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8/7/2019 Presentation-Ready HB587 Jobs Bill Summary
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NC Job Growth ActNorth Carolina Job Growth Through
Regulatory Reform Act of 2011
HB 587NC JOBGROWTH
Glen Bradley, Harry Warren,Kelly Hastings, John Torbett
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StatutoryAdjustmentsRegulatory ArchitectureReform to Promote theGrowth of Innovation in
the Small BusinessMarketplace for thepurpose of Job Growth
amending NC G.S. 150B-2 & -19
amending NC G.S. 150B-2 & -19
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Section 1SECTION 1. 150B 2. Denitions.
(8b) "Signicant rule change" means a proposed rule that may do one or moreof the following:
a. Have a signicant effect on the economy, State, or local funds.b. Create an inconsistency with an action taken or planned by another agency.c. Raise novel policy issues.
In raising the bar for the imposition of new rules, we are raising thestandard from Substantial Economic Impact which is not well-dened,to a Signicant Rule Change which is:
Has a signicant impact on the economy or any government entity Creates inconsistency with action taken or planned by other agencies Raises a novel policy issue preventing the regulation of new things
just because they happen to be new.
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Section 1SECTION 1. 150B 2. Denitions.
(8c) "Small business" means a business entity, including its afliates, that (i) isindependently owned and operated and (ii) either has gross annual sales of lessthan six million dollars ($6,000,000) or employs fewer than 500 full timeemployees.
The 150B-2 (8c) denition of Small Business brings NorthCarolina into compliance with the Federal SBA denition of Small Business.
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Section 2Additional restrictions onwhat can be adopted as apermanent rule.
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Section 2 150B 19. Restrictions on what can be adopted as a rule.An agency may not adopt a rule that does one or more of the following:
(8) Exceeds standards or requirements established by an act of Congress orfederal regulation, unless expressly required by an act of the General Assembly."
The amendment to GS 150B-19 restrictions on what can beadopted as a rule prevents rule-making bodies from oversteppingtheir delegated authority by:
Preventing them from making rules which exceed Congress orFederal regulatory standards
Unless the NC State Legislature passes a law requiring it
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SubstantiveChangesRegulatory ArchitectureReform to Promote theGrowth of Innovation inthe Small BusinessMarketplace for thepurpose of Job Growth
amending NC G.S. 150B-21.2-17
amending NC G.S. 150B-21.2-17
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Section 3Procedural reform foradoption of permanentrules.
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Section 3Amends the procedurefor adopting apermanent rule byadding two additional
requirements:Cost BenefitAnalysis
Small BusinessRegulatory FlexibilityAnalysis
SECTION 3. 150B 21.2. Procedure foradopting a permanent rule.
(a) (2) When required by G.S. 150B 21.4,prepare or obtain a scal note note,
costbenet analysis, and small businessregulatory exibility analysis for the proposed
rule.
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Section 3 150B-21-2 (c) 1-3Amends procedure
for public noticeRequires describing
how new rule fitsinto existing rulesMust fix specificproblem
Must be in plainlanguage for publicMust justify authority
SECTION 3. 150B 21.2. Procedure for adoptinga permanent rule.
(c) Notice of Text. A notice of the proposedtext of a rule rule, or textual changes to an existingrule, must include all of the following:
(1) The text of the proposed rule.
(2) A short explanation of the reason for theproposed rule.summary of the existing regulationsand an explanation of how the proposed rule wouldchange the existing regulations. This informationshould explain the purpose of the proposed rule andwhat specic problem or problems the proposedrule is attempting to address. In order to meet therequirements of this subdivision, the agency shalluse plain language that is easily understandable to
the general public.(3) A citation to the law that gives the agencythe authority to adopt the rule.rule and a detailedexplanation as to why the specic citations providethe necessary authority. The explanation shouldclarify why there is no reasonable argument thatstatutory authority does not exist.
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Section 3 150B-21-2 (c) 8-10Requires Cost
Benefit Analysis andSmall Business
Flexibility AnalysisRequires that a hardcopy be madeavailable to public
Guarantees the rightof judicial review
SECTION 3. 150B 21.2. Procedure for adoptinga permanent rule.
