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An affiliate of Wisconsin Manufacturers & Commerce

Regulatory Reform Bill Sent to the Governor

Special Session AB 8/SB 8 makes a number of important changes to the agency rulemaking process. In general, the new law makes the Governor and the Legislature more accountable for the adoption of new regulations and forces agencies to be more transparent about how proposed rules impact regulated businesses.

The bill reinforces that the Legislature, not state agencies, sets state policy, by:

  • Providing that an agency may not implement or enforce any standard, requirement, or threshold as a term or condition of a license (permit) unless expressly required or permitted by statute or rule;
  • Providing that broad grants of authority to an agency do not authorize rulemaking beyond that which is expressly conferred by the Legislature, and;
  • Prohibiting an agency from adopting or enforcing a standard, requirement or threshold that is more restrictive than one prescribed by the Legislature.

In addition, new provisions make the Governor and the Legislature more accountable for review of administrative rules by:

  • Requiring the Governor to actively approve or reject both the scoping statement (which starts the rulemaking process) of a proposed rule and later the proposed rule itself, before it is submitted to the Legislature for review;
  • Requiring that, after the traditional legislative standing committee review, all rules must then be reviewed by the Joint Committee for Review of Administrative Rules (JCRAR) before they can be promulgated, and;
  • Restricting the agency from advancing rules to the Legislature after the last general business floor period is concluded. Under current law an agency may not advance rules after September 1st of an even numbered year. The floor period schedule is set by Joint Resolution at the beginning of each session, but in the case of the 2011-12 session the provision would mean that no rules may be advanced to the Legislature after March 15, 2012 as opposed to September 1, 2012.

The bill requires agencies to do a more thorough economic impact analysis of proposed rules. For example, the economic impact analysis must contain information on the economic effect of the proposed rule on specific businesses, business sectors, public utility ratepayers, local units of government and the state’s economy as a whole.

Specifically, the economic impact analysis must include:

  • Quantification of the policy problem that the proposed rule is intending to address, including comparisons with the approaches used by the federal government and neighboring states.
  • Detailed quantification of the economic impact of the proposed rule, including the implementation and compliance costs that are reasonably expected to be incurred by or passed along to businesses and individuals that may be affected.
  • The quantifiable benefits of the proposed rule, including an assessment of how effective the proposed rule will be in addressing the policy problem that the rule is intended to address.
  • Alternatives to the proposed rule, including the alternative of not promulgating the proposed rule.
  • A determination made in consultation with the businesses that may be affected by the proposed rule as to whether the proposed rule would materially adversely affect a sector of the economy, productivity, jobs, or the overall economic competitiveness of the state.

The law also provides that an action for declaratory judgment to challenge the validity of a rule in court can be brought in the county where the challenging party resides or has its principal place of business. Formerly, the validity of a rule could only be challenged in Dane County Circuit Court. In addition, after there has been a declaratory judgment on a rule’s validity, the Legislative Reference Bureau will now be required to insert an annotation in the administrative code.

This post was authored by GLLF’s intern, Emily Kelchen, a recent graduate of the University of Wisconsin Law School.