ARTICLE 39 SUBSTITUTE A

Relating To Rules and Regulations -- Funding Required

SECTION 1. Section 22-12-1.1 of the General Laws in Chapter 22-12 entitled "Fiscal Notes" is hereby amended to read as follows:

22-12-1.1. Fiscal notes for administrative rules. -- Whenever a state department or agency proposes to adopt administrative rules in accordance with the provisions of chapter 35 of title 42, which rules affect the state or any city or town financially, the proposed rules shall be accompanied by a fiscal note. prepared by the department or agency in consultation and cooperation with the department of administration and the Rhode Island League of Cities and Towns. The budget officer shall be responsible, in cooperation with these agencies, for the preparation of the fiscal note, except that the department of administration, in consultation and cooperation with the Rhode Island League of Cities and Towns, shall be responsible for the preparation of the fiscal note for bills affecting cities and towns. Fiscal notes shall be returned to the state department or agency proposing to adopt administrative rules within ten (10) calendar days of when the request was made. Copies of all fiscal notes for administrative rules shall be forwarded to the chairperson of the house finance committee, the chairperson of the senate finance committee, house fiscal advisor and senate fiscal advisor.

SECTION 2. Section 45-13-7 of the General Laws in Chapter 45-13 entitled "State Aid" is hereby amended to read as follows:

45-13-7. State mandated costs defined. -- "State mandate" means any state initiated statutory or executive action that requires a local government to establish, expand, or modify its activities in a way as to necessitate additional expenditures from local revenue sources where the expenditures are not otherwise reimbursed in whole or in part. For the purpose of this chapter, a "state mandate" shall also mean any requirement, rule, or dictate by a regulator of a state agency. When state statutory, or executive, or regulator actions are intended to achieve compliance with federal statutes or regulations or court orders, state mandates shall be determined as follows:

(1) Where the federal statute or regulations or court order is discretionary, the state statutory, or executive, or regulator action shall be considered a state mandate for the purposes of sections 45-13-7 -- 45-13-10.

(2) Where the state statutory, or executive, or regulator action exceeds what is required by the federal statute or regulation or court order, only the provisions of the state action which exceed the federal requirements shall be considered a state mandate for the purposes of sections 45-13-7 -- 45-13-10.

(3) Where the state statutory, or executive, or regulator action does not exceed what is required by the federal statute or regulation or court order, the state action shall not be considered a state mandate for the purposes of sections 45-13-7 -- 45-13-10.

(4) Where the cost of a single state mandate does not exceed the sum of five hundred dollars ($500) the state mandate shall not be reimbursable.

SECTION 3. Chapter 45-13 of the General Laws entitled "State Aid" is hereby amended by adding thereto the following sections:

45-13-9.1. Future mandates. – No mandate shall be enacted or promulgated after July 1, 2006, unless the body enacting or promulgating the same shall first, after public hearing, determine the cost of the proposed mandate to the city, town or school districts of the state. Any rule, regulation or policy adopted by state departments, agencies or quasi-state departments or agencies which require any new expenditure of money or increased expenditure of money by a city, town or school district shall take effect on July 1 of the calendar year following the year of adoption. Provided, however, should funding be provided for the said expenditure, then such rule, regulation or policy shall take effect upon adoption.

45-13-9.2. Postponement of effective date. – Whenever it shall be determined by the governor that the postponement of the effective date of rules, regulations or policies of state departments, agencies or quasi-state departments or agencies, shall cause an emergency situation which imperils the public's safety or public's health, the governor may by executive order suspend the operation of, in whole or in part, section 45-13-9.1 and such order shall remain in effect until it is rescinded by a subsequent executive order.

SECTION 4. This article shall take effect upon passage.