LIMIT RULES WITH SUBSTANTIAL FINANCIAL COSTS. (NEW)

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View NCGA Bill Details(link is external)2025-2026 Session
House Bill 402 (Public) Filed Thursday, March 13, 2025
AN ACT TO PUT LIMITATIONS ON RULES WITH SUBSTANTIAL FINANCIAL COSTS.
Intro. by Chesser, Bell, Zenger, Schietzelt.
Status: Placed On Cal For 06/17/2025 (House action) (Jun 12 2025)

SOG comments (3):

Identical bill

Submitted by jhenders@sog.unc.edu on

Identical to S 290, filed 3/13/25.

Long title change

Submitted by iveybyrd on

Previous title was AN ACT TO ENACT THE REGULATIONS FROM THE EXECUTIVE IN NEED OF SCRUTINY ACT.

Long title change

Submitted by jhenders@sog.unc.edu on

Committee substitute to the 2nd edition changed the long title. Previous long title was AN ACT TO ENACT REGULATIONS FROM THE EXECUTIVE IN NEED OF SCRUTINY ACT AND TO CLARIFY THE JUDICIAL DEFERENCE AFFORDED TO AGENCY INTERPRETATIONS OF RULES.

Bill History:

H 402

Bill Summaries:

  • Bill H 402 (2025-2026)
    Summary date: Jun 10 2025 - View Summary

    Senate amendment to the 3rd edition makes the following changes.

    Amends proposed GS 150B-19.4 (limitation on rules with substantial financial costs) to provide that the statute does not apply to rules required by federal law, including a rule or set of rules necessary to maintain compliance with a program delegated to the State from a federal agency (was, if the rule or set of rules is required by federal law, including a rule or set of rules necessary to maintain compliance with a program delegated to the State from a federal agency, the permanent rule or set of rules must be adopted by a vote of at least two-thirds of the board or commission members present and voting on the rule or set of rules).

    Government, APA/Rule Making
    GS 150B
  • Bill H 402 (2025-2026)
    Summary date: Jun 4 2025 - View Summary

    Senate committee substitute to the 2nd edition makes the following changes. Makes conforming changes to act’s titles. Makes organizational changes. Deletes changes to GS 150B-34 (final decision or order under the APA); and GS 150B-51 (APA scope and standard of review).  

    Amends GS 150B-21.3 (pertaining to the effective date of rules under the APA), as follows. Requires that any permanent rule that would have an aggregate financial cost on all persons affected of at least $20 million as calculated under law in a five-year period can only become effective if the NCGA ratifies a bill approving the rule with the rule becoming effective in accordance with the described timetable. Exempts rules promulgated to comply with federal law, as specified. Makes organizational and conforming changes.

    Changes the timeframe for a proposed permanent rule to have a substantial economic impact under GS 150B-21.4 so that it applies when that rule would have an aggregate economic impact of at least $1 million in a five-year period (was, 12-month period). Removes provisions requiring an agency to consider an estimate of the combined cost of the baseline conditions and the proposed rule, including direct costs as well as opportunity costs, as described, in determining the substantial economic impact of a proposed rule.

    Creates new GS 150B-19.4 (Limitation on rules with substantial financial costs), which requires any board/commission or other similar unit of government that proposes a rule with a financial cost of more than $1,000,000 to all affected persons during a five-year period to adopt the permanent rule by at least a 2/3rds vote of the board/commission members present and voting. If the proposed rule has a cost of more than $10,000,000 to all affected persons during the five-year period, then the board/commission must adopt the permanent rule by unanimous vote of the members present and voting, unless the rule is required to comply with federal law, in which case the vote must be at least 2/3rds. Applies to all rules under GS Chapter 150B, Article 2A, including periodic review and re-adoption. Clarifies that the aggregate financial cost required under the statute is the amount calculated in a substantial economic impact analysis under GS 150B-21.4, not including benefits.

    Makes conforming changes to effective date.

    Government, APA/Rule Making
    GS 150B
  • Bill H 402 (2025-2026)
    Summary date: Apr 15 2025 - View Summary

    House committee substitute to the 1st edition makes the following changes. Makes conforming changes to act’s long title.

    Modifies the economic impact rule delaying a new permanent rule’s effective date until ratified by the NCGA under GS 150B-21.3 (effective date of rules under the APA) so that the rule would have to have a substantial economic impact as calculated under GS 150B-21.4 (was, an aggregate economic impact on all persons affected of at least $1 million as calculated under law in a 12-month period). Makes conforming changes. Removes proposed (b3), which concerned rules and substantial economic impact. Provides a calculation in GS 150B-21.4 for how to determine whether a rule has a substantial economic impact by having the agency estimate the combined cost of the baseline conditions and the proposed rule. Specifies that the agency should estimate the cost of the baseline if the proposed rule amends or readopts an existing rule. (Previously, expanded what an agency must consider in determining the substantial economic impact of a rule under GS 150B-21.4 to include an estimate of the combined cost of the baseline conditions and the proposed rule, including direct costs as well as opportunity costs, as described. Removes changes to GS 150B-21.11 (procedure when Commission approves a permanent rule), and GS 120B-70.101 (purpose and powers of Committee)

    Authorizes an administrative law judge to exercise independent judgment in making a final decision or order in GS 150B-34, while being informed by the demonstrated knowledge and expertise of the agency, as specified (was, judge had to give due regard to the agency’s demonstrated knowledge and expertise). Makes clarifying changes. Modifies the judge’s deference in GS 150B-51 (scope and standard of review) so that in conducting its review of the final decision, the court must be informed by the demonstrated knowledge and expertise of the agency with respect to facts and inferences within the specialized knowledge of the agency but should exercise independent judgment in making its order. Applies to actions pending or filed on or after the act becomes law.

    Government, APA/Rule Making
    GS 150B
  • Bill H 402 (2025-2026)
    Summary date: Mar 13 2025 - View Summary

    Amends GS 150B-21.3 (pertaining to effective date of rules under the APA), as follows. Requires that any permanent rule that would have an aggregate economic impact on all persons affected of at least $1 million as calculated under law in a 12-month period (an Economic Rule) can only become effective if the NCGA ratifies a bill approving the rule with the rule becoming effective in accordance with the described timetable. Allows for any member of either chamber to introduce a bill during any regular or special session to approve a rule upon the earlier of either the day following a recommendation on the rule by the Joint Administrative Procedure Oversight Committee (the specified NCGA committee) or sixty days after the specified NCGA committee receives the rule for review but has not made a recommendation on the rule. Exempts an Economic Rule from the objection period. Provides for notice in GS 150B-21.11 (procedure when Rules Review Commission [Commission] approves permanent rule) to the chairs of the specified NCGA committee by the Commission when it approves an Economic Rule.

    Expands what an agency must consider in determining the substantial economic impact of a rule under GS 150B-21.4 (fiscal and regulatory impact analysis under rules) to include an estimate of the combined cost of the baseline conditions and the proposed rule, including direct costs as well as opportunity costs, as described.

    Makes organizational and conforming changes, including to GS 120-70.101 (purpose and powers of the specified NCGA committee).

    Applies to rules adopted on or after the act becomes law. 

    Government, APA/Rule Making
    GS 120, GS 150B
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