6-0210-15219-1

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA DEPARTMENT OF ADMINISTRATION

BUILDING CODES AND STANDARDS DIVISION

 

In the Matter of the Proposed Rules Governing Building Official Discipline (Administrative Actions), Minnesota Rules, Part 1301.1201

REPORT OF THE ADMINISTRATIVE LAW JUDGE

         

A public hearing in this matter was held before Administrative Law Judge Allan W. Klein on February 4, 2003, in St. Paul, Minnesota.  The hearing continued until all interested persons, groups and associations had an opportunity to be heard concerning the proposed rules.

The hearing and this report are part of a rule-making process that must occur under the Minnesota Administrative Procedure Act[1] before an agency can adopt rules.  The legislature has designed this process to ensure that State agencies have met all the requirements that Minnesota law specifies for adopting rules.  Those requirements include assurances that the proposed rules are necessary and reasonable, that they are within the agency’s statutory authority, and that any modifications to the proposed rules made after their initial publication do not result in rules that are substantially different from those which were originally proposed.

The rule-making process also includes a hearing, when a sufficient number of persons request one.  The hearing is intended to allow the agency and the Administrative Law Judge to hear public comments regarding the impact of the proposed rules and what changes might be appropriate.  The Administrative Law Judge is employed by the Office of Administrative Hearings, an agency independent from the Department of Administration.

Bernard E. Johnson, Assistant Attorney General, 525 Park Street, Suite 200, St. Paul, MN 55103-2106, appeared on behalf of the Building Codes and Standards Division of the Department of Administration (hereinafter “Department”).  Others representing the Department at the hearing were Thomas C. Anderson, B. Michael Godfrey, Scott McLellan and Colleen H. Chirhart.  Approximately 12 persons attended the hearing, and 7 of them signed the hearing register.

After the hearing ended, the Administrative Law Judge kept the record open for the 30 calendar days, until March 6, 2003, to allow interested persons and the Department an opportunity to submit written comments.[2]  Following the initial comment period, the Administrative Procedure Act requires that the hearing record remain open for another five business days to allow interested parties and the Department to respond to any written comments.  The hearing record closed for all purposes on March 13, 2003.

Based upon all of the testimony, exhibits and written comments, the Administrative Law Judge makes the following:

          FINDINGS OF FACT

Procedural Requirements

1.                On October 21, 2002, the Department published a Request for Comments on Planned Amendments to Rules Governing Building Official Certification in the State Register at 27 State Register 590.[3]

2.                By a letter dated December 9, 2002, the Department requested that the Office of Administrative Hearings schedule a rule hearing and assign an Administrative Law Judge.  The Department also filed a proposed Dual Notice of Intent to Adopt Rules Without a Public Hearing, a copy of the proposed rules and a draft of the Statement of Need and Reasonableness (SONAR).[4]  The Department asked for prior approval of its additional notice plan.

3.                In a letter dated December 11, 2002, the Administrative Law Judge approved the Dual Notice.  In a letter dated December 11, 2002, the Administrative Law Judge approved the additional notice plan.

4.                On December 23, 2002, the Department published its Notice of Intent to Adopt Rules Without a Public Hearing, Unless 25 or More Persons Request a Hearing, and Notice of Hearing if 25 or More Requests for Hearing are Received (Dual Notice), at 27 State Register 946.[5]

5.                On December 17, 2002, the Department mailed the Dual Notice to all persons and associations who had registered their names with the agency for the purpose of receiving such notice and to all persons identified in the additional notice plan.[6]

6.                On December 17, 2002, the Department mailed the Dual Notice and the Statement of Need and Reasonableness to the legislators specified in Minn. Stat. § 14.116.[7]

7.                On December 17, 2002, the Department mailed a copy of the Statement of Need and Reasonableness to the Legislative Reference Library.[8]

8.                On the day of the hearing the following documents were placed in the record:

 

A.    The Request for Comments published in the State Register.[9]

B.    The proposed rule, as approved by the Revisor of Statutes.[10]

C.    The Statement of Need and Reasonableness (SONAR).[11]

D.    A copy of the certificate showing that the agency sent a copy of the SONAR to the Legislative Reference Library.[12]

