Governor Kay Ivey signed an executive order on Wednesday that places a moratorium on state agencies from creating new administrative rules with some exceptions for one year and encourages agencies to reduce regulations by 25% over the next two years.

According to the executive order released today, the “executive branch of state government will endeavor, over the next two years, to reduce by twenty-five percent the number of discretionary regulatory restrictions on citizens and businesses found in the Alabama Administrative Code.”

The order also places a moratorium on administrative rules and regulations from the executive branch until March 1, 2024, with the exception of rules that “notice of the intended action was given on or prior to the date of this order or the action is narrowly tailored to reduce or remove a regulatory burden; to remove obsolete, outdated, or unnecessary rules.” Rules “to enhance job creation or economic development in the State of Alabama; to comply with a court order, federal law or regulations, or state law; or to protect public health, safety, or welfare” are also exempted from Ivey’s order.

Phase one of the process outlined in the executive order requires each state executive branch agency to prepare a written inventory of its existing administrative rules. Agencies will provide this information to the Office of the Governor. Phase one is anticipated to occur between March and September of 2023, according to Ivey.

Phase two directs each state executive branch agency to develop a written plan to reduce regulatory burdens imposed through its administrative rules and otherwise tighten up its administrative code. Phase two is anticipated to occur between September 2023 and March 2024.

Phase three is where the implementation of each agency’s rule reduction plan will begin. It is anticipated to occur between March 2024 and March 2025.

“In many cases, government regulations that were necessary a decade ago have outlived their usefulness, and it’s time for that to change,” Ivey said in a statement on Wednesday. “This order directs state executive branch agencies to find where they can better serve our people, and I look forward to seeing its impact result in positive changes soon.”

Rosemary Elebash, state director for Alabama of the National Federation of Independent Businesses, told 1819 News on Wednesday that “to have a one-year moratorium and then to require state agencies to come back and reduce rules and regulations by 25% is huge for business owners.” 

"State agencies will then have to be thoughtful about rules and regulations that they’re looking at,” Elebash said. “The cost to small business owners for all these rules and regulations is just unbelievable. The typical small business doesn’t have a compliance officer so they’re trying to do this themselves.”

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