RALEIGH — The U.S. House of Representative voted July 13 to close a loophole in the Unfunded Mandates Reform Act of 1995, which requires agencies to curtail the regulatory costs on local governments and businesses.
The 230-168 vote fell closely along party lines.
Current law only requires agencies to report the expected cost of regulations if they issue a notice of proposed rulemaking. Republicans say this offers agencies a loophole to pass more regulations with less oversight by simply not posting a notice.
H.R. 50, named the Unfunded Mandates Information and Transparency Act (UMITA), would require scrutiny for all major rules, as well expanding the law to cover all independent agencies. UMITA also expands the scope of cost analysis to the private sector.
Bill sponsor U.S. Rep. Virginia Foxx, a Republican representing North Carolina’s 5th Congressional District, argued agencies should be reined in before continuing to burden local governments and businesses with expensive regulations.
“The weaknesses in our current law have allowed federal regulators to escape public scrutiny and remain unaccountable for mandates’ true economic costs,” Foxx said in a statement. “Taxpayers deserve to know whether the costs of compliance will make it harder for businesses to stay afloat and for state and local governments to achieve citizens’ priorities.”
Foxx has pushed for regulatory reform in the past. Although similar bills have passed the House, they are usually scuttled in the Senate.
In 2016, 15 Republican attorneys general wrote Congress to criticize the act for providing a “dangerous loophole for agencies to exploit.”
Federal regulations and intervention cost $1.9 trillion in 2017, according to the Competitive Enterprise Institute’s Ten Commandments report.
“In general, the regulatory process in the U.S. is still a runaway freight train,” said Jon Sanders, director of regulatory studies for the John Locke Foundation. “[This amendment] would have a marginally positive effect. Anything that can slow down overregulation and require regulatory bodies to consider their costs and be a little bit more circumspect in what rules they pass would be useful.”
North Carolina’s Regulatory Reform Act of 2011 requires state agencies to provide a description of two alternatives to any regulation with a substantial economic impact, as well as an explanation of why those alternatives were rejected.
Foxx argued that UMITA will lead to more efficient ways to protect public health and safety. “This bill provides the public opportunity to suggest alternatives that don’t drain state and local government coffers,” she said.
Julie Havlak is a staff writer for Carolina Journal.