E.    The Dual Notice as mailed and published in the State Register.[13]

F.    Certificate of Mailing the Dual Notice and the Certificate of Accuracy of Mailing List.[14]

G.   Certificate of Mailing to Additional Notice recipients.[15]

H.    Written comments on the proposed rule received by the Department during the comment period.[16]

I.      Certificate of Mailing Notice to Legislators.[17]

J.     Notice of Hearing sent to those persons who had requested a hearing and the mailing list of those persons.[18]

Nature and History of the Proposed Rules

9.                Prior statute and rule authorized the Commissioner to remove from office and revoke the certification of a building official who had “consistently failed to act in the public interest in performance of duties.”[19]  In 2001, the legislature expanded and refined the authority of the commissioner to discipline building officials.[20]  In particular, the legislature directed the Commissioner to adopt procedures for administrative actions, penalties, suspensions and revocations of certification, and to adopt a graduated schedule of administrative actions.  The legislature also required the appointment of an oversight committee to screen complaints and make recommendations for discipline to the commissioner.  The proposed rule at issue in this proceeding is a direct response to those legislative actions.

Statutory Authority

             10.   Minn. Stat. § 16B.61 provides, in part, as follows:

 

    Subdivision 1.    Adoption of code.  Subject to sections

 16B.59 to 16B.75, the commissioner shall by rule establish a

 code of standards for the construction, reconstruction,

 alteration, and repair of buildings, governing matters of

 structural materials, design and construction, fire protection,

 health, sanitation, and safety, including design and

 construction standards regarding heat loss control,

 illumination, and climate control.  The code must also include

 duties and responsibilities for code administration, including

 procedures for administrative action, penalties, and suspension

 and revocation of certification. …  Except as otherwise provided in sections 16B.59 to  16B.75, the commissioner shall administer and enforce the

 provisions of those sections.

 

11.         Minn. Stat. Sec. 16B.65, subds. 2,3,5 and 7 provide, in pertinent part, as follows:

    Subd 2.    Qualifications.  … No person may be designated as a building official for a municipality unless the commissioner determines

 that the official is qualified as provided in subdivision 3. 

 

    Subd. 3.    Certification.  The commissioner shall: 

 

    (1) prepare and conduct written and practical examinations

 to determine if a person is qualified pursuant to subdivision 2

 to be a building official;

 

    (2) accept documentation of successful completion of

 testing programs developed by nationally recognized testing

 agencies, as proof of qualification pursuant to subdivision 2;

 or

 

    (3) determine qualifications by both clauses (1) and (2). 

 

    Upon a determination of qualification under clause (1),

 (2), or both of them, the commissioner shall issue a certificate

 to the building official stating that the official is

 certified.  Each person applying for examination and

 certification pursuant to this section shall pay a nonrefundable

 fee of $70.  The commissioner or a designee may establish

 categories of certification that will recognize the varying

 complexities of code enforcement in the municipalities within

 the state.  The commissioner shall provide educational programs

 designed to train and assist building officials in carrying out

 their responsibilities.

 

      Subd. 5.  Oversight committee.  (a) The commissioner shall establish a code administration oversight committee to  evaluate, mediate, and recommend to the commissioner any  administrative action, penalty, suspension, or revocation with  respect to complaints filed with or information received by the commissioner alleging or indicating the unauthorized performance of official duties or unauthorized use of the title certified

 building official, or a violation of statute, rule, or order

 that the commissioner has issued or is empowered to enforce. 

 The committee consists of five certified building officials, at

 least two of whom must be from nonmetropolitan counties. 

 Committee members must be compensated according to section

 15.059, subdivision 3.  The commissioner's designee shall act as

 an ex-officio member of the oversight committee. 

