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Administrative Procedures Act / Regulatory Reform

Position: NCCBI supports an Administrative Procedures Act (APA) which clearly defines the process for promulgating environmental regulations and provides for fair and effective oversight by third parties, stakeholders and the General Assembly, as well as providing for the promulgation of cost effective rules.  Specifically, NCCBI supports:

  1. Use of Existing Rulemaking Process: NCCBI believes that all parties should be held accountable to the APA and should not deviate from its requirements.  NCCBI will adhere to the APA and work diligently to see that the APA is followed by other parties. Specifically, NCCBI believes that the Department of Environment, Health and Natural Resources (DENR) must be held accountable to the APA and internal departmental documents referred to as “Policies, Agreements, or Guidance” should not be considered valid for enforcement if they are clearly regulatory in nature and have not been through proper procedures for adoption of a regulation. If these documents are to be enforceable under the law, each must be promulgated under the requirements of the APA.

  2. Improvements in the Rulemaking Process: NCCBI supports improvements in the rule making process to assure that (1) all rules must be shown to be necessary and cost effective, (2) controversial or expensive rules should continue to be subject to oversight by the General Assembly, (3) the Rules Review Commission’s (RRC) review of regulations should be strengthened, (4) judicial review of rules should be reinstated, and (5) the adoption of simple and/or noncontroversial rules should be streamlined.  NCCBI  also supports improvement in the oversight and review of administrative decisions by independent third parties, such as administrative law judges (ALJs), having adequate power and authority to apply meaningful review and oversight to the decisions.

Explanation: In order to have a fair and equitable rulemaking process, a clear APA is necessary. This gives all stakeholders guidance as to their roles, responsibilities and rights, as well as prescribing with some degree of certainty the process for the general public, DENR, the Environmental Management Commission (EMC) and the legislature. Stakeholders, including businesses, industries and special interest groups, as well as the EMC and the legislature, provide a system of checks and balances. An appropriate APA assures a regulatory process that considers a variety of aspects including the need for regulations and the cost/benefit of the regulation.  Legislative oversight is an important element of the APA and broadens the perspective of the rulemaking process.

Use of Existing Rulemaking Process: The APA should be followed by all parties. Deviations from and attempts to circumvent the APA jeopardize the system and the rights of all stakeholders. DENR should not be allowed to impose requirements that are regulatory in nature without following the requirements of the APA which allow for public input.

Improvements in the Rulemaking Process: NCCBI strongly believes in the maxim that “he who governs least, governs best,” and that often, administrative agencies have issued an excessive number of unnecessary and unduly burdensome rules. However, NCCBI also recognizes that narrow, specific, cost effective rules that are well-crafted and subject to adequate oversight can provide guidance to the regulated community in its efforts to comply with present-day comprehensive and complicated statutory schemes, such as those found in the laws for the protection of the environment, health and safety.

The promulgation and review of administrative rules under the APA now allows for oversight by the General Assembly, as well as enhanced review by the RRC. However, the APA still fails to provide an overarching principle that the State has the burden of demonstrating that every rule adopted is needed and appropriate, drawn to be no broader than necessary, and does so in the most cost-effective manner possible. These standards should apply to all rules, in addition to the current requirements that rules must be adopted using proper procedures, be based on adequate statutory authority, and, provides clear guidance to the regulated community.

NCCBI believes that, before the adoption of any rule, its total monetary and other costs should be quantified, and these costs should be compared to the purported benefits that the supporter of the rule believes will accrue from its adoption. It would be preferable that these measures, or at least a comparison of these measures, be performed by some entity other than the agency adopting the rules. In addition, judicial review of these comparisons should be available beyond the RRC and the General Assembly’s review.

The current system for contested cases under the APA consists of a hearing before an Administrative Law Judge (ALJ) that produces a record and a recommended decision. The record and recommended decision are then returned to the agency, board or commission, that made the original decision. Statistics show that, where the ALJ recommends a position contrary to that of the original agency,  board or commission decision the agency, board or commission rarely follows the different recommendation.  These statistics support a growing belief on the part of the regulated community, especially individuals who may only be exposed to the process once, that the whole hearing procedure is unjustified, because it is often composed of a long hearing with many procedures, which produces a recommendation that the agency ignores, anyway, particularly where the decision is visible or controversial. This needs to be changed.  At a minimum, the ALJ’s findings of fact should be presumptively binding. Serious consideration should also be given to making the ALJ’s decision final, with appeal directly to court for judicial review.

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