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Administrative Rulemaking / Rulemaking Process Overview

Administrative Rulemaking

Prior to submission of a proposed rule to LSA for publication in the Indiana Register, the requesting agency must submit the proposed rule to the Office of Management and Budget (OMB) and the State Budget Agency (SBA) along with a regulatory analysis for review and approval pursuant to IC 4-22-2-22.8. Requests for approval should be submitted to OMB via SBARules@sba.IN.gov. The template for the regulatory analysis is provided here.

NOTE: To ensure proper routing of your request, please indicate in the subject line of your email that this is for REGULAR rulemaking.

The requesting agency should review Financial Management Circular 5.1 OMB and SBA Review of Agency Rulemaking,  Financial Management Circular 5.2 Requirements for Regulatory Analysis, and OMB’s rulemaking presentation for guidance regarding the information required for review. OMB will notify the requesting agency once a final determination has been made. If approval is granted, the requesting agency may then proceed to file a notice of first public comment period under IC 4-22-2-23, IC 13-14-9, or other rule-making authority.

Rulemaking Process Overview

Although some agencies have unique rulemaking requirements provided in statute, the general steps in the administrative rulemakings process are the following:

1. Rule Development: The agency works with interested stakeholders to discuss issues and develop a draft proposed rule prior to commencing the formal rulemaking process.

2. SBA and OMB Approval of Rulemaking:  The agency submits the proposed rule language and a regulatory analysis to the Indiana Office of Management and Budget (OMB) and Indiana State Budget Agency (SBA) for review and approval.  The requesting agency should review Financial Management Circular 5.1 OMB and SBA Review of Agency Rulemaking ,  Financial Management Circular 5.2 Requirements for Regulatory Analysis, and OMB’s rulemaking presentation for guidance regarding the information required for review. The template for the regulatory analysis is provided here.

3. [If necessary] Budget Committee Review: If the proposed rule adds or amends language to increase or expand application of a fee, fine, or civil penalty, or the rule will have a combined implementation and compliance costs of at least one million dollars ($1,000,000) for businesses, local units, and individuals over any two (2) year period, the agency must obtain budget committee review of the proposed rule before it can be approved by OMB and SBA.  SBA will assist an agency covered by this requirement to seek budget committee review.  The template for new fees, fines, and civil penalties is provided here.  The template for increased fees, fines, and civil penalties is provided here.  The template for safe harbor fees, fines, and civil penalties is provided here.

4. Notice of First Public Comment Period: The agency files the Notice of First Public Comment Period, proposed rule language, regulatory analysis, SBA and OMB approval, budget committee agenda (if necessary), and other documents required under IC 4-22-2-23 with LSA, and the documents are published in the Indiana Register. The LSA template for the notice is provided here. The agency should review the Administrative Rules Drafting Manual for guidance regarding the information and format required by LSA. All required documents must be published at least thirty (30) days before the public hearing.

5. Public Hearing and Public Comment: The agency will hold a public hearing, during which time anyone can provide oral comments on the rule. The agency will also have a written comment period, with oral and written comments having equal weight. The LSA template for the notice is provided here. The public comment period usually corresponds with the period from the notice of public hearing until the hearing itself.  The agency must provide an option for the public to attend and comment on the hearing remotely.  Webcasts must be archived as public records on the agency’s rulemaking docket website.

6. [If necessary] Notice of Second Public Comment Period: If an agency receives substantive comments during the first public comment period or the proposed rule establishes a requirement or limitation that is more stringent than an applicable federal requirement or limitation, the agency must have a second public comment period and hearing.  The agency files the Notice of Second Public Comment Period, proposed rule language, regulatory analysis, SBA and OMB approval, budget committee agenda (if necessary), summary of comments received and agency response, explanation of any differences between the text of the proposed rule for the first public comment period and the second, and other documents required under IC 4-22-2-24 with LSA, and the documents are published in the Indiana Register. The LSA template for the notice is provided here. All required documents must be published at least thirty (30) days before the public hearing.

7. [If necessary] Second Public Hearing and Public Comment: The agency will hold a second public hearing and comment period with the same requirements as the first public hearing and comment period. The LSA template for the notice is provided here.

8. Final Rule: The agency considers the public comments and may make changes based on those comments to form the Final Rule. The Final Rule as published must include the name, address, telephone number, and electronic mail address of a person designated by the agency as the small business regulatory coordinator for the rule who will answer questions and assist small businesses with compliance.

9. Attorney General Review: The agency submits the Final Rule and supporting documents to the Office of the Attorney General for review and approval.  The Attorney General has forty-five (45) days from the date that the agency submits a rule or resubmits a rule to approve or disapprove the rule.

10. Governor Review: After the Attorney General has approved a rule, the agency submits the Final Rule and supporting documents the Governor’s Office for review and approval. The Governor has fifteen (15) days to review and approve a rule.  The Governor may have up to thirty (30) days for review if the Governor files a statement with the Indiana Register indicating the Governor intends to take an additional fifteen (15) days.

11. Effective Rule: After the rule has been approved by all state signatories, it will be filed with LSA and becomes effective 30 days later. It is now an enforceable administrative rule and published in the Indiana Administrative Code. The LSA template for the final rule is provided here .