Senate committee advances bill limiting costly administrative regulations

The Senate Licensing and Occupations Committee advanced Senate Bill 20 on a favorable report after members debated a $500,000 threshold that would block state agencies from issuing administrative regulations with implementation and compliance costs above that amount over any two-year period.

Sponsor Senator Matt Nunn said the bill is “a proactive measure” meant to protect Kentuckians from “overly burdensome regulations” and to ensure the state remains “a pro-growth economic environment.” Nunn told the committee SB 20 would restrict agencies from promulgating administrative regulations that create greater than $500,000 in costs over two years while carving out limited exceptions for regulations expressly authorized by the General Assembly, rules needed to prevent loss of federal funds, and rules that relate to licensure of health facilities and services. “This is one piece of that puzzle,” Nunn said, adding the measure includes an emergency clause.

The bill’s sponsor and supporters framed the proposal as a way to increase legislative oversight of high-dollar regulatory actions and to encourage agency-lawmaker-stakeholder collaboration before agencies enact rules with substantial fiscal effects. Nunn pointed to similar measures in other states and said the change is intended to “restore the balance of power” by requiring legislative engagement for costly rules.

Opponents raised concerns that the dollar threshold is too low and could unintentionally prevent agencies from adopting regulations that produce broader societal benefits. Senator Chambers Armstrong asked whether the bill’s definition of “major economic impact” accounts for downstream or societal savings — for example, a rule with $500,000 in compliance costs that could prevent “millions of dollars in cancer and health care spending.” Nunn responded that evaluating broader societal costs is the appropriate role of the legislature and that such concerns should be addressed through statute rather than administrative regulation.

Committee members also questioned whether the legislature’s limited session calendar would allow timely responses if agencies needed to promulgate costly rules between sessions. Nunn and others noted SB 20 contains carve-outs for emergencies and loss of federal funding; supporters said those exceptions would allow agencies to respond to events such as natural disasters without waiting for an emergency session.

During roll call on the committee motion to report the bill favorably, Senator Chambers Armstrong recorded a no vote and Senator Berg indicated she would “pass” for the record; several other senators recorded aye votes and the chair announced that Senate Bill 20 passed the committee with favorable expression. The committee discussion and roll call focused on the bill’s $500,000 two-year threshold and the listed carve-outs; no amendments were adopted in committee.

Why it matters: The bill would change how Kentucky agencies are able to adopt high-cost regulations by triggering legislative review for rules exceeding the monetary threshold. That would move some policymaking currently implemented through agency rulemaking into a process requiring greater legislative engagement if the rule meets the threshold and is not covered by a carve-out. Implementation details and the precise scope of exemptions will be subject to further debate if the bill advances to the full Senate and the House.

Votes at a glance: The committee reported Senate Bill 20 favorably. During the committee roll call, Senator Chambers Armstrong voted no; Senator Berg passed/declined to vote; several senators recorded aye votes (including Senators Mays Bledsoe, Meredith, Nunn and Chair Rocky Adams).