(c) Notice of Text. A notice of the proposedtext of a rule rule, or textual changes to an existingrule, must include all of the following:
(8) If a scal note note, cost benet analysis, orsmall business regulatory exibility analysis has
been prepared for the rule, a statement explainingthat a note or analysis has been conducted and howto obtain the note or analysis on the agency Website and how to obtain a hard copy of the scal notecan be obtained from the agency.
(9) The procedure by which a person can object
to a proposed rule and the requirements forsubjecting a proposed rule to the legislative reviewprocess.
(10) The right of judicial review for any personthat seeks to challenge the adoption of a rule.
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Section 4Methods and Tools
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Section 4 150B-21.4 (b1)Replaces Fiscal
Note with moredetailed Cost Benefit
AnalysisRevokes exemptionfrom OSBMoversight
ReplacesSubstantialEconomic Impactwith Significant RuleChange
SECTION 4. 150B 21.4. Fiscal notes on notes, cost benet analysis,periodic review, and small business regulatory exibility analysis for rules.
(b1) Substantial Economic Impact. Signicant Rule Change. Before anagency publishes in the North Carolina Register the proposed text of apermanent rule change that would have a substantial economic impactbe asignicant rule change and that is not identical to a federal regulation that the
agency is required to adopt, the agency must obtain a scal note costbenetanalysis for the proposed rule change from the Ofce of State Budget andManagement or prepare a scal note costbenet analysis for the proposed rulechange and have the note analysis approved by that Ofce. If an agencyrequests the Ofce of State Budget and Management to prepare a scalnotecostbenet analysis for a proposed rule change, that Ofce must preparethe note analysis within 90 days after receiving a written request for thenote.analysis. If the Ofce of State Budget and Management fails to prepare ascal note costbenet analysis within this time period, the agency proposingthe rule change may prepare a scal note. A scal note prepared in thiscircumstance does not require approval of the Ofce of State Budget andManagement. costbenet analysis.
If an agency prepares the required scal note, costbenet analysis, the agencymust submit the note analysis to the Ofce of State Budget and Managementfor review. The Ofce of State Budget and Management must review thescal note costbenet analysis within 14 days after it is submitted and eitherapprove the note analysis or inform the agency in writing of the reasons whyit does not approve the scal note. costbenet analysis. After addressing these
reasons, the agency may submit the revised scal note costbenet analysis tothat Ofce for its review. If an agency is not sure whether a proposed rule
change would have a substantial economic impact,be a signicant rulechange, the agency may ask the Ofce of State Budget and Management todetermine whether the proposed rule change has a substantial economicimpact.is a signicant rule change.
As used in this subsection, the term "substantial economic impact" means an"signicant rule change" would include any rule that has an aggregatenancial impact on all persons affected of at least three million dollars
($3,000,000) in a 12 month period.
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Section 4 150B-21.4 (b2)-(b4)Requires Cost-
Benefit Analysts, justification, and
OSBM oversightRequires cost-basedrejection of rulesAllows Emergency,
Legislative, andJudicial action.
SECTION 4. 150B 21.4.
(b2) Content. A scal note costbenet analysis required by subsection(b1) of this section must contain the following:(5) A comprehensive list of the costs and benets resulting from theproposed rule change. In developing this list, the costs and benets should bequantied in monetary terms to the greatest extent possible. Costs shallinclude opportunity costs borne by affected people.(6) Alternatives considered instead of the proposed rule change and whythe proposed rule was selected instead of one of the alternatives.(7) Other factors that the Ofce of State Budget and Management deemsnecessary for an exhaustive cost benet analysis.
(b3) The Ofce of State Budget and Management shall reject the proposedrule based on a cost benet analysis if any of the following are true:(1) The projected costs exceed projected benets. In making this
determination, the Ofce of State Budget and Management shall base itsdecision on whether any reasonable scenario yields costs that exceed benets.(2) An alternative to the proposed change is less costly and is reasonablylikely to achieve, in signicant part, the same objective.(3) The proposed rule change would not achieve the stated purpose of therule.
