Chapter 400

2004 -- S 3233

Enacted 07/06/04

A N A C T

RELATING TO ADMINISTRATIVE PROCEDURES

Introduced By: Senator Leo R. Blais

Date Introduced: June 25, 2004

It is enacted by the General Assembly as follows:

SECTION 1. Sections 42-35-1, 42-35-3 and 42-35-15 of the General Laws in Chapter 42-

35 entitled "Administrative Procedures" are hereby amended to read as follows:

42-35-1. Definitions. -- As used in this chapter:

(a) "Agency" includes each state board, commission, department, or officer, other than

the legislature or the courts, authorized by law to make rules or to determine contested cases, and

all authorities, as that term is defined below;

(b) "Authorities" includes the following: the Rhode Island industrial building authority,

the Rhode Island recreational building authority, the Rhode Island port authority and economic

development corporation, the Rhode Island industrial facilities corporation, the Rhode Island

refunding bond authority, the Rhode Island housing and mortgage finance corporation, the Rhode

Island solid waste management corporation, the Rhode Island public transit authority, the Rhode

Island student loan authority, the Howard development corporation, the water resources board,

the Rhode Island health and educational building corporation, the Rhode Island higher education

assistance authority, the Rhode Island turnpike and bridge authority, the Blackstone Valley

district commission, the Narragansett Bay water quality management district commission, their

successors and assigns, and any body corporate and politic with the power to issue bonds and

notes, which are direct, guaranteed, contingent, or moral obligations of the state, which is

hereinafter created or established in this state.

price fixing, and licensing, in which the legal rights, duties, or privileges of a specific party are

required by law to be determined by an agency after an opportunity for hearing;

(d) "License" includes the whole or part of any agency permit, certificate, approval,

registration, charter, or similar form of permission required by law, but it does not include a

license required solely for revenue purposes;

(e) "Licensing" includes the agency process respecting the grant, denial, renewal,

revocation, suspension, annulment, withdrawal, or amendment of a license;

(f) "Party" means each person or agency named or admitted as a party, or properly

seeking and entitled as of right to be admitted as a party;

(g) "Person" means any individual, partnership, corporation, association, governmental

subdivision, or public or private organization of any character other than an agency;

(h) "Rule" means each agency statement of general applicability that implements,

interprets, or prescribes law or policy or describes the organization, procedure, or practice

requirements of any agency. The term includes the amendment or repeal of a prior rule, but does

not include (1) statements concerning only the internal management of an agency and not

affecting private rights or procedures available to the public, or (2) declaratory rulings issued

pursuant to section 42-35-8, (3) intra-agency memoranda, or (4) an order.

(i) (1) "Small business" shall ~~mean a business activity, that complies with all of the~~

~~following:~~ have the same meanings that are provided for under title 13, volume 1, part 121 of the

Code of Federal Regulations (13 CFR 121, as may be amended from time to time).

~~(A) Independently owned and operated.~~

~~(B) Not dominant in its field of operation.~~

~~(C) Not exceeding the following annual gross receipts in the categories of:~~

~~(i) Agricultural, one million dollars ($1,000,000).~~

~~(ii) General construction, nine million five hundred thousand dollars ($9,500,000).~~

~~(iii) Special trade construction, five million dollars ($5,000,000).~~

~~(iv) Retail trade, two million dollars ($2,000,000).~~

~~(v) Wholesale trade, nine million five hundred thousand dollars ($9,500,000).~~

~~(vi) Services, two million dollars ($2,000,000).~~

~~(vii) Transportation and warehousing, one million five hundred thousand dollars~~

~~($1,500,000).~~

~~(D) If a manufacturing enterprise, not exceeding two hundred fifty (250) employees.~~

~~(E) If a health care facility, not exceeding one hundred fifty (150) beds or one million~~

~~five hundred thousand dollars ($1,500,000) in annual gross receipts.~~

~~(F) If a generating or transmitting facility, generating and/or transmitting electric power~~

~~not exceeding four million five hundred thousand (4,500,000) kilowatts.~~

~~(2) The following professional and business activities shall not be considered a small~~

