1-1     By:  Brown, Ellis                                      S.B. No. 882

 1-2           (In the Senate - Filed March 3, 1997; March 5, 1997, read

 1-3     first time and referred to Committee on State Affairs;

 1-4     March 25, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 11, Nays 0; March 25, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 882                    By:  Ellis

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to negotiated rulemaking by state agencies.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Subtitle A, Title 10, Government Code, is amended

1-13     by adding Chapter 2008 to read as follows:

1-14                    CHAPTER 2008.  NEGOTIATED RULEMAKING

1-15                      SUBCHAPTER A.  GENERAL PROVISIONS

1-16           Sec. 2008.001.  SHORT TITLE.  This chapter may be cited as

1-17     the Negotiated Rulemaking Act.

1-18           Sec. 2008.002.  DEFINITIONS.  In this chapter:

1-19                 (1)  "State agency" means an officer, board,

1-20     commission, department, or other agency in the executive branch of

1-21     state government with statewide jurisdiction that makes rules.  The

1-22     term includes:

1-23                       (A)  the attorney general;

1-24                       (B)  an institution of higher education as

1-25     defined by Section 61.003, Education Code; and

1-26                       (C)  the State Office of Administrative Hearings.

1-27                 (2)  The terms "party," "person," and "rule" have the

1-28     meanings assigned by Section 2001.003.

1-29           Sec. 2008.003.  COSTS OF PARTICIPATING IN NEGOTIATED

1-30     RULEMAKING.  (a)  A member of a negotiated rulemaking committee

1-31     established under Subchapter B is responsible for the member's own

1-32     costs in serving on the committee, except as provided by Subsection

1-33     (b).

1-34           (b)  The state agency that established the negotiated

1-35     rulemaking committee may pay a member's technical assistance

1-36     expenses and reasonable travel and per diem costs related to the

1-37     member's service on the committee at the rate set in the General

1-38     Appropriations Act for state employees and may provide a reasonable

1-39     rate of compensation to the member if:

1-40                 (1)  the member certifies that the member lacks

1-41     sufficient financial resources to participate as a member of the

1-42     committee; and

1-43                 (2)  the agency determines that the member's service on

1-44     the committee is necessary for the adequate representation of an

1-45     affected interest.

1-46           (c)  The state agency that established the negotiated

1-47     rulemaking committee shall provide appropriate administrative

1-48     support to the committee.

1-49           (Sections 2008.004 to 2008.050 reserved for expansion

1-50             SUBCHAPTER B.  PROCEDURES FOR NEGOTIATED RULEMAKING

1-51           Sec. 2008.051.  AUTHORITY FOR NEGOTIATED RULEMAKING.  A state

1-52     agency may engage in negotiated rulemaking to assist it in drafting

1-53     a proposed rule by following the procedures prescribed by this

1-54     chapter.

1-55           Sec. 2008.052.  APPOINTMENT AND DUTIES OF CONVENER.  (a)  A

1-56     state agency that proposes to engage in negotiated rulemaking shall

1-57     appoint a convener to assist the agency in determining whether it

1-58     is advisable to proceed.

1-59           (b)  The state agency may appoint an agency employee or

1-60     contract with another individual to serve as the convener.  The

1-61     convener may not have a financial or other interest in the outcome

1-62     of the rulemaking process that would interfere with the person's

1-63     impartial and unbiased service as the convener.

1-64           (c)  The convener shall assist the agency in identifying

 2-1     persons who are likely to be affected by the proposed rule,

 2-2     including persons who oppose the issuance of a rule.  The convener

 2-3     shall discuss with those persons or their representatives:

 2-4                 (1)  whether they are willing to participate in

 2-5     negotiated rulemaking;

 2-6                 (2)  whether the agency should engage in negotiated

 2-7     rulemaking to develop the proposed rule;

 2-8                 (3)  which issues that a negotiated rulemaking

 2-9     committee should address; and

2-10                 (4)  whether there are other persons the convener needs

2-11     to identify who may be affected by the proposed rule.

