Time for legislators to REIN in abusive regulators
January 29, 2013This topic is not sexy. But it is one of the most important issue facing the people of this state. The issue? Abusive regulators.
Nearly every politician we heard campaign this past election said they were in favor of regulatory reform. Even Democrats said they thought we should take a close look at regulatory abuse.
We think the time has come to stop talking and actually do something to clean up this mess. And we think a good starting point is what Jon Sanders is suggesting in the Carolina Journal when he writes:
The past two years have shown that the General Assembly is serious about regulatory reform, an attitude that is very welcome — not to mention vital to improving the state's business climate (as well as the climate for liberty in North Carolina). Click here to read the rest of the story.
Regulations are rules made by state agencies and commissions, under authority delegated them by the legislature, for implementing or interpreting enacted legislation. Ideally, the legislature delegates part of its authority to the agency, which will be staffed by people expert in the particular subject area who will devise good rules to interpret the legislation faithfully. Regardless, their rules carry the full force of law, so those who fall under the regulations face fines and even jail time for violating them.
An ongoing concern from good-government advocates is that this great power is vested in bureaucrats who lack direct accountability to the voters. That is all well and good when they are merely formulating rules to comply with legislative or federal edicts. But what about when a proposed rule rises to the level of something that will have a major impact on citizens and business? Then we face the unhappy prospect of state law being crafted without the consent of the governed.
A solution to this problem has been around for years, and it was first articulated by a federal appellate judge who would later be nominated for the Supreme Court by President Bill Clinton. Speaking before a Georgetown Law School audience in 1983, Judge Stephen Breyer offered a qualified analysis "suggesting that Congress condition the exercise of a delegated legislative power on the enactment of a confirmatory statute, passed by both houses and signed by the President. It would be perfectly in keeping with the Constitution's language, Mr. Breyer noted, while simulating the function of the traditional legislative veto."
A bill that passed the U.S. House in 2011 sought to enact such a confirmatory statute. H.R. 10, the Regulations from the Executive In Need of Scrutiny Act of 2011, or REINS, would require Congress to approve any proposed rule that would have a major impact on the economy, cause significant cost or price increases on consumers, or have significant harms against competition, employment, productivity, and other healthy economic activities. A joint resolution approving the regulation would have to pass both chambers and be signed by the president for the rule to take effect. Also, if no vote on the regulation took place within 70 session days, the regulation would not take effect.
In other words, if an agency proposed a rule that would significantly affect citizens or industry, that rule would require direct approval from Congress and at least indirect approval from the president in order to take effect.
A REINS approach in North Carolina would restore accountability to rule-making in a key way. At present, the system is heavily biased in favor of expanding regulations, including major regulations (e.g., the Regulatory Reform Act of 2011 defined a rule as having "substantial economic impact" if it had "an aggregate financial impact on all persons affected" of at least $500,000). In a nutshell, if the proposed rule passes muster with the Rules Review Commission (which cannot judge the merits of a rule, only whether it was drafted properly, is clear, and can be seen as fitting within the agency's statutory authority), then it takes 10 public objections to delay the rule, during which the General Assembly could (they are not obligated) produce legislation blocking it.