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Committee adopts amendment to require agencies to estimate private-sector man‑hour costs in rulemaking
Summary
The West Virginia Senate Government Organization Committee approved a committee substitute for Senate Bill 570, adding a requirement that agencies estimate non‑governmental man hours needed to comply with proposed rules and report an aggregate $60‑per‑hour cost when applicable; the committee voted to report the measure to the full Senate with a recommendation to pass.
The West Virginia Senate Government Organization Committee approved a committee substitute for Senate Bill 570 as amended, adding a requirement that agencies estimate the number of non‑governmental man hours required to comply with proposed legislative rules and, when applicable, report an aggregate cost using a $60‑per‑hour multiplier (adjusted for inflation as discussed in committee). The committee voted to report the committee substitute as amended to the full Senate with a recommendation that it pass.
The bill amends the state legislative rulemaking statute to define specific economic factors agencies must consider when submitting a statement of economic impact to the Legislative Rulemaking Review Committee (LRMRC). The listed factors include regulatory or transactional costs, business productivity, innovation or competitiveness, effects on private-sector job creation and private-sector investment, and economic growth. The committee substitute also directs the LRMRC to identify, when it posts notice of its action on a rule, whether the agency complied with the statutory requirements for submitting a rule, including the agency’s economic impact statement.
Committee Counsel said the committee substitute removed a previously proposed requirement for a separate, professionally prepared economic impact statement tied to a financial threshold because that requirement was judged unworkable; Counsel said the remaining changes are not expected to materially increase agencies’ costs. Counsel also said the committee substitute eliminated sunset provisions that had been in the earlier version of the bill.
The committee considered an amendment from the Junior Senator from the Fifteenth that would require agencies to estimate whether a proposed rule would force non‑governmental persons or entities to invest man hours of labor to comply, and if so to estimate the aggregate cost to West Virginia by multiplying the total man hours across the state by $60 per hour (the senator said the dollar amount would be adjusted for inflation). The committee discussed the practicality of agencies producing such estimates and whether a fixed dollar multiplier would produce accurate results for all businesses. The Junior Senator argued the requirement would force agencies to "place themselves in the shoes of a private entity" and consider the economic drag of regulation; supporters noted federal practice includes time‑to‑comply estimates for some regulations.
A division vote was taken on the amendment; committee officers counted six yays and four nays and adopted the amendment. The committee then agreed to the committee substitute as amended and voted to report the bill to the full Senate with a recommendation that it pass. Committee members noted the governor’s office (via Sean Whalen, general counsel for the governor) supported the committee substitute language in the substitute to the committee substitute. Committee Counsel also observed that the statement of economic impact agencies already prepare is not expected to add materially to agencies’ costs under the substitute.
