Michigan Office of Administrative Hearings and Rules

Administrative Rules Division (ARD)

MOAHR-Rules@michigan.gov

REGULATORY IMPACT STATEMENT

and COST-BENEFT ANALYSIS (RIS)

Agency Information:

Department name:

Licensing and Regulatory Affairs

Bureau name:

Bureau of Construction Codes

Name of person filling out RIS:

Amanda Johnson

Phone number of person filling out RIS:

517-241-3408

E-mail of person filling out RIS:

JohnsonA39@michigan.gov

Rule Set Information:

ARD assigned rule set number:

2019-115 LR

Title of proposed rule set:

Michigan Boiler Rules

Comparison of Rule(s) to Federal/State/Association Standard

1. Compare the proposed rules to parallel federal rules or standards set by a state or national licensing agency or

accreditation association, if any exist.

There are no federal rules or standards that are set by a state or national licensing agency or accreditation association.

State law mandates the rules. MCL 125.1504(5) states that the director shall add, amend, and rescind rules to update

the MI Boiler Rules not less than once every 3 years to coincide with the national code change cycle.

A. Are these rules required by state law or federal mandate?

The rules are promulgated under authority in the State Boiler Act, which was repealed, so these rules are being

rescinded.

B. If these rules exceed a federal standard, please identify the federal standard or citation, describe why it is

necessary that the proposed rules exceed the federal standard or law, and specify the costs and benefits arising out

of the deviation.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. These rules do not exceed a federal standard.

2. Compare the proposed rules to standards in similarly situated states, based on geographic location, topography,

natural resources, commonalities, or economic similarities.

While the current rules are being rescinded, they are being recodified. In Ohio, Illinois, Indiana, Wisconsin and

Minnesota you must have a state issued commission, certification, license, and a National Board Commission.

A. If the rules exceed standards in those states, please explain why and specify the costs and benefits arising out of

the deviation.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The rules do not exceed standards in the surrounding states.

3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the proposed

rules.

MCL 24.245(3)

RIS-Page 2

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no law, rules and or other legal requirements that duplicate, overlap, or

conflict with the proposed rules.

A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and local laws

applicable to the same activity or subject matter. This section should include a discussion of the efforts undertaken

by the agency to avoid or minimize duplication.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no federal, state, or local laws applicable to the same activity or subject

matter.

4. If MCL 24.232(8) applies and the proposed rules are more stringent than the applicable federally mandated

standard, provide a statement of specific facts that establish the clear and convincing need to adopt the more

stringent rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no federal rules or standards that regulate construction codes.

5. If MCL 24.232(9) applies and the proposed rules are more stringent than the applicable federal standard,

provide either the Michigan statute that specifically authorizes the more stringent rules OR a statement of the

specific facts that establish the clear and convincing need to adopt the more stringent rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no federal rules or standards that regulate construction codes.

Purpose and Objectives of the Rule(s)

6. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.

The State Boiler Act of 1965, 1965 PA 290, MCL 408.751 to MCL 408.776, has been repealed, is outdated, and does

not provide uniform licensing, complaint investigation, and enforcement provisions for skilled trades licenses. This

places a burden on the Bureau administering the act and creates an inefficient use of resources. Additionally, many

licensees who are cross licensed in multiple trades have expressed dissatisfaction with conflicting provisions in

separate statutes. The Skilled Trades Regulation Act, 2016 PA 407, streamlines the processes for all license types

included, while providing for modernized provisions, such as electronic communication and third-party continuing

education tracking options, and specifies violations for unlicensed activity as provided to other regulated professions.

While the Skilled Trades Regulation Act repealed the five Acts that regulated certain skilled trades, this new Act

includes provisions to regulate those same skilled trades. Consequently, the bureau is promulgating a new rule set to

regulate these skilled trades, as provided under the new Act. In addition, the bureau has submitted separate RFRs to

rescind the current rules that were promulgated under the authority of the five Acts that have been repealed.

A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.

The State Boiler rules are being rescinded and the State Boiler Act of 1965, 1965 PA 290, MCL 408.751 to MCL

408.776, has been repealed.

B. Describe the difference between current behavior/practice and desired behavior/practice.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The current practice is inconsistent whereas the desired practice will be consistent

and will regulate the skilled trades in one place.

C. What is the desired outcome?

The repealed act is outdated and does not provide uniform licensing, complaint investigation, and enforcement

provisions for skilled trades licenses. This places a burden on the Bureau administering these acts and creates an

inefficient use of resources. The new rule set will provide uniform regulation of the skilled trades, as provided under

the new Act, 2016 PA 407.

7. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood

that the harm will occur in the absence of the rule.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The harm will be the continuation of the inconsistencies in the regulation of the

license trades. Likewise, the harm is the continuation of a lack of uniform regulation.

A. What is the rationale for changing the rules instead of leaving them as currently written?

MCL 24.245(3)

RIS-Page 3

The repealed act is outdated and does not provide uniform licensing, complaint investigation, and enforcement

provisions for the boiler trade. This places a burden on the bureau administering these acts and creates an inefficient

use of resources. Additionally, many licensees who are cross licensed in multiple trades have expressed

dissatisfaction with conflicting provisions in separate statutes. The Skilled Trades Regulation Act, 2016 PA 407,

streamlines the processes for all license types including while providing for modernized provisions, such as electronic

communication and third-party continuing education tracking options, and specifies violations for unlicensed activity

as provided to other regulated professions. The new rule set will regulate the skilled trades as provided under the new

act.

8. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting a

regulatory environment in Michigan that is the least burdensome alternative for those required to comply.

The State Boiler Act has been repealed. The State Boiler rules are being rescinded and recodified in the Skilled Trades

Regulation rules. The proposed rules will be reviewed and updated to protect the health, safety, and welfare of

Michigan citizens.

9. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.

The State Boiler Act has been repealed. Because the State Boiler Act was repealed, the bureau is rescinding the

Michigan Boiler rules and then will recodify those rules in a new rule set that will cover all licensing rules regulated

under the Skilled Trades Regulation Act, including the Michigan Boiler Rules.

Fiscal Impact on the Agency

Fiscal impact is an increase or decrease in expenditures from the current level of expenditures, i.e. hiring additional staff,

higher contract costs, programming costs, changes in reimbursements rates, etc. over and above what is currently

expended for that function. It does not include more intangible costs for benefits, such as opportunity costs, the value of

time saved or lost, etc., unless those issues result in a measurable impact on expenditures.

10. Please provide the fiscal impact on the agency (an estimate of the cost of rule imposition or potential savings

for the agency promulgating the rule).

These rules are being rescinded so there is no fiscal impact on the agency. The authority these rules were

promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and so these rules are being

rescinded.

11. Describe whether or not an agency appropriation has been made or a funding source provided for any

expenditures associated with the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. No agency appropriation has been made, nor a funding source provided for any

expenditures associated with the proposed rules.

12. Describe how the proposed rules are necessary and suitable to accomplish their purpose, in relationship to the

burden(s) the rules place on individuals. Burdens may include fiscal or administrative burdens, or duplicative

acts.

The current Michigan Boiler rules will be rescinded, and the bureau will promulgate a new rule set, the Skilled

Trades Regulation rules, that will include the boiler rules. The State Boiler Act was repealed under the Skilled Trades

Regulation Act.

A. Despite the identified burden(s), identify how the requirements in the rules are still needed and reasonable

compared to the burdens.

The Bureau has rescinded the State Boiler Act and is promulgating a new rule set to regulate the skilled trades, as

provided under the new Act.

Impact on Other State or Local Governmental Units

13. Estimate any increase or decrease in revenues to other state or local governmental units (i.e. cities, counties,

school districts) as a result of the rule. Estimate the cost increases or reductions for other state or local

governmental units (i.e. cities, counties, school districts) as a result of the rule. Include the cost of equipment,

supplies, labor, and increased administrative costs in both the initial imposition of the rule and any ongoing

monitoring.

MCL 24.245(3)

RIS-Page 4

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no increases or decreases in revenues to other state or local

governmental units as a result of these rules. There are no cost increases or reductions for such other state or local

governmental units as a result of the rules. No cost of equipment, supplies, labor, or increased administrative costs.

14. Discuss any program, service, duty, or responsibility imposed upon any city, county, town, village, or school

district by the rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There is no program, service, duty, or responsibility imposed upon any city,

county, town, village, or school district by these rules.

A. Describe any actions that governmental units must take to be in compliance with the rules. This section should

include items such as record keeping and reporting requirements or changing operational practices.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no actions that governmental units must take to be in compliance with

the rules.

15. Describe whether or not an appropriation to state or local governmental units has been made or a funding

source provided for any additional expenditures associated with the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. No appropriations to state or local governmental units have been made nor a

funding source provided for any additional expenditures associated with the proposed rules.

Rural Impact

16. In general, what impact will the rules have on rural areas?

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There will be no impact on rural areas.

