Bill Summaries: H933 REGULATORY REFORM ACT OF 2011.

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  • Summary date: Jun 7 2011 - More information

    Scope and effect. Current law provides that Article 2A of GS Chapter 150B applies to an agency’s exercise of its authority to adopt a rule. Amends GS 150B-18 to clarify that an agency is prohibited from seeking to implement or enforce a policy, guideline, or other nonbinding interpretive statement that has not been adopted as a rule in accordance with Article 2A of GS Chapter 150B.
    Requirements for agencies in the rule-making process. (Effective October 1, 2011). Enacts new GS 150B-19.1 directing agencies to adhere to the following principles in developing and drafting rules for adoption in accordance with Article 2A of GS Chapter 150B (Article 2A): (1) agencies may only adopt rules expressly authorized by federal or state law and that are necessary to serve the public interest; (2) requires an agency to seek to reduce the burden on those persons or entities who must comply with the rule; (3) directs that rules be written in a clear and unambiguous manner and be reasonably necessary to implement or interpret federal or state law; (4) requires an agency to consider the cumulative effect of all rules adopted by that agency. Prohibits an agency from adopting a rule that is unnecessary or redundant; (5) provides that when appropriate, rules are to be based on sound, reasonably available scientific, technical, economic, and other relevant information and include a reference to this information in the notice of text required by GS 150B-21.2(c); and (6) requires rules to be designed to achieve the regulatory objective in a cost-effective and timely manner.
    Directs each agency subject to Article 2A to conduct an annual review of its rules to identify any rules that are unnecessary, unduly burdensome, or inconsistent with the specified rule making principles and to repeal any rule identified by this review.
    Requires each agency subject to Article 2A to post the following information on its website, to maintain the information in a searchable database, and to periodically update this online information: (1) the text of a proposed rule, (2) an explanation of and reason for the proposed rule, (3) the required federal certification, (4) instructions on how and where to make oral or written comments on the proposed rule, and (5) any fiscal note for the proposed rule. Imposes additional requirements regarding evaluating the fiscal impact of a proposed rule. Provides that if a proposed rule has a substantial economic impact as defined in GS 150B-21.4(b1), the proposing agency must consider at least two alternatives to the proposed rule. Requires that an agency prepare and post on the agency website a certification identifying a federal law requiring the adoption of a proposed rule whenever an agency proposes a rule that is identified as implementing a federal law or required under federal law (was codified as GS 150B-21(f) except directed the rule-making coordinator to prepare the certification). Repeals GS 150B-21(f).
    Review of existing rules. (Effective October 1, 2011). Establishes the Rules Modification and Improvement Program, under the coordination and oversight of the Office of State Budget and Management (OSBM), to conduct an annual review of existing rules. Specifies the responsibilities of the OSBM in providing the opportunity for public comment on existing rules. Requires the OSBM to direct each agency to engage in an internal review of its rules as required by GS 150B-19.1(b) and to submit its report to OSBM. Specifies the responsibilities of each agency in reviewing and taking appropriate action based on public comment. Includes annual reporting requirements for agencies and the OSBM. Requires the OSBM to establish a single Web portal dedicated to receiving public comments and tracking agency progress on reforming rules.
    Limitation on certain environmental rules. (Effective October 1, 2011.) Prohibits an agency from adopting a rule for the protection of the environment or natural resources that imposes a more restrictive standard, limitation, or requirement than those imposed by federal law or rule pertaining to the same subject, unless adoption of the more restrictive rule is required by one of the following: (1) a serious and unforeseen threat to the public health, safety, or welfare; (2) an act of the General Assembly or the United States Congress (Congress) that expressly requires the agency to adopt rules; (3) a change in federal or state budgetary policy; (4) a federal regulation required by an act of Congress to be adopted or administered by the state; or (5) a court order. Specifies that the limitation applies to an agency authorized to implement and enforce state and federal environmental laws and lists the following agencies as meeting that definition: (1) the Department of Environment and Natural Resources, (2) the Environmental Management Commission, (3) the Coastal Resources Commission, (4) the Marine Fisheries Commission, (5) the Wildlife Resources Commission, (6) the Commission of Public Health, (7) the Sedimentation Control Commission, and (8) the Mining Commission.
    Makes stylistic changes to GS 150B-21.1(a3).
    Procedure for adopting a permanent rule. (Effective October 1, 2011). Amends GS 150B-21.2 to require an agency to accept comments at the public hearing on both the proposed rule and any fiscal note that has been prepared in connection with the proposed rule. Directs an agency to review any fiscal note received in connection with the proposed rule and consider any public comment offered on the proposed rule before adopting a proposed rule. Requires that the record also contain any fiscal note prepared for the proposed rule. Makes additional conforming changes.
