Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
MOAHR-Rules@michigan.gov  
REGULATORY IMPACT STATEMENT  
and COST-BENEFIT ANALYSIS (RIS)  
AGENCY INFORMATION:  
Department name:  
Lifelong Education, Advancement, and Potential  
Bureau name:  
Office of the Director  
Name of person filling out RIS:  
Stacy Guthrie  
Phone number of person filling out RIS:  
517-328-8296  
Email of person filling out RIS:  
GuthrieS4@michigan.gov  
RULE SET INFORMATION:  
ARD assigned rule set number:  
2026-29 LP  
Title of proposed rule set:  
Declaratory Rulings  
COMPARISON OF RULE(S) TO FEDERAL/STATE/ASSOCIATION STANDARDS  
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.  
The proposed rules were drafted after reviewing the rules on Declaratory Rulings from other state agencies: MDCR,  
LARA, DHHS, and MDE.  
MDCR (R 37.20) does not require a particular method of submission; does not have a detailed form; prohibits the  
department from issuing a declaratory ruling if a complaint has been filed with the department; does not set a  
timetable for a determination; and requires the petitioner to submit a clear and concise statement of the facts, and a  
legal brief, memorandum, or other reference to legal authorities relied on.  
LARA (R 338.81) and DHHS (R 325.1211) have nearly identical rulesets regarding Declaratory Rules. Both agencies  
include a form, set a timetable for determination, permits the agency to seek out additional information, and specify  
the method of submission that is restricted to mail or personal delivery.  
MDE (R 340.1352) permits the submission by email or mail; requires that the request include a clear and concise  
statement of the facts, a legal brief, memorandum, or other reference to legal authorities relied on, and the contact  
information of the applicant; and sets a timeframe for the determination.  
A. Are these rules required by state law or federal mandate?  
The proposed rules are required by state law, MCL 24.263.  
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 proposed rules do not exceed a federal standard. The U.S. Code permits federal departments to issue a  
declaratory ruling but is vague on the details of what that process would look like. Section 5(d) of the  
MCL 24.245(3)  
RIS-Page 2  
Administrative Procedure Act (5 U.S.C. § 554(e)) provides that an “agency, with like effect as in the case of  
other orders, and in its sound discretion, may issue a declaratory order to terminate a controversy or remove  
uncertainty.”  
2. Compare the proposed rules to standards in similarly situated states, based on geographic location,  
topography, natural resources, commonalities, or economic similarities.  
227.41 of Wisconsin Statute outlines the Declaratory Rulings process for state agencies, with more specific  
requirements for the Department of Revenue in subsection (5). Wisconsin Statute is similar in terms of the content of  
the Declaratory Ruling request, though Wisconsin provides interested parties with a hearing if a state agency grants  
the petition.  
A. If the rules exceed standards in those states, please explain why and specify the costs and benefits  
arising out of the deviation.  
The proposed rules do not exceed the standards in other states.  
3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the  
proposed rules.  
The proposed rules do not conflict with any laws, rules, or other legal requirements as they are specific to a  
department process.  
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 proposed rules are specific to a department process and do not require coordination with other state,  
federal and local laws as there would be no overlap in terms of the subject matter or activity.  
PURPOSE AND OBJECTIVES OF THE RULE(S)  
4. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.  
The proposed rules are not designed to alter a behavior but to create a formal process for interested parties to submit  
a declaratory ruling request.  
A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.  
The proposed rules are not designed to alter a behavior but to create a formal process for interested parties to  
submit a declaratory ruling request.  
B. Describe the difference between current behavior/practice and desired behavior/practice.  
The proposed rules are not designed to alter a behavior but to create a formal process for interested parties to  
submit a declaratory ruling request.  
C. What is the desired outcome?  
The proposed rules are not designed to alter a behavior but to create a formal process for interested parties to  
submit a declaratory ruling request.  
5. 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.  
In the absence of the rule, interested parties will lack a formal process established by rules to submit a declaratory  
ruling request to the department.  
A. What is the rationale for changing the rules instead of leaving them as currently written?  
There is currently no department rule establishing a declaratory ruling process.  
6. 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.  
This doesn’t create a requirement of interested parties but creates a mechanism for interested parties to request a  
declaratory ruling of the department.  
7. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.  
There is currently no department rule establishing a declaratory ruling process.  
MCL 24.245(3)  
RIS-Page 3  
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.  
8. 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).  
There is no fiscal impact on the agency.  
9. Describe whether or not an agency appropriation has been made or a funding source provided for any  
expenditures associated with the proposed rules.  
There is no need for a funding source for the proposed rules.  
10. 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 proposed rules do not create a burden on individuals but provide clarity on how to submit a declaratory rulings  
request.  
A. Despite the identified burden(s), identify how the requirements in the rules are still needed and  
reasonable compared to the burdens.  
The proposed rules do not create a burden on individuals.  
IMPACT ON OTHER STATE OR LOCAL GOVERNMENTAL UNITS  
11. 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.  
There is no fiscal impact on other state or local governmental units.  
12. Discuss any program, service, duty, or responsibility imposed upon any city, county, town, village, or school  
district by the rules.  
The rules do not extend beyond the process established for the department and would not impact any other program,  
service, duty or responsibility on local government.  
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 rules do not extend beyond the process established for the department and would not impact any other  
program, service, duty or responsibility on local government.  
13. 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.  
No appropriation is needed for the proposed rules.  
