New Rule: No New Rules!

Lawmakers have begun the 2011 session by debating a piece of legislation that promises to bog down the already protracted administrative rule making process, if passed.

Senate Bill 22, sponsored by Senate Majority Leader Harry Brown, would bar state agencies from adopting any new rule that leads to higher costs to taxpayers or users, without the consent of the General Assembly. The measure makes a few exceptions for rule changes made to comply with a federal regulation, a court order, a change in state budgetary policy or an unforeseen threat to public health and safety. Even so, the broad sweep of SB22 would affect every agency in the state and effectively turn the legislature into micro-managers.

Using the Administrative Procedures Act, state agencies formulate scores of rules each year as they put into effect the laws passed by the General Assembly and update existing rules. The current rule-making process provides numerous opportunities to assess the cost of any new rule, allows for input from the public and those affected and provides review by the legislature.

The Administrative Procedures Act, the governing law for rule-making, currently requires all North Carolina state agencies to prepare a fiscal analysis of any new rule that would have “a substantial economic impact” and describe the persons who would be affected by the proposed change and the types of expenditures they would incur. The agencies and commissions that currently consider new rules have the resources and expertise to analyze the impact of new rules.

Under the current system, proposed new rules also are subject to public comment and undergo a rigorous multi-step review by the Rules Review Commission. If the Rules Review Commission approves the rule and those affected still object, they can ask the legislature to review it. North Carolina’s regulatory process strikes a careful balance between accommodation and protection of resources as recognized by business publications. Forbes magazine and chiefexecutive.net recently ranked North Carolina among the Top 3 states in their rankings of places to do business.

Molly Diggins, state director of the North Carolina Chapter of the Sierra Club, expressed concern that SB 22 would ban any new rule that cost an extra dollar or two without taking into account the bigger picture of the millions or dollars or thousands of lives the rule might save over time.

Diggins said the North Carolina General Assembly lacks the resources or expertise to review every single petition for rule-making from every single agency and would have to hire new staff and lengthen the legislative session to address all the necessary rule changes throughout the year.

Right now, SB 22 is what needs a lot of scrutiny by a lot of legislative committees to understand its full impacts and unintended consequences.