A ‘seismic shift’ in legislative control over state government rules

With generally strong backing from the business lobby, Tennessee legislators made a theme this year of curbing the power of state departments and agencies while enhancing the General Assembly’s oversight of their rules and regulations.

The move with perhaps the greatest long-range consequences came with passage of HB2068 by Rep. Martin Daniel, R-Knoxville, and Sen. Mike Bell, R-Riceville.

The bill, signed into law by Gov. Bill Haslam despite concerns from several of the departments he oversees, makes it more difficult to promulgate rules and regulations. And it makes clear that the Legislature, acting through the Government Operations Committees of the House and Senate, has absolute authority to reject any rule that a majority want to overturn.

As Daniel put it: “The primary effect of this bill will be to eliminate the liberal construction of the Administrative Procedures Act.” Currently, the Uniform Administrative Procedures Act (UAPA) contains provisions that say, more or less, that if there’s a doubt about the authority of an administrative agency, the dispute will be resolved in favor of the agency having the authority to act.

The bill effectively flips that. The presumption now is that the agency does not have authority and must establish that the rule is necessary through “convincing” evidence. During debate, Democrats said the move is an unprecedented revision to the UAPA, a model law that has been adopted to govern administrative operations in all states, though each state can make modifications.

Rep. John Ray Clemmons, D-Nashville, said the “seismic shift” could endanger the agencies’ ability to put rules in to protect the environment, consumers, workers and the safety of citizens in general. House Government Operations Committee Chairman Jeremy Faison, R-Cosby, agreed that it was a seismic shift, but a good one that would curb the power of “unelected bureaucrats” and put them under oversight of elected legislators.

“I would say the agencies are not thrilled with this bill, but we’ve tried to accommodate their concerns,” said Daniel.

The original bill used the words “narrow construction” in declaring the standard for assessing an agency’s authority. After agency complaints, said Daniel, it was changed to “neutral construction.”

It passed the House 69-22; the Senate vote was 28-1.

While Haslam signed the UAPA bill into law, he balked at a measure that deals with storm water regulations adopted by the Tennessee Department of Environment and Conservation (TDEC). That measure (SB1830), pushed by the Home Builders Association of Tennessee, would loosen the rules for issuance of water quality permits to developers.

Sponsored by House Agriculture Committee Chairman Curtis Halford, R-Dyer, and Senate Energy, Agriculture and Natural Resources Committee Chairman Steve Southerland, R-Morristown, it says state standards on storm water runoff can be no stricter than federal standards and otherwise puts restrictions on what TDEC and local governments can and cannot do with their rules.

One impact: Elimination of the so-called “1-inch rule” that is in effect across the state, mandating that the permit applicant assure that up to 1 inch of rainfall be absorbed within the development property without any runoff.

Haslam refused to sign the bill, but let it become law. In a letter to the House and Senate speakers, he echoed some of the complaints raised by TDEC commissioner Bob Martineau as the bill made its way through the Legislature.

“I have concerns about the potential impacts of this legislation and the limits it places on the State’s ability to protect our water resources adequately. In addition, the bill imposes on local governments a cumbersome procedural mechanism that will cause confusion for those communities as they seek to implement required storm water pollutant removal programs,” the governor wrote. “I am concerned that some of the ambiguous and confusing language of the bill could lead to costly litigation.”

The bill passed 71-18 in the House; 31-0 in the Senate.

Rep. Daniel’s “Right to Earn a Living” bill (HB2201), sponsored in the Senate by Sen. Mark Green, R-Clarksville, targeted boards and commissions that oversee licensing and rules for various professions with the goal of easing or eliminating licensing requirements in some cases.

As approved, the measure is softened from the original version. It basically requires all the boards and commissions to submit a justification for their current requirements to the government operations committees by the end of the year. The committees then will decide what requirements, if any, should be jettisoned and make recommendations to the full General Assembly for next year’s session.

Proponents say that while some professions obviously need strict oversight to ensure public safety — surgeons, for example — others do not and instead merely restrict competition among people who want to be hair stylists, manicurists, barbers and the like.

Note: This is most of an article written for the Knoxville Business Journal, also available in the full version HERE. Since it was written, the Beacon Center of Tennessee, which supported the “Right to Earn a Living” bill, has filed a lawsuit challenging the requirement that a person need a state license to shampoo hair. Post HERE.