First Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 15-0232.02 Debbie Haskins x2045 HOUSE BILL 15-1044 HOUSE SPONSORSHIP Klingenschmitt, SENATE SPONSORSHIP (None), House Committees Senate Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning the periodic legislative review of executive branch agency rules. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill creates a schedule for the legislative review, including a policy review and a legal review, over a 4-year period of all of the existing rules of the principal departments in the state executive branch, the office of the governor, the public employees' retirement association, and the independent ethics commission. The bill provides for an automatic expiration of each state agency's (agency) rules on a scheduled date following such review, unless extended by the general assembly acting by bill. The schedule of review is coordinated with the annual rule review cycle in the "State Administrative Procedure Act", and the committees of reference will not review rules that are pending the regular rule review process conducted annually by the committee on legal services (COLS). The bill includes a nonstatutory legislative declaration outlining the purpose of the bill. During the interim prior to the scheduled expiration of an agency's rules, the joint legislative committee of reference assigned with oversight responsibility for that particular agency will hold a public hearing to conduct a policy review of the rules of the agency. Each agency shall prepare a brief written summary of each portion of the code subject to review 2 weeks prior to the hearing, specifying for each portion of the code in which existing state statute the general assembly specifically authorized the agency to create or promulgate the rules, any expiration or sunset dates for the rules or statutes, and the approximate cost in staff to enforce these rules. At the hearing, the agency shall explain the content of the rules to the joint committee of reference and has the right to testify about its position on the rules based on the committee's criteria for the policy review of the agency's rules. When conducting the policy review, the committee of reference shall use the following criteria and examine: The necessity and efficacy of the rules, including whether the costs associated with the continued enforcement of the rules outweigh the benefits derived from such enforcement; Whether the rules are outdated and obsolete; and Whether the statutes governing the agency still require the agency to maintain the rules. Based on such review, the joint committee of reference shall decide, affirmatively, which rules should expire or be extended. The joint committee of reference shall prepare a written report of its policy review of the agency's rules. When reviewing each set of rules, the joint committee of reference shall recommend whether the rules should expire on the scheduled expiration date, or be subject to expiration and rereviewed in 4 years or 8 years or at a different time as specified by bill or existing statute. The joint committee of reference shall sponsor a departmental rule review bill for that agency's rules that provides for the expiration or extension of the agency's rules based on the committee's policy review and recommendations and specifying the expiration dates for future review of those rules. The COLS is the committee of reference for each departmental rule review bill introduced as a result of this legislative review. During the interim prior to the expiration of an agency's rules, the office of legislative legal services and the COLS will also conduct a legal review of the agency's rules to determine whether the rules are within the agency's rule-making authority or conflict with state law or the state constitution. The COLS will conduct hearings on the staff's findings on the rules and make recommendations on the expiration or extension of the agency's rules based on the legal review. The staff will prepare a draft amendment to the departmental rule review bill that reflects the COLS' recommendations on the agency's rules. When the COLS sits as the committee of reference on the agency's departmental rule review bill during the session, the COLS will amend the departmental rule review bill to incorporate its findings on the legal review of the agency's rules. When the COLS sits as the committee of reference on the departmental rule review bill, the COLS shall also review the report on the policy review from the applicable committee of reference and the recommended dates of expiration. The COLS may decide, based on a majority vote, not to follow the recommendations from the joint committee of reference about any of the rules. The bill specifies the effect of the general assembly's action in passing a bill providing for the expiration or postponed expiration of the rules of an agency. The bill states that the legislative review process does not apply to rules of agency organization or nonbinding rules and that it does not apply to agencies in the department of regulatory agencies that are subject to review under the regular sunset process. Notwithstanding the termination schedule for an agency's rules as provided in this bill, if the general assembly fails to pass a departmental rule review bill during the legislative session of the year in which the agency's rules are scheduled to expire or if the governor vetoes the departmental rule review bill, the rules of the agency are automatically