HBA-DMD S.B. 382 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 382 By: Duncan State Affairs 4/7/1999 Engrossed BACKGROUND AND PURPOSE Currently, Texas law provides that a state agency that adopts a rule must include a reasoned justification for its adoption. A reasoned justification includes a summary of comments on the rule submitted by interested parties, a restatement of the rule's factual basis, and the reasons why the agency disagrees with any submitted proposals that are not included in the final rule. S.B. 382 provides that a state agency order adopting a rule must include a reasoned justification for the rule as adopted consisting solely of, rather than including, certain information, among which is a summary, rather than a restatement, of the basis for the rule as adopted that demonstrates a rational connection between the basis for the rule and the rule as adopted. Under this bill, any rule, rather than a rule adopted after January 1, 1976, is voidable, rather than not valid, unless a state agency adopts it in substantial compliance with applicable provisions of the Government Code. A technical defect that does not result in prejudice to a person's rights or privileges is not a ground to invalidate a rule. A court is authorized to remand a rule to an agency if it finds that the agency has not substantially complied with one or more procedural requirements of the Government Code. The remanded rule remains effective during its remand unless the court finds good cause to invalidate the rule or a portion of the rule. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2001.033, Government Code, as follows: (a) Sets forth that a state agency order adopting a rule must include a reasoned justification for the rule as adopted consisting solely of, rather than including, certain information, among which is a summary, rather than a restatement, of the basis for the rule as adopted that demonstrates a rational connection between the basis for the rule and the rule as adopted. Makes nonsubstantive changes. (b) Adds this subsection to specify that nothing in Section 2001.033 (State Agency Order Adopting Rule) is required to be construed to require additional analysis of alternatives not adopted by an agency beyond the reasons why the agency disagrees with party submissions and proposals, or to require the reasoned justification to be stated separately from the statements required in Subdivision (1). SECTION 2. Amends Section 2001.035, Government Code, as follows: (a) Provides that any rule, rather than a rule adopted after January 1, 1976, is voidable, rather than not valid, unless a state agency adopts it in substantial compliance with Sections 2001.0225, rather than 2001.023, through 2001.034. (b) Makes a conforming change. (c) Adds this subsection to provide that the compliance requirements of Section 2001.033 are met if it is demonstrated that the agency's justification demonstrates that the rule is a reasonable means to a legitimate objective. (d) Adds this subsection to provide that a technical defect that does not result in prejudice to a person's rights or privileges is not a ground to invalidate a rule. SECTION 3. Amends Subchapter B, Chapter 2001, Government Code, by adding Section 2001.039, as follows: Sec. 2001.039. SCOPE AND EFFECT OF ORDER INVALIDATING AGENCY RULE. Authorizes a court, if it finds that an agency has not substantially complied with one or more procedural requirements of Sections 2001.0225 through 2001.034, to remand a rule to the agency. Requires the court, if it remands a rule, to provide time to the agency to revise or readopt the rule. Requires the remanded rule to remain effective during its remand unless the court finds good cause to invalidate the rule or a portion of the rule. SECTION 4. Repealers: Sections 2 and 3, Chapter 1067, Acts of the 75th Legislature, Regular Session, 1997. SECTION 5. Effective date: September 1, 1999. Provides that the change in law made by this Act applies to all rules adopted by a state agency on or after January 1, 1998, except that the change in law made by this Act does not apply to a challenge to a rule in a court action that is brought before September 1, 1999. SECTION 6. Emergency clause.