Recently, Governor Beverly Perdue signed Executive Order No. 70 as part of her Set Government Straight initiative. The Executive Order creates three new processes to improve North Carolina's rulemaking:

• Executive agencies must follow enumerated principles when drafting and adopting regulations;
• The Office of State Budget and Management ("OSBM") is responsible for reviewing all new rules to ensure they meet the new principles; and
• OSBM is responsible for reviewing all existing rules and, where appropriate, recommending the amendment or repeal of existing rules and associated requirements.

This third process creates opportunities for parties affected by state regulations to seek reform or rescission of these rules. The Executive Order requires agencies to internally review all rules and invites public comment on all existing rules. OSBM will then assemble and evaluate the recommended changes from the internal agency reviews and public comments.

OSBM recently published a memorandum to all state agencies clarifying the Rules Modification and Improvement Program. OSBM is requiring agencies to submit the results of their internal agency reviews by November 22, 2010. We have confirmed with OSBM that public comments are also due by this date if they are to be considered in the first wave of OSBM review. Public comments received after this date will also be considered by OSBM on a rolling basis.  Comments can be submitted anonymously.

Executive Order No. 70 applies to all Cabinet agencies and all boards and commissions within these Cabinet agencies that have rulemaking powers. A partial list of these agencies may be found here. From the employment perspective, this initiative includes North Carolina rules involving Workers' Compensation, substance abuse testing, child labor, wage and hour, and other areas of state responsibility.

OSBM will assemble and evaluate the reform suggestions from the public comment process and internal agency reviews. Any meritorious suggestions will be passed on to the agencies for additional review.  Agencies must then submit a report back to OSBM by January 31, 2011.  OSBM will then publish a report with the recommendations and any resulting actions that agencies have taken or proposed no later than April 30, 2011.

The Executive Order is designed to fix or root out rules that are outdated, irrelevant, unnecessary to serve the public interest, vague, unduly burdensome, ineffective, inefficient, or not informed by sound, reasonably available scientific, technical, economic and other relevant information.

Parker Poe Adams & Bernstein's Government Relations Team can assist employers with identifying rules appropriate for comment, preparing comments that articulate the conflict with the Executive Order's stated principles and guiding these comments through the entire process.