extended for one additional year. In that event, the joint committee of reference shall conduct additional hearings, make new recommendations, and introduce another departmental rule review bill during the next succeeding legislative session. If the second departmental rule review bill for the agency fails to pass during the succeeding legislative session or fails to become law, the rules of that agency expire automatically on May 15 of the year of the succeeding legislative session. After the passage of a bill extending or providing for the expiration of rules of an agency pursuant to this review process, the office of legislative legal services will inform the secretary of state of any rules that expire as the result of the passage of a bill. The secretary of state is required to remove any expired rules from the code of Colorado regulations (CCR) and to include notations in the CCR regarding any rules removed from the CCR as a result of this review process. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) In a democratic republic that is accountable to the people, rules that govern the people should generally be made by those elected officials who are most accountable to the voters and generally not by unelected administrators who cannot be easily held accountable by the people or voted out of office. The Colorado constitution vests power in the hands of the people to govern themselves and make laws for themselves primarily through the hands of their elected representatives in the general assembly, not primarily through the hands of a growing bureaucracy of rule-makers that now govern the people but cannot easily be removed or replaced by the vote of the people. (2) The general assembly finds that its own members' responsibility for legislative review of administrative rules promulgated by the executive branch has lapsed. While the general assembly's committee on legal services reviews and approves new rules promulgated by departments and agencies every year, there has not been a thorough legislative review of all of the existing administrative rules since 1984. (3) The sheer volume of the Colorado Code of Regulations (CCR), which is the sole official public repository of rules promulgated and enforced upon the people by the executive branch, has grown over the decades and is now approaching 40 volumes, enough to fill an entire library shelf. The majority of these rules were not promulgated in the past year, meaning the vast majority, perhaps ninety-five percent or more of these rules, have not recently been reviewed or re-approved by the legislature. Many or even most rules will likely never expire unless the legislature acts to review them. (4) While all existing rules in the CCR theoretically have some basis in legislated or delegated authority derived from the Colorado Revised Statutes (C.R.S.), many old and outdated rules in the CCR may have lost their legal authority either due to changes in the C.R.S. or through mission creep, by expanding beyond what existing statute intended. This allows the potential for a runaway bureaucracy, or, worse, an unlawful one. If the legislature delegates too much authority without continued oversight, the people of Colorado will eventually, if they are not already, be governed by an unconstitutional ruling class of unelected officials rather than by those whom the people elected to help them self-govern. (5) Indeed, some existing but unreviewed administrative rules promulgated in the 1980s were written by executive agency heads who have long since retired or died; yet ironically, these rule-makers still theoretically govern our people from the grave. Without current legislative review and without sunset clauses, they will continue to do so, theoretically forever. (6) The general assembly therefore declares that the purpose of House Bill 15-_____ is for the properly accountable and elected officials in the general assembly to fulfill their duty by reviewing and positively approving or allowing to expire those volumes of administrative rules that have grown for decades without proper oversight and review. SECTION 2. In Colorado Revised Statutes, add 24-4-109 as follows: 24-4-109. Legislative review of existing rules in the code of Colorado regulations - schedule for review - expiration. (1) Unless extended by the general assembly acting by bill or as otherwise provided in subsection (7) of this section, all of the rules of agencies expire on the dates specified in this section. Prior to the expiration of the rules as outlined in this section, each joint committee of reference, as defined in section 2-7-203 (1), C.R.S., assigned with oversight responsibility for a particular agency shall conduct a policy review of the rules as outlined in subsection (2) of this section, and the committee on legal services shall conduct a legal review of the rules as outlined in subsection (3) of this section. The joint committee of reference shall introduce a departmental rule review bill that addresses the expiration or extension of the rules of that particular agency based upon the committee's policy review. The committee on legal services is the committee of reference for the departmental rule review bill and shall review the bill and add its recommendations on the expiration or extension of the agency's rules to the departmental rule review bill based upon the legal review. (2) (a) During the interim before the scheduled expiration of a particular agency's rules, the applicable joint committee