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New Legislation Intended to Reduce Burdensome Regulation by Michigan Agencies

By Thomas P. Wilczak and Andrea E. Hayden, Attorneys, Pepper Hamilton LLP

On November 28, 2011 Michigan's Gov. Rick Snyder signed five bills into law, three of which amend Michigan's Natural Resources and Environmental Protection Act (NREPA), and two that amend its Administrative Procedures Act (APA). These bills were drafted to address perceived problems of over-regulation by Michigan's government agencies in general, and to create requirements that facilitate transparency and efficiency in the Michigan Department of Environmental Quality (MDEQ)'s permitting and inspection processes.

The NREPA is amended by Public Acts 235, 236, and 237 of 2011. Public Act 235 requires the MDEQ to use "fair and equitable" processes in selecting operations or facilities for inspection. This amendment is intended to alleviate concerns that site inspections "randomly" conducted by MDEQ's compliance and enforcement divisions were anything but random. Act 235 provides a host of exceptions to the fair and equitable selection process, however. For example, inspections performed because the MDEQ has evidence that a violation has occurred or to determine whether violations identified in a previous inspection have been corrected, are not subject to requirements of the act.

Under Public Act 236, the MDEQ must provide to a permit applicant the specific information on which it bases a permit denial. This includes references to NREPA and its regulations and the scientific information effecting MDEQ's decision, to the extent applicable.

MDEQ's current practice of offering to meet with permit holders prior to initiating an enforcement action was codified by Public Act 237. The requirement does not apply when the violation constitutes a civil infraction or an imminent and substantial endangerment of public health, safety, or welfare, or of the environment.

Amendments to the APA include the creation of standards, under Act 328 of 2011, for state departments to regularly review rules to ensure they are still necessary and relevant. HB-4573 requires agencies to include the decision record of an advisory committee, if applicable, in a request for rulemaking to the Office of Regulatory Reinvention (ORR), formerly the State Office of Administrative Hearings and Rules. The ORR is not obligated to approve an agency request, and may do so only after it has determined that there are necessary legal and policy bases for approving the request.

A separate bill to limit the rulemaking authority of Michigan agencies under the APA was vetoed by the governor. That bill, HB-4326, was designed to prohibit agencies from adopting a rule that is more stringent than the applicable federal standard, whether or not the federal government had directed Michigan to promulgate rules. Exceptions to this limitation could only have been in the form of explicit authorization by Michigan statute. In vetoing the bill, Gov. Snyder expressed concerns that such a restriction would prevent the state from meeting the specific needs of Michigan citizens.

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