Stewards of the Visual Exposition
Law REINing In Regulations Gaining Supporters
Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.
State-level REINS Act would subject rules to more public oversight
RALEIGH - Legislation limiting assertive regulatory actions by executive branch agencies is gaining interest in the General Assembly and in state capitals around the country. Supporters say a state-focused version of the federal Regulations from the Executive in Need of Scrutiny, or REINS, Act, could improve economic growth and business formation in North Carolina.
The REINS Act passed the U.S. House earlier this year but has not come before the Senate. The act would require Congress to approve every major rule proposal by the executive branch that has an annual economic impact of $100 million or more.
"I'd love for us to do something like that," said state Rep. Mike Hager, R-Rutherford. "Any major impact you have on business we should be able to look at."
Hager, who is vice chairman of the House Environment Committee and chairman of the Joint Legislative Commission on Energy Policy, said he could imagine the tipping point to trigger state legislative review of agency regulations could range from those costing $100,000 - "To small businesses, that's a lot of money," he said - to $1 million.
Allowing cost-inducing regulations to go unchecked "makes us not competitive with South Carolina, or Georgia, or Tennessee, or Virginia," Hager said.
He said lawmakers have been writing legislation that excludes extensive administrative detail because they fear opposition from advocacy groups that create legislative scorecards to use in campaigns. As a result, Hager said, executive branch agencies effectively write laws by filling in the gaps later.
"You can't allow non-legislative entities to make law, and that's what we're doing," he said.
Jon Sanders, director of regulatory studies at the John Locke Foundation, said a state-level REINS law would be a good idea.
"The present structure of regulation in North Carolina is heavily biased toward expanding regulation. Procedural hurdles make successfully blocking a proposed rule extremely rare," Sanders said.
A JLF study found that, of the 6,510 permanent rules introduced between 2004-05 and 2008-09, only 218 faced legislative review. Only 28 bills were introduced to repeal the regulations, and a mere seven of those bills passed.
"In other words, only about one-tenth of 1 percent of regulations were ultimately blocked," Sanders said.
"A REINS Act for North Carolina would reverse this bias. Any proposed major rule would require approval by the General Assembly. Such a rule would have to be compelling enough to survive the deliberative process of the legislature," he said.
"The legislature would not be obligated to draft approval legislation, and the vote would not constitute enactment but would merely be a grant of legislative authority to the agency to proceed with the proposed major rule under the regulatory process," Sanders said.
By requiring major rules to be approved by elected representatives directly accountable to the voters, REINS for North Carolina would offer two additional pre-emptive improvements, he said.
"It would incentivize legislators to write clearer, more narrowly focused bills, given that any excessive interpretation by agencies would return to them for votes anyway," Sanders said. "It would also incentivize the agencies to write better rules clearly within their statutory authority."
War between the states
Gary Palmer, president and CEO of the Alabama Policy Institute, supports the state-level REINS Act concept. He said federal agencies are using approach known as "sue and settle" to impose regulations on states using the courts rather than Congress to enforce executive branch goals. Palmer said sue-and-settle could enhance environmentalists demand to crack down on fossil fuel use, shutting out elected representatives from the process.
"I think we're about to engage in a new war between the states, only the battleground will be in the courtroom," he said.
New York and other states are pushing the U.S. Environmental Protection Agency to enforce regulations against states including Oklahoma, Alabama, and Pennsylvania that allow hydraulic fracturing to extract natural gas. The plantiff states are "attempting to inflict economic harm against other states," Palmer said. North Carolina is expected to begin fracking by 2015.
"We've got to look at this in a broader perspective about how other states and these activist politicians are impacting our ability to govern our states, to build our economies, and to raise our families," Palmer said.
Matt Mayer, president of the free-market think tank Opportunity Ohio, agrees, and said coal-producing states such as Ohio and West Virginia also are falling into the EPA's crosshairs.
"Other states won't have to deal with coal plant shutdowns," he said. "It is a big, big fight."
Hager said the war on coal "is the most egregious," and could affect North Carolina. "Certainly there will be a war on natural gas, sooner or later. It's a war on anything but renewables, basically," with solar energy the trendy "clean" energy.
He estimated it would require 40,000 acres of solar farms to replace the amount of coal generation the state has remaining.
"Where are we going to get 40,000 acres? Cover all of eastern North Carolina?" Hager said.
He also is concerned about federal regulations on automobile emissions as part of the federal Clean Air Act's crackdown on regional haze. Congress passed a regional haze rule in 2005. It requires states to adopt a plan to reduce air pollution that impairs visibility, and to reach "natural visibility" in 156 national parks and key wildlife areas by 2064.
North Carolina has five areas affected by the rule: Great Smoky Mountains National Park; Joyce Kilmer-Slickrock, Linville Gorge, and Shining Rock wilderness areas; and Swanquarter Wildlife Refuge.