 

    (b) If the commissioner has a reasonable basis to believe

 that a person has engaged in an act or practice constituting the

 unauthorized performance of official duties, the unauthorized

 use of the title certified building official, or a violation of

 a statute, rule, or order that the commissioner has issued or is

 empowered to enforce, the commissioner may proceed with

 administrative actions or penalties as described in subdivision

 5a or suspension or revocation as described in subdivision 5b. 

 

    Subd. 5a.    Administrative action and penalties.  The

 commissioner shall, by rule, establish a graduated schedule of

 administrative actions for violations of sections 16B.59 to

 16B.75 and rules adopted under those sections.  The schedule

 must be based on and reflect the culpability, frequency, and

 severity of the violator's actions.  The commissioner may impose

 a penalty from the schedule on a certification holder for a

 violation of sections 16B.59 to 16B.75 and rules adopted under

 those sections.  The penalty is in addition to any criminal

 penalty imposed for the same violation.  Administrative monetary

 penalties imposed by the commissioner must be paid to the

 special revenue fund. 

 

    Subd. 5b.    Suspension; revocation.  Except as

 otherwise provided for by law, the commissioner may, upon notice

 and hearing, revoke or suspend or refuse to issue or reissue a

 building official certification if the applicant, building

 official, or certification holder:

 

    (1) violates a provision of sections 16B.59 to 16B.75 or a

 rule adopted under those sections;

 

    (2) engages in fraud, deceit, or misrepresentation while

 performing the duties of a certified building official;

 

    (3) makes a false statement in an application submitted to

 the commissioner or in a document required to be submitted to

 the commissioner; or

 

    (4) violates an order of the commissioner. 

 

    Notice must be provided and the hearing conducted in

 accordance with the provisions of chapter 14 governing contested

 case proceedings.  Nothing in this subdivision limits or

 otherwise affects the authority of a municipality to dismiss or

 suspend a building official at its discretion, except as

 otherwise provided for by law.

 

Subd. 7.    Continuing education.  Subject to sections

 16B.59 to 16B.75, the commissioner may by rule establish or

 approve continuing education programs for municipal building

 officials dealing with matters of building code administration,

 inspection, and enforcement. 

 

    Each person certified as a building official for the state

 must satisfactorily complete applicable educational programs

 established or approved by the commissioner every three calendar

 years to retain certification.

 

    Each person certified as a building official must submit in

 writing to the commissioner an application for renewal of

 certification within 60 days of the last day of the third

 calendar year following the last certificate issued.  Each

 application for renewal must be accompanied by proof of

 satisfactory completion of minimum continuing education

 requirements and the certification renewal fee established by

 the commissioner. 

 

Impact on Farming Operations

12.         Minn. Stat. § 14.111 imposes an additional notice requirement when rules are proposed that affect farming operations.  The statute requires that the agency provide a copy of the proposed rules to the Commissioner of Agriculture 30 days prior to the publication of the proposed rule in the State Register.  In this particular case, the Department did not give the required notice to the Commissioner of Agriculture because it concluded the rules do not affect farming operations.  The Administrative Law Judge agrees with that conclusion.

Regulatory Analysis

13.           The Administrative Procedure Act requires an agency adopting rules to discuss six factors in its statement of need and reasonableness.  These factors are:

(1)  A description of classes of persons who probably will be affected by the proposed rule, including classes that will bear the costs of the proposed rule and classes that will benefit from the proposed rule.

The Department identified affected persons as including building officials and candidates for certification.  The Department also noted that generally, the public may be affected because the rule can be used to determine continued fitness for building officials.  The Department stated there would be no additional costs to the general public or to any specific group of people.  They stated that design professionals, the construction industry, building code professionals and the general public will all benefit because of the new rule.

(2) The probable costs to the agency and any other agency of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues.

The Department indicated that there will be no costs to the Department of Administration, Building Codes Division or any other state agency as a result of the rule, nor would it affect state revenues.

(3) A determination of whether there are less costly methods or less intrusive methods for achieving the purpose of the proposed rule.

The Department identified no other options to achieving the purpose to the proposed rule, and thus there were none that were less costly or intrusive.[21]

(4) A description of any alternative methods for achieving the purpose of the proposed rule that were seriously considered by the agency and reasons why they were rejected in favor of the proposed rule.

