GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 2
HOUSE BILL 402
Committee Substitute Favorable 4/15/25
Short Title: NC REINS Act. (Public)
Sponsors:
Referred to:
March 17, 2025
*H402 -v-2*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT THE REGULATIONS FROM THE EXECUTIVE IN NEED O F 2
SCRUTINY ACT AND TO CLARIFY THE JUDICIAL DEFERENCE AFFORDED TO 3
AGENCY INTERPRETATIO NS OF RULES. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 150B-21.3 reads as rewritten: 6
"§ 150B-21.3. Effective date of rules. 7
(a) Temporary and Emergency Rules. – A temporary rule or an emergency rule becomes 8
effective on the date the Codifier of Rules enters the rule in the North Carolina Administrative 9
Code. 10
(b) Permanent Rule. – A permanent rule approved by the Commission becomes effective 11
on the first day of the month following the month the rule is approved by the Commission, unless 12
(i) the Commission received written objections to the rule in accordance with subsection (b2) of 13
this section, section, (ii) the rule would have a substantial economic impact as calculated under 14
G.S. 150B-21.4(b1)(4a), or unless (iii) the agency that adopted the rule specifies a later effective 15
date. 16
(b1) Delayed Effective Dates. – Except as provided in G.S. 14-4.1, if the Commission 17
received written objections to the rule in accordance with subsection (b2) of this section, or if the 18
rule would have a substantial economic impact as calculated under G.S. 150B-21.4(b1)(4a), the 19
rule becomes effective on the earlier of the thirty-first legislative day or the day of adjournment 20
of the next regular session of the General Assembly that begins at least 25 days after the date the 21
Commission approved the rule, unless a different effective date applies under this section. If a 22
bill that specifically disapproves the rule is introduced in either house of the General Assembly 23
before the thirty-first legislative day of that session, the rule becomes effective on the earlier of 24
either the day an unfavorable final action is taken on the bill or the day that session of the General 25
Assembly adjourns without ratifying a bill that specifically disapproves the rule. If the agency 26
adopting the rule specifies a later effective date than the date that would otherwise apply under 27
this subsection, the later date applies. A permanent rule that is not approved by the Commission 28
or that is specifically disapproved by a bill enacted into law before it becomes effective does not 29
become effective. 30
A bill specifically disapproves a rule if it contains a provision that refers to the rule by 31
appropriate North Carolina Administrative Code citation and states that the rule is disapproved. 32
Notwithstanding any rule of either house of the General Assembly, any member of the General 33
Assembly may introduce a bill during the first 30 legislative days of any regular session to 34
disapprove a rule that has been approved by the Commission and that either has not become 35
effective or has become effective by executive order under subsection (c) of this section. 36 General Assembly Of North Carolina Session 2025
Page 2 House Bill 402-Second Edition
…." 1
SECTION 2. G.S. 150B-21.4(b1) reads as rewritten: 2
"(b1) Substantial Economic Impact. – Before an agency publishes in the North Carolina 3
Register the proposed text of a permanent rule change that would have a substantial economic 4
impact and that is not identical to a federal regulation that the agency is required to adopt, the 5
agency shall prepare a fiscal note for the proposed rule change and have the note approved by 6
the Office of State Budget and Management. The agency must also obtain from the Office a 7
certification that the agency adhered to the regulatory principles set forth in 8
G.S. 150B-19.1(a)(2), (5), and (6). The agency may request the Office of State Budget and 9
Management to prepare the fiscal note only after, working with the Office, it has exhausted all 10
resources, internal and external, to otherwise prepare the required fiscal note. If an agency 11
requests the Office of State Budget and Management to prepare a fiscal note for a proposed rule 12
change, that Office must prepare the note within 90 days after receiving a written request for the 13
note. If the Office of State Budget and Management fails to prepare a fiscal note within this time 14
period, the agency proposing the rule change shall prepare a fiscal note. A fiscal note prepared 15
in this circumstance does not require approval of the Office of State Budget and Management. 16
If an agency prepares the required fiscal note, the agency must submit the note to the Office 17
of State Budget and Management for review. The Office of State Budget and Management shall 18
review the fiscal note within 14 days after it is submitted and either approve the note or inform 19
the agency in writing of the reasons why it does not approve the fiscal note. After addressing 20
these reasons, the agency may submit the revised fiscal note to that Office for its review. If an 21
agency is not sure whether a proposed rule change would have a substantial economic impact, 22
the agency shall ask the Office of State Budget and Management to determine whether the 23
proposed rule change has a substantial economic impact. Failure to prepare or obtain approval of 24
the fiscal note as required by this subsection shall be a basis for objection to the rule under 25
G.S. 150B-21.9(a)(4). 26
As used in this subsection, the term "substantial economic impact" means an aggregate 27
financial impact on all persons affected of at least one million dollars ($1,000,000) in a 12-month 28
period. period, as calculated under subdivision (4a) of this subsection. In analyzing substantial 29
