By:  Duncan                                            S.B. No. 382
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to the requirements for state agency orders adopting rules
 1-2     and substantial compliance with rulemaking requirements.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 2001.033, Government Code, is amended to
 1-5     read as follows:
 1-6           Sec. 2001.033.  State Agency Order Adopting Rule.  (a)  A
 1-7     state agency order finally adopting a rule must include:
 1-8                 (1)  a reasoned justification for [of] the rule as
 1-9     adopted consisting solely of [, including]:
1-10                       (A)  a summary of comments received from parties
1-11     interested in the rule that shows the names of interested groups or
1-12     associations offering comment on the rule and whether they were for
1-13     or against its adoption;
1-14                       (B)  a summary [restatement] of the [rule's]
1-15     factual basis for the rule as adopted which demonstrates a rational
1-16     connection between the factual basis for the rule and the rule as
1-17     adopted; and
1-18                       (C)  the reasons why the agency disagrees with
1-19     party submissions and proposals;
1-20                 (2)  a concise restatement of the particular statutory
1-21     provisions under which the rule is adopted and of how the agency
1-22     interprets the provisions as authorizing or requiring the rule; and
1-23                 (3)  a certification that the rule, as adopted, has
1-24     been reviewed by legal counsel and found to be a valid exercise of
 2-1     the agency's legal authority.
 2-2           (b)  Nothing in this section shall be construed to require
 2-3     additional analysis of alternatives not adopted by an agency beyond
 2-4     that required by Subdivision (1)(C) or to require the reasoned
 2-5     justification to be stated separately from the statements required
 2-6     in Subdivision (1).
 2-7           SECTION 2.  Section 2001.035, Government Code, is amended to
 2-8     read as follows:
 2-9           Sec. 2001.035.  Substantial Compliance Requirement; Time
2-10     Limit on Procedural Challenge.  (a)  A rule [adopted after January
2-11     1, 1976,] is voidable [not valid] unless a state agency adopts it
2-12     in substantial compliance with Sections 2001.0225 [2001.023]
2-13     through 2001.034.
2-14           (b)  A person must initiate a proceeding to contest a rule on
2-15     the ground of noncompliance with the procedural requirements of
2-16     Sections 2001.0225 [2001.023] through 2001.034 not later than the
2-17     second anniversary of the effective date of the rule.
2-18           (c)  A state agency substantially complies with the
2-19     requirements of Section 2001.033 if the agency's reasoned
2-20     justification demonstrates in a relatively clear and logical
2-21     fashion that the rule is a reasonable means to a legitimate
2-22     objective.
2-23           (d)  A mere technical defect that does not result in
2-24     prejudice to a person's rights or privileges is not grounds for
2-25     invalidation of a rule.
2-26           SECTION 3.  Subchapter B, Chapter 2001, Government Code, is
 3-1     amended by adding Section 2001.039 to read as follows:
 3-2           Sec. 2001.039.  SCOPE AND EFFECT OF ORDER INVALIDATING AGENCY
 3-3     RULE.  If a court finds that an agency has not substantially
 3-4     complied with one or more procedural requirements of Sections
 3-5     2001.0225 through 2001.034, the court may remand the rule, or a
 3-6     portion of the rule, to the agency and, if it does so remand, shall
 3-7     provide a reasonable time for the agency to either revise or
 3-8     readopt the rule through established procedure.  During the remand
 3-9     period, the rule shall remain effective unless the court finds good
3-10     cause to invalidate the rule or a portion of the rule, effective as
3-11     of the date of the court's order.
3-12           SECTION 4.  Sections 2 and 3, Chapter 1067, Acts of the 75th
3-13     Legislature, Regular Session, 1997, are repealed.
3-14           SECTION 5.  This Act takes effect September 1, 1999.  The
3-15     change in law made by this Act applies to all rules adopted by a
3-16     state agency on or after January 1, 1998, except that the change in
3-17     law made by this Act does not apply to a challenge to a rule in a
3-18     court action that is brought before September 1, 1999.
3-19           SECTION 6.  The importance of this legislation and the
3-20     crowded condition of the calendars in both houses create an
3-21     emergency and an imperative public necessity that the
3-22     constitutional rule requiring bills to be read on three several
3-23     days in each house be suspended, and this rule is hereby suspended.