(b4) The Ofce of State Budget and Management shall approve theproposed rule, notwithstanding subsection (b3) of this section, if the ruleminimizes the economic impact to the greatest extent possible and the rule isrequired to respond to at least one of the following:(1) A serious and unforeseen threat to the public health, safety, orwelfare.(2) An act of the General Assembly that expressly requires the specicrule.(3) An act of Congress or federal regulation that expressly requires thespecic rule and the General Assembly has given the agency authority torespond to the federal requirement.(4) A change in federal or State budgetary policy.
(5) A court order.
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Section 4 150B-21.4 (b5)Establishes Periodic
Review to existingregulatory standards
In six months andthen annually.Complies to samestandard as above
SECTION 4. 150B 21.4. (b5) Periodic Review of Rules.(1) Within six months after enactment of this law, each agency shall review all of its rulesexisting at the time of enactment to determine whether such rules should be continued withoutchange or should be amended or rescinded to minimize the economic impact of the rules. Eachagency shall invite and review written public comments, as prescribed under this Article. Eachagency shall submit a report to the Joint Legislative Administrative Procedure Oversight
Committee on or before six months after enactment of this law to justify the existence of itsrules and may take action to amend or rescind rules at any time.(2) Rules adopted after the enactment of this law shall be reviewed every year to ensure thatthe rules minimize their economic impact.(3) In reviewing rules to minimize their economic impact, each agency shall consider thefollowing factors:a. The continued need for the rule.b. The nature of complaints or comments received concerning the rule from the public.c. The complexity of the rule.d. The extent to which the rule overlaps, duplicates, or conicts with other federal, State, orlocal governmental rules.e. The length of time since the rule has been evaluated or the degree to which technology,economic conditions, or other factors have changed in the area affected by the rule.(4) Each agency shall annually submit a list of its rules to the Ofce of State Budget andManagement, including an explanation as to its economic impact.(5) The Ofce of State Budget and Management shall direct an agency to amend or rescinda rule if the agency is unable to demonstrate each of the following:a. There is a continued need for the rule.b. The nature of complaints or comments received concerning the rule from the public doesnot justify amending or rescinding the rule.c. The rule is not too complex.d. The rule does not overlap, duplicate, or conict with other federal, State, and localgovernmental rules or such overlap is nominal.e. Technology, economic conditions, or other factors have not changed in the area affectedby the rule.(6) Notwithstanding subdivision (5) of this subsection, a rule may be amended or rescindedonly if the rule is not required to respond to at least one of the following:a. A serious and unforeseen threat to the public health, safety, or welfare.b. An act of the General Assembly that expressly requires the specic rule.c. An act of Congress or federal regulation that expressly requires the specic rule and theGeneral Assembly has given the agency authority to respond to the federal requirement.d. A change in federal or State budgetary policy.e. A court order.(7) The Ofce of State Budget and Management shall submit an annual summary of itsndings to the Commission as required under G.S. 150B21.17.
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Section 4 150B-21.4 (b6)Focus on alleviating
burden from SmallBusiness
Standardestablished for OSBM to overseeRequires the OSBM
rejection of rulesthat place undueburden on smallbusiness
SECTION 4. 150B 21.4. (b6) Small BusinessRegulatory Flexibility Analysis.
(1) Prior to the adoption of any proposed regulation that may have anadverse impact on small businesses, each agency shall prepare a smallbusiness impact statement that includes each of the following:a. An identication and estimate of the number of the smallbusinesses subject to the proposed regulation.b. The projected reporting, record keeping, and other administrativecosts required for compliance with the proposed regulation, including thetype of professional skills necessary for preparation of the report orrecord.c. A statement of the probable effect on impacted small businesses.
(2) Before an agency publishes in the North Carolina Register theproposed text of a permanent rule change, it shall consider and provide tothe Ofce of State Budget and Management, without limitation, each of the following methods of reducing the impact of the proposed regulationon small businesses:a. The establishment of less stringent compliance or reportingrequirements for small businesses.b. The establishment of less stringent schedules or deadlines forcompliance or reporting requirements for small businesses.c. The consolidation or simplication of compliance or reportingrequirements for small businesses.d. The establishment of performance standards for small businessesto replace design or operational standards required in the proposedregulation.e. The exemption of small businesses from all or any part of therequirements contained in the proposed regulation.
