SB340 - Revises provisions relating to governmental administration. (BDR 18-1008)

(Reprinted with amendments adopted on April 21, 2025) FIRST REPRINT S.B. 340 - *SB340_R1* SENATE BILL NO. 340–SENATOR DALY MARCH 12, 2025 ____________ Referred to Committee on Government Affairs SUMMARY—Revises provisions relating to governmental administration. (BDR 18-1008) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to governmental administration; authorizing the Legislative Commission to suspend or nullify certain administrative regulations in certain circumstances; revising provisions relating to judicial review of certain administrative regulations in certain circumstances; revising provisions relating to certain administrative regulations and procedures; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Under the separation-of-powers provision of the Nevada Constitution, one 1 department of the State Government may not exercise powers properly belonging to 2 another department of the State Government “except in the cases expressly directed 3 or permitted in this constitution.” (Nev. Const. Art. 3, § 1) As a general rule under 4 the separation-of-powers doctrine, because the question of whether a regulation 5 adopted by an executive agency exceeds its statutory authority or is inconsistent 6 with legislative intent presents a question of statutory interpretation, the power to 7 resolve that question of statutory interpretation and determine whether to invalidate 8 or nullify the regulation is usually regarded as judicial power because “it is 9 emphatically the province and duty of the judicial department to say what the law 10 is.” (Nevadans for Nev. v. Beers, 122 Nev. 930, 943 n.20 (2006) (quoting Marbury 11 v. Madison, 3 U.S. 137, 177-78 (1803)); Berkson v. LePome, 126 Nev. 492, 499 12 (2010) (explaining that “[t]o declare what the law is or has been is judicial power; 13 to declare what the law shall be is legislative.” (quoting 1 Thomas M. Cooley, 14 Constitutional Limitations 191 (8th ed. 1927)); Silver State Elec. Supply Co. v. 15 State ex rel. Dep’t of Tax’n, 123 Nev. 80, 84 (2007) (“appeals involving 16 interpretation of a statute or regulation present questions of law subject to our 17 independent review.”)) 18 For example, in applying the separation-of-powers doctrine to the Federal 19 Government and other state governments, courts have found that the separation-of- 20 – 2 – - *SB340_R1* powers doctrine ordinarily prohibits legislative committees or other legislative 21 bodies from exercising the power to nullify a regulation adopted by an executive 22 agency on the basis that the regulation exceeds the statutory authority of the agency 23 or is inconsistent with legislative intent, unless Congress or the state legislature 24 passes a law that expressly nullifies the regulation or revises or repeals the agency’s 25 statutory authority. (I.N.S. v. Chadha, 462 U.S. 919, 953 n.16 (1983); State v. 26 A.L.I.V.E. Voluntary, 606 P.2d 769, 772-79 (Alaska 1980); Legis. Research 27 Comm’n v. Brown, 664 S.W.2d 907, 917-20 (Ky. 1984); Blank v. Dep’t of Corr., 28 611 N.W.2d 530, 537-39 (Mich. 2000); General Assembly of N.J. v. Byrne, 448 29 A.2d 438, 443-49 (N.J. 1982); State ex rel. Barker v. Manchin, 279 S.E.2d 622, 30 630-36 (W. Va. 1981)) 31 However, in Nevada, the voters in 1996 approved a constitutional amendment 32 to Nevada’s separation-of-powers provision which expressly empowers the 33 Legislature to provide by law for legislative agencies and legislative bodies 34 composed of members of the Senate and Assembly to suspend or nullify 35 regulations adopted by executive agencies on the basis that the regulations exceed 36 the statutory authority of the agencies or are inconsistent with legislative intent. The 37 constitutional amendment provides that if the Legislature authorizes the adoption of 38 regulations by executive agencies which bind persons outside the agencies, the 39 Legislature is authorized to enact laws providing for: (1) the review of such 40 regulations by a legislative agency before their effective date to determine whether 41 each such regulation is within the statutory authority for its adoption; (2) the 42 suspension by a legislative agency of any such regulation which appears to exceed 43 the statutory authority for its adoption until the regulation is reviewed by a 44 legislative body composed of members of the Senate and Assembly; and (3) the 45 nullification of any such regulation by a majority vote of a legislative body 46 composed of members of the Senate and Assembly. (Nev. Const. Art. 3, § 1) When 47 the constitutional amendment was presented to the voters, the ballot materials 48 explained that its purpose was to ensure that the Legislative Department had the 49 specific constitutional power to suspend or nullify