7. Minnesota Statutes 2010, section 14.131, is amended to read:
6.2714.131 STATEMENT OF NEED AND REASONABLENESS.
6.28By the date of the section 14.14, subdivision 1a, notice, the agency must
6.29prepare, review, and make available for public review a statement of the need for and
6.30reasonableness of the rule. The statement of need and reasonableness must be prepared
6.31under rules adopted by the chief administrative law judge and must include the following
6.32to the extent the agency, through reasonable effort, can ascertain this information:
7.1(1) a description of the classes of persons who probably will be affected by the
7.2proposed rule, including classes that will bear the costs of the proposed rule and classes
7.3that will benefit from the proposed rule;
7.4(2) the probable costs to the agency and to any other agency of the implementation
7.5and enforcement of the proposed rule and any anticipated effect on state revenues;
7.6(3) a determination of whether there are less costly methods or less intrusive
7.7methods for achieving the purpose of the proposed rule;
7.8(4) a description of any alternative methods for achieving the purpose of the
7.9proposed rule that were seriously considered by the agency and the reasons why they
7.10were rejected in favor of the proposed rule;
7.11(5) the probable costs of complying with the proposed rule, including the portion
7.12of the total costs that will be borne by identifiable categories of affected parties, such as
7.13separate classes of governmental units, businesses, or individuals;
7.14(6) the probable costs or consequences of not adopting the proposed rule, including
7.15those costs or consequences borne by identifiable categories of affected parties, such as
7.16separate classes of government units, businesses, or individuals; and
7.17(7) an assessment of any differences between the proposed rule and existing federal
7.18regulations and a specific analysis of the need for and reasonableness of each difference.;
7.19and
7.20(8) an assessment of the cumulative effect of all rules adopted by the agency or any
7.21other agency, and all federal regulations and local ordinances or regulations, related to
7.22the specific purpose for which the rule is being adopted.
7.23The statement must describe how the agency, in developing the rules, considered
7.24and implemented the legislative policy supporting performance-based regulatory systems
7.25set forth in section 14.002 in a cost-effective and timely manner.
7.26The statement must describe, with reasonable particularity, the scientific, technical,
7.27and economic information that supports the proposed rule.
7.28The statement must also describe the agency's efforts to provide additional
7.29notification under section 14.14, subdivision 1a, to persons or classes of persons who may
7.30be affected by the proposed rule or must explain why these efforts were not made.
7.31The agency must consult with the commissioner of management and budget to
7.32help evaluate the fiscal impact and fiscal benefits of the proposed rule on units of local
7.33government. The agency must send a copy of the statement of need and reasonableness
7.34to the Legislative Reference Library when the notice of hearing is mailed under section
7.3514.14, subdivision 1a .

8.1    Sec. 8. Minnesota Statutes 2010, section 14.388, subdivision 2, is amended to read:
8.2    Subd. 2. Notice. An agency proposing to adopt, amend, or repeal a rule under this
8.3section must give notice to the chairs and ranking minority members of the legislative
8.4policy and budget committees with jurisdiction over the subject matter of the proposed
8.5rules and to the Legislative Coordinating Commission, must give electronic notice of its
8.6intent in accordance with section 16E.07, subdivision 3, and must give notice by United
8.7States mail or electronic mail to persons who have registered their names with the agency
8.8under section 14.14, subdivision 1a. The notice must be given no later than the date the
8.9agency submits the proposed rule to the Office of Administrative Hearings for review
8.10of its legality and must include:
8.11(1) the proposed rule, amendment, or repeal;
8.12(2) an explanation of why the rule meets the requirements of the good cause
8.13exemption under subdivision 1; and
8.14(3) a statement that interested parties have five business days after the date of the
8.15notice to submit comments to the Office of Administrative Hearings.

8.16    Sec. 9. Minnesota Statutes 2010, section 14.389, subdivision 2, is amended to read:
8.17    Subd. 2. Notice and comment. The agency must publish notice of the proposed
8.18rule in the State Register and, must mail the notice by United States mail or electronic
8.19mail to persons who have registered with the agency to receive mailed notices, and must
8.20give notice to the chairs and ranking minority members of the legislative policy and
8.21budget committees with jurisdiction over the subject matter of the proposed rules and to
8.22the Legislative Coordinating Commission. The mailed notice and the notice to legislators
8.23must include either a copy of the proposed rule or a description of the nature and effect
8.24of the proposed rule and a statement that a free copy is available from the agency upon
8.25request. The notice in the State Register must include the proposed rule or the amended
8.26rule in the form required by the revisor under section 14.07, an easily readable and
8.27understandable summary of the overall nature and effect of the proposed rule, and a
8.28citation to the most specific statutory authority for the rule, including authority for the
8.29rule to be adopted under the process in this section. The agency must allow 30 days after
8.30publication in the State Register for comment on the rule.

8.31    Sec. 10. REVIEW AND SUNSET OF CERTAIN RULES; REPORT.
8.32    Subdivision 1. Report. By January 15, 2013, the Pollution Control Agency,
8.33Department of Natural Resources, Board of Water and Soil Resources, Environmental
8.34Quality Board, and Department of Agriculture must each submit to the governor, the
9.1Legislative Coordinating Commission, and the policy and funding committees and
9.2divisions with jurisdiction over the agency, a list of all rules promulgated by the agency.
9.3The list must also include an explanation of why each rule or portion of the rule is not
9.4obsolete, unnecessary, or duplicative of other state or federal statutes or rules. In that
9.5submission, the agency must either report a timetable for repeal of each rule, or must
9.6develop a bill, and proposed justification, for submission to the appropriate policy
9.7committee to reauthorize the rule. The submission to reauthorize the rule must include
9.8for each rule:
9.9(1) the statutory authority;
9.10(2) intended outcomes;
9.11(3) the cost to state and local government, businesses, and individuals;
9.12(4) the scientific, technical, and economic information that supports it;
9.13(5) the relationship of the specified rule to other local, state, and federal statutes,
9.14rules, regulations, or ordinances;
9.15(6) a summary of any inconsistency and redundancy between the specified rule and
9.16other local, state, and federal statutes, rules, regulations, and ordinances; and
9.17(7) a summary of the means to better coordinate rulemaking between state agencies
9.18and other local, state, and federal agencies and a strategy and schedule to repeal or
9.19amend agency rules so as to achieve intended outcomes of the rules more effectively
9.20and efficiently.
9.21A report submitted under this subdivision must be signed by the person in the agency
9.22who is responsible for identifying and initiating rules and the commissioner of the agency.
9.23    Subd. 2. Rule sunset. Rules of the Pollution Control Agency, Department of
9.24Natural Resources, Board of Water and Soil Resources, Environmental Quality Board, and
9.25Department of Agriculture are repealed August 1, 2013, unless a new law is enacted after
9.26the effective date of this section providing that some or all of the rules remain in effect.