Within his first several months in office, Governor Charlie Baker took steps to make Massachusetts a friendlier place to do business. On March 31, 2015, Governor Baker issued Executive Order No. 562 (the "Order") addressing the burdensome regulatory framework within the Commonwealth of Massachusetts. In the preamble to the Order, Governor Baker writes:
"WHEREAS, confusing, unnecessary, inconsistent and redundant government regulations inconvenience individuals, encumber cities and towns, stress resources of non-profit organizations, including our health care and educational institutions, inhibit business growth and the creation of jobs, and place Massachusetts for profit enterprises at a competitive disadvantage relative to their out-of-state and foreign competitors…"
The Order requires every Executive Department regulating agency to conduct a comprehensive review of existing regulations. Each agency must sunset, simplify or revise its existing regulations in a manner consistent with the Order by March 31, 2016. In addition, when proposing new regulations, the agency must submit a business and competitiveness impact statement assessing the disruptive impact the proposed regulation might have on small businesses.
Each agency must be able to demonstrate that the existing regulations satisfy seven criteria:
- There is a clearly identified need for governmental intervention that is best addressed by the Agency and not another Agency or governmental body.
- The costs of the regulation do not exceed the benefits that would result from the regulation.
- The regulation does not exceed federal requirements or duplicate local requirements.
- Less restrictive and intrusive alternatives have been considered and found less desirable based on a sound evaluation of the alternatives.
- The regulation does not unduly and adversely affect Massachusetts citizens and customers of the Commonwealth, or the competitive environment in Massachusetts.
- The Agency has established a process and a schedule for measuring the effectiveness of the regulation.
- The regulation is time-limited or provides for regular review.
Particularly important is the requirement that the state regulation does not exceed federal regulatory requirements. To that end, a few regulations come to mind that may be ripe for either sunsetting or revising. For example, 760 CMR 27, promoted by the Department of Housing and Community Development, governs relocation benefits afforded to both residential and commercial tenants forced to move as a result of any development project benefitting from federal financing. 49 CFR 24 is a second set of regulations governing the exact same scenario as 760 CMR 27, but enacted and enforced by the federal Department of Transportation.
Although the state and federal relocation benefits govern the same activity, the procedure and entitlement to benefits can differ under the state and federal regulations. Any developer or project proponent must take due care to comply with both sets of regulations, which can increase total development costs that are likely passed on to prospective tenants.
In 2009, Massachusetts enacted The Menu Labeling Act of 2009, which requires certain restaurants to publish calorie counts on their menus. The FDA also publishes rules on menu labeling, which federal rules may be subject to change by the proposed federal legislation entitled the Common Sense Nutrition Disclosure Act. Federal, state and even local regulations governing menu labeling each impose a heavy financial and compliance burden on restaurants. If the state and federal menu labeling standards are uniform, then compliance will become easier and less costly for restaurants.
This new Executive Order has the potential to eliminate a number of costly regulations that are obsolete, duplicative and overly burdensome to business. It is far too early to tell which regulations may be eliminated or revised; however the business community and their advocates should use this opportunity of comprehensive regulatory review to inform the Governor’s office of overly burdensome regulations affecting their business.