House subcommittee advances bill to force review, sunset and economic tests for state regulations

A House Labor, Commerce and Industry (LCI) Regulatory Review Subcommittee voted unanimously to advance House Bill 3021 — the “Small Business Regulatory Freedom Act” — to the full committee after testimony from business groups, regulators and public-safety stakeholders.

The bill, as described by Representative Jeff Bradley, chair of the Regulations Committee, would require a periodic automatic sunset review of agency regulations, create a regulatory “budget” that generally requires agencies proposing a new regulation to identify two existing regulations for removal, and require enhanced economic analysis for proposals with large fiscal impacts. "The idea is to reduce by 25% the regulations that our folks are having to deal with," Bradley said, adding that the measure would strengthen the Small Business Regulatory Review Committee and change judicial deference in administrative-law cases.

Supporters said the bill would lower costs and speed commerce. Tim Frost, senior fellow at the Cicero Institute, described outcomes in Idaho following mandatory sunsets and consolidation of boards, and said the measure would lower housing and medical costs, reduce occupational-licensing barriers and speed permitting. "This is gonna help with housing affordability and home ownership for young families," Frost said. Industry and small-business witnesses — including Betty Gail Nichols of Red Bug Barn and Kathleen Stevens of Rainbow Rooster Boutique — testified that navigating licensing, building and other rules creates time and cost burdens for small operators.

Regulatory staff and public-safety officials urged caution. Alan Powell, an expert on the state regulatory process, walked the committee through the standard notice, comment and review stages and described emergency rules and the typical time frames, saying the full promulgation process commonly takes six months or more. Powell explained procedural safeguards now in place and described existing opportunities for economic-impact review. Virginia Wetzel, governmental affairs liaison for the Department of Labor, Licensing and Regulation (LLR), told the panel the agency supports the bill’s intent but needs clarity on how automatic sunsets would affect rules that track national standards — for example, building codes and state OSHA — and warned that losing timely authority to update such standards could have unintended consequences.

Public-safety witnesses raised similar concerns about timing and continuity. John Cameron, executive director of the Charleston Branch Pilots Association, said pilots rely on stable, sometimes highly technical safety rules and asked that the bill preserve the existing pilotage regulatory structure under Title 54. Chief Jamie Helms, speaking for firefighters, said the association wants to avoid any gap in building or fire codes that could pose safety risks.

The bill’s specific mechanisms described in testimony and committee discussion include: - A target to reduce the total volume of restrictive regulatory text by 25% through repeal and reform efforts. - An eight-year rolling sunset schedule (committee members discussed a 5–8 year window and suggested the schedule could be adjusted to match legislative oversight cycles). - A regulatory budget that would generally require agencies proposing a new regulation to identify two existing regulations for removal. - Enhanced economic-impact analysis: agencies would prepare guidance and, when a proposal is estimated to impose $1 million or more in cumulative costs on the regulated community over five years, that proposal would be subject to review and likely require a joint resolution. - A change to judicial review language that would reduce or remove judicial deference to agency interpretations in favor of independent (de novo) statutory and rule interpretation in court.

Supporters who testified included business-advocacy groups and conservative policy organizations such as the Cicero Institute, Pacific Legal Foundation, Americans for Prosperity, the National Federation of Independent Business (NFIB) and the Small Business Regulatory Review Committee’s advocates. Jamie Cavanaugh of the Pacific Legal Foundation cited other states with sunset statutes and said courts should not automatically defer to agencies. Candace Carroll of Americans for Prosperity and Ben Hohmeyer of NFIB urged passage, saying the bill would make it easier for small firms to operate without hiring outside counsel to navigate rules.

Committee members acknowledged tradeoffs and pressed witnesses on implementation burdens. Representative Roger Kirby asked whether agencies had capacity to carry out systematic deregulation, and Tim Frost and other witnesses said the first full reviews would be the most labor-intensive but that administrations can re-prioritize existing staff or request additional FTEs. Frost described Idaho and Virginia examples where governors directed agencies to make regulatory review a performance priority. LLR’s Wetzel and other agency witnesses asked for clarifications to avoid unintentionally stripping agency authority to adopt national safety or building standards.

After public testimony and committee discussion the subcommittee took a procedural vote. A motion to pass H.3021 out of subcommittee was made, seconded by Representative Mark Smith, and approved unanimously by voice/hand vote; the committee chair announced the bill would move to the full LCI committee for further consideration.

The bill remains subject to amendment and detailed drafting changes in committee. Committee members and agency witnesses signaled they expect additional work on implementation details — including the sunset schedule, how national standards and emergency regulations are handled, and potential fiscal impacts associated with initial review workloads — before the bill reaches a final vote.