New Rules Review Commissioners test the waters

You don’t hear much about the Rules Review Commission. It’s one of the cogs in the state’s bureaucratic machine, tasked with the final review of new rules state agencies say are needed. Those rules cover everything from how barbers and librarians are accredited to what fees agencies can charge to water and air pollution standards.

Since regulatory reform is one of the top priorities for Republican House and Senate leaders, it’s no surprise they appointed new commission members who would be wary of rules changes, especially those dealing with the environment. But some of the seven new commissioners seemed disappointed today to find out they don’t have the power to refuse new regulations outright.

The meeting was chugging along at a decent clip until it got to the agenda items from the Environmental Management Commission. The EMC was seeking proposed technical changes to Jordan Lake rules, a reclassification of an area of the Dan River, and tougher new federally-mandated air quality standards for sulfur oxide and nitrogen dioxide.

Commission counsel Joseph DeLuca recommended approval of the EMC changes. But the new commissioners were openly skeptical. One, Addison Bell, wanted to know whether the air standards targeted power plants, and whether the EPA paid the state for the use of state employees to enforce federal mandates. Another new commissioner, Grant Dunklin, objected to the way the rules were written. And others cited concerns about public objections to the proposed Dan River changes.

The panel failed on a 2-7 vote to approve the Dan River changes, despite Chairman Ralph Walker's explanation that an approval vote was needed to send the rule to state lawmakers for possible changes next session.

Agency representatives in the room seemed surprised by the vote. DeLuca stepped in to explain to the commissioners what their options were.

According to DeLuca, the Rules Review Commission has to evaluate new rules according to a limited set of criteria set out in the Administrative Procedures Act – like whether the agency in question has the authority to make that rule, whether it’s clear and necessary, and whether the correct process was followed. “It can’t be ‘I don’t like that rule,’ or ‘it imposes too many requirements,’ or ‘it doesn’t impose enough requirements,’” DeLuca explained. “That’s up to the agency.” ‘

DeLuca told the new commissioners they have the right to reject his recommendations as counsel. “But you do have to act within the authority you have within the APA. You’re not supposed to substitute your expertise for that of the agency.”

Under the APA, DeLuca explained, the commission has only three options to act on a rule: it can approve it, object to it on clear grounds as set out by the APA criteria, or seek specific additional information. The agency then responds to either of the latter two options.

In the end, the commission opted to seek further information on whether the legislative history laid out in the Dan River rule is accurate. This will delay the vote by at least a month, possibly two.

The panel also approved the air quality changes, but grudgingly, and only after being reminded the changes were required by federal law. Chairman Walker, who seemed frustrated at times during the meeting, had to ask twice for a second on the motion for approval. No one voted against it, but at least one commissioner didn’t vote at all.

After the meeting, new commissioner Addison Bell said he was still figuring out what authority the commission has. “I knew we were going to review the rules, but I didn’t know to what depth we’d review them,” he said. “It looks like to me that we’re doing a lot of technical review, and just making a decision on the technical. I don’t know exactly how much of the substance of the rules we’re authorized to get into, if at all.”

“The charge I had on being appointed to the commission was, are there rules that are creating high unemployment in our state, and are there rules that are killing jobs?” Bell continued. “We’ve gotta have rules, I don’t have any question about that, but what can we do economically regarding rules to help the state?”

Elizabeth Kountis with the Division of Water Quality testified at the meeting. She was surprised by the failed approval vote on her agency’s rule, but said DWQ will find a way to make changes sought by the panel. “That’s a new commission,” she said. “It’s a new day. There’s a different representation of interests.”

When Senate Bill 781, Regulatory Reform, takes effect October 1st, it'll be yet another new day. The legislation, vetoed by Gov. Bev Perdue but overridden by lawmakers, will severely limit new rulemaking, and will also apply to proposed regulations still in the pipeline. 

DeLuca said the Rules Review Commission is still assessing what S781 will mean to its operations. But most of the new law's impact will likely be at the agency level, where the rulemaking process already takes 6 months to 2 years on average. Retroactive requirements under S781 are expected to slow that process even more.