Assigned to COMPS AS VETOED
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
VETOED
AMENDED
permits; licenses; denials; agency hearings
Purpose
Requires adjudication of contested agency cases to observe formal hearing procedures and establishes a preponderance of the evidence as the applicable burden of proof.
Background
Boards and commissions are statutorily established to license and regulate various professions and occupations. A board or commission may not base a licensing decision in whole or in part on a requirement or condition that is not specifically authorized by statute or rule (A.R.S. § 41-1030). Unless covered by an explicit exemption, a rule related to occupational licensing requires approval by the Governor's Regulatory Review Council (GRRC). GRRC may not approve a rule unless the probable benefits of the rule outweigh the probable costs. The board or commission must demonstrate that it has selected the alternative that imposes the least burden and costs necessary to achieve the underlying regulatory objective (A.R.S. § 41-1052).
The Administrative Procedures Act establishes procedures for adjudicating appeals of agency decisions. In contested agency actions, the agency may conduct a preliminary hearing informally without observing the rules of evidence required in judicial proceedings (A.R.S. § 41‑1062). Unresolved cases may be appealed to the Office of Administrative Hearings (OAH) to be adjudicated before an Administrative Law Judge (ALJ). All parties have the opportunity to respond, present evidence and deliver arguments on relevant issues discussed in the hearings (A.R.S. § 41-1092.07). The ALJ must issue a written decision within 20 days after the hearing is concluded (A.R.S. § 41-1092.08).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Administrative Procedures Act
1. Requires, unless knowingly and voluntarily waived by the parties, all adjudicative hearings to adhere to procedures observed during OAH or judicial proceedings.
2. Repeals hearing procedures that allow contested cases to be adjudicated in an informal manner without adherence to rules of evidence required in judicial proceedings.
3. Allows the hearing manner or the failure to adhere to rules of evidence to be grounds for evidence dismissal or decision reversal.
4. Establishes that the burden of proof in all agency hearings is a preponderance of the evidence.
5. Extends the burden of persuasion, assigned to the agency when setting fees, denying initial licenses or taking disciplinary actions, to the agency when denying a license renewal.
Agency License Information
6. Requires an agency to specify license criteria in clear and unambiguous language that is subject to review by a court of competent jurisdiction without deference to the agency.
7. Presumes language approved by GRRC or issued as an agency clarification to be clear and unambiguous.
8. Requires an agency to review a license approval or denial within 30 days of petition by the license applicant.
Local Governments
9. Requires cities, towns and counties to specify license criteria in clear and unambiguous language for any license required before a person may engage in a constitutionally protected activity.
10. Requires a court to determine whether the language is clear and unambiguous, unless the criteria is established by federal law.
11. Requires a city, town or county to approve or deny a license within 30 days from application submittal.
Miscellaneous
12. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Transfers political subdivision license requirements from the Administrative Procedures Act to statute relating to cities and towns.
Amendments Adopted by Committee of the Whole
· Removes a provision prohibiting courts from deferring to the Legislature when interpreting license language criteria.
Governor's Veto Message
The Governor indicates in his veto message that he has concerns about the unintended consequences of the legislation, including removing agencies' ability to resolve issues through more efficient informal processes.
House Action Senate Action
GOV 2/15/18 DPA 7-0-0-1 COMPS 3/12/18 DPA 8-0-0
3rd Read 2/21/18 60-0-0 3rd Read 5/3/18 27-1-2
Final Read 5/3/18 50-9-1
Vetoed by the Governor 5/16/18
Prepared by Senate Research
May 17, 2018
GH/lb