Senate Bill No. 348

(By Senator Hall)

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[Introduced January 19, 2012; referred to the Committee on Government Organization; and then to the Committee on the Judiciary.]

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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §29A-3-19, relating to implementing a quality control procedure for agency rules.

Be it enacted by the Legislature of West Virginia:

    That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §29A-3-19, to read as follows:

ARTICLE 3. RULE MAKING.

§29A-3-19. Quality control procedure for agency rules.

    (a) This section may be known and cited as the “Quality Control Procedure For Agency Rules Act of 2012”.

    (b) Legislature findings and purpose:

    (1) West Virginia has consistently been considered one of the more difficult states for businesses to thrive for various reasons;

    (2) One of the key reasons this state has been consistently rated as a difficult jurisdiction for businesses is because the state’s regulatory environment is rated as one of the most burdensome in the country;

    (3) This burdensome regulatory environment has had a significantly negative impact on economic development and growth in this state;

    (4) If meaningful action is not taken to address this regulatory burden it is likely the state’s economic development and growth will continue to be impeded;

    (5) There must be a quality control procedure implemented including a cost-benefit analysis that will provide for an evaluation of the regulatory burden on business and industry;

    (6) These burdensome rules must be repealed or modified in order to improve this state’s business climate and economic health; and

    (7) New and modified rules must contain a sunset provision to provide the Legislature with an opportunity to determine whether these rules or modifications are accomplishing the intended objective without creating a heavy burden on business and industry.

    (c) Definitions:

    (1) “Cost-benefit analysis” means the Joint Committee on Government and Finance’s oversight of West Virginia University’s and Marshall University’s evaluation of rules based on whether these rules:

    (A) Impede private sector job creation;

    (B) Discourage innovation and entrepreneurial activity;

    (C) Hurt economic growth and investment;

    (D) Harm the state’s competitiveness;

    (E) Limit access to credit and capital;

    (F) Fail to utilize or apply accurate cost-benefit analyses;

    (G) Create additional economic uncertainty;

    (H) Are promulgated in such a way as to limit transparency and the opportunity for public comment, particularly by affected parties;

    (I) Lacks specific statutory authorization;

    (J) Undermines labor-management relations;

    (K) Results in large-scale unfunded mandates on employers without due cause; and

    (L) Imposes undue paperwork and cost burdens on small business.

    (2) “Modification” means changes or amendments to an agency rule that alters the function or material purpose of a rule.(3) “Moratorium” means a suspension of promulgating new rules or the modification of existing rules.

    (4) “Sunset” means the expiration of a rule or modificiation on a date whereby it is repealed.

    (d) Agency Rule and Modification Moratorium -- There shall be a three-year moratorium on the adoption of new agency rules and modification of existing rules beginning on the effective date of this legislation while the cost-benefit analysis for existing rules required under subsection (e) is being conducted. However, this subsection shall not apply to new emergency rules or new rules or modifications required by federal or state law.

    (e) Cost-Benefit analysis for existing rules. -- All existing rules in effect upon the effective date of this legislation shall undergo a cost-benefit analysis within three years beginning on the effective date of this legislation. The cost-benefit analysis shall be conducted by the Joint Committee on Government and Finance through a partnership between West Virginia University and Marshall University. The Joint Committee on Government and Finance shall oversee the universities efforts in conducting this comprehensive cost-benefit analysis of all existing agency rules. The universities shall prepare and submit a final joint report to the Joint Committee on Government and Finance within four years of the effective date of this legislation that includes its findings and recommendations. The Joint Committee on Government and Finance shall review the universities’ final joint report detailing its findings for each agency rule. After the Joint Committee on Government and Finance reviews the universities’ final joint report it may make modifications and shall adopt its final report. A copy of the Joint Committee’s final report shall be provided to the Speaker of the House of Delegates, the Senate President, the Governor and the Board of Regulatory Reform established in subsection (g) within five years of the effective date of this legislation.

    (f) Post Moratorium Rules and Modifications. -- Any state rule promulgated or modified after the moratorium required by subsection (d) shall contain a seven-year sunset provision. Additionally, these post-moratorium rules or modifications must undergo a cost-benefit analysis defined in subsection (c), subdivision (1), conducted by a partnership between West Virginia University and Marshall University with oversight by the Joint Committee on Government and Finance prior to being promulgated or modified to determine if the renewal or modification will create an undue burden on business and industry. The universities shall prepare and submit a final joint report to the Joint Committee on Government and Finance prior to a modification becoming effective that includes its findings and recommendations. The Joint Committee on Government and Finance shall review the universities final joint report detailing its findings for each agency rule or modification. After the Joint Committee on Government and Finance reviews the universities final joint report it may make modifications and shall adopt a final report. The Joint Committee on Government and Finance shall submit a copy of the final report to the Speaker of the House of Delegates, the Senate President, the Governor and the Board of Regulatory Reform established in subsection (g) prior to the post-moratorium rule or modification becoming effective.

    (g) Board of Regulatory Reform:

    (1) The Governor shall establish the Board of Regulatory Reform within the Department of Administration.

    (2) The Department of Administration shall provide the Board of Regulatory Reform with staff who are presently employed by the agency.

    (3) The Department of Administration shall provide the Board of Regulatory Reform with facilities from their existing operations.

    (4) The Board of Regulatory Reform shall elect a chairman by a majority vote who will serve a biannual term.

    (5) The Governor shall appoint at least seven persons to serve on the Board of Regulatory Reform who will not be compensated for their services.

    (6) In selecting persons to serve on the Board of Regulatory Reform, the Governor shall choose one person who is a representative of the West Virginia Chamber of Commerce, one person who represents the West Virginia Manufacturer’s Association, one person who represents the West Virginia Business and Industry Council, one person who represents the West Virginia Department of Commerce, one person who represents the West Virginia Business Roundtable, one person who represents West Virginia University and one person who represents Marshall University.

    (7) The Board of Regulatory Review shall develop its own internal rules and procedures that shall include the following:

    (A) Meet on a monthly basis;

    (B) Require staff to establish and monitor a website that allows individuals associated with business and industry to anonymously comment on existing rules that are negatively impacting their business or industry;

    (C) By a majority vote, make recommendations to the Governor based upon their own experience, expertise, and communications with other who are affected by overly burdensome business regulations;

    (D) By a majority vote, make recommendations to the Governor based upon petitions received from business and industry, with or without a hearing, to terminate or modify rules by businesses or industries aggrieved by agency rules; and

    (E) By a majority vote, make recommendations to the Governor regarding the termination or modification of agency rules after reviewing the Joint Committee on Government and Finance’s final report regarding the cost-benefit analysis of an agency rule and post-moratorium proposed new rules or modifications.

    (h) Severability. -- If any provision of this section or application thereof to any person or any circumstance is held invalid, such invalidity shall not affect other provisions or applications of this section which can be given effect without the invalid provision or its application, and to this end the provisions of this section are declared to be severable.

    NOTE: The purpose of this bill is to establish a quality control procedure for agency rules.

    This section is new; therefore, it has been completely underscored.