~~business for purposes of this section:~~

~~(A) Financial institutions including banks, trusts, savings and loan associations, thrift~~

~~institutions, consumer and industrial finance companies, credit unions, mortgage and investment~~

~~bankers, and stock and bond brokers.~~

~~(B) Insurance companies, both stock and mutual.~~

~~(C) Mineral, oil and gas brokers; subdividers and developers.~~

~~(D) Landscape architects, architects, and building designers.~~

~~(E) Entities organized as nonprofit institutions.~~

~~(F) Entertainment activities and productions including motion pictures, stage~~

~~performances, television and radio stations, and production companies.~~

~~(G) All utilities, water companies, and power transmission companies, except electrical~~

~~power generating transmission companies providing less than 4.5 kilowatts.~~

~~(H) All petroleum and natural gas producers, refiners, and pipelines.~~

(j) "Order" means the whole or a part of a final disposition, whether affirmative,

negative, injunctive or declaratory in form, of a contested case.

42-35-3. Procedures for adoption of rules. -- (a) Prior to the adoption, amendment, or

repeal of any rule the agency shall:

(1) Give at least thirty (30) days notice of its intended action. The notice shall include a

statement of either the terms or substance of the intended action or a description of the subjects

and issues involved, and of the time when, the place where, and the manner in which interested

persons may present their views thereon. The notice shall be mailed to all persons who have made

timely request of the agency for advance notice of its rule-making proceedings, and published in a

newspaper or newspapers having aggregate general circulation throughout the state, provided,

however, that if the action is limited in its applicability to a particular area, then the publication

may be in a newspaper having general circulation in the area. Copies of proposed rules shall be

available at the agency and by mail to any member of the public upon request.

(2) Afford all interested persons reasonable opportunity to submit data, views, or

arguments, orally or in writing. In the case of rules, opportunity for oral hearing must be granted

if requested by twenty-five (25) persons, or by a governmental subdivision or agency, or by an

association having not less than twenty-five (25) members. The agency shall consider fully all

written and oral submissions respecting the proposed rule. Upon adoption of a rule, the agency, if

requested to do so by an interested person, either prior to adoption or within thirty (30) days

thereafter, shall issue a concise statement of the principal reasons for and against its adoption,

incorporating therein its reasons for overruling the considerations urged against its adoption.

(3) Demonstrate the need for the adoption, amendment, or repeal of any rule in the

record of the rulemaking proceeding. The agency shall demonstrate that there is no alternative

approach among the alternatives considered during the rulemaking proceeding which would be as

effective and less burdensome to affected private persons as another regulation. This standard

requires that an agency proposing to adopt any new regulation must identify any other state

regulation which is overlapped or duplicated by the proposed regulation and justify any overlap

or duplication.

(4) ~~Determine whether such action would have a significant adverse economic impact on~~

~~small business or any city or town. If a significant adverse economic impact on small business or~~

~~any city or town may result from the proposed action, the notice of proposed action shall identify~~

~~the types of small businesses that would be affected and the kind of adverse economic impact on~~

~~small business that may result, or the adverse fiscal impact on cities and towns which may result~~

~~and shall request comments on proposals as to how the proposed action can be changed so that~~

~~the adverse economic impact on small business or cities and towns can be minimized or~~

~~eliminated.~~ Comply with section 42-35-3.3.

(5) Ensure that any proposed additions, deletions or other amendments to the rules and

regulations be clearly marked. An agency's lawful promulgation of amendments to an existing

rule shall be deemed to supersede and repeal the previous enactments of that rule, provided that

the public notice required under subsection (a)(1) of this section indicated such an intent.

(b) If an agency finds that an imminent peril to the public health, safety, or welfare

requires adoption of a rule upon less than thirty (30) days' notice, and states in writing its reasons

for that finding, it may proceed without prior notice or hearing or upon any abbreviated notice

and hearing that it finds practicable, to adopt an emergency rule. The rule so adopted may be

effective for a period of not longer than one hundred twenty (120) days renewable once for a

period not exceeding ninety (90) days, but the adoption of an identical rule under subsections

(a)(1) and (a)(2) is not precluded.

section, but no contest of any rule on the ground of noncompliance with the procedural

requirements of this section may be commenced after two (2) years from its effective date.

