Stein vetoes REINS Act, a bill aimed at bureaucratic overreach

On Friday, Gov. Josh Stein vetoed House Bill 402, Limit Rules with Substantial Financial Cost, known as the REINS Act, a major piece of regulatory reform legislation.

On June 11, the state Senate approved it by a vote of 26-17, and the House concurred by a vote of 70-44 on June 17.

The measure marks a significant effort by Republican lawmakers to impose new checks on unelected regulatory bodies and to curb the economic burden of expansive government rulemaking. It now goes back to the North Carolina House for consideration.

Key Provisions of the REINS Act

House Bill 402 targets what supporters call “regulatory overreach” by requiring greater legislative scrutiny for rules that impose high financial costs. The legislation introduces tiered thresholds for regulatory oversight:

• Any proposed permanent rule with an economic cost of $20 million or more over five years must receive direct approval from the General Assembly, unless the rule is mandated by federal law
• Rules that would cost more than $10 million over five years would need unanimous approval by the rulemaking board or commission, again unless federally required
• Rules exceeding $1 million over five years would require a two-thirds supermajority vote from the adopting body.

Importantly, the bill expands the definition of “substantial economic impact” from $1 million over a 12-month span to $1 million over five years. That change is expected to significantly widen the range of regulations subject to stricter scrutiny and comprehensive fiscal-note requirements.

Supporters: Transparency and Accountability

Republican leaders argue the bill would enhance government accountability and protect North Carolina residents and businesses from overregulation. They say that unelected bureaucrats have too much power to impose costly rules without sufficient input from elected officials or consideration of long-term financial consequences.

Backers also emphasize the bill’s emphasis on transparency, noting that the expanded fiscal note process will offer stakeholders — including businesses, local governments, and citizens — a clearer understanding of the economic consequences of proposed regulations before they are implemented.

Critics: Risks of Legislative Bottlenecks

Opponents of the REINS Act warn that the legislation could stifle timely responses by regulatory agencies, particularly in areas such as environmental protection, public health, and worker safety. By requiring legislative approval or supermajority board votes, critics say the bill could lead to bureaucratic delays and partisan gridlock.

Some also raise concerns that the thresholds set in the bill could discourage agencies from proposing rules if the cost projections — regardless of net benefit — appear politically risky or burdensome to defend.

“This bill would make it harder for the state to keep people’s drinking water clean from PFAS and other dangerous chemicals, their air free from toxic pollutants, and their health care facilities providing high quality care,” Stein said in a press release. “It would impose red tape, including an unworkable unanimity requirement, that would hamstring the decision-making of agencies, boards, and commissions, making them less effective at protecting people’s health, safety, and welfare.”

Broader Implications

The REINS Act would place North Carolina among a growing number of states adopting measures modeled after the federal-level Regulations from the Executive in Need of Scrutiny Act. Seven states have passed such laws so far, with Kentucky and Utah most recently passing them in 2025.

North Carolina’s HB 402 reflects a broader movement to rein in executive agency power at the state level. Americans for Tax Reform estimates that more than a quarter of US states will have a REINS Act on the books by 2026.

John Locke Foundation’s CEO issues a response to Stein’s veto

Donald Bryson, CEO of the John Locke Foundation, issued the following statement on Stein’s decision:

“Unelected bureaucrats shouldn’t impose million-dollar regulations in the dark — but Governor Stein’s veto of the REINS Act protects that very overreach,” he said in a press release. “By rejecting this commonsense reform, the governor has chosen bureaucratic power over democratic accountability. The REINS Act would have required legislative approval for regulations with price tags exceeding $20 million — rules that can reshape our economy, burden small businesses, and raise costs for families. If a regulation impacts your wallet, your vote should matter. The John Locke Foundation urges the General Assembly to override this veto and restore the people’s voice in the rulemaking process.”

override may still be possible

But, there may be enough votes for a veto override as Rep. Carla Cunnigham, D-Mecklenburg; Cecil Brockman, D-Guilford; and Rep. Shelly Willingham, D-Edgecombe, all voted in favor of the bill on June 17.

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