Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

Fact Sheet Memorandum

HB 12-1002 The CLEAR Act & Application Permit Rules Rep. Sonnenberg & Sen. Jahn Staff Name: Riki Parikh What the Bill Does: Under current administrative procedure, if a business applies for a permit and the legislature subsequently changes the application rules before the permit is processed and granted, the applicant is required to re-start or amend their application. H.B. 12-1002 attempts to remove this burden by requiring that the rules governing an application filed with a state agency stay in place for the duration of that applications review. The bill creates the Creating Level Expectations for Application Review (CLEAR) Act, which amends the State Administrative Procedure Act (APA)1 to require state agencies that grant permits to process the application or renewal using the rules in effect on the initial date of application. The bill distinguishes permits from licenses, and states that the act does not apply to professional licenses. The bill also provides a health and safety exception if an agency determines that an unsafe situation is likely to result if the existing rules apply. If so, the agency must treat the application as pending, provide a written notice to the person that states the reasons the application is incomplete, and give the person a reasonable opportunity to comply with all new lawful requirements. Colorado Context: Numerous state agencies issue permits, including the Department of Natural Resources, Department of Agriculture, Department of Public Health & Environment, the Department of Transportation, and the Department of Revenue.2 In January 2012, Governor Hickenlooper released a report titled Cutting Red Tape in Colorado State Government, which contained recommendations to reduce regulatory inefficiencies based on feedback from statewide business organizations, local governments, and community groups.3 Delays in the permitting process were among the concerns raised.4
1 2

C.R.S. 24-4-101 et. seq. See Permit and Licenses Index, COLORADO.GOV, http://www.colorado.gov/government/government/permits-licenses.html (last visited Feb. 18, 2012). 3 Governors Office Press Release, Gov. Hickenlooper announces regulatory reform and red tape reduction for state government, Jan. 9, 2012, available at http://www.colorado.gov/cs/Satellite?c=Page&childpagename=GovHickenlooper%2FCBONLayout&cid=1251614803260&page name=CBONWrapper. 4 Dept. of Regulatory Agencies, CUTTING RED TAPE IN COLORADO STATE GOVERNMENT 47-79 (Dec. 2011), available at http://bit.ly/zkJnIN.

DRAFT 1/27/2012 For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.

National Context: Federal law often governs state permitting regulations, particular in the energy, environment, and health care sectors.5 It is unclear how many states have adopted similar provisions. Bill Provisions: The bill defines permit as a grant of authority by an agency that authorizes the holder of the permit to do some act not forbidden by law but not allowed to be performed without such authority, and does not include a professional license issued by a licensing board or agency to conduct a profession or occupation. The bill states that the rules of an agency that are in effect on the date a person applies for a permit or renewal govern the application process unless the agency determines in writing that (1) the new rules materially affect the health and safety of the public and the existing rules would be likely to result in an unsafe situation, OR (2) the new rules are required by federal law and regulations. If the agency makes one of the above determinations, the bill requires the agency to (1) treat the application as pending; (2) provide written notice to the applicant stating reasons why the application is incomplete; and (3) give the applicant a reasonable opportunity to comply with the new rules. The bill also provides that if the agency rules change while an application is pending, the applicant has the option of to process the application under the new rules or under the rules in place when the application was submitted. Fiscal Impact: The Colorado Legislative Council estimates an indeterminate, but potentially significant, impact on the administrative costs for state agencies that process and grant permits. Cost increases include those associated with tracking application dates, legal analysis of current and future rules, health and safety analyses, written determinations and notices. The fiscal note anticipates that affected agencies will request additional budget resources to respond to the increased workload. Meanwhile, local governments that apply for permits would experience savings under the bill based on reduced workload on their part.6

See House Business & Economic Development Committee Testimony, Jan. 26, 2012, available at http://www.leg.state.co.us/clics/clics2012A/cslFrontPages.nsf/Audio?OpenPage. 6 Alex Schatz, Fiscal Note: HB 12-1002 (Jan. 25, 2012), http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/BA7F3126663C963287257981007F6841?Open&file=HB1002_00. pdf.

DRAFT 1/27/2012 For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.