The Department pointed out that there are no other methods for achieving the proposed rule, and thus none were considered or rejected.

(5) Probable cost of complying with a proposed rule.

The Department noted that there are no additional costs associated with complying with the proposed rule.

(6) An assessment of any differences between the proposed rule and existing federal regulations and a specific analysis of the need for and reasonableness of each difference.

The Department stated that there are no federal regulations related to the proposed rule.

          14.          The only questions raised about these Departmental assertions related to cost.  Both at the hearing and in written submission, persons said that investigation and monitoring required by these rules would inevitably cost money.  The Department responded that it was already performing investigations with current employees, and they would just continue performing them.  For monitoring, the Department expects to use existing staff as well, and thus does not believe the rule will cause it to incur any additional costs.[22]

 

Performance Based Rules

15.         The Administrative Procedure Act also requires an agency to describe how it has considered and implemented the legislative policy supporting performance based regulatory systems.  A performance based rule is one that emphasizes superior achievement in meeting the agency’s regulatory objectives, but gives maximum flexibility to the regulated party and the agency in meeting those objectives.  The Department failed to adequately respond to this item in the SONAR, but did adequately respond during the hearing and in post-hearing comments.  Given the nature of the legislative mandate that the Department provide a “graduated schedule” as well as “procedures” for taking certain specified actions, it is difficult to see  how the rule could be more performance-based.  The more general the legislative grant is, the greater is the ability of the agency to respond in a performance-based way.  But to the extent the legislature requires certain items, the agency is forced to spell out those items, and the specific legislative directive must override the general desire for more performance-based rules.

Additional Notice and Advisory Committee

16.         In addition to the mailed and published notices required by statute, the Department published the proposed rule, Statement of Need and Reasonableness (“SONAR”), and Notice of Intent to Adopt on its website.  It also mailed a Notice of Intent to Adopt to all certified building officials in the state, members of the construction codes advisory council, and also to the Metropolitan Council.  After it was determined that a hearing would be required, the Department mailed a Notice of Hearing to all persons who had requested a hearing.

17.         The Department formed an advisory committee to assist it in drafting the proposed rule.  As finally constituted, the committee included four building officials, one representative from the Builders Association of Minnesota staff, one Building Owners and Managers Association staff, and one staff person from the Building Codes and Standards Department.  The committee met four times, reviewed occupational regulation procedures from a number of other regulated professions, as well as looking at building official discipline regulations from other states.  After the committee  completed its draft, the Attorney General’s office proposed changes and the Department made changes, and recirculated it to the committee.  No member of the committee objected to the proposed changes.[23]

Rulemaking Legal Standards 

18.        Under Minn. Stat. § 14.14, subd. 2, and Minn. Rule 1400.2100, a determination must be made in a rulemaking proceeding as to whether the agency has established the need for and reasonableness of the proposed rule by an affirmative presentation of facts.  In support of a rule, an agency may rely on legislative facts, namely general facts concerning questions of law, policy and discretion, or it may simply rely on interpretation of a statute, or stated policy preferences.[24]  The Department prepared a Statement of Need and Reasonableness in support of the proposed rules.  At the hearing, the Department primarily relied upon the SONAR as its affirmative presentation of need and reasonableness for the proposed amendments.  The SONAR was supplemented by comments made by Department representatives at the public hearing and in written post-hearing submissions.

19.           The question of whether a rule has been shown to be reasonable focuses on whether it has been shown to have a rational basis, or whether it is arbitrary, based upon the rulemaking record.  Minnesota case law has equated an unreasonable rule with an arbitrary rule.[25]  Arbitrary or unreasonable agency action is action without consideration and in disregard of the facts and circumstances of the case.[26]  A rule is generally found to be reasonable if it is rationally related to the end sought to be achieved by the governing statute.[27]  The Minnesota Supreme Court has further defined an agency’s burden in adopting rules by requiring it to “explain on what evidence it is relying and how the evidence connects rationally with the agency’s choice of action to be taken.”[28]  An agency is entitled to make choices between possible approaches as long as the choice made is rational.  Generally, it is not the proper role of the Administrative Law Judge to determine which policy alternative presents the “best” approach since this would invade the policy-making discretion of the agency.  The question is rather whether the choice made by the agency is one that a rational person could have made.[29]

