Summary of February 27, 2024, Administrative Procedures Oversight (APO) Committee Meeting
By The APO Committee is chaired by Rep. Sarah Stevens. Sen. Galey is Co-Chair and was present along with Committee Members Sen. Mayfield, Sen. Moffit, Sen, Sanderson, Rep. Longest and Rep. Dahle.
A report on the Periodic Review of Existing Rules (Existing Rules Review or ERR) was presented by Codifier of Rules Ashley Berger Synder and RRC Chair Jeanette Doran. The first step of the review, which will be completed in three years, is the classification of rules. Sen. Mayfield inquired if the RRC could intervene if the agencies classified rules in the middle bucket which was necessary without a substantive public interest. Synder responded with a review of the three buckets for classification in the first round of ERR, how each bucket was handled, and noted that the General Assembly amended the process to delete the middle bucket. Rep. Longest asked how many rules were classified in the middle bucket. Doran responded they did not have numbers for this question but could get them. Doran went on to state that the APA defines public comment in a much narrower fashion than might be expected and that only comments on a rule could be calculated. Rep. Stevens asked what groups are exempt from the review. Sen Mayfield asked about the process of rule making for the exempt groups. Synder responded with examples of exempt groups: the State Bar, the Utilities Commission, and the Lottery Commission. The exemption is defined by statute, and each of the exempt groups have processes for review of rules. Rep. Stevens mentioned problems with HHS and DPI having not complied with the rules review process. Doran indicated they did not know the number of rules issues, and the two agencies had too many subdivisions to determine a number. Rep. Stevens asked for an explanation of the difference between rules and policy.
Synder explained the part of the process for rules subject to legislative review resulting from 10 objections from the public. Synder did not mention that the effective date for the objected rules is 31 legislative days of the next regular session that begins at least 25 days after the RRC approved the rules. Stevens asked if the Committee should review the 10 objections as a committee and recommend a bill for disapproving rules. There was no discussion of her idea. Stevens stated that the process follows normal procedure where the Governor can veto such bills. Sen. Moffit asked why the Governor was involved in APA. He indicated that APA is a statutory construct. Synder stated that the bills often used are the Technical Corrections bills and Regulatory Reform bill. The bills are not in the constitutional list of bills, which the Governor cannot veto.
Bill Peaslee, the RRC Counsel, reviewed the recent RRC litigation since 2014. He indicated that the General Assembly allocated funds for RRC to retain outside counsel. Peaslee indicated that in one case the DOJ had represented RRC but not the Codifier of Rules. A discussion proceeded concerning the DOJ determination of a conflict of interest. Sen. Moffit asked why the DOJ was making these determinations and should funds used for outside representation be taken out the of the DOJ budget. Peaslee responded they would need to ask the DOJ. Jeanette Doran stated that she was not speaking as RRC Chair but rather as the General Counsel and President of the North Carolina Institute of Constitutional Law when she said that in her opinion the actions of the DOJ in all these cases were politically motivated. Doran stated in one case RRC did not find out about the DOJ not being able to represent RRC or staff until three hours before a TRO hearing. The RRC had to scramble to find outside counsel who would work without the funds being designated to do the work. A motion to seek $100,000 for the retention of outside counsel was made and passed by the Committee sending the motion to staff to prepare legislation. Sen. Mayfield requested information as to how the DOJ determines conflict interests when representing agencies and subdivisions of agencies. Mayfield asked if DOJ”s primary responsibility is to represent agencies over representation of RRC. Peaslee indicated that RRC has statutory authority to retain outside counsel. Rep. Stevens stated that funds for outside counsel could be deducted from the DOJ budget. Doran stated that prior to the amendment Peaslee mentioned, the RRC had to retain outside counsel going through the normal process and funding approved later.
Sen. Moffit asked general questions. He inquired about the rules the RRC used to evaluate rules. He further asked if rules have to be based in a statute. In regard to penalties and fees, Sen. Moffit asked about the effect on the public and how this was done. Peaslee explained that there had to be statutory authority to impose penalties and fees. Doran stated that there is a very narrow window that criminal penalties can be levied without statutory authority.
Sen. Moffit added a discussion that was not on the agenda. Sen. Moffit indicated that in 1973 when the APA was developed, it was a different era. At that time, the General Assembly was delegating to the experts. Sen. Moffit stated that he believes the APA to be unconstitutional. He stated that now unnamed individuals are developing rules and being codified. Sen. Moffit supports bringing all of the administrative rulemaking process back into the Legislature and having a committee like APO review all rules. Rep. Stevens stated that the Legislature passed bare bones laws and turns the laws over to the agencies, boards and commissions to put the meat on the bones. She did indicate that only with statutory authority could a criminal penalty be imposed. Sen. Sanderson indicated that a review of policies and resolutions should be reviewed. Rep. Stevens indicated that an APA constitutionality discussion might be a topic for a future meeting.
A staff counsel reviewed how military personnel and their families can receive training and job preference. He indicated that most agencies, commissions and boards are complying with state and federal law concerning these directives. The staff member stated that some are still operating under the old process and were not yet aware of the changes made by the General Assembly to clarify the requirements with which they have to comply.
Chris Saunders, staff member, summarized the Dental Board case. He stated the dissent was written by Alito, Thomas and Scalia and that a similar case brought today might have a different result. Rep. Stevens presented a bill developed by Administrative Law Council members, board counsel, and legislative staff to address the need for oversight of the actions of agencies, boards and commissions. Rep. Stevens indicated that Sen. Wells had added everything he wanted to the bill three years ago. As a result, the bill was killed. She asked that the bill be approved by the Committee and sent to both houses. A motion was unanimous and staff was instructed to prepare the bill for introduction.
Dennis Seavers, Executive Director of the Barber and Electrolysis Board, outlined how the two boards were merged with both boards’ support.
Mike Tadych, Counsel for the Acupuncture Board, noted that the UNC Board of Governors have approved a Ph.D. program at UNC Asheville for acupuncture. He indicated that individuals practicing acupuncture without a license can be sent to court for an injunction or to the SBI for investigation. He asked that the Board be able to pursue a fee increase. Sen. Mayfield moved that the Board be able to pursue a fee increase. Rep. Stevens asked that she come back with a specific number at the next meeting.
Rep. Dahle indicated that she believes the Legislature is piling up responsibilities on RRC. She requested that an understandable process that an average person could understand be developed. She also requested a process be developed so that an individual with minimal education can understand how to navigate the administrative process. Rep. Stevens stated this was a good topic for discussion. This will be on the next committee agenda. Sen. Galey indicated that a discussion of protecting the public interest would be good to look at.
The next Jt. Administrative Procedures (APO) Oversight Committee meeting is set for Tuesday, March 26, 2024, at 2 p.m. in Room 643 of the Legislative Office Building. An agenda has not yet been posted for that meeting.