Branstad gives business more leverage against new regulations

Governor Terry Branstad’s latest executive order gives businesses and their advocates new opportunities to pre-empt government regulation of their activities. The governor’s spin on the new order presents it as a way to meet his administration’s job-creation goals:

“Executive Order Seventy-One will ensure that state government’s eyes are affixed on job creation, retention and development when issuing rules and regulations,” said Branstad. “This rule making process will assist in our administration’s goal of creating 200,000 new jobs and putting the roughly 106,000 unemployed Iowans back to work.”

The executive order will identify policies that hurt jobs before they impact job retention and development. […]

“As we travel the state we have heard Iowans voice their concerns over the burdens of bureaucracy that fails to understand the relationship between excessive regulation and job creation,” Branstad added. “Executive Order Seventy-One encourages a job-friendly environment as we build a strong foundation for the future.”

I’ve posted the full text of Executive Order 71 after the jump. It requires all government agencies to prepare a “jobs impact statement” before adopting any new rules and regulations, and to “minimize the adverse impact on jobs and the development of new employment opportunities before proposing a rule.” Furthermore,

Each Agency shall accept comments and information from stakeholders prior to the Jobs Impact Statement. Any concerned private sector employer or self-employed individual, potential employer, potential small business, or member of the public is entitled to submit information relating to Jobs Impact Statement upon a request for information or notice of intended action by a Department or Agency.

So, the governor is instructing agency employees to make “jobs impact” a greater consideration than other public-interest concerns (for example, reducing air pollution that causes life-threatening and costly illnesses, or restricting lending practices that trap consumers in cycles of debt). Furthermore, agency employees need to hear input from “stakeholders” (businesses and business owners) when drafting the jobs impact statements. Also, certain sectors receive privileged status:

The analysis in the Jobs Impact Statement should give particular weight to jobs in production sectors of the economy which includes the manufacturing, and agricultural sectors of the economy and include analysis, where applicable of the impact of the rule on expansion of existing businesses or facilities.

The likely outcome is that “doomsday scenario” analysis from advocacy groups like the Iowa Association of Business and Industry or the Iowa Farm Bureau Federation will now carry new credibility as part of the official “jobs impact statement” issued by state agencies. Any potential rule that manufacturers or agricultural operators view as too “burdensome” will be discarded, regardless of how many other Iowans might benefit.

For as long as I can remember, industry trade groups and lobbyists have exaggerated the potential jobs cost of regulations ranging from the Clean Air Act to the Americans with Disabilities Act. Meanwhile, no one is calculating the economic impact of, say, preventable respiratory illnesses in communities with high levels of particulate matter in the air, or making Des Moines Water Works customers pay to clean up pollution agricultural producers create in the Raccoon River Watershed.

Executive Order 71 dovetails with other recent Branstad efforts to increase business leverage against government regulations. All four of his appointees to the Environmental Protection Commission have close ties to agribusiness. The governor is also leaning toward moving Iowa’s water monitoring and water quality protection programs from the Department of Natural Resources to the Iowa Department of Agriculture and Land Stewardship.

Governor Terry Branstad’s executive order issued March 7, 2011 (pdf file):

EXECUTIVE ORDER NUMBER SEVENTY-ONE

WHEREAS, while new policies that encourage a job-friendly environment can take Iowa a significant way forward in our effort to compete for new jobs, much of that work can be undone by a bureaucracy that fails to understand the critical relationship between burdensome regulation and job creation; and

WHEREAS, when adopting regulations to protect the health, safety and welfare of the people of the State of Iowa, state agencies should seek to achieve statutory goals as effectively and efficiently as possible without imposing unnecessary burdens that reduce jobs and hurt job growth;

WHEREAS, small businesses are the greatest generators of job growth and are also disproportionately burdened by regulations; and

WHEREAS, proposed rules and regulations should contain a jobs impact statement so we can identify those that hurt jobs before they impact our job retention and development; and

WHEREAS, now is the time to make Iowa’s main streets truly open for business with the jobs we so desperately need.