A. Describe the types of public or private interests in rural areas that will be affected by the rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no public or private interests in rural that will be affected by the rules.

Environmental Impact

17. Do the proposed rules have any impact on the environment? If yes, please explain.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The proposed rules will have no impact on the environment.

Small Business Impact Statement

18. Describe whether and how the agency considered exempting small businesses from the proposed rules.

These rules are being rescinded. The Bureau had a four-week period that licensees and stakeholders could propose a

code change via the rules/code proposal form.

19. If small businesses are not exempt, describe (a) the manner in which the agency reduced the economic impact

of the proposed rules on small businesses, including a detailed recitation of the efforts of the agency to comply

with the mandate to reduce the disproportionate impact of the rules upon small businesses as described below (in

accordance with MCL 24.240(1)(a-d)), or (b) the reasons such a reduction was not lawful or feasible.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Small businesses are not anticipated to be adversely affected by the changes.

A. Identify and estimate the number of small businesses affected by the proposed rules and the probable effect on

small businesses.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The Bureau does not expect that small businesses will be affected by these

proposed rules.

MCL 24.245(3)

RIS-Page 5

B. Describe how the agency established differing compliance or reporting requirements or timetables for small

businesses under the rules after projecting the required reporting, record-keeping, and other administrative costs.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Because the rules apply to individuals who apply for licensure, it is not practical to

establish differing compliance or reporting requirements or timetables for small businesses. Small businesses are not

expected to be adversely affected by these rules. There are no additional reporting, record keeping, or other

administrative costs associated with the implementation of the proposed rules.

C. Describe how the agency consolidated or simplified the compliance and reporting requirements for small

businesses and identify the skills necessary to comply with the reporting requirements.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades

Regulation Act, and so these rules are being rescinded. The compliance and reporting requirements, which are being

added to the new rule set promulgated under the Skilled Trades Regulation Act, are unchanged.

D. Describe how the agency established performance standards to replace design or operation standards required

by the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no design or operation standards in the proposed rules.

20. Identify any disproportionate impact the proposed rules may have on small businesses because of their size or

geographic location.

The State Boiler Act is repealed, and the Michigan Boiler Rules are being rescinded and will be recodified in the

Skilled Trades Regulation rules. The new rules will have no disproportionate impact on small businesses because of

their size or geographic location.

21. Identify the nature of any report and the estimated cost of its preparation by small businesses required to

comply with the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no anticipated reports or increased costs to small businesses that are

required to comply with the proposed rules.

22. Analyze the costs of compliance for all small businesses affected by the proposed rules, including costs of

equipment, supplies, labor, and increased administrative costs.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Small businesses are not expected to be adversely affected the proposed rules,

including costs of equipment, supplies, labor, and increased administrative costs.

23. Identify the nature and estimated cost of any legal, consulting, or accounting services that small businesses

would incur in complying with the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no legal, consulting, or accounting services costs that small businesses

would incur in complying with the proposed rules.

24. Estimate the ability of small businesses to absorb the costs without suffering economic harm and without

adversely affecting competition in the marketplace.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no additional costs or harm anticipated as a result of the State Boiler

Act being repealed.

25. Estimate the cost, if any, to the agency of administering or enforcing a rule that exempts or sets lesser

standards for compliance by small businesses.

The State Boiler Act has been repealed and the new rules are needed to reflect the Skilled Trades Regulation Act.

There is no additional cost to the agency for administrating and enforcing the proposed rules beyond the current

operational costs.

26. Identify the impact on the public interest of exempting or setting lesser standards of compliance for small

businesses.

The State Boiler Act has been repealed and the new rules are needed to reflect the Skilled Trades Regulation Act.

Small businesses are not exempt from either rule set. Therefore, there is no impact on the public interest of

exempting or setting lesser standards of compliance for small businesses.

27. Describe whether and how the agency has involved small businesses in the development of the proposed rules.

MCL 24.245(3)

RIS-Page 6

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The Bureau involved small businesses through the new Skilled Trades Regulation

Act rules review process. An email blast was sent out to stakeholders and licensees with a rule/code proposal form

giving them four weeks to get any rule changes submitted and an advisory meeting was held with stakeholders and

licensees invited.

A. If small businesses were involved in the development of the rules, please identify the business(es).

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Licensees and stakeholders that the Bureau has emails for were involved if they

chose to be.

Cost-Benefit Analysis of Rules (independent of statutory impact)

28. Estimate the actual statewide compliance costs of the rule amendments on businesses or groups.

The rules are needed to reflect the Skilled Trades Regulation Act and will not result in any statewide compliance

costs on businesses or groups. The authority these rules were promulgated under, the State Boiler Act, was repealed

by the Skilled Trades Act, and so these rules are being rescinded.

