Certified Final Objection No. 49 of the

Joint Legislative Committee on Administrative Rules

At its meeting on July 24, 1992, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:3-e, to enter a preliminary objection to Final Proposal 92-098 containing proposed rules of the Commissioner of the Department of Environmental Services (Commissioner) relative to an administrative fine assessment for violation of certain rules governing the Water Resources Division. The Commissioner responded to the preliminary objection by letter dated August 18, 1992.

At its meeting on October 9, 1992, the Committee voted, pursuant to RSA 541-A:3-e, V(c), to enter a final objection to Final Proposal 92-098. 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 outlines the basis upon which the final objection has been entered:

Env-Wr 802.01(e)(l),-(2), (3)

The Committee objected, pursuant to Committee Rule 401.04, that rules Env-Wr 802.01(e)(1), (2), and (3) are beyond the authority of the Commissioner and, pursuant to Committee Rule 402.04, are contrary to legislative intent to the extent that they violate 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.

Rules Env-Wr 802.01(e)(i), (2), and (3) levy-administrative fines for failure to pay dam registration fees. The Department indicated, in its notice in the Rulemaking that there are costs to political subdivisions associated with the implementation of these rules. The Committee has consistently embraced the position that, unless funded by the state or 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 concluded in its preliminary objection that the Department's reliance upon the assertion, stated in the Rulemaking Notice form, that "proprietary" functions are not encompassed within Pt. 1, Art. 28-a, virtually admits that the rule would otherwise be unconstitutional. Additionally, the Department's assertion that the fines do not constitute a new, expanded or modified program or responsibility was, in the view of the Committee, equally without merit. Therefore, the Committee had made a preliminary objection that the rule is beyond the Commissioner's authority and is contrary to legislative intent because RSA 482:89 governing administrative fines could be implemented so as not to violate Pt. 1, Art. 28-a.

The Commissioner in his response has taken the position that it is the legislature that has commanded that these fines be collected from municipalities along with every other dam owner, as RSA 482:89, II refers to levying fines against "any person," and did not specifically exclude municipalities. The Commissioner also argues that no person is mandated to violate the requirements in the first instance, and that the imposition of a fine for such a violation "cannot be construed as a 'mandate' upon anyone."

The Commissioner's second argument is that if someone voluntarily violates a rule, then any punishment imposed in the form of a requirement with which the violator must comply cannot be said to be "mandate". This argument was unpersuasive to the Committee. The Committee has concluded that there are two layers to the "mandate" imposed upon political subdivisions that- own dams. The first layer is that the underlying dam registration fee is, in the Committee's view, in violation of Pt. 1, Art. 28-a. In fact, the Committee entered a final objection on April 17, 1992 to Final Proposal 91-220, containing rules imposing the dam registration fees upon political subdivisions, as being in violation of Pt. 1, Art. 28-a. That final objection was published in the Rulemaking Register on April 24, 1992. In that final objection the Committee took the position that the imposition of an administrative fine against a political subdivision for nonpayment of these fees was itself in violation of Pt. 1, Art. 28-a, as it penalizes political subdivisions for exercising their constitutional right to decline to comply with the underlying unfunded mandate. The Committee stated that "fining political subdivisions that decline to fund such [unfunded mandates] undercuts the very purpose of the power to so decline."

The Commissioner's first argument is one based upon statutory construction, and also was not persuasive to the Committee. Pursuant to RSA 482:89, II, the Department "may impose upon any person" who violates RSA 482 a fine not to exceed $2000. This provision gives the Department discretion at two different levels as to whether a fine will be imposed for such violations. The first level of discretion is that the statute says that such fines "may" be imposed. This allows the Commissioner to decline to impose them.

The second level of discretion can be found in the use of the phrase "any person" in RSA 482:89, II. In the Committee's view the Commissioner interpreted how these words can be applied too narrowly. The Committee decided that if the word "every" were substituted for "any" then the Commissioner would be correct, that if the Department chose to impose fines, it would be required without exception to impose a fine for each violation. But the statute uses the phrase "my person," which has the effect of giving the Commissioner authority to specify who will be subject to fines for violation. The Committee determined that, similarly, the Commissioner could, consistent with the grant of authority, provide that only owners of Class C dams will be subject to such fines for failure to register. Since the legislature did not require that every violator must be fined, but left it to the Department to specify the class of violators to be fined, then in the Committee's view it is within the power and authority of the Department to exclude the political subdivisions from that class. As stated in the preliminary objection, the Committee decided a rule which could exclude political subdivisions from compliance with these costs and avoid conflicting with Pt. 1, Art. 28-a but which does not do so, is contrary to legislative intent.