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Business and Regulations,Environment,Local Government,State Government

Major Regulatory Reform Caps Legislative Session

Sunset provisions, limits on local governments highlight rulemaking agenda

Jul. 31st, 2013
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RALEIGH — Lawmakers wrapped up the 2013 legislative session with a bill embracing broad regulatory reform. The 68-page bill crossed into several functions of state government and reached into the powers of local governments. The bill sought to rein in regulations and requirements that some local governments put on businesses, such as requiring sick leave or preventing billboard owners from cutting trees blocking their signs.

At a Friday press conference, Gov. Pat McCrory objected to a couple of provisions in the legislation — the billboard treecutting item and a measure easing restrictions on landfills. McCrory said he could mitigate the billboard provision with an executive order, but he did not indicate whether his concerns over the landfill portion would lead him to veto the bill.

A key piece of the reform would require state regulations to come up for periodic review, an action that one academic study suggests is an important measure a state can take to reduce its regulatory burden.

“I think it’s a great idea,” said Jon Sanders, director of regulatory studies at the John Locke Foundation. “Sunsetting has been proven to be a very effective way of reducing regulation in the state.”

Sanders pointed to a study by the Mercatus Center at George Mason University concluding that sunset provisions had a significant positive impact on economic growth.

Under the bill, the Rules Review Commission would establish a schedule for regulations to be reviewed. If an agency does not conduct the review by the date set in the schedule, the rule would automatically expire.

Rep. Pricey Harrison, D-Guilford, said the review process was troublesome, particularly in the Department of Environment and Natural Resources. She said that merged divisions and funding crunches could make the reviews difficult.

“I don’t know how DENR is going to do that without a lot of extra funding,” Harrison said.

During Senate debate of the bill, Sen. Ralph Hise, R-Mitchell, objected to a provision in the bill that would give students facing disciplinary procedures in the UNC or community college system the right to be represented by an attorney or a non-attorney advocate.

Hise said he thought it was a “huge mistake” to start injecting attorneys into the procedure.

Sen. Andrew Brock, R-Davie, said the bill, overall, would have a positive effect. “This will help North Carolina in so many different ways, with our companies, our businesses, those that are here now and those that want to move to North Carolina,” Brock said.

The bill also would bar local governments from requiring their contractors to include in their compensation packages requirements such as “living wages” — pay scales wages higher than the federal minimum wage — or sick leave. It also would prohibit local governments from enacting “transportation impact mitigation ordinances,” which could assess fees on businesses that with "large carbon footprints" that do not limit air pollution allegedly related to their employees’ commutes to and from work.

During Senate debate on the measure July 20, Sen. Floyd McKissick, D-Durham, peppered Sen. Brent Jackson, R-Sampson, about the provisions, saying that Durham had adopted "living wage" ordinances.

“They wanted to make sure that individuals that were providing those services were paying livable wages,” McKissick said of Durham’s contractors.

Jackson responded that minimum wage laws are already in place, and a livable wage is a matter of interpretation.

Sen. Andrew Brock, R-Davie, said the transportation impact requirements also could be job killers.

“You’re putting an unfair burden on business owners to try to provide transportation for its employees,” Brock said.

The bill includes other provisions that would:

• Prohibit local governments from enforcing zoning ordinances against grandfathered practices after 10 years.

• Allow billboard owners to remove trees blocking their signs along highway acceleration and deceleration ramps. It also allows billboard companies to repair their signs, provided the advertising surface area is not increased. It also would allow them to change an existing multipole structure to a monopole sign.

• Allow a bed and breakfast to serve three meals per day to its guests, instead of just breakfast.

• Allow businesses that offer employment preferences to veterans and their spouses to get immunity from potential violations of state or local equal employment opportunity law.

• Direct the Building Code Council to adopt rules requiring hotels to install carbon monoxide detectors in facilities that are heated with fossil-fuel radiators, fireplaces, or other fuel-burning appliances. “It does include the existing facilities,” Rep. Becky Carney, D-Mecklenburg, said when an earlier measure was debated in the House. The provision is in response to three deaths blamed on carbon monoxide toxicity in a Boone hotel earlier this year.

One provision in a previous version of the bill that was left out of the final legislation would have repealed the state’s zoning protest petition law. That law remains in effect.

When neighboring property owners successfully file a protest petition, a three-fourths supermajority of a local government body is required before a zoning change can take effect. Supporters of repealing protest petitions said that the current law allows a small percentage of neighborhood landowners effectively to block a request unless the project has near-unanimous support.

Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.