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Moratorium on administrative rules leads to uncertainty

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Indiana Lawyer Focus
romig Romig

It’s taking some time to see just what the effects of a relatively new executive order will be on state agencies, such as the Indiana Department of Environmental Management, and the Hoosiers affected by those agencies’ work. On Jan. 14, one of Gov. Mike Pence’s first actions was to sign Executive Order 13-03 which placed a moratorium on the promulgation of any new administrative rules by Indiana’s agencies. Gov. Pence believes the moratorium will free the Office of Management and Budget from the burden of reviewing new rules and give it more time to examine existing regulations to determine which rules impose unnecessary and burdensome costs on Indiana business owners and, therefore, hinder job creation. As a follow-up to his moratorium, Gov. Pence introduced his “Cut Red Tape” initiative with a new website in July. The website – www.in.gov/cutredtape – solicits suggestions about which regulations should be simplified or eliminated. Hoosiers are asked which regulations they consider “most burdensome.” Their suggestions are sent directly to OMB staff members.

There are certain exceptions to the moratorium, such as rules which the agency had announced an intent to adopt before the moratorium took effect on Jan. 14, as well as rules which:

• are related to job creation;

• repeal existing rules;

• reduce state spending;

• reduce agency waste;

• are emergency rules; or

• those necessary to implement federal or court mandates.

If an agency wishes to promulgate a rule within one of these exceptions, it must notify the OMB that it is promulgating the rule under the exception – and presumably satisfy the OMB that such promulgation is necessary.

In February, a document was circulated to agencies notifying them how to proceed under the moratorium. If an agency believes that it needs to promulgate a rule, and it fits one of the exceptions listed in the moratorium, its head must submit a written request via email to the OMB director including the reasons why the proposed rule fits an exception. The OMB director will review the request and make a written determination of whether an exception applies and if the rulemaking may go forward. If the OMB director determines that an exception does not apply, the rulemaking is officially suspended. The document doesn’t discuss how an agency may proceed if it strongly disagrees with the OMB director’s assessment. Only after the OMB determines an exception applies may the agency file a notice of intent to adopt a rule and proceed under Indiana Code 4-22. It appears the moratorium is actually building an additional layer into the rulemaking process for agencies by making the OMB director a “gatekeeper” to determine whether rules meet the governor’s exceptions necessary for good government. The document does not specify any time limits or deadlines by which the OMB must make a determination.

Even before Gov. Pence signed the moratorium, Indiana legislators had addressed a need to constantly review regulations to ensure that stale, inapplicable rules didn’t remain on the books. Under Indiana law, many administrative rules expire seven years after they take effect. (IC 4-22-2.5-2). Certain rules necessary for federal approval of programs delegated under federal law don’t expire, but must still be readopted after seven years. (IC 4-22-2.5-1.1). A few subcategories of rules are excepted from expiration. (IC 4-22-2.5-1). When rules are readopted, agencies must go through the full rulemaking process. (IC 4-22-2.5-3). The rulemaking process includes a review in which the agency must consider other alternatives that are less “costly” or “intrusive” including whether there is even a continued need for the rule. (IC 4-22-2.5-3.1). The public has an opportunity to comment during this procedure. This “sunsetting” policy where rules must be readopted ensures that agencies are constantly reviewing (at least on a seven-year cycle) whether rules are necessary and what effect these rules might have on small businesses.

Gov. Pence’s moratorium doesn’t address how the OMB’s review of all existing regulations will proceed in light of the statutory sunsetting provisions. Many agencies, such as the Indiana Department of Environmental Management, are required to promulgate rules to maintain their “delegated” status under various federal laws such as the Clean Air Act and Clean Water Act. Since any rules passed by such agencies to comply with federal law fit one of the moratorium’s exceptions – presumably the OMB will approve such promulgation. However, seeking such permission and determination adds additional time to the already lengthy rulemaking process. When these agencies must also readopt rules – and follow the same time-added process – they’re likely facing an additional demand on resources that are already spread thin by reduced budgets.

State Budget Director Chris Atkins stated in June that notices of intent to file new rules had drastically dropped in the first part of 2013, compared to the same time period in 2012.

Although the public has always had an opportunity to comment on proposed rulemaking and readoptions, Gov. Pence has provided an additional opportunity for any regulated entity, such as a business with environmental emissions, to vent its frustrations and to suggest which regulations should be reviewed first by the OMB.

But, eight months after signing the moratorium, it is still unclear what effect the governor’s order will have on simplifying Indiana’s regulatory systems in light of existing statutory safeguards against stale, outdated and burdensome rules. It is also unclear how the OMB will cope with its ordinary job of reviewing pending regulations that are excluded from the moratorium while reviewing the approximately 11,000 pages of existing regulations and how it will juggle the suggestions coming in from the “Cut Red Tape” website. The environmental legal community will be closely watching to see how these uncertainties are clarified.•

__________

Amy Romig is a partner at Indianapolis-based Plews Shadley Racher & Braun LLP, who focuses on environmental law. She can be reached by email at aromig@psrb.com or by calling 317-637-0700. More information about Amy is available at www.psrb.com.

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  1. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

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  3. So if I am reading it right, only if and when African American college students agree to receive checks labeling them as "Negroes" do they receive aid from the UNCF or the Quaker's Educational Fund? In other words, to borrow from the Indiana Appellate Court, "the [nonprofit] supposed to be [their] advocate, refers to [students] in a racially offensive manner. While there is no evidence that [the nonprofits] intended harm to [African American students], the harm was nonetheless inflicted. [Black students are] presented to [academia and future employers] in a racially offensive manner. For these reasons, [such] performance [is] deficient and also prejudice[ial]." Maybe even DEPLORABLE???

  4. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

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