(3) The Ofce of State Budget and Management shall reject aproposed rule if the agency has not taken reasonable steps to reduce theimpact on small businesses.
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Section 5 150B-21.9 (a)Rules are prevented
without clear NCGAstatutory authority
The authority musthave beenintentionalRules must meet the
above describedstandards for newrules and periodicreview.
SECTION 5. G.S. 150B 21.9. Standards andtimetable for review by Commission as rewritten:
(a) Standards. The Commission must determinewhether a rule meets all of the following criteria:
(1) It is within the clear authority delegated to theagency by the General Assembly.Assembly, and noreasonable argument can be made that that authority doesnot exist.
(2) It is clear and unambiguous.
(3) It is reasonably necessary to implement or interpretan enactment of the General Assembly, or of Congress, or aregulation of a federal agency.and the General Assembly,when enacting the law, likely intended for the agency toadopt such a rule. The Commission shall consider thecumulative effect of all rules adopted by the agency relatedto the specic purpose for which the rule is proposed.
(4)
The Ofce of State Budget and Managementproperly approved the cost benet analysis and smallbusiness regulatory exibility analysis developed for therule, in accordance with G.S. 150B 21.4.
(5) It was adopted in accordance with Part 2 of thisArticle.
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Section 5 150B-21.9Compliance with
CBA and SignificantRule Change
Obtaining/Producingthe Small BusinessRegulatory FlexibilityAnalysis
Removes theassumption of propriety
SECTION 5. G.S. 150B 21.9. Standards andtimetable for review by Commission as rewritten:
The Commission shall not consider questions relating to the qualityor efcacy of the rule but shall restrict its review to determination of
the standards set forth in this subsection.
The Commission may ask the Ofce of State Budget andManagement to determine if a rule has a substantial economicimpactis a signicant rule change and is therefore required to have ascal note. costbenet analysis. The Commission must ask the Ofceof State Budget and Management to make this determination if ascal note costbenet analysis was not prepared for a rule and the
Commission receives a written request for a determination of whether the rule has a substantial economic impact.is a signicantrule change.
The Commission may ask the Ofce of State Budget andManagement to determine if a rule may have an adverse impact onsmall businesses and is therefore required to have a small businessregulatory exibility analysis. The Commission must ask the Ofceof State Budget and Management to make this determination if asmall business regulatory exibility analysis was not prepared for arule and the Commission receives a written request for adetermination of whether the rule may have an adverse impact onsmall businesses.
(a1) Entry of a rule in the North Carolina Administrative Codeafter review by the Commission creates a rebuttable presumption thatthe rule was adopted in accordance with Part 2 of this Article.
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Section 6Annual Legislative Review
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Section 6 150B-21.17OSMB to provide
annual summary of regulatory action
LegislativeCommission tooversee OSBMCompliance with
emergencies,Legislative, andJudicial activities
SECTION 6. 150B 21.17. Periodic review of rules by Commission is added:
(a) The Ofce of State Budget and Management shall provide an annualsummary of its ndings to the Commission explaining why it directed each agencyto rescind or amend a rule, or decided that no action on a rule was necessary.
(b) The Commission shall direct the Ofce of State Budget and Managementto amend or rescind a rule if the Commission believes that an agency was unable todemonstrate all of the following:
(1) There is a continued need for the rule.
(2) The nature of complaints or comments received concerning the rule fromthe public does not justify amending or rescinding the rule.
(3) The rule is not too complex.
(4) The rule does not overlap, duplicate, or conict with other federal, State,and local governmental rules, or such overlap is nominal.
(5) Technology, economic conditions, or other factors have not changed in thearea affected by the rule.
(c) Notwithstanding subsection (b) of this section, a rule may be amended orrescinded only if the rule is not required to respond to at least one of the following:
(1) A serious and unforeseen threat to the public health, safety, or welfare.
(2) An act of the General Assembly that expressly requires the specic rule.
(3) An act of Congress or federal regulation that expressly requires the specicrule and the General Assembly has given the agency authority to respond to thefederal requirement.
(4) A change in federal or State budgetary policy.
(5) A court order."
