Man Bites Dog – Idaho Repeals its Regulatory Code
J. Kennerly Davis
Idaho has long been widely known for the natural wonders that grace its landscape: the rugged wilderness, the snow-capped peaks, the sparkling waters and, of course, the potatoes.
This spring, the state attracted widespread attention for a different reason when news reports announced that the Idaho legislature had repealed the entire state code of regulations.
The entire code? How could they have accomplished such a thing? What could have possessed the Gem State solons to rise up suddenly and vanquish their administrative state with a single blow? What were the consequences of this reported revolution? Have they descended into unregulated anarchy? And, most importantly, what lessons can the rest of the country, choked as we are with red tape, draw from the events in Idaho?
Like a lot of news stories, what actually happened in Idaho this spring was somewhat less sensational than suggested by the headlines of the moment. Nevertheless, it’s an interesting story, and very instructive for all those who labor to curb the excesses of the administrative state.
The real Idaho story demonstrates the central importance of process in the regulatory system, and the remarkable regulatory reductions that can be achieved if the necessary hard work has first been done to establish basic procedures of governance that embody principles of republican self-government. Sadly, most procedures of governance at both the state and federal level operate to perpetuate an unaccountable bureaucracy. Idaho took a different course.
Under an Idaho law enacted in 1990, the entire regulatory code automatically expires each year unless the legislature passes a statute to reauthorize the code for an additional year. [https://legislature.idaho.gov/statutesrules/idstat; Idaho Code §67-5292.] Idaho is the only state in the nation where the elected representatives of the people must affirmatively act at regular intervals to continue the existence and operation of their regulatory system.
Many reformers have proposed some form of sunset process to weed out excessive, duplicative, or outdated regulations. Sunsetting often falls short because the process put in effect tends to favor continuation of the status quo. Sunset provisions are often targeted to cover certain specific regulations, and those targeted can often be reauthorized by the agency responsible for the targeted regulation.
Idaho turbo-charged sunsetting by providing for the automatic simultaneous expiration of all its regulations, and requiring legislative instead of agency reauthorization. In effect, the state transformed the typical sunset process into a “sunrise” process that embodies a bedrock principle of republican self-government. In Idaho, the people, acting through their elected representatives, must affirmatively approve the regulatory measures that legally bind them.
To be sure, the Idaho legislature has routinely acted to reauthorize the state’s regulatory code. But not this year. In April, a reportedly acrimonious session of the legislature concluded with no reauthorization. As a result, all the regulations contained in 8,200 pages and 736 chapters of the code were automatically set for expiration on July 1, unless the governor acted before then to reauthorize them on a temporary basis.
Governor Brad Little already had an ambitious red tape reduction program underway when the legislature failed to reauthorize the regulatory code. In January of 2019 he had signed two executive orders designed to simplify state government and make it more accountable.
The first executive order dealt with occupational licensing. It established a process that requires regular review by the governor of every state licensing regulation to determine if the requirements of each regulation continue to serve the public interest. The licensing order specified a list of factors that the governor and executive departments must consider with the legislature before imposing any new regulatory requirements on businesses, professions, or occupations.
The second executive order dealt with red tape reduction generally. It requires the annual reporting of all state efforts currently underway to eliminate regulations and streamline government operations. And for each new regulation that is proposed through FY2021, the order requires the proposing agency to submit a formal statement describing the impact the new rule would have on individuals and small businesses. The order also requires the agency proposing a new regulation to identify two existing regulations that can be eliminated or simplified, or to explain why this cannot be done.
These two executive orders are commendable examples of regulatory reform and red tape reduction. But the process established by the orders is incremental, at best. Each individual proposal to eliminate an existing regulation must be considered separately and approved separately in accordance with the applicable procedural requirements. The burden of proof always rests on the one proposing elimination.
When the state legislature failed in April to reauthorize the regulatory code as a whole, the burden of proof for red tape reduction shifted dramatically. It was now up to the agencies to justify every regulation they wanted to save from elimination, and to do so before July 1.
In the latter part of May, after dozens of public meetings hosted by state agencies and countless hours of intensive staff work to consider agency and public input, Governor Little announced his plan for a partial and temporary reauthorization of the regulatory code. He asked for further public input on the following: 139 full chapters of the regulatory code were proposed for expiration on July 1, sections within another 79 chapters were proposed for expiration, and 31 chapters were proposed for simplification. The Governor further proposed to temporarily reauthorize the rest of the code as measures necessary to protect public health, safety, and welfare. He said he would submit all reauthorized regulations to the legislature for further review and approval. The Governor asked the public to submit comments on his plan by June 11. Most of the comments that were submitted suggested additional regulations for elimination.
The Governor and state agencies will finalize the temporarily reauthorized regulations this fall, and submit the resulting package to the legislature for its review and approval during the 2020 session. During that session, the public will have additional opportunities to comment further on the regulations reauthorized and submitted by the Governor. And, of course, by the end of its next session, the legislature will have to again reauthorize the regulatory code as a whole or it will automatically expire.
Idaho was once a frontier state. It now stands on the frontier of regulatory reform and rollback, dramatically demonstrating what can be accomplished if the process established to review and approve regulations truly embodies basic principles of republican self-government. With such a process in place, an unusual turn of events this April gave the people of Idaho an opportunity to envision the entire regulatory code gone, and then decide what they wanted to keep. All in all, they cut over 900 pages of regulations. Idaho deserves its nickname – The Gem State!
J. Kennerly Davis served as Deputy Attorney General for Virginia from 2013-2014. He is an expert contributing to the Federalist Society’s Regulatory Transparency Project.