Victory! NC Legislature Overrides Veto to Enact REINS Act – Goldwater Institute

Report on North Carolina’s REINS Act and its Implications for Sustainable Development Goals

Legislative Action and Institutional Framework

The North Carolina state legislature has enacted the Regulations from the Executive in Need of Scrutiny (REINS) Act, designated as HB 402. This legislation was passed following a successful override of a gubernatorial veto. The Act establishes a new protocol for the implementation of administrative rules and regulations within the state.

• The central provision of the REINS Act requires any new administrative rule with a projected economic impact of $20 million or more over a five-year period to receive explicit approval from the state legislature before it can be enforced.
• Prior to this Act, administrative agencies possessed greater autonomy in promulgating rules based on broad statutory authority.
• With this law, North Carolina joins seven other states, including Kentucky, Oklahoma, and Utah, that have implemented similar legislative oversight mechanisms for executive rulemaking.

Alignment with SDG 16: Peace, Justice, and Strong Institutions

The REINS Act directly engages with the principles of governance outlined in Sustainable Development Goal 16, which seeks to build effective, accountable, and inclusive institutions at all levels.

1. Effective, Accountable, and Transparent Institutions (Target 16.6): The Act is designed to increase the accountability and transparency of the regulatory process. By transferring final approval for high-cost rules from executive agencies to the elected legislature, it creates a public forum for scrutiny and debate.
2. Responsive and Inclusive Decision-Making (Target 16.7): Proponents, such as House sponsor Rep. David Chesser, assert that the legislation enhances democratic accountability by ensuring that regulations with a substantial impact on citizens and the economy are approved by their elected representatives, thereby making the decision-making process more responsive.
3. Rule of Law and Separation of Powers: The law reinforces the constitutional principle of separation of powers by affirming the legislature’s primary role in law-making, thereby checking the legislative-style functions often carried out by administrative bodies through regulation.

Potential Impacts on SDG 8: Decent Work and Economic Growth

The legislation’s focus on the economic impact of regulations has direct implications for SDG 8, which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

• Economic Productivity and Growth (Target 8.2): The Act aims to foster economic growth by mitigating the potential for costly regulatory burdens. The legislative review is intended to prevent the imposition of rules that could hinder productivity or impose excessive compliance costs on businesses.
• Support for Entrepreneurship and SMEs (Target 8.3): By creating a check on “red tape” and significant regulatory expenses, the policy seeks to create a more favorable environment for entrepreneurs, small, and medium-sized enterprises (SMEs), which are critical drivers of economic diversification and job creation.

Considerations for Broader Sustainable Development Goals

The requirement for legislative approval of major regulations will invariably affect policies related to other SDGs, including environmental protection and infrastructure development.

• Sustainable Industrialization and Innovation (SDG 9): The legislative review process will apply to regulations aimed at promoting sustainable industrial practices or green infrastructure. This oversight could influence the pace and direction of policies designed to upgrade industries with clean and environmentally sound technologies (Target 9.4).
• Environmental Regulations (SDG 6, 13, 14, 15): Any future regulations concerning water quality, climate action, or biodiversity that meet the financial threshold will be subject to this legislative review, creating a new dynamic for the implementation of state-level environmental policy.

Multi-stakeholder Engagement and SDG 17: Partnerships for the Goals

The passage of the REINS Act exemplifies the role of multi-stakeholder partnerships in influencing public policy, a key component of SDG 17.

• Partnerships for Policy Advocacy (Target 17.17): The successful enactment of HB 402 was supported by a coalition of non-governmental organizations, including the Goldwater Institute, the John Locke Institute, Americans for Prosperity, and the Pacific Legal Foundation. This collaboration demonstrates a partnership model focused on achieving specific governance reforms.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 16: Peace, Justice and Strong Institutions

   The article is fundamentally about governance and institutional reform. It focuses on creating more accountable and transparent governmental processes. The text explicitly mentions principles like “separation of powers,” “democratic accountability,” and restoring “accountability and transparency to the rulemaking process.” The REINS Act is presented as a mechanism to ensure that institutions (state agencies) are subject to checks and balances from other institutions (the legislature), which is a core theme of SDG 16.