42-35-15. Judicial review of contested cases. -- (a) Any person, including any small

business, who has exhausted all administrative remedies available to him within the agency, and

who is aggrieved by a final order in a contested case is entitled to judicial review under this

chapter. This section does not limit utilization of or the scope of judicial review available under

other means of review, redress, relief, or trial de novo provided by law. Any preliminary,

procedural, or intermediate agency act or ruling is immediately reviewable in any case in which

review of the final agency order would not provide an adequate remedy.

(b) Proceedings for review are instituted by filing a complaint in the superior court of

Providence County or in the superior court in the county in which the cause of action arose, or

where expressly provided by the general laws in the sixth division of the district court or family

court of Providence County, within thirty (30) days after mailing notice of the final decision of

the agency or, if a rehearing is requested, within thirty (30) days after the decision thereon,

provided, however, that any person who is aggrieved by a final order concerning the assessment

or determination of any tax, interest, or penalty made by the tax administrator must pay the

amount of the tax, interest, or penalty to the administrator as a prerequisite to the filing of such

complaint. Copies of the complaint shall be served upon the agency and all other parties of record

in the manner prescribed by applicable procedural rules within ten (10) days after it is filed in

court, provided, however, that the time for service may be extended for good cause by order of

the court.

agency may grant, or the reviewing court may order, a stay upon the appropriate terms.

(d) Within thirty (30) days after the service of the complaint, or within further time

allowed by the court, the agency shall transmit to the reviewing court the original or a certified

copy of the entire record of the proceeding under review. By stipulation of all parties to the

review proceedings, the record may be shortened. Any party unreasonably refusing to stipulate to

limit the record may be taxed by the court for the additional costs. The court may require or

permit subsequent corrections or additions to the record.

(e) If, before the date set for hearing, application is made to the court for leave to present

additional evidence, and it is shown to the satisfaction of the court that the additional evidence is

material and that there were good reasons for failure to present it in the proceeding before the

agency, the court may order that the additional evidence be taken before the agency upon

conditions determined by the court. The agency may modify its findings and decision by reason

of the additional evidence and shall file that evidence and any modifications, new findings, or

decisions with the reviewing court.

(f) The review shall be conducted by the court without a jury and shall be confined to the

record. In cases of alleged irregularities in procedure before the agency, not shown in the record,

proof thereon may be taken in the court. The court, upon request, shall hear oral argument and

receive written briefs.

(g) The court shall not substitute its judgment for that of the agency as to the weight of

the evidence on questions of fact. The court may affirm the decision of the agency or remand the

case for further proceedings, or it may reverse or modify the decision if substantial rights of the

appellant have been prejudiced because the administrative findings, inferences, conclusions, or

decisions are:

(1) In violation of constitutional or statutory provisions;

(2) In excess of the statutory authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error or law;

(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the

whole record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted

exercise of discretion.

SECTION 2. Chapter 42-35 of the General Laws entitled "Administrative Procedures" is

hereby amended by adding thereto the following sections:

42-35-3.3. Regulations affecting small business. – (a) Prior to the adoption of any

proposed regulation on or after January 1, 2005, each agency shall notify the governor’s office

and the economic development corporation of its intent to adopt the proposed regulation. The

agency shall submit the proposed regulation to both the governor’s office and the economic

development corporation at a time reasonably in advance of the commencement of the formal

rule-making process, but in any case no later than the date of public notice. If the governor’s

office or the economic development corporation shall, within fifteen (15) days of receipt of such

notice, identify a proposed regulation as one that may have a significant adverse economic impact

on small businesses the proposing agency shall prepare a regulatory flexibility analysis in which

the agency shall, where consistent with health, safety and environmental and economic welfare,

consider utilizing regulatory methods that will accomplish the objectives of applicable laws while

minimizing adverse impact on small business. The economic development corporation shall

identify and convey specific concerns raised by small business in providing notice to the agency

proposing the regulation, and shall, when appropriate, act as advocate for a small business raising

concerns hereunder. To the extent that a proposed regulation is required to be promulgated by a

state agency in order to comply with a requirement for the establishment of specific standards

under federal law, such regulations or nondiscretionary portions thereof shall not be subject to the

requirements of this section. The analysis shall, to the extent ascertainable, include the following:

