November 13, 2013

In recent years, special interests and their allies in Congress have pushed a number of dangerous proposals to "reform" the rulemaking process to undermine the standards and safeguards that guarantee clean air and water, safe workplaces, healthy food, and safe medicines. Now, these same special interests are pushing similar proposals in the states.

Many of these so-called "reforms" expand or institutionalize requirements that delay and weaken important regulations and increase the already outsized influence of corporations in setting environmental, food, consumer, and worker safety policies. Two key policy changes these anti-regulatory interests support include: 1) increasing the power of a politicized centralized review body with the authority to second-guess the standards proposed by scientists and substantive experts; and 2) requiring new, more extensive economic analyses of the costs of new standards. Moratoriums on new rules are also being promoted in the states.

The anti-regulatory initiatives in the states have been largely driven by the American Legislative Exchange Council (ALEC), a network of corporate interests and their allies in state legislatures. ALEC promotes "model" state bills that cover everything from the privatization of prisons and foster care services to environmental rollbacks. ALEC is pushing model state legislation that would make it harder for state public health, environmental, and labor agencies to issue new health and safety standards. In addition, ALEC has championed efforts to prohibit local governments from adopting standards stronger than those on the state or federal levels.

The Uniform Law Commission (ULC), a group of state government-appointed commissioners whose mission is to make state administrative processes more uniform, has also proposed model state administrative policies that would increase procedural requirements and reviews and make it harder for agencies to issue rules.

Experience at the federal and state level has shown that centralized regulatory review can delay rules, increase uncertainty for the public and regulated community, and politicize rulemaking. Such reviews can have a chilling effect on agencies' willingness to propose new standards and rules. It puts the decisions in the hands of politicians, not experts, who may base their decisions on political, partisan, or monetary considerations rather than concern for public health and safety.

Mandatory cost-benefit analyses can be expensive and time-consuming; they are often based on limited, inadequate data. Codifying cost-benefit analysis into state law removes agency discretion and mandates a one-size-fits-all approach ill-suited for many health and safety rules. Cost-benefit analyses require agencies to create artificial prices for unquantifiable benefits and exclude important fairness and morality considerations. As a result, agencies are forced to spend precious resources collecting data for analyses that often turn out to be incomplete or unreliable.

Initiatives to freeze the regulatory process or prohibit new rules altogether obviously reduce the safeguards protecting the public, and moratoriums instituted by state governors may interfere with authority that has been delegated to regulatory agencies by state legislatures.

States should be on the lookout for these proposals and oppose any regulatory process changes designed to delay, weaken, or block important agency actions. Where existing regulatory analyses and review requirements already impede state agencies' ability to promptly issue and update standards, states should consider reforms that would address issues of delay, political and special interest interference, and inadequate transparency in the regulatory process. These positive policy changes could include:

  • Curbing undue political interference in rulemaking
    States should ensure that members of regulatory review bodies or committees disclose any conflicts of interest.

  • Limiting the agency actions that are subject to centralized regulatory review
    Review bodies have struggled to keep up with requirements to review all rules. Even if the review body has the discretion to select the rules it will review, there may be a tendency to assert review authority over a wide range of agency actions. Narrowing the scope of the review body’s authority can help conserve scarce resources.

  • Ensuring that centralized regulatory review does not result in unnecessary delay
    It is important that state agencies be allowed to move forward with rules without being subject to unnecessary and excessive reviews. States could prescribe time limits on reviews to prevent a centralized review body from holding up agency actions.

  • Reducing reliance on cost-benefit analysis
    Where agencies are required to conduct or rely on cost-benefit analyses, those analyses should only be informative, not determinative. States should acknowledge the limitations of cost-benefit analysis and the importance of considering qualitative factors in decision making. States should also explicitly endorse deference to the regulatory determinations of expert agencies.

  • Increasing transparency in the regulatory review process
    Transparency can ensure accountability in the review process. The public should be informed of regulatory delays and any changes that are made to an agency’s rule or analysis during review. States should require review bodies and agencies to document these changes, as well as any communications they have with outside parties concerning the rule’s cost-benefit analysis or substance.

The legislative models that ALEC has been promoting are being sold as "reasonable" regulatory reforms. In fact, these pieces of legislation serve as a Trojan horse designed to quietly shut down state efforts to establish public protections that ensure all their residents enjoy safe and healthful lives. Even the model state procedures endorsed by the Uniform Law Commission would unnecessarily complicate and obstruct the regulatory process, making it more difficult to issue important rules. State legislators need to close and bar the gates against these dangerous proposals.

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