20.           In addition to need and reasonableness, the Administrative Law Judge must also assess whether the rule adoption procedure was complied with, whether the rule grants undue discretion, whether the Department has statutory authority to adopt the rule, whether the rule is unconstitutional or illegal, whether the rule constitutes an undue delegation of authority to another entity, or whether the proposed language is not a rule.[30]  In this matter, the Department has proposed several changes to the rule after publication of the rule language in the State Register.  Because of this circumstance, the Administrative Law Judge must determine if the new language is substantially different from that which was originally proposed.[31]

21.           The standards to determine if new language is substantially different are found in Minn. Stat. § 14.05, subd. 2.  The statute specifies that a modification does not make a proposed rule substantially different if “the differences are within the scope of the matter announced … in the notice of hearing and are in character with the issues raised in that notice,” the differences “are a logical outgrowth of the contents of the … notice of hearing and the comments submitted in response to the notice,” and the notice of hearing “provided fair warning that the outcome of that rulemaking proceeding could be the rule in question.”  In determining whether modifications make the rules substantially different, the Administrative Law Judge is to consider whether “persons who will be affected by the rule should have understood that the rulemaking proceeding … could affect their interests,” whether “the subject matter of the rule or issues determined by the rule are different from the subject matter or issues contained in the … notice of hearing,” and whether “the effects of the rule differ from the effects of the proposed rule contained in the … notice of hearing.”[32] 

 

Analysis of Proposed Rule

General

22.           There are 13 subparts to this rule, but only three of them received significant comment.  This report is limited to discussion of the three portions of the proposed rule that received significant comment or otherwise need to be examined.  When proposed rules are adequately supported by the SONAR or the Department’s oral or written comments, a detailed discussion of them is unnecessary.  Instead, the Administrative Law Judge now finds that the agency has demonstrated the need for and reasonableness of all the rule provisions not specifically discussed in this report.  All the rule provisions not specifically discussed in this report are found to be authorized by statute, and there are no other problems with them that would prevent their adoption.

Discussion of Proposed Rule by Subpart

          Subpart 4 – Oversight Committee

23.         Minn. Stat. § 16B.65, subd 5, directs the Commissioner to establish a code administration oversight committee to handle complaints concerning certified building officials.  The committee is to recommend disciplinary action to the Commissioner, and the Commissioner is empowered to proceed with discipline.  The statute specifies that the committee be made up of five certified building officials, at least two of whom must be from non-metropolitan counties.

24.         At the hearing, it was suggested that complainants should have to exhaust their remedies at the local level before they could file a complaint with the oversight committee.[33]  The Department responded that to the extent the complaint involved interpretation of the building code, as opposed to misconduct of the officials, the committee would steer the complainant to whatever due process for code administration exists at the local level, such as a local board of appeals.  But to the extent the complaint deals with matters such as official misconduct, the Department stated that the statute does not allow the committee to require the exhaustion of local remedies.  The Administrative Law Judge agrees with the Department.  The statute explicitly directs the Commissioner to establish the committee to deal with “complaints filed with or information received by the Commissioner alleging or indicating the unauthorized performance of official duties or unauthorized use of the title certified building official, or a violation of statute, rule, or order that the Commissioner has issued or is empowered to enforce.”  Therefore, to the extent that a complaint falls within the committee’s statutory jurisdiction, it is improper to require the exhaustion of local remedies.  Such a requirement must be added by the legislature, not the Department.