A. Identify the businesses or groups who will be directly affected by, bear the cost of, or directly benefit from the

proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Businesses will not be directly affected by the proposed rules.

B. What additional costs will be imposed on businesses and other groups as a result of these proposed rules (i.e.

new equipment, supplies, labor, accounting, or recordkeeping)? Please identify the types and number of businesses

and groups. Be sure to quantify how each entity will be affected.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There will be no additional costs imposed on businesses or other groups as a

result of the proposed rules.

29. Estimate the actual statewide compliance costs of the proposed rules on individuals (regulated individuals or

the public). Include the costs of education, training, application fees, examination fees, license fees, new

equipment, supplies, labor, accounting, or recordkeeping.

The proposed rules are not anticipated to increase compliance costs for the public. Individuals who in the past have

had an application and examination fee will continue to do so. Individuals requesting registration as a plan review,

inspector, or building official registration will continue to pay an application fee and will now pay an examination fee

as well. The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades

Act, and so these rules are being rescinded.

A. How many and what category of individuals will be affected by the rules?

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The individuals that would be affected by the rescinding of these rules would be

anyone who works with boilers within the state of Michigan.

B. What qualitative and quantitative impact do the proposed changes in rules have on these individuals?

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The qualitative impact will ensure higher standards for an individual who is

licensed in the skilled trades. There is no quantitative impact.

30. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a result

of the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There are no expected cost reductions to businesses, individuals, or groups of

individuals as a result of the proposed rules.

31. Estimate the primary and direct benefits and any secondary or indirect benefits of the proposed rules. Please

provide both quantitative and qualitative information, as well as your assumptions.

MCL 24.245(3)

RIS-Page 7

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. The primary benefit is uniform licensing, compliant investigation, and

enforcement provisions for skilled trades licensees. The secondary benefit is higher quality licensee, citizens in

Michigan will be better served, likewise fewer complaints will be investigated by the Bureau, this reduces staff costs.

32. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.

The State Boiler rules are being rescinded and recodified in the Skilled Trades Regulation rules. The proposed rules

are not expected to have any adverse impact on business growth or job creation.

33. Identify any individuals or businesses who will be disproportionately affected by the rules as a result of their

industrial sector, segment of the public, business size, or geographic location.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Individuals or businesses will not be disproportionately affected by the rules as a

result of their industrial sector, segment of the public, business size, or geographic location.

34. Identify the sources the agency relied upon in compiling the regulatory impact statement, including the

methodology utilized in determining the existence and extent of the impact of the proposed rules and a cost-

benefit analysis of the proposed rules.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. There were neither estimates or assumptions made. The bureau relied upon staff

and the rules code proposal forms from the public and shareholders.

A. How were estimates made, and what were your assumptions? Include internal and external sources, published

reports, information provided by associations or organizations, etc., that demonstrate a need for the proposed

rules.

There were neither estimates or assumptions made. The authority these rules were promulgated under, the State

Boiler Act, was repealed by the Skilled Trades Act, and so these rules are being rescinded. There are no reasonable

alternatives to the proposed rules that have been identified that would achieve the same or similar goals.

Alternative to Regulation

35. Identify any reasonable alternatives to the proposed rules that would achieve the same or similar goals.

There are no reasonable alternatives to the proposed rules that have been identified that would achieve the same or

similar goals.

A. Please include any statutory amendments that may be necessary to achieve such alternatives.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. No statutory amendments are necessary to achieve alternatives.

36. Discuss the feasibility of establishing a regulatory program similar to that proposed in the rules that would

operate through private market-based mechanisms. Please include a discussion of private market-based systems

utilized by other states.

The authority these rules were promulgated under, the State Boiler Act, was repealed by the Skilled Trades Act, and

so these rules are being rescinded. Establishment of a regulatory program operating through private market-based

mechanisms similar to the proposed rules would not be feasible, as licensing by the Bureau is the primary obligation

as required under the Act.

37. Discuss all significant alternatives the agency considered during rule development and why they were not

incorporated into the rules. This section should include ideas considered both during internal discussions and

discussions with stakeholders, affected parties, or advisory groups.

There were no significant alternatives presented for the Bureau to consider.

Additional Information

38. As required by MCL 24.245b(1)(c), please describe any instructions regarding the method of complying with

the rules, if applicable.

The State Boiler Rules are being rescinded so there are no instructions for compliance.

MCL 24.245(3)