Regulatory Review and Rescission Act

Regulatory Review and Rescission Act

Purpose: Section 1 of this Act institutes a system allowing state lawmakers to examine the efficacy of regulations before implementation, reviewing costs, benefits, and potential impacts on employment.  Section 2 provides a system of retrospective review of regulations three years after they take effect.  Section 2 grants the governor the power to rescind regulations after the retrospective review.

 

Section 1.  {Review of Future Regulations} 

(A) Except as provided in subsection (E), the state budget office shall perform a cost benefit analysis upon each proposed rule and provide it to:

(1) the governor; and

(2) the relevant oversight committee.

(B) In the case that a proposed rule has an impact of at least five hundred thousand dollars ($500,000), the cost benefit analysis performed by the state budget office under this section shall replace and be used for all fiscal analyses.

(C) In preparing a cost benefit analysis under this section, the state budget office shall consider in its analysis any verified data provided voluntarily by interested parties, regulated persons, and nonprofit corporations whose members may be affected by the proposed rule. A cost benefit analysis prepared under this section is a public document, subject to the following:

(1)   This subsection does not empower the state budget office or an agency to require an interested party or a regulated person to provide any materials, documents, or other information in connection with a cost benefit analysis under this section. If an interested party or a regulated person voluntarily provides materials, documents, or other information to the state budget office or an agency in connection with a cost benefit analysis under this section, the state budget office or the agency, as applicable, shall ensure the adequate protection of any confidential and proprietary business plans and other confidential information. Interested parties and regulated persons must submit the information in accordance with the confidentiality rules adopted by the agency to ensure proper processing of confidentiality claims. The state budget office and any agency involved in proposing the rule, or in administering the rule upon the rule’s adoption, shall exercise all necessary caution to avoid disclosure of any confidential information supplied to the state budget office or the agency by an interested party or a regulated person.

(2)   The state budget office shall make the cost benefit analysis and other related public documents available to interested parties, regulated persons, and nonprofit corporations whose members may be affected by the proposed rule at least thirty (30) days before presenting the cost benefit analysis to the governor and the relevant oversight committee under subsection (A).

(D) If the state budget office or an agency is unable to obtain verified data for the cost benefit analysis described in subsection (C), the state budget office shall state in the cost benefit analysis which data were unavailable for purposes of the cost benefit analysis.

(E) If the state budget office finds that a proposed rule is a technical amendment with no substantive effect on an existing rule, the state budget office may not prepare a cost benefit analysis of the rule under this section. The agency shall submit the proposed rule to the state budget office with a statement explaining how the proposed rule meets the requirements of this subsection. If the state budget office finds that the rule meets the requirements of this subsection, the state budget office shall provide its findings to the governor and to the relevant oversight committee. If the agency amends or modifies the proposed rule after the state budget office finds that a cost benefit analysis may not be prepared for the rule, the agency shall resubmit the proposed rule to the state budget office either for a new determination that the rule meets the requirements of this subsection, or for the state budget office to prepare a cost benefit analysis of the rule under this section.

 

Section 2.  {Retrospective Review of Regulations}

(A) This section applies to a rule that:

(1) has been adopted under state administrative procedure; and

(2) has taken effect; after December 31, 20XX.

(B) For each rule to which this section applies, the state budget office shall perform a cost benefit analysis of the rule with respect to the period encompassing the first three (3) years following the rule’s effective date. Except as otherwise required by the governor or the relevant oversight committee, the state budget office shall submit a cost benefit analysis prepared under this section to:

(1) the governor; and

(2) the relevant oversight committee; not later than six (6) months after the third anniversary of the rule’s effective date.

(C) A cost benefit analysis prepared under this section must include the following with respect to the three (3) year period covered by the analysis:

(1) The estimate of the primary and direct benefits of the rule, including the impact on:

(a) consumer protection;

(b) worker safety;

(c) employment;

(d) energy reliability;

(e) the environment; and

(f) business competitiveness; as determined before the rule’s adoption.

(2) The estimate of the secondary or indirect benefits of the rule and the explanation of how the conduct regulated by the rule is linked to the primary and secondary benefits, as determined before the rule’s adoption.

(3) The estimate of any cost savings to regulated persons (including individuals and businesses) as a result of the rule, including any savings from:

(a) a change in an existing requirement;

(b) the imposition of a new requirement; or

(c) the imposition of cumulative requirements; as determined before the rule’s adoption.

(4) A statement of the number of regulated persons, classified by industry sector, subject to the rule.

(5) A comparison of:

(a) the cost benefit analysis for the rule prepared before the rule’s implementation; and

(b) the actual costs and benefits of the rule during the first three (3) years of the rule’s implementation, including the following:

(i) Any actual primary and direct benefits of the rule, including the rule’s impact on consumer protection, worker safety, employment, energy reliability, the environment, and business competitiveness.

(ii) Any actual secondary or indirect benefits of the rule and an explanation of how the conduct regulated by the rule is linked to the primary and secondary benefits.

(iii) Any actual cost savings to regulated persons (including individuals and businesses) as a result of the rule, including any savings from a change in an existing requirement or from the imposition of a new requirement.

(D) In preparing a cost benefit analysis under Section II, the state budget office shall follow the procedure set forth in Section I (c).

(E) The governor may:

(1) prescribe the form of a cost benefit analysis;

(2) rescind the rule if the state budget office determines the costs exceed the benefits, or if there is an adverse impact on employment; and

(3) prescribe the process, deadlines, and other requirements for submitting a cost benefit analysis required under this section.

Approved by ALEC Board of Directors on September 2012.

Keyword Tags: Cost Benefit, Electricity, Energy, Environment, Industry, Regulation