of reference shall conduct a policy review of the agency's rules. The legislative council staff shall assist the committee of reference in scheduling and staffing the committee meetings of the joint committee of reference. The legislative council staff shall contact the affected agency and schedule a committee hearing identifying those sets of rules by CCR citation that will be reviewed and discussed at the hearing. (b) (I) The agency shall prepare for the applicable joint committee of reference a brief written summary of the rules for each identified CCR citation, with less than two hundred words, and specifying: (A) In which existing state statute the general assembly specifically authorized the agency to create or promulgate the rules now listed under this CCR citation; (B) The future date of any existing expiration or sunset dates or whether there is no existing sunset date, if indefinite, for the rules or the applicable statutes; and (C) The approximate annual cost in full-time equivalent employees to the agency in enforcing these rules. (II) The agency shall submit the summaries to the legislative council staff for distribution to the joint committee of reference at least two weeks prior to the committee's hearing on the agency's rules. (c) The joint committee of reference shall hold a public meeting after timely notice to the public and affected agency during the interim prior to the scheduled expiration of the rules for that department. The joint committee of reference shall conduct a hearing on the rules of the agency and take public comment regarding the criteria specified in paragraph (d) of this subsection (2). The agency shall explain the content of the agency's rules and explain the relevant statutes governing the rules. The agency has the right to testify about its position about whether the rules should expire or be extended based upon the criteria for the committee's policy review as outlined in paragraph (d) of this subsection (2). (d) The role of the joint committee of reference is to conduct a policy review of the agency's rules and determine what rules should expire or be extended in legislation submitted to the general assembly. When conducting the policy review of the agency's rules, the applicable joint committee of reference shall examine: (I) The necessity and efficacy of the rules, including whether the costs associated with the continued enforcement of the rules outweigh the benefits derived from such enforcement; (II) Whether the rules are outdated or obsolete; and (III) Whether the statutes governing the agency still require the agency to maintain these rules. (e) After the completion of the public comment on the agency's rules, the joint committee of reference shall, on affirmative vote, make recommendations on the expiration or extension of rules of the agency during the interim prior to the scheduled expiration date. When reviewing each set of rules, the joint committee of reference shall recommend whether the rules should expire on the scheduled expiration date, or whether they should be subject to another automatic expiration and review in four years or eight years or at a different time as specified by bill or existing statute. If the rules of an agency already have a scheduled repeal date pursuant to statute, the joint committee of reference shall not recommend a different repeal date. The joint committee of reference shall approve and sponsor a departmental rule review bill for the particular agency that contains its recommendations to the general assembly about which rules of the agency should expire and which should be extended and sets the next automatic expiration dates for the agency's rules that are extended. A bill introduced pursuant to this subsection (2) does not count against a legislator's individual bill limit . The committee on legal services is the committee of reference for any departmental rule review bill introduced pursuant to this section. (3) (a) During the interim before the scheduled expiration of a particular agency's rules, in addition to the policy review conducted as described in subsection (2) of this section, the office of legislative legal services shall review the rules of the agency and prepare a summary for the committee on legal services for each set of rules of the agency, concerning whether each rule is required by, conflicts with, or exceeds the authority granted by existing statute. The office of legislative legal services and the committee on legal services shall conduct a legal review of the authority for the rules and shall determine whether the rules are within the agency's rule-making authority in accordance with the provisions of section 24-4-103 (8) (a). (b) The office of legislative legal services shall present its findings to the committee on legal services. The committee shall conduct a hearing on the staff's findings about the authority of the agency's rules and shall take public comment on the staff's findings regarding whether the rules conform with the provisions of section 24-4-103 (8) (a). The committee on legal services shall, on affirmative vote, make recommendations on the expiration or extension of the rules of that agency based on the legal review. The staff shall maintain a record of the committee's decisions on the expiration or extension of the agency's rules and prepare a draft amendment for the departmental rule review bill that reflects the committee on legal services' recommendations to the general assembly about which of