An Act to Establish the Office of Regulatory Management

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Summary

This act establishes the Office of Regulatory Management. This Office aims to enhance and utilize transparency to reduce unnecessary regulatory burdens and ensure that new regulations are evidence-based and cost-effective. The Office may also act as a framework upon which several regulatory reform efforts might be attached, including a regulatory budget, the enforcement of requirement caps, cost/benefit qualifications, universal or industry-specific regulatory sandboxes, etc.

An Act to Establish the Office of Regulatory Management

Section 1. Short Title.

This act may be cited as the Regulatory Management Act of [insert year].

Section 2. Definitions.

As used in this act, unless the context requires a different meaning:

“Agency” means [add state appropriate definition or APA definition]

“Anecdotal problem” means an isolated incident or issue based on individual cases or specific situations, not indicative of a broader pattern or systemic deficiency, and typically resolvable through existing procedures or case-by-case interventions without necessitating new regulatory requirements.

“Catalog” means a list of regulatory requirements currently enacted and enforceable and such identifying and originating information deemed relevant by the Office of Regulatory Management, as established in this act, to the existence and context of each regulation, such as: authorizing legislation and/or regulation, purpose, or date of enactment.

“Cost of compliance” means the total estimated financial burden imposed on individuals or businesses to adhere to regulatory requirements.

“Monetized cost or benefit” means those costs or benefits that can be expressed in monetary terms, such as: health benefits leading to a reduction in healthcare costs for employees, improvements to market efficiency due to loss reduction or reduced transaction costs, consumer savings, licensure and registration fees, legal costs, certification and education costs, material costs, opportunity costs related to property value and/or usage, etc.

“Non-monetized cost or benefit” means those costs or benefits that cannot be easily quantified in monetary terms, such as costs or benefits associated with: changes in privacy protections, indirect environmental impacts, changes in how markets are regulated, changes in security protocols or requirements, etc.

“Regulatory requirement” means any action or step that must be taken or piece of information that must be provided in accordance with legislation, regulation, guidance, policy, or forms. The meaning of “regulatory requirement” may be clarified or specified by the Office of Regulatory Management as established in this act but does not include non-binding statements such as: statements concerning only the internal management of any agency not affecting private rights or procedures, declaratory rulings, intra-agency or inter-agency memoranda, or agency guidance that is not enforceable under the rule of law.

“Systemic failure or problem” means a widespread market failure, government failure, or other issue affecting the functionality or efficiency of an industry, market, process, or system within the state that (i) is identified using a coherent and testable theory explaining why the failure or problem is systemic rather than anecdotal, and (ii) is reasonably considered to be possible to resolve or mitigate through regulatory intervention.

 

Section 3. Office of Regulatory Management Created.

(A) There is created the Office of Regulatory Management (the Office), which shall be under the direct control and supervision of a Director appointed by the Governor to serve at his pleasure.

(1) The Director of the Office shall, under the direction and control of the Governor, exercise the powers and perform the duties conferred or imposed on him by law and perform such other duties as may be required by the Governor. The Director shall be responsible for the overall supervision of the Office’s programs and personnel. Under his direction, the Office shall serve as an agency whose services are primarily for the support and regulation of other state agencies in carrying out their regulatory functions.

(2) The Office shall include appropriate staff to carry out the duties and programs assigned to the Office as outlined in Section 3(B) [et seq.] of this act.

(B) Duties.

(1) The Office shall supervise the establishment of a baseline catalog of regulatory requirements currently in effect and accurately maintain and publish such catalog in a manner that is fully transparent.

(a) Each agency will conduct and communicate to the Office an internal review of all regulatory requirements currently in effect and will update such review at the request of the Office or every 24 months, whichever is soonest.

(b) Each regulatory requirement will be listed along with its governing regulation, statutory authority or requirement, or other relevant documentation. The catalog shall retain a consistent format to ensure data efficacy over time.

(c) Agency reviews, pursuant to 3.B.1.a of this subsection, will be completed and communicated to the Office no later than six months after the enactment of this act. Thereafter, updates to agency reviews will be completed and communicated to the Office no later than 60 days after an update request or at the end of the 24-month period described in this subsection if no update has been requested by the Office.

(d) The Office shall publish, in a manner that is fully transparent, a biennial report showing the change in the number and estimated impact of regulatory requirements currently enacted by each agency. Such report shall include an estimated change in cost of compliance for the median citizen and/or business of the [insert state or commonwealth].

(2) The Office shall collect, analyze, assess, and publish agency evaluations, reports, needs assessments, and/or other due diligence related to new regulatory requirements to ensure best practices are being utilized in the creation of new requirements. All departments, agencies, offices, or divisions of the state of [insert state or commonwealth] shall provide the Office with such evaluations, reports, needs assessments, and/or other due diligence upon request.

(a) The Office shall endeavor to ensure that agencies are (i) clearly identifying a systemic failure or problem that requires new regulatory action to solve and not an anecdotal problem that could be handled on a case-by-case basis, (ii) analyzing credible and substantial empirical evidence to support the agency’s identification of a systemic failure or problem, (iii) establishing a clear cost/benefit analysis of new regulatory requirements to be taken to solve a systemic failure or problem identified by the agency, and (iv) adequately addressing uncertainty about the existence or impact of the systemic failure or problem identified by the agency, i.e., ensuring the agency has adequately diagnosed the systemic failure or problem, estimated its impact, and qualified its identification as requiring new regulatory requirements to solve or mitigate.

(b) When establishing a cost/benefit analysis of a regulatory requirement, an agency shall provide monetized estimates of non-monetized costs or benefits when such an estimate is feasible, and quantitative estimates of non-monetized effects when such an estimate is not feasible. If neither a monetized nor a quantitative estimate is feasible for a non-monetized cost, agencies shall provide a note within the analysis with qualitative descriptions of such non-monetized costs and benefits.

(c) If the Office determines that best practices were not used in identifying a systemic failure or problem and subsequent regulatory action taken by an agency, the Office shall communicate to the agency and the Office of the Governor a request to re-evaluate the decision to take regulatory action based on the best practices established in this act and those further established by the Office. The Office shall not consider a statement of statutory authorization to be sufficient due diligence in the identification of a systemic failure or problem or as substantial evidence of the need for new regulatory action.

(d) The Office shall publish agency evaluations, reports, needs assessments, and/or other due diligence provided, as well as the Office’s assessment thereof, in a manner that is fully transparent.

(e) In the case that a new regulatory requirement(s) is mandated by statute, such information shall be included in the information provided to the Office and shall be published in the Office’s assessment thereof in accordance with this act.

(3) The Office shall not have the authority to authorize or reject regulatory actions taken by any other agency of the state of [insert state or commonwealth].