Certified Final Objection No. 96 of the
Joint Legislative Committee on Administrative Rules
At its meeting on September 19, 1997, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:13, IV, to enter a preliminary objection to Final Proposal 97-031 of the Board of Auctioneers relative to procedural, licensing and ethical requirements. The Board responded by letter dated November 3, 1997, received by the Office of Legislative Services on November 3, 1997.
At its meeting on November 21, 1997, the Committee voted, pursuant to RSA 541-A:13, V(d), to enter a final objection to Final Proposal 96-199. The final objection has been filed with the Acting 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.
Due to the number of bases for objection, some of the rules to which a final objection has been filed have not been identified in this text. Such unidentified rules, and the bases for final objection, are specified in the annotations to the rules made by the Committee's staff. Copies of the rules can be obtained from the Office of Legislative Services, Division of Administrative Rules, Room 219 in the State House Annex, 25 Capitol Street, Concord, New Hampshire 03301.
The following summarizes some of the more significant issues and the bases upon which the Committee objected:
1. Incomplete Procedural Rules
The Committee objected that Auc 200 is, pursuant to Committee Rule 402.02(a) and (b)(2), contrary to legislative intent by violating RSA 541-A:16, I(b), RSA 541-A:3 and RSA 541-A:22, I, and, pursuant to Committee Rule 403.01(d), is contrary to the public interest by not being clear and understandable.
The Committee determined that Auc 200 either does not include or inadequately addresses a number of issues which the Committee determined are necessary to a complete set of procedural rules pursuant to RSA 541-A:16, I(b). That statute requires each agency to "adopt rules of practice setting forth the nature and requirement of all formal and informal procedures available…." Such procedures are rules as defined by RSA 541-A:1, XV. The Committee determined that, to the extent the Board develops such procedures, it is required to adopt them pursuant to the process established in RSA 541-A:3. Pursuant to RSA 541-A:22, I, no rule is valid or binding unless it has been filed in accordance with the requirements of RSA 541-A. The Committee concluded that, without properly adopted rules, if one or more of the issues arise(s), the Board is forced to either make an arbitrary decision which may violate due process, or develop rules outside the rulemaking process in violation of RSA 541-A:3 and RSA 541-A:22, I. In the Commitee’s view, if Auc 200 does not adequately address an issue, Auc 200 is also unclear because readers cannot determine what procedures are required to be followed.
Examples of issues which the Committee determined were not adequately addressed in Auc 200 include:
2. Auc 203.07
The Committee objected that Auc 203.07 is, pursuant to Committee Rule 402.02(a), contrary to legislative intent by conflicting with RSA 311-B:11-a, I, and is, pursuant to Committee Rule 401.01, beyond the authority of the Board, as discussed below.
RSA 311-B:11-a, I, requires the Board to hold a hearing on each written complaint unless otherwise agreed to by the parties. The Committee determined that the Board’s policy is to cease investigation or disciplinary action when a licensee voluntarily surrenders his/her license. It was the Committee’s opinion that, without an indication in the rules that agreement by all parties is a necessary condition for ceasing action, the rule conflicts with RSA 311-B:11-a, I.
3. Auc 303.02 and Auc 305.03
The Committee objected that Auc 303.02 and Auc 305.03 are, pursuant to Committee Rule 402.02(a), contrary to legislative intent by conflicting with RSA 311-B:3, III, and RSA 541-A:22, III(c) and, pursuant to Committee Rule 401.01, beyond the authority of the Board, as discussed below.
Auc 303.02 and Auc 305.03 impose a $30 fee for the auctioneer’s licensing exam. The Committee noted that RSA 311-B:3, III, only permits the Board to establish the fees required by RSA 311-B. The Committee also noted that RSA 541-A: 22, III(c), prohibits agencies from adopting fees by rule unless the agency has specific authority for such fee. It was the Committee’s determination that RSA 311-B makes no reference to an examination fee, and therefore provides no authority for such a fee.
