Changes to Minnesota’s Rulemaking Process

Proposed changes to Minnesota’s regulatory process passed a House committee on last week.

Approved by the House Civil Law and Data Practices Committee, the bill sponsored by Rep. Ron Kresha (R-Little Falls) would make several changes to how the state’s executive branch agencies establish regulations by requiring that proposed rules deemed to have “substantial economic impact” gain legislative approval.

The bill, referred to the House State Government Finance Committee, would introduce additional legislative review on proposed rules likely to result in an annual negative impact of $5 million or more to the state’s private sector economy; cause a significant jump in consumer costs; adversely impact competitiveness; or increase compliance costs by more than $25,000 for any business with fewer than 50 employees.

The bill, HF1261, would impact the procedure used by state agencies to set rules governing a wide range of issues, including water and air standards, fire codes and outdoor recreation regulations.

The heart of HF1261 proposes that before giving notice to adopt a rule the agency must determine if the proposed regulation has a substantial economic impact. If calculated that it would, a panel established by the legislative auditor would convene to conduct an economic impact analysis to be provided to the state agency proposing the rule before public comment could begin. If ultimately determined a proposed rule has substantial economic effect, as defined by Kresha’s bill, it could not take effect until passed by the Legislature and signed into law.

A companion, SF1329, sponsored by Sen. Kent Eken (DFL-Twin Valley), awaits action by the Senate State and Local Government Committee.