NOW, THEREFORE, I, Terry E. Branstad, Governor of the State of Iowa, declare that the best interests of our state would be well served if our government would promote private sector jobs and eliminate impediments to economic growth imposed by burdensome administrative rules and regulations. I hereby order and direct that:

1.

For purpose of this Order, the following definitions shall apply: a. “Benefit” means the reasonably identifiable and quantifiable positive effect or

outcome that is expected to result from implementation of a rule. b. “Cost-Benefit Analysis” means regulatory analysis to provide the public with transparency regarding the cost-effectiveness of a rule, including the economic costs and the effectiveness weighed by the agency in adopting the rule. “Cost- Benefit Analysis” includes a comparison of the probable costs and benefits of the proposed rule to the probable costs and benefits of less intrusive or expensive methods that exist for achieving the purpose of the proposed rule.

c. “Cost” means reasonably identifiable, significant, direct or indirect, economic impact that is expected to result from implementation of and compliance with a rule.

d. “Jobs” means private sector employment including self-employment and areas for potential for employment growth.

e. “Jobs Impact Statement” means a statement that must: i. identify the objective of the proposed rule and the applicable section of the

Code of Iowa that provides specific legal authority for the agency to adopt

the rule; and ii. identify and describe the cost that the Department or Agency anticipates

state agencies, local governments, the public, and the regulated entities, including regulated businesses and self-employed individuals, will incur from implementing and complying with the rule; and

iii. show whether a proposed rule would have a positive or negative impact on private sector jobs and employment opportunities in Iowa; and

iv. describe and quantify the nature of the impact the proposed rule will have on private sector jobs and employment opportunities including the categories of jobs and employment opportunities that are affected by the proposed rule, the number of jobs or potential job opportunities and the regions of the state affected; and

v. identify, where possible, the additional costs to the employer per employee for the proposed regulation; and

vi. include other relevant analysis requested by the Administrative Rules Coordinator.

2. Each Agency, as defined by Iowa Code Section 17A.2(1), must take steps to minimize the adverse impact on jobs and the development of new employment opportunities before proposing a rule. Evidence of such steps would include a Cost-Benefit Analysis of the proposed regulation.

3. Each Agency shall provide a Jobs Impact Statement to the Administrative Rules Coordinator in the Office of the Governor prior to publication of notice of intended action pursuant to Iowa Code Chapter 17A.

4. The Jobs Impact Statement shall be published as part of the preamble to the notice of rulemaking in the Iowa administrative bulletin, unless the Administrative Rules Coordinator determines that publication of the entire Jobs Impact Statement would be unnecessary or impractical.

5. Each Agency shall accept comments and information from stakeholders prior to the Jobs Impact Statement. Any concerned private sector employer or self-employed individual, potential employer, potential small business, or member of the public is entitled to submit information relating to Jobs Impact Statement upon a request for information or notice of intended action by a Department or Agency.

6. If the Jobs Impact Statement is revised after notice, it shall be published as part of the preamble to the proposed rule, unless the Administrative Rules Coordinator determines that publication of the entire Jobs Impact Statement would be unnecessary or impractical.

7. The analysis in the Jobs Impact Statement should give particular weight to jobs in production sectors of the economy which includes the manufacturing, and agricultural sectors of the economy and include analysis, where applicable of the impact of the rule on expansion of existing businesses or facilities. The Administrative Rules Coordinator may waive the Jobs Impact Statement requirement for rules proposed on an emergency basis or if unnecessary or impractical.

8. If any provision of this Order, or the application of such provision to any person or circumstance, is held to be invalid, the remaining provisions, as applied to any person or circumstance, shall not be affected thereby.

9. This Order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, by any party against the State of Iowa, its Departments, Agencies, or Political Subdivisions, or its officers, employees, or agents, or any other person.

ATTEST:

__________________ MATTHEW SCHULTZ SECRETARY OF STATE

IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused the Great Seal of Iowa to be affixed. Done at Des Moines this ___ day of March, in the year of our Lord two thousand eleven.

__________________ TERRY E. BRANSTAD GOVERNOR

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