(1) An identification and estimate of the number of small businesses subject to the

proposed regulation;

(2) The projected reporting, record keeping and other administrative costs required for

compliance with the proposed regulation, including the type of professional skills necessary for

preparation of the report or record;

(3) A statement of the probable effect on impacted small businesses; and

(4) A description of any less intrusive or less costly alternative methods of achieving the

purpose of the proposed regulation.

(b) The agency shall consider, without limitation, each of the following methods of

reducing the impact of the proposed regulation on small businesses:

(1) The establishment of less stringent compliance or reporting requirements for small

businesses;

(2) The establishment of less stringent schedules or deadlines for compliance or reporting

requirements for small businesses;

(3) The consolidation or simplification of compliance or reporting requirements for small

businesses;

(4) The establishment of performance standards for small businesses to replace design or

operational standards required in the proposed regulation; and

(5) The exemption of small businesses from all or any part of the requirement contained

in the proposed regulation.

with the provisions of this section and provide such data as is available to the corporation in order

to support the intent of this section and develop alternatives for consideration by the proposing

agency. The economic development corporation shall provide written comment specifically

detailing any information that relates to the components of analysis in subsection 42-35-3.3(a)(1-

4) above and, such alternatives as they may have identified pursuant to subsection 42-35-

3.3(b)(1-5) above. Such review and advice shall be completed within the notice and review

periods required by this chapter and shall not serve to delay the promulgation of rules.

(d) The following professional and business activities shall not be considered a small

business for purposes of this section:

(1) Financial institutions including banks, trusts, savings and loan associations, thrift

institutions, consumer and industrial finance companies, credit unions, mortgage and investment

bankers, and stock and bond brokers;

(2) Insurance companies, both stock and mutual;

(3) Mineral, oil and gas brokers; subdividers and developers;

(4) Landscape architects, architects and building designers;

(5) Entities organized as nonprofit institutions;

(6) Entertainment activities and productions including motion pictures, stage

performances, television and radio stations, and production companies;

(7) All utilities, water companies, and power transmission companies, except electrical

power generating transmission companies providing less than four and one-half (4.5) kilowatts;

(8) All petroleum and natural gas producers, refiners and pipelines.

42-35-3.4. Periodic review of rules. – (a) Within five (5) years of the effective date of

this section, each agency shall review all agency rules existing at the time of enactment to

determine whether such rules should be continued without change, or should be amended or

rescinded, consistent with the stated objectives of those statutes, to minimize economic impact of

the rules on small businesses in a manner consistent with the state objective of applicable statutes.

If the head of the agency determines that completion of the review of existing rules is not feasible

by the established date, the agency shall publish a statement certifying that determination. The

agency may extend the completion date by one (1) year at a time for a total of not more than six

(6) years.

(b) Rules adopted after the enactment of this section shall be reviewed within six (6)

years of the publication of the final rule and every five (5) years thereafter to ensure that they

minimize economic impact on small businesses in a manner consistent with the stated objectives

of applicable statutes.

agency shall consider the following factors:

(1) The continued need for the rules;

(2) The nature of complaints or comments received concerning the rule from the public;

(3) The complexity of the rule;

(4) The extent to which the rule overlaps, duplicates, or conflicts with other federal, state

and local government rules; and

(5) The length of time since the rule has been evaluated or the degree to which

technology, economic conditions or other factors have changed in the area affected by the rule.

SECTION 3. This act shall take effect upon passage and shall apply to all rules or

regulations proposed on or after January 1, 2005.

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LC03778

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