Certified Final Objection No. 104 of the
Joint Legislative Committee on Administrative Rules
At its meeting on October 16, 1998, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:13, V(a), to enter a preliminary objection to Final Proposal 98-113 containing proposed rules Env-Ws 421 of the Department of Environmental Services (Department) relative to best management practices. The Department responded by letter dated November 25, 1998.
At its meeting on December 18, 1998, a representative of the Department requested that the Committee enter a revised objection to the rules pursuant to RSA 541-A:13, V(c). The Committee acceded to the request and so voted. The Department responded to the revised objection by letter dated January 21, 1999.
At its meeting on February 19, 1999, the Committee voted, pursuant to RSA 541-A:13, V(d), to enter a final objection to Final Proposal 98-113. The final objection has been filed with the Director of the Office of Legislative Services for publication in the New Hampshire Rulemaking Register. The effect of a final objection is stated in RSA 541-A:13, VI:
After a final objection by the committee to a provision of a rule is filed with the director under subparagraph V(d), the burden of proof thereafter shall be on the agency in any action for judicial review or for enforcement of the provision to establish that the part objected to is within the authority delegated to the agency, is consistent with the intent of the legislature, is in the public interest, or does not have a substantial economic impact not recognized in the fiscal impact statement. If the agency fails to meet its burden of proof, the court shall declare the whole or portion of the rule objected to invalid. The failure of the committee to object to a rule shall not be an implied legislative authorization of its substantive or procedural lawfulness.
The following summarizes the bases for the Committee’s final objection:
The Committee objected that Env-Ws 421 violates Committee rules 401.04 and 402.04 by being beyond the authority of the Commissioner and contrary to legislative intent to the extent that Env-Ws 421 conflicts with Part 1, Article 28-a of the New Hampshire Constitution.
Pt. 1, Art. 28-a of the New Hampshire Constitution provides that:
The state shall not mandate or assign any new, modified or expanded programs or responsibilities to any political subdivision in such a way as to necessitate additional local expenditures by the political subdivision unless such programs or responsibilities are fully funded by the state or unless such programs or responsibilities are approved for funding by a vote of the local legislative body of the political subdivision.
In 1992 when the Department first proposed the adoption of rules relative to best management practices (BMP), it indicated in the notice published in the August 7, 1992 Rulemaking Register that, although the rules were new and there were costs to political subdivisions associated with the implementation of the BMP rules, such costs were attributable only to RSA 485-C and not the rules. The Committee determined that this statement was not accurate, as RSA 485-C:4, VII, provided that rules relative to "best management practices as provided under RSA 485-C:11" be adopted. Similarly, RSA 485-C:11, I, stated, in pertinent part, that "the [department] shall develop best management practices for the activities identified in RSA 485-C:7." The Committee determined that it was clear from these statutes that it is up to the Department to "develop" the details and set the specifics for BMP. As the Department has discretion to "develop" BMP, the Committee determined that the cost associated with compliance with a requirement is a cost that has been imposed by these rules, and not RSA 485-C.
The Committee in 1992 rejected the Commissioner’s argument that political subdivisions "may choose to refrain from engaging in the activities involving such regulated substances; if they choose to engage in such activities, we believe they should be held to the same standards as any other party." In the view of the Committee, political subdivisions enjoy a level of constitutional protection not available to any other person or entity. Further, RSA 541-A:25 states that the kinds of programs or functions to which the provisions of Art. 28-a apply, include "those functions of a nature customarily undertaken by municipalities whether or not performance of such functions is required by statute." The types of functions under RSA 485-C:7 for which BMP may be developed include operating vehicle service and repair shops, maintaining oil storage facilities, operating certain types of septic systems, and storage of salt for winter road maintenance. Such functions appeared to the Committee to fall squarely within the scope of RSA 541-A:25, which the Committee determined effectively negated the Commissioner's arguments.
In 1992 the Committee also rejected the argument that because "the statute does not specifically exempt political subdivisions from compliance with any legal requirements set forth in the statutes" such political subdivisions were required to comply with those requirements. In the Committee’s view, Art. 28-a itself provides the exemption for political subdivisions from otherwise lawful and legal requirements that are contained in a statute.