25.         A similar issue is raised by the City of Plymouth.[34]  The City suggested that the rule be amended to require that complaints be filed within one year from the time of the alleged violation.  The Department responded that such a change could not be made by rule, but had to be made by statute.  Again, the Administrative Law Judge concludes that the Department is correct.[35]

26.         Some commentators basically disagree with the idea of having a state-level complaint process at all.[36]  They fear that a disgruntled permit applicant will file frivolous complaints in an attempt to harass a building official.  In response, the Department noted that the committee would be made up entirely of certified building officials, who would be able to spot a frivolous complaint when they saw it.  Moreover, if Department investigators are used by the committee to investigate complaints, they are already versed in the nature of frivolous complaints because they already have to deal with them.  The Administrative Law Judge finds the question of whether or not there ought to be a state-level complaint process at all is not open for discussion – the legislature has mandated it, and the Department must adopt it.

27.         One commentator suggested that there be a “sunset” after which a complaint and any resulting disciplinary action be expunged from an official’s record if they have no further violations.[37]  The Department responded that normally, disciplinary actions on a license or certification remain on record forever, unless a separate statute states otherwise.  The Administrative Law Judge agrees that this is the normal procedure, but is not aware that it is one which is required by any statute or court ruling.  In other words, the Department could, on a case-by-case basis, provide a “sunset” provision as part of a disciplinary order.  But that would be most appropriately allowed on a case-by-case basis.  The rule is reasonable without having a blanket “sunset” provision for all situations.

28.         In sum, the rule relating to the oversight committee has been demonstrated to be needed and reasonable, and no additional changes are required.

Subpart 5 – Graduated Schedule of Penalties

29.           Minn. Stat. § 16B.65, subd. 1 requires each municipality to designate a building official, and not more than one building official, to be responsible for code administration.  To be eligible for such designation, a building official must be certified by the Department.  The law does not require that all building officials be certified, only the one designated building official.  Part of the certification process is an examination, and continuing education is required in order to renew certification.  Some cities have chosen to require that a number of its personnel hold a building official’s certification, but that requirement is something that is solely within the discretion of the city.  Similarly, some individuals have chosen to obtain certification, presumable to further their careers, even though they are not currently a municipality’s designated building official.  Some of those individuals may work for municipalities, but others may not.  There is no requirement that an individual be employed by a municipality in order to be certified.  All that the law requires is that a municipality designate one, and not more than one, certified person to be its building official.  Once a person becomes certified, then they are subject to the disciplinary powers of the Commissioner, which are set forth in this rule.  The Commissioner is empowered to discipline any certified person, regardless of their current employment status.

30.         A number of persons criticized the graduated schedule of penalties set forth in subpart 5 because they felt it allowed the Commissioner to intrude too far into the employer/employee relationship that exists between a certified person and a municipality.  The best example of this concern relates to proposed subpart 5(b)(2) and (3), which allow the Commissioner to limit the scope of work that can be performed by an individual, or impose mandatory supervision, monitoring, reporting, or minimizing or controlling public contact.  The commentators are concerned that the Commissioner might impose conditions on an individual that make it impossible for an office to function.  For this reason, the City of Plymouth objects to items B(3), B(4), C(1), and C(2) and recommends that they all be replaced with a single penalty. The City’s proposed penalty would allow the Commissioner to reduce the classification of a certified building official to that of a certified building official-limited.  This limited status exists in Rule (part 1301.0200), and specifies a limited number of activities which can be performed.[38]  The City wants maximum flexibility to reassign work within the office, and the less specific the penalty, the more flexible it is for a municipality.  The City also pointed out that its employees are covered by a collective bargaining agreement, and that agreement provides a grievance process and certain other due process procedures.  The City expressed concerns that if the state imposed a certain penalty on a certified building official, an arbitrator in the grievance process might prohibit the imposition of that penalty, and a municipality would be caught in the middle.