the agency's rules should expire or be extended. When the committee on legal services sits as the committee of reference on the agency's departmental rule review bill, the committee shall review its findings on the legal review and amend the departmental rule review bill accordingly to incorporate its findings. When the committee on legal services sits as the committee of reference on the departmental rule review bill, the committee on legal services shall also review the report on the policy review from the applicable joint committee of reference about the agency's rules. The committee on legal services may decide, based on a majority vote, not to follow the recommendations from the joint committee of reference about any of the rules. (4) (a) In a departmental rule review bill, the general assembly, in its discretion, may postpone the expiration of rules or any portion thereof for an agency. The postponement of the expiration of a rule does not constitute legislative approval of the rule or mean that the rule is admissible in any court as evidence of legislative intent. Only that portion of any rule specifically disapproved by bill is no longer effective, and that portion of the rule that remains after deletion of a portion thereof retains its character as an administrative rule. Nothing in this section prohibits any action by the general assembly pursuant to section 24-4-103 (8) with respect to rules that are reviewed annually by the committee on legal services. (b) Each agency shall revise its rules to conform with the action taken by the general assembly. An agency shall not repromulgate a rule that has been allowed to expire by action of the general assembly pursuant to the provisions of this section unless the authority to promulgate such rule has been granted to such agency by a statutory amendment, by the state constitution, or by a judicial determination that statutory or constitutional authority exists. Any rule so repromulgated is void. Passage of a bill repealing a rule does not result in revival of a predecessor rule. (5) This section does not apply to rules of agency organization or general statements of policy that are not meant to be binding as rules. This section does not apply to rules of any agency in the department of regulatory agencies that is subject to the provisions of section 24-34-104. (6) After the review of rules for an agency has occurred as specified in subsections (8) to (10) of this section and the rules have either been extended or the expiration date has been postponed as provided by the general assembly acting by bill, the rules of the agency either expire as provided in the bill or are subject to another automatic expiration and review in four years or in eight years or at a different time as specified by bill or by existing statute. The joint committee of reference may also recommend to the general assembly that an agency's rules automatically expire in four years or eight years without a required review by a committee of reference, unless extended by the general assembly acting by bill. (7) Notwithstanding the termination schedule for an agency's rules provided in this section, if the general assembly fails to pass a departmental rule review bill during the legislative session of the year in which the agency's rules are scheduled to expire as provided in this section or if the governor vetoes the departmental rule review bill, the rules of the agency are automatically extended for one additional year. In that event, the joint committee of reference shall conduct additional hearings, make new recommendations, and introduce another departmental rule review bill during the next succeeding legislative session. If the second departmental rule review bill for the agency fails to pass during the succeeding legislative session or fails to become law, the rules of that agency expire automatically on May 15 of the year of the succeeding legislative session. (8) The rules of the following principal departments or agencies adopted prior to November 1, 2014, expire on May 15, 2016, unless extended by the general assembly acting by bill: (a) Department of personnel; (b) Department of education; (c) Department of human services; (d) Department of public safety; (e) The public utilities commission in the department of regulatory agencies. (9) The rules of the following principal departments or agencies adopted prior to November 1, 2015, expire on May 15, 2017, unless extended by the general assembly acting by bill: (a) Department of revenue; (b) Department of labor and employment; (c) Department of higher education; (d) Public employees' retirement association; (e) Department of health care policy and financing; (f) Department of state; (g) Department of natural resources; (h) The office of the governor. (10) The rules of the following principal departments or agencies adopted prior to November 1, 2016, expire on May 15, 2018, unless extended by the general assembly acting by bill: (a) Department of agriculture; (b) The rules of the following commissions or boards of the department of public health and environment: (I) The air quality control commission; (II) The water quality control commission; (III) The rules of the state board of health relating to water quality control; (IV) The rules of the executive director on environmental management system permit program regulation; (V) The rules of the state board of health; (c) Department of local affairs. (11) The rules of the following principal departments