2-12           (d)  The convener shall then recommend to the agency whether

2-13     negotiated rulemaking is a feasible method to develop the proposed

2-14     rule and shall report to the agency on the relevant considerations,

2-15     including:

2-16                 (1)  the number of identifiable interests that would be

2-17     significantly affected by the proposed rule;

2-18                 (2)  the probability that those interests would be

2-19     adequately represented in a negotiated rulemaking;

2-20                 (3)  the probable willingness and authority of the

2-21     representatives of affected interests to negotiate in good faith;

2-22                 (4)  the probability that a negotiated rulemaking

2-23     committee would reach a unanimous or a suitable general consensus

2-24     on the proposed rule;

2-25                 (5)  the probability that negotiated rulemaking will

2-26     not unreasonably delay notice and eventual adoption of the proposed

2-27     rule;

2-28                 (6)  the adequacy of agency and citizen resources to

2-29     participate in negotiated rulemaking;

2-30                 (7)  the probability that the negotiated rulemaking

2-31     committee will provide a balanced representation between public and

2-32     regulated interests; and

2-33                 (8)  the willingness of the agency to accept the

2-34     consensus of a negotiated rulemaking committee as the basis for the

2-35     proposed rule.

2-36           Sec. 2008.053.  NOTICE REQUIREMENTS FOR NEGOTIATED

2-37     RULEMAKINGS.  (a)  After considering the convener's recommendation

2-38     and report, a state agency that intends to engage in negotiated

2-39     rulemaking shall publish timely notice of its intent in appropriate

2-40     media and file timely notice of its intent with the secretary of

2-41     state for publication in the Texas Register.  The notice must

2-42     include:

2-43                 (1)  a statement that the agency intends to engage in

2-44     negotiated rulemaking;

2-45                 (2)  a description of the subject and scope of the rule

2-46     to be developed;

2-47                 (3)  a description of the known issues to be considered

2-48     in developing the rule;

2-49                 (4)  a list of the interests that are likely to be

2-50     affected by the proposed rule;

2-51                 (5)  a list of the individuals the agency proposes to

2-52     appoint to the negotiated rulemaking committee to represent the

2-53     agency and affected interests;

2-54                 (6)  a request for comments on the proposal to engage

2-55     in negotiated rulemaking and on the proposed membership of the

2-56     negotiated rulemaking committee; and

2-57                 (7)  a description of the procedure through which a

2-58     person who will be significantly affected by the proposed rule may,

2-59     before the agency establishes the negotiated rulemaking committee,

2-60     apply to the agency for membership on the committee or nominate

2-61     another to represent the person's interests on the committee.

2-62           (b)  A state agency that intends to proceed with the

2-63     rulemaking process after receiving the report of the negotiated

2-64     rulemaking committee shall announce in a statement accompanying the

2-65     notice of a proposed rule required by Subchapter B, Chapter 2001,

2-66     that:

2-67                 (1)  negotiated rulemaking was used in developing the

2-68     proposed rule; and

2-69                 (2)  the report of the negotiated rulemaking committee

 3-1     is public information and the location at which the report is

 3-2     available to the public.

 3-3           Sec. 2008.054.  APPOINTMENT AND DURATION OF NEGOTIATED

 3-4     RULEMAKING COMMITTEE.  (a)  After considering comments it receives

 3-5     in response to the notice of proposed negotiated rulemaking, a

 3-6     state agency that intends to proceed shall establish a negotiated

 3-7     rulemaking committee and appoint the members of the committee.

 3-8           (b)  A state agency shall consider the appropriate balance

 3-9     between representatives of affected interests in appointing the

3-10     negotiated rulemaking committee.

3-11           (c)  The state agency shall appoint individuals to the

3-12     committee to represent the agency and appoint other individuals to

3-13     the committee to represent the interests identified by the agency

3-14     that are likely to be affected by the proposed rule.  Article

3-15     6252-33, Revised Statutes, does not apply to the size or

3-16     composition of the committee or to the agency's ability to

3-17     reimburse expenses of committee members under Section 2008.003(b).

3-18           (d)  The committee is automatically abolished on the adoption

3-19     of the proposed rule, unless the committee or the state agency

3-20     after consulting the committee specifies an earlier abolition date.

3-21           Sec. 2008.055.  APPOINTMENT OF FACILITATOR.

3-22     (a)  Concurrently with its establishment of the negotiated

3-23     rulemaking committee, a state agency shall appoint a facilitator.

3-24     The agency may appoint an agency employee, subject to Subdivision

3-25     (b)(3), or contract with another state employee or private

3-26     individual to serve as the facilitator.  The agency's appointment

3-27     of the facilitator is subject to the approval of the negotiated

3-28     rulemaking committee and the facilitator serves at the will of the

3-29     committee.

