The “Administrative State” has continued to wreak havoc with small business owners at both the state and federal level for years.  Rule-making authority, sometimes delegated by elected officials, sometimes not, is being used to circumvent the legislative process.  Unlike elected officials, there is no accountability or consequence for bureaucrats in agencies who promulgate rules that have the same effect as law.  These unelected officials can implement policies that can often contradict the intent of passed legislation.  Unfortunately, there are legislators that prefer that the various state and federal departments are blamed for these policies, rather than taking ownership for potentially unpopular votes.

Over the past fifteen years, the former pro-small business majorities in the capital were intentional in putting limits on department rulemaking in legislation. This has been particularly important with environmental issues, due to the tension of private property rights and protecting natural resources.

Since January 2023, the House and Senate Democrats along with Governor Whitmer have been slowly stripping away these guardrails, especially when it comes to environmental rules.  These bills can seem innocuous to the average person but could have far-reaching consequences.  Below is legislation where NFIB has been actively engaged, including a court case that showcases the overreach of EGLE.

Removing Safeguards over Administrative Rules (Public Act 104 of 2023)

In 2018, NFIB worked with other business groups to pass legislation that would require the director of any state agency to write up a statement of clear and convincing need before moving forward with any administrative rule that was stricter than the federal rule.  Senate Bill 14 would eliminate this requirement that provided extra accountability and transparency over rules, which have the force of law, being made by unelected bureaucrats in state government.  NFIB testified in opposition to this bill in both the House and Senate.  For more information click HERE.

Elimination of State Environmental Permitting and Rules Oversight

In 2018, NFIB supported legislation that created three boards to oversee the department responsible for environmental regulations and permitting (currently, the Department of Environment, Great Lakes, and Energy.) The Environmental Science Advisory Board, Environmental Permit Review Commission and Environmental Rules Committee were designed to include all stakeholders from small business owners to environmentalists. The goal was to provide oversight over civil servants and the administration to achieve fair and balanced rules and permitting, no matter which party was in control.  When Governor Whitmer became Governor in 2019, she moved to eliminate these boards through executive order, which was soundly rejected by legislative Republicans.  Legislation to eliminate these boards is currently moving through the legislature. (Senate Bills 393 & 394 and House Bills 4824-4826). NFIB has submitted written testimony against these bills in both chambers.

Remove Prohibition on EGLE Restricting Water Withdrawal on Private Property

House Bill 5205 would remove the prohibition on rule making authority for the Department of Environment, Great Lakes, and Energy (EGLE) on groundwater/water withdrawal regulations.  The prohibition was a part of bi-partisan legislation passed in 2008 to protect private property owners who own wells and prevent the government from restricting water withdrawal.  NFIB testified and submitted written remarks to the House Natural Resources Committee.

There is an additional fear that this legislation could pave the way for passage of HB 4939 which would declare that all groundwater is in the “public trust” and belongs to the state of Michigan.

EGLE Goes Around the Rules Process

On January 11, 2024, NFIB Senior Attorney Patrick Moran delivered an oral argument in the case Michigan Farm Bureau, et al. v. Department of Environment, Great Lakes, and Energy (EGLE) at the Michigan Supreme Court. NFIB filed an amicus brief in the case.  The case concerns the Administrative Procedures Act (APA) and how the EGLE defines a “rule.” NFIB’s brief argues: 1) EGLE’s actions violate the APA and undermine the separation of powers, and 2) small businesses will suffer if agencies enact rules without following APA procedures.

Statute (law) set by the legislature prohibited certain rule making authority by the department regarding pollutant discharge regulations for livestock and animal feeding industries.  EGLE then chose to go around the rule making process by creating requirements for permits, that essentially, were rules.   Farm Bureau and NFIB are arguing that the department violated the constitution by not following the proper process for creating a rule.   You can view the arguments HERE.