regulations adopted by executive 50 agencies which exceed the statutory authority granted by the Legislature when it 51 passed the laws that authorized the agencies to adopt the regulations. (State of 52 Nevada Ballot Questions 1996, Question No. 5, at pp. 1-2 (Nev. Sec’y of State 53 1996)) 54 When the Nevada Constitution expressly grants specific powers to the 55 Legislative Department, the other departments may not infringe upon the exercise 56 of those powers out of respect for an equal and coordinate department of 57 government. (Heller v. Legislature, 120 Nev. 456, 466-72 (2004); Comm’n on 58 Ethics v. Hardy, 125 Nev. 285, 291-94 (2009)) For example, the Nevada Supreme 59 Court has determined that because the Nevada Constitution expressly grants to each 60 legislative House the specific power to “judge” the qualifications, returns and 61 elections of its own members, the constitutional assignment of that power to the 62 Legislative Department “insulates a legislator’s qualifications to hold office from 63 judicial review. In other words, a legislative body’s decision to admit or expel a 64 member is almost unreviewable by the courts.” (Heller v. Legislature, 120 Nev. 65 456, 466-67 (2004)) Because Nevada’s voters expressly granted specific 66 constitutional power to the Legislature to provide by law for legislative agencies 67 and legislative bodies composed of members of the Senate and Assembly to 68 suspend or nullify regulations adopted by executive agencies, the other departments 69 may not infringe upon the exercise of that power out of respect for an equal and 70 coordinate department of government. Section 1 of this bill expresses the 71 Legislature’s findings and declaration regarding its exercise of its expressly granted 72 and specific constitutional power to suspend or nullify such regulations. 73 In exercising its expressly granted and specific constitutional power regarding 74 agency regulations, the Legislature has enacted provisions of the Nevada 75 – 3 – - *SB340_R1* Administrative Procedure Act which set forth the procedures for the adoption of 76 emergency, temporary and permanent regulations by certain executive agencies. 77 (NRS 233B.0395-233B.120) Under existing law, with limited exceptions, the 78 Legislative Commission or the Subcommittee to Review Regulations of the 79 Legislative Commission has the authority to review and to approve or object to 80 certain temporary or permanent regulations before those regulations become 81 effective. (NRS 233B.067-233B.070) 82 Section 3 of this bill authorizes a person or an executive agency to submit a 83 petition requesting the Legislative Commission to review whether a permanent or 84 temporary regulation adopted pursuant to the Nevada Administrative Procedure Act 85 should be suspended or nullified because the regulation: (1) exceeds the statutory 86 authority for its adoption; (2) is inconsistent with the intent of the Legislature in 87 granting the statutory authority for its adoption; or (3) is not being administered or 88 interpreted in a manner that is consistent with the agency’s stated intent when 89 adopting the regulation or the agency’s stated intent during the review and approval 90 of the regulation by the Legislative Commission. In addition, section 16 of this bill 91 authorizes a court to order the plaintiff in an action for a declaratory judgment to 92 submit a petition to the Legislative Commission pursuant to section 3 if all or any 93 part of the action relates to whether a regulation violates statutory provisions or 94 exceeds the statutory authority of an agency. Section 3: (1) establishes procedures 95 for the review and consideration of such petitions; (2) authorizes the Legislative 96 Commission to suspend or nullify a regulation based on certain grounds raised in 97 such petitions; and (3) requires certain actions to be taken after a suspension or 98 nullification. Additionally, sections 3 and 5 of this bill preclude judicial review of 99 any action taken or determination made by the Legislative Commission in 100 exercising its powers to review, object to, suspend or nullify a regulation. Sections 101 5, 10, 11, 15 and 16 of this bill make conforming changes relating to the authority 102 of the Legislative Commission to suspend or nullify a regulation. 