2. SDG 8: Decent Work and Economic Growth

   The article connects regulatory processes directly to economic outcomes. It argues that unchecked regulations impose a “steep cost” on the economy, specifically affecting “entrepreneurs, employees, consumers and businesses.” By creating a legislative check on regulations with a “substantial economic impact” (defined as $20 million over five years), the act aims to reduce “compliance costs” and “red tape,” which is intended to foster a more favorable environment for economic activity and growth.

3. SDG 17: Partnerships for the Goals

   The article highlights the collaborative effort required to pass the legislation. It explicitly thanks “allies at the John Locke Institute, Americans for Prosperity and the Pacific Legal Foundation for their unwavering partnership in achieving this victory.” This demonstrates a multi-stakeholder partnership between different civil society organizations (institutes and foundations) to achieve a specific policy goal, which is central to SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 16.6: Develop effective, accountable and transparent institutions at all levels.

   This target is directly addressed. The article states that the purpose of the REINS Act is to restore “accountability and transparency to the rulemaking process.” House sponsor Rep. David Chesser is quoted saying, “The current process is simply not transparent; we owe it to the people we serve to do better.” The entire premise of the act is to make administrative agencies more accountable to the legislature and, by extension, the public.

2. Target 16.7: Ensure responsive, inclusive, participatory and representative decision-making at all levels.

   The article argues that the REINS Act enhances representative decision-making. It states that the bill “has been about giving the people of North Carolina a stronger voice in the rules that impact their lives” by ensuring their “elected representatives in the legislature” have the final say on costly regulations. This shifts decision-making power from unelected bureaucrats to elected officials, making the process more representative.

3. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation…

   The article frames the REINS Act as a policy that supports entrepreneurship and business activity. It argues that prior to the act, “Entrepreneurs, employees, consumers and businesses all bear these increased costs of complying with red tape and restrictions imposed by regulators.” By controlling these costs, the policy is intended to support productive activities by reducing regulatory burdens on businesses.

4. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships…

   The article provides a clear example of this target in action. The concluding paragraph celebrates the “unwavering partnership” between the Goldwater Institute, the John Locke Institute, Americans for Prosperity, and the Pacific Legal Foundation. This is a documented civil society partnership working to influence public policy.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicator for Target 16.6: Existence of legislative oversight mechanisms for executive rulemaking.

   The primary indicator mentioned is the law itself: the “Regulations from the Executive in Need of Scrutiny Act” (HB 402). The passage of this act is presented as the tangible achievement of creating a more accountable and transparent system. Progress is measured by the successful implementation of this new institutional check.

2. Indicator for Target 16.7: The number of major regulations subject to legislative approval.

   The article implies this indicator by establishing a clear threshold for legislative review. Any rule with a “price tag of at least $20 million over a five-year period” now requires legislative approval. The number of rules that meet this criterion and are subsequently debated and voted on by the legislature would be a direct measure of increased representative decision-making.

3. Indicator for Target 8.3: The economic impact of regulations on businesses.

   The article explicitly uses a monetary value as a key metric: the “$20 million over a five-year period” cost of a regulation. This figure serves as an indicator of a “substantial economic impact.” A reduction in the overall compliance costs imposed by new regulations could be used to measure progress toward supporting entrepreneurship and business.

4. Indicator for Target 17.17: The number and nature of civil society partnerships formed to influence policy.

   The article mentions a specific partnership of four organizations: “the Goldwater Institute…the John Locke Institute, Americans for Prosperity and the Pacific Legal Foundation.” The existence of this named coalition serves as a direct indicator of a successful civil society partnership.

4. Table of SDGs, Targets, and Indicators

Source: goldwaterinstitute.org