Certified Final Objection No. 84 of the

Joint Legislative Committee on Administrative Rules

At its meeting on January 17, 1997, 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 96-208 containing proposed rules Env-Wr 100 through Env-Wr 500 of the Department of Environmental Services (Department) relative to dam safety and water investigations. The Department responded by letter dated February 7, 1997, received by the Office of Legislative Services on the same date.

At its meeting on February 14, 1997, the Committee voted, pursuant to RSA 541-A:13, V(d), to enter a final objection to Final Proposal 96-208. 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:

New Hampshire Constitution Part I, Article 28-a

The Committee objected that, to the extent that it violates Part 1, Article 28-a of the New Hampshire Constitution, Final Proposal 96-208 is beyond the authority of the Department, pursuant to Committee Rule 401.04, and contrary to legislative intent, pursuant to Committee Rule 402.04. That constitutional provision states 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.

The Committee objected that, to the extent Final Proposal 96-208 imposes new, modified or expanded requirements after November 28, 1984, the effective date of Pt. 1, Art. 28-a, and such requirements will require increased expenditures by political subdivisions without either a vote by the political subdivision to approve funding for compliance or funding by the state for such compliance, it violates Pt 1. Art. 28-a.

Final Proposal 96-208, regulates all aspects of dam permitting, registration, ownership, and construction. Some of the requirements relative to dams have come into existence or were modified after the effective date of Pt. 1, Art. 28-a. For example, the Committee determined that one such requirement relates to reclassification of certain dams and the fees that are charged for registration of such dams. Under the rules this proposal seeks to replace, certain dams were classified as Class AA dams, and there was no fee requirement associated with registration. However, the proposed Env-Wr 101.03 has amended what qualifies as a Class AA dam, and approximately 15 dams owned by political subdivisions will change from being Class AA to being Class A dams. As a result of the change in classification the political subdivisions must now pay a $50 registration fee to the Department pursuant to RSA 482:8-a and Env-Wr 301.04.

The Committee noted that the Department has taken the position that the ownership of a dam by anyone, including political subdivisions, is discretionary. In discussing the objection response, the Department stated its position is that all dam owners must be bound by the same requirements, and it sees no reason for treating political subdivisions differently than other dam owners. The Department asserted that unless each political subdivision complies with the requirements, "neither DES nor the political subdivision can be assured of protecting public health and safety."

The Committee rejected this analysis. The Committee has taken the position consistently that the discretionary nature of the act becomes relevant only in the context of the political subdivision choosing to provide funding, (in which case the choice would operate as a waiver of the political subdivision’s right to the protection offered by Pt. 1, Art. 28-a), or in the context of choosing to engage in an already-regulated activity (in which case Pt. 1, Art. 28-a would not yet apply, as there would be only existing requirements, and not new, modified or expanded requirements imposed upon that political subdivision).

Env-Wr 504.06(b)

The Committee objected that Env-Wr 504.06(b) is contrary to legislative intent, pursuant to Committee Rule 402.04, by implementing a statutory provision in such a way as to be inconsistent with the due process requirements of the State and Federal Constitutions.

The rule in question, Env-Wr 504.06(b), provides that "the department, based upon the recommendation of the presiding officer, shall issue a final order stating the required repairs or investigations and the time allowed for compliance. The order shall be sent by certified mail to the dam owner." In dam cases, it is the Commissioner who issues the final decision. Pursuant to RSA 541-A:34, the person or entity rendering the final decision in a contested case can require that a presiding officer hear the case and draft a recommended decision, provided that it is served on the parties for review and comment prior to the final decision being issued.

Until In Re Grimm, 138 NH 42 (1993) was decided, this process was available in all cases. However, the Committee determined that the New Hampshire Supreme Court indicated in Grimm that the trier of fact must have a reasonable basis for evaluating the kind of testimony before it. The Committee determined that the requirements imposed by Grimm are applicable to this rule. In the Committee’s view, Grimm requires that, when the disposition of the case turns on the credibility of witnesses, state and federal due process requirements oblige those who ultimately decide a case to be in attendance for all of the testimony that bears on the issue of credibility. This allows the trier of fact to have a reasonable basis to evaluate the testimony and assess effectively the issue of credibility. The Committee concluded that a rule such as Env-Wr 504.06(b) that allows for recommended decisions in all cases and which does not take into account the requirements imposed by Grimm was unconstitutional.

Although the Department did not address this issue in its preliminary objection response letter, a representative of the Department indicated in testimony before the Committee that it was the Department’s view that Grimm does not apply to single-person decision-makers such as the Commissioner; that only a trier of fact consisting of a group of persons acting as a hearings panel are required to be present for such testimony. The Committee did not agree with this interpretation. In the view of the Committee, the Department’s understanding of the holding in Grimm seemed to be that only a hearing panel must have a reasonable basis for evaluating the type of testimony in the hearing, but that a single decision-maker does not need to have such a reasonable basis. The Committee concluded that Grimm requires that such a reasonable basis must exist in each case.