31.         The Department’s response to these  concerns is to point out that there is a distinction between the certification relationship which exists between the state and the individual, on the one hand, and the employment relationship which exists between the municipality and the individual on the other hand.  The Department recognizes that both certification actions and employment actions can arise from the same incident, but believes that it is the state’s responsibility to determine the discipline to be placed on a certification holder for a violation, and the employer’s responsibility to determine what employer/employee discipline should be placed on the employee, even though both actions arise from the same incident.[39] The Department argues that there well could be violations that the Department takes seriously, and believes discipline is appropriate, but the municipality does not take seriously and does not believe warrant discipline, and vice versa.  Finally, the Department points out that it is a municipality’s choice to require its employees to hold certifications, and that the state only requires one employee to be certified.  The Department suggests that if a municipality does not like having an outside authority in a position to discipline its employees, then the municipality should reconsider the benefits of requiring all staff to be certified in light of the possibility of conflicts.

32.         The Administrative Law Judge concludes that the Department’s proposed schedule of penalties has been demonstrated to be reasonable, and the fact that some of them may marginally intrude upon the operations of a municipal office does not render them unreasonable.  The collective bargaining agreement issue is a short-term one:  presumably, the next time the agreement is negotiated, cities will insist on some sort of recognition of the state’s disciplinary process.  In the short-term, the Administrative Law Judge believes that the likelihood of an arbitrator rejecting a state penalty and placing the city in an untenable position is too remote and speculative to render the proposed rule unreasonable.  There is no collective bargaining agreement in the record, but the kinds of considerations which the statute requires the state to weigh in assessing a penalty are similar to the kinds of considerations that an arbitrator would likely consider.[40]

33.         Finally, the City of Plymouth proposes to delete the last sentence of part (c)(6).  Subpart (6) allows the Commissioner to impose an administrative penalty not exceeding $700 for each separate violation, and ends with the sentence “the amount of the penalty imposed upon the building official may be fixed for each separate violation to match any economic advantage gained as a result of the official’s actions.”  The City believes that if any economic advantage has been gained, then it is highly likely that laws have been violated and criminal prosecution or other severe actions should be taken, far beyond this administrative penalty.[41]  The Department responds that although there may, indeed, be other actions or criminal prosecutions for a violation resulting in economic gain, there is no assurance that there will be.  The Department believes that the proposed rule would provide a way to fine an official, regardless of whether or not other actions are taken.  The Administrative Law Judge believes that the Department has provided a reasonable basis for its proposal.  There are innumerable factors which go into a decision of whether or not to criminally prosecute an individual, some of which would also be pertinent to the state’s decision of whether or not to fine the person, but others of which would not.  It is rational for the state to want to have this penalty available, regardless of whether or not there is a criminal prosecution.

Subpart 8 – Notice to Municipalities

34.         By far the most controversial issue in this proceeding is whether or not the Department has justified its proposal to delay giving notice to a municipality when one of its employees is under investigation until such time as the Commissioner actually imposes a penalty on the employee.  Critics assail this as poor policy based on a false legal premise.  The Department responds that it is required by law to withhold information until final action is taken.  The law at issue is the Minnesota Government Data Practices Act.[42]

35.         The general premise of the Data Practices Act is that government data are public, and are accessible by the public unless there is a state statute or other authority that makes them not public.  At particular issue in this proceeding are complaints against building officials which are filed with the state.  The law provides that, in general, collection and storage of all data on individuals and the use and dissemination of private and confidential data on individuals shall be limited to that necessary for the administration and management of programs specifically authorized by the legislature or local governing body or mandated by the federal government.[43]  It also provides that, in general, a responsible authority shall allow another responsible authority access to data classified as not public only when the access is authorized or required by statute or federal law.[44]  The law has specific provisions relating to educational data, health data, welfare data, taxation data, and numerous other categories.  Of particular interest in this inquiry, however, are two of these categories:  investigative data, and licensing data. 