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Section 7 150B-43 Judicial Review
amending NC G.S. 150B-43
amending NC G.S. 150B-43
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Section 7 150B-43Any person shall
have standing toJudicially challengewhether a rule hasbeen properly made
150B 43. Right to judicial review.Any person who is aggrieved by the naldecision in a contested case, and who hasexhausted all administrative remedies madeavailable to him by statute or agency rule, isentitled to judicial review of the decisionunder this Article, unless adequate procedurefor judicial review is provided by anotherstatute, in which case the review shall beunder such other statute. Within one year afterthe effective date of a nal rule, any person isentitled to judicial review in order todetermine whether a rule has been properlyadopted as required under this Article.
Nothing in this Chapter shall prevent anyperson from invoking any judicial remedyavailable to him under the law to test thevalidity of any administrative action not madereviewable under this Article."
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UtilityCommissionAmendments
Chapter 62.Public Utilities.
amending NC G.S. 62-3 & -15
amending NC G.S. 62-3 & -15
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Section 8 62-3 Denition AppendedUsing and Consuming Public
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Section 8 62-3 Adds to thedefinition of utilityconsumers to:
Clarify 62-15 thatregulations work onbehalf of consumer Clarify 62-17 same 62-20 NC AG onbehalf of consumer 62-48 Judicialconsideration for consumers
62 3. Denitions.As used in this Chapter, unless thecontext otherwise requires, theterm:
(31) "Using and consuming
public" means utility consumerssolely in their role as consumers."
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Section 9 62-15 UtilityCommission Direction
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Section 9 62-15 Amends theduties of the UtilitiesCommission to:
Prevents vague justifications for Utility Commissionregulatory actionswithout directLegislative Authority.Enables petition of grievances by theconsuming public
6215. Ofce of executive director; public staff, structure and function.
(e) In representing the using and consuming public, the PublicStaff shall not consider general societal interests but only the interestsof the using and consuming public in their interest as consumers. ThePublic Staff may not take any action that would lead to higher pricesfor consumers unless the higher prices are clearly justied because of more reliable, or otherwise better quality, utility services for the usingand consuming public.
(e1) The public staff shall have no duty, responsibility, or authoritywith respect to the laws, rules or regulations pertaining to the physicalfacilities or equipment of common, contract and exempt carriers, the
registration of vehicles or of insurance coverage of vehicles of common, contract and exempt carriers; the licensing, training, orqualications of drivers or other persons employed by common,contract and exempt carriers, or the operation of motor vehicleequipment by common, contract and exempt carriers in the State.
(j) A member of the using and consuming public may petition theCommission to initiate a review of whether the Public Staff has actedconsistently with subsection (e) of this section. If the Commissiondetermines that the Public Staff has not acted consistently withsubsection (e) of this section, it shall make formal public notice of thisnding and submit a written nding to the Joint Legislative UtilityReview Committee and request the Public Staff to reconsider anyaction taken that is inconsistent with subsection (e) of this section."
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Section 10Legislative Commissionon State Licensure andBarriers to Market Entry
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Section 1010.1 Creates a PublicCommission of 12members:
Four Gubernatorialappointments, onegeneral publicFour Senateappointments, twogeneral publicFour Houseappointments, twogeneral public
SECTION 10.1. Commission Created. There is createdthe Legislative Study Commission on OccupationalLicensing. The Commission shall consist of 12 votingmembers appointed as follows:
(1) Four members appointed by the Governor, to include at leastone member of the general public.
(2) Four members appointed by the President Pro Tempore of theSenate, to include the following:
a. Two members of the Senate.
b. Two members of the general public.
(3) Four members appointed by the Speaker of the House of Representatives, to include the following:
a. Two members of the House of Representatives.
b. Two members of the general public.
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SECTION 10.2. Duties. TheCommission shall do each of thefollowing:
(1) Identify outdated and unnecessary occupationallicensing laws that should be repealed.
(2) Identify existing occupations that are regulated thatdo not require licensing.
(3) Study alternatives to occupational licensing laws
that would work effectively.
(4) Study to what extent occupational licensing lawscreate barriers for individuals, including low incomeindividuals, from entering into new occupations.
(5) Study any other matters that the Commission
deems relevant.