or agencies adopted prior to November 1, 2017, expire on May 15, 2019, unless extended by the general assembly acting by bill: (a) The following divisions in the department of regulatory agencies: (I) The division of banking; (II) The division of insurance; (III) The division of financial services; (IV) The division of securities; (b) Department of law; (c) The rules of the department of public health and environment relating to hazardous materials and waste management; (d) Department of treasury; (e) Department of corrections; (f) Department of military and veterans affairs; (g) Department of transportation; (h) The independent ethics commission. SECTION 3. In Colorado Revised Statutes, 24-4-103, amend (8) (c) (I), (11) (a), and (11) (d) (II) as follows: 24-4-103. Rule-making - procedure - definitions - repeal. (8) (c) (I) Notwithstanding any other provision of law to the contrary and the provisions of section sections 24-4-107 and 24-4-109, all rules adopted or amended on or after January 1, 1993, and before November 1, 1993, shall expire at 11:59 p.m. on May 15 of the year following their adoption unless the general assembly by bill acts to postpone the expiration of a specific rule, and commencing with rules adopted or amended on or after November 1, 1993, all rules adopted or amended during any one-year period that begins each November 1 and continues through the following October 31 shall expire at 11:59 p.m. on the May 15 that follows such one-year period unless the general assembly by bill acts to postpone the expiration of a specific rule; except that a rule adopted pursuant to section 25.5-4-402.3 (5) (b) (III), C.R.S., shall expire expires at 11:59 p.m. on the May 15 following the adoption of the rule unless the general assembly acts by bill to postpone the expiration of a specific rule. The general assembly, in its discretion, may postpone such expiration, in which case, the provisions of section 24-4-108 or 24-34-104 shall apply, and the rules shall expire or be are subject to review as provided in said sections. The postponement of the expiration of a rule shall not constitute legislative approval of the rule nor be admissible in any court as evidence of legislative intent. The postponement of the expiration date of a specific rule shall not prohibit any action by the general assembly pursuant to the provisions of paragraph (d) of this subsection (8) with respect to such rule. (11) (a) There is hereby established the code of Colorado regulations for the publication of rules of agencies of the executive branch and the Colorado register for the publication of notices of rule-making, proposed rules, attorney general's opinions relating to such rules, and adopted rules. The code and the register shall be are the sole official publications for such rules, notices of rule-making, proposed rules, and attorney general's opinions. The code and the register shall must contain, where applicable, references to court opinions and recommendations of the legal services committee of the general assembly or of the committees of reference of the general assembly that relate to or affect such rules and references to any action of the general assembly relating to the extension, expiration, deletion, or rescission of such rules and may contain other items that, in the opinion of the editor, are relevant to such rules. The register may also include other public notices, including annual departmental regulatory agendas submitted by principal departments to the secretary of state pursuant to section 2-7-203, C.R.S.; however, except as specifically permitted by law, the inclusion of such notices in the register shall be is in addition to and not in substitution for existing public notice requirements. (d) (II) Each rule adopted, together with the attorney general's opinion rendered in connection therewith, shall must be filed pursuant to subsection (12) of this section within twenty days after adoption with the secretary of state for publication in the Colorado register. Upon written request of an agency, the secretary of state shall correct typographical and other nonsubstantive errors appearing in the rules as filed by such agency that occur after final adoption of the rules by the agency during the preparation of such rules for publication in order to conform the published rules with the adopted rules. Notices of rule-making proceedings pursuant to subsection (3) of this section shall must also be filed with the secretary of state in sufficient time for publication pursuant to subsection (5) of this section in the register. Rules revised to conform with action taken by the general assembly shall must be filed with the secretary of state for publication in the register and in the code of Colorado regulations. The legal services committee of the general assembly shall notify the secretary of state whenever a rule published in the code is rescinded or a portion thereof is deleted by the general assembly and whenever a rule or a portion thereof is allowed to expire in accordance with section 24-4-108, section 24-4-109, or with subparagraph (I) of paragraph (c) of subsection (8) of this section, and the secretary of state shall direct the removal from the code of material so deleted, rescinded, or allowed to expire. SECTION 4. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 5, 2015, if adjournment sine die is on May 6, 2015); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2016 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.