36.         With regard to investigative data, the law provides that data collected by a state agency as part of an active investigation undertaken for the purpose of commencing civil legal action, or which are retained in anticipation of a pending civil legal action, are classified as confidential.[45]  However, the agency may make such data accessible to any person, agency or to the public if the agency determines that the access will aid the law enforcement process.  The law goes on to provide that any person may petition the district court to obtain disclosure of such confidential data, and the court shall consider whether the benefit to the person seeking the data outweighs any harm to the public, investigating agency, or any person identified in the data.[46]

37.         The law relating to “licensing data” applies to certain data maintained by a “licensing agency.”  “Licensing agency,” in turn, refers to any agency of the state which is given statutory authority to issue professional or other types of licenses.  The initial threshold question, then, is whether or not the certification issued by the Commissioner constitutes a “license.”  Neither the attorney for the League of Cities, nor the Assistant Attorney General representing the department, presented any relevant statute or case law support to answer this question one way or the other, nor has the Administrative Law Judge’s limited research uncovered any.  However, when one considers the standards for issuance of a certificate (including passing an examination), and the disciplinary system imposed by the legislature (and the department) in disciplining a holder, the Administrative Law Judge cannot find any meaningful difference between this “certificate” and a “license.”  The import of that conclusion is that Minn. Stat. § 13.41, subd. 4 provides that “active investigative data relating to the investigation of complaints against any Licensee” is confidential data, and is not to be shared with anyone, even the subject of the investigation.  Once there has been a final disciplinary action, then a variety of materials including findings of fact, conclusions of law and specification of the final disciplinary action and the entire record of any disciplinary proceeding where a hearing is held, becomes public.  If the Licensee and licensing agency agree to resolve a complaint without a hearing, the agreement and the specific reasons for the agreement are also public data.  What that means, for purpose of this proceeding, is that if a complaint is filed with the state, the state may not inform the municipality of details of the complaint until final disciplinary action is taken by the state.

38.         The record contains a number of policy arguments as to why the state ought to be required to inform municipalities if there is a complaint concerning one of their employees, but the pros and cons of those arguments are of no importance when the law requires the state to keep information confidential.  Therefore, the Administrative Law Judge will not attempt to evaluate and weigh these arguments.  Persons who believe that the Data Privacy Act ought to be changed to require the Department to share information must petition the legislature for a change to allow such sharing, or convince the Commissioner that the current law allows it.[47]

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

1.   The Department gave proper notice of the hearings in this matter.

2.   The Department has fulfilled the procedural requirements of Minn. Stat. § 14.14, and all of the other procedural requirements of law or rule.

3.   The Department has demonstrated its statutory authority to adopt the proposed rules and has fulfilled all other substantive requirements of law or rule within the meaning of Minn. Stat. § § 14.05, 14.15, and 14.50.

4.   The Department has documented the need for and reasonableness of its proposed rules with an affirmative presentation of facts in the record within the meaning of Minn. Stat. § § 14.14, subd. 2 and 14.50 (iii).

5.   The additions to the rules which were suggested by the Department after publication of the proposed rules in the State Register do not result in rules which are substantially different from the proposed rules as published, within the meaning of Minn. Stat. § § 14.05, subd. 2 and 14.15, subd. 3.

6.   Any findings that might properly be termed conclusions and any conclusions that might properly be termed findings are hereby adopted as such.

7.   A finding or conclusion of need and reasonableness in regard to any particular rule subsection does not preclude and should not discourage the Department from further modification of the proposed rules based upon an examination of the public comments, provided that the rule as finally adopted is based upon facts appearing in this rule hearing record.

          Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:

 

RECOMMENDATION

IT IS HEREBY RECOMMENDED:  That the proposed rules be adopted.

Dated this _2nd_ day of April, 2003.

                   

/s/ Allan W. Klein

ALLAN W. KLEIN

Administrative Law Judge

 

Reported:  Transcript Prepared by Barbara F. Schwegman,

Kirby A. Kennedy & Assoc.

NOTICE

This Report must be available for review to all affected individuals upon request for at least five working days before the agency takes any further action on the rule(s).  The agency may then adopt a final rule or modify or withdraw its proposed rule.  If the Department makes changes in the rule other than those recommended in this report, it must submit the rule with the complete hearing record to the Chief Administrative Law Judge for a review of the changes prior to final adoption.  Upon adoption of a final rule, the agency must submit it to the Revisor of Statutes for a review of the form of the rule.  The agency must also give notice to all persons who requested to be informed when the rule is adopted and filed with the Secretary of State.