Research Note: Regulations in Nebraska and Iowa

Research Note: Regulations in Nebraska and Iowa

Note: This Research Note is the first in a planned series of notes by Platte’s summer interns. 

Despite sharing a border, Iowa and Nebraska diverge on many legislative topics, especially the regulatory review process. Iowa has been noted to have “one of the best-designed review structures in the country,” according to the Institute for Policy Integrity, by maximizing the oversight of state agencies, ensuring public transparency and impact. The same cannot be said for the Cornhusker State, whose process is notably less thorough. The Beacon Institute found that the State of Nebraska spent more than $473.8 million in 2016 resulting from regulations, a conservative estimate not including immeasurable costs. Almost a decade later, it’s probable that the figure has increased, yet the regulatory review system remains opaque. Upholding simple principles of transparent governance and maintaining a sophisticated regulatory review system can help Nebraska mitigate unnecessary costs for the state, small businesses, and consumers.

Some key differences between Iowa and Nebraska’s processes stem from their reliance on their respective legislatures for general involvement. Like most states, Iowa has a legislative Administrative Rules Review Committee (ARRC) that is specifically tasked with the review of proposed and past rules. Following deliberation, the committee can offer objections or refer the rule to standing committees. These committees can, in turn, introduce a joint resolution to the General Assembly to block rules without the governor’s signature. Conversely, Nebraska’s unicameral can only comment on the legislation during the 30-day public comment period and subsequent hearing, and objections must be responded to within 60 days. The legislature has no further involvement in the process, much less any prohibitive power.

The executive branch plays a pivotal role in both states, with governors wielding ultimate authority in the regulation process. In Iowa, the governor assigns each rule with ID numbers to navigate the review process. He may object if the rule is “unreasonable, arbitrary, capricious, or beyond the authority delegated to the agency.” Nebraska’s approach mandates dual verification: the attorney general ensures the rules’ constitutionality, while the governor verifies the adequacy of public involvement for approval. Despite its critical role in the gubernatorial review, public attendance at Nebraska’s agency hearings is sparse, barring interested parties, largely due to inadequate advertisement. Therefore, the governor’s review is obscure and may not be authentically based on the processes outlined by the Nebraska code.

Both states require the submission of certain economic statements to the governor and legislature in Iowa’s case. Iowa requires a robust fiscal impact statement (for rules costing $100,000 annually), a regulatory analysis examining alternatives if requested by the legislative review committees, and a small business impact statement if publicly requested by 25 or more small business owners. These three reports are examined by all interested parties, significantly informing the public, legislature, and executive on the necessity of the proposed rule. Nebraska only requires quantifying fiscal impacts and describing impacted entities, lacking clear structure and continuity. This report is submitted only to the governor for review, furthering the divide between this executive review process and the public.

The differences between regulatory review standards between the two states build upon these remarks, but to recapitulate, Iowa’s process is a promising starting point for Nebraska’s reevaluation. Iowa distinguishes itself through a complex review process that includes all government branches and the public. While some may argue that it’s duplicative, having redundant processes is preferable to having none at all. Idealistically, the process in Nebraska should seek more public involvement, yield informative impact studies, seek regulatory alternatives, provide periodic reviews, and depend heavily on legislative involvement.


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