RURAL IMPACT  
14. In general, what impact will the rules have on rural areas?  
There is no impact on rural areas.  
A. Describe the types of public or private interests in rural areas that will be affected by the rules.  
There is no impact on rural areas.  
MCL 24.245(3)  
RIS-Page 4  
ENVIRONMENTAL IMPACT  
15. Do the proposed rules have any impact on the environment? If yes, please explain.  
No, there is no impact on the environment.  
SMALL BUSINESS IMPACT STATEMENT  
16. Describe whether and how the agency considered exempting small businesses from the proposed rules.  
There is no impact on small businesses.  
17. 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.  
There are no compliance or reporting requirements for small businesses under the proposed rules.  
A. Identify and estimate the number of small businesses affected by the proposed rules and the probable  
effect on small businesses.  
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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.  
There are no compliance or reporting requirements for small businesses under 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.  
There are no compliance or reporting requirements for small businesses under the proposed rules.  
D. Describe how the agency established performance standards to replace design or operation standards  
required by the proposed rules.  
There are no performance standards for small businesses under the proposed rules.  
18. Identify any disproportionate impact the proposed rules may have on small businesses because of their size  
or geographic location.  
There is no impact on small businesses.  
19. Identify the nature of any report and the estimated cost of its preparation by small businesses required to  
comply with the proposed rules.  
There are no compliance or reporting requirements for small businesses under the proposed rules.  
20. Analyze the costs of compliance for all small businesses affected by the proposed rules, including costs of  
equipment, supplies, labor, and increased administrative costs.  
There are no compliance or reporting requirements for small businesses under the proposed rules.  
21. Identify the nature and estimated cost of any legal, consulting, or accounting services that small businesses  
would incur in complying with the proposed rules.  
There are no compliance or reporting requirements for small businesses under the proposed rules.  
22. Estimate the ability of small businesses to absorb the costs without suffering economic harm and without  
adversely affecting competition in the marketplace.  
There are no costs to small businesses under the proposed rules.  
23. 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.  
There are no costs to small businesses under the proposed rules.  
24. Identify the impact on the public interest of exempting or setting lesser standards of compliance for small  
businesses.  
There are no compliance or reporting requirements for small businesses under the proposed rules.  
MCL 24.245(3)  
RIS-Page 5  
25. Describe whether and how the agency has involved small businesses in the development of the proposed  
rules.  
The department has not involved small business in the development of the proposed rules. The proposed rules are  
specific to a department process for interested parties to submit a declaratory rulings request.  
A. If small businesses were involved in the development of the rules, please identify the business(es).  
The department has not involved small businesses in the development of the proposed rules.  
COST-BENEFIT ANALYSIS OF RULES (INDEPENDENT OF STATUTORY IMPACT)  
26. Estimate the actual statewide compliance costs of the rule amendments on businesses or groups.  
There are no costs to businesses or groups under the proposed rules.  
A. Identify the businesses or groups who will be directly affected by, bear the cost of, or directly benefit  
from the proposed rules.  
There are no costs to businesses or groups under 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.  
There are no costs to businesses or groups under the proposed rules.  
27. 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.  
There are no compliance costs to individuals under the proposed rules.  
A. How many and what category of individuals will be affected by the rules?  
The number of individuals is undetermined and would be those who would like to submit a request for a  
declaratory ruling.  
B. What qualitative and quantitative impact do the proposed changes in rules have on these individuals?  
The individuals will have a formalized process established by rules to request a declaratory ruling.  
28. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a  
result of the proposed rules.  
There are no cost reductions under the proposed rules.  
29. 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 any assumptions.  
The primary benefit is that individuals who would like to submit a declaratory rulings request to the department will  
have clarity on how to do so.  
30. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.  
The proposed rules would not impact business growth or job creation in Michigan.  
31. 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 proposed rules would not have a disproportionate impact.  
32. 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.  
Since the proposed rules would establish a department process for interested parties to submit a declaratory ruling as  
required by APA, the department does not see a cost to those interested parties. The department did consider the  
methods for submission and included electronic transmission to limit costs for the applicant.  
A. How were estimates made, and what assumptions were made? Include internal and external sources,  
published reports, information provided by associations or organizations, etc., that demonstrate a need  
for the proposed rules.  
Declaratory rulings generally do not present a cost to interested parties. In fact, declaratory rulings can reduce  
costs for interested parties by providing clarity and guidance. According to the Administrative Conference of the  
MCL 24.245(3)  
RIS-Page 6  
United States (Declaratory Orders, December 7, 2015), declaratory rulings “can provide a legally binding  
decision to the parties to the proceeding, without imposing a penalty, sanction, or other liability, in order to  
terminate an actual or emerging.  
ALTERNATIVE TO REGULATION  
33. Identify any reasonable alternatives to the proposed rules that would achieve the same or similar goals.  
Since the goal is to comply with Michigan statute, there are no alternatives.  
A. Please include any statutory amendments that may be necessary to achieve such alternatives.  
The only statutory alternative would be to eliminate the requirement from the APA, MCL 24.263.  
34. 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 proposed rules establish a department process that cannot be handled by private market-based mechanisms.  
35. 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.  
The proposed rule is required to comply with Michigan statute.  
ADDITIONAL INFORMATION  
36. As required by MCL 24.245b(1)(c), please describe any instructions regarding the method of complying with  
the rules, if applicable.  
The proposed rule is required to comply with Michigan statute. MCL 24.245b(1)(c) is not applicable.  
MCL 24.245(3)  
;