Chapter 10 - Exempt Rules Under 14.386
[Revised in 2017]
In General. This chapter deals with rules that are adopted under the exempt rulemaking procedures found in Minnesota Statutes, section 14.386. Agencies may adopt rules using exempt procedures if a law authorizing the rules specifically exempts them from Chapter 14 or from the definition of a rule.
10.1 Determine which procedural requirements apply to your exempt rules. There are three types of exempt rules:
10.1.1 Exempt under 14.386. The rulemaking authority for some rules exempts those rules from having to go through the usual rulemaking procedures of chapter 14. Most rules that are specifically exempt from the usual rulemaking procedures must still follow some procedures before the rules can take effect. Those procedures are contained in Minnesota Statutes, section 14.386. The first part of this chapter describes the process for adopting exempt rules under 14.386.
10.1.2 Completely exempt under 14.386. Some rules are not only exempt from the usual rulemaking procedures of chapter 14, but are also specifically exempt from the procedures of section 14.386 (Completely Exempt). If this describes your rules, you may adopt your rules with only the requirements set out in your rulemaking authority. The second part of this chapter describes the process for adopting Completely Exempt rules.
10.1.3 Exempt for good cause under 14.388. Some rules are excepted from the normal rulemaking procedures for one or more “good cause” reasons (Good Cause Exemptions) stated in Minnesota Statutes, section 14.388. Chapter 11 of this Manual describes the process for adopting Good Cause Exempt rules under 14.388.
10.2 Draft your rules and obtain approval from your chain of command. Draft your rules as you would any rules. Remember to have your chain of command review and approve your rules before you go on to the next step. This is important for obvious reasons but also because you are required to submit any 14.386 rules to the Governor’s Office before OAH review, which requires the signature of your Director or Commissioner. Note that as part of the review-and-approval process, some agencies also choose to have their legal counsel review their rules.
Adopting 14.386 Rules
10.3 Preparing your 14.386 rules for adoption.
10.3.1 Notify Governor’s Office. You must notify the Governor’s Office of your exempt rulemaking per the Governor’s policy memo, GOV-PLCY. By this time you should have had your rules reviewed and approved by your chain of command. Your next step is to submit the Preliminary Proposal Form GOV-PRLM when you are ready to move the exempt rules forward just as you would when the agency has developed a rule idea. If the Director or Commissioner has reviewed and approved as shown by properly signing the form, the agency does not need to wait for Governor’s Office approval. If you have uncertainty about moving forward without the Governor’s approval, you should discuss it with the Governor’s Legislative Coordinator, but the Governor’s Office’s current practice is not to issue formal approval. At least one agency awaited the expected approval unnecessarily. Thus, the Editor’s advice is to move forward unless told otherwise.
10.3.2 Get approved draft from the Revisor. [Revised in 2017] Before you can adopt your 14.386 exempt rules, you must request the Revisor’s Office to draft your rules in the Revisor’s format (i.e., printed from the Revisor’s computer). The Revisor’s draft must also have a Revisor’s certificate stating that the rules are approved for publication. Tell the Revisor that these rules are exempt rules under section 14.386. This will ensure that the title to the rules will include the exempt designation. You will need draft rules with a Revisor’s signed certificate for your OAH submission.
10.3.3 Draft Proposed Order Adopting Rules. [Revised in 2017] As soon you receive the Revisor’s approved draft, you will be able to draft your proposed Order Adopting Rules. See ORD-ADPT(EX) in the appendix. The requirements for your Order Adopting Rules can be found in Minnesota Rules, part 1400.2400. When drafting your proposed Order, OAH rules, part 1400.2400, requires that you to include a citation to the rules’ statutory exemption, any argument (if necessary) to support this exemption, plus any other information required by law.
You do not need to provide any argument for the need and reasonableness of these rules. The Editor, however, recommends including some sort of argument for your rules to keep a record of how and why these rules were developed. Such a record is particularly helpful if your rules are later challenged. You should consider the nature of your rules when deciding whether or not including an explanation is advantageous.