103 Section 4 of this bill requires the Legislative Commission to adopt such 104 regulations as are necessary to carry out the provisions of the Nevada 105 Administrative Procedure Act governing administrative regulations. Section 4 also 106 requires the regulations to: (1) include procedural standards that provide interested 107 persons with an opportunity to comment on issues raised in a petition and whether 108 the regulation should be suspended or nullified; and (2) be included in the Nevada 109 Administrative Code. 110 Existing law excludes the application of certain agency policies to a person 111 with sufficient prior actual notice of the policy from the definition of “regulation” 112 for the purposes of the Nevada Administrative Procedure Act. (NRS 233B.038) 113 Section 6 of this bill removes this exception, which has the effect of requiring such 114 policies to be adopted in a regulation under the Nevada Administrative Procedure 115 Act. 116 Existing law ratifies the Nevada Administrative Code as revised or 117 supplemented before May 15, 1987. (NRS 233B.0395) Section 7 of this bill ratifies 118 the Code as revised or supplemented before February 3, 2025. 119 Existing law requires an agency to adopt a proposed regulation not later than 2 120 years after the proposed regulation is submitted to the Legislative Counsel. (NRS 121 233B.040) Section 8 of this bill requires an agency to also submit the proposed 122 regulation to the Legislative Commission for review within the same 2-year period. 123 Existing law requires an agency to hold an oral public hearing on a proposed 124 regulation if an oral hearing is requested by certain persons and the proposed 125 regulation is substantive. (NRS 233B.061) Section 9 of this bill eliminates the 126 requirement regarding the substantiveness of the regulation, which has the effect of 127 requiring an oral hearing on all proposed regulations. 128 Under existing law, the Legislative Counsel is required to prepare and publish a 129 Register of Administrative Regulations, which includes information relating to 130 – 4 – - *SB340_R1* adopted permanent regulations. (NRS 233B.0653) Section 12 of this bill eliminates 131 the requirement that the Legislative Counsel publish paper copies of the Register 132 and instead requires the Legislative Counsel to publish the Register electronically 133 on the public Internet website of the Legislature. 134 An emergency regulation becomes effective when certain documents are filed 135 with the Secretary of State. (NRS 233B.070) Sections 10 and 14 of this bill require 136 a copy of the written statement of the emergency endorsed by the Governor to be 137 included with the information that is required be filed with the Secretary of State 138 before an emergency regulation becomes effective. 139 Existing law authorizes a plaintiff to bring an action for declaratory judgment 140 on an allegation that a regulation, or its proposed application, interferes with or 141 impairs, or threatens to interfere with or impair, the legal rights or privileges of the 142 plaintiff. Under existing law, a court is required to declare the regulation invalid if 143 it finds that the regulation violates constitutional or statutory provisions or exceeds 144 the statutory authority of the agency that adopted the regulation. (NRS 233B.110) 145 In determining whether a regulation violates statutory provisions or exceeds the 146 statutory authority of an agency, the Nevada Supreme Court has held that “courts 147 should not substitute their own construction of a statutory provision for a 148 reasonable interpretation made by an agency.” (Collins Disc. Liquors & Vending v. 149 State, Dep’t of Tax’n, 106 Nev. 766, 768 (1990)) The Nevada Supreme Court has 150 also held that “the interpretation by the agency charged with administering a statute 151 is persuasive, and that great deference should be given to that interpretation if it is 152 within the language of the statute.” (Nev. Tax Comm’n v. Nev. Cement Co., 117 153 Nev. 960, 968-69 (2001)) 154 However, because the Nevada Administrative Procedure Act does not include 155 any specific provisions regarding whether any deference should be given to the 156 Legislative Commission’s approval of a regulation, the Nevada Supreme Court has 157 declined to give any deference to the Legislative Commission’s approval of the 158 regulation, even though such approval includes the Legislative Commission’s legal 159 determination that the regulation conforms to the statutory authority pursuant to 160 which it was adopted and carries out the Legislature’s intent in granting that 161 authority. (Killebrew v. State ex rel. Donahue, 139 Nev. Adv. Op. No. 43, 535 P.3d 162 1167, 1173 n.4 (2023) (“The Legislative Commission, as amicus curiae, urges us to 163 give deference to its approval of the regulation and to review whether the regulation 164 is reasonable as a matter of law. We decline the invitation to alter our statutorily 165 mandated review of a regulation.”)) 166 Section 16 amends the Nevada Administrative Procedure Act to provide that in 167 any action where the court must determine whether a regulation violates statutory 168 provisions or exceeds the statutory authority of an agency and the Legislati [Text truncated for display. Full text available on LegiScan.]