Oklahoma Attorney General Scott Pruitt is leading Oklahoma's lawsuit in federal court against the EPA's regional haze rule. The case is on appeal in the 10th U.S. Circuit Court of Appeals.
In 2010 Oklahoma adopted a plan to achieve the rule's mandate by 2026, Pruitt said.
Then-EPA Administrator Lisa Jackson rejected the plan, and ordered it replaced with a federal plan that would have required a $2 billion to $2.5 billion investment by utility companies to install scrubbers on every coal-fired plant in Oklahoma. That would have increased utility rates almost 20 percent within three years and annually thereafter, Pruitt said.
"The key to this is the EPA doesn't have the authority to come in and offer their judgment in place of a law. Congress said ... the state has primacy as it relates to adopting a plan" under the Clean Air Act, he said. Pruitt expects the case, which affects a number of other states, to reach the U.S. Supreme Court.
North Carolina will not be involved in the lawsuit. "Oklahoma circulated a sign-on letter to EPA in support of its case. We were given a very short period of time to review the issue, and without sufficient time, declined to participate," said Noelle Talley, spokeswoman for Attorney General Roy Cooper.
Tom Mather, a spokesman at the state Department of Environment and Natural Resources' Division of Air Quality, said "all indications we're getting" is that the EPA will approve and put in the Federal Register North Carolina's five-year periodic review plan to show it is on track to meet 2018 reasonable progress goals.
"The EPA hasn't approved any of these plans yet. However, we were one of the first to submit this mid-course plan," Mather said. "A lot of times EPA is real reluctant to put it in writing."
There have been a number of federal lawsuits and consent agreements involving billions of dollars in EPA-mandated mitigation with some of the other eight states whose interstate air pollution affects their own and North Carolina's ability to meet regional haze goals.
Also, the Clean Air Transport Rule is "sort of in limbo" in court, Mather said, and the outcome could require tweaking in the state plan.
The Supreme Court will hear an EPA appeal in December challenging a ruling by the U.S. Court of Appeals for the D.C. Circuit that the EPA violated the Clean Air Act by imposing a federal plan reducing greenhouse gas emissions on 28 states - including North Carolina - before allowing states to attempt their own solutions.
The appeals court also ruled that the EPA exceeded its authority by requiring some states to reduce emissions at a faster rate than the pollution they caused in downwind states.
Go Back
State-level REINS Act would subject rules to more public oversight
RALEIGH - Legislation limiting assertive regulatory actions by executive branch agencies is gaining interest in the General Assembly and in state capitals around the country. Supporters say a state-focused version of the federal Regulations from the Executive in Need of Scrutiny, or REINS, Act, could improve economic growth and business formation in North Carolina.
The REINS Act passed the U.S. House earlier this year but has not come before the Senate. The act would require Congress to approve every major rule proposal by the executive branch that has an annual economic impact of $100 million or more.
"I'd love for us to do something like that," said state Rep. Mike Hager, R-Rutherford. "Any major impact you have on business we should be able to look at."
Hager, who is vice chairman of the House Environment Committee and chairman of the Joint Legislative Commission on Energy Policy, said he could imagine the tipping point to trigger state legislative review of agency regulations could range from those costing $100,000 - "To small businesses, that's a lot of money," he said - to $1 million.
Allowing cost-inducing regulations to go unchecked "makes us not competitive with South Carolina, or Georgia, or Tennessee, or Virginia," Hager said.
He said lawmakers have been writing legislation that excludes extensive administrative detail because they fear opposition from advocacy groups that create legislative scorecards to use in campaigns. As a result, Hager said, executive branch agencies effectively write laws by filling in the gaps later.
"You can't allow non-legislative entities to make law, and that's what we're doing," he said.
Jon Sanders, director of regulatory studies at the John Locke Foundation, said a state-level REINS law would be a good idea.
"The present structure of regulation in North Carolina is heavily biased toward expanding regulation. Procedural hurdles make successfully blocking a proposed rule extremely rare," Sanders said.
A JLF study found that, of the 6,510 permanent rules introduced between 2004-05 and 2008-09, only 218 faced legislative review. Only 28 bills were introduced to repeal the regulations, and a mere seven of those bills passed.
"In other words, only about one-tenth of 1 percent of regulations were ultimately blocked," Sanders said.
"A REINS Act for North Carolina would reverse this bias. Any proposed major rule would require approval by the General Assembly. Such a rule would have to be compelling enough to survive the deliberative process of the legislature," he said.
"The legislature would not be obligated to draft approval legislation, and the vote would not constitute enactment but would merely be a grant of legislative authority to the agency to proceed with the proposed major rule under the regulatory process," Sanders said.
