Regulatory Reform Legislation Dies in Senate

Legislation that would have been a big win for the business community died after the Senate did not take up Assembly Bill 251 on the last day of session. Key provisions in the bill would require legislative approval of rules costing over $10 million and allow for independent economic impacts of rules.

This legislation, authored by Sen. Devin LeMahieu (R-Oostburg) and Rep. Adam Neylon (R-Pewaukee), would require agencies to stop work on rules costing more than $10 million to implement. The agency could only proceed upon passage of an authorizing bill or if the agency modifies the bill to reduce the cost below $10 million. This most controversial aspect of the legislation caused it to be coined “the state REINS Act” reflecting the major component of federal legislation known as “the Regulations from the Executive in Need of Scrutiny (REINS) Act.” The federal REINS Act passed the House in 2015 but stalled in the Senate.

The bill also would have helped ensure accurate cost estimates for regulations by allowing for an independent economic impact analysis. Currently, agencies must prepare economic impact analysis for all rules. But such economic analysis is not meaningful given agencies lack of expertise or bias. This legislation, as amended, would authorize the Secretary of Administration, the Joint Committee for Review of Administrative Rules (JCRAR), or either co-chair of JCRAR to request an independent economic impact analysis to be prepared for a proposed rule.

This bill would add oversight to ensure regulations are based on proper legal authority. It also would require a public hearing on a scope statement to ensure regulated industries and other interested parties can weigh-in on a proposed administrative rule before the agency starts drafting it.

The Assembly passed the legislation with amendments on their last day in session. One amendment, Amendment 8, exempts from the legislative oversight provisions those regulations arising out of federal Environmental Protection Agency (EPA) mandates, including EPA’s Clean Power Plan (climate change rules) and ozone regulations.

Without the Senate’s vote, the bill dies in the legislature. However, Senate Majority Leader Scott Fitzgerald (R-Juneau) has stated he wants to work on the policy and bring it back when the legislature convenes in January 2017.