10.4 Submitting your 14.386 rules to OAH. [Revised in 2016] Submit the following documents to OAH: the rules as approved by the Revisor; and a proposed Order Adopting Rules. Note: OAH does not require that the proposed order be signed. Obviously, the agency needs to document proper approval for the Official Rulemaking Record, so submit an unsigned one to use after you receive approval.
Rulemaking Manual Editor’s Note: [Revised in 2017] In 2015, the Legislature amended Minnesota Statutes, section 14.05 by adding subdivision 7, which permits agencies to file rule-related documents electronically. This change is effective on January 1, 2016. See Minnesota Laws 2015, Chapter 63, sections 1 and 6.
[Revised in 2017] E-filing rule-related documents. OAH asks agencies to e-file all rule-related documents wherever possible. See section 1.6. This means all documents submitted for ALJ review should be e-filed. OAH has posted step-by-step instructions for creating an account and filing your documents on its website at https://mn.gov/oah/forms-and-filing/efiling/ . (The page also includes a link to frequently asked questions.)
[New in 2017] [Editor’s note: Best Practices for Working Within OAH’s E-Filing System. To accommodate e-filing, it’s best to take some extra steps to organize your documents before uploading them into OAH’s system. Simply consolidating all your individual documents into one huge file will make navigating it difficult for the ALJ’s review. Also, finding things yourself will be difficult. What should you do? Index them so you and the ALJ can find and cite to them. It is wise to check with your assigned ALJ to determine whether he or she has a preference for how to do this. The following is one way to accomplish this:
As usual, organize your documents as described in Minnesota Rules 1400.2400, subpart 1. OAH prefers the documents be consolidated as one PDF document and bookmarked. After collating them, but before scanning them, give each page a unique sequential page number. One system designed to automatically apply such a unique number is called a “Bates” stamp. Once you’ve numbered them, scan the pages as a single PDF with bookmarks and prepare an index keyed to the unique numbers. You can adapt the cover-letter text (EXEMPT-LTR) into a template for this purpose. If the filing is quite large, you may separate it into parts.
Also, consider your timing when e-filing. After you request OAH to assign an ALJ to your rulemaking, it’s a good idea to communicate with the assigned ALJ (through the ALJ’s legal assistant) to notify the ALJ when you will file your record for review. Or, you can wait to request OAH to appoint an ALJ only when you have the file ready to submit. The key is to avoid keeping the ALJ waiting, anticipating a file to review imminently.
10.4.1 Letter to OAH submitting your exempt rules for approval. A form for the cover letter to the OAH submitting your exempt rules for approval is in the appendix as EXEMPT-LTR. This letter is designed to serve as a checklist for meeting the requirements stated in OAH Rules, part 1400.2400.
10.4.2 OAH standards of review. As with any other rules, you must make certain that the proposed rules comply with certain standards of legality before you submit them for OAH. OAH Rules, part 1400.2400, subpart 3, requires that exempt rules meet these standards for them to be approved. These standards require that the agency adopt their rules in compliance with exempt rules procedural requirements; that the rules comply with and do not exceed, conflict with, or grant the agency more discretion than allowed by law; that the rules are not unconstitutional or illegal; that the rules do not improperly delegate the agency’s powers to another; and that they fit the statutory definition of a “‘rule”.
10.5 ALJ Review. [Revised in 2017] The ALJ has 14 days to review and approve or disapprove your rules. If the ALJ approves the rules, the OAH will send you a copy of the judge’s decision and return your filing to you. [Text about final steps moved to 10.6.3 below.]
10.6 Adopting your approved exempt rules. If the ALJ approves your rules, you are now ready to officially adopt the rules. To do so, there are still two final requirements:
10.6.1 Finalize the Order Adopting Rules and have it signed. You are now ready to finalize the Order Adopting Rules. Unless the ALJ has recommended any specific changes to your proposed Order Adopting Rules, use the proposed Order. The only difference between the proposed order and your final Order Adopting Rules should be omitting the word “Proposed” from the title. Have this document signed by your Commissioner or Director.
