Wyoming committee weighs major changes to Senate File 127 on rule review; proposes narrower thresholds and agency responsibilities

The Management Audit Committee on July 9 reviewed research and a working bill draft proposing changes to Senate File 127, the 2024 law that expanded legislative review of administrative rules. LSO staff and management auditors discussed options including a lower economic threshold for "major rules," exemptions for emergency and federally mandated rules, and shifting some regulatory impact analysis work to agencies.

"There are a total of 8 states that have a program or an approach to approval of administrative rules similar to what the state of Wyoming did with Senate file 127 in this last session," said Matt Petrie, an administrator assigned to the committee—s research effort. He told members Florida and Kansas provided the clearest models on staff needs, thresholds and committee review procedures.

The presentation and committee discussion focused on five amendment options included in a working draft (26 LSO 106 working draft 0.4): remove the requirement that "major rules" be designated by management council; change the measurable economic threshold; exempt emergency rules (and possibly federally mandated rules) from major-rule review; require agencies to prepare a statement of estimated regulatory costs; and specify a committee or process for legislative review of a regulatory economic analysis.

LSO staff described state comparisons. Kansas and Florida were highlighted for having standing review bodies and staffing devoted to regulatory impact work. Petrie said the practical result of other states— laws is that agencies often prepare an economic impact statement and the legislature has a committee available to review major rules outside of the regular session schedule.

On thresholds, the working draft would change Senate File 127—s $1,000,000 test to a $200,000-per-year standard, a level committee staff said aligns with how some comparators measure implementation and compliance costs. "If we stuck with that $200,000 threshold, we would be using a threshold that was similar to both Florida and Kansas," Petrie said.

Members debated whether emergency rules should be exempted. Staff noted emergency rules are commonly adopted to meet a statutory July 1 implementation date, are generally mirror images of the later permanent rules, and are time-limited (statutory emergency rules can be effective for short periods). "It's a bit redundant to do [the regulatory impact analysis] on those emergency rules, but also the timing —120 days of emergency rules plus extensions—1 means there's little time to conclude an analysis before they expire," Mr. Anderson of LSO told the committee.

A key policy choice was who performs the initial regulatory economic work. Under current law, LSO would complete a regulatory impact analysis of each major rule; in many other states the proposing agency prepares the initial economic analysis and LSO or a legislative committee then reviews it. "The benefit to having agency involvement on the front end is that it eliminates those rules that LSO would not have to look at to even determine whether it approaches that threshold," Petrie said.

Members asked about separation-of-powers concerns and timelines if rules required legislative approval before becoming effective. LSO counsel warned courts in some jurisdictions have invalidated legislative vetoes over rules on separation-of-powers grounds and that any change to the governor—s role would require careful drafting. The committee also discussed options to preserve timely implementation (delaying effective dates, temporarily extending emergency rules, or a case-by-case statutory exception for time‑sensitive rules).

Committee staff highlighted staffing and budget implications. The bill as drafted appropriates $400,000 for two positions to staff regulatory impact work; staff recommended three positions would better match the workload implied by a lower $200,000 threshold.

What happens next: committee members asked LSO to refine the draft with clearer measurable criteria and options on exemptions and timelines. LSO—s draft and the committee—s questions will guide any recommendation the Management Audit Committee forwards to management council before the December 1 deadline set in SF127.

Provenance: First discussion of the research and background appears in the transcript at 00:02:13 where Mr. Petrie summarizes the cross-state research; discussion of the working draft and threshold language continues through the committee—s review at 00:22:45 and later exchanges. Evidence spans include the staff presentation and the bill-draft walkthrough referenced throughout the record.