| 12 | 13 | | A BILL TO BE ENTITLED 1 |
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| 13 | 14 | | AN ACT TO PUT LIMITATIONS ON RULES WITH SUBSTANTIAL FINANCIAL COSTS . 2 |
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| 14 | 15 | | The General Assembly of North Carolina enacts: 3 |
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| 15 | 16 | | SECTION 1. G.S. 150B-21.4(b1) reads as rewritten: 4 |
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| 16 | 17 | | "(b1) Substantial Economic Impact. – Before an agency publishes in the North Carolina 5 |
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| 17 | 18 | | Register the proposed text of a permanent rule change that would have a substantial economic 6 |
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| 18 | 19 | | impact and that is not identical to a federal regulation that the agency is required to adopt, the 7 |
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| 19 | 20 | | agency shall prepare a fiscal note for the proposed rule change and have the note approved by 8 |
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| 20 | 21 | | the Office of State Budget and Management. The agency must also obtain from the Office a 9 |
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| 21 | 22 | | certification that the agency adhered to the regulatory principles set forth in 10 |
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| 22 | 23 | | G.S. 150B-19.1(a)(2), (5), and (6). The agency may request the Office of State Budget and 11 |
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| 23 | 24 | | Management to prepare the fiscal note only after, working with the Office, it has exhausted all 12 |
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| 24 | 25 | | resources, internal and external, to otherwise prepare the required fiscal note. If an agency 13 |
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| 25 | 26 | | requests the Office of State Budget and Management to prepare a fiscal note for a proposed rule 14 |
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| 26 | 27 | | change, that Office must prepare the note within 90 days after receiving a written request for the 15 |
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| 27 | 28 | | note. If the Office of State Budget and Management fails to prepare a fiscal note within this time 16 |
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| 28 | 29 | | period, the agency proposing the rule change shall prepare a fiscal note. A fiscal note prepared 17 |
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| 29 | 30 | | in this circumstance does not require approval of the Office of State Budget and Management. 18 |
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| 30 | 31 | | If an agency prepares the required fiscal note, the agency must submit the note to the Office 19 |
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| 31 | 32 | | of State Budget and Management for review. The Office of State Budget and Management shall 20 |
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| 32 | 33 | | review the fiscal note within 14 days after it is submitted and either approve the note or inform 21 |
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| 33 | 34 | | the agency in writing of the reasons why it does not approve the fiscal note. After addressing 22 |
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| 34 | 35 | | these reasons, the agency may submit the revised fiscal note to that Office for its review. If an 23 |
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| 35 | 36 | | agency is not sure whether a proposed rule change would have a substantial economic impact, 24 |
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| 36 | 37 | | the agency shall ask the Office of State Budget and Management to determine whether the 25 |
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| 37 | 38 | | proposed rule change has a substantial economic impact. Failure to prepare or obtain approval of 26 |
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| 38 | 39 | | the fiscal note as required by this subsection shall be a basis for objection to the rule under 27 |
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| 39 | 40 | | G.S. 150B-21.9(a)(4). 28 |
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| 40 | 41 | | As used in this subsection, the term "substantial economic impact" means an aggregate 29 |
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| 41 | 42 | | financial impact on all persons affected of at least one million dollars ($1,000,000) in a 12-month 30 |
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| 42 | 43 | | five-year period. In analyzing substantial economic impact, an agency shall do the following: 31 |
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| 43 | 44 | | (1) Determine and identify the appropriate time frame of the analysis. 32 |
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| 44 | 45 | | (2) Assess the baseline conditions against which the proposed rule is to be 33 |
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| 45 | 46 | | measured. 34 |
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| 46 | 47 | | (3) Describe the persons who would be subject to the proposed rule and the type 35 |
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| 49 | 54 | | (4) Estimate any additional costs that would be created by implementation of the 1 |
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| 50 | 55 | | proposed rule by measuring the incremental difference between the baseline 2 |
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| 51 | 56 | | and the future condition expected after implementation of the rule. The 3 |
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| 52 | 57 | | analysis should include direct costs as well as opportunity costs. Cost 4 |
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| 53 | 58 | | estimates must be monetized to the greatest extent possible. Where costs are 5 |
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| 54 | 59 | | not monetized, they must be listed and described. 6 |
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| 55 | 60 | | (5) For costs that occur in the future, the agency shall determine the net present 7 |
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| 56 | 61 | | value of the costs by using a discount factor of seven percent (7%)." 8 |
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| 57 | 62 | | SECTION 2. Part 1 of Article 2A of Chapter 150B of the General Statutes is 9 |
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| 58 | 63 | | amended by adding a new section to read: 10 |
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| 59 | 64 | | "§ 150B-19.4. Limitation on rules with substantial financial costs. 11 |
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| 60 | 65 | | (a) If an agency determines that a proposed permanent rule or set of rules will have a 12 |
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| 61 | 66 | | projected aggregate financial cost to all persons affected equal to or greater than one million 13 |
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| 62 | 67 | | dollars ($1,000,000) during any five-year period and the agency is a board, a commission, a 14 |
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| 63 | 68 | | council, or other similar unit of government, the permanent rule or set of rules must be adopted 15 |
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| 64 | 69 | | by a vote of at least two-thirds of the board or commission members present and voting on the 16 |
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| 65 | 70 | | rule or set of rules. 17 |
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| 66 | 71 | | (b) If an agency determines that a proposed permanent rule or set of rules will have a 18 |
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| 67 | 72 | | projected aggregate financial cost to all persons affected equal to or greater than ten million 19 |
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| 68 | 73 | | dollars ($10,000,000) during any five-year period and the agency is a board, a commission, a 20 |
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| 69 | 74 | | council, or other similar unit of government, the permanent rule or set of rules must be adopted 21 |
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| 70 | 75 | | by a unanimous vote of the board or commission members present and voting on the rule or set 22 |
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| 71 | 76 | | of rules. Provided, however, that if the rule or set of rules is required by federal law, including a 23 |
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| 72 | 77 | | rule or set of rules necessary to maintain compliance with a program delegated to the State from 24 |
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| 73 | 78 | | a federal agency, the permanent rule or set of rules must be adopted by a vote of at least two-thirds 25 |
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| 74 | 79 | | of the board or commission members present and voting on the rule or set of rules. 26 |
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| 75 | 80 | | (c) This section shall apply to all rules adopted pursuant to Article 2A of Chapter 150B 27 |
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| 76 | 81 | | of the General Statutes, including rules undergoing periodic review and readoption under 28 |
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| 77 | 82 | | G.S. 150B-21.3A. 29 |
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| 78 | 83 | | (d) For purposes of this section, "aggregate financial cost" means the amount of costs to 30 |
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| 79 | 84 | | all persons affected identified in a substantial economic impact analysis conducted according to 31 |
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| 80 | 85 | | G.S. 150B-21.4(b1), not inclusive of benefits." 32 |
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| 81 | 86 | | SECTION 2. This section is effective when it becomes law and applies to rules 33 |
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| 82 | 87 | | adopted on or after that date. 34 |
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