10.6.2 Determine whether to notify the Governor’s Office further. If you have made changes to the proposed rules or controversies have arisen, you might wish to communicate with the Governor’s Office. Per the Governor’s Office 9/17/15 rules review policy, GOV-PLCY:
“When the agency is adopting exempt rules or good cause exempt rules: the agency may exercise its judgment about whether to submit a completed Final Rule Form [GOV-FNL] to the Office of the Governor. The nature of exempt . . . rules is that there are no policy considerations to make or controversies to address, so waiting for approval is not necessary. If either were to develop, however, the agency should notify the Office. Submitting a completed Final Rule Form is usually a wise precaution against error. When in doubt, the agency may contact the Legislative Coordinator. Agencies should note that exempt rules adopted under Minnesota Statutes, section 14.386 are subject to veto. [emphasis supplied]”
10.6.3 [New in 2017] Filing your approved exempt rules. Submit copy of signed Order to OAH; OAH files rules with the Secretary of State. Under Minnesota Statutes, section 14.08(d) agencies must confirm that the Order Adopting Rules has been signed by faxing or emailing a signed copy to OAH. OAH will then request from the Revisor certified copies of the rules, approved for filing with the Secretary of State.
[Editor’s note: As of publication, OAH, the Revisor’s Office, and Secretary of State’s Office are all moving toward completing the final steps electronically. How these entities carry out these steps is stated in Minnesota Statutes, section 14.16. Minnesota Statutes, section 14.08(d) permits them to accomplish these steps electronically. Thus e-filing the Orders Adopting Rules and Final Rules; and serving the Final Rules on the Governor to start the veto period will all be done by e-filing.
Here’s how it will work. OAH will no longer request four certified copies from the Revisor’s Office. Instead OAH will obtain only one electronic copy of the certified rule(s) from the Revisor’s Office, which OAH will e-file with the Secretary of State as an adopted rule. The Secretary of State will forward the adopted rule to the agency, the Revisor’s Office, and the Governor’s Office. Many details remain to be resolved about exact procedure, which means more precise instructions will be announced as they become available. See section 1.6 above.
The following text [copied from Section 10.5] is added here for using until the transition takes place: OAH will also file four copies of the rule with the Revisor’s certificate in the Office of the Secretary of State. [If your agency prefers, however, you may instead pick up all four stamped copies from the Secretary of State and deliver the rules to the Governor and the other offices yourself. This is a good idea for knowing exactly when the Governor's Office receives your exempt rules.]
10.6.4 Publish in the State Register. Before your rules can take effect, you must publish them in the State Register. Minnesota Statutes, section 14.386, paragraph (a), clause (4). The rules will take effect on the date of publication. [Revised in 2016] The State Register publishes on Mondays. Publication deadlines depend on the length or complexity of your rules: Short notices of adoption (10 or fewer pages) are due by 12:00 noon on the Tuesday before publication. Long or complex notices of adoption (more than 10 pages) are due by 12:00 noon on the Wednesday, 12 calendar days (or 8 working days) before publication (except when the deadline is changed by a holiday). When you deliver your documents to the State Register, you will also need to inform the editor of the Revisor’s draft number from the rules as filed by OAH with the Secretary of State, which will be “SR” plus four digits. He will request the Revisor’s Office to transmit the adopted rules directly to the State Register electronically.
10.6.5 Governor Veto. After the Governor receives a copy of the adopted rules, the Governor may veto the rules. To veto the rules, the Governor must submit a notice of the veto to the State Register within 14 days of receiving the rules from the Secretary of State. A veto is effective when the veto notice is submitted to the State Register. Minnesota Statutes, section 14.05, subdivision 6.