SECTION 10.3. Report. The Commission shall makea nal report to the General Assembly with specicrecommendations, including any proposed legislation, tothe 2012 Regular Session of the 2011 General Assemblyupon its convening. The Commission shall terminate uponling its nal report.
Section 1010.2 Charges theCommission to do:
Identify licensure lawsand regulations thatshould be repealedStudy AlternativesIdentify Market EntryBarriers to low incomeentrepreneurs
10.3 RecommendationReport to Legislaturemeasures to reducebarriers to market entry.
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10.4 Administers PublicCommissionOperations
AuthorizesexpensesAuthorizes Staff Grants AccessGrants subpoena
power to callwitnesses10.5 Appropriates$50,000 to operate
in the biennium.
SECTION 10.4. Administration. The Speaker of the House of Representatives and the President Pro Tempore of the Senateeach shall appoint a cochair for the Commission. TheCommission may contract for consultant services as provided byG.S. 120 32.02.
Upon approval of the Legislative Services Commission, theLegislative Services Ofcer shall assign professional and clericalstaff to assist in the work of the Commission. Clerical staff shall befurnished to the Commission through the ofces of the House of Representatives and the Senate Directors of Legislative Assistants.
The Commission may meet in the Legislative Building or theLegislative Ofce Building upon the approval of the Legislative
Services Commission. Members of the Commission shall receive perdiem, subsistence, and travel allowances at the rate established inG.S. 120 3.1. The appointing authority shall ll vacancies.
The Commission, while in the discharge of its ofcial duties, mayexercise all the powers provided under the provisions of G.S. 120 19through G.S. 120 19.4, including the power to request all ofcers,agents, agencies, and departments of the State to provide anyinformation, data, or documents within their possession,ascertainable from their records, or otherwise available to them andthe power to subpoena witnesses.
SECTION 10.5. Appropriation. There is appropriated from theGeneral Fund to the General Assembly the sum of fty thousanddollars ($50,000) for the 2011 2012 scal year to fund the work of the Legislative Study Commission on Occupational Licensing created by this act.
Section 10
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Section 11Effective Date July 1st,2011
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SECTION 11. This act becomes effective July 1, 2011.
Section 11Effective Date of July1st, 2011
Makes 6-monthreports due on
January 1 2012Annuals July 1 2013and following
Left free to set the cycleof OSBM/LegislativeAnnual Reports
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POLICY CHANGE ANALYSIS AND IMPACTFISCAL NOTES, COST BENEFIT ANALYSIS, LONG TERM PROJECTIONS
AWAITING
FISCAL NOTE
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Thou ht Process and Polic ArchitectureDIRECTIVE INPUT AND PRODUCT ANALYSIS
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Thought Process
The best way to grow jobs is to create a
marketplace conducive to job growthDecrease regulatory burdens on job-makers
Especially on Small Businesses, and
Lower Barriers to Market Entry for all
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Frees Hiring Budgets
2%
18%
80%
Remaining Budget Compliance Cost Hiring
10%
10%
80%
Remaining Budget Compliance Cost Hiring
BEFORE REGULATORY REFORM AFTER REGULATORY REFORM
SPECUL ATIVE
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Job Growth
Lifts the bureaucratic burden from businesseswho start, grow, and hire.
Aid-compliance (instead of punitive non-compliance) for small business. (SBRFA)
Creates a commission charged with lowering the barriers to market entry for all people.
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Executive order Signed by GovernorBeverly Perdue October 2010
Rules shall only be adopted when required by federal or statelaw or when deemed necessary by the agency to serve thepublic interest.
Rules shall be subject to periodic evaluation and review inaccordance with the procedures described in this Executive
Order.
Agencies shall quantify the costs and benefits to all partiesof a rule to the greatest extent possible. The level of analysisshall be proportional to the significance of the rule.
Governor s
Initiative
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Governor s
InitiativeExecutive order Signed by GovernorBeverly Perdue October 2010
Agencies shall identify and assess available alternatives toregulation, including the use of economic incentives,information disclosure requirements, and performancestandards.
Rules shall not impose undue burden upon those persons or
entities who must comply with the rules.
Rules shall be based on sound, reasonably availablescientific, technical, economic, and other relevant information.Agencies shall cite this information in support of regulatoryproposals.