The Board pointed out that RSA 332-H:3 permits agencies to recover the cost of printing and issuing certain publications to licensees via the licensing and examination fees charged by the agencies. It was the Committee’s determination that this was not a grant of rulemaking authority, but a statement of an option which would only apply if the underlying authority existed.
4. Auc 305.01(b) and Auc 305.02(b)
The Committee objected that Auc 305.01(b) and Auc 305.02(b) are, pursuant to Committee Rules 401.01(c) and 402.02(a), beyond the authority of the Board and contrary to legislative intent as discussed below.
Auc 305.01 and Auc 305.02, specify the fees to be paid for auctioneers’ licenses and renewals, respectively. Each paragraph (a) sets the fee for residents of New Hampshire at $85 per annum, and each paragraph (b) sets the fee for non-residents at $125 per annum.
Pursuant to RSA 311-B:5 the Board has authority to grant an original or renewal license to any applicant, resident or non-resident alike, who meets the criteria specified in paragraphs I through IV. Paragraph I requires the applicant to attest to the fact that he or she is an auctioneer, and Paragraph II requires the submission of recommendations regarding the applicant. Paragraph III requires that the applicant must submit "the fee established by the board for licensure and renewal," and paragraph IV requires the filing of a bond as required by RSA 311-B:8. The Committee noted that the language of paragraph III refers to "the fee", from which the Committee concluded that a single fee and not a schedule of fees was intended by the General Court.
With respect to an applicant who applies for licensure through reciprocity pursuant to RSA 311-B:6, the Committee noted that they must demonstrate that the other state’s licensing requirement are "substantially equivalent" to those of New Hampshire, and that the applicant must comply with RSA 311-B:5, III and IV. As noted above, the Committee determined that the fee to be paid for licensure and renewal pursuant to RSA 311-B:5, III, should not vary due to residency. In the Committee’s view, this means that applicants under RSA 311-B:6 are mandated to pay the same fee as applicants under RSA 311-B:5, and therefore the fee cannot vary due to residency. As Auc 305.01(b) and Auc 305.02(b) specify different license and renewal fees for non-residents, the Committee determined that the rules are beyond the authority of the Board and contrary to legislative intent by conflicting with RSA 311-B:5 and RSA 311-B:6.
5. Auc 501.01.
The Committee objected that Auc 501.01 is, pursuant to Committee Rules 402.02(a) and 402.02(b)(2), contrary to legislative intent by conflicting with RSA 541-A:3, 1994, 412:52, and RSA 541-A:22, III(c).
The entirety of Auc 501.01 states that:
The ethical standards set forth in this part shall bind all licensees, and violation of any such standard shall be a basis for imposing disciplinary sanctions. Conduct proscribed by these ethical standards, when performed by an unlicensed person or during a prior period of licensure, shall also be a basis for denying a license application.
Pursuant to Ls-A 402.19 of the New Hampshire Rulemaking Manual, the Board is required, pursuant 1994, 412:52, to specify in its rules how it will handle discretionary decision-making, by setting forth the criteria to be applied and the procedure to be followed. The goals for such specificity are twofold: to ensure that the Board set requirements only through the process mandated by RSA 541-A:3; and to ensure that the criteria will be applied in a uniform, consistent manner. Pursuant to Ls-A 402.19, the criteria are not required to be exhaustive but must be enough to put the regulated community on notice generally as to how the rule will be applied.
However, Auc 501.01 states only that violation of the ethical standards "shall be a basis for" taking disciplinary action. The Board has provided no criteria for determining under what circumstances the Board will impose or decline to impose sanctions. Without such criteria, the Committee concluded that the Board will be enforcing criteria that fall under the definition of "rule’ in RSA 541-A:1, XV, but have not been adopted under the RSA 541-A process. The Committee noted that, pursuant to RSA 541-A:22, I, the Board can neither invoke nor enforce any rule against any person for any purpose until such rule has been adopted and filed pursuant to RSA 541-A. Therefore, the Committee concluded that Auc 501.01 conflicts with RSA 541-A:3 and RSA 541-A:22, I.