Cost-benet analysis, which is a well-established requirement for analyzing regulations, requires that the costs of aproposed rule be compared to the benets of a proposed rule. Among other things, proper cost-benet analysis quanti-es the costs and benets of the regulation as much as feasible and addresses alternatives to the regulation.For nearly 40 years, the federal government has been using some form of cost-benet analysis.
The state doesnot formally have cost-benet analysis in its statutes, but the North Carolina Ofce of State Budget and Managementalready requires some form of cost-benet analysis for many rules.
In other words, requiring cost-benet analysis in state law is not a radical new idea.Furthermore, Gov. Perdue in her regulatory reform executive order required cost-benet analysis by executivebodies in which the governor has oversight.
Her order does not and may not cover Council of State agencies that arerun by directly elected ofcials.
A legislative cost-benet requirement would, at a minimum, simply ensure that cost-benet analysis is conductedfor all agencies, not just for agencies under the governor’s control. Ideally, cost-benet analysis requirements would bedetailed and mandate the rejection of regulations that exceed costs.
It is ironic when critics of a “no more stringent” law explain that such a prohibition would create a one-size-ts-allsystem of regulation.
That is precisely the argument against federal regulation in the rst place. If the critics are tru-ly concerned with one-size-ts-all regulations, then they should be the rst to call for the repeal of federal regulations.Unfortunately, when there is federal regulation on a specic issue, North Carolina is not allowed to reject the regu-lation because it is unnecessary or too strict. That does not concern critics of a “no more stringent law,” however; theycare only about the state exceeding federal requirements.Fortunately for special-interest groups wanting to keep the status quo, a “no more stringent” law would not pre-vent them from getting the state to exceed federal standards. They could always go to the legislature and make theircase. Unfortunately for them, they would not nd persuading majorities of elected legislators as easy as swaying ahandful of unelected bureaucrats or appointees.Two simple reforms — a “no more stringent” law and a cost-benet analysis requirement — would be a step in theright direction. They are regulatory reforms that should have a positive impact on the economy, but they are rst andforemost about good government.
Daren Bakst, J.D., LL.M., is Director o Legal and Regulatory Studies at the
John Locke Foundation.
1. North Carolina House Bill 200 (2011), Version 7, Section 13.11B.(a)-(c),
; see also North Carolina House Bill 587 (2011),
.2. N.C. Exec. Order No. 2010-70, Rules Modication and Improvement Program (Oct. 21, 2010), Ofce of Governor Beverly Perdue,
.3. North Carolina House Bill 200 (2011), Version 7, Section 13.11B.(a)-(c),
5. “EPA Announces First-Ever Rule to Reduce Mercury Emissions from Power Plants,” United States Environmental Protection Agency press release, March 15,2005,
8. North Carolina Administrative Code, 15A NCAC 02D .2503,
; see also “Commission Adopts Rules for CurbingMercury Emissions,” North Carolina Department of Environment and Natural Resources press release, November 9, 2006,
.9. United States Environmental Protection Agency web page entitled “State ‘No More Stringent’ Laws,”