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Regulatory Moratorium Impacts New Environmental Rules Board

03.18.2013

By Jennifer Kahney Thompson, Attorney, Bingham Greenebaum Doll LLP

Within hours of being sworn into office on January 14, 2013, Indiana Governor Mike Pence signed Executive Order No. 13-03 for Promoting Job Creation, Economic Development, And Freedom By Ordering A Moratorium On Regulations (Order).  The Order applies to state agencies, including the Indiana Department of Environmental Management (IDEM) and the new Environmental Rules Board.  Agencies affected by the Order are to indefinitely suspend all rulemaking actions on proposed rules for which a notice of intent to adopt a rule under state laws was not submitted to the office of the Indiana Register on or before January 14, 2013 (Moratorium).

The Order excludes the following rules from the Moratorium:

  1. Rules to fulfill an objective related to job creation and increasing investment in Indiana or to improve the quality of Indiana’s workforce;
  2. Rules that repeal existing rules or reduce their regulatory impact;
  3. Rules that implement a federal mandate and no waiver is permitted;
  4. Rules necessary to avoid a violation of a court order or federal law that would result in sanctions by a court or the federal government against the state for failure to conduct the rulemaking action;
  5. Rules to address matters pertaining to the control, mitigation or eradication of waste, fraud or abuse within a state agency or wasteful or abusive activities perpetrated against a state agency;
  6. Rules that reduce State spending; or
  7. Rules whose predominate purpose and effect are to address matters of emergency or health or safety, including the promulgation of an emergency rule under IC § 4-22-2-37.1.

To receive a determination whether an exception applies, the Commissioner of IDEM is now required to submit a written request to the Office of Management and Budget (OMB) Director, with a brief statement regarding the applicable exception, prior to filing any notice of intent to adopt a rule.  OMB issued procedures for this process on February 8, 2013 in Financial Management Circular No. 2013-01.  The OMB Director will issue a determination in writing.  If an exception does not apply, the Moratorium suspends any formal rulemaking activity with regard to the proposed rule, and a notice of intent cannot be filed until the moratorium is terminated.  If the OMB Director determines that an exception does apply, IDEM may proceed with the filing of the notice of intent to adopt a rule.

Additionally, the Order requires OMB to:  (1) perform a comprehensive evaluation and a rigorous cost benefit analysis of any existing administrative rules as adopted under IC 4-22-2 and IC 13-14-9; (2) give priority to rules with the most negative impact on job creation and economic development; (3) solicit participation of interested citizens in the evaluation of existing rules; and (4) make recommendations to the Governor and the General Assembly regarding modifications and repeals of rules which would “lift unjustifiable burdens from Hoosier citizens, especially such burdens that discourage creation of jobs and economic development.”

IDEM had until March 1, 2013 to submit a summary of all pending, non-final rules for which a notice of intent (under IC 4-22-2 or IC 13-14-9) was submitted to the Indiana Register on or before January 14, 2013, along with a statement regarding the proposed rule’s potential to promote private-sector job growth or foster economic development and an estimated date of adoption.  IDEM is also required to report the existence of any proposed or pending rulemakings not within the legal authority of IC 4-22-2 or IC 13-14-9 to the OMB Director, such as proposed or pending emergency rules.

To view a complete PDF of the January/February 2013 issue of the Environmental Letter, click HERE.

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