HB2456: Administrative Process Act; schedule of review of regulations, report.

HOUSE BILL NO. 2456

Offered January 20, 2017
A BILL to amend and reenact §§ 2.2-4007.1 and 2.2-4017 of the Code of Virginia, relating to the Administrative Process Act; schedule of review of regulations; report.
Patron-- Hodges

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1. That §§ 2.2-4007.1 and 2.2-4017 of the Code of Virginia are amended and reenacted as follows:

§ 2.2-4007.1. Regulatory flexibility for small businesses.

A. As used in this section, "small business" means a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million.

B. In addition to the requirements of §§ 2.2-4007 through 2.2-4007.06, prior to the adoption of any proposed regulation, the agency proposing a regulation shall prepare a regulatory flexibility analysis in which the agency shall consider utilizing alternative regulatory methods, consistent with health, safety, environmental, and economic welfare, that will accomplish the objectives of applicable law while minimizing the adverse impact on small businesses. The agency shall consider, at a minimum, each of the following methods of reducing the effects of the proposed regulation on small businesses:

1. The establishment of less stringent compliance or reporting requirements;

2. The establishment of less stringent schedules or deadlines for compliance or reporting requirements;

3. The consolidation or simplification of compliance or reporting requirements;

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 requirements contained in the proposed regulation.

C. Prior to the adoption of any proposed regulation that may have an adverse effect on small businesses, each agency shall notify the Joint Commission on Administrative Rules, through the Virginia Regulatory Town Hall, of its intent to adopt the proposed regulation. The Joint Commission on Administrative Rules shall advise and assist agencies in complying with the provisions of this section.

D. In addition to other requirements of § 2.2-4017, all regulations shall be reviewed every four years to determine whether they should be continued without change or be amended or repealed, consistent with the stated objectives of applicable law, to minimize the economic impact on small businesses in a manner consistent with the stated objectives of applicable law. When a regulation has undergone a comprehensive review as part of a regulatory action that included the solicitation of public comment on the regulation, a periodic review shall not be required until four years after the effective date of the regulatory action.

E. The regulatory review required by this section shall include consideration of:

1. The continued need for the rule;

2. The nature of complaints or comments received concerning the regulation from the public;

3. The complexity of the regulation;

4. The extent to which the regulation overlaps, duplicates, or conflicts with federal or state law or regulation; and

5. The length of time since the regulation has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the regulation.

F. Prior to commencement of the regulatory review required by subsection D, the agency shall publish a notice of the review in the Virginia Register of Regulations and post the notice on the Virginia Regulatory Town Hall. The agency shall provide a minimum of 21 days for public comment after publication of the notice. No later than 120 days after close of the public comment period, the agency shall publish a report of the findings of the regulatory review in the Virginia Register of Regulations and post the report on the Virginia Regulatory Town Hall.

§ 2.2-4017. Review of regulations; report to the Governor and General Assembly.

Each Governor shall mandate through executive order a procedure for periodic review during that Governor's administration of regulations of agencies within the executive branch of state government. The procedure shall include (i) a review by the Attorney General to ensure statutory authority for regulations and (ii) a determination by the Governor whether the regulations are (a) necessary for the protection of public health, safety and welfare and (b) clearly written and easily understandable.

The Governor may require each agency (i) to review all regulations promulgated by that agency to determine whether new regulations should be adopted and old regulations amended or repealed, and (ii) to prepare a written report summarizing the agency's findings about its regulations, its reasons for its findings and any proposed course of action.

A. All agencies shall establish a schedule for a recurring review over a five-year period encompassing all regulations for which the agencies are the primary agency responsible. Such schedule shall require the annual review of at least 20 percent of the regulations by July 1 of each year and contain the information required by subsection C. In reviewing any regulation, the agency shall provide for (i) at least 60 days of public comment, to include an online public comment forum on the Virginia Regulatory Town Hall, and (ii) the participation of any other agencies with an interest in the regulation during the regular and recurring agency review. Notwithstanding the schedule developed pursuant to this section, an agency may review any regulation at any time and as many times as it deems necessary.

B. Each agency shall submit the proposed schedule for the regular and recurring review of the agency's regulations for the upcoming year to the Department of Planning and Budget by September 1 of each year. The Department of Planning and Budget shall (i) ensure that each proposed schedule complies with the requirements of this section and (ii) consolidate the agency review schedules for submission to the Governor for review and approval by November 1 of each year. After approval of the schedule by the Governor, each agency shall proceed to conduct the annual review of the agency's regulations in compliance with the approved schedule.

C. The results of the annual agency review shall be incorporated into a report containing the following information:

1. A summary of each regulation reviewed, the legal authority requiring the regulation, when the regulation went into force, and the last time the regulation was reviewed.

2. A summary of all public comment received and the agency's response.

3. For each regulation a statement citing (i) whether there is a continued need for the rule; (ii) the nature of complaints or comments received concerning the regulation from the public; (iii) the complexity of the regulation; (iv) the extent to which the regulation overlaps, duplicates, or conflicts with federal or state law or regulation; (v) the length of time since the regulation has been evaluated or the degree to which technological advancement, economic conditions, or other factors have changed in the area affected by the regulation; and (vi) whether the regulation should be continued without change or be amended or repealed, consistent with the stated objectives of applicable law, to minimize the economic impact on small businesses in a manner consistent with the stated objectives of applicable law.

4. The total number of regulations the agency reviewed for that year, including (i) the number that were retained and the rationale for their retention, (ii) the number that were amended and the reason for the amendments, and (iii) the number that were repealed and the rationale for repeal.

5. An assessment by the reviewing agency of whether or not the regulation attained the specific and measurable goals it was designed to achieve. If no specific and measurable goals were identified when the regulation was developed or amended, such specific and measurable goals shall be developed for any regulation retained or amended. Specific and measurable goals shall not be required for any regulation that is repealed.

6. In conjunction with the Department of Planning and Budget, an estimated cost of enforcing the retained, amended, or repealed regulations by the Commonwealth and, to the extent possible and feasible, the estimated cost to citizens, professions, trades, or occupations to comply with the regulation that can be reasonably determined.

7. A validation by the reviewing agency that (i) regulations retained or amended have been adopted in the least burdensome and intrusive manner and are written in a clear and understandable manner and (ii) the public was provided an opportunity to provide comments and concerns during the review.

8. Any comments or concerns by the Attorney General concerning the retention, amendment, or repeal of a regulation.

D. The report shall be submitted to the Department of Planning and Budget by July 1 of each year for consolidation into an overall report containing all agency regulations reviewed in the current year. The final consolidated report shall be approved by the Governor by August 1 of each year. Upon approval, the Governor shall submit the report to the Chairmen of the standing committees of the House of Delegates and the Senate.