The recent extraordinary legislative session in Wisconsin included significant reforms to the administrative-rule-making process. Lost among the objections from some (allegations that the current Republican government is kneecapping the incoming Democratic administration) is a simple reality: The reforms are but the culmination of eight years of thoughtful efforts on the part of the governor and legislative leaders to recalibrate the constitutionally mandated separation of powers. Other states, and even Congress, should take note of what Wisconsin reformers have accomplished.
Normally, arguments about the proper role of executive agencies play out at the national level. Particularly controversial are the Supreme Court cases Chevron and Auer, which give federal agencies wide latitude to interpret statutes and regulations as they see fit without interference from the courts. But as with many legal and policy questions, the states, our laboratories of democracy, are better positioned to serve as the tip of the spear on this issue. And as a proud Wisconsin guy, I like to think on all issues all roads lead to Wisconsin.
In 2011, much attention was given Act 10, Governor Walker’s signature reform to public-sector collective bargaining. Less well-known was Act 21, which can rightly be considered the beginning of an administrative-law revolution in Wisconsin. In 2017, Acts 39, 57, and 108 added to those reform efforts. And this past summer, the Wisconsin supreme court issued a significant decision in Tetra Tech v. Department of Revenue, creating a stricter framework for courts to apply when considering the amount of deference to provide agency interpretations.
Much of what we now consider the standard rule-making process in Wisconsin was first set out in 2011 Act 21. At its core, Act 21 provides that no agency may implement or enforce any standard, requirement, or threshold (including as a term or condition of any license it issues) unless such action is explicitly required or permitted by statute or rule. Gone are the days of implied or perceived authority.
Additionally, for each proposed rule, the act required agencies to submit a “statement of scope” to the governor for review and prepare an economic-impact analysis relating to specific businesses, business sectors, public-utility ratepayers, local governmental units, and the state’s economy as a whole.
Six years later, Act 39 addressed concerns over the lengthy periods of time that agencies were given to promulgate rules. An agency must now submit a proposed rule to the legislature before a scope statement expires, resulting in a 30-month deadline. This requirement adds certainty to the process for the regulated community.
Act 57 is the state version of the federal REINS Act, which several Congresses have considered but none have passed. Wisconsin is the only state thus far to adopt such a reform. Wisconsin agencies must now determine whether a proposed rule will impose $10 million or more in implementation and compliance costs over a two-year period. If there is such a finding, an agency may not promulgate the rule absent authorizing legislation or germane modification to the proposed rule to reduce the costs below the $10 million threshold. In addition, the Department of Administration must review an agency’s scope statement prior to presentation to the governor to ensure an agency has explicit authority to promulgate a given rule (note the connection to Act 21).
Act 108 created an expedited process for the repeal of certain “unauthorized rules.” (If the law that authorized a rule’s promulgation has since been repealed or amended, the rule is considered “unauthorized” — again, note the connection to Act 21.) Any such rules, in addition to rules that are obsolete, duplicative, superseded, or economically burdensome, must be included in a biennial report to the legislature’s Joint Committee for the Review of Administrative Rules. The report must also describe any actions taken by an agency, if any, to address each of the problematic rules listed.