The Carolina Journal’s Brianna Kraemer reports on an encouraging development in House Bill 402, the NC REINS Act. It’s not just that the bill, which has already passed the House, cleared the Senate Committee on Regulatory Reform. It’s how it made it out:
The REINS Act would require legislative approval of executive branch rulemaking when the estimated economic impact exceeds $20 million over five years. The House version set the impact at $1 million per year, but an amendment added on Wednesday increased the level of economic impact.
The threshold is significantly higher, yes, but the key difference between the version advanced by the Senate and that which passed the House is legislative ratification. My op-ed earlier this week in The Carolina Journal explained why this aspect is not just important but the key to whole reform:
The General Assembly can disapprove a rule it believes oversteps bounds, but this requires passing a bill — drafting it, clearing committees, getting approval from both chambers, and securing the governor’s signature, which is unlikely since the governor may veto it.
The opportunity cost of this time to legislators is high, especially compared with such a low likelihood of success. For this reason, institutional inertia tends to favor excessive rulemaking. It’s easier for the General Assembly to do nothing, but inaction means the rule takes effect. …
A proper REINS Act would use this opportunity cost against expensive rules instead of for them. Done correctly, REINS would prevent the expensive rule from taking effect unless it received approval from the General Assembly. It’ll still be easier for the General Assembly to do nothing, but now inaction means the rule cannot take effect.
North Carolina is by far from the only state considering REINS this year. Patrick Gleason writes in Forbes that nearly a quarter of states will likely have their own REINS Acts by 2026. Provided that the NC REINS Act continues to require legislative ratification, this could be a very important reform for the regulatory climate in North Carolina.
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Author: Jon Sanders
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