By requiring major rules to be approved by elected representatives directly accountable to the voters, REINS for North Carolina would offer two additional pre-emptive improvements, he said.
"It would incentivize legislators to write clearer, more narrowly focused bills, given that any excessive interpretation by agencies would return to them for votes anyway," Sanders said. "It would also incentivize the agencies to write better rules clearly within their statutory authority."
War between the states
Gary Palmer, president and CEO of the Alabama Policy Institute, supports the state-level REINS Act concept. He said federal agencies are using approach known as "sue and settle" to impose regulations on states using the courts rather than Congress to enforce executive branch goals. Palmer said sue-and-settle could enhance environmentalists demand to crack down on fossil fuel use, shutting out elected representatives from the process.
"I think we're about to engage in a new war between the states, only the battleground will be in the courtroom," he said.
New York and other states are pushing the U.S. Environmental Protection Agency to enforce regulations against states including Oklahoma, Alabama, and Pennsylvania that allow hydraulic fracturing to extract natural gas. The plantiff states are "attempting to inflict economic harm against other states," Palmer said. North Carolina is expected to begin fracking by 2015.
"We've got to look at this in a broader perspective about how other states and these activist politicians are impacting our ability to govern our states, to build our economies, and to raise our families," Palmer said.
Matt Mayer, president of the free-market think tank Opportunity Ohio, agrees, and said coal-producing states such as Ohio and West Virginia also are falling into the EPA's crosshairs.
"Other states won't have to deal with coal plant shutdowns," he said. "It is a big, big fight."
Hager said the war on coal "is the most egregious," and could affect North Carolina. "Certainly there will be a war on natural gas, sooner or later. It's a war on anything but renewables, basically," with solar energy the trendy "clean" energy.
He estimated it would require 40,000 acres of solar farms to replace the amount of coal generation the state has remaining.
"Where are we going to get 40,000 acres? Cover all of eastern North Carolina?" Hager said.
He also is concerned about federal regulations on automobile emissions as part of the federal Clean Air Act's crackdown on regional haze. Congress passed a regional haze rule in 2005. It requires states to adopt a plan to reduce air pollution that impairs visibility, and to reach "natural visibility" in 156 national parks and key wildlife areas by 2064.
North Carolina has five areas affected by the rule: Great Smoky Mountains National Park; Joyce Kilmer-Slickrock, Linville Gorge, and Shining Rock wilderness areas; and Swanquarter Wildlife Refuge.
Oklahoma Attorney General Scott Pruitt is leading Oklahoma's lawsuit in federal court against the EPA's regional haze rule. The case is on appeal in the 10th U.S. Circuit Court of Appeals.
In 2010 Oklahoma adopted a plan to achieve the rule's mandate by 2026, Pruitt said.
Then-EPA Administrator Lisa Jackson rejected the plan, and ordered it replaced with a federal plan that would have required a $2 billion to $2.5 billion investment by utility companies to install scrubbers on every coal-fired plant in Oklahoma. That would have increased utility rates almost 20 percent within three years and annually thereafter, Pruitt said.
"The key to this is the EPA doesn't have the authority to come in and offer their judgment in place of a law. Congress said ... the state has primacy as it relates to adopting a plan" under the Clean Air Act, he said. Pruitt expects the case, which affects a number of other states, to reach the U.S. Supreme Court.
North Carolina will not be involved in the lawsuit. "Oklahoma circulated a sign-on letter to EPA in support of its case. We were given a very short period of time to review the issue, and without sufficient time, declined to participate," said Noelle Talley, spokeswoman for Attorney General Roy Cooper.
Tom Mather, a spokesman at the state Department of Environment and Natural Resources' Division of Air Quality, said "all indications we're getting" is that the EPA will approve and put in the Federal Register North Carolina's five-year periodic review plan to show it is on track to meet 2018 reasonable progress goals.
"The EPA hasn't approved any of these plans yet. However, we were one of the first to submit this mid-course plan," Mather said. "A lot of times EPA is real reluctant to put it in writing."
There have been a number of federal lawsuits and consent agreements involving billions of dollars in EPA-mandated mitigation with some of the other eight states whose interstate air pollution affects their own and North Carolina's ability to meet regional haze goals.
Also, the Clean Air Transport Rule is "sort of in limbo" in court, Mather said, and the outcome could require tweaking in the state plan.
The Supreme Court will hear an EPA appeal in December challenging a ruling by the U.S. Court of Appeals for the D.C. Circuit that the EPA violated the Clean Air Act by imposing a federal plan reducing greenhouse gas emissions on 28 states - including North Carolina - before allowing states to attempt their own solutions.
The appeals court also ruled that the EPA exceeded its authority by requiring some states to reduce emissions at a faster rate than the pollution they caused in downwind states.
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