    Fiscal notes on rules. (Effective October 1, 2011.) Amends GS 150B-21.4 to provide that in addition to the proposed text of a permanent rule change and its fiscal note, an agency must also submit to the OSBM (was, the Director of the Budget) an analysis of the proposed rule change before publishing a permanent rule change that requires a distribution of funds under the State Budget Act in the North Carolina Register. Transfers responsibilities regarding certification to the OSBM (was, the Director of the Budget). Removes requirement that an agency must submit the text of a proposed rule change and the fiscal note on that proposed change to the Office of the Governor before publishing the proposed text in the North Carolina Register when the proposed rule change affects the expenditures or revenues of a unit of local government. Adds requirement that the required fiscal note must contain a description of at least two alternatives to the proposed rule that were considered by the agency and rejected, and the reasons for the rejection. Provides that the alternatives may have been identified by the agency or by members of the public.
    Requires an agency to prepare a fiscal note (was, required the agency to obtain a fiscal note from the OSBM) for a proposed permanent rule change that would have a substantial economic impact and that is not identical to a federal regulation that the agency is required to adopt, and have that fiscal note approved by the OSBM. Permits the agency to request the OSBM to prepare the fiscal note only after the agency, working with the OSBM, has exhausted all resources, internal and external, to otherwise prepare the fiscal note. Provides that if an agency asks OSBM to prepare a fiscal note and the OSBM fails to prepare the fiscal note within 90 days after receiving the written request from the agency for the note, then the agency must (was, may) prepare a fiscal note. If there is uncertainty by the agency as to whether or not a proposed rule change would have a substantial economic impact, the agency must (was, may) ask the OSBM to make a determination as to if the proposed rule change has a substantial economic impact. Declares that failure to prepare or obtain approval of the fiscal note is basis for objection to the rule under GS 150B-21.9(a)(4).
    Provides that substantial economic impact means an aggregate financial impact on all persons affected of at least $500,000 (was, $3 million) in a 12-month period. Provides guidelines to be followed by an agency in analyzing substantial economic impact.
    Procedure when Rules Review Commission approves permanent rule. (Effective October 1, 2011.) Removes requirements that the Rules Review Commission (Commission) must provide notice of rule approval to the Joint Legislative Administrative Procedure Oversight Committee (Oversight Committee). Repeals GS 150B-21.16, which required the Commission to make monthly reports to the Oversight Committee.
    Amends GS 150B-21.17(a) to delete requirement that the North Carolina Register, published at least twice monthly, must contain (1) notices of receipt of a petition for municipal incorporation as required by GS 120-165 and (2) orders of the Tax Review Board issued under GS 105-241.2.
    North Carolina Administrative Code. (Effective October 1, 2011.) Amends GS 150B-21.18 to delete requirement that the Codifier of Rules must keep the North Carolina Administrative Code (Code) current by publishing it in a loose-leaf format, periodically providing new pages to substitute for outdated pages, by publishing the Code in volumes and periodically publishing cumulative supplements, or by other means.
    Exempt agencies. (Effective October 1, 2011.) Current law identifies specified agencies that are fully exempt from the provisions of GS Chapter 150B, the Administrative Procedure Act (APA). Amends GS 150B-21.21(b) to provide that an agency that is exempted from the APA by GS 150B-1 or any other statute must submit a temporary or permanent rule adopted by it to the Codifier of Rules for inclusion in the Code (was, this provision applied to exempt agencies other than the North Carolina Utilities Commission). Repeals GS 150B-21.23, which requires the Codifier of Rules to publish a rule publication manual.
    Rules affecting local governments. (Effective October 1, 2011.) Amends GS 150B-21.26 to provide that the OSBM (was, Governor) is to conduct preliminary review of administrative rules that would affect the expenditures or revenues of a unit of local government at least 60 days (was, 30) before an agency publishes the proposed text of the permanent rule change in the North Carolina Register. Makes a conforming change.
    Contested Cases. (Effective January 1, 2012.) Amends GS 150B-2(5) to delete restriction that prohibits an agency making a final decision, or an officer or employee of that agency, from petitioning for initial judicial review of that decision. Amends GS 150B-23(a) to delete the exception that requires the State Personnel Commission to enter final decisions in cases involving discrimination as prohibited by Article 6 of GS Chapter 126 and provides that a contested case involving a local government employee, an applicant for employment, or a former employee to whom GS Chapter 126 apples is to be conducted in the same manner as other contested cases under Article 3A of GS Chapter 150B.
    Amends GS 150B-33(b) to delete provision regarding an administrative law judge’s authority to accept or refuse to accept a remanded case from an agency.
    Final decision or order. (Effective January 1, 2012). Amends GS 150B-34 to provide that the administrative law judge (ALJ) is to make a final decision or order that contains findings of fact and conclusions of law; deletes exceptions provided in GS 150B-34(c) regarding a final decision or order (was, directed the ALJ to make a decision or order that contained findings of fact and conclusions of law and to return the decision to the agency for a final decision). Declares that the provisions of this statute regarding the decision of the administrative law judge apply only to agencies subject to Article 3 of GS Chapter 150B except for the exemptions contained in GS 150B-1. Provides additional specifications regarding the authority of the administrative law judge. Makes conforming changes to GS 150B-35 (regarding ex parte communications) and GS 150B-37 (regarding the official record).
