Certified Final Objection No. 29 of the
Joint Legislative Committee on Administrative Rules
At its meeting on September 20, 1991, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:3-e, IV, to enter a preliminary objection to Final Proposal 91-119 containing proposed rules of the Department of Environmental Services relative to administrative fines. The Department responded by letter dated October 17, 1991.
At a special meeting on November 1, 1991, the Committee voted, pursuant to RSA 541-A:3-e, V(c), to enter a final objection to Final Proposal 91-119. 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:3-e, VI:
After a committee objection is filed with the director under paragraph V(c), to the extent that the objection covers a rule or portion of a rule, the burden of proof thereafter shall be on the agency in any action for judicial review or for enforcement of the rule to establish that the part objected to is within the authority delegated to the agency, is consistent with the intent of the legislature, and is in the public interest. 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 basis upon which the final objection has been entered:
Env-C 201.02, Env-C 602.01, Env-C 602.02(g) to (l),
Env-C 602.03(a), (b), (g) (p) and (q), Env-C 602.06,
and Env-C 602.08
The Committee objected, pursuant to RSA 541-A:3-e, IV(a) and Committee Rule 401.01, that Env-C 201.02, Env-C 602.01, Env-C 602.02(g) to (l), Env-C 602.03(a), (b), (g), (p) and (q), Env-C 602.06, and Env-C 602.08 are beyond the authority of the Commissioner to the extent that they violate Part 1, Article 28-a of the New Hampshire Constitution.
The rules cited above govern how certain administrative fines will be handled by the Department. The rules of the final proposal do not distinguish between those who violate rules but are not political subdivisions and those violators that are political subdivisions. 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.
The Committee concluded that unless a political subdivision takes the positive step to approve them for funding, the new, expanded or modified programs or responsibilities are unconstitutional as applied to that political subdivision. The Committee determined that, to the extent that these rules allow political subdivisions to be fined for refusing to comply with unfunded new requirements, the rules penalize political subdivisions for the exercise of their constitutional right. Fining political subdivisions that decline to fund or comply with such requirements undercuts the very purpose of the power to so decline. It should also be understood that the requirements being imposed to implement its fine authority did not exist in November of 1984 when the New Hampshire Constitution was amended to include Pt. 1, Art. 28-a. The Committee concluded that compliance with such requirements are "new" responsibilities.
In its response the Department offered two arguments against the applicability of the constitutional provision, and one argument against voting for a final objection if the first arguments fail. The Department made the argument that Pt. 1, Art. 28-a applies only in the case of an activity that is exclusively governmental and is inapplicable to activities that are not required of a political subdivision, but have been voluntarily undertaken by the political subdivision. The Department also argued that it does "not believe that the drafters of the amendment or the voters of the State could possibly have intended the amendment to allow municipalities to escape responsibility for behavior that constituted violation of State law or rules." Finally, the Department argued that, "even if the amendment were deemed by a court of competent jurisdiction to apply in the case of monetary penalties, since the amendment clearly contemplates that a municipality can choose to pay, arguments regarding the impact of Art. 28-a can be raised directly by any municipality who may have been requested to pay a fine, and does not have to be spelled out in the rules."
The Committee has rejected the distinction urged by the Department that Pt. 1, Art. 28-a applies only to governmental activities and not to so-called "proprietary" activities, as the plain language of the provision makes no such distinction.
The second argument, regarding allowing municipalities to "escape responsibility for violation of state laws and rules," also was rejected. The Department and Committee agreed that municipalities are responsible for compliance with all requirements that existed prior to the effective date of Pt. 1, Art. 28-a. The Department and Committee also agreed that municipalities are responsible for compliance with requirements that became effective after Pt. 1, Art. 28-a if either the municipality has agreed to fund compliance with such requirements or the state has provided the funding. Where the Department and Committee diverged was in the case of requirements that became effective after Pt. 1, Art. 28-a and for which the municipality and the state have chosen not to fund. In the view of the Committee such requirements would be unconstitutional as applied to those municipalities, and those municipalities could not be held responsible for compliance with such requirements once adjudicated to be unconstitutional. Thus, if a municipality is constitutionally exempted from the requirements of a law or rule, there is no law or rule for the municipality to violate.
The Committee understood the Department's third argument to say that if Pt. 1, Art. 28-a is found by a court to apply to administrative fine rules, then the rules would not need to be amended to reflect that fact by specifying the procedure by which municipalities can exercise their constitutional right to exemption from the rules. The Committee decided that this position would have been arguable if it were not for the requirements of RSA 541-A. A rule is defined, pursuant to RSA 541-A:1, XIII, as any "regulation, standard or other statement of general applicability adopted by an agency to (a) implement, interpret or make specific a statute enforced or administered by such agency or (b) prescribe or interpret an agency policy, procedure or practice requirement binding on persons outside the agency." Additionally, pursuant to RSA 541-A:2, I(b), agencies must "adopt rules of practice setting forth the nature and requirement of all formal and informal procedures available, including a description of all forms and instructions used by the agency." The Committee determined that the process by which a municipality exercises its right to an exemption is encompassed within the definition of a rule, the process is something which comes under the description of rules of practice, and such process must be adopted as rules. The way in which rules are proposed, reviewed, and adopted is specified by RSA 541-A:3. Thus, in contrast to the Department's assertion in its response, the provisions of RSA 541-A require that the "impact of Pt. 1, Art. 28-a" be "spelled out."