3-30           (b)  The facilitator:

3-31                 (1)  must possess the qualifications required for an

3-32     impartial third party under Section 154.052(a) and (b), Civil

3-33     Practice and Remedies Code;

3-34                 (2)  is subject to the standards and duties prescribed

3-35     by Section 154.053(a) and (b), Civil Practice and Remedies Code,

3-36     and has the qualified immunity prescribed by Section 154.055, Civil

3-37     Practice and Remedies Code, if applicable;

3-38                 (3)  shall not be the person designated to represent

3-39     the agency on the negotiated rulemaking committee on substantive

3-40     issues related to the rulemaking; and

3-41                 (4)  shall not have a financial or other interest in

3-42     the outcome of the rulemaking process that would interfere with the

3-43     person's impartial and unbiased service as the facilitator.

3-44           Sec. 2008.056.  DUTIES OF NEGOTIATED RULEMAKING COMMITTEE AND

3-45     FACILITATOR.  (a)  The facilitator shall preside over meetings of

3-46     the negotiated rulemaking committee and assist the members of the

3-47     committee:

3-48                 (1)  to establish procedures for conducting

3-49     negotiations; and

3-50                 (2)  to discuss, negotiate, mediate, and employ other

3-51     appropriate alternative dispute resolution processes to arrive at a

3-52     consensus on the proposed rule.

3-53           (b)  It is presumed that the committee has reached a

3-54     consensus on a matter only if the consensus is unanimous, unless

3-55     the committee unanimously:

3-56                 (1)  agrees to define a consensus to mean a general

3-57     rather than a unanimous consensus; or

3-58                 (2)  agrees to define the term in another manner.

3-59           (c)  The facilitator shall encourage the members of the

3-60     committee to reach a consensus but may not compel or coerce the

3-61     members to do so.

3-62           (d)  At the conclusion of the negotiations, the committee

3-63     shall send a written report to the agency that:

3-64                 (1)  contains the text of the proposed rule, if the

3-65     committee reached a consensus on the proposed rule; or

3-66                 (2)  specifies the issues on which the committee

3-67     reached consensus, the issues that remain unsolved, and any other

3-68     information, recommendations, or materials that the committee

3-69     considers important, if the committee did not reach a consensus on

 4-1     the proposed rule.

 4-2           Sec. 2008.057.  CONFIDENTIALITY OF CERTAIN RECORDS AND

 4-3     COMMUNICATIONS.  (a)  Sections 154.053 and 154.073, Civil Practice

 4-4     and Remedies Code, apply to the communications, records, conduct,

 4-5     and demeanor of the facilitator and the members of the negotiated

 4-6     rulemaking committee as if the negotiated rulemaking were a dispute

 4-7     being resolved in accordance with Chapter 154, Civil Practice and

 4-8     Remedies Code.

 4-9           (b)  In the negotiated rulemaking context the attorney

4-10     general, subject to review by a Travis County district court,

4-11     decides in accordance with Section 154.073(d), Civil Practice and

4-12     Remedies Code, whether a communication or material subject to

4-13     Section 154.073(d) is confidential, excepted from required

4-14     disclosure, or subject to required disclosure.

4-15           (c)  Notwithstanding Section 154.073(d), Civil Practice and

4-16     Remedies Code:

4-17                 (1)  a private communication and a record of a private

4-18     communication between a facilitator and a member or members of the

4-19     committee are confidential and may not be disclosed unless the

4-20     member or members of the committee, as appropriate, consent to the

4-21     disclosure; and

4-22                 (2)  the notes of a facilitator are confidential except

4-23     to the extent that the notes consist of a record of a communication

4-24     with a member of the committee who has consented to disclosure in

4-25     accordance with Subdivision (1).

4-26           (d)  The report and recommendations of a convener and a

4-27     negotiating committee are public information and available on

4-28     request to any member of the public.

4-29           Sec. 2008.058.  ADMINISTRATIVE PROCEDURE ACT REQUIREMENTS

4-30     UNAFFECTED.  (a)  This chapter does not affect the rulemaking

4-31     requirements prescribed by Chapter 2001.

4-32           (b)  A state agency that intends to proceed with the

4-33     rulemaking process after receiving the report of the negotiated

4-34     rulemaking committee shall proceed in accordance with the

4-35     requirements prescribed by Subchapter B, Chapter 2001.

4-36           SECTION 2.  This Act takes effect September 1, 1997.

4-37           SECTION 3.  The importance of this legislation and the

4-38     crowded condition of the calendars in both houses create an

4-39     emergency and an imperative public necessity that the

4-40     constitutional rule requiring bills to be read on three several

4-41     days in each house be suspended, and this rule is hereby suspended.

4-42                                  * * * * *