economic impact, an agency shall do the following: 30
(1) Determine and identify the appropriate time frame of the analysis. 31
(2) Assess the baseline conditions against which the proposed rule is to be 32
measured. 33
(3) Describe the persons who would be subject to the proposed rule and the type 34
of expenditures these persons would be required to make. 35
(3a) Estimate the cost of the baseline, if the proposed rule amends or readopts an 36
existing rule. The analysis should include direct costs as well as opportunity 37
costs. Cost estimates must be monetized to the greatest extent possible. Where 38
costs are not monetized, they must be listed and described. 39
(4) Estimate any additional costs that would be created by implementation of the 40
proposed rule by measuring the incremental difference between the baseline 41
and the future condition expected after implementation of the rule. The 42
analysis should include direct costs as well as opportunity costs. Cost 43
estimates must be monetized to the greatest extent possible. Where costs are 44
not monetized, they must be listed and described. 45
(4a) Estimate the combined cost of the baseline conditions and the proposed rule 46
as calculated in subdivisions (3a) and (4) of this subsection. 47
(5) For costs that occur in the future, the agency shall determine the net present 48
value of the costs by using a discount factor of seven percent (7%)." 49
SECTION 3. G.S. 150B-34 reads as rewritten: 50
"§ 150B-34. Final decision or order. 51 General Assembly Of North Carolina Session 2025
House Bill 402-Second Edition Page 3
(a) In each contested case the administrative law judge shall make a final decision or 1
order that contains findings of fact and conclusions of law. The administrative law judge shall 2
decide the case based upon the preponderance of the evidence, giving due regard to evidence. 3
The administrative law judge shall be informed by the demonstrated knowledge and expertise of 4
the agency with respect to facts and inferences within the specialized knowledge of the 5
agency.agency but shall exercise independent judgment in making a final decision or order. 6
(b) Repealed by Session Laws 1991, c. 35, s. 6. 7
(c) Repealed by Session Laws 2011-398, s. 18. For effective date and applicability, see 8
editor's note. 9
(d) Except for the exemptions contained in G.S. 150B-1, the provisions of this section 10
regarding the decision of the administrative law judge shall apply only to agencies subject to 11
Article 3 of this Chapter, notwithstanding any other provisions to the contrary relating to 12
recommended decisions by administrative law judges. 13
(e) An administrative law judge may grant judgment on the pleadings, pursuant to a 14
motion made in accordance with G.S. 1A-1, Rule 12(c), or summary judgment, pursuant to a 15
motion made in accordance with G.S. 1A-1, Rule 56, that disposes of all issues in the contested 16
case. Notwithstanding subsection (a) of this section, a decision granting a motion for judgment 17
on the pleadings or summary judgment need not include findings of fact or conclusions of law, 18
except as determined by the administrative law judge to be required or allowed by G.S. 1A-1, 19
Rule 12(c), or Rule 56." 20
SECTION 4. G.S. 150B-51 reads as rewritten: 21
"§ 150B-51. Scope and standard of review. 22
(a), (a1) Repealed by Sessions Laws, 2011-398, s. 27. For effective date and applicability, 23
see editor's note. 24
(b) The court reviewing a final decision may affirm the decision or remand the case for 25
further proceedings. It may also reverse or modify the decision if the substantial rights of the 26
petitioners may have been prejudiced because the findings, inferences, conclusions, or decisions 27
are: 28
(1) In violation of constitutional provisions; 29
(2) In excess of the statutory authority or jurisdiction of the agency or 30
administrative law judge; 31
(3) Made upon unlawful procedure; 32
(4) Affected by other error of law; 33
(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 34
150B-30, or 150B-31 in view of the entire record as submitted; or 35
(6) Arbitrary, capricious, or an abuse of discretion. 36
(c) In reviewing a final decision in a contested case, the court shall determine whether 37
the petitioner is entitled to the relief sought in the petition based upon its review of the final 38
decision and the official record. With regard to asserted errors pursuant to subdivisions (1) 39
through (4) of subsection (b) of this section, the court shall conduct its review of the final decision 40
using the de novo standard of review. With regard to asserted errors pursuant to subdivisions (5) 41
and (6) of subsection (b) of this section, the court shall conduct its review of the final decision 42
using the whole record standard of review. In conducting its review of the final decision, the 43
court shall be informed by the demonstrated knowledge and expertise of the agency with respect 44
to facts and inferences within the specialized knowledge of the agency but shall exercise 45
independent judgment in making its order. 46
(d) In reviewing a final decision allowing judgment on the pleadings or summary 47
judgment, the court may enter any order allowed by G.S. 1A-1, Rule 12(c) or Rule 56. If the 48
order of the court does not fully adjudicate the case, the court shall remand the case to the 49
administrative law judge for such further proceedings as are just." 50 General Assembly Of North Carolina Session 2025
Page 4 House Bill 402-Second Edition
SECTION 5. This act is effective when it becomes law. Sections 1 and 2 of this act 1
apply to rules adopted on or after that date. Sections 3 and 4 of this act apply to actions pending 2
or filed on or after that date. 3