In its notice for the rulemaking proceeding begun in 1998, the Department indicated that "there are no substantive changes from the previously adopted version of this rule." Therefore, the Committee determined on February 19, 1999, that the rules, as proposed to be readopted, continue to violate Art. 28-a as stated above to the extent that the exemption provision for political subdivisions in Env-Ws 421.11 does not recognize the constitutional exemption in Art. 28-a.
The Committee objected that Env-Ws 421.11 violates Committee rules 401.04 and 403.01(d) by being beyond the authority of the Commissioner to the extent that Env-Ws 421.11 conflicts with Part 1, Article 28-a of the New Hampshire Constitution and by being contrary to the public interest by not being clear and understandable.
This section governs compliance with the rules by political subdivisions. Paragraph (a) sets forth a purpose statement, a recommendation, and a limitation on the effect of paragraph (b). Paragraph (b) sets forth conditions for exemption from compliance with certain requirements by political subdivisions.
Paragraph (b) provides that political subdivisions are, pursuant to Art. 28-a, exempt from compliance with certain requirements in Env-Ws 421. However, (b)(4) provides that a political subdivision shall not be exempt if the requirement "implements a federal statute or regulation with which the political subdivision would otherwise be required to comply by the federal government." The Committee noted that this language appears to be consistent with RSA 541-A:26, which is relative to administration of federal mandates. Similarly, the Department argued that when administering a federal mandate, the state was only acting as the agent of the federal government, and therefore such action does not constitute "state" action.
The Committee noted that Art. 28-a is a prohibition against state action that results in increased costs for compliance by political subdivisions. The Committee observed that when administering a federal mandate, a state agency uses a state rulemaking process and is subject to state legislative oversight. Further, if the state agency seeks to enforce the provisions of the state administrative rules, it does so in a state administrative process governed by state administrative rules, is empowered to collect state administrative fines to be deposited in the state’s coffers, and any appeals to be taken from such state administrative actions are taken to state courts. Finally, the Committee noted that there is nothing in Art. 28-a that indicates that unfunded mandates that are federally-driven should be treated any differently than any other unfunded mandate.
The limitation in paragraph (a) states that "regardless of any exemption(s) from specific requirements of these rules pursuant to paragraph (b), below, all entities that engage in the activities regulated by these rules remain fully responsible for complying with all applicable statutes, such as those which prohibit the discharge of pollutants to groundwater."
The Committee indicated that the language seemed to override the exemption provided for in paragraph (b), despite the fact that the provisions in (b)(1) – (3) reflect the substance of Art. 28-a. The Committee concluded that, consistent with Art. 28-a, unless any of the statements in (b)(1) – (3) were true, the political subdivision be exempt from compliance with any new, modified, or expanded program or responsibility. Therefore, the Committee determined that there was no authority to override the constitutionally-based exemption stated in paragraph (b).
The Committee also indicated that it was not certain what was intended by the phrase "fully responsible" in this context. In the Committee’s view, this language could be read to mean that the Department intends to bring enforcement actions against political subdivisions even for violation of statutes that are not applicable to such political subdivisions by operation of Art. 28-a. In testimony before the Committee, the Department’s representative indicated that this sentence was intended to be a "gentle reminder" that political subdivisions violate statutory provisions at their own peril.
Putting aside the issue of whether it was appropriate for the Department to make such a statement in its rules, the Committee determined that the explanation did not seem to be consistent with the language of the provision. The Committee noted that Env-Ws 421.11(a) requires compliance with all applicable statutes, including those which were enacted after November 28, 1984, the effective date of Art. 28-a. The Committee concluded this because RSA 485-C became effective on June 28, 1991, more than 6 years after Art. 28-a became effective; there would have been no reason to include the language from paragraph (a) quoted above unless it was specifically intended to apply to RSA 485-C. Thus, the Committee determined that the language was more than a "gentle reminder" and was, in fact, a statement indicating the Department’s intent to enforce statute and rules without regard to Art. 28-a.