Agencies largely mum as committee seeks to reshape their powers

Multiple industry groups testified Thursday before an interim Indiana legislative study committee laying the groundwork to curb state agencies’ rulemaking powers—but just one agency showed up.

“I can’t require them to come in,” said Administrative Rules Review Task Force Chair Rep. Steve Bartels, R-Eckerty.

“I’ve asked several to come in,” he added. “… I don’t know why they didn’t. Maybe they were told not to, or they’re waiting to see what happens, I guess. I don’t know.”

The 10-member committee plans to recommend that lawmakers in January write legislation upgrading a public records website and requiring agencies to post proposed policy changes there. In addition there could be a bill limiting so-called emergency rules.

The committee could also recommend legislation for a permanent legislative body to oversee agencies, and bar agencies from using fines and fees collection in promotion decisions. Member lawmakers will vote to finalize the list of recommendations in October.

The task force stems from a failed effort in the 2022 regular session, House Bill 1100, but Bartels said his interest in the unflashy world of administrative rulemaking grew out of a desire to create a more transparent process.

“How do we make it where ‘Joe Blow’ can find out, ‘Hey, is this [rule] going to affect my farm? Is this going to affect my small business?’” Bartels said. “We found out that even government officials can’t find that information.”

From there, Bartels said, he dove into emergency rules, which involve less oversight than other administrative rules, and rules that impose fines or fees.

Bartels described his displeasure when, after the Republican-dominated Legislature deregulated most Indiana wetlands in 2021’s Senate Enrolled Act 389, the agency previously charged with wetlands permitting sidestepped the law’s implications.

The Indiana Department of Environmental Management said, “‘We’re going to make an emergency rule’ and changed it back to what they wanted,” Bartels said. “That’s sort of the prime example. It’s like, ‘Wait a minute. Your authority comes from us … You know that wasn’t the intent.’”

A representative of the Indiana Economic Development Commission spoke Thursday, focusing on its own role in protecting small businesses in the rulemaking process.

But Bartels said he’d also hoped to hear from IDEM, the Department of Natural Resources, the Indiana Gaming Commission, the Indiana Alcohol and Tobacco Commission, and others that interact more with everyday residents and businesses.

‘Bureaucrats’ vs. lawmakers?

A stream of industry representatives also testified, largely in support of changes or restrictions on rulemaking — but for different reasons.

Those behind Indiana’s housing stock argued “unnecessary” regulations add significant costs to new builds, some of which is passed onto consumers.

Carly Hopper, governmental affairs director for the Indiana Builders Association, said regulation comprises about 25% of residential homebuilding costs, while Brian Spaulding, vice president of government affairs for the Indiana Apartment Association, said the percentage was nearing 50% for multifamily projects.

Sen. Chris Garten, R-Charlestown, sympathized, asking, “Should bureaucrats who are unelected be allowed to raise taxes on Hoosiers?”

“… Ideologically, the answer for me is no, repeatedly,” Garten continued. “We are lawmakers elected to do this stuff, not the bureaucrats.”

Conflicts and questions

Other speakers said agencies are years behind on rule adjustments to comply with recent changes to state law. The mismatches, they said, are creating expensive headaches.

Jessaca Turner Stults, who appeared on behalf of the Indiana Academy of Physician Assistants, said some of her clients have waited months and years for updated Indiana Professional Licensing Agency rules on licensing requirements, doctor-physician assistant supervision ratios, a specific definition and the practice of dry needling.

“We know that the statute always prevails when there’s a conflict, but providers don’t know that, and employers don’t know that,” Stultz said. “They’re looking at it saying, ‘Okay, how do we reconcile this?’”

Rules also provide more details than laws.

The process has lagged so much that, in some cases, industry groups have enlisted lawmakers to help.

Dry needling rule changes, Stultz said, “only got done because I pressured the PLA and the Governor’s Office, and we had Sen. [Mark] Messmer involved … We finally got that done, but it took three years—which is actually fast, comparatively, to some of these other ones.”

Representatives for The Arc of Indiana, a group for Hoosiers with intellectual and developmental disabilities, and the Indiana Psychological Association also has been waiting about two years for professional licensing rule updates.

Wisdom Environmental, a recycler and manufacturer, said IDEM’s delays in changing rules following a 2016 law had limited the company’s ability to recycle blasting dust into new products, plan for the future and for supply chain setbacks, and saddled the company with some financial requirements.

“With no rules to cite or follow, we believe that IDEM staff are doing their best to piecemeal a regulatory framework to apply to the SteelCrete operation from other existing rules,” said Rhonda Cook, of Cook Government Advisors. Wisdom sealed an answer to one question into law recently, but is still waiting for guidance on other things.

“We recognize that there’s staff turnover at agencies [and] that the rulemaking process is more complex and cumbersome than it has ever been before,” Cook added. “But without that process in place … [businesses] don’t have a known playing field or the opportunity to have input on rulemaking that’s imposed on their business.”

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.