    Repeals GS 150B-36 (providing that the agency makes the final decision in a contested case).
    Makes technical changes to GS 150B-43.
    Makes a conforming change to GS 150B-44, deleting provisions relating to an agency’s authority to make a final decision in a contested case as deleted in this act. Sets as an unreasonable delay the failure of an ALJ who is subject to Article 3 of GS Chapter 150B to make a decision within 120 days of the close of the contested case hearing and provides for a right of judicial intervention.
    Amends GS 150B-47 to direct the Office of Administrative Hearings (was, the agency that made the final decision in the contested case) to transmit to the reviewing court the original or a certified copy of the official record in the contested case under review. Makes technical and conforming changes to GS 150B-49 and GS 150B-50.
    Scope and standard of review. (Effective January 1, 2012.) Makes conforming changes to GS 150B-51 consistent with amendments in this act authorizing ALJs to make final decisions and orders in contested cases. Also clarifies that a superior court reviewing a final decision may affirm the decision or remand the case for further proceedings, or it may reverse or modify the decision based on specified standards. Provides that the superior court, in reviewing a final decision in a contested case, is to determine whether the decision is supported by substantial evidence admissible under GS 150B-29, 150B-30, or 150B-31 in view of the entire record. Provides additional criteria applicable to reversing or remanding the contested case to the ALJ or the agency.
    Makes conforming changes to GS 7A-759(e), 74-58(b), 74-61, 74-85, 108A-70.9A(f), 108A-70.9B(g), 113-171(e), 113-202, and 122C-24.1(h). Also makes conforming changes deleting references to the authority of the Commission to make final decisions in a contested case in GS 113-229(f), 113A-121.1(b), and 113A-126(d). Makes additional conforming changes to the following various provisions: GS 122C-151.4(f), 126-14.4(e), 126-37, 131D-34(e), 131E-188(a), 131F-5(b), 131F-15(e), 143-215.22L(o), 143-215.94E(e3), 143-215.94U(e), 143-215.104P(d), 143-215.104S, and 153A-223.
    Repeals GS 126-4.1 (allowing the State Personnel Commission to make a final agency decision in a contested case), 126-14.4(f) (regarding the rendering of a final decision by the State Personnel Commission), and 135-44.7(c) (permitting the Board of trustees to make a final decision in a contested case).
    Miscellaneous issues. Directs an agency to issue a declaratory ruling to resolve a conflict or inconsistency within the agency regarding an interpretation of the law or a rule adopted by the agency. Requires the agency to also prescribe in its rules the procedure for requesting a declaratory ruling. Provides that a declaratory ruling is a final agency decision and is subject to judicial review in accordance with Article 4 of GS Chapter 150B. Failing to issue a declaratory reading within 60 days of the request for such a ruling constitutes a determination in favor of the aggrieved person (was, constitutes a denial of the request and its merits, and is subject to judicial review).
    Directs every entity with rule making powers to deliver to the Joint Select Regulatory Reform Committee (Reform Committee) of the General Assembly, no later than October 1, 2011, a list of all permanent rules adopted by that entity that includes specified information for each rule. Includes study requirements and a reporting deadline for the Reform Committee.
    Amends GS 113A-12 to provide that no environmental document is required in connection with a major development as defined in GS 113A-118(c) that receives a permit issued under Article 7 of GS Chapter 113A. Applies to any major development for which a permit application is received by the Department of Environment and Natural Resources (DENR).
    Amends GS 143-215.108(d1) to prohibit issuance or renewal of a Title V permit for a term exceeding five years. Provides that all other permits issued under this statute are issued for a term of 10 years. Makes a conforming change to GS 143-215.1(c) and GS 143-215.1.
    Directs DENR to review the types of permits it issues and the rule making agencies under its authority and recommend whether the duration of any types of permits should be extended beyond their duration under current rule or law. Requires DENR to report its findings to the Environmental Review Commission no later than February 1, 2012. Applies to permits that are issued on or after July 1, 2011.
    Directs the Secretary of Environment and Natural Resources to develop a uniform policy for notification of deficiencies and violations for all of the regulatory programs within DENR. Provides additional guidelines regarding the development of the notification policy. Requires the policy to be implemented no later than February 1, 2012.
    Includes a severability clause. Except as otherwise indicated, the provisions of this act are effective when they become law. For provisions indicated as effective October 1, 2011, those provisions apply to rules adopted on or after that date. For provisions indicated as effective January 